<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------
FORM 8-K/A
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AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
THE ALPINE GROUP, INC.
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Report on Form 8-K
dated April 15, 1997 filed on April 30, 1997 as set forth in the pages
attached hereto:
Item 2 Acquisition or Disposition of Assets
Item 7 Financial Statements and Exhibits
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
Dated: June 27, 1997
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The indebtedness incurred under the Term Loan Agreement of Refraco
Inc. with Bankers Trust and described in Item 2 of the Current Report on Form
8-K dated April 15, 1997 and filed on April 30, 1997 is secured by, among
other things, a guaranty of The Alpine Group Inc. (the "Company"). Such
guaranty, originally secured by the Company's pledge of all the shares of
capital stock of Refraco Inc. at any time owned by the Company (the "Alpine
Refraco Shares") and 1,318,681 shares of common stock, par value $.01 per
share ("Superior Common Stock"), of Superior TeleCom Inc., was modified on
June 11, 1997 to be secured by the Alpine Refraco Shares and shares of
Superior Common Stock with a market value of $60 million (subject to
adjustment based on the market value of the pledged Superior Common Stock)
and to eliminate certain restrictions on the incurrence by the Company of
other indebtedness and on the ability of the Company to dispose of the
Company's shares of Superior Common Stock in excess of the foregoing market
value amount. Each of the Credit Agreement and the Term Loan Agreement were
also amended to make certain ministerial and administrative revisions
thereto. For further information with respect to the guaranty and pledge
agreements entered into by the Company and the aforementioned amendments
thereto and to the Credit Agreement and the Term Loan Agreement, reference is
made to Exhibits 4-11 hereto, which are hereby incorporated by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
1. The audited consolidated balance sheets of Hepworth Refractories
(Holdings) Limited ("Hepworth") as of December 31, 1996 and 1995
and the related consolidated profit and loss accounts and cash flow
statements for each of the years in the three-year period ended
December 31, 1996 are included in this Report on Form 8-K/A as
Item 7(a).
2. Pro Forma Financial Information. The pro forma financial
information included herein reflects the pro forma effects of the
acquisition of Hepworth. Upon completion of the acquisition,
Hepworth changed its name to Refraco Holdings Limited ("Refraco").
The pro forma adjustments have been applied to (i) the condensed
historical financial statements of Alpine for the fiscal year ended
April 30, 1996, which statements have been derived from Alpine's
Consolidated Financial Statements, (ii) the unaudited financial
statements of Alpine as of January 31, 1997 and for the nine months
then ended, (iii) the unaudited condensed historical financial
statements of Refraco for the 12-month period ended March 31, 1996
and (iv) the unaudited financial statements of Refraco as of
December 31, 1996 and for the nine months then ended.
The unaudited pro forma condensed combined balance sheet is
presented as if the acquisition transaction has occurred on
January 31, 1997. The unaudited pro forma condensed combined
statements of operations for the 12 months ended April 30, 1996 and
the nine months ended January 31, 1997 give effect to such
transaction as if they had occurred on May 1, 1995.
The pro forma financial statements are based on preliminary
estimates of values, transaction costs, plant and product line
closure and relocation costs and preliminary appraisals. The actual
recording of the transactions will be based on final appraisals,
values, closure and
2
<PAGE>
relocation costs and transaction costs. Accordingly, the actual
recording of the transactions can be expected to differ from these
pro forma financial statements.
Such pro forma financial statements do not necessarily represent the
financial position or the results of operations that might have
occurred had the transactions been consummated as of the dates
referred to above, nor are they necessarily indicative of future
operations of Alpine or Refraco. Such pro forma statements should be
read in conjunction with the Consolidated Financial Statements of
Alpine and the Consolidated Financial Statements of Hepworth,
together with the respective notes thereto.
3
<PAGE>
(a) Financial Statements of Business Acquired
Consolidated Financial Statements of Hepworth Refractories
(Holdings) Limited, with report of Independent Auditors.
(b) Pro Forma Condensed Combined Financial Statements (Unaudited)
(c) Exhibits
1. Reference is made to Form 8-K dated April 15, 1997 and filed
April 30, 1997 Item 7(c) for a list of Exhibits 1-3, which are
incorporated herein by reference.
2. Exhibit 4 - Alpine Pledge Agreement, dated as of April 15,
1997, made by the Alpine Group, inc. in favor of Bankers Trust
Company, as Collateral Agent for the benefit of the Secured
Creditors (as defined therein).
3. Exhibit 5 - First Amendment, dated as of June 11, 1997, to
the Alpine Pledge Agreement, dated as of April 15, 1997, made by
The Alpine Group, Inc. in favor of Bankers Trust Company, as
Collateral Agent for the benefit of the Secued Creditors.
4. Exhibit 6 - Guaranty, dated as of April 15, 1997, made by The
Alpine Group, Inc. for the benefit of the Secured Creditors
(as defined therein).
5. Exhibit 7 - First Amendment, dated as of June 11, 1997, to
the Guaranty, dated as of April 15, 1997, made by The Alpine
Group, Inc. for the benefit of the Secured Creditors.
6. Exhibit 8 - First Amendment, dated as of June 11, 1997, to the
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.
7. Exhibit 9 - Second Amendment, dated as of June 12, 1997, to
the 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.
8. Exhibit 10 - First Amendment, dated as of June 11, 1997,
to the Term Loan Agreement, dated as of April 15, 1997, among
Refraco Inc., various banks, and Bankers Trust Company, as
Administrative Agent.
4
<PAGE>
9. Exhibit 11 - Second Amendment, dated as of June 12, 1997, to
the Term Loan Agreement, dated as of April 15, 1997, among
Refraco Inc., various banks, and Bankers Trust Company, as
Administrative Agent.
5
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
By: /s/ Gary Edwards
------------------------------
Gary Edwards
Controller
6
<PAGE>
(a) Financial Statements of Businesses Acquired
7
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of Hepworth Refractories (Holdings)
Limited
We have audited the accompanying consolidated balance sheets of Hepworth
Refractories (Holdings) Limited and its subsidiaries at 31 December 1996 and
1995 and the related consolidated profit and loss accounts and cash flow
statements for each of the years in the three year period ended 31 December
1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United Kingdom and the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes assessing the principles used and the
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Hepworth
Refractories (Holdings) Limited and its subsidiaries at 31 December 1996 and
1995 and the results of their operations and their cash flows for each of the
years in the three year period ended 31 December 1996 in conformity with
generally accepted accounting principles in the United Kingdom.
Generally accepted accounting principles in the United Kingdom vary in
certain significant respects from generally accepted accounting principles in
the United States of America. Application of generally accepted accounting
principles in the United States of America would have affected the profit for
the financial year for each of the years in the three year period ended 31
December 1996 and equity shareholders' funds at 31 December 1996 and 1995 to the
extent summarised in Note 22 to the consolidated financial statements.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
Sheffield, England
27 June 1997
8
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
Consolidated profit and loss accounts
YEARS ENDED 31 DECEMBER 1994, 1995 AND 1996
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-----------------------------------
<S> <C> <C> <C> <C>
1994 1995 1996
NOTE L000 L000 L000
----- ---------- ---------- ----------
Turnover............................................................... 1 134,178 161,374 155,088
Cost of sales.......................................................... (114,561) (136,664) (128,103)
---------- ---------- ----------
Gross profit........................................................... 19,617 24,710 26,985
Distribution costs..................................................... (6,892) (8,139) (7,954)
Administrative expenses................................................ (9,176) (9,821) (10,090)
Other operating income................................................. 1,827 188 231
---------- ---------- ----------
Operating profit....................................................... 5,376 6,938 9,172
Share of profits of associated companies............................... 577 635 (104)
Interest payable and similar charges................................... 3 (314) (370) (374)
Other interest receivable and similar income........................... 3 181 334 229
---------- ---------- ----------
Profit before taxation................................................. 4 5,820 7,537 8,923
Taxation............................................................... 6 (426) (2,485) (3,330)
---------- ---------- ----------
Profit after taxation.................................................. 5,394 5,052 5,593
Dividends.............................................................. 7 (5,136) (5,500) (2,056)
---------- ---------- ----------
Retained (loss)/profit for the year attributable to equity
shareholders......................................................... 258 (448) 3,537
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
In all of the above years the group made no material acquisitions and had no
material discontinued activities.
The notes on pages 13 to 34 form part of these financial statements.
9
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
Consolidated balance sheets
AT 31 DECEMBER 1995 AND 1996
<TABLE>
<CAPTION>
AT 31 DECEMBER
---------------------------------
<S> <C> <C> <C>
1995 1996
NOTE L000 L000
----- --------- ---------
Fixed assets
Tangible fixed assets............................................................... 8 22,721 21,595
Investments......................................................................... 10 10
Associated companies................................................................ 9 2,971 2,201
--------- ---------
25,702 23,806
--------- ---------
Current assets
Stock............................................................................... 10 28,563 27,990
Debtors............................................................................. 11 51,484 43,847
Cash.................................................................................. 4,337 3,463
--------- ---------
84,384 75,300
Creditors: amounts falling due within one year........................................ 12 (54,488) (44,838)
--------- ---------
Net current assets.................................................................... 29,896 30,462
--------- ---------
Creditors: amounts falling due after more than one year............................... 13 (1,844) (1,260)
--------- ---------
Provisions for liabilities and charges................................................ 14 (4,460) (2,825)
--------- ---------
Net assets............................................................................ 49,294 50,183
--------- ---------
--------- ---------
Capital and reserves
Share capital....................................................................... 15 12,000 12,000
Share premium....................................................................... 16 829 829
Non distributable reserves.......................................................... 16 147 147
Profit and loss account............................................................. 16 36,318 37,207
--------- ---------
Total equity shareholders' funds...................................................... 49,294 50,183
--------- ---------
--------- ---------
</TABLE>
The notes on pages 13 to 34 form part of these financial statements.
10
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
Reconciliation of movements in shareholders' funds
<TABLE>
<CAPTION>
YEAR TO 31 DECEMBER
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
Profit for the financial year........................................................ 5,394 5,052 5,593
Dividends............................................................................ (5,136) (5,500) (2,056)
--------- --------- ---------
258 (448) 3,537
Goodwill written off on acquisition of subsidiary.................................... -- -- (115)
Exchange differences................................................................. 320 1,148 (2,533)
--------- --------- ---------
Net addition to shareholders' funds.................................................. 578 700 889
Opening shareholders' funds.......................................................... 48,016 48,594 49,294
--------- --------- ---------
Closing shareholders' funds.......................................................... 48,594 49,294 50,183
--------- --------- ---------
</TABLE>
Consolidated statements of total recognised gains and losses
<TABLE>
<CAPTION>
YEAR TO 31 DECEMBER
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
Profit for the financial year........................................................... 5,394 5,052 5,593
Exchange rate fluctuation differences................................................... 320 1,148 (2,533)
--------- --------- ---------
Total recognised gains for the year..................................................... 5,714 6,200 3,060
--------- --------- ---------
</TABLE>
11
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
Cash flow statement
FOR THE YEARS ENDED 31 DECEMBER 1994, 1995 AND 1996
<TABLE>
<CAPTION>
1994 1995 1996
NOTE L000 L000 L000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash inflow from operating activities....................................... 18a 2,991 7,743 11,056
Returns on investments and servicing of finance............................. 18b (133) (556) (98)
Taxation.................................................................... (1,623) (1,114) (3,256)
Capital expenditure and financial investment................................ 18b (2,336) (2,586) (3,128)
Acquisitions and disposals.................................................. 18b -- -- (347)
Equity dividends paid....................................................... -- (14,000) (5,610)
--- --------- --------- ---------
Net cash outflow before use of liquid resources and financing............... (1,101) (10,513) (1,383)
Financing................................................................... 18b (1,804) 11,255 1,101
--- --------- --------- ---------
(Decrease)/increase in cash................................................. 18c (2,905) 742 (282)
--- --------- --------- ---------
--- --------- --------- ---------
</TABLE>
12
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared under the historical cost convention,
and comply with applicable UK accounting standards.
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the financial
statements.
BASIS OF CONSOLIDATION
This financial information consolidates the accounts of Hepworth
Refractories (Holdings) Limited and all its subsidiary undertakings. These
accounts are made up to 31 December.
The acquisition method of accounting has been adopted. Under this method,
the results of subsidiaries acquired or disposed of in the year are included in
the consolidated profit and loss account from the date of acquisition or up to
the date of disposal. Goodwill arising on consolidation (representing the excess
of the fair value of the consideration given over the fair value of the
separable net assets acquired) is written off against reserves on acquisition.
On subsequent disposal or termination of a previously acquired business, the
profit or loss on disposal or termination is calculated after charging the gross
amount of any related goodwill previously written off.
DEPRECIATION AND AMORTISATION
The charge less the estimated residual value is calculated at rates
appropriate to write off the net cost of the individual assets from the time
they become operational by equal annual instalments over their estimated useful
lives, which are principally as follows:
Buildings--40 years
Plant and equipment--10, 15 or 25 years
Commercial vehicles--5 years
Motor cars--4 years
Freehold land is not depreciated.
PENSIONS
DEFINED BENEFIT SCHEME
The expected cost of pensions is charged to the profit and loss account so
as to spread the cost of pensions over the service life of employees. Variations
from the regular cost are spread over the expected service lives of current
employees in the scheme. Pension costs are assessed in accordance with the
advice of an actuary.
DEFINED CONTRIBUTION SCHEME
The cost of pensions is charged to the profit and loss account as incurred.
RESEARCH AND DEVELOPMENT
All revenue expenditure is charged against income as it is incurred.
13
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
RELATED PARTY TRANSACTIONS
As the company is a wholly owned subsidiary of Hepworth PLC, the company has
taken advantage of the exemption contained in FRS 8 and has therefore not
disclosed transactions or balances with entities which form part of the group.
The consolidated financial statements of Hepworth PLC, within which this company
is included, can be obtained from Tapton Park Road, Sheffield, S10 3FS. The
company was sold on 15 April 1997 to the Alpine Group, Inc.
STOCKS
Stocks are stated at the lower of cost and net realisable value. In
determining the cost of raw materials, consumables and goods purchased for
resale, the weighted average purchase price is used. For work in progress and
finished goods cost is taken as production cost, which includes an appropriate
proportion of attributable overheads.
FOREIGN EXCHANGE
Transactions denominated in foreign currencies are translated at the rate of
exchange ruling on the day the transaction occurs.
Foreign currency monetary assets and liabilities in the balance sheet are
translated into sterling at the rates of exchange ruling at the end of the year.
Any resulting exchange gains or losses are taken to the profit and loss account.
The assets and liabilities of overseas subsidiary undertakings are
translated at the closing exchange rate. The profit and loss accounts of those
undertakings are translated using the average rate of exchange during the year.
Net exchange differences arising on translation are taken to reserves.
LEASING OF EQUIPMENT
Payments under operating leases are charged wholly to the profit and loss
account in the year in which they are incurred.
TURNOVER
Turnover comprises the invoice value, excluding value added tax, of goods
and services supplied to customers including fellow subsidiaries (and includes
royalties receivable).
DEFERRED TAXATION
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. Provision is made for
deferred taxation to the extent that it is probable an actual liability will
arise.
14
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
POST-EMPLOYMENT BENEFITS
In Belgium there is a requirement to pay certain personnel made redundant
through to their normal retirement age. Such costs are termed pre-pensions. A
number of UK employees who left employment due to illness are entitled to
certain payment to retirement age. Such costs are termed long term sick.
The expected cost of pre-pension and long term sick is charged to the profit
and loss account when the redundancy or cessation of employment occurs. The
liabilities are discounted to present value.
ASSOCIATED COMPANIES
Companies, other than subsidiary companies, in which the Group holds a
participating interest and over which it exercises significant influence are
treated as associated companies. Shares in these companies are stated at the
value attributed to the proportion of the net assets held, after writing off
goodwill.
15
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1 SEGMENTAL ANALYSIS
a) Turnover is analysed by geographical destination and origin as follows:
Turnover by destination
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
United Kingdom................................................................... 42,166 43,388 40,315
Rest of Europe................................................................... 53,029 60,780 61,576
Rest of the world................................................................ 38,983 57,205 53,197
--------- --------- ---------
134,178 161,374 155,088
--------- --------- ---------
</TABLE>
Turnover by origin
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
United Kingdom................................................................... 101,359 120,488 114,303
Rest of Europe................................................................... 31,004 38,310 35,727
Rest of the world................................................................ 1,815 2,576 5,058
--------- --------- ---------
134,178 161,374 155,088
--------- --------- ---------
</TABLE>
All of the above turnover derives from the one class of business undertaken
and the profits attributable thereto are shown in the profit and loss account.
b) Profit before taxation by geographical area of operation is analysed below:
<TABLE>
<CAPTION>
1994 1995 1996
L000V L000 L000
--------- --------- ---------
<S> <C> <C> <C>
United Kingdom........................................................................... 5,637 6,100 6,024
Rest of Europe........................................................................... 37 1,194 2,558
Rest of the world........................................................................ 146 243 341
--------- --------- ---------
5,820 7,537 8,923
--------- --------- ---------
</TABLE>
16
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
c) Net assets by geographical area of operation is analysed below:
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
United Kingdom............................................................. 24,706 30,490
Rest of Europe............................................................. 23,825 18,910
Rest of the world.......................................................... 763 783
------- -------
49,294 50,183
------- -------
</TABLE>
2 STAFF NUMBERS AND COSTS
The average number of persons employed by the group (including directors)
during the year, analysed by category, was as follows:
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
NO. NO. NO.
--------- --------- ---------
Production and distribution.............................................................. 1,681 1,762 1,590
Administration, accounting and computer.................................................. 86 79 68
Sales and marketing...................................................................... 107 115 122
Research and development................................................................. 86 82 79
--------- --------- ---------
1,960 2,038 1,859
--------- --------- ---------
</TABLE>
The aggregate payroll costs of these persons were:
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
Wages and salaries................................................................... 34,767 39,691 37,341
Social Security costs................................................................ 5,972 6,917 6,492
Pension costs--UK.................................................................... (36) 820 1,341
--Overseas................................................................ 561 388 363
--------- --------- ---------
41,264 47,816 45,537
--------- --------- ---------
</TABLE>
17
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3 INTEREST
a) Interest payable and similar charges
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
----- ----- -----
<S> <C> <C> <C>
On bank loans, overdrafts and other loans wholly repayable within five years................. 312 180 205
On all other loans........................................................................... -- 188 153
Finance charges payable in respect of finance leases and hire purchase contracts............. 2 2 16
--- --- ---
314 370 374
--- --- ---
</TABLE>
b) Other interest receivable and similar income
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
----- ----- -----
<S> <C> <C> <C>
Receivable from group undertaking............................................................ -- 224 106
Bank interest................................................................................ 181 110 123
--- --- ---
181 334 229
--- --- ---
</TABLE>
4 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION IS STATED AFTER
(CHARGING)/CREDITING THE FOLLOWING
<TABLE>
<CAPTION>
YEAR ENDED 31 DECEMBER
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
Hire of plant & equipment............................................................... (673) (847) (831)
Lease rentals........................................................................... (288) (407) (386)
Auditors' remuneration--audit work...................................................... (93) (94) (99)
Auditors' remuneration--non audit work.................................................. (35) (24) (14)
Net profit on assets disposed........................................................... 495 313 114
Net rents receivable.................................................................... 258 135 160
Exchange gains/(losses)................................................................. 65 21 (65)
Expenditure on research & development................................................... (875) (862) (911)
Grants received credited to P&L accounts................................................ 85 -- --
Exceptional reorganisation costs........................................................ (1,180) -- (1,001)
</TABLE>
18
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5 REMUNERATION OF DIRECTORS
Emoluments paid to the directors of Hepworth Refractories (Holdings) Limited
by subsidiary undertakings were as follows:
<TABLE>
<CAPTION>
1994 1995 1996
L L L
--------- --------- ---------
<S> <C> <C> <C>
Directors' emoluments............................................................ 428,776 514,753 675,529
Compensation for loss of office.................................................. -- 203,200 41,325
--------- --------- ---------
428,776 717,953 716,854
--------- --------- ---------
</TABLE>
Directors' emoluments, excluding pension costs, fell within the following
scale:
<TABLE>
<CAPTION>
1994 1995 1996
NO. NO. NO.
--------- --------- ---------
<S> <C> <C> <C>
0-5,000.......................................................................... 1 2 1
5,001--10,000.................................................................... -- -- 1
40,001--45,000................................................................... -- -- 1
55,001--60,000 -- 1 2
60,001-65,000.................................................................... 1 -- --
65,001-70,000.................................................................... 1 -- --
70,001-75,000.................................................................... 1 1 --
75,001-80,000.................................................................... -- 1 --
85,001-90,000.................................................................... -- 1 1
90,001-95,000.................................................................... -- 1 --
95,001-100,000................................................................... -- -- 1
115,001-120,000.................................................................. -- 1 --
120,001-125,000.................................................................. 1 -- --
150,001-155,000.................................................................. 1 -- --
210,001-215,000.................................................................. -- -- 1
Included above are emoluments of Chairman........................................ -- -- --
Highest paid director............................................................ 154,749 115,741 214,878
</TABLE>
19
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
6 TAXATION
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
UK corporation tax at 33% (1995: 33%, 1994: 33%)........................................ (795) (2,022) (2,253)
UK double taxation relief............................................................... 135 -- --
Deferred tax............................................................................ 552 5 43
Overseas tax payable.................................................................... (79) (299) (1,292)
Related companies tax (charge)/ credit.................................................. (220) (360) 59
Adjustments relating to an earlier year in respect of:
Corporation tax......................................................................... 174 (14) (20)
Deferred tax............................................................................ (193) 205 133
--- --------- ---------
(426) (2,485) (3,330)
</TABLE>
The corporation tax liability for the year to 31 December 1994 has been
reduced by L1.2 million due to tax relief on the closure costs of the Andenne
branch which were provided in 1993 but not allowed for tax in either the
corporation or deferred tax computations for that year.
7 DIVIDENDS
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Dividend proposed........................................................................ 5,136 5,500 2,056
--------- --------- ---------
</TABLE>
20
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8 TANGIBLE ASSETS
<TABLE>
<CAPTION>
LAND & BUILDINGS PLANT & VEHICLES
--------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PLANT
HELD ASSETS IN
PLANT UNDER THE COURSE
INCLUDING FINANCE OF
FREEHOLD LONG LEASE SHORT LEASE FIXTURES VEHICLES LEASES CONSTRUCTION TOTAL
L000 L000 L000 L000 L000 L000 L000 L000
-------- ---------- ----------- --------- -------- ------- ------------ ------
Cost
At 1 January 1994.............. 10,316 27 1 64,512 3,198 7 1,284 79,345
Additions...................... 99 -- -- 1,894 524 -- 683 3,200
Group transfers in............. -- -- -- -- 34 -- -- 34
Disposals...................... (1,258) -- -- (2,175) (481) -- (73) (3,987)
Reclassifications.............. 144 -- -- 873 -- -- (1,017) --
Exchange adjustment............ 658 -- -- 1,674 11 1 16 2,360
-------- --- --- --------- -------- ------- ------ ------
At 31 December 1995............ 9,959 27 1 66,778 3,286 8 893 80,952
-------- --- --- --------- -------- ------- ------ ------
Additions...................... 329 -- -- 1,068 369 142 2,842 4,750
Group transfers in............. -- -- -- 30 30 -- -- 60
Disposals...................... (323) -- -- (3,827) (136) -- -- (4,286)
Reclassifications.............. -- -- -- 874 -- -- (874) --
Exchange adjustment............ (1,083) -- -- (3,282) (29) (2) (62) (4,458)
-------- --- --- --------- -------- ------- ------ ------
At 31 December 1996............ 8,882 27 1 61,641 3,520 148 2,799 77,018
-------- --- --- --------- -------- ------- ------ ------
</TABLE>
21
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8 TANGIBLE ASSETS (CONTINUED)
<TABLE>
<CAPTION>
LAND & BUILDINGS PLANT & VEHICLES
---------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
PLANT HELD
PLANT UNDER
INCLUDING FINANCE
FREEHOLD LONG LEASE SHORT LEASE FIXTURES VEHICLES LEASES
L000 L000 L000 L000 L000 L000
----------- --------------- --------------- ----------- ----------- -----------
Depreciation
At 1 January 1994..................... 5,683 25 -- 47,857 3,016 1
Disposals............................. (1,061) -- -- (2,147) (390) --
Group transfers in.................... -- -- -- -- 19 --
Charge for the year................... 269 -- -- 2,820 174 2
Reclassifications..................... (6) -- -- 13 -- --
Exchange adjustment................... 517 -- -- 1,398 10 --
----------- --- --- ----------- ----- ---
At 31 December 1995................... 5,402 25 -- 49,941 2,829 3
----------- --- --- ----------- ----- ---
Disposals............................. (54) -- -- (2,510) (109) --
Group transfers in.................... -- -- -- 25 5 --
Charge for the year................... 309 -- -- 2,671 167 18
Reclassifications..................... -- -- -- 27 -- --
Exchange adjustment................... (882) -- -- (2,476) (25) --
----------- --- --- ----------- ----- ---
At 31 December 1996................... 4,775 25 -- 47,678 2,867 21
----------- --- --- ----------- ----- ---
Net book value at
31 December 1996...................... 4,107 2 1 13,963 653 127
31 December 1995...................... 4,557 2 1 16,837 457 5
31 December 1994...................... 4,633 2 1 16,655 182 6
<CAPTION>
<S> <C> <C>
ASSETS IN THE
COURSE OF
CONSTRUCTION TOTAL
L000 L000
--------------- ---------
Depreciation
At 1 January 1994..................... 80 56,662
Disposals............................. (73) (3,671)
Group transfers in.................... -- 19
Charge for the year................... 25 3,290
Reclassifications..................... (7) --
Exchange adjustment................... 6 1,931
----- ---------
At 31 December 1995................... 31 58,231
----- ---------
Disposals............................. -- (2,673)
Group transfers in.................... -- 30
Charge for the year................... 61 3,226
Reclassifications..................... (27) --
Exchange adjustment................... (8) (3,391)
----- ---------
At 31 December 1996................... 57 55,423
----- ---------
Net book value at
31 December 1996...................... 2,742 21,595
31 December 1995...................... 862 22,721
31 December 1994...................... 1,204 22,683
</TABLE>
22
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
9 ASSOCIATED COMPANIES
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Rotary Nozzle International SA............................................... 2,971 2,202
--------- ---------
--------- ---------
</TABLE>
Hepworth Refractories (Holdings) Limited holds 50% of the ordinary share
capital of both Rotary Nozzle International SA, incorporated in Belgium. The
principal activity of this company is the manufacture and sale of refractory
products.
10 STOCK
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Raw materials and consumables.............................................. 12,310 11,996
Work inprogress............................................................ 4,312 3,748
Finished goods and goods for resale........................................ 11,941 12,246
--------- ---------
28,563 27,990
--------- ---------
</TABLE>
11 DEBTORS
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Trade debtors.............................................................. 41,167 37,694
Other debtors.............................................................. 482 1,722
Prepayments and accrued income............................................. 1,267 997
Amounts owed by parent and fellow subsidiary undertakings.................. 4,255 462
Pension scheme............................................................. 4,313 2,972
--------- ---------
51,484 43,847
--------- ---------
Analysis
Debtors falling due within one year...................................... 47,171 40,691
Debtors falling due after more than one year............................. 4,313 3,156
--------- ---------
51,484 43,847
--------- ---------
</TABLE>
23
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Bank loans................................................................. 445 467
Obligations under finance leases and hire purchase contracts............... 4 32
Payments received on account............................................... 2,048 358
Trade creditors............................................................ 30,020 25,800
Other taxes and Social Security............................................ 2,248 3,924
Other creditors............................................................ 1,207 627
Accruals and deferred income............................................... 6,376 7,047
Amounts owed to parent and fellow subsidiary undertakings.................. 4,402 2,112
Dividends proposed......................................................... 5,610 2,056
Corporation tax............................................................ 2,128 2,415
--------- ---------
54,488 44,838
--------- ---------
</TABLE>
The bank loans are secured by charges over certain of the group's assets.
13 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Bills of exchange payable.................................................... 250 229
Bank loans................................................................... 1,584 922
Obligations under finance leases and hire purchase contracts................. 10 109
--------- ---------
1,844 1,260
--------- ---------
</TABLE>
The bank loans are secured by charges over certain of the group's assets.
Bank loans are repayable as follows:
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Within one year.............................................................. 445 467
Between one and two years.................................................... 504 310
Between two and five years................................................... 716 461
After five years............................................................. 364 151
--------- ---------
2,029 1,389
--------- ---------
</TABLE>
24
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
13 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (CONTINUED)
Obligations under hire purchase and finance leases are payable as follows:
<TABLE>
<CAPTION>
1995 1996
L000 L000
----- -----
<S> <C> <C>
Within one year................................................................. 4 32
Between one and two years....................................................... 4 35
Between two and five years...................................................... 6 74
-- ---
14 141
-- ---
</TABLE>
14 PROVISIONS FOR LIABILITIES AND CHARGES
<TABLE>
<CAPTION>
LONG TERM
DEFERRED SICK &
TAXATION PREPENSION WARRANTY TOTAL
L000 L000 L000 L000
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
At 1 January 1995....................................................... 649 3,161 546 4,356
Utilised during year.................................................... -- (737) (93) (830)
(Credit)/charge for the year............................................ (209) 789 93 673
Exchange movement....................................................... -- 212 49 261
--- ----- --- ---------
At 31 December 1995..................................................... 440 3,425 595 4,460
Utilised during year.................................................... -- (902) -- (902)
(Credit)/charge for the year............................................ (193) 287 (345) (251)
Transferred to creditors................................................ -- -- (155) (155)
Exchange movement....................................................... -- (232) (95) (327)
--- ----- --- ---------
At 31 December 1996..................................................... 247 2,578 -- 2,825
--- ----- --- ---------
</TABLE>
The amounts provided for deferred taxation and amounts not provided are set
out below:
<TABLE>
<CAPTION>
1995 1996
<S> <C> <C> <C> <C>
1996
PROVIDED UNPROVIDED PROVIDED UNPROVIDED
L000 L000 L000 L000
----------- ------------- ----------- -------------
Difference between accumulated depreciation and amortisation and
capital allowances............................................... 1,294 1,285 1,199 1,166
Other timing differences........................................... (854) -- (952) --
----- ----- ----- -----
440 1,285 247 1,166
----- ----- ----- -----
</TABLE>
25
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
15 SHARE CAPITAL
<TABLE>
<CAPTION>
31 DECEMBER 1995 31 DECEMBER 1996
<S> <C> <C> <C> <C>
NUMBER NUMBER
'000 L000 '000 L000
----------- --------- ----------- -----------
Ordinary shares of L1 each
Authorised................................................................ 12,000 12,000 12,000 12,000
Allotted, called up and fully paid........................................ 12,000 12,000 12,000 12,000
</TABLE>
16 RESERVES
<TABLE>
<CAPTION>
PROFIT &
NON-DISTRIBUTABLE LOSS
SHARE PREMIUM RESERVES ACCOUNT
L000 L000 L000
------------- ------------------- ---------
<S> <C> <C> <C>
At 1 January 1995.......................................................... 829 147 35,618
Retained profit for the year............................................... -- -- (448)
Exchange differences....................................................... -- -- 1,148
--- --- ---------
829 147 36,318
Retained profit for the year............................................... -- -- 3,537
Exchange differences....................................................... -- -- (2,533)
Goodwill written off....................................................... -- -- (115)
--- --- ---------
At 31 December 1996........................................................ 829 147 37,207
--- --- ---------
</TABLE>
At 31 December 1996 cumulative goodwill written off against reserves in
respect of the acquisition of businesses amounted to L23.3m (1995: L23.2m).
17 PENSION SCHEME
The principal UK operating company, Hepworth Refractories Limited,
participates in the Hepworth PLC Group pension scheme covering the majority
of its employees, including the executive directors. This scheme is a funded
defined benefit scheme and is financed through a separate trustee
administered fund. A valuation of the fund at April 1996 showed that the
actuarial valuation of the assets represented 117% of the value of the
benefits that had accrued to members, after allowing for expected future
increases in earnings. Further details of the actuarial valuation can be
found in the consolidated financial statements of Hepworth PLC.
The surplus disclosed by the actuarial valuation is being spread over the
expected service lives of the current employees in the scheme as a variation
from regular cost. Overall this resulted in a net credit in 1994 of L36,000 and
a net charge of L820,000 in 1995 and of L1,341,000 in 1996 in respect of the UK
scheme.
Certain overseas subsidiaries operate defined contribution schemes. The
pension cost charge described at note 2 represents contributions payable by
these subsidiaries.
26
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18 NOTES TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
a) Reconciliation of operating profit to net cash inflow from operating
activities:
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Operating profit..................................................................... 5,376 6,938 9,172
Depreciation......................................................................... 3,366 3,290 3,226
Profit on sale of tangible fixed assets.............................................. (495) (313) (114)
Share of profit of associated companies.............................................. 577 635 (104)
--------- --------- ---------
8,824 10,550 12,180
Increase in stocks................................................................... (87) (3,328) (650)
(Increase)/decrease in debtors....................................................... (775) (5,708) 1,756
(Decrease)/increase in creditors..................................................... (4,971) 6,229 (2,230)
--------- --------- ---------
(5,833) (2,807) (1,124)
--------- --------- ---------
Net cash inflow from operating activities............................................ 2,991 7,743 11,056
--------- --------- ---------
</TABLE>
27
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
b) Analysis of cash flows
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Returns on investments and servicing of finance
Interest received.................................................................. 454 81 118
Interest paid...................................................................... (587) (635) (204)
Interest element of finance lease control payments................................. -- (2) (12)
--------- --------- ---------
(133) (556) (98)
--------- --------- ---------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets.......................................... (3,466) (3,215) (4,781)
Proceeds from sale of tangible fixed assets........................................ 1,130 629 1,653
--------- --------- ---------
(2,336) (2,586) (3,128)
--------- --------- ---------
Acquisitions and disposals
Acquisition of business (net of cash acquired)..................................... -- -- (487)
Disposal of business (net of cash disposed of)..................................... -- -- 140
--------- --------- ---------
-- -- (347)
--------- --------- ---------
Financing
Inception of new finance leases.................................................... 12 -- 139
Repayment of bank loans............................................................ (870) (380) (315)
(Repayment)/receipts from loans and other borrowings............................... (946) 11,635 1,277
--------- --------- ---------
(1,804) 11,255 1,101
--------- --------- ---------
</TABLE>
28
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
c) Analysis of changes in net debt
<TABLE>
<CAPTION>
CASH IN DEBT DUE DEBT DUE
HAND AND WITHIN ONE AFTER ONE FINANCE
AT BANK YEAR YEAR LEASES TOTAL
L000 L000 L000 L000 L000
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
At 1 January 1994............................................. 5,871 (785) (2,480) (4) 2,602
Cash flows.................................................... (2,905) 57 813 -- (2,035)
Other non cash changes........................................ 335 (57) (195) (12) 71
----------- --- ----------- --- ---------
At 1 January 1995............................................. 3,301 (785) (1,862) (16) 638
Cash flows.................................................... 742 271 109 2 1,124
Other non cash changes........................................ 294 69 169 -- 532
----------- --- ----------- --- ---------
At 31 December 1995........................................... 4,337 (445) (1,584) (14) 2,294
Cash flows.................................................... (282) (90) 405 12 45
Other non cash changes........................................ (592) 68 257 (139) (406)
----------- --- ----------- --- ---------
At 31 December 1996........................................... 3,463 (467) (922) (141) 1,933
----------- --- ----------- --- ---------
</TABLE>
d) Acquisition of business
The investing cash flows arising in respect of acquisitions during the year
ended 31 December 1996 were as follows:
<TABLE>
<CAPTION>
1996
L000
-----
<S> <C>
Hepworth Refractories Inc
Cash consideration including costs of acquisition................... 507
Cash balances....................................................... (20)
---
487
---
</TABLE>
On 30 November 1996 the company acquired the entire issued share capital of
Hepworth Refractories Inc for a total consideration of L507,000.
29
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
The fair value of the assets and liabilities acquired are as follows:
<TABLE>
<CAPTION>
1996
L000
---------
<S> <C>
Fixed assets........................................................................... 29
Stock.................................................................................. 108
Debtor................................................................................. 612
Cash................................................................................... 20
Creditors.............................................................................. (348)
Taxation............................................................................... (29)
---
Net assets............................................................................. 392
Goodwill............................................................................... 115
---
507
---
Satisfied by
Cash................................................................................. 507
---
---
</TABLE>
No fair value adjustments were required.
e) Disposal of business
Sales proceeds of the disposal in 1996 were matched by underlying assets.
19 COMMITMENTS
Capital commitments for which no provision has been made in these financial
statements, are as follows:
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- -----
<S> <C> <C>
Contracted but not provided for................................................ 2,623 660
</TABLE>
Annual commitments under operating leases are as follows:
<TABLE>
<CAPTION>
LAND AND BUILDINGS OTHER
------------- -----------
<S> <C> <C> <C>
1995 1996 1995
L000 L000 L000
----- ----- -----
Expiring within one year.............................................................. -- -- --
Expiring between two and five years................................................... -- -- 386
Expiring in more than five years...................................................... 45 46 --
--- --- ---
--- --- ---
<CAPTION>
<S> <C>
1996
L000
-----
Expiring within one year.............................................................. 36
Expiring between two and five years................................................... 321
Expiring in more than five years...................................................... --
---
---
</TABLE>
30
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20 CONTINGENT LIABILITIES
The company is engaged in a number of disputes arising in the normal course
of business which involve, or may involve, legal proceedings.
In the opinion of the directors, because of the uncertainty surrounding the
outcome of these disputes, it is not possible to estimate the potential
liability that may arise.
21 INVESTMENT IN SUBSIDIARIES
Principal trading subsidiary undertakings are shown below. The principal
activity of all group companies is the manufacture and sale of refractory
products
<TABLE>
<CAPTION>
COUNTRY OF
INCORPORATION
COMPANY OR REGISTRATION
- ------------------------------------------------------------------------------------------ ----------------------
<S> <C>
Hepworth Refractories Limited England & Wales
Coolee Limited England & Wales
The Meltham Silica Fire Brick Co Ltd* England & Wales
Hepworth Refractories Deutschland GmbH* Germany
Thomas Marshall (Loxley) Limited England & Wales
Marshall Leasing (Loxley) Limited England & Wales
Thomas Marshall Overseas Investments Limited* England & Wales
Moler Products Limited* England & Wales
Hepworth Refractories (Belgium) SA* Belgium
Hepworth Refractories Italiana SrL* Italy
Hepworth Refractories (Canada) Limited* Canada
Les Produits Silicieux SA France
Constructions Thermiques Europeennes France
Hepworth Refractories (International) Limited* England & Wales
Hepworth Refractories Inc USA
</TABLE>
All subsidiary undertakings are wholly owned with only ordinary shares in
issue (except Thomas Marshall (Loxley) Limited which also has preference
shares), and operate in their country of incorporation or registration.
The companies which are not direct subsidiary undertakings of Hepworth
Refractories (Holdings) Limited are denoted*.
22 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UNITED KINGDOM AND
UNITED STATES OF AMERICA GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The Group's consolidated financial statements are prepared in conformity
with generally accepted accounting principles applicable in the United Kingdom
(UK GAAP), which differ in certain significant respects from those applicable in
the United States of America (US GAAP). These differences, together with the
approximate effects of the adjustments on net profit and equity shareholders'
funds, relate principally to the items set out below:
(a) GOODWILL: Under UK GAAP, goodwill arising from acquisitions is written off
against equity shareholders' funds. Upon the subsequent disposal of the
business, goodwill previously written off is reinstated and considered in
the calculation of the gain or loss on disposal. Under US GAAP, goodwill is
31
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
capitalised and amortised over its estimated useful life. For the purpose of
calculating the amortisation of goodwill a life of 30 years has been
assumed. Upon the subsequent disposal of the business, unamortised goodwill
is considered in the calculation of the gain or loss on disposal.
(b) DIVIDENDS: Under UK GAAP, proposed dividends on ordinary shares, as
recommended by the Directors, are deducted from equity shareholders' funds
and shown as a liability in the balance sheet at the end of the period to
which they relate. Under US GAAP, such dividends are deducted from equity
shareholders' funds at the date of declaration of the dividend.
(c) DEFERRED TAXATION: UK GAAP requires that no provision for deferred taxation
should be made if there is reasonable evidence that such taxation will not
be payable in the foreseeable future. Under US GAAP, deferred taxation is
recognised under the full liability method which also permits deferred tax
assets to be recognised if their realisation is considered more likely than
not.
Deferred taxation also arises in relation to the tax effect of other US GAAP
differences.
(d) PENSION COSTS: Under UK GAAP, the expected cost of pensions is charged to
the profit and loss account so as to spread the cost of pensions over the
expected service lives of employees. Surpluses arising from the actuarial
valuation are similarly spread. Under US GAAP, costs and surpluses are also
spread over the expected service lives but based on prescribed actuarial
assumptions, allocation of costs and valuation methods, which differ from
those used for UK GAAP.
COMPARISON OF SSAP 24 AND FAS 87 CALCULATED PENSION EXPENSE
The components of the SSAP 24 pension expense, based upon an appropriate
allocation of the valuation surplus (note 17), is compared against the pension
expense as calculated under FAS 87 in the table below:
<TABLE>
<CAPTION>
SSAP 24
-------------------------------
<S> <C> <C> <C>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
Net pension expense................................................................... (36) 820 1,341
--------- --------- ---------
--------- --------- ---------
<CAPTION>
FAS 87
-------------------------------
Net periodic pension cost............................................................. 956 1,423 1,591
--------- --------- ---------
--------- --------- ---------
</TABLE>
32
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(e) CASH FLOWS: The principal difference between UK GAAP and US GAAP is in
respect of classification. Under UK GAAP, the Group presents its cash flows
for operating activities, returns on investments and servicing of finance,
taxation, investing activities, and financing activities. US GAAP requires
only three categories of cash flow activities which are operating, investing
and financing.
Cash flows arising from taxation and returns on investments and servicing of
finance under UK GAAP would, with the exception of dividends paid, be included
as operating activities under US GAAP; dividend payments would be included as a
financing activity under US GAAP. In addition, under UK GAAP, cash and cash
equivalents include short term borrowings which under US GAAP would be presented
as financing activities.
Under US GAAP, the following amounts would be reported:
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Net cash provided by operating activities............................................. 1,235 6,073 7,702
Net cash used in investing activities................................................. (2,336) (2,586) (3,475)
Net cash used in financing activities................................................. (1,804) (2,745) (4,509)
--------- --------- ---------
Net (decrease)/increase in cash....................................................... (2,905) 742 (282)
--------- --------- ---------
--------- --------- ---------
Cash under US GAAP.................................................................... 3,301 4,337 3,463
--------- --------- ---------
--------- --------- ---------
</TABLE>
CURRENT ASSETS AND LIABILITIES: Current assets and liabilities under UK GAAP
include amounts which fall due after more than one year. Under US GAAP such
assets would be classified as non-current assets. Provisions for liabilities and
other charges under UK GAAP include amounts due within one year which would be
classified as current liabilities under US GAAP.
APPROXIMATE EFFECTS ON NET PROFIT ON DIFFERENCES BETWEEN UK AND US GAAP.
<TABLE>
<CAPTION>
1994 1995 1996
L000 L000 L000
--------- --------- ---------
<S> <C> <C> <C>
Net profit in conformity with UK GAAP.................................................... 5,394 5,052 5,593
Adjustments:
Goodwill............................................................................... (773) (773) (773)
Deferred taxation...................................................................... 67 (37) 119
Pension cost........................................................................... (992) (603) (250)
Tax effect of US GAAP adjustments...................................................... 327 199 83
--------- --------- ---------
Net profit in conformity with US GAAP.................................................... 4,023 3,838 4,772
--------- --------- ---------
--------- --------- ---------
</TABLE>
33
<PAGE>
HEPWORTH REFRACTORIES (HOLDINGS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
APPROXIMATE EFFECTS ON EQUITY SHAREHOLDERS FUNDS OF DIFFERENCES BETWEEN UK
AND US GAAP.
<TABLE>
<CAPTION>
1995 1996
L000 L000
--------- ---------
<S> <C> <C>
Equity shareholders' funds in conformity with UK GAAP...................... 49,294 50,183
Adjustments:
Goodwill................................................................. 17,941 17,283
Dividends................................................................ 5,500 2,056
Deferred taxation........................................................ (1,285) (1,166)
Pension cost............................................................. (3,027) (3,277)
Tax effect of US GAAP adjustments........................................ 998 1,081
--------- ---------
Equity shareholders' funds in conformity with US GAAP...................... 69,421 66,160
--------- ---------
--------- ---------
</TABLE>
34
<PAGE>
(b) Pro Forma Condensed Combined Financial Statements (Unaudited)
35
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JANUARY 31, 1997 (ALPINE) AND DECEMBER 31, 1996 (REFRACO)
HISTORICAL HISTORICAL PRO FORMA
AGI REFRACO ADJUSTMENTS PRO FORMA
--------- --------- --------- ---------
(DOLLARS IN THOUSANDS)*
<S> <C> <C> <C> <C>
Net Sales $ 426,638 $ 186,106 -- $ 612,744
Cost of goods sold 353,730 152,066 $ 526(a) 506,322
--------- --------- --------- ---------
Gross profit 72,908 34,040 (526) 106,422
Selling, general & administrative 29,480 21,653 100(a) 50,333
(900)(b)
Amortization of goodwill 2,292 927 125 3,344
--------- --------- --------- ---------
Operating income (loss) 41,136 11,460 149 52,745
Interest income 1,123 275 -- 1,398
Interest (expense) (17,954) (450) (8,250)(c) (26,654)
Gain on sale of subsidiary stock 80,397 -- -- 80,397
Other income (expense), net 357 64 -- 421
--------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes &
minority interest in subsidiaries 105,059 11,349 (8,101) 108,307
Benefit (provision) for income taxes (48,151) (4,203) 2,533(d) (49,821)
--------- --------- --------- ---------
Income (loss) from continuing
operations before minority
interest in subsidiaries 56,908 7,146 (5,568) 58,486
Minority interest in subsidiary (3,392) -- -- (3,392)
--------- --------- --------- ---------
Income (loss) from continuing
operations 53,516 7,146 (5,568) 55,094
Preferred stock dividend 537(e) -- -- (537)
--------- --------- --------- ---------
Income (loss) attributable to
common stock from continuing
operations $ 52,979 $ 7,146 $ (5,568) $ 54,557
--------- --------- --------- ---------
--------- --------- --------- ---------
Income (loss) per share of
common stock from continuing
operations $ 2.85 $ 2.93
--------- ---------
--------- ---------
Weighted average number of
common stock shares outstanding 18,621,000 18,621,000
---------- ----------
---------- ----------
</TABLE>
- -----------------------
* Except share and per share amounts
36
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE TWELVE MONTHS ENDED APRIL 30, 1996 (ALPINE) AND MARCH 31, 1996 (REFRACO)
HISTORICAL HISTORICAL PRO FORMA
AGI REFRACO ADJUSTMENTS PRO FORMA
--------- --------- --------- ---------
(DOLLARS IN THOUSANDS)*
<S> <C> <C> <C> <C>
Net sales $ 524,113 $ 255,685 -- $ 779,798
Cost of goods sold 453,785 213,808 $ 701(a) 668,294
--------- --------- --------- ---------
Gross profit 70,328 41,877 (701) 111,504
Selling, general & administrative 35,148 28,770 133(a) 62,851
(1,200)(b)
Amortization of goodwill 2,658 1,237 166(a) 4,061
--------- --------- --------- ---------
Operating income (loss) 32,522 11,870 200 44,592
Interest income 2,146 493 -- 2,639
Interest (expense) (27,795) (594) (11,000)(c) (39,389)
Other income (expense), net 22 1,008 -- 1,030
--------- --------- --------- ---------
Income (loss) from continuing
operations before minority interest
in subsidiaries 6,895 12,777 (10,800) 8,872
Benefit (provision) for income taxes (1,676) (5,270) 3,865(d) (3,081)
--------- --------- --------- ---------
Income (loss) from continuing
operations 5,219 7,507 (6,935) 5,791
Preferred stock dividends (1,098) -- -- (1,098)
--------- --------- --------- ---------
Income (loss) attributable to
common stock from continuing
operations $ 4,121 $ 7,507 $ (6,935) $ 4,693
--------- --------- --------- ---------
--------- --------- --------- ---------
Income (loss) per share of
common stock from continuing
operations $ 0.23 $ 0.26
--------- ---------
--------- ---------
Weighted average number of
common stock shares outstanding 17,987,000 17,987,000
---------- ----------
---------- ----------
</TABLE>
- -----------------------
* Except share and per share amounts
37
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JANUARY 31, 1997 (ALPINE) AND DECEMBER 31, 1996 (REFRACO)
HISTORICAL HISTORICAL PRO FORMA
AGI REFRACO ADJUSTMENTS PRO FORMA
--------- --------- --------- ---------
(DOLLARS IN THOUSANDS)*
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 34,097 -- $ 156,800 (f) $ 34,097
(5,500)(f)
(106,300)(f)
(45,000)(g)
Marketable securities 8,178 -- -- 8,178
Accounts receivable, net 50,772 $ 60,310 -- 111,082
Inventories, net 61,580 44,784 -- 106,364
Prepaid expenses, deposits & other 6,641 9,105 -- 15,746
--------- --------- --------- ---------
Total current assets 161,268 114,199 -- 275,467
Property, plant and equipment, net 99,368 34,552 20,800(f) 154,720
Goodwill, net 79,326 27,653 4,994(f) 111,973
Other assets 25,309 3,538 5,500(f) 34,347
--------- --------- --------- ---------
Total assets 365,271 179,942 31,294 576,507
--------- --------- --------- ---------
--------- --------- --------- ---------
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
obligation 1,418 747 -- 2,165
Accounts payable 34,634 41,280 -- 75,914
Accrued expenses 44,851 23,045 13,715(f) 81,611
--------- --------- --------- ---------
Total current liabilities 80,903 65,072 13,715 159,690
Long-term debt, less current portion 196,067 1,475 156,800(f) 309,342
(45,000)(g)
Other long-term obligations 13,962 11,429 8,445(h) 33,836
Minority interest-Superior TeleCom 17,415 -- -- 17,415
Stockholders' equity 56,924 101,966 (101,966)(f) 56,224
(700)(g)
--------- --------- --------- ---------
Total liabilities and stockholders'
equity $365,271 $179,942 $31,294 $576,507
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
38
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(a) Reflects the changes to Refraco's historical depreciation ruling from
the allocation of Alpine's purchase price to property, plant and
equipment.
(b) Reflects the elimination of Hepworth Plc for corporate administrative
charges incurred during the twelve months ended March 31, 1996 and the
nine months ended December 31, 1996 of $1.6 million and $1.2 million,
respectively, offset by incremental selling general & administrative
charges estimated to be incurred by Alpine of $0.4 million and $0.3
million for the twelve months ended March 31, 1996 and the nine months
ended December 31, 1996, respctively, as a result of the acquisition.
(c) Reflects the adjustment to interest expense resulting from debt
incurred as a result of the acquisition which is more fully described in
Note (d) below.
(d) Reflects the adjustment to income tax expense resulting from the
transaction.
(e) Excludes $5.2 million premium paid on the redemption of certain
preferred stock by Alpine in October 1996.
(f) In conjunction with the acquisition of Refraco, Refraco and its
subsidiaries entered into a $130.0 million Senior Secured Credit Facility
("Credit Facility") and a $60.0 million Secured Floating Rate Note
("Notes"). Proceeds from the initial borrowings under these facilities
amounted to $156.8 million and were used to pay the cash purchase price of
$106.3 million (including approximately $1.5 million in transaction
expenses) to Hepworth Plc, refinance approximately $45.0 million of
existing debt and pay financing expenses of approximately $5.5 million.
The following reflects the preliminary allocation of the purchase price to
the net asets of Refraco based upon estimated fair valuesof such assets:
<TABLE>
<CAPTION>
Amount
------------------
(in millions)
<S> <C>
Estimated acquisition cost (including $1.5
million in expenses)......................... $106.3
Less: Historical book values of net assets at
December 31, 1996............................ (102.0)
Write-up of property, plant and equipment....... (20.8)
Accrual of expenses relating to closure,
relocation and redundancies at certain
Refraco facilities.......................... 13.1
Deferred taxes resulting from the write-up of
property, plant and equipment and
accrual of expenses......................... 8.4
----------------
Acquisition goodwill (to be amortized over 30
years) $ 5.0
----------------
----------------
</TABLE>
(g) Reflects the debt extinguished in connection with the financing
described in note (f) and the write-off of $700,000 in deferred
finance charges previously capitalized.
(h) Reflects the adjustment to deferred taxes resulting from the purchase
accounting adjustments to certain assets and liabilities.
39
<PAGE>
Exhibit 4
ALPINE PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April 15, 1997 (as amended, modified or
supplemented from time to time, this "Agreement"), made by THE ALPINE GROUP,
INC., a Delaware corporation (the "Pledgor"), in favor of BANKERS TRUST COMPANY,
as Collateral Agent (the "Pledgee"), for the benefit of the Secured Creditors
(as defined below). Except as otherwise defined herein, terms used herein and
defined in the Term Loan Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H :
WHEREAS, Refraco Inc. (the "Borrower"), various lenders from time to
time party thereto (the "Banks"), and Bankers Trust Company, as Administrative
Agent (together with any successor agent, the "Administrative Agent," and
together with the Pledgee and the Banks, the "Bank Creditors"), have entered
into a Term Loan Agreement, dated as of April 15, 1997 (as amended, modified or
supplemented from time to time, the "Term Loan Agreement"), providing for the
making of Loans to the Borrower as contemplated therein;
WHEREAS, the Borrower may from time to time be party to one or more
interest rate swap agreements, interest rate cap agreements, interest rate
collar agreements, interest rate hedging agreements or other similar agreements
or arrangements (each such agreement or arrangement with an Other Creditor (as
hereinafter defined), an "Interest Rate Protection Agreement") to protect the
Borrower against fluctuations in interest rates in respect of the Loans, with a
Bank or an affiliate of a Bank (each such Bank or affiliate, even if the
respective Bank subsequently ceases to be a Bank under the Term Loan Agreement
for any reason, together with such Bank's or affiliate's successors and assigns,
collectively, the "Other Creditors," and together with Bank Creditors, the
"Secured Creditors");
WHEREAS, pursuant to the Alpine Guaranty, the Pledgor has guaranteed
to the Secured Creditors the payment when due of all obligations and liabilities
of the
<PAGE>
Borrower under or with respect to (x) the Credit Documents and (y) each Interest
Rate Protection Agreement with one or more Other Creditors;
WHEREAS, it is a condition precedent to the making of Loans under the
Term Loan Agreement that the Pledgor shall have executed and delivered to the
Pledgee this Agreement; and
WHEREAS, the Pledgor will obtain benefits from the incurrence of Loans
under the Term Loan Agreement and, accordingly, desires to execute this
Agreement to satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
of the Pledgor (including, without limitation, the obligations and
liabilities of the Pledgor under the Alpine Guaranty), now existing or
hereafter incurred under, arising out of or in connection with any Credit
Document to which it is a party and the due performance and compliance by
the Pledgor with the terms of each such Credit Document (all such
obligations and liabilities under this clause (i), except to the extent
consisting of Other Obligations (as defined below), being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
of the Pledgor, now existing or hereafter incurred under, arising out of or
in connection with any Interest Rate Protection Agreement (including all
obligations of the Pledgor under the Alpine Guaranty) and the due
performance and compliance by the Pledgor with the terms, conditions and
agreements of each such Interest Rate Protection Agreement (all such
obligations and liabilities under this clause (ii) being herein
collectively called the "Other Obligations");
-2-
<PAGE>
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred to in
clauses (i), (ii) and (iii) above, after an Event of Default (such term, as
used in this Agreement, shall mean any Event of Default under, and as
defined in, the Term Loan Agreement, or any payment default by the Borrower
under any Interest Rate Protection Agreement and shall in any event
include, without limitation, any payment default (after the expiration of
any applicable grace period) on any of the Obligations (as hereinafter
defined)) shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any exercise by the Pledgee
of its rights hereunder, together with reasonable attorneys' fees and court
costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the type described above, whether outstanding on
the date of this Agreement or extended from time to time after the date of this
Agreement.
2. DEFINITION OF STOCK. As used herein, the term "Stock" shall
mean (x) 1,318,681 shares of issued and outstanding capital stock of Superior
Telecom Inc. ("Superior") owned by the Pledgor on the date of this Agreement and
described in Annex A hereto and (y) 100% of the issued and outstanding shares of
capital stock of Refraco Inc. at any time owned by the Pledgor, in each case
together with any stock issued in substitution or exchange therefor, or as
proceeds with respect thereto (including without limitation all additional stock
received as described in following Section 6).
3. PLEDGE OF STOCK, ETC.
3.1. PLEDGE. To secure the Obligations of the Pledgor and for the
purposes set forth in Section 1 hereof, the Pledgor hereby: (i) grants to the
Pledgee a security interest in all of the Collateral owned by the Pledgor; (ii)
pledges and deposits as security with the Pledgee the Stock owned by the Pledgor
on the date hereof, and
-3-
<PAGE>
delivers to the Pledgee certificates or instruments therefor, accompanied by
undated stock powers duly executed in blank by the Pledgor or such other
instruments of transfer as are reasonably acceptable to the Pledgee; and (iii)
assigns, transfers, hypothecates, mortgages, charges and sets over to the
Pledgee all of the Pledgor's right, title and interest in and to such Stock (and
in and to all certificates or instruments evidencing such Stock), to be held by
the Pledgee, upon the terms and conditions set forth in this Agreement.
3.2. DEFINITION OF PLEDGED STOCK AND COLLATERAL. All Stock at any
time pledged or required to be pledged hereunder is hereinafter called the
"Pledged Stock," which together with all proceeds thereof, including any
securities and moneys received and at the time held by the Pledgee hereunder, is
hereinafter called the "Collateral".
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Stock, which may be held (in the
discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a
sub-agent appointed by the Pledgee. The Pledgee agrees to promptly notify the
Pledgor after the appointment of any sub-agent; PROVIDED, HOWEVER, that the
failure to give such notice shall not affect the validity of such appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until an
Event of Default shall have occurred and be continuing, the Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Stock and to give all consents, waivers or ratifications in
respect thereof; PROVIDED, that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any other Credit Document or any
Interest Rate Protection Agreement (collectively, the "Secured Debt
Agreements"), or which would have the effect of impairing the rights, priorities
or remedies of the Pledgee or any other Secured Creditor under this Agreement or
any other Secured Debt Agreement. All such rights of the Pledgor to vote and to
give consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. So long as no Default or
Event of Default is then in existence or would exist immediately after giving
effect thereto, cash proceeds representing regular quarterly dividends paid by
Superior with respect to the Pledged Stock shall be released from this Agreement
and paid to the Pledgor; PROVIDED that, (x) all cash dividends payable in
respect of the Pledged Stock
-4-
<PAGE>
which represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so representing
an extraordinary, liquidating or other distribution in return of capital, to the
Pledgee and retained by it as part of the Collateral and (y) at any time when a
Default or Event of Default is in existence, all cash dividends payable in
respect of the Pledged Stock shall be paid to the Pledgee and retained by it as
part of the Collateral. The Pledgee shall also be entitled to receive directly,
and to retain as part of the Collateral:
(i) all other or additional stock or other securities or property
(other than cash) paid or distributed by way of dividend or otherwise in
respect of the Pledged Stock;
(ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged Stock by way
of stock-split, spin-off, split-up, reclassification, combination of shares
or similar rearrangement; and
(iii) all other or additional stock or other securities or property
(including cash) which may be paid in respect of the Collateral by reason
of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other
payments which are received by the Pledgor contrary to the provisions of this
Section 6 and Section 7 below shall be received in trust for the benefit of the
Pledgee, shall be segregated from other property or funds of the Pledgor and
shall be forthwith paid over to the Pledgee as Collateral in the same form as so
received (with any necessary endorsement).
7. REMEDIES IN CASE OF EVENTS OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, and the Pledgee
shall be entitled to exercise all the rights and remedies of a secured party
under the Uniform Commercial Code and also shall be entitled, without
limitation, to exercise the following rights, which the Pledgor hereby agrees to
be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
payable to the Pledgor under Section 6 hereof;
-5-
<PAGE>
(ii) to transfer all or any part of the Pledged Stock into the
Pledgee's name or the name of its nominee or nominees (the Pledgee agrees
to promptly notify the Pledgor after such transfer; PROVIDED, HOWEVER, that
the failure to give such notice shall not affect the validity of such
transfer);
(iii) to vote all or any part of the Pledged Stock (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (the Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do so);
and
(iv) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by the Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; PROVIDED, that at least 10 Business
Days' notice of the time and place of any such sale shall be given to the
Pledgor. The Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if any,
of marshalling the Collateral and any other security for the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any Secured Creditor shall be liable
for failure to collect or realize upon any or all of the Collateral or for
any delay in so doing nor shall any of them be under any obligation to take
any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or any other Secured Debt Agreement
or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or
any other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and
-6-
<PAGE>
no failure or delay on the part of the Pledgee or any other Secured Creditor to
exercise any such right, power or remedy shall operate as a waiver thereof. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Pledgee, in each case acting upon the
instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Other Obligations) and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Pledgee or the holders of at least a majority of the
outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided in Section 9 of the Borrower
Pledge Agreement.
(b) It is understood and agreed that the Pledgor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by
the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees (i) to indemnify and hold
harmless the Pledgee in such capacity and each other Secured Creditor from and
against any and all claims, demands, losses, judgments and liabilities of
whatsoever kind or nature, and (ii) to reimburse the Pledgee and each other
Secured Creditor for all reasonable costs and expenses, including reasonable
attorneys' fees, in each case to the extent growing out of or resulting from the
exercise by the Pledgee of any right or remedy granted to it hereunder or under
any other Secured Debt Agreement except, with respect to clauses (i) and (ii)
above, for those arising from the Pledgee's or such other Secured Creditor's
gross negligence or willful misconduct. In no event shall the Pledgee be
liable, in the absence of gross negligence or willful misconduct on its part,
for any matter or thing in connection with this Agreement other than to account
for
-7-
<PAGE>
moneys actually received by it in accordance with the terms hereof. If and to
the extent that the obligations of the Pledgor under this Section 11 are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join with
the Pledgee in executing and, at the Pledgor's own expense, file and refile
under the applicable UCC or such other law such financing statements,
continuation statements and other documents in such offices as the Pledgee may
reasonably deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral and hereby authorizes the Pledgee to file financing statements and
amendments thereto relative to all or any part of the Collateral without the
signature of the Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably deem necessary or advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Pledgee shall act hereunder on the
terms and conditions set forth herein and in Section 10 of the Term Agreement.
14. TRANSFER BY PLEDGOR. The Pledgor shall not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement or any other Secured Debt Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that (i) it is the legal, record and
beneficial owner of, and has good title to, all Pledged Stock, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or
other encumbrance whatsoever, except the liens and security interests created by
this Agreement;(ii) it has the requisite power, authority and legal right to
pledge all the Pledged Stock;(iii) this Agreement has been duly authorized,
executed and delivered by the Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor enforceable in accordance with its terms, except to
the extent that the enforceability hereof may be
-8-
<PAGE>
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
(iv)no consent of any other party (including, without limitation, any
stockholder or creditor of the Pledgor or any of its Subsidiaries) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required to be obtained by the Pledgor in connection with the
execution, delivery or performance of this Agreement, or in connection with the
exercise of its rights and remedies pursuant to this Agreement, except those
which have been obtained or made or as may be required by laws affecting the
offer and sale of securities generally in connection with the exercise by the
Pledgee of certain of its remedies hereunder;(v) the execution, delivery and
performance of this Agreement by the Pledgor does not violate any provision of
any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or foreign,
or of the certificate of incorporation or by-laws (or analogous organizational
documents) of the Pledgor or of any securities issued by the Pledgor or any of
its Subsidiaries, or of any mortgage, indenture, lease, deed of trust, credit
agreement or loan agreement, or any other material agreement, contract or
instrument to which the Pledgor or any of its Subsidiaries is a party or which
purports to be binding upon the Pledgor or any of its Subsidiaries or upon any
of their respective assets and will not result in the creation or imposition of
any lien or encumbrance on any of the assets of the Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (vi)all the shares of
Stock have been duly and validly issued, are fully paid and nonassessable and
subject to no options to purchase or similar rights; and (vii) the pledge,
assignment and delivery of the Pledged Stock, creates a valid and perfected
first security interest in such Stock and the proceeds thereof, subject to no
prior lien or encumbrance or to any agreement purporting to grant to any third
party a lien or encumbrance on the property or assets of the Pledgor which would
include the Stock. The Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Stock and the
proceeds thereof against the claims and demands of all persons whomsoever; and
the Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the other Secured Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt
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<PAGE>
Agreement or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof;(ii) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such agreement
or instrument or this Agreement;(iii) any furnishing of any additional security
to the Pledgee or its assignee or any acceptance thereof or any release of any
security by the Pledgee or its assignee;(iv) any limitation on any party's
liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; or (v) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Pledgor or any Subsidiary of the Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not the Pledgor shall have notice
or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, the Pledgor as
soon as practicable and at its expense will use its reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
reasonable efforts to cause such qualification and compliance to be effected
(and be kept effective) as may be so requested and as would permit or facilitate
the sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933 as then in effect (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other government
requirements; PROVIDED, that the Pledgee shall furnish to the Pledgor such
information regarding the Pledgee as the Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee, each other Secured Creditor and all others participating in the
distribution of the Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information
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<PAGE>
furnished in writing to the Pledgor by the Pledgee or such other Secured
Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Stock pursuant to Section 7 hereof,
such Pledged Stock or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as then
in effect, the Pledgee may, in its sole and absolute discretion, sell such
Pledged Stock or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration; PROVIDED, that at least
10 Business Days' notice of the time and place of any such sale shall be given
to the Pledgor. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion: (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Pledged Stock or part thereof shall have been filed under
such Securities Act; (ii) may approach and negotiate with a single possible
purchaser to effect such sale; and (iii) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Stock or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Stock at a price which the Pledgee, in its sole and absolute discretion, may in
good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
18. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
Pledgor, will promptly execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection Agreements have been terminated, no Note is outstanding
and all Obligations then due and payable have been indefeasibly paid in full.
(b) In the event that any part of the Collateral is released at the
direction of the Required Banks (or all the Banks if required by Section 11.12
of the Term Loan
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<PAGE>
Agreement), the Pledgee, at the request and expense of the Pledgor will duly
assign, transfer and deliver to the Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in possession of the Pledgee and has not
theretofore been released pursuant to this Agreement.
(c) At any time that the Pledgor desires that Collateral be released
as provided in the foregoing Section 18(a) or (b), it shall deliver to the
Pledgee a certificate signed by an Authorized Officer of the Pledgor stating
that the release of the respective Collateral is permitted pursuant to Section
18(a) or (b).
19. NOTICES, ETC. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been given or made when delivered to the
party to which such notice, request, demand or other communications is required
or permitted to be given or made under this Agreement, addressed as follows:
(a) if to the Pledgor, at its address set forth opposite its signature
below;
(b) if to the Pledgee, at:
Bankers Trust Company
One Bankers Trust Plaza
New York, New York 10006
Attention: Gina Thompson
Telephone No.:(212) 250-7356
Telecopier No.:(212) 250-7218
(c) if to any Bank (other than the Pledgee), at such address as such
Bank shall have specified in the Term Loan Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to the Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgor directly affected thereby and the
Pledgee (with the written consent of either (x) the Required Banks (or all the
Banks if required
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<PAGE>
by Section 11.12 of the Term Loan Agreement) at all times prior to the time on
which all Credit Document Obligations have been paid in full or (y) the holders
of at least a majority of the outstanding Other Obligations at all times after
the time on which all Credit Document Obligations have been paid in full;
PROVIDED, that any change, waiver, modification or variance affecting the rights
and benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall require the written
consent of the Requisite Creditors (as defined below) of such Class. For the
purpose of this Agreement, the term "Class" shall mean each class of Secured
Creditors, I.E., whether (i) the Bank Creditors as holders of the Credit
Document Obligations or (ii) the Other Creditors as holders of the Other
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (i) with respect to the Credit Document
Obligations, the Required Banks and (ii) with respect to the Other Obligations,
the holders of at least a majority of all obligations outstanding from time to
time under the Interest Rate Protection Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.
22. RECOURSE. This Agreement is made with full recourse to the
Pledgor and pursuant to and upon all representations, warranties, covenants and
agreements on the part of the Pledgor contained herein and in the other Secured
Debt Agreements and otherwise in writing in connection herewith or therewith.
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<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Address: 1790 Broadway THE ALPINE GROUP, INC.,
New York, NY 10019 as Pledgor
Telephone No.: (212) 757-3333
Telecopier No.: (212) 757-3423
Attention: Stewart H. Wahrsager,
Secretary By /s/ Stewart H. Wahrsager
--------------------------------------
Title: Secretary
BANKERS TRUST COMPANY,
as Pledgee
By /s/ Gina S. Thompson
--------------------------------------
Title: Vice President
<PAGE>
Exhibit 5
FIRST AMENDMENT TO ALPINE PLEDGE AGREEMENT
------------------------------------------
FIRST AMENDMENT (this "Amendment"), dated as of June 11, 1997, among
THE ALPINE GROUP, INC., a Delaware corporation (the "Pledgor"), and BANKERS
TRUST COMPANY, as Collateral Agent (in such capacity, the "Collateral Agent").
Unless otherwise defined herein, all capitalized terms used herein shall have
the respective meanings provided such terms in the Alpine Pledge Agreement
referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Refraco, Inc. (the "Borrower"), the lenders from time to time
party thereto (the "Banks") and Bankers Trust Company, as administrative agent,
have entered into a Term Loan Agreement, dated as of April 15, 1997, providing
for the making of loans as contemplated therein (as amended, modified or
supplemented through the date hereof, the "Term Loan Agreement");
WHEREAS, in connection with the initial execution of the Term Loan
Agreement, the Pledgor entered into the Alpine Pledge Agreement, dated as of
April 15, 1997 (as amended, modified or supplemented through the date hereof,
the "Alpine Pledge Agreement"); and
WHEREAS, the parties hereto wish to amend the Alpine Pledge Agreement
as provided herein;
NOW, THEREFORE, it is agreed:
I. AMENDMENTS TO ALPINE PLEDGE AGREEMENT
1. Section 2 of the Alpine Pledge Agreement is hereby amended by
deleting clause (x) thereof and inserting the following new clause (x) in lieu
thereof:
"(x) all of the shares of capital stock of Superior Telecom Inc.
("Superior") owned by the Pledgor and from time to time on deposit with the
Pledgee pursuant to this Agreement (it is understood that shares of capital
stock of Superior shall be released by and/or deposited with the Pledgee
from time to time pursuant to Section 12(d) of the Alpine Guaranty) and".
<PAGE>
2. Section 18 of the Pledge Agreement is hereby amended by deleting
clause (c) thereof in its entirety and inserting the following new clauses (c)
and (d) in lieu thereof:
"(c) The Pledgee may release such of the Collateral as provided in
Section 12(d) of the Alpine Guaranty.
(d) At any time that the Pledgor desires that Collateral be released
as provided in the foregoing Section 18(a), (b) or (c), it shall deliver to
the Pledgee a certificate signed by an Authorized Officer of the Pledgor
stating that the release of the respective Collateral is permitted pursuant
to Section 18 (a), (b) or (c)."
II. MISCELLANEOUS PROVISIONS.
1. The Pledgor hereby reaffirms its obligations under the Alpine
Pledge Agreement and the grant of security interests contemplated thereby.
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provisions of the Alpine Pledge
Agreement.
3. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Pledgor and the Collateral Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when the Pledgor and the Collateral Agent shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the same to
the Collateral Agent.
6. From and after the First Amendment Effective Date, all references
in the Alpine Pledge Agreement and in the other Credit Documents to the Alpine
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<PAGE>
Pledge Agreement shall be deemed references to the Alpine Pledge Agreement as
amended hereby.
* * *
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
THE ALPINE GROUP, INC.
By /s/ Bragi F. Schut
-----------------------------
Title: Executive Vice President
BANKERS TRUST COMPANY,
as Collateral Agent
By /s/ Gina S. Thompson
-----------------------------
Title: Vice President
<PAGE>
Exhibit 6
ALPINE GUARANTY
GUARANTY, dated as of April 15, 1997 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by The Alpine Group,
Inc., a Delaware corporation (the "Guarantor") for the benefit of the Secured
Creditors (as hereinafter defined). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Refraco Inc. (the "Borrower"), various lenders from time to
time party thereto (the "Banks") and Bankers Trust Company, as Administrative
Agent (together with any successor administrative agent, the "Administrative
Agent"), have entered into a Term Loan Credit Agreement, dated as of April 15,
1997, providing for the making of Loans as contemplated therein (as used herein,
the term "Credit Agreement" means the Credit Agreement described above in this
paragraph, as the same may be amended, modified, extended, renewed, replaced or
supplemented from time to time, and including any agreement extending the
maturity of, or restructuring all or any portion of the Indebtedness under such
agreement or any successor agreement) (the Banks, the Administrative Agent and
the Collateral Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements with one or more Banks or any
affiliate thereof (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors," and together with the Bank Creditors, the
"Secured Creditors");
WHEREAS, the Borrower is a direct Wholly-Owned Subsidiary of the
Guarantor;
WHEREAS, it is a condition precedent to the making of Loans under the
Credit Agreement that the Guarantor shall have executed and delivered this
Guaranty; and
<PAGE>
WHEREAS, the Guarantor will obtain benefits from the incurrence of
Loans under the Credit Agreement and the entering into of Interest Rate
Protection Agreements and, accordingly, desires to execute this Guaranty in
order to satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:
1. The Guarantor irrevocably and unconditionally guarantees: (i) to
the Bank Creditors the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of (x) the principal of and interest on
the Loans made to the Borrower under the Credit Agreement and (y) all other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Bank Creditors under the Credit Agreement or any other
Credit Document to which the Borrower is a party (including, without limitation,
indemnities, Fees and interest thereon), whether now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement or any
such other Credit Document and the due performance and compliance by the
Borrower with all of the terms, conditions and agreements contained in the
Credit Documents (all such principal, interest, liabilities and obligations
being herein collectively called the "Credit Document Obligations"); and (ii) to
each Other Creditor the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities owing by the Borrower under
any Interest Rate Protection Agreement, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in the Interest Rate Protection
Agreements (all such obligations and liabilities being herein collectively
called the "Other Obligations," and together with the Credit Document
Obligations are herein collectively called the "Guaranteed Obligations"). The
Guarantor understands, agrees and confirms that the Secured Creditors may
enforce this Guaranty up to the full amount of the Guaranteed Obligations
against the Guarantor without proceeding against the Borrower, against any
security for the Guaranteed Obligations, or under any other guaranty covering
all or a portion of the Guaranteed Obligations.
2. Additionally, the Guarantor unconditionally and irrevocably
guarantees the payment of any and all Guaranteed Obligations to the Secured
Creditors whether or not due or payable by the Borrower upon the occurrence in
respect of the Borrower of any of the events specified in Section 8.05 or 8.06
of the Credit Agreement, and unconditionally
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and irrevocably promises to pay such Guaranteed Obligations to the Secured
Creditors, or order, on demand, in lawful money of the United States. This
Guaranty shall constitute a guaranty of payment, and not of collection.
3. The liability of the Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by the Guarantor, any other guarantor or by any other
party, and the liability of the Guarantor hereunder shall not be affected or
impaired by any circumstance or occurrence whatsoever, including, without
limitation: (a) any direction as to application of payment by the Borrower or
by any other party, (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations, (c) any payment on or in reduction of any such other guaranty or
undertaking, (d) any dissolution, termination or increase, decrease or change in
personnel by the Borrower, (e) any payment made to any Secured Creditor on the
indebtedness which any Secured Creditor repays the Borrower pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and the Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (f)
any action or inaction by the Secured Creditors as contemplated in Section 6
hereof, or (g) any invalidity, irregularity or unenforceability of all or part
of the Guaranteed Obligations or of any security therefor.
4. The obligations of the Guarantor hereunder are independent of the
obligations of any other guarantor of the Borrower or the Borrower, and a
separate action or actions may be brought and prosecuted against the Guarantor
whether or not action is brought against any other guarantor of the Borrower or
the Borrower and whether or not any other guarantor of the Borrower or the
Borrower be joined in any such action or actions. The Guarantor expressly
acknowledges and agrees that any payment by the Borrower or other circumstance
which operates to toll any statute of limitations as to the Borrower shall
operate to toll the statute of limitations as to the Guarantor.
5. The Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Secured Creditor against, and any other notice
to, any party liable thereon (including the Guarantor, any other guarantor or
the Borrower).
6. Any Secured Creditor may at any time and from time to time without
the consent of, or notice to, the Guarantor, without incurring responsibility to
the Guarantor, without impairing or releasing the obligations of the Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
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<PAGE>
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew 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;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower 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 the Borrower to creditors of the Borrower
other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Secured Creditors
regardless of what liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, any of the Interest Rate Protection Agreements, the Credit Documents
or any of the instruments or agreements referred to therein, or otherwise
amend, modify or supplement any of the Interest Rate Protection Agreements,
the Credit Documents or any of such other instruments or agreements; and/or
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive the Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to
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<PAGE>
this Guaranty, and this Guaranty shall be primary, absolute and unconditional
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a surety
or guarantor except payment in full of the Guaranteed Obligations.
8. 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. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Secured Creditor would otherwise have. No notice
to or demand on the Guarantor in any case shall entitle the Guarantor to any
other further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Secured Creditor to any other or further action in
any circumstances without notice or demand. It is not necessary for any Secured
Creditor to inquire into the capacity or powers of the Borrower or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by the
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Secured Creditors, and such indebtedness of the Borrower to the Guarantor, if
the Administrative Agent, after an Event of Default has occurred, so requests,
shall be collected, enforced and received by the Guarantor as trustee for the
Secured Creditors and be paid over to the Secured Creditors on account of the
indebtedness of the Borrower to the Secured Creditors, but without affecting or
impairing in any manner the liability of the Guarantor under the other
provisions of this Guaranty. Prior to the transfer by the Guarantor of any note
or negotiable instrument evidencing any indebtedness of the Borrower to the
Guarantor, the 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, the 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.
10. (a) The 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 the Borrower, any other guarantor of the Guaranteed
Obligations or any other party; (ii) proceed against or exhaust any security
held from the Borrower, any other guarantor of the Guaranteed Obligations or any
other party; or (iii) pursue any other remedy in the
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Secured Creditors' power whatsoever. The Guarantor waives any defense based on
or arising out of any defense of the Borrower, any other guarantor of the
Guaranteed Obligations or any other party other than payment in full of the
Guaranteed Obligations, including, without limitation, any defense based on or
arising out of the disability of the Borrower, any other guarantor of the
Guaranteed Obligations 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 the Borrower 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 the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid in full in cash. The 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 the Guarantor against the Borrower or any other party or any security.
(b) The 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
indebtedness. The Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower'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 the Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise the Guarantor of information known to them regarding such
circumstances or risks.
11. In order to induce the Banks to make Loans pursuant to the Credit
Agreement, and in order to induce the Other Creditors to execute, deliver and
perform the Interest Rate Protection Agreements, the Guarantor makes the
following representations, warranties and agreements:
(a) CORPORATE STATUS. The Guarantor (i) is a duly organized and
validly existing corporation in good standing under the laws of the
jurisdiction of its organization, (ii) has the requisite 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
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expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Guarantor or the Guarantor and its Subsidiaries taken as a
whole.
(b) POWER AND AUTHORITY. The Guarantor has the requisite power and
authority to execute, deliver and perform the terms and provisions of
this Guaranty and each other Credit Document to which it is a party and has
taken all necessary action to authorize the execution, delivery and
performance by it of this Guaranty and each such other Credit Document.
The Guarantor has duly executed and delivered this Guaranty and each other
Credit Document to which it is a party, and this Guaranty and each such
other Credit Document constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except to the extent that the
enforceability hereof or 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).
(c) NO VIOLATION. Neither the execution, delivery or performance by
the Guarantor of this Guaranty or any other Credit Document to which it is
a party, nor compliance by it with the terms and provisions hereof or
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 upon any of the property or
assets of the Guarantor 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
Guarantor 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, partnership
agreement, by-laws or equivalent organizational or charter documents of the
Guarantor or any of its Subsidiaries.
(d) GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Closing Date), 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 this Guaranty or any
other Credit Document to which the Guarantor is a party or (ii) the
legality, validity, binding effect or enforceability of this Guaranty or
any such other Credit Document.
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(e) FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; FINANCIAL PROJECTIONS; CONSTRUCTION BUDGETS; CONSTRUCTION
SCHEDULE; PLANS AND SPECIFICATIONS. (i) The consolidated statements of
financial condition of the Guarantor and its consolidated subsidiaries at
each of April 30, 1996 and January 31, 1997 (the "January Balance Sheet"),
and the related consolidated statements of income and cash flow and changes
in shareholders' equity of the Guarantor and its consolidated subsidiaries
for the fiscal year or nine months, as the case may be, ended on such date,
and furnished to the Banks by the Guarantor prior to the Closing Date
present fairly the consolidated financial condition of the Guarantor and
its consolidated subsidiaries at the date of such statements of financial
condition and the consolidated results of the operations of the Guarantor
and its consolidated subsidiaries for such fiscal year or nine months, as
the case may be. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied, subject, in the case of the financial statements as
at, and for the nine months ending on, January 31, 1997, to normal year-end
audit adjustments and the absence of footnotes. Since January 31, 1997,
there has been no material adverse change in the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Guarantor or of the Guarantor and its Subsidiaries taken
as a whole.
(ii) On and as of the Closing Date, after giving effect to all
Indebtedness (including the Loans) being guaranteed by the Guarantor
hereunder, (a) the sum of the assets, at a fair valuation, of the Guarantor
will exceed its debts; (b) the Guarantor has not incurred, nor does it
intend to incur or believe that it will incur, debts beyond its ability to
pay such debts as such debts mature; and (c) the Guarantor has, and will
have, sufficient capital with which to conduct its business. For purposes
of this clause (ii), "debt" means any liability on a claim, and "claim"
means (x) 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 (y) 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.
(iii) Except as disclosed in the financial statements delivered
pursuant to preceding clause (i), there were as of the Closing Date no
liabilities or obligations with respect to the Guarantor 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 Guarantor or the Guarantor and its Subsidiaries taken as a whole,
other than obligations incurred under contracts entered into in the normal
course of business since January 31, 1997 and the obligations pursuant to
the Acquisition Documents (collectively the "Additional Obligations"). As
of the
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Closing Date, the Guarantor knows of no basis for the assertion against the
Guarantor or any of its Subsidiaries of any liability or obligation of any
nature whatsoever (other than any Additional Obligations) that is not
disclosed in the financial statements delivered pursuant to preceding
clause (i) which, either individually or in the aggregate, is material to
the Guarantor or the Guarantor and its Subsidiaries taken as a whole.
(f) LITIGATION. There are no actions, suits or proceedings pending
or, to the best knowledge of the Guarantor, overtly threatened (i) with
respect to this Guaranty or any other Credit Document to which the
Guarantor is a party, (ii) with respect to any material Indebtedness of the
Guarantor or any of its Subsidiaries or (iii) that could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Guarantor or the Guarantor and its Subsidiaries taken as a
whole.
(g) TRUE AND COMPLETE DISCLOSURE. All factual information (other
than the Projections) (taken as a whole) furnished by the Guarantor in
writing to the Administrative Agent or any Bank for purposes of or in
connection with this Guaranty, 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 the Guarantor 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.
(h) TAX RETURNS AND PAYMENTS. Except as set forth on Schedule I
hereto, the Guarantor and each Person for whose tax the Guarantor is liable
under applicable law has filed or caused to be filed with the appropriate
taxing authority, all Federal and all other material returns, statements,
forms and reports for all taxes (the "Returns") required to be filed by it
and has paid or caused to be paid (i) all material taxes due for the
periods covered thereby and (ii) all taxes pursuant to any assessment
received by the Guarantor or any such Person, excluding, in each case, any
such taxes that have been contested in good faith and for which adequate
reserves have been established in accordance with generally accepted
accounting principles. Except as disclosed on Schedule I hereto, as of the
Closing Date, there is no action, suit, proceeding, investigation, audit,
or claim now pending or, to the knowledge of the Guarantor, overtly
threatened by any governmental or taxing authority regarding any material
taxes relating to the Guarantor or any of its Subsidiaries. Except as
disclosed on Schedule I hereto, as of the Closing Date, neither the
Guarantor nor any of its Subsidiaries has entered into an agreement or
waiver
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extending any statute of limitations relating to the payment or collection
of any material taxes of the Guarantor or any of its Subsidiaries.
(i) COMPLIANCE WITH STATUTES, ETC. The Guarantor 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 on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Guarantor or of the Guarantor and its Subsidiaries taken
as a whole.
(j) INVESTMENT COMPANY ACT. The Guarantor is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
(k) PUBLIC UTILITY HOLDING COMPANY ACT. The Guarantor is not 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.
(l) EXISTING INDEBTEDNESS. Schedule II hereto sets forth a true and
complete list of all Indebtedness of Alpine (excluding indebtedness which,
in the aggregate, does not exceed $1,000,000) as of the Closing Date, in
each case showing the amount outstanding on the Closing Date and the direct
borrower thereof.
(m) ASSETS OF GUARANTOR. On the Closing Date, the only significant
assets directly owned by the Guarantor are (w) 100% of the capital stock of
the Borrower, (x) 6,474,048 shares of common stock of Superior Telecom Inc.
("Superior"; and with all capital stock of Superior at any time owned by
Alpine being herein called the "Superior Stock"), (y) approximately
$35,292,500 in cash, Cash Equivalents and other investments in marketable
securities and (z) such other assets as are reflected in the January
Balance Sheet or listed on Schedule III hereto.
12. The Guarantor covenants and agrees that on and after the
Effective Date and for so long as the Credit Agreement is in effect and until
the Total Commitment and all Interest Rate Protection Agreements have terminated
and the Loans, together with interest, Fees and all other Guaranteed Obligations
incurred hereunder and thereunder are paid in full, it will:
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(a) LIENS. Not create, assume or suffer to exist any Lien upon any
of the shares of capital stock of Superior at any time owned by the
Guarantor, except for Liens created pursuant to the Alpine Pledge
Agreement. Notwithstanding anything to the contrary contained above, the
covenant contained in the immediately preceding sentence shall cease to
apply to the Non-Pledged Superior Stock (as defined below) only, on the
first date occurring after the Initial Borrowing Date upon which both (x)
no Default or Event of Default exists pursuant to the Credit Agreement and
(y) the Administrative Agent receives a certificate pursuant to Section
6.01(d) of the Credit Agreement establishing, to the reasonable
satisfaction of the Administrative Agent, that the Leverage Ratio (as
defined in the Credit Agreement) as calculated on the last day of any
fiscal quarter ended on or after April 30, 1998, is less than 3.25:1.
(b) DISTRIBUTIONS. Not declare or make any Distribution to its
shareholders in the form of Superior Stock or proceeds representing a
liquidation or other distribution in return of capital of Superior Stock.
(c) INDEBTEDNESS. Not create, incur, assume or suffer to exist any
Indebtedness except (i) Indebtedness under this Guaranty, (ii) Indebtedness
listed on Schedule II hereto so long as the outstanding principal amount
thereof is not increased, and so long as no additional security is
furnished by the Guarantor therefor and (iii) additional Indebtedness of
the Guarantor not otherwise permitted under this Section 12(c) in an
aggregate principal amount not to exceed $30,000,000 at any time
outstanding.
(d) SUPERIOR STOCK. The Guarantor shall take all action as is needed
so that, on the Closing Date, Superior Stock with a fair market value of
$30 million is pledged, and delivered for pledge, pursuant to the Alpine
Pledge Agreement (with the pledged stock described above in this sentence,
together with any additional shares of stock, certificates or other
instruments of Superior received in respect thereof after the Closing Date,
being herein called the "Superior Pledged Stock", and with any Superior
Stock owned by the Guarantor which is not required to be pledged pursuant
to the Alpine Pledge Agreement being herein called the "Non-Pledged
Superior Stock"). To the extent any proceeds are received in respect of
the Superior Pledged Stock (including, without limitation, cash
distributions or dividends, distributions of assets and additional shares
of stock, and any stock received in connection with stock splits, exchanges
or otherwise), such proceeds shall be delivered immediately to the
Collateral Agent in accordance with the requirements of the Alpine Pledge
Agreement and continue to be held as security thereunder; provided that (x)
so long as no Default or Event of Default is then in existence or would
exist immediately after giving effect thereto, cash proceeds representing
regular quarterly dividends paid by Superior with respect to the
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Superior Pledged Stock (in each case so long as such dividends do not
constitute an extraordinary, liquidating or other distribution in return of
capital) shall be released from the Alpine Pledge Agreement in accordance
with the terms thereof and paid over to the Guarantor and (y) and all other
cash proceeds so received (to which preceding clause (x) does not apply)
shall, if the Guarantor so directs the Collateral Agent, be directly
applied by the Collateral Agent to repay outstanding principal of Loans in
accordance with the requirements of the Credit Agreement, in which case the
amount of cash so applied shall be deemed to constitute a common equity
capital contribution by the Guarantor to the Borrower. With respect to the
Non-Pledged Superior Stock, the Guarantor will not sell, transfer or
dispose of same except (i) for sales of such stock for cash at fair market
value (as determined in good faith by the Guarantor), to Persons other than
the Borrower and Subsidiaries of the Borrower, so long as the net cash
proceeds received from each such sale are immediately used to pay amounts
owing pursuant to this Guarantee or to make a cash common equity
contribution to the Borrower, who in turn immediately uses such proceeds to
pay amounts owing pursuant to the Credit Agreement and (ii) at a time when
no Default under Section 8.01 or 8.05 and no Event of Default is in
existence or would exist immediately after giving effect thereto,
Non-Pledged Superior Stock may be sold for cash at fair market value (as
determined in good faith by the Guarantor), to Persons other than the
Borrower and Subsidiaries of the Borrower, in each case so long as the net
cash proceeds received therefrom are invested in the business of the
Guarantor and its Subsidiaries (including by making acquisitions), or held
by the Guarantor as cash or Cash Equivalents pending such investments.
(e) DISSOLUTION AND SALE OF ASSETS. Except for sales of assets
expressly permitted pursuant to preceding clause (d), not wind up,
liquidate or dissolve its affairs or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or
substantially all of its property or assets.
(f) INFORMATION COVENANTS. Furnish to each Bank copies of (i) all
financial information, proxy materials and other information and reports,
if any, (A) which the Guarantor shall file with the SEC, or (B) which the
Guarantor shall deliver to the holders of its capital stock, and (ii) such
other information or documents (financial or otherwise) in the possession
of, or otherwise available without material cost to, the Guarantor, as the
Administrative Agent or the Required Banks may from time to time reasonably
request.
(g) TAXES. Pay when due all taxes which, if not paid when due, would
materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the
Guarantor or of the Guarantor and its Subsidiaries taken as a whole, except
as contested in good faith and by
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appropriate proceedings if adequate reserves (in the good faith judgment of
the management of the Guarantor) have been established with respect
thereto.
(h) ALPINE. Not at any time own less than 75% of the outstanding
capital stock (and at least 75% of the outstanding voting stock) of the
Borrower.
(i) COMPLIANCE WITH CREDIT AGREEMENT. Cause the Borrower and its
Subsidiaries to comply with the provisions of Section 7.01 of the Credit
Agreement. Without limiting the requirements of the immediately preceding
sentence, the Guarantor agrees that if at any time, and for any reason
whatsoever, it receives a Restricted Payment which is in violation of the
provisions of the Credit Agreement, it shall, immediately after it becomes
aware of same, return such excess Restricted Payment to the Borrower. The
Guarantor shall also return any refunds in respect of tax payment to the
Borrower to the extent required by the provisions of Section 7.01 of the
Credit Agreement.
13. As used herein, the term "Guarantor Event of Default" shall mean
the occurrence of any of the following specified events:
(a) PAYMENTS. The Guarantor shall fail to make any payment required
to be made by it hereunder, and such failure has continued, in the case of
payments other than principal, for three or more Business Days; or
(b) REPRESENTATIONS, ETC. Any representation, warranty or statement
made by the Guarantor herein or in any certificate delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the
date as of which made or deemed made; or
(c) COVENANTS. The Guarantor shall (i) default in the due
performance or observance by it of any term, covenant or agreement
contained in 12(a), (c) or (d) or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained herein
and such default, in the case of this clause (ii), shall continue
unremedied for a period of 30 days after written notice to the Guarantor by
the Administrative Agent or the 25% Banks; or
(d) DEFAULT UNDER OTHER AGREEMENTS. There shall be a default under
any Indebtedness (other than pursuant to this Guaranty) of the Guarantor,
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)
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the amount of such Indebtedness, together with the principal amount of any
other such Indebtedness in default for failure to pay the principal at
stated final maturity or the maturity of which has been so accelerated,
aggregate $5 million or more at any time outstanding; or
(e) BANKRUPTCY, ETC. The Guarantor or Superior shall commence a
voluntary case concerning itself under the Bankruptcy Code; or an
involuntary case is commenced against the Guarantor or Superior and the
petition is not controverted within 10 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 the Guarantor or Superior or the Guarantor or
Superior commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
or liquidation or similar law of any jurisdiction whether now or hereafter
in effect relating to the Guarantor or Superior or there is commenced
against the Guarantor or Superior any such proceeding which remains
undismissed for a period of 60 days, or the Guarantor or Superior is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Guarantor or
Superior suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Guarantor or Superior makes a general assignment
for the benefit of creditors; or any corporate action is taken by Guarantor
or Superior for the purpose of effecting any of the foregoing; or
(f) JUDGMENTS. One or more judgments or decrees shall be entered
against the Guarantor involving in the aggregate for the Guarantor a
liability (not paid or fully covered by a reputable 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 $5,000,000; or
(g) CHANGE OF CONTROL. Any Change of Control shall have occurred.
14. Upon the occurrence and during the continuance of any Event of
Default (such term to mean and include any "Event of Default" as defined in the
Credit Agreement or any payment default under any Interest Rate Protection
Agreement continuing after any applicable grace period) or any Guarantor Event
of Default, the Required Banks shall have the right to take all action permitted
pursuant to Section 8 of the Credit Agreement as a result thereof and to require
the Guarantor to pay to the Administrative Agent and the Banks in cash any
amounts then owed to them pursuant to the terms of this Guaranty.
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15. The Guarantors hereby jointly and severally agree to pay all
out-of-pocket costs and expenses of the Administrative Agent in connection with
any amendment, waiver or consent relating hereto and of the Administrative Agent
and each of the other Secured Creditors in connection with any enforcement of
this Guaranty (including in each case, without limitation, the fees and
disbursements of counsel employed by the Administrative Agent and each other
Secured Creditor).
16. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
17. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the
Guarantor and with the written consent of either (x) the Required Banks (or to
the extent required by Section 11.12 of the Credit Agreement, with the written
consent of each Bank) at all times prior to the time on which all Credit
Document Obligations have been paid in full or (y) the holders of at least a
majority of the outstanding Other Obligations at all times after the time on
which all Credit Document Obligations have been paid in full; PROVIDED, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall also require the written consent of
the Requisite Creditors (as defined below) of such Class of Secured Creditors.
For the purpose of this Guaranty the term "Class" shall mean each class of
Secured Creditors, I.E., whether (x) the Bank Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Guaranty, the term "Requisite Creditors"
of any Class shall mean (x) with respect to the Credit Document Obligations, the
Required Banks (or to the extent required by Section 11.12 of the Credit
Agreement, each Bank) and (y) with respect to the Other Obligations, the holders
of at least a majority of all obligations outstanding from time to time under
the Interest Rate Protection Agreements.
18. The Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and Interest Rate Protection Agreements has been
made available to it and it is familiar with the contents thereof.
19. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default or
a Guarantor Event of Default, each Secured Creditor is hereby authorized at any
time or from time to time, without notice to the Guarantor or to any other
Person, any such notice being 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 Secured Creditor to or for the credit or the
account of the Guarantor,
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against and on account of the obligations and liabilities of the Guarantor to
such Secured Creditor under this Guaranty, irrespective of whether or not such
Secured Creditor shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of them, shall be
contingent or unmatured. Each Secured Creditor acknowledges and agrees that the
provisions of this Section 19 are subject to the sharing provisions set forth in
Section 11.06(b) of the Credit Agreement.
20. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of the Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
21. 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 the Borrower), then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon the Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of the Borrower, and the 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.
22. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
the Guarantor is a party may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Guaranty, the Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Guarantor hereby
further irrevocably waives any claim that any such courts lack jurisdiction over
the Guarantor, and agrees not to plead or claim, in any legal action or
proceeding with respect to this Guaranty brought in any of the aforesaid courts,
that any such court lacks jurisdiction over such
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Guarantor. The Guarantor hereby irrevocably designates, appoints and empowers
CT Corporation System, with offices on a date hereof at 1633 Broadway, New York,
New York 10019 as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served in
any such action or proceeding. If for any reason such designee, appointee and
agent shall cease to be available to act as such, the Guarantor agrees to
designate a new designee, appointee and agent in New York City on the terms and
for the purposes of this provision reasonably satisfactory to the Administrative
Agent. The Guarantor 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 Guarantor at its address set forth opposite its signature below, such
service to become effective 30 days after such mailing. Nothing herein shall
affect the right of any of the Secured Creditors to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Guarantor in any other jurisdiction.
(B) The Guarantor 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 Guaranty or any other
Credit Document to which the Guarantor is a party brought in the courts referred
to in clause (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(C) THE GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
23. It is the desire and intent of the Guarantor and the Secured
Creditors that this Guaranty shall be enforced against the 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 the Guarantor under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason, then the amount of the Guaranteed
Obligations of the Guarantor shall be deemed to be reduced and the Guarantor
shall pay the maximum amount of the Guaranteed Obligations which would be
permissible under applicable law.
24. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and
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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 Guarantor and the Administrative Agent.
25. All payments made by the Guarantor hereunder will be made without
setoff, counterclaim or other defense and on the same basis as payments are made
by the Borrower under Sections 3.03 and 3.04 of the Credit Agreement.
26. This Guaranty is made for the benefit of the Administrative Agent,
the Banks and the other Secured Creditors (and their respective successors and
assigns), and may be enforced by them in accordance with the terms hereof.
Except for the parties described in the immediately preceding sentence, no other
person shall be entitled to the benefits of, or be entitled to enforce the
provisions of, this Guaranty.
* * *
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<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Addresses: THE ALPINE GROUP, INC.
1790 Broadway
New York, New York 10019
Attn: Stewart H. Wahrsager,
Secretary By /s/ Stewart H. Wahrsager
Telephone No.: (212) 757-3333 --------------------------------------
Facsimile No.: (212) 757-3423 Title: Secretary
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent for the Banks
By /s/ Gina S. Thompson
-------------------------------------
Title: Vice President
<PAGE>
Exhibit 7
FIRST AMENDMENT TO ALPINE GUARANTY
----------------------------------
FIRST AMENDMENT (this "Amendment"), dated as of June 11, 1997, among
THE ALPINE GROUP, INC., a Delaware corporation (the "Guarantor"), the lenders
party to the Term Loan Agreement referred to below (the "Banks") and BANKERS
TRUST COMPANY, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"). Unless otherwise defined
herein, all capitalized terms used herein shall have the respective meanings
provided such terms in the Alpine Guaranty referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Refraco Inc. (the "Borrower"), the Banks and the
Administrative Agent, have entered into a Term Loan Agreement, dated as of April
15, 1997, providing for the making of loans as contemplated therein (as amended,
modified or supplemented through the date hereof, the "Term Loan Agreement");
WHEREAS, in connection with the initial execution of the Term Loan
Agreement, the Guarantor entered into the Alpine Guaranty, dated as of April 15,
1997 (as amended, modified or supplemented through the date hereof, the "Alpine
Guaranty"); and
WHEREAS, the parties hereto wish to amend the Alpine Guaranty as
provided herein;
NOW, THEREFORE, it is agreed:
I. AMENDMENTS TO ALPINE GUARANTY
1. Section 12 of the Alpine Guaranty is hereby amended by deleting
clause (a) thereof in its entirety and inserting the following new clause (a) in
lieu thereof:
"(a) Liens. Not create, assume or suffer to exist any Lien upon any
of the Superior Pledged Stock (as defined below), except for Liens created
pursuant to the Alpine Pledge Agreement."
<PAGE>
2. The text of Section 12(b) of the Alpine Guaranty is hereby
deleted in its entirety and the following new text is inserted in lieu:
"Intentionally omitted."
3. The text of Section 12(c) of the Alpine Guaranty is hereby
deleted in its entirety and the following new text is inserted in lieu thereof:
"Intentionally omitted."
3. Section 12(d) of the Alpine Guaranty is hereby amended by
deleting the existing text thereof in its entirety and inserting the following
new text in lieu thereof:
"The Guarantor shall take all action as is needed so that Superior
Stock with a fair market value of $60 million is pledged, and delivered for
pledge, pursuant to the Alpine Pledge Agreement (with the pledged stock
described above in this sentence, together with any additional shares of
stock, certificates or other instruments of Superior received in respect
thereof, or otherwise pledged or required to be pledged hereunder, after
the Closing Date, being herein called the "Superior Pledged Stock", and
with any Superior Stock owned by the Guarantor which is not required to be
pledged pursuant to the Alpine Pledge Agreement being herein called the
"Non-Pledged Superior Stock"); provided that at the end of each fiscal
quarter, the Guarantor shall deliver a certificate to the Administrative
Agent establishing the fair market value of the Superior Pledged Stock (it
is understood that all determinations of the fair market value of the
Superior Pledged Stock shall be made on a basis reasonably satisfactory to
the Administrative Agent) and (x) in the event that the fair market value
of the Superior Pledged Stock at the time of such determination is less
than $60 million, the Guarantor shall, within 10 days of such
determination, pledge and deposit with the Collateral Agent such additional
shares of Superior Stock (or certificates or instruments representing such
Superior Stock) as is necessary to increase the fair market value of the
Superior Pledged Stock to $60 million in accordance with the terms and
provisions of the Alpine Pledge Agreement and (y) in the event that the
fair market value of the Superior Pledged Stock, at the time of such
determination, is in excess of $60 million, the Collateral Agent shall, at
the request and expense of the Guarantor, release the security interest in
that number of shares of Superior Stock as is necessary to reduce the fair
market value of the Superior Pledged Stock to $60 million and transfer and
deliver the same to the Guarantor. Notwithstanding anything herein
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<PAGE>
to the contrary, at the option of the Guarantor, the Guarantor may elect to
pledge and deposit with the Collateral Agent cash and Cash Equivalents with
a fair market value of $60 million in lieu of Superior Stock with a fair
market value of $60 million, or any combination of cash, Cash Equivalents
and Superior Stock with a fair market value of $60 million; provided, that
if the Guarantor elects to pledge and deposit cash or Cash Equivalents with
the Collateral Agent, such cash or Cash Equivalents shall be pledged and
deposited with the Collateral Agent pursuant to a cash collateral
arrangement reasonably satisfactory to the Collateral Agent and all actions
shall be taken in connection therewith which are necessary or which the
Collateral Agent may reasonably request in order to ensure that the
security interest of the Collateral Agent in all such cash and Cash
Equivalents constitutes a first priority perfected security interest. To
the extent any proceeds are received in respect of the Superior Pledged
Stock (including, without limitation, cash distributions or dividends,
distributions of assets and additional shares of stock, and any stock
received in connection with stock splits, exchanges or otherwise), such
proceeds shall be delivered immediately to the Collateral Agent in
accordance with the requirements of the Alpine Pledge Agreement and
continue to be held as security thereunder; provided that (x) so long as no
Default or Event of Default is then in existence, cash proceeds
representing regular quarterly dividends paid by Superior with respect to
the Superior Pledged Stock (in each case so long as such dividends do not
constitute an extraordinary, liquidating or other distribution in return of
capital) shall be released from the Alpine Pledge Agreement in accordance
with the terms thereof and paid over to the Guarantor and (y) so long as no
Default or Event of Default is then in existence pursuant to any of
Sections 8.01, 8.05 and 8.06 of the Term Loan Agreement, all other proceeds
so received shall be released to the Guarantor, but only if the Guarantor
certifies, and establishes to the reasonable satisfaction of the
Administrative Agent, that the fair market value of the remaining
Collateral at such time deposited pursuant to the Alpine Pledge Agreement
(or the cash collateral agreement referenced in the immediately preceding
sentence) has an aggregate fair market value of at least $60 million."
II. MISCELLANEOUS PROVISIONS.
1. The Guarantor hereby reaffirms its obligations under the Alpine
Guaranty.
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provisions of the Alpine
Guaranty.
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<PAGE>
3. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Guarantor and the Administrative Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when the Guarantor and the Required Banks shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the same to
the Administrative Agent at the Notice Office.
6. From and after the First Amendment Effective Date, all references
in the Alpine Guaranty and in the other Credit Documents to the Alpine Guaranty
shall be deemed references to the Alpine Guaranty as amended hereby.
* * *
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
THE ALPINE GROUP, INC.
By /s/ Bragi F. Schut
-----------------------------
Title: Executive Vice President
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ Gina S. Thompson
-----------------------------
Title: Vice President
<PAGE>
Exhibit 8
FIRST AMENDMENT
---------------
FIRST AMENDMENT (this "Amendment"), dated as of June 11, 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"),
REFRACO (UK) LIMITED (formerly known as "Hepworth Refractories (Holdings)
Limited"), a private limited company organized under the laws of England with
registered number 00054713 ("Hepworth", and together with Adience and Newco, the
"Borrowers"), the lenders party to the Credit Agreement referred to below (the
"Banks") and BANKERS TRUST COMPANY, as Administrative Agent (in such capacity,
the "Administrative Agent"). Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings provided such terms in the
Credit Agreement referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Holdings, the Borrowers, the Banks and the Administrative
Agent are parties to a Credit Agreement, dated as of April 15, 1997 (the "Credit
Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
provided herein;
NOW, THEREFORE, it is agreed:
1. Section 1.01(d) of the Credit Agreement is hereby amended by (i)
deleting clause (iv) thereof in its entirety and inserting the following new
clause (iv) in lieu thereof:
"(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
<PAGE>
(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 (for this purpose,
using the Dollar Equivalent thereof in the case of Hepworth 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, (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 and (z) the
aggregate principal amount (for this purpose, using the Dollar Equivalent
of each outstanding Sterling Swingline Loan) of all Sterling Swingline
Loans (exclusive of Sterling Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Bank at such time,";
and (ii) deleting clause (vi) thereof in its entirety and inserting the
following new clause (vi) in lieu thereof:
"(vi) shall not, in the case of Sterling Revolving Loans, at any time
exceed in aggregate outstanding principal amount, when added to (x) 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) and (y) the aggregate principal
amount of all Sterling Swingline Loans (exclusive of Sterling Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Sterling Revolving Loans) then
outstanding, the amount of the Sterling Revolving Sub-Limit."
2. Section 1.01(e) of the Credit Agreement is hereby amended by
deleting clause (iv) thereof and inserting the following new clause (iv) in lieu
thereof:
"(iv) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the sum of (I) the aggregate principal
amount of all Revolving Loans (for this purpose, using the Dollar
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<PAGE>
Equivalent of each outstanding Sterling Revolving Loan) then outstanding,
(II) the aggregate amount of all Letter of Credit Outstandings at such time
and (III) the aggregate principal amount of all Sterling Swingline Loans
(for this purpose, using the Dollar Equivalent of each outstanding Sterling
Swingline Loan) then outstanding, 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),".
3. Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new clauses (g) and (h) immediately after existing
clause (f) thereof:
"(g) Subject to the terms and conditions set forth herein, BTCo in its
individual capacity agrees to make, from time to time after the First
Amendment Effective Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Sterling Swingline Loan" and,
collectively, the "Sterling Swingline Loans") to Hepworth, which Sterling
Swingline Loans (i) shall be made and denominated in Pounds Sterling, (ii)
shall bear interest as provided in Section 1.08(g), (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount (for this purpose, using the Dollar
Equivalent of each outstanding Sterling Swingline Loan) at any time
outstanding, when combined with the sum of (I) the aggregate principal
amount of all Revolving Loans (for this purpose, using the Dollar
Equivalent of each outstanding Sterling Revolving Loan) then outstanding,
(II) the aggregate amount of Letter of Credit Outstandings (for this
purpose, using the Dollar Equivalent thereof in the case of Hepworth Letter
of Credit Outstandings) at such time and (III) the aggregate principal
amount of all Swingline Loans then outstanding, an amount equal to the
Total Revolving Loan Commitment (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 sum of (I) the aggregate principal amount of all Sterling Revolving
Loans then outstanding and (II) the aggregate amount of Hepworth Letter of
Credit Outstandings at such time, an amount equal to the Sterling Revolving
Sub-Limit and (vi) shall not exceed in aggregate principal amount at any
time outstanding, the Maximum Sterling Swingline Amount. BTCo shall not be
obligated to make any Sterling Swingline Loan at a time when a Bank Default
exists unless BTCo has entered into arrangements satisfactory to it to
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<PAGE>
eliminate BTCo's risk with respect to the Defaulting Bank's or Banks'
participation in such Sterling Swingline Loans, including by cash
collateralizing such Defaulting Bank's or Banks' RL Percentage of the
outstanding Sterling Swingline Loans.
(h) On any Business Day, BTCo may, in its sole discretion, give notice
to the Banks that its outstanding Sterling Swingline Loans shall be funded
with a Borrowing of Sterling 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 Sterling Revolving Loans (each such Borrowing, a
"Mandatory Sterling 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 Sterling Swingline
Loans. Each such Bank hereby irrevocably agrees to make Sterling Revolving
Loans upon one Business Day's notice pursuant to each Mandatory Sterling
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 Sterling 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
Sterling Borrowing and (v) the amount of the Total Revolving Loan
Commitment at such time or the Sterling Revolving Sub-Limit. In the event
that any Mandatory Sterling 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 any bankruptcy, reorganization,
dissolution, insolvency, receivership, administration or liquidation or
similar law with respect to Hepworth), then each such Bank hereby agrees
that it shall forthwith purchase (as of the date the Mandatory Sterling
Borrowing would otherwise have occurred, but adjusted for any payments
received from Hepworth on or after such date and prior to such purchase)
from BTCo such participations in the outstanding Sterling Swingline Loans
as shall be necessary to cause such Banks to share in
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<PAGE>
such Sterling 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 Sterling 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
Sterling Borrowing would otherwise have occurred to but excluding the date
of payment for such participation, at the rate otherwise applicable to
Sterling Swingline Loans."
4. Section 1.02 of the Credit Agreement is hereby amended by
deleting the proviso appearing at the end of the second sentence thereof and by
deleting the third sentence thereof in its entirety, and inserting the following
new text in lieu thereof:
"; provided that (x) Mandatory Borrowings shall be made in the amounts
required by Section 1.01(f) and (y) Mandatory Sterling Borrowings shall be
made in the amounts required by Section 1.01(h). The aggregate principal
amount of each Borrowing of (x) Swingline Loans shall be not less than
$100,000 and (y) Sterling Swingline Loans shall be not less than L100,000."
5. Section 1.03(a) of the Credit Agreement is hereby amended by
deleting the first parenthetical appearing therein and inserting the following
new parenthetical in lieu thereof:
"(excluding Borrowings of (w) Swingline Loans, (x) Revolving Loans
incurred pursuant to a Mandatory Borrowing, (y) Sterling Swingline Loans
and (z) Revolving Loans incurred pursuant to a Mandatory Sterling
Borrowing)".
6. Section 1.03 of the Credit Agreement is hereby amended by (i)
redesignating clause (c) thereof as clause "(d)" and (ii) inserting the
following new clause (c) immediately after existing clause (b)(ii) thereof:
"(c)(i) Whenever Hepworth desires to incur Sterling Swingline Loans
hereunder, it shall give BTCo not later than 12:00 noon (London
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<PAGE>
time) on the date that a Sterling Swingline Loan is to be incurred, written
notice or telephonic notice promptly confirmed in writing of each Sterling
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 Sterling
Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Sterling Borrowings shall be made upon the notice
specified in Section 1.01(h), with Hepworth irrevocably agreeing, by its
incurrence of any Sterling Swingline Loan, to the making of the Mandatory
Sterling Borrowings as set forth in Section 1.01(h)."
7. Section 1.03(d) of the Credit Agreement (after giving effect to
the amendment in paragraph 6 above) is hereby amended by inserting the words "or
Sterling Swingline Loans" immediately after the words "Swingline Loans"
appearing in the first parenthetical therein.
8. Section 1.04 of the Credit Agreement is hereby amended by
deleting the first sentence thereof in its entirety and inserting the following
new first sentence in lieu thereof:
"No 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 (w) in the case of Swingline Loans, no later
than 2:00 P.M. (New York time) on the date specified in Section 1.03(b)(i),
(x) in the case of Mandatory Borrowings, no later than 12:00 Noon (New York
time) on the date specified in Section 1.01(f), (y) in the case of Sterling
Swingline Loans, no later than 2:00 P.M. (London time) on the date
specified in Section 1.03(c)(i) or (z) in the case of Mandatory Sterling
Borrowings, no later than 12:00 Noon (London time) on the date specified in
Section 1.01(h)), 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 and Sterling Swingline Loans, BTCo shall
make available the full amount thereof) in the manner provided below."
9. Section 1.05(a) of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (v) thereof and inserting
a
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comma in lieu thereof and (ii) deleting the period appearing at the end of
clause (vi) thereof and inserting the following text in lieu thereof:
"and (vii) if Sterling Swingline Loans, by a promissory note
substantially in the form of Exhibit B-7, with blanks appropriately
completed in conformity herewith (the "Sterling Swingline Note")."
10. Section 1.05 of the Credit Agreement is hereby amended by (i)
redesignating clause (h) thereof as clause "(i)" and (ii) inserting the
following new clause (h) immediately after existing clause (g) thereof:
"(h) The Sterling Swingline Note issued to BTCo shall (i) be executed
by Hepworth, (ii) be payable to the order of BTCo and be dated the First
Amendment Effective Date (or if issued thereafter, the date of issuance),
(iii) be in a stated principal amount equal to the Maximum Sterling
Swingline Amount and be payable in Pounds Sterling in the principal amount
of the outstanding Sterling Swingline Loans evidenced thereby, (iv) mature
on the Swingline Expiry Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Sterling Swingline
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)."
11. Section 1.06 of the Credit Agreement is hereby amended by
inserting the following parenthetical immediately after the words "outstanding
principal amount of such Dollar Loans" appearing therein:
"(other than Swingline Loans, which may not be converted pursuant to
this Section 1.06)".
12. Section 1.07 of the Credit Agreement is hereby amended by
inserting the text "or a Mandatory Sterling Borrowing, as the case may be,"
immediately after the words "Mandatory Borrowing" appearing therein.
13. Section 1.08 of the Credit Agreement is hereby amended by
inserting the following new clause (g) immediately after existing clause (f):
"(g) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, Hepworth hereby agrees to pay interest in respect of
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<PAGE>
the unpaid principal amount of each Sterling Swingline Loan made to it from
the date the proceeds thereof are made available to it until such Sterling
Swingline Loan is repaid at a rate per annum which shall be equal to the
sum of the Applicable Margin for Sterling Revolving Loans plus the
Overnight LIBOR Rate plus the MLA Cost, which interest shall be payable at
the time such Sterling Swingline Loan is repaid or converted into a
Mandatory Sterling Borrowing, provided that overdue principal and, to the
extent permitted by law, overdue interest in respect of each Sterling
Swingline Loan shall bear interest at a rate per annum equal to 2% per
annum in excess of the Applicable Margin for Sterling Revolving Loans plus
the Overnight LIBOR Rate plus the MLA Cost."
14. Section 1.09 of the Credit Agreement is hereby amended by (i)
deleting the text "at the option of the Borrower, be one, two, three or
six-month period," appearing therein and (ii) inserting the following new text
in lieu thereof:
"(x) at the option of Adience or Newco, as the case may be, be one,
two, three or six-month period, and (y) at the option of Hepworth, be one,
two, three or six-month period, or, if available to each of the Banks with
a Revolving Loan Commitment, one or two-week period,".
15. Section 1.13 of the Credit Agreement is hereby amended by
(i) deleting the word "and" appearing at the end of clause (i)(x) of the proviso
appearing in the first sentence thereof and inserting a comma in lieu thereof
and (ii) inserting the following new clause (i)(z) immediately after the word
"and" appearing at the end of clause (i)(y) of the proviso appearing in the
first sentence thereof:
"(z) in the case of the replacement of the Revolving Loan Commitments,
BTCo an amount equal to such Replaced Bank's RL Percentage of any Mandatory
Borrowing and/or Mandatory Sterling Borrowing, in each case to the extent
such amount was not theretofore funded by such Replaced Bank and".
16. Section 2.02(a) of the Credit Agreement is hereby amended by (i)
deleting the text of clause (i)(y) thereof in its entirety and inserting the
following new text in lieu thereof:
"when added to the sum of (I) the aggregate principal amount of all
Revolving Loans (for this purpose, using the Dollar Equivalent of each
outstanding Sterling Revolving Loan) then outstanding, (II) the aggregate
principal amount of all Swingline Loans then outstanding and
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<PAGE>
(III) the aggregate principal of all Sterling Swingline Loans (for this
purpose, using the Dollar Equivalent of each outstanding Sterling Swingline
Loan) then outstanding, the Total Revolving Loan Commitment at such time,";
and (ii) deleting clauses (ii) and (iii) thereof in their entirety and inserting
the following new clauses (ii) and (iii) in lieu thereof:
"(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 sum of (I) the aggregate principal amount of all Dollar
Revolving Loans (expressed in Dollars) then outstanding and (II) the
aggregate principal amount of all Swingline 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 sum of (I) the aggregate principal amount of all Sterling Revolving
Loans (expressed in Pounds Sterling) then outstanding and (II) the
aggregate principal amount of all Sterling Swingline Loans (expressed in
Pounds Sterling) then outstanding, the Sterling Revolving Sub-Limit,".
17. Section 4.01 of the Credit Agreement is hereby amended by
(i) deleting the third parenthetical appearing in clause (i) thereof in its
entirety and inserting the following new parenthetical in lieu thereof:
"(or same day notice in the case of (x) Swingline Loans, provided such
notice is given prior to 11:00 A.M. (New York time) and (y) Sterling
Swingline Loans, provided such notice is given prior to 11:00 A.M. (London
time))";
and (ii) deleting the parenthetical appearing in clause (ii)(x) thereof in its
entirety and inserting the following new parenthetical in lieu thereof:
-9-
<PAGE>
"(or (x) in the case of Swingline Loans, $100,000, and (y) in the case
of Sterling Swingline Loans, L50,000)".
18. Section 4.02(a) of the Credit Agreement is hereby amended by
deleting clause (i) thereof in its entirety and inserting the following new
clause (i) in lieu thereof:
"(i) On any day on which the sum of the aggregate outstanding
principal amount of Swingline Loans, the aggregate outstanding principal
amount of Sterling Swingline Loans (for this purpose, using the Dollar
Equivalent thereof), the aggregate outstanding principal amount of
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, Sterling Swingline Loans and,
after the Sterling 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 Swingline Loans and Sterling Revolving Loans)
equal to such excess. If, after giving effect to the prepayment in full of
all outstanding Swingline Loans, Sterling 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 equal to the
amount 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 in
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
-10-
<PAGE>
Loan Borrower 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 exceeds
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."
19. Section 4.02(a) of the Credit Agreement is hereby further amended
by deleting clause (iii) thereof in its entirety and inserting the following new
clause (iii) in lieu thereof:
"(iii) If on any date the sum of the aggregate outstanding
principal amount of Sterling Revolving Loans, the aggregate outstanding
principal amount of Sterling Swingline 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
Swingline Loans and, after the Sterling Swingline Loans have been repaid in
full, Sterling Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment in full of all outstanding Sterling
Swingline Loans and 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 in 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 exceeds 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."
-11-
<PAGE>
20. Section 6.02(a) of the Credit Agreement is hereby amended by (i)
deleting the parenthetical appearing in the first sentence thereof and inserting
the following new parenthetical in lieu thereof:
"(excluding Swingline Loans and Sterling Swingline Loans)";
and (ii) inserting the following new sentence at the end thereof:
"Prior to the making of any Sterling Swingline Loan, BTCo shall have
received the notice required by Section 1.03(c)(i)."
21. The definition of "Bank Default" appearing in Section 11.01 of
the Credit Agreement is hereby amended by inserting the text ", 1.01(h)"
immediately after the text "Section 1.01(d), 1.01(f)" appearing therein.
22. Section 11.01 of the Credit Agreement is hereby amended by
deleting the definitions of "Euro Rate", "Interest Determination Date", "Loan",
"Maturity Date", "Minimum Borrowing Amount", "Required Banks", "Sterling Loan",
"Total Unutilized Revolving Loan Commitment" and "Tranche" appearing therein and
inserting the following new definitions in the appropriate alphabetical order:
"Euro Rate" shall mean and include each of the Eurodollar Rate, the
Sterling Euro Rate and the Overnight LIBOR Rate.
"Interest Determination Date" shall mean, with respect to any Euro
Rate Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Euro Rate Loan.
"Loan" shall mean each Adience B Term Loan, each Newco A Term Loan,
each Newco B Term Loan, each Revolving Loan, each Swingline Loan and each
Sterling Swingline Loan.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
A Term Loan Maturity Date, the B Term Loan Maturity Date, the Revolving
Loan Maturity Date or the Swingline Expiry Date, as the case may be.
"Minimum Borrowing Amount" shall mean (i) in the case of Newco A Term
Loans, L2,000,000, (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, L500,000, (v) in the case
-12-
<PAGE>
of Swingline Loans, $250,000 and (vi) in the case of Sterling Swingline
Loans, L125,000.
"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 Swingline Loans,
Sterling Swingline Loans and 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 the total outstanding Swingline Loans, the
total outstanding Sterling Swingline Loans and Letter of Credit
Outstandings at such time). For purposes of determining Required Banks,
all outstanding Loans and Commitments and Letter of Credit Outstandings, as
the case may be, that are denominated in Dollars will be calculated in
Dollars and all Loans and Commitments and Letter of Credit Outstandings, as
the case may be, denominated in Pounds Sterling will be calculated
according to the Dollar Equivalent thereof.
"Sterling Loan" shall mean each Newco A Term Loan, each Sterling
Revolving Loan and each Sterling Swingline Loan.
"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 outstanding), (II) the aggregate
principal amount of Swingline Loans then outstanding, (III) the then
aggregate amount of Letter of Credit Outstandings (for this purpose, using
the Dollar Equivalent thereof in the case of Hepworth Letter of Credit
Outstandings) and (IV) the aggregate principal amount of Sterling Swingline
Loans then outstanding (for this purpose, using the Dollar Equivalent
thereof).
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being six separate
-13-
<PAGE>
Tranches, I.E., Adience B Term Loans, Newco A Term Loans, Newco B Term
Loans, Revolving Loans, Swingline Loans and Sterling Swingline Loans.
23. The definition of "Holdings Excess Cash Flow" appearing in
Section 11.01 of the Credit Agreement is hereby amended by inserting the words
"or Swingline Loans" immediately after the words "Revolving Loans" but before
the comma appearing in clause (y) of the second parenthetical contained in
clause (ii)(b) thereof.
24. The definition of "Newco Excess Cash Flow" appearing in Section
11.01 of the Credit Agreement is hereby amended by inserting the words "or
Sterling Swingline Loans" immediately after the words "Revolving Loans" but
before the comma appearing in clause (y) of the parenthetical contained in
clause (ii)(b) thereof.
25. Section 11.01 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical order:
"First Amendment" shall mean the First Amendment, dated as of June 11,
1997, to this Agreement.
"First Amendment Effective Date" shall have the meaning provided in
the First Amendment.
"Mandatory Sterling Borrowing" shall have the meaning provided in
Section 1.01(h).
"Maximum Sterling Swingline Amount" shall mean L5,000,000.
"Overnight LIBOR Rate" shall mean the offered quotation to first-class
banks in the London interbank Eurodollar market by BTCo for Pounds Sterling
overnight deposits of amounts in immediately available funds comparable to
the outstanding principal amount of the Sterling Swingline Loan of BTCo
commencing as of 11:00 A.M. (London time) on the date of Borrowing of the
respective Borrowing of Sterling Swingline Loans; 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 Overnight LIBOR 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 Swingline Loan.
-14-
<PAGE>
"Sterling Swingline Loan" shall have the meaning provided in Section
1.01(g).
"Sterling Swingline Note" shall have the meaning provided in Section
1.05(a).
26. Section 13.12(a) of the Credit Agreement is hereby amended by
inserting the following new clause (t) immediately before clause (u) appearing
in the second proviso thereof:
"(t) without the consent of BTCo, amend, modify or waive any provision
relating to the rights or obligations with respect to Swingline Loans or
Sterling Swingline Loans, as the case may be (including, without
limitation, the obligations of other Banks with Revolving Loan Commitments
to fund Mandatory Borrowings or Mandatory Sterling Borrowings, as the case
may be),".
27. The Credit Agreement is hereby further amended by inserting as a
new Exhibit B-7 to the Credit Agreement the form of Exhibit B-7 attached hereto.
28. In order to induce the Banks to enter into this Amendment, the
Borrower hereby represents and warrants that (x) no Default or Event of Default
exists on the First Amendment Effective Date (as defined below), both before and
after giving effect to this Amendment, and (y) all of the representations and
warranties contained in the Credit Agreement and the other Credit Documents
shall be true and correct in all material respects as of the First Amendment
Effective Date, both before and after giving effect to this Amendment, with the
same effect as though such representations and warranties had been made on and
as of the First Amendment Effective Date (it being understood that any
representation or warranty made as of a specified date shall be required to be
true and correct in all material respects only as of such specified date).
29. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provisions of the Credit
Agreement or any other Credit Document.
30. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with Adience and the Administrative Agent.
-15-
<PAGE>
31. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
32. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when Holdings, the Borrowers and each Bank shall have
signed a counterpart of this Amendment (whether the same or different
counterparts) and shall have delivered (including by way of telecopier) the same
to the Administrative Agent at the Notice Office. The Administrative Agent
shall promptly notify Adience and the Banks in writing of the First Amendment
Effective Date.
33. From and after the First Amendment Effective Date, all references
in the Credit Agreement and the other Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
-16-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
REFRACO INC.
By /s/ Bragi F. Schut
-----------------------------
Title: Executive Vice President
ADIENCE, INC.
By /s/ Bragi F. Schut
-----------------------------
Title: Executive Vice President
REFRACO HOLDINGS LIMITED
By /s/ Bragi F. Schut
-----------------------------
Title: Director and Secretary
REFRACO (UK) LIMITED
By /s/ Bragi F. Schut
-----------------------------
Title: Director and Secretary
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ Gina S. Thompson
-----------------------------
Title: Vice President
FLEET NATIONAL BANK
By /s/ Alexander Sade
-----------------------------
Title: Senior Vice President
<PAGE>
Exhibit 9
SECOND AMENDMENT
----------------
SECOND AMENDMENT (this "Amendment"), dated as of June 12, 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"),
REFRACO (UK) LIMITED (formerly known as "Hepworth Refractories (Holdings)
Limited"), a private limited company organized under the laws of England with
registered number 00054713 ("Hepworth" and, together with Adience and Newco, the
"Borrowers"), the lenders party to the Credit Agreement referred to below on the
date hereof and immediately before giving effect to this Amendment (the
"Existing Banks"), FLEET NATIONAL BANK, as syndication agent, BANKERS TRUST
COMPANY, as Administrative Agent (the "Administrative Agent") and each of the
lenders listed on Schedule A hereto (the "New Banks"). Unless otherwise defined
herein, all capitalized terms used herein shall have the respective meanings
provided such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Holdings, the Borrowers, the Existing Banks, and the
Administrative Agent are parties to a Credit Agreement, dated as of April 15,
1997 (the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
provided herein;
NOW, THEREFORE, it is agreed:
1. Each of the Existing Banks severally and not jointly hereby
sells and assigns to each of the New Banks without recourse and without
representation or warranty (other than as expressly provided herein), and each
New Bank hereby purchases and assumes from each of the Existing Banks, that
interest in and to each of such Existing Bank's rights and obligations in
respect of the facilities set forth on Schedule B hereto under the Credit
Agreement as of the date hereof which represents such New Bank's pro rata share
(for each such New Bank, its "Pro Rata Share") of all of the outstanding rights
and obligations under the Credit Agreement in respect of the facilities as set
forth on such Schedule B hereto (calculated after giving effect to this
Amendment) that are being sold and
<PAGE>
assigned to each New Bank pursuant to this Amendment, including, without
limitation, (w) in the case of any assignment of the outstanding Adience B Term
Loans, all rights and obligations with respect to such New Bank's Pro Rata Share
of such outstanding Adience B Term Loans, (x) in the case of any assignment of
the outstanding Newco A Term Loans, all rights and obligations with respect to
such New Bank's Pro Rata Share of such outstanding Newco A Term Loans, (y) in
the case of any assignment of the outstanding Newco B Term Loans, all rights and
obligations with respect to such New Bank's Pro Rata Share of such outstanding
Newco B Term Loans, and (z) in the case of any assignment of the Total Revolving
Loan Commitment, all rights and obligations with respect to such New Bank's Pro
Rata Share of the Total Revolving Loan Commitment and any outstanding Revolving
Loans and Letters of Credit. After giving effect to this Amendment, each Bank's
outstanding Adience B Term Loans, Newco A Term Loans, Newco B Term Loans and
Revolving Loan Commitment will be as set forth on Schedule C hereto.
2. In accordance with the requirements of Section 13.04(b) of the
Credit Agreement, on the Second Amendment Effective Date (as defined below), (i)
the Credit Agreement shall be amended by deleting Schedule I thereto in its
entirety and by inserting in lieu thereof a new Schedule I in the form of
Schedule C hereto and (ii) the Borrower agrees that it will issue to each Bank
an appropriate Adience B Term Note, Newco A Term Note, Newco B Term Note and/or
Revolving Note in conformity with the requirements of Section 1.05 of the Credit
Agreement.
3. On the Second Amendment Effective Date, Schedule II to the
Credit Agreement shall be amended by deleting such Schedule in its entirety and
inserting in lieu thereof a new Schedule II in the form of Schedule D hereto.
4. Each Existing Bank (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Holdings or
any of its Subsidiaries or the performance or observance by Holdings or any of
its Subsidiaries of any of their obligations under the Credit Agreement or the
other Credit Documents to which they are a party or any other instrument or
document furnished pursuant thereto.
5. Each New Bank (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate
-2-
<PAGE>
to make its own credit analysis and decision to enter into this Amendment; (ii)
agrees that it will, independently and without reliance upon the Administrative
Agent or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that it
is an Eligible Transferee under Section 13.04(b) of the Credit Agreement; (iv)
appoints and authorizes the Administrative Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Credit Documents as are delegated to the
Administrative Agent and the Collateral Agent, as the case may be, by the terms
thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (vi) to the extent legally entitled to do so,
agrees to promptly submit the forms described in Section 13.04(b) of the Credit
Agreement.
6. Each of the Existing Banks, the New Banks and the
Administrative Agent hereby agree that all amounts accrued with respect to the
Adience B Term Loans, Newco A Term Loans, Newco B Term Loans, Revolving Loans,
Total Revolving Loan Commitment and Letters of Credit prior to the delivery by
such New Bank of the amount referred to in clause (ii) of Section 11 of this
Amendment shall be for the account of the Existing Banks, and that all such
amounts accrued on and after the delivery of such amount referred to in clause
(ii) of such Section 11 shall be for the account of such New Bank based upon its
relevant Pro Rata Share.
7. In accordance with Section 13.04(b) of the Credit Agreement, on
and as of the date upon which each of the New Banks delivers the amounts
referred to in clause (ii) of Section 11 of this Amendment, each New Bank shall
become a "Bank" under, and for all purposes of, the Credit Agreement and the
other Credit Documents and, notwithstanding anything to the contrary in Section
13.15 of the Credit Agreement, the Administrative Agent shall record the
transfers contemplated hereby in the Register.
8. This Amendment is limited as specified and shall not constitute
a modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
9. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with Adience and the Administrative Agent.
-3-
<PAGE>
10. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
11. Subject to Section 12 of this Amendment, this Amendment shall
become effective on the date (the "Second Amendment Effective Date") when (i)
Holdings, the Borrowers, the Administrative Agent, each Existing Bank and each
New Bank shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent at its Notice Office, (ii)
each New Bank shall have delivered to the Administrative Agent, for the account
of the Existing Banks, an amount equal to such New Bank's relevant Pro Rata
Share of the outstanding Loans being assigned to such New Bank and (iii) each
New Bank that is not a resident of the United Kingdom for United Kingdom tax
purposes that is purchasing Newco A Term Loans, Newco B Term Loans and/or
Sterling Revolving Loans shall have (x) in the case of any New Bank that is a
United States person (as defined in Section 7701(a)(30) of the Code), completed
a Form FD-13 and delivered the same to the Administrative Agent at its Notice
Office and (y) in the case of any other such New Bank that is not a resident of
the United Kingdom for United Kingdom tax purposes, completed such other
appropriate form, to the extent reasonably requested by Newco, and delivered the
same to the Administrative Agent at its Notice Office.
12. Notwithstanding Section 11 of this Amendment, if for any reason
any New Bank shall not have (i) signed a counterpart hereof and delivered the
same to the Administrative Agent at its Notice Office on or prior to June 12,
1997 and (ii) delivered to the Administrative Agent an amount equal to such New
Bank's relevant Pro Rata Share of the outstanding Loans being assigned to such
New Bank on or prior to June 12, 1997, then, if each Existing Bank agrees, this
Amendment shall become effective notwithstanding such failure, provided that (x)
Schedule C and Schedule D shall each be modified to delete any such New Bank and
such New Bank's relevant Pro Rata Share shall be reallocated among the Existing
Banks in such manner as the Existing Banks shall agree and (y) the signature
pages of this Amendment shall be deemed revised to delete such New Bank's name
therefrom.
13. From and after the Second Amendment Effective Date, all
references in the Credit Agreement and each of the Credit Documents to the
Credit Agreement shall be deemed to be references to the Credit Agreement as
amended hereby.
* * *
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
REFRACO INC.
By /s/ Bragi F. Schut
----------------------------------
Title: Executive Vice President
ADIENCE, INC.
By /s/ Bragi F. Schut
----------------------------------
Title: Executive Vice President
REFRACO HOLDINGS LIMITED
By /s/ Bragi F. Schut
----------------------------------
Title: Director and Secretary
REFRACO (UK) LIMITED
By /s/ Bragi F. Schut
----------------------------------
Title: Director and Secretary
EXISTING BANKS:
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By /s/ Gina S. Thompson
----------------------------------
Title: Vice President
<PAGE>
FLEET NATIONAL BANK,
Individually and as
Syndication Agent
By /s/ Alex Sade
----------------------------------
Title: Senior Vice President
NEW BANKS:
CORESTATES BANK, N.A.
By /s/ Mark S. Supple
----------------------------------
Title: Vice President
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company,
its Investment Manager
By /s/ Justin L. Driscoll
----------------------------------
Title: Senior Vice President
CYPRESS TREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Life Insurance Company
By /s/ Jeffrey Garner
----------------------------------
Title: Assistant Vice President
<PAGE>
KZH HOLDING CORPORATION II
By /s/ Virginia Conway
----------------------------------
Title: Authorized Agent
LLOYDS BANK PLC
By /s/ David Rodway
----------------------------------
Title: Senior Vice President
By /s/ Paul D. Brimenonto
----------------------------------
Title: Vice President
MERRILL LYNCH PRIME RATE
PORTFOLIO
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By /s/ Anthony R. Clemente
----------------------------------
Title: Authoirzed Signatory
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By /s/ Anthony R. Clemente
----------------------------------
Title: Authorized Signatory
<PAGE>
ML CBO IV (CAYMAN) LTD.
By: Protective Asset Management,
L.L.C., as Collateral Manager
By /s/ James Dondero
----------------------------------
Title: President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO [A UNIT OF THE CHASE
MANHATTAN BANK]
By /s/ Joyce C. DeLucca
----------------------------------
Title: Managing Director
PRIME INCOME TRUST
By /s/ Rafael Scolari
----------------------------------
Title: Vice President Portfolio Manager
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By: ING Capital Advisors, Inc.,
as Investment Advisor
By /s/ Kathleen A. Lenarcic
----------------------------------
Title: Vice President & Portfolio Manager
<PAGE>
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its investment advisor
By /s/ Raymond Kennedy
----------------------------------
Title: Vice President
<PAGE>
SCHEDULE A
to
Second Amendment
----------------
NEW BANKS
---------
CORESTATES BANK, N.A.
CRESCENT/MACH I PARTNERS, L.P.
CYPRESS TREE INVESTMENT MANAGEMENT COMPANY, INC.
KZH HOLDING CORPORATION II
LLOYDS BANK PLC
MERRILL LYNCH PRIME RATE PORTFOLIO
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
ML CBO IV (CAYMAN) LTD.
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO
PRIME INCOME TRUST
ROYALTON COMPANY
THE ING CAPITAL SENIOR SECURED HIGH INCOME FUND, L.P.
<PAGE>
SCHEDULE B
to
Second Amendment
----------------
RELEVANT PERCENTAGES
--------------------
<TABLE>
<CAPTION>
Adience B Newco A Newco B
Term Loan Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment Commitment
- ---- ---------- ---------- ---------- ----------
<S> <S> <C> <C> <C>
BANKERS TRUST 8.73% 34.10% 17.46% 34.10%
COMPANY
CORESTATES 23.50% 23.50%
BANK, N.A.
CRESCENT MACH I 8.73%
PARTNERS, L.P.
CYPRESS TREE 4.76% 4.76%
INVESTMENT
MANAGEMENT
COMPANY, INC.
FLEET NATIONAL BANK 24.70% 24.70%
KZH HOLDING 4.76% 4.76%
CORPORATION II
LLOYDS BANK PLC 17.60% 17.60%
MERRILL LYNCH PRIME 11.27% 11.27%
RATE PORTFOLIO
MERRILL LYNCH SENIOR 11.27% 11.27%
FLOATING RATE FUND,
INC.
ML CBO IV 4.76% 4.76%
(CAYMAN) LTD.
OCTAGON CREDIT 18.10% 18.10%
INVESTORS LOAN
PORTFOLIO
PRIME INCOME TRUST 18.10% 18.10%
ROYALTON 4.76% 4.76%
COMPANY
</TABLE>
<PAGE>
RELEVANT PERCENTAGES
--------------------
<TABLE>
<CAPTION>
Adience B Newco A Newco B
Term Loan Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment Commitment
- ---- ---------- ---------- ---------- ----------
<S> <S> <C> <C> <C>
THE ING CAPITAL
SENIOR SECURED
HIGH INCOME
FUND, L.P. 4.76% 4.76%
</TABLE>
<PAGE>
SCHEDULE C
to
Second Amendment
----------------
COMMITMENTS
-----------
<TABLE>
<CAPTION>
Adience B Newco A Newco B
Term Loan Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment Commitment
- ---- ---------- ---------- ---------- ----------
<S> <S> <C> <C> <C>
BANKERS TRUST $ 3,055,555.55 L 10,461,684.98 $ 1,746,031.75 $11,941,176.47
COMPANY
CORESTATES L 7,214,955.16 $ 8,235,294.12
BANK, N.A.
CRESCENT/MACH I $ 3,055,555.56
PARTNERS, L.P.
CYPRESS TREE $ 1,666,666.66 $ 476,190.48
INVESTMENT
MANAGEMENT
COMPANY, INC.
FLEET NATIONAL BANK L 7,575,702.92 $ 8,647,058.82
KZH HOLDING $ 1,666,666.67 $ 476,190.48
CORPORATION II
LLOYDS BANK PLC L 5,411,216.37 $ 6,176,470.59
MERRILL LYNCH PRIME $ 3,944,444.45 $ 1,126,984.13
RATE PORTFOLIO
MERRILL LYNCH SENIOR $ 3,944,444.44 $ 1,126,984.12
FLOATING RATE FUND,
INC.
ML CBO IV $ 1,666,666.66 $ 476,190.48
(CAYMAN) LTD.
OCTAGON CREDIT $ 6,333,333.33 $ 1,809,523.81
INVESTORS LOAN
PORTFOLIO
PRIME INCOME TRUST $ 6,333,333.33 $ 1,809,523.81
ROYALTON COMPANY $ 1,666,666.66 $ 476,190.48
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Adience B Newco A Newco B
Term Loan Term Loan Term Loan Revolving Loan
Bank Commitment Commitment Commitment Commitment
- ---- ---------- ---------- ---------- ----------
<S> <S> <C> <C> <C>
THE ING CAPITAL
SENIOR SECURED
HIGH INCOME
FUND, L.P. $ 1,666,666.67 $ 476,190.48
-------------- ---------------- -------------- --------------
TOTAL: $35,000,000.00 L 30,663,559.43 $10,000,000.00 $35,000,000.00
-------------- ---------------- -------------- --------------
-------------- ---------------- -------------- --------------
</TABLE>
<PAGE>
SCHEDULE D
to
Second Amendment
----------------
BANK ADDRESSES
--------------
BANKERS TRUST COMPANY 130 Liberty Street
New York, NY 10006
Attention: Gina Thompson
Telephone: (212) 250-7356
Telecopier: (212) 250-7218
CORESTATES BANK, N.A. 1339 Chestnut Street
4th Floor
Philadelphia, PA 19107
Attention: Mark Supple
Telephone: (215) 973-2562
Telecopier: (215) 973-6680
CYPRESS TREE INVESTMENT
MANAGEMENT COMPANY, INC. 125 High Street
Boston, MA 02110
Attention: Philip C. Robbins
Telephone: (617) 946-0600
Telecopier: (617) 946-5680
FLEET NATIONAL BANK 56 East 42nd Street
3rd Floor
New York, NY 10017
Attention: Alex Sade
Telephone: (212) 907-5219
Telecopier: (212) 907-5637
KZH HOLDING CORPORATION II c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Robert Goodwin/Joseph
Nerich
Telephone: (212) 946-7544
Telecopier: (212) 946-7776
MERRILL LYNCH PRIME RATE
PORTFOLIO 800 Scudders Road
Plainsboro, NJ 08536
Attention: Anthony Clemente
Telephone: (609) 282-2092
Telecopier: (609) 282-2756
<PAGE>
SCHEDULE D
Page 2
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC. 800 Scudders Road
Plainsboro, NJ 08536
Attention: Anthony Clemente
Telephone: (609) 282-2092
Telecopier: (609) 282-2756
ML CBO IV (CAYMAN) LTD. 13455 Noel Road
2 Galleria Tower
Dallas, TX 75240
Attention: T.J. Juffer
Telephone: (972) 233-4300
Telecopier: (972) 233-4343
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO 380 Madison Avenue
12th Floor
New York, NY 10017
Attention: Joyce DeLucca
Telephone: (212) 622-3104
Telecopier: (212) 622-3797
PRIME INCOME TRUST c/o Dean Witter Intercapital, Inc.
Two World Trade Center
72nd Floor
New York, NY 10048
Attention: Peter Gewirtz
Telephone: (212) 392-9034
Telecopier: (212) 392-5345
ROYALTON COMPANY 840 Newport Center Drive
Newport Beach, CA 92658
Attention: Jason Rosiak
Telephone: (714) 640-3407
Telecopier: (714) 725-6839
<PAGE>
SCHEDULE D
Page 3
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P. 333 South Grand Avenue
Suite 4250
Los Angeles, CA 90071
Attention: Kathleen Lenarcic
Telephone: (213) 346-3971
Telecopier: (213) 346-3995
<PAGE>
Exhibit 10
FIRST AMENDMENT TO TERM LOAN AGREEMENT
--------------------------------------
FIRST AMENDMENT (this "Amendment"), dated as of June 11, 1997, among
REFRACO INC., a Delaware corporation (the "Borrower"), the lenders party to the
Term Loan Agreement referred to below (the "Banks") and BANKERS TRUST COMPANY,
as Administrative Agent (in such capacity, the "Administrative Agent"). Unless
otherwise defined herein, all capitalized terms used herein shall have the
respective meanings provided such terms in the Term Loan Agreement referred to
below.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower, the Banks and the Administrative Agent are
parties to a Term Loan Agreement, dated as of April 15, 1997 (the "Term Loan
Agreement"); and
WHEREAS, the parties hereto wish to amend the Term Loan Agreement as
provided herein;
NOW, THEREFORE, it is agreed:
1. Section 3.01 of the Term Loan Agreement is hereby amended by
deleting clause (iv) appearing therein and inserting the following new clause
(iv) in lieu thereof:
"(iv) any voluntary prepayment of Loans made on or prior to the second
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 the
Borrower shall pay a prepayment premium equal to 3.0% of the principal
amount of the Loans so prepaid; and (B) if such prepayment occurs after the
first anniversary of the Closing Date but on or prior to the second
anniversary of the Closing Date, then
<PAGE>
the Borrower shall pay a prepayment premium equal to 1.0% of the principal
amount of the Loans so prepaid."
2. Section 3.02(d) of the Term Loan Agreement is hereby amended by
deleting the word "third" appearing therein and inserting the word "second" in
lieu thereof.
3. The Banks hereby consent to the amendments to the Alpine Pledge
Agreement and the Alpine Guaranty in the form attached hereto.
4. In order to induce the Banks to enter into this Amendment, the
Borrower hereby represents and warrants that (x) no Default or Event of Default
exists on the First Amendment Effective Date (as defined below), both before and
after giving effect to this Amendment, and (y) all of the representations and
warranties contained in the Term Loan Agreement and the other Credit Documents
shall be true and correct in all material respects as of the First Amendment
Effective Date, both before and after giving effect to this Amendment, with the
same effect as though such representations and warranties had been made on and
as of the First Amendment Effective Date (it being understood that any
representation or warranty made as of a specified date shall be required to be
true and correct in all material respects only as of such specified date).
5. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provisions of the Term Loan
Agreement or any other Credit Document.
6. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
7. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
8. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when the Borrower and the Required Banks shall have
signed a counterpart of this Amendment (whether the same or different
counterparts) and shall have delivered (including by way of telecopier) the same
to the Administrative
-2-
<PAGE>
Agent at the Notice Office. The Administrative Agent shall promptly notify the
Borrower and the Banks in writing of the First Amendment Effective Date.
9. From and after the First Amendment Effective Date, all references
in the Term Loan Agreement and the other Credit Documents to the Term Loan
Agreement shall be deemed to be references to the Term Loan Agreement as
modified hereby.
-3-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
REFRACO INC.
By /s/ Bragi F. Schut
-----------------------------
Title: Executive Vice President
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ Gina S. Thompson
-----------------------------
Title: Vice President
<PAGE>
Exhibit 11
SECOND AMENDMENT
----------------
SECOND AMENDMENT (this "Amendment"), dated as of June 12, 1997, among
REFRACO INC., a Delaware corporation (the "Borrower"), the lenders party to the
Term Loan Agreement referred to below on the date hereof and immediately before
giving effect to this Amendment (the "Existing Banks"), BANKERS TRUST COMPANY,
as Administrative Agent (in such capacity, the "Administrative Agent"), and each
of the lenders listed on Schedule A hereto (the "New Banks"). Unless otherwise
defined herein, all capitalized terms used herein shall have the respective
meanings provided such terms in the Term Loan Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Borrower, the Existing Banks and the Administrative
Agent are parties to a Term Loan Agreement, dated as of April 15, 1997 (as
amended, modified or supplemented through the date hereof, the "Term Loan
Agreement"); and
WHEREAS, the parties hereto wish to amend the Term Loan Agreement as
provided herein;
NOW, THEREFORE, it is agreed:
1. Each of the Existing Banks severally and not jointly hereby
sells and assigns to each of the New Banks without recourse and without
representation or warranty (other than as expressly provided herein), and each
New Bank hereby purchases and assumes from each of the Existing Banks, that
interest in and to each of such Existing Bank's rights and obligations under the
Term Loan Agreement as of the date hereof which represents such New Bank's pro
rata share (for each such New Bank, its "Pro Rata Share") as set forth on such
Schedule B hereto (calculated after giving effect to this Amendment) of all of
the outstanding rights and obligations with respect to the outstanding Term
Loans. After giving effect to this Amendment, each Bank's outstanding Loans
will be as set forth on Schedule C hereto.
2. In accordance with the requirements of Section 11.04(b) of the
Term Loan Agreement, on the Second Amendment Effective Date (as defined below),
(i) the Term Loan Agreement shall be amended by deleting Schedule I thereto in
its entirety and by inserting in lieu thereof a new Schedule I in the form of
Schedule C hereto and (ii) the
<PAGE>
Borrower agrees that it will issue to each Bank an appropriate Note in
conformity with the requirements of Section 1.04 of the Term Loan Agreement.
3. On and after the Second Amendment Effective Date, Schedule II to
the Term Loan Agreement shall be amended by deleting such Schedule in its
entirety and inserting in lieu thereof a new Schedule II in the form of Schedule
D hereto.
4. Each Existing Bank (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Term
Loan Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Term Loan
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of its Subsidiaries of any of their obligations under the Term
Loan Agreement or the other Credit Documents to which they are a party or any
other instrument or document furnished pursuant thereto.
5. Each New Bank (i) confirms that it has received a copy of the
Term Loan Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Amendment; (ii) agrees that it will, independently
and without reliance upon the Administrative Agent or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Term Loan Agreement; (iii) confirms that it is an Eligible Transferee under
Section 11.04(b) of the Term Loan Agreement; (iv) appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under the Term Loan Agreement and the
other Credit Documents as are delegated to the Administrative Agent and the
Collateral Agent, as the case may be, by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Term Loan Agreement are required to be performed by it as a Bank; and (vi) to
the extent legally entitled to do so, agrees to promptly submit the forms
described in Section 11.04(b) of the Term Loan Agreement.
6. Each of the Existing Banks, the New Banks and the
Administrative Agent hereby agree that all amounts accrued with respect to the
Loans prior to the delivery by such New Bank of the amount referred to in clause
(ii) of Section 11 of this Amendment shall be for the account of the Existing
Banks, and that all such amounts accrued on and
-2-
<PAGE>
after the delivery of such amount referred to in clause (ii) of such Section 11
shall be for the account of such New Bank based upon its relevant Pro Rata
Share.
7. In accordance with Section 11.04(b) of the Term Loan Agreement,
on and as of the date upon which each of the New Banks delivers the amounts
referred to in clause (ii) of Section 11 of this Amendment, each New Bank shall
become a "Bank" under, and for all purposes of, the Term Loan Agreement and the
other Credit Documents and, notwithstanding anything to the contrary in Section
11.15 of the Term Loan Agreement, the Administrative Agent shall record the
transfers contemplated hereby in the Register.
8. This Amendment is limited as specified and shall not constitute
a modification, acceptance or waiver of any other provision of the Term Loan
Agreement or any other Credit Document.
9. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
10. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
11. Subject to Section 12 of this Amendment, this Amendment shall
become effective on the date (the "Second Amendment Effective Date") when (i)
the Borrower, the Administrative Agent, each Existing Bank and each New Bank
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent at its Notice Office and (ii)
each New Bank shall have delivered to the Administrative Agent, for the accounts
of the Existing Banks, an amount equal to such New Bank's relevant Pro Rata
Share of the outstanding Loans being assigned to such New Bank.
12. Notwithstanding Section 11 of this Amendment, if for any reason
any New Bank shall not have (i) signed a counterpart hereof and delivered the
same to the Administrative Agent at its Notice Office on or prior to June 12,
1997 and (ii) delivered to the Administrative Agent an amount equal to such New
Bank's relevant Pro Rata Share of the outstanding Loans being assigned to such
New Bank on or prior to June 12, 1997, then, if each Existing Bank agrees, this
Amendment shall become effective notwithAmendstanding such failure, provided
that (x) Schedule C and Schedule D shall each be modified to delete any such New
Bank and such New Bank's relevant Pro Rata Share shall be reallocated to among
the Existing Banks in such manner as the Existing Banks shall
-3-
<PAGE>
agree and (y) the signature pages of this Amendment shall be deemed revised to
delete such New Bank's name therefrom.
13. From and after the Second Amendment Effective Date, all
references in the Term Loan Agreement and each of the Credit Documents to the
Term Loan Agreement shall be deemed to be references to the Term Loan Agreement
as amended hereby.
* * *
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Amendment as of the date first above
written.
REFRACO INC.
By /s/ Bragi F. Schut
---------------------------------
Title: Executive Vice President
EXISTING BANKS:
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By /s/ Gina S. Thompson
---------------------------------
Title: Vice President
NEW BANKS:
CYPRESS TREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Life Insurance Company
By /s/ Jeffrey Garner
---------------------------------
Title: Assistant Vice President
DEBT STRATEGIES FUND, INC.
By /s/ Anthony R. Clemente
---------------------------------
Title: Authorized Signatory
EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By /s/ Joel Serebransky
---------------------------------
Title: Investment Officer
<PAGE>
KZH HOLDING CORPORATION II
By /s/ Virginia Conway
---------------------------------
Title: Authorized Agent
MERRILL LYNCH DEBT
STRATEGIES PORTFOLIO
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By /s/ Anthony R. Clemente
---------------------------------
Title: Authorized Signatory
ML CBO IV (CAYMAN) LTD.
By: Protective Asset Management,
L.L.C., as Collateral Manager
By /s/ James Dondero
---------------------------------
Title: President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO [A UNIT OF THE CHASE
MANHATTAN BANK]
By /s/ Joyce C. DeLucca
---------------------------------
Title: Managing Director
PRIME INCOME TRUST
By /s/ Rafael Scolari
---------------------------------
Title: V.P. Portfolio Manager
<PAGE>
SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ Anthony Clemente
---------------------------------
Title: Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By: ING CAPITAL ADVISORS, INC.,
as Investment Advisor
By /s/ Kathleen A. Lenarcic
---------------------------------
Title: Vice President & Portfolio Manager
<PAGE>
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its investment advisor
By /s/ Raymond Kennedy
Title: Vice President
<PAGE>
SCHEDULE A
to
Second Amendment
---------------
NEW BANKS
---------
CYPRESS TREE INVESTMENT MANAGEMENT COMPANY, INC.
DEBT STRATEGIES FUND, INC.
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
KZH HOLDING CORPORATION II
MERRILL LYNCH DEBT STRATEGIES PORTFOLIO
ML CBO IV (CAYMAN) LTD.
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO
PRIME INCOME TRUST
ROYALTON COMPANY
SENIOR HIGH INCOME PORTFOLIO, INC.
THE ING CAPITAL SENIOR SECURED HIGH INCOME FUND, L.P.
<PAGE>
SCHEDULE B
to
Second Amendment
---------------
RELEVANT PERCENTAGES
--------------------
Bank Loans Commitment
- ---- ----- ----------
BANKERS TRUST COMPANY 8.57% 8.57%
CYPRESS TREE INVESTMENT 4.76% 4.76%
MANAGEMENT COMPANY, INC.
DEBT STRATEGIES FUND, INC. 4.92% 4.92%
DEBT STRATEGIES PORTFOLIO 4.92% 4.92%
EQUITABLE LIFE ASSURANCE 16.67% 16.67%
SOCIETY OF THE UNITED STATES
KZH HOLDING CORPORATION II 4.76% 4.76%
MERRILL LYNCH DEBT 4.92% 4.92%
STRATEGIES PORTFOLIO
ML CBO IV (CAYMAN) LTD. 4.76% 4.76%
OCTAGON CREDIT INVESTORS 18.10% 18.10%
LOAN PORTFOLIO
PRIME INCOME TRUST 18.10% 18.10%
ROYALTON COMPANY 4.76% 4.76%
SENIOR HIGH INCOME 4.92% 4.92%
PORTFOLIO, INC.
THE ING CAPITAL SENIOR 4.76% 4.76%
SECURED HIGH INCOME FUND,
L.P.
<PAGE>
SCHEDULE C
to
Second Amendment
---------------
COMMITMENTS
-----------
Bank; Commitment
---- ----------
BANKERS TRUST COMPANY $ 5,142,857.14
CYPRESS TREE INVESTMENT $ 2,857,142.86
MANAGEMENT COMPANY, INC.
DEBT STRATEGIES FUND, INC. $ 2,952,380.95
EQUITABLE LIFE ASSURANCE $10,000,000.00
SOCIETY OF THE UNITED STATES
KZH HOLDING CORPORATION II $ 2,857,142.85
MERRILL LYNCH DEBT $ 2,952,380.95
STRATEGIES PORTFOLIO
ML CBO IV (CAYMAN) LTD. $ 2,857,142.86
OCTAGON CREDIT INVESTORS $10,857,142.86
LOAN PORTFOLIO
PRIME INCOME TRUST $10,857,142.86
ROYALTON COMPANY $ 2,857,142.86
SENIOR HIGH INCOME $ 2,952,380.96
PORTFOLIO, INC.
THE ING CAPITAL SENIOR $ 2,857,142.85
SECURED HIGH INCOME FUND, L.P.
-------------
Total: $60,000,000.00
<PAGE>
SCHEDULE D
to
Second Amendment
---------------
BANK ADDRESSES
--------------
BANKERS TRUST COMPANY 130 Liberty Street
New York, NY 10006
Attention: Gina Thompson
Telephone: (212) 250-7356
Telecopier: (212) 250-7218
CYPRESS TREE INVESTMENT
MANAGEMENT COMPANY, INC. 125 High Street
Boston, MA 02110
Attention: Philip C. Robbins
Telephone: (617) 946-0600
Telecopier: (617) 946-5680
EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES 1345 Avenue of the Americas
38th Floor
New York, NY 10105
Attention: Joel Serebransky
Telephone: (212) 969-2267
Telecopier: (212) 969-1554
DEBT STRATEGIES FUND, INC. 800 Scudders Mill Road
Plainsboro, NJ 08536
Attention: Anthony Clemente
Telephone: (609) 282-2092
Telecopier: (609) 282-2756
KZH HOLDING CORPORATION II c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Robert Goodwin/Joseph Nerich
Telephone: (212) 946-7544
Telecopier: (212) 946-7776
<PAGE>
SCHEDULE D
Page 2
MERRILL LYNCH DEBT STRATEGIES
PORTFOLIO 800 Scudders Mill Road
Plainsboro, NJ 08536
Attention: Anthony Clemente
Telephone: (609) 282-2092
Telecopies: (609) 282-2756
ML CBO IV (CAYMAN) LTD. 13455 Noel Road
2 Galleria Tower
Dallas, TX 75240
Attention: T.J. Juffer
Telephone: (972) 233-4300
Telecopier: (972) 233-4343
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO 380 Madison Avenue
12th Floor
New York, NY 10017
Attention: Joyce DeLucca
Telephone: (212) 622-3104
Telecopier: (212) 622-3797
PRIME INCOME TRUST c/o Dean Witter Intercapital, Inc.
Two World Trade Center
72nd Floor
New York, NY 10048
Attention: Peter Gewirtz
Telephone: (212) 392-9034
Telecopier: (212) 392-5345
ROYALTON COMPANY 840 Newport Center Drive
Newport Beach, CA 92658
Attention: Jason Rosiak
Telephone: (714) 640-3407
Telecopier: (714) 725-6839
<PAGE>
SCHEDULE D
Page 3
SENIOR HIGH INCOME PORTFOLIO, INC 800 Scudders Mill Road
Plainsboro, NJ 08536
Attention: Anthony Clemente
Telephone: (609) 282-2092
Telecopies: (609) 282-2756
THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P. 333 South Grand Avenue
Suite 4250
Los Angeles, CA 90071
Attention: Kathleen Lenarcic
Telephone: (213) 346-3971
Telecopier: (213) 346-3995
