SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM 8-K
------------------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 15, 1997
------------------------------------------------
Date of report (Date of earliest event reported)
THE ALPINE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9078 22-1620387
- ---------------------------- ---------------------- ----------------------
(State or other jurisdiction Commission File Number (I.R.S. Employer
of incorporation) Identification Number)
1790 Broadway, New York, New York 10019-1412
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 757-3333
____________________________________________________________________
(Former name or former address, if changed since last report)
================================================================================
Page 1 of 406 pages
Exhibit Index appears on page 5
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On April 15, 1997, The Alpine Group, Inc. (the "Company") purchased (the
"Acquisition") all of the outstanding shares of Hepworth Refractories, Ltd., a
manufacturer and distributor of refractory products and services, from Hepworth
P.L.C. ("Seller") for approximately $104 million in funds obtained by the
Company under a credit agreement among several wholly-owned subsidiaries of the
Company, a syndicate of bank lenders, and Bankers Trust Company, as
Administrative Agent. The terms of the acquisition, including the amount of
consideration given for the shares, were the result of negotiation between the
managements of the Company and of Seller. For further information with respect
to the Acquisition, reference is made to the Share Purchase Agreement, dated
April 15, 1997, between Hepworth R. and M. Holdings Limited, Hepworth P.L.C.,
Refraco Holdings Limited and the Company which is Exhibit 1 hereto and which is
incorporated herein by reference.
On April 15, 1997, Refraco Inc., a newly formed subsidiary of the
Company ("Holdings"), Adience, Inc., a direct subsidiary of the Company
("Adience"), and Refraco Holdings Limited, a newly formed subsidiary of Adience
("UK Holdings"), entered into a Credit Agreement (the "Credit Agreement") among
Holdings, Adience, UK Holdings, Hepworth Refractories (Holdings) Limited
("HRHL"), various Banks and Bankers Trust Company ("Bankers Trust"), as
Administrative Agent. The initial borrowings under the Credit Agreement, which
were approximately $95.3 million, were used to (i) finance a portion of the
price required to consummate the Acquisition, including related transaction
expenses, (ii) repay outstanding bank debt refinanced by the indebtedness
incurred under the Credit Agreement and (iii) repay to the Company outstanding
intercompany debt of Adience to the Company of approximately $20.0 million). The
Company used the proceeds of the intercompany indebtedness repayment from
Adience to repay outstanding bank debt.
The Credit Agreement is comprised of two tranches of term loans and
a revolving credit facility. Interest on amounts outstanding under the Credit
Agreement are payable quarterly based upon the prime rate or the Eurodollar rate
plus, in each case, the applicable margin. In the case of the term loans, the
applicable margin is 1.5% and 2.0%, respectively, above the prime rate and 2.5%
and 3.0%, respectively, above the Eurodollar rate. The applicable margin in
respect of the revolving credit facility is 1.5% above the prime rate and 2.5%
above the Eurodollar rate. The variable components of these rates are subject to
periodic adjustment based on the leverage ratios maintained by the borrowers.
One tranche of term loans has an eight year term; the remaining tranche has a
six year term. Each of the term loans require periodic mandatory amortization
payments. The revolving credit facility has a six year term.
The indebtedness incurred under the Credit Agreement is secured by a
blanket lien on the assets of Adience, UK Holdings and HRHL and their
subsidiaries.
Concurrently with the execution of the Credit Agreement, Holdings
also entered into a Term Loan Agreement (the "Term Loan Agreement") with Bankers
Trust. The initial borrowings under the Term Loan Agreement, which were
approximately $60 million, were used to finance the balance of the acquisition
price required to consummate the Acquisition, including related transaction
expenses.
- 2 -
<PAGE>
Interest on amounts outstanding under the Term Loan Agreement are
payable quarterly based upon the prime rate plus 2.75% or the Eurodollar rate
plus 3.75%. The term of the indebtedness arising under the Term Loan Agreement
is eight years.
The indebtedness incurred under the Term Loan Agreement is secured
by, among other things, a guaranty by the Company. The guaranty of the Company
is secured by its pledge of 1,318,681 shares of common stock, par value $.01 per
share ("Superior Common Stock"), of Superior TeleCom Inc. owned by the Company.
In addition, the Company has agreed to certain other restrictions which limit
its ability to dispose of its remaining shares of Superior Common Stock.
For further information with respect to the Credit Agreement and the
Term Loan Agreement, reference is made to such agreements which are Exhibits 2
and 3 respectively, hereto, and which are incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
In accordance with Instruction 4 of this Item 7, financial
statements required by this item will be filed by an amendment to this initial
report on Form 8-K not later than 60 days after the date hereof.
(b) Exhibits.
Exhibit 1 - Share Purchase Agreement, dated April 15, 1997, between
Hepworth R. and M. Holdings Limited, Hepworth P.L.C., Refraco Holdings Limited,
and The Alpine Group, Inc.
Exhibit 2 - Credit Agreement, dated as of April 15, 1997, among Refraco
Inc., Adience, Inc., Refraco Holdings Limited, Hepworth Refractories (Holdings)
Limited, various banks, and Bankers Trust Company, as Administrative Agent.
Exhibit 3 - Term Loan Agreement, dated as of April 15, 1997, among Refraco
Inc., various banks, and Bankers Trust Company, as Administrative Agent.
- 3 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE ALPINE GROUP, INC.
Date: April 30, 1997 By: /s/ Bragi F. Schut
---------------------------------
Bragi F. Schut
Executive Vice President
- 4 -
<PAGE>
EXHIBIT INDEX
Share Purchase Agreement, dated April 15, 1997, between Hepworth R. and M.
Holdings Limited, Hepworth P.L.C., Refraco Holdings Limited, and The Alpine
Group, Inc..............................................................Page 7
Credit Agreement, dated as of April 15, 1997, among Refraco Inc., Adience Inc.,
Refraco Holdings Limited, Hepworth Refractories (Holdings) Limited, various
banks, and Bankers Trust Company as Administrative Agent................Page 109
Term Loan Agreement, dated as of April 15, 1997, among Refraco Inc., various
banks, and Bankers Trust Company, as Administrative Agent...............Page 294
- 5 -
DATED 15th April, 1997
HEPWORTH R. AND M. HOLDINGS LIMITED
and
HEPWORTH PLC
and
REFRACO HOLDINGS LIMITED
and
THE ALPINE GROUP, INC.
-----------------------------------------------
SHARE PURCHASE AGREEMENT
relating to the issued share capital of
Hepworth Refractories (Holdings) Limited
-----------------------------------------------
Slaughter and May
35 Basinghall Street
London EC2V 5DB
(TNC/KMH)
<PAGE>
CONTENTS
Page
1. INTERPRETATION 1
2. SALE AND PURCHASE 2
3. CONSIDERATION 2
4. LITIGATION PROVISION 3
5. COMPLETION 6
6. SELLER'S WARRANTIES 6
7. PURCHASER'S WARRANTIES 7
8. PURCHASER'S UNDERTAKINGS AND SELLER'S UNDERTAKING 8
9. INTRA-GROUP GUARANTEES AND BORROWINGS 9
10. RESTRICTIONS ON SELLER 12
11. SELLER'S INDEMNITY 13
12. PROVISION RELATING TO RESTRICTIONS 13
13. HEPWORTH GUARANTEE 14
14. ALPINE GUARANTEE 15
15. PENSIONS 16
16. EFFECT OF COMPLETION 16
17. REMEDIES AND WAIVERS 16
18. ASSIGNMENT 16
19. FURTHER ASSURANCE 17
20. ENTIRE AGREEMENT 17
21. NOTICES 18
22. ANNOUNCEMENTS 19
<PAGE>
23. CONFIDENTIALITY 20
24. RESTRICTIVE TRADE PRACTICES ACT 1976 21
25. COSTS AND EXPENSES 21
26. TIME OF ESSENCE 22
27. COUNTERPARTS 22
28. INVALIDITY 22
29. GOVERNING LAW 22
30. JURISDICTION 22
31. AGENT FOR SERVICE 23
SCHEDULE 1 (Interpretation) 25
SCHEDULE 2 (Completion Arrangements) 38
SCHEDULE 3 (The Warranties) 44
SCHEDULE 4 (Limitations on Liability) 64
SCHEDULE 5 (The Company) 71
SCHEDULE 6 Part A (The Subsidiaries) 73
Part B (The Associated Company) 113
SCHEDULE 7 (Pensions) 114
SCHEDULE 8 (The Property) 133
SCHEDULE 9 (Completion Accounts) 140
SCHEDULE 10 (Disputes) 148
ATTACHMENT A (Data Room List)
ATTACHMENT B (Deed of Release)
ATTACHMENT C (Disclosure Letter)
ATTACHMENT D (Licences)
<PAGE>
ATTACHMENT E (Hepworth's Press Announcement)
ATTACHMENT F (Alpine Press Announcement)
ATTACHMENT G (Registered Intellectual Property)
ATTACHMENT H (Tax Covenant)
ATTACHMENT I (Accounting Pack)
ATTACHMENT J (Worked Example Schedule)
ATTACHMENT K (Environmental Indemnity)
ATTACHMENT L (Loxley Lease)
ATTACHMENT M (Confidentiality Release Letters)
ATTACHMENT N (Report Letters)
ATTACHMENT O (Employer's Liability Insurance Policy)
ATTACHMENT P (Minerals Lease)
ATTACHMENT Q (Completion Accounts Format)
<PAGE>
SHARE PURCHASE AGREEMENT
DATED 15th April, 1997
BETWEEN:
1. HEPWORTH R. and M. HOLDINGS LIMITED whose registered office is at Tapton
Park Road, Sheffield S10 3FS (registered in England and Wales No. 2369751)
(the "Seller");
AND
2. HEPWORTH PLC whose registered office is at Tapton Park Road, Sheffield S10
3FS (registered in England and Wales No. 965093) (the "Hepworth
Guarantor");
AND
3. Refraco Holdings Limited whose registered office is at 65 Fleet Street,
London EC4Y 1HS (registered in England and Wales No. 3354257) (the
"Purchaser").
AND
4. The Alpine Group, Inc., a corporation registered under the laws of
Delaware with IRS employer identification number 22-1620387, whose
principal place of business is at 1790 Broadway, New York, New York
10019-1412 (the "Alpine Guarantor").
WHEREAS:
(A) The Seller has agreed to sell, or procure the sale of, and the Purchaser
has agreed to purchase and pay for the Shares (as defined in this
Agreement) on the terms and subject to the conditions of this Agreement.
(B) The Hepworth Guarantor has agreed to guarantee the obligations of the
Seller under this Agreement and the Alpine Guarantor has agreed to
guarantee the obligations of the Purchaser under this Agreement.
WHEREBY IT IS AGREED as follows:
1. INTERPRETATION
(A) Certain words and expressions used in this Agreement are defined in
Schedule 1.
(B) The Schedules form part of this Agreement and shall have the same force
and effect as if set out in the body of this Agreement and any reference
to this Agreement shall include the Schedules.
<PAGE>
2
2. SALE AND PURCHASE
(A) On the terms and subject to the conditions set out in this Agreement, the
Seller shall sell, or procure the sale of, and the Purchaser shall
purchase and pay for the Shares as at and with effect from Completion
together with all rights attached or accruing to them at Completion.
(B) The Seller has the right to transfer, or procure the transfer of, the
legal and beneficial title to the Shares.
(C) The Shares shall be sold free from all liens, charges, encumbrances or
other third party rights.
(D) The Shares shall be sold together with all rights attached or accruing to
the Shares including, without limitation, the right to receive all
dividends, distributions or any return of capital declared, paid or made
by the Company on or after the Completion Date.
(E) The Hepworth Guarantor will procure the waiver of all rights of
pre-emption over any of the Shares conferred upon any member of the
Seller's Group by the articles of association of the Company or in any
other way.
(F) For the avoidance of doubt, Part I of the Law of Property (Miscellaneous
Provisions) Act 1994 shall not apply for the purpose of this Clause 2.
3. CONSIDERATION
(A) The initial consideration for the sale of the Shares (the "Initial
Consideration") shall be the payment by the Purchaser to the Seller of the
sum of (pound)62,500,000, payable in accordance with Clause 5.
(B) The Initial Consideration shall be subject to adjustment in accordance
with the provisions of sub-clauses (C) and (D) below and as adjusted shall
constitute the consideration for the Shares (the "Consideration").
(C) Within seven (7) Business Days of the final determination of the value of
the Net Assets identified in the Completion Accounts in accordance with
the provisions of Schedule 9:-
(i) in the event that the value of the Net Assets is greater than the
sterling amount of (pound)47.1 million (the "Target Value"), the
Purchaser shall pay to the Seller, by way of adjustment to the
Initial Consideration, a sum equivalent to the excess over the
Target Value together with an amount equivalent to interest thereon
at the Agreed Rate for the period from the date of Completion to the
date of payment; and
<PAGE>
3
(ii) in the event that the value of the Net Assets is less than the
Target Value, the Seller shall pay to the Purchaser, by way of an
adjustment to the Initial Consideration, a sum equivalent to the
shortfall below the Target Value together with an amount equivalent
to interest thereon at the Agreed Rate for the period from the date
of Completion to the date of payment.
For the avoidance of doubt, if the value of the Net Assets equals the
Target Value, no payment shall be made by either party.
(D) A further adjustment shall be made to the Initial Consideration in the
circumstances set out in, and in accordance with, Clause 4.
(E) Any amounts to be paid pursuant to sub-clauses (C) or (D) above shall be
paid in pounds sterling through a CHAPS transfer for same day value to the
Seller's Account or the Purchaser's Account, as applicable.
(F) All payments by the Seller or the Purchaser under the Warranties or
indemnities contained in this Agreement shall (so far as possible) be made
by way of adjustment to the Consideration.
4. LITIGATION PROVISION
(A) The Purchaser acknowledges and agrees that it shall not utilise the
(pound)2,000,000 general provision referred to in paragraph 4(vii) of
Schedule 9 (the "Litigation Provision") for any purpose whatsoever except
for any purpose relating to the disputes listed in Schedule 10 (the
"Disputes"). For the purposes of this Clause 4, references to "the
Litigation Provision, or any part thereof," being "released by the
Purchaser unutilised" shall mean released for a reason other than in
relation to any payments made in relation to any of the Disputes (and any
associated costs and expenses).
(B) An adjustment, in accordance with clause (C) below, shall be made to the
Initial Consideration:
(i) on any date on which the Litigation Provision, or any part thereof,
is released by the Purchaser unutilised; and/or
(ii) on the later of:
(aa) the date falling 5 years after the Completion Date (the
"Release Date"); and
(bb) if, prior to the Release Date, legal proceedings of any
description (including arbitration, administrative or criminal
proceedings) have been commenced against any member of the
Group, or any member of the Group has been joined in any such
proceedings, in relation to any
<PAGE>
4
of the Disputes ("Legal Proceedings"), the date on which, in
relation to each set of Legal Proceedings, one or more of the
following has occurred:-
(1) such Legal Proceedings have been fully and finally
settled or awards, and the corresponding payments, of
damages have been made;
(2) such Legal Proceedings have been irrevocably
discontinued;
(3) the claims underlying such Legal Proceedings have been
fully waived and released; or
(4) in relation to such Legal Proceedings, no formal step
has been taken by, and no correspondence specifically
relating to the continuance of such Legal Proceedings,
or the settlement thereof, has been received from, any
other party to such Legal Proceedings or their legal
representatives during a consecutive period of three
calendar years.
(C) (i) Subject to clause (C)(iii) below, in the circumstances, and
within seven (7) Business Days of any date referred to in clause
(B)(i) above, the Purchaser shall pay to the Seller by way of
adjustment to the Initial Consideration a sum equal to 50 per cent.
of that part of the Litigation Provision released by the Purchaser
unutilised.
(ii) Subject to clause (C)(iii) below, in the circumstances, and within
seven (7) Business Days of the later of the dates, referred to in
clause (B)(ii) above, the Purchaser shall pay to the Seller by way
of adjustment to the Initial Consideration a sum equal to 50 per
cent. of that part of the Litigation Provision remaining unutilised.
(iii) The maximum aggregate amount payable to the Seller as an adjustment
to the Initial Consideration pursuant to Clause (C)(i) and Clause
(C)(ii) shall not exceed (pound)500,000.
(D) In relation to any Legal Proceedings, the Seller may, at any time after
the date falling 5 years after the Completion Date, request, and the
Purchaser shall procure, that the relevant members of the Group apply to
the appropriate judicial authorities to have the relevant proceedings
struck out for want of prosecution PROVIDED THAT, in each case, in the
circumstances the Purchaser, in good faith, believes that it is reasonable
for the Seller to make such a request and that to do so would not result
in an increase in the liability of the relevant member of the Group in
relation to the relevant Dispute (other than the costs and expenses of the
application) and PROVIDED THAT the relevant members of the Group each have
the appropriate judicial grounds and capacity to make such an application
and FURTHER PROVIDED THAT the Seller shall
<PAGE>
5
indemnify the Purchaser against 50 per cent. of all reasonable costs and
expenses incurred by any member of the Group in relation to the making,
and prosecution, of such an application.
(E) The Purchaser undertakes (upon the request of the Seller) to provide to,
or procure the provision of, to the Seller or its representatives as soon
as reasonably practicable, such information as the Seller may reasonably
require from time to time in relation to the performance of the
Purchaser's obligations under this Clause 4 and to co-operate fully with
the Seller or its representatives in this regard. In particular, but
without limitation to the generality of the foregoing, the Purchaser shall
give the Seller reasonable access to all correspondence and other relevant
documentation relating to any Legal Proceedings in the possession or
control of any member of the Group, any member of the Purchaser's Group
or, to the extent that the Purchaser or any member of the Group can
require such access, any such person's legal advisers PROVIDED THAT due
regard shall be given to the privileged nature of any such correspondence
or documentation in relation to which legal privilege may attach. Any
information or documents provided pursuant to the foregoing shall be
subject to the confidentiality provisions in Clause 23.
(F) Notwithstanding Clause (E) above, the Purchaser shall notify the Seller as
soon as reasonably practicable after:
(i) the date on which the Litigation Provision, or any part thereof, is
released by the Purchaser either unutilised or for any purpose
relating to the Disputes; and/or
(ii) the date on which any Dispute is settled without commencing Legal
Proceedings; and/or
(iii) in relation to Legal Proceedings:
(aa) to the extent that such Legal Proceedings are commenced after
the Completion Date, the date on which each such Legal
Proceedings is commenced; and/or
(bb) in relation to each Legal Proceedings, the date on which it is
fully and finally settled or on which an award, and the
corresponding payment, of damages has been made or on which it
has been irrevocably discontinued or on which the relevant
claims have been fully waived and released or on which three
years have passed since any formal step has been taken or
relevant correspondence received,
that such event has occurred.
(G) Notwithstanding Clauses 4(E) and (F) above, on the Release Date, the
Purchaser shall notify the Seller in writing whether an adjustment to the
Initial Consideration
<PAGE>
6
falls to be made and, if no such adjustment falls to be made pursuant to
Clause 4(C)(ii), shall set out in reasonable detail the reasons why,
including details of any release of the Litigation Provision or any part
thereof which has not resulted in an adjustment pursuant to Clause 4(C)(i)
and details of any Legal Proceedings which are still outstanding.
5. COMPLETION
(A) Completion of the sale and purchase of the Shares shall take place at
11.00 a.m. (or immediately following the signing of this Agreement, if
later) on the Completion Date at the offices of the Seller's Solicitors.
(B) At Completion the Seller and the Purchaser shall do those things
respectively listed and required of them in Schedule 2.
(C) The Initial Consideration shall be payable by or on behalf of the
Purchaser in immediately available funds in pounds sterling at Completion
as referred to in Schedule 2.
(D) Receipt of funds in accordance with sub-clause (C) shall constitute a good
discharge of the Purchaser in respect of the payment of the Initial
Consideration.
(E) Receipt of funds in accordance with sub-clause 3(E) shall constitute a
good discharge of the Purchaser or the Seller, as applicable, in respect
of any further payments to be made pursuant to Clause 3.
6. SELLER'S WARRANTIES
(A) Subject as provided in this Agreement, the Seller warrants to the
Purchaser in the terms set out in Schedule 3.
(B) The only Warranties given:
(i) in respect of Property are those contained in paragraphs 3(A) and
(B), 6(D) and (E), 9(A)(i) and 17 of Schedule 3 and each of the
other Warranties shall be deemed not to be given in relation to
Property;
(ii) in respect of Intellectual Property are those contained in paragraph
18 of Schedule 3 and each of the other Warranties shall be deemed
not to be given in relation to Intellectual Property;
(iii) in respect of competition, anti-restrictive trade practices or
anti-trust legislation are those contained in paragraph 19 of
Schedule 3 and each of the other Warranties shall be deemed not to
be given in relation to competition, anti-restrictive trade
practices or anti-trust legislation;
<PAGE>
7
(iv) in respect of pensions are those contained in paragraph 10 of
Schedule 7 and each of the other Warranties shall be deemed not to
be given in relation to pensions; and
(v) in respect of Environmental Matters are those contained in paragraph
22 of Schedule 3 and each of the other Warranties shall be deemed
not to be given in relation to Environmental Matters.
(C) The liability of the Seller under or in relation to the Warranties shall
be limited as set out in Schedule 4.
(D) Breach of Warranty shall not entitle the Purchaser to rescind or terminate
this Agreement, or any part of it, after Completion.
(E) The Seller accepts that the Purchaser is entering into this Agreement in
reliance upon the Warranties.
(F) The Seller undertakes (if any claim is made against it in connection with
the Warranties and in the absence of fraud or dishonesty) not to make any
claim against any member of the Group or the Associated Company or any
director or employee of any member of the Group or the Associated Company
on whom it may have relied before agreeing to any terms of this Agreement
or of the Tax Covenant or authorising any statement in the Disclosure
Letter.
(G) Save as stated in sub-clause (B), each of the Warranties shall be
construed as a separate and independent warranty and shall not be limited
or restricted by reference to any other Warranty.
7. PURCHASER'S WARRANTIES
The Purchaser warrants to the Seller that:
(i) each of the Purchaser and the Alpine Guarantor has the requisite
power and authority to enter into and perform this Agreement and the
other documents which are to be executed by the Purchaser and/or the
Alpine Guarantor (as the case may be) at Completion and which are
listed in paragraph (C)(i) of Schedule 2 (the "Purchaser's
Completion Documents");
(ii) this Agreement constitutes and the Purchaser's Completion Documents
will, when executed by the Purchaser and/or the Alpine Guarantor (as
the case may be), constitute binding obligations of the Purchaser
and/or the Alpine Guarantor (as the case may be) in accordance with
their respective terms; and
(iii) the execution and delivery of, and the performance by each of the
Purchaser and the Alpine Guarantor of its obligations under, this
Agreement and the Purchaser's Completion Documents will not:
<PAGE>
8
(a) result in a breach of any provision of the memorandum or
articles of association or equivalent constitutional documents
of the Purchaser or the Alpine Guarantor (as the case may be);
(b) result in a breach of, or constitute a default under, any
instrument to which the Purchaser or the Alpine Guarantor (as
the case may be) is a party or by which the Purchaser or the
Alpine Guarantor (as the case may be) is bound; or
(c) result in a breach of any order, judgment or decree of any
court or governmental agency to which the Purchaser or the
Alpine Guarantor (as the case may be) is a party or by which
the Purchaser or the Alpine Guarantor (as the case may be) is
bound.
8. PURCHASER'S UNDERTAKINGS AND SELLER'S UNDERTAKINGS
(A) The Purchaser undertakes that, in the absence of fraud or dishonesty or
save as provided in this sub-clause (A), it has no rights against and
shall not make any claim against any employee, director, agent, officer or
adviser of any member of the Seller's Group on whom it may have relied
before agreeing to any term of this Agreement or any other agreement or
document referred to herein or entering into this Agreement or any other
agreement or document referred to herein including, without prejudice to
the generality of the foregoing, any such persons as are named in the
definition of "so far as the Seller is aware" in Schedule 1, PROVIDED that
nothing contained in this sub-clause (A) shall restrict or prevent the
Purchaser or the Alpine Guarantor from bringing any claim against
Chesterton, the Investigating Accountants or Fugro in relation to any
matters contained in their respective Reports.
(B) The Purchaser undertakes on behalf of itself and each member of the
Purchaser's Group that, any future use of Seller Confidential Information
is at the risk of the Purchaser and other members of the Purchaser's
Group. No updates of the Seller Confidential Information will be provided
by any member of the Seller's Group to any member of the Purchaser's Group
after Completion.
(C) The Purchaser acknowledges and agrees on behalf of itself and each member
of the Purchaser's Group that, for the avoidance of doubt, nothing in this
Agreement shall operate as an agreement to transfer (nor shall transfer)
any right, title, or interest in any trade mark, house mark or company
name to the extent it contains or consists of the word "Hepworth" or in
any other mark in which that element appears or the word "Hepworth" in the
translational or transliteral form appears (together the "Hepworth Marks")
and agrees that it will use all reasonable endeavours to procure, as soon
as reasonably practicable after Completion, and, in any event, within 18
months of the Completion Date, that the Hepworth Marks will be removed
from all signage, stocks, sales literature, or other promotional material
and all other assets whatsoever of each member of the Group and the
Associated Company and the Purchaser agrees that neither it nor any other
member of the Purchaser's Group will use the Hepworth
<PAGE>
9
Marks or any signage, stocks, sales literature or other promotional
literature bearing or containing a Hepworth Mark nor shall the Purchaser
or any other member of the Purchaser's Group hold itself out as being part
of or in any way connected with the Seller's Group.
(D) The Purchaser shall procure that originals of all notices, correspondence,
information, orders or enquiries relating solely to the business of any
member of the Seller's Group and copies of all other notices,
correspondence, information, orders or enquiries to the extent that they
otherwise relate to the business of any member of the Seller's Group which
are received by any member of the Purchaser's Group on or after Completion
shall be passed as soon as practicable to the Seller.
(E) The Purchaser undertakes that it will, within two Business Days after
Completion, or as soon as reasonably practicable thereafter, procure that
the name of the Company and any other Subsidiary which contains the word
"Hepworth" shall be changed to a name not including the word "Hepworth".
(F) The Purchaser undertakes that it will, subject to the granting of
landlord's consent, promptly complete the assignation by Hepworth
Refractories Limited to Hepworth Minerals and Chemicals Limited of the
Minerals Lease.
(G) The Seller shall procure that whatever title, including both legal and
beneficial title, which Hepworth European Holdings Limited holds as at the
date of this Agreement to the parcels of land at the Bawtry site,
identified in the schedule for Bawtry at Index A, Part 7 of the property
section of the Data Room List as parcels numbered 1, 3, 5 and 6, shall be
transferred from Hepworth European Holdings Limited to Hepworth
Refractories (Holdings) Limited for the consideration of a peppercorn,
payable on demand, and the Seller undertakes to use reasonable endeavours
to procure that this transfer is effected within five Business Days of the
date of this Agreement.
(H) The Seller shall procure that Hepworth Properties Limited shall grant and
the Purchaser shall procure that the Company shall take the Loxley Lease
within five Business Days of this Agreement. From the date of this
Agreement until the grant of the Loxley Lease, the Company may occupy the
premises to be demised by the Loxley Lease as licensee as if the Loxley
Lease had been granted.
(I) The Seller shall procure that originals of all notices, correspondence,
information, orders or enquiries relating solely to the business of any
member of the Group and copies of all other notices, correspondence,
information, orders or enquiries to the extent that they otherwise relate
to the business of any member of the Group which are received by any
member of the Seller's Group on or after Completion shall be passed as
soon as practicable to the Purchaser.
(J) The Seller undertakes to lodge the Land Certificate relating to the title
of Hepworth Properties Limited to the freehold of the Loxley site with the
appropriate Land
<PAGE>
10
Registry for the purposes of registration of the First Option and the
Second Option referred to in the Loxley Lease.
9. INTRA-GROUP GUARANTEES AND BORROWINGS
(A) The Purchaser, for itself and its successors and assigns, covenants that,
at any time and from time to time on or after Completion, it will execute
and deliver all such instruments of assumption and acknowledgements
(including, without limitation, the Purchaser's Completion Release
Documents) or take such other action as the Seller may reasonably request
in order to effect the release and discharge in full of any Assurance
given by any member of the Seller's Group to any person (including any
member of the Group or the Associated Company) in respect of any
obligation or liability of any member of the Group or the Associated
Company and the Purchaser's assumption of, and the substitution of the
Purchaser as the primary obligor in respect of, each such Assurance in
each case on a non-recourse basis to any member of the Seller's Group.
Pending such release and discharge, the Purchaser hereby agrees with the
Seller (on behalf of itself and each member of the Seller's Group) that it
will assume and pay and discharge when due, and indemnify each member of
the Seller's Group against, all such Assurances.
(B) The Seller, for itself and its successors and assigns, covenants that, at
any time and from time to time on or after Completion, it will execute and
deliver all such instruments of assumption and acknowledgements
(including, without limitation, the Deed of Release) or take such other
action as the Purchaser may reasonably request in order to effect the
release and discharge in full of any Assurance given by any member of the
Group or the Associated Company to any person in respect of any obligation
or liability of any member of the Seller's Group and the Seller's
assumption of, and the substitution of the Seller as the primary obligor
in respect of, each such Assurance on a non-recourse basis to the
Purchaser, any member of the Group or the Associated Company. Pending such
release and discharge, the Seller hereby agrees with the Purchaser (on
behalf of itself, each member of the Group and the Associated Company)
that it will assume and pay and discharge when due, and indemnify each
member of the Group and the Associated Company against, all such
Assurances.
(C) If any action, claim or demand is brought or alleged against any member of
the Seller's Group or, as the case may be, any member of the Group or the
Associated Company (the "Relevant Indemnified Party") in respect of which
an indemnity is to be sought from the Purchaser or, as the case may be,
the Seller (the "Relevant Indemnifying Party") pursuant to this Clause,
the Relevant Indemnified Party shall forthwith notify the Relevant
Indemnifying Party thereof and the Relevant Indemnifying Party shall have
the option to assume the defence thereof. If the Relevant Indemnifying
Party fails to assume such defence, it will be liable to the Relevant
Indemnified Party for any reasonable legal or other expenses subsequently
incurred by the Relevant Indemnified Party in connection with such
defence.
<PAGE>
11
(D) All sums payable by the Relevant Indemnifying Party to any Relevant
Indemnified Party under this Clause shall be paid free and clear of all
deductions or withholdings whatsoever, save only as may be required by
law.
(E) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in sub-clause (D), the Relevant
Indemnifying Party shall be obliged to pay to the Relevant Indemnified
Party such sum as will, after such deduction or withholding has been made,
leave the Relevant Indemnified Party with the same amount as it would have
been entitled to receive in the absence of any such requirement to make
such deduction or withholding.
(F) If any sum payable by the Relevant Indemnifying Party to any Relevant
Indemnified Party under this Clause shall be subject to a liability to
Taxation in the hands of such Relevant Indemnified Party, the Relevant
Indemnifying Party shall be under the same obligation to make an increased
payment in relation to that liability to Taxation as if the liability were
a deduction or withholding required by law.
(G) The Seller and the Purchaser hereby undertake to each other that:
(i) on Completion, all Intra-Group Borrowings will be repaid by the
relevant members of the Seller's Group and/or the Group and the
Seller will confirm such repayment in writing to the Purchaser at
Completion;
(ii) following Completion, each of the Intra-Group Currency Agreements
which is a sales contract shall be cancelled at the banks' forward
selling rate shown at the time of cancellation on Reuters' screen
(Money calc facility) and each of the Intra-Group Currency
Agreements which is a purchase contract shall be cancelled at the
banks' forward buying rate shown at the time of cancellation on
Reuters' screen (Money calc facility). The differences between the
value of each Intra-Group Currency Agreement on cancellation and the
original value of the relevant contract shall be calculated as shown
in the Worked Example Schedule and the difference so calculated in
relation to each contract shall be discounted on a monthly basis at
67% of the base rate quoted on the Completion Date by National
Westminster Bank plc. The differences as so calculated and
discounted in respect of each Intra-Group Currency Agreement shall
be netted off against each other and the sum resulting (a) if
positive, shall be paid by Hepworth Group Services Limited to
Hepworth Refractories Limited; or (b) if negative, shall be paid by
Hepworth Refractories Limited to Hepworth Group Services Limited.
The parties acknowledge that the process of cancellation of all
Intra-Group Currency Agreements may take 24 hours to complete; and
(iii) following Completion, any amounts, if any, outstanding between any
member of the Seller's Group and any member of the Group (other than
the Intra-Group Borrowings and the Intra-Group Currency Agreements)
shall be paid off in the ordinary course of business.
<PAGE>
12
(H) If any claim is made by any member of the Group or the Associated Company
under an insurance policy in force prior to Completion which results in
any liability of any member of the Seller's Group to pay, and the actual
payment by any member of the Seller's Group of, any excess or deductible
amount to the relevant insurer, a sum equal to such amount shall be paid
by the Purchaser to the relevant member of the Seller's Group or as it may
direct.
(I) If any claim is capable of being made or is made by any member of the
Group under any insurance policy maintained by the Seller's Group prior to
Completion, then the Seller will, and will procure that each member of the
Seller's Group as appropriate will, provide to the relevant member of the
Group such co-operation and assistance as the member of the Group making
such claim may reasonably require PROVIDED THAT the Purchaser shall
indemnify the Seller against all reasonable costs and expenses incurred by
any member of the Seller's Group in providing such assistance.
10. RESTRICTIONS ON SELLER
(A) The Seller undertakes that it will not, and shall procure that each member
of the Seller's Group will not, do any of the following things:
(i) for a period of five years after the Completion Date either alone or
jointly with any person directly or indirectly carry on or be
engaged or economically interested in any business which competes
(directly or indirectly) with any of the Group Businesses and which
is carried on within any one of the member states of the European
Union;
(ii) within a period of three and one half (3 1/2) years from the
Completion Date, entice away from the employment of any member of
the Group any Senior Employee EXCEPT for those who answer an
advertisement for a post with any member of the Seller's Group
available to members of the public generally which is not aimed
specifically at a person with experience of working for the Group;
nor
(iii) intentionally assist any person to do either of the foregoing
things.
(B) Nothing in sub-clause (A) shall prevent any member of the Seller's Group:
(i) carrying on or being engaged in or economically interested in
any business (other than any Group Business) which, at the
date of this Agreement, it currently carries on or is engaged
in or is economically interested in or any reasonable
extension or development thereof which does not directly
involve the manufacture of products of a type produced, or the
provision of services of a type provided, by the Group in the
12 months prior to Completion (PROVIDED THAT, for the
avoidance of doubt, this shall not prevent any member of the
Seller's Group from supplying materials used in the
manufacture of such products);
<PAGE>
13
(ii) carrying on or being engaged in or economically interested in any
business referred to in paragraph (i) of sub-clause (A) twelve
months after such time as such business, in its entirety, has been
sold to a third party and/or all members of the Purchaser's Group
have ceased to be engaged in or economically interested in such
business;
(iii) being the holder of shares of a company (conferring not more than
five per cent. of the votes which would normally be cast at a
general meeting of that company) or debentures of a company which is
engaged in any business referred to in paragraph (i) of sub-clause
(A);
(iv) acquiring the whole or any part of a business, the carrying on of
which would otherwise amount to a breach of the undertaking
contained in sub-clause (A), as part of a larger acquisition or
series of related acquisitions PROVIDED THAT such acquisition is not
made with the sole or main purpose of acquiring such business and
PROVIDED FURTHER THAT the member of the Seller's Group which is the
acquiring party shall, within a period of eighteen months after such
acquisition (and provided that the business is not liquidated and/or
does not cease to trade within such period), use its reasonable
endeavours to sell such business to a third party and PROVIDED
FURTHER THAT, prior to any member of the Seller's Group or its
representatives endeavouring to sell such business to any person,
the Seller shall procure that the relevant member of the Seller's
Group shall first give the Purchaser written notice of its intention
to sell such business. The Seller agrees to procure that for a
period of 30 days immediately after such notice has been given to
the Purchaser, no member of the Seller's Group shall directly or
indirectly negotiate the sale of, or sell, such business to any
person whatsoever except any member of the Purchaser's Group and
their representatives; and/or
(v) trading with its existing customers or any future customers provided
that it does not solicit or accept the custom of any person in
respect of goods or services competitive with those manufactured or
supplied by any member of the Group during the 12 months prior to
Completion.
11. SELLER'S INDEMNITY
With effect from Completion, the Seller shall indemnify, and keep
indemnified, the Purchaser on demand (on an after tax basis) against any
liability, cost, damage or loss and any expense suffered or incurred by
the Purchaser or any member of the Group which arises from any liability
(whether actual or contingent) of either AS Furmol Kompagnet or ApS United
Moler
12. PROVISION RELATING TO RESTRICTIONS
Clause 10 contains an entirely separate and independent restriction and if
any such restriction shall be adjudged by any court or authority of
competent jurisdiction to be
<PAGE>
14
unlawful, against the public interest, void or unenforceable but would be
valid if part of the wording thereof were to be deleted and/or the period
thereof were to be reduced and/or the area dealt with thereby were to be
reduced, the said restriction shall be applied within the jurisdiction of
that court or competent authority with such modifications as are necessary
to make it valid and effective and shall continue to bind the Seller.
13. HEPWORTH GUARANTEE
(A) In consideration of the Purchaser entering into this Agreement, the
Hepworth Guarantor hereby unconditionally and irrevocably guarantees to
the Purchaser the full, due and punctual performance and observation by
the Seller of all its obligations under the terms of this Agreement, the
Tax Covenant and the Environmental Indemnity. In the event of any matter
as aforesaid, the Hepworth Guarantor shall be liable for the obligations
of the Seller arising hereunder as if it were a primary obligor.
(B) The Hepworth Guarantor shall from time to time pay to the Purchaser on
demand any sum of money which the Seller shall at any time be liable to
pay to the Purchaser under or pursuant to the terms of this Agreement, the
Tax Covenant or the Environmental Indemnity and which has not been paid
when due.
(C) The obligations of the Hepworth Guarantor under this Clause 13:
(i) shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement of
account or any change in the constitution or control of, or the
insolvency of, or any liquidation, winding up or analogous
proceedings relating to, the Seller or any change in the terms,
conditions and undertakings on the part of the Seller contained in
this Agreement, the Tax Covenant or the Environmental Indemnity; and
(ii) shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate the Hepworth
Guarantor from all or any part of such obligations or in any way
discharge, prejudice, lessen, affect or impair the same.
(D) All sums payable by the Hepworth Guarantor under this Clause shall be paid
free and clear of all deductions or withholdings whatsoever, save only as
may be required by law.
(E) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in sub-clause (D), the Hepworth Guarantor
shall be obliged to pay to the Purchaser such sum as will, after such
deduction or withholding has been made, leave the Purchaser with the same
amount as it would have been
<PAGE>
15
entitled to receive in the absence of any such requirement to make such
deduction or withholding.
(F) If any sum payable by the Hepworth Guarantor under this Clause shall be
subject to a liability to Taxation in the hands of the Purchaser, the
Hepworth Guarantor shall be under the same obligation to make an increased
payment in relation to that liability to Taxation as if the liability were
a deduction or withholding required by law.
14. ALPINE GUARANTEE
(A) In consideration of the Seller entering into this Agreement, the Alpine
Guarantor hereby unconditionally and irrevocably guarantees to the Seller
the full, due and punctual performance and observation by the Purchaser of
all its obligations under the terms of this Agreement, the Tax Covenant
and the Environmental Indemnity. In the event of any matter as aforesaid,
the Alpine Guarantor shall be liable for the obligations of the Purchaser
arising hereunder as if it were a primary obligor.
(B) The Alpine Guarantor shall from time to time pay to the Seller on demand
any sum of money which the Purchaser shall at any time be liable to pay to
the Seller under or pursuant to the terms of this Agreement, the Tax
Covenant or the Environmental Indemnity and which has not been paid when
due.
(C) The obligations of the Alpine Guarantor under this Clause 14:
(i) shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement of
account or any change in the constitution or control of, or the
insolvency of, or any liquidation, winding up or analogous
proceedings relating to, the Purchaser or any change in the terms,
conditions and undertakings on the part of the Purchaser contained
in this Agreement, the Tax Covenant or the Environmental Indemnity;
and
(ii) shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission or circumstance whatsoever which but for this
provision might operate to release or exonerate the Alpine Guarantor
from all or any part of such obligations or in any way discharge,
prejudice, lessen, affect or impair the same.
(D) All sums payable by the Alpine Guarantor under this Clause shall be paid
free and clear of all deductions or withholdings whatsoever, save only as
may be required by law.
(E) If any deductions or withholdings are required by law to be made from any
of the sums payable as mentioned in sub-clause (D), the Alpine Guarantor
shall be obliged to pay to the Seller such sum as will, after such
deduction or withholding has been made, leave the Seller with the same
amount as it would have been entitled to
<PAGE>
16
receive in the absence of any such requirement to make such deduction or
withholding.
(F) If any sum payable by the Alpine Guarantor under this Clause shall be
subject to a liability to Taxation in the hands of the Seller, the Alpine
Guarantor shall be under the same obligation to make an increased payment
in relation to that liability to Taxation as if the liability were a
deduction or withholding required by law.
15. PENSIONS
Each of the parties shall comply with the requirements pertaining to that
party set out in Schedule 7.
16. EFFECT OF COMPLETION
Save as otherwise provided herein, any provision of this Agreement or of
any other document referred to herein which is capable of being performed
after but which has not been performed at or before Completion and all
Warranties and other Assurances contained in this Agreement shall remain
in full force and effect notwithstanding Completion.
17. REMEDIES AND WAIVERS
(A) No delay or omission on the part of either party to this Agreement in
exercising any right, power or remedy provided by law or under this
Agreement or any other documents referred to in it shall impair such
right, power or remedy or operate as a waiver thereof.
(B) The single or partial exercise of any right, power or remedy provided by
law or under this Agreement shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy
except where expressly stated herein.
(C) The rights, powers and remedies provided in this Agreement are cumulative
and not exclusive of any rights, powers and remedies provided by law
unless otherwise stated herein including, without prejudice to the
generality of the foregoing, as stated in Clauses 6(D), 6(F), 8(A) and 20.
18. ASSIGNMENT
(A) Obligations under this Agreement shall not be assignable.
(B) The benefits of this Agreement (including, without limitation, the
benefits of the Warranties) shall not be assignable except that the
Purchaser may, upon giving written notice to the Seller and the Hepworth
Guarantor, (i) assign the benefit of the Warranties to the Administrative
Agent under the Credit Agreement (the "Warranty Assignment") PROVIDED THAT
the provisions of sub-clause (C) are complied with;
<PAGE>
17
and (ii) assign the benefit of this Agreement to a member of the
Purchaser's Group (a "Permitted Assignee") provided that and subject to
the condition that if such Permitted Assignee shall subsequently cease to
be a member of the Purchaser's Group, the Purchaser shall procure that
prior to its ceasing to be a member of the Purchaser's Group the Permitted
Assignee shall assign so much of the benefit of this Agreement as has been
assigned to it to the Purchaser or (upon giving further written notice to
the Seller and the Hepworth Guarantor) to another member of the
Purchaser's Group. Any purported assignment in contravention of this
Clause shall be void.
(C) The Purchaser hereby agrees and undertakes that the liabilities of the
Seller and the Hepworth Guarantor under this Agreement shall not be
increased by the Warranty Assignment, and that the rights conferred on the
Administrative Agent pursuant to the Assignment shall only be exercisable
by the Administrative Agent at the same time as the Administrative Agent
exercises its security under the Credit Agreement.
19. FURTHER ASSURANCE
Without prejudice to any restriction or limitation on the extent of any
party's obligations under this Agreement contained in this Agreement, each
of the parties shall from time to time so far as each is reasonably able
do or procure the doing of all such acts and/or execute or procure the
execution of all such documents in a form reasonably satisfactory to the
party concerned as they may reasonably consider necessary to transfer the
Shares to the Purchaser or otherwise to give the other party the full
benefit of this Agreement.
20. ENTIRE AGREEMENT
(A) This Agreement, the Tax Covenant and the Environmental Indemnity
constitute the whole and only agreement between the parties relating to
the sale and purchase of the Shares and, save if and only to the extent
expressly repeated in any such document, supersede and extinguish any
prior drafts, agreements, undertakings, representations, warranties and
arrangements of any nature whatsoever, whether or not in writing, relating
thereto.
(B) The Purchaser acknowledges and agrees with the Seller (on behalf of itself
and each other member of the Seller's Group) that:
(i) it does not rely on and has not been induced to enter into this
Agreement or any other agreement or document referred to herein on
the basis of any Assurance made or given by or on behalf of any
member of the Seller's Group or any of their respective agents,
officers, employees or advisers other than those expressly set out
in this Agreement or in any document entered into pursuant to this
Agreement or, to the extent that it has been, it has (in the absence
of fraud or dishonesty or subject to the proviso in Clause 8(A)) no
rights or remedies in relation thereto; and
<PAGE>
18
(ii) no member of the Seller's Group, or any of their respective agents,
officers, employees or advisers, has given or made any Assurance
other than those expressly set out in this Agreement or in any
document entered into pursuant to this Agreement or, to the extent
that they have, the Purchaser hereby unconditionally and irrevocably
waives (in the absence of fraud or dishonesty) any claim which it
might otherwise have had in relation thereto.
(C) This Agreement may only be varied by a document signed by each of the
parties hereto and expressed to be a variation to this Agreement.
21. NOTICES
(A) Any notice or other communication given or made under or in connection
with the matters contemplated by this Agreement shall be in writing.
(B) Any such notice or other communication shall be addressed as provided in
sub-clause (C) and, if so addressed, shall be deemed to have been duly
given or made as follows:
(i) if sent by personal delivery, upon receipted delivery at the address
of the relevant party;
(ii) if sent by air mail recorded delivery between the United States and
the United Kingdom, four Business Days after the date of posting;
(iii) if sent by recorded post within the United Kingdom, two Business
Days after the date of posting;
(iv) if sent by facsimile, when received;
PROVIDED THAT if, in accordance with the above provisions, any such notice
or other communication would otherwise be deemed to be given or made
outside Working Hours, such notice or other communication shall be deemed
to be given or made at the start of Working Hours on the next Business
Day.
(C) The relevant addressee, address and facsimile number of each party for the
purposes of this Agreement, subject to sub-clause (D), are:
Name of party Address Facsimile No.
------------- ------- -------------
Hepworth R. and M. Holdings Tapton Park Road, 0114 230 8642
Limited Sheffield S10 3FS
For the attn. of: Company Secretary
<PAGE>
19
Hepworth PLC Tapton Park Road, 0114 230 8642
Sheffield S10 3FS
For the attn. of: Company Secretary
Refraco Holdings Limited
Swanwick Court, 01773 522645
Alfreton,
Derbyshire DE55 7AR
For the attn. of: Company Secretary
The Alpine Group Inc. 1790 Broadway, 001 212 757
15th Floor, New 3423
York, NY10019,
United States of
America
For the attn. of: General Counsel
(D) A party may notify the other parties to this Agreement of a change to its
name, relevant addressee, address or facsimile number for the purposes of
sub-clause (C) PROVIDED THAT such notification shall only be effective
on:-
(i) the date specified in the notification as the date on which the
change is to take place; or
(ii) if no date is specified or the date specified is less than five
clear Business Days after the date on which notice is given, the
date falling five clear Business Days after notice of any such
change has been given.
(E) For the avoidance of doubt, the parties agree that the provisions of this
Clause shall not apply in relation to the service of any writ, summons,
order, judgment or other document relating to or in connection with any
Proceedings.
22. ANNOUNCEMENTS
(A) Subject to sub-clause (B), no announcement concerning the sale or purchase
of the Shares or any ancillary matter (other than the Press Announcements)
shall be made by any party without the prior written approval, in the case
of the Purchaser or the Alpine Guarantor, of the Hepworth Guarantor and,
in the case of the Hepworth Guarantor or the Seller, of the Alpine
Guarantor, such approval not to be unreasonably withheld or delayed.
<PAGE>
20
(B) Any party may make an announcement concerning the sale or purchase of the
Shares or any ancillary matter if required by:-
(i) the law of any relevant jurisdiction;
(ii) any securities exchange or regulatory or governmental body to which
either party is subject or submits, wherever situated (including,
without limitation, the London Stock Exchange or the New York Stock
Exchange), whether or not the requirement has the force of law,
in which case the party concerned shall take all such steps as may be
reasonable and practicable in the circumstances to agree the contents of
such announcement with, in the case of the Purchaser or the Alpine
Guarantor, the Hepworth Guarantor and, in the case of the Hepworth
Guarantor or the Seller, the Alpine Guarantor before making such
announcement and PROVIDED THAT any such announcement shall be made only
after notice to such other party.
(C) Each of the Purchaser and the Hepworth Guarantor shall procure that
forthwith, and in any event not later than 8.30 a.m. on the date of this
Agreement (or, if this Agreement is signed after 8.30 a.m. on any day, the
immediately following Business Day), its respective Press Announcement is
released to the London Stock Exchange or the New York Stock Exchange, as
applicable, and the Purchaser and the Hepworth Guarantor shall endeavour
to procure that the Press Announcements are released to the London Stock
Exchange and the New York Stock Exchange as near to simultaneously as
possible.
23. CONFIDENTIALITY
(A) Subject to sub-clause (B) and Clause 22, each party shall treat as
strictly confidential all information received or obtained as a result of
entering into or performing this Agreement which relates to:-
(i) the provisions or the subject matter of this Agreement or any
document referred to herein (excluding those documents contained in
the Data Room to the extent that they do not relate to the Seller's
Group);
(ii) the negotiations relating to this Agreement or any document referred
to herein (excluding those documents contained in the Data Room to
the extent that they do not relate to the Seller's Group);
(iii) (in the case of the Purchaser only) the Seller's Group, (in the case
of the Seller only) the Purchaser's Group and the Group and the
business carried on by each member of each of them respectively.
(B) Any party may disclose information which would otherwise be confidential
if and to the extent:-
<PAGE>
21
(i) required by the law of any relevant jurisdiction or for the purpose
of any judicial proceedings;
(ii) required by any securities exchange or regulatory or governmental
body to which that party is subject or submits, wherever situated,
including (without limitation) the London Stock Exchange or the New
York Stock Exchange, whether or not the requirement for information
has the force of law;
(iii) that the information is disclosed on a strictly confidential basis
to the professional advisers, auditors and bankers of that party;
(iv) that the information has come into the public domain through no
fault of that party;
(v) that the other party has given prior written approval to the
disclosure, such approval not to be unreasonably withheld or
delayed;
(vi) that the information has been included in a filing by the Alpine
Guarantor with the Securities and Exchange Commission in the US
which has been approved in writing by the Hepworth Guarantor; or
(vii) required to enable that party to enforce its rights under this
Agreement,
PROVIDED THAT any such information disclosed pursuant to paragraphs (i) or
(ii) shall be disclosed, where reasonably practicable, only after notice
to the other parties, in which case the party concerned shall take all
such steps as may be reasonable and practicable in the circumstances to
agree the contents of such disclosure with, in the case of the Purchaser,
the Hepworth Guarantor and, in the case of the Hepworth Guarantor or the
Seller, the Purchaser before making such disclosure, unless such notice
would itself constitute a breach of the relevant law or regulation
referred to therein.
(C) The restrictions contained in this Clause shall continue to apply after
the sale and purchase of the Shares under this Agreement without limit in
time.
24. RESTRICTIVE TRADE PRACTICES ACT 1976
If there is any provision of this Agreement, or of any agreement or
arrangement of which this Agreement forms part, which causes or would
cause this Agreement or that agreement or arrangement to be subject to
registration under the RTPA 1976, then that provision shall not take
effect until the day after particulars of this Agreement or of that
agreement or arrangement (as the case may be) have been furnished to the
Director General of Fair Trading pursuant to section 24 RTPA 1976.
<PAGE>
22
25. COSTS AND EXPENSES
(A) Save as otherwise stated in any other provision of this Agreement, each
party shall pay its own costs and expenses in relation to the negotiations
leading up to the sale of the Shares and to the preparation, execution and
carrying into effect of this Agreement and all other documents referred to
in it.
(B) Without prejudice to sub-clause (A), all stamp duty and stamp duty reserve
tax and other similar United States stamp, transfer or registration taxes,
duties and charges payable in connection with the sale or purchase of the
Shares under this Agreement shall be paid by the Purchaser.
26. TIME OF ESSENCE
Save as otherwise expressly provided, time is of the essence of each
provision of this Agreement.
27. COUNTERPARTS
(A) This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
(B) Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same
instrument.
28. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair:-
(i) the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or
(ii) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
29. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
30. JURISDICTION
(A) Each of the parties to this Agreement irrevocably agrees for the exclusive
benefit of each of the other parties that the courts of England are to
have jurisdiction to settle
<PAGE>
23
any disputes which may arise out of or in connection with this Agreement
and that accordingly any Proceedings may be brought in such courts.
Nothing contained in this Clause shall limit the right of any party to
take Proceedings against the others in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more
jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not, to the extent permitted by the
law of such other jurisdiction.
(B) Each party irrevocably waives (and irrevocably agrees not to raise) any
objection which it may have now or hereafter to the laying of the venue of
any Proceedings in any such court as is referred to in sub-clause (A) and
any claim of forum non conveniens and further irrevocably agrees that a
judgment in any Proceedings brought in any court referred to in this
Clause shall (provided that there is no appeal pending or open) be
conclusive and binding upon such party and may be enforced in the courts
of any other jurisdiction.
31. AGENT FOR SERVICE
(A) The Alpine Guarantor irrevocably agrees that any Service Document may be
sufficiently and effectively served on it in connection with Proceedings
in England and Wales by service on the Purchaser, as its agent (if no
replacement agent has been appointed and notified to the Seller pursuant
to sub-clause 31(D)), or on the replacement agent if one has been
appointed and notified to the Seller.
(B) Any Service Document served pursuant to this clause shall be marked for
the attention of:-
(i) the Purchaser at its address set out in Clause 21(C) or such other
address within England and Wales as may be notified to the Seller by
the Alpine Guarantor; or
(ii) such other person as is appointed as agent for service pursuant to
sub-clause 31(D) at the address notified pursuant to sub-clause
31(D).
(C) Any document addressed in accordance with sub-clause 31(B) shall be deemed
to have been duly served if:-
(i) sent by personal delivery to the specified address, upon receipted
delivery at such address; or
(ii) sent by registered post, two Business Days after the date of
posting.
(D) If the Purchaser (or any replacement agent appointed pursuant to this
sub-clause) at any time ceases for any reason to act as agent, the Alpine
Guarantor shall appoint a replacement agent to accept service having an
address for service in England or Wales and shall notify the Seller of the
name and address of the replacement agent; failing
<PAGE>
24
such appointment and notification, the Seller shall be entitled by notice
to the Alpine Guarantor to appoint such a replacement agent to act on the
Alpine Guarantor's behalf.
(E) A copy of any Service Document served on an agent pursuant to this clause
shall be sent by post to the Alpine Guarantor at its address for the time
being for the service of notices and other communications under clause 21
(Notices), but no failure or delay in so doing shall prejudice the
effectiveness of service of the Service Document in accordance with the
provisions of sub-clause 31(A).
(F) "Service Document" means a writ, summons, order, judgment or other
document relating to or in connection with any Proceedings.
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
<PAGE>
25
SCHEDULE 1
(Interpretation)
(A) In this Agreement and the Schedules to it:-
"Accounting Pack" means the consolidated accounting pack for the
Group for the accounting reference period ended
on the Accounts Date, together with an
associated note on contingent liabilities, in
the Agreed Form as set out in Attachment I;
"Agreed Rate" interest at a rate of 2 per cent. per annum
above the base rate from time to time of the
Bank of England;
"Accounts Date" means 31st December, 1996;
"Administrative Agent" means Bankers Trust Company;
"Agreed Form" in relation to any document means such document
in the form initialled for the purposes of
identification only by the Purchaser's
Solicitors and the Seller's Solicitors;
"Associated Company" means Rotary Nozzle International SA, the
undertaking in which the Company has a
participating interest (as defined in section
260 of the Companies Act 1985) but which is not
a Subsidiary, basic information concerning which
is set out in Part B of Schedule 6;
"Associated Company Shares" means the 20,000 shares of 2000
Belgian Francs each in the Associated Company,
which represent 50% of the total issued share
capital of the Associated Company;
"Assurance" means any warranty, representation, statement,
assurance, covenant, agreement, undertaking,
indemnity, guarantee or commitment of any nature
whatsoever;
"Business Day" means a day (other than a Saturday or a Sunday)
on which banks are generally open for business
in London;
<PAGE>
26
"Chesterton" means Chesterton plc;
"Chesterton Report" means the report dated 1st June, 1996 prepared
by Chesterton in relation to certain of the
Properties;
"Clause 11 Indemnity" has the meaning given in paragraph 3 of Schedule
4;
"Companies Acts" means the Companies Act 1985, the Companies
Consolidation (Consequential Provisions) Act
1985, the Companies Act 1989 and Part V of the
Criminal Justice Act 1993;
"Company" means Hepworth Refractories (Holdings) Limited
(formerly GR-Stein Refractories Limited), basic
information concerning which is set out in
Schedule 5;
"Completion" means completion of the sale and purchase of the
Shares under this Agreement;
"Completion Accounts" has the meaning given to it in Schedule 9;
"Completion Date" means the date of this Agreement;
"Completion Accounts Date" means 31st March, 1997;
"Consideration" has the meaning given thereto in Clause 3;
"Confidentiality Release means letters in the Agreed Form from the
Letters" Hepworth Guarantor and Schroders
releasing the Alpine Guarantor, its
subsidiaries and their respective
representatives from their respective
obligations arising pursuant to the
confidentiality letter from Schroders to
the Alpine Guarantor dated 18th December,
1996, as set out in Attachment M;
"Credit Agreement" means the credit agreement dated on or after the
date hereof among, inter alia, the Purchaser,
the Administrative Agent and various banks;
"Data Room" means those documents referred to in the Data
Room List;;
<PAGE>
27
"Data Room List" means the list of documents in the Agreed Form
entitled "Data Room List" and forming Attachment
A;
"Deed of Release" means the deed releasing Hepworth Refractories
Limited, Thomas Marshall (Loxley) Limited and
various members of the Seller's Group from
certain of their obligations under the NatWest
Cross Guarantees in the Agreed Form forming
Attachment B;
"Disclosure Letter" means the letter dated with the same date as
this Agreement written by the Seller to the
Purchaser for the purposes of paragraph 10 of
Schedule 4 in the Agreed Form forming Attachment
C;
"Disputes" has the meaning given thereto in Clause 4;
"Employees" means persons employed by any member of the
Group including directors of the Company and/or
the Subsidiaries at the date of this Agreement;
"Employer's Liability means the insurance policy issued by
Insurance Policy" London & Edinburgh, forming Attachment O;
"Environment" means all, or any, of the following media namely
the air (including without limitation the air
within buildings and the air within other
natural or man-made structures above or below
ground), water and land and any living organisms
or systems supported by those media;
"Environmental Indemnity" means the environmental indemnity in the
Agreed Form as set out in Attachment K;
"Environmental Laws" means the following each as in existence
at the date of Completion:
<PAGE>
28
(a) all European Community, national,
state or local statutes, codes, or
other laws or legislation
concerning Environmental Matters
which are applicable to the
business of the Company or to the
Properties and all rules,
regulations, ordinances, orders,
notices and directives made
thereunder; and
(b) judicial and administrative
interpretation of each of the
foregoing;
"Environmental Matters" means, in relation to the business assets and
operations of the Group and the Properties, all
matters relating to Pollution of or Harm to the
Environment or to the health and safety of the
Employees of the Group or any other person;
"Environmental Permits" means the permits, consents, licences,
certificates and other authorisations and
approvals required under the Environmental Laws
to be obtained in connection with the use of the
Properties or the conduct of the Group Business;
"Event" has the same meaning as in the Tax Covenant;
"Fugro" means Fugro Environmental Limited;
"Fugro Report" means the environmental reports dated
August, 1996 prepared by Fugro;
"Hepworth Marks" has the meaning given thereto in Clause 8(C);
"Group" means the Company and all Subsidiaries;
"Group Business" means the business of a member of the Group as
carried on by that member in a particular
jurisdiction in the 12 months immediately
preceding the date of this Agreement and "Group
Businesses" shall be construed accordingly;
"Harm" means harm to the health of any living organism
or other interference with the ecological
systems of which it forms a part and, in the
case of human beings, includes offence to any of
the senses,
<PAGE>
29
impairment of amenity and damage to property;
"Hazardous Materials" means pollutants, contaminants and dangerous,
toxic or radioactive substances;
"Hepworth Refractories Inc. means the Stock Purchase Agreement
Stock Purchase Agreement" relating to the issued common stock of
Hepworth Refractories Inc. between (1)
the Hepworth Guarantor and (2) Thomas
Marshall (Overseas Investments) Limited
dated 12th December, 1996;
"ICTA 1988" means the Income and Corporation Taxes Act 1988;
"Information Memorandum" means the information memorandum relating to
Hepworth Refractories (Holdings) Limited
prepared by Schroders on behalf of the Seller
and dated 17th July, 1996;
"Initial Consideration" has the meaning given thereto in Clause 3;
"Intellectual Property" means patents, trade marks and service marks,
rights in designs, trade or business names or
signs, copyrights (including rights in computer
software) and topography rights (whether or not
any of these is registered and including
applications for registration of any such thing)
and rights under licences and consents in
relation to any such thing and all rights or
forms of protection of a similar nature or
having equivalent or similar effect to any of
these which may subsist anywhere in the world;
"Intra-Group Borrowings" means any borrowings or other indebtedness owed
by or to any member of the Seller's Group to or
by any member of the Group but excluding, for
the avoidance of doubt, any amounts outstanding
pursuant to any contract between such parties
entered into in the ordinary course of trading
(including, for the avoidance of doubt, the
Intra-Group Currency Agreements);
"Intra-Group Currency means contracts to exchange currency at a
Agreements" future date made between Hepworth Group
Services Limited and Hepworth Refractories
Limited which
<PAGE>
30
are outstanding at the Completion Date;
"Investigating Accountants" means KPMG of The Fountain Precinct, 1 Balm
Green, Sheffield S1 3AF;
"KPMG Report" means the reports on the Group prepared
by the Investigating Accountants and dated 28th
August, 1996, 18th September, 1996 and 14th
October, 1996 and addressed to the Seller and
the Purchaser;
"Legal Proceedings" has the meaning given thereto in Clause 4;
"Licences" means the licences, agreements or arrangements
referred to in Clause 18(B) of Schedule 3
forming Attachment D;
"Litigation Provision" has the meaning given thereto in Clause 4;
"London Stock Exchange" means the London Stock Exchange Limited;
"Loxley Lease" means the lease in relation to land at Loxley in
the Agreed Form as set out in Attachment L;
"Material Asset" means an asset of a member of the Group with a
value of more than (pound)100,000;
"Material Contract" means any written contract relating to the Group
Businesses calling for payments by any party
thereto in excess of (pound)500,000 in any one
year;
"Minerals Lease" means the lease made between (1) Margaret
Thornton and others and (2) The Glenboig Union
Fire Clay Company Limited dated 29th July, 17th
and 27th August and 8th September, 1966 and
relating to extraction rights at Levenseat in
Scotland, as set out in Attachment P;
"NatWest Cross Guarantees" means the cross-guarantee arrangements entered
into by various members of the Seller's Group,
by Hepworth Refractories Limited and by Thomas
Marshall (Loxley) Limited in favour of National
Westminster Bank plc;
"Net Assets" means the aggregate value of the consolidated
assets of the Group less the aggregate amount of
<PAGE>
31
the consolidated liabilities of the Group, as
shown by the Completion Accounts;
"Overseas Subsidiaries" means Hepworth Refractories (Belgium) SA,
Refinter, Auxiref, Hepworth Refractories
Deutschland GmbH, Hepworth Refractories Italiana
SRL, Les Produits Siliceux SA, Constructions
Thermiques Europeennes SA, S.C.I.47, Hepworth
Refractories Canada Limited and Hepworth
Refractories Inc and "Overseas Subsidiary" shall
be construed accordingly;
"Permitted Assignee" has the meaning given thereto in Clause 18;
"Press Announcements" means the press announcements to be issued by
each of the Hepworth Guarantor and the Alpine
Guarantor in the Agreed Form of Attachments E
and F and the "Hepworth Press Announcement and
the Alpine Press Announcement" shall be
construed accordingly;
"Pollution" means the discharge or release into the
Environment whether intentionally or otherwise
of any substances or energy (including, but not
limited to, sound, vibration, heat and ionising
and non-ionising radiation);
"Proceedings" means any proceeding, suit or action arising out
of or in connection with this Agreement;
"Properties" means the properties specified in Schedule 8
and, where the context so requires, includes all
or any of such properties and "Property" shall
be construed accordingly;
"Purchaser's Account" such account as the Purchaser shall notify to
the Seller within 30 Business Days of the
Completion Date;
"Purchaser's Auditors" Arthur Andersen of St. Paul's House, Part
Square, Leeds LS1 2PJ;
"Purchaser's Completion are the documents listed in paragraph
Documents" 1(C)(i) of Schedule 2;
<PAGE>
32
"Purchaser's Completion means the documents to be delivered by
Release Documents" the Purchaser at Completion which are
listed in paragraph 1(C)(i)(b) of Schedule 2;
"Purchaser's Group" means the Purchaser, its subsidiaries, any
holding company of the Purchaser and all other
subsidiaries of any such holding company from
time to time;
"Purchaser's Solicitors" means Freshfields, 65 Fleet Street,
London EC4Y 1HS;
"Registered Intellectual means the registered Intellectual Property and
Property" applications therefor referred to in paragraph
18(A) of Schedule 3 forming Attachment G;
"Release Date" has the meaning given thereto in Clause 4;
"Relevant Indemnified Party" has the meaning given thereto in Clause 9(C);
"Relevant Indemnifying Party" has the meaning given thereto in Clause 9(C);
"Relief" means any allowance, credit, deduction,
exemption or set off in respect of any Tax or
relevant to the computation of any income,
profits or gains for the purposes of any Tax or
any other saving of Tax;
"Reports" means the Chesterton Report, the Fugro Report
and the KPMG Report;
"Report Letters" means the letters from Chesterton, Fugro and the
Investigating Accountants relating to the
Reports in the Agreed Form, as set out in
Attachment N;
"Revenue Authority" means the Inland Revenue and the Commissioners
of Customs and Excise;
"RTPA 1976" means the Restrictive Trade Practices Act 1976;
"Schroders" means J. Henry Schroder & Co. Limited;
"Seller Confidential means all information which is not in the
Information" public domain in whatever form held:-
(i) relating to any member of the Seller's
<PAGE>
33
Group or the business of any such member;
(ii) supplied by or on behalf of any member of
the Seller's Group to any member of the
Group or any other member of the
Purchaser's Group; or
(iii) supplied in confidence to any member of
the Seller's Group by any third party;
"Seller's Account" means the Seller's account with National
Westminster Bank PLC of 42 High Street,
Sheffield S1 1QG, sort code 56-00-09, account
name: Hepworth PLC, account number 00011878;
"Seller's Auditors" KPMG of The Fountain Precinct, 1 Balm Green,
Sheffield S1 3AF;
"Seller's Completion has the meaning given thereto in paragraph 2(A)
Documents" of Schedule 3;
"Seller's Group" means the Hepworth Guarantor and its
subsidiaries (but excluding each member of the
Group);
"Seller's Solicitors" means Slaughter and May;
"Senior Employee" means any one of the Employees who is entitled
to a salary and bonus at a rate (or, in the case
of fluctuating amounts, has or would have been
entitled to an average annual rate over the last
three financial years) in excess of(pound)40,000
per annum and every director who is also an
Employee;
"Service Document" has the meaning given thereto in Clause 31(F);
"Shares" means all the issued shares in the capital of
the Company;
"so far as the Seller is means so far as is within the actual knowledge
aware" (having made reasonable enquiries) of the
following parties:-
<PAGE>
34
John Carter,
Malcolm Heald,
Robert Lambourne
Richard Sykes,
John Casewell,
Jim Casey,
Ian Hutchinson,
Michael de la Roche,
(in relation to the Warranties in Schedule 7
only)
Helen Grantham and Lyn Wright,
(in relation to the Warranties in respect of
Property in Schedule 3 only)
Richard Needham,
(PROVIDED THAT, for these purposes, the actual
knowledge of Robert Lambourne shall be his
actual knowledge as at 21st March, 1997 and
shall not include any actual knowledge he may
have obtained after that date)
and all other phrases in this Agreement relating
to the knowledge, information and belief or
awareness of the Seller shall be construed as a
reference to "so far as the Seller is aware" as
so defined;
"Subsidiaries" means any of the subsidiaries of the Company
(basic information concerning each current
subsidiary of the Company being set out in Part
A of Schedule 6) and, where the context so
requires, includes any or all of such companies
and "Subsidiary" shall be construed accordingly;
"Target Value" has the meaning given in Clause 3;
"Tax" or "Taxation" includes all forms of taxation and statutory,
governmental, supra-governmental, state,
principal, local governmental or municipal
impositions, duties, contributions and levies,
in each case whether of the United Kingdom or
elsewhere, whenever imposed and all penalties,
charges, costs and interest relating thereto and
without limitation all employment taxes and any
deductions or withholdings of any sort;
<PAGE>
35
"Tax Authority" means any taxing or other authority (whether
within or outside the United Kingdom) competent
to impose any Tax Liability;
"Tax Covenant" means the tax covenant in the Agreed Form as set
out in Attachment H;
"Tax Liability" has the meaning given thereto in the Tax
Covenant;
"Tax Warranties" means the Warranties set out in paragraphs 23 to
46 of Schedule 3 and "Tax Warranty" shall be
construed accordingly;
"UK Subsidiaries" means Ice Limited, Ice International Limited,
The Meltham Silica & Firebrick Co. Limited,
Coolee Limited, Industry Connect Limited
(formerly Porthgain Village Industries Limited),
Genefax Transport Ltd, GR Stein Refractories
Limited (formerly Thomas Brooke & Sons Ltd.),
The Glenboig Union Fireclay Co. Limited, British
Refractories Corporation Limited, Genefax
Monolithics Limited, General Refractories
Limited, High Peak Silica Co. Limited, John G
Stein & Co. Limited, Bonnybridge Refractories
Limited, Bonnybridge Silica & Fireclay Co.
Limited, Thomas Marshall (Loxley) Limited,
Thomas Marshall (Overseas Investments) Limited,
Moler Products Limited, Colchester Mineral
Products Limited, MM Monolithics Limited, MPK
Insulation Limited, Marshall Leasing (Loxley)
Ltd, Carblox Ltd, Hoyland Marshall Limited,
Marshall Refractories Limited, and FFrith
Fireclay Limited and, where the context so
requires, includes any or all of such companies
and "UK Subsidiary" shall be construed
accordingly;
"VATA 1994" means the Value Added Tax Act 1994;
"Warranties" means the warranties set out in Schedule 3 and
in Schedule 7 and "Warranty" shall be construed
accordingly;
"Waste" means any waste including anything which is
abandoned, unwanted or surplus irrespective of
whether it is capable of being recovered or
<PAGE>
36
recycled or has any value;
"Worked Example Schedule" means the schedule showing worked examples in
relation to the cancellation of the Intra-Group
Currency Agreements in the Agreed Form as set
out in Attachment J; and
"Working Hours" means 9.30 a.m. to 5.30 p.m. on a Business Day.
(B) In this agreement, unless otherwise specified:-
(i) references to Clauses, Schedules and Attachments are to Clauses of,
and Schedules and Attachments to, this Agreement;
(ii) a reference to a sub-clause is to a sub-clause of the Clause in
which such reference appears, to a paragraph is to a paragraph of
the sub-clause or Schedule (as the case may be) in which such
reference appears and to a sub-paragraph is to a sub-paragraph of
the paragraph in which such reference appears;
(iii) a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, amended, modified or re-enacted except to the extent that
any amendment or modification made after the date of this Agreement
would increase the liability of the Seller under this Agreement;
(iv) references to a "company" shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
(v) references to a "person" shall be construed so as to include any
individual, firm, company, government, state or agency of a state or
any joint venture, association or partnership (whether or not having
separate legal personality);
(vi) the expressions "holding company", "subsidiary" and "wholly-owned
subsidiary" shall have the respective meanings given in the
Companies Act 1985;
(vii) a person shall be deemed to be connected with another if that person
is connected with another within the meaning of section 839 ICTA
1988;
(viii) references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
(ix) references to times of the day are to London time;
<PAGE>
37
(x) headings are for convenience only and do not affect the
interpretation of this Agreement;
(xi) references to any English legal term for any action, remedy, method
of judicial proceeding, legal document, legal status, court,
official, or any legal concept or thing shall in respect of any
jurisdiction other than England be deemed to include what most
nearly approximates in that jurisdiction to the English legal term;
(xii) references in any Warranty to any monetary sum expressed in pounds
sterling shall, where such sum is referable in whole or in part to a
particular jurisdiction, be deemed to be a reference to an
equivalent amount in the local currency of that jurisdiction
translated at the prevailing exchange rate applicable to that amount
of sterling by reference to middle-market rates quoted by National
Westminster Bank plc immediately before close of business in London
on the date of this Agreement or, if such day is not a Business Day,
on the Business Day immediately preceding such day; and
(xiii) where it is necessary to determine whether a monetary limit or
threshold set out in paragraph 1 of Schedule 4 has been reached or
exceeded (as the case may be) and the value of the relevant claim or
any of the relevant claims is expressed in a currency other than
pounds sterling, the value of each such claim shall be translated
into pounds sterling at the prevailing exchange rate applicable to
that amount of that non-sterling currency by reference to
middle-market rates quoted by National Westminster Bank plc
immediately before close of business in London on the date of
receipt by the Seller of written notification from the Purchaser in
accordance with paragraph 2 of Schedule 4 of the existence of such
claim or, if such day is not a Business Day, on the Business Day
immediately preceding such day.
<PAGE>
38
SCHEDULE 2
(Completion Arrangements)
1. GENERAL
(A) Obligations on signing
Prior to signing this Agreement:-
(i) the Seller shall have provided to the Purchaser or the Purchaser's
Solicitors a copy of the minutes of a duly held meeting of the
directors of each of the Seller and the Hepworth Guarantor (or duly
constituted committees thereof) authorising the execution by the
Seller or (as the case may be) the Hepworth Guarantor of this
Agreement and the Seller's Completion Documents and, in the case
where such execution is authorised by a committee of the board of
directors of the Seller or (as the case may be) the Hepworth
Guarantor, a copy of the minutes of a duly held meeting of the
directors constituting such committee (in each case such copy
minutes being certified as correct by the secretary of the relevant
company); and
(ii) the Purchaser shall have provided to the Seller or the Seller's
Solicitors a signed opinion from each of the Purchaser's Solicitors
and Proskauer, Rofe, Goetz & Mendelsohn LLP in a form satisfactory
to the Seller and a copy of the minutes of a duly held meeting of
the directors of the Purchaser (or a duly constituted committee
thereof) authorising the execution by the Purchaser of this
Agreement and the Purchaser's Completion Documents and, in the case
where such execution is authorised by a committee of the board of
directors of the Purchaser, a copy of the minutes of a duly held
meeting of the directors constituting such committee or the relevant
extract thereof (in each case such copy minutes being certified as
correct by the secretary of the relevant company).
(B) Seller's obligations
At Completion (or, in the case of (B)(iv), as soon as practicable
thereafter) the Seller shall deliver to the Purchaser or the Purchaser's
Solicitors:
(i) a counterpart of the Tax Covenant, duly executed by the
Seller;
(ii) a counterpart of the Environmental Indemnity, duly executed and
delivered as a deed by the Seller and the Hepworth Guarantor;
(iii) subject to receipt of any money owing to Hepworth Group Services
Limited, confirmation that the Purchaser's undertaking in Clause
9(G)(iii) has been fulfilled;
<PAGE>
39
(iv) signed copies of the Confidentiality Release Letters and the Report
Letters;
(v) a copy of the Employer's Liability Insurance Policy issued by the
relevant insurers;
(vi) the Deed of Release, duly executed by the relevant members of the
Seller's Group, by Hepworth Refractories Limited, by Thomas Marshall
(Loxley) Limited and by National Westminster Bank plc; and
(vii) subject to receipt of the relevant funds, written confirmation of
the repayment of all Intra-Group Borrowings.
(C) Purchaser's obligations
At Completion (or, in the case of C(i)(c), as soon as practicable
thereafter), the Purchaser shall:
(i) deliver to the Seller or the Seller's Solicitors:
(a) a counterpart of the Tax Covenant, duly executed by the
Purchaser;
(b) a counterpart of the Environmental Indemnity, duly executed
and delivered as a deed by the Purchaser
(c) subject to receipt of any money owing to Hepworth Refractories
Limited, confirmation that the Seller's undertaking in Clause
9(G)(ii) has been fulfilled; and
(ii) pay the sterling amount of the Consideration by CHAPS transfer for
same day value to the Seller's Account.
2. IN RELATION TO THE COMPANY AND THE UK SUBSIDIARIES
At Completion the Seller shall:
(i) deliver to the Purchaser or the Purchaser's Solicitors (or confirm
where such documents are held and that they are held to the
Purchaser's order):-
(a) duly executed transfers in respect of the Shares (including
any shares held by any nominee of the Seller) and any nominee
shares in any of the UK Subsidiaries held by a member of the
Seller's Group in favour of the Purchaser or such person as
the Purchaser shall have nominated in writing to the Seller
two Business Days prior to Completion and share certificates
for such shares in the names of the relevant transferors and
any power of attorney under which any transfer is executed on
behalf of the Seller or its nominee;
<PAGE>
40
(b) share certificates in respect of all the issued share capital
of each of the UK Subsidiaries (where such certificates have
not been produced pursuant to sub-paragraph (i)(a));
(c) the statutory registers (which shall be written up to but not
including the Completion Date), the certificate of
incorporation (and any certificate of incorporation on change
of name) and common seal (if any) of the Company and each of
the UK Subsidiaries;
(d) a power of attorney in the Agreed Form duly executed as a deed
by the Seller and/or its nominees appointing the Purchaser as
its attorney in respect of the Shares;
(e) a power of attorney in the Agreed Form duly executed as a deed
by the nominee of any relevant member of the Group appointing
the Purchaser as its attorney in respect of any shares in any
member of the Group held by it; and
(f) the deeds and documents of title relating to the Properties,
save in relation to Bawtry where the documents will be held by
the Seller to the order of the Purchaser pending completion of
the transfer referred to at Clause 8(G); and
(ii) procure that the present auditors of the Company and each of the UK
Subsidiaries resign their office as such and deposit at the
registered office of the Company and/or the relevant UK Subsidiary
(as the case may be) a letter notifying their resignation
acknowledging that, save for the payment of fees in the ordinary
course, they have in each case no claim against the relevant company
and containing a statement pursuant to section 394(1) Companies Act
1985 that there are no circumstances connected with their ceasing to
hold office which they consider should be brought to the attention
of any members or creditors, and the Seller shall procure that a
copy of each letter referred to in this sub-paragraph (ii) shall be
delivered to the Purchaser on Completion;
(iii) procure that resolutions of the boards of directors of the Company
and, where applicable, each of the UK Subsidiaries are passed by
which:-
(a) the transfers of the Shares referred to in sub-paragraph
(i)(a) shall be approved for registration and (subject only to
the transfers being duly stamped) the transferee registered as
the holder of the Shares in the register of members of the
Company;
(b) each of the persons nominated by the Alpine Guarantor shall be
appointed directors and/or secretary of the Company and/or any
of the UK Subsidiaries, as the Purchaser shall direct, such
appointments to take effect on Completion; and
<PAGE>
41
(c) the resignation or removal from the office of director or
secretary of the Company and/or any of the UK Subsidiaries of
such persons as the Alpine Guarantor has identified to the
Seller and the Hepworth Guarantor in writing three Business
Days prior to Completion shall be tendered and accepted so as
to take effect at the close of the meeting and, in the case of
John Carter, delivery to the relevant company of an
acknowledgement executed as a deed in the Agreed Form stating
that he has no claim against the relevant company for breach
of any contract of employment with the relevant company,
compensation for loss of office, redundancy or unfair
dismissal or on any other account whatsoever and that no
agreement or arrangement is outstanding under which the
relevant company has or could have any obligation to him; and
(iv) procure that either the originals or copies of the resolutions
referred to above, certified as correct by the secretary of the
relevant company, and the resignations and acknowledgements referred
to above are delivered to the Purchaser or the Purchaser's
Solicitors.
3. IN RELATION TO HEPWORTH REFRACTORIES (BELGIUM) SA, REFINTER, AUXIREF AND
THE ASSOCIATED COMPANY
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, share transfer
agreements and powers of attorney signed by Pierre Halleux in order to
transfer all the issued shares in Hepworth Refractories (Belgium) SA,
Refinter and Auxiref held by him;
(B) deliver the statutory books of Hepworth Refractories (Belgium) SA,
Refinter and Auxiref, (which shall be written up to but not including the
Completion Date), including the shareholders' registers and the minute
books for meetings of the shareholders and directors, where these are not
held to the order of the Purchaser.
(C) deliver to the Purchaser or the Purchaser's Solicitors a letter from KPMG
addressed to Hepworth Refractories (Belgium) SA tendering their
resignation as auditors, subject to various conditions;
(D) procure shareholders' meetings of Refinter and Auxiref at which Stephen M.
Johnson shall be appointed director of the relevant company, such
appointment to take effect on the Completion Date; and
(E) procure that a copy of the minutes of the shareholders' meetings referred
to above are delivered to the Purchaser or the Purchaser's Solicitors.
<PAGE>
42
4. IN RELATION TO HEPWORTH REFRACTORIES DEUTSCHLAND GMBH
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, a notarial deed
purporting to transfer the one issued share in Hepworth Refractories
Deutschland GmbH held by Hepworth Nominee Limited to Hepworth Refractories
(Holdings) Limited and letters from Hepworth Nominee Limited and Hepworth
Refractories (Holdings) Limited confirming the transfer of the share; and
(B) deliver a shareholders' resolution of Hepworth Refractories Deutschland
GmbH approving the transfer of the share from Hepworth Nominee Limited to
Hepworth Refractories (Holdings) Limited.
5. IN RELATION TO HEPWORTH REFRACTORIES ITALIANA SRL
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, a notarial deed
transferring the quota of Italian Lire 200,000 (representing 1% of the
corporate capital) of Hepworth Refractories Italiana Srl held by Hepworth
Nominee Limited to Coolee Limited; and
(B) deliver to the Purchaser or the Purchaser's Solicitors, (i) originals of
all the corporate books and ledgers of Hepworth Refractories Italiana Srl
(which shall be written up to but not including the Completion Date) and
(ii) a certificate of incorporation issued by the competent Chamber of
Commerce on a date not earlier than 10 days preceding Completion where
these are not held to the order of the Purchaser.
6. IN RELATION TO LES PRODUITS SILICEUX SA, CONSTRUCTIONS THERMIQUES
EUROPEENNES SA AND S.C.I.47
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, the shareholders'
account forms in respect of all of the issued shares in Les Produits
Siliceux SA, Constructions Thermiques Europeennes SA and S.C.I.47;
(B) deliver to the Purchaser or the Purchaser's Solicitors, share transfer
forms transferring the one issued shares in Les Produits Siliceux SA and
five issued shares in Constructions Thermiques Europeennes SA held by
Bernard Niel;
(C) deliver the statutory registers (which shall be written up to but not
including the Completion Date) of Les Produits Siliceux SA, Constructions
Thermiques Europeennes SA and S.C.I.47 where these are not held to the
order of the Purchaser; and
<PAGE>
43
(D) deliver a letter of resignation from Bernard Niel from the office of
director of Les Produits Siliceux SA and of Constructions Thermiques
Europeennes SA.
7. IN RELATION TO HEPWORTH REFRACTORIES CANADA LIMITED
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, share certificates
in respect of all of the issued shares in Hepworth Refractories Canada
Limited;
(B) deliver the statutory registers (which shall be written up to but not
including the Completion Date), the certificate of incorporation (and any
certificate of incorporation on change of name) and common seal (if any)
of Hepworth Refractories Canada Limited or their equivalents where these
are not held to the order of the Purchaser.
(C) deliver to the Purchaser or the Purchaser's Solicitors a letter from the
auditors of Hepworth Refractories Canada Limited addressed to that company
tendering their resignation as auditors;
(D) deliver a letter of resignation from Ian Graham Hutchinson from the office
of director of Hepworth Refractories Canada Limited; and
(E) deliver a shareholders' resolution of Hepworth Refractories Canada Limited
that Stephen M. Johnson be appointed director of Hepworth Refractories
Canada Limited, such appointment to take effect on the Completion Date and
that the resignation of Ian Graham Hutchinson as director of Hepworth
Refractories Canada Limited be accepted.
8. IN RELATION TO HEPWORTH REFRACTORIES INC.
At Completion the Seller shall:-
(A) deliver to the Purchaser or the Purchaser's Solicitors, share certificates
in respect of all of the issued shares in Hepworth Refractories Inc.;
(B) deliver the statutory registers (which shall be written up to but not
including the Completion Date) and the certificate of incorporation (and
any certificate of incorporation on change of name) of Hepworth
Refractories Inc. or their equivalents where these are not held to the
order of the Purchaser;
(C) deliver to the Purchaser a letter from the auditors of Hepworth
Refractories Inc. addressed to that company tendering their resignation as
auditors;
(D) deliver a shareholder's resolution of Hepworth Refractories Inc. that
Stephen S. Elbaum, Bragi F. Schut and Stephen M. Johnson be appointed
directors or secretary
<PAGE>
44
of Hepworth Refractories Inc., such appointments to take effect on the
Completion Date.
<PAGE>
45
SCHEDULE 3
(The Warranties)
For the purpose of this Schedule 3, a "material adverse effect on the Group
taken as a whole" or a "material adverse change in the financial position of the
Group taken as a whole" shall be deemed to have occurred if, as a result of any
circumstances, acts or omissions, or event or series of events, relevant to the
particular Warranty in which either of the terms, or any similar term, is used,
there is a material adverse effect on, or a material adverse change in the
financial position of, either of the Principal Operating Companies, or a
material adverse effect on, or a material adverse change in the financial
position of, the Group taken as a whole.
Unless otherwise expressly provided, any circumstances, acts or omissions, or
event or series of events, will be "material in the context of the Group taken
as a whole" or "material in relation to the Group Businesses taken as a whole"
in relation to the particular Warranty in which either of the terms, or any
similar term, is used, where such circumstances, acts or omissions, or events or
series of events are material to any one of the Principal Operating Companies,
or are material to the Group taken as a whole.
"Principal Operating Companies" shall mean Hepworth Refractories Limited and
Hepworth Refractories (Belgium) SA.
1. OWNERSHIP OF THE SHARES
(A) The Seller is the sole legal and beneficial owner of the Shares.
(B) There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting the
Shares or any of them and there is no agreement or commitment entered into
by any member of the Seller's Group to give or create any of the
foregoing.
2. CAPACITY OF THE SELLER AND THE HEPWORTH GUARANTOR
(A) Each of the Seller and the Hepworth Guarantor has the requisite power and
authority to enter into and perform this Agreement and the other documents
which are to be executed by the Seller and/or the Hepworth Guarantor (as
the case may be) at Completion (the "Seller's Completion Documents").
(B) This Agreement constitutes and the Seller's Completion Documents will,
when executed by the Seller and/or the Hepworth Guarantor (as the case may
be), constitute binding obligations of the Seller and/or the Hepworth
Guarantor (as the case may be) in accordance with their respective terms.
(C) The execution and delivery of, and the performance by each of the Seller
and the Hepworth Guarantor of its respective obligations under, this
Agreement and the Seller's Completion Documents will not:-
<PAGE>
46
(i) result in a breach of any provision of the memorandum or articles of
association of the Seller or the Hepworth Guarantor (as the case may
be);
(ii) result in a breach of, or constitute a default under, any instrument
to which the Seller or the Hepworth Guarantor (as the case may be)
is a party or by which the Seller or the Hepworth Guarantor (as the
case may be) is bound; or
(iii) result in a breach of any existing order, judgment or decree of any
court or governmental agency to which the Seller or the Hepworth
Guarantor (as the case may be) is a party or by which the Seller or
the Hepworth Guarantor (as the case may be) is bound.
3. ARRANGEMENTS BETWEEN THE COMPANY AND THE SELLER
(A) No arrangement or contract other than on arm's length terms is outstanding
between any member of the Group and any member of the Seller's Group or
any person who is a director of or connected with any such member of the
Seller's Group.
(B) Since the Accounts Date, there has been no transfer of any interest in
real property between any member of the Group and any member of the
Seller's Group or any person who is a director of or connected with any
such member of the Seller's Group.
4. GROUP STRUCTURE, ETC.
(A) The Shares comprise the whole of the issued and allotted share capital of
the Company and all of them are fully paid up and there are no
restrictions of any kind on the voting or transfer of any of the shares.
(B) There is no agreement or commitment outstanding entered into by any member
of the Group which calls for the allotment, issue or transfer of, or
accords to any person the right to call for the allotment or issue of, any
shares (including the Shares) or debentures in or securities of any member
of the Group.
(C) The information given in Schedule 5 and Parts A and B of Schedule 6 is
true and accurate.
(D) Either the Company or another member of the Group is the sole legal and
beneficial owner of the entire issued share capital of each of the
Subsidiaries free and clear of all pledges, securities, liens (other than
liens arising by operation of law in the ordinary course of trading),
charges, encumbrances, equities, claims, restrictions, options or
limitations affecting the Company's ability to vote or transfer such
shares.
(E) Hepworth Refractories (Belgium) SA is the sole legal and beneficial owner
of the Associated Company Shares and there is no option, right to acquire,
mortgage, charge, pledge, lien or other form of security or encumbrance
on, over or affecting
<PAGE>
47
any of the Associated Company Shares and there is no agreement or
commitment to give or create any of the foregoing.
(F) No member of the Group has any interest in the share capital of or other
equity interest in any company other than the Subsidiaries or the
Associated Company.
(G) No member of the Group acts nor carries on business in partnership with
any other person or is a member (otherwise than through the holding of
share capital) of any corporate or unincorporated body, undertaking or
association (other than a trade association) or holds or is liable on any
share or security which is not fully paid up or which carries any
liability.
(H) No member of the Group trades under a name other than its corporate name
(excluding trademarks registered or applied for in its corporate name
details of which are contained in Attachment G).
(I) The Data Room contains all agreements outstanding between all or any of
the shareholders of the Associated Company to which any member of the
Group is a party and, so far as the Seller is aware, no party to any such
agreement has received notice of any kind from any other party to such
agreement of any intention to terminate any such agreement.
5. OWNERSHIP OF ASSETS
(A) Each of the Material Assets included in the Accounting Pack or acquired by
any member of the Group since the Accounts Date (other than current assets
sold, realised or applied in the normal course of business) is owned both
legally and beneficially by a member of the Group and each of those assets
capable of possession is in the possession of a member of the Group.
(B) No option, right to acquire, mortgage, charge, pledge, lien (other
than a lien arising by operation of law in the ordinary course of
business) or other form of security or encumbrance or equity (an
"Encumbrance") on, over or affecting the whole or any part of the
Material Assets of any member of the Group is outstanding (other
than any asset acquired in the ordinary course of business on terms
that the property does not pass until payment is made) and there is
no agreement or commitment entered into by any member of the Group
to give or create any and no claim has been made against any member
of the Group by any person to be entitled to any such Encumbrance.
(C) The Seller has been informed by Mr. J. Casey, the Group's production
director, that he is not actually aware of any material item of plant or
machinery owned by the Group which (on the assumption that currently
planned maintenance and repair takes place) is either not reasonably
useable for the purpose for which it is currently used as at the date of
this
<PAGE>
48
Agreement or which is likely not to be reasonably useable for the purpose
for which it is currently used within 2 months after the date of this
Agreement other than in any such case as a result of current, planned or
anticipated maintenance or repair or as a result of normal wear and tear
bearing in mind the age of such plant or machinery.
For this purpose, there is no requirement for Mr. J. Casey to have made
any enquiries and an item is only material if its replacement value is in
excess of (pound)200,000 and the Group neither owns a reasonably useable
replacement nor has a means of avoiding the adverse effects of the loss of
use of such item without direct expenditure (excluding loss of profit) in
excess of (pound)100,000.
(D) The plant registers of each member of the Group (other than any dormant
Subsidiary) comprise a record of the plant, machinery, equipment and
vehicles owned by that member of the Group which is, in all material
respects, complete and accurate.
6. ACCURACY OF INFORMATION
(A) All statutory books, books of accounts, registers and minute books
required to be kept by the law of the relevant jurisdiction of each member
of the Group are up-to-date and have in all material respects been
properly kept in accordance with all applicable law and contain a record
of the matters which should be dealt with in those books and no notice or
allegation that any of them is materially incorrect or should be rectified
has been received by any member of the Group.
(B) The copy of the memorandum and articles of association or other like
constitutional documents of each member of the Group contained in the Data
Room is a complete and accurate and up to date copy in all material
respects.
(C) All returns and other documents relating to each member of the Group
required to be delivered to the Registrar of Companies or any equivalent
body under the law of the relevant jurisdiction of each member of the
Group have been properly made and delivered.
(D) The information provided to the Purchaser in the Data Room was provided by
the Seller in good faith.
(E) The information provided by the Seller for the purpose of preparing each
of the KPMG Report, the Fugro Report and the Chesterton Report was
provided by the Seller in good faith.
7. ACCOUNTS
The Accounting Pack:-
(i) was prepared in accordance with accounting principles and practices
generally accepted in the United Kingdom as at the Accounts Date;
and
<PAGE>
49
(ii) gives a true and fair view of the state of affairs of the Group at
such date.
8. EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:-
(i) there has been no material adverse change in the financial position
of the Group taken as a whole;
(ii) the Group Businesses have in all material respects been carried on
in the ordinary course;
(iii) no Material Asset of any member of the Group has been acquired or
disposed of or has been agreed to be acquired or disposed of;
(iv) no resolution of any member of the Group in general meeting has been
passed other than resolutions relating to the routine business of
annual general meetings;
(v) no member of the Group has declared, authorised, made or paid to its
members any dividend or other similar distribution;
(vi) no member of the Group has allotted or issued or agreed to issue or
granted an option or other right to acquire any share capital; and
(vii) no member of the Group has redeemed or purchased or offered or
agreed to redeem or purchase any of its share capital.
9. CONTRACTS AND COMMITMENTS
(A) The Data Room contains each outstanding contract or arrangement entered
into by any member of the Group which:
(i) is a Material Contract; or
(ii) restricts it from carrying on the business of that member of the
Group in any part of the world; or
(iii) is a joint venture agreement or arrangement, consortium, partnership
or profit (or loss) sharing agreement under which it is to
participate with any other person in any business; or
(iv) is an agency, distributorship or marketing contract or arrangement,
which is material in the context of the Group taken as a whole; or
<PAGE>
50
(v) is a contract or arrangement which has an unexpired term of three or
more years and which is material in relation to the Group Businesses
taken as a whole; or
(vi) can be terminated by any other party thereto in the event of a
change of control of that member of the Group and which is material
in relation to the Group Businesses taken as a whole; or
(vii) makes it liable to make any investment in securities or make any
loan (other than trade credit) to any person.
(B) No member of the Group is in material breach of any Material Contract and,
so far as the Seller is aware, no other party to any Material Contract is
in material breach of any such Material Contract and, so far as the Seller
is aware, there are no circumstances likely to give rise to any such
breach by any member of the Group or any other party. For the purposes of
this warranty, a "material breach" shall be a breach which, in the
ordinary course of business of the Group Businesses as they have been
conducted during the 12 months prior to the date of this Agreement, is
reasonably likely to result in termination of the Material Contract or in
litigation leading to the award and payment of damages to the party which
is not in default.
(C) So far as the Seller is aware, no member of the Group is in material
breach of any obligation of confidentiality imposed on it by any third
party. For the purposes of this warranty, a "material breach" shall be a
breach which, in the ordinary course of business of the Group Businesses
as they have been conducted during the 12 months prior to the date of the
Agreement, is reasonably likely to result in termination of any material
arrangements made pursuant to, or in connection with, the relevant member
of the Group accepting such an obligation of confidentiality or is
reasonably likely to result in litigation leading to the award of damages
to the party which is not in default.
(D) The Data Room contains details as at close of business on 14th April, 1997
of all currency and/or interest rate swap agreements, asset swap, future
rate or forward rate agreements, interest cap, collar and/or floor
agreements or other exchange or rate protection transactions or
combinations thereof or any options with respect to any such transfers or
any other similar transaction, in each case to which a member of the Group
and a member of the Seller's Group are party.
10. BANK ACCOUNTS AND BORROWINGS
(A) The Data Room contains the terms of each material overdraft, loan and
other similar financial facility currently available to each member of the
Group other than from a member of the Seller's Group.
(B) The total amount borrowed by each member of the Group does not exceed any
limitation in its financial facilities or articles of association.
<PAGE>
51
(C) So far as the Seller is aware, no member of the Group has received any
notice to repay under any agreement relating to any borrowing or
indebtedness in the nature of borrowing which is repayable on demand.
11. POWERS OF ATTORNEY
No member of the Group has given any power of attorney, proxy or similar
authority in relation to the Group Businesses (other than such given to an
officer of a member of the Group or to a patent or trademark agent, in
each case in the ordinary course of the business of that member of the
Group) which is outstanding as at the date of this Agreement.
12. GRANTS AND ALLOWANCES
No member of the Group has received or applied for any grant, allowance,
aid or subsidy, in each case in excess of (pound)100,000, in relation to
the Group Businesses from any supranational, national or local authority
or government agency which would be repayable as a result of the sale of
the Shares to the Purchaser.
13. SUBSTANTIAL DEPENDENCE
The details of the top ten customers of Hepworth Refractories Limited for
the years ending 31st December, 1993, 1994, 1995 and 1996 provided at
document 4.1 in the Data Room are materially complete and accurate.
14. INSOLVENCY
(A) No order has been made, and no resolution has been passed for, and no
meeting has been convened for the purpose of, the winding up of the
Company or any UK Subsidiary or for a provisional liquidator to be
appointed in respect of the Company or any UK Subsidiary and, so far as
the Seller is aware, no petition has been presented for the purpose of
winding up the Company or any UK Subsidiary.
(B) No administration order has been made and, so far as the Seller is aware,
no petition for such an order has been presented in respect of the Company
or any UK Subsidiary.
(C) No receiver (which expression shall include an administrative receiver)
has been appointed in respect of the Company or any UK Subsidiary or all
or any of its assets.
(D) No event analogous to any of the foregoing has occurred in respect of any
Overseas Subsidiary PROVIDED THAT this Warranty 14(D) is subject to
Seller's awareness where the relevant event is analogous to an event
referred to in Warranties 14(A) and 14(B) to the extent that they are
given subject to the Seller's awareness.
<PAGE>
52
15. LITIGATION
(A) No member of the Group is engaged in any litigation or arbitration,
administrative or criminal proceedings, whether as plaintiff, defendant or
otherwise, in relation to which a claim of (pound)50,000 or above has been
made against, or by, any member of the Group.
(B) So far as the Seller is aware, no such litigation or arbitration,
administrative or criminal proceedings as are referred to in sub-paragraph
(A) (but substituting a sum of (pound)100,000 for the sum of (pound)50,000
referred to therein) are pending or threatened.
16. DELINQUENT AND WRONGFUL ACTS
(A) No member of the Group has committed any criminal or illegal act which
would have a material adverse effect on the Group taken as a whole.
(B) So far as the Seller is aware, no member of the Group has received
notification that any investigation or inquiry is being or has been
conducted by any supranational, national or local authority or
governmental agency in respect of the business or affairs of any member of
the Group.
(C) Each member of the Group has conducted its business materially in
accordance with its Memorandum and Articles of Association (or the
equivalent in the relevant jurisdiction other than the UK) and in all
material respects with all applicable law and regulations.
(D) Each member of the Group has obtained all licences, permissions,
authorisations and consents which are material to the business of the
Group taken as a whole (the "Material Permits") and, so far as the Seller
is aware, no notice of withdrawal of any of such Material Permits has been
received by any member of the Group and no material breach of such
Material Permits is outstanding..
(E) The Data Room contains details, on a monthly basis, of all claims notified
to the Group in writing which were outstanding as at the specified date in
each month (commencing with January 1996 and ending with March 1997) in
relation to faulty, defective or dangerous products or products not
meeting relevant specifications, in each case which had been manufactured,
sold or supplied by any member of the Group.
17. PROPERTY
(A) The Properties referred to in Schedule 8 are the only Properties owned,
used or occupied by any member of the Group or in respect of which any
member of the Group has any estate, interest, right or actual or
contingent liability.
<PAGE>
53
(B) So far as the Seller is aware, each written reply of the Seller's
Solicitors to written enquiries relating to the Properties referred to in
Schedule 8 made by the Purchaser's Solicitors is true and accurate in all
material respects and is not misleading in a material way.
(C) A member of the Group is in possession of the whole of each of the
Properties and no other person is in or, so far as the Seller is aware, is
entitled to occupation of any of the Properties.
(D) The relevant member of the Group shown in Schedule 8 as the owner of each
Property is the sole legal and beneficial owner thereof, and all
materially relevant deeds and documents are in its possession or under its
control.
(E) So far as the Seller is aware, no member of the Group is for any reason
anticipating the expenditure of any material sum of money in respect of
any of the Properties.
(F) Within the last seven years, no member of the Group has received any
materially adverse surveyors', engineers' or other professional report in
respect of any of the Properties.
(G) The details of the Properties referred to in Schedule 8 are true and
accurate and not misleading.
(H) So far as the Seller is aware, there are no material current, contingent
or anticipated notices, actions, disputes, complaints, liabilities, claims
or demands relating to or in respect of the Properties or their uses.
(I) Neither the Seller nor any member of the Group has received notice that
the Properties and all uses of and developments on the Properties do not
comply with all town and country planning legislation and any orders,
regulations, consents or permissions made or granted under any of the
same.
(J) No planning permission in respect of any of the Properties is for a
limited period or personal, and so far as the Seller is aware, there are
no onerous planning conditions.
(K) During the ten year period preceding the date of this Agreement, a member
of the Group has enjoyed uninterrupted access to and use of the Properties
numbered 1, 2, 5, 6, 7, 8, 13, 19, 20 and 23 in Schedule 8 for the
purposes for which they are currently used.
(L) In relation to the Properties or any properties formerly occupied by any
member of the Group (or in relation to which minerals were excavated) all
restoration and aftercare obligations and obligations under planning
permissions or planning agreements, highway agreements and other statutory
agreements have been discharged in all material respects.
<PAGE>
54
(M) There are no financial bonds relating to any planning permission which
have not been discharged. In relation to the Properties, there are no
planning agreements or conditions which require the monitoring of
environmental conditions.
(N) Neither the Seller nor any member of the Group has received any
written notices relating to ground pollution, water pollution,
subsidence, gas leakage, air emission or flooding in respect of any
of the Properties or in respect of any properties formerly mined by
the Company (including completed landfill sites) or in respect of
which the Company formerly had an interest (excluding any such
notices which have been resolved without any prospect of further
liability).
(O) In respect of the Properties and any properties mined by the Company in
the past, no royalties for minerals extractions are payable and no
royalties are outstanding.
(P) Neither the Vendor nor any member of the Group has at any time in the past
twenty five years carried out any landfill operations at Old Ewloe Works,
Buckley, nor at Ewloe Barns Works, Buckley.
18. INTELLECTUAL PROPERTY
(A) Details of all registered Intellectual Property, and applications for
registration, owned by any member of the Group are set out in Attachment G
(the "Registered Intellectual Property"). The relevant member of the Group
is the sole legal owner of such registered Intellectual Property.
(B) Details of all licences, agreements and arrangements:-
(i) granted by any member of the Seller's Group or any third party to
any member of the Group in respect of any Intellectual Property
material to the on-going operations of the Group Businesses; or
(ii) granted by any member of the Group to any member of the Seller's
Group or any third party in respect of any Intellectual Property
material to the on-going operations of the Group Businesses,
in each case, as carried on at the date of this Agreement, are set
out in Attachment D (the "Licences").
(C) All renewal fees and steps required for the maintenance or protection of
the Registered Intellectual Property have been paid or taken and none of
such rights are subject to any challenge or attack by a third party or
competent authority of which the Seller has been notified.
(D) No member of the Group nor any other party is, so far as the Seller is
aware, in material breach of any of the Licences .
<PAGE>
55
(E) So far as the Seller is aware, the processes and methods employed, the
services provided, the businesses conducted and the products manufactured,
used or dealt in by any member of the Group, in each case in relation to
the Group Businesses as carried on at the date of this Agreement, do not
infringe the rights of any other person in any Intellectual Property and
the Seller has not received any notification of any such infringement.
(F) So far as the Seller is aware, there is no current unauthorised use or
infringement by any person of any registered Intellectual Property.
(G) So far as the Seller is aware, none of the Registered Intellectual
Property is subject to any charge, lien or other security interest.
(H) No member of the Group has received notification of any liability on its
behalf to pay any compensation, or notification of any request for
compensation under Section 40 of the Patents Act 1977 or any analogous
rights anywhere in the world.
(I) No member of the Group has received notification from the Comptroller
General of Patents, Designs and Trade Marks that he may exercise his
discretion to grant a compulsory licence in relation to any patents
currently owned and used by such member of the Group.
(J) So far as the Seller is aware, to the extent that any information
of a confidential nature owned by any member of the Group has been
used by any member of the Group in the two year period prior to the
date hereof such information (except in so far as it has fallen into
the public domain through no fault of such member of the Group) has
not been disclosed to any third party by such member of the Group
otherwise than subject to an obligation of confidentiality being
imposed on the person to whom the information was disclosed, where
such disclosure would be in breach of a duty of confidence owed to a
third party or where such disclosure would have a material effect on
the ongoing operations of the Group Businesses.
19. COMPETITION AND TRADE REGULATION LAW
(A) So far as the Seller is aware, no member of the Group is or has been a
party to any agreement material in relation to the business of the Group
taken as a whole which:-
(i) has been registered under the RTPA 1976; or
(ii) contravenes the provisions of the Resale Prices Act 1976; or
(iii) infringes Article 85 or 86 of the Treaty establishing the European
Union; or
(iv) so far as the Seller is aware, contravenes or infringes any
equivalent legislation to the provisions referred to in sub-clauses
(A)(i), (ii) and (iii) embodied in the domestic anti-trust or
similar legislation of Germany (in the
<PAGE>
56
case of Hepworth Refractories Deutschland GmbH), Belgium (in the
case of Hepworth Refractories (Belgium) SA, Refinter and Auxiref),
Italy (in the case of Hepworth Refractories Italiana SRL), France
(in the case of Les Produits Siliceux SA, Constructions Thermiques
Europeennes SA and S.C.I.47), the United States (in the case of
Hepworth Refractories Inc.), and Canada (in the case of Hepworth
Refractories Canada Limited).
(B) No member of the Group is a party to any agreement material in relation to
the Group Businesses as a whole in respect of which any undertaking has
been given by or any order made against any member of the Group pursuant
to the RTPA 1976 or in respect of which an undertaking has been given by
or an order made against any member of the Group pursuant to the Resale
Prices Act 1976.
(C) No member of the Group has given any assurance or undertaking to, nor is
it subject to any specific order, decision or ruling of:-
(i) the Office of Fair Trading, the Monopolies and Mergers Commission,
the Secretary of State or any equivalent authority in Germany,
Belgium, Italy, France, the United States of America or Canada under
competition legislation of the relevant country; or
(ii) the Commission of the European Union under EU competition
legislation,
in relation to the Group Businesses where such assurance, undertaking,
order, decision or ruling is likely to cause a material loss or liability
to the Group taken as a whole.
(D) No member of the Group is or has been a party to or is or has been
concerned in any agreement or arrangement relating to the Group Businesses
in respect of which an application for negative clearance and/or exemption
has been made to the Commission of the European Union.
20. INSURANCE
Details of the current insurance policies in respect of which any member
of the Group has an interest are set out in the Data Room and, so far as
the Seller was aware on 11th April, 1997, no individual or related claims
for amounts in excess of (pound)100,000 are outstanding thereunder.
21. EMPLOYMENT
(A) A list of the names, jobs and short details of the terms of employment
(including the emoluments) of every Employee as at 5th April is set out in
the Data Room, together with copies of all standard form contracts and
terms and conditions of employment of general application.
<PAGE>
57
(B) A list of the names, jobs and details of the terms of employment
(including the emoluments) of, and a copy of the Employment contract for,
each Senior Employee are set out in the Disclosure Letter.
(C) Short details of any material benefit received by any Employee otherwise
than in cash, and of any benefit received by any Employee in cash which is
related in whole or in part to sales, profits, turnover or performance, or
which is otherwise variable (other than normal overtime), are set out in
the Disclosure Letter.
(D) Any contract of employment with any Employee to which any member of the
Group is a party can be terminated by the employing company without
damages or compensation (other than that payable under statute) by giving
at any time six months' notice in writing to that Employee.
(E) As at 14th April, 1997, no Senior Employee has given notice terminating
his contract of employment or is under notice of dismissal and no amount
due to or in respect of any such Senior Employee, director or Employee or
former Senior Employee is in arrears and unpaid other than his salary for
the month current at the date of this Agreement.
(F) Since the Accounts Date, no material change has been made in the
emoluments or other terms of employment of any Senior Employee save for
increases in emoluments made in accordance with the normal practice of the
Seller's Group not exceeding an overall increase of 5% to payroll costs.
(G) So far as the Seller is aware, no member of the Group has outstanding any
material undischarged liability to pay to any governmental or regulatory
authority in any jurisdiction any contribution, Taxation or other impost
arising in connection with the employment or engagement in that
jurisdiction of personnel by any member of the Group.
(H) No member of the Group has entered into any arrangement regarding any
future material variation in any contract of employment in respect of any
of its Employees or any agreement imposing an obligation on any member of
the Seller's Group to increase the basis and/or rates of remuneration
and/or the provision of other benefits in kind to or on behalf of any of
its Employees at any future date which could have the effect of increasing
payroll costs by 5% or more.
(I) Each member of the Group has in relation to each of its Employees (and,
insofar as relevant, to each of its prospective, future or former
employees) complied in all material respects with all legislation and
statutory regulations relevant to their conditions of service or to the
relations between it and its employees or any recognised trade union and
no member of the Group has received notice that it has not complied with
the terms of the contracts of employment of any of its Employees (or
former employees).
<PAGE>
58
(J) The number of persons who have been offered employment with any member of
the Group which offer remains outstanding and who are employed (or were
previously employed) by any member of the Group who are on secondment,
maternity leave, absence on grounds of disability or other leave of
absence and have, or may have, a statutory or contractual right to return
to work for any member of the Seller's Group shall not exceed 10% of the
number of Employees whose names are listed in accordance with Clause
21(A).
(K) There is no provision in any contract of employment or other arrangement,
in either case involving a member of the Group, giving a right or an
increased right to any Senior Employee which may arise on the acquisition
of the Shares by the Purchaser under this Agreement or which is contingent
on a change of control or ownership of any member of the Group.
(L) No member of the Group has established or informed its employees that it
intends to introduce any share incentive scheme, share option scheme,
profit related pay scheme or profit sharing bonus or other incentive
scheme for all or any of its employees save those disclosed in the
Disclosure Letter and the Data Room.
(M) No payment (gratuitous or otherwise) has been made or promised to be made
by any member of the Group in connection with the actual or proposed
termination or suspension of employment or variation of any contract of
employment of any present or former Employee employed to work in the UK
except in accordance with their contracts of employment, relevant
legislation and the collective agreements which have been disclosed.
(N) No member of the Group has:
(a) within the period of one year preceding the date of this Agreement,
given notice of any dismissals or redundancies to the relevant
Secretary of State or started consultations with any independent
trade union under the provisions of Part IV of the Trade Union and
Labour Relations (Consolidation) Act 1992 or Part IV of the
Employment Protection Act 1975 or failed to comply with any such
obligation under that legislation; or
(b) within the period of 6 months preceding the date of this Agreement,
been a party to any "relevant transfer" (as defined in the Transfer
of Undertakings (Protection of Employment) Regulations 1981) or
agreement for a relevant transfer or failed to comply with any duty
to inform and consult any independent trade union under the said
Regulations.
(O) No member of the Group has an agreement or other arrangement (binding or
otherwise) with any trade union or other body representing its employees
in the UK or any of them and does not recognise to any extent any trade
union or other body representing its employees in the UK or any of them
for the purpose of collective bargaining or other negotiating purposes.
<PAGE>
59
(P) No member of the Group is involved (or has been so involved at any time
during the last year in any industrial or trade disputes in the UK which
caused stoppages of one day or more, and no member of the Seller's Group
is aware of any such dispute that may be pending or threatened, or of any
present circumstances which may give rise to any such dispute.
22. ENVIRONMENTAL
(A) (i) Each member of the Group has all Environmental Permits required
to enable it to conduct its business lawfully under the terms of the
Environmental Laws.
(ii) Each such Environmental Permit is in full force and effect.
(iii) No proceeding or other action of whatever nature is pending or is
threatened or, so far as the Seller is aware, is under consideration
seeking the suspension, revocation, variation, limitation of or
otherwise relating to any Environmental Permit or seeking to impose
any penalty under any Environmental Permit or Environmental Laws.
This warranty does not apply to the Properties at Bawtry or Loxley
in so far as it relates to matters other than suspension or
revocation.
(iv) There are no facts or circumstances which will or are likely to
result in any Environmental Permit being suspended, revoked or, so
far as the Seller is aware, varied or limited prior to renewal or
expiry. This warranty does not apply to the Properties at Bawtry or
Loxley in so far as it relates to matters other than suspension or
revocation and only applies to variation or limitation where the
seller is aware both (a) of the relevant facts or circumstances; and
(b) that such facts or circumstances are likely to lead to a
variation or limitation prior to renewal or expiry.
(v) No appeals are pending or being contemplated in respect of the
refusal of or conditions contained in any Environmental Permit or
any action taken in respect of any Environmental Permit. This
warranty does not apply to the Properties at Bawtry and Loxley.
(B) (i) So far as the Seller is aware, each member of the Group is and
always has been in full compliance with the Environmental Permits
and Environmental Laws in all material respects and the use of all
the Properties and the machinery and other property employed in the
conduct of the Group Business has been and is in accordance with the
Environmental Permits and Environmental Laws in all material
respects.
(ii) No notice, notification, demand, request for information, summons,
complaint or order has been issued, no complaint has been made, no
penalty has been assessed and, so far as the Seller is aware, no
investigation or review is
<PAGE>
60
pending or is threatened, by any public authority having
responsibility for Environmental Matters or by any other person with
respect to:
(a) any alleged violation by each member of the Group of any
Environmental Law including the failure by each member of the
Group to report to the proper governmental entity the
occurrence of any event which is required to be so reported by
any Environmental Law; or
(b) any alleged failure by each member of the Group to have or to
operate in compliance with any Environmental Permit; or
(c) any Environmental Matter relating to the acts or omissions of
each member of the Group (or of those other persons for whom
it is liable) or any of the Properties.
This warranty 22(B)(ii) does not apply to the renewal of
Environmental Permits or to matters relating to routine compliance
with Environmental Laws or routine monitoring under Environmental
Laws or in relation to any matter which does not constitute or
relate to an actual or potential breach of Environmental Laws.
(C) None of the warranties in this Warranty 22 apply to Relevant Environmental
Matters as defined in the Environmental Deed.
23. TAX RETURNS, DISPUTES, RECORDS AND CLAIMS ETC.
(A) Each member of the Group has made or caused to be made within any
appropriate time limits all proper returns required to be made, and has
supplied or caused to be supplied all information required to be supplied,
to any Tax Authority and all such information was and so far as the Seller
is aware remains complete and accurate in all material respects and all
such returns were and so far as the Seller is aware remain complete and
accurate in all material respects and were made on the proper basis and do
not, and so far as the Seller is aware are not likely to, reveal any
transactions which may be the subject of any dispute with any Tax
Authority.
(B) So far as the Seller is aware, there is no material dispute or
disagreement outstanding at the date of this Agreement with any Tax
Authority regarding liability or potential liability to any Tax (including
in each case penalties or interest) recoverable from any member of the
Group or regarding the availability of any relief from Tax to any member
of the Group. So far as the Seller is aware in relation to each member of
the Group there is no planned investigation or non-routine visit by any
Tax Authority and there are no facts which might cause an investigation or
non-routine visit to be instituted.
<PAGE>
61
24. ACCOUNTS AND TAX
No member of the Group has any liability in respect of Tax assessable or
payable by reference to profits, gains, income or distributions earned,
received or paid or arising or deemed to arise on or at any time prior to
the Accounts Date or in respect of any period starting before the Accounts
Date (whether actual or contingent) that is not fully provided for in the
Accounting Pack.
25. TAX EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:-
(i) no member of the Group has declared, made or paid any distribution
within the meaning of ICTA 1988;
(ii) no accounting period of any member of the Group has ended;
26. RESIDENCE
The country which is given in Schedule 5 or Part A of Schedule 6 as the
Tax residence of each member of the Group is and has within the last 6
years been the only country whose Tax Authorities seek to charge Tax on
the world-wide profits or gains (or any part of those profits or gains) of
that member of the Group.
27. GROUP ARRANGEMENTS
So far as the Seller is aware, there are no circumstances by virtue of
which section 410 or 413 of ICTA 1988 would prevent each member of the
Group resident in the United Kingdom being treated as a member of the same
group of companies as each other such member so resident within Chapter IV
Part X of ICTA 1988 for any accounting period commencing on or before the
date of this Agreement.
28. CLOSE COMPANY
No UK Subsidiary is, was or has been a close company as defined in ICTA
1988 in the last six years.
29. No relief has been claimed by and/or given to any member of the Group, or
taken into account in computing or eliminating any provision for Tax or
deferred Tax in the Accounting Pack, which could or might be effectively
withdrawn, postponed, restricted or otherwise lost by virtue of this
Agreement or any other event or circumstance occurring or arising at any
time after the Accounts Date.
30. There has been no change in the ownership of any member of the Group nor
any major change in the nature or conduct of any trade or business carried
on by any member of the Group nor has any other event or series of events
occurred before
<PAGE>
62
Completion which might cause the disallowance of the carry forward or back
of losses or excess charges, set-off or surrender of advance corporation
tax under the provisions of section 768 or 768A of the Taxes Act or
sections 245 to 245B of that Act or which might cause a trade to be
disregarded by virtue of paragraph 8 of Schedule 7A to the Taxation of
Chargeable Gains Act 1992.
31. SINCE THE ACCOUNTS DATE:
(a) no member of the Group has been involved in any transaction
which has given or may give rise to a liability to Tax on any
member of the Group (or would have given or might give rise to
such a liability but for the availability of any relief) other
than Tax in respect of normal trading income or receipts of
the member of the Group concerned arising from transactions
entered into by it in the ordinary course of business; and
(b) no material disposal has taken place or other event occurred
outside the ordinary course of business which has or may have
the effect of crystallising a liability to Tax which, if such
disposal or event had been planned or predicted at the
Accounts Date, should have been reflected in the provision for
deferred Tax contained in the Accounting Pack.
32. Within the past six years, no member of the Group nor any director or
officer of any member of the Group (in his capacity as such) has paid or
become liable to pay, and so far as the Seller is aware there are no
circumstances by reason of which it or they may become liable to pay to
any Tax Authority, any penalty, fine, surcharge or interest in respect of
Tax (including in respect of any failure to make any return, give any
notice or supply any information to any relevant Tax Authority, or any
failure to pay Tax on the due date for payment).
33. No transaction in respect of which any consent or clearance was required
by law or sought from any Tax Authority has been entered into or carried
out by any member of the Group without such consent or clearance having
first been properly obtained and all information supplied to any Tax
Authority or other appropriate authority in connection with any such
consent or clearance fully and accurately disclosed all facts and
circumstances material to the giving of such consent or clearance. Any
transaction for which such consent or clearance was obtained has been
carried out only in accordance with the terms of such consent or clearance
and the application on which the consent or clearance was based and at a
time when such consent or clearance was valid and effective. So far as the
Seller is aware, no facts or circumstances have arisen since any such
consent or clearance was obtained which would cause the consent or
clearance to become invalid or ineffective.
34. No Tax Authority has operated or agreed to operate any special arrangement
(being an arrangement which is not based on relevant legislation or any
published practice) in relation to the Tax affairs of any member of the
Group.
<PAGE>
63
35. No member of the Group is liable for any Tax as the agent of any other
person or business or constitutes a permanent establishment of any other
person, business or enterprise for any Tax purpose.
36. All amounts payable to any Tax Authority in respect of any employee
(including any Tax deductible from any amounts paid to an employee, and
any national insurance, social fund or similar contributions required to
be made in respect of employees) due and payable by any member of the
Group up to the date hereof have been duly paid and each member of the
Group has made all such deductions and retentions as should have been made
under applicable laws or regulations.
37. If each member of the Group disposed of each of its assets (except trading
stock and work-in-progress) for a consideration equal to the book value of
that asset as shown in or adopted for the purposes of the Accounting Pack
to a person not connected with it and by way of bargain at arm's length,
no liability to Tax would arise by reference to any actual or deemed gain
and no member of the Group has acquired any such asset (otherwise than
from another member of the Group) except by way of bargain at arm's
length.
38. Details of all material transactions whereby the value of the shares of
any of the Subsidiaries has been materially reduced by virtue of a
depreciatory or value shifting transaction of which the Seller is aware
have been disclosed to the Purchaser.
39. If each member of the Group disposed of each of its assets, or of any pool
of assets (that is to say all those assets expenditure relating to which
would be taken into account in computing whether a balancing charge or
corresponding Tax would arise on a disposal of any of those assets) for a
consideration equal to their book value as shown in or adopted for the
purpose of the Accounting Pack, no balancing charge (or corresponding Tax
of any relevant foreign jurisdiction) would arise in respect of any such
asset or pool of assets under any legislation relating to capital
allowances (or corresponding legislation of the relevant foreign
jurisdiction).
40. All material transactions in the last 6 years between members of the
Group, or between any member of the Group and any current or past member
of the Seller's Group have been and are on arm's length terms. There are
no circumstances which could cause any Tax Authority to make any
adjustment for Tax purposes to the terms on which any such transaction is
treated as taking place, and no such adjustment has been made or attempted
in fact.
41. No Tax Authority has denied relief for interest paid by any member of the
Group.
42. For the purposes of this warranty the expression "VAT" means value added
tax or any similar sales or turnover tax of any relevant jurisdiction, and
"VAT legislation" means any relevant enactments in relation to VAT and all
notices, provisions and conditions made or issued thereunder including the
terms of any agreement reached with any relevant Tax Authority, and any
concession referred to in the Disclosure Letter.
<PAGE>
64
In relation to each member of the Group:
(a) it is registered for the purposes of VAT, has been so registered at
all times that it has been required to be registered by VAT
legislation, and such registration is not subject to any conditions
imposed by or agreed with the relevant Tax Authority;
(b) it has complied fully with and observed in all material respects the
terms of VAT legislation;
(c) it has maintained and obtained at all times complete, correct and
up-to-date records, invoices and other documents (as the case may
be) appropriate or requisite for the purposes of VAT legislation and
has preserved such records, invoices and other documents in such
form and for such periods as are required by VAT legislation;
(d) it only obtains credit for input tax paid in connection with taxable
supplies;
(e) it is not and has not been treated as a member of a group for the
purposes of VAT legislation, and has not applied for such treatment;
and
(f) it is not and has not been subject under VAT legislation to any
penalty, fine or surcharge, or any warning or notice which could
(whether with or without other events) lead to the imposition of any
penalty, fine or surcharge, and has not been required to give any
security as a condition of making supplies for the purposes of VAT.
43. Since the Accounts Date all VAT, import duty and other taxes or charges
payable upon the importation of goods or services and all excise duties
payable in respect of any assets (including trading stock) imported or
owned by any member of the Group have been paid in full.
44. All documents in the possession or under the control of each member of the
Group or to the production of which any member of the Group is entitled
which establish or are necessary to establish the title of any member of
the Group to any asset have been duly stamped and any applicable stamp
duties or similar duties or charges in respect of such documents have been
duly accounted for and paid.
45. All capital duties, fees and penalties payable in respect of the share
capital of each member of the Group (including any premium over nominal
value at which any share was issued) have been duly accounted for and
paid, and there are no circumstances under which any relief obtained
against payment of any such amount could be withdrawn.
46. The details as set out in the document listed at 15A48 in the Data Room
Index are correct insofar as they relate to the acquisition cost and the
date of acquisition of
<PAGE>
65
Hepworth Refractories (Belgium) SA and Les Produits Siliceux SA, subject
to the reorganisation of the French companies which took place in 1994,
details of which are disclosed in the Data Room.
<PAGE>
66
SCHEDULE 4
(Limitations on Liability)
1. LIMITATION ON QUANTUM AND GENERAL
(A) The Purchaser shall not be entitled in any event to damages or other
payment in respect of any claim or claims under any of the Warranties in
respect of any individual claim (or series of related claims with respect
to related facts or circumstances):
(i) unless and until the amount of that claim exceeds (pound)15,000 but,
once the amount of that claim has exceeded such sum, the Seller's
liability shall arise in respect of the full amount of that claim
and not merely in respect of the excess over such sum; and
(ii) unless and until the amount of all claims made in respect of the
Warranties and the Tax Covenant in aggregate exceeds (pound)630,000
and, once the amount of all such claims has exceeded such sum, the
Seller's liability shall only arise in respect of the amount by
which such claims exceed a sum of (pound)250,000.
(B) The total aggregate liability of the Seller under the Warranties, the Tax
Covenant and the Environmental Indemnity together, shall not in any event
exceed an amount equal to the Initial Consideration.
(C) Each provision of this Schedule shall be read and construed without
prejudice to each of the other provisions of this schedule.
(D) As regards the Tax Covenant, the provisions of this Schedule shall operate
to limit the liability of the Seller in so far as any provision in this
Schedule is expressed to be applicable to the Tax Covenant and the
provisions of the Tax Covenant shall further operate to limit the
liability of the Seller in respect of any claim thereunder. In particular,
and without limitation to the foregoing, the provisions of Clauses 3,
4(A), 7 and 8 of the Tax Covenant shall apply mutatis mutandis to any
claim under the Tax Warranties.
2. TIME LIMITS FOR BRINGING CLAIMS
(A) No claim shall be brought against the Seller in respect of any of the
Warranties (other than the Tax Warranties and the Warranties contained in
paragraphs 1 and 4(D) and (E) of Schedule 3) unless the Purchaser shall
have given to the Seller written notice of such claim specifying (in
reasonable detail) the matter which gives rise to the claim, the nature of
the claim and the estimated amount claimed in respect thereof (detailing
the Purchaser's calculation of the loss thereby alleged to have been
suffered by it on a without prejudice basis), in the case of all relevant
Warranties other than
<PAGE>
67
those contained in paragraph 22 of Schedule 3, on or before 31 December
1998 or, in the case of Warranties contained in paragraph 22 of Schedule
3, on or before the fifth anniversary of the date of this Agreement,
PROVIDED that the liability of the Seller in respect of such claim shall
absolutely determine (if such claim has not been previously satisfied,
settled or withdrawn) if legal proceedings in respect of such claim shall
not have been commenced within 18 months of the service of such notice and
for this purpose proceedings shall not be deemed to have been commenced
unless they shall have been properly issued and validly served upon the
Seller.
(B) None of the limitations contained in this Clause 2 shall apply to any
breach of Warranty which (or the delay in discovery of which) is the
consequence of fraudulent mis-statement, concealment or other conduct by
any member of the Seller's Group or any officer or employee of any member
of the Seller's Group.
3. CONDUCT OF LITIGATION
(A) Upon the Purchaser or any member of the Purchaser's Group becoming aware
of any claim, action or demand against it or any other matter likely to
give rise to any claim in respect of any of the Warranties (other than the
Tax Warranties) or under the indemnity set out in Clause 11 (the "Clause
11 Indemnity"), the Purchaser shall:-
(i) notify the Seller by written notice as soon as it appears to the
Purchaser that any assessment or claim of a third party received by
or coming to the notice of the Purchaser or any member of the
Purchaser's Group may result in a claim under the Warranties or the
Clause 11 Indemnity;
(ii) subject to the Seller indemnifying the Purchaser in a form
reasonably satisfactory to the Purchaser against any liability,
cost, damage or expense (including legal expenses) which may be
incurred by the Purchaser or any member of the Group, take such
action and give such information and access to personnel, premises,
chattels, documents and records to the Seller and its professional
advisers as it may reasonably request to investigate the claim and
the Seller shall be entitled to require (if such requirement is
reasonable in the circumstances) any relevant member of the
Purchaser's Group to take such action and give such information and
assistance in order to avoid, dispute, resist, mitigate, settle,
compromise, defend or appeal any claim in respect thereof or
adjudication with respect thereto;
(iii) in the case of any claim pursuant to the Warranties, cause the
relevant member of the Group to consult as fully as is reasonably
practicable with the Seller as regards the conduct of any
proceedings arising out of such third party claim;
<PAGE>
68
(iv) in the case of any claim under the Clause 11 Indemnity and at the
request of the Seller, allow the Seller to take the sole conduct of
such actions as the Seller may deem appropriate in connection with
any such assessment or claim in the name of the Purchaser or any
relevant member of the Purchaser's Group or the Group and in that
connection the Purchaser shall give or cause to be given to the
Seller all such assistance as the Seller may require in avoiding,
disputing, resisting, settling, compromising, defending or appealing
any such claim and shall instruct such solicitors or other
professional advisers as the Seller may nominate to act on behalf of
the Purchaser or any relevant member of the Purchaser's Group or the
Group, as appropriate, but to act in accordance with the Seller's
sole instructions; and
(v) make no admission of liability, agreement, settlement or compromise
with any third party in relation to any such claim or adjudication
without the prior written consent of the Seller (such consent not to
be unreasonably withheld).
(B) In relation to the Clause 11 Indemnity only, the Seller shall be entitled
at any stage and at its sole discretion to settle any such third party
assessment or claim PROVIDED THAT it shall notify the Purchaser of its
decision so to settle prior to it settling such assessment or claim.
4. NO LIABILITY IF LOSS IS OTHERWISE COMPENSATED FOR
(A) The Purchaser shall not be entitled to recover damages or otherwise obtain
reimbursement or restitution more than once in respect of any individual
breach of the Warranties.
(B) No liability shall attach to the Seller by reason of any breach of any
term of the Warranties to the extent that the same loss has been recovered
by the Purchaser or any member of the Group under any other terms of this
Agreement or any other document referred to herein, including, without
limitation, the Hepworth Refractories Inc. Stock Purchase Agreement and
the Tax Covenant.
5. RECOVERY FROM INSURERS AND OTHER THIRD PARTIES
(A) If, in respect of any matter which would give rise to a claim under the
Warranties, (other than the Tax Warranties), any member of the Group or
the Purchaser's Group is entitled to claim under any policy of insurance,
then, as soon as reasonably practicable and prior to taking action against
the Seller (other than to notify the Seller of the claim against the
Seller pursuant to paragraph 2 of this Schedule), the Purchaser shall make
a claim against its insurers and use all reasonable endeavours to pursue
such claim and such claims under the Warranties shall be reduced by the
amounts recovered, less any costs or expenses (including reasonable costs
of legal counsel and other advisers) incurred by the Purchaser or any
member of the Group in connection with any action taken by the Purchaser
or such members of the Group in recovering such claim from any insurer.
<PAGE>
69
Notwithstanding paragraph 2 above, no claim made under the Warranties, and
for which there has been a related claim made under any policy of
insurance in accordance with this sub-paragraph (A), shall absolutely
determine unless legal proceedings in respect of such claim under the
Warranties shall not have been commenced within 18 months after final
determination of the related claim made under any such insurance policy.
(B) Where the Purchaser or any member of the Purchaser's Group is at any time
entitled to recover from some other person any sum in respect of any
matter giving rise to a claim under the Warranties other than the Tax
Warranties, the Purchaser shall, and shall procure that the member of the
Purchaser's Group concerned shall, take all reasonable steps to enforce
such recovery prior to taking action against the Seller (other than to
notify the Seller of the claim against the Seller pursuant to paragraph 2
of this Schedule) (subject to the Purchaser being indemnified to its
reasonable satisfaction by the Seller against all reasonable costs and
expenses incurred by the Purchaser in connection with any legal
proceedings taken in recovering any amount from the third party) and, in
the event that the Purchaser or any member of the Purchaser's Group shall
recover any amount from such other person, the amount of the claim against
the Seller under the Warranties shall be reduced by the amount recovered.
Notwithstanding paragraph 2 above, no claim made under the Warranties, and
for which action has been taken to enforce such recovery from such other
person in accordance with this sub-paragraph (B), shall absolutely
determine unless legal proceedings in respect of such claims under the
Warranties shall not have been commenced 18 months after all such efforts
to enforce such recovery have ceased.
(C) If the Seller pays at any time to the Purchaser or any member of the
Purchaser's Group an amount pursuant to a claim in respect of the
Warranties or under any provision of this Agreement and the Purchaser or
other member of the Purchaser's Group subsequently becomes entitled to
recover from some other person any sum in respect of any matter giving
rise to such claim, the Purchaser shall, and shall procure that the other
member of the Purchaser's Group shall, take all necessary steps to enforce
such recovery and shall forthwith repay to the Seller so much of the
amount paid by the Seller to the Purchaser or other member of the
Purchaser's Group (less any reasonable costs and expenses incurred by the
Purchaser or the relevant member of the Group in connection with any legal
proceedings taken in recovering from the third party any sum in respect of
any matter giving rise to a claim under the Warranties and any tax
suffered on the receipt) as does not exceed the sum recovered from such
other person.
6. ACTS OF PURCHASER
(A) No claim shall lie against the Seller under or in relation to the
Warranties (other than the Tax Warranties) to the extent that such claim
is attributable to:
<PAGE>
70
(i) any voluntary act, omission, transaction, or arrangement carried out
by the Purchaser or by a member of the Purchaser's Group on or after
Completion; or
(ii) any admission of liability made in breach of the provisions of this
schedule after the date hereof by the Purchaser or on its behalf or
by persons deriving title from the Purchaser or by a member of the
Purchaser's Group on or after Completion.
(B) The Seller shall not be liable for any breach of any Warranty (other than
a Tax Warranty) to the extent that a claim for any breach of any Warranty
occurs or is increased as a result of any reorganisation or change in
ownership of any member of the Group after Completion or change in any
accounting basis on which any member of the Group values its assets or any
accounting basis, method, policy or practice of any member of the Group.
7. ALLOWANCE, PROVISION OR RESERVE IN THE ACCOUNTS
(A) No matter shall be the subject of a claim under the Warranties to the
extent that allowance, provision or reserve in respect of such matter
shall have been made in the Accounting Pack or the Completion Accounts or
has been included in calculating creditors or deducted in calculating
debtors in the Accounting Pack or the Completion Accounts or shall have
been otherwise taken account of or reflected in the Accounting Pack or the
Completion Accounts.
(B) Where any circumstances which would otherwise constitute a breach of
Warranty come to the attention of the Purchaser after the Completion
Accounts Date but prior to the end of the "review period" referred to in
paragraph 9 of Schedule 9, then PROVIDED THAT the Seller was not aware of
the circumstances or the fact that the circumstances constituted a breach
of Warranty prior to the Completion Date and PROVIDED FURTHER THAT the
circumstances and their treatment are discussed between the Purchaser and
the Seller prior to the end of the "review period" referred to in
paragraph 9 of Schedule 9 and either (i) agreement is reached between them
as to the treatment thereof in the Completion Accounts; or (ii) the matter
is notified to the expert (as defined in Schedule 9) in the statement of
either party referred to in paragraph 13(i) of Schedule 9 and the expert
is requested to, and confirms that he has, considered the matter when
coming to his conclusion, then no claim shall be made by the Purchaser
against the Seller for the breach of Warranty that would otherwise arise.
This limitation shall not apply to the extent that any relevant facts have
been fraudulently withheld or fraudulently misstated by any member of the
Seller's Group or any officer or agent of the Seller's Group.
8. RETROSPECTIVE LEGISLATION
No liability shall arise in respect of any breach of any of the Warranties
(other than the Tax Warranties) to the extent that liability for such
breach occurs or is increased directly or indirectly as a result of any
legislation not in force on or prior to the date
<PAGE>
71
of this Agreement or as a result of the withdrawal of any extra-statutory
concession or other agreement or arrangement currently granted by or made
with any governmental authority or Tax Authority or as a result of any
change after the date of this Agreement of any generally accepted
interpretation or application of any legislation or the enforcement policy
or practice of the relevant authorities or as a result of the withdrawal
of any extra-statutory concession or any other formal agreement or
arrangements with any Tax Authority (whether or not having the force of
law) currently granted by or made with any Tax Authority (whether within
or outside the United Kingdom).
9. PURCHASER'S KNOWLEDGE
Without prejudice to paragraph 10, the Seller shall not be liable under
the Warranties if and to the extent that the Purchaser was aware at the
date of this Agreement of the facts, matters, events or circumstances
which are the subject matter of the claim under the Warranties and that
those facts, matters, events or circumstances amounted to a breach of any
of the Warranties as at the date of this Agreement. For the avoidance of
doubt, the foregoing limitation shall not apply to any breach of any
indemnities given by the Seller to the Purchaser.
10. DISCLOSURE
The Purchaser shall not be entitled to claim that any fact, matter or
circumstance causes any of the Warranties to be breached if fairly
disclosed in the Disclosure Letter or in any document listed in the Data
Room List or otherwise specifically agreed in the Disclosure Letter to
have been disclosed to the Purchaser.
11. NO LIABILITY FOR CONTINGENT OR NON-QUANTIFIABLE CLAIMS
If any breach of the Warranties arises by reason of some liability of any
member of the Group which, at the time any such claim is notified to the
Seller, is contingent only or otherwise not capable of being quantified,
then the Seller shall not be under any obligation to make any payment in
respect of such claim unless and until such liability ceases to be
contingent or becomes capable of being quantified, as the case may be.
Notwithstanding paragraph 2 above, any claim made under the Warranties and
notified pursuant to paragraph 2 of this Schedule which is contingent only
or otherwise not capable of being quantified at the time such claim was
made, shall not absolutely determine unless legal proceedings in respect
of such claim shall not have been commenced within 18 months of the
contingent liability ceasing to be so contingent or becoming quantifiable,
as the case may be PROVIDED THAT no such notified claim shall remain
outstanding for longer than the sixth anniversary of the Completion Date.
<PAGE>
72
12. CLAIM TO BE REDUCTION OF CONSIDERATION
Any payment made by Seller in respect of any claim under the Warranties
shall be deemed to be a reduction of the Consideration.
13. NON-APPLICABILITY OF LIMITATIONS TO INDEMNITIES
For the avoidance of doubt, none of the limitations (other than paragraph
3 of this Schedule) contained in this Schedule shall apply to any breach
of the Clause 11 Indemnity EXCEPT THAT the limitation in paragraph 2 shall
apply to claims under the Clause 11 Indemnity as if the reference to 31
December, 1998 were to the date falling seven years after the Completion
Date.
14. INFORMATION MEMORANDUM
(A) The Purchaser acknowledges and agrees with the Seller (for itself and for
the benefit of the other members of the Seller's Group and on behalf of
their respective officers, employees and advisers and as trustees for such
officers, employees and advisers) that, subject to sub-clause (B) and
without prejudice to the provisions of Clause 20:-
(i) no representation or warranty was given as to the accuracy or
completeness of the Information Memorandum or the contents of the
Data Room and that none of the persons listed shall be under any
liability to the Purchaser in the event that such information is or
becomes inaccurate, incomplete or misleading in any particular; and
(ii) the Seller shall have no liability whatsoever in relation to, or
arising from (whether directly or indirectly), the Reports.
(B) The Seller acknowledges that the limitations set out in sub-clause A(i)
are without prejudice to the proviso contained in Clause 8(A) of this
Agreement.
<PAGE>
116
SCHEDULE 7
(Pensions)
UK PENSIONS
1. DEFINITIONS
(A) For the purposes of this Schedule the following expressions shall have the
following meanings:-
"Actuarial Assumptions" means the actuarial assumptions and
methods specified in the Actuary's
Letter.
"Actuary" means a person who is a Fellow of the
Institute of Actuaries or a Fellow of
the Faculty of Actuaries in Scotland.
"Actuary's Letter" means the letter from the
Seller's Actuary to the Purchaser's
Actuary a copy of which is attached as
ANNEXA.
"Agreed Interest Rate" means the base rate from
time to time prescribed by National
Westminster Bank plc.
"Condition Satisfaction Date" means the date falling 25 business days
after the date on which the Pension
Liabilities are determined and agreed in
accordance with paragraph 4 (or where
paragraph 8 applies, the 25th working
day after the Pension Liabilities are
certified pursuant to that paragraph) or
such later date as the conditions in
paragraph 3(B) are complied with or such
later date as the Seller may agree in
writing.
"Market Value Adjustment" means the market value adjustment set
out in the Actuary's Letter.
"Payment Date" means whichever is the later of:
(a) the 30th working day after the date
on which the Pension Liabilities
are determined and agreed in
accordance with paragraph 4 (or,
where paragraph 8 applies, the 30th
working day after the Pension
Liabilities are certified pursuant
to that paragraph); and
(b) the 5th working day after the
Condition
<PAGE>
117
Satisfaction Date.
"Pensionable Age" NPA (as defined in and in
accordance with the rules of the
Seller's Scheme).
"Pensionable Employees" means:
(i) such of the Relevant Employees at
Completion as are then active
members of the Seller's Scheme; and
(ii) such of the Relevant Employees at
Completion who become active
members of the Seller's Scheme
during the Transitional Period.
"Pension Liabilities" means the pension liabilities,
calculated in accordance
with the Actuary's Letter and, in
particular, on the basis that:
(i) any limitation on the level of the
pensionable salary of a
Transferring Employee under the
Finance Act 1989 shall be taken
into account in accordance with the
Actuarial Assumptions; and
(ii) it shall be assumed that there is
no obligation to equalise accrued
rights to guaranteed minimum
pensions of and in respect of the
Transferring Employees under
Article 119 of the Treaty of Rome.
"Purchaser's Actuary" means the Actuary or firm of Actuaries
appointed by the Purchaser for the
purposes of this Schedule.
"Purchaser's Scheme" means the retirement benefits
scheme (or, if the context so requires,
the trustees of that scheme) nominated
by the Purchaser pursuant to paragraph
3(A)(i).
"Relevant Employees" means such of the Employees as are
employed by the Company and the UK
Subsidiaries at the Completion Date.
"Seller's Actuary" means the Actuary or firm of Actuaries
appointed by the Seller for the purposes
of this Schedule.
"Seller's Scheme" means the Hepworth Pension Scheme
currently constituted by a definitive
trust deed and rules
<PAGE>
118
dated 12th October, 1992 or, if the
context so requires, the trustees of
that scheme.
"Timing Adjustment" means:
(i) in respect of each sum to which
this definition applies, the
formula found by calculating the
proportionate change during the
period specified of an index
comprising 80 per cent. of the
Total Return on the FT-SE -
Actuaries All Share Index and 20
per cent. of the FT-SE - Actuaries
British Government Over 15 Year
Index with an adjustment on account
of accrued interest at monthly
intervals and multiplied by 1-n x
0.000167 where n is the number of
complete months in the relevant
period; or
(ii) if either or both Indices are not
compiled to cover the period
specified, the Timing Adjustment
for that period shall be that
determined by the Seller's Actuary
and agreed by the Purchaser's
Actuary (or in default of agreement
the amount certified pursuant to
paragraph 8).
"Transfer Amount" means such amount as shall be determined
by the Seller's Actuary and agreed by
the Purchaser's Actuary (or where
paragraph 8 of this Schedule applies,
the amount certified pursuant to
paragraph 8) as being equal to the
aggregate of:
(i) the Pension Liabilities multiplied
by the Timing Adjustment for the
period from and including the
Completion Date to and excluding
the Payment Date; plus
(ii) the Transitional Period Pension
Contributions; less
(iii) the Transitional Period Costs.
"Transfer Date" means 31st December, 1997 or such
earlier date as the Purchaser by not
less than 30 days' notice to the Seller
designates as the Transfer Date.
"Transferring Employees" means those of the Pensionable
Employees:
<PAGE>
119
(i) who join the Purchaser's Scheme
with effect from the Transfer Date
pursuant to paragraph 3(A)(ii); and
(ii) who elect or consent in the Agreed
Form to a payment (in cash or in
other assets) being made by the
Seller's Scheme to the Purchaser's
Scheme in lieu of their accrued
rights under the Seller's Scheme;
and
(iii) who do not withdraw that election
or consent.
"Transitional Period" means the period commencing on the
Completion Date and ending immediately
before the Transfer Date.
"Transitional Period Costs" means the amount equal to:
(i) an allowance in respect of the cost
of insuring or notionally insuring
lump sum benefits and spouse and
dependants' benefits payable on
death-in-service in respect of all
or any of the Transferring
Employees in respect of the
Transitional Period calculated at
the rate specified in and otherwise
in accordance with Part III of
ANNEX B;
(ii) the administrative expenses
calculated at the rate specified in
accordance with Part II of Annex B
payable in respect of Transferring
Employees; and
(iii) any amounts payable but unpaid
under paragraph 2(B)(i) in respect
of any Pensionable Employees who
are not Transferring Employees,
adjusted, in respect of each such
amount, by the Timing Adjustment for the
period from and including the date on
which such cost is incurred or as the
case may be on which such amount becomes
payable to and excluding the Payment
Date. For this purpose each such cost
shall be deemed to be incurred or to
have become payable on the first day of
the month in which it is so incurred or
becomes payable.
<PAGE>
120
"Transitional Period Pension means an amount equal to the
Contributions" contributions made in respect of the
Transitional Period to the Seller's
Scheme by and in respect of the
Transferring Employees adjusted, in
respect of each such contribution, by
the Timing Adjustment for the period
from and including the date of payment
of each such contribution to and
excluding the Payment Date.
(B) Save where specifically defined or where the context otherwise requires,
words and expressions used in Chapter I of Part XIV of the Income and
Corporation Taxes Act 1988 or in the Pension Schemes Act 1993 shall have
the same meanings in this Schedule.
(C) References in this Schedule to any statute or statutory provision shall
include any statute or statutory provision which amends, extends,
consolidates or replaces the same.
(D) References in this Schedule to paragraphs are references to paragraphs of
this Schedule.
(E) If any index used for the purposes of this Schedule is not compiled or
ceases to exist it shall be replaced by such index as is agreed between
the Seller's Actuary and the Purchaser's Actuary or, in default of
agreement, as is determined under paragraph 8.
(F) References to Article 119 of the Treaty of Rome shall be deemed to include
any current or future legislation which implements Article 119 or which
implements any EC Directive relating to equal treatment. References to the
EC shall be taken to include the European Community (formerly the European
Economic Community) and the European Union.
2. MATTERS RELATING TO THE SELLER'S SCHEME
(A) The Seller's undertakings
The Seller shall use its reasonable endeavours to procure that:
(i) subject to the consent of the Commissioners of Inland Revenue (which
the Seller shall use its reasonable endeavours to obtain) Hepworth
Refractories Limited is permitted to continue its participation in
the Seller's Scheme throughout the Transitional Period; and
(ii) the Seller's Scheme will be maintained, in relation to the
Pensionable Employees, in full force and effect until after the
Transfer Date; and
(iii) except with the consent (such consent not to be unreasonably
withheld or delayed) of the Purchaser, the provisions of the
Seller's Scheme will
<PAGE>
121
not be amended until after the Transfer Date in a manner which may
affect materially and adversely the Transfer Amount; and
(iv) the Seller's Scheme shall not be terminated or wound-up or closed in
whole or in part prior to the Transfer Date.
(B) The Purchaser's undertakings
The Purchaser undertakes that Hepworth Refractories Limited will:-
(i) pay promptly to the Seller's Scheme the contributions due and
payable in respect of the Transitional Period to the Seller's Scheme
by and in respect of the Pensionable Employees, calculated at the
rate specified in and otherwise in accordance with Part I of ANNEX
B;
(ii) comply during the Transitional Period in all other material respects
with the provisions of the Seller's Scheme;
(iii) not do or omit to do during the Transitional Period any act or thing
whereby the approval of the Seller's Scheme as an exempt approved
scheme or as a contracted-out scheme would be prejudiced;
(iv) not increase the pensionable earnings (for the purposes of the Rules
of the Seller's Scheme) of any Pensionable Employee during the
Transitional Period by an amount which exceeds 7 per cent. per annum
except on such terms (whether as to payment of additional
contributions to the Seller's Scheme or otherwise) as the Seller may
agree;
(v) The Purchaser hereby agrees that Hepworth Refractories Limited :
(a) will not exercise any power, right or discretion conferred on
it under or in relation to the Seller's Scheme, including
(without limitation) any power, right or discretion conferred
by any statutory provision, without the prior written consent
of the Seller and on such terms (whether as to payment of
additional contributions to the Seller's Scheme or otherwise)
as the Seller may agree;
(b) will from time to time exercise any such power, right or
discretion and execute any deed or document as, in each case,
the Seller may reasonably require in order to enable the
Seller's Scheme to implement or comply with any applicable
legislation;
(c) will co-operate with the Seller and the Seller's Scheme in
providing such information about, and access to, Relevant
Employees as the Seller or the Seller's Scheme may reasonably
require for the purposes of the Seller's Scheme.
<PAGE>
122
(vi) The Purchaser irrevocably appoints the Seller as its attorney to
execute (in its name or otherwise) from time to time any deeds or
documents referred to in paragraph 2(B)(v)(b).
(vii) Subject to paragraph 2(B)(viii), the Purchaser undertakes that
Hepworth Refractories Limited will pay to the Seller's Scheme, in
respect of any Pensionable Employees who, during the Transitional
Period, begin to receive an early retirement pension under Rule D2
of the Seller's Scheme, the aggregate, being not less than zero, of
the differences at the date of commencement of the payment of
pension calculated in accordance with the Actuarial Assumptions
between:
o the actuarial value, excluding the Market Value Adjustment, of
the aggregate of the benefits actually payable by the Seller's
Scheme to and in respect of each such Pensionable Employee
(including any earnings-related lump sum payable on death
before NPA); and
o the Pension Liabilities, excluding the Market Value
Adjustment, calculated as if the Completion Date were the date
of the retirement of the Pensionable Employee in respect of
that Pensionable Employee
multiplied by the Market Value Adjustment, as at the date of
commencement of the payment of the pension, determined in accordance
with the Actuarial Assumptions and multiplied by the Timing
Adjustment for the period from and including the date of
commencement of the payment of each such pension to and excluding
the date of payment of the aggregate difference, such aggregate
difference to be determined by the Seller's Actuary and agreed with
the Purchaser's Actuary (the "Early Retirement Pension Cost").
The Seller undertakes that in determining whether or not to give its
consent to any early retirement of any Pensionable Employee on
grounds of Incapacity under Rule D2 during the Transitional Period,
it shall apply similar criteria to those used by it in respect of
members of the Seller's Scheme other than the Pensionable Employees.
(viii) The Early Retirement Pension Cost in respect of any Excluded
Individual who begins to receives an early retirement pension during
the Transitional Period under Rule D2 will be zero.
"Excluded Individual" means any Pensionable Employee who prior to
the Completion Date has applied in writing to the trustees of the
Seller's Scheme to receive an early retirement pension on account of
incapacity under Rule D2:01(ii).
(C) Submission of notices for Seller's approval
The Purchaser undertakes to procure that the notices to be issued (if any)
pursuant to paragraphs 2(D) and 3(A)(ii) will be submitted in advance of
their
<PAGE>
123
issue to the Seller and will not be issued until the Seller has approved
them, such approval not to be unreasonably withheld or delayed.
(D) Parties to do everything necessary to comply with contracting-out
requirements
The Seller and the Purchaser shall take, and the Purchaser shall procure
that Hepworth Refractories Limited takes, such steps as may be required of
them (if any ), including the completion of any notices and elections, to
procure that Hepworth Refractories Limited:
(i) holds or continues to be named in a contracting-out certificate in
relation to the Seller's Scheme in respect of the Transitional
Period; and
(ii) ceases to hold or be named in such certificate with effect from the
end of the Transitional Period.
3. THE PURCHASER'S SCHEME
(A) The Purchaser to nominate a pension scheme and offer membership
The Purchaser shall procure that:
(i) before the Transfer Date it will nominate a contracted-out
retirement benefits scheme:
(a) which Hepworth Refractories Limited will have established (or
become a party to) with effect from a date no later than the
Transfer Date;
(b) which is approved or is capable of approval as an exempt
approved scheme; and
(c) to which the Seller's Scheme can make a transfer payment
without prejudicing approval of the Seller's Scheme as an
exempt approved scheme;
(ii) such of the Pensionable Employees as have not ceased to be in the
employment of the Company or any UK Subsidiary or attained
Pensionable Age in the Seller's Scheme at the Transfer Date and who
remain active members of the Seller's Scheme will be offered
membership of the Purchaser's Scheme with effect from the Transfer
Date; and
(iii) the offer to be made pursuant to paragraph 3(A)(ii) will not be
conditional upon the Pensionable Employee agreeing to transfer his
benefits in respect of past service to the Purchaser's Scheme,
(B) Tax approval and contracting-out matters relating to the Purchaser's
Scheme
<PAGE>
124
The Purchaser shall use all reasonable endeavours to procure by the date
defined in paragraph (a) of the definition of Payment Date:
(i) that the Purchaser's Scheme is an exempt approved scheme or that the
Commissioners of Inland Revenue have specifically approved the
transfer of the Transfer Amount from the Seller's Scheme to the
Purchaser's Scheme; and
(ii) that Hepworth Refractories Limited holds or is named in a
contracting-out certificate in relation to the Purchaser's Scheme.
(C) Compliance with statute and schedule by Purchaser and financial matters
relating to the Purchaser's Scheme
The Purchaser shall procure by the Condition Satisfaction Date that the
Purchaser and the Purchaser's Scheme will enter into an agreement under
seal with the Seller and the Seller's Scheme in such form as the Seller
may reasonably require under which the Purchaser's Scheme:
(a) agrees to accept the Transfer Amount in full and final settlement of
all claims against the Seller's Scheme in respect of the
Transferring Employees;
(b) agrees to provide benefits to the Transferring Employees in
accordance with paragraph 7 and the announcement made to the
Transferring Employees; and
(c) agrees to comply with the applicable requirements of the
Commissioners of the Inland Revenue, the relevant preservation
requirements of the Pension Schemes Act 1993 and contracting-out
requirements of that Act and the relevant provisions of clause 9.03
of the Rules of the Seller's Scheme; and
4. DETERMINATION OF PENSION LIABILITIES AND OTHER MATTERS
(A) Actuaries to be instructed
(i) Immediately after the Completion Date the Seller and the Purchaser
shall respectively instruct the Seller's Actuary and the Purchaser's
Actuary to consult with a view to the Seller's Actuary determining
and the Purchaser's Actuary agreeing the Pension Liabilities
(ignoring for the time being the adjustment for the period from the
Completion Date) within 90 days after the Transfer Date in
accordance with paragraph 4(A)(ii).
(ii) The Seller's Actuary will determine the Pension Liabilities and
provide the result and the underlying calculations to the
Purchaser's Actuary within 60 days of the Transfer Date, and the
Seller's Actuary and the Purchaser's Actuary shall have 30 days from
the receipt of such
<PAGE>
125
determination by the Purchaser's Actuary to agree the Pension
Liabilities.
(B) Accuracy of information to be provided to the Actuaries by the Seller
(i) The Seller shall procure that all such information in its
possession, custody or control as the Seller's Actuary or the
Purchaser's Actuary may reasonably request for the purpose of
calculating the Pension Liabilities and the Transfer Amount shall be
made available promptly to such Actuary.
(ii) The Seller hereby warrants to the Purchaser that all such
information shall be true, complete and accurate in all material
respects as at the date the information is required for the purpose
of this Schedule and shall contain no omission material to the
calculation of the Transfer Amount or material to any other
calculation or determination for the purposes of this Schedule.
(C) Accuracy of information to be provided to the Actuaries by the Purchaser
(i) The Purchaser shall procure that all such information in its or the
Group's possession, custody or control as the Seller's Actuary or
the Purchaser's Actuary may reasonably request for the purpose of
calculating the Pension Liabilities and the Transfer Amount shall be
made available promptly to such Actuary and to the Seller's Scheme.
(ii) The Purchaser hereby warrants to the Seller that all such
information shall be true, complete and accurate in all material
respects as at the date the information is required for the purpose
of this Schedule and shall contain no omission material to the
calculation of the Transfer Amount or material to any other
calculation or determination for the purposes of this Schedule.
5. PAYMENT OF TRANSFER AMOUNT AND EXCESS PAYMENT
(A) Seller's obligations conditional upon Purchaser's obligations being duly
performed
The Seller's obligations in this paragraph 5 are conditional upon the
Purchaser's obligations in paragraphs 2 and 3 being duly performed in all
material respects on or before the Payment Date.
(B) Seller to procure payment of Transfer Amount on the Payment Date by the
Seller's Scheme Trustees
Subject to paragraph 5(A), the Seller shall use its reasonable endeavours
to procure that on the Payment Date the Seller's Scheme (to the extent
that it can lawfully make such payment) shall pay the Transfer Amount to
the Purchaser's Scheme.
<PAGE>
126
(i) The payment of the Transfer Amount shall be satisfied by the
transfer of a reasonable cross-section of the assets of the Seller's
Scheme, excluding any direct holdings of real property (as agreed by
the Seller's Scheme and the Purchaser's Scheme) having a mid-market
value on the day before the Payment Date equal to the Transfer
Amount.
(ii) If the Seller's Scheme and the Purchaser's Scheme are unable to
agree some or all of the particular assets to be transferred or the
mid-market value of any such assets, the payment of the Transfer
Amount (or the appropriate part of it) shall be satisfied by the
Seller's Scheme transferring cash equal to 99 per cent. of that part
of the Transfer Amount in respect of which there has been no
agreement as to the assets to be transferred.
(C) Shortfall
(i) Subject to paragraph 5(A) if the amount which has been actually
transferred (if any) by the Seller's Scheme to the Purchaser's
Scheme on or before the Payment Date in respect of the Transferring
Employees is less (other than by the application of the final
sentence of paragraph 5(B)) than the Transfer Amount, then the
Seller shall immediately pay to the Purchaser, by way of an
adjustment of the consideration payable for the Shares pursuant to
this Agreement, and the Purchaser shall procure that Hepworth
Refractories Limited then pays to the Purchaser's Scheme, a sum in
cash (the "Shortfall") calculated according to the formula:
((A - B) + C) where
A = the Transfer Amount
B = the amount actually transferred on or before the Payment
Date plus interest at the Agreed Interest Rate for the
period from and including the date or dates on which
such amount was transferred to and excluding the Payment
Date;
C = the amount representing interest at the Agreed Interest
Rate on an amount equal to A - B for the period from and
including the Payment Date to and excluding the date on
which payment is made under this sub-paragraph;
The amount of the Shortfall shall be determined by the Seller's
Actuary and agreed by the Purchaser's Actuary or, in default of
agreement, be determined under paragraph 8.
(ii) If, after the date the Seller pays the Shortfall to the Purchaser
under paragraph 5(C)(i), the Seller's Scheme makes any payment in
respect of any benefits retained by the Seller's Scheme in respect
of any
<PAGE>
127
Transferring Employee the Purchaser shall pay forthwith to the
Seller by way of an adjustment of the consideration payable for the
Shares pursuant to this Agreement a sum equal to that payment
If the Purchaser does not pay the amount due under the previous
sentence within 2 days of the date of the payment in respect of
benefits by the Seller's Scheme, the Purchaser shall, in addition,
pay interest at the Agreed Interest Rate (as well after as before
judgment) on the amount due from and including the date on which the
payment was made by the Seller's Scheme to and excluding the date on
which payment actually is made by the Purchaser.
(iii) If, in the period of five tax years beginning with tax year
1997/1998, after any payment in respect of the Shortfall under
paragraph 5(C)(i), the Purchaser or any member of the Purchaser's
Group achieves a reduction in its liability to corporation tax
("Reduction") as a result of being able to treat a payment to the
Purchaser's Scheme of an amount equal to the payment in respect of
the Shortfall as deductible for corporation tax purposes, the
Purchaser shall pay to the Seller, within 7 days after the Purchaser
would otherwise have been liable to pay the saved corporation tax, a
sum equal to that Reduction.
(iv) The Purchaser shall use all reasonable endeavours to obtain a
Reduction at the earliest time possible after its receipt of any
payment in respect of the Shortfall.
6. VOLUNTARY FUND
(A) Meaning of "Voluntary Fund"
In this paragraph 6, the expression "Voluntary Fund" means a fund
comprising those voluntary contributions, or the investments or moneys
representing them and any income derived from them, in respect of which
the entitlements of the members who have paid them are not related to
earnings (however defined) but are based on the respective parts of such
Voluntary Fund which are attributable to them.
(B) Voluntary Fund to be disregarded for calculations
Notwithstanding the preceding provisions of this Schedule, if within the
Seller's Scheme there is a Voluntary Fund, the Voluntary Fund, the
benefits payable from it, the contributions payable to it and any transfer
payment made from it shall be disregarded for all the preceding provisions
of this Schedule.
(C) Transfer of Voluntary Fund
The Seller shall nevertheless use its reasonable endeavours to procure
that the part of the Voluntary Fund attributable to the Transferring
Employees in
<PAGE>
128
accordance with the provisions of the Seller's Scheme is transferred to
the Purchaser's Scheme on the Payment Date.
7. TRANSFER AMOUNT TO PURCHASE BENEFITS FOR TRANSFERRING EMPLOYEES
(A) Purchaser to provide benefits of equal actuarial value
Subject to receipt of the Transfer Amount (as reduced in accordance with
the final sentence of paragraph 5(B), if applicable) by the Purchaser's
Scheme (or, as the case may be, the payment of the Shortfall by the Seller
under paragraph 5(C)), the Purchaser shall procure that the Purchaser's
Scheme shall provide benefits in respect of the pensionable service
(including transfer credits) of each Transferring Employee in the Seller's
Scheme before Completion which are of equal actuarial value on the basis
of the Actuarial Assumptions to the benefits applying in the Seller's
Scheme (as in force on the date of this Agreement) in relation to such
service.
(B) Purchaser not to discriminate against Transferring Employees
The Purchaser shall procure that, in granting any benefit improvement in
the Purchaser's Scheme, the Purchaser's Scheme will not discriminate
against any of the Transferring Employees or persons claiming through or
in respect of them.
(C) Benefit of covenants
The Purchaser declares as trustee for the benefit of the Transferring
Employees that the benefit of the covenants contained in paragraphs 7(A)
and (B) shall be directly enforceable by each Transferring Employee and by
persons claiming through or in respect of them.
8. DISPUTES
(A) Referral to an independent Actuary
(i) Any dispute between the Seller's Actuary and the Purchaser's Actuary
concerning the determination or agreement of the Transfer Amount or
of any other matters to be determined or agreed by them for the
purposes of this Schedule shall, in the absence of agreement between
them, be referred to an independent Actuary.
(ii) The independent Actuary shall be nominated jointly by the Seller and
the Purchaser or, failing such nomination, shall be nominated by the
President for the time being of The Institute of Actuaries at the
instance of the party first applying to him.
(B) Independent Actuary to act as expert and direct payment of costs
<PAGE>
129
The independent Actuary so appointed shall act as an expert and not as an
arbitrator. His decision shall be final and binding. His costs shall be
borne between the Seller of the one part and the Purchaser of the other
part as the independent Actuary may direct.
9. INDEMNITIES
(A) Deficiency
Subject to paragraph 9(D), the Seller shall indemnify the Purchaser
against any Covered Liability which the Purchaser may incur (whether or
not pursuant to Section 144 of the Pension Schemes Act 1993 or Section 75
of the Pensions Act 1995 (as appropriate) and any regulations made
pursuant to such section) to contribute to the Seller's Scheme.
(B) Relevant Deficit
Subject to paragraph 9(D), in the event that there is a Relevant Deficit
in the Seller's Scheme, the Seller shall make a payment to the Seller's
Scheme of such amount as is required to discharge the Purchaser from any
liability pursuant to the Relevant Provisions to contribute to or in
respect of any Deficit arising in respect of the Seller's Scheme.
(C) Definitions
For the purpose of this paragraph 9:
"Covered Liability" means any Liability other than a Liability which
arises under paragraph 2(B) of this Schedule or which arises from an act
or omission (other than the cessation of participation in the Seller's
Scheme by the Purchaser in the manner envisaged by this Schedule) of the
Purchaser or any member of the Purchaser's Group;
"Deficit" means a deficit in terms of the Relevant Provisions;
"Liability" means any loss, cost, expense, damage or other liability;
"Relevant Deficit" means any Deficit in respect of the Seller's Scheme
which arises as at the date Hepworth Refractories Limited ceases to
participate in the Seller's Scheme or as at the first actuarial valuation
of such scheme with an effective date falling after 5th April, 1997 except
to the extent that any Deficit arises from an act or omission (other than
the cessation of participation in the Seller's Scheme by Hepworth
Refractories Limited) of the Purchaser or any member of the Purchaser's
Group;
"Relevant Provisions" means section 75 of the Pensions Act 1995 and
regulations made pursuant to that section.
<PAGE>
130
10. PENSION WARRANTIES
The Seller represents, warrants and undertakes, so far as the Seller is aware
and save as disclosed in the Disclosure Letter, that:
(A) Seller's Scheme is the only funded pension/disability arrangement
Other than the Seller's Scheme and schemes to which the State requires
contributions to be made (including the statutory sick pay scheme) there
is no arrangement to which the Company or any of the Subsidiaries is or
within the five year period prior to Completion has been a party or to
which it contributes or may be liable to contribute under which benefits
of any kind are payable to or in respect of any of the Employees or any
former employees of the Company or the UK Subsidiaries on retirement,
death or disability or on the attainment of a specified age or on the
completion of a specified number of years of service.
(B) All material Seller's Scheme documents supplied
The trust deeds and rules of the Seller's Scheme, together with the Inland
Revenue approval letter, contracting-out certificate, material deeds of
amendment and participation, all material announcements (to members of the
Seller's Scheme who are Relevant Employees) which have not been
incorporated into the Trust Deed and Rules of the Seller's Scheme and the
scheme booklet and accounts for the Seller's Scheme for 1995 and 1996 have
been supplied to the Purchaser or the Purchaser's advisers and are
attached to the Disclosure Letter.
(C) Exercise of discretion or power
No discretion or power has been exercised under the Seller's Scheme in
respect of members of that Scheme who are Relevant Employees to augment
benefits or to provide a benefit which would not otherwise be provided.
(D) Contributions duly paid
The Company and the Subsidiaries have no liability to make payments to the
Seller's Scheme or to any insurance company in respect of benefits
provided under the Seller's Scheme in respect of any period ending on or
before the Completion Date.
(E) Adherence
Hepworth Refractories Limited and Industry Connect Limited adhere to the
Seller's Scheme in respect of the Pensionable Employees. So far as the
Seller is aware, Hepworth Refractories Limited and Industry Connect
Limited have each duly complied with all their obligations and duties
(including statutory obligations) under and in respect of the Seller's
Scheme.
<PAGE>
131
(F) Exempt Approval
The Seller's Scheme is an exempt approved scheme.
(G) Contracting-out
The Seller's Scheme is a contracted-out scheme and Hepworth Refractories
Limited is named in a contracting-out certificate in relation to the
Seller's Scheme.
(H) So far as the Seller is aware nothing has been done or omitted to be done
which would result in the Seller's Scheme ceasing to be an exempt approved
scheme or the contracting-out certificate being cancelled or surrendered.
(I) All benefits (other than a refund of contributions with interest where
appropriate) payable under the Seller's Scheme on the death of a member or
beneficiary while in an employment to which the Seller's Scheme relates
are fully insured under a policy effected in the name of the trustees of
the Seller's Scheme.
(J) None of the Employees who are members of the Seller's Scheme in
pensionable service are employed outside Great Britain.
(K) The principal employer and the trustees or administrator of the Seller's
Scheme do not intend that the Seller's Scheme will contract out of the
State Earnings Related Pension Scheme using the protected rights basis
after 6 April 1997.
(L) So far as the Seller is aware, there are no actions, claims or suits
(other than routine claims for benefits) outstanding, pending or
threatened in respect of any of the Employees or former employees and
former officers of any member of the Group against the trustees or
administrators of the Seller's Schemes or against any member of the Group,
in respect of any act, event or omission or other matter arising out of or
in connection with the Seller's Schemes or otherwise in relation to the
provisions of any relevant benefit (as defined in sub-paragraph (B)
above).
(M) Any employee benefit plans which are operated by the Overseas Subsidiaries
or in which they participate has, so far as the Seller is aware, been
operated in compliance with all applicable laws and in all material
respects in accordance with their provisions.
(N) No employee or former employee of any member of the Group participating in
the Seller's Scheme has, in the five years prior to Completion, been
excluded from membership of the Seller's Scheme in contravention of
Article 119 of the Treaty of Rome.
<PAGE>
132
11. NO ASSISTANCE TO BE GIVEN BY THE PURCHASER
(i) The Purchaser undertakes neither to take any action nor to assist,
whether directly or indirectly, any person in any manner which would
result in the Seller's Scheme having to pay a larger amount than the
Transfer Amount to the Purchaser's Scheme.
(ii) The Purchaser agrees that this undertaking extends to the Purchaser
and any other company directly or indirectly controlled or connected
with the Purchaser and applies both during and after the
Transitional Period.
12. CALCULATION OF LIABILITY
In quantifying any liability, loss, damage, cost, claim or expense which either
party may incur or sustain arising out of or in connection with the breach by
the other of any of the provisions of this Schedule, the parties agree that the
Actuarial Assumptions shall be applied as nearly as may be and in default of
agreement as to how they should apply, the disagreement shall be resolved in
accordance with paragraph 8.
<PAGE>
142
SCHEDULE 9
(Preparation and agreement of the Completion Accounts)
1. The Completion Accounts shall be prepared and agreed in accordance with
the provisions of this Schedule. The general purpose of the Completion
Accounts is to enable the Purchaser to confirm that the Net Assets
disclosed in the Accounting Pack remain in existence at the Completion
Accounts Date.
2. Subject to paragraphs 3 and 4 below or as otherwise expressly stated in
this Schedule, the Completion Accounts shall:
(i) be prepared as if the period (the "Completion Period") beginning
with the opening of business on the day following the Accounts Date
and ending as at the close of business on 31st March, 1997 (the
"Completion Accounts Date") was a financial year of the Company,
with appropriate apportionment of income and expenditure;
(ii) be based on the books and records of each member of the Group
(together with appropriate consolidation adjustments;
(iii) comprise:
(a) a consolidated balance sheet of the Group as at the close of
business on the Completion Accounts Date in the format set out
in Attachment Q; and
(b) a statement of the value of Net Assets as at the close of
business on the Completion Accounts Date as set out on the
line marked "Net Assets" in Attachment Q,
but shall not include any notes;
(iv) be prepared in accordance with the same accounting principles,
policies, treatments, categorisations and practices as were used in
the preparation of the Accounting Pack, applied (including in
relation to the exercise of discretion and judgement) on a basis
which is in all respects consistent with the basis of application
which was used in the preparation of the Accounting Pack, or, in the
absence thereof, in accordance with accounting principles, policies
and practices generally accepted in the United Kingdom;
(v) in relation to stock in trade (including raw materials, work in
progress, finished goods and packaging), be based on a stock take
carried out over the period 27th March to 1st April, 1997;
<PAGE>
143
(vi) take appropriate account of:
(a) wages, salaries and other periodic outgoings in respect of the
employees, assets and liabilities of each member of the Group
for any period of time prior to the Completion Accounts Date;
(b) any payment (by way of deposit, prepayment or otherwise) made
by any member of the Group in respect of the price or cost of
anything (including any service) to be provided to it after
the Completion Accounts Date;
(c) any payment (by way of deposit, prepayment or otherwise)
received by any member of the Group in respect of the price or
cost of anything (including any service) to be provided by it
after the Completion Accounts Date;
(d) end-of-period accounting "cut-off" procedures which are
consistent with those adopted for the purposes of the
preparation of the Accounting Pack; and
(vii) no post balance sheet event occurring after the end of the review
period referred to in paragraph 9 shall be taken into account.
3. The Completion Accounts shall, subject to paragraph 4, be prepared on the
basis of the following assumptions:
(i) that the Completion Accounts relate to each member of the Group as a
going concern and excluding any effect of the change of control or
ownership of any member of the Group contemplated by this Agreement
or any other effect of this Agreement, the Tax Covenant or the
Environmental Deed (including any new or amended arrangements which
it may be necessary or desirable for any member of the Group to
enter into after the date of this Agreement by reason of any of the
foregoing) and in all respects as if each member of the Group was to
remain a member of the Seller's Group; and
(ii) that all levels of materiality in relation to individual items shall
be the levels of materiality which were applied in relation thereto
in compiling the Accounting Pack; and
(iii) that the currency conversion rates to be applied to all currencies
other than sterling shall be the relevant mid-market rates as at the
close of business on the Completion Accounts Date (or, if such date
is not a business day, on the immediately preceding business day) as
published in "The Financial Times".
<PAGE>
144
4. In the balance sheet comprised within the Completion Accounts:
(i) no fixed asset or investment reflected in the Accounting Pack shall
be written up or down by way of revaluation above or below the
amount ascribed to it in the Accounting Pack (other than, subject to
paragraph 4(xiv), with respect to depreciation which shall be
applied in accordance with paragraph 2(iv));
(ii) subject to any other sub-paragraphs of this paragraph 4, where a
provision was made in the Accounting Pack in relation to any matter
or series of related matters no decrease or increase in that
provision shall be made unless and to the extent that since the
preparation of the Accounting Pack new facts or circumstances have
arisen which, in accordance with paragraph 2(iv), justify such
increase or decrease;
(iii) the aggregate provision in respect of or relating to deferred tax
shall be (pound)689,000;
(iv) no provision shall be made in respect of or relating to any
post-Completion reorganisation, redundancy, dismissal, closure or
rationalisation proposed or contemplated by the Purchaser, the
Seller or any member of the Group whether at the Group's site at
Loxley or otherwise (save for redundancy costs where the relevant
employees have by the Completion Accounts Date been given formal
notice of redundancy) and save for any planned or actual redundancy
disclosed in the Disclosure Letter, including in relation to Bernard
Niels;
(v) the investment in Rotary Nozzle International SA ("RNI") shall be
valued on a basis consistent with the Accounting Pack, save that, to
the extent that the management accounts of RNI for March 1997 are
not available, and unless such management accounts become available
before the end of the review period (as defined in paragraph 9), the
valuation shall be based on the management accounts of RNI for
January and February and the figure for the Group's "Best Estimate"
of its share of the RNI results contained in the flash results for
the Group listed at document 2-8 in the Data Room List;
(vi) no provision (whether in respect of taxation or otherwise) shall be
made in respect of or relating to payments made to past or current
employees via the private social fund, the Fonds Ceram, by Hepworth
Refractories (Belgium) SA or any associated costs, penalties or
interest;
(vii) subject to paragraph 4(xx), the aggregate provision which shall be
made in respect of or relating to all facts and circumstances which
have resulted or may result in claims of any nature (including
product warranty or defective product claims) against any member of
the Group by any past or present customer, supplier or employee of
any member of the Group (including claims to the effect that any
such customer is or may be entitled to withhold, set-off or not make
any payment which
<PAGE>
145
may otherwise be payable) and all associated costs, expenses,
penalties and interest shall be (pound)2 million and for the
avoidance of doubt no separate provision shall be made in respect of
the receivable from Kvaerner Davy Limited;
(viii) the Intra-Group Currency Agreements shall not be marked to market;
(ix) no provision shall be made in respect of or relating to any
liability to which the Clause 11 Indemnity relates;
(x) no provision shall be made in respect of or relating to any cost to
the Group of assisting with the preparation of any draft or final
Completion Accounts, including the stock take in relation thereto;
(xi) the Wallhouse clay stock shall be valued at (pound)265,000;
(xii) no provision shall be made in respect of or relating to any amount
which may be payable after the Completion Account Date under any
senior managers bonus scheme in relation to the period from the
Accounts Date to the Completion Accounts Date or thereafter;
(xiii) other than any provision made in respect of Belgian holiday pay on
the same basis as in the Accounting Pack, no provision shall be made
in respect of or relating to UK staff holiday pay;
(xiv) the aggregate adjustment to the provision made in respect of or
relating to accelerated depreciation in Belgium shall be the same as
that reflected in the Accounting Pack;
(xv) no provision shall be made in respect of or relating to any cost
payable to Chadwick or Kaiser other than in respect of the unpaid
invoices raised by Chadwick in France during the period from the
Accounts Date to the Completion Accounts Date, amounting to 75,000FF
per week;
(xvi) the provision reflected in the Accounting Pack in respect of costs
payable after the Accounting Date to Kaiser and/or Chadwick shall
not constitute a precedent for reflecting any provision in the
Completion Accounts for any costs payable after the Completion
Accounts Date;
(xvii) the aggregate provision made in respect of or relating to costs
associated with Environmental Matters, including any restoration
liabilities, shall not be greater than the aggregate provision for
restoration liabilities of (pound)205,000 reflected in the
Accounting Pack;
(xviii) no consolidation adjustment shall be made in respect of or
relating to inter company profit in stock as between members of the
Group;
(xix) no adjustment shall be made to the procedure used at the Accounts
Date to value UK stock in respect of or relating to the inclusion
therein of a
<PAGE>
146
proportion of the pension charge raised by the Seller's Group and
accruals shall include the pension charge raised by the Seller's
Group in March 1997;
(xx) the aggregate provision made in respect of or relating to credit
notes issued in the UK after the Completion Accounts Date in
relation to sales before the Completion Accounts Date shall be
(pound)113,000;
(xxi) the corporation tax liability accruing for the Completion Period
shall be the profit before tax of each member of the Group for the
Completion Period multiplied by the local corporation income tax
rates less the value of any tax losses within the Group brought
forward and utilisable by the relevant member of the Group in
respect of the Completion Period. Local corporation income tax rates
shall include national and local taxes on corporation income and
includes surcharges;
(xxii) no provision shall be made against raw materials and bought out
parts in the UK and Belgium; and
(xvxiii) no provision shall be made against work in progress in the UK.
In this Schedule, where the word "provision" is made in the context of the
Completion Accounts that shall be deemed to include any other accrual,
charge, write-off or adjustment which would have an equivalent effect on
the value of Net Assets as at the close of business on the Completion
Accounts Date.
5. The Seller shall, with the assistance of the Group management (in
particular, Richard Sykes), as soon as practicable after Completion, and
in any event by the date falling 45 days after the date of this Agreement
(the "preparation period"), prepare, with the assistance of the Seller's
Auditors, and deliver to the Purchaser draft Completion Accounts (the
"draft Completion Accounts") . The fees and costs of the Seller's Auditors
shall be paid by the Seller.
6. Following Completion the Purchaser shall, and shall procure that each
member of the Group and the Purchaser's Auditors shall, give the Seller
and the Seller's Auditors reasonable access at reasonable times to all
books, records and working papers in their respective possession or
control relating to the Group Businesses or members of the Group and
generally shall provide the Seller and the Seller's Auditors with such
other information and assistance as the Seller and the Seller's Auditors
may reasonably require (including the reasonable provision and assistance
at reasonable times of financial personnel employed by members of the
Group and reasonable copies of such books, records and papers) for the
purposes of preparing and reviewing the draft Completion Accounts,
discussing them with the Purchaser or the Purchaser's Auditors or making
submissions to the expert (as defined below).
7. If the Purchaser fails to comply with the provisions of paragraph 6 the
Seller (in addition to any other remedies it may have):
<PAGE>
147
(a) shall give written notice to the Purchaser to the effect that the
Purchaser has failed to comply with its obligations pursuant to
paragraph 6 above and such notice shall describe such non-compliance
in reasonable detail. The preparation period shall then be extended
by such number of days as is necessary, in the Seller's reasonable
opinion, to take account of such failure (in which event it shall be
deemed to be so extended); and/or
(b) if such failure has resulted, in the Seller's reasonable opinion, in
the Seller being unable to comply with its obligations under
paragraph 5 for a period of 20 days or more beyond the end of the
original preparation period , or, if later, the end of any extension
given under paragraph 7(a), may give written notice to the
Purchaser, giving reasons for the notice, to the effect that no
Completion Accounts shall be delivered by it (in which event there
shall be no Completion Accounts and no adjustment to the
Consideration).
The Seller shall be entitled to give one or more notices under paragraph
7(a).
8. If the Purchaser shall not agree that the Seller is entitled either to
extend the preparation period or to give notice that no Completion
Accounts shall be delivered and such dispute is not resolved in good faith
negotiations within seven (7) days after receipt by the Purchaser of the
notice referred to in paragraph 7(a) or in paragraph 7(b) above (as
appropriate), such dispute shall be referred at the election of either
party for the determination of the "expert" referred to in paragraph 11
below. The expert shall act as an expert (and not as an arbitrator) in
making a determination of the dispute and the expenses of the
determination by the expert shall be borne between the Seller and the
Purchaser in such proportions as the expert shall in its discretion
determine.
9. The Purchaser shall have a period of 30 days (the "review period") after
the delivery to it of the draft Completion Accounts to review, in
conjunction with the Purchaser's Auditors, the draft Completion Accounts
and to present to the Seller in writing any objections (particularising
the matters in dispute, the reasons why they are not in accordance with
this Schedule and the effect thereof on the value of Net Assets) it may
have as to whether the draft Completion Accounts have been prepared in
accordance with this Schedule.
10. The Seller shall, following the Completion Date, give the Purchaser and
the Purchaser's Auditors reasonable access at reasonable times to all
books, records and working papers in its possession or control or (subject
to the execution of a hold harmless letter in the Seller's Auditors'
customary form) in the possession or control of the Seller's Auditors
relating to the Group on or prior to the Completion Accounts Date and
generally shall provide the Purchaser and the Purchaser's Auditors with
such other information and assistance as the Purchaser or the Purchaser's
Auditors may reasonably require (including reasonable access to the
relevant senior financial officers of the Seller) for the purpose of
enabling the Purchaser to present any such written objections as are
referred to in paragraph 9, provided that the Purchaser and the
Purchaser's
<PAGE>
148
Auditors shall not be entitled to any such access, information or
assistance which goes beyond that reasonably necessary to review whether
the draft Completion Accounts have been prepared in accordance with the
provisions of this Schedule. The fees and costs of the Purchaser's
Auditors shall be paid by the Purchaser.
11. If no such written objections as are referred to in paragraph 9 are
presented to the Seller by the end of the review period, then the draft
Completion Accounts shall, as between the Seller and the Purchaser, be
deemed to have been accepted and approved by the Seller and the Purchaser
and shall be final and binding on the Seller and the Purchaser and shall
be deemed to constitute the "Completion Accounts" for all purposes of this
Agreement.
12. If any such written objections as are referred to in paragraph 9 are
presented to the Seller by the end of the review period, then the Seller
and the Purchaser shall attempt to resolve the matters in dispute in good
faith negotiations. If there are any such matters in dispute between the
Seller and the Purchaser which have not been resolved in good faith
negotiations within a period of 14 days after the end of the review
period, then the matters remaining in dispute shall be referred at the
election of either party for determination to a partner of at least 10
years qualified experience at , with experience of acting as an expert, at
Price Waterhouse or, if no such partner is able to act, by an independent
firm of internationally recognised chartered accountants to be selected,
on the application of either the Purchaser or the Seller, by the President
for the time being of the Institute of Chartered Accountants in England
and Wales (the "expert"), who shall be instructed to notify both the
Seller and the Purchaser of his determination within 14 days of such
referral, or as soon as practicable thereafter.
13. The following terms of reference for the expert shall apply:
(i) the Purchaser and the Seller shall each promptly prepare a written
statement on the matters remaining in dispute which (together with
the relevant documents) shall be submitted to the expert for
determination, provided that no matters shall be disputed by the
Purchaser which were not included within the written statement of
objections referred to in paragraph 9;
(ii) in giving such determination, the expert shall state what
adjustments (if any) are necessary to the draft Completion Accounts
in respect of the matters in dispute in order to comply with the
requirements of this Schedule and the reasons for such adjustments,
and shall also, if requested, confirm that his determination has
taken into account any matters referred to him pursuant to paragraph
7(B) of Schedule 4;
(iii) the expert shall act as an expert (and not as an arbitrator) in
making any such determination;
<PAGE>
149
(iv) the expenses of any such determination by the expert shall be borne
between the Seller and the Purchaser in such proportions as the
expert shall in its discretion determine.
14. The Seller shall, and shall procure that the Seller's Auditors shall, and
the Purchaser shall and shall procure that each member of the Group and
the Purchaser's Auditors shall, give the expert reasonable access at
reasonable time to all books and records in their respective possession or
control relating to the Group on or prior to the Completion Accounts Date
and generally shall provide the expert with such other information and
assistance as the expert may reasonable require.
15. The draft Completion Accounts as amended by the expert shall, as between
the Seller and the Purchaser and in the absence of manifest error, be
deemed to have been accepted and approved by the Seller and the Purchaser.
The draft Completion Accounts accepted and approved, or deemed to be
accepted and approved, by the Seller and the Purchaser at any stage in the
procedures set out in this Schedule shall be final and binding on the
Seller and the Purchaser and shall be deemed to constitute the "Completion
Accounts" for all purposes of this Agreement.
<PAGE>
152
Signed by JOHN CARTER )
for and on behalf of )
HEPWORTH R. AND M. HOLDINGS LIMITED ) /s/ J.D. Carter
) ----------------------------
Signed by JOHN CARTER )
for and on behalf of ) /s/ J.D. Carter
HEPWORTH PLC ) ----------------------------
Signed by STEVEN ELBAUM )
for and on behalf of ) /s/ S. Elbaum
REFRACO HOLDINGS LIMITED ) ----------------------------
Signed by STEVEN ELBAUM )
for and on behalf of ) /s/ S. Elbaum
THE ALPINE GROUP, INC. ) ----------------------------
================================================================================
CREDIT AGREEMENT
among
REFRACO INC.,
ADIENCE, INC.,
REFRACO HOLDINGS LIMITED,
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
----------------------------------
Dated as of April 15, 1997
----------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit.......................... 1
1.01 The Commitments..................................... 1
1.02 Minimum Amount of Each Borrowing.................... 5
1.03 Notice of Borrowing................................. 5
1.04 Disbursement of Funds............................... 6
1.05 Notes............................................... 7
1.06 Conversions......................................... 10
1.07 Pro Rata Borrowings................................. 11
1.08 Interest............................................ 11
1.09 Interest Periods.................................... 12
1.10 Increased Costs, Illegality, etc.................... 14
1.11 Compensation........................................ 18
1.12 Lending Offices; Changes Thereto.................... 18
1.13 Replacement of Banks................................ 19
SECTION 2. Letters of Credit................................... 21
2.01 Letters of Credit................................... 21
2.02 Maximum Letter of Credit Outstandings; Final
Maturities.......................................... 22
2.03 Letter of Credit Requests; Notices of Issuance;
Minimum Stated Amount............................... 23
2.04 Letter of Credit Participations..................... 24
2.05 Agreement to Repay Letter of Credit Drawings........ 26
2.06 Increased Costs..................................... 27
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.......................................... 28
3.01 Fees................................................ 28
3.02 Voluntary Termination of Unutilized Commitments..... 30
3.03 Mandatory Reduction of Commitments.................. 30
SECTION 4. Prepayments; Payments; Taxes........................ 32
4.01 Voluntary Prepayments............................... 32
4.02 Mandatory Repayments and Commitment Reductions...... 32
4.03 Method and Place of Payment......................... 43
(i)
<PAGE>
Page
----
4.04 Net Payments........................................ 44
SECTION 5. Conditions Precedent to Initial Credit Events....... 47
5.01 Execution of Agreement; Notes....................... 47
5.02 Opinions of Counsel................................. 48
5.03 Corporate Documents; Proceedings; etc............... 48
5.04 Plans; Shareholders' Agreements; Management Agree-
ments; Collective Bargaining Agreements; Existing
Indebtedness Agreements............................. 48
5.05 Floating Rate Loans................................. 49
5.06 Consummation of Acquisition; Etc.................... 50
5.07 Existing Credit Agreement........................... 51
5.08 Adverse Change, etc................................. 52
5.09 Litigation.......................................... 52
5.10 U.S. Pledge Agreement............................... 52
5.11 U.S. Security Agreement............................. 53
5.12 U.K. Security Document.............................. 54
5.13 Guaranties.......................................... 54
5.14 Mortgage; Title Insurance........................... 55
5.15 Projections; Pro Forma Balance Sheet................ 55
5.16 Solvency Certificate; Environmental Analyses;
Insurance Analyses.................................. 56
5.17 Fees, etc........................................... 56
5.18 Termination of Confidentiality Undertakings......... 57
5.19 Repayment of 11% Senior Secured Notes............... 57
SECTION 6. Conditions Precedent to All Credit Events........... 57
6.01 No Default; Representations and Warranties.......... 57
6.02 Notice of Borrowing; Letter of Credit Request....... 57
SECTION 7. Representations, Warranties and Agreements.......... 58
7.01 Corporate and Other Status.......................... 58
7.02 Corporate and Other Power and Authority............. 58
7.03 No Violation........................................ 59
7.04 Governmental Approvals.............................. 59
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc........... 59
7.06 Litigation.......................................... 61
(ii)
<PAGE>
Page
----
7.07 True and Complete Disclosure........................ 61
7.08 Use of Proceeds; Margin Regulations................. 62
7.09 Tax Returns and Payments............................ 62
7.10 Compliance with ERISA............................... 63
7.11 The Security Documents.............................. 64
7.12 Representations and Warranties in Other Documents... 66
7.13 Properties.......................................... 66
7.14 Capitalization...................................... 66
7.15 Subsidiaries........................................ 66
7.16 Compliance with Statutes, etc....................... 67
7.17 Investment Company Act.............................. 67
7.18 Public Utility Holding Company Act.................. 67
7.19 Environmental Matters............................... 67
7.20 Labor Relations..................................... 68
7.21 Patents, Licenses, Franchises and Formulas.......... 68
7.22 Indebtedness........................................ 69
7.23 Transaction......................................... 69
7.24 Special Purpose Corporation......................... 69
7.25 No Tax Sharing Agreements........................... 69
SECTION 8. Affirmative Covenants............................... 69
8.01 Information Covenants............................... 70
8.02 Books, Records and Inspections...................... 74
8.03 Maintenance of Property; Insurance.................. 74
8.04 Corporate Franchises................................ 75
8.05 Compliance with Statutes, etc....................... 76
8.06 Compliance with Environmental Laws.................. 76
8.07 ERISA............................................... 77
8.08 End of Fiscal Years; Fiscal Quarters................ 78
8.09 Performance of Obligations.......................... 78
8.10 Payment of Taxes.................................... 78
8.11 Additional Security; Further Assurances............. 79
8.12 Foreign Subsidiaries Security....................... 81
8.16 Permitted Acquisitions.............................. 83
8.17 Post-Closing Restructuring.......................... 83
8.18 Long Form Report.................................... 84
SECTION 9. Negative Covenants.................................. 84
(iii)
<PAGE>
Page
----
9.01 Liens............................................... 84
9.02 Consolidation, Merger, Purchase or Sale of Assets,
etc................................................. 87
9.03 Restricted Payments................................. 89
9.04 Indebtedness........................................ 91
9.05 Advances, Investments and Loans..................... 93
9.06 Transactions with Affiliates........................ 94
9.07 Capital Expenditures................................ 95
9.08 Consolidated Fixed Charge Coverage Ratio............ 96
9.09 Consolidated Interest Coverage Ratio................ 96
9.10 Maximum Leverage Ratio.............................. 97
9.11 Minimum Consolidated EBITDA......................... 98
9.12 Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other
Agreements; etc..................................... 99
9.13 Limitation on Certain Restrictions on Subsidiaries.. 100
9.14 Limitation on Issuance of Capital Stock............. 100
9.15 Business............................................ 101
9.16 Limitation on Creation of Subsidiaries.............. 101
SECTION 10. Events of Default................................... 102
10.01 Payments............................................ 102
10.02 Representations, etc................................ 102
10.03 Covenants........................................... 102
10.04 Default Under Other Agreements...................... 103
10.05 Bankruptcy, etc..................................... 103
10.06 ERISA............................................... 104
10.07 Security Documents.................................. 104
10.08 Guaranties.......................................... 105
10.09 Judgments........................................... 105
10.10 Change of Control................................... 105
SECTION 11. Definitions and Accounting Terms.................... 106
11.01 Defined Terms....................................... 106
SECTION 12. The Administrative Agent............................ 145
12.01 Appointment......................................... 145
12.02 Nature of Duties.................................... 146
12.03 Lack of Reliance on the Administrative Agent........ 146
(iv)
<PAGE>
Page
----
12.04 Certain Rights of the Administrative Agent.......... 146
12.05 Reliance............................................ 147
12.06 Indemnification..................................... 147
12.07 The Administrative Agent in its Individual Capacity. 147
12.08 Holders............................................. 148
12.09 Resignation by the Administrative Agent............. 148
SECTION 13. Miscellaneous....................................... 149
13.01 Payment of Expenses, etc............................ 149
13.02 Right of Setoff..................................... 150
13.03 Notices............................................. 150
13.04 Benefit of Agreement; Assignments; Participations... 151
13.05 No Waiver; Remedies Cumulative...................... 153
13.06 Payments Pro Rata................................... 154
13.07 Calculations; Computations.......................... 154
13.08 GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE; WAIVER OF JURY TRIAL........... 155
13.09 Counterparts........................................ 157
13.10 Effectiveness....................................... 157
13.11 Headings Descriptive................................ 157
13.12 Amendment or Waiver; etc............................ 157
13.13 Survival............................................ 159
13.14 Domicile of Loans................................... 159
13.15 Register............................................ 160
13.16 Judgment Currency................................... 160
13.17 Confidentiality..................................... 161
13.18 Acknowledgement..................................... 162
13.19 Limitation on Additional Amounts, etc............... 162
13.20 Post Closing Actions................................ 163
13.21 Acknowledgement Regarding Hepworth.................. 165
SECTION 14. U.S. Parents Guaranty............................... 165
14.01 The Guaranty........................................ 165
14.02 Bankruptcy.......................................... 165
14.03 Nature of Liability................................. 166
14.04 Independent Obligation.............................. 166
14.05 Authorization....................................... 167
14.06 Reliance............................................ 168
(v)
<PAGE>
Page
----
14.07 Subordination....................................... 168
14.08 Waiver.............................................. 168
14.09 Nature of Liability................................. 169
(vi)
<PAGE>
Page
----
SCHEDULE I Commitments
SCHEDULE II Bank Addresses and Applicable Lending Offices
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
SCHEDULE VIII Existing Investments
SCHEDULE IX-A Organization Chart (post-Acquisition, but pre-Restructuring)
SCHEDULE IX-B Organization Chart (post-Restructuring)
SCHEDULE X Restrictions Applicable to Adience Subsidiaries
SCHEDULE XI Calculation of the MLA Cost
SCHEDULE XII Hepworth Acquisition/Adience Refinancing/
Restructuring Description
SCHEDULE XIII Tax Matters
SCHEDULE XIV ERISA Matters
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Adience B Term Note
EXHIBIT B-2 Newco A Term Note
EXHIBIT B-3 Newco B Term Note
EXHIBIT B-4 Dollar Revolving Note
EXHIBIT B-5 Sterling Revolving Note
EXHIBIT B-6 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of Proskauer Rose Goetz
& Mendelsohn LLP, U.S. counsel to
the Credit Parties
EXHIBIT E-2 Opinion of Freshfields, U.K. counsel
to the Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G U.S. Pledge Agreement
EXHIBIT H U.S. Security Agreement
EXHIBIT I U.K. Security Agreement
(vii)
<PAGE>
EXHIBIT J U.S. Subsidiary Guaranty
EXHIBIT K Solvency Certificate
EXHIBIT L Assignment and Assumption Agreement
EXHIBIT M Adience U.K. Pledge Agreement
EXHIBIT N Newco U.K. Pledge Agreement
EXHIBIT O Hepworth Assumption Agreement
(viii)
<PAGE>
CREDIT AGREEMENT, dated as of April 15, 1997, among REFRACO INC., a
Delaware corporation ("Holdings"), ADIENCE, INC., a Delaware corporation
("Adience"), REFRACO HOLDINGS LIMITED, a private limited company organized under
the laws of England with registered number 3354257 ("Newco") and, after it
becomes a party hereto in accordance with the relevant requirements of Section
13.20(a), HEPWORTH REFRACTORIES (HOLDINGS) LIMITED, a private limited liability
company organized under the laws of England with registered number 00054713
("Hepworth" and, together with Adience and Newco, the "Borrowers" and each a
"Borrower"), the Banks party hereto from time to time, and BANKERS TRUST
COMPANY, as Administrative Agent (all capitalized terms used herein and defined
in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrowers the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with an Adience B Term Loan Commitment
severally agrees to make, on the Initial Borrowing Date, a term loan or term
loans (each an "Adience B Term Loan" and, collectively, the "Adience B Term
Loans") to Adience, which Adience B Term Loans (i) shall be made and maintained
in Dollars, (ii) shall be made and initially maintained as a single Borrowing of
Base Rate Loans (subject to the option to convert such Adience B Term Loans
pursuant to Section 1.06) and (iii) shall be made by each such Bank in that
initial aggregate principal amount as is equal to the Adience B Term Loan
Commitment of such Bank on the Initial Borrowing Date (before giving effect to
any reductions thereto on such date pursuant to Section 3.03(b)(i) but after
giving effect to any reductions thereto on or prior to such date pursuant to
Section
<PAGE>
3.03(b)(ii)). Once repaid, Adience B Term Loans incurred hereunder may not be
reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Newco A Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan or term loans (each a "Newco A Term Loan"
and, collectively, the "Newco A Term Loans") to Newco, which Newco A Term Loans
(i) shall be made and maintained in Pounds Sterling and (ii) shall be made by
each such Bank in that initial aggregate principal amount as is equal to the
Newco A Term Loan Commitment of such Bank on the Initial Borrowing Date (before
giving effect to any reductions thereto on such date pursuant to Section
3.03(c)(i) but after giving effect to any reductions thereto on or prior to such
date pursuant to Section 3.03(c)(ii)). Once repaid, Newco A Term Loans incurred
hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank with a Newco B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan or term loans (each a "Newco B Term Loan"
and, collectively, the "Newco B Term Loans") to Newco, which Newco B Term Loans
(i) shall be made and maintained in Dollars, (ii) shall be made and initially
maintained as a single Borrowing of Base Rate Loans (subject to the option to
convert such Newco B Term Loans pursuant to Section 1.06) and (iii) shall be
made by each such Bank in that initial aggregate principal amount as is equal to
the Newco B Term Loan Commitment of such Bank on the Initial Borrowing Date
(before giving effect to any reductions thereto on such date pursuant to Section
3.03(d)(i) but after giving effect to any reductions thereto on or prior to such
date pursuant to Section 3.03(d)(ii)). Once repaid, Newco B Term Loans incurred
hereunder may not be reborrowed.
(d) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a revolving loan or revolving loans (each
a "Revolving Loan" and, collectively, the "Revolving Loans") to the Revolving
Loan Borrowers, which Revolving Loans (i) shall, in the case of Revolving Loans
made to Adience, be made and maintained in Dollars (each a "Dollar Revolving
Loan" and, collectively, the "Dollar Revolving Loans"), which Dollar Revolving
Loans shall, at the option of Adience, be incurred and maintained as, and/or
converted into, Base Rate Loans and Eurodollar Loans, provided that (A) except
as otherwise specifically provided in Section 1.10(b),
all Dollar Revolving Loans comprising the same Borrowing shall at all times be
of the same Type and (B) no Revolving Loans maintained as Eurodollar Loans may
be incurred prior to the earlier of (1) the 60th day after the Initial Borrowing
Date and (2) the Syndication Date, (ii) shall,
-2-
<PAGE>
in the case of Revolving Loans made to Hepworth, be made and maintained in
Pounds Sterling (each a "Sterling Revolving Loan" and, collectively, the
"Sterling Revolving Loans"), (iii) may be repaid and reborrowed in accordance
with the provisions hereof, (iv) shall not exceed for any Bank at the time of
the making of any such Revolving Loans, and after giving effect thereto, that
aggregate principal amount (for this purpose, using the Dollar Equivalent of
each outstanding Sterling Revolving Loan) which, when added to the sum of (I)
the aggregate principal amount of all other Revolving Loans then outstanding
from such Bank (for this purpose, using the Dollar Equivalent of each Sterling
Revolving Loan then outstanding from such Bank) and (II) the product of (A) such
Bank's RL Percentage and (B) the sum of (x) the aggregate amount of all Letter
of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the Revolving Loan
Commitment of such Bank at such time and (y) the aggregate principal amount of
all Swingline Loans (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, (v) shall not, in the case of
Dollar Revolving Loans, at any time exceed in aggregate outstanding principal
amount, when added to (x) the aggregate amount of all Adience Letter of Credit
Outstandings (exclusive of any Unpaid Drawings with respect thereto which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Dollar Revolving Loans) and (y) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of Dollar Revolving
Loans), the amount of the Dollar Revolving Sub-Limit and (vi) shall not, in the
case of Sterling Revolving Loans, at any time exceed in aggregate outstanding
principal amount, when added to the aggregate amount of all Hepworth Letter of
Credit Outstandings (exclusive of any Unpaid Drawings with respect thereto which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Sterling Revolving Loans), the amount of the Sterling
Revolving Sub-Limit.
(e) Subject to and upon the terms and conditions set forth herein,
BTCo in its individual capacity agrees to make, from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan
or revolving loans (each a "Swingline Loan" and, collectively, the "Swingline
Loans") to Adience, which Swingline Loans (i) shall be made and maintained in
Dollars, (ii) shall be made and maintained as Base Rate Loans, (iii) may be
repaid and reborrowed in accordance with the provisions hereof, (iv) shall not
exceed in aggregate principal amount at any time outstanding, when combined with
the aggregate principal amount of all Revolving Loans (for this purpose, using
the Dollar Equivalent of each outstanding Sterling Revolving
-3-
<PAGE>
Loan) then outstanding and the Letter of Credit Outstandings at such time, an
amount equal to the Total Revolving Loan Commitment at such time (after giving
effect to any reductions to the Total Revolving Loan Commitment on such date),
(v) shall not exceed in the aggregate principal amount at any time outstanding,
when combined with the aggregate principal amount of all Dollar Revolving Loans
then outstanding and the Adience Letter of Credit Outstandings at such time, an
amount equal to the Dollar Revolving Sub-Limit and (vi) shall not exceed in
aggregate principal amount at any time outstanding, the Maximum Swingline
Amount. BTCo shall not be obligated to make any Swingline Loans at a time when a
Bank Default exists unless BTCo has entered into arrangements satisfactory to it
to eliminate BTCo's risk with respect to the Defaulting Bank's or Banks'
participation in such Swingline Loans, including by cash collateralizing such
Defaulting Bank's or Banks' RL Percentage of the outstanding Swingline Loans.
Notwithstanding anything to the contrary contained in this Section 1.01(e), BTCo
shall not make any Swingline Loan after it has received written notice from any
Borrower or the Required Banks stating that a Default or an Event of Default
exists and is continuing until such time as BTCo shall have received written
notice (i) of rescission of all such notices from the party or parties
originally delivering such notice, (ii) of the waiver of such Default or Event
of Default by the Required Banks or (iii) that the Administrative Agent in good
faith believes such Default or Event of Default has ceased to exist.
(f) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks that its outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (provided that such notice shall be deemed to have
been automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all Banks with a
Revolving Loan Commitment (without giving effect to any reductions thereto
pursuant to the last paragraph of Section 10) pro rata based on each Bank's RL
Percentage (determined before giving effect to any termination of the Revolving
Loan Commitments pursuant to the last paragraph of Section 10) and the proceeds
thereof shall be applied directly to BTCo to repay BTCo for such outstanding
Swingline Loans. Each such Bank hereby irrevocably agrees to make Revolving
Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified in writing by BTCo notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Section 6
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing and (v) the
-4-
<PAGE>
amount of the Total Revolving Loan Commitment at such time or the Dollar
Revolving Sub-Limit. In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to Adience), then each such Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from Adience on or after such
date and prior to such purchase) from BTCo such participations in the
outstanding Swingline Loans as shall be necessary to cause such Banks to share
in such Swingline Loans ratably based upon their respective RL Percentages
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 10), provided that (x) all
interest payable on the Swingline Loans shall be for the account of BTCo until
the date as of which the respective participation is required to be purchased
and, to the extent attributable to the purchased participation, shall be payable
to the participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Bank
shall be required to pay BTCo interest on the principal amount of the
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Term Loans shall not be less than (x) in the case of
B Term Loans, $5,000,000 and (y) in the case of Newco A Term Loans,
(pounds)2,000,000. The aggregate principal amount of each Borrowing of Revolving
Loans shall not be less than (x) in the case of Dollar Revolving Loans,
$1,000,000 and (y) in the case of Sterling Revolving Loans, (pounds)500,000;
provided that Mandatory Borrowings shall be made in the amounts required by
Section 1.01(f). The aggregate principal amount of each Borrowing of Swingline
Loans shall not be less than $250,000. More than one Borrowing may occur on the
same date, but at no time shall there be outstanding more than 12 Borrowings of
Euro Rate Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires to incur
Loans hereunder (excluding Borrowings (x) of Swingline Loans and (y) Revolving
Loans incurred pursuant to a Mandatory Borrowing), it shall give the
Administrative Agent at its Notice Office at least one Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each Base
Rate Loan, at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of each Euro
-5-
<PAGE>
Rate Loan to be incurred hereunder, provided that any such notice shall be
deemed to have been given on a certain day only if given before 11:00 A.M. (New
York time) (or 10:00 A.M. (London time) in the case of Sterling Loans) on such
day. Each such written notice or written confirmation of telephonic notice (each
a "Notice of Borrowing"), except as otherwise expressly provided in Section
1.10, shall be irrevocable and shall be given by the respective Borrower in the
form of Exhibit A, appropriately completed to specify (i) the name of such
Borrower, (ii) the aggregate principal amount of the Loans to be incurred
pursuant to such Borrowing (stated in the Applicable Currency), (iii) the date
of such Borrowing (which shall be a Business Day), (iv) whether the Loans being
incurred pursuant to such Borrowing shall constitute Adience B Term Loans, Newco
A Term Loans, Newco B Term Loans or Revolving Loans, (v) in the case of Dollar
Loans, whether the Loans being incurred pursuant to such Borrowing are to be
initially maintained as Base Rate Loans or Eurodollar Loans and (vi) in the case
of Euro Rate Loans, the initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Bank which is required to make
Loans of the Tranche specified in the respective Notice of Borrowing, notice of
such proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.
(b)(i) Whenever Adience desires to incur Swingline Loans hereunder,
it shall give BTCo not later than 12:00 Noon (New York time) on the date that a
Swingline Loan is to be incurred, written notice or telephonic notice promptly
confirmed in writing of each Swingline Loan to be incurred hereunder. Each such
notice shall be irrevocable and specify in each case (A) the date of Borrowing
(which shall be a Business Day) and (B) the aggregate principal amount of the
Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(f), with Adience irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(f).
(c) Without in any way limiting the obligation of any Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, BTCo (in the case of a Borrowing of Swingline Loans) or
the Issuing Bank (in the case of issuance of Letters of Credit), as the case may
be, may act without liability upon the basis of such telephonic notice, believed
by the Administrative Agent, BTCo or the Issuing Bank, as the case may be, in
good faith to be from an Authorized Officer of such Borrower prior to receipt of
written confirmation. In each
-6-
<PAGE>
such case, each Borrower hereby waives the right to dispute the Administrative
Agent's or Issuing Bank's record of the terms of such telephonic notice.
1.04 Disbursement of Funds. Not later than 12:00 Noon (New York time
or, in the case of any Sterling Loan to be made available in London after the
Initial Borrowing Date, London time, if so requested by Hepworth on the date
specified in each Notice of Borrowing (or (x) in the case of Swingline Loans,
not later than 2:00 P.M. (New York time) on the date specified in Section
1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than 12:00 Noon
(New York time) on the date specified in Section 1.01(f)), each Bank with a
Commitment of the respective Tranche will make available its pro rata portion
(determined in accordance with Section 1.07) of each such Borrowing requested to
be made on such date (or in the case of Swingline Loans, BTCo shall make
available the full amount thereof) in the manner provided below. All such
amounts will be made available in Dollars (in the case of Dollar Loans) or
Pounds Sterling (in the case of Sterling Loans), as the case may be, and in
immediately available funds at the appropriate Payment Office of the
Administrative Agent, and the Administrative Agent will make available to the
relevant Borrower by depositing to its account at such Payment Office the
aggregate of the amounts so made available by the Banks in the type of funds
received. Unless the Administrative Agent shall have been notified by any Bank
prior to the date of Borrowing that such Bank does not intend to make available
to the Administrative Agent such Bank's portion of any Borrowing to be made on
such date, the Administrative Agent may assume that such Bank has made such
amount available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the relevant Borrower and such Borrower shall
immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover on demand from such Bank
or such Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to such Borrower until the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
(i) if recovered from such Bank, at the overnight Federal Funds Rate and (ii) if
recovered from such Borrower, the rate of interest applicable to the respective
Borrowing, as determined pursuant to Section 1.08. Nothing in this Section 1.04
shall be deemed to relieve any Bank from its obligation to make Loans hereunder
or to preju-
-7-
<PAGE>
dice any rights which the relevant Borrower may have against any Bank as a
result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) Each Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Bank shall be evidenced (i) if Adience B
Term Loans, by a promissory note duly executed and delivered by Adience
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each an "Adience B Term Note" and, collectively, the
"Adience B Term Notes"), (ii) if Newco A Term Loans, by a promissory note duly
executed and delivered by Newco substantially in the form of Exhibit B-2, with
blanks appropriately completed in conformity herewith (each a "Newco A Term
Note" and, collectively, the "Newco A Term Notes"), (iii) if Newco B Term Loans,
by a promissory note duly executed and delivered by Newco substantially in the
form of Exhibit B-3, with blanks appropriately completed in conformity herewith
(each a "Newco B Term Note" and, collectively, the "Newco B Term Notes"), (iv)
if Dollar Revolving Loans, by a promissory note duly executed and delivered by
Adience substantially in the form of Exhibit B-4, with blanks appropriately
completed in conformity herewith (each a "Dollar Revolving Note" and,
collectively, the "Dollar Revolving Notes"), (v) if Sterling Revolving Loans, by
a promissory note duly executed and delivered by Hepworth substantially in the
form of Exhibit B-5, with blanks appropriately completed in conformity herewith
(each a "Sterling Revolving Note" and, collectively, the "Sterling Revolving
Notes") and (vi) if Swingline Loans, by a promissory note substantially in the
form of Exhibit B-6, with blanks appropriately completed in conformity herewith
(the "Swingline Note").
(b) The Adience B Term Note issued to each Bank that has an Adience
B Term Loan Commitment or outstanding Adience B Term Loans shall (i) be executed
by Adience, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date (or if issued thereafter, the date of issuance), (iii) be in a
stated principal amount equal to the Adience B Term Loans made by such Bank and
be payable in Dollars in the outstanding principal amount of Adience B Term
Loans evidenced thereby, (iv) mature on the B Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents (to the extent and in
the manner provided therein).
(c) The Newco A Term Note issued to each Bank that has a Newco A
Term Loan Commitment or outstanding Newco A Term Loans shall (i) be executed by
-8-
<PAGE>
Newco, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date (or if issued thereafter, the date of issuance), (iii) be in a
stated principal amount equal to the Newco A Term Loans made by such Bank and be
payable in Pounds Sterling in the outstanding principal amount of Newco A Term
Loans evidenced thereby, (iv) mature on the A Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Newco A Term Loans evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents (to the extent and in the manner provided therein).
(d) The Newco B Term Note issued to each Bank that has a Newco B
Term Loan Commitment or outstanding Newco B Term Loans shall (i) be executed by
Newco, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date (or if issued thereafter, the date of issuance), (iii) be in a
stated principal amount equal to the Newco B Term Loans made by such Bank and be
payable in Dollars in the outstanding principal amount of Newco B Term Loans
evidenced thereby, (iv) mature on the B Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents (to the extent and in
the manner provided therein).
(e) The Dollar Revolving Note issued to each Bank that has a
Revolving Loan Commitment shall (i) be executed by Adience, (ii) be payable to
the order of such Bank and be dated the Initial Borrowing Date (or if issued
thereafter, the date of issuance), (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Bank and be payable in Dollars in the
outstanding principal amount of Dollar Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of Base Rate Loans and Eurodollar
Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01, and mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents (to the extent and in the manner provided therein).
(f) The Sterling Revolving Note issued to each Bank that has a
Revolving Loan Commitment or outstanding Sterling Revolving Loans shall (i) be
executed by Hepworth, (ii) be payable to the order of such Bank and be dated the
Initial
-9-
<PAGE>
Borrowing Date (or if issued thereafter, the date of issuance), (iii) be in a
stated principal amount equal to the respective Bank's RL Percentage of the
Sterling Revolving Sub-Limit and be payable in Pounds Sterling in the
outstanding principal amount of the Sterling Revolving Loans evidenced thereby,
(iv) mature on the Revolving Loan Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Sterling Revolving
Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents (to
the extent and in the manner provided therein).
(g) The Swingline Note issued to BTCo shall (i) be executed by
Adience, (ii) be payable to the order of BTCo and be dated the Initial Borrowing
Date (or, if issued thereafter, the date of the issuance thereof), (iii) be in a
stated principal amount equal to the Maximum Swingline Amount and be payable in
the principal amount of the outstanding Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents (to
the extent and in the manner provided therein).
(h) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the respective Borrower's
obligations in respect of such Loans.
1.06 Conversions. Adience or Newco (but not in respect of Newco A
Term Loans), as the case may be, shall have the option to convert, on any
Business Day occurring on or after the earlier of (i) the 60th day after the
Initial Borrowing Date and (ii) the Syndication Date, all or a portion equal to
at least (x) in the case of a conversion of Adience B Term Loans or Newco B Term
Loans, $5,000,000 and (y) in the case of a conversion of Dollar Revolving Loans,
$1,000,000, of the outstanding principal amount of such Dollar Loans made to
Adience or Newco, as the case may be, pursuant to one or more Borrowings (so
long as of the same Tranche of Dollar Loans) of one or more Types of Loans into
a Borrowing (of the same Tranche of Dollar Loans) of another Type of Loan,
provided that, (i) except as otherwise provided in Section 1.10(b), Euro dollar
Loans may be converted into Base Rate Loans only on the last day of an Interest
Period applicable to the Loans being converted and no such partial conversion of
Eurodollar
-10-
<PAGE>
Loans shall reduce the outstanding principal amount of such Eurodollar Loans
made pursuant to a single Borrowing to less than (x) in the case of a Borrowing
of B Term Loans, $5,000,000 and (y) in the case of a Borrowing of Dollar
Revolving Loans, $1,000,000, (ii) unless the Required Banks otherwise
specifically agree, Base Rate Loans may only be converted into Eurodollar Loans
if no Default under Section 10.01 or 10.05 or Event of Default is in existence
on the date of the conversion and (iii) no conversion pursuant to this Section
1.06 shall result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 1.02. Each such conversion shall be effected by Adience
or Newco, as the case may be, by giving the Administrative Agent at its Notice
Office prior to 12:00 Noon (New York time or, in the case of Newco B Term Loans,
London time) at least two Business Days' prior notice (each a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans. Upon any such conversion the proceeds
thereof will be deemed to be applied directly on the day of such conversion to
prepay the outstanding principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Adience B Term Loans,
Newco A Term Loans, Newco B Term Loans and Revolving Loans under this Agreement
shall be incurred from the Banks pro rata on the basis of their Adience B Term
Loan Commitments, Newco A Term Loan Commitments, Newco B Term Loan Commitments
or Revolving Loan Commitments, as the case may be, provided that all Borrowings
of Revolving Loans made pursuant to a Mandatory Borrowing shall be incurred from
the Banks with Revolving Loan Commitments pro rata on the basis of their RL
Percentages. It is understood that no Bank shall be responsible for any default
by any other Bank of its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) Each of Adience and Newco hereby severally agree
to pay interest in respect of the unpaid principal amount of each Base Rate Loan
made to it from the date the proceeds thereof are made available to Adience or
Newco, as the case may be, until the earlier of (x) the maturity thereof
(whether by acceleration or otherwise) and (y) the conversion of such Base Rate
Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per annum which
shall be equal to the sum of the Applicable Margin plus the Base Rate in effect
from time to time.
-11-
<PAGE>
(b) Each of Adience and Newco hereby severally agree to pay interest
in respect of the unpaid principal amount of each Eurodollar Loan made to it
from the date the proceeds thereof are made available to Adience or Newco, as
the case may be, until the earlier of (x) the maturity thereof (whether by
acceleration or otherwise) and (y) the conversion of such Eurodollar Loan to a
Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate
per annum which shall, during each Interest Period applicable thereto, be equal
to the sum of the Applicable Margin plus the Eurodollar Rate for such Interest
Period.
(c) Each of Newco and Hepworth hereby severally agrees to pay
interest in respect of the unpaid principal amount of each Sterling Loan made to
it from the date the proceeds thereof are made available to Newco or Hepworth,
as the case may be, until the maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Sterling Euro Rate for such Interest Period plus the MLA Cost.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum (1) in the case of
overdue principal of, and interest or other amounts owing with respect to,
Sterling Loans and amounts owing with respect to Hepworth Letters of Credit or
Hepworth Letter of Credit Outstandings, equal to 2% per anum in excess of the
Applicable Margin plus the Sterling Euro Rate for such successive periods not
exceeding three months as the Administrative Agent may determine from time to
time in respect of amounts comparable to the amount not paid plus the MLA Cost
and (2) in all other cases, equal to the greater of (x) 2% per annum in excess
of the rate otherwise applicable to Base Rate Loans of the respective Tranche
(or in the case of amounts which do not relate to a given Tranche of outstanding
Dollar Loans, 2% per annum in excess of the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans) from time to time and (y) the
rate which is 2% in excess of the rate borne by the respective such Loans at the
time of the payment default, in each case with such interest to be payable on
demand.
(e) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in the case of any Eurodollar Loan, on the date of any
conversion to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as
applicable (on the amount so converted), (iii) in respect of each Euro Rate
Loan, on the last day of each Interest Period applicable thereto and, in the
case of an Interest Period in excess of three months, on each date
-12-
<PAGE>
occurring at three month intervals after the first day of such Interest Period
and (iv) in respect of each Loan, on any repayment or prepayment (on the amount
repaid or prepaid), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand.
(f) Upon each Interest Determination Date, the Administrative Agent
shall determine the respective Euro Rate for the respective Interest Period or
Interest Periods to be applicable to Euro Rate Loans and shall promptly notify
the respective Borrower and the Banks thereof. Each such determination shall,
absent manifest error, be final and conclusive and binding on all parties
hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing
or Notice of Conversion in respect of the making of, or conversion into, any
Euro Rate Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Euro Rate Loan (in the case of any subsequent Interest
Period), the respective Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Euro Rate Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six-month period, provided that:
(i) all Euro Rate Loans comprising a single Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Euro Rate
Loans shall commence on the date of such Borrowing (including, in the case
of Dollar Loans, the date of any conversion thereto from a Dollar Loan of
a different Type) and each Interest Period occurring thereafter in respect
of such Euro Rate Loans shall commence on the day on which the next
preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for a Euro Rate Loan begins on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period for a Euro Rate Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if any
Interest Period for a Euro Rate Loan would otherwise expire on a day which
is not a Business Day
-13-
<PAGE>
but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) unless the Required Banks otherwise specifically agree, no
Interest Period may be selected at any time when a Default under Section
10.01 or 10.05 or an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche
of Loans shall be selected which extends beyond the respective Maturity
Date for such Tranche of Loans;
(vii) no Interest Period in respect of any Borrowing of Adience B
Term Loans, Newco A Term Loans or Newco B Term Loans, as the case may be,
shall be selected which extends beyond any date upon which a mandatory
repayment of such Tranche of Term Loans will be required to be made under
Section 4.02(b)(i), (ii) or (iii), as the case may be, if the aggregate
principal amount of Adience B Term Loans, Newco A Term Loans or Newco B
Term Loans, as the case may be, which have Interest Periods which will
expire after such date will be in excess of the aggregate principal amount
of Adience B Term Loans, Newco A Term Loans or Newco B Term Loans, as the
case may be, then outstanding less the aggregate amount of such required
repayment; and
(viii) prior to the first to occur of the 60th day after the Initial
Borrowing Date and the Syndication Date, and notwithstanding anything to
the contrary contained elsewhere in this Agreement, (x) all Newco A Term
Loans shall be maintained as a single Borrowing, and successive Interest
Periods of one month only may be selected and (y) Interest Periods of one
month only may be selected with respect to Borrowings of Sterling
Revolving Loans.
Prior to the termination of any Interest Period applicable to
Sterling Loans, the respective Borrower may, at its option, designate that the
respective Borrowing subject thereto be split into more than one Borrowing (for
purposes of electing multiple Interest Periods to be subsequently applicable
thereto), so long as each such Borrowing resulting from the action taken
pursuant to this sentence meets the minimum Borrowing amount for Sterling Loans
of the respective Tranche set forth in Section 1.02. If upon the expiration of
any Interest Period applicable to a Borrowing of Euro Rate Loans, the relevant
Borrower has failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such Euro Rate Loans as provided above, such Borrower
shall be deemed to have elected (x) if Eurodollar Loans, to convert such
-14-
<PAGE>
Eurodollar Loans into Base Rate Loans and (y) if Sterling Loans, to select a
one-month Interest Period for such Sterling Loans, in either case effective as
of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
Bank shall have determined in good faith (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) and (iv) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the applicable
interbank market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of the respective Euro Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Euro Rate Loan because of (x) any change arising after the date of
this Agreement in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or in
the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Bank of the principal of
or interest on the Notes or any other amounts payable hereunder (except
for changes in the rate of tax on, or determined by reference to, the net
income or profits or franchise taxes based on net income of such Bank
pursuant to the laws of the jurisdiction in which it is organized or in
which its principal office or applicable lending office is located or any
subdivision thereof or therein) or (B) a change in official reserve
requirements (except to the extent covered by Section 1.10(d) in respect
of Sterling Loans or included in the computation of the Eurodollar Rate)
or any special deposit, assessment or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any Bank
(or its applicable lending office) and/or (y) other circumstances since
the date of this Agreement affecting such Bank or the applicable interbank
market or the position of such Bank in such market; or
(iii) at any time after the date of this Agreement, that the making
or continuance of any Euro Rate Loan has been made (x) unlawful by any law
or governmental rule, regulation or order, (y) impossible by compliance by
any Bank in good faith with any governmental request (whether or not
having force
-15-
<PAGE>
of law) or (z) impracticable as a result of a contingency occurring after
the date of this Agreement which materially and adversely affects the
applicable interbank market; or
(iv) at any time that Pounds Sterling are not available in
sufficient amounts, as determined in good faith by the Administrative
Agent, to fund any Borrowing of Sterling Loans requested pursuant to
Section 1.01;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) or (iv) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the respective Borrower and, except in the case of
clauses (i) and (iv) above, to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the
other Banks). Thereafter (w) in the case of clause (i) above, (A) in the event
that Eurodollar Loans are so affected, Eurodollar Loans shall no longer be
available until such time as the Administrative Agent notifies Adience and the
Banks that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by Adience with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by Adience, and (B)
in the event that any Sterling Loan is so affected, the Sterling Euro Rate shall
be determined on the basis provided in the proviso to the definition of Sterling
Euro Rate, (x) in the case of clause (ii) above, the respective Borrower shall,
subject to the provisions of Section 13.19 (to the extent applicable), pay to
such Bank, upon its written request therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the respective Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto), (y) in the case of clause (iii) above, the respective Borrower shall
take one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law and (z) in the case of
clause (iv) above, Sterling Loans shall no longer be available until such time
as the Administrative Agent notifies Newco, Hepworth and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no longer
exists, and any Notice of Borrowing giving by Newco or Hepworth, as the case may
be, with respect to such Sterling Loans which have not been incurred shall be
deemed rescinded by Newco or Hepworth, as the case may be.
-16-
<PAGE>
(b) At any time that any Euro Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the respective Borrower
may (and in the case of a Euro Rate Loan affected by the circumstances described
in Section 1.10(a)(iii) shall) either (x) if the affected Euro Rate Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Administrative Agent telephonic notice (confirmed in
writing) on the same date that such Borrower was notified by the affected Bank
or the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if
the affected Euro Rate Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent, (A) in the case of a
Eurodollar Loan, require the affected Bank to convert such Eurodollar Loan into
a Base Rate Loan and (B) in the case of a Sterling Loan, repay such Sterling
Loan in full, provided that, (i) if the circumstances described in Section
1.10(a)(iii) apply to any Sterling Loan, the Borrower may, in lieu of taking the
actions described above, maintain such Sterling Loan outstanding, in which case
the Sterling Euro Rate shall be determined on the basis provided in the proviso
to the definition of Sterling Euro Rate, unless the maintenance of such Sterling
Loan outstanding on such basis would not stop the conditions described in
Section 1.10(iii) from existing (in which case the actions described above,
without giving effect to the proviso, shall be required to be taken) and (ii) if
more than one Bank is affected at any time as described above in this clause
(b), then all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change (which introduction or change
shall have occurred after the date of this Agreement) in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrowers jointly and severally
agree to pay, subject to the provisions of Section 13.19 (to the extent
applicable), to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such other corporation
for the increased cost to such Bank or such other corporation or the reduction
in the rate of return to such Bank or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's determination of compensation
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Bank, upon deter-
-17-
<PAGE>
mining that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Borrowers, which notice
shall show in reasonable detail the basis for calculation of such additional
amounts. For the avoidance of doubt, nothing in this Section 1.10(c) shall
require any Borrower to pay to any Bank any amount for which it has already been
compensated by way of payment of the MLA Cost.
(d) In the event that any Bank shall in good faith determine (which
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto) at any time that such Bank is required to maintain
reserves (including, without limitation, any marginal, emergency, supplemental,
special or other reserves required by applicable law) which have been
established by any Federal, state, local or foreign court or governmental
agency, authority, instrumentality or regulatory body with jurisdiction over
such Bank (including any branch, Affiliate or funding office thereof) in respect
of any Sterling Loans or any category of liabilities which includes deposits by
reference to which the interest rate on any Sterling Loan is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to non-United States residents, then,
unless such reserves are included in the calculation of the interest rate
applicable to such Sterling Loans or in Section 1.10(a)(ii), such Bank shall
promptly notify Newco and Hepworth in writing specifying the additional amounts
required to indemnify such Bank against the cost of maintaining such reserves
(such written notice to provide in reasonable detail a computation of such
additional amounts) and the respective Borrower shall pay to such Bank such
specified amounts as additional interest at the time that the respective
Borrower is otherwise required to pay interest in respect of such Sterling Loan
or, if later, on written demand therefor by such Bank.
1.11 Compensation. Each Borrower shall, subject to the provisions of
Section 13.19 (to the extent applicable), compensate each Bank, upon its written
request (which request shall set forth in reasonable detail the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Euro Rate Loans, but excluding loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Euro Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any
repayment (including any repayment made pursuant to Section 4.01 or 4.02 or as a
result of an acceleration of the
-18-
<PAGE>
Loans pursuant to Section 10) or conversion of any of such Borrower's Euro Rate
Loans occurs on a date which is not the last day of an Interest Period with
respect thereto; (iii) if any prepayment of any of such Borrower's Euro Rate
Loans is not made on any date specified in a notice of prepayment given by such
Borrower; or (iv) as a consequence of (x) any other default by such Borrower to
repay its Loans when required by the terms of this Agreement or any Note held by
such Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Lending Offices; Changes Thereto. (a) Each Bank may at any time
or from time to time designate , by written notice to the Administrative Agent
to the extent not already reflected on Schedule II, one or more lending offices
(which, for this purpose, may include Affiliates of the respective Bank) for the
various Loans made, and Letters of Credit participated in, by such Bank
(including by designating a separate lending office (or Affiliate) to act as
such with respect to Dollar Loans and Adience Letter of Credit Outstandings
versus Sterling Loans and Hepworth Letter of Credit Outstandings); provided
that, for designations made after the Initial Borrowing Date, to the extent such
designation shall result in increased costs under Section 1.10, 2.06 or 4.04 in
excess of those which would be charged in the absence of the designation of a
different lending office (including a different Affiliate of the respective
Bank), then the Borrowers shall not be obligated to pay such excess increased
costs (although the Borrowers, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay the costs which would
apply in the absence of such designation and any subsequent increased costs of
the type described above resulting from changes after the date of the respective
designation). Each lending office and Affiliate of any Bank designated as
provided above shall, for all purposes of this Agreement, be treated in the same
manner as the respective Bank (and shall be entitled to all indemnities and
similar provisions in respect of its acting as such hereunder).
(b) Each Bank agrees that on the occurrence of any event giving rise
to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section
1.10(d), Section 2.06 or Section 4.04 with respect to such Bank, it will, if
requested by the applicable Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of any
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
-19-
<PAGE>
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of an event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 1.10(d), Section 2.06 or Section
4.04 with respect to any Bank which results in such Bank charging to any
Borrower increased costs in excess of those being generally charged by the other
Banks or (z) in the case of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12, Adience shall have the right, if no Default under
Section 10.01 or 10.05 and no Event of Default then exists (or, in the case of
preceding clause (z), no Default under Section 10.01 or 10.05 and no Event of
Default will exist immediately after giving effect to such replacement), to
either (1) replace such Bank (the "Replaced Bank") with one or more other
Eligible Transferees, none of whom shall constitute a Defaulting Bank at the
time of such replacement (collectively, the "Replacement Bank") and each of whom
shall be required to be reasonably acceptable to the Administrative Agent or (2)
at the option of Adience, replace only (a) the Revolving Loan Commitment (and
outstandings pursuant thereto) of the Replaced Bank with an identical Revolving
Loan Commitment (and related outstandings) provided by the Replacement Bank or
(b) in the case of a replacement as provided in Section 13.12(b) where the
consent of the respective Bank is required with respect to less than all
Tranches of its Loans or Commitments, the Commitments and/or outstanding Term
Loans of such Bank in respect of each Tranche where the consent of such Bank
would otherwise be individually required, with identical Commitments and/or Term
Loans of the respective Tranche provided by the Replacement Bank, provided that
(i) any replacement pursuant to this Section 1.13 shall be required to comply
with the requirements of Section 13.04(b) (including without limitation those
relating to pro rata assignments) and at the time of any replacement pursuant to
this Section 1.13, the Replacement Bank shall enter into one or more Assignment
and Assumption Agreements pursuant to Section 13.04(b) (and with all fees
payable pursuant to said Section 13.04(b) to be paid by the Replacement Bank)
pursuant to which the Replacement Bank shall acquire all of the Commitments and
outstanding Loans (or, in the case of the replacement of only (a) the Revolving
Loan Commitment, the Revolving Loan Commitment and outstanding Revolving Loans
and participations in Letter of Credit Outstandings and/or (b) the outstanding
Term Loans and/or Term Loan Commitments of the respective Tranche or Tranches)
of, and in each case (except for the replacement of only the outstanding Term
Loans (and/or Term Loan Commitments, as the case may be) of one or more Tranches
of the respective Bank) participations in Letters of Credit by, the Replaced
Bank and, in connection therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (I) the principal of, and all accrued
interest on, all outstanding Loans (or of the Loans of the
-20-
<PAGE>
respective Tranche or Tranches being replaced) of the Replaced Bank, (II) all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such time
and (III) all accrued, but theretofore unpaid, Fees owing to the Replaced Bank
(but only with respect to the relevant Tranche, in the case of the replacement
of less than all Tranches of Loans then held by the respective Replaced Bank)
pursuant to Section 3.01 and (y) except in the case of the replacement of only
the outstanding Term Loans of one or more Tranches of a Replaced Bank, each
Issuing Bank an amount equal to such Replaced Bank's RL Percentage of any Unpaid
Drawing (which at such time remains an Unpaid Drawing) to the extent such amount
was not theretofore funded by such Replaced Bank to such Issuing Bank and (ii)
all obligations of the Borrowers due and owing to the Replaced Bank at such time
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreements, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 13.15 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the respective Borrower, the Replacement
Bank shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans or a Commitment hereunder, the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall survive as to
such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, each Revolving Loan Borrower may request that any
Issuing Bank issue, at any time and from time to time on and after the Initial
Borrowing Date and prior to the third Business Day prior to the Revolving Loan
Maturity Date (or the 30th day prior to the Revolving Loan Maturity Date in the
case of Trade Letters of Credit), (x) for the account of such Revolving Loan
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
such Revolving Loan Borrower or any of its Subsidiaries, an irrevocable sight
standby letter of credit, in a form customarily used by such Issuing Bank or in
such other form as has been approved by such Issuing Bank (each such standby
letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Obligations and (y) for the account of such Revolving Loan Borrower
and for the benefit of sellers of goods,
-21-
<PAGE>
materials and services used in the ordinary course of business of such Revolving
Loan Borrower or any of its Subsidiaries an irrevocable sight commercial letter
of credit in a form customarily used by such Issuing Bank or in such other form
as has been approved by such Issuing Bank (each such commercial letter of
credit, a "Trade Letter of Credit", and each such Trade Letter of Credit and
each Standby Letter of Credit, a "Letter of Credit") in support of commercial
transactions of such Revolving Loan Borrower and its Subsidiaries.
(b) All (x) Adience Letters of Credit shall be issued, and
denominated, in Dollars and (y) Hepworth Letters of Credit shall be issued, and
denominated, in Pounds Sterling.
(c) Each Issuing Bank hereby agrees that it will (subject to terms
and conditions contained herein), at any time and from time to time on and after
the Initial Borrowing Date and prior to the third Business Day prior to the
Revolving Loan Maturity Date (or the 30th day prior to the Revolving Loan
Maturity Date in the case of Trade Letters of Credit), following its receipt of
the respective Letter of Credit Request, issue for the account of the respective
Revolving Loan Borrower, subject to the terms and conditions of this Agreement,
one or more Letters of Credit (x) in the case of Standby Letters of Credit, in
support of such L/C Supportable Obligations of the respective Revolving Loan
Borrower or any of its Subsidiaries as are permitted to remain outstanding
without giving rise to a Default or an Event of Default and (y) in the case of
Trade Letters of Credit, in support of sellers of goods or materials used in the
ordinary course of business of the respective Revolving Loan Borrower or any of
its Subsidiaries as referenced in Section 2.01(a), provided that the respective
Issuing Bank shall be under no obligation to issue any Letter of Credit of the
types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Issuing Bank as of the date hereof
-22-
<PAGE>
and which such Issuing Bank reasonably and in good faith deems material to
it; or
(ii) such Issuing Bank shall have received notice from the Required
Banks prior to the issuance of such Letter of Credit of the type described
in the penultimate sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities. (a)
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount (for this purpose, using the
Dollar Equivalent of the Stated Amount of each Hepworth Letter of Credit) of
which, when added to the Letter of Credit Outstandings (for this purpose, using
the Dollar Equivalent of all Hepworth Letter of Credit Outstandings) (exclusive
of Unpaid Drawings which are repaid on the date of, and prior to the issuance
of, the respective Letter of Credit) at such time would exceed either (x)
$7,500,000 or (y) when added to the aggregate principal amount of all Revolving
Loans (for this purpose, using the Dollar Equivalent of each outstanding
Sterling Revolving Loan) then outstanding, the Total Revolving Loan Commitment
at such time, (ii) no Adience Letter of Credit shall be issued the Stated Amount
(expressed in Dollars) of which, when added to the Adience Letter of Credit
Outstandings (expressed in Dollars) (exclusive of Unpaid Drawings with respect
thereto which are repaid on the date of, and prior to the issuance of, the
respective Adience Letter of Credit) at such time would exceed, when added to
the aggregate principal of all Dollar Revolving Loans (expressed in Dollars)
then outstanding, the Dollar Revolving Sub-Limit, (iii) no Hepworth Letter of
Credit shall be issued the Stated Amount (expressed in Pounds Sterling) of
which, when added to the Hepworth Letter of Credit Outstandings (expressed in
Pounds Sterling) (exclusive of Unpaid Drawings with respect thereto which are
repaid on the date of, and prior to the issuance of, the respective Hepworth
Letter of Credit) at such time would exceed, when added to the aggregate
principal of all Sterling Revolving Loans (expressed in Pounds Sterling) then
outstanding, the Sterling Revolving Sub-Limit, and (iv) each Letter of Credit
shall by its terms terminate (A) in the case of Standby Letters of Credit, on or
before the earlier of (x) the date which occurs 12 months after the date of the
issuance thereof (although any such Standby Letter of Credit may be extendable
for successive periods of up to 12 months, but not beyond the third Business Day
prior to the Revolving Loan Maturity Date, on terms acceptable to the Issuing
Bank thereof) and (y) the third Business Day prior to the Revolving Loan
Maturity Date and (B) in the case of Trade Letters of Credit, on or before the
earlier of (x) the date which occurs 180 days after the date of issuance thereof
and (y) 30 days prior to the Revolving Loan Maturity Date.
-23-
<PAGE>
(b) Notwithstanding the foregoing, in the event a Bank Default
exists, the Issuing Bank shall not be required to issue any Letter of Credit
unless the Issuing Bank has entered into arrangements satisfactory to it and the
respective Revolving Loan Borrower to eliminate the Issuing Bank's risk with
respect to the participation in Letters of Credit of the Defaulting Bank or
Banks, including by cash collateralizing (in Dollars) such Defaulting Bank's or
Banks' RL Percentage of the Letter of Credit Outstandings.
2.03 Letter of Credit Requests; Notices of Issuance; Minimum Stated
Amount. (a) Whenever a Revolving Loan Borrower desires that a Letter of Credit
be issued for its account, such Revolving Loan Borrower shall give the
Administrative Agent and the respective Issuing Bank at least two Business Days'
(or such shorter period as is acceptable to the respective Issuing Bank) written
notice thereof. Each notice shall be in the form of Exhibit C (each a "Letter of
Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the respective Revolving Loan Borrower that
(i) such Letter of Credit may be issued in accordance with, and will not violate
the requirements of, Section 2.02 and (ii) all of the applicable conditions set
forth in Section 5 and 6 shall be met at the time of such issuance. Unless the
respective Issuing Bank has received notice from the Required Banks before it
issues a Letter of Credit that one or more of the conditions specified in
Section 5 are not satisfied on the Initial Borrowing Date or Section 6 are not
then satisfied, or that the issuance of such Letter of Credit would violate
Section 2.02, then such Issuing Bank may issue the requested Letter of Credit
for the account of the Borrower in accordance with such Issuing Bank's usual and
customary practices. Upon the issuance of or amendment or modification to any
Standby Letter of Credit, the respective Issuing Bank shall promptly notify the
Banks and the Administrative Agent of such issuance, amendment or modification
and such notification shall be accompanied by a copy of the issued Standby
Letter of Credit or amendment or modification. For Trade Letters of Credit on
which the Issuing Bank is other than the Administrative Agent, the Issuing Bank
will send to the Administrative Agent by facsimile transmission, promptly on
the first Business Day of each week, the daily aggregate Stated Amount of Trade
Letters of Credit issued by such Issuing Bank and outstanding during the
preceding week. The Administrative Agent shall deliver to each Bank, after each
calendar month end and upon each payment of the Letter of Credit Fee, a report
setting forth for the relevant period the daily aggregate Stated Amount of all
outstanding Trade Letters of Credit during such period.
(c) Each Issuing Bank shall, on the date of issuance of a Letter of
Credit by it, give the Administrative Agent, each Bank and the Revolving Loan
-24-
<PAGE>
Borrowers written notice of the issuance of such Letter of Credit, accompanied
by a copy to the Administrative Agent of the Letter of Credit or Letters of
Credit issued by it.
(d) The initial Stated Amount of each Letter of Credit shall not be
less than (x) in the case of Adience Letters of Credit, $50,000 and (y) in the
case of Hepworth Letters of Credit, (pounds)50,000, or in each case such lesser
amount as is acceptable to the respective Issuing Bank.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the respective Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to each Bank with a Revolving
Loan Commitment, other than such Issuing Bank (each such Bank, in its capacity
under this Section 2.04, a "Participant"), and each such Participant shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation in, to the extent of such Participant's RL Percent age in such
Letter of Credit, each drawing or payment made thereunder and the obligations of
the Revolving Loan Borrowers under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto (although Letter of Credit Fees
shall be paid directly to the Administrative Agent for the ratable account of
the Participants as provided in Section 3.01(b) and the Participants shall have
no right to receive any portion of any Facing Fees). Upon any change in the
Revolving Loan Commitments or RL Percentages of the Banks pursuant to Section
1.13 or 13.04, it is hereby agreed that, with respect to all outstanding Letters
of Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new RL Percentages
of the assignor and assignee Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
respective Issuing Bank shall have no obligation relative to the other Banks
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to either Revolving Loan Borrower, any other Credit Party,
any Bank or any other Person.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the respective Revolving Loan Borrower shall not have
reimbursed such amount in full to such Issuing Bank pursuant to Section 2.05(a),
such Issuing Bank
-25-
<PAGE>
shall promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Bank the amount of such Participant's RL
Percentage of such unreimbursed payment (x) in Dollars and in same day funds. If
the Administrative Agent so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to such Issuing Bank, in Dollars,
such Participant's RL Percentage of the amount of such payment (or, in the case
of payments made in Pounds Sterling, the Dollar Equivalent thereof) on such
Business Day in same day funds. If and to the extent such Participant shall not
have so made its RL Percentage of the amount of such payment available to such
Issuing Bank, such Participant agrees to pay to such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Bank at the overnight Federal
Funds Rate for the first three days and at the interest rate applicable to
Dollar Revolving Loans maintained as Base Rate Loans hereunder for each day
thereafter. The failure of any Participant to make available to such Issuing
Bank its RL Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
such Issuing Bank its RL Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to such Issuing Bank such
other Participant's RL Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall pay to each Participant
which has paid its RL Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with
-26-
<PAGE>
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the respective Revolving Loan Borrower or any of its Subsidiaries or
Affiliates may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, any Participant,
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the respective
Revolving Loan Borrower or any Subsidiary or Affiliate of the respective
Revolving Loan Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) Each
Revolving Loan Borrower hereby severally agrees to reimburse the respective
Issuing Bank, by making payment in Dollars directly to such Issuing Bank, for
any payment or disbursement (or, in the case of payments or disbursements made
in Pounds Sterling, the Dollar Equivalent thereof) made by such Issuing Bank
under any Letter of Credit issued for the account of such Revolving Loan
Borrower (with each such amount so paid, until reimbursed, an "Unpaid Drawing"),
immediately after, and in any event on the date of, such payment or
disbursement, with interest on the amount so paid or disbursed by such Issuing
Bank, to the extent not reimbursed prior to 2:00 P.M. (New York time or, in the
case of Hepworth Letters of Credit, London time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding
the date such Issuing Bank was reimbursed by Adience or Hepworth, as the case
may be, therefor at a rate per annum which shall be the Base Rate in effect from
time to time plus the
-27-
<PAGE>
Applicable Margin for Revolving Loans maintained as Base Rate Loans; provided,
however, to the extent such amounts are not reimbursed prior to 12:00 Noon (New
York time or, in the case of Hepworth Letters of Credit, London time) on the
third Business Day following the receipt by Adience or Hepworth, as the case may
be, of notice of such payment or disbursement or upon the occurrence of a
Default or an Event of Default under Section 10.05, interest shall thereafter
accrue on the amounts so paid or disbursed by such Issuing Bank (and until
reimbursed by Adience or Hepworth, as the case may be) at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans maintained as Base Rate Loans plus 2%, in each such case,
with interest to be payable on demand. The respective Issuing Bank shall give
Adience or Hepworth, as the case may be, prompt written notice of each Drawing
under any Letter of Credit, provided that the failure to give any such notice
shall in no way affect, impair or diminish the respective Revolving Loan
Borrower's obligations hereunder.
(b) The obligations of Adience (with respect to Adience Letters of
Credit) and of Hepworth (with respect to Hepworth Letters of Credit) under this
Section 2.05 to reimburse the respective Issuing Bank with respect to Unpaid
Drawings (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the respective Revolving Loan Borrower
may have or have had against any Bank (including in its capacity as issuer of
the Letter of Credit or as Participant), including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any nonapplication
or misapplication by the beneficiary of the proceeds of such Drawing; provided
that any reimbursement made by Adience or Hepworth, as the case may be, shall be
without prejudice to any claim it may have against such Issuing Bank as a result
of such Issuing Bank's gross negligence or willful misconduct.
2.06 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by any Issuing Bank or participated in by any Participant, or (ii)
impose on any Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to any Issuing
-28-
<PAGE>
Bank or any Participant of issuing, maintaining or participating in any Letter
of Credit, or reduce the amount of any sum received or receivable by any Issuing
Bank or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits or franchise taxes based
on net income of such Issuing Bank or such Participant pursuant to the laws of
the jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon written demand to Adience or Hepworth, as the case may be, by such
Issuing Bank or any Participant (a copy of which certificate shall be sent by
such Issuing Bank or such Participant to the Administrative Agent), Adience or
Hepworth, as the case may be, shall, subject to the provisions of Section 13.19
(to the extent applicable), pay to such Issuing Bank or such Participant such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction in the amount receivable or reduction on the rate of return on
its capital. Any Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to Adience or Hepworth, as the case may be, which
notice shall include a certificate submitted to Adience or Hepworth, as the case
may be, by such Issuing Bank or such Participant (a copy of which certificate
shall be sent by such Issuing Bank or such Participant to the Administrative
Agent), setting forth in reasonable detail the basis for the calculation of
such additional amount or amounts necessary to compensate such Issuing Bank or
such Participant. The certificate required to be delivered pursuant to this
Section 2.06 shall, absent manifest error, be final and conclusive and binding
on Adience.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Revolving Loan Borrowers jointly and severally
agree to pay to the Administrative Agent in Dollars for distribution to each
Bank with a Revolving Loan Commitment a commitment commission (the "Commitment
Commission") for the period from and including the Effective Date to but
excluding the Revolving Loan Maturity Date (or such earlier date as the Total
Revolving Loan Commitment shall have been terminated), computed at a rate for
each day equal to 1/2 of 1% per annum on the daily average Unutilized Revolving
Loan Commitment of such Bank. Accrued Commitment Commission shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the Revolving
Loan Maturity Date or such earlier date upon which the Total Revolving Loan
Commitment is terminated.
-29-
<PAGE>
(b) Each of Adience and Hepworth agrees to pay to the Administrative
Agent for distribution to each Bank with a Revolving Loan Commitment (based on
their respective RL Percentages) in Dollars a fee in respect of each Letter of
Credit issued hereunder for the account of such Revolving Loan Borrower (with
all fees payable as described in this clause (b) being herein referred to as
"Letter of Credit Fees"), for the period from and including the date of issuance
of the respective Letter of Credit to and including the date of termination of
such Letter of Credit (or, in the case of a Trade Letter of Credit, the date of
the stated expiration thereof), computed at a rate per annum equal to the
Applicable Margin for Revolving Loans maintained as Eurodollar Loans on the
daily average Stated Amount (for this purpose, using the Dollar Equivalent of
the Stated Amount of each Hepworth Letter of Credit) of such Letter of Credit
(or, in the case of a Trade Letter of Credit, on the initial Stated Amount (for
this purpose, using the Dollar Equivalent of the Stated Amount of each Hepworth
Letter of Credit) of such Letter of Credit). Accrued Letter of Credit Fees
payable with respect to Standby Letters of Credit shall be due and payable by
the respective Revolving Loan Borrower quarterly in arrears on each Quarterly
Payment Date and on the first day after the termination of the Total Revolving
Loan Commitment upon which no Standby Letters of Credit remain outstanding and
all Letter of Credit Fees payable with respect to each Trade Letter of Credit
shall be due and payable on the date of issuance of such Trade Letter of Credit.
(c) Each of Adience and Hepworth agrees to pay to each Issuing Bank,
for its own account, in Dollars a facing fee in respect of each Letter of Credit
issued by such Issuing Bank for the account of such Revolving Loan Borrower (the
"Facing Fee"), (x) in the case of each Standby Letter of Credit, for the period
from and including the date of issuance of such Standby Letter of Credit to and
including the date of the termination of such Standby Letter of Credit, computed
at a rate equal to 1/4 of 1% per annum of the daily average Stated Amount (for
this purpose, using the Dollar Equivalent of the Stated Amount of each Hepworth
Letter of Credit) of such Standby Letter of Credit, provided, that in no event
shall the annual Facing Fee with respect to any Standby Letter of Credit be less
than $500 (being herein called the "Minimum Facing Fee Amount" for any Letter of
Credit), it being agreed that, on the date of issuance of any Standby Letter of
Credit and on each anniversary thereof prior to the termination of such Standby
Letter of Credit, if the Minimum Facing Fee Amount will exceed the amount of
Facing Fees that will accrue with respect to such Standby Letter of Credit for
the immediately succeeding 12-month period, the full Minimum Facing Fee Amount
shall be payable on the date of issuance of such Standby Letter of Credit and on
each anniversary thereof prior to the termination of such Standby Letter of
Credit, and (y) in the case of each Trade Letter of Credit, in an amount equal
to the greater of (A) 1/4 of 1% of the Stated Amount (for this purpose, using
the Dollar Equivalent of the Stated Amount of
-30-
<PAGE>
each Hepworth Letter of Credit) of such Trade Letter of Credit as of the date of
issuance thereof and (B) the Minimum Facing Fee Amount. Except as otherwise
provided in the proviso to the immediately preceding sentence, accrued Facing
Fees payable with respect to Standby Letters of Credit shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the first day after
the termination of the Total Revolving Loan Commitment upon which no Standby
Letters of Credit remain outstanding and all Facing Fees payable with respect to
each Trade Letter of Credit shall be due and pay able on the date of issuance of
such Trade Letter of Credit.
(d) The respective Revolving Loan Borrower shall pay, upon each
payment under, issuance of, or amendment to, any Letter of Credit, such amount
as shall at the time of such event be the administrative charge and the
reasonable expenses which the applicable Issuing Bank is generally imposing in
connection with such occurrence with respect to letters of credit denominated in
the respective Applicable Currency.
(e) The Borrowers shall pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Borrowers and
the Administrative Agent.
3.02 Voluntary Termination of Unutilized Commitments. Upon at least
three Business Days' prior notice to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), Adience shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part, in integral multiples of $500,000 in the case
of partial reductions to the Total Unutilized Revolving Loan Commitment,
provided that each such reduction shall apply proportionately to permanently
reduce the Revolving Loan Commitment of each Bank with such a Commitment.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitments
(and the Adience B Term Loan Commitment, the Newco A Term Loan Commitment, the
Newco B Term Loan Commitment and the Revolving Loan Commitment of each Bank)
shall terminate in their entirety on May 31, 1997 unless the Initial Borrowing
Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Adience B Term Loan Commitment shall
(i) terminate in its entirety on the Initial Borrowing Date (after giving effect
to the making of the Adience B Term Loans on such date) and (ii) prior to the
termination of the Total Adience B Term
-31-
<PAGE>
Loan Commitment as provided in clause (i) above, be reduced from time to time to
the extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Newco A Term Loan Commitment shall (i)
terminate in its entirety on the Initial Borrowing Date (after giving effect to
the making of the Newco A Term Loans on such date) and (ii) prior to the
termination of the Total Newco A Term Loan Commitment as provided in clause (i)
above, be reduced from time to time to the extent required by Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Newco B Term Loan Commitment shall (i)
terminate in its entirety on the Initial Borrowing Date (after giving effect to
the making of the Newco B Term Loans on such date) and (ii) prior to the
termination of the Total Newco B Term Loan Commitment as provided in clause (i)
above, be reduced from time to time to the extent required by Section 4.02.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory repayment of Term Loans or a mandatory reduction to the
Total Term Loan Commitment pursuant to any of Sections 4.02(c), (d), (e) and (g)
is required (and exceeds in amount the aggregate principal amount of Term Loans
then outstanding) or would be required if Term Loans were then outstanding, the
Total Revolving Loan Commitment shall be permanently reduced by the amount, if
any, by which the amount required to be applied pursuant to said Sections
(determined as if an unlimited amount of Term Loans were actually outstanding)
exceeds the aggregate principal amount of Term Loans then outstanding.
(g) Each reduction to the Total Adience B Term Loan Commitment, the
Total Newco A Term Loan Commitment, the Total Newco B Term Loan Commitment and
the Total Revolving Loan Commitment pursuant to this Section 3.03 (or pursuant
to Section 4.02) shall be applied proportionately to reduce the Adience B Term
Loan Commitment, the Newco A Term Loan Commitment, the Newco B Term
-32-
<PAGE>
Loan Commitment or the Revolving Loan Commitment, as the case may be, of each
Bank with such a Commitment.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. Each Borrower shall have the right to
prepay the Loans made to such Borrower, without premium or penalty, in whole or
in part at any time and from time to time on the following terms and conditions:
(i) such Borrower shall give the Administrative Agent prior to 12:00 Noon (New
York time or, in the case of Sterling Loans, London time) at its Notice Office
(x) in the case of Base Rate Loans, at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay such Base Rate Loans (or same day notice in the case of Swingline Loans,
provided such notice is given prior to 11:00 A.M. (New York time)) and (y) in
all other cases, at least two Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Euro Rate Loans,
whether Adience B Term Loans, Newco A Term Loans, Newco B Term Loans, Dollar
Revolving Loans, Sterling Revolving Loans or Swingline Loans shall be prepaid,
the amount of such prepayment and the Types of Loans to be prepaid and, in the
case of Euro Rate Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Administrative Agent shall promptly transmit to each of
the Banks; (ii) each prepayment shall be in an aggregate principal amount of at
least (x) in the case of Dollar Loans, $1,000,000 (or $100,000 in the case of
Swingline Loans) and (y) in the case of Sterling Loans, at least
(pounds)500,000, provided that if any partial prepayment of Euro Rate Loans made
pursuant to any Borrowing shall reduce the out standing Euro Rate Loans made
pursuant to such Borrowing to an amount less than the respective Minimum
Borrowing Amount for such Tranche and Type of Loans, then (x) in the case of
Dollar Loans, such Borrowing may not be continued as a Borrowing of Euro Rate
Loans and any election of an Interest Period with respect thereto given by
Adience or Newco, as the case may be, shall have no force or effect and (y) in
the case of a Borrowing of Sterling Loans, such Borrowing shall be required to
be prepaid in full at such time; (iii) each prepayment in respect of any Loans
made pursuant to a Borrowing shall be applied pro rata among such Loans; (iv)
each voluntary prepayment of Newco Term Loans pursuant to this Section 4.01(a)
shall be applied pro rata to each Tranche of Newco Term Loans (based upon the
then outstanding principal amount of Newco A Term Loans and Newco B Term Loans);
and (v) each voluntary prepayment of any Tranche of Term Loans (after giving
effect to any applicable requirements set forth above) shall apply to reduce the
then remaining Scheduled Repayments of such Tranche of Term Loans on a pro
rata basis (based upon the then remaining principal amounts of such Scheduled
Repayments of the respective Tranche of Term Loans, after giving effect to all
prior reductions thereto).
-33-
<PAGE>
4.02 Mandatory Repayments and Commitment Reductions. (a) (i) On any
day on which the sum of the aggregate outstanding principal amount of the
Swingline Loans, Revolving Loans (for this purpose, using the Dollar Equivalent
thereof in the case of outstanding Sterling Revolving Loans) and the Letter of
Credit Outstandings (for this purpose, using the Dollar Equivalent thereof in
the case of Hepworth Letter of Credit Outstandings) exceeds the Total Revolving
Loan Commitment as then in effect, the Revolving Loan Borrowers shall prepay on
such day the principal of Swingline Loans and, after the Swingline Loans have
been repaid in full, Revolving Loans (allocated between Dollar Revolving Loans
and Sterling Revolving Loans as the Revolving Loan Borrowers may elect) in an
amount (for this purpose, taking the Dollar Equivalent of payments in Pounds
Sterling made with respect to the Sterling Revolving Loans) equal to such
excess. If, after giving effect to the prepayment in full of all outstanding
Swingline Loans and Revolving Loans, the aggregate amount of the Letter of
Credit Outstandings (for this purpose, using the Dollar Equivalent thereof in
the case of Hepworth Letter of Credit Outstandings) exceeds the Total Revolving
Loan Commitment as then in effect, the respective Revolving Loan Borrowers shall
pay to the Administrative Agent at the appropriate Payment Office on such day an
amount of cash or Cash Equivalents or Foreign Cash Equivalents of such excess
(up to a maximum amount equal to the Letter of Credit Outstandings at such
time), such cash, Cash Equivalents or Foreign Cash Equivalents to be held as
security for all obligations of the respective Revolving Loan Borrower or
Borrowers hereunder in a cash collateral account to be established by the
Administrative Agent, provided that so long as no Default under Section 10.01 or
10.05 and no Event of Default is then existence, such cash, Cash Equivalents or
Foreign Cash Equivalents shall be released (subject to continued compliance with
clauses (ii) and (iii) below) to the respective Revolving Loan Borrower at such
time (if any), and to the extent that, the aggregate amount of such cash, Cash
Equivalents and Foreign Cash Equivalents at such time on deposit with the
Administrative Agent exceed the amount by which the Letter of Credit
Outstandings at such time exceed the amount of the Total Revolving Loan
Commitment as then in effect.
(ii) If on any date the sum of the aggregate outstanding principal
amount of Swingline Loans, Dollar Revolving Loans and the Adience Letter of
Credit Outstandings exceeds the Dollar Revolving Sub-Limit as then in effect,
Adience shall prepay on such day principal of outstanding Swingline Loans and,
after the Swingline Loans have been repaid in full, Dollar Revolving Loans in an
amount equal to such excess. If, after giving effect to the prepayment in full
of all outstanding Swingline Loans and Dollar Revolving Loans, the aggregate
amount of the Adience Letter of Credit Outstandings exceeds the Dollar Revolving
Sub-Limit as then in effect, Adience shall pay to the Administrative Agent at
the appropriate Payment Office on such day an amount of
-34-
<PAGE>
cash or Cash Equivalents equal to the amount of such excess (up to a maximum
amount equal to the Adience Letter of Credit Outstandings at such time), such
cash or Cash Equivalents to be held as security for all obligations of Adience
hereunder in a cash collateral account to be established by the Administrative
Agent, provided that, so long as no Default under Section 10.01 or 10.05 and no
Event of Default is then existence, such cash or Cash Equivalents shall be
released (subject to continued compliance with preceding clause (i)) to Adience
at such time (if any) as, and to the extent that, the aggregate amount of such
cash and Cash Equivalents at such time on deposit with the Administrative Agent
exceed the amount by which the Adience Letter of Credit Outstandings at such
time exceed the amount of the Dollar Revolving Sub-Limit as then in effect.
(iii) If on any date the sum of the aggregate outstanding principal
amount of Sterling Revolving Loans and the Hepworth Letter of Credit
Outstandings exceeds the Sterling Revolving Sub-Limit as then in effect,
Hepworth shall prepay on such day principal of outstanding Sterling Revolving
Loans in an amount equal to such excess. If, after giving effect to the
prepayment in full of all outstanding Sterling Revolving Loans, the aggregate
amount of the Hepworth Letter of Credit Outstandings exceeds the Sterling
Revolving Sub-Limit as then in effect, Hepworth shall pay to the Administrative
Agent at the appropriate Payment Office on such day an amount of cash, Cash
Equivalents or Foreign Cash Equivalents equal to the amount of such excess (up
to a maximum amount equal to the Hepworth Letter of Credit Outstandings at such
time), such cash, Cash Equivalents or Foreign Cash Equivalents to be held as
security for all obligations of Hepworth hereunder in a cash collateral account
to be established by the Administrative Agent, provided that, so long as no
Default under Section 10.01 or 10.05 and no Event of Default is then existence,
such cash, Cash Equivalents or Foreign Cash Equivalents shall be released
(subject to continued compliance with preceding clause (i)) to Hepworth at such
time (if any) as, and to the extent that, the aggregate amount of such cash,
Cash Equivalents and Foreign Cash Equivalents at such time on deposit with the
Administrative Agent exceed the amount by which the Hepworth Letter of Credit
Outstandings at such time exceed the amount of the Sterling Revolving Sub-Limit
as then in effect.
(b)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, Adience
shall be required to repay that principal amount of Adience B Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h)
through (j), inclusive, an "Adience B Scheduled Repayment," and each such date,
an "Adience B Scheduled Repayment Date"):
-35-
<PAGE>
Adience B
Scheduled Repayment Date Amount
------------------------ ------
July 31, 1997 $ 112,500
October 31, 1997 $ 112,500
January 31, 1998 $ 112,500
April 30, 1998 $ 112,500
July 31, 1998 $ 112,500
October 31, 1998 $ 112,500
January 31, 1999 $ 112,500
April 30, 1999 $ 112,500
July 31, 1999 $ 112,500
October 31, 1999 $ 112,500
January 31, 2000 $ 112,500
April 30, 2000 $ 112,500
July 31, 2000 $ 112,500
October 31, 2000 $ 112,500
January 31, 2001 $ 112,500
April 30, 2001 $ 112,500
July 31, 2001 $ 112,500
October 31, 2001 $ 112,500
January 31, 2002 $ 112,500
April 30, 2002 $ 112,500
July 31, 2002 $ 112,500
October 31, 2002 $ 112,500
January 31, 2003 $ 112,500
April 30, 2003 $ 112,500
July 31, 2003 $2,900,000
October 31, 2003 $2,900,000
January 31, 2004 $2,900,000
April 30, 2004 $2,900,000
July 31, 2004 $5,175,000
October 31, 2004 $5,175,000
January 31, 2005 $5,175,000
B Term Loan Maturity Date $5,175,000
-36-
<PAGE>
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, Newco
shall be required to repay that principal amount of Newco A Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h)
through (j), inclusive, a "Newco A Scheduled Repayment," and each such date, a
"Newco A Scheduled Repayment Date"):
Newco A
Scheduled Repayment Date Amount
------------------------ ------
July 31, 1998 (pounds) 536,612.29
October 31, 1998 (pounds) 536,612.29
January 31, 1999 (pounds) 536,612.29
April 30, 1999 (pounds) 536,612.29
July 31, 1999 (pounds) 766,588.99
October 31, 1999 (pounds) 766,588.99
January 31, 2000 (pounds) 766,588.99
April 30, 2000 (pounds) 766,588.99
July 31, 2000 (pounds)1,149,883.48
October 31, 2000 (pounds)1,149,883.48
January 31, 2001 (pounds)1,149,883.48
April 30, 2001 (pounds)1,149,883.48
July 31, 2001 (pounds)2,146,449.16
October 31, 2001 (pounds)2,146,449.16
January 31, 2002 (pounds)2,146,449.16
April 30, 2002 (pounds)2,146,449.16
July 31, 2002 (pounds)3,066,355.94
October 31, 2002 (pounds)3,066,355.94
January 31, 2003 (pounds)3,066,355.94
A Term Loan Maturity Date (pounds)3,066,355.94
(iii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, Newco
shall be required to repay that principal amount of Newco B Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h)
through (j), inclusive, a "Newco B Scheduled Repayment," and each such date, a
"Newco B Scheduled Repayment Date"):
-37-
<PAGE>
Newco B
Scheduled Repayment Date Amount
------------------------ ------
July 31, 2003 $ 925,000
October 31, 2003 $ 925,000
January 31, 2004 $ 925,000
April 30, 2004 $ 925,000
July 31, 2004 $1,575,000
October 31, 2004 $1,575,000
January 31, 2005 $1,575,000
B Term Loan Maturity Date $1,575,000
(c)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries (other than Newco and its
Subsidiaries) receives any cash proceeds from any capital contribution or any
sale or issuance of its equity (other than equity contributions to any
Subsidiary of Holdings made by Holdings or any other Subsidiary of Holdings), an
amount equal to 100% (or 50% (or such greater percentage, between 50% and 100%,
as is needed to cause the Leverage Ratio requirement hereinafter described to be
satisfied)) if on the date of receipt of such cash proceeds (x) no Default or
Event of Default then exists and (y) the Leverage Ratio, after the required
application pursuant to this clause (c), is less than 4.00:1.00) of the cash
proceeds of such capital contribution or sale or issuance (net of underwriting
or placement discounts and commissions and other costs and expenses associated
therewith) shall be applied in accordance with the requirements of Sections
4.02(i) and (j).
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Newco or any of its Subsidiaries receives any cash proceeds from any
capital contribution or any sale or issuance of its equity (other than equity
contributions to Newco or any Subsidiary of Newco made by Holdings or any other
Subsidiary of Holdings), an amount equal to 100% (or 50% (or such greater
percentage, between 50% and 100%, as is needed to cause the Leverage Ratio
requirement hereinafter described to be satisfied)) if on the date of receipt of
such cash proceeds (x) no Default or Event of Default then
exists and (y) the Leverage Ratio, after the required application pursuant to
this clause (c), is less than 4.00:1.00) of the cash proceeds of such capital
contribution or sale or issuance (net of underwriting or placement discounts or
commissions and other costs and expenses
-38-
<PAGE>
associated therewith) shall be applied in accordance with the requirements of
Sections 4.02(h) and (j).
(d)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries (other than Newco and its
Subsidiaries) receives any cash proceeds from any incurrence by Holdings or any
of its Subsidiaries (other than Newco and its Subsidiaries) of Indebtedness for
borrowed money (other than Indebtedness for borrowed money permitted to be
incurred pursuant to Section 9.04 as such Section is in effect on the Effective
Date), an amount equal to 100% of the cash proceeds of the respective incurrence
of Indebtedness (net of underwriting or placement discounts and commissions and
other costs associated therewith) shall be applied in accordance with the
requirements of Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Newco or any of its Subsidiaries receives any cash proceeds from any
incurrence by Newco or any of its Subsidiaries of Indebtedness for borrowed
money (other than Indebtedness for borrowed money permitted to be incurred
pursuant to Section 9.04 as such Section is in effect on the Effective Date), an
amount equal to 100% of the cash proceeds of the respective incurrence of
Indebtedness (net of underwriting or placement discounts and commissions and
other costs associated therewith) shall be applied in accordance with the
requirements of Sections 4.02(h) and (j).
(e)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries (other than Newco and its
Subsidiaries) receives cash proceeds from any sale of assets (including capital
stock and securities held thereby but excluding (x) sales of assets permitted by
Sections 9.02(v), (vi), (viii), (ix) (except to the extent required to be
applied pursuant to the proviso to said clause (ix)) and (x), an amount equal to
100% of the Net Sale Proceeds therefrom shall be applied in accordance with the
requirements of Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Newco or any of its Subsidiaries receives cash proceeds from any sale
or assets (including capital stock and securities held thereby but excluding (x)
sales of assets permitted by Section 9.02(v), (vi), (viii), (ix) (except to the
extent required to be applied pursuant to the proviso to said clause (ix)) and
(x)), an amount equal to 100% of the Net
-39-
<PAGE>
Sale Proceeds therefrom shall be applied in accordance with the requirements of
Sections 4.02(h) and (j).
(f)(i) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% (or
50% (or such greater percentage, between 50% and 100%, as is needed to cause the
Leverage Ratio requirement hereinafter described to be satisfied) if on such
Excess Cash Payment Date (x) no Default or Event of Default then exists and (y)
the Leverage Ratio, after the required application pursuant to this clause (f),
is less than 3.25:1.00) of the Holdings Excess Cash Flow for the relevant Excess
Cash Payment Period shall be applied in accordance with the requirements of
Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% (or 50%
(or such greater percentage, between 50% and 100%, as is needed to cause the
Leverage Ratio requirement hereinafter described to be satisfied) if on such
Excess Cash Payment Date (x) no Default or Event of Default then exists and (y)
the Leverage Ratio, after the required application pursuant to this clause (f),
is less than 3.25:1.00) of the Newco Excess Cash Flow for the relevant Excess
Cash Payment Period shall be applied in accordance with the requirements of
Section 4.02(h) and (j).
(g)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 30 days following each date
after the Effective Date on which Holdings or any of its Subsidiaries receives
any proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net of costs and taxes incurred in connection with such
Recovery Event) shall be applied in accordance with the requirements of Sections
4.02(i) and (j), provided that (x) so long as no Default or Event of Default
then exists and such proceeds do not exceed $5,000,000, such proceeds shall not
be required to be so applied on such date to the extent that Adience has
delivered a certificate to the Administrative Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties or
assets in respect of which such proceeds were paid within 365 days following the
date of such Recovery Event (which certificate shall set forth the estimates of
the proceeds to be so expended) and (y) so long as no Default or Event of
Default then exists and to the extent that (a) the amount of such proceeds
exceeds $5,000,000, (b) Adience has delivered to the Administrative Agent a
certificate on or prior to the date the application would otherwise be required
pursuant to this Section 4.02(g)(i) in the form described in clause (x) above
and also certifying the sufficiency of business interruption insurance as
required by succeeding clause (c), and (c) Adience has delivered to the
Administrative
-40-
<PAGE>
Agent such evidence as the Administrative Agent may reasonably request in form
and substance reasonably satisfactory to the Administrative Agent establishing
that Adience has sufficient business interruption insurance and that Adience
will be receiving regular payments thereunder in such amounts and at such times
as are necessary to satisfy all obligations and expenses of Adience (including,
without limitation, all debt service requirements, including pursuant to this
Agreement), without any delay or extension thereof, for the period from the date
of the respective casualty, condemnation or other event giving rise to the
Recovery Event and continuing through the completion of the replacement or
restoration of respective properties or assets, then the entire amount and not
just the portion in excess of $5,000,000 shall be deposited as security for the
Obligations with the Administrative Agent for the benefit of the Secured
Creditors pursuant to a cash collateral arrangement reasonably satisfactory to
the Administrative Agent whereby such proceeds shall be disbursed to Adience
from time to time as needed to pay actual costs incurred by it in connection
with the replacement or restoration of the respective properties or assets
(pursuant to such reasonable certification requirements as may be established by
the Administrative Agent), provided further, that at any time while an Event of
Default has occurred and is continuing, the Required Banks may direct the
Administrative Agent (in which case the Administrative Agent shall, and is
hereby authorized by Adience to, follow said directions) to apply any or all
proceeds then on deposit in such collateral account to the repayment of
Obligations hereunder in the same manner as proceeds would be applied pursuant
to the U.S. Security Agreement, and, provided further, that if all or any
portion of such proceeds not required to be applied as a mandatory repayment
and/or commitment reduction pursuant to the second preceding proviso (whether
pursuant to clause (x) or (y) thereof) are either (A) not so used within 365
days after the date of receipt of proceeds from the respective Recovery Event or
(B) if committed to be used within 365 days after the date of receipt of
proceeds from the respective Recovery Event and not so used within 540 days
after the date of receipt of proceeds from the respective Recovery Event, then,
in either case, such remaining portion not used or committed to be used in the
case of the preceding clause (A) and not used in the case of preceding clause
(B), shall be applied on the date which is 365 days following the date of
receipt of proceeds from the respective Recovery Event in the case of clause (A)
above, or the date which is 540 days after the date of receipt of proceeds from
the respective Recovery Event in the case of clause (B) above, in accordance
with the requirements of Section 4.02(i) and (j).
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 30 days following each date
after the Effective Date on which Newco or any of its Subsidiaries receives any
proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net
-41-
<PAGE>
of costs and taxes incurred in connection with such Recovery Event) shall be
applied in accordance with the requirements of Sections 4.02(h) and (j),
provided that (x) so long as no Default or Event of Default then exists and such
proceeds do not exceed $5,000,000, such proceeds shall not be required to be so
applied on such date to the extent that Newco has delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to replace or restore any properties or assets in respect of which such
proceeds were paid within 365 days following the date of such Recovery Event
(which certificate shall set forth the estimates of the proceeds to be so
expended) and (y) so long as no Default or Event of Default then exists and to
the extent that (a) the amount of such proceeds exceeds $5,000,000, (b) Newco
has delivered to the Administrative Agent a certificate on or prior to the date
the application would otherwise be required pursuant to this Section 4.02(g)(ii)
in the form described in clause (x) above and also certifying the sufficiency of
business interruption insurance as required by succeeding clause (c), and (c)
Newco has delivered to the Administrative Agent such evidence as the
Administrative Agent may reasonably request in form and substance reasonably
satisfactory to the Administrative Agent establishing that Newco has sufficient
business interruption insurance and that Newco will be receiving regular
payments thereunder in such amounts and at such times as are necessary to
satisfy all obligations and expenses of Newco (including, without limitation,
all debt service requirements, including pursuant to this Agreement), without
any delay or extension thereof, for the period from the date of the respective
casualty, condemnation or other event giving rise to the Recovery Event and
continuing through the completion of the replacement or restoration of
respective properties or assets, then the entire amount and not just the portion
in excess of $5,000,000 shall be deposited as security for the Obligations with
the Administrative Agent for the benefit of the Secured Creditors pursuant to a
cash collateral arrangement reasonably satisfactory to the Administrative Agent
whereby such proceeds shall be disbursed to Newco from time to time as needed to
pay actual costs incurred by it in connection with the replacement or
restoration of the respective properties or assets (pursuant to such reasonable
certification requirements as may be established by the Administrative Agent),
provided further, that at any time while an Event of Default has occurred and is
continuing, the Required Banks may direct the Administrative Agent (in which
case the Administrative Agent shall, and is hereby authorized by Newco to,
follow said directions) to apply any or all proceeds then on deposit in such
collateral account to the repayment of Obligations hereunder in the same manner
as proceeds would be applied pursuant to the U.K. Security Agreement, and,
provided further, that if all or any portion of such proceeds not required to be
applied as a mandatory repayment and/or commitment reduction pursuant to the
second preceding proviso (whether pursuant to clause (x) or (y) thereof) are
either (A) not so used within 365 days after the date of receipt of proceeds
from the respective Recovery Event or (B)
-42-
<PAGE>
if committed to be used within 365 days after the date of receipt of proceeds
from the respective Recovery Event and not so used within 540 days after the
date of receipt of proceeds from the respective Recovery Event, then, in either
case, such remaining portion not used or committed to be used in the case of the
preceding clause (A) and not used in the case of preceding clause (B), shall be
applied on the date which is 365 days following the date of receipt of proceeds
from the respective Recovery Event in the case of clause (A) above, or the date
which is 540 days after the date of receipt of proceeds from the respective
Recovery Event in the case of clause (B) above, in accordance with the
requirements of Section 4.02(h) and (j).
(h) Each amount required to be applied pursuant to this clause (h)
as a result of the requirements of Sections 4.02(c)(ii), (d)(ii), (e)(ii),
(f)(ii) and (g)(ii), and the last sentence of Section 4.02(i), shall be applied
(after the conversion by Newco of any amounts received in a currency other than
Pounds Sterling into Pounds Sterling) pro rata to each Tranche of Newco Term
Loans based upon the then remaining principal amounts (or, if the Initial
Borrowing Date has not theretofore occurred, the then remaining commitments) of
the respective Tranches (with each Tranche of Newco Term Loans to be allocated
that percentage of the amount to be so applied as is equal to a fraction
(expressed as a percentage) the numerator of which is equal to the outstanding
principal amount of such Tranche of Newco Term Loans (or, if the Initial
Borrowing Date has not yet occurred, the aggregate Newco Term Loan Commitments
of the Banks with respect to such Tranche) and the denominator of which is equal
to the then outstanding principal amount of all Newco Term Loans (or, if the
Initial Borrowing Date has not yet occurred, the Total Newco Term Loan
Commitment at such time)). Any amount required to be applied to either Tranche
of Newco Term Loans pursuant to the requirements of the immediately preceding
sentence shall be applied to repay the outstanding principal amount of Newco
Term Loans of the respective Tranche (or, if the Initial Borrowing Date has not
yet occurred, to reduce the Total Newco A Term Loan Commitment or the Total
Newco B Term Loan Commitment, as the case may be). The amount of each principal
repayment of Newco Term Loans (and the amount of each reduction to the Term Loan
Commitments) made as required by this clause (h) shall be applied pro rata to
reduce the then remaining Scheduled Repayments of the respective Tranche based
upon the then remaining amount of each Scheduled Repayment of the respective
Tranche, after giving effect to all prior reductions thereto. To the extent the
amount at any time required to be applied pursuant to this Section 4.02(h)
exceeds the aggregate principal amount of Newco Term Loans then outstanding (or,
if the Initial Borrowing Date has not yet occurred, the Total Newco Term Loan
Commitment), then (x) such excess shall instead be required to be repatriated to
Adience and (y) the amount (net of any applicable withholding taxes or other
amounts required under applicable law to be withheld in
-43-
<PAGE>
respect of the amount repatriated to Adience) repatriated to Adience as
described in this sentence shall be applied as otherwise required by Sections
4.02(i) and (j).
(i) Each amount required to be applied to Term Loans pursuant to
this clause (i) as a result of the requirements of Sections 4.02(c)(i), (d)(i),
(e)(i), (f)(i) and (g)(i), and the last sentence of Section 4.02(h), shall be
applied (after the conversion by Adience of any amounts received in a currency
other than Dollars into Dollars) to repay the outstanding principal amount of
Adience B Term Loans (or, if the Initial Borrowing Date has not yet occurred, to
reduce the Total Adience B Term Loan Commitment). The amount of each principal
repayment of Adience B Term Loans (and the amount of each reduction to the
Adience B Term Loan Commitments) made as required by this clause (i) shall be
applied pro rata to reduce the then remaining Adience B Scheduled Repayments
based upon the then remaining amount of each Adience B Scheduled Repayment after
giving effect to all prior reductions thereto. To the extent the amount at any
time required to be applied pursuant to this Section 4.02(i) exceeds the
aggregate principal amount of Adience B Term Loans then outstanding (or, if the
Initial Borrowing Date has not yet occurred, the Total Adience B Term Loan
Commitment), then (x) such excess (up to the aggregate principal amount of Newco
Term Loans then outstanding) shall instead be required to be invested in Newco
and (y) the amount so invested in Newco as described in this sentence shall be
applied as otherwise required by Sections 4.02(h) and (j).
(j) With respect to each repayment of Loans required by this Section
4.02, the respective Borrower may designate the Types of Loans of the respective
Tranche which are to be repaid and, in the case of Euro Rate Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
provided that: (i) in the case of repayments of Dollar Loans, repayments of
Eurodollar Loans of the respective Tranche pursuant to this Section 4.02 may
only be made on the last day of an Interest Period applicable thereto unless all
Eurodollar Loans of the respective Tranche with Interest Periods ending on such
date of required repayment and all Base Rate Loans of the respective Tranche
have been paid in full; (ii) if any repayment of Euro Rate Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the respective Minimum Borrowing Amount for the
respective Tranche and Type of Loan, such Borrowing (x) in the case of Dollar
Loans, shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans and (y) in the case of Sterling Loans, shall be
repaid in full at the end of the then current Interest Period (with the amount
of any such repayment to be applied pro rata to reduce the then remaining
Scheduled Repayments of the respective Tranche based upon the then remaining
amount of each Scheduled Repayment
-44-
<PAGE>
of the respective Tranche after giving effect to all prior reductions thereto);
and (iii) each repayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the absence of a designation by the
respective Borrower as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its sole discretion.
(k) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans of any
Tranche shall be repaid in full on the respective Maturity Date for such Tranche
of Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (local time in the city in which the Payment Office
for the respective such payments is located) on the date when due and shall be
made in (x) Dollars in immediately available funds at the appropriate Payment
Office of the Administrative Agent in respect of any obligation of the Borrowers
under this Agreement except as otherwise provided in the immediately following
clause (y) and (y) Pounds Sterling in immediately available funds at the
appropriate Payment Office of the Administrative Agent, if such payment is made
in respect of (i) principal of or interest on Sterling Loans, or (ii) any
increased costs, indemnities or other amounts owing with respect to Sterling
Loans (or Commitments relating thereto), in the case of this clause (ii) to the
extent the respective Bank which is charging same denominates the amounts owing
in Pounds Sterling. The Administrative Agent will thereafter cause to be
distributed on the same day (if payment was actually received by the
Administrative Agent prior to 12:00 noon (Local time in the city in which such
payments are to be made)) like funds relating to the payment of principal,
interest or Fees ratably to the Banks entitled thereto. Any payments under this
Agreement which are made later than 12:00 Noon (local time in the city in which
such payments are to be made) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments. (a) All payments made by each Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Sections 4.04(b) and (c), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts,
-45-
<PAGE>
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income or profits or franchise taxes based on net income of a Bank
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the
respective Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the respective Borrower agrees to reimburse each Bank, upon
the written request of such Bank, for taxes imposed on or measured by the net
income or profits of such Bank pursuant to the laws of the jurisdiction in which
the principal office or applicable lending office of such Bank is located or
under the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence. If
any Borrower pays any additional amount under this Section 4.04 to a Bank and
such Bank determines in its sole discretion that it has actually received or
realized in connection therewith any refund or any reduction of, or credit
against, its Tax liabilities in or with respect to the taxable year in which the
additional amount is paid, such Bank shall pay to such Borrower an amount that
the Bank shall, in its sole discretion, determine is equal to the net benefit,
after tax, which was obtained by the Bank in such year as a consequence of such
refund, reduction or credit. The respective Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the respective Borrower. Each Borrower agrees to indemnify and hold
harmless each Bank, and reimburse such Bank upon its written request, for the
amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to Adience and the
Administrative Agent on or prior to the Effective Date, or in the case of a Bank
that is
-46-
<PAGE>
an assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 13.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to Adience and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001, or Form
W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify Adience and the Administrative Agent of its
inability to deliver any such Form or Certificate in which case such Bank shall
not be required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x)
Adience shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to Adience U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) Adience shall not
be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made
to a Bank in respect of income or similar taxes imposed by the United States if
(I) such Bank has not provided to Adience the Internal Revenue Service Forms
required to be provided to Adience pursuant to this Section 4.04(b) or (II) in
the case of a payment, other than interest, to a Bank described in clause (ii)
above, to the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding
-47-
<PAGE>
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 13.04(b), Adience agrees to
pay additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any
changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
(c) Each Bank that is not a resident of the United Kingdom for
United Kingdom tax purposes agrees to (i) deliver to Newco and the
Administrative Agent such declaration of non-residence or other similar claim as
shall be requested by Newco (giving the Bank sufficient time to satisfy such
requirement), as is required by statute, treaty or regulation of the United
Kingdom existing on the date hereof or which are not substantially more onerous
than those existing on the date hereof and which do not impose an unreasonable
burden (in time, resources or otherwise) on the Bank, or (ii) within 45 days
after the date hereof, make the requisite filing with the U.K. Inspector of
Foreign Dividends (and/or the taxing authority of the jurisdiction in which such
Bank's principal office is located) as required to establish its entitlement to
an exemption from U.K. withholding under the double tax treaty currently in
force between the United States (or the jurisdiction in which such Bank's
principal office is located) and the United Kingdom. Notwithstanding anything to
the contrary contained in Section 4.04(a), but subject to Section 13.04(b) and
the immediately succeeding sentence, (x) Newco shall be entitled, to the extent
it is required to do so by law, to deduct and withhold income or similar taxes
imposed by the United Kingdom on interest, Fees or other amounts payable
hereunder for the account of any Bank which is not a resident of the United
Kingdom for U.K. tax purposes to the extent that such Bank has not provided
forms, declarations or other certification required to establish a complete
exemption from such deduction or withholding and (y) Newco shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United Kingdom if
such Bank has not provided to Newco the forms and declaration required to be
provided by such Bank pursuant to the preceding sentence. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04, and except as set forth in Section 13.04(b), Newco agrees to
pay any additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any Taxes deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the
-48-
<PAGE>
interpretation thereof, relating to the deducting or withholding of such Taxes.
For the avoidance of doubt, nothing herein shall require any Bank to disclose
any information regarding its tax affairs or computations to Newco or any of its
Affiliates and no Bank shall be obligated to disclose any of its tax returns to
Newco or any of its Affiliates or any agent of the foregoing.
SECTION 5. Conditions Precedent to Initial Credit Events. The
obligation of each Bank to make Loans, and the obligation of any Issuing Bank to
issue Letters of Credit, on the Initial Borrowing Date, is subject to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Banks the appropriate Adience B Term Note, Newco A Term Note, Newco B Term
Note, Dollar Revolving Note and/or Sterling Revolving Note executed by the
appropriate Borrower, in each case in the amount, maturity and as otherwise
provided herein.
5.02 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from (i) Proskauer Rose Goetz &
Mendelsohn LLP, special U.S. counsel to the Credit Parties, an opinion addressed
to the Administrative Agent, the Collateral Agent and each of the Banks and
dated the Initial Borrowing Date in the form set forth as Exhibit E-1, (ii)
Freshfields, special U.K. counsel to the Credit Parties, an opinion addressed to
the Administrative Agent, the Collateral Agent and each of the Banks and dated
the Initial Borrowing Date in the form set forth as Exhibit E-2 and (iii) local
counsel (satisfactory to the Administrative Agent) legal opinions each of which
(x) shall be addressed to the Administrative Agent, the Collateral Agent and
each of the Banks and dated the reasonably Initial Borrowing Date, (y) shall be
in form and substance reasonably satisfactory to the Administrative Agent and
(z) shall cover the perfection of the security interests granted pursuant to the
Security Documents and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request.
5.03 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Administrative Agent shall have received a certificate of
each Credit Party, dated the Initial Borrowing Date, signed by an Authorized
Officer of such Credit Party, and attested to by the Secretary or any Assistant
Secretary of such Credit Party, in the form of Exhibit F with appropriate
insertions, together with copies of the certificate of incorporation (or
equivalent organizational document) and by-laws of such Credit Party
-49-
<PAGE>
and the resolutions of such Credit Party referred to in such certificate, and
the foregoing shall be reasonably acceptable to the Administrative Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent and the Required Banks, and the Administrative Agent
shall have received all in formation and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
5.04 Plans; Shareholders' Agreements; Management Agreements;
Collective Bargaining Agreements; Existing Indebtedness Agreements. On the
Initial Borrowing Date, there shall have been made available to the
Administrative Agent true and correct copies of:
(i) all Plans that, as of the Initial Borrowing Date, are
maintained, sponsored or contributed to by Holdings, any Subsidiary of
Holdings, or any ERISA Affiliate (and for each such Plan that is required
to file an annual report on Internal Revenue Service Form 5500-series, a
copy of the most recent such report (including, to the extent required,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and for
each such Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in Section
3(3) of ERISA, and any other material agreements, plans or arrangements,
with or for the benefit of current or former employees of Holdings or any
of its Subsidiaries or any ERISA Affiliate (provided that the foregoing
shall apply in the case of any multiemployer plan, as defined in Section
4001(a)(3) of ERISA, only to the extent that any document described
therein is in the possession of Holdings or any Subsidiary of Holdings or
any ERISA Affiliate or reasonably available thereto from the sponsor or
trustee of any such Plan;
(ii) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such
entity with respect to its capital stock (collectively, the "Shareholders'
Agreements");
-50-
<PAGE>
(iii) all agreements with members of, or with respect to, the senior
management and management of Holdings or any of its Subsidiaries
(collectively, the "Management Agreements");
(iv) all collective bargaining agreements applying or relating to
any employee of Holdings or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements"); and
(v) all agreements evidencing or relating to Indebtedness of
Holdings or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial Borrowing Date
(collectively, the "Existing Indebtedness Agreements");
all of which Plans, Shareholders' Agreements, Management Agreements, Collective
Bargaining Agreements, Existing Indebtedness Agreements and Tax Sharing
Agreements shall be in form and substance satisfactory to the Administrative
Agent and the Required Banks and shall be in full force and effect.
5.05 Floating Rate Loans. (a) On or prior to the Initial Borrowing
Date, (i) Holdings shall have received gross cash proceeds of $60,000,000 from
its incurrence of a like principal amount of Floating Rate Loans, (ii) Holdings
shall have contributed the full amount of the net cash proceeds received by it
from its incurrence of the Floating Rate Loans to the capital of Adience and
(iii) Adience shall have utilized the full amount of such cash proceeds to make
payments owing in connection with the Transaction (in a manner consistent with
the description contained in Schedule XII) prior to utilizing any proceeds of
Adience A Term Loans or Adience B Term Loans for such purpose.
(b) On or prior to the Initial Borrowing Date, the Administrative
Agent shall have received true and correct copies of the Floating Rate Loan
Documents and all of the terms and conditions of the Floating Rate Loan
Documents (including, without limitation, subordination provisions, covenants,
events of defaults, remedies, maturities, sinking fund, redemption provisions,
interest rates and all other terms) shall be required to be in form and
substance satisfactory to the Administrative Agent and the Required Banks.
5.06 Consummation of Acquisition; Etc. (a) On the Initial Borrowing
Date, (i) the Acquisition shall have been consummated in accordance with the
Acquisition Documents and all applicable laws (except insofar as moneys to be
advanced under the terms of this Agreement as are required for such purpose),
(ii) each of the conditions
-51-
<PAGE>
precedent set forth in the Acquisition Documents shall have been satisfied and
not waived (unless waived with the consent of the Administrative Agent and the
Required Banks), and (iii) the Administrative Agent shall have received true and
correct copies of the Acquisition Documents, all of which shall be in full force
and effect and required to be in form and substance (including as to all of the
terms and conditions thereof) satisfactory to the Administrative Agent and the
Required Banks.
(b) On the Initial Borrowing Date, the Acquisition shall be
consummated and the financing therefor shall occur, in a manner consistent with
the description contained in Schedule XII (excluding Parts II.D. and IV thereof,
which describe various post-closing actions to be taken).
(c) On the Initial Borrowing Date (and after giving effect to the
Transaction), the capital structure of Holdings and its Subsidiaries shall be as
set forth in the Organization Chart attached as Schedule IX-A, which shall be
required to be in form and substance satisfactory to the Administrative Agent
and the Required Banks.
(d) On the Initial Borrowing Date, and without limiting the
requirements set forth above in this Section 5.06, (x) not more than $20 million
may be used by Adience to repay an inter-company loan previously incurred by it
from Alpine, so long as Alpine uses all proceeds of such repayment to repay
amounts owed by it pursuant to the Existing Credit Agreement as required by
following Section 5.07 and (y) all other inter-company loans and notes payable
by Holdings, Adience or any of their Subsidiaries to Alpine shall be contributed
to the capital of Holdings and such obligations shall be extinguished. On the
Initial Borrowing Date, neither Adience nor any of its Subsidiaries shall owe
any amounts, by way of inter-company loans or otherwise, to Alpine or any of its
Subsidiaries (other than Adience and its Subsidiaries).
5.07 Existing Credit Agreement. (a) On or prior to the Initial
Borrowing Date or concurrently with the Credit Events then occurring, the total
commitments under the Existing Credit Agreement shall have been terminated, and
all loans and notes issued thereunder shall have been repaid in full, together
with interest thereon, all letters of credit issued thereunder shall have been
terminated or collateralized by new back-to-back letters of credit in form and
substance, and issued by an issuer, satisfactory to the respective letter of
credit issuers or otherwise supported in a manner satisfactory to the respective
letter of credit issuers, and all other amounts owing pursuant to the Existing
Credit Agreement shall have been repaid in full and the Existing Credit
Agreement shall have been terminated and be of no further force or effect except
for continuing indemnification obligations described therein. The
Administrative Agent shall have received
-52-
<PAGE>
evidence in form, scope and substance reasonably satisfactory to it that the
matters set forth in this Section 5.07(a) have been satisfied on such date.
(b) On or prior to the Initial Borrowing Date or concurrently with
the Credit Events then occurring, the creditors under the Existing Credit
Agreement shall have terminated and released all security interests and Liens on
the assets owned or to be owned by Adience or any of its Subsidiaries granted in
connection with the Existing Credit Agreement. The Administrative Agent shall
have received such releases of security interests in and Liens on the assets
owned or to be owned by Adience and its Subsidiaries as may have been reasonably
requested by the Administrative Agent, which releases shall be in form and
substance reasonably satisfactory to the Administrative Agent. Without limiting
the foregoing, there shall have been delivered (i) proper termination
statements (Form UCC-3 or the appropriate equivalent) for filing under the UCC
of each jurisdiction where a financing statement (Form UCC-1 or the appropriate
equivalent) was filed with respect to Adience or any of its Subsidiaries, or
their respective predecessors in interest, in connection with the security
interests created with respect to the Existing Credit Agreement and the
documentation related thereto, (ii) terminations or assignments of any security
interest in, or Lien on, any patents, trademarks, copyrights, or similar
interests of Adience or any of its Subsidiaries, on which filings have been made
and (iii) terminations of all mortgages, leasehold mortgages and deeds of trust
created with respect to property of Adience or any of its Subsidiaries, or their
respective predecessors in interest, in each case, to secure the obligations
under the Existing Credit Agreement, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent.
5.08 Adverse Change, etc. (a) On or prior to the Initial Borrowing
Date, nothing shall have occurred (and neither the Administrative Agent nor the
Banks shall have become aware of any facts, conditions or other information not
previously known) which the Administrative Agent or the Required Banks shall
determine could reasonably be expected to have a material adverse effect on the
rights or remedies of the Administrative Agent or the Banks, or on the ability
of any Credit Party to perform its obligations to the Administrative Agent and
the Banks or which could reasonably be expected to have a Material Adverse
Effect.
(b) All necessary governmental (domestic and foreign) and third
party approvals and/or consents in connection with any Credit Event and the
Transaction, the other transactions contemplated by the Documents and otherwise
referred to herein or therein (excluding governmental approvals and/or consents
not required to be obtained on or prior to the Initial Borrowing Date) shall
have been obtained and remain in effect,
-53-
<PAGE>
and all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents, or imposes
materially adverse conditions upon, the consummation of any Credit Event and
the Transaction or the other transactions contemplated by the Documents or
otherwise referred to herein or therein. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon any Credit Event or the Transaction
or the other transactions contemplated by the Documents.
5.09 Litigation. On the Initial Borrowing Date, no litigation by any
entity (private or governmental) shall be pending or threatened with respect to
this Agreement, any other Document or any documentation executed in connection
herewith or therewith or the transactions contemplated hereby or thereby, or
which the Administrative Agent or the Required Banks shall determine could
reasonably be expected to have a material adverse effect on the Transactions or
a Material Adverse Effect.
5.10 U.S. Pledge Agreement. On the Initial Borrowing Date, Adience
and each U.S. Subsidiary Guarantor shall have duly authorized, executed and
delivered a Pledge Agreement in the form of Exhibit G (as amended, modified or
supplemented from time to time, the "U.S. Pledge Agreement") and shall have
delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledged
Securities, if any, referred to therein then owned by Adience and each U.S.
Subsidiary Guarantor, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated stock
powers in the case of capital stock constituting Pledged Securities. Without
limiting the foregoing requirements, on the Initial Borrowing Date, at least
45.35% of the total equity interests in Newco shall be represented by non-voting
stock owned by Adience (all of which shall be pledged pursuant to the U.S.
Pledge Agreement), with the remaining equity capitalization of Newco to consist
of voting stock owned by Adience, 65% of which shall be pledged pursuant to the
U.S. Pledge Agreement.
5.11 U.S. Security Agreement. On the Initial Borrowing Date, Adience
and each U.S. Subsidiary Guarantor shall have duly authorized, executed and
delivered a Security Agreement in the form of Exhibit H (as modified,
supplemented or amended from time to time, the "U.S. Security Agreement")
covering all of Adience's and each such U.S. Subsidiary Guarantor's present and
future U.S. Security Agreement Collateral, together with:
-54-
<PAGE>
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the U.S. Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name Adience or any of its Domestic Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (i) above, together
with copies of such other financing statements that name Adience or any of
its Domestic Subsidiaries as debtor (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in respect
of which the Collateral Agent shall have received termination statements
(Form UCC-3) or such other termination statements as shall be required by
local law fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, U.S. Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable to perfect the
security interests intended to be created by the U.S. Security Agreement;
and
(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the U.S. Security Agreement
have been taken.
5.12 U.K. Security Document. (a) On the Initial Borrowing Date, each
of the U.K. Subsidiaries (excluding Immaterial Foreign Subsidiaries) shall have
duly authorized, executed and delivered a composite guarantee and debenture in
substantially the form of Exhibit I (the "U.K. Security Agreement") together
with:
(i) evidence of the completion of all other recordings and filings
of, or with respect to, the U.K. Security Agreement as may be necessary
or, in the reasonable opinion of the Collateral Agent, desirable to
perfect the security interests intended to be created by the U.K. Security
Agreement including, without limitation, the delivery of the U.K. Security
Agreement together with duly completed Companies Forms M395 to the
Registrar of Companies within 21 days from the date of the U.K. Security
Agreement;
-55-
<PAGE>
(ii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the U.K. Security Agreement
have been taken; and
(iii) the Administrative Agent shall have received true and correct
copies of statutory declarations made by the directors of the U.K.
Subsidiaries, auditor's reports and such other documents as may be
necessary to procure that the execution and delivery of the U.K. Security
Document does not contravene Section 151 of the (English) Companies Act
1985.
(b) On the Initial Borrowing Date, (x) Adience shall have duly
authorized, executed and delivered a charge over shares in the form of Exhibit M
(the "Adience U.K. Pledge Agreement") and (y) Newco shall have duly authorized,
executed and delivered a charge over shares and promissory notes in the form of
Exhibit N (the "Newco U.K. Pledge Agreement" and, together with the Adience U.K.
Pledge Agreement, each a "U.K. Pledge Agreement"), and each such pledgor) shall
have delivered to the Collateral Agent signed but undated stock transfer forms
relating to the shares charged (and in the case of the Newco U.K. Pledge
Agreement, endorsements in blank relating to promissory notes charged, pursuant
to the respective U.K. Pledge Agreements) together with the relative share
certificates.
5.13 Guaranties. (a) On the Initial Borrowing Date, the U.S.
Subsidiary Guarantors, if any then exist, shall have duly authorized, executed
and delivered a Subsidiary Guaranty in the form of Exhibit J (as amended,
modified or supplemented from time to time, the "U.S. Subsidiary Guaranty"),
guaranteeing all of the Obligations of each of the Borrowers as more fully
provided therein, and the U.S. Subsidiary Guaranty, if required to be executed
on the Initial Borrowing Dates shall be in full force and effect.
5.14 Mortgage; Title Insurance. On the Initial Borrowing Date, the
Collateral Agent shall have received:
(i) fully executed counterparts of mortgages, deeds of trust or
deeds to secure debt, in each case in form and substance reasonably
satisfactory to the Administrative Agent (as modified, supplemented or
amended from time to time, each a "Mortgage" and, collectively, the
"Mortgages"), which Mortgages shall cover such of the Real Property owned
or leased by Adience and its Domestic Subsidiaries as shall be designated
on Schedule III (each a "Mortgaged Property"
-56-
<PAGE>
and, collectively, the "Mortgaged Properties"), together with evidence
that counterparts of the Mortgages have been delivered to the title
insurance company insuring the Lien of the Mortgages for recording in all
places to the extent necessary or, in the reasonable opinion of the
Collateral Agent, desirable to effectively create a valid and enforceable
first priority mortgage lien on each Mortgaged Property in favor of the
Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors; and
(ii) a mortgagee title insurance policy on each Mortgaged Property
issued by Lawyers Title Insurance Company or such other title insurer as
is reasonably satisfactory to the Collateral Agent (the "Mortgage
Policies") in amounts satisfactory to the Administrative Agent assuring
the Collateral Agent that the Mortgages on such Mortgaged Properties are
valid and enforceable first priority mortgage liens on the respective
Mortgaged Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances and such Mortgage Policies shall otherwise
be in form and substance reasonably satisfactory to the Administrative
Agent and shall include, as appropriate, an endorsement for future
advances under this Agreement and the Notes and for any other matter that
the Administrative Agent in its reasonable discretion may reasonably
request, shall not include an exception for mechanics' liens, and shall
provide for affirmative insurance as the Administrative Agent in its
discretion may reasonably request.
5.15 Projections; Pro Forma Balance Sheet. On or prior to the
Initial Borrowing Date, there shall have been delivered to the Administrative
Agent:
(i) projected financial statements for Holdings and its Subsidiaries
for the period from the Initial Borrowing Date to and including at least
April 30, 2005 (the "Projections"), which Projections (x) shall reflect
the forecasted financial condition and income and expenses of Holdings and
its Subsidiaries after giving effect to the Transaction and the related
financing thereof and the other transactions contemplated hereby and
thereby and (y) shall be reasonably satisfactory in form and substance to
the Administrative Agent and the Required Banks; and
(ii) an unaudited pro forma consolidated balance sheet of Holdings
and its Subsidiaries, and of each Borrower, after giving effect to the
Transaction and the incurrence of all Indebtedness contemplated herein and
prepared in accordance with generally accepted accounting principles,
which pro forma consolidated
-57-
<PAGE>
balance sheets shall be required to be in form and substance reasonably
satisfactory to the Administrative Agent and the Required Banks.
5.16 Solvency Certificate; Environmental Analyses; Insurance
Analyses. On the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent:
(i) a solvency certificate in the form of Exhibit K from the chief
financial officer of Holdings and each Borrower and dated the Initial
Borrowing Date;
(ii) Phase I environmental assessment reports with respect to
certain currently owned or operated real properties prepared by
environmental consultants reasonably satisfactory to the Administrative
Agent, the results of which do not disclose any environmental liabilities
or potential environmental liabilities reasonably likely to result in a
Material Adverse Effect; and
(iii) analyses and evidence of insurance complying with the
requirements of Section 8.03 for the business and properties of Holdings
and its Subsidiaries, in scope, form and substance satisfactory to the
Administrative Agent and the Required Banks and naming the Collateral
Agent as an additional insured and as loss payee, and stating that such
insurance shall not be cancelled or revised without at least 30 days prior
written notice by the insurer to the Collateral Agent.
5.17 Fees, etc. On the Initial Borrowing Date, Adience shall have
paid to the Administrative Agent and each Bank all costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses) payable to
the Administrative Agent and such Bank to the extent then due.
5.18 Termination of Confidentiality Undertakings. On the Initial
Borrowing Date, each of the Borrowers and the seller pursuant to the Acquisition
Agreement shall have released the Agent, each of the Banks and their counsel
from all obligations of such Persons pursuant to any Confidentiality Undertaking
theretofore executed and delivered by any such Person, except that, from and
after the Initial Borrowing Date, the confidentiality provisions of Section
13.17 of this Agreement shall survive in accordance with the terms hereof. The
releases described in the immediately preceding sentence shall be in form and
substance satisfactory to the Agent, the Banks and their counsel.
-58-
<PAGE>
5.19 Repayment of 11% Senior Secured Notes. On the Initial Borrowing
Date, Adience shall have repaid in full, for cash not in excess of $5.7 million
in the aggregate, all of its 11% senior secured notes due 2002, and all security
therefor shall have been released to the satisfaction of the Agent and the
Required Banks.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
of each Bank to make Loans (including Loans made on the Initial Borrowing Date,
but excluding Mandatory Borrowings to be made thereafter, which shall be made as
provided in Section 1.01(f)), and the obligation of any Issuing Bank to issue
any Letter of Credit, is subject, at the time of each such Credit Event (except
as hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (excluding Swingline Loans), the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section 1.03(a).
Prior to the making of any Swingline Loan, BTCo shall have received the notice
required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
The acceptance of the proceeds of each Loan or the making of each
Letter of Credit Request (occurring on the Initial Borrowing Date and
thereafter) shall constitute a representation and warranty by each Credit Party
to the Administrative Agent and each of the Banks that all the conditions
specified in Section 5 (with respect to Credit Events on the Initial Borrowing
Date) and in this Section 6 (with respect to Credit Events on and after the
Initial Borrowing Date) and applicable to such Credit Event exist as of that
time. All of the Notes, certificates, legal opinions and other documents and
papers referred to in Section 5 and in this Section 6, unless otherwise
specified, shall be delivered to the
-59-
<PAGE>
Administrative Agent at the Notice Office for the account of each of the Banks
and, except for the Notes, in sufficient counterparts or copies for each of the
Banks and shall be in form and substance satisfactory to the Administrative
Agent and the Required Banks.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, Holdings and each
of the Borrowers make the following representations, warranties and agreements,
in each case after giving effect to the Transaction, all of which shall survive
the execution and delivery of this Agreement and the Notes and the making of the
Loans and issuance of the Letters of Credit, with the occurrence of each Credit
Event on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct on and as of the Initial Borrowing Date and in all material
respects on the date of each such Credit Event (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
7.01 Corporate and Other Status. Each of Holdings and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
requisite corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.02 Corporate and Other Power and Authority. Each Credit Party has
the requisite corporate power and authority to execute, deliver and perform the
terms and provisions of each of the Documents to which it is party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Documents. Each Credit Party has duly executed
and delivered each of the Documents to which it is party, and each of such
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
-60-
<PAGE>
7.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, coven ants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents and the Floating Rate Loan Documents) upon any of the property or
assets of Holdings or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which Holdings or any of
its Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational documents)
of Holdings or any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except (x) as have been obtained or made on or prior to the Initial Borrowing
Date, (y) as will be made pursuant to the terms of any Security Document,
provided that all such filings as described in this clause (y) shall have been
made within the time periods required by this Agreement and the relevant
Security Documents and (z) the Environmental Disclosure Document for Transfer of
Real Property under the Indiana Responsible Property Transfer Law), or exemption
by, any governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document or (ii) the legality, validity, binding
effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of Adience and
its Subsidiaries (which does not include Newco, Hepworth or any of their
respective Subsidiaries) at April 30, 1996 and January 31, 1997 and the related
statements of consolidated income, consolidated cash flows and shareholders'
equity of Adience and its Subsidiaries for the fiscal year and the nine-month
period ended on such date, as the case may be, and furnished to the Banks prior
to the Initial Borrowing Date, fairly present the consolidated results of the
operations of Adience and its Subsidiaries for the respective fiscal year or
nine-month period ended on such date, as the case may be, and consolidated
financial position of Adience and its Subsidiaries at the date of such balance
sheet. All such consolidated financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied,
subject to normal year-end audit
-61-
<PAGE>
adjustments and the absence of footnotes in the case of the January 31, 1997
financial statements.
(b) The Accounting Pack (as defined in the Acquisition Agreement)
for Hepworth and its Subsidiaries for the accounting reference period ended
December 31, 1996, and furnished to the Banks prior to the Initial Borrowing
Date, was prepared in accordance with accounting principles and practices
generally accepted in the United Kingdom as at December 31, 1996, and gives a
true and fair view of the state of affairs of Hepworth and its Subsidiaries as
at December 31, 1996.
(c) Since April 30, 1996 (but for this purpose, assuming that the
Transaction had been consummated on such date), there has been no material
adverse change in the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings, any Borrower,
Holdings and its Subsidiaries taken as a whole or any Borrower and its
Subsidiaries taken as a whole.
(d) (i) On and as of the Initial Borrowing Date, after giving effect
to the Transaction and to all Indebtedness (including the Loans) being incurred
or assumed and Liens created by the Credit Parties in connection therewith, (a)
the sum of the assets, at a fair valuation, of each of Holdings and its
Subsidiaries taken as a whole and each Borrower on a stand-alone basis will
exceed their respective debts; (b) each of Holdings and its Subsidiaries taken
as a whole and each Borrower on a stand-alone basis have not incurred and do not
intend to incur, and do not believe that they will incur, debts beyond their
ability to pay such debts as such debts mature; and (c) each of Holdings and its
Subsidiaries taken as a whole and each Borrower on a stand-alone basis will have
sufficient capital with which to conduct their respective businesses. For
purposes of this Section 7.05(d), "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(e) Except (i) as disclosed in the financial statements delivered
pursuant to Sections 7.05(a) and (b) and (ii) liabilities arising in the
ordinary course of business since January 31, 1997, there were as of the Initial
Borrowing Date no liabilities or obligations with respect to Holdings or any of
its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due)
-62-
<PAGE>
which, either individually or in aggregate, would be material to Holdings and
its Subsidiaries taken as a whole. As of the Initial Borrowing Date, neither
Holdings nor any Borrower knows of any basis for the assertion against it or any
of its Subsidiaries of any liability or obligation of any nature whatsoever that
is not disclosed in the financial statements delivered pursuant to Sections
7.05(a) and (b) which, either individually or in the aggregate, could reasonably
be expected to be material to Holdings, any Borrower, Holdings and its
Subsidiaries taken as a whole or any Borrower and its Subsidiaries taken as a
whole other than liabilities arising under the Acquisition Documents.
(f) On and as of the Initial Borrowing Date, the Projections
delivered to the Administrative Agent pursuant to Section 5.15 have been
prepared in good faith and are based on reasonable assumptions under the then
known facts and circumstances (it being understood that nothing contained herein
shall constitute a representation that the results forecasted in such
Projections will in fact be achieved), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to Holdings or any Borrower to be misleading in any material
respect or which knowingly fail to take into account material information
regarding the matters reported therein. On the Initial Borrowing Date, Holdings
and each of the Borrowers believe that the Projections are reasonable and
attainable based upon the then known facts and circumstances, it being
understood that nothing contained herein shall constitute a representation that
the results forecasted in such Projections will in fact be achieved.
7.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Holdings or any Borrower, threatened (i) with
respect to any Document or (ii) that are reasonably likely to result in a
Material Adverse Effect.
7.07 True and Complete Disclosure. All factual information (other
than the Projections, which are covered in Section 7.05(f)) (taken as a whole)
furnished by any Credit Party in writing to the Administrative Agent or any Bank
(including, without limitation, all information contained in the Documents, but
for purposes of or in connection with this Agreement, the other Credit
Documents or any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of any Credit Party in writing to the Administrative Agent or any Bank will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided.
-63-
<PAGE>
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Term Loans will be used by the Borrowers (other than Hepworth) (i) to effect the
Transaction and (ii) to pay fees and expenses related to the Transaction.
(b) The proceeds of Revolving Loans incurred by each Revolving Loan
Borrower will be used for such Revolving Loan Borrower's and its Subsidiaries'
(excluding, in the case of Borrowings of Revolving Loans by Adience, Hepworth
and its Subsidiaries) general corporate and working capital purposes, provided
that not more than $7,500,000 of the aggregate proceeds of Revolving Loans shall
be used to make payments in connection with the Transaction.
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X.
7.09 Tax Returns and Payments. Except as set forth on Schedule XIII,
Holdings and each of its Subsidiaries have timely filed or caused to be timely
filed with the appropriate taxing authority, all Federal, state, local, foreign
and other returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of Holdings and/or any of its Subsidiaries. The Returns accurately reflect all
liability for taxes of Holdings and its Subsidiaries for the periods covered
thereby. Holdings and each of its Subsidiaries have paid all taxes payable by
them other than taxes contested in good faith and for which adequate reserves
have been established in accordance with generally accepted accounting
principles. There is no action, suit, proceeding, investigation, audit, or claim
now pending or, to the knowledge of any Credit Party, threatened by any
authority regarding any taxes relating to Holdings or any of its Subsidiaries.
As of the Initial Borrowing Date, neither Holdings nor any of its Subsidiaries
has entered into an agreement or waiver or been requested to enter into an
agreement or waiver extending any statute of limitations relating to the payment
or collection of taxes of Holdings or any of its Subsidiaries, is aware of any
agreement or waiver extending any statute of limitations relating to the payment
or collection of other taxes of Holdings or any of its Subsidiaries, or is aware
of any circumstances that would cause the taxable years or other taxable periods
of Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. None of Holdings or any of its Subsidiaries
has provided, with respect to itself or property held by it, any consent under
Section 341 of the Code. None of Holdings or any of its Subsidiaries has
incurred, or will incur, any tax liability in
-64-
<PAGE>
connection with the Acquisition or any other transactions contemplated hereby
other than stamp tax duty under applicable laws of England.
7.10 Compliance with ERISA. (a) Schedule XIV sets forth each Plan
that, on the Initial Borrowing Date is maintained, sponsored or contributed to
by Holdings, any Subsidiary of Holdings or any ERISA Affiliate; and each Plan
(and each related trust, insurance contract or fund) is in compliance with its
terms and with all applicable laws, including, without limitation, ERISA and the
Code, except where noncompliance could not reasonably be expected to result in a
Material Adverse Effect. Each Plan (and each related trust, if any) which is
intended to be qualified under Section 401(a) of the Code or its prototype Plan
document (to the best knowledge of Holdings in the case of multiemployer plans
(as defined in section 4001(a)(3) of ERISA)) has received a determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code. None of the following conditions
exist, the liability for which, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect: no Reportable Event has occurred with
respect to a Plan; none of Holdings or any of its ERISA Affiliates received
notice that any Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans, exceeds the aggregate amount of
such Unfunded Current Liabilities that existed on the Initial Borrowing Date by
$1,000,000; no Plan which is subject to Section 412 of the Code or Section 302
of ERISA has an accumulated funding deficiency, within the meaning of such
sections of the Code or ERISA, or has applied for or received a waiver of an
accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate
has incurred any liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971, 4975 or 4980 of the Code or expects to incur any such liability under any
of the foregoing Sections with respect to any Plan; no condition exists which
presents a material risk to Holdings or any Subsidiary of Holdings or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been instituted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, or, to the knowledge
of Holdings or any Subsidiary of
-65-
<PAGE>
Holdings or any ERISA Affiliate, expected or threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of Holdings and its Subsidiaries
and its ERISA Affiliates to all Plans which are multiemployer plans (as defined
in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom,
as of the close of the most recent fiscal year of each such Plan ended prior to
the date of the most recent Credit Event, would not exceed $5,000,000; each
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) which covers or has covered employees or former employees of
Holdings, any Subsidiary of Holdings, or any ERISA Affiliate has at all times
been operated in substantial compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code and no material
liability exists or could arise as a result of any failure to so comply; and no
lien imposed under the Code or ERISA on the assets of Holdings or any Subsidiary
of Holdings or any ERISA Affiliate exists or is likely to arise on account of
any Plan; and Holdings and its Subsidiaries do not maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan the obligations with respect to
which could reasonably be expected to have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, except where
the failure to so comply would not result in a Material Adverse Effect. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Holdings nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of the
most recently ended fiscal year of Holdings on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
7.11 The Security Documents. (a) The provisions of the U.S. Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties party thereto in
the U.S. Security Agreement Collateral described therein, subject to the
provisions of the U.S. Security Agreement, and the Collateral Agent, for the
benefit of the Secured Creditors, has a fully perfected first lien on, and
security interest in, all right, title and interest in all of the U.S. Security
-66-
<PAGE>
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens. The recordation of the Assignment of Security Interest in U.S.
Patents and Trademarks in the form attached to the U.S. Security Agreement in
the United States Patent and Trademark Office together with filings on Form
UCC-1 made pursuant to the U.S. Security Agreement will create, as may be
perfected by such filing and recordation, a perfected security interest granted
to the Collateral Agent in the trademarks and patents covered by the U.S.
Security Agreement and the recordation of the Assignment of Security Interest in
U.S. Copyrights in the form attached to the U.S. Security Agreement with the
United States Copyright Office together with filings on Form UCC-1 made pursuant
to the U.S. Security Agreement will create, as may be perfected by such filing
and recordation, a perfected security interest granted to the Collateral Agent
in the copyrights covered by the U.S. Security Agreement.
(b) Subject to the terms of the U.S. Pledge Agreement, the security
interests created in favor of the Collateral Agent, as Pledgee, for the benefit
of the Secured Creditors under the U.S Pledge Agreement constitute first
priority perfected security interests in the Pledged Securities described in the
U.S. Pledge Agreement, subject to no security interests of any other Person. No
filings or recordings are required in order to perfect (or maintain the
perfection or priority of) the security interests created in the Pledged
Securities under the U.S. Pledge Agreement.
(c) Subject to the terms of the Mortgages, the Mortgages create, for
the obligations purported to be secured thereby, a valid and enforceable
perfected security interest in and mortgage lien on all of the Mortgaged
Properties in favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the Secured Creditors,
superior to and prior to the rights of all third persons (except that the
security interest and mortgage lien created in the Mortgaged Properties may be
subject to the Permitted Encumbrances related thereto) and subject to no other
Liens (other than Liens permitted under Section 9.01). Schedule III contains a
true and complete list of each parcel of Real Property owned or leased by
Holdings and its Subsidiaries on the Initial Borrowing Date, and the type of
interest therein held by Holdings or such Subsidiary. Holdings and each of its
Subsidiaries have good and marketable title to all fee-owned Real Property and
valid leasehold title to all Leaseholds, in each case free and clear of all
Liens except those described in the first sentence of this subsection (c).
(d) Subject to the terms of the respective U.K. Security Documents,
the security interests created in favor of the Collateral Agent, as Chargee, for
the benefit of the Secured Creditors under the U.K. Security Documents
constitute first priority
-67-
<PAGE>
perfected security interests in the assets charged pursuant to the U.K. Security
Documents, subject to no security interests of any other Person. No filings or
recordings are required in order to perfect (or maintain the perfection or
priority of) the security interests created in the assets charged pursuant to
the U.K. Security Documents other than the filing of the U.K. Security Documents
together with duly completed Companies Forms M395 with the Registrar of
Companies in England and Wales within 21 days of the date of those documents
(which filings, if this representation is made at any time after the 21st day
following the Initial Borrowing Date, have been made).
7.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the Documents (other than the
Credit Documents) were true and correct in all material respects at the time as
of which such representations and warranties were made (or deemed made);
provided that, to the extent such representations and warranties in the
Acquisition Documents were made by the seller thereunder, the representations
and warranties made pursuant to this Section 7.12 are to the best knowledge of
the Credit Agreement Parties.
7.13 Properties. Holdings and each of its Subsidiaries have good and
marketable title to all material properties owned by them, including all
property reflected in the financial statements referred to in Sections 7.05(a)
and (b) (except as sold or otherwise disposed of since the date of such balance
sheet in the ordinary course of business), free and clear of all Liens, other
than Liens permitted by Section 9.01.
7.14 Capitalization. On the Initial Borrowing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, the
authorized capital stock of (w) Holdings shall consist of (i) 500 shares of
common stock, $.01 par value per share, and (ii) 2,500 shares of preferred
stock, $.01 par value per share, (x) Adience shall consist of 1,000 shares of
common stock, $.01 par value per share, (y) Newco shall consist of (i)
12,499,900 ordinary shares of (pounds)1 each, and (ii) 10,500,000 shares of 6%
fixed non-cumulative redeemable preferred shares of (pounds)1, and (z) Hepworth
shall consist of 12,000,000 ordinary shares of (pounds)1 each. All such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights. Neither Holdings nor any of its
Subsidiaries has outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
-68-
<PAGE>
7.15 Subsidiaries. Schedule IV correctly sets forth, as of the
Initial Borrowing Date and after giving effect to the Transaction, each
Subsidiary of Holdings, and the direct and indirect ownership interest of
Holdings therein. Schedule IX-A correctly sets forth, as of the Initial
Borrowing Date and after giving effect to the Transaction, an Organization Chart
showing the corporate structure of Holdings and its Subsidiaries, consistent
with Schedule IV.
7.16 Compliance with Statutes, etc. Each of Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
7.17 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither Holdings nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.19 Environmental Matters. (a) Holdings and each of its
Subsidiaries have complied with, and on the date of such Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of Holdings or any Borrower, overtly threatened Environmental
Claims against Holdings or any of its Subsidiaries (including any such
Environmental Claim arising out of the ownership or operation by Holdings or any
of its Subsidiaries of any Real Property no longer owned by Holdings or any of
its Subsidiaries) or, to the best knowledge of Holdings or any Borrower, any
Real Property owned or operated by Holdings or any of its Subsidiaries. There
are no facts, circumstances, conditions or occurrences with respect to the
business or operations of Holdings or any of its Subsidiaries or any Real
Property owned or operated by Holdings or any of its Subsidiaries (including
any Real Property formerly owned or operated by Holdings or any of its
Subsidiaries but no longer owned by Holdings or any of its Subsidiaries) or, to
the best knowledge of Holdings or any Borrower, any real
-69-
<PAGE>
property adjoining or adjacent to any such Real Property that would reasonably
be expected (i) to form the basis of an Environmental Claim against Holdings or
any of its Subsidiaries or any Real Property owned or operated by Holdings or
any of its Subsidiaries, or (ii) to cause any Real Property owned or operated by
Holdings or any of its Subsidiaries to be subject to any restrictions on the
ownership, occupancy or transferability of such Real Property by Holdings or
any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings or any of its Subsidiaries where such generation, use,
treatment, storage or transportation has violated or would reasonably be
expected to violate any applicable Environmental Law. Hazardous Materials have
not at any time been Released on or from any Real Property owned or operated by
Holdings or any of its Subsidiaries where such Release has violated or would
reasonably be expected to violate any applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 7.19,
the representations made in this Section 7.19 shall not be untrue unless the
aggregate effect of all violations, Environmental Claims, facts, circumstances,
conditions, occurrences, restrictions, failures and noncompliances of the types
described above would reasonably be expected to have a Material Adverse Effect.
7.20 Labor Relations. Neither Holdings nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against Holdings any of its Subsidiaries or, to the best knowledge of
Holdings or any Borrower, overtly threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings or any Borrower, overtly threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against Holdings or any of
its Subsidiaries or, to the best knowledge of Holdings or any Borrower, overtly
threatened against Holdings or any of its Subsidiaries, (iii) to the best
knowledge of Holdings or any Borrower, no union representation question existing
with respect to the employees of Holdings or any of its Subsidiaries and (iv) no
payments are due and no circumstances exist which might make any payment due by
any of the U.K. Subsidiaries under the provisions of the Employment Rights Act
1996, except (with respect to any matter speci-
-70-
<PAGE>
fied in clause (i), (ii), (iii) or (iv) above, either individually or in the
aggregate) such as could not reasonably be expected to have a Material Adverse
Effect.
7.21 Patents, Licenses, Franchises and Formulas. Each of Holdings
and each of its Subsidiaries owns all the patents, trademarks, permits, service
marks, trade names, copyrights, licenses, franchises, proprietary information
(including but not limited to rights in computer programs and databases) and
formulas, or rights with respect to the foregoing, and has obtained assignments
of all leases and other rights of whatever nature, necessary for the present
conduct of its business, without any known conflict with the rights of others
which, or the failure to obtain which, as the case may be, could reasonably be
expected to result in a Material Adverse Effect.
7.22 Indebtedness. Schedule V sets forth a true and complete list of
all Indebtedness of Holdings and its Subsidiaries as of the Initial Borrowing
Date and which is to remain outstanding after giving effect to the Transaction
(excluding the Loans, the Letters of Credit and the Floating Rate Loans, the
"Existing Indebtedness"), in each case, showing the aggregate principal amount
thereof and the name of the respective borrower and any Credit Party or any of
its Subsidiaries which directly or indirectly guaranteed such debt.
7.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all material consents and approvals of, and filings and registrations
with, and all other actions in respect of, all governmental agencies,
authorities or instrumentalities required in order to make or consummate the
Transaction to the extent then required have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained). All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transaction, or the occurrence of any Credit Event or the performance by any
Credit Party of its obligations under the Documents to which it is party.
7.24 Special Purpose Corporation. Holdings has no significant assets
(other than the capital stock of Adience) or liabilities (other than those
liabilities under this Agreement and the Floating Rate Loan Documents).
-71-
<PAGE>
7.25 No Tax Sharing Agreements. On the Initial Borrowing Date,
neither Holdings nor any of its Subsidiaries is party to any tax sharing, tax
allocation or other similar agreements (collectively, the "Tax Sharing
Agreements").
SECTION 8. Affirmative Covenants. Holdings and each Borrower hereby
covenants and agrees that on and after the Effective Date and until the Total
Commitments and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Credit Agreement Parties will
furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of Holdings (excluding any fiscal month which ends on the last day
of a fiscal quarter or fiscal year of Holdings), the consolidated balance
sheet of each of (x) Holdings and its Subsidiaries, (y) Adience and its
Subsidiaries (excluding Newco and its Subsidiaries) and (z) Newco and its
Subsidiaries, each as at the end of such fiscal month and the related
consolidated statements of income and retained earnings and statement of
cash flows for such fiscal month and for the elapsed portion of the fiscal
year ended with the last day of such fiscal month, in each case, setting
forth comparative figures for the corresponding fiscal month in the prior
fiscal year and comparable budgeted figures for such fiscal month
(provided that the Credit Agreement Parties shall only be required to show
such comparative information with respect to Hepworth and its Subsidiaries
for any period prior to the Effective Date to the extent of such
comparative figures may be practicably obtained).
(b) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of
Holdings, (i) the consolidated (and, in the case of the statements for
Holdings and its Subsidiaries, consolidating) and consolidating balance
sheets of each of (x) Holdings and its Subsidiaries, (y) Adience and its
Subsidiaries (excluding Newco and its Subsidiaries) and (z) Newco and its
Subsidiaries, each as at the end of such quarterly accounting period and
the related consolidated and consolidating statements of income and
retained earnings and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certi-
-72-
<PAGE>
fied by the chief financial officer of Holdings, subject to normal
year-end audit adjustments and the absence of footnotes and (ii)
management's discussion and analysis of the important operational and
financial developments during the quarterly and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of Holdings, (i) the consolidated (and, in the case of
the statements for Holdings and its Subsidiaries, consolidating) balance
sheets of each of (x) Holdings and its Subsidiaries, (y) Adience and its
Subsidiaries (excluding Newco and its Subsidiaries) and (z) Newco and its
Subsidiaries, each as at the end of such fiscal year and the related
consolidated and consolidating statements of income and retained earnings
and of cash flows for such fiscal year setting forth comparative figures
for the preceding fiscal year and certified (x) in the case of the
consolidating financial statements, by the chief financial officer of
Holdings and (y) in the case of the consolidated financial statements, by
Arthur Andersen LLP or such other independent certified public accountants
of recognized national standing reasonably acceptable to the
Administrative Agent, together with a re port of such accounting firm
stating that in the course of its regular audit of the respective
financial statements, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Event of Default which has occurred and is continuing or,
if in the opinion of such accounting firm such an Event of Default has
occurred and is continuing, a statement as to the nature thereof and (ii)
management's discussion and analysis of the important operational and
financial developments during the respective fiscal year.
(d) Management Letters. Promptly after Holdings' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" addressed
to the board of directors of Holdings or such Subsidiary from its
certified public accountants and the management's responses thereto.
(e) Budgets. No later than 30 days after the first day of each
fiscal year of Holdings, budgets (for (i) Holdings and its Subsidiaries
taken as a whole, (ii) Adience and its Subsidiaries (excluding Newco and
its Subsidiaries) and (iii) Newco and its Subsidiaries) in form
satisfactory to the Administrative Agent and the Required Banks (including
budgeted statements of income and sources and uses of cash and balance
sheets) prepared by Holdings for (x) each of the months of such fiscal
year prepared in reasonable detail and (y) the immediately following
fiscal year prepared in summary form, in each case accompanied by the
statement
-73-
<PAGE>
of the chief financial officer of Holdings to the effect that, to the best
of his knowledge, the respective budget is a reasonable estimate for the
period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(b) and (c), a
certificate of the chief financial officer of Holdings to the effect that,
to the best of such officer's knowledge, no Default or Event of Default
has occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof,
which certificate shall (x) set forth in reasonable detail the
calculations required to establish whether Holdings and its Subsidiaries
were in compliance with the provisions of Section 4.02(f) (to the extent
delivered with the financial statements required by Section 8.01(c)),
9.03, 9.04, 9.05 and 9.07 through 9.11, inclusive, at the end of such
fiscal quarter or year, as the case may be and (y) if delivered with the
financial statements required by Section 8.01(c), set forth in reasonable
detail the amount of Holdings Excess Cash Flow and Newco Excess Cash Flow
for the respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
within three Business Days (or five Business Days in the case of following
clause (ii)) after an executive or financial officer of any Credit
Agreement Party obtains actual knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of
Default and (ii) any litigation or governmental investigation or
proceeding pending (x) against Holdings or any of its Subsidiaries which,
if adversely determined, could reasonably be expected to have a Material
Adverse Effect, (y) with respect to any material Indebtedness of Holdings
or any of its Subsidiaries or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports,
if any, which Holdings or any of its Subsidiaries shall publicly file with
the Securities and Exchange Commission or any successor thereto (the
"SEC") or the Registrar of Companies in England and Wales or shall deliver
to its shareholders or to holders of its Indebtedness pursuant to the
terms of the documentation governing such Indebtedness (or any trustee,
agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, an executive or financial officer of any Credit
Agreement Party obtains knowledge thereof, notice of one or more of the
following
-74-
<PAGE>
environmental matters, unless such environmental matters would not, individually
or when aggregated with all other such environmental matters, be reasonably
expected to have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Borrower or any of its
Subsidiaries that (a) results in noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environmental Law or
(b) would reasonably be expected to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries
or any such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by the Borrower or any of its Subsidiaries that would
reasonably be expected to cause such Real Property to be subject to
any restrictions on the ownership, occupancy, use or
transferability by the Borrower or any of its Subsidiaries of such
Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
Real Property owned or operated by the Borrower or any of its
Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency (with the items
described above in preceding clauses (i) through (iv) being herein
called, collectively, "Environmental Matters").
All such notices shall describe in reasonable detail the nature of
the respective Environmental Matter and Holdings' or such Subsidiary's intended
response thereto. In addition, Holdings or any of its Subsidiaries will provide
the Banks with copies of all communications between Holdings or any of its
Subsidiaries and any government or governmental agency relating to Environmental
Laws which would reasonably be expected to have a Material Adverse Effect, all
notices of any Environmental Claims, and such detailed reports of any
outstanding Environmental Claim as may reasonably be requested by the Banks;
provided, that in any event Holdings and its Subsidiaries shall deliver to each
Bank all notices received by Holdings or any of its Subsidiaries from any
government or governmental agency under, or pursuant to, CERCLA which identify
-75-
<PAGE>
Holdings or any of its Subsidiaries as potentially responsible parties for
response costs or which otherwise notify Holdings or any of its Subsidiaries of
potential liability under CERCLA.
(j) Annual Meetings with Banks. At the request of the Administrative
Agent, at a date to be mutually agreed upon between the Administrative Agent and
Adience occurring on or prior to the 120th day after the close of each fiscal
year of Holdings, Adience shall hold a meeting with all of the Banks at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of Holdings and its Subsidiaries and the budgets
presented for the current fiscal year of Holdings and its Subsidiaries.
(k) Notices Pursuant to Acquisition Documents. Promptly after the
receipt or delivery thereof by any Credit Agreement Party or any of its
Subsidiaries, copies of any notices (excluding immaterial notices not involving
adjustments to the purchase price, claims for indemnities or damages, notices of
breach or similar types of claims or notices) sent or received by any Credit
Agreement Party or any of its Subsidiaries after the Initial Borrowing Date
pursuant to any Acquisition Document.
(l) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings or any of its
Subsidiaries as any Bank may reasonably request.
8.02 Books, Records and Inspections. Holdings will, and will cause
each of its Subsidiaries to, keep proper books of record and accounts in which
full, true and correct entries in conformity with generally accepted accounting
principles and all requirements of law shall be made of all dealings and
transactions in relation to its business and activities. Upon prior notice,
Holdings will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Administrative Agent or any Bank to visit and
inspect, during regular business hours and under guidance of officers of
Holdings or such Subsidiary, any of the properties of Holdings or such
Subsidiary, and to examine the books of account of Holdings or such Subsidiary
and discuss the affairs, finances and accounts of Holdings or such Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or such Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule VI sets forth
a true and complete listing of all insurance maintained by Holdings and its
Subsidiaries as
-76-
<PAGE>
of the Initial Borrowing Date. Holdings will, and will cause each of its
Subsidiaries to, (i) keep all property necessary to the business of the Borrower
and its Subsidiaries in reasonably good working order and condition, ordinary
wear and tear excepted, (ii) maintain insurance on all such property in at least
such amounts and against at least such risks as is consistent and in accordance
with industry practice for companies similarly situated owning similar
properties in the same general areas in which Holdings or any of its
Subsidiaries operates, and (iii) furnish to the Administrative Agent or any
Bank, upon written request, full information as to the insurance carried. At any
time that insurance at levels described on Schedule VI is not being maintained
by Holdings or any Subsidiary of Holdings, Holdings will, or will cause one of
its Subsidiaries to, promptly notify the Administrative Agent and the Banks in
writing and, if thereafter notified by the Required Banks to do so, Holdings or
any such Subsidiary, as the case may be, shall obtain such insurance at such
levels to the extent such insurance is reasonably available. In addition to the
requirements of the two immediately preceding sentences, Holdings will, and will
cause each of its Subsidiaries to, at all times cause property and business
interruption insurance of the types described in Schedule VI to be maintained
(with the same scope of coverage as that described in Schedule VI) at levels
which are at least as great as the respective amounts described on Schedule VI.
(b) Holdings will, and will cause each of its Subsidiaries to, at
all times keep its property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by Holdings and/or its
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and/or additional insured), (ii) shall state
that such insurance policies shall not be cancelled or revised without at least
30 days' prior written notice thereof by the respective insurer to the
Collateral Agent, (iii) shall provide that the respective insurers irrevocably
waive any and all rights of subrogation with respect to the Collateral Agent and
the Secured Creditors, (iv) shall contain the standard non-contributing mortgage
clause endorsement in favor of the Collateral Agent with respect to hazard
liability insurance, (v) shall, except in the case of public liability
insurance, provide that any losses shall be payable notwithstanding (A) any act
or neglect of Holdings or any of its Subsidiaries, (B) the occupation or use of
the properties for purposes more hazardous than those permitted by the terms of
the respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(C) any foreclosure or other proceeding relating to the insured properties or
(D) any change in the title to or ownership or possession of the insured
properties and (vi) shall be deposited with the Collateral Agent (although
proceeds
-77-
<PAGE>
received thereunder shall be permitted to be used, subject to (x) the absence of
any Default under Section 10.01 and 10.05 and to the absence of any Event of
Default and (y) compliance with the relevant provisions thereof, in the manner
contemplated by Section 4.02(g)).
(c) If Holdings or any of its Subsidiaries shall fail to insure its
property in accordance with this Section 8.03, or if Holdings, or if Holdings
any of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation), upon 10 Business Days' prior notice to
Adience, to procure such insurance and Holdings and each of the Borrowers agree
to reimburse the Collateral Agent for all costs and expenses of procuring such
insurance.
8.04 Corporate Franchises. Holdings will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this Section 8.04 shall
prevent (i) sales of assets by Holdings or any of its Subsidiaries in accordance
with Section 9.02 or (ii) the withdrawal by Holdings or any of its Subsidiaries
of its qualification as a foreign corporation in any jurisdiction where such
withdrawal could not reasonably be expected to have a Material Adverse Effect.
8.05 Compliance with Statutes, etc. Holdings will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
8.06 Compliance with Environmental Laws. (a) Holdings will comply,
and will cause each of its Subsidiaries to comply, in all material respects with
all Environmental Laws applicable to the ownership or use of its Real Property
now or hereafter owned or operated by Holdings or any of its Subsidiaries, will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws.
Neither Holdings nor any of its Subsidiaries will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of Hazardous Materials on any Real Property now or
-78-
<PAGE>
hereafter owned or operated by Holdings or any of its Subsidiaries, or transport
or permit the transportation of Hazardous Materials to or from any such Real
Property, except for Hazardous Materials generated, used, treated, stored,
released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and as is reasonably
required in connection with the operation, use and maintenance of the business
or operations of Holdings or any of its Subsidiaries.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, Adience will provide, at its sole
cost and expense, an environmental site assessment report concerning any Real
Property owned or operated by Holdings and its Subsidiaries, prepared by an
environmental consulting firm reasonably acceptable to the Administrative Agent,
indicating the presence or absence of Hazardous Materials and the estimated
reasonably likely cost of any removal or remedial action required under
Environmental Laws in connection with such Hazardous Materials on such Real
Property, provided that in no event shall such request be made more often than
once every two years for any particular Real Property unless either (i) an Event
of Default shall be in existence or (ii) the Banks receive notice under Section
8.01(i) of any Environmental Matter for which notice is required to be delivered
for any such Real Property. If Adience fails to provide the same within ninety
days after such request was made, the Administrative Agent may order the same,
the cost of which shall be borne by Adience, and Adience shall grant and hereby
grants to the Administrative Agent and the Banks and their agents access to such
Real Property and specifically grant the Administrative Agent and the Banks an
irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment using a nationally recognized environmental
consulting firm reasonably acceptable to Adience at any reasonable time upon
reasonable notice to Adience, all at the sole costs and reasonable expense of
Adience.
8.07 ERISA. As soon as possible and, in any event, within 20 days
after Holdings or any Subsidiary of Holdings or any ERISA Affiliate knows or
could be reasonably expected to know of the occurrence of any of the following,
Adience will deliver to each of the Banks a certificate of the chief financial
officer of Adience setting forth the full details as to such occurrence and the
action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required to be given to
or filed with or by Holdings, the Subsidiary, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that Adience has previously
delivered to the Banks a certificate and notices (if any) concerning such event
pursuant to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13)
-79-
<PAGE>
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made to a Plan or Foreign Pension Plan has not been timely made; that a Plan has
been or could reasonably be expected to be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans, exceeds the aggregate amount of
such Unfunded Current Liabilities that existed on the Initial Borrowing Date by
$1,000,000 or more; that proceedings could reasonably be expected to be or have
been instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that
Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or could
reasonably be expected to incur any material liability (including any indirect,
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code; or that Holdings or any
Subsidiaries of Holdings could reasonably be expected to incur any material
liability not existing on the Initial Borrowing Date pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. Holdings will
deliver to each of the Banks (i) a complete copy of the annual report on
Internal Revenue Service Form 5500-series of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service and (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. In addition to any certificates
or notices delivered to the Banks pursuant to the first sentence hereof, copies
of annual reports and any records, documents or other information required to be
furnished to the PBGC and any material notices re-
-80-
<PAGE>
ceived by Holdings, any Subsidiary of Holdings or any ERISA Affiliate with
respect to any Plan or Foreign Pension Plan shall be delivered to the Banks no
later than 10 days after the date such annual report has been filed with the
Internal Revenue Service or such notice has been received by Holdings, the
Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause (i)
each of its, and each of its Subsidiaries', fiscal years to end on April 30, and
(ii) each of its, and each of its Subsidiaries', fiscal quarters to end on July
31, October 31, January 31 and April 30.
8.09 Performance of Obligations. Holdings will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it
is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.10 Payment of Taxes. Holdings will, and will cause each of its
Subsidiaries to, pay and discharge, or cause to be paid and discharged, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims which, if unpaid, might become a lien or
charge upon any properties of Holdings or any of its Subsidiaries; provided that
neither Holdings nor any of its Subsidiaries will be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by appropriate proceedings if it has maintained adequate reserves with
respect thereto in accordance with generally accepted accounting principles.
8.11 Additional Security; Further Assurances. (a) Within 90 days
after the Initial Borrowing Date, Adience will cause each Foreign Subsidiary
(which is not already a Guarantor) designated by the Administrative Agent within
thirty days after the Initial Borrowing Date as required to become an additional
Guarantor to enter into an unconditional guarantee of all obligations of the
U.K. Borrowers pursuant to this Agreement and the other Credit Documents, in
each case pursuant to a guarantee in form and substance (and governed by laws of
a jurisdiction) satisfactory to the Administrative Agent (with each guarantee
delivered pursuant to this sentence or clause (y) of the immediately succeeding
sentence, or pursuant to Section 8.12, being herein called an "Additional
Guaranty"). In addition to the foregoing, not later than 30 days after any
request is received by Adience from the Administrative Agent or the Required
Banks, the Credit Agreement Parties shall cause
-81-
<PAGE>
(x) any Domestic Subsidiary which is not already a U.S. Subsidiary Guarantor to
become a U.S. Subsidiary Guarantor by executing and delivering a counterpart of
the U.S. Subsidiary Guaranty (or if the U.S. Subsidiary Guaranty has not
theretofore been executed by any U.S. Subsidiary Guarantor, by executing and
delivering the U.S. Subsidiary Guaranty) and (y) any Foreign Subsidiary which is
not already a Guarantor to become an additional Guarantor by taking the actions
specified in the first sentence of this clause (a). Notwithstanding anything to
the contrary contained above, in no event shall an Immaterial Foreign Subsidiary
be required to become a Credit Party or be required to execute and delivery any
Guarantee or any Security Document.
(b) Adience will, and will cause each of its Subsidiaries to, (x)
grant to the Collateral Agent security interests and mortgages in such assets
and properties of Holdings and its Subsidiaries as are not covered by the
original Security Documents (without limiting the foregoing, which grant may be
required in respect of all or any part of the assets of any Person which becomes
a Guarantor after the Initial Borrowing Date pursuant to the requirements of
preceding clause (a)) and (y) enter into any additional security documentation
as may be deemed by the Administrative Agent or the Required Banks as necessary
or desirable (including, in the case of any pledge of stock of a Foreign
Subsidiary by Adience or a Domestic Subsidiary, such additional documentation or
actions requested under the relevant local law of the jurisdiction of
organization of the Foreign Subsidiary as may be requested), in each case as may
be requested from time to time by the Administrative Agent or the Required Banks
(collectively, together with any security documents entered into pursuant to
Section 8.12, the "Additional Security Documents"). Notwithstanding anything to
the contrary contained above in this clause (b), in no event will Adience or any
Domestic Subsidiary be required to pledge a greater percentage of the voting
stock of any Foreign Subsidiary than is originally provided in the U.S. Pledge
Agreement, except to the extent otherwise required by following Section 8.12.
All security interests and mortgages created as required by this Section 8.11(b)
shall be granted pursuant to documentation in form and substance (and shall be
governed by law) reasonably satisfactory to the Administrative Agent and shall
constitute (after giving effect to any filings or recording required in
accordance with applicable law, which filings and recordings shall be required
to be made) valid and enforceable perfected security interests and mortgages
superior to and prior to the rights of all third Persons and subject to no other
Liens except for Permitted Liens. The Additional Security Documents or
instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Security Documents and all taxes, fees and other
charges payable in
-82-
<PAGE>
connection therewith shall have been paid in full by the Credit Agreement
Parties or their respective Subsidiaries.
(c) Holdings will, and will cause each of its Subsidiaries to, at
the expense of Holdings and its Subsidiaries, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, Holdings
and each of the Borrowers will cause to be delivered to the Collateral Agent
such opinions of counsel, title insurance and other related documents as may be
reasonably requested by the Administrative Agent to assure themselves that this
Section 8.11 has been complied with.
(d) Holdings and each of the Borrowers agree that each action
required above by this Section 8.11 shall be completed within 30 days (or such
longer period as may be required under local law) after such action is either
requested to be taken by the Administrative Agent or the Required Banks or
required to be taken by Holdings and its Subsidiaries pursuant to the terms of
this Section 8.11.
(e) In the event that the Administrative Agent or the Required Banks
at any time after the Effective Date determine in their sole discretion (whether
as a result of a position taken by an applicable bank regulatory agency or
official, or otherwise) that a real estate appraisal satisfying the requirements
set forth in 123 C.F.RA., Part 34-Subpart C, or any successor or similar
statute, rule, regulation, guideline or order (any such appraisal a "Required
Appraisal") are or were required to be obtained, or should be obtained, in
connection with the Mortgaged Property, then, within 90 days after receiving
written notice thereof from the Administrative Agent or the Required Banks, as
the case may be, Adience shall cause such Required Appraisal to be delivered, at
the expense of Adience, to the Banks which Required Appraisal, and the
respective appraiser, shall be reasonably satisfactory to the Administrative
Agent.
8.12 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, Proskauer Rose
Goetz & Mendelsohn LLP or such other counsel for Adience as may be reasonably
acceptable to the Administrative Agent does not within 30 days after a request
from the Administrative Agent or the Required Banks deliver evidence, in form
and substance mutually satisfactory to the
-83-
<PAGE>
Administrative Agent and Adience, with respect to any Foreign Subsidiary of
Adience which has not already had all of its stock pledged pursuant to the U.S.
Pledge Agreement that (i) a pledge of 66-2/3% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote, (ii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the U.S. Security Agreement and (iii) the
entering into by such Foreign Subsidiary of a guaranty in substantially the
form of the U.S. Subsidiary Guaranty, in any such case would cause the
undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes, then in the
case of a failure to deliver the evidence described in clause (i) above, that
portion of such Foreign Subsidiary's outstanding capital stock so issued by such
Foreign Subsidiary, in each case not theretofore pledged pursuant to the U.S.
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the U.S. Pledge Agreement (or another pledge
agreement in substantially similar form, if needed), and in the case of a
failure to deliver the evidence described in clause (ii) above, such Foreign
Subsidiary will execute and deliver the U.S. Security Agreement (or another
security agreement in substantially similar form, if needed), granting the
Secured Creditors a security interest in all of such Foreign Subsidiary's assets
and securing the Obligations of all Borrowers under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement and, in
the event that the respective Foreign Subsidiary shall have executed and
delivered a Guaranty, the obligations of such Foreign Subsidiary there under,
and in the case of a failure to deliver the evidence described in clause (iii)
above, such Foreign Subsidiary will execute and deliver the U.S. Subsidiary
Guaranty (or another guaranty in substantially similar form, if needed),
guaranteeing the Obligations of all Borrowers under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement, in each
case to the extent that the entering into of the respective security documents
or guaranty is permitted by the laws of the respective foreign jurisdiction and
with all documents delivered pursuant to this Section 8.12 to be in form and
substance reasonably satisfactory to the Administrative Agent.
8.13 Maintenance of Corporate Separateness. Each Credit Agreement
Party will, and will cause each of its Subsidiaries to, satisfy customary
corporate formalities, including the holding of regular board of directors' and
shareholders' meetings or action by directors or shareholders without a meeting
and the maintenance of corporate offices and records. The Credit Agreement
Parties shall take all actions as shall be required so that, at all times, at
least (x) one director of Holdings is not also a director of any Borrower and
(y) at least one director of the Borrower is not also a director of Holdings. No
Borrower nor any of its respective Subsidiaries shall make any
-84-
<PAGE>
payment to a creditor of any of Holdings, Alpine or any Subsidiary of Alpine
(other than Adience and its Subsidiaries) in respect of any liability of any
such Person, and no bank account of any of Holdings, Alpine or any Subsidiary of
Alpine (other than Adience and its Subsidiaries) shall be commingled with any
bank account of Holdings, Alpine or any Subsidiary of Alpine (other than Adience
and its Subsidiaries). In dealing with their respective creditors, none of
Holdings, Alpine or any Subsidiary of Alpine shall act in a manner which would
cause its creditors to believe that any such Person was not a separate corporate
entity from the other such Persons. Finally, no Credit Agreement Party nor any
of its Subsidiaries shall take any action, or conduct its affairs in a manner,
which could result in the corporate existence of Adience or any of its
Subsidiaries being ignored, or in the assets and liabilities of Adience or any
of its respective Subsidiaries being substantively consolidated with those of
any of Holdings, Alpine or any Subsidiary of Alpine (other than Adience and its
Subsidiaries) in a bankruptcy, reorganization or other insolvency proceeding.
8.14 Ownership of Certain Subsidiaries. Notwithstanding anything to
the contrary contained elsewhere in this Agreement, the Credit Agreement Parties
shall take all action necessary so that at all times (i) Holdings directly owns
100% of the capital stock of Adience, (ii) Adience directly owns 100% of the
capital stock of Newco (at least 45.35% of which capital stock shall at all
times be non-voting capital stock owned by Adience, with the remaining equity
interests being voting stock owned by Adience, and with 100% of said non-voting
stock, and 65% of such voting stock, being at all times pledged by Adience
pursuant to the U.S. Pledge Agreement), and (iii) Newco directly owns 100% of
the capital stock of Hepworth, all of which capital stock shall be pledged
pursuant to the U.K. Security Documents.
8.15 Acquisition Documents. Holdings will, and will cause each of
its Subsidiaries to, perform in all material respects all of its obligations
under the Acquisition Documents by which it is bound, and to procure the
compliance by the other parties to the Acquisition Documents of their
obligations under the Acquisition Documents.
8.16 Permitted Acquisitions. Subject to the provisions of this
Section 8.16, Section 9.02(ii) and the requirements contained in the definition
of Permitted Acquisition, Adience and its Wholly-Owned Subsidiaries may from
time to time after the Initial Borrowing Date effect Permitted Acquisitions, so
long as (i) Adience shall have given the Administrative Agent and the Banks at
least 10 Business Days' prior written notice of any Permitted Acquisition, (ii)
based on calculations made by Adience on a Pro Forma Basis after giving effect
to the respective Permitted Acquisition and any
-85-
<PAGE>
Indebtedness (including without limitation Acquired Indebtedness, Permitted
Acquisition Subordinated Indebtedness and any Revolving Loans) incurred, issued
or assumed in connection with the respective Permitted Acquisition or to finance
same, no Default or Event of Default will exist under, or would have existed
during the periods covered by, the financial covenants contained in Sections
9.08 through 9.11, inclusive, of this Agreement, (iii) based on good faith
projections prepared by Adience for the period from the date of the consummation
of the Permitted Acquisition to the date which is one year thereafter, the level
of financial performance measured by the covenants set forth in Sections 9.08
through 9.11 inclusive shall be better than or equal to such level as would be
required to provide that no Default or Event of Default would exist under the
financial covenants contained in Sections 9.08 through 9.11, inclusive, of this
Agreement as compliance with such covenants would be required through the date
which is one year from the date of the consummation of the respective Permitted
Acquisition, (iv) Adience shall certify that the proposed Permitted Acquisition
could not reasonably be expected to result in materially increased tax
(excluding income and similar taxes as a result of increased earnings which may
result from the respective Permitted Acquisition), ERISA or environmental
liabilities with respect to Holdings or any of its Subsidiaries, it being
understood that any determination of whether the proposed Permitted Acquisition
could reasonably be expected to result in such materially increased tax, ERISA
or environmental liabilities shall take into account, inter alia, (x) any
available indemnities and (y) the timing and likelihood of payment thereunder
and (v) Adience shall have delivered to the Administrative Agent an officer's
certificate executed by an Authorized Representative of the Borrowers,
certifying (A) to the best of his knowledge, compliance with the requirements of
preceding clauses (i), (ii) and (iii) and containing the calculations required
by the preceding clauses (ii) and (iii) and (B) compliance with the requirements
of Section 9.02(ii).
8.17 Post-Closing Restructuring. The Credit Agreement Parties will,
and will cause their Subsidiaries to, complete the Post-Closing Restructuring,
and take all actions described in Part II.D. and IV of Schedule XII hereto in
substantial compliance therewith, in each case, within 150 days after the
Initial Borrowing Date. Within said 150 days all inter-company loans, notes and
advances described in said Schedule XII shall be extinguished.
8.18 Long Form Report. The Credit Agreement Parties will deliver,
and will take all actions necessary to deliver, to the Administrative Agent a
Long Form Report prepared by Arthur Andersen LLP for the fiscal year ended April
30, 1997 with respect to Hepworth and its Subsidiaries in form satisfactory to
the Administrative Agent within 60 days after the Initial Borrowing Date.
-86-
<PAGE>
SECTION 9. Negative Covenants. Holdings and each of the Borrowers
hereby covenant and agree that on and after the Effective Date and until the
Total Commitments and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
9.01 Liens. No Credit Agreement Party will, nor will any Credit
Agreement Party permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon or with respect to any property or assets (real or
personal, tangible or intangible) of such Credit Agreement Party or any of its
Subsidiaries, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable with
recourse to Holdings or any of its Subsidiaries), or assign any right to receive
income or permit the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute;
provided that the provisions of this Section 9.01 shall not prevent the
creation, incurrence, assumption or existence of the following (Liens described
below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles;
(ii) Liens in respect of property or assets of Adience or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Adience's
or such Subsidiary's property or assets taken as a whole or materially
impair the use thereof in the operation of the business of Adience or such
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule VII, but
only to the respective date, if any, set forth in such Schedule VII for
the removal, replace-
-87-
<PAGE>
ment and termination of any such Liens, plus renewals, replacements and
extensions of such Liens to the extent set forth on Schedule VII, provided
that (x) the aggregate principal amount of the Indebtedness, if any,
secured by such Liens does not increase from that amount outstanding at
the time of any such renewal, replacement or extension and (y) any such
renewal, replacement or extension does not encumber any additional assets
or properties of Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases, sublicenses or subleases granted to other
Persons not materially interfering with the conduct of the business of
Adience and its Subsidiaries taken as a whole;
(vii) Liens upon assets of Adience or its Subsidiaries subject to
Capitalized Lease Obligations to the extent such Capitalized Lease
Obligations are permitted by Section 9.04(iv), provided that (x) such
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of Adience or any Subsidiary of Adience;
(viii) Liens placed upon equipment or machinery used in the ordinary
course of business of Adience or any of its Subsidiaries at the time of
acquisition thereof by Adience or any such Subsidiary or within 90 days
thereafter to secure Indebtedness incurred to pay all or a portion of the
purchase price thereof or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such equipment or machinery or
extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount, provided that (x) the aggregate outstanding principal
amount of all Indebtedness secured by Liens permitted by this clause
(viii) shall not at any time exceed $5,000,000 and (y) in all events, the
Lien encumbering the equipment or machinery so acquired does not encumber
any other asset of Adience or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each
case not securing Indebtedness and not materially interfering with the
conduct of the business of Adience or any of its Subsidiaries;
-88-
<PAGE>
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by Adience or any of its
Subsidiaries in the ordinary course of business;
(xi) Liens arising out of the existence of judgments, decrees or
awards not constituting an Event of Default under Section 10.09, provided
that no cash or property is deposited or delivered to secure the
respective judgment or award (or any appeal bond in respect thereof,
except as permitted by following clause (xiii));
(xii) statutory and common law landlords' liens under leases to
which Adience or any of its Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security or (y) to secure the performance of tenders, statutory
obligations (other than excise taxes), surety, stay, customs and appeal
bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money)
and (z) deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers, provided that the aggregate
amount of deposits at any time pursuant to clauses (y) and (z) shall not
exceed $10,000,000 in the aggregate;
(xiv) the Floating Rate Loans and other obligations pursuant to the
Floating Rate Loan Documents, as well as any obligations pursuant to
Interest Rate Protection Agreements entered into by Holdings with respect
to the Indebtedness evidenced by the Floating Rate Loans, may be secured
by the capital stock of Adience owned by Holdings (and proceeds thereof);
(xv) Liens securing Acquired Indebtedness incurred in accordance
with Section 9.04(x) provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by Adience or a Subsidiary of Adience and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by Adience or a Subsidiary of Adience and (B) such Liens do
not extend to or cover any property or assets of Adience or of any of its
Subsidiaries other than the property or assets that secured the Acquired
Indebtedness prior to the time such
-89-
<PAGE>
indebtedness became Acquired Indebtedness of Adience or a Subsidiary of
Adience and are no more favorable to the lienholders than those securing
the Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by Adience or a Subsidiary of Adience; and
(xvi) additional Liens, so long as neither the fair market value of
all assets subject thereto, nor the aggregate amount of obligations
secured thereby, exceeds $1,000,000 in the aggregate at any time
outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. No
Credit Agreement Party will, nor will any Credit Agreement Party permit any of
its Subsidiaries to, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the property or
assets (other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by Adience and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.07(a), (b) and
(c)(i);
(ii) the Borrowers and Adience and its Wholly-Owned Subsidiaries
shall be permitted to make Permitted Acquisitions so long as (A) such
Permitted Acquisitions are effected in accordance with the requirements of
Section 8.16, (B) after giving effect to any Permitted Acquisition, the
aggregate amount paid (including for the purpose of this clause (ii) all
cash consideration and the fair market value of any non-cash
consideration, but excluding any Indebtedness (and any cash proceeds
thereof paid as consideration) issued, incurred or assumed in connection
with such Permitted Acquisition, but only if outstanding pursuant to
clauses (x) and/or (xi) of Section 9.04) by Adience and its Subsidiaries
in connection with such Permitted Acquisition shall not exceed the
Permitted Acquisition Amount at such time (after giving effect to all
prior and contemporaneous adjustments thereto, except as a result of such
Permitted Acquisition); and (B) with respect to each Permitted
Acquisition, no Default or Event of Default is in existence at the time of
the consummation of such Permitted Acquisition or would exist after giving
effect thereto;
(iii) Investments may be made to the extent permitted by Section
9.05;
-90-
<PAGE>
(iv) each of Adience and its Subsidiaries may lease (as lessee) real
or personal property in the ordinary course of business (so long as any
such lease does not create a Capitalized Lease Obligation except to the
extent permitted by Section 9.04);
(v) each of Adience and its Subsidiaries may make sales of inventory
and services in the ordinary course of business;
(vi) each of Adience and its Subsidiaries may sell equipment and
other assets, to the extent not otherwise permitted under any other clause
of this Section 9.02, at the fair market value thereof (as determined in
good faith by management of Adience), provided that the proceeds thereof
(x) shall consist of at least 80% in cash and (y) do not exceed $3,000,000
in the aggregate for all sales pursuant to this clause (vi) in any fiscal
year;
(vii) Adience and its Subsidiaries may sell the Designated Assets at
fair market value, provided that the proceeds thereof (x) shall consist of
at least 80% in cash and (y) shall be used to make mandatory repayments
pursuant to Section 4.02(e) in accordance with the terms thereof;
(viii) Adience and its Subsidiaries may, in the ordinary course of
business, license, as licensor or licensee, patents, trademarks,
copyrights and know-how to third Persons and to one another, so long as
any such license by Adience or its Subsidiaries in its capacity as
licensor is permitted to be assigned pursuant to the Security Documents
(to the extent that a security interest in such patents, trademarks,
copyrights and know-how is granted thereunder) and does not otherwise
prohibit the granting of a Lien by Adience or any of its Subsidiaries
pursuant to the Security Documents in the intellectual property covered by
such license;
(ix) Adience and its Subsidiaries may from time to time, in the
ordinary course of business dispose of obsolete, worn-out or outmoded
equipment, so long as the respective such sales are for fair market value
(as determined by Adience) and the proceeds thereof are used within one
year after the date of the respective such sale to purchase replacement
equipment; provided that if for any reason, and to the extent, any Net
Sale Proceeds are not so utilized on or before the first anniversary of
the date of the respective such sale, then on such date any Net Sale
Proceeds not so used shall be applied as required by Section 4.02(e); and
-91-
<PAGE>
(x) the Acquisition shall be permitted to be made on the Initial
Borrowing Date, and the Post-Closing Restructuring shall be permitted (and
required) to be consummated within 150 days thereafter.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02, in each case so long as the respective sale is to a Person
other than a Credit Agreement Party or any of its Subsidiaries, such Collateral
shall be sold free and clear of the Liens created by the Security Documents, and
the Administrative Agent and the Collateral Agent shall be authorized to take
any actions deemed appropriate in order to effect the foregoing.
9.03 Restricted Payments. No Credit Agreement Party will, nor will
any Credit Agreement Party permit any of its Subsidiaries to, authorize,
declare, pay or make any Restricted Payments, except that
(i) any Subsidiary of Adience (x) may pay cash Distributions to
Adience or any Wholly-Owned Subsidiary of Adience and (y) if such
Subsidiary is not a Wholly-Owned Subsidiary, may pay cash Distributions to
its shareholders generally so long as Adience or its respective Subsidiary
which owns the equity interest or interests in the Subsidiary paying such
Dividends receives at least its proportionate share thereof (based upon
its relative holdings of equity interests in the Subsidiary paying such
Dividends and taking into account the relative preferences, if any, of
the various classes of equity interests in such Subsidiary);
(ii) Adience may pay cash Distributions to Holdings in the amounts
and at the times that (a) any cash interest payments, increased costs or
other amounts (other than principal payments), are due on the Floating
Rate Loans or under the Floating Rate Loan Credit Agreement or (b) any
cash payments are owing with respect to Interest Rate Protection
Agreements maintained as contemplated by Section 6.14 of the Floating Rate
Loan Credit Agreement as originally in effect, in each case, so long as
(x) no Default or Event of Default then exists pursuant to Section 10.01,
(y) no Default or Event of Default then exists with respect to any Credit
Agreement Party pursuant to Section 10.05 and (z) Holdings immediately
uses such cash Distributions to make such interest or other payments;
provided that (in addition to the foregoing restrictions) at any time when
any Event of Default is then in existence (other than an Event of Default
specified in preceding clause (x) or (y)), if the Administrative Agent or
the Required Banks have given notice to Adience that payments will not be
-92-
<PAGE>
permitted to be made pursuant to this Section 9.03(ii), then for a period
(each a "Payment Blockage Period") of 180 days after the giving of such
notice (or such shorter period ending on the first date thereafter when
(i) such notice shall have been rescinded by the Administrative Agent or
the Required Banks, as the case may be, (ii) no Event of Default remains
in existence or (iii) the immediately succeeding proviso causes the
termination of the respective Payment Blockage Period) no Distributions
may be made pursuant to this clause (ii), provided further that in no
event shall Payment Blockage Periods pursuant to the immediately preceding
proviso actually extend for more than 180 days in any period of 365
consecutive days;
(iii) payments may be made by Adience and its Subsidiaries (x) to
Alpine (or to Holdings, which in turn makes the respective payment to
Alpine) for any taxable year of Adience in which it joins in filing a
consolidated federal income tax return with Alpine or (y) to Holdings for
any taxable year of Adience in which it joins in filing a consolidated
federal income tax return with Holdings, but not Alpine, in either case
from time to time in amounts equal to the Permitted Tax Payments owing at
such time, so long as Alpine or Holdings, as the case may be, makes all
payments in respect of the tax obligations of the type described in the
definition of Permitted Tax Payments required to be made by the affiliated
group of which such Person is the parent; provided further, that any
refund attributable to Permitted Tax Payments (or similar such payments
made prior to the Initial Borrowing Date by Adience and its Subsidiaries)
actually received by either Alpine or Holdings shall be promptly (and in
any event within two Business Days) returned to Adience (and if not so
returned, shall reduce the amount of payments otherwise permitted to be
made in the future by Adience and its Subsidiaries pursuant to this clause
(iii));
(iv) payments may be made by Adience and its Subsidiaries to
Holdings to the extent necessary to permit Holdings to pay its reasonable
professional fees and expenses in connection with complying with its
reporting obligations and obligations to prepare and distribute business
records, financial statements or other documents to any lender or other
persons having business dealings with Holdings, or in connection with
other corporate overhead items, provided that the aggregate payments
pursuant to this clause (iv) shall not exceed $250,000 in any fiscal year
of Holdings; and
(v) payments may be made by Adience and its Subsidiaries to Alpine
(or, without duplication, to Holdings so long as Holdings immediately pays
such
-93-
<PAGE>
amounts to Alpine) (i) for (and in amounts equal to) direct charges
incurred by Alpine and attributable to Holdings and its Subsidiaries plus
(but without duplication) Holdings' (and its Subsidiaries') allocable
share of insurance costs for insurance maintained by Alpine which benefits
Holding and its Subsidiaries (with all allocations pursuant to preceding
clause (i) to be determined by Alpine in good faith and on a fair and
reasonable basis) and (ii) so long as no Default under Section 10.01 or
10.05 and no Event of Default exists at the time of any payment thereof,
additional payments may be made to Alpine (on a quarterly basis in equal
installments) in any fiscal year of Holdings pursuant to this clause (v)
in an amount not to exceed the Alpine Permitted Amount for such fiscal
year.
9.04 Indebtedness. No Credit Agreement Party will, nor will any
Credit Agreement Party permit any of its Subsidiaries to, contract, create,
incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness with respect to performance bonds, surety bonds,
appeal bonds or customs bonds required in the ordinary course of business
or in connection with the enforcement of rights or claims of Adience or
any of its Subsidiaries or in connection with judgments that do not
result in a Default or an Event of Default, provided that the aggregate
outstanding amount of all such performance bonds, surety bonds, appeal
bonds and customs bonds permitted by this clause (ii) shall not at any
time exceed $10,000,000;
(iii) Indebtedness under Interest Rate Protection Agreements entered
into to protect Holdings or the Borrowers against fluctuations in interest
rates in respect of Floating Rate Loans or the Obligations, as the case
may be, on terms reasonably satisfactory to the Administrative Agent;
(iv) Indebtedness evidenced by Capitalized Lease Obligations to the
extent permitted pursuant to Section 9.07, provided that in no event shall
the aggregate principal amount of Capitalized Lease Obligations permitted
by this clause (iv) exceed $4,000,000 at any time outstanding;
(v) Indebtedness subject to Liens permitted under Section
9.01(viii);
-94-
<PAGE>
(vi) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Schedule V, without giving effect to any subsequent
extension, renewal or refinancing thereof, except that with respect to the
Existing Indebtedness specifically identified on Schedule V as being
permitted to be refinanced, such Existing Indebtedness may be extended,
renewed or refinanced (and successively extended, renewed or refinanced)
so long as (x) the principal amount thereof is not increased and (y) no
additional security is furnished in connection therewith;
(vii) Indebtedness of Holdings incurred under the Floating Rate
Loans in an aggregate principal amount not to exceed $60,000,000 less any
repayments or prepayments of principal thereof actually made;
(viii) Indebtedness constituting intercompany loans and advances to
the extent permitted by Section 9.05(iv) and/or (ix);
(ix) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with
Adience's or any of its Subsidiaries' operations so long as management of
Adience or such Subsidiary, as the case may be, has determined that the
entering into of such Other Hedging Agreements are bona fide hedging
activities and are not speculative in nature;
(x) Acquired Indebtedness may be incurred or assumed in connection
with Permitted Acquisitions, so long as the aggregate principal amount of
all Acquired Indebtedness incurred or assumed after the Initial Borrowing
Date does not exceed $2,500,000;
(xi) to finance one or more Permitted Acquisitions, Adience may
issue (directly as consideration, or for cash proceeds which are used as
consideration, for such Permitted Acquisition) unsecured subordinated
indebtedness, so long as (x) all terms thereof (including the interest
rate applicable thereto, the subordination provisions thereof, the
maturity and the required repayments thereof and the covenants and
defaults applicable thereto) are reasonably satisfactory to the
Administrative Agent and Required Banks and (y) the aggregate principal
amount of all such Indebtedness ("Permitted Acquisition Subordinated
Indebtedness") issued after the Initial Borrowing Date does not exceed
$5,000,000; and
-95-
<PAGE>
(xii) in addition to Indebtedness otherwise permitted above, Adience
and its Subsidiaries may from time to time issue or incur Indebtedness
(but not in connection with, or to finance, Permitted Acquisitions) so
long as the aggregate principal amount of all Indebtedness at any time
outstanding pursuant to this clause (xii) does not exceed $1,000,000.
9.05 Advances, Investments and Loans. No Credit Agreement Party
will, nor will any Credit Agreement Party permit any of its Subsidiaries to,
directly or indirectly, lend money or credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any other Person, or purchase
or own a futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract, or hold any cash, Cash Equivalents or Foreign Cash Equivalents (each
of the foregoing an "Investment" and, collectively, "Investments"), except that
the following shall be permitted:
(i) Adience and its Subsidiaries may acquire and hold accounts
receivables, trade receivables, notes receivables, prepaid expenses and
similar items owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms, and Adience and its Subsidiaries may own Investments
received in connection with the bankruptcy, work-out, reorganization,
liquidation or similar proceeding of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(ii) Adience and its Subsidiaries may acquire and hold cash and Cash
Equivalents and any Foreign Subsidiary of Adience may acquire and hold
Foreign Cash Equivalents;
(iii) Adience and its Subsidiaries may receive non-cash
consideration in connection with any asset sale permitted by Section
9.02(vi) or (vii) but only to the extent set forth in Section 9.02(vi) or
(vii), as the case may be;
(iv) (a) Adience and its Subsidiaries may hold the Investments held
by them on the Initial Borrowing Date and described on Schedule VIII
without giving effect to any additions thereto or replacements thereof and
(b) the Investments described in Schedule XII may be made, provided that
all intercompany advances, loans and notes described in said Schedule XII
shall in any event be required to be extinguished within 150 days after
the Initial Borrowing Date;
-96-
<PAGE>
(v) Adience and its Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $750,000;
(vi) the Borrowers may enter into Interest Rate Protection
Agreements to the extent permitted by Section 9.04(iii);
(vii) Adience and its Subsidiaries may enter into Other Hedging
Agreements to the extent permitted by Section 9.04(ix);
(viii) Adience and its Subsidiaries shall be permitted to make
Capital Expenditures to the extend permitted by Section 9.07;
(ix) after the Initial Borrowing Date, (a) Adience and the U.S.
Subsidiary Guarantors may make inter-company loans to each other, and any
U.S. Subsidiary Guarantor may make intercompany loans to any other U.S.
Subsidiary Guarantor, (b) the U.K. Borrowers and each Foreign Subsidiary
Guarantor may make intercompany loans to each other and (c) in addition to
the loans permitted pursuant to preceding clauses (a) and (b),
intercompany loans may be made between Adience and its Subsidiaries, or
between Subsidiaries of Adience; provided that the aggregate principal
amount of intercompany loans at any time outstanding (determined without
regard to any write-downs or write-offs thereof) pursuant to this clause
(c) at no time outstanding shall exceed $5,000,000; provided further that
if any loans made pursuant to this clause (ix) are evidenced by a
promissory note, the respective promissory note shall be pledged to the
extent such pledge is required by the terms of any Security Document;
(x) Adience and its Wholly-Owned Subsidiaries may establish
Subsidiaries to the extent permitted by Section 9.16; and
(xi) Adience and its Subsidiaries may make additional Investments
which may, but shall not be required to, be made in joint ventures or non
Wholly-Owned Subsidiaries so long as the amount of the Investment then
being made (taking the amount of any cash investment and the fair market
value of any non-cash investment) pursuant to this clause (xi) shall not
exceed the Permitted Investment Amount as then in effect.
-97-
<PAGE>
9.06 Transactions with Affiliates. No Credit Agreement Party will,
nor will any Credit Agreement Party permit any of its Subsidiaries to, enter
into any transaction or series of related transactions, with Alpine or any other
Affiliate of Holdings or Alpine (excluding Adience and its Subsidiaries), other
than in the ordinary course of business and on terms and conditions
substantially as favorable to Holdings or such Subsidiary as would reasonably be
obtained by Holdings or such Subsidiary at that time in a comparable
arm's-length transaction with a Person other than an Affiliate, except that the
following in any event shall be permitted: (i) the Transaction and the
Post-Closing Restructuring, (ii) Dividends may be paid to the extent provided in
Section 9.03 (although, as provided in Section 9.03(v)(i), payments pursuant to
said clause must be determined in good faith and on a reasonable basis), (iii)
loans may be made and other transactions may be entered into by Adience and its
Subsidiaries to the extent permitted by Sections 9.04 and 9.05, (iv) customary
fees may be paid to non-officer directors of Holdings, (v) Holdings and its
Subsidiaries may enter into employment arrangements with their respective
officers in the ordinary course of business and (vi) transactions between
Adience and its Wholly-Owned Subsidiaries.
In addition to the applicable requirements provided above, any
transactions (other than as described in clauses (i) through (vi) above) between
and among Holdings and/or its Subsidiaries on the one hand, and any of their
respective Affiliates on the other hand, between and among the aforementioned
parties with a value in excess of (A) $1,000,000 shall only be permitted if a
majority of the disinterested directors of Alpine approve the transaction as
meeting the standards set forth above in this Section 9.06 and (B) $2,500,000
shall only be permitted if the parties thereto provide a fairness opinion from a
Person, and in form and substance, satisfactory to the Administrative Agent.
9.07 Capital Expenditures. (a) No Credit Agreement Party will, nor
will any Credit Agreement Party permit any of its Subsidiaries to, make any
Capital Expenditures, except that Adience and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of such Capital Expenditures does
not exceed (x) for Holdings' fiscal year ended in April, 1998, $15,000,000 and
(y) in any fiscal year ended thereafter, $8,500,000; provided that if the
Leverage Ratio as determined from the last day of any fiscal year of Holdings
ending after the Initial Borrowing Date (calculating the numerator as of such
date and the denominator for the fiscal year then ended) is less than 3.25:1,
the amount set forth in clause (y) for the immediately succeeding fiscal year
shall be increased by $1,500,000.
-98-
<PAGE>
(b) Notwithstanding anything to the contrary contained in clause (a)
above, to the extent that the amount of Capital Expenditures made by Adience and
its Subsidiaries in any fiscal year set forth in clause (a) above is less than
the amount permitted to be made in such fiscal year (giving effect to the
proviso thereto, but without giving effect to any additional amount available as
a result of this clause (b) or clause (c) below), the amount of such difference,
but not in excess of 50% of the amount originally permitted to be spent in said
fiscal year pursuant to said clause (a) (giving effect to the proviso thereto if
applicable), may be carried forward and used to make Capital Expenditures in the
immediately succeeding fiscal year of Adience. Any amount carried forward into a
fiscal year pursuant to this clause (b) shall, if not used to make Capital
Expenditures in such fiscal year, terminate at the end thereof (and shall not be
carried forward to a subsequent fiscal year).
(c) In addition to the Capital Expenditures permitted to be made
pursuant to preceding clauses (a) and (b) of this Section 9.07, (i) Adience and
its Subsidiaries may make additional Capital Expenditures with the amount of
insurance proceeds received by Adience or any of its Subsidiaries from any
Recovery Event so long as such proceeds are used to replace or restore any
properties or assets in respect of which such proceeds were paid within the time
periods set forth in Section 4.02(g) (and to the extent such proceeds are not
required to be applied pursuant to Section 4.02(g)) and (ii) Permitted
Acquisitions shall be permitted to be made in accordance with Sections 9.02 and
8.16. To the extent Capital Expenditures are made as permitted by this clause
(c), same shall not count as Capital Expenditures for purposes of determining
compliance with clause (a) or (b) of this Section 9.07.
9.08 Consolidated Fixed Charge Coverage Ratio. Holdings will not
permit the Consolidated Fixed Charge Coverage Ratio for any Test Period ending
after the Initial Borrowing Date to be less than 1.0:1.0.:
9.09 Consolidated Interest Coverage Ratio. The Credit Agreement
Parties will not permit the Consolidated Interest Coverage Ratio for any Test
Period ended on the last day of a fiscal quarter of Holdings set forth below to
be less than the ratio set forth opposite such fiscal quarter below:
================================================================================
Holdings' Fiscal Quarter
Ended Closest to the Last Day in Ratio
- --------------------------------------------------------------------------------
July, 1997 1.80:1
- --------------------------------------------------------------------------------
October, 1997 1.90:1
- --------------------------------------------------------------------------------
January, 1998 2.00:1
- --------------------------------------------------------------------------------
-99-
<PAGE>
================================================================================
Holdings' Fiscal Quarter
Ended Closest to the Last Day in Ratio
- --------------------------------------------------------------------------------
April, 1998 2.00:1
- --------------------------------------------------------------------------------
July, 1998 2.00:1
- --------------------------------------------------------------------------------
October, 1998 2.10:1
- --------------------------------------------------------------------------------
January, 1999 2.15:1
- --------------------------------------------------------------------------------
April, 1999 2.20:1
- --------------------------------------------------------------------------------
July, 1999 2.25:1
- --------------------------------------------------------------------------------
October, 1999 2.25:1
- --------------------------------------------------------------------------------
January, 2000 2.30:1
- --------------------------------------------------------------------------------
April, 2000 2.30:1
- --------------------------------------------------------------------------------
July, 2000 2.35:1
- --------------------------------------------------------------------------------
October, 2000 2.35:1
- --------------------------------------------------------------------------------
January, 2001 2.40:1
- --------------------------------------------------------------------------------
April, 2001 2.40:1
- --------------------------------------------------------------------------------
July, 2001 2.50:1
- --------------------------------------------------------------------------------
October, 2001 2.60:1
- --------------------------------------------------------------------------------
January, 2002 2.70:1
- --------------------------------------------------------------------------------
April, 2002 2.70:1
- --------------------------------------------------------------------------------
July, 2002 2.80:1
- --------------------------------------------------------------------------------
October, 2002 2.90:1
- --------------------------------------------------------------------------------
Thereafter 3.00:1
================================================================================
9.10 Maximum Leverage Ratio. The Credit Agreement Parties will not
permit the Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:
-100-
<PAGE>
Period Ratio
------ -----
Beginning May 1, 1997 and ending July 31, 5.70:1
1997
Beginning August 1, 1997 and ending 5.60:1
October 31, 1997
Beginning November 1, 1997 and ending 5.50:1
January 31, 1998
Beginning February 1, 1998 and ending 5.50:1
April 30, 1998
Beginning May 1, 1998 and ending July 31, 5.40:1
1998
Beginning August 1, 1998 and ending 5.25:1
October 31, 1998
Beginning November 1, 1998 and ending 5.00:1
April 30, 1999
Beginning May 1, 1999 and ending October 4.75:1
31, 1999
Beginning November 1, 1999 and ending 4.50:1
April 30, 2000
Beginning May 1, 2000 and ending October 4.25:1
31, 2000
Beginning November 1, 2000 and ending 4.00:1
April 30, 2001
Beginning May 1, 2001 and ending October 3.75:1
31, 2001
Beginning November 1, 2001 and ending 3.50:1
April 30, 2002
Beginning May 1, 2002 and ending October 3.35:1
31, 2002
Beginning November 1, 2002 and ending 3.20:1
April 30, 2003
Beginning May 1, 2003 and ending October 3.10:1
31, 2003
Any time thereafter 3.00:1
9.11 Minimum Consolidated EBITDA. The Credit Agreement Parties will
not permit Consolidated EBITDA for any Test Period ended on the last day of a
-101-
<PAGE>
fiscal quarter of Holdings set forth below to be less than the respective amount
set forth opposite such fiscal quarter below:
Holding Fiscal Quarter Ended
Closest to the Last Day In Amount
-------------------------- ------
July, 1997 $ 7,000,000
October, 1997 14,200,000
January, 1998 21,800,000
April, 1998 29,100,000
July, 1998 30,700,000
October, 1998 32,300,000
January, 1999 33,900,000
April, 1999 35,500,000
July, 1999 36,850,000
October, 1999 38,200,000
January, 2000 39,550,000
April, 2000 40,900,000
July, 2000 41,275,000
October, 2000 41,650,000
January, 2001 42,025,000
April, 2001 42,400,000
July, 2001 42,700,000
October, 2001 43,000,000
January, 2002 43,300,000
April, 2002 43,600,000
July, 2002 44,000,000
Thereafter 45,000,000
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. No Credit Agreement Party will, nor will any Credit
Agreement Party permit any of its Subsidiaries to, (i) make (or give any notice
in respect of) any voluntary or optional payment or prepayment on or redemption
or acquisition for value of, or make any prepayment or redemption as a result of
any asset sale, change of control or similar event of (including, in each case,
without limitation, by way of depositing with the trustee with respect thereto
or any other Person, money or securities before due for the purpose of paying
when due) any Floating Rate Loan, (ii) amend or modify, or permit the amendment
or modification of, any provision of any Floating Rate Loan Document, other
-102-
<PAGE>
than any amendments or modifications which do not in any way adversely affect
the interests of the Banks, (iii) amend, modify or change its certificate of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or by-laws or any agreement entered into by it,
with respect to its capital stock (including any Shareholders' Agreement), or
enter into any new agreement with respect to its capital stock unless such
amendment, modification, change or other action contemplated by this clause (iv)
could not be adverse to the interests of the Banks under the Credit Documents in
any material respect or (v) enter into any Tax Sharing Agreement, tax allocation
agreement or similar agreement.
9.13 Limitation on Certain Restrictions on Subsidiaries. The Credit
Parties will not permit any of Adience's 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 such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Adience or any Subsidiary of
Adience, or pay any Indebtedness owed to Adience or any Subsidiary of Adience,
(b) make loans or advances to Adience or any Subsidiary of Adience or (c)
transfer any of its properties or assets to Adience or any Subsidiary of
Adience, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of Adience or any Subsidiary of
Adience, (iv) customary provisions restricting assignment of any licensing
agreement entered into by Adience or any Subsidiary of Adience in the ordinary
course of business, (v) the Floating Rate Loan Documents (so long as the
restrictions contained therein are not more restrictive than those contained in
such documents as in effect as the Initial Borrowing Date), (vi) restrictions on
the transfer of any asset subject to a Lien permitted by Sections 9.01(iii),
(vii) and (viii), and (vii) restrictions existing on the Initial Borrowing Date
and specifically described in Schedule X.
9.14 Limitation on Issuance of Capital Stock. (a) Holdings will not
issue (i) any preferred stock (except the preferred stock issued on or prior to
the Initial Borrowing Date as contemplated by Part I.B.3 of Schedule XII, which
preferred stock shall be in the form approved by the Administrative Agent and
Required Banks on the Effective Date and, in any event, shall expressly provide
that no payments (whether dividend payments, redemption payments or otherwise)
may be made thereon to the extent the making of such payment would cause a
breach or violation of any provision of this Agreement
or any other agreement evidencing Indebtedness for borrowed money to which
Holdings or any of its Subsidiaries is at any time a party) or (ii) any
redeemable common stock (except at the sole option of Holdings or such
Subsidiary).
-103-
<PAGE>
(b) The Credit Agreement Parties will not permit any Subsidiary of
Holdings to issue any capital stock (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then outstanding
shares of capital stock, (ii) for stock splits, stock dividends and similar
issuances which do not decrease the percentage ownership of Holdings or any of
its Subsidiaries in any class of the capital stock of such Subsidiary, (iii) to
qualify directors to the extent required by applicable law and (iv) issuances to
Adience and its Wholly-Owned Subsidiaries, so long as such issuances in no event
reduce the percentage of the capital stock of the respective issuer (if any)
pledged at such time pursuant to the Security Documents.
9.15 Business. (a) No Credit Agreement Party will, nor will any
Credit Agreement Party permit any of its Subsidiaries to, engage (directly or
indirectly) in any business other than the businesses in which Holdings and its
Subsidiaries are engaged on the Initial Borrowing Date and reasonable extensions
thereof or incidental thereto.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Holdings will engage in no business activities and will not have any
significant assets (other than the capital stock of Adience) or liabilities
(other than those liabilities under this Agreement and the Floating Rate Note
Documents).
9.16 Limitation on Creation of Subsidiaries. (a) Except as otherwise
specifically provided in following clause (b), Holdings will not, and will not
permit any of its Subsidiaries to, establish, create or acquire after the
Initial Borrowing Date any Subsidiary; provided that, (a) Adience and its
Wholly-Owned Subsidiaries shall be permitted to establish or create
Wholly-Owned Subsidiaries so long as (i) 100% of the capital stock of such new
Subsidiary that is owned by any Credit Party (or 100% of the non-voting stock
and 65% of the voting stock of any such Foreign Subsidiary that is owned by
Adience or any Domestic Subsidiary of Adience (or 100% of such voting stock to
the extent provided in Section 8.12)) is pledged pursuant to, and to the extent
required by, the U.S. Pledge Agreement or other relevant Security Document and
the certificates representing such stock, together with stock powers duly
executed in blank, are delivered to the Collateral Agent for the benefit of the
Secured Creditors, (ii) such new Subsidiary (unless an Immaterial Foreign
Subsidiary) executes a counterpart of the U.S. Subsidiary Guaranty or a
Foreign Subsidiary Guaranty, as is appropriate, and, in the case of any Domestic
Subsidiary of Adience, the U.S. Pledge Agreement and the U.S. Security
Agreement, and (iii) such new Subsidiary, to the extent requested by the
Administrative Agent or the Required Banks, takes all actions required pursuant
to Section 8.11. In addition, each new Wholly-Owned Subsidiary shall execute and
deliver, or cause to be
-104-
<PAGE>
executed and delivered, all other relevant documentation of the type described
in Section 5 as such new Subsidiary would have had to deliver if such new
Subsidiary were a Credit Party on the Initial Borrowing Date. Without prejudice
to the preceding provisions of this Section 9.16(a), the Collateral Agent may
require that the capital stock of a new Subsidiary be pledged pursuant to an
agreement in a form suitable for enforcement in the jurisdiction in which the
new Subsidiary in incorporated.
(b) In addition to Subsidiaries created or established as permitted
by preceding clause (a), after the Initial Borrowing Date, Adience may establish
or acquire (x) non-Wholly-Owned Subsidiaries as a result of Permitted
Acquisitions, but only if the respective non-Wholly-Owned Subsidiary is a
Subsidiary of the Person being acquired pursuant to the Permitted Acquisition
and the requirements of the definition of Permitted Acquisition contained herein
are satisfied and (y) to the extent Investments are made pursuant to Section
9.05(xi), such investments may be made in, or to acquire interests in, joint
ventures or non-Wholly-Owned Subsidiaries.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in no event will Holdings permit any equity interests in any of its
non-Wholly-Owned Subsidiaries to be owned by Alpine or any of its Subsidiaries
or Affiliates (other than Adience and its Subsidiaries).
SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
10.01 Payments. Any Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any
other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered to the Administrative Agent or any Bank pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i), 8.08, 8.13 or 8.14 or Section 9 or Section 13.20 or (ii)
default in the due performance or observance by it of any other term, covenant
or agreement contained in
-105-
<PAGE>
this Agreement or any other Credit Document (other than those set forth in
Sections 10.01 and 10.02 and clause (i) of this Section 10.03) and such default
as described in this clause (ii) shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by the Administrative
Agent or the Required Banks; or
10.04 Default Under Other Agreements. (i) Holdings or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Notes) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity, or (ii) any Indebtedness (other than the Notes) of Holdings
or any of its Subsidiaries shall be declared to be (or shall become) due and
payable, or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof, provided that it shall not be
a Default or an Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i) and
(ii) is at least $3,000,000 (or in the case of currencies other than Dollars,
the Dollar Equivalent thereof); or
10.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries, and the petition is not controverted within
15 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Holdings or any of its
Subsidiaries, or Holdings or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency, receivership, administration or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
Holdings or any of its Subsidiaries, or there is commenced against Holdings or
any of its Subsidiaries any such proceeding which remains undismissed for a
period of 60 days, or Holdings or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or Holdings or any of its Subsidiaries suffers
any appointment of any custodian, administrator,
-106-
<PAGE>
administrative receiver or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA, shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, Holdings or any Subsidiary of
Holdings or any ERISA Affiliate has incurred or is likely to incur any liability
to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or Holdings or any Subsidiary of Holdings has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or Plans
or Foreign Pension Plans; (b) there shall result from any such event or events
the imposition of a lien, the granting of a security interest, or a liability or
a material risk of incurring a liability; and (c) such lien, security interest
or liability, individually and/or in the aggregate, could reasonably be expected
to have a Material Adverse Effect; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents (except as expressly provided by
the terms thereof) shall cease to be in full force and effect, or shall cease to
give the Collateral Agent for the benefit of the Secured Creditors the Liens,
rights, powers and privileges
-107-
<PAGE>
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral, in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.01), and subject to no other Liens (except as
permitted by Section 9.01), or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any of the Security Documents and such default
shall continue beyond any grace period specifically applicable thereto pursuant
to the terms of such Security Document; or
10.08 Guaranties. (a) Except in accordance with the express terms of
the respective Guaranty, any Guaranty or any provision thereof shall cease to be
in full force or effect as to the relevant Guarantor, or any Guarantor or Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under the relevant Guaranty, or (b) any Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to such Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against Holdings or any Subsidiary of Holdings involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments exceeds $3,000,000 (or in the case of
currencies other than Dollars, the Dollar Equivalent thereof); or
10.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrowers, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Bank or the holder of any Note to enforce its claims against any
Credit Party (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to any Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitments terminated, whereupon all Commitments of each
Bank shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the
-108-
<PAGE>
principal of and any accrued interest in respect of all Loans and the Notes and
all Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct Adience to pay (and Adience agrees that upon receipt of such
notice, or upon the occurrence of an Event of Default specified in Section 10.05
with respect to any Borrower, it will pay) to the Collateral Agent at the
appropriate Payment Office such additional amount of cash, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Adience Letters of Credit then outstanding; (v) direct Hepworth to pay (and
Hepworth agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default specified in Section 10.05 with respect to any Borrower, it
will pay) to the Collateral Agent at the appropriate Payment Office such
additional amount of cash, to be held as security by the Collateral Agent, as is
equal to the aggregate Stated Amount of all Hepworth Letters of Credit then
outstanding; (vi) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vii) apply any cash
collateral held pursuant to Section 4.02 to the repayment of the Obligations of
the respective Revolving Loan Borrower.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"A Term Loan Maturity Date" shall mean April 15, 2003.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person (the "Acquired Person") existing at the time
such Acquired Person becomes a Subsidiary of or merges or consolidates with such
specified Person or any of its Subsidiaries pursuant to a Permitted Acquisition
(and not redeemed, defeased, retired or otherwise repaid at the time of or upon
consummation of such merger or acquisition) or Indebtedness assumed in
connection with the acquisition of assets from such Acquired Person pursuant to
a Permitted Acquisition, but in each case excluding any Indebtedness incurred or
secured by Liens (on additional assets or otherwise) in connection with, or in
anticipation or contemplation of, such Acquired Person merging or consolidating
with, or becoming a Subsidiary of, such specified Person.
-109-
<PAGE>
"Acquisition" shall mean the acquisition by Newco of 100% of the
outstanding capital stock of Hepworth pursuant to, and in accordance with the
terms of, the Acquisition Documents.
"Acquisition Agreement" shall mean the Share Purchase Agreement,
dated as of March 27, 1997, among Glacier RA. and M. Holdings Limited, Glacier
PLC, Newco and Alpine and as in effect on the Initial Borrowing Date.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other agreements and documents relating to the Acquisition.
"Additional Guaranty" shall have the meaning provided in Section
8.11.
"Additional Security Documents" shall have the meaning provided in
Section 8.11.
"Adience" shall have the meaning provided in the first paragraph of
this Agreement.
"Adience B Scheduled Repayment" shall have the meaning provided in
Section 4.02(b)(i).
"Adience B Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(b)(i).
"Adience B Term Loan" shall have the meaning provided in Section
1.01(a).
"Adience B Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Adience B Term Loan Commitment", as the same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04(b).
"Adience B Term Note" shall have the meaning provided in Section
1.05(a).
"Adience Letter of Credit" shall mean each Letter of Credit issued
for the account of Adience pursuant to Section 2.01.
-110-
<PAGE>
"Adience Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Adience Letters of
Credit and (ii) the amount of all Unpaid Drawings with respect to Adience
Letters of Credit.
"Adience U.K. Pledge Agreement" shall have the meaning provided in
Section 5.12(b).
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of deposit.
"Administrative Agent" shall mean Bankers Trust Company, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided, however, that for purposes of
Section 9.06, an Affiliate of Holdings shall include (x) any Person that
directly or indirectly owns more than 5% of any class of the capital stock of
Holdings and (y) any executive officer or director of Holdings. A Person shall
be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
-111-
<PAGE>
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Alpine" shall mean The Alpine Group, Inc., a Delaware corporation.
"Alpine Permitted Amount" shall mean $2,000,000; provided that if
the Leverage Ratio as determined for the last day of any fiscal year of Holdings
ending after the Initial Borrowing Date (calculating the numerator as of such
date and the denominator for the fiscal year then ended) is (x) less than 3:1,
the Alpine Permitted Amount shall instead be $4,000,000 and (y) is greater than
or equal to 3:1, but less than 3.25:1, the Alpine Permitted Amount shall instead
be $3,000,000.
"Applicable Currency" shall mean Dollars or Pounds Sterling, as the
case may be.
"Applicable Margin" shall mean (i) in the case of Newco A Term Loans
and Revolving Loans that are maintained as (x) Base Rate Loans, 1.50%, and (y)
Euro Rate Loans, 2.50%, less, in each case the Interest Reduction Discount, if
any, and (ii) in the case of B Term Loans that are maintained as (x) Base Rate
Loans, 2.00%, and (y) Euro Rate Loans, 3.00%.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
"Authorized Officer" of any Credit Party shall mean any of the
President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
any Vice-President, the Secretary or any Assistant Secretary of such Credit
Party or any other officer of such Credit Party which is designated in writing
to the Administrative Agent, BTCo and the Issuing Bank by any of the foregoing
officers of such Credit Party as being authorized to give such notices under
this Agreement.
"B Term Loan" shall mean each Adience B Term Loan and each Newco B
Term Loan.
"B Term Loan Maturity Date" shall mean April 15, 2005.
"Bank" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Bank" hereunder pursuant to Section 1.13
or 13.04(b).
-112-
<PAGE>
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Bank having notified in
writing any Borrower and/or the Administrative Agent that such Bank does not
intend to comply with its obligations under Section 1.01(d), 1.01(f) or 2.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the highest of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of 1% in excess of
the overnight Federal Funds Rate and (iii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Dollar Loan designated or deemed
designated as such by Adience or Newco, as the case may be, at the time of the
incurrence thereof or conversion thereto.
"Borrowers" shall have the meaning provided in the first paragraph
of this Agreement; provided that Hepworth shall not be a Borrower unless and
until it executes and delivers the Hepworth Assumption Agreement as required by
Section 13.20(a).
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments of the respective Tranche on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Euro Rate Loans the same Interest Period, provided that Base Rate
Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Euro Rate Loans and Hepworth Letters of Credit, any
day which is a Business Day described in clause (i) above and which is also a
day for trading by and between banks in the London interbank market and which
shall not be a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close
-113-
<PAGE>
in the city where the applicable Payment Office of the Administrative Agent is
located in respect of Euro Rate Loans or Hepworth Letters of Credit, as the case
may be.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be shown as capital expenditures in
accordance with generally accepted accounting principles and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) time deposits and certificates
of deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company having, a long-term unsecured debt rating
of at least "A" or the equivalent thereof from Standard & Poor's Ratings Group
or "A2" or the equivalent thereof from Moody's Investors Service, Inc. with
maturities of not more than one year from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person rated at least A-1 or the equivalent
thereof by Standard & Poor's Ratings Group or at least P-1 or the equivalent
thereof by Moody's Investors Service, Inc. and in each case maturing not more
than 270 days after the date of acquisition by such Person, (v) Eurodollar
certificates of deposit maturing within one year after the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any State thereof or the District of Columbia or by any
foreign bank, which is a Bank, or United States branches of foreign banks, and
in any case having a combined capital and surplus of not less than $100,000,000
and (vi) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
-114-
<PAGE>
"Change of Control" shall mean (i) Alpine shall at any time cease to
own 100% of the capital stock of Holdings, or (ii) Holdings shall at any time
cease to own 100% of the capital stock of Adience, or (iii) Adience shall at any
time cease to own 100% of the capital stock of Newco, or (iv) Newco shall at any
time cease to own 100% of the capital stock of Hepworth, or (v) a "change in
control" or similar event shall occur as provided in the Floating Rate Loan
Credit Agreement, or (vi) the board of directors of Alpine shall cease to
consist of a majority of Continuing Directors or (vii) any Person, entity or
"group" (as such term is defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) (other than a Permitted Holder) is or becomes the
beneficial owner of an amount of outstanding Voting Stock, or of outstanding
common stock, of Alpine in excess of 25% of the total amount of fully diluted
shares of outstanding Voting Stock or common stock, as the case may be, of
Alpine.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and to any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
U.S. Pledge Agreement Collateral, all U.S. Security Agreement Collateral, the
Mortgaged Properties and all cash and Cash Equivalents delivered as collateral
pursuant to Section 4.02 or 10 hereof.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided
in Section 5.04.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether, the Adience B Term Loan Commitment, the Newco A Term Loan Commitment,
the Newco B Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
-115-
<PAGE>
"Consolidated Cash Interest Expense" shall mean, for any period, the
total consolidated interest expense of Holdings and its Subsidiaries (including
Newco and its Subsidiaries) for such period plus, without duplication, that
portion of Capitalized Lease Obligations of Holdings and its Subsidiaries
(including Newco and its Subsidiaries) representing the implicit or imputed
interest factor for such period; provided that (x) interest expense which is not
required to be, and which is not, paid or payable in cash on a current basis and
(y) the amortization of deferred financing costs with respect to this Agreement
or the Indebtedness incurred hereunder, and with respect to the Floating Rate
Loans and the Indebtedness incurred pursuant to the Floating Rate Loan
Documents, in each case shall be excluded from Consolidated Net Cash Interest
Expense to the extent the same would otherwise have been included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income, before Consolidated Interest Expense and provision for taxes and without
giving effect to (x) any extraordinary gains or losses (including any taxes
attributable to any such extraordinary gains or losses) and (y) gains or losses
from sales of assets other than inventory and services sold in the ordinary
course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation, in each case that were deducted in arriving at Consolidated EBIT
for such period.
"Consolidated Fixed Charge Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" for any period shall mean the sum,
without duplication, of (i) Consolidated Interest Expense for such period, (ii)
the amount of all cash payments in respect of taxes or tax liabilities during
such period (net of any cash tax refunds actually received during such period)
and (iii) the scheduled principal amount of all amortization payments on all
Indebtedness (including, without limitation, the principal component of all
Capitalized Lease Obligations) of Holdings and its Subsidiaries for such period
(as determined on the first day of the respective period).
"Consolidated Indebtedness" shall mean, at any time, the aggregate
amount of all Indebtedness of Holdings and its Subsidiaries determined on a
consolidated basis with respect to borrowed money or other obligations of such
Persons which would appear on the balance sheet of such Persons as indebtedness.
-116-
<PAGE>
"Consolidated Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDA to Consolidated Cash Interest Expense for such
period; provided that, if the Consolidated Interest Coverage Ratio is being
determined for any Test Period ended on or prior to April 30, 1998, Consolidated
EBITDA as otherwise determined shall be increased by an amount equal to $800,000
multiplied by the number of fiscal quarters included in the respective Test
Period..
"Consolidated Interest Expense" shall mean, for any period, the
total consolidated interest expense of Holdings and its Subsidiaries (including
Newco and its Subsidiaries) for such period (calculated without regard to any
limitations on the payment thereof) plus, without duplication, that portion of
Capitalized Lease Obligations of Holdings and its Subsidiaries (including Newco
and its Subsidiaries) representing the implicit or imputed interest factor for
such period; provided that the amortization of deferred financing costs with
respect to this Agreement or the Indebtedness incurred hereunder, and with
respect to the Floating Rate Loans and the Indebtedness incurred pursuant to the
Floating Rate Note Documents, shall be excluded from Consolidated Interest
Expense to the extent the same would otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income of Holdings and its Subsidiaries (including
Newco and its subsidiaries) for such period; provided that, except to the extent
such payments have already reduced Consolidated Net Income for the respective
period, Consolidated Net Income shall be reduced by the amount of all payments
made by Holdings and its Subsidiaries during the respective period to Alpine
pursuant to clauses (iii), (iv) and (v) of Section 9.03; provided further, that
to the extent that any payment pursuant to clause (v) of Section 9.03 (excluding
for purposes of this proviso any payment in respect of the Alpine Permitted
Amount) would, in accordance with U.S. GAAP as applied by Alpine, be capitalized
by Alpine for purposes of its consolidated financial statements, such payment
shall only reduce Consolidated Net Income when, and then to the extent, such
amounts reduce Alpine's consolidated net income (in accordance with U.S. GAAP as
applied by Alpine).
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to
-117-
<PAGE>
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of Alpine on the
Initial Borrowing Date and each other director of Alpine if such director's
nomination for election to the Board of Directors of Alpine is recommended by a
majority of the then Continuing Directors.
"Credit Agreement Parties" shall mean and include each of Holdings
and each Borrower.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, each Guaranty, each Security Document and the Hepworth Assumption
Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean Holdings, each Borrower and each
Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Designated Assets" shall mean the parcels of real property referred
to as such on Schedule III.
-118-
<PAGE>
"Distribution" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for any consideration any shares of any class
of its capital stock or any partnership interests outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock or any partnership interests), or set aside any funds for any
of the foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock or any partnership interests of such Person outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock). Without limiting the foregoing, "Distributions"
with respect to any Person shall also include all payments made or required to
be made by such Person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes, in each case, except to the extent the
respective such payments described in this sentence reduced Consolidated Net
Income for such period.
"Documents" shall mean the Credit Documents, the Floating Rate Note
Documents and the Acquisition Documents.
"Dollar Equivalent" of an amount denominated in a currency other
than Dollars (the "Other Currency") shall mean, at any time for the
determination thereof, the amount of Dollars which could be purchased with the
amount of the respective Other Currency involved in such computation at the spot
exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M.
(London time) on the date two Business Days prior to the date of any
determination thereof for purchase on such date; provided that the Dollar
Equivalent of any Unpaid Drawing in a currency other than Dollars shall be
determined at the time the drawing under the related Letter of Credit was paid
or disbursed by the Issuing Bank; provided further that for purposes of (x)
determining compliance with Sections 1.01(d), 1.01(e) and 2.02(a) and (y)
calculating Letter of Credit Fees pursuant to Section 3.01(b), the Dollar
Equivalent of the Stated Amount of any outstanding Letters of Credit and any
Unpaid Drawings, in each case denominated in a currency other than Dollars,
shall be revalued on a monthly basis using the spot exchange rate therefor
quoted in the Wall Street Journal on the first Business Day of each month.
"Dollar Loan" shall mean each Adience B Term Loan, each Newco B Term
Loan, each Dollar Revolving Loan and each Swingline Loan.
-119-
<PAGE>
"Dollar Revolving Loan" shall have the meaning provided in Section
1.01(d).
"Dollar Revolving Note" shall have the meaning provided in Section
1.05(a).
"Dollar Revolving Sub-Limit" shall mean $17,500,000.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in bank loans and any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"End Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings arising
under any Environmental Law or any permit issued, or any approval given, under
any such Environmental Law (hereafter, "Claims"), including, without limitation,
(a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to human health, safety or the environment due to the presence of
Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of
-120-
<PAGE>
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the
Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
U.S.C. ss. 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C.
ss. 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651
et seq.; and any state and local or foreign counterparts or equivalents, in each
case as amended from time to time.
"Environmental Matters" shall have the meaning provided in Section
8.01(i).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b) or (c) of
the Code, except that solely with respect to liabilities to the PBGC for
premiums, liabilities for excise taxes under Section 4980B of the Code and
pension funding liabilities under Section 412 of the Code, the term "ERISA
Affiliate" also includes each person (as defined in Section 3(a) of ERISA) which
together with Holdings is treated as a "single employer" within the meaning of
Section 414(m) or (o) of ERISA.
"Eurodollar Loan" shall mean each Dollar Loan designated as such by
Adience or Newco, as the case may be, at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable
-121-
<PAGE>
to such Eurodollar Loan commencing two Business Days thereafter as of 10:00 A.M.
(New York time) on the date which is two Business Days prior to the commencement
of such Interest Period, divided (and rounded off to the nearest 1/16 of 1%) by
(b) a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Euro Rate" shall mean and include each of the Eurodollar Rate and
the Sterling Euro Rate.
"Euro Rate Loan" shall mean each Eurodollar Loan and each Sterling
Loan.
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of Holdings (beginning with its fiscal
year ending April 30, 1998).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, (x) in the case of Holdings
Excess Cash Flow, the immediately preceding fiscal year of Holdings and (y) in
the case of Newco Excess Cash Flow, the immediately preceding fiscal year of
Newco.
"Existing Credit Agreement" shall mean that certain Credit
Agreement, dated as of January 31, 1997, among Alpine, Adience, Fleet National
Bank, BTCo and Bank of Boston Connecticut, as Lenders, BTCo, as documentation
agent, and Fleet National Bank, as agent, in the form delivered to the
Administrative Agent prior to the Initial Borrowing Date.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.04.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
-122-
<PAGE>
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Floating Rate Loan Credit Agreement" shall mean that certain Term
Loan Agreement, dated as of April 14, 1997, among Holdings, Bankers Trust
Company, as Administrative Agent, and the various lenders party thereto from
time to time, as the same may be amended, modified or supplemented from time to
time pursuant to the terms hereof and thereof.
"Floating Rate Loan Documents" shall mean and include the Floating
Rate Loan Credit Agreement and all other documents and agreements entered into
in connection therewith, in each case as in effect from time to time.
"Floating Rate Loans" shall mean term loans incurred by Holdings
pursuant to the Floating Rate Loan Credit Agreement.
"Foreign Cash Equivalents" shall mean, with respect to any Foreign
Subsidiary of Holdings (i) any evidence of Indebtedness maturing not later than
six months after the date of acquisition and issued or guaranteed by the
national government of the country in which such Foreign Subsidiary is
incorporated or organized, (ii) any time deposits, certificates of deposit or
bankers acceptances maturing not later than six months after the date of
acquisition and issued by any bank, provided that the aggregate principal amount
of the Indebtedness referred to in clause (i) above, together with the aggregate
amount of the deposits or acceptances referred to in clause (ii) above, shall
not exceed at any time $10,000,000 and (iii) investments in money market funds
substantially all of the assets of which are comprised of securities of the
types described in clauses (i) and (ii) above and/or Cash Equivalents.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained
-123-
<PAGE>
outside the United States by Holdings or any one or more of its Subsidiaries
primarily for the benefit of employees of Holdings or such Subsidiaries residing
outside the United States, which plan, fund or other similar program provides,
or results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings other
than a Domestic Subsidiary.
"Foreign Subsidiary Guaranty" shall mean and include the U.K.
Subsidiary Guaranty and each Additional Guaranty delivered by a Foreign
Subsidiary pursuant to Section 8.11 or 8.12.
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by each Guaranteed Party to each
Bank, and Loans made to a Guaranteed Party, under this Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit
issued for the account of a Guaranteed Party, together with all the other
obligations and liabilities (including, without limitation, indemnities, fees
and interest thereon) of each Guaranteed Party to such Bank now existing or
hereafter incurred under, arising out of or in connection with this Agreement or
any other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by each
Guaranteed Party and (ii) the full and prompt payment when due (whether by
acceleration or otherwise) of all obligations of each Guaranteed Party owing
under any Interest Rate Protection Agreement or Other Hedging Agreement entered
into by each Guaranteed Party or any of its Subsidiaries with any Bank or any
affiliate thereof (even if such Bank subsequently ceases to be a Bank under this
Agreement for any reason), or in which any such Bank or affiliate participate,
and their subsequent assigns, if any, whether now in existence or hereafter
arising, and the due performance and compliance with all terms, conditions and
agreements contained therein.
"Guaranteed Party" shall mean (i) in the case of Holdings, as
Guarantor, Adience, Newco and Hepworth and (ii) in the case of Adience, as
Guarantor, Newco and Hepworth.
"Guarantor" shall mean each U.S. Parent Guarantor and each
Subsidiary Guarantor.
-124-
<PAGE>
"Guaranty" shall mean and include each of the U.S. Parents Guaranty,
the U.S. Subsidiary Guaranty, the U.K. Subsidiary Guaranty and each Additional
Guaranty delivered pursuant to Section 8.11, 8.12 and/or 9.16.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is friable, urea formaldehyde
foam insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous waste," "hazardous materials," "extremely
hazardous substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import, which
are regulated under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Hepworth" shall have the meaning provided in the first paragraph of
this Agreement.
"Hepworth Assumption Agreement" shall have the meaning provided in
Section 13.20(a).
"Hepworth Letter of Credit" shall mean each Letter of Credit issued
for the account of Hepworth pursuant to Section 2.01.
"Hepworth Letter of Credit Outstandings" shall mean, at any time,
the sum of (i) the aggregate Stated Amount of all outstanding Hepworth Letters
of Credit and (ii) the amount of all Unpaid Drawings with respect to Hepworth
Letters of Credit.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Adjusted Consolidated Net Income" for any period shall
mean Holdings Consolidated Net Income for such period plus, without duplication,
the sum of the amount of all net non-cash charges (including, without
limitation, depreciation, amortization, deferred tax expense, non-cash interest
expense) and net non-cash losses which were included in arriving at Holdings
Consolidated Net Income for such period less all net non-cash gains included in
arriving at Holdings Consolidated Net Income for such period; provided that
gains or losses from sales of assets (other than sales of inventory in the
ordinary course of business) shall be excluded to the extent same would
-125-
<PAGE>
otherwise be included in Holdings Adjusted Consolidated Net Income for the
respective period.
"Holdings Adjusted Consolidated Working Capital" at any time shall
mean Holdings Consolidated Current Assets (but excluding therefrom all cash,
Cash Equivalents and Foreign Cash Equivalents) less Holdings Consolidated
Current Liabilities at such time.
"Holdings Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Subsidiaries (excluding Newco
and its Subsidiaries) at such time.
"Holdings Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of Holdings and its Subsidiaries (excluding
Newco and its Subsidiaries) at such time, but excluding (i) the current portion
of any long-term Indebtedness which would otherwise be included therein and (ii)
the current portion of Indebtedness constituting Capitalized Lease Obligations.
"Holdings Consolidated Net Income" shall mean, for any period, the
net after tax income of Holdings and its Subsidiaries (other than Newco and its
Subsidiaries) for such period; provided that, notwithstanding any contrary
treatment required by generally accepted accounting principles, for purposes of
determining Holdings Consolidated Net Income the financial results of Newco and
its Subsidiaries shall be ignored, such entities shall be treated as if same
were not Subsidiaries of Holdings, and any income of Holdings and its
Subsidiaries (other than Newco and its Subsidiaries) from transactions with
Newco and its Subsidiaries shall be accounted for on the same basis as if they
were transactions with unrelated parties; provided further that the amount of
cash Distributions actually received by Holdings and its Subsidiaries (other
than Newco and its Subsidiaries) during the respective period from Newco and its
Subsidiaries shall, to the extent such payments would not have reduced Newco
Consolidated Net Income for such period, in the absence of the proviso to the
definition thereof, increase Holdings Consolidated Net Income for such period.
"Holdings Excess Cash Flow" shall mean, for any period, the
remainder of (i) the sum of (a) Holdings Adjusted Consolidated Net Income for
such period and (b) the decrease, if any, in Holdings Adjusted Consolidated
Working Capital from the first day to the last day of such period, minus (ii)
the sum of (a) the amount of Capital Expenditures (but excluding Capital
Expenditures (x) financed with Indebtedness or equity proceeds or (y) made with
insurance proceeds pursuant to Section 9.07(c)) made
-126-
<PAGE>
by Holdings and its Subsidiaries (other than Newco and its Subsidiaries) during
such period in accordance with Section 9.07, (b) the aggregate amount of
permanent principal payments of Indebtedness for borrowed money of Holdings and
its Subsidiaries (other than Newco and its Subsidiaries) (other than repayments
of Loans, provided that repayments of Loans shall be deducted in determining
Holdings Excess Cash Flow if such repayments were (x) required as a result of a
Scheduled Repayment under Section 4.02(b)(i) or (y) made as a voluntary
prepayment by Adience with internally generated funds (but in the case of a
voluntary prepayment of Revolving Loans, only to the extent accompanied by a
voluntary reduction to the Total Revolving Loan Commitment)) during such period,
(c) to the extent same did not reduce Holdings Consolidated Net Income for the
respective period, the amount of cash payments made to Alpine during such period
pursuant to Section 9.03(iv) and (d) the increase, if any, in Holdings Adjusted
Consolidated Working Capital from the first day to the last day of such period.
"Immaterial Foreign Subsidiary" at any time shall mean any Foreign
Subsidiary of Holdings which (x) had consolidated net income before interest and
provision for taxes (excluding non-recurring gains or losses) for the four
consecutive fiscal quarters last ended (taken as one accounting period) prior to
the date of any determination pursuant to this definition and for which
financial information is then available of less than $600,000 and (y)
consolidated net worth under generally accepted accounting principles applicable
to such Foreign Subsidiary of less than $2,000,000.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided, that, if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the fair market value of the property to
which such Lien relates as determined in good faith by such Person), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person and (vii) all obligations under any Interest Rate Protection Agreement,
any Other Hedging Agreement or under any similar type of agreement.
Notwithstanding the foregoing, Indebtedness shall not include trade payables
-127-
<PAGE>
and accrued expenses incurred by any Person in accordance with customary
practices and in the ordinary course of business of such Person.
"Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing of Loans hereunder occurs.
"Interest Determination Date" shall mean, (x) with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan and (y) with respect to any
Sterling Loan, the first day of any Interest Period relating to such Sterling
Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean (i) initially zero and (ii)
from and after each day (each a "Start Date") of delivery of any certificate
delivered in accordance with the following sentence indicating an entitlement to
an Interest Reduction Discount other than zero (or, if a Start Date has
theretofore occurred with an Interest Reduction Discount of .25%, indicating an
entitlement to an Interest Reduction Discount of .50%), the percentage set forth
below opposite the Leverage Ratio indicated to have been achieved in any
certificate delivered in accordance with the following sentence:
Base Rate Euro Rate
Leverage Ratio Loans Loans
-------------------------------------------------------------
Equal to or less than 3.25:1 0.25% 0.25%
but greater than 2.75:1
Equal to or less than 2.75:1 0.50% 0.50%
The Leverage Ratio shall be determined based on the delivery of a certificate of
Holdings to the Administrative Agent (with a copy to be sent by Holdings to each
Bank), certified by an Authorized Officer of Holdings within 90 days after the
last day of any fiscal quarter of Holdings (commencing with its fiscal quarter
ending April 30, 1998, which
-128-
<PAGE>
certificate shall set forth the calculation of the Leverage Ratio for the Test
Period ended immediately prior to the relevant Start Date and the Interest
Reduction Discount which shall be thereafter applicable (unless and until, in an
instance where an Interest Reduction Discount of .25% is indicated, such time,
if any, as a subsequent Start Date occurs where, in accordance with the
requirements of this sentence, a subsequent certificate of an Authorized Officer
of Holdings indicates an entitlement to an Interest Reduction Discount of .50%).
Notwithstanding anything to the contrary contained above in this definition, the
Interest Reduction Discount shall be reduced to zero at any time upon the
occurrence of any Default under Section 10.05 or any Event of Default, in which
case the Interest Reduction Discount shall remain at 0% until such time, if any,
as on a subsequent Start Date, no Default or Event of Default is in existence
and an Interest Reduction Discount of more than zero is attained in accordance
with the provisions of the preceding sentences of this definition of Interest
Reduction Discount.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo and any other Bank which at the
request of the Revolving Loan Borrowers (or the respective Revolving Loan
Borrower) and with the consent of the Administrative Agent agrees, in such
Bank's sole discretion, to become an Issuing Bank for the purpose of issuing
Letters of Credit pursuant to Section 2. The sole Issuing Bank on the Initial
Borrowing Date is BTCo.
"Judgment Currency" shall have the meaning provided in Section
13.16(a).
"Judgment Currency Conversion Date" shall have the meaning provided
in Section 13.16(a).
"Leaseholds" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"L/C Supportable Obligations" of each Revolving Loan Borrower shall
mean obligations of such Revolving Loan Borrower or any of its Subsidiaries
(other than, in the case of Adience Letters of Credit, Hepworth and its
Subsidiaries) incurred in the ordinary course of business.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
-129-
<PAGE>
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the then most recently
ended Test Period; provided that in calculating the Leverage Ratio (x) to the
extent any Permitted Acquisition or Significant Divestiture has occurred during
the relevant Test Period or thereafter but on or prior to the date of the
respective determination of the Leverage Ratio, Consolidated EBITDA shall be
determined for the respective Test Period on a Pro Forma Basis to give effect to
all such Permitted Acquisitions and/or Significant Divestitures occurring after
the first day of the respective Test Period and (y) if the Leverage Ratio is
being determined at any time prior to April 30, 1998, the Test Period shall be
shorter than four fiscal quarters and, accordingly, if the length of the
respective Test Period is (i) one fiscal quarter, the amount of Consolidated
EBITDA shall be multiplied by four, (ii) two fiscal quarters, the amount of
Consolidated EBITDA shall be multiplied by two or (iii) three fiscal quarters,
the amount of Consolidated EBITDA shall be multiplied 4/3; provided further that
in calculating the Leverage Ratio for purposes of Section 9.10 only, if the
Leverage Ratio is being determined at any time prior to April 30, 1998, an
amount equal to $3,200,000 shall be added to Consolidated EBITDA, representing
the per annum amount of cost savings expected to be generated during Test
Periods ended after April 30, 1998..
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Adience B Term Loan, each Newco A Term Loan,
each Newco B Term Loan, each Revolving Loan and each Swingline Loan.
"Majority Banks" of any Tranche shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in, this
Agreement if
-130-
<PAGE>
all outstanding Obligations of the other Tranches under this Agreement were
repaid in full and all Commitments with respect thereto were terminated.
"Management Agreements" shall have the meaning provided in Section
5.04.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(f).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean any material adverse effect on
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings, any Borrower, Holdings and its Subsidiaries
taken as a whole or any Borrower and its Subsidiaries taken as a whole.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the A Term Loan Maturity Date, the B Term Loan Maturity Date or the Revolving
Loan Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $3,000,000.
"Minimum Borrowing Amount" shall mean (i) in the case of Newco A
Term Loans, (pounds)2,000,000, (ii) in the case of B Term Loans, $5,000,000,
(iii) in the case of Dollar Revolving Loans, $1,000,000, (iv) in the case of
Sterling Revolving Loans, (pounds)500,000 and (v) in the case of Swingline
Loans, $250,000.
"Minimum Facing Fee Amount" shall have the meaning provided in
Section 3.01(c).
"MLA Cost" shall mean the cost imputed to a Bank in complying with
the Mandatory Liquid Assets requirements of the Bank of England during the
period in which a Sterling Loan is outstanding determined in accordance with
Schedule XI.
"Mortgage" shall have the meaning provided in Section 5.14.
"Mortgage Policy" shall have the meaning provided in Section 5.14.
"Mortgaged Property" shall have the meaning provided in Section
5.14.
-131-
<PAGE>
"Net Sale Proceeds" shall mean for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of (a) cash expenses of sale (including,
without limitation, brokerage fees, if any, transfer taxes and payment of
principal, premium and interest of Indebtedness other than the Loans required to
be repaid as a result of such asset sale) and (b) all foreign, federal, state
and local taxes to the extent payable as a direct consequence of any such asset
sale.
"Newco" shall have the meaning provided in the first paragraph of
this Agreement.
"Newco A Scheduled Repayment" shall have the meaning provided in
Section 4.02(b)(ii).
"Newco A Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(b)(ii).
"Newco A Term Loan" shall have the meaning provided in Section
1.01(b).
"Newco A Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Newco A Term Loan Commitment", as the same may be (x) reduced from
time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
"Newco A Term Note" shall have the meaning provided in Section
1.05(a).
"Newco Adjusted Consolidated Net Income" for any period shall mean
Newco Consolidated Net Income for such period plus, without duplication, the sum
of the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense
and net non-cash losses which were included in arriving at Newco Consolidated
Net Income for such period less all net non-cash gains included in arriving at
Newco Consolidated Net Income for such period; provided that gains or losses
from sales of assets (other than sales of inventory and services in the ordinary
course of business) shall be excluded to the extent same
-132-
<PAGE>
would otherwise be included in Newco Adjusted Consolidated Net Income for the
respective period.
"Newco Adjusted Consolidated Working Capital" at any time shall mean
Newco Consolidated Current Assets (but excluding therefrom all cash, Cash
Equivalents and Foreign Cash Equivalents) less Newco Consolidated Current
Liabilities.
"Newco B Scheduled Repayment" shall have the meaning provided in
Section 4.02(b)(iii).
"Newco B Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(b)(iii).
"Newco B Term Loan" shall have the meaning provided in Section
1.01(c).
"Newco B Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Newco B Term Loan Commitment", as the same may be (x) reduced from
time to time pursuant to Sections 3.03, 4.02 and/or 10 and (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04(b).
"Newco B Term Note" shall have the meaning provided in Section
1.05(a).
"Newco Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Newco and its Subsidiaries at such time.
"Newco Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of Newco and its Subsidiaries at such time,
but excluding (i) the current portion of any long-term Indebtedness which would
otherwise be included therein and (ii) the current portion of Indebtedness
constituting Capitalized Lease Obligations.
"Newco Consolidated Net Income" shall mean, for any period, the net
after tax income of Newco and its Subsidiaries for such period; provided that
the amount of cash Distributions actually paid by Newco and its Subsidiaries to
Holdings and its Subsidiaries (other than Newco and its Subsidiaries) during the
respective period shall, to the extent such payments did not reduce Newco
Consolidated Net Income for such
-133-
<PAGE>
period before giving effect to this proviso, decrease Newco Consolidated Net
Income for such period.
"Newco Excess Cash Flow" shall mean, for any period, the remainder
of (i) the sum of (a) Newco Adjusted Consolidated Net Income for such period and
(b) the decrease, if any, in Newco Adjusted Consolidated Working Capital from
the first day to the last day of such period, minus (ii) the sum of (a) the
amount of Capital Expenditures (but excluding Capital Expenditures (x) financed
with Indebtedness or equity proceeds or (y) made with insurance proceeds
pursuant to Section 9.07(c)) made by Newco and its Subsidiaries during such
period in accordance with Section 9.07, (b) the aggregate principal amount of
permanent principal payments of Indebtedness for borrowed money of Newco and its
Subsidiaries (other than repayments of Loans, provided that repayments of Loans
shall be deducted in determining Newco Excess Cash Flow if such repayments were
(x) required as a result of a Scheduled Repayment under Section 4.02(b)(ii) or
(iii) or (y) made as a voluntary prepayment by Newco or any of its Subsidiaries
with internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans, only to the extent accompanied by a voluntary reduction to the
Total Revolving Loan Commitment)) during such period and (c) the increase, if
any, in Newco Adjusted Consolidated Working Capital from the first day to the
last day of such period. The foregoing calculation (and all components as used
therein) shall be made in Pounds Sterling.
"Newco Term Loan" shall mean such Newco A Term Loan and each
Newco B Term Loan.
"Newco Term Loan Commitment" shall mean, for each Bank, such Bank's
Newco A Term Loan Commitment and Newco B Term Loan Commitment.
"Newco U.K. Pledge Agreement" shall have the meaning provided in
Section 5.12(b).
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Adience B Term Note, each Newco A Term Note,
each Newco B Term Note, each Dollar Revolving Note, each Sterling Revolving Note
and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
-134-
<PAGE>
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, New York 10006, Attention: Gina
Thompson, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto; provided that copies
of all notices with respect to Sterling Loans and/or Hepworth Letters of Credit
shall also be sent to the office of the Administrative Agent located at BT
Services Ireland Limited, Abbey Court, Irish Life Centre, Lower Abbey Street,
Dublin 1, Ireland, Attention: Mick Murrey.
"Obligation Currency" shall have the meaning provided in Section
13.16(a).
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Bank pursuant to the terms of this Agreement
or any other Credit Document.
"Other Creditor" shall have the meaning provided in the Security
Documents.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Blockage Period" shall have the meaning provided in Section
9.03(ii).
"Payment Office" shall mean (i) in respect of Dollar Loans, Adience
Letters of Credit, Fees (other than Letter of Credit Fees and Facing Fees with
respect to Hepworth Letters of Credit) and, except as provided in clause (ii)
below, all other amounts owing under this Agreement and the other Credit
Documents, the office of the Administrative Agent located at One Bankers Trust
Plaza, New York, New York 10006, ABA Number: 021001033, Account Name: Commercial
Loan Division, Account Number: 99-401-268, Attention: Shannon Farrell, and (ii)
in the case of Sterling Loans, Hepworth Letters of Credit and Letter of Credit
Fees and Facing Fees with respect to Hepworth Letters of Credit, the office of
the Administrative Agent located in London, England at the office of Midland
Bank, Account Name: Bankers Trust Company,
-135-
<PAGE>
Account Number: 00491302, Reference: Adience, Inc., Sort Code: 40-48-04,
Attention: Mick Murrey or in each case such other office as the Administrative
Agent may hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition by Adience or any
of its Wholly-Owned Subsidiaries of assets constituting an entire business or
division of any Person not already a Subsidiary of Alpine or Holdings or of 100%
of the capital stock of any such Person which Person shall, as a result of such
acquisition, become a Wholly-Owned Subsidiary of Adience, provided that (A) the
consideration paid by the Borrowers and/or its Subsidiaries consists solely of
cash, the issuance or assumption, as the case may be, of Indebtedness permitted
in Section 9.04(x) and/or (xi), (B) the assets acquired, or the business of the
Person whose stock is acquired, shall be in the same line of business in which
Adience and its Wholly-Owned Subsidiaries are already engaged, and (C) in the
case of the acquisition of 100% of the capital stock of any Person, such Person
shall own no capital stock of any other Person unless either (x) such Person
owns 100% of the capital stock of such other Person or (y) (1) such Person
and/or its Wholly-Owned Subsidiaries own 80% of the consolidated assets of such
Person and its Subsidiaries and (2) any non-Wholly Owned Subsidiary of such
Person was non-Wholly Owned prior to the date of such Permitted Acquisition of
such Person. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, any acquisition shall be a Permitted
Acquisition only if all requirements of Sections 8.16 and 9.02(ii) applicable to
Permitted Acquisitions are met with respect thereto.
"Permitted Acquisition Amount" shall, at any time, be an amount
equal to (i) $12,500,000, less (ii) the sum of (x) the aggregate amount of all
cash consideration and the fair market value of any non-cash consideration (but
excluding any Indebtedness (and any cash proceeds thereof paid as consideration)
issued, incurred or assumed in connection with Permitted Acquisitions
theretofore made but only if the respective Indebtedness was incurred pursuant
to clauses (x) and/or (xi) of Section 9.04) and (y) the aggregate amount of
reductions theretofore made to the Permitted Investment Amount pursuant to
clause (ii)(x) of the definition thereof after the Initial Borrowing Date.
"Permitted Acquisition Subordinated Indebtedness" shall have the
meaning provided in Section 9.04(xi).
-136-
<PAGE>
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Administrative Agent in its reasonable
discretion.
"Permitted Holder" shall mean Steve Elbaum, each member of the
immediate family of the foregoing natural person and any trust or similar device
created for the benefit of any one or more of the foregoing and each Person
which acquires the direct or indirect beneficial ownership interest in shares of
capital stock of Alpine as an executor or administrator for or by way of
inheritance or bequest from the foregoing natural person following the death of
such natural person.
"Permitted Investment Amount" at any time shall mean an amount equal
to (i) $5,000,000, minus (ii) the sum of (x) the aggregate amount of Investments
(including all cash investments and the fair market value of all non-cash
investments) pursuant to Section 9.05(xi) after the Initial Borrowing Date and
(y) the aggregate amount of reductions theretofore made to the Permitted
Acquisition Amount pursuant to clause (ii)(x) of the definition thereof after
the Initial Borrowing Date, but only to the extent the amount of such reductions
exceeds $7,500,000.
"Permitted Tax Payment" means (for any taxable year of Adience in
which it joins in filing a consolidated federal income tax return with (x)
Alpine or (y) Holdings (but not Alpine)) a payment (including any estimated tax
payment based on any estimated tax liability for such year) by Adience and its
Subsidiaries to Alpine (in the case preceding clause (x) is applicable) or
Holdings (in the case preceding clause (y) if applicable) in an amount equal to
the separate return federal income tax liability (if any) of the affiliated
group (within the meaning of Section 1504 of the Code) of which Holdings would
be the parent (the "Holdings Group") if it were not a member of another
affiliated group for that or any other taxable year; provided, that such payment
can be made by Adience and its Subsidiaries no earlier than two Business Days
prior to the date on which the affiliated group of which Adience is actually a
member makes federal income tax payments (including estimated tax payments) for
such year to the Internal Revenue Service. In the event that Alpine or Holdings
and any member of the Adience Group join in filing any combined or consolidated
(or similar) state or local income or franchise tax returns, then Permitted Tax
Payment shall include payments with respect to such state or local income or
franchise taxes determined in a manner as similar as possible to that provided
in the preceding sentence for federal income taxes.
"Permitted Liens" shall have the meaning provided in Section 9.01.
-137-
<PAGE>
"Person" shall mean any individual, partnership, joint venture,
limited liability company, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2) of
ERISA, subject to Title IV of ERISA, Section 412 of the Code, or Section 401(a)
of the Code, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Holdings or a Subsidiary of Holdings or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledged Securities" shall mean all "Pledged Securities" as defined
in the U.S. Pledge Agreement.
"Post-Closing Restructuring" shall mean the taking of all actions
described in Part II.D. and Part IV of Schedule XII hereto.
"Pounds Sterling" and "(pounds)" shall mean freely transferable
lawful money of the United Kingdom.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, as to any Person, for any of the
following events which occur subsequent to the commencement of a period for
which the financial effect of such event is being calculated, and giving effect
to the event for which such calculation is being made, such calculation as will
give pro forma effect to such event as if same had occurred at the beginning of
such period of calculation, and
(i) for purposes of the foregoing calculation, the transaction
giving rise to the need to calculate the pro forma effect to any of the
following events shall be assumed to have occurred on the first day of the
four fiscal quarter period last ended before the occurrence of the
respective event for which such pro forma effect is being determined (the
"Reference Period"), and
-138-
<PAGE>
(ii) in making any determination with respect to the incurrence or
assumption of any Indebtedness during the Reference Period or subsequent
to the Reference Period and on or prior to the date of the transaction
referenced in clause (i) above (the "Transaction Date"), (x) all
Indebtedness (including the Indebtedness incurred or assumed and for which
the financial effect is being calculated, whether incurred under this
Agreement or otherwise, but excluding normal fluctuations in revolving
indebtedness incurred for working capital purposes and not to finance any
Permitted Acquisition) incurred or permanently repaid during the Reference
Period shall be deemed to have been incurred or repaid at the beginning of
such period, (y) Consolidated Net Interest Expense of such Person
attributable to interest or dividends on any Indebtedness, as the case may
be, bearing floating interest rates should be computed on a pro forma
basis as if the rate in effect on the Transaction Date had been the
applicable rate for the entire period and (z) Consolidated Interest
Expense will be increased or reduced by the net cost (including
amortization of discount) or benefit (after giving effect to amortization
of discount) associated with the Interest Rate Protection Agreements,
which will remain in effect for the twelve-month period after the
Transaction Date and which shall have the effect of fixing the interest
rate on the date of computation, and
(iii) in making any determination of Consolidated EBITDA, pro forma
effect shall be given to any Permitted Acquisition or Significant
Divestiture which occurred during the Reference Period or subsequent to
the Reference Period and prior to the Transaction Date, as if such
Permitted Acquisition or Significant Divestiture occurred on the first day
of the Reference Period, taking into account cost savings and expenses
which would otherwise be accounted for as an adjustment pursuant to
Article 11 of Regulation S-X under the Securities Act, as if such cost
savings or expenses were realized on the first day of the Reference
Period.
"Projections" shall have the meaning provided in Section 5.15.
"Quarterly Payment Date" shall mean the last Business Day of each
April, July, October and January occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
-139-
<PAGE>
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction or damage or any other similar
event with respect to any property or assets of Holdings or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 8.03.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
-140-
<PAGE>
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Appraisal" shall have the meaning provided in Section
8.11.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments) and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentage of Letter of Credit Outstandings)
represent an amount greater than 50% of the sum of all outstanding Term Loans
(or, if prior to the Initial Borrowing Date, the Term Loan Commitments) of
Non-Defaulting Banks and the Total Revolving Loan Commitment less the Revolving
Loan Commitments of Defaulting Banks (or after the termination of the Total
Revolving Loan Commitment, the sum of the then total outstanding Revolving Loans
of Non-Defaulting Banks, and the aggregate RL Percentages of all Non-Defaulting
Banks of Letter of Credit Outstandings at such time). For purposes of
determining Required Banks, all outstanding Loans and Commitments, as the case
may be, that are denominated in Dollars will be calculated in Dollars and all
Loans and Commitments, as the case may be, denominated in Pounds Sterling will
be calculated according to the Dollar Equivalent thereof.
"Restricted Payments" shall mean (a) any authorization, declaration
or payment of any Distributions with respect to any Credit Agreement Party or
any of its Subsidiaries or any other payment to Alpine or any Affiliate of
Adience or Alpine (excluding Adience and its Subsidiaries) by Holdings or any of
its Subsidiaries, (b) the making (or the giving of any notice in respect
thereof) by any Credit Agreement Party or any of its Subsidiaries of any
voluntary or mandatory payment, purchase, acquisition or redemption, whether by
the making of any payments of the principal, interest or otherwise, in respect
of any loan, advance or extension of credit made to any Credit Agreement Party
or any of its Subsidiaries by, or in respect of any guarantee or Contingent
Obligation made for the benefit of any Credit Agreement Party or any of its
Subsidiaries by, or in respect of any other obligation of any Credit Agreement
Party or any of its Subsidiaries owed to, Alpine or any of its Subsidiaries
(excluding Adience and its Subsidiaries) or any other Affiliate of Adience
(excluding Subsidiaries of Adience), whether pursuant to a contractual agreement
or otherwise, and (c) the payment of any management fees or any other fees or
expenses (including the reimbursement thereof by Adience or any of its
Subsidiaries) to Alpine or any of its Subsidiaries (excluding Adience and its
Subsidiaries) or to any other Affiliate of Adience (excluding its Subsidiaries)
-141-
<PAGE>
pursuant to the Management Agreement or any other agreement. Notwithstanding
anything to the contrary contained above, (x) the $20 million paid to Alpine on
the Initial Borrowing Date as contemplated by Section 5.06(d), so long as used
by Alpine for the purposes required therein, shall not constitute a Restricted
Payment, and (y) payments made in respect of the Obligations in accordance with
the terms of this Agreement shall not constitute Restricted Payments, even if
the respective Obligations are held by Alpine or an Affiliate of Alpine or the
Borrower.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(d).
"Revolving Loan Borrowers" shall mean and include each of Adience
and Hepworth; provided that Hepworth shall not be a Revolving Loan Borrower
unless and until it executes and delivers the Hepworth Assumption Agreement as
required by Section 13.20(a).
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as the same may be (x) reduced from time
to time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 1.13 or
13.04(b).
"Revolving Loan Maturity Date" shall mean April 15, 2003.
"Revolving Note" shall mean each Dollar Revolving Note and each
Sterling Revolving Note.
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"Scheduled Repayment" shall mean an Adience A Scheduled Repayment,
an Adience B Scheduled Repayment, a Newco A Scheduled Repayment or a Newco B
Scheduled Repayment, as the case may be.
-142-
<PAGE>
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Security Document" shall mean and include each U.S. Security
Document, each U.K. Security Document and each security document entered into by
Holdings or any Subsidiary of Holdings pursuant to Section 8.11, 8.12 and/or
9.16.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.04.
"Significant Divestiture" shall mean any sale or other disposition
of assets by Adience and/or its Subsidiaries, the fair market value of which
exceeds $500,000 for any transaction (or series of related transactions).
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Start Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Stated Amount" of each Letter of Credit shall, at any time, mean
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met, but after
giving effect to all previous drawings made thereunder), provided that the
"Stated Amount" of each Letter of Credit denominated in Pounds Sterling shall
be, on any date of calculation, the Dollar Equivalent of the maximum amount
available to be drawn in Pounds Sterling thereunder (determined without regard
to whether any conditions to drawing could then be met).
-143-
<PAGE>
"Sterling Borrower" shall mean each of Newco and Adience.
"Sterling Equivalent" shall mean, at any time for the determination
thereof, the amount of Dollars which could be purchased with the amount of
Pounds Sterling involved in such computation at the spot exchange rate therefore
as quoted by the Administrative Agent as of 11:00 A.M. (London time) on the date
two Business Days prior to the date of any determination thereof for purchase on
such date.
"Sterling Euro Rate" shall mean (i) the rate per annum that appears
on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Pounds
Sterling deposits with maturities comparable to the Interest Period applicable
to the Sterling Loans subject to the respective Borrowing commencing two
Business Days thereafter as of 11:00 a.m. (London time) on the date which is two
Business Days prior to the commencement of the respective Interest Period or, if
such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or
any successor page), (ii) the offered quotation to first-class banks in the
London interbank Eurodollar market by BTCo for Pounds Sterling deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Sterling Loan of BTCo with maturities comparable to the Interest
Period applicable to such Sterling Loan commencing two Business Days thereafter
as of 11:00 A.M. (London time) on the date which is two Business Days prior to
the commencement of such Interest Period; provided, that in the event the
Administrative Agent has made any determination pursuant to Section 1.10(a)(i)
in respect of Sterling Loans, or in the circumstances described in clause (i) to
the proviso to Section 1.10(b) in respect of Sterling Loans, the Sterling Euro
Rate determined pursuant to this definition shall instead be the rate determined
by BTCo as the all-in-cost of funds for BTCo to fund such Sterling Loan with
maturities comparable to the Interest Period applicable thereto.
"Sterling Loan" shall mean each Newco A Term Loan and each Sterling
Revolving Loan.
"Sterling Revolving Loan" shall have the meaning provided in Section
1.01(d).
"Sterling Revolving Note" shall have the meaning provided in Section
1.05(a).
"Sterling Revolving Sub-Limit" shall mean (pounds)15,000,000.
-144-
<PAGE>
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of Holdings which
has executed and delivered a Guaranty.
"Subsidiary Guaranty" shall mean and include the U.S. Subsidiary
Guaranty and each Foreign Subsidiary Guaranty.
"Supermajority Banks" of any Tranche shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in, this
Agreement if (x) all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated and (y) the percentage "50%" contained therein were changed to
"66-2/3%."
"Swingline Expiry Date" shall mean the date which is five (5)
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(e).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Date" shall mean that date upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrowers) that the primary syndication (and resultant addition of institutions
as Banks pursuant to Section 13.04) has been completed.
"Tax Sharing Agreements" shall have the meaning provided in Section
7.25.
"Taxes" shall have the meaning provided in Section 4.04(a).
-145-
<PAGE>
"Term Loan" shall mean each Adience B Term Loan, each Newco A Term
Loan and each Newco B Term Loan.
"Term Loan Commitment" shall mean each Adience B Term Loan
Commitment, each Newco A Term Loan Commitment and each Newco B Term Loan
Commitment.
"Test Period" shall mean (i) for any determination made on or prior
to April 30, 1998, the period from May 1, 1997 to the last day of the fiscal
quarter of Holdings then last ended and (ii) for any determination made
thereafter, the four consecutive fiscal quarters of Holdings then last ended
(taken as one accounting period).
"Total Adience B Term Loan Commitment" shall mean, at any time, the
sum of the Adience B Term Loan Commitments of each of the Banks.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Newco A Term Loan Commitment" shall mean, at any time, the
sum of the Newco A Term Loan Commitments of each of the Banks.
"Total Newco B Term Loan Commitment" shall mean, at any time, the
sum of the Newco B Term Loan Commitments of each of the Banks.
"Total Newco Term Loan Commitment" shall mean, at any time, the sum
of the Total Newco A Term Loan Commitment and the Total Newco B Term Loan
Commitment.
"Total Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Total Adience B Term Loan Commitment, the Total Newco A Term Loan Commitment and
the Total Newco B Term Loan Commitment.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect, less (y) the sum of (I) the aggregate principal
amount of Revolving Loans then outstanding (or the Dollar Equivalent thereof in
the case of Sterling Revolving Loans then
-146-
<PAGE>
outstanding) plus (II) the aggregate principal amount of Swingline Loans then
outstanding plus (III) the then aggregate amount of Letter of Credit
Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being five separate Tranches,
i.e., Adience B Term Loans, Newco A Term Loans, Newco B Term Loans, Revolving
Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation of the
Acquisition, (ii) the incurrence by Holdings of the Floating Rate Loans, (iii)
the repayment of all amounts owing, and the termination of all commitments,
under the Existing Credit Agreement, (iv) the incurrence of Loans on the Initial
Borrowing Date, (v) the taking of all actions described in Schedule XII
(excluding the actions described in Part II.D. and Part IV, which will occur
after the Initial Borrowing Date), and (vi) the payment of fees and expenses
owing in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar
Loan or a Sterling Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"U.K. GAAP" shall mean generally accepted accounting principles in
the United Kingdom.
"U.K. Security Agreement" shall have the meaning provided in Section
5.12(a).
"U.K. Security Documents" shall mean the U.K. Security Agreement,
each U.K. Pledge Agreement and, after the execution and delivery thereof, each
additional Security Document executed and delivered by any Subsidiary of
Holdings incorporated or organized under the laws of England.
"U.K. Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized under the laws of England.
-147-
<PAGE>
"U.K. Subsidiary Guarantor" shall mean Newco, Hepworth and each
other U.K. Subsidiary of Holdings which has executed and delivered a U.K.
Security Document.
"U.K. Subsidiary Guaranty" shall mean the guarantee provided by the
U.K. Subsidiaries (excluding certain Immaterial Foreign Subsidiaries) pursuant
to the U.K. Security Agreement.
"Unfunded Current Liability" of any Plan, means the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan and in
accordance with the provisions of ERISA for calculating the potential liability
of Holdings, any Subsidiary of Holdings or any ERISA Affiliate on an ongoing
basis to the PBGC or the Plan under Title IV of ERISA.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less the
sum of (x) the aggregate principal amount of Revolving Loans then outstanding
(taking the Dollar Equivalent thereof in the case of any Sterling Revolving
Loans then outstanding) and (y) such Bank's RL Percentage of the Letter of
Credit Outstandings.
"U.S. GAAP" shall mean generally accepted accounting principles in
the United States of America.
"U.S. Parent Guarantors" shall mean and include each of Holdings and
Adience.
"U.S. Parents Guaranty" shall mean the guaranty of the Parent
Guarantors pursuant to Section 14.
"U.S. Pledge Agreement" shall have the meaning provided in Section
5.10.
-148-
<PAGE>
"U.S. Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the U.S. Pledge Agreement.
"U.S. Security Agreement" shall have the meaning provided in Section
5.11.
"U.S. Security Agreement Collateral" shall mean all "Collateral" as
defined in the U.S. Security Agreement.
"U.S. Security Document" shall mean and include each of the U.S.
Security Agreement, the U.S. Pledge Agreement, each Mortgage and, after the
execution and delivery thereof, each Additional Security Document executed and
delivered by Holdings, Adience or any Domestic Subsidiary thereof.
"U.S. Subsidiary Guarantor" shall mean each Domestic Subsidiary of
Holdings which has executed and delivered a U.S. Subsidiary Guaranty or an
Additional Guaranty.
"U.S. Subsidiary Guaranty" shall have the meaning provided in
Section 5.13(a).
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person 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 of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Administrative Agent.
12.01 Appointment. The Banks hereby designate BTCo as Administrative
Agent (for purposes of this Section 12, the term "Administrative Agent" shall
include BTCo in its capacity as Collateral Agent pursuant to the Security
Documents) to act as specified herein and in the other Credit Documents. Each
Bank hereby irrevocably
-149-
<PAGE>
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of its duties hereunder by or through
its respective officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative Agent nor any of
its respective officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank or the holder of
any Note; and nothing in this Agreement or any other Credit Document, expressed
or implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of Holdings and its Subsidiaries in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of
Holdings and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition
-150-
<PAGE>
of Holdings or any of its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of Holdings or any of its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance with the instructions
of the Required Banks.
12.05 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrowers or any of their Subsidiaries, the
Banks will reimburse and indemnify the Administrative Agent, in proportion to
their respective "percentages" as used in determining the Required Banks, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its respective duties hereunder or under any
other Credit Document, in any way relating to or arising out of this Agreement
or any other Credit Document; provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct.
-151-
<PAGE>
12.07 The Administrative Agent in its Individual Capacity. With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Administrative Agent shall have the rights and
powers specified herein for a "Bank" and may exercise the same rights and powers
as though it were not performing the duties specified herein; and the term
"Banks," "Required Banks," "Majority Banks," "Supermajority Banks," "holders of
Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Credit Party or
any Affiliate of any Credit Party as if it were not performing the duties
specified herein, and may accept fees and other consideration from any Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
12.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Banks and the Borrowers. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to Adience.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of Adience (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent
-152-
<PAGE>
hereunder or thereunder until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrowers jointly and severally
agree that they shall: (i) whether or not the transactions herein contemplated
are consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent (including, without limitation, the reasonable fees and
disbursements of White & Case and the Administrative Agent's local and foreign
counsel and consultants) in connection with the preparation, execution and
delivery of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Administrative Agent in connection with its
syndication efforts with respect to this Agreement and of the Administrative
Agent and, after the occurrence of an Event of Default, each of the Banks in
connection with the enforcement of this Agreement and the other Credit Documents
and the documents and instruments referred to herein and therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent); (ii) pay and hold each of the Banks harmless from and
against any and all present and future stamp, excise and other similar
documentary taxes with respect to the foregoing matters and save each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) indemnify the Administrative Agent and
each Bank, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Bank is a party thereto) related to the entering into and/or
performance of
-153-
<PAGE>
this Agreement or any other Credit Document or the use of any Letter of Credit
or the proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned
or at any time operated by Holdings or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned or operated by Holdings or any of its
Subsidiaries, the non-compliance of any Real Property with foreign, federal,
state and local laws, regulations, and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against Holdings, any of its Subsidiaries or any Real Property owned or at any
time operated by Holdings or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify, pay or hold harmless the Administrative Agent or any Bank set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, the Borrowers shall make the maximum contribution to
the payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized (to the extent not prohibited by applicable law) at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to any Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of such Credit Party to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 13.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
-154-
<PAGE>
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Bank, at its address specified on Schedule II; and
if to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each Bank,
at such other address as shall be designated by such Bank in a written notice to
the Borrowers and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective (x) three Business Days after deposited in the
mails, (y) one Business Day after delivered to the telegraph company, cable
company or a recognized overnight courier, as the case may be, or (z) when sent
by telex or telecopier, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
13.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, no Borrower may assign or transfer any of its rights, obligations or
interest hereunder without the prior written consent of the Banks and, provided
further, that, although any Bank may transfer, assign or grant participations in
its rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments hereunder
except as provided in Sections 1.13 and 13.04(b)) and the transferee, assignee
or participant, as the case may be, shall not constitute a "Bank" hereunder and,
provided further, that no Bank shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Loan Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment shall not constitute a change
in the terms of such participation, and that an increase in any Commitment or
Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as
-155-
<PAGE>
a result thereof), (ii) consent to the assignment or transfer by any Borrower of
any of its rights and obligations under this Agreement, (iii) release or
terminate any Guaranty provided by any of Holdings, Adience, Newco or Hepworth
or (iv) release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Credit Documents)
supporting the Loans hereunder in which such participant is participating. In
the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Bank in respect of such participation to be those set forth
in the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrowers hereunder shall be determined
as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Commitments
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to (i) its
parent company and/or any affiliate of such Bank which is at least 50% owned by
such Bank or its parent company or to one or more Banks or (ii) in the case of
any Bank that is a fund that invests in bank loans, any other fund that invests
in bank loans and is managed by the same investment advisor of such Bank or by
an Affiliate of such investment advisor or (y) assign all, or if less than all,
a portion equal to at least $5,000,000 in the aggregate for the assigning Bank
or assigning Banks, of such Commitments and related outstanding Obligations (or,
if the Commitments with respect to the relevant Tranche have terminated,
outstanding Obligations) hereunder to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a Bank by execution of
an Assignment and Assumption Agreement, provided that, (i) any assignment of
outstanding Adience B Term Loans or Newco B Term Loans (or, if prior to the
Initial Borrowing Date, the related Commitments) shall be required to consist of
a pro rata assignment of such Tranches (i.e., an assignment of the same
percentage of outstanding Adience B Term Loans and Newco B Term Loans (or
related Commitments)), (ii) any assignment of all or any portion of the
Revolving Loan Commitment and related outstanding Obligations (or, if the
Revolving Loan Commitment has terminated, any assignment of Obligations
originally extended pursuant to the Revolving Loan Commitments) shall be made on
a basis such that the respective assignee participates in both Dollar Revolving
Loans and Sterling Revolving Loans, and in all Letter of Credit Outstandings, in
accordance with the Revolving Loan Commitment so assigned (or if the Revolving
Loan Commitment has terminated, on the same basis as participated in by the
Banks with Revolving Loan Commitments prior to the termination thereof), (iii)
at such time Schedule I shall be deemed modified to reflect the Commitments (or
outstanding Term
-156-
<PAGE>
Loans, as the case may be) of such new Bank and of the existing Banks, (iv) upon
the surrender of the relevant Notes by the assigning Bank (or, upon such
assigning Bank's indemnifying the respective Borrower for any lost Note pursuant
to a customary indemnification agreement) new Notes will be issued, at the
Borrowers' expense, to such new Bank and to the assigning Bank upon the request
of such new Bank or assigning Bank, such new Notes to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments (or outstanding Term Loans, as the
case may be), (v) the consent of the Administrative Agent shall be required in
connection with any assignment to an Eligible Transferee pursuant to clause (y)
above, (vi) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Bank, the payment of a non-refundable
assignment fee of $3,500, and (vii) promptly after such assignment, the
Borrowers shall have received from the Administrative Agent notice of any such
assignment and of the identity, nationality and applicable lending office of any
such Eligible Transferee that is not a United States Person (as defined in
Section 7701(a)(30) of the Code), together with the copy of the Assignment and
Assumption Agreement relating thereto and, provided further, that such transfer
or assignment will not be effective until recorded by the Administrative Agent
on the Register pursuant to Section 13.15 hereof. To the extent of any
assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Commitments.
At the time of each assignment pursuant to this Section 13.04(b) to a Person
which is not already a Bank hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Bank shall, to the extent legally entitled
to do so, provide to Adience in the case of a Bank described in clause (ii) or
(iv) of Section 4.04(b), the forms described in such clause (ii) or (iv), as the
case may be. To the extent that an assignment of all or any portion of a Bank's
Commitments and related outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 2.06 or 4.04 in excess of those being charged by the
respective assigning Bank prior to such assignment, then the Borrowers shall not
be obligated to pay such excess increased costs (although the Borrowers, in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay the costs which are not in excess of those being charged by the
respective assigning Bank prior to such assignment and any subsequent increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank and, with the
consent of the
-157-
<PAGE>
Administrative Agent, any Bank which is a fund may pledge all or any portion of
its Notes or Loans to its trustee in support of its obligations to its trustee.
No pledge pursuant to this clause (c) shall release the transferor Bank from any
of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent, the Collateral Agent or any Bank in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between any Borrower or any other Credit Party and the
Administrative Agent, the Collateral Agent or any Bank shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent, the Collateral Agent
or any Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent or any Bank to any other or further
action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of any Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from
-158-
<PAGE>
the other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with US GAAP (or, in the case of the financial statements of Newco and its
Subsidiaries only, UK GAAP), consistently applied throughout the periods
involved (except as set forth in the notes thereto or as otherwise disclosed in
writing by the Borrowers to the Banks); provided that the financial statements
of Newco and its Subsidiaries shall also (x) be accompanied by convenience
translations pursuant to which all Pounds Sterling (or other currencies not in
Dollars) amounts will be converted into Dollars both (i) using the Dollar
Equivalent as in effect on the last day of the respective fiscal quarter or year
of Hepworth, as the case may be, and (ii) on the basis provided in Section
13.07(b)(i), and (y) contain a reconciliation between UK GAAP and US GAAP.
(b) Notwithstanding anything to the contrary contained in clause (a)
of this Section 13.07, (i) all calculations used in determining Holdings Excess
Cash Flow and compliance with Sections 9.08 through 9.11, inclusive, shall
convert all Pounds Sterling (or other currencies not in Dollars) amounts into
Dollars using the average rate of exchange (as quoted in the Wall Street
Journal) during the relevant fiscal period based on the rates in effect in
London, England on each Business Day during such fiscal period, provided that in
determining the Leverage Ratio at any time the numerator thereof shall be
calculated by converting all Pounds Sterling (or other currencies not in
Dollars) amounts into Dollars using the Dollar Equivalent of the respective such
amounts as in effect on the date of determination, (ii) for purposes of
determining compliance with any incurrence tests set forth in Sections 8 and/or
9 (excluding Sections 9.08 through 9.11, inclusive), any amounts so incurred or
expended (to the extent incurred or expended in a currency other than Dollars)
shall be converted into Dollars on the basis of the Dollar Equivalent of the
respective such amounts as in effect on the date of such incurrence or
expenditure under any provision of any such Section that has an aggregate Dollar
limitation provided for therein (and to the extent the respective incurrence
test regulates the aggregate amount outstanding at any time and it is expressed
in terms of Dollars, all outstanding amounts originally incurred or spent in
currencies other than Dollars shall be converted into Dollars on the basis of
the Dollar Equivalent of the respective such amounts as in effect on the date
any new incurrence or expenditures made under any provision of any such Section
that regulates the Dollar amount outstanding at any time)
-159-
<PAGE>
and (iii) except as otherwise specifically provided herein, all computations
determining compliance with Sections 9.08 through 9.11, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements delivered to the Banks for the first fiscal year of the
Borrower ended after the Effective Date pursuant to Section 8.01(c) (which
annual financial statements shall be generally consistent with the historical
financial statements delivered to the Banks pursuant to Section 7.05(a) and (b))
but shall be made in accordance with the requirements of clause (i) or (ii), as
the case may be, of this Section 13.07(b) and (iii) all calculations used in
determining Newco Excess Cash Flow shall be made in Pounds Sterling, utilizing
accounting principles and policies in conformity with those used to prepare the
historical financial statements delivered to the Banks prior to the Initial
Borrowing Date pursuant to Section 7.05(b).
(c) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days (or 365 days in the
case of interest on Sterling Loans) for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (EXCEPT, IN THE
CASE OF OTHER CREDIT DOCUMENTS, AS SPECIFICALLY OTHERWISE PROVIDED THEREIN) AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF (X) THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, OR (Y) THE HIGH COURT
OF JUSTICE IN ENGLAND AND WALES AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, HOLDINGS AND EACH BORROWER HEREBY IRREVOCABLY ACCEPT FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. EACH OF HOLDINGS AND EACH BORROWER HEREBY FURTHER
IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER
HOLDINGS OR SUCH BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
-160-
<PAGE>
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR SUCH BORROWER. EACH OF
HOLDINGS AND EACH BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
HOLDINGS OR SUCH BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF HOLDINGS
AND EACH BORROWER HEREBY IRREVOCABLY WAIVE ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST HOLDINGS OR ANY BORROWER IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS AND EACH BORROWER HEREBY IRREVOCABLY WAIVE ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
-161-
<PAGE>
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which Holdings, each Borrower (other than
Hepworth), the Administrative Agent and each of the Banks shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered the same to the Administrative Agent at its Notice Office or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it. The Administrative Agent
shall give each Borrower (other than Hepworth) and each Bank prompt written
notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Parties party thereto and the
Required Banks (except that additional parties may be added to the various
Guaranties and Security Documents in accordance with the provisions thereof,
without the consent of the other Credit Parties party thereto or the Required
Banks), provided that no such change, waiver, discharge or termination shall,
without the consent of each Bank (other than a Defaulting Bank) with Obligations
being directly modified, (i) extend the final scheduled maturity of any Loan or
Note or extend the stated expiration date of any Letter of Credit beyond the
Revolving Loan Maturity Date, or reduce the rate or extend the time of payment
of interest or Fees thereon, or reduce the principal amount thereof (except to
the extent repaid in cash), (ii) release or terminate any Guaranty provided by
any of Holdings, Adience, Newco or Hepworth or (iii) release all or
substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents, (iv) amend, modify or waive any
provision of this Section 13.12 (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
protections set forth in the proviso below to such additional extensions of
credit), (v) reduce the percentage specified in the definition of Required
-162-
<PAGE>
Banks (it being understood that, with the consent of the Required Banks,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Banks on substantially the same basis as the
extensions of Term Loans and Revolving Loan Commitments are included on the
Effective Date) or (vi) consent to the assignment or transfer by any Borrower of
any of its rights and obligations under this Agreement; provided further, that
no such change, waiver, discharge or termination shall (t) increase the
Commitments of any Bank over the amount thereof then in effect without the
consent of such Bank (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitments shall not constitute an increase of the
Commitment of any Bank, and that an increase in the available portion of any
Commitment of any Bank shall not constitute an increase of the Commitment of
such Bank), (u) without the consent of each Issuing Bank, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (v) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 or any other provision as same
relates to the rights or obligations of the Administrative Agent, (x) without
the consent of the Collateral Agent, amend, modify or waive any provision
relating to the rights or obligations of the Collateral Agent, (y) except in
cases where additional extensions of term loans are being afforded substantially
the same treatment afforded to the Term Loans pursuant to this Agreement as
originally in effect, without the consent of the Majority Banks of each Tranche
which is being allocated a lesser prepayment, repayment or commitment reduction
as a result of the actions described below (or without the consent of the
Majority Banks of each Tranche in the case of an amendment to the definition of
Majority Banks), amend the definition of Majority Banks or alter the required
application of any prepayments or repayments (or commitment reductions), as
between the various Tranches, pursuant to Section 4.01(a) or 4.02 (excluding
Section 4.02(b)) (although the Required Banks may waive, in whole or in part,
any such prepayment, repayment or commitment reduction, so long as the
application, as amongst the various Tranches, of any such prepayment, repayment
or commitment reduction which is still required to be made is not altered) or
(z) without the consent of the Supermajority Banks of the respective Tranche,
waive, or decrease the amount of, any Adience B Scheduled Repayment, Newco A
Scheduled Repayment or Newco B Scheduled Repayment or extend the date on which
the respective Scheduled Repayment is required to be made.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose
-163-
<PAGE>
consent is required is not obtained, then Adience shall have the right, so long
as all nonconsenting Banks whose individual consent is required are treated as
described below, to replace each such non-consenting Bank or Banks (or, at the
option of Adience if the respective Bank's consent is required with respect to
less than all Tranches of Loans (or related Commitments), to replace only the
respective Tranche or Tranches of Commitments and/or Loans of the respective
non-consenting Bank which gave rise to the need to obtain such Bank's individual
consent) with one or more Replacement Banks pursuant to Section 1.13 so long as
at the time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination provided further, that in any
event Adience shall not have the right to replace a Bank, terminate its
Revolving Loan Commitment or repay its Loans solely as a result of the exercise
of such Bank's rights (and the withholding of any required consent by such Bank)
pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 in
excess of those being charged by the respective Bank prior to such transfer,
then the Borrowers shall not be obligated to pay such excess increased costs
(although the Borrowers, in accordance with and pursuant to the other provisions
of this Agreement, shall be obligated to pay the costs which would apply in the
absence of such designation and any subsequent increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Register. Each Borrower hereby designates the Administrative
Agent to serve as such Borrower's agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the respective Borrower's obligations in respect of
such Loans. With respect to any Bank, the transfer of the Commitments of such
Bank and the rights to the principal of, and interest on, any Loan made
-164-
<PAGE>
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. Each Borrower jointly and severally agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
13.15.
13.16 Judgment Currency. (a) The Credit Parties' obligations
hereunder and under the other Credit Documents to make payments in the
respective Applicable Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent, the Collateral Agent or the respective Bank
of the full amount of the Obligation Currency expressed to be payable to the
Administrative Agent, the Collateral Agent or such Bank under this Agreement or
the other Credit Documents. If for the purpose of obtaining or enforcing
judgment against any Credit Party in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made, at the Sterling Equivalent or the Dollar Equivalent thereof, as the case
may be, and, in the case of other currencies, the rate of exchange (as quoted by
the Administrative Agent or if the Administrative Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
-165-
<PAGE>
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Borrowers covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate or exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Sterling Equivalent or the
Dollar Equivalent or any other rate of exchange for this Section, such amounts
shall include any premium and costs payable in connection with the purchase of
the Obligation Currency.
13.17 Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 13.17, each Bank agrees that it will use its reasonable efforts
not to disclose without the prior consent of Adience (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 13.17 to the same extent as such Bank)
any information with respect to Holdings or any of its Subsidiaries which is now
or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by Adience to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to such Bank, (e) to the
Administrative Agent or the Collateral Agent or any other Bank and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or any
interest therein by such Bank, provided, that such prospective transferee shall
be subject to the provisions of this Section 13.17(a).
(b) Each of Holdings and each of the Borrowers hereby acknowledge
and agree that each Bank may share with any of its affiliates any information
related to Holdings or any of its Subsidiaries (including, without limitation,
any non public customer
-166-
<PAGE>
information regarding the creditworthiness of Holdings and its Subsidiaries,
provided such Persons shall be subject to the provisions of this Section 13.17
to the same extent as such Bank).
13.18 Acknowledgement. The Banks hereby acknowledge and agree that,
unless and until the provisions of Section 8.12 require further action, (x) the
guarantee of the Obligations provided by Newco in the U.K. Security Documents
shall only apply to guarantee the Obligations of Hepworth, (y) the guarantee of
the Obligations provided by Hepworth in the U.K. Security Documents shall only
apply to guarantee the Obligations of Newco and (z) the guarantee of the
Obligations provided by the Foreign Subsidiaries shall only apply to guarantee
the Obligations of the U.K. Borrowers. The Banks further acknowledge and agree
that, unless and until the provisions of Section 8.12 require further action,
the security interests granted by each of Newco, Hepworth and the Foreign
Subsidiaries under the Security Documents to which it is a party shall only
secure such party's guarantee obligations provided in the preceding sentence.
13.19 Limitation on Additional Amounts, etc. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11 or 2.06 of this
Agreement, unless a Bank gives notice to the respective Borrower that it is
obligated to pay an amount under the respective Section within one year after
the later of (x) the date the Bank incurs the respective increased costs, loss,
expense or liability, reduction in amounts received or receivable or reduction
in return on capital or (y) the date such Bank has actual knowledge of its
incurrence of the respective increased costs, loss, expense or liability,
reductions in amounts received or receivable or reduction in return on capital,
then such Bank shall only be entitled to be compensated for such amount by such
Borrower pursuant to said Section 1.10, 1.11 or 2.06, as the case may be, to the
extent the costs, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs one year prior to such Bank giving notice to such
Borrower that it is obligated to pay the respective amounts pursuant to said
Section 1.10, 1.11 or 2.06, as the case may be. This Section 13.19 shall have no
applicability to any Section of this Agreement other than said Sections 1.10,
1.11 or 2.06.
13.20 Post Closing Actions. Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:
(a) Hepworth as a Credit Party. Hepworth shall not execute or
deliver, or become a party to, this Agreement or any other Credit Document
on
-167-
<PAGE>
the Effective Date or the Initial Borrowing Date. Hepworth shall, however,
be required to become a party to this Agreement, by executing and
delivering to the Administrative Agent an agreement in the form of Exhibit
O hereto (the "Hepworth Assumption Agreement") within fifteen days after
the Initial Borrowing Date. At such time, Hepworth shall also deliver
Sterling Revolving Notes to the Administrative Agent for the account of
each Bank with a Revolving Loan Commitment, otherwise satisfying the
requirements of Section 1.05, and all other relevant documentation of the
type described in Section 5 as Hepworth would have had to deliver if it
was a Credit Party on the Initial Borrowing Date. At such time, Hepworth
shall also be required to furnish to the Administrative Agent satisfactory
legal opinions from Freshfields, special U.K. counsel to the Credit
Parties, with respect to the actions taken pursuant to this clause (a),
which opinion shall cover the matters which would have been covered had
the actions required to be taken pursuant to this clause (a) been taken on
or prior to the Initial Borrowing Date, and shall be required to be in
form and substance satisfactory to the Administrative Agent. Until such
time as all actions required to be taken pursuant to this clause (a) have
been taken to the satisfaction of the Administrative Agent, it is
understood and agreed that, notwithstanding anything to the contrary
contained elsewhere in this Agreement, Hepworth shall not be permitted to
borrow any Revolving Loans hereunder, and shall not be permitted to have
any Letters of Credit issued for its account. It is further understood and
agreed that until such time as all actions required to be taken pursuant
to following clause (b) have been satisfied in full, the sum of (x) the
aggregate principal amount of all outstanding Sterling Revolving Loans and
(y) Hepworth Letter of Credit Outstandings shall not exceed
(pounds)7,500,000 at any time.
(b) U.K. Security Documents. The Credit Agreement Parties were not
required to satisfy the conditions precedent set forth in Section 5.12(a)
on the Initial Borrowing Date. Such conditions precedent shall be
satisfied in full not later than the fifteenth day after the Initial
Borrowing Date. At such time, Hepworth shall be required to furnish to the
Administrative Agent satisfactory legal opinions from Freshfields, special
U.K. counsel to the Credit Parties, with respect to the actions taken
pursuant to this clause (b), which opinion shall cover the matters that
would have been covered had the actions required to be taken pursuant to
this clause (b) been taken on or prior to Initial Borrowing Date, and
shall be required to be in form and substance satisfactory to the
Administrative Agent.
-168-
<PAGE>
(c) UCC searches; terminations; Etc. The Credit Agreement Parties
were not required to satisfy the condition precedent set forth as Section
5.11(ii) of the Agreement on the Initial Borrowing Date, and have not
delivered all terminations of mortgages and financing statements which
would have been required in connection with the termination of security
interests in favor of IBJ Shroeder Bank and Trust Company. It is agreed
that, within 60 days after the Initial Borrowing Date, the Credit
Agreement Parties shall take all action as may be required to (i) satisfy
the conditions set forth in Section 5.11(ii), including by returning
Requests for Information or Copies (Form UCC-11), or equivalent reports,
listing all effective financing statements that name Holdings or any of
its Domestic Subsidiaries as Debtor that are filed in the jurisdictions
referred to therein, which Requests for Information or Copies shall also
show the filed financing statements with respect to the security interests
created pursuant to the U.S. Security Documents and shall show no evidence
of the financing statements in favor of IBJ Shroeder Bank and Trust
Company, which shall have been terminated and (ii) terminate all mortgages
(and make filings of such terminations reasonably satisfactory to the
recordings Administrative Agent) securing Indebtedness repaid on or prior
to the Initial Borrowing Date.
(d) Insurance. To the extent all actions set forth in Section
8.03(b) have not been taken, or completed, on the Initial Borrowing Date,
all such actions shall be taken to the satisfaction of the Administrative
Agent within 30 days after the Initial Borrowing Date.
(e) Post-Closing Restructuring. Within 150 days after the Initial
Borrowing Date, the Post-Closing Restructuring shall have been completed
in substantial compliance with the steps outlined in Schedule XII.
(f) Repayment of 11% of Senior Secured Notes. Adience was not
required to satisfy the conditions precedent set forth in Section 5.19 on
the Initial Borrowing Date. Such conditions precedent shall be satisfied
in full not later than the fourteenth day after the Initial Borrowing
Date.
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to the extent
necessary to effect the foregoing (and to permit the taking of the actions
described above within the time periods required above, rather than as elsewhere
provided in the Credit Documents); provided, that (x) to the extent any
representation and warranty would not be true because the foregoing actions were
not taken on the Initial Borrowing Date, the respective
-169-
<PAGE>
representation and warranty shall be required to be true and correct in all
material respects at the time the respective action is taken (or was required to
be taken) in accordance with the foregoing provisions of Section 13.20 and (y)
all representations and warranties relating to the Security Documents shall be
required to be true immediately after the actions required to be taken by
Section 13.20 have been taken (or were required to be taken). The acceptance of
the benefits of each Credit Event shall constitute a representation, warranty
and covenant by the Borrowers to each of the Banks that the actions required
pursuant to this Section 13.20 will be, or have been, taken within the relevant
time periods referred to in this Section 13.20 and that, at such time, all
representations and warranties contained in this Agreement and the other Credit
Documents shall then be true and correct without any modification pursuant to
this Section 13.20, the parties hereto acknowledge and agree that the failure to
take any of the actions required above, within the relevant time periods
required above, shall give rise to an immediate Event of Default pursuant to
this Agreement.
13.21 Acknowledgement Regarding Hepworth. Each of the parties to
this Agreement hereby acknowledges and agrees that, on the Effective Date and on
the Initial Borrowing Date, as contemplated by preceding Section 13.20, Hepworth
shall not be required to be a party to this Agreement or any other Credit
Document. The parties hereto further acknowledge and agree that Hepworth may
thereafter become a party to this Agreement as a Revolving Loan Borrower in
accordance with the requirements of preceding Section 13.20. Notwithstanding
anything to the contrary contained elsewhere in this Agreement or otherwise, the
parties hereto agree that this Agreement shall be fully binding upon them
regardless of whether or not Hepworth subsequently becomes a party hereto as
required by preceding Section 13.20 (although, if Hepworth does not take the
actions required by Section 13.20, an Event of Default will exist pursuant to
Section 10.03(i), in accordance with the terms thereof).
SECTION 14. U.S. Parents Guaranty.
14.01 The Guaranty. In order to induce the Banks to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by each U.S. Parent Guarantor from the proceeds of the
Loans and the issuance of the Letters of Credit, each U.S. Parent Guarantor
hereby jointly and severally agrees with the Banks as follows: each U.S. Parent
Guarantor hereby, jointly and severally, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of each Guaranteed Party to the Secured
Creditors. If any or all of the Guaranteed Obligations of any Guaranteed Party
to the
-170-
<PAGE>
Secured Creditors becomes due and payable hereunder, each U.S. Parent Guarantor
unconditionally promises to pay such indebtedness to the Secured Creditors, or
order, on demand, together with any and all expenses which may be incurred by
the Secured Creditors in collecting any of the Guaranteed Obligations.
14.02 Bankruptcy. Additionally, each U.S. Parent Guarantor, jointly
and severally, unconditionally and irrevocably guarantees the payment of any and
all of the Guaranteed Obligations of each Guaranteed Party to the Secured
Creditors whether or not due or payable by such Guaranteed Party upon the
occurrence of any of the events specified in Section 10.05, and unconditionally
promises to pay such indebtedness to the Secured Creditors, or order, on demand.
Each U.S. Parent Guarantor agrees that all payments made by it with respect to
any Guaranteed Obligations pursuant to this Guaranty shall be made in the
respective currency in which the underlying Guaranteed Obligations are
denominated or payable, as the case may be. This Guaranty shall constitute a
guaranty of payment, and not of collection.
14.03 Nature of Liability. (i) The liability of each U.S. Parent
Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the Guaranteed Obligations of any Guaranteed Party whether executed
by such U.S. Parent Guarantor, any other guarantor or by any other party, and
the liability of neither U.S. Parent Guarantor hereunder shall be affected or
impaired by (a) any direction as to application of payment by any Guaranteed
Party or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of any Guaranteed Party, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by any Guaranteed
Party, or (e) any payment made to the Secured Creditors on the Guaranteed
Obligations which any such Secured Creditor repays to any Guaranteed Party
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each U.S. Parent Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding.
(ii) If claim is ever made upon any Secured Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including any Guaranteed Party), then and in such event
each U.S. Parent Guarantor agrees that any
-171-
<PAGE>
such judgment, decree, order, settlement or compromise shall be binding upon
each U.S. Parent Guarantor, notwithstanding any revocation hereof or other
instrument evidencing any liability of any Guaranteed Party, and such U.S.
Parent Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
14.04 Independent Obligation. The obligations of each U.S. Parent
Guarantor hereunder are independent of the obligations of any other guarantor,
any other party or any Guaranteed Party, and a separate action or actions may be
brought and prosecuted against each U.S. Parent Guarantor whether or not action
is brought against any other guarantor, any other party or any Guaranteed Party
and whether or not any other guarantor, any other party or any Guaranteed Party
shall be joined in any such action or actions. Each U.S. Parent Guarantor
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by any Guaranteed Party or other circumstance which operates to toll any
statute of limitations as to such Guaranteed Party shall operate to toll the
statute of limitations as to each U.S. Parent Guarantor. This Guaranty is a
continuing one and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon.
14.05 Authorization. Each U.S. Parent Guarantor authorizes the
Secured Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in
the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the Guaranty
herein made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
-172-
<PAGE>
(c) exercise or refrain from exercising any rights against any
Guaranteed Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, any
Guaranteed Party or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of any Guaranteed Party to its creditors
other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Guaranteed Party to the Secured Creditors
regardless of what liability or liabilities of any Guaranteed Party remain
unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
such U.S. Parent Guarantor from its liabilities under this Guaranty.
14.06 Reliance. It is not necessary for the Secured Creditors to
inquire into the capacity or powers of any Guaranteed Party or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of any Guaranteed Party
now or hereafter owing to any U.S. Parent Guarantor is hereby subordinated to
the Guaranteed Obligations of such Guaranteed Party owing to the Secured
Creditors; and if the Administrative Agent so requests at a time when an Event
of Default exists, all such indebtedness of any Guaranteed Party to any U.S.
Parent Guarantor shall be collected, enforced and received by such U.S. Parent
Guarantor for the benefit of the Secured Creditors and be paid over to the
Administrative Agent on behalf of the Secured Creditors on account of the
Guaranteed Obligations of such Guaranteed Party to the
-173-
<PAGE>
Secured Creditors, but without affecting or impairing in any manner the
liability of such U.S. Parent Guarantor under the other provisions of this
Guaranty. Prior to the transfer by any U.S. Parent Guarantor of any note or
negotiable instrument evidencing any of the indebtedness of any Guaranteed Party
to such U.S. Parent Guarantor, such U.S. Parent Guarantor shall mark such note
or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each U.S.
Parent Guarantor hereby agrees with the Secured Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.
14.08 Waiver. (a) Each U.S. Parent Guarantor waives any right
(except as shall be required by applicable statute and cannot be waived) to
require the Secured Creditors to (i) proceed against any Guaranteed Party, any
other guarantor or any other party, (ii) proceed against or exhaust any security
held from any Guaranteed Party, any other guarantor or any other party or (iii)
pursue any other remedy in the Secured Creditors' power whatsoever. Each U.S.
Parent Guarantor waives any defense based on or arising out of any defense of
any Guaranteed Party, any other guarantor or any other party, other than payment
in full of the Guaranteed Obligations, based on or arising out of the disability
of any Guaranteed Party, any other guarantor or any other party, or the
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any Guaranteed Party
other than payment in full of the Guaranteed Obligations. The Secured Creditors
may, at their election, foreclose on any security held by the Administrative
Agent, the Collateral Agent or the other Secured Creditors by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Secured Creditors may have
against any Guaranteed Party or any other party, or any security, without
affecting or impairing in any way the liability of any U.S. Parent Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in
full. Each U.S. Parent Guarantor waives any defense arising out of any such
election by the Secured Creditors, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of such U.S. Parent Guarantor against any Guaranteed Party or any other party or
any security.
(b) Each U.S. Parent Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional
-174-
<PAGE>
Guaranteed Obligations. Each U.S. Parent Guarantor assumes all responsibility
for being and keeping itself informed of the each Guaranteed Party's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which such U.S. Parent Guarantor assumes and incurs hereunder, and agrees
that the Administrative Agent and the Banks shall have no duty to advise any
U.S. Parent Guarantor of information known to them regarding such circumstances
or risks.
14.09 Nature of Liability. It is the desire and intent of each U.S.
Parent Guarantor and the Secured Creditors that this Guaranty shall be enforced
against such U.S. Parent Guarantor to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. If, however, and to the extent that, the obligations of any U.S. Parent
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations of such U.S. Parent
Guarantor shall be deemed to be reduced and such U.S. Parent Guarantor shall pay
the maximum amount of the Guaranteed Obligations which would be permissible
under applicable law.
-175-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
c/o The Alpine Group, Inc. REFRACO INC.
1790 Broadway
New York, New York 10019
Attn: Stewart H. Wahrsager, By /s/ Bragi F. Schut
Vice President ---------------------------------------
Telephone: (212) 757-3333 Title:
Facsimile: (212) 757-3423
27 Noblestown Road ADIENCE, INC.
Carnegie, Pennsylvania 15106
Attn: Stephen M. Johnson,
President By /s/ Bragi F. Schut
Telephone: (212) 757-3333 ---------------------------------------
Facsimile: (212) 757-3423 Title: Vice President
Swanswick Court REFRACO HOLDINGS LIMITED
Alfreton
Derbyshire
DE557AR By /s/ Bragi F. Schut
Attn: Company Secretary ---------------------------------------
Telephone: Title:
Facsimile: (44) 01773522645
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ Gina S. Thompson
---------------------------------------
Title: Vice President
-176-
================================================================================
TERM LOAN AGREEMENT
among
REFRACO INC.,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
----------------------------------
Dated as of April 15, 1997
----------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit.......................... 1
1.01 The Commitments..................................... 1
1.02 Notice of Borrowing................................. 1
1.03 Disbursement of Funds............................... 2
1.04 Notes............................................... 3
1.05 Pro Rata Borrowings................................. 3
1.06 Interest............................................ 3
1.07 Interest Periods.................................... 4
1.08 Increased Costs, Illegality, etc.................... 5
1.09 Compensation........................................ 7
1.10 Change of Lending Office............................ 8
1.11 Replacement of Banks................................ 8
SECTION 2. Fees; Reductions of Commitment...................... 9
2.01 Fees................................................ 9
2.02 Mandatory Reduction of Commitments.................. 9
SECTION 3. Prepayments; Payments; Taxes........................ 9
3.01 Voluntary Prepayments............................... 9
3.02 Mandatory Repayments................................ 10
3.03 Method and Place of Payment......................... 13
3.04 Net Payments........................................ 13
SECTION 4. Conditions Precedent................................ 15
4.01 Execution of Agreement; Notes....................... 15
4.02 No Default; Representations and Warranties.......... 15
4.03 Opinions of Counsel................................. 16
4.04 Corporate Documents; Proceedings; etc............... 16
4.05 Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements;
Existing Indebtedness Agreements.................... 16
4.06 Adience Credit Agreement............................ 17
4.07 Consummation of Acquisition; Etc.................... 18
4.08 Existing Credit Agreement........................... 18
(i)
<PAGE>
Page
4.09 Adverse Change, etc................................. 19
4.10 Litigation.......................................... 20
4.11 Borrower Pledge Agreement........................... 20
4.12 Alpine Pledge Agreement............................. 20
4.13 Alpine Guaranty..................................... 20
4.14 Projections; Pro Forma Balance Sheet................ 21
4.15 Solvency Certificate; Environmental Analyses; Insurance
Analyses............................................ 21
4.16 Notice of Borrowing................................. 22
4.17 Fees, etc........................................... 22
4.18 Termination of Confidentiality Undertakings......... 22
4.19 Repayment of 11% Senior Secured Notes............... 22
SECTION 5. Representations, Warranties and Agreements.......... 22
5.01 Corporate and Other Status.......................... 23
5.02 Corporate and Other Power and Authority............. 23
5.03 No Violation........................................ 23
5.04 Governmental Approvals.............................. 23
5.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc....................... 24
5.06 Litigation.......................................... 26
5.07 True and Complete Disclosure........................ 26
5.08 Use of Proceeds; Margin Regulations................. 26
5.09 Tax Returns and Payments............................ 26
5.10 Compliance with ERISA............................... 27
5.11 The Pledge Agreements............................... 29
5.12 Representations and Warranties in Other Documents... 29
5.13 Properties.......................................... 29
5.14 Capitalization...................................... 29
5.15 Subsidiaries........................................ 29
5.16 Compliance with Statutes, etc....................... 30
5.17 Investment Company Act.............................. 30
5.18 Public Utility Holding Company Act.................. 30
5.19 Environmental Matters............................... 30
5.20 Labor Relations..................................... 31
5.21 Patents, Licenses, Franchises and Formulas.......... 31
5.22 Indebtedness........................................ 32
5.23 Transaction......................................... 32
(ii)
<PAGE>
Page
SECTION 6. Affirmative Covenants............................... 32
6.03 Maintenance of Property; Insurance.................. 36
6.04 Corporate Franchises................................ 36
6.05 Compliance with Statutes, etc....................... 37
6.06 Compliance with Environmental Laws.................. 37
6.07 ERISA............................................... 38
6.08 End of Fiscal Years; Fiscal Quarters................ 39
6.09 Performance of Obligations.......................... 39
6.10 Payment of Taxes.................................... 39
SECTION 7. Negative Covenants.................................. 41
7.01 Limitation on Restricted Payments................... 41
7.02 Limitation on Transactions with Affiliates.......... 43
7.03 Limitation on Incurrence of Additional Indebtedness. 44
7.04 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.............................. 44
7.05 Limitation on Asset Sales........................... 45
7.06 Limitation on Preferred Stock of Subsidiaries....... 47
7.07 Limitation on Liens................................. 47
7.08 Maximum Leverage Ratio.............................. 47
7.09 Limitation on Guarantees by Subsidiaries............ 48
7.10 Merger, Consolidation and Sale of Assets............ 49
7.11 Successor Corporation Substituted................... 50
SECTION 8. Events of Default................................... 50
8.01 Failure to Make Payments When Due................... 50
8.02 Representations and Warranties...................... 50
8.03 Covenants........................................... 51
8.04 Default Under Other Credit Documents................ 51
8.05 Voluntary Insolvency, Etc........................... 51
8.06 Involuntary Insolvency, Etc......................... 51
8.07 Default Under Other Agreements...................... 52
8.08 Judgments........................................... 52
8.09 Pledge Agreements................................... 52
8.10 Alpine Guaranty..................................... 52
SECTION 9. Definitions and Accounting Terms.................... 53
9.01 Defined Terms....................................... 53
(iii)
<PAGE>
SECTION 10. The Administrative Agent............................ 88
10.01 Appointment......................................... 88
10.02 Nature of Duties.................................... 88
10.03 Lack of Reliance on the Administrative Agent........ 89
10.04 Certain Rights of the Administrative Agent.......... 89
10.05 Reliance............................................ 89
10.06 Indemnification..................................... 90
10.07 The Administrative Agent in its Individual Capacity. 90
10.08 Holders............................................. 90
10.09 Resignation by the Administrative Agent............. 90
SECTION 11. Miscellaneous....................................... 91
11.01 Payment of Expenses, etc............................ 91
11.02 Right of Setoff..................................... 92
11.03 Notices............................................. 93
11.04 Benefit of Agreement; Assignments; Participations... 93
11.05 No Waiver; Remedies Cumulative...................... 95
11.06 Payments Pro Rata................................... 96
11.07 Calculations; Computations.......................... 96
11.08 GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE; WAIVER OF JURY TRIAL........... 97
11.09 Counterparts........................................ 99
11.10 Effectiveness....................................... 99
11.11 Headings Descriptive................................ 99
11.12 Amendment or Waiver; etc............................ 99
11.13 Survival............................................100
11.14 Domicile of Loans...................................100
11.15 Register............................................101
11.16 Confidentiality.....................................101
11.17 No Recourse Against Others..........................102
11.18 Limitation on Additional Amounts, etc...............102
(iv)
<PAGE>
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
SCHEDULE VIII Existing Investments
SCHEDULE IX-A Organization Chart (post-Acquisition, but pre-
Restructuring)
SCHEDULE IX-B Organization Chart (post-Restructuring)
SCHEDULE X Restrictions Applicable to Adience Subsidiaries
SCHEDULE XI ERISA
SCHEDULE XII Hepworth Acquisition/Adience Refinancing/Restructuring
Description
SCHEDULE XIII Tax Matters
EXHIBIT A Notice of Borrowing
EXHIBIT B Note
EXHIBIT C Section 3.04(b)(ii) Certificate
EXHIBIT D Opinion of Proskauer Rose Goetz & Mendelsohn LLP, U.S.
counsel to the Credit Parties
EXHIBIT E Officer's Certificate
EXHIBIT F Borrower Pledge Agreement
EXHIBIT G Alpine Pledge Agreement
EXHIBIT H Alpine Guaranty
EXHIBIT I Solvency Certificate
EXHIBIT J Assignment and Assumption Agreement
(v)
<PAGE>
TERM LOAN AGREEMENT, dated as of April 15, 1997, among REFRACO INC.,
a Delaware corporation (the "Borrower"), the Banks party hereto from time to
time, and BANKERS TRUST COMPANY, as Administrative Agent (all capitalized terms
used herein and defined in Section 9 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. Subject to and upon the terms and conditions
set forth herein, each Bank severally agrees to make, on the Closing Date, a
term loan or term loans (each a "Loan" and, collectively, the "Loans") to the
Borrower, which Loans (i) shall be denominated in Dollars, (ii) shall be made
and maintained as a single Borrowing of Eurodollar Loans (subject to conversion,
in whole or in part, into Base Rate Loans pursuant to Section 1.08) and (iii)
shall be made by each such Bank in that initial aggregate principal amount as is
equal to the Commitment of such Bank on the Closing Date (before giving effect
to any reductions thereto on such date pursuant to Section 2.02(b)). Once
repaid, Loans incurred hereunder may not be reborrowed.
1.02 Notice of Borrowing. (a) When the Borrower desires to incur the
Loans hereunder, it shall give the Administrative Agent at its Notice Office at
least three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing), provided that any such notice shall be deemed to have
been given on a certain day only if given before 11:00 A.M. (New York time) on
such day. Such written notice or written confirmation of telephonic notice (the
"Notice of Borrowing"), except as otherwise expressly provided in Section 1.08,
shall be irrevocable and shall be given by the Borrower in the form of Exhibit
A, appropriately completed to specify (i) the aggregate principal amount of the
Loans to be incurred pursuant to such Borrowing and (ii) the date of such
Borrowing (which shall be a Business Day). The Administrative Agent shall
-1-
<PAGE>
promptly give each Bank notice of such proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters required by the immediately
preceding sentence to be specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act without liability upon the basis of such telephonic
notice, believed by the Administrative Agent in good faith to be from an
Authorized Officer of the Borrower prior to receipt of written confirmation. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice.
1.03 Disbursement of Funds. No later than 12:00 Noon (New York time)
on the Closing Date, each Bank will make available its pro rata portion
(determined in accordance with Section 1.05) of the Loans to be made on such
date. All such amounts will be made available in Dollars and in immediately
available funds at the Payment Office of the Administrative Agent, and the
Administrative Agent will make available to the Borrower by depositing to its
account at the Payment Office the aggregate of the amounts so made available by
the Banks in the type of funds received. Unless the Administrative Agent shall
have been notified by any Bank prior to the Closing Date that such Bank does not
intend to make available to the Administrative Agent such Bank's portion of the
Loans to be made on such date, the Administrative Agent may assume that such
Bank has made such amount available to the Administrative Agent on the Closing
Date and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand from such Bank or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Bank, at the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the Loans, as determined pursuant
to Section 1.08. Nothing in this Section 1.04 shall be deemed to relieve any
Bank from its obligation to
-2-
<PAGE>
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.04 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Bank shall be evidenced by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B, with blanks appropriately completed in conformity herewith (each a
"Note" and, collectively, the "Notes"). The Note issued to each Bank shall (i)
be executed by the Borrower, (ii) be payable to the order of such Bank and be
dated the Closing Date (or if issued thereafter, the date of issuance), (iii) be
in a stated principal amount equal to the principal amount of the Loans made by
such Bank and be payable in Dollars in the outstanding principal amount of Loans
evidenced thereby, (iv) mature on the Final Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.06 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 3.01, and mandatory
repayment as provided in Section 3.02 and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(b) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.05 Pro Rata Borrowings. All Loans made under this Agreement shall
be incurred from the Banks pro rata on the basis of their Commitments. It is
understood that no Bank shall be responsible for any default by any other Bank
of its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Loans hereunder.
1.06 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per annum which shall be equal to the
sum of the Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made
-3-
<PAGE>
available to the Borrower until the maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
from time to time and (y) the rate which is 2% in excess of the rate borne by
such Loans at the time of the payment default, in each case with such interest
to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for the respective Interest Period or
Interest Periods to be applicable to Eurodollar Loans and shall promptly notify
the Borrower and the Banks thereof. Each such determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto.
1.07 Interest Periods. All Eurodollar Loans outstanding hereunder at
any time shall have a single interest period applicable thereto at such time of
three (3) months duration (each an "Interest Period"), provided that:
(i) the initial Interest Period for the Eurodollar Loans shall
commence on the Closing Date and each Interest Period occurring thereafter
in respect of such Eurodollar Loans shall commence (x) on the day on which
the next preceding Interest Period applicable thereto expires or (y) only
in the circumstances provided in Section 1.08(d)(y) (where all Eurodollar
Loans have theretofore been converted into Base Rate Loans), on the
Business Day specified in Section 1.08(d)(y);
(ii) if any Interest Period for a Eurodollar Loan begins on a day
for which there is no numerically corresponding day in the calendar month
at the end
-4-
<PAGE>
of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if any
Interest Period for a Eurodollar Loan would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day; and
(iv) no Interest Period shall be selected which extends beyond the
Final Maturity Date.
1.08 Increased Costs, Illegality, etc. (a) In the event that any
Bank shall have determined in good faith (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) and (iv) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change arising after the date of
this Agreement in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or in
the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Bank of the principal of
or interest on the Notes or any other amounts payable hereunder (except
for changes in the rate of tax on, or determined by reference to, the net
income or profits or franchise taxes based on net income of such Bank
pursuant to the laws of the jurisdiction in which it is organized or in
which its principal office or applicable lending office is located or any
subdivision thereof or therein) or (B) a change in official reserve
requirements (except to the extent included in the computation of the
Eurodollar Rate) or any special deposit, assessment or similar requirement
against assets of, deposits with or for the account of,
-5-
<PAGE>
or credit extended by, any Bank (or its applicable lending office) and/or
(y) other circumstances since the date of this Agreement affecting such
Bank or the interbank Eurodollar market or the position of such Bank in
such market; or
(iii) at any time after the date of this Agreement, that the making
or continuance of any Eurodollar Loan has been made (x) unlawful by any
law or governmental rule, regulation or order, (y) impossible by
compliance by any Bank in good faith with any governmental request
(whether or not having force of law) or (z) impracticable as a result of a
contingency occurring after the date of this Agreement which materially
and adversely affects the applicable interbank market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone promptly confirmed
in writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, on the last day of the then current Interest Period,
all Loans shall be automatically converted to Base Rate Loans, until such time
as the circumstances described in clause (i) shall no longer be applicable, in
which event Section 1.08(d) shall apply, (y) in the case of clause (ii) above,
the Borrower shall, subject to the provisions of Section 11.8 (to the extent
applicable), pay to such Bank, upon its written request therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, showing in reasonable detail the
basis for the calculation thereof, submitted to the Borrower by such Bank shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take one
of the actions specified in Section 1.08(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.08(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.08(a)(iii) shall), upon at least three Business Days' written notice
to the Administrative Agent, require the affected Bank to convert such
Eurodollar Loan into a Base Rate Loan, until such time as the circumstances
described in Section 1.08(a)(ii) or (iii) shall no longer be applicable in which
event clause (d) below shall apply, provided that, if more than one Bank is
affected
-6-
<PAGE>
at any time, then all affected Banks must be treated the same pursuant
to this Section 1.08(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change (which introduction or change
shall have occurred after the date of this Agreement) in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrower agrees to pay, subject
to the provisions of Section 11.8 (to the extent applicable), to such Bank, upon
its written demand therefor, such additional amounts as shall be required to
compensate such Bank or such other corporation for the increased cost to such
Bank or such other corporation or the reduction in the rate of return to such
Bank or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Bank will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Bank's determination of compensation owing under this Section
1.08(c) shall, absent manifest error, be final and conclusive and binding on all
the parties hereto. Each Bank, upon determining that any additional amounts will
be payable pursuant to this Section 1.08(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the basis
for calculation of such additional amounts.
(d) In the event that any Base Rate Loan is outstanding at any time
and the relevant circumstances described in Section 1.08(a)(i), (ii) and/or
(iii), as the case may be, cease to be applicable, the respective Bank(s) or the
Administrative Agent (as applicable) shall give prompt notice thereof to the
Borrower and the Administrative Agent (as applicable) and (x) if a Borrowing of
Eurodollar Loans is outstanding at such time (from one or more Banks which were
not affected by such circumstances or as a result of the application of
following clause (y)), then on the last day of the Interest Period then
applicable thereto the Base Rate Loans of the respective affected Bank or Banks
to which the circumstances described above have ceased to be applicable shall be
converted back into (and thereafter shall form a part of) the respective
Borrowing of Eurodollar Loans (until such time, if any, as Section 1.08(a) and
(b) shall thereafter become applicable) and (y) if no Eurodollar Loans remain
outstanding at such time, then on the third Business Day thereafter the Base
Rate Loans of the respective Bank or Banks to which the circumstances described
above shall cease to be applicable shall be converted into a
-7-
<PAGE>
Borrowing of Eurodollar Loans (with an Interest Period of three months beginning
on said third Business Day).
1.09 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans, but excluding loss of
anticipated profits) which such Bank may sustain: (i) if any repayment
(including any repayment made pursuant to Section 3.01 or 3.02 or as a result of
an acceleration of the Loans pursuant to Section 8) occurs on a date which is
not the last day of an Interest Period with respect thereto; (ii) if any
prepayment of any of its Eurodollar Loans is not made on any date specified in a
notice of prepayment given by such Borrower; or (iii) as a consequence of (x)
any other default by such Borrower to repay its Loans when required by the terms
of this Agreement or any Note held by such Bank or (y) any election made
pursuant to Section 1.08(b).
1.10 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.08(a)(ii) or
(iii), Section 1.08(c) or Section 3.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any Loans
affected by such event, provided that such designation is made on such terms
that such Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of such Section. Nothing in this Section 1.10 shall affect
or postpone any of the obligations of the Borrower or the right of any Bank
provided in Sections 1.08 and 3.04.
1.11 Replacement of Banks. (x) Upon the occurrence of an event
giving rise to the operation of Section 1.08(a)(ii) or (iii), Section 1.08(c) or
Section 3.04 with respect to any Bank which results in such Bank charging to the
Borrower increased costs in excess of those being generally charged by the other
Banks or (y) in the case of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 11.12(b), the Borrower shall have the right, if no Default
under Section 10.01 or 10.05 and no Event of Default then exists (or, in the
case of preceding clause (y), no Default under Section 10.01 or 10.05 and no
Event of Default will exist immediately after giving effect to such
replacement), to replace such Bank (the "Replaced Bank") with one or more other
Eligible Transferees (collectively,
-8-
<PAGE>
the "Replacement Bank") and each of whom shall be required to be reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.11, the Replacement Bank shall enter into
one or more Assignment and Assumption Agreements pursuant to Section 11.04(b)
(and with all fees payable pursuant to said Section 11.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire all of
the outstanding Loans of the Replaced Bank and, in connection therewith, shall
pay to the Replaced Bank in respect thereof an amount equal to the principal of,
and all accrued interest on, all outstanding Loans of the Replaced Bank and (ii)
all obligations of the Borrower due and owing to the Replaced Bank at such time
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreements, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 11.15 and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Note or Notes executed by the Borrower, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.08, 1.09, 3.04, 10.06 and
11.01), which shall survive as to such Replaced Bank. It is understood and
agreed that replacements pursuant to this Section 1.11 shall be effected by
means of assignments which otherwise meet the applicable requirements of Section
11.04(b).
SECTION 2. Fees; Reductions of Commitment.
2.01 Fees. The Borrower shall pay to the Administrative Agent, for
its own account, such fees as have been previously agreed to in writing by the
Borrower and the Administrative Agent.
2.02 Mandatory Reduction of Commitments. (a) The Total Commitment
(and the Commitment of each Bank) shall terminate in its entirety on May 31,
1997 unless the Closing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 2.02, the Total Commitment shall terminate in its
entirety on the Closing Date (after giving effect to the making of Loans on such
date).
SECTION 3. Prepayments; Payments; Taxes.
-9-
<PAGE>
3.01 Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 12:00 Noon (New York time) at its
Notice Office at least two Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Loans, the amount
of such prepayment and the Types of Loans to be prepaid, which notice the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $1,000,000;
(iii) each prepayment in respect of any Loans shall be applied pro rata to Loans
of the various Banks (based upon the relative outstanding principal amounts
thereof); and (iv) any voluntary prepayment of Loans made on or prior to the
third anniversary of the Closing Date shall be subject to a prepayment premium
(to be paid ratably to the Banks receiving the respective prepayment) determined
as follows: (A) if such prepayment occurs after the Closing Date but on or prior
to the first anniversary of the Closing Date, then Borrower shall pay a
prepayment premium equal to 3.0% of the principal amount of the Loans so
prepaid, (b) if such prepayment occurs after the first anniversary of the
Closing Date but on or before the second anniversary of the Closing Date, then
Borrower shall pay a prepayment premium equal to 1.0% of the principal amount of
the Loans so prepaid; and (C) if such prepayment occurs after the second
anniversary of the Closing Date but on or before the third anniversary of the
Closing Date, then Borrower shall pay a prepayment premium equal to 0.50% of the
principal amount of the Loans so prepaid.
3.02 Mandatory Repayments. (a) The Borrower shall cause all then
outstanding Loans to be repaid in full on the Final Maturity Date.
(b) The Borrower shall cause the outstanding principal amount of the
Loans to be repaid with the Net Sale Proceeds from any Asset Sale as required by
Section 7.05.
(c) Within thirty (30) days following each date on which Borrower or
any of its Restricted Subsidiaries receives any cash proceeds from any Recovery
Event, an amount equal to 100% of the cash proceeds of such Recovery Event (net
of costs and taxes incurred in connection with such Recovery Event) shall,
unless waived in writing by the Required Banks, be applied as a mandatory
repayment of principal of the Loans (subject in each case to 3.02(f)), provided
that (1) so long as no Default or Event of Default then exists, if the net cash
proceeds from any Recovery Event are less than $1,000,000, then no prepayment
shall be required pursuant to this Section 3.02(c), (2) to the extent the net
cash proceeds from any Recovery Event are applied to permanently
-10-
<PAGE>
repay (x) principal of loans, and/or unpaid drawings in respect of letters of
credit, outstanding under the Adience Credit Agreement and/or (y) other
outstanding Indebtedness of Restricted Subsidiaries of the Borrower (and, in the
case of any repayment pursuant to this clause (2) of outstandings pursuant to
any revolving loan or similar commitment, so long as the respective such
revolving loan or similar commitment is permanently reduced by the amount of
such repayment), no repayment shall be required pursuant to this Section
3.02(c), (3) so long as no Default or Event of Default then exists, with respect
to any single or series of related Recovery Events the net proceeds therefrom
which are equal to or greater than $1,000,000 but less than $10,000,000, such
proceeds shall not be required to be so applied on such date to the extent that
Borrower has delivered a certificate to the Administrative Agent on or prior to
such date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid within 365 days
(or 540 days so long as contractually committed to be so used within 365 days)
following the date of the receipt of such proceeds (which certificate shall set
forth the estimates of the proceeds to be so expended), (4) if the amount of
such proceeds from any single or series of related Recovery Events exceeds
$10,000,000, then the entire amount and not just the portion in excess of
$10,000,000 shall either (i) be applied against the Adience Revolving Credit
Facility with authorization reserved for replacement or restoration of the
assets affected by such Recovery Event or applied to permanently repay (x)
principal of loans, and/or unpaid drawings in respect of letters of credit,
outstanding under the Adience Credit Agreement and/or (y) other outstanding
Indebtedness of Restricted Subsidiaries of the Borrower (and, in the case of any
such repayment pursuant to this clause (4)(x) or (y) of outstandings pursuant to
any revolving loan or similar commitment, so long as the respective such
revolving loan or similar commitment is permanently reduced by the amount of
such repayment) with such proceeds, or (ii) if not so applied, unless waived in
writing by the Required Banks, be applied as a mandatory repayment of Loans as
provided above in this Section 3.02(c), (5) if all or any portion of such
proceeds not required to be applied to the repayment of Loans pursuant to the
proviso of this Section 3.02(c) are not used for the purposes described in
clause (3) above (or contractually committed to be used) within 365 days after
the day of the receipt of such proceeds, such remaining portion shall be (A)
applied to permanently repay (x) principal of loans, and/or unpaid drawings in
respect of letters of credit, outstanding under the Adience Credit Agreement
and/or (y) other outstanding Indebtedness of Restricted Subsidiaries of the
Borrower (and, in the case of any repayment pursuant to this clause (5)(A) of
outstandings pursuant to any revolving loan or similar commitment, so long as
the respective revolving loan or similar commitment is permanently reduced by
the amount of such repayment) or (B) if not so applied and unless waived in
writing by the Required Banks, applied on the last day of such period as a
mandatory repayment of principal of
-11-
<PAGE>
the Loans as provided in this Section 3.02(c) and (6) if all or any portion of
such proceeds are not required to be applied on the 365th day referred to in
clause (5) above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, then such remaining portion shall be (A) applied to
permanently repay (x) principal of loans, and/or unpaid drawings in respect of
letters of credit, outstanding under the Adience Credit Agreement and/or (y)
other outstanding Indebtedness of Restricted Subsidiaries of the Borrower (and,
in the case of any repayment pursuant to this clause (6)(A) of outstandings
pursuant to any revolving loan or similar commitment, so long as the respective
such revolving loan or similar commitment is permanently reduced by the amount
of such repayment) or (B) if not so applied and unless waived in writing by the
Required Banks, applied on the date of such termination or expiration as a
mandatory repayment of principal of outstanding Loans as provided in this
Section 3.02(c).
(d) The Borrower shall cause all then outstanding Loans to be repaid
in full on any date on which a Change of Control occurs, with any repayment
required to be made pursuant to this Section 3.02(d) to be accompanied, if the
respective Change of Control occurred on or before the third anniversary of the
Closing Date, by a prepayment premium (to be paid ratably to the Banks receiving
the respective repayment pursuant to this Section 3.02(d)) in the same amount
which, pursuant to clause (iv) of Section 3.01, would be required to accompany a
voluntary prepayment in full, pursuant to Section 3.01, of all Loans outstanding
(before giving effect to any repayment required pursuant to this Section
3.02(d)) on the date on which the respective Change of Control occurred.
(e) All repayments of principal made by Borrower pursuant to this
Section 3.02 shall, subject to following clause (f), be applied pro rata to the
outstanding Loans of the various Banks (based upon the relative outstanding
principal amounts thereof).
(f) Notwithstanding anything to the contrary contained in Section
3.02 or elsewhere in this Agreement, the Borrower shall have the option, in its
sole discretion, to give the Banks with outstanding Loans the option to waive a
mandatory prepayment of such Loans pursuant to Section 3.02(b) (each such
repayment, "Waivable Mandatory Prepayment") upon the terms and provisions set
forth in this Section 3.02(f). If Borrower elects to exercise the option
referred to in the preceding sentence, Borrower shall give to Administrative
Agent written notice of its intention to give the Banks the right to waive a
Waivable Mandatory Prepayment at least five (5) Business Days' prior to such
repayment, which notice Administrative Agent shall promptly forward to all Banks
-12-
<PAGE>
(indicating in such notice the amount of such repayment to be applied to each
such Bank's outstanding Loans). The Borrower's offer to permit the Banks to
waive any such Waivable Mandatory Prepayment may apply to all or part of such
repayment; provided; that any offer to waive part of such repayment must be made
ratably to the Banks on the basis of their Pro Rata Share of outstanding Loans.
In the event any Bank desires to waive such Bank's right to receive any such
Waivable Mandatory Prepayment in whole or in part, such Bank shall so advise the
Administrative Agent no later than the close of business two (2) Business Days
after the date of such notice from the Administrative Agent, which notice shall
also include the amount such Bank desires to receive in respect of such
prepayment. If any Bank does not reply to the Administrative Agent within the
two (2) Business Days after the date of such notice from Administrative Agent,
it will be deemed not to have waived any part of such prepayment. If any Bank
does not specify an amount it wishes to receive, it will be deemed to have
accepted one hundred percent (100%) of the total payment. In the event that any
Bank waives all or part of such right to receive any such Waivable Mandatory
Prepayment, Borrower shall be relieved of its obligation to make such Waivable
Mandatory Prepayment to the extent of the amount so waived.
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. The Administrative Agent will thereafter cause to be
distributed on the same day (if payment was actually received by the
Administrative Agent prior to 12:00 Noon (New York time) on such day) like funds
relating to the payment of principal, interest or fees ratably to the Banks
entitled thereto. Any payments under this Agreement which are made later than
12:00 Noon (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
3.04 Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Sections 3.04(b) all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with
-13-
<PAGE>
respect to such payments (but excluding, except as provided in the second
succeeding sentence, any tax imposed on or measured by the net income or profits
or franchise taxes based on net income of a Bank pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income or profits of such Bank pursuant to the laws of
the jurisdiction in which the principal office or applicable lending office of
such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located and for any withholding of taxes as such
Bank shall determine are payable by, or withheld from, such Bank in respect of
such amounts so paid to or on behalf of such Bank pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Bank
pursuant to this sentence. If the Borrower pays any additional amount under this
Section 3.04 to a Bank and such Bank determines in its sole discretion that it
has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Bank shall pay to the
Borrower an amount that the Bank shall, in its sole discretion, determine is
equal to the net benefit, after tax, which was obtained by the Bank in such year
as a consequence of such refund, reduction or credit. The Borrower will furnish
to the Administrative Agent within 45 days after the date the payment of any
Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Bank, and reimburse such Bank upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Effective Date, or in the case
of a Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.11 or 11.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank,
-14-
<PAGE>
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Bank's entitlement to
a complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Bank is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit C (any such certificate,
a "Section 3.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the Borrower and the Administrative Agent two new
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may
be, and such other forms as may be required in order to confirm or establish the
entitlement of such Bank to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or it shall immediately notify the Borrower and the Administrative Agent
of its inability to deliver any such Form or Certificate in which case such Bank
shall not be required to deliver any such Form or Certificate pursuant to this
Section 3.04(b). Notwithstanding anything to the contrary contained in Section
3.04(a), but subject to Section 11.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Bank has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 3.04(a) hereof to
gross-up payments to be made to a Bank in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the Borrower
the Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 3.04(b) or (II) in the case of a payment, other than
interest, to a Bank described in clause (ii) above, to the extent that such
forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 3.04 and except as set forth in Section 11.04(b), the
Borrower agrees to pay additional amounts and to indemnify each Bank in the
manner set forth in
-15-
<PAGE>
Section 3.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of income or similar Taxes.
SECTION 4. Conditions Precedent. The obligation of each Bank to make
Loans on the Closing Date, is subject to the satisfaction of the following
conditions:
4.01 Execution of Agreement; Notes. On or prior to the Closing Date
(i) the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each of the Banks the
appropriate Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
4.02 No Default; Representations and Warranties. On the Closing Date
and after giving effect to the Loans made on such date, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the Closing Date (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
4.03 Opinions of Counsel. On the Initial Borrowing Date, the
Administrative Agent shall have received from Proskauer Rose Goetz & Mendelsohn
LLP, counsel to the Credit Parties, an opinion addressed to the Administrative
Agent, the Collateral Agent and each of the Banks and dated the Closing Date in
the form set forth as Exhibit D.
4.04 Corporate Documents; Proceedings; etc. (a) On the Closing Date,
the Administrative Agent shall have received a certificate of each Credit Party,
dated the Closing Date, signed by an Authorized Officer of such Credit Party,
and attested to by the Secretary or any Assistant Secretary of such Credit
Party, in the form of Exhibit E with appropriate insertions, together with
copies of the certificate of incorporation (or equivalent organizational
document) and by-laws of such Credit Party and the resolutions of such Credit
Party referred to in such certificate, and the foregoing shall be reasonably
acceptable to the Administrative Agent.
-16-
<PAGE>
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent and the Required Banks, and the Administrative Agent
shall have received all information and copies of all documents and papers,
including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
4.05 Plans; Shareholders' Agreements; Management Agreements;
Collective Bargaining Agreements; Existing Indebtedness Agreements. On the
Closing Date, there shall have been made available to the Administrative Agent
true and correct copies, certified as true and complete by an appropriate
officer of the Borrower of:
(i) all Plans that, as of the Initial Borrowing Date, are
maintained, sponsored or contributed to by the Borrower, any Subsidiary of
the Borrower, or any ERISA Affiliate (and for each such Plan that is
required to file an annual report on Internal Revenue Service Form
5500-series, a copy of the most recent such report (including, to the
extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules and
information), and for each such Plan that is a "single-employer plan," as
defined in Section 4001(a)(15) of ERISA, the most recently prepared
actuarial valuation therefor) and any other "employee benefit plans," as
defined in Section 3(3) of ERISA, and any other material agreements, plans
or arrangements, with or for the benefit of current or former employees of
the Borrower or any of its Subsidiaries or any ERISA Affiliate (provided
that the foregoing shall apply in the case of any multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, only to the extent that any
document described therein is in the possession of the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate or reasonably available
thereto from the sponsor or trustee of any such Plan;
(ii) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such
entity with respect to its capital stock (collectively, the "Shareholders'
Agreements");
-17-
<PAGE>
(iii) all agreements with members of, or with respect to, the senior
management and management of the Borrower or any of its Subsidiaries
(collectively, the "Management Agreements");
(iv) all collective bargaining agreements applying or relating to
any employee of the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements"); and
(v) all agreements evidencing or relating to Indebtedness of the
Borrower or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Closing Date
(collectively, the "Existing Indebtedness Agreements");
all of which Plans, Shareholders' Agreements, Management Agreements, Collective
Bargaining Agreements and Existing Indebtedness Agreements shall be in form and
substance satisfactory to the Administrative Agent and the Required Banks and
shall be in full force and effect.
4.06 Adience Credit Agreement. (a) On or prior to the Closing Date,
the borrowers under the Adience Credit Agreement (i) shall have entered into the
Adience Credit Agreement and shall have incurred the full amount of term loans
provided thereunder and (ii) shall, on such date, utilize the full amount of
such cash proceeds to make payments owing in connection with the Transaction (in
a manner consistent with the description contained in Schedule XII).
(b) On or prior to the Closing Date, the Administrative Agent shall
have received true and correct copies of the Adience Credit Documents as then in
effect, and all of the terms and conditions of such Adience Credit Documents
(including, without limitation, covenants, events of defaults, remedies,
maturities, interest rates and all other terms) shall be required to be in form
and substance satisfactory to the Administrative Agent and the Required Banks.
4.07 Consummation of Acquisition; Etc. (a) On the Closing Date, (i)
the Acquisition shall have been consummated in accordance with the Acquisition
Documents and all applicable laws (except insofar as moneys to be advanced under
the terms of this Agreement as are required for such purpose), (ii) each of the
conditions precedent set forth in the Acquisition Documents shall have been
satisfied and not waived (unless waived with the consent of the Administrative
Agent and the Required Banks), and (iii) the Administrative Agent shall have
received true and correct copies of the Acquisition
-18-
<PAGE>
Documents, all of which shall be in full force and effect and required to be in
form and substance (including as to all of the terms and conditions thereof)
satisfactory to the Administrative Agent and the Required Banks.
(b) On the Closing Date, the Acquisition shall be consummated and
the financing therefor shall occur, in a manner consistent with the description
contained in Schedule XII (excluding Parts II. D. and IV thereof, which describe
various post- closing actions to be taken).
(c) On the Closing Date (and after giving effect to the
Transaction), the capital structure of the Borrower and its Subsidiaries shall
be as set forth in the Organization Chart attached as Schedule IX-A, which shall
be required to be in form and substance satisfactory to the Administrative Agent
and the Required Banks.
(d) On the Closing Date, and without limiting the requirements set
forth above in this Section 4.07, (x) not more than $20 million may be used by
Adience to repay an inter-company loan previously incurred by it from Alpine, so
long as Alpine uses all proceeds of such repayment to repay amounts owed by it
pursuant to the Existing Credit Agreement as required by the following Section
4.08 and (y) all other inter-company loans and notes payable by the Borrower or
any of its Subsidiaries to Alpine shall be contributed to the capital of the
Borrower and such obligations shall be extinguished. On the Closing Date,
neither the Borrower nor any of its Subsidiaries shall owe any amounts, by way
of inter-company loans or otherwise, to Alpine or any of its Subsidiaries (other
than the Borrower and its Subsidiaries).
4.08 Existing Credit Agreement. (a) On or prior to the Closing Date
or concurrently with the making of Loans on such date, the total commitments
under the Existing Credit Agreement shall have been terminated, and all loans
and notes issued thereunder shall have been repaid in full, together with
interest thereon, all letters of credit issued thereunder shall have been
terminated or collateralized by new back-to-back letters of credit in form and
substance, and issued by an issuer, satisfactory to the respective letter of
credit issuers or otherwise supported in a manner satisfactory to the respective
letter of credit issuers, and all other amounts owing pursuant to the Existing
Credit Agreement shall have been repaid in full and the Existing Credit
Agreement shall have been terminated and be of no further force or effect except
for continuing indemnification obligations described therein. The Administrative
Agent shall have received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section 4.08(a) have been
satisfied on such date.
-19-
<PAGE>
(b) On or prior to the Closing Date or concurrently with the making
of Loans on such date, the creditors under the Existing Credit Agreement shall
have terminated and released all security interests and Liens on the assets
owned or to be owned by Alpine or any of its Subsidiaries granted in connection
with the Existing Credit Agreement. The Administrative Agent shall have received
such releases of security interests in and Liens on the assets owned or to be
owned by Alpine and its Subsidiaries as may have been reasonably requested by
the Administrative Agent, which releases shall be in form and substance
reasonably satisfactory to the Administrative Agent. Without limiting the
foregoing, there shall have been delivered (i) proper termination statements
(Form UCC-3 or the appropriate equivalent) for filing under the UCC of each
jurisdiction where a financing statement (Form UCC-1 or the appropriate
equivalent) was filed with respect to Alpine or any of its Subsidiaries, or
their respective predecessors in interest, in connection with the security
interests created with respect to the Existing Credit Agreement and the
documentation related thereto, (ii) terminations or assignments of any security
interest in, or Lien on, any patents, trademarks, copyrights, or similar
interests of Alpine or any of its Subsidiaries, on which filings have been made
and (iii) terminations of all mortgages, leasehold mortgages and deeds of trust
created with respect to property of Alpine or any of its Subsidiaries, or their
respective predecessors in interest, in each case, to secure the obligations
under the Existing Credit Agreement, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent.
4.09 Adverse Change, etc. (a) On or prior to the Closing Date,
nothing shall have occurred (and neither the Administrative Agent nor the Banks
shall have become aware of any facts, conditions or other information not
previously known) which the Administrative Agent or the Required Banks shall
determine could reasonably be expected to have a material adverse effect on the
rights or remedies of the Administrative Agent or the Banks, or on the ability
of any Credit Party to perform its obligations to the Administrative Agent and
the Banks or which could reasonably be expected to have a Material Adverse
Effect.
(b) All necessary governmental (domestic and foreign) and third
party approvals and/or consents in connection with the making of the Loans and
the Transaction, the other transactions contemplated by the Documents and
otherwise referred to herein or therein (excluding governmental approvals and/or
consents not required to be obtained on or prior to the Closing Date) shall have
been obtained and remain in effect, and all applicable waiting periods shall
have expired without any action being taken by any competent authority which
restrains, prevents, or imposes materially adverse conditions upon, the
consummation of the Transaction or the other transactions contemplated by the
Documents or otherwise referred to herein or therein. Additionally, there shall
-20-
<PAGE>
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the Transaction or
the other transactions contemplated by the Documents.
4.10 Litigation. On the Closing Date, no litigation by any entity
(private or governmental) shall be pending or threatened with respect to this
Agreement, any other Document or any documentation executed in connection
herewith or therewith or the transactions contemplated hereby or thereby, or
which the Administrative Agent or the Required Banks shall determine could
reasonably be expected to have a material adverse effect on the Transaction or a
Material Adverse Effect.
4.11 Borrower Pledge Agreement. On the Closing Date, the Borrower
shall have duly authorized, executed and delivered a Pledge Agreement in the
form of Exhibit F (as amended, modified or supplemented from time to time, the
"Borrower Pledge Agreement") and shall have delivered to the Collateral Agent,
as Pledgee thereunder, all of the Borrower Pledged Stock, if any, referred to
therein then owned by the Borrower, together with executed and undated stock
powers.
4.12 Alpine Pledge Agreement. On the Closing Date, Alpine shall have
duly authorized, executed and delivered a Pledge Agreement in the form of
Exhibit G (as amended, modified or supplemented from time to time, the "Alpine
Pledge Agreement") and shall have delivered to the Collateral Agent, as Pledgee
thereunder, all of the Alpine Pledged Stock, if any, referred to therein then
owned by Alpine, together with executed and undated stock powers.
4.13 Alpine Guaranty. On the Closing Date, Alpine shall have duly
authorized, executed and delivered a Guaranty in the form of Exhibit H (as
amended, modified or supplemented from time to time, the "Alpine Guaranty"),
guaranteeing all of the Obligations of the Borrower as more fully provided
therein, and the Alpine Guaranty shall be in full force and effect.
4.14 Projections; Pro Forma Balance Sheet. On or prior to the
Closing Date, there shall have been delivered to the Administrative Agent:
(i) projected financial statements for the Borrower and its
Subsidiaries for the period from the Closing Date to and including at
least April 30, 2005 (the "Projections"), which Projections (x) shall
reflect the forecasted financial condition and income and expenses of the
Borrower and its Subsidiaries after
-21-
<PAGE>
giving effect to the Transaction and the related financing thereof and the
other transactions contemplated hereby and thereby and (y) shall be
reasonably satisfactory in form and substance to the Administrative Agent
and the Required Banks; and
(ii) an unaudited pro forma consolidated balance sheet of the
Borrower and its Subsidiaries, after giving effect to the Transaction and
the incurrence of all Indebtedness contemplated herein and prepared in
accordance with generally accepted accounting principles, which pro forma
consolidated balance sheets shall be required to be in form and substance
reasonably satisfactory to the Administrative Agent and the Required
Banks.
4.15 Solvency Certificate; Environmental Analyses; Insurance
Analyses. On the Closing Date, there shall have been delivered to the
Administrative Agent:
(i) a solvency certificate in the form of Exhibit I from the chief
financial officer of the Borrower and dated the Closing Date;
(ii) Phase I environmental assessment reports with respect to
certain currently owned or operated real properties prepared by
environmental consultants reasonably satisfactory to the Administrative
Agent, the results of which do not disclose any environmental liabilities
or potential environmental liabilities reasonably likely to result in a
Material Adverse Effect; and
(iii) analyses and evidence of insurance complying with the
requirements of Section 6.03 for the business and properties of the
Borrower and its Subsidiaries, in scope, form and substance satisfactory
to the Administrative Agent and the Required Banks.
4.16 Notice of Borrowing. Prior to the making of each Loan, the
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.02(a).
4.17 Fees, etc. On the Closing Date, the Borrower shall have paid to
the Administrative Agent and each Bank all costs, fees and expenses (including,
without limitation, reasonable legal fees and expenses) payable to the
Administrative Agent and such Bank to the extent then due.
-22-
<PAGE>
4.18 Termination of Confidentiality Undertakings. On the Closing
Date, the Borrower and the seller pursuant to the Acquisition Agreement shall
have released the Agent, each of the Banks and their counsel from all
obligations of such Persons pursuant to any Confidentiality Undertaking
theretofore executed and delivered by any such Person, except that, from and
after the Closing Date, the confidentiality provisions of Section 11.16 of this
Agreement shall survive in accordance with the terms hereof. The releases
described in the immediately preceding sentence shall be in form and substance
satisfactory to the Agent, the Banks and their counsel.
4.19 Repayment of 11% Senior Secured Notes. On the Closing Date,
Adience shall have repaid in full, for cash not in excess of $5.7 million in the
aggregate, all of its 11% senior secured notes due 2002, and all security
therefor shall have been released to the satisfaction of the Agent and the
Required Banks.
The occurrence of the Closing Date and the incurrence of the Loans
on such date shall constitute a representation and warranty by each Credit Party
to the Administrative Agent and each of the Banks that all the conditions
specified in Section 4 exist as of that time. All of the Notes, certificates,
legal opinions and other documents and papers referred to in Section 4, unless
otherwise specified, shall be delivered to the Administrative Agent at the
Notice Office for the account of each of the Banks and, except for the Notes, in
sufficient counterparts or copies for each of the Banks and shall be in form and
substance satisfactory to the Administrative Agent and the Required Banks.
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans provided for
herein, the Borrower makes the following representations, warranties and
agreements, in each case after giving effect to the Transaction, all of which
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans on and as of the Closing Date (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date).
5.01 Corporate and Other Status. Each of the Borrower and each of
its Subsidiaries (i) is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its incorporation, (ii) has
the requisite corporate power and authority to own its property and assets and
to transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications
-23-
<PAGE>
except for failures to be so qualified which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
5.02 Corporate and Other Power and Authority. Each Credit Party has
the requisite corporate power and authority to execute, deliver and perform the
terms and provisions of each of the Documents to which it is party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Documents. Each Credit Party has duly executed
and delivered each of the Documents to which it is party, and each of such
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
5.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents and the Adience Credit Documents) upon any of the property or assets
of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the Borrower or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
documents) of the Borrower or any of its Subsidiaries.
5.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except (x) as have been obtained or made on or prior to the Closing Date or (y)
as may be required by, or made pursuant to, the Adience Credit Documents), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
-24-
<PAGE>
5.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of Adience and
its Subsidiaries (which does not include Newco, Hepworth or their respective
Subsidiaries) at April 30, 1996 and January 31, 1997 and the related statements
of consolidated income, consolidated cash flows and shareholders' equity of the
Borrower and its Subsidiaries for the fiscal year and the nine-month period
ended on such date, as the case may be, and furnished to the Banks prior to the
Closing Date, fairly present the consolidated results of the operations of the
Borrower and its Subsidiaries for the respective fiscal year or nine-month
period ended on such date, as the case may be, and consolidated financial
position of the Borrower and its Subsidiaries at the date of such balance sheet.
All such consolidated financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes in the case of the
January 31, 1997 financial statements.
(b) The Accounting Pack (as defined in the Acquisition Agreement)
for Hepworth and its Subsidiaries for the accounting reference period ended
December 31, 1996, and furnished to the Banks prior to the Closing Date, was
prepared in accordance with accounting principles and practices generally
accepted in the United Kingdom as at December 31, 1996, and gives a true and
fair view of the state of affairs of Hepworth and its Subsidiaries as at
December 31, 1996.
(c) The Borrower is a special purpose corporation formed to own 100%
of the capital stock of Adience and, except in connection therewith (and as
shown in Schedule XII) and pursuant to this Agreement and the other Credit
Documents and the Adience Credit Documents, on the Closing Date the Borrower had
no other significant assets, liabilities or operations.
(d) Since April 30, 1996 (but for this purpose, assuming that the
Transaction had been consummated on such date), there has been no material
adverse change in the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower or the Borrower
and its Subsidiaries taken as a whole.
(e) (i) On and as of the Closing Date, after giving effect to the
Transaction and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created by the Credit Parties in connection therewith, (a) the
sum of the assets, at a fair valuation, of the Borrower and its Subsidiaries
taken as a whole will exceed their debts; (b) the Borrower and its Subsidiaries
taken as a whole have not incurred and do not intend to incur, and do
-25-
<PAGE>
not believe that they will incur, debts beyond their ability to pay such debts
as such debts mature; and (c) the Borrower and its Subsidiaries taken as a whole
will have sufficient capital with which to conduct their businesses. For
purposes of this Section 5.05(c), "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(f) Except (i) as disclosed in the financial statements delivered
pursuant to Sections 5.05(a) and (b) and (ii) liabilities arising in the
ordinary course of business since January 31, 1997, there were as of the Closing
Date no liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
would be material to the Borrower and its Subsidiaries taken as a whole. As of
the Closing Date, the Borrower does not know of any basis for the assertion
against it or any of its Subsidiaries of any liability or obligation of any
nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Sections 5.05(a) and (b) which, either individually or in
the aggregate, could reasonably be expected to be material to the Borrower or
the Borrower and its Subsidiaries taken as a whole.
(g) On and as of the Closing Date, the Projections delivered to the
Administrative Agent pursuant to Section 4.14 have been prepared in good faith
and are based on reasonable assumptions under the then known facts and
circumstances (it being understood that nothing contained herein shall
constitute a representation that the results forecasted in such Projections will
in fact be achieved), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to the Borrower to
be misleading in any material respect or which knowingly fail to take into
account material information regarding the matters reported therein. On the
Closing Date, the Borrower believes that the Projections are reasonable and
attainable based upon the then known facts and circumstances, it being
understood that nothing contained herein shall constitute a representation that
the results forecasted in such Projections will in fact be achieved.
-26-
<PAGE>
5.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of the Borrower, threatened (i) with respect to any
Document or (ii) that are reasonably likely to result in a Material Adverse
Effect.
5.07 True and Complete Disclosure. All factual information (other
than the Projections, which are covered in Section 5.05(g)) (taken as a whole)
furnished by any Credit Party in writing to the Administrative Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any Credit
Party in writing to the Administrative Agent or any Bank will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
5.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Loans will be used by the Borrower (i) to effect the Transaction and (ii) to pay
fees and expenses related to the Transaction.
(b) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X.
5.09 Tax Returns and Payments. Except as set forth on Schedule XIII,
the Borrower and each of its Subsidiaries have timely filed or caused to be
timely filed with the appropriate taxing authority, all Federal, state, local,
foreign and other returns, statements, forms and reports for taxes (the
"Returns") required to be filed by or with respect to the income, properties or
operations of the Borrower and/or any of its Subsidiaries. The Returns
accurately reflect all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby. The Borrower and each of its Subsidiaries have
paid all taxes payable by them other than taxes contested in good faith and for
which adequate reserves have been established in accordance with generally
accepted accounting principles. There is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of any Credit
Party, threatened by any authority regarding any taxes relating to the Borrower
or any of its Subsidiaries. As of the Closing Date, neither the Borrower nor any
of its Subsidiaries has entered into an agreement or
-27-
<PAGE>
waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of the
Borrower or any of its Subsidiaries, is aware of any agreement or waiver
extending any statute of limitations relating to the payment or collection of
other taxes of the Borrower or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of the
Borrower or any of its Subsidiaries not to be subject to the normally applicable
statute of limitations. None of the Borrower or any of its Subsidiaries has
provided, with respect to itself or property held by it, any consent under
Section 341 of the Code. None of the Borrower or any of its Subsidiaries has
incurred, or will incur, any tax liability in connection with the Acquisition or
any other transactions contemplated hereby other than stamp tax duty under
applicable laws of England.
5.10 Compliance with ERISA. (a) Schedule XI sets forth each Plan
that, on the Closing Date is maintained, sponsored or contributed to by the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate; and each Plan
(and each related trust, insurance contract or fund) is in compliance with its
terms and with all applicable laws, including, without limitation, ERISA and the
Code, except where noncompliance could not reasonably be expected to result in a
Material Adverse Effect. Each Plan (and each related trust, if any) which is
intended to be qualified under Section 401(a) of the Code or its prototype Plan
document (to the best knowledge of the Borrower in the case of multiemployer
plans (as defined in section 4001(a)(3) of ERISA)) has received a determination
letter from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code. None of the following
conditions exist, the liability for which, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect: no Reportable Event has
occurred with respect to a Plan; none of the Borrower or any of its ERISA
Affiliates received notice that any Plan which is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no
Plan has an Unfunded Current Liability which, when added to the aggregate amount
of Unfunded Current Liabilities with respect to all other Plans, exceeds the
aggregate amount of such Unfunded Current Liabilities that existed on the
Initial Borrowing Date by $1,000,000; no Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made; neither the Borrower nor any Subsidiary of the
Borrower nor any ERISA Affiliate has incurred any liability (including any
indirect, contingent or secondary liability) to or on account of a Plan pursuant
to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
-28-
<PAGE>
4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or
expects to incur any such liability under any of the foregoing Sections with
respect to any Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or appoint
a trustee to administer any Plan which is subject to Title IV of ERISA; no
action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, or, to the knowledge of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate, expected or threatened;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and
its Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not
exceed $5,000,000; each group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate has at all times been operated in substantial compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code and no material liability exists or could arise as a result of any failure
to so comply; and no lien imposed under the Code or ERISA on the assets of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and the Borrower and its Subsidiaries do
not maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan
the obligations with respect to which could reasonably be expected to have a
Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, except where
the failure to so comply would not result in a Material Adverse Effect. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither the Borrower nor any of its Subsidiaries has incurred
any obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of the most recently ended fiscal year of the Borrower on the basis of
actuarial
-29-
<PAGE>
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
5.11 The Pledge Agreements. Subject to the terms of each Pledge
Agreement, the security interests created in favor of the Collateral Agent, as
Pledgee, for the benefit of the Secured Creditors under each Pledge Agreement
constitute first priority perfected security interests in the Pledged Stock
described in such Pledge Agreement, subject to no security interests of any
other Person. No filings or recordings are required in order to perfect (or
maintain the perfection or priority of) the security interests created in the
Pledged Stock under either Pledge Agreement.
5.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the Documents (other than the Credit
Documents) were true and correct in all material respects at the time as of
which such representations and warranties were made (or deemed made); provided
that, to the extent such representations and warranties in the Acquisition
Documents were made by the Seller thereunder, the representations and warranties
made pursuant to this Section 5.12 are to the best knowledge of the Credit
Agreement Parties.
5.13 Properties. The Borrower and each of its Subsidiaries have good
and marketable title to all material properties owned by them, including all
property reflected in the financial statements referred to in Sections 5.05(a)
and (b) (except as sold or otherwise disposed of since the date of such balance
sheet in the ordinary course of business), free and clear of all Liens, other
than Liens permitted by Section 7.07.
5.14 Capitalization. On the Closing Date and after giving effect to
the Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of 500 shares of common stock, $.01
par value per share, and 2500 shares of preferred stock, $.01 par value per
share. All such outstanding shares have been duly and validly issued, are fully
paid and nonassessable and are free of preemptive rights. Neither the Borrower
nor any of its Subsidiaries has outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
5.15 Subsidiaries. Schedule IV correctly sets forth, as of the
Closing Date and after giving effect to the Transaction, each Subsidiary of the
Borrower, and the direct and indirect ownership interest of the Borrower
therein. Schedule IX-A correctly
-30-
<PAGE>
sets forth, as of the Closing Date and after giving effect to the Transaction,
an Organization Chart showing the corporate structure of the Borrower and its
Subsidiaries, consistent with Schedule IV.
5.16 Compliance with Statutes, etc. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
5.18 Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
5.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with, and on the Closing Date are in compliance with,
all applicable Environmental Laws and the requirements of any permits issued
under such Environmental Laws. There are no pending or, to the best knowledge of
the Borrower, overtly threatened Environmental Claims against the Borrower or
any of its Subsidiaries (including any such Environmental Claim arising out of
the ownership or operation by the Borrower or any of its Subsidiaries of any
Real Property no longer owned by the Borrower or any of its Subsidiaries) or, to
the best knowledge of the Borrower, any Real Property owned or operated by the
Borrower or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences with respect to the business or operations of the
Borrower or any of its Subsidiaries or any Real Property owned or operated by
the Borrower or any of its Subsidiaries (including any Real Property formerly
owned or operated by the Borrower or any of its Subsidiaries but no longer owned
by the Borrower or any of its Subsidiaries) or, to the best knowledge of the
Borrower or any Borrower, any real property adjoining or adjacent to any such
Real Property that would reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Property owned or operated by the Borrower or any of its
-31-
<PAGE>
Subsidiaries, or (ii) to cause any Real Property owned or operated by the
Borrower or any of its Subsidiaries to be subject to any restrictions on the
ownership, occupancy or transferability of such Real Property by the Borrower or
any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by the Borrower or any of its Subsidiaries where such generation, use,
treatment, storage or transportation has violated or would reasonably be
expected to violate any applicable Environmental Law. Hazardous Materials have
not at any time been Released on or from any Real Property owned or operated by
the Borrower or any of its Subsidiaries where such Release has violated or would
reasonably be expected to violate any applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 5.19,
the representations made in this Section 5.19 shall not be untrue unless the
aggregate effect of all violations, Environmental Claims, facts, circumstances,
conditions, occurrences, restrictions, failures and noncompliances of the types
described above could reasonably be expected to have a Material Adverse Effect.
5.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower any of its Subsidiaries or, to
the best knowledge of the Borrower, overtly threatened against any of them,
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, overtly threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, overtly
threatened against the Borrower or any of its Subsidiaries and (iii) to the best
knowledge of the Borrower, no union representation question existing with
respect to the employees of the Borrower or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.
5.21 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and each of its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises, proprietary
information (including but not
-32-
<PAGE>
limited to rights in computer programs and databases) and formulas, or rights
with respect to the foregoing, and has obtained assignments of all leases and
other rights of whatever nature, necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, could reasonably be expected to
result in a Material Adverse Effect.
5.22 Indebtedness. Schedule V sets forth a true and complete list of
all Indebtedness of the Borrower and its Subsidiaries as of the Initial
Borrowing Date and which is to remain outstanding after giving effect to the
Transaction (excluding the Loans and the Indebtedness pursuant to the Adience
Credit Documents, the "Existing Indebtedness"), in each case, showing the
aggregate principal amount thereof and the name of the respective borrower and
any Credit Party or any of its Subsidiaries which directly or indirectly
guaranteed such debt.
5.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all material consents and approvals of, and filings and registrations
with, and all other actions in respect of, all governmental agencies,
authorities or instrumentalities required in order to make or consummate the
Transaction to the extent then required have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained). All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transaction, or the making of the Loans or the performance by any Credit Party
of its obligations under the Documents to which it is party.
SECTION 6. Affirmative Covenants. The Borrower hereby covenants and
agrees that on and after the Effective Date so long as this Agreement is in
effect and the Loans and Notes, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
6.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated and consolidating balance sheets of each of
the Borrower and
-33-
<PAGE>
its Subsidiaries as at the end of such quarterly accounting period and the
related consolidated and consolidating statements of income and retained
earnings and statement of cash flows for such quarterly accounting period
and for the elapsed portion of the fiscal year ended with the last day of
such quarterly accounting period, in each case, setting forth comparative
figures for the related periods in the prior fiscal year, all of which
shall be certified by the chief financial officer of the Borrower, subject
to normal year-end audit adjustments and the absence of footnotes and (ii)
management's discussion and analysis of the important operational and
financial developments during the quarterly and year-to-date periods.
(b) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Borrower, (i) the consolidated (and, in the case
of the statements for the Borrower and its Subsidiaries, consolidating)
balance sheets of the Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for such fiscal year
setting forth comparative figures for the preceding fiscal year and
certified (x) in the case of the consolidating financial statements, by
the chief financial officer of the Borrower and (y) in the case of the
consolidated financial statements, by Arthur Andersen LLP or such other
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent, together with a report
of such accounting firm stating that in the course of its regular audit of
the respective financial statements, which audit was conducted in
accordance with generally accepted auditing standards, such accounting
firm obtained no knowledge of any Event of Default which has occurred and
is continuing or, if in the opinion of such accounting firm such Event of
Default has occurred and is continuing, a statement as to the nature
thereof and (ii) management's discussion and analysis of the important
operational and financial developments during the respective fiscal year.
(c) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" addressed
to the board of directors of the Borrower or such Subsidiary from its
certified public accountants and the management's responses thereto.
(d) Budgets. No later than 30 days after the first day of each
fiscal year of the Borrower, budgets for the Borrower and its Subsidiaries
taken as a whole in form satisfactory to the Administrative Agent and the
Required Banks
-34-
<PAGE>
(including budgeted statements of income and sources and uses of cash and
balance sheets) prepared by the Borrower for the immediately following
fiscal year prepared in summary form, in each case accompanied by the
statement of the chief financial officer of the Borrower to the effect
that, to the best of his knowledge, the budget is a reasonable estimate
for the period covered thereby.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 6.01(a) and (b), a
certificate of the chief financial officer of the Borrower to the effect
that, to the best of such officer's knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall set forth in reasonable detail the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections 7.01,
7.03, 7.05 and 7.12, at the end of such fiscal quarter or year, as the
case may be.
(f) Notices Pursuant to Acquisition Documents. Promptly after the
receipt or delivery thereof by the Borrower or any of its Subsidiaries,
copies of any notices (excluding immaterial notices not involving
adjustments to the purchase price, claims for indemnity or damages,
notices of breach or similar types of claims or notices) sent or received
by the Borrower or any of its Subsidiaries after the Closing Date pursuant
to any Acquisition Document.
(g) Notice of Default or Litigation. Promptly, and in any event
within three Business Days (or five Business Days in the case of following
clause (ii)) after an executive or financial officer of the Borrower
obtains actual knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or an Event of Default and (ii) any
litigation or governmental investigation or proceeding pending (x) against
the Borrower or any of its Subsidiaries which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect, (y) with
respect to any material Indebtedness of the Borrower or any of its
Subsidiaries or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports,
if any, which the Borrower or any of its Subsidiaries shall publicly file
with the Securities and Exchange Commission or any successor thereto (the
"SEC") or the Registrar of Companies in England and Wales or shall deliver
to its shareholders or to holders of its Indebtedness pursuant to the
terms of the documentation
-35-
<PAGE>
governing such Indebtedness (or any trustee, agent or other representative
therefor).
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, an executive or financial officer of the Borrower
obtains knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such environmental matters,
be reasonably expected to have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (b) would reasonably be expected
to form the basis of an Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that would reasonably
be expected to cause such Real Property to be subject to any restrictions
on the ownership, occupancy, use or transferability by the Borrower or any
of its Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by the Borrower or any of its Subsidiaries as required
by any Environmental Law or any governmental or other administrative
agency (with the items described above in preceding clauses (i) through
(iv) being herein called, collectively, "Environmental Matters").
All such notices shall describe in reasonable detail the nature of the
respective Environmental Matter and the Borrower's or such Subsidiary's intended
response thereto. In addition, the Borrower or any of its Subsidiaries will
provide the Banks with copies of all communications between the Borrower or any
of its Subsidiaries and any government or governmental agency relating to
Environmental Laws which
-36-
<PAGE>
would reasonably be expected to have a Material Adverse Effect, all notices of
any Environmental Claims, and such detailed reports of any outstanding
Environmental Claim as may reasonably be requested by the Banks; provided, that
in any event the Borrower and its Subsidiaries shall deliver to each Bank all
notices received by the Borrower or any of its Subsidiaries from any government
or governmental agency under, or pursuant to, CERCLA which identify the Borrower
or any of its Subsidiaries as potentially responsible parties for response costs
or which otherwise notify the Borrower or any of its Subsidiaries of potential
liability under CERCLA.
(j) Annual Meetings with Banks. At the request of the Administrative
Agent, at a date to be mutually agreed upon between the Administrative Agent and
the Borrower occurring on or prior to the 120th day after the close of each
fiscal year of the Borrower, the Borrower shall hold a meeting with all of the
Banks at which meeting shall be reviewed the financial results of the previous
fiscal year and the financial condition of the Borrower and its Subsidiaries and
the budgets presented for the current fiscal year of the Borrower and its
Subsidiaries.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as any Bank may reasonably request.
6.02 Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. Upon prior notice,
the Borrower will, and will cause each of its Subsidiaries to, permit officers
and designated representatives of the Administrative Agent or any Bank to visit
and inspect, during regular business hours and under guidance of officers of the
Borrower or such Subsidiary, any of the properties of the Borrower or such
Subsidiary, and to examine the books of account of the Borrower or such
Subsidiary and discuss the affairs, finances and accounts of the Borrower or
such Subsidiary with, and be advised as to the same by, its and their officers
and independent accountants, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or such Bank may request.
6.03 Maintenance of Property; Insurance. Schedule VI sets forth a
true and complete listing of all insurance maintained by the Borrower and its
Subsidiaries as of the Closing Date. The Borrower will, and will cause each of
its Subsidiaries to, (i) keep all property necessary to the business of the
Borrower and its Subsidiaries in
-37-
<PAGE>
reasonably good working order and condition, ordinary wear and tear excepted,
(ii) maintain insurance on all such property in at least such amounts and
against at least such risks as is consistent and in accordance with industry
practice for companies similarly situated owning similar properties in the same
general areas in which the Borrower or any of its Subsidiaries operates, and
(iii) furnish to the Administrative Agent or any Bank, upon written request,
full information as to the insurance carried.
6.04 Corporate Franchises. The Borrower will, and will cause each of
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
Section 6.04 shall prevent (i) sales of assets by the Borrower or any of its
Subsidiaries in accordance with Section 7.05 or (ii) the withdrawal by the
Borrower or any of its Subsidiaries of its qualification as a foreign
corporation in any jurisdiction where such withdrawal could not reasonably be
expected to have a Material Adverse Effect.
6.05 Compliance with Statutes, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.06 Compliance with Environmental Laws. (a) The Borrower will
comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws. Neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property, except for Hazardous Materials generated,
used, treated, stored, released or disposed of at any such Real Properties in
compliance in all material respects with all applicable Environmental Laws and
as is reasonably required in connection with the operation, use and maintenance
of the business or operations of the Borrower or any of its Subsidiaries.
-39-
<PAGE>
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Borrower will provide, at its
sole cost and expense, an environmental site assessment report concerning any
Real Property owned or operated by the Borrower and its Subsidiaries, prepared
by an environmental consulting firm reasonably acceptable to the Administrative
Agent, indicating the presence or absence of Hazardous Materials and the
estimated reasonably likely cost of any removal or remedial action required
under Environmental Laws in connection with such Hazardous Materials on such
Real Property, provided that in no event shall such request be made more often
than once every two years for any particular Real Property unless either (i) an
Event of Default shall be in existence or (ii) the Banks receive notice under
Section 6.01(i) of any Environmental Matter for which notice is required to be
delivered for any such Real Property. If the Borrower fails to provide the same
within ninety days after such request was made, the Administrative Agent may
order the same, the cost of which shall be borne by the Borrower, and the
Borrower shall grant and hereby grants to the Administrative Agent and the Banks
and their agents access to such Real Property and specifically grant the
Administrative Agent and the Banks an irrevocable non-exclusive license, subject
to the rights of tenants, to undertake such an assessment using a nationally
recognized environmental consultant firm reasonably acceptable to the Borrower
at any reasonable time upon reasonable notice to the Borrower, all at the sole
costs and reasonable expense of the Borrower.
6.07 ERISA. As soon as possible and, in any event, within 20 days
after the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
knows or could reasonably be expected to know of the occurrence of any of the
following, the Borrower will deliver to each of the Banks a certificate of the
chief financial officer of the Borrower setting forth the full details as to
such occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices
required to be given to or filed with or by the Borrower, the Subsidiary, the
ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred (except to the extent that
the Borrower has previously delivered to the Banks a certificate and notices (if
any) concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or
-39-
<PAGE>
an application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; that any
contribution required to be made to a Plan or Foreign Pension Plan has not been
timely made; that a Plan has been or could reasonably be expected to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability which, when added to the
aggregate amount of Unfunded Current Liabilities with respect to all other
Plans, exceeds the aggregate amount of such Unfunded Current Liabilities that
existed on the Closing Date by $1,000,000 or more; that proceedings could
reasonably be expected to be or have been instituted to terminate or appoint a
trustee to administer a Plan which is subject to Title IV of ERISA; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate will or could reasonably be expected to incur
any material liability (including any indirect, contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that the Borrower or any Subsidiaries of the
Borrower could reasonably be expected to incur any material liability not
existing on the Closing Date pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any
Plan or any Foreign Pension Plan. The Borrower will deliver to each of the Banks
(i) a complete copy of the annual report on Internal Revenue Service Form 5500-
series of each Plan (including, to the extent required, the related financial
and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of annual reports and
any records, documents or other information required to be furnished to the PBGC
and any material notices received by the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan
shall be delivered to the Banks no later than 10 days after the date such annual
report has been filed with the Internal Revenue Service or such notice has been
received by the Borrower, the Subsidiary or the ERISA Affiliate, as applicable.
-40-
<PAGE>
6.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause
(i) each of its, and each of its Subsidiaries', fiscal years to end on April 30,
and (ii) each of its, and each of its Subsidiaries', fiscal quarters to end on
July 31, October 31, January 31 and April 30.
6.09 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.10 Payment of Taxes. The Borrower will, and will cause each of its
Subsidiaries to, pay and discharge, or cause to be paid and discharged, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims which, if unpaid, might become a lien or
charge upon any properties of the Borrower or any of its Subsidiaries; provided
that neither the Borrower nor any of its Subsidiaries will be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by appropriate proceedings if it has maintained adequate reserves with
respect thereto in accordance with generally accepted accounting principles.
6.11 Maintenance of Corporate Separateness. The Borrower will, and
will cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the holding of regular board of directors' and shareholders' meetings
or action by directors or shareholders without a meeting and the maintenance of
corporate offices and records. Neither the Borrower nor any of its Subsidiaries
shall make any payment to a creditor of any of Alpine or any Subsidiary of
Alpine (other than the Borrower) in respect of any liability of any such Person,
and no bank account of any of Alpine or any Subsidiary of Alpine (other than the
Borrower) shall be commingled with any bank account of the Borrower or any of
its Subsidiaries. In dealing with their respective creditors, each of the
Borrower, Alpine and the Subsidiaries of Alpine (other than the Borrower and its
Subsidiaries) shall clearly establish or indicate the corporate separateness of
such Person or Persons from the Borrower and its Subsidiaries. Finally, neither
the Borrower nor any of its Subsidiaries shall take any action, or conduct its
affairs in a manner, which could result in the corporate existence of the
Borrower or any of its Subsidiaries being ignored, or in the assets and
liabilities of the Borrower or any of its Subsidiaries being substantively
consolidated with those of any of Alpine or any Subsidiary of Alpine in a
bankruptcy, reorganization or other insolvency proceeding.
-41-
<PAGE>
6.12 Ownership of Certain Subsidiaries. Notwithstanding anything to
the contrary contained elsewhere in this Agreement, the Borrower shall take all
action necessary so that at all times (i) the Borrower directly owns 100% of the
capital stock of Adience, (ii) Adience directly owns 100% of the capital stock
of Newco and (iii) Newco directly owns 100% of the capital stock of Hepworth.
6.13 Acquisition Documents. The Borrower will, and will cause each
of its Subsidiaries to, perform in all material respects all of its obligations
under the Acquisition Documents by which it is bound, and to procure the
compliance by the other parties to the Acquisition Documents of their
obligations under the Acquisition Documents.
6.14 Interest Rate Protection. No later than thirty (30) days after
the Closing Date, the Borrower shall enter into Interest Rate Protection
Agreements reasonably acceptable to the Administrative Agent establishing a
fixed or maximum interest rate reasonably acceptable to the Administrative Agent
for an aggregate notional principal amount equal to at least $30,000,000 for a
period of at least five years from the Closing Date.
SECTION 7. Negative Covenants. The Borrower hereby covenants and
agrees that on and after the Effective Date and so long as this Agreement is in
effect and the Loans and Notes, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
7.01 Limitation on Restricted Payments. The Borrower will not, and
will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, (a) authorize, declare, pay or make any Restricted Distribution, (b)
make any Investment (other than Permitted Investments) or (c) purchase, redeem,
defease, or otherwise acquire or retire for value, any Indebtedness which is
subordinate or junior in right of payment to the Loans (each of the foregoing
actions set forth in clauses (a), (b) and (c) being referred to as a "Restricted
Payment"), if at the time of such Restricted Payment or immediately after giving
effect thereto, (i) a Default or an Event of Default shall have occurred and be
continuing or (ii) Borrower is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 7.03
or (iii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made subsequent to the Closing Date (the amount expended for
such purposes, if other than in cash, being the fair market value of such
property as determined reasonably and in good faith by the Board of Directors of
Borrower) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net
Income (or if
-42-
<PAGE>
cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of
Borrower earned subsequent to the Closing Date and on or prior to the date the
Restricted Payment occurs (the "Reference Date") (treating such period as a
single accounting period); plus (x) 100% of the aggregate net cash proceeds
received by Borrower from any Person (other than a Subsidiary of Borrower) from
the issuance and sale subsequent to the Closing Date and on or prior to the
Reference Date of Qualified Capital Stock of Borrower; plus (y) without
duplication of any amounts included in clause (iii)(x) above, 100% of the
aggregate net cash proceeds of any equity contribution received by Borrower from
a holder (other than a Subsidiary of the Borrower) of Borrower's Capital Stock;
plus (z) without duplication, the sum of (1) the aggregate amount returned in
cash on or with respect to Investments (other than Permitted Investments) made
subsequent to the Closing Date, whether through interest payments, principal
payments, dividends or other distributions or payments and (2) the net cash
proceeds received by Borrower or any Restricted Subsidiary from the disposition
of all or any portion of such Investments (other than to the Borrower or a
Subsidiary of Borrower) and (3) upon the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary;
provided, however, that with respect to all Investments made in any Unrestricted
Subsidiary or joint venture, the sum of clauses (1), (2) and (3) above with
respect to such Investment shall not exceed the aggregate amount of all such
Investments made subsequent to the Closing Date in such Unrestricted Subsidiary
or joint venture.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
within 60 days after the date of declaration of such dividend if the dividend
would have been permitted on the date of declaration; (2) the acquisition of any
shares of Capital Stock of Borrower, either (i) solely in exchange for shares of
Qualified Capital Stock of Borrower or (ii) through the application of the net
cash proceeds of a substantially concurrent sale for cash (other than to the
Borrower or a Subsidiary of Borrower) of shares of Qualified Capital Stock of
Borrower; (3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of Borrower that is subordinate
or junior in right of payment to the Loans either (i) solely in exchange for
shares of Qualified Capital Stock of Borrower or (ii) through the application of
net proceeds of a substantially concurrent sale for cash (other than to the
Borrower or a Subsidiary of Borrower) of shares of Qualified Capital Stock of
Borrower; (4) the payment by any Restricted Subsidiary of the Borrower (x) of
cash Distributions or other amounts to the Borrower or any Wholly-Owned
Restricted Subsidiary of the Borrower and (y) if such Restricted Subsidiary is
not a Wholly-Owned Restricted Subsidiary, of cash Distributions or other
payments to its shareholders generally so long as the Borrower or its Restricted
Subsidiary which owns the equity interest or interests in the Restricted
Subsidiary paying
-43-
<PAGE>
such amounts receives at least its proportionate share thereof (based upon its
relative holdings of equity interests in the Restricted Subsidiary paying such
amounts and taking into account the relative preferences, if any, of the various
classes of equity interests in such Restricted Subsidiary); (5) payments may be
made by the Borrower and its Subsidiaries to Alpine for any taxable year of the
Borrower in which it joins in filing a consolidated federal income tax return
with Alpine, from time to time in amounts equal to the Permitted Tax Payments
owing at such time, so long as Alpine makes all payments in respect of the tax
obligations of the type described in the definition of Permitted Tax Payments
required to be made by the affiliated group of which Alpine is the parent;
provided further, that any refund attributable to Permitted Tax Payments (or
similar such payments made prior to the Closing Date by Adience and its
Subsidiaries) actually received by Alpine shall be promptly (and in any event
within two Business Days) returned to the Borrower or the respective Subsidiary
thereof (and if not so returned, shall reduce the amount of payments otherwise
permitted to be made in the future by the Borrower and its Subsidiaries pursuant
to this clause (5)); and (6) payments may be made by the Borrower and its
Subsidiaries to Alpine (i) for (and in amounts equal to) direct charges incurred
by Alpine and attributable to the Borrower and its Subsidiaries plus (but
without duplication) the Borrower's (and its Subsidiaries') allocable share of
insurance costs for insurance maintained by Alpine which benefits the Borrower
and its Subsidiaries (with all allocations pursuant to this clause (i) to be
determined by Alpine in good faith and on a fair and reasonable basis) and (ii)
so long as no Default under Section 8.01 or 8.05 and no Event of Default exists
at the time of any payment thereof, additional payments may be made to Alpine
(on a quarterly basis in equal installments) in any fiscal year of the Borrower
pursuant to this clause (6) in an amount not to exceed the Alpine Permitted
Amount for such fiscal year. In determining the aggregate amount of Restricted
Payments made subsequent to the Closing Date in accordance with clause (iii) of
the immediately preceding paragraph, amounts expended pursuant to clause (1)
shall be included in such calculation.
Not later than the date of making by the Borrower or any Restricted
Subsidiary of any Restricted Payment (except to the extent permitted pursuant to
clauses (4) through (6) of the immediately preceding paragraph), Borrower shall
deliver to the Administrative Agent an officers' certificate stating that such
Restricted Payment complies with this Agreement and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon Borrower's latest available internal quarterly
financial statements.
7.02 Limitation on Transactions with Affiliates. (a) The Borrower
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter
-44-
<PAGE>
into or permit to exist any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under clause (b) below or (y) Affiliate Transactions on
terms that are no less favorable to the Borrower or such Subsidiary than those
that could reasonably have been obtained in a comparable transaction at such
time on an arm's-length basis from a Person that is not an Affiliate of the
Borrower or such Subsidiary. All Affiliate Transactions (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a fair market value in
excess of $1 million shall be approved by the Board of Directors of the Borrower
or such Restricted Subsidiary, as the case may be, such approval to be evidenced
by a Board Resolution stating that such Board of Directors has determined that
such transaction complies with the foregoing provisions. If the Borrower or any
Restricted Subsidiary of the Borrower enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
aggregate payments or other property with a fair market value of more than $5
million, the Borrower or such Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Borrower or the relevant
Restricted Subsidiary, as the case may be, from a financial point of view, from
an Independent Financial Advisor and file the same with the Administrative
Agent.
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Borrower or any Restricted Subsidiary of
the Borrower as determined in good faith by the Borrower's Board of Directors;
(ii) transactions exclusively between or among the Borrower and any of its
Wholly-Owned Restricted Subsidiaries or exclusively between or among such
Wholly-Owned Restricted Subsidiaries, provided such transactions are not
otherwise prohibited by this Agreement; and (iii) Restricted Payments permitted
by this Agreement.
7.03 Limitation on Incurrence of Additional Indebtedness. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for payment of (collectively, "incur") any Indebtedness (including
Acquired Indebtedness); provided, however, that (i) if no Default or Event of
Default shall have occurred and be continuing at the time of or as a consequence
of the incurrence of any such Indebtedness, then the Borrower may incur
Indebtedness if on the date of the incurrence of such Indebtedness, after giving
pro forma
-45-
<PAGE>
effect to the incurrence thereof, (x) the Consolidated Fixed Charge Coverage
Ratio of Borrower is greater than 2.00 to 1.00 if incurred on or prior to the
third anniversary of the Closing Date or greater than 2.25 to 1.00 if incurred
thereafter and (y) the Borrower would remain in compliance with the requirements
of Section 7.08 and (ii) Borrower or any of its Subsidiaries may incur Permitted
Indebtedness.
7.04 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Borrower will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of Borrower to (a) pay dividends or make
any other distributions on or in respect of its Capital Stock; (b) make loans or
advances or pay or guarantee any Indebtedness or other obligation owed to
Borrower or any other Restricted Subsidiary of Borrower; or (c) transfer any of
its property or assets to Borrower or any other Restricted Subsidiary of
Borrower, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Agreement; (3) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of any
Restricted Subsidiary of the Borrower; (4) any instrument governing Acquired
Indebtedness which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired; (5) agreements existing on the
Closing Date (including without limitation the Adience Credit Agreement and the
other Adience Credit Documents) to the extent and in the manner such agreements
are in effect on the Closing Date; (6) restrictions imposed by any agreement to
sell assets or Capital Stock permitted under this Agreement to any Person
pending the closing of such sale; (7) any agreement or instrument governing
Capital Stock of any person that is assumed in connection with the acquisition
thereof; (8) any restriction on transfer of an asset pursuant to an agreement to
sell such asset to the extent such sale would be permitted under the terms of
this Agreement; (9) Liens permitted pursuant to Section 7.07, to the extent
restricting the transfer of disposition of the respective asset or assets
subject to such Lien; (10) other Indebtedness permitted to be incurred
subsequent to the Closing Date pursuant to the provisions of Section 7.03;
provided that (x) any such restrictions are ordinary and customary with respect
to the type of Indebtedness being incurred (under the relevant circumstance) and
(y) in no event shall the respective such restrictions be more restrictive in
any respect than those contained in the Adience Credit Agreement as originally
in effect; (11) Indebtedness or other contractual requirements of a
Securitization Entity in connection with a Qualified Securitization Transaction;
provided that such restrictions apply only to such Securitization Entity; or
(12) an agreement governing Indebtedness incurred to Refinance the Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in
-46-
<PAGE>
clause (2), (4), (5), (9) or (11) above; provided, however, that the provisions
relating to such encumbrance or restrictions contained in any such Refinancing
Indebtedness are no less favorable to Borrower in any material respect as
determined by the Board of Directors of Borrower in their reasonable and good
faith judgment than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4), (5), (9) or (11).
7.05 Limitation on Asset Sales. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless
(i) the Borrower or the applicable Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined in good
faith by the Borrower's or the applicable Restricted Subsidiary's Board of
Directors); (ii) at least 80% of the consideration received by the Borrower or
the Restricted Subsidiary, as the case may be, from such Asset Sale shall be in
the form of cash or Cash Equivalents (provided that the amount of any
liabilities (as shown on the Borrower's or such Restricted Subsidiary's most
recent balance sheet) of the Borrower or any such Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Loans) that are
assumed by the transferee of any such assets shall be deemed to be cash for
purposes of this provision) and be received at the time of such disposition; and
(iii) the Borrower shall apply, or cause such Restricted Subsidiary to apply,
the Net Sale Proceeds relating to such Asset Sale within 365 days of receipt
thereof either (A) to permanently repay (x) principal of loans, and/or unpaid
drawings and respective letters of credit, outstanding under the Adience Credit
Agreement and/or (y) other outstanding Indebtedness of Restricted Subsidiaries
of the Borrower (and, in the case of any repayment pursuant to this clause (A)
of outstandings pursuant to any revolving loan or similar commitment, so long as
the respective revolving loan or similar commitment is permanently reduced by
the amount of such repayment), (B) to make an investment in properties and
assets that replace the properties and assets that were the subject of such
Asset Sale or in properties and assets that will be used by Borrower or its
Restricted Subsidiaries in the businesses of the Borrower and its Restricted
Subsidiaries as existing on the Closing Date or in businesses reasonably related
thereto ("Replacement Assets"), or (C) a combination of prepayment and
investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the
366th day after an Asset Sale or such earlier date, if any, as the Board of
Directors of Borrower or of such Restricted Subsidiary determines not to apply
the Net Sale Proceeds relating to such Asset Sale as set forth in clause
(iii)(A), (iii)(B) or (iii)(C) of the next preceding sentence (a "Net Proceeds
Trigger Date"), such aggregate amount of Net Sale Proceeds which have not been
applied on or before such Net Proceeds Trigger Date as permitted in clause
(iii)(A), (iii)(B) or (iii)(C) of the next preceding sentence (the "Net Proceeds
-47-
<PAGE>
Prepayment Amount") shall be applied by Borrower or such Restricted Subsidiary
to prepay outstanding principal of the Loans on a date (the "Net Proceeds
Payment Date") not more than 5 Business Days following the applicable Net
Proceeds Trigger Date, with such prepayment being applied to all then
outstanding Loans on a pro rata basis and shall include accrued interest
thereon, if any, to the date of repayment; provided, however, that if at any
time any non-cash consideration received by the Borrower or any Restricted
Subsidiary of Borrower, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Sale Proceeds thereof shall be applied in accordance with this covenant. The
Borrower may defer the mandatory prepayment of the Loans until there is an
aggregate unutilized Net Proceeds Prepayment Amount equal to or in excess of $5
million resulting from one or more Assets Sales (at which time, the entire
unutilized Net Proceeds Prepayment Amount, and not just the amount in excess of
$5 million, shall be applied as required pursuant to this paragraph).
Notwithstanding the immediately preceding paragraph, Borrower and
its Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraph to the extent (i) at least 80% of the
consideration for such Asset Sale constitutes Replacement Assets and the
reminder in cash or Cash Equivalents and (ii) such Asset Sale is for fair market
value; provided that any consideration not constituting Replacement Assets
received by Borrower or any of its Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net Sale
Proceeds subject to the provisions of the immediately preceding paragraph.
7.06 Limitation on Preferred Stock of Subsidiaries. The Borrower
shall not permit any of its Restricted Subsidiaries to issue any Preferred Stock
(other than to Borrower or to a Wholly-Owned Restricted Subsidiary of Borrower)
or permit any Person (other than to Borrower or a Wholly-Owned Restricted
Subsidiary of Borrower) to own any Preferred Stock of any Restricted Subsidiary
of the Borrower.
7.07 Limitation on Liens. The Borrower will not, and will not cause
or permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or permit or suffer to exist any Liens of any kind against or upon
any property or assets of the Borrower or any of its Restricted Subsidiaries
whether owned on the Closing Date or acquired after the Closing Date, or any
proceeds therefrom, or assign or otherwise convey any right to receive income or
profits therefrom unless (i) in the case of Liens securing Indebtedness that is
expressly subordinate or junior in right of payment to the Loans, the Loans are
secured by a Lien on such property, assets or proceeds that is senior
-48-
<PAGE>
in priority to such Liens and (ii) in all other cases, the Loans are equally and
ratably secured, except for (A) Liens existing as of the Closing Date to the
extent and in the manner such Liens are in effect on the Closing Date; (B) Liens
securing the Adience Credit Agreement and obligations pursuant thereto and
pursuant to the Adience Credit Documents; (C) Liens securing the Loans; (D)
Liens in favor of the Borrower or a Wholly-Owned Restricted Subsidiary of
Borrower on assets of any Restricted Subsidiary of the Borrower; (E) Liens
securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under this Agreement and
which has been incurred in accordance with the provisions of this Agreement;
provided, however, that such Liens (x) are no less favorable to the Banks in any
material respect and are not more favorable to the lienholders in any material
respect with respect to such Liens than the Liens in respect of the Indebtedness
being Refinanced and (y) do not extend to or cover any property or assets of the
Borrower or any of its Subsidiaries not securing the Indebtedness so Refinanced;
and (F) Permitted Liens.
7.08 Maximum Leverage Ratio. The Borrower will not permit the
Leverage Ratio at any time during a period set forth below to be greater than
the ratio set forth opposite such period below:
==========================================================================
Period Ratio
- --------------------------------------------------------------------------
Beginning May 1, 1997 and ending April
30, 1998 6.00:1
- --------------------------------------------------------------------------
Beginning May 1, 1998 and ending July 6.00:1
31, 1998
- --------------------------------------------------------------------------
Beginning August 1, 1998 and ending 5.85:1
October 31, 1998
- --------------------------------------------------------------------------
Beginning November 1, 1998 and ending 5.75:1
January 31, 1999
- --------------------------------------------------------------------------
Beginning February 1, 1999 and ending 5.75:1
April 30, 1999
- --------------------------------------------------------------------------
Beginning May 1, 1999 and ending April 5.50:1
30, 2000
- --------------------------------------------------------------------------
Beginning May 1, 2000 and ending April 5.25:1
30, 2001
- --------------------------------------------------------------------------
Any time thereafter 5.00:1
==========================================================================
-49-
<PAGE>
7.09 Limitation on Guarantees by Subsidiaries. The Borrower will not
permit any Restricted Subsidiary, directly or indirectly, by way of the pledge
of any intercompany note or otherwise, to assume, guarantee or in any other
manner become liable with respect to any Indebtedness of the Borrower or any
other Subsidiary (other than with respect to (A) Permitted Indebtedness of a
Restricted Subsidiary (excluding Permitted Indebtedness of the type described in
clause (xiii) of the definition of Permitted Indebtedness contained herein), (B)
Indebtedness under Other Hedging Agreements in reliance on clause (vi) of the
definition of Permitted Indebtedness or (C) Interest Rate Protection Agreements
incurred in reliance on clause (v) of the definition of Permitted Indebtedness),
unless, in any such case (a) such Restricted Subsidiary executes and delivers an
amendment to this Agreement, or a separate guarantee agreement, in either case
in form and substance and pursuant to documentation reasonably satisfactory to
the Administrative Agent, providing an unconditional guarantee of payment of the
Loans (and all other Obligations pursuant to this Agreement) by such Restricted
Subsidiary (each a "Guarantee") and (b) if such assumption, guarantee or other
liability of such Restricted Subsidiary is provided in respect of Indebtedness
that is expressly subordinated to the Loans, the guarantee or other instrument
provided by such Restricted Subsidiary in respect of such subordinated
Indebtedness shall be subordinated to the Guarantee pursuant to subordination
provisions no less favorable in all material respects to the Banks than those
applicable to the respective subordinated Indebtedness.
Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary of the Loans shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Administrative Agent of any Bank, upon: (i)
the unconditional release of such Restricted Subsidiary from its liability in
respect of all Indebtedness in connection with which such Guarantee was executed
and delivered (or thereafter incurred to the extent such incurrence would also
have required the execution and delivery of such Guarantee if same had not
theretofore been executed and delivered) pursuant to the preceding paragraph; or
(ii) any sale or other disposition (by merger or otherwise) to any Person which
is not a Subsidiary of the Borrower of all of Borrower's Capital Stock in, or
all or substantially all of the assets of, such Subsidiary; provided that (a)
such sale or disposition of such Capital Stock or assets is otherwise in
compliance with the terms of this Agreement and (b) such assumption, guarantee
or other liability of such Subsidiary has been released by the holders of the
other Indebtedness so guaranteed.
7.10 Merger, Consolidation and Sale of Assets. The Borrower shall
not, in a single transaction or a series of related transactions, consolidate or
merge with or into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause
-50-
<PAGE>
or permit any Restricted Subsidiary of the Borrower to sell, assign, transfer,
lease, convey or otherwise dispose of) all or substantially all of the
Borrower's assets (determined on a consolidated basis for the Borrower and its
Restricted Subsidiaries) whether as an entirety or substantially as an entirety
to any Person unless:
(i) either (1) the Borrower shall be the surviving or continuing
corporation or (2) the Person (if other than the Borrower) formed by such
consolidation or into which the Borrower is merged or the person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Borrower and of its
Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia and (y) shall expressly assume, by an amendment (in form and
substance reasonably satisfactory to the Administrative Agent), executed
and delivered to the Administrative Agent, the due and punctual payment of
the principal of, and premium, if any, and interest on all of the Loans
and the performance of every covenant of this Agreement and the other
Credit Documents on the part of Borrower to be performed or observed;
(ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness
incurred or anticipated to be incurred in connection with or in respect of
such transaction), the Borrower or such Surviving Entity, as the case may
be, shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Borrower immediately prior to such
transaction;
(iii) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default
or Event of Default shall have occurred or be continuing; and
(iv) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred in connection
with or in respect of such Transaction), the Borrower or such Surviving
Entity is able to incur at least $1.00
-51-
<PAGE>
of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 7.03.
7.11 Successor Corporation Substituted. Upon any consolidation,
combination or merger or any transfer of all or substantially all of the assets
of the Borrower in accordance with Section 7.10, in which the Borrower is not
the continuing corporation, the surviving entity shall succeed to, and be
substituted for, and may exercise every right and power of, the Borrower under
this Agreement and other Credit Documents with the same effect as if such
surviving entity had been named as such.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 Failure to Make Payments When Due. Borrower (i) shall default
in the payment of principal when due on any of the Loans; or (ii) shall default
in the payment of interest on any of the Loans or default in the payment of any
fee or any other amount owing hereunder or under any other Credit Document when
due and such default in payment shall continue unremedied for thirty (30) or
more days; or
8.02 Representations and Warranties. Any representation or warranty
made by or on the part of Borrower or any Credit Party, as the case may be,
contained in any Credit Document or any document, instrument or certificate
delivered pursuant hereto or thereto shall have been incorrect or misleading in
any material respect when made or deemed made; or
8.03 Covenants. Borrower defaults in the observance or performance
of any other covenant or agreement contained in this Agreement and which default
continues for a period of thirty (30) days after written or telephonic
(immediately confirmed in writing) notice thereof has been given to Borrower by
the Administrative Agent or the 25% Banks (except in the case of a default with
respect to Section 7.10, which will constitute an Event of Default with such
notice requirement but without such passage of time requirement); or
8.04 Default Under Other Credit Documents. Any Credit Party shall
default in the performance or observance of any term, covenant, condition or
agreement on its part to be performed or observed hereunder or under any Credit
Document (and not constituting an Event of Default under Sections 8.01, 8.02 or
8.03) and such default shall continue unremedied for a period of thirty (30)
days after written or telephonic
-52-
<PAGE>
(immediately confirmed in writing) notice thereof has been given to Borrower by
Agent or the 25% Banks; or
8.05 Voluntary Insolvency, Etc. Alpine, the Borrower or any
Restricted Subsidiary of the Borrower shall voluntarily commence any proceeding
or file any petition under any bankruptcy, insolvency or similar law or seeking
dissolution or reorganization or the appointment of a receiver, trustee,
custodian or liquidator for it or a substantial portion of its property, assets
or business or to effect a plan or other arrangement with its creditors, or
shall file any answer admitting the jurisdiction of the court and the material
allegations of an involuntary petition filed against it in any bankruptcy,
insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall
make a general assignment for the benefit of creditors, or shall consent to, or
acquiesce in the appointment of, a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business, shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts or shall take any corporate action authorizing any of the foregoing;
or
8.06 Involuntary Insolvency, Etc. Involuntary proceedings or an
involuntary petition shall be commenced or filed against Alpine, the Borrower or
any Restricted Subsidiary of the Borrower under any bankruptcy, insolvency or
similar law or seeking the dissolution or reorganization of it or the
appointment of a receiver, trustee, custodian or liquidator for it or of a
substantial part of its property, assets or business, or any similar writ,
judgment, warrant of attachment, execution or process shall be issued or levied
against a substantial part of its property, assets or business, and such
proceedings or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded, within sixty (60) days after commencement, filing or levy, as the
case may be, or any order for relief shall be entered in any such proceeding; or
8.07 Default Under Other Agreements. There shall be a default under
any Indebtedness (other than the Notes) of Alpine, the Borrower and/or one or
more Restricted Subsidiaries of the Borrower, whether such Indebtedness now
exists or shall hereafter be created, if (A) such default either (1) results
from the failure to pay any such Indebtedness at its stated final maturity or
(2) relates to an obligation other than the obligation to pay such Indebtedness
at its stated final maturity and results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated final
maturity, and (B) the amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal at
stated
-53-
<PAGE>
final maturity or the maturity of which has been so accelerated, aggregates $5
million or more at any one time outstanding; or
8.08 Judgments. One or more judgments in an aggregate amount in
excess of $5 million (which are not covered by third party insurance as to which
the insurer has not disclaimed coverage) shall have been rendered against
Alpine, the Borrower and/or one or more Restricted Subsidiaries of the Borrower
and such judgments remain undischarged, unpaid or unstayed for a period of 30
days after such judgment or judgments become final and non-appealable; or
8.09 Pledge Agreements. At any time after the execution and delivery
thereof, either of the Pledge Agreements shall cease to be in full force and
(other than as a result of the actions taken by the Administrative Agent or the
Banks to release such Pledge Agreement) effect or shall cease to give the
Administrative Agent for the benefit of the Banks the Liens, rights, powers and
privileges purported to be created thereby, in favor of the Administrative
Agent, superior to and prior to the rights of all third Persons and subject to
no other Liens (except to the extent expressly permitted herein or therein); or
8.10 Alpine Guaranty. The Alpine Guaranty or any provision thereof
shall cease to be in full force and effect in accordance with its terms, or
Alpine or any Person acting by or on behalf of Alpine shall deny or disaffirm
Alpine's obligations under the Alpine Guaranty, or any Guarantor Event of
Default (as defined in the Alpine Guaranty) shall be in existence pursuant to
the terms of the Alpine Guaranty; or
If any of the foregoing Events of Default shall have occurred and be
continuing, the Administrative Agent, at the written direction of the Required
Banks shall, take one or more of the following actions: (i) by written or oral
or telephonic notice (in the case of oral or telephonic notice confirmed in
writing immediately thereafter) to Borrower declare the Total Commitment to be
terminated whereupon the Total Commitment shall forthwith terminate, (ii) by
written or oral or telephonic notice (in the case of oral or telephonic notice
confirmed in writing immediately thereafter) to Borrower declare all sums then
owing by Borrower hereunder and under the Credit Documents to be forthwith due
and payable, whereupon all such sums shall become and be immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Borrower and (iii) enforce, as Collateral Agent
all of the Liens and security interests created pursuant to the Pledge
Agreements. In cases of any occurrence of any Event of Default described in
Section 8.05 or 8.06 with respect to Borrower, the Total Commitment shall
terminate and the
-54-
<PAGE>
Loans, together with accrued interest thereon, shall become due and payable
forthwith without the requirement of any such acceleration or request, and
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived by Borrower, any provision of this Agreement or any other
Credit Document to the contrary notwithstanding, and other amounts payable by
Borrower hereunder shall also become immediately due and payable all without
notice of any kind.
Anything in this Section 8 to the contrary notwithstanding, the
Administrative Agent shall, at the request of the Required Banks, rescind and
annual any acceleration of the Loans by written instrument filed with Borrower;
provided that at the time such acceleration is so rescinded and annulled: (A)
all past due interest and principal (other than principal due solely as a result
of such acceleration), if any, on the Loans and all other sums payable under
this Agreement and the other Credit Documents shall have been duly paid, and (B)
no other Event of Default shall have occurred and be continuing which shall not
have been waived in accordance with the provisions of Section 11.12 hereof.
SECTION 9. Definitions and Accounting Terms.
9.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person (the "Acquired Person") existing at the time
such Acquired Person becomes a Subsidiary of or merges or consolidates with such
specified Person or any of its Subsidiaries (and not redeemed, defeased, retired
or otherwise repaid at the time of or upon consummation of such merger or
acquisition) or Indebtedness assumed in connection with the acquisition of
assets from such Acquired Person, but in each case excluding any Indebtedness
incurred or secured by Liens (on additional assets or otherwise) in connection
with, or in anticipation or contemplation of, such Acquired Person merging or
consolidating with, or becoming a Subsidiary of, such specified Person.
"Acquisition" shall mean the acquisition by Newco of 100% of the
outstanding capital stock of Hepworth pursuant to, and in accordance with the
terms of, the Acquisition Documents.
-55-
<PAGE>
"Acquisition Agreement" shall mean the Share Purchase Agreement,
dated as of March 27, 1997, among Glacier R. and M. Holdings Limited, Glacier
PLC, Newco and Alpine and as in effect on the Closing Date.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other agreements and documents relating to the Acquisition.
"Adience" shall mean Adience, Inc., a Delaware corporation.
"Adience Credit Agreement" shall mean that certain Credit Agreement,
dated as of April 14, 1997, among the Borrower, Adience, Newco, Hepworth, the
various lenders party thereto from time to time, and BTCo, as administrative
agent, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by Section
7.03)) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Adience Credit Documents" shall mean and include each of the
documents and other agreements entered into (including, without limitation, the
Adience Credit Agreement) relating to the Adience Credit Agreement, as the same
may be modified, supplemented or amended from time to time pursuant to the terms
thereof.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified
-56-
<PAGE>
in Regulation D applicable on such day to a three-month certificate of deposit
of a member bank of the Federal Reserve System in excess of $100,000 (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves), plus (2) the then daily net annual assessment rate as estimated by
the Administrative Agent for determining the current annual assessment payable
by the Administrative Agent to the Federal Deposit Insurance Corporation for
insuring three-month certificates of deposit.
"Administrative Agent" shall mean Bankers Trust Company, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 10.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided, however, that for purposes of
Section 7.02 an Affiliate of the Borrower shall include (x) any Person that
directly or indirectly owns more than 5% of any class of the capital stock of
the Borrower and (y) any executive officer or director of the Borrower. A Person
shall be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Affiliate Transaction" shall have the meaning provided in Section
7.02.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Alpine" shall mean The Alpine Group, Inc., a Delaware corporation.
"Alpine Guaranty" shall have the meaning provided in Section 4.13.
"Alpine Permitted Amount" shall mean $2,000,000; provided that if
the Leverage Ratio as determined for the last day of any fiscal year of the
Borrower ending after the Closing Date (calculating the numerator as of such
date and the denominator for the fiscal year then ended) is (x) less than 3:1,
the Alpine Permitted Amount shall instead be $4,000,000 and (ii) is greater than
or equal to 3:1, but less than 3.25:1, the Alpine Permitted Amount shall instead
be $3,000,000.
-57-
<PAGE>
"Alpine Pledge Agreement" shall have the meaning provided in Section
4.12.
"Alpine Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Alpine Pledge Agreement.
"Alpine Pledged Stock" shall mean all "Pledged Stock" as defined in
the Alpine Pledge Agreement.
"Applicable Margin" shall mean a percentage per annum equal to (x)
in the case of Base Rate Loans, 2.75%, and (y) in the case of Eurodollar Loans,
3.75%.
"Asset Acquisition" means (a) an Investment by the Borrower or any
Restricted Subsidiary of the Borrower in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Borrower, or shall be merged
with or into the Borrower or any Restricted Subsidiary of the Borrower, or (b)
the acquisition by the Borrower or any Restricted Subsidiary of the Borrower of
the assets of any Person (other than a Restricted Subsidiary of the Borrower)
which constitute all or substantially all of the assets of such Person or
comprise all or substantially all of any division or line of business of such
Person.
"Asset Sale" shall mean any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Borrower or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than Borrower or a Wholly-Owned Restricted
Subsidiary of Borrower of (a) any Capital Stock of any Restricted Subsidiary of
the Borrower; or (b) any other property or assets of the Borrower or any
Restricted Subsidiary of the Borrower other than in the ordinary course of
business; provided, however, that Asset Sales shall not include (i) a
transaction or series of related transactions for which Borrower and its
Restricted Subsidiaries receive aggregate consideration of less than $500,000,
(ii) sales of accounts receivable and related assets (including contract rights)
of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity for the fair market value thereof,
including cash in an amount equal to at least 80% of the fair market value
thereof as determined in accordance with GAAP, (iii) Permitted Investments, (iv)
any transfer of property or assets in connection with a dividend to holders of
capital stock if such payment is permitted by Section 7.01, (v) the granting of
Permitted Liens, and (vi) the sale, lease, conveyance, disposition or other
transfer (w) of all or substantially all of the assets of Borrower as permitted
under Section 7.10, (x) pursuant to any foreclosure of
-58-
<PAGE>
assets or other remedy provided by applicable law to a creditor of Borrower or
any Subsidiary of Borrower with a Lien on such assets, which Lien is permitted
under this Agreement, provided that such foreclosure or other remedy is
conducted in a commercially reasonable manner or in accordance with any
bankruptcy law, (y) involving only Cash Equivalents or inventory in the ordinary
course of business or obsolete, worn out or outmoded equipment in the ordinary
course of business consistent with past practices of Borrower or (z) involving
only the lease or sublease of any real or personal property in the ordinary
course of business or transfers for security purposes only.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Authorized Officer" of any Credit Party shall mean any of the
President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
any Vice-President, the Secretary or any Assistant Secretary of such Credit
Party or any other officer of such Credit Party which is designated in writing
to the Administrative Agent and BTCo by any of the foregoing officers of such
Credit Party as being authorized to give such notices under this Agreement.
"Bank" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Bank" hereunder pursuant to Section 1.11
or 11.04(b).
"Bankruptcy Code" shall mean Title I of the Bankruptcy Reform Act of
1978, as amended, as set forth in Title 11 of the United States Code, as
hereafter amended.
"Base Rate" at any time shall mean the highest of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of 1% in excess of
the overnight Federal Funds Rate and (iii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan converted into such pursuant
to Section 1.08, until such time (if any) has converted back into a Eurodollar
Loan in accordance with the requirements of Section 1.08(d).
"Board of Directors" shall mean, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
-59-
<PAGE>
"Borrower Pledge Agreement" shall have the meaning provided in
Section 4.11.
"Borrower Pledge Agreement Collateral" shall mean all "Collateral"
as defined in the Borrower Pledge Agreement.
"Borrower Pledged Stock" shall mean all "Pledged Stock" as defined
in the Borrower Pledge Agreement.
"Borrowing" shall mean the single borrowing of Loans hereunder, to
be incurred from all the Banks on the Closing Date.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in Dollars in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be shown as capital expenditures in
accordance with generally accepted accounting principles and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are to be classified and accounted
for as Capital Lease Obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such person, and (ii) with
respect to any person that is not a corporation, any and all partnership or
other equity interests of such Person.
-60-
<PAGE>
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) time deposits and certificates
of deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company having, a long-term unsecured debt rating
of at least "A" or the equivalent thereof from Standard & Poor's Ratings Group
or "A2" or the equivalent thereof from Moody's Investors Service, Inc. with
maturities of not more than one year from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person rated at least A-1 or the equivalent
thereof by Standard & Poor's Ratings Group or at least P-1 or the equivalent
thereof by Moody's Investors Service, Inc. and in each case maturing not more
than 270 days after the date of acquisition by such Person, (v) Eurodollar
certificates of deposit maturing within one year after the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any State thereof or the District of Columbia or by any
foreign bank, which is a Bank, or United States branches of foreign banks, and
in any case having a combined capital and surplus of not less than $100,000,000
and (vi) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (i) Alpine shall at any time cease to
own at least 75% of the outstanding capital stock (and at least 75% of the
outstanding Voting Stock) of the Borrower, or (ii) the Borrower shall at any
time cease to own 100% of the capital stock of Adience, or (iii) the Board of
Directors of Alpine shall cease to consist of a majority of Continuing Directors
or (iv) any Person, entity or "group" (as such term is defined in Section
13(d)(3) of the Securities Exchange Act of 1934 (as amended) other than a
Permitted Holder) is or becomes the beneficial owner of an amount of outstanding
Voting Stock, or of outstanding common stock, of Alpine in excess of 35% of the
total amount of fully diluted shares of outstanding Voting Stock or common
stock, as the case may be, of Alpine.
-61-
<PAGE>
"Closing Date" shall mean the date occurring on or after the
Effective Date on which the Loans are incurred hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and to any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Pledge Agreement, including, without limitation, all
Alpine Pledge Agreement Collateral, and all Borrower Pledge Agreement
Collateral.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Pledge Agreements.
"Collective Bargaining Agreements" shall have the meaning provided
in Section 4.05.
"Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I, as the same may be (x) reduced from
time to time pursuant to Sections 2.02, 3.02 and/or 8 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.11
or 11.04(b).
"Consolidated EBITDA" means, with respect to the Borrower, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of the Borrower and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business or other
transactions the effect of which has been excluded from Consolidated Net
Income), (B) Consolidated Interest Expense and (C) Consolidated Non-cash Charges
less any non-cash items increasing Consolidated Net Income for such period, all
as determined on a consolidated basis for the Borrower and its Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means the ratio of
Consolidated EBITDA of the Borrower during the four most recent full fiscal
quarters
-62-
<PAGE>
for which financial information is available (the "Four Quarter Period") ending
on or prior to the date of the transaction giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to
Consolidated Fixed Charges of the Borrower for the Four Quarter Period,
provided, however, that prior to the time that financial statements for the
Borrower are available for four full fiscal quarters following the Acquisition,
the financial statements for the Four Quarter Period shall include the pro forma
(giving effect to the Acquisition as if same had occurred on the first day of
the respective period) financial statements of Borrower for the number of
quarters prior to the Acquisition necessary to provide financial statements for
the four most recent full fiscal quarters. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence (and the
application of the proceeds thereof) or repayment of any Indebtedness of the
Borrower or any of its Restricted Subsidiaries giving rise to the need to make
such calculation and any incurrence (and the application of the proceeds
thereof) or repayment of other Indebtedness, other than the incurrence or
repayment of Indebtedness in the ordinary course of business for working capital
purposes pursuant to working capital or revolving credit facilities unless
permanently reduced, occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence (and the application of the proceeds
thereof) or repayment, as the case may be, occurred on the first day of the Four
Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of the Borrower or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including or excluding, as the case may be, any
Consolidated EBITDA (provided that such Consolidated EBITDA shall be included
only to the extent includable pursuant to the definition of "Consolidated Net
Income") attributable to the assets which are the subject of the Asset
Acquisition or Asset Sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset Acquisition (including the incurrence, assumption or liability for any
such Acquired Indebtedness) occurred on the first day of the Four Quarter
Period. If the Borrower or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person (other than a Restricted
Subsidiary), the preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if the Borrower or any Restricted Subsidiary of such
Person had directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes
-63-
<PAGE>
of determining the denominator (but not the numerator) of this "Consolidated
Fixed Charge Coverage Ratio," (1) interest on outstanding Indebtedness
determined on a fluctuating basis as of the Transaction Date and which will
continue to be so determined thereafter shall be deemed to have accrued at a
fixed rate per annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date, (2) if interest on any Indebtedness actually
incurred on the Transaction Date may optionally be determined at an interest
rate based upon a factor of a prime or similar rate, a eurocurrency interbank
offered rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the Four Quarter
Period; (3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Rate Protection Agreements, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements; and (4) to the extent pro forma effect is being given to
interest expense attributable to Indebtedness denominated in a currency other
than Dollars which was not outstanding for the entire Four Quarter Period, pro
forma effect shall be given based on the relevant exchange rates applicable on
the date of any determination of the Consolidated Fixed Charge Coverage Ratio is
being made.
"Consolidated Fixed Charges" means, with respect to the Borrower for
any period, the sum, without duplication, of (i) Consolidated Interest Expense,
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of the Borrower and its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Stock of the Borrower and dividends to the
extent payable to the Borrower or its Restricted Subsidiaries) paid, accrued or
scheduled to be paid or accrued during such period times (other than in the case
of Preferred Stock of such Person and its Restricted Subsidiaries for which the
dividends are tax deductible for Federal income tax purposes) (y) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current consolidated federal, state and local tax rate of the Borrower (giving
effect to all tax payments made to Alpine), expressed as a decimal.
"Consolidated Indebtedness" shall mean, at any time, the aggregate
amount of all Indebtedness of the Borrower and its Subsidiaries determined on a
consolidated basis with respect to borrowed money or other obligations of such
Persons which would appear on the balance sheet of such Persons as indebtedness.
"Consolidated Interest Expense" means, with respect to the Borrower
for any period, the sum of, without duplication: (i) the aggregate of the
interest expense, net of interest income, of the Borrower and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, including without
-64-
<PAGE>
limitation, (a) any amortization of debt discount (but excluding the
amortization of debt issuance costs), (b) the net costs under Interest Rate
Protection Agreements, (c) all capitalized interest and (d) the interest portion
of any deferred payment obligation; and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Borrower and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to the Borrower, for
any period, the aggregate net earnings (or loss) of the Borrower for such period
on a consolidated basis (before preferred stock dividend requirements),
determined in accordance with GAAP; provided that there shall be excluded
therefrom (a) after-tax gains or losses from Asset Sales or abandonments or
reserves relating thereto, (b) after-tax items classified as extraordinary or
nonrecurring gains or losses, (c) the net earnings of any Person acquired in a
"pooling of interests" transaction accrued prior to the date it becomes a
Restricted Subsidiary of the Borrower or is merged or consolidated with the
Borrower or any Restricted Subsidiary of the Borrower, (d) the net earnings (but
not loss) of any Restricted Subsidiary of the Borrower to the extent that the
declaration of dividends or similar distributions by that Subsidiary of that
income is restricted by a contract, operation of law or otherwise, (e) the net
earnings of any Person, other than a Restricted Subsidiary of the Borrower,
except to the extent of cash dividends or distributions paid to the Borrower or
to a Restricted Subsidiary of the Borrower by such Person, (f) any restoration
to income of any contingency reserve, except to the extent that provision for
such reserve was made out of Consolidated Net Income accrued at any time
following the Closing Date, (g) income or loss attributable to discontinued
operations (including, without limitation, operations disposed of during such
period whether or not such operations were classified as discontinued), (h) in
the case of a successor to the Borrower by consolidation or merger or as a
transferee of the Borrower's assets, any earnings of the successor corporation
prior to such consolidation, merger or transfer of assets and (i) all gains or
losses from the cumulative effect of any change in accounting principles.
Notwithstanding anything to the contrary contained above, to the extent
Consolidated Net Income has not already been reduced by same, Consolidated Net
Income for any period shall be reduced by the amount of all Restricted Payments
made during such period pursuant to clauses (5) and (6) of the second paragraph
of Section 7.01; provided further, that to the extent that any payment pursuant
to clause (6) of the second paragraph of Section 7.01 (excluding for purposes of
this proviso any payment in respect of the Alpine Permitted Amount) would, in
accordance with U.S. GAAP as applied by Alpine, be capitalized by Alpine for
purposes of its consolidated financial statements, such payment shall only
reduce Consolidated Net Income when, and then to
-65-
<PAGE>
the extent, such amounts reduce Alpine's consolidated net income (in accordance
with U.S. GAAP as applied by Alpine).
"Consolidated Net Worth" of the Borrower means the consolidated
stockholders' equity of the Borrower, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of the Borrower.
"Consolidated Non-cash Charges" means, with respect to the Borrower,
for any period, the aggregate depreciation, amortization and other non-cash
expenses of the Borrower and its Restricted Subsidiaries reducing Consolidated
Net Income of the Borrower and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP (excluding any such
charges constituting an extraordinary item or loss or any such charge which
requires an accrual of or a reserve relating to possible cash charges or
expenditures for any future or past period).
"Continuing Directors" shall mean the directors of Alpine on the
Closing Date and each other director of Alpine if such director's nomination for
election to the Board of Directors of Alpine is recommended by a majority of the
then Continuing Directors.
"Credit Documents" shall mean this Agreement, each Note, each Pledge
Agreement and, after the execution and delivery thereof pursuant to the terms of
this Agreement, each Guarantee.
"Credit Party" shall mean Alpine, the Borrower and, after the
execution and delivery of any Guarantee as required by Section 7.09, each
Subsidiary of the Borrower which has executed and delivered such a Guarantee
(until such time, if any, as the Guarantee of such Subsidiary is released in
accordance with Section 7.09).
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the date occurring six months after the Final Maturity
Date.
-66-
<PAGE>
"Distribution" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than Qualified Capital Stock of such Person) or
cash to its stockholders or partners as such, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for any consideration any shares of
any class of its capital stock or any partnership interests outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock or any partnership interests), or set aside any
funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock or any partnership interests of such Person
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock). Without limiting the foregoing,
"Distributions" with respect to any Person shall also include all payments made
or required to be made by such Person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes, in each case except to
the extent the respective such payments described in this sentence reduced
Consolidated Net Income for such period.
"Documents" shall mean the Credit Documents, the Adience Credit
Documents and the Acquisition Documents.
"Dollar Equivalent" of an amount denominated in a currency other
than Dollars (the "Other Currency") shall mean, at any time for the
determination thereof, the amount of Dollars which could be purchased with the
amount of the respective Other Currency involved in such computation at the spot
exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M.
(London time) on the date two Business Days prior to the date of any
determination thereof for purchase on such date.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Effective Date" shall have the meaning provided in Section 11.10.
-67-
<PAGE>
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in bank loans and any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to human health, safety or the environment due to the presence of
Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the
Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
U.S.C. ss. 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C.
ss. 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651
et seq.; and any state and local or foreign counterparts or equivalents, in each
case as amended from time to time.
"Environmental Matter" shall have the meanings provided in Section
6.01(i).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
-68-
<PAGE>
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or any Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section 414(b)
or (c) of the Code, except that solely with respect to liabilities to the PBGC
for premiums, liabilities for excise taxes under Section 4980B of the Code and
pension funding liabilities under Section 412 of the Code, the term "ERISA
Affiliate" also includes each person (as defined in Section 3(a) of ERISA) which
together with the Borrower is treated as a "single employer" within the meaning
of Section 414(m) or (o) of ERISA.
"Eurodollar Loan" shall mean each Loan outstanding at any time
hereunder, except during such time (and then only to the extent) as the
respective such Loan is required to be maintained as a Base Rate Loan in
accordance with the provisions of Section 1.08.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period, divided (and
rounded off to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves
required by applicable law) applicable to any member bank of the Federal Reserve
System in respect of Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 8.
"Existing Credit Agreement" shall mean that certain Credit
Agreement, dated as of January 31, 1997, among Alpine, Adience, Fleet National
Bank, BTCo and Bank of Boston Connecticut, as lenders, BTCo, as documentation
agent, and Fleet National Bank, as agent, in the form delivered to the
Administrative Agent prior to the Closing Date.
"Existing Indebtedness" shall have the meaning provided in Section
5.22.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 4.05.
-69-
<PAGE>
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 2.01.
"Final Maturity Date" shall mean October 15, 2005.
"Foreign Cash Equivalents" shall mean, with respect to any Foreign
Subsidiary of the Borrower (i) any evidence of Indebtedness maturing not later
than six months after the date of acquisition and issued or guaranteed by the
national government of the country in which such Foreign Subsidiary is
incorporated or organized, (ii) any time deposits, certificates of deposit or
bankers acceptances maturing not later than six months after the date of
acquisition and issued by any bank, provided that the aggregate principal amount
of the Indebtedness referred to in clause (i) above, together with the aggregate
amount of the deposits or acceptances referred to in clause (ii) above, shall
not exceed at any time $10,000,000 and (iii) investments in money market funds
substantially all of the assets of which are comprised of securities of the
types described in clauses (i) and (ii) above and/or Cash Equivalents.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by the Borrower or any one or more of its
Subsidiaries primarily for the benefit of employees of the Borrower or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower
other than a Domestic Subsidiary.
-70-
<PAGE>
"GAAP" means generally accepted accounting principals in the U.S. as
in effect from time to time.
"Guarantee" shall have the meaning provided in Section 7.09.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is friable, urea formaldehyde
foam insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous waste," "hazardous materials," "extremely
hazardous substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance, the Release of which is prohibited, limited or regulated by any
governmental authority.
"Hepworth" shall mean Hepworth Refractories (Holdings) Limited, a
corporation organized under the laws of England with registered number 00054713.
"incur" shall have the meaning provided in Section 7.03.
"Indebtedness" means with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all indebtedness or other obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale obligations and
all Obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary course of
business), (v) all indebtedness for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (vi)
guarantees and other contingent obligations in respect of Indebtedness referred
to in clauses (i) through (v) above and clause (viii) below, (vii) all
indebtedness of any other Person of the type referred to in clauses (i) through
(vi) which are secured by any lien on any property or asset of such Person, the
amount of such Obligation being deemed to be the lesser of the fair market value
of such property or asset or the amount of the Obligation so secured, (viii) all
obligations under Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement of such Person and (ix) all
Disqualified Capital Stock issued by such Person with the amount of Indebtedness
represented by such Disqualified Capital Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its
-71-
<PAGE>
maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock.
"Independent Financial Advisor" means an accounting, appraisal,
investment banking or consulting firm of nationally recognized standing that is,
in the reasonable and good faith judgment of the board of directors of the
Borrower, qualified to perform the task for which such firm has been engaged and
disinterested and independent with respect to the Borrower and its Affiliates.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.07.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit in
the ordinary course of business by Borrower and its Subsidiaries. For the
purposes of Section 7.01, (i) "Investment" shall include and be valued at the
fair market value of the net assets of any Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary and
shall exclude the fair market value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (ii) the amount of any Investment made shall be the
original cost of such Investment plus the cost of all
-72-
<PAGE>
additional Investments by Borrower or any of its Restricted Subsidiaries,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the
payment of dividends or distributions in connection with such Investment or any
other amounts received in respect of such Investment; provided that no such
payment of dividends or distributions or receipt of any such other amounts shall
reduce the amount of any Investment if such payment of dividends or
distributions or receipt of any such amounts would be included in Consolidated
Net Income.
"Leaseholds" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the then most recently
ended Test Period; provided that in calculating the Leverage Ratio (x) to the
extent any Asset Acquisition or Asset Sale has occurred during the relevant Test
Period or thereafter but on or prior to the date of the respective determination
of the Leverage Ratio, Consolidated EBITDA shall be determined for the
respective Test Period on a pro forma basis (as provided in the definition of
Consolidated Fixed Charge Coverage Ratio in calculating the denominator thereof)
to give effect to all such Asset Acquisitions and/or Asset Sales occurring after
the first day of the respective Test Period and (y) if the Leverage Ratio is
being determined at any time prior to April 30, 1998, the Test Period shall be
shorter than four fiscal quarters and, accordingly, if the length of the
respective Test Period is (i) one fiscal quarter, the amount of Consolidated
EBITDA shall be multiplied by four, (ii) two fiscal quarters, the amount of
Consolidated EBITDA shall be multiplied by two or (iii) three fiscal quarters,
the amount of Consolidated EBITDA shall be multiplied by 4/3; provided further
that in calculating the Leverage Ratio for purposes of Section 7.08 only, if the
Leverage Ratio is being determined at any time prior to April 30, 1998, an
amount equal to $3,200,000 shall be added to Consolidated EBITDA, representing
the per annum amount of cost savings expected to be generated during Test
Periods ended after April 30, 1998.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
-73-
<PAGE>
"Loan" shall have the meaning provided in Section 1.01.
"Management Agreements" shall have the meaning provided in Section
4.05.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean any Material Adverse Effect on
the business, operations, properties, assets, liabilities, conditions (financial
or otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole.
"Net Proceeds Payment Date" shall have the meaning provided in
Section 7.05.
"Net Proceeds Prepayment Amount" shall have the meaning provided in
Section 7.05.
"Net Proceeds Trigger Date" shall have the meaning provided in
Section 7.05.
"Net Sale Proceeds" shall mean for any Asset Sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of (a) cash expenses of sale (including,
without limitation, brokerage fees, if any, transfer taxes and payment of
principal, premium and interest of Indebtedness other than the Loans and
obligations pursuant to the Adience Credit Documents required to be repaid as a
result of such asset sale) and (b) all foreign, federal, state and local taxes
to the extent payable as a direct consequence of any such asset sale.
"Newco" shall mean Refraco Holdings Limited, a private limited
company organized under the laws of England with registered number 3354257.
"Note" shall have the meaning provided in Section 1.04(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.02(a).
"Notice Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, New York 10006, Attention: Gina
Thompson, or such
-74-
<PAGE>
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Bank pursuant to the terms of this Agreement
or any other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006, ABA Number:
021001033, Account Name: Commercial Loan Division, Account Number: 99-401-268,
Reference: Refraco Inc., Attention: Shannon Farrell, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Holder" shall mean Steve Elbaum, each member of the
immediate family of the foregoing natural person and any trust or similar device
created for the benefit of any one or more of the foregoing and each Person
which acquires the direct or indirect beneficial ownership interest in shares of
capital stock of Alpine as an executor or administrator for or by way of
inheritance or bequest from the foregoing natural person following the death of
such natural person.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under this Agreement;
(ii) Indebtedness of the Borrower and any of its Subsidiaries
incurred pursuant to the Adience Credit Documents in an aggregate principal
amount at any time outstanding not to exceed (A) the sum of (x) $80,000,000 and
(y) (pound)36,663,559.43 (or the Dollar Equivalent thereof), less (B) the sum of
(x) the aggregate amount of Indebtedness of Securitization Entities in Qualified
Securitization Transactions (which reduction shall not exceed $35 million) and
(y) the aggregate amount of any permanent prepayments or
-75-
<PAGE>
repayments of principal of Indebtedness pursuant to the Adience Credit Documents
as required by Section 3.02(c) and 7.05 hereof;
(iii) Interest Rate Protection Agreements of Borrower covering
Indebtedness of Borrower; provided, however, that (x) such Interest Rate
Protection Agreements are designed to protect Borrower from fluctuations in
interest rates on Indebtedness incurred in accordance with this Agreement (and
are used for bona fide hedging, and not speculative, purposes); and (y) the
notional principal amount thereof does not exceed the principal amount of the
Indebtedness outstanding under this Agreement;
(iv) Interest Rate Protection Agreements of Restricted Subsidiaries
of the Borrower covering Indebtedness of one or more Restricted Subsidiaries;
provided, however, that (x) such Interest Rate Protection Agreements are
designed to protect the Restricted Subsidiaries of the Borrower from
fluctuations in interest rates on Indebtedness incurred in accordance with this
Agreement (and are used for bona fide hedging, and not speculative, purposes)
and (y) the notional principal amount thereof does not exceed the principal
amount of the Indebtedness to which the respective Interest Rate Protection
Agreements relate;
(v) Indebtedness of one or more Restricted Subsidiaries of the
Borrower under Other Hedging Agreements; provided that such Other Hedging
Agreements are (as reasonably determined in good faith by the Borrower or its
respective Restricted Subsidiary) designed to protect against fluctuations in
currency values (and are used for bona fide hedging, and not speculative,
purposes) related to income or cash flow derived from foreign operations of
Restricted Subsidiaries of the Borrower not already protected against through
existing Other Hedging Agreements or Indebtedness outstanding and denominated in
the respective other currencies;
(vi) Indebtedness of a Wholly-Owned Restricted Subsidiary of the
Borrower to the Borrower or to a Wholly-Owned Restricted Subsidiary of the
Borrower for so long as such Indebtedness is held by the Borrower or a
Wholly-Owned Restricted Subsidiary of the Borrower, in each case subject to no
Lien (other than Permitted Liens) held by a Person other than the Borrower or a
Wholly-Owned Restricted Subsidiary of the Borrower; provided that if as of any
date any Person other than the Borrower or a Wholly-Owned Restricted Subsidiary
of the Borrower owns or holds any such Indebtedness or holds a Lien (other than
a Permitted Lien) in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer
of such Indebtedness;
-76-
<PAGE>
(vii) Indebtedness of the Borrower to a Wholly-Owned Restricted
Subsidiary of the Borrower for so long as such Indebtedness is held by a Wholly-
Owned Restricted Subsidiary of the Borrower, in each case subject to no Lien
(other than Permitted Liens); provided that (a) any Indebtedness of the Borrower
to any Wholly-Owned Restricted Subsidiary of the Borrower is unsecured and
subordinated, pursuant to a written agreement, to the Borrower's Obligations
under this Agreement (provided, however, that payments in respect of such
Indebtedness may be made so long as at the time of and immediately after giving
effect to such payment, no Default or Event of Default shall have occurred and
be continuing) and (b) if as of any date any Person other than a Wholly-Owned
Restricted Subsidiary of the Borrower owns or holds any such Indebtedness or any
Person holds a Lien (other than a Permitted Lien) in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the Borrower;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such Indebtedness is
extinguished within five business days of incurrence;
(ix) Indebtedness of the Borrower or any of its Restricted
Subsidiaries represented by letters of credit for the account of the Borrower or
such Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business;
(x) Refinancing Indebtedness;
(xi) Indebtedness arising from agreements of the Borrower or its
Restricted Subsidiaries providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition;
provided that the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received by the
Borrower and its Restricted Subsidiaries in connection with such disposition;
-77-
<PAGE>
(xii) obligations in respect of performance bonds and completion,
guarantee, surety and similar bonds provided by the Borrower or any Restricted
Subsidiary in the ordinary course of business;
(xiii) guarantees by the Borrower or a Restricted Subsidiary of
Indebtedness incurred by the Borrower or a Restricted Subsidiary so long as (x)
the incurrence of such Indebtedness by the Borrower or any such Restricted
Subsidiary is otherwise permitted by the terms of this Agreement and (y) any
Guarantees required to be executed and delivered pursuant to Section 7.09, as a
result of the guaranty incurred pursuant to this clause (xiii), shall in fact be
executed and delivered;
(xiv) Indebtedness of the Borrower or its Restricted Subsidiaries
incurred in the ordinary course of business not to exceed $10 million at any
time outstanding (A) representing Capitalized Lease Obligations and (B) in
respect of Indebtedness incurred for financing all or a part of the costs of
acquiring, constructing or developing assets used in the business of Borrower or
its Restricted Subsidiaries;
(xv) the incurrence by a Securitization Entity of Indebtedness in a
Qualified Securitization Transaction that is not recourse to Borrower or any
Subsidiary of Borrower (except for Standard Securitization Undertakings); and
(xvi) $30 million of other Indebtedness of the Borrower or any of
its Restricted Subsidiaries at any one time outstanding (which amount may, but
need not, be incurred in whole or in part under the Adience Credit Agreement).
"Permitted Investments" means (i) Investments by the Borrower or any
Restricted Subsidiary of the Borrower in any Person that is or will become
immediately after such Investment a Wholly-Owned Restricted Subsidiary of the
Borrower or that will merge or consolidate into the Borrower or a Wholly-Owned
Restricted Subsidiary of the Borrower; (ii) Investments in the Borrower by any
Restricted Subsidiary of the Borrower, provided that any Indebtedness evidencing
such Investment is unsecured and subordinated, pursuant to a written agreement
reasonably satisfactory to the Administrative Agent, to the Borrower's
Obligations hereunder; (iii) Investments in cash, Foreign Cash Equivalents and
Cash Equivalents; (iv) loans and advances to employees and officers of the
Borrower and its Restricted Subsidiaries in the ordinary course of business for
bona fide business purposes not to exceed $2 million in the aggregate at any one
time outstanding; (v) Interest Rate Protection Agreements and Other Hedging
Agreements entered into in the ordinary course of Borrower's or its
Subsidiaries' businesses that are entered into for bona fide hedging activities
and are otherwise in
-78-
<PAGE>
compliance with this Agreement; (vi) Investments acquired in connection with
bankruptcy, work-out, reorganization, liquidation or similar proceedings of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business; (vii) Investments made by Borrower or its Subsidiaries as a result of
consideration received in connection with an Asset Sale made in compliance with
Section 7.05; (viii) Investments existing on the Closing Date; (ix) any
Investment by the Borrower or a Wholly-Owned Restricted Subsidiary of the
Borrower in a Securitization Entity or any Investment by a Securitization Entity
in any other Person in connection with a Qualified Securitization Transaction;
provided that any Investment in a Securitization Entity is in the form of a
Purchase Money Note or an equity interest; and (x) additional Investments in an
aggregate amount not exceeding $5 million outstanding at any time. The amount of
any Permitted Investment made shall be the original cost of such Investment plus
all additional capital contributions or purchase price paid in respect thereof,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the
payment of dividends or distributions in connection with such Permitted
Investment or any other amounts received in respect of such Permitted
Investment.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which Borrower or its Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business,
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance,
pensions and other types of social security;
(iv) Liens to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
-79-
<PAGE>
(v) judgment Liens not giving rise to an Event of Default, so long
as such Lien is adequately bonded within ten days after the entry of such
judgment;
(vi) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Borrower
and its Subsidiaries, taken as a whole;
(vii) any interest or title of a lessor under any Capitalized Lease
Obligation permitted under Section 7.03; provided that such Liens do not
extend to any property or assets which is not leased property subject to
such Capitalized Lease Obligation;
(viii) purchase money Liens to finance property or assets of the
Borrower or any Subsidiary of Borrower acquired in the ordinary course of
business; provided, however, that (A) the related purchase money
Indebtedness is Permitted Indebtedness and shall not exceed the cost of
such property or assets and shall not be secured by any property or assets
of the Borrower or any Subsidiary of Borrower other than the property and
assets so acquired and additions and accessions thereto and proceeds
therefrom and (B) the Lien securing such Indebtedness shall be created
within 90 days of such acquisition;
(ix) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(x) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xi) Liens encumbering deposits, including operating lease deposits
made to secure obligations arising from statutory, regulatory,
contractual, or warranty requirements of the Borrower or any of its
Subsidiaries, including rights of offset and set-off;
(xii) Liens securing Interest Rate Protection Agreements and Other
Hedging Agreements otherwise permitted under this Agreement;
-80-
<PAGE>
(xiii) Liens securing Acquired Indebtedness incurred in accordance
with Section 7.03 provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Borrower or a Subsidiary of Borrower and were not
granted in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Borrower or a Subsidiary of the Borrower and
(B) such Liens do not extend to or cover any property or assets of the
Borrower or of any of its Subsidiaries other than the property or assets
that secured the Acquired Indebtedness prior to the time such indebtedness
became Acquired Indebtedness of the Borrower or a Subsidiary of Borrower
and are no more favorable to the lienholders than those securing the
Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by the Borrower or a Subsidiary of the Borrower;
(xiv) Leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any Subsidiary;
(xv) any interest or title of a lessor in the property subject to
any lease, whether characterized as capitalized or operating other than
any such interest or title resulting from or arising out of a default by
the Borrower or any Restricted Subsidiary of its obligations under such
lease;
(xvi) Liens arising from filing UCC financing statements for
precautionary purposes in connection with true leases of personal property
that are otherwise permitted under this Agreement and under which the
Borrower or any Restricted Subsidiary is lessee;
(xvii) Liens securing the Obligations under this Agreement;
(xviii) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in each case incurred in connection
with a Qualified Securitization Transaction;
(xix) Liens arising out of consignment or similar arrangements for
sales of goods entered into by Restricted Subsidiaries of the Borrower in
the ordinary course of business and;
(xx) additional Liens, so long as neither the fair market value of
all assets subject thereto, nor the aggregate amount of obligations
secured thereby, exceeds $2,000,000 in the aggregate at any time
outstanding.
-81-
<PAGE>
"Permitted Tax Payment" means (for any taxable year of the Borrower
in which it joins in filing a consolidated federal income tax return with
Alpine) a payment (including any estimated tax payment based on any estimated
tax liability for such year) by the Borrower and its Subsidiaries to Alpine in
an amount equal to the separate return federal income tax liability (if any) of
the affiliated group (within the meaning of Section 1504 of the Code) of which
the Borrower would be the parent (the "Borrower Group") if it were not a member
of another affiliated group for that or any other taxable year; provided, that
such payment can be made by the Borrower and its Subsidiaries no earlier than
two Business Days prior to the date on which the affiliated group of which the
Borrower is actually a member makes federal income tax payments (including
estimated tax payments) for such year to the Internal Revenue Service. In the
event that Alpine and any member of the Borrower Group join in filing any
combined or consolidated (or similar) state or local income or franchise tax
returns, the Permitted Tax Payment shall include payments with respect to such
state or local income or franchise taxes determined in a manner as similar as
possible to that provided in the preceding sentence for federal income taxes.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2) of
ERISA, subject to Title IV of ERISA, Section 412 of the Code or Section 401(a)
of the Code, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreements" shall mean the Alpine Pledge Agreement and the
Borrower Pledge Agreement.
"Pledged Stock" shall mean the Alpine Pledged Stock and the Borrower
Pledged Stock.
"Pounds Sterling" and "(pound)" shall mean freely transferrable
lawful money of England.
-82-
<PAGE>
"Preferred Stock" of any person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section 4.14.
"Pro Rata Share" shall mean, with respect to any Bank, an amount
equal to the result obtained by multiplying a described amount or total amount
by a fraction the numerator of which shall be such Bank's then outstanding Loans
and the denominator of which shall be all then outstanding Loans.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from the Borrower
or any Subsidiary of the Borrower in connection with a Qualified Securitization
Transaction to a Securitization Entity, which note shall be repaid from cash
available to the Securitization Entity, other than amounts required to be paid
in fees to other parties in the Qualified Securitization Transaction and amounts
required to be established as reserves pursuant to agreements, amounts paid to
investors in respect of interest, principal and other amounts owing to such
investors and amounts paid in connection with the purchase of newly generated
receivables of newly acquired equipment.
"Qualified Capital Stock" means any capital stock of the Borrower
that is not Disqualified Capital Stock.
"Qualified Securitization Transaction" means any transaction or
series of transactions that may be entered into by the Borrower or any of its
Subsidiaries pursuant to which the Borrower or any of its Subsidiaries may sell,
convey or otherwise transfer to (a) a Securitization Entity (in the case of a
transfer by the Borrower or any of its Subsidiaries) and (b) any other Person
(in the case of transfer by a Securitization Entity), or may grant a security
interest in any accounts receivable (whether now existing or arising or acquired
in the future) of the Borrower or any of its Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts
-83-
<PAGE>
receivable, all contracts and contract rights and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts receivable.
"Quarterly Payment Date" shall mean the last Business Day of each
January, April, July and October occurring after the Closing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Restricted Subsidiaries of any cash insurance proceeds or condemnation
awards payable (i) by reason of theft, loss, physical destruction or damage or
any other similar event with respect to any property or assets of the Borrower
or any of its Restricted Subsidiaries, (ii) by reason of any condemnation,
taking, seizing or similar event with respect to any properties or assets of the
Borrower or any of its Restricted Subsidiaries and (iii) under any policy of
insurance required to be maintained under Section 6.03, provided, however, that
in no event shall payments made under business interruption insurance constitute
a Recovery Event.
"Reference Date" shall have the meaning provided in Section 7.01.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Borrower or
any Subsidiary of Borrower of Indebtedness incurred in accordance with Section
7.03 (other than pursuant to clause (ii), (iii), (iv), (v), (vi), (vii), (viii),
(ix), (xi), (xiii), (xiv), (xv) or (xvi) of the definition of Permitted
Indebtedness), in each case that does not (1) result in an increase in the
aggregate principal amount of Indebtedness of such Person as of the date of such
proposed Refinancing (plus the amount of any premium or penalty required to be
paid under the terms of the instrument governing such Indebtedness and
-84-
<PAGE>
plus the amount of reasonable fees and expenses incurred by the Borrower and/or
its Restricted Subsidiaries in connection with such Refinancing) or (2) create
Indebtedness with (A) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a
final maturity earlier than the final maturity of the Indebtedness being
Refinanced, provided that (x) if such Indebtedness being Refinanced is
Indebtedness solely of the Borrower, then such Refinancing Indebtedness shall be
Indebtedness solely of Borrower and (y) if such Indebtedness being Refinanced is
subordinate or junior to the Loans, then such Refinancing Indebtedness shall be
subordinate to the Loans at least to the same extent and in the same manner as
the Indebtedness being Refinanced.
"Register" shall have the meaning provided in Section 11.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Bank" shall have the meaning provided in Section 1.11.
-85-
<PAGE>
"Replacement Asset" shall have the meaning provided in Section 7.05.
"Replacement Bank" shall have the meaning provided in Section 1.11.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean, collectively, Banks the sum of whose
outstanding Loans (or, if prior to the Closing Date, Commitments) represent an
amount greater than 50% of the sum of all outstanding Loans (or, if prior to the
Closing Date, the Commitments).
"Restricted Payment" shall have the meaning provided in Section
7.01.
"Restricted Distribution" shall mean (a) any authorization,
declaration or payment of any Distributions with respect to the Borrower or any
of its Restricted Subsidiaries or any other payment to Alpine or any Affiliate
of the Borrower or Alpine (excluding the Borrower and its Subsidiaries) by the
Borrower or any of its Restricted Subsidiaries, (b) the making (or the giving of
any notice in respect thereof) by the Borrower or any of its Restricted
Subsidiaries of any voluntary or mandatory payment, purchase, acquisition or
redemption, whether by the making of any payments of the principal, interest or
otherwise, in respect of any loan, advance or extension of credit made to the
Borrower or any of its Subsidiaries by, or in respect of any guarantee or
Contingent Obligation made for the benefit of the Borrower or any of its
Subsidiaries by, or in respect of any other obligation of the Borrower or any of
its Subsidiaries owed to, Alpine or any of its Subsidiaries (excluding the
Borrower and its Restricted Subsidiaries) or any other Affiliate of Alpine
(excluding the Borrower and its Restricted Subsidiaries), whether pursuant to a
contractual agreement or otherwise, and (c) the payment of any management fees
or any other fees or expenses (including the reimbursement thereof by the
Borrower or any of its Restricted Subsidiaries) to Alpine or any of its
Subsidiaries (excluding the Borrower and its Restricted Subsidiaries) or to any
other Affiliate of Alpine (excluding the Borrower and its Restricted
Subsidiaries) pursuant to any Management Agreement or any other agreement.
Notwithstanding anything to the contrary contained above, payments made in
respect of the Obligations in accordance with the terms of this Agreement shall
not constitute Restricted Payments, even if the respective Obligations are held
by Alpine or an Affiliate of Alpine or the Borrower.
-86-
<PAGE>
"Restricted Subsidiary" means any Subsidiary of the Borrower which
at the time of determination is not an Unrestricted Subsidiary.
"Returns" shall have the meaning provided in Section 5.09.
"Sale and Leaseback Transaction" means any arrangement, directly or
indirectly, whereby a seller or transferror shall sell or otherwise transfer any
real or personal property and then or thereafter lease, or repurchase under an
extended purchase contract, conditional sales or other title retention
agreement, the same or similar property.
"SEC" shall have the meaning provided in Section 6.01(h).
"Section 3.04(b)(ii) Certificate" shall have the meaning provided in
Section 3.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Pledge Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Securitization Entity" means a Wholly Owned Subsidiary of the
Borrower (or another Person in which the Borrower or any Subsidiary of the
Borrower makes an Investment and to which the Borrower or any Subsidiary of the
Borrower transfers accounts receivable or equipment and related assets) which
engages in no activities other than in connection with the financing of accounts
receivable or equipment and which is designated by the Board of Directors of the
Borrower (as provided below) as a Securitization Entity (a) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which (i) is
guaranteed by the Borrower or any Subsidiary of the Borrower (excluding
guarantees of obligations (other than the principal of, and interest on,
Indebtedness)) pursuant to Standard
-87-
<PAGE>
Securitization Undertakings, (ii) is recourse to or obligates the Borrower or
any Subsidiary of the Borrower in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of the
Borrower or any Subsidiary of the Borrower, directly or indirectly, contingently
or otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (b) with which neither the Borrower nor any
Subsidiary of the Borrower has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Borrower or such
Subsidiary than those that might be obtained at the time from Persons that are
not Affiliates of the Borrower, other than fees payable in the ordinary course
of business in connection with servicing receivables of such entity or other
arrangements common to a Qualified Securitization Transaction, and (c) to which
neither the Borrower nor any Subsidiary of the Borrower has any obligation to
maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results. Any such designation by the Board
of Directors of the Borrower shall be evidenced to the Administrative Agent by
filing with the Administrative Agent a certified copy of the resolution of the
Board of Directors of the Borrower giving effect to such designation and an
officers' certificate certifying that such designation complied with the
foregoing conditions.
"Shareholders' Agreements" shall have the meaning provided in
Section 4.05.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Borrower or any
Subsidiary of the Borrower which are reasonably customary in an accounts
receivable securitization transaction.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Surviving Entity" shall have the meaning provided in Section 7.10.
"Taxes" shall have the meaning provided in Section 3.04(a).
"Test Period" shall mean (i) for any determination made on or prior
to April 30, 1998, the period from May 1, 1997 to the last day of the fiscal
quarter of the Borrower then last ended and (ii) for any determination made
thereafter, the four
-88-
<PAGE>
consecutive fiscal quarters of the Borrower then last ended (taken as one
accounting period).
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Transaction" shall mean, collectively, (i) the consummation of the
Acquisition, (ii) the incurrence by Adience, Newco and Hepworth of the loans
under the Adience Credit Agreement, (iii) the repayment of all amounts owing,
and the termination of all commitments, under the Existing Credit Agreement,
(iv) the incurrence of Loans on the Closing Date, (v) the taking of all actions
described in Schedule XII (excluding the actions described in Part II.D. and
Part IV thereof, which will occur after the Closing Date) and (vi) the payment
of fees and expenses owing in connection with the foregoing.
"25% Banks" shall mean, collectively Banks the sum of whose
outstanding Loans represent an amount equal to, or in excess of, 25% of the sum
of all outstanding Loans.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan, means the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan and in
accordance with the provisions of ERISA for calculating the potential liability
of the Borrower, any Subsidiary of the Borrower or any ERISA affiliate on an
ongoing basis to the PBGC or the Plan under Title IV of ERISA.
"United States" and "U.S." shall each mean the United States of
America.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Borrower
that at the time of determination shall be or continue to be designated an
Unrestricted Subsidiary by the Board of Directors of the Borrower in the manner
provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board
of Directors of the
-89-
<PAGE>
Borrower may designate any Subsidiary (including any newly acquired or newly
formed Subsidiary, but excluding the Borrower and Adience) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Borrower or any other Subsidiary of the
Borrower that is not a Subsidiary of the Subsidiary to be so designated;
provided that (x) the Borrower certifies to the Administrative Agent that such
designation complies with Section 7.01 and (y) each Subsidiary to be so
designated and each of its Subsidiaries has not at the time of designation, and
does not thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to which
the Lender has recourse to any of the assets of the Borrower or any of its
Restricted Subsidiaries. The Board of Directors of the Borrower may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary only if (x)
immediately after giving effect to such designation, the Borrower is able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 7.03 and (y) immediately before and
immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing. Any such designation by the Board
of Directors of the Borrower shall be evidenced to the Administrative Agent by
promptly filing with the Administrative Agent a copy of the resolution giving
effect to such designation and an officers' certificate certifying that such
designation complied with the foregoing provisions.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person 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 of such Person.
"Waivable Mandatory Prepayment" shall have the meaning provided in
Section 3.02(f).
"Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
-90-
<PAGE>
"Wholly-Owned Restricted Subsidiary" at any time shall mean any
Person which at such time is both a Wholly-Owned Subsidiary of the Borrower and
a Restricted Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 10. The Administrative Agent.
10.01 Appointment. The Banks hereby designate BTCo as Administrative
Agent (for purposes of this Section 10, the term "Administrative Agent" shall
include BTCo in its capacity as Collateral Agent pursuant to the Pledge
Agreements) to act as specified herein and in the other Credit Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
10.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative Agent nor any of
its respective officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank or the holder of
any Note; and nothing in this Agreement or any other Credit Document, expressed
or implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.
-91-
<PAGE>
10.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.
10.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance with the instructions
of the Required Banks.
10.05 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal
-92-
<PAGE>
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the
Administrative Agent.
10.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
10.07 The Administrative Agent in its Individual Capacity. With
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Administrative Agent shall have the rights and
powers specified herein for a "Bank" and may exercise the same rights and powers
as though it were not performing the duties specified herein; and the term
"Banks," "Required Banks," "holders of Notes" or any similar terms shall, unless
the context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with any Credit Party or any Affiliate of any Credit Party as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
10.08 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
-93-
<PAGE>
10.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Banks and the Borrower. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to Adience.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of Adience (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
SECTION 11. Miscellaneous.
11.01 Payment of Expenses, etc. The Borrower agrees that it shall:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case and the Administrative Agent's local counsel and consultants) in connection
with the preparation, execution and delivery of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein and any amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent in connection with its syndication efforts with respect to
this Agreement and of the Administrative Agent and, after the occurrence of an
Event of Default, each of the Banks in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred
-94-
<PAGE>
to herein and therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent; (ii) pay and hold each of
the Banks harmless from and against any and all present and future stamp, excise
and other similar documentary taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify the
Administrative Agent and each Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Administrative Agent or any Bank is a party thereto) related to the entering
into and/or performance of this Agreement or any other Credit Document or the
use of the proceeds of any Loans hereunder or the consummation of any
transactions contemplated herein or in any other Credit Document or the exercise
of any of their rights or remedies provided herein or in the other Credit
Documents, or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time operated by the Borrower or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by the
Borrower or any of its Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property, or
any Environmental Claim asserted against the Borrower, any of its Subsidiaries
or any Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Administrative Agent or any Bank set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
11.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon
-95-
<PAGE>
the occurrence of an Event of Default, each Bank is hereby authorized (to the
extent not prohibited by applicable law) at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of such Credit Party to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 11.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
11.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to any Bank, at its address specified on Schedule II; and
if to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each Bank,
at such other address as shall be designated by such Bank in a written notice to
the Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective (x) three Business Days after deposited in the
mails, (y) one Business Day after delivered to the telegraph company, cable
company or a recognized overnight courier, as the case may be, or (z) when sent
by telex or telecopier, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
11.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Banks and,
provided further, that, although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of
-96-
<PAGE>
its outstanding Loans hereunder except as provided in Sections 1.11 and
11.04(b)) and the transferee, assignee or participant, as the case may be, shall
not constitute a "Bank" hereunder and, provided further, that no Bank shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan or Note in which such participant is
participating, or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory repayment of Loans shall not constitute a
change in the terms of such participation), (ii) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement, (iii) release or terminate the Guaranty provided by Alpine or (iv)
release all or substantially all of the Collateral under all of the Pledge
Agreements (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its outstanding
Obligations hereunder to (i) its parent company and/or any affiliate of such
Bank which is at least 50% owned by such Bank or its parent company or to one or
more Banks or (ii) in the case of any Bank that is a fund that invests in bank
loans, any other fund that invests in bank loans and is managed by the same
investment advisor of such Bank or by an Affiliate of such investment advisor or
(y) assign all, or if less than all, a portion equal to at least $2,000,000 in
the aggregate for the assigning Bank or assigning Banks, of such outstanding
Obligations hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Bank by execution of an
Assignment and Assumption Agreement, provided that, (i) at such time Schedule I
shall be deemed modified to reflect the outstanding Loans of such new Bank and
of the existing Banks, (ii) upon the surrender of the Notes by the assigning
Bank (or, upon such assigning Bank's indemnifying the Borrower for any lost Note
pursuant to a customary indemnification agreement) new Notes will be issued, at
the Borrower's expense, to such new Bank and to the assigning Bank upon the
request of such new Bank or assigning
-97-
<PAGE>
Bank, such new Notes to be in conformity with the requirements of Section 1.04
(with appropriate modifications) to the extent needed to reflect the revised
outstanding Loans, (iii) the consent of the Administrative Agent shall be
required in connection with any assignment to an Eligible Transferee pursuant to
clause (y) above, (iv) the Administrative Agent shall receive at the time of
each such assignment, from the assigning or assignee Bank, the payment of a
non-refundable assignment fee of $3,500, (v) promptly after such assignment, the
Borrower shall have received from the Administrative Agent notice of any such
assignment and of the identity, nationality and applicable lending office of any
such Eligible Transferee that is not a United States Person (as defined in
Section 7701(a)(30) of the Code), together with the copy of the Assignment and
Assumption Agreement relating thereto and, provided further, that such transfer
or assignment will not be effective until recorded by the Administrative Agent
on the Register pursuant to Section 11.15 hereof. To the extent of any
assignment pursuant to this Section 11.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Loans. At the
time of each assignment pursuant to this Section 11.04(b) to a Person which is
not already a Bank hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Bank shall, to the extent legally entitled to
do so, provide to the Borrower in the case of a Bank described in clause (ii) or
(iv) of Section 3.04(b), the forms described in such clause (ii) or (iv), as the
case may be. To the extent that an assignment of all or any portion of a Bank's
outstanding Obligations pursuant to Section 1.11 or this Section 11.04(b) would,
at the time of such assignment, result in increased costs under Section 1.08 or
4.04 in excess of those being charged by the respective assigning Bank prior to
such assignment, then the Borrower shall not be obligated to pay such excess
increased costs (although the Borrower, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay the costs which
are not in excess of those being charged by the respective assigning Bank prior
to such assignment and any subsequent increased costs of the type described
above resulting from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank and, with the
consent of the Administrative Agent, any Bank which is a fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to its trustee. No pledge pursuant to this clause (c) shall release the
transferor Bank from any of its obligations hereunder.
-98-
<PAGE>
11.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent, the Collateral Agent or any Bank in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower or any other Credit Party and the
Administrative Agent, the Collateral Agent or any Bank shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent, the Collateral Agent
or any Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent or any Bank to any other or further
action in any circumstances without notice or demand.
11.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation then
owed and due to such Bank bears to the total of such Obligation then owed and
due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
participation by all the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
-99-
<PAGE>
11.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP, consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by the Borrower
to the Banks); provided that (i) except as otherwise specifically provided
herein, all computations determining compliance with Sections 7.03 and 7.08,
shall utilize accounting principles and policies in conformity with those used
to prepare the financial statements delivered to the Banks for the first fiscal
year of the Borrower ended after the Effective Date pursuant to Section 6.01(b)
(which annual financial statements shall be generally consistent with the
historical financial statements delivered to the Banks pursuant to Section
5.05(a) and (b)) and (ii) for purposes of calculating financial terms, all
covenants and related definitions, all such calculations based on the operations
of the Borrower and its Restricted Subsidiaries on a consolidated basis shall be
made without giving effect to the results of operations of any Unrestricted
Subsidiaries (which for this purpose shall be treated as if same did not exist).
(b) Notwithstanding anything to the contrary contained in clause (a)
of this Section 11.07, (i) all calculations used in determining the Consolidated
Fixed Charge Coverage Ratio (except to the extent otherwise provided in clause
(4) of the last sentence of the definition thereof) and the Leverage Ratio shall
convert all Pounds Sterling (or other currencies not in Dollars) amounts into
Dollars using the average rate of exchange (as quoted in the Wall Street
Journal) during the relevant fiscal period based on the rates in effect in
London, England on each Business Day during such fiscal period, provided that in
determining the Leverage Ratio at any time the numerator thereof shall be
calculated by converting all Pounds Sterling (or other currencies not in
Dollars) amounts into Dollars using the Dollar Equivalent of the respective such
amounts as in effect on the date of determination, and (ii) for purposes of
determining compliance with any incurrence tests set forth in Section 7
(excluding the definitions of Consolidated Fixed Charge Coverage Ratio and
Leverage Ratio), any amounts so incurred or expended (to the extent incurred or
expended in a currency other than Dollars) shall be converted into Dollars on
the basis of the Dollar Equivalent of the respective such amounts as in effect
on the date of such incurrence or expenditure under any provision of any such
Section that has an aggregate Dollar limitation provided for therein (and to the
extent the respective incurrence test regulates the aggregate amount outstanding
at any time and is expressed in terms of Dollars, all outstanding amounts
originally incurred or spent in currencies other than Dollars shall be converted
into Dollars on the basis of the Dollar Equivalent of the respective such
amounts as in effect on the date any new incurrence or expenditure is made under
any provision of any such Section that regulates the aggregate Dollar amount
outstanding at any time) and (iii) except as otherwise specifically provided
-100-
<PAGE>
herein, all computations determining compliance with Section 7 shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements delivered to the Banks for the first fiscal year of the
Borrower ended after the Effective Date pursuant to Section 6.01(b) (which
annual financial statements shall be generally consistent with the historical
financial statements delivered to the Banks pursuant to Section 7.05(a) and (b))
but shall be made in accordance with the requirements of clause (i) or (ii), as
the case may be, of this Section 13.07(b).
(c) All computations of interest and Fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (EXCEPT, IN THE
CASE OF OTHER CREDIT DOCUMENTS, AS SPECIFICALLY OTHERWISE PROVIDED THEREIN) AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER, AND
AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER THE
BORROWER. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME
-101-
<PAGE>
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT,
ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE BORROWER IN ANY OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
11.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower, the Administrative Agent and
each of the Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at its Notice Office or, in
-102-
<PAGE>
the case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it. The Administrative Agent
shall give the Borrower and each Bank prompt written notice of the occurrence of
the Effective Date.
11.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) with
Obligations being directly modified, (i) extend the final scheduled maturity of
any Loan or Note, or reduce the rate or extend the time of payment of interest
or Fees thereon, or reduce the principal amount thereof (except to the extent
repaid in cash), (ii) release or terminate the Alpine Guaranty provided by
Alpine or (iii) release all or substantially all of the Collateral (except as
expressly provided in the Credit Documents) under all the Pledge Agreements,
(iv) amend, modify or waive any provision of this Section 11.12 (except for
technical amendments with respect to additional extensions of credit pursuant to
this Agreement which afford the protections set forth in the proviso below to
such additional extensions of credit), (v) reduce the percentage specified in
the definition of Required Banks (it being understood that, with the consent of
the Required Banks, additional extensions of credit pursuant to this Agreement
may be included in the determination of the Required Banks on substantially the
same basis as the extensions of Loans are included on the Effective Date) or
(vi) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement; provided further, that no such change,
waiver, discharge or termination shall (x) increase the Commitment of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default shall not constitute an increase of the
Commitment of any Bank), (y) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 10 or any other provision as
same relates to the rights or obligations of the Administrative Agent, (x)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
-103-
<PAGE>
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vi), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described below, to replace each such
non-consenting Bank or Banks with one or more Replacement Banks pursuant to
Section 1.11 so long as at the time of such replacement, each such Replacement
Bank consents to the proposed change, waiver, discharge or termination provided
further, that in any event the Borrower shall not have the right to replace a
Bank, or repay its Loans solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
the second proviso to Section 11.12(a).
11.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.08, 3.04, 10.06 and 11.01 shall survive the execution,
delivery and termination of this Agreement and the Notes and the making and
repayment of the Obligations.
11.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 11.14 would, at the time of such
transfer, result in increased costs under Section 1.08, 1.09 or 3.04 in excess
of those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such excess increased costs (although the
Borrower, in accordance with and pursuant to the other provisions of this
Agreement, shall be obligated to pay the costs which would apply in the absence
of such designation and any subsequent increased costs of the type described
above resulting from changes after the date of the respective transfer).
11.15 Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
11.15, to maintain a register (the "Register") on which it will record the Loans
made by each of the Banks and each repayment in respect of the principal amount
of the Loans of each Bank. Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the rights to the principal of,
and interest on, any Loan shall not be effective until such transfer is recorded
on the Register maintained by the Administrative Agent with respect to ownership
of such Loans and prior to such recordation all amounts
-104-
<PAGE>
owing to the transferor with respect to such Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 11.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 11.15.
11.16 Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 11.16, each Bank agrees that it will use its reasonable efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 11.16 to the same extent as such Bank)
any information with respect to the Borrower or any of its Subsidiaries which is
now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Borrower to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to such Bank, (e) to the
Administrative Agent or the Collateral Agent or any other Bank and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Loans or any
interest therein by such Bank, provided, that such prospective transferee shall
be subject to the provisions of this Section 11.16(a).
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding
-105-
<PAGE>
the creditworthiness of the Borrower and its Subsidiaries, provided such Persons
shall be subject to the provisions of this Section 11.16 to the same extent as
such Bank).
11.17 No Recourse Against Others. No stockholder (except Alpine to
the extent expressly provided in the Alpine Guaranty and Alpine Pledge
Agreement), director, officer, employee, incorporator or Subsidiary of the
Borrower (including without limitation Adience and its Subsidiaries) as such,
past, present or future of the Borrower or any successor corporation shall have
any liability for any obligations of the Borrower under this Agreement or the
Notes or for any claim based on, in respect of or by reason of, such obligations
or their creation. Each Bank waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
11.18 Limitation on Additional Amounts, etc. Notwithstanding
anything to the contrary contained in Section 1.08 or 1.09 of this Agreement,
unless a Bank gives notice to the respective Borrower that it is obligated to
pay an amount under the respective Section within one year after the later of
(x) the date the Bank incurs the respective increased costs, Taxes, loss,
expense or liability, reduction in amounts received or receivable or reduction
in return on capital or (y) the date such Bank has actual knowledge of its
incurrence of the respective increased costs, Taxes, loss, expense or liability,
reductions in amounts received or receivable or reduction in return on capital,
then such Bank shall only be entitled to be compensated for such amount by such
Borrower pursuant to said Section 1.08 or 1.09, as the case may be, to the
extent the costs, Taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs one year prior to such Bank giving
notice to such Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.08 and 1.09, as the case may be. This Section 11.18
shall have no applicability to any Section of this Agreement other than said
Sections 1.08 and 1.09.
-106-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
c/o The Alpine Group, Inc.
1790 Broadway REFRACO INC.
New York, New York 10019
Attn: Stewart H. Wahrsager,
Vice President By /s/ Stewart H. Wahrsager
Telephone: (212) 757-3333 --------------------------
Facsimile: (212) 757-3423 Title: Vice President
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By /s/ Gina S. Thompson
--------------------------
Title: Vice President
