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United States
Securities and Exchange Commission
Washington, D.C. 20549
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FORM 8-K
---------------
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 30, 1998 1-9078
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Date of Report (Date of earliest event reported) Commission File Number
The Alpine Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-1620387
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1790 Broadway
New York, New York 10019-1412
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(Address of Principal Executive Offices) (Zip Code)
(212) 757-3333
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On January 30, 1998, The Alpine Group, Inc. (the "Company") acquired
American Premier Holdings, Inc., a manufacturer and distributor of refractory
products in the United States and Canada (together with its subsidiaries, unless
the context otherwise requires, "APHI"), through the merger (the "Merger") of
APHI with and into Refraco Inc., a wholly-owned subsidiary of the Company
("Refraco"). The consideration paid by the Company in the Merger consisted of:
(i) the payment of an aggregate of $31,742,263 in cash to the stockholders of
APHI; (ii) the repayment or assumption of $63,081,511 of indebtedness of APHI;
and (iii) the issuance to the stockholders of APHI of shares representing
16.556% of the issued and outstanding common stock of Refraco. Prior to the
consummation of the Merger, APHI's subsidiary, American Premier, Inc., spun off
its American Minerals division, which produces and supplies mineral products for
applications in the agricultural and steel industries, to Minerals Trading,
Inc., a stockholder of APHI. The terms of the Merger, including the amount of
consideration paid in connection therewith, were the result of arms-length
negotiation among the Company, APHI and the stockholders of APHI. For further
information with respect to the Merger, reference is made to the Agreement and
Plan of Merger, dated as of January 18, 1998, among the Company, Refraco, APHI
and the stockholders of APHI listed therein, which is Exhibit 1 hereto and which
is incorporated herein by reference.
APHI is a manufacturer and distributor of refractory products in the
United States and Canada with net sales of $171.1 million for the year ended
December 31, 1996. APHI produces a wide range of monolithic (unformed) and
specialty refractories, ceramic fiber refractories and pre-formed ceramic
shapes. These products are used in virtually every industrial process
requiring heating or containment of a solid, liquid or gas at high
temperature. The major industries served by these products include iron and
steel, ferrous and non-ferrous foundries, power generation, hydrocarbon
processing, aluminum, rock products (cement, lime and gypsum), mining and
mineral processing, glass, pulp and paper. In addition, APHI produces other
products derived from magnesite which are used in wastewater treatment
plants, chemical processing industries and as an animal feed supplement.
APHI operates nine manufacturing facilities in North America, including
facilities in Aurora, Illinois, Brownsville, Texas, Chicago Heights, Illinois,
Erwin, Tennessee, Maple Grove, Ohio, Ontario, Canada and Mexico (in which it has
a 50% interest). APHI also operates a sea-water magnesite extraction facility
in Port St. Joe, Florida and the only magnesite mine in North America located in
Gabbs, Nevada.
In connection with the Merger, on January 30, 1998, Refraco, Adience, Inc.,
a wholly-owned subsidiary of Refraco ("Adience"), Refraco Holdings Limited, a
wholly-owned subsidiary of Adience ("UK Holdings"), and Refraco (U.K.) Limited,
a wholly-owned subsidiary of UK Holdings ("UK Limited"), entered into an Amended
and Restated Credit Agreement (the "Credit Agreement") among Refraco, Adience,
UK Holdings, UK Limited, various banks and Bankers Trust Company ("Bankers
Trust"), as Administrative Agent. The Credit Agreement provides for total
borrowings of up to $260.0 million. The incremental borrowings of approximately
$115.0 million under the Credit Agreement were used to (i) pay a portion of the
consideration required to consummate the
2
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Merger (including the repayment of certain indebtedness of APHI referred to
above) and to pay related transaction expenses and (ii) repay outstanding bank
debt previously incurred under the Credit Agreement. Upon completion of the
funding of the Merger, approximately $278.4 million was outstanding under the
Credit Agreement.
The Credit Agreement is comprised of six tranches of term loans and a
revolving credit facility. Interest on amounts outstanding under the Credit
Agreement is payable quarterly based upon the prime rate or the Eurodollar
rate plus, in each case, the applicable margin, which in the case of the term
loans is 1.5%, 2.0% and 2.25%, respectively, above the prime rate and 2.5%,
3.0% and 3.25%, respectively, above the Eurodollar rate. The applicable
margin in respect of the revolving credit facility is 1.5% above the prime
rate and 2.5% above the Eurodollar rate. The variable components of these
rates are subject to periodic adjustment based on the leverage ratios
maintained by the borrowers. Three tranches of term loans have an average
eight-year term; the remaining three tranches have an average six-year term.
Each of the term loans requires periodic mandatory amortization payments.
The revolving credit facility has approximately five years remaining on its
initial six-year term.
The indebtedness incurred under the Credit Agreement is secured by a
blanket lien on the assets of Adience, UK Holdings and UK Limited and their
respective subsidiaries.
Concurrently with the execution of the Credit Agreement, Refraco also
entered into a Third Amendment to the Term Loan Agreement, dated as of January
30, 1998 (the "Term Loan Agreement"), with various banks and Bankers Trust, as
Administrative Agent. The initial borrowings in April 1997 under the Term Loan
Agreement, which were approximately $60 million, were used to finance a portion
of the acquisition price required to consummate the purchase by the Company, on
April 15, 1997, of all of the outstanding shares of Hepworth Refractories, Ltd.,
a manufacturer and distributor of refractory products and services, from
Hepworth P.L.C. for approximately $104 million, including related transaction
expenses. Such amendment to the Term Loan Agreement reflects the consent of the
lenders thereto to the Merger and also adjusts certain financial covenants to
give effect to the Merger.
Interest on amounts outstanding under the Term Loan Agreement is payable
quarterly based upon the prime rate plus 2.75% or the Eurodollar rate plus
3.75%. The term of the indebtedness arising under the Term Loan Agreement is
eight years.
The indebtedness incurred under the Term Loan Agreement is secured by,
among other things, a guaranty by the Company. The guaranty of the Company is
secured by its pledge of common stock, par value $.01 per share ("Superior
Common Stock"), of Superior TeleCom Inc. owned by the Company with a market
value of $60 million.
For further information with respect to the Credit Agreement and the Third
Amendment to the Term Loan Agreement, reference is made to such agreements,
which are Exhibits 2 and 3, respectively, hereto and which are incorporated
herein by reference.
3
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a),(b)
In accordance with Instruction 4 of this Item 7, financial statements
required by this Item will be filed by an amendment to this initial report on
Form 8-K not later than 60 days after the date hereof.
(c) Exhibits
Exhibit 1 - Agreement and Plan of Merger, dated as of January 18, 1998,
among The Alpine Group, Inc., Refraco Inc., American Premier Holdings, Inc. and
the stockholders of American Premier Holdings, Inc. listed therein.
Exhibit 2 - Amended and Restated Credit Agreement, dated as of January 30,
1998, among Refraco Inc., Adience, Inc., Refraco Holdings Limited, Refraco
(U.K.) Limited, various banks and Bankers Trust Company, as Administrative
Agent.
Exhibit 3 - Third Amendment to the Term Loan Agreement, dated as of January
30, 1998, between Refraco Inc., various banks and Bankers Trust Company, as
Administrative Agent.
4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 13, 1998 THE ALPINE GROUP, INC.
By:/s/ Bragi F. Schut
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Bragi F. Schut
Executive Vice President
5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
1 Agreement and Plan of Merger, dated as of January 18, 1998,
among The Alpine Group, Inc., Refraco Inc., American Premier
Holdings, Inc. and the stockholders of American Premier
Holdings, Inc. listed therein.
2 Amended and Restated Credit Agreement, dated as of January
30, 1998, among Refraco Inc., Adience, Inc., Refraco
Holdings Limited, Refraco (U.K.) Limited, various banks and
Bankers Trust Company, as Administrative Agent.
3 Third Amendment to the Term Loan Agreement, dated as of
January 30, 1998, between Refraco Inc., various banks and
Bankers Trust Company, as Administrative Agent.
</TABLE>
6
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Exhibit 1
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AGREEMENT AND PLAN OF MERGER
Among
THE ALPINE GROUP, INC.,
REFRACO INC.,
AMERICAN PREMIER HOLDINGS, INC,
MINERALS TRADING, INC.,
RALPH FEUERRING,
CHARLES GEHRET,
JOHN GEHRET
and
STANLEY WEISS
Dated as of January 18, 1998
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TABLE OF CONTENTS
ARTICLE I ACTIONS PRIOR TO THE MERGER............................ 1
SECTION 1.1. Drop-Down, Dividend And The Split-Off.................. 1
ARTICLE II THE MERGER............................................. 2
SECTION 2.1. The Merger............................................. 2
SECTION 2.2. Effective Time......................................... 2
SECTION 2.3. Effect of the Merger................................... 2
SECTION 2.4. Certificate of Incorporation; By-Laws.................. 3
SECTION 2.5. Directors and Officers................................. 3
SECTION 2.6. Conversion of Securities............................... 3
SECTION 2.7. Refraco Class B Common Stock Purchase.................. 4
SECTION 2.8. Surrender and Payment.................................. 5
SECTION 2.9. Closing................................................ 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ALPINE AND
REFRACO................................................ 7
SECTION 3.1. Organization and Qualification; Subsidiaries........... 7
SECTION 3.2. Authority Relative to this Agreement and Related
Matters................................................ 8
SECTION 3.3. Certificate of Incorporation and By-Laws............... 9
SECTION 3.4. Capitalization......................................... 9
SECTION 3.5. No Conflict; Required Filings and Consents............. 10
SECTION 3.6. SEC Filings; Financial Statements; Liabilities......... 11
SECTION 3.7. Brokers................................................ 12
SECTION 3.8. Board and Stockholder Approvals........................ 13
SECTION 3.9. No Intention of Disposition, Etc. ..................... 13
SECTION 3.10. Absence of Certain Changes or Events................... 15
SECTION 3.11. Absence of Litigation.................................. 15
SECTION 3.12. Employee Benefit Plans................................. 15
SECTION 3.13. Permits and Licenses................................... 17
SECTION 3.14. Properties, Contracts and Insurance.................... 18
SECTION 3.15. Compliance with Environmental Laws..................... 18
SECTION 3.16. Employment Matters..................................... 21
SECTION 3.17. Transactions with Affiliates........................... 22
SECTION 3.18. Books and Records...................................... 22
SECTION 3.19. Improper Payments...................................... 22
SECTION 3.20. Full Disclosure........................................ 22
SECTION 3.21. Tax Returns, Audits and Liabilities.................... 23
SECTION 3.22. Title to Properties; Absence of Encumbrances........... 24
SECTION 3.23. Real Property.......................................... 24
SECTION 3.24. Financing.............................................. 25
i
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE APHI
SHAREHOLDERS........................................... 25
SECTION 4.1. Organization and Qualification; Subsidiaries........... 25
SECTION 4.2. Authority Relative to this Agreement and Related
Matters................................................ 26
SECTION 4.3. Certificate of Incorporation and By-Laws............... 26
SECTION 4.4. Capitalization......................................... 26
SECTION 4.5. No Conflict; Required Filings and Consents............. 27
SECTION 4.6. Financial Statements; Liabilities...................... 28
SECTION 4.7. Brokers................................................ 29
SECTION 4.8. Board and Stockholder Approvals........................ 29
SECTION 4.9. Intentionally Omitted.................................. 29
SECTION 4.10. Absence of Certain Changes or Events................... 29
SECTION 4.11. Absence of Litigation.................................. 30
SECTION 4.12. Employee Benefit Plans................................. 30
SECTION 4.13. Permits and Licenses................................... 32
SECTION 4.14. Properties, Contracts and Insurance.................... 33
SECTION 4.15. Compliance with Environmental Laws..................... 34
SECTION 4.16. Employment Matters..................................... 36
SECTION 4.17. Transactions with Affiliates........................... 38
SECTION 4.18. Books and Records...................................... 38
SECTION 4.19. Improper Payments...................................... 38
SECTION 4.20. Full Disclosure........................................ 38
SECTION 4.21. Tax Returns, Audits and Liabilities.................... 39
SECTION 4.22. Title to Properties; Absence of Encumbrances........... 41
SECTION 4.23. Real and Personal Property............................. 42
SECTION 4.24. Inventory.............................................. 42
SECTION 4.25. Accounts Receivable.................................... 43
SECTION 4.26. Active Conduct of Business, Etc. ...................... 43
SECTION 4.27. Certain Additional Representations..................... 45
ARTICLE IVA CERTAIN ADDITIONAL REPRESENTATIONS AND WARRANTIES OF
THE APHI SHAREHOLDERS.................................. 46
SECTION 4A.1. Title to Shares........................................ 46
SECTION 4A.2. Authority Relative to this Agreement................... 46
SECTION 4A.3. No Conflict; Required Filings and Consents............. 47
SECTION 4A.4. No Intention of Disposition, Etc. ..................... 48
SECTION 4A.5. Acquisition of Stock for Investment.................... 50
SECTION 4A.6. Brokers................................................ 51
SECTION 4A.7. Absence of Litigation.................................. 51
SECTION 4A.8. Full Disclosure........................................ 51
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INDIVIDUAL
SHAREHOLDERS WITH RESPECT TO THE AM DIVISION AND AMI... 51
SECTION 5.1. Intentionally Omitted.................................. 51
SECTION 5.2. Intentionally Omitted.................................. 51
SECTION 5.3. Intentionally Omitted.................................. 51
SECTION 5.4. Intentionally Omitted.................................. 52
SECTION 5.5. Financial Statements; Liabilities...................... 52
SECTION 5.6. Intentionally Omitted.................................. 52
SECTION 5.7. Absence of Certain Changes or Events................... 52
SECTION 5.8. Absence of Litigation.................................. 53
SECTION 5.9. Employee Benefit Plans................................. 53
SECTION 5.10. Permits and Licenses................................... 55
SECTION 5.11. Properties, Contracts and Insurance.................... 56
SECTION 5.12. Compliance with Environmental Laws..................... 57
SECTION 5.13. Employment Matters..................................... 59
SECTION 5.14. Transactions with Affiliates........................... 60
SECTION 5.15. Books and Records...................................... 61
SECTION 5.16. Improper Payments...................................... 61
SECTION 5.17. Full Disclosure........................................ 61
SECTION 5.18. Title to Properties; Absence of Encumbrances........... 61
SECTION 5.19. Real and Personal Property............................. 62
SECTION 5.20. Active Conduct of Business............................. 63
ARTICLE VI COVENANTS OF APHI AND THE APHI SHAREHOLDERS............ 65
SECTION 6.1. Conduct of Business by APHI Pending the Merger......... 65
SECTION 6.2. No Solicitation of Transactions........................ 68
SECTION 6.3. Notification of Certain Events......................... 68
SECTION 6.4. Consents and Approvals................................. 68
SECTION 6.5. Limitations on Dispositions of Interests............... 69
SECTION 6.6. Lime Quarry Sale....................................... 69
SECTION 6.7. Stockholders' and Debtholders' Agreement............... 70
SECTION 6.8. Contracts.............................................. 70
SECTION 6.9. Employee Plans......................................... 70
ARTICLE VII COVENANTS OF ALPINE AND REFRACO........................ 70
SECTION 7.1. Certain Actions Pending the Merger..................... 71
SECTION 7.2. Notification of Certain Events......................... 71
SECTION 7.3. Consents and Approvals................................. 72
SECTION 7.4. Limitations on Dispositions of Interests............... 72
SECTION 7.5. Blue-Sky Compliance.................................... 72
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ARTICLE VIII ADDITIONAL AGREEMENTS OF THE PARTIES................... 73
SECTION 8.1. Access to Information; Confidentiality................. 73
SECTION 8.2. Notification of Certain Matters........................ 75
SECTION 8.3. Further Action......................................... 75
SECTION 8.4. Tax Matters............................................ 76
SECTION 8.5. Public Announcements................................... 77
SECTION 8.6. Government Compliance.................................. 77
SECTION 8.7. Non-Competition Agreement.............................. 77
SECTION 8.8. Subsidiary Merger...................................... 78
SECTION 8.9. Intentionally Omitted.................................. 78
SECTION 8.10. 1997 Bonus Amount...................................... 78
SECTION 8.11. Organizational Matters Pertaining to AMI............... 79
ARTICLE IX CONDITIONS TO THE CLOSING.............................. 79
SECTION 9.1. Conditions to Obligations of Each Party................ 79
SECTION 9.2. Additional Conditions to Obligations of Refraco........ 80
SECTION 9.3. Additional Conditions to Obligations of APHI and
the APHI Shareholders.................................. 83
SECTION 9.4. Additional Conditions to Obligations of MTI............ 85
ARTICLE X TERMINATION, AMENDMENT AND WAIVER...................... 86
SECTION 10.1. Termination............................................ 86
SECTION 10.2. Effect of Termination.................................. 87
ARTICLE XI INDEMNIFICATION PROVISIONS............................. 87
SECTION 11.1. APHI Shareholders' Indemnification Obligation.......... 87
SECTION 11.2. Alpine and Refraco Indemnification Obligation.......... 88
SECTION 11.3. Individual Shareholders' Indemnification Obligation.... 88
SECTION 11.4. Procedures for Indemnification for Third Party Claims.. 88
SECTION 11.5. Indemnification Deductibles and Caps................... 90
SECTION 11.6. Exclusive Remedy....................................... 94
SECTION 11.7. Certain Rights to Recover.............................. 94
SECTION 11.8. Lime Quarry Indemnification............................ 95
ARTICLE XII GENERAL PROVISIONS..................................... 95
SECTION 12.1. Survival of Representations and Warranties............. 95
SECTION 12.2. Notices................................................ 96
SECTION 12.3. Certain Definitions.................................... 98
SECTION 12.4. Headings............................................... 98
SECTION 12.5. Entire Agreement....................................... 98
SECTION 12.6. Assignment: Parties in Interest........................ 98
SECTION 12.7. Governing Law; Consent to Jurisdiction................. 99
SECTION 12.8. Counterparts........................................... 99
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SECTION 12.9. Severability........................................... 99
SECTION 12.10. Specific Performance................................... 99
SECTION 12.11. Fees and Expenses...................................... 100
SECTION 12.12. Action by Individual Shareholders...................... 100
SECTION 12.13. Amendment.............................................. 100
SECTION 12.14. Waiver................................................. 100
SECTION 12.15. Definitions............................................ 101
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List of Exhibits
Exhibit A: Exchange Agreement
Exhibit B: Refraco Stockholders' Agreement
Exhibit C: Allocation of Merger Consideration
Exhibit D: Refraco Charter Amendment
Exhibit E: Supply Agreement
Exhibit F: Registration Rights Agreement
Exhibit G: John Gehret Employment Agreement
Exhibit H: Charles Gehret Consulting Agreement
Exhibit I: Alpine Guarantee
Exhibit J: Tax Sharing Agreement
Exhibit K: APHI Stock Ownership
Exhibit L: Required APHI Consents and Approvals
Exhibit M: IMETAL Letter
Exhibit N: Required Alpine and Refraco Consents and Approvals
Exhibit O: Required APHI Consents and Approvals
Exhibit P: Escrow Agreement
Exhibit Q: Expense Allocation
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January __, 1998 (this
"Agreement"), by and among Refraco Inc., a Delaware corporation ("Refraco"); The
Alpine Group, Inc., a Delaware corporation and the sole shareholder of Refraco
("Alpine"); American Premier Holdings, Inc., a Delaware corporation ("APHI");
Minerals Trading, Inc., a Delaware corporation ("MTI"); Ralph Feuerring ("RF");
Charles Gehret ("CG"); John Gehret ("JG"); and Stanley Weiss ("SW") (MTI, RF,
CG, JG and SW, being the shareholders of APHI, are sometimes hereinafter
collectively referred to as the "APHI Shareholders");
WHEREAS, the shareholders and the Boards of Directors of Refraco and
APHI have each approved the merger (the "Merger") of APHI with and into Refraco
in accordance with the General Corporation Law of the State of Delaware (the
"GCL") and upon the terms and subject to the conditions set forth herein; and
WHEREAS, the parties intend that the Merger qualify as a
reorganization under Section 368(a)(1)(A) of the Internal Revenue Code of 1986,
as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants and agreements herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Refraco, Alpine, APHI, MTI, RF, CG, JG and
SW (RF, CG, JG and SW are sometimes hereinafter collectively referred to as the
"Individual Shareholders") hereby agree as follows:
ARTICLE
ACTIONS PRIOR TO THE MERGER
SECTION 1.1. Drop-Down, Dividend And The Split-Off.
Immediately prior to the Effective Time (as defined below), the APHI
Shareholders shall cause American Premier, Inc., a Delaware corporation and a
wholly-owned subsidiary of APHI ("API"), and API Technologies, Inc., a Delaware
corporation and a wholly-owned subsidiary of API ("API Technologies"), to
contribute (the "Drop-Down") to American Minerals Inc., a Delaware corporation
to be newly-organized and all of the capital stock of which will be owned, in
the aggregate, by API and API Technologies ("AMI"), substantially all of the
assets and liabilities (excluding, among other things, certain intercompany
accounts) of the business currently conducted by API
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and its subsidiaries and affiliates (including API Technologies) as the American
Minerals division of API (the "AM Division") and cause all of the equity
interests in AMI to be distributed first by API Technologies to API and then by
API to APHI, in each case as a dividend (collectively, the "Dividend"), and then
to MTI in redemption of a portion of the shares of the outstanding capital stock
of APHI owned by MTI (the "Split-Off"), all in accordance with the provisions of
the Exchange Agreement substantially in the form attached hereto as Exhibit A
and made a part hereof (the "Exchange Agreement"), and the bills of sale,
assumption agreements and other documents substantially in the forms attached as
Exhibit A to the Exchange Agreement (the "Drop-Down Documents").
ARTICLE II
THE MERGER
SECTION 2.1. The Merger.
At the Effective Time (as defined in Section 2.2) and subject to and
upon the terms and conditions of this Agreement and the GCL, APHI shall be
merged with and into Refraco, the separate corporate existence of APHI shall
cease, and Refraco shall continue as the surviving corporation. Refraco as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
SECTION 2.2. Effective Time.
At the Closing referred to in Section 2.9, the parties hereto shall
cause the Merger to be consummated by delivering a Certificate of Merger (the
"Certificate of Merger") to the Secretary of State of the State of Delaware, in
such form as required by, and executed in accordance with the relevant
provisions of, the GCL, for filing by the Secretary of State (the time of such
filing being the "Effective Time").
SECTION 2.3. Effect of the Merger.
At the Effective Time, the effect of the Merger shall be as provided
in the applicable provisions of the GCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time (following the Drop-Down,
Dividend and Split-Off) all the rights, privileges, powers, franchises, and
property of APHI shall vest in the Surviving Corporation, and all restrictions,
disabilities, duties, debts, and liabilities of APHI shall become the
restrictions, disabilities, duties, debts, and liabilities of the Surviving
Corporation.
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SECTION 2.4. Certificate of Incorporation; By-Laws.
At the Effective Time, the Certificate of Incorporation and By-Laws of
Refraco shall be the Certificate of Incorporation and By-Laws of the Surviving
Corporation until thereafter amended.
SECTION 2.5. Directors and Officers.
The directors of the Surviving Corporation shall be the directors of
Refraco immediately prior to the Effective Time, and the officers of the
Surviving Corporation shall be the officers of Refraco immediately prior to the
Effective Time, in each case until their respective successors are duly elected
or appointed and qualified; provided, however, that immediately following the
Effective Time, the shareholders of Refraco shall cause certain designees of the
parties to be elected to the Board of Directors of the Surviving Corporation, in
accordance with the provisions of the Refraco Shareholders' Agreement
substantially in the form attached hereto as Exhibit B and made a part hereof
(the "Shareholders' Agreement").
SECTION 2.6. Conversion of Securities.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of Refraco, APHI or the holders of any of the following
securities: (i) all the shares of Common Stock, par value $0.01 per share ("APHI
Common Stock"), of APHI then held by APHI as treasury shares shall be cancelled
and extinguished without payment of any consideration therefor and without any
conversion thereof; and (ii) all the shares of APHI Common Stock then issued and
outstanding (other than those referred to in Section 2.6(a)(i)) shall, subject
to and in accordance with Section 2.8 hereof, be automatically cancelled and
extinguished and thereafter shall represent, in the aggregate, the right to
receive the consideration set forth in the immediately following sentence, as
adjusted to the extent, if any, required pursuant to Section 2.6(c) below (as so
adjusted, the "Merger Consideration"). The Merger Consideration shall be an
amount equal to $62.5 million (as adjusted to the extent, if any, required
pursuant to the provisions of Section 2.6(c) below), payable (x) $31.225 million
in cash and (y) $31.275 million by the delivery of shares of Class B common
stock, par value $0.01 per share ("Refraco Class B Common Stock"), of Refraco
(together with the shares of common stock, par value $0.01 per share ("Refraco
Ordinary Common Stock"), of Refraco, the "Refraco Common Stock"), valued at
$2,077 per share (the "Refraco Per Share Dollar Value") of Refraco Class B
Common Stock (for a total, prior to any adjustment pursuant to the provisions of
Section 2.6(c), of 15,058 such shares).
(b) The APHI Shareholders hereby elect to receive the Merger
Consideration, and the Merger Consideration shall be paid to the APHI
Shareholders, as follows: (i) MTI shall receive the Merger Consideration solely
in shares of Refraco Class
3
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B Common Stock (4,454 shares, prior to adjustment in accordance with
Section 2.6(c), of Refraco Class B Common Stock valued at the Refraco Per Share
Dollar Value) and (ii) the Individual Shareholders shall receive an aggregate of
10,604 shares of Refraco Class B Common Stock valued at the Refraco Per Share
Dollar Value and the balance in cash ($31.225 million in cash, prior to
adjustment in accordance with Section 2.6(c)), the relative numbers of shares
and amounts of cash allocated to each Individual Shareholder to be as set forth
on Exhibit C attached hereto and made a part hereof.
(c) In the event that the indebtedness of APHI for borrowed money as
of the close of the Business Day immediately preceding the Closing, including
accrued interest as of such date, is less than $70.0 million, the aggregate
Merger Consideration shall be increased by an amount (the "Merger Consideration
Adjustment") equal to (i) the difference between $70.0 million and the amount of
such debt, less (ii) the 1997 Bonus Amount and the Quarry Amount (each as
hereinafter defined); provided, however, that if, subject to and in accordance
with the provisions of Section 6.1, the C.C.P.I. patent infringement litigation
(the "Patent Litigation") identified in Section 4.11 of the APHI Disclosure
Schedule (as defined below) is settled and any amounts are paid to the other
party prior to the Closing, the amount of such debt shall be deemed to be
reduced by the amount of such payment for purposes of determining the Merger
Consideration Adjustment. As used herein, "Business Day" means any day other
than a Saturday, a Sunday or a day on which banking institutions in the City of
New York are not required to be open. The Merger Consideration Adjustment shall
be allocated fifty percent to MTI, which additional amount shall be payable by
delivery of shares of Refraco Class B Common Stock valued at the Refraco Per
Share Dollar Value, and fifty percent to the Individual Shareholders, which
additional amount shall be payable in cash, in proportion to the Individual
Shareholders' ownership of APHI Common Stock.
SECTION 2.7. Refraco Class B Common Stock Purchase.
At the Closing and immediately after the Effective Time, Refraco shall
issue to MTI, and MTI shall purchase from Refraco (the "Refraco Class B Common
Stock Purchase"), the number of shares of Refraco Class B Common Stock, if any,
necessary to cause the number of shares of Refraco Class B Common Stock owned by
MTI immediately after the Effective Time to be equal to five percent (5%) of the
number of shares of Refraco Common Stock in the aggregate that is outstanding at
such time after giving effect to (i) the issuance of shares of Refraco Class B
Common Stock as part of the Merger Consideration, and (ii) the issuance of
shares, if any, of Refraco Class B Common Stock in accordance with this
Section 2.7, for a per share purchase price in cash equal to the Refraco Per
Share Dollar Value, payable by wire transfer of immediately available funds to
an account designated by Refraco at least two Business Days prior to the
Closing, against receipt by MTI of certificates representing such shares of
Refraco Class B Common Stock.
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SECTION 2.8. Surrender and Payment.
All amounts payable as Merger Consideration shall be delivered at the
Effective Time, against the Surviving Corporation's receipt of certificates
representing shares of APHI Common Stock that have been converted into a right
to receive the Merger Consideration, together with appropriate and properly
completed instruments of transfer covering such shares of APHI Common Stock, (i)
if cash, by wire transfer of immediately available funds to accounts designated
at least two Business Days prior to the Effective Time, and (ii) if Refraco
Class B Common Stock, by delivery of certificates representing shares of Refraco
Class B Common Stock. After the Effective Time, there shall be no further
registration of transfers of shares of APHI Common Stock outstanding prior to
the Effective Time.
SECTION 2.9. Closing.
(a) The Closing. The closing of the various transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Proskauer Rose LLP, 1585 Broadway, New York, New York, at 11:00 a.m., local
time, on the Business Day following the date on which the conditions set forth
in Article IX hereof are satisfied or waived, or at such other place and time
and on such other date as the parties shall agree (the "Closing Date").
(b) Actions At the Closing. At the Closing, the following actions
shall occur in the following sequence, and in the event the Split-Off is
consummated, the Merger must be consummated, and none of them shall be
consummated unless all of them shall have been consummated:
(i) Refraco shall file a certificate of amendment to its
certificate of incorporation substantially in the form attached hereto as
Exhibit D (the "Refraco Charter Amendment"), Alpine shall contribute to the
capital of Refraco all the shares of Refraco Preferred Stock (as defined below)
and Refraco shall distribute to Alpine 84,386 shares of Ordinary Common Stock
(as defined below), as a result of which Alpine shall own 84,396 shares of
Ordinary Common Stock;
(ii) Refraco shall repay or cause to be repaid (the "APHI Bank
Debt Repayment") all liability of APHI and its Subsidiaries under and terminate
each of (A) the Revolving Credit Facility to API, Premier Services Corporation
and Premier Refractories Canada, Ltd. from Bank of America Illinois, The First
National Bank of Boston and Bank of America Canada dated June 3, 1996, as
amended, and (B) the Note Agreement between API, Premier Services Corporation,
Premier Refractories Canada, Ltd. and the Noteholders listed therein dated May
15, 1996;
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(iii) The Drop-Down, in accordance with the provisions of the
Drop-Down Documents;
(iv) The Dividend;
(v) The Split-Off, in accordance with the provisions of the
Exchange Agreement;
(vi) The Merger, in accordance with the provisions hereof;
(vii) Refraco shall repay or cause to be repaid (the "APHI
Shareholder Debt Repayment") in cash all of the amount of existing indebtedness
of APHI and its Subsidiaries to the APHI Shareholders that is outstanding at
such time, including accrued interest through the Business Day immediately
preceding the Closing, all as indicated on Schedule 2.9(d) (which Schedule shall
be updated as of the Business Day immediately preceding the Closing and such
updated version delivered to Refraco at the Closing); and
(viii) The Refraco Class B Common Stock Purchase, if applicable.
The APHI Bank Debt Repayment, the Drop-Down, the Dividend, the
Split-Off, the Merger, the APHI Shareholder Debt Repayment and the Refraco
Class B Common Stock Purchase, if applicable, are sometimes hereinafter
collectively referred to as the "Closing Transactions."
(c) Closing Deliveries. In addition to the items set forth in
Sections 2.7 and 2.8 hereof, each party shall (and in the case of AMI after the
Split-Off, MTI shall cause AMI to) duly execute and deliver the following
documents to which it or he is a party:
(i) The Exchange Agreement;
(ii) The Shareholders' Agreement;
(iii) The Supply Agreement relating to the supply by MTI and
AMI of magnesite and other minerals to Refraco, substantially in the form
attached hereto as Exhibit E and made a part hereof (the "Supply Agreement");
(iv) The Registration Rights Agreement, substantially in the form
attached hereto as Exhibit F and made a part hereof (the "Registration Rights
Agreement");
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(v) The certificates referenced in Sections 9.2(c), 9.3(c)
and 9.4(b);
(vi) The employment agreement between Refraco and JG, pursuant to
which he will serve as President of Refraco's North American operations for a
three-year term, substantially in the form attached hereto as Exhibit G and made
a part hereof (the "JG Employment Agreement");
(vii) The consulting agreement between Refraco and CG,
pursuant to which he will serve as a consultant to Refraco for a three-year
term, substantially in the form attached hereto as Exhibit H and made a part
hereof (the "CG Consulting Agreement");
(viii) Alpine's Guaranty, substantially in the form attached
hereto attached hereto as Exhibit I and made a part hereof (the "Guaranty"); and
(ix) The tax sharing agreement between Alpine and Refraco,
substantially in the form attached hereto as Exhibit J and made a part hereof
(the "Tax Sharing Agreement").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ALPINE AND REFRACO
Each of Alpine and Refraco (to its respective actual knowledge after
reasonable investigation and inquiry, except for the representations and
warranties set forth in Sections 3.2, 3.3, 3.4, 3.7, 3.8, 3.9 and 3.24 below,
which expressly are not qualified as to such actual knowledge) hereby represents
and warrants to each of the APHI Shareholders that, except as set forth in the
Disclosure Schedule delivered by Alpine and Refraco to APHI and the APHI
Shareholders and attached hereto and made a part hereof (the "Alpine Disclosure
Schedule"):
SECTION 3.1. Organization and Qualification; Subsidiaries.
Each of Alpine, Refraco and Refraco's Subsidiaries (as defined below)
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority and any necessary governmental authority to own,
operate, or lease the properties that it purports to own, operate, or lease and
to carry on its business as it is now being conducted, and is in good standing
in each jurisdiction where the character of its properties owned, operated, or
leased or the nature of its activities makes such
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qualification necessary, except for such failures which, individually or in the
aggregate, would not have an Alpine Material Adverse Effect. The term "Alpine
Material Adverse Effect," as used in this Agreement means any change, effect,
event or situation that is either (a) materially adverse to the business,
results of operations, assets, liabilities, condition (financial or otherwise),
or prospects of Alpine and its Subsidiaries taken as a whole prior to the
Effective Time, or (b) materially adverse to the business, results of
operations, assets, liabilities, condition (financial or otherwise), or
prospects of Refraco and its Subsidiaries, taken as a whole prior to the
Effective Time. The term "Subsidiary" of a person as used in this Agreement
shall mean any corporation or other legal entity of which that person (either
alone or together with other Subsidiaries of that person) owns, directly or
indirectly, more than 50% of the stock or other equity interests which are
ordinarily and generally, in the absence of contingencies or understandings,
entitled to vote for the election of a majority of the board of directors or
governing body of such entity. Except as set forth in Section 3.1 of the Alpine
Disclosure Schedule, all the outstanding capital stock and other ownership
interests or equity equivalents of each of the Subsidiaries of Refraco is duly
authorized, validly issued, fully paid, and non-assessable and is owned by
Refraco or another Subsidiary of Refraco free and clear of any claim, lien or
encumbrance. The Subsidiaries of Refraco that are not listed in Section 9.3(g)
of the Alpine Disclosure Schedule did not, in the aggregate, represent more than
5% of the consolidated income of Refraco and its consolidated Subsidiaries
during the fiscal year ended April 30, 1997 or during the period commencing May
1, 1997 and ended on October 31, 1997 and, as of October 31, 1997, did not, in
the aggregate, represent more than 5% of the consolidated assets of Refraco and
its consolidated Subsidiaries. Except as disclosed in Section 3.1 of the Alpine
Disclosure Schedule, neither Refraco nor any of its Subsidiaries directly or
indirectly controls or owns any interest in any other corporation, partnership,
joint venture, or other business association or entity.
SECTION 3.2. Authority Relative to this Agreement and Related
Matters.
Each of Alpine and Refraco has all necessary corporate power and
authority to enter into this Agreement and the other agreements contemplated
hereby (the "Ancillary Agreements") to which it will be a party (the Refraco
Charter Amendment shall be deemed for purposes of this Agreement to be an
Ancillary Agreement to which Refraco will be a party) and to carry out its
respective obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Ancillary Agreements to which it will be a party by each
of Alpine and Refraco and the consummation by each of Alpine and Refraco of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of each of Alpine and Refraco. This
Agreement has been, and at the Closing, the Ancillary Agreements to which it
will be a party will be, duly executed and delivered by each of Alpine and
Refraco and, assuming the due authorization, execution, and delivery hereof and
thereof
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by each of the other parties hereto and thereto, constitutes, or in the case of
the applicable Ancillary Agreement, will constitute, legal, valid, and binding
obligations of each of Alpine and Refraco, enforceable against each in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other similar laws
relating to or affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
SECTION 3.3. Certificate of Incorporation and By-Laws.
Alpine and Refraco have heretofore furnished to the APHI Shareholders
a true, complete and correct copy of the Certificate of Incorporation and
By-Laws, each as amended to date, of Alpine and Refraco. Such Certificates of
Incorporation and By-Laws are in full force and effect. Neither Alpine or
Refraco nor any of Refraco's Subsidiaries is in violation of any of the
provisions of its Certificate of Incorporation or By-Laws.
SECTION 3.4. Capitalization.
(a) The authorized capital stock of Refraco consists of 500 shares of
Refraco Ordinary Common Stock, no shares of Refraco Class B Common Stock, and
2,500 shares of preferred stock, par value $0.01 per share ("Refraco Preferred
Stock"). As of the date hereof (i) 2,000 shares of Refraco Preferred Stock are
issued and outstanding and no shares are reserved for issuance, and (ii) 10
shares of Refraco Ordinary Common Stock are issued and outstanding (all of which
are owned by Alpine, free and clear of all claims, liens, security interests,
pledges, charges, encumbrances, stockholders' agreements and voting trusts,
except as disclosed in Section 3.4(a) of the Alpine Disclosure Schedule), and no
shares are reserved for issuance.
(b) Immediately prior to the Effective Time (and after giving effect
to the filing of the Refraco Charter Amendment), the authorized capital stock of
Refraco will consist of 500,000 shares of Refraco Ordinary Common Stock, 100,000
shares of Refraco Class B Common Stock, and 400,000 shares of Refraco Preferred
Stock. Immediately prior to the Effective Time (and after giving effect to the
actions described in Section 2.9(b)(i)), (i) no shares of Refraco Preferred
Stock will be issued and outstanding or reserved for issuance, (ii) 84,396
shares of Refraco Ordinary Common Stock will be issued and outstanding (all of
which will be owned by Alpine, free and clear of all claims, liens, security
interests, pledges, charges, encumbrances, stockholders' agreements and voting
trusts) and no shares will be reserved for issuance and (iii) no shares of
Refraco Class B Common Stock will be issued and outstanding or reserved for
issuance.
(c) There are no securities convertible into or exchangeable for
capital stock or other ownership interests or equity equivalents, options,
warrants, or other rights,
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agreements, arrangements, or commitments of any character relating to the issued
or unissued capital stock, or ownership or equity equivalent of Refraco or any
Subsidiary thereof or obligating Refraco or any Subsidiary thereof to issue or
sell any shares of capital stock of, or other ownership interests or equity
equivalents in, Refraco or any Subsidiary thereof or any agreement to issue any
capital stock or any such convertible or exchangeable securities, options,
warrants, rights, agreements, arrangements, or commitments. All issued and
outstanding shares of Refraco Common Stock and Refraco Preferred Stock are duly
authorized, validly issued, fully paid, and non-assessable. There are no voting
trusts or other agreements or understandings to which Refraco or any Subsidiary
thereof is a party with respect to the voting of the capital stock of Refraco or
any Subsidiary thereof.
(d) Immediately prior to the Effective Time, the shares of Refraco
Class B Common Stock and the shares of Refraco Ordinary Common Stock into which
the Refraco Class B Common Stock is convertible (the "Conversion Shares") will
be duly authorized and at the Closing (in the case of the shares of Refraco
Class B Common Stock issued in accordance with Article II), or upon conversion
of the Refraco Class B Common Stock in accordance with its terms (in the case of
the Conversion Shares), will be validly issued, fully paid and non-assessable,
will not have been issued in violation of any preemptive right of stockholders
or rights of first refusal, and the APHI Shareholders receiving such shares will
have good title to the shares of Refraco Class B Common Stock (and, upon
conversion thereof in accordance with their terms, the Conversion Shares) free
and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders agreements and voting trusts (other than those set forth herein and
those created by such APHI Shareholders). At the Closing, sufficient shares of
Refraco Common Stock will be reserved for issuance upon the conversion of the
Refraco Class B Common Stock.
SECTION 3.5. No Conflict; Required Filings and Consents.
(a) Other than as set forth in Section 3.5(a) of the Alpine
Disclosure Schedule, the execution and delivery of this Agreement by each of
Alpine and Refraco do not, and the execution and delivery of the Ancillary
Agreements to which each of Alpine and Refraco will be a party will not, and
neither the performance by each of Alpine and Refraco of this Agreement or the
Ancillary Agreements to which each of Alpine and Refraco will be a party nor the
Merger or other transactions contemplated hereby or thereby will, (i) conflict
with or violate the Certificate of Incorporation or By-Laws of Alpine or Refraco
or any of their respective Subsidiaries, (ii) conflict with or violate any law,
rule, regulation, order, judgment, or decree applicable to Alpine, Refraco or
any of their respective Subsidiaries or by which any of them or their respective
properties is bound or affected (except as provided in Section 3.5(b)) or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration, or
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cancellation of, or give to others any other rights pursuant to, or result in
the creation of a lien or encumbrance on any of the properties or assets of
Alpine, Refraco or any of their respective Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise, or other instrument or obligation to which Alpine, Refraco or any of
their respective Subsidiaries is a party or by which Alpine, Refraco, any of
their respective Subsidiaries or any of their properties is bound or affected,
except for any such breaches, defaults, or other occurrences which would not,
individually or in the aggregate, have an Alpine Material Adverse Effect.
(b) The execution and delivery of this Agreement and the Ancillary
Agreements to which it will be a party by Alpine and Refraco do not, and the
performance of this Agreement and such Ancillary Agreements by Alpine and
Refraco will not, require Alpine or Refraco to obtain any consent, approval,
authorization or permit of, or to make any filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements of state securities laws ("Blue Sky Laws"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and filing and
recordation of the Certificate of Merger as required by the GCL, (ii) for
filings required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder (the "HSR
Act"), and (iii) where failure to obtain such consents, approvals,
authorizations, or permits, or to make such filings or notifications, would not
either (x) prevent or materially delay consummation of the Merger, or otherwise
prevent Alpine or Refraco from performing their respective obligations under
this Agreement and the Ancillary Agreements to which it is a party or (y) have
an Alpine Material Adverse Effect.
SECTION 3.6. SEC Filings; Financial Statements; Liabilities.
(a) As of their respective dates, all reports, schedules,
registration statements, and definitive proxy statements filed by Alpine with
the Securities and Exchange Commission (the "SEC") for periods ended on or after
April 30, 1997 (collectively, the "SEC Reports"), except as described in
subsequently filed SEC Reports (that have been filed with the SEC prior to the
date hereof), (i) complied as to form in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) Except as described in Section 3.6(b) of the Alpine Disclosure
Schedule, each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the SEC Reports has been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the
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periods involved (except as may be indicated therein or in the notes thereto),
and each fairly presents the consolidated financial position of Alpine and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and changes in financial position for the
periods indicated, except that the unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount.
(c) Neither Alpine, Refraco or any of Refraco's consolidated
Subsidiaries has any liability or obligation of any nature whatsoever of the
type required to be set forth on the consolidated balance sheet of Alpine and
its consolidated Subsidiaries (including the notes thereto) in accordance with
generally accepted accounting principles, consistently applied (whether known or
unknown, due or to become due, accrued, fixed, contingent, liquidated,
unliquidated, or otherwise), other than liabilities and obligations (i) which
are reflected in the consolidated balance sheet of Alpine and its consolidated
Subsidiaries as of April 30, 1997 or reflected in the notes thereto or (ii)
which arose in the ordinary course since April 30, 1997 and do not and will not
individually or in the aggregate, have an Alpine Material Adverse Effect.
(d) The unaudited consolidated balance sheet of Refraco and its
consolidated Subsidiaries as of April 30, 1997, and the related consolidated
statements of income and cash flows for the year then ended, certified by the
principal financial and accounting officer of Refraco and previously delivered
to the APHI Shareholders and attached hereto as Section 3.6(d)(i) to the Alpine
Disclosure Schedule, and the unaudited consolidated balance sheet of Refraco and
its consolidated Subsidiaries as of October 31, 1997, and the related
consolidated statements of income and cash flows for the six-month period then
ended, certified by the principal financial and accounting officer of Refraco
and previously delivered to the APHI Shareholders and attached hereto as
Section 3.6(d)(ii) to the Alpine Disclosure Schedule, fairly present the
consolidated financial position of Refraco and its consolidated Subsidiaries as
at the respective dates thereof and the consolidated results of its operations
and changes in financial position for the periods indicated.
SECTION 3.7. Brokers.
No broker, finder, or investment banker is entitled to any brokerage,
finder's, or similar fee or commission in connection with the transactions
contemplated by this Agreement, based upon arrangements made by or on behalf of
Alpine or Refraco, except Rothschild Inc., whose fee will be paid by Refraco.
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SECTION 3.8. Board and Stockholder Approvals.
The Board of Directors of Refraco, at a meeting of such board duly
called and held prior to the time of the execution of this Agreement, by the
unanimous vote of all directors present (or by unanimous written consent), (a)
approved and adopted this Agreement, the Ancillary Agreements to which Refraco
will be a party, the Merger, and the other transactions contemplated hereby and
thereby in accordance with Refraco's Certificate of Incorporation and the GCL
and (b) resolved to recommend approval and adoption of this Agreement, the
Ancillary Agreements, the Merger and the other transactions contemplated hereby
and thereby by Alpine, in its capacity as the sole stockholder of Refraco. The
Board of Directors of Alpine, at a meeting of such board duly called and held
prior to the time of the execution of this Agreement, by the unanimous vote of
all directors present (or by unanimous written consent), approved and adopted
this Agreement, the Ancillary Agreements to which Alpine or Refraco will be a
party, the Merger, and the other transactions contemplated hereby and thereby in
accordance with Alpine's Certificate of Incorporation and the GCL both on behalf
of Alpine and in Alpine's capacity as the sole stockholder of Refraco.
SECTION 3.9. No Intention of Disposition, Etc.
(a) Refraco has no intention to redeem or otherwise reacquire any
Refraco Class B Common Stock issued as part of the Merger Consideration.
(b) Alpine has no plan or intention to sell, exchange, distribute or
otherwise dispose of, or reduce the risk of loss by short sale or otherwise with
respect to, any of the capital stock of Refraco owned by it or enter into any
contract or arrangement with respect to any of the foregoing matters, or to
liquidate, merge or consolidate Refraco with any other person.
(c) Refraco has no intention to liquidate, sell or otherwise dispose
of any of the assets of APHI acquired in the Merger or any of its assets, except
for dispositions made in the ordinary course of business, or transfers to a
direct wholly-owned subsidiary of Refraco, and following the Merger Refraco will
continue the historic business of APHI or use a significant portion of APHI's
assets in Refraco's business, except that Refraco may merge Adience, Inc., a
Delaware corporation and a direct, wholly-owned subsidiary of Refraco
("Adience"), API and API Technologies.
(d) Refraco is not an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(e) The Refraco Class B Common Stock and cash, as the case may be,
received by each APHI Shareholder in exchange for the APHI Common Stock
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surrendered in the Merger represents consideration bargained for in an
arm's-length transaction.
(f) Except as provided in Section 12.11, Refraco will pay the
expenses of Alpine and Refraco, if any, incurred in connection with the Merger.
(g) There is no intercorporate indebtedness existing between APHI and
Refraco.
(h) None of the compensation to be received after the Merger from the
Surviving Corporation or its Subsidiaries by any employee of the Surviving
Corporation or its Subsidiaries who is also an Individual Shareholder was
bargained for as consideration for any of their shares of APHI Common Stock;
none of the shares of Refraco Class B Common Stock received in the Merger by any
employee of the Surviving Corporation or its Subsidiaries who is also an
Individual Shareholder was bargained for as consideration for any employment
agreement with the Surviving Corporation; and the compensation paid by the
Surviving Corporation to any employee of APHI or its Subsidiaries who is also an
Individual Shareholder will be for services actually to be rendered and was
negotiated as such in an arms-length transaction.
(i) Neither Alpine nor Refraco has ever owned shares of capital stock
of APHI.
(j) The Split-Off is being carried out for the corporate business
purpose of facilitating the Merger. The Split-Off is motivated, in whole or in
substantial part, by this corporate business purpose.
(k) There is no plan or intention to liquidate APHI, to merge APHI
with any other corporation, or to sell or otherwise dispose of the assets of
APHI subsequent to the Split-Off except (i) in the ordinary course of business,
(ii) pursuant to the Merger and (iii) the merger of Adience, API and API
Technologies.
(l) Payments made in connection with all continuing transactions
between AMI and APHI will be for fair market value based on terms and conditions
arrived at by the parties bargaining at arm's-length.
(m) Following the Split-Off, Refraco and API intend to continue the
active conduct of the APHI trade or business independently from AMI and with
their own employees, except as contemplated by the Supply Agreement and the
agreement with respect to services contemplated by Section 3.6 of the Exchange
Agreement (the "Services Agreement").
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(n) Except as contemplated by the Supply Agreement referred to in
Section 2.9(c)(iii) and the Services Agreement, no intercorporate debt will
exist between Refraco and AMI following the Split-Off and any such
intercorporate debt will not constitute stock or securities.
SECTION 3.10. Absence of Certain Changes or Events.
Except as contemplated by this Agreement or disclosed in Section 3.10
of the Alpine Disclosure Schedule, since April 30, 1997, Alpine and Refraco have
operated their respective businesses diligently and only in the ordinary course
of business as theretofore conducted, and, since such date, (i) there has not
been any Alpine Material Adverse Effect, and (ii) none of Alpine, Refraco or any
Refraco Subsidiary has entered into any material transaction with any third
party or any of their respective affiliates.
SECTION 3.11. Absence of Litigation.
Except as set forth in Section 3.11 of the Alpine Disclosure Schedule,
no claim, action, proceeding, or investigation is pending or threatened against
Alpine, Refraco or Refraco's Subsidiaries which would, individually or in the
aggregate, if adversely determined, have an Alpine Material Adverse Effect. As
of the date hereof, there are no actions, suits, or proceedings pending or
threatened against Alpine, Refraco or any of Refraco's Subsidiaries which seeks
to prevent or challenge the transactions contemplated by this Agreement or
otherwise arising out of or in any way related to this Agreement, the Ancillary
Agreements or any of the transactions contemplated hereby or thereby.
SECTION 3.12. Employee Benefit Plans.
True, correct, and complete copies, as in effect on the date hereof,
of the employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), and related trust
or funding agreements, summary plan descriptions and summaries of material
modifications, currently established, maintained, sponsored or contributed to
(or with respect to which any obligation to contribute has been undertaken) by
Alpine or its Subsidiaries or any entity that would be deemed a "single
employer" with Alpine (an "Alpine ERISA Affiliate") within the meaning of
Section 414(b), (c), (m) or (o) of the Code, and all material bonus, stock
option, stock purchase, stock appreciation right, incentive, deferred
compensation, supplemental retirement, post-retirement or post-termination
health or welfare benefit, severance, welfare, medical, life, vacation,
sickness, change in control, death benefit, and other similar fringe or employee
benefit plans, programs, policies, or arrangements, all employment, consulting,
or executive compensation agreements, in each case, whether domestic or foreign,
for the benefit of, or relating to, any employee, former employee, consultant,
director, or retiree of Alpine, Refraco or any Subsidiary of Refraco or any
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Alpine ERISA Affiliate (including their family members and other beneficiaries)
(collectively, the "Alpine Employee Plans") have been provided or made available
to APHI and the APHI Shareholders prior to the date hereof. Except as which
would not, individually or in the aggregate, have an Alpine Material Adverse
Effect, with respect to any of the Alpine Employee Plans, (i) each Alpine
Employee Plan intended to qualify under Section 401(a) of the Code (or similar
provisions for tax-registered or tax-favored plans of foreign jurisdictions) has
received a favorable determination letter from the Internal Revenue Service (the
"IRS") (or, if applicable, similar approvals of foreign governmental
authorities), and with respect to each such Alpine Employee Plan, no event has
occurred or condition exists that could disqualify such Alpine Employee Plan;
(ii) no such Alpine Employee Plan is or has ever been a "multiemployer plan"
within the meaning of Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of
the Code (a "Multiemployer Plan") or a single employer pension plan within the
meaning of Section 4001(a)(15) of ERISA which is subject to Sections 4063 and
4064 of ERISA (a "Multiple Employer Plan"), and neither Alpine nor any Alpine
ERISA Affiliate has had an obligation to contribute to any Multiemployer Plan or
Multiple Employer Plan; (iii) there has been no "prohibited transaction" within
the meaning of Section 4975(c) of the Code or Section 406 of ERISA, involving
the assets of the Alpine Employee Plans, in connection with which Alpine or any
of the Alpine ERISA Affiliates could subject Refraco or any Refraco Subsidiary
either to a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Code; (iv) no "accumulated funding deficiency"
(within the meaning of Section 412 of the Code and Section 302 of ERISA), has
been or could be expected to be incurred, whether or not waived, and no excise
or other taxes have been or could be expected to be incurred or are due and
owing with respect to the Alpine Employee Plans because of any failure to comply
with the minimum funding standards of the Code and ERISA; (v) no claim, lawsuit,
arbitration or other action is threatened or anticipated or has been asserted or
instituted against the Alpine Employee Plans (other than non-material routine
claims for benefits, and appeals of such claims), any trustee or fiduciaries
thereof, Alpine, any Alpine ERISA Affiliate, any director, officer, or employee
thereof, or any of the assets of any trust of the Alpine Employee Plans;
(vi) each Alpine Employee Plan complies and has been maintained and operated in
all respects in accordance with its terms and applicable law, including, without
limitation, ERISA and the Code; (vii) no Alpine Employee Plan is or expected to
be under audit or investigation by the IRS, U.S. Department of Labor, or any
other governmental authority and no such completed audit, if any, has resulted
in the imposition of any tax or penalty; and (viii) Alpine has made available to
APHI and the APHI Shareholders as to each Alpine Employee Plan, a true and
correct copy of the most recent annual report (Form 5500) filed with the IRS and
other like reports required to be filed in foreign jurisdictions and the most
recent actuarial report.
Except as listed in Section 3.12 of the Alpine Disclosure Schedule or
which would not have an Alpine Material Adverse Effect or as required by
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Section 4980B(f) of the Code, no Alpine Employee Plan provides medical, death,
or welfare benefits (whether or not insured) with respect to current or former
employees of Alpine, Refraco or Refraco's Subsidiaries beyond their retirement
or other termination of employment.
Each of Alpine, Refraco and Refraco's Subsidiaries that maintains a
"group health plan" within the meaning of Section 5000(b)(1) of the Code has
complied in all material respects with the notice and continuation requirements
of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA and
the regulations thereunder.
No "reportable event" within the meaning of Section 4043(c) of ERISA,
other than any such event for which the 30-day notice requirement under ERISA
has been waived, and the regulations thereunder has occurred or is expected to
occur that could reasonably be expected to have an Alpine Material Adverse
Effect, and the consummation of the transaction contemplated by this Agreement
will not result in a reportable event with respect to any Alpine Employee Plan
or any plan of an Alpine ERISA Affiliate.
SECTION 3.13. Permits and Licenses.
Except as set forth in Section 3.13 of the Alpine Disclosure Schedule,
Alpine, Refraco and Refraco's Subsidiaries are now, and on the Closing Date will
be, the holder of all licenses, franchises, ordinances, authorizations, permits,
and certificates, domestic or foreign, necessary to enable them to continue to
conduct their businesses in all material respects as presently conducted
(collectively, the "Alpine Licenses"), except where the failure to have such
Alpine Licenses, individually or in the aggregate, would not have an Alpine
Material Adverse Effect. Except as set forth in Section 3.13 of the Alpine
Disclosure Schedule, all of the Alpine Licenses are now, and on the Closing Date
will be, in full force and effect, except those that lapse in accordance with
their terms. Alpine and Refraco have no reason to believe that any federal,
state, or local government or agency having jurisdiction will revoke, cancel,
rescind, refuse to renew in the ordinary course, or modify any of the Alpine
Licenses. Except set forth in Section 3.13 of the Alpine Disclosure Schedule,
there is not now pending or threatened any investigation before any such
federal, state, or local governments or agencies which, either individually or
in the aggregate, would have an Alpine Material Adverse Effect. Each of Alpine,
Refraco and Refraco's Subsidiaries has conducted its business so as to comply
with all applicable laws, regulations, ordinances, and codes, domestic and
foreign, including, without limitation, laws, regulations, ordinances, and codes
relating to the protection of the environment, the failure to comply with which
would be reasonably likely to have, either individually or in the aggregate, an
Alpine Material Adverse Effect.
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SECTION 3.14. Properties, Contracts and Insurance.
(a) Except as set forth in Section 3.14(a) of the Alpine Disclosure
Schedule, Alpine, Refraco and Refraco's Subsidiaries own, or are licensed to
use, or lease, all property and assets, real and personal, tangible and
intangible (including, but not limited to, all patents, trademarks, trade names,
copyrights, technology, know-how, and processes), used in or necessary for the
conduct of their businesses as currently conducted, except where the failure so
to own, license, or lease would not have an Alpine Material Adverse Effect. The
use of such patents, trademarks, trade names, copyrights, technology, know-how,
and processes by Alpine, Refraco or Refraco's Subsidiaries does not infringe on
the rights of any person, subject to such claims and infringement which,
individually or in the aggregate, have not had and will not have an Alpine
Material Adverse Effect.
(b) Except as set forth in Section 3.14(b) of the Alpine Disclosure
Schedule, all of the material contracts of Alpine, Refraco and Refraco's
Subsidiaries are presently valid and enforceable, and there is no violation,
default or claim of violation or default by any party thereto and no condition
or event has occurred which with notice or lapse of time or both would
constitute a violation or default thereunder, except for any such failure to be
valid and existing and in full force and effect, or any such violation, default,
or claim, which would not have an Alpine Material Adverse Effect.
(c) All insurance policies maintained for the benefit of Alpine,
Refraco and Refraco's Subsidiaries are in full force and effect, no notice of
default or termination has been given thereunder, and no effect, occurrence, or
thing has occurred which, with notice or lapse of time or both, could result in
the early termination thereof.
SECTION 3.15. Compliance with Environmental Laws.
For the purposes of this Section 3.15, the following terms shall have
the meanings set forth hereafter:
"Environment" shall mean any surface or subsurface physical medium or
natural resource, including, air, land, soil, surface waters, ground waters,
stream and river sediments, biota and any indoor area, surface or physical
medium.
"Environmental Laws" shall mean any federal, state, local, foreign or
common law, rule, regulation, ordinance, code, order or judgment (including any
written judicial or administrative guidances) enacted, promulgated or issued
prior to the Effective Time relating to the injury to, or the pollution or
protection of human health and safety or the Environment.
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"Environmental Liabilities" shall mean any claims, judgments, damages
(including punitive damages), losses, penalties, fines, liabilities,
encumbrances, liens, violations, costs and expenses (including attorneys' and
consultants' fees) of investigation, remediation, monitoring or defense of any
matter relating to human health, safety or the Environment of whatever kind or
nature by any party, entity or authority, (A) which are incurred as a result of
(i) the existence of Hazardous Substances in, on, under, at or emanating from
any real property presently or formerly owned, operated or managed by Refraco or
any of its Subsidiaries, (ii) the offsite transportation, treatment, storage or
disposal of Hazardous Substances generated by Refraco or any of its Subsidiaries
or (iii) the violation of any Environmental Laws or (B) which arise under the
Environmental Laws.
"Hazardous Substances" shall mean petroleum, petroleum products,
petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos
or any materials containing asbestos, and any materials or substances regulated
or defined as or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous constituents," "toxic substances,"
"pollutants," "contaminants" or any similar denomination intended to classify
or regulate substances by reason of toxicity, carcinogenicity, ignitability,
corrosivity or reactivity under any Environmental Law.
All references in this Section 3.15 to Refraco shall include any of
its Subsidiaries, and all predecessors thereof, and any person or entity the
liabilities of which, pursuant to the Environmental Laws, contractually, by
common law, by operation of law or otherwise, Refraco or any of Refraco's
Subsidiaries or such predecessors may have succeeded to.
Except as set forth in Section 3.15 of the Alpine Disclosure Schedule:
(a) All of the current and past operations of Alpine (excluding any
Alpine Subsidiaries other than Refraco and Refraco's Subsidiaries), Refraco and
the Refraco Subsidiaries comply and have at all times complied with all
applicable Environmental Laws, and any real property presently or formerly
owned, used, leased, occupied, managed or operated by Refraco (collectively, the
"Refraco Real Property") meets the requirements and standards of all
Environmental Laws, except such non-compliances or failures of the Refraco Real
Property to meet the requirements and standards of applicable Environmental Laws
which will not, either individually or in the aggregate, have an Alpine Material
Adverse Effect.
(b) The Refraco Real Property does not contain any Hazardous
Substances in, on, over, under or at it, in concentrations which would presently
violate any applicable Environmental Laws or would be reasonably likely to
result in the imposition of liability or obligations on the present or former
owner, manager, or operator
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of the Refraco Real Property under any applicable Environmental Laws, including
any violation, liability or obligations for the investigation, corrective
action, remediation or monitoring of Hazardous Substances in, on, over, under or
at the Refraco Real Property, except those which will not, individually or in
the aggregate, have an Alpine Material Adverse Effect.
(c) None of the Refraco Real Property is listed or proposed for
listing on the National Priorities List pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., or any similar inventory of sites requiring investigation
or remediation maintained by any state or locality. Except as set forth on
Section 3.15 of the Alpine Disclosure Schedule, neither Alpine nor Refraco has
received any notice, whether oral or written, from any governmental entity or
third party of any actual or threatened Environmental Liability which is
outstanding, pending or unresolved with respect to the Refraco Real Property,
except for such notices relating to Environmental Liabilities which would not
reasonably be likely to result in an Alpine Material Adverse Effect.
(d) There are no underground storage tanks, asbestos or asbestos
containing materials, polychlorinated biphenyls, urea formaldehyde, or other
Hazardous Substances in, on, over, under or at any Refraco Real Property, except
for such underground storage tanks, asbestos or asbestos containing materials,
polychlorinated biphenyls, urea formaldehyde, or other Hazardous Substances as
would not reasonably be likely to result in an Alpine Material Adverse Effect.
(e) There are no conditions existing at any Refraco Real Property or
with respect to Refraco's business, that require, or which with the giving of
notice or the passage of time or both will reasonably likely require, remedial
or corrective action, removal, monitoring or closure pursuant to the
Environmental Laws, except for such conditions which will not, individually or
in the aggregate, have an Alpine Material Adverse Effect.
(f) Refraco has all the permits, licenses, authorizations and
approvals necessary for the conduct of its business and for the operations on,
in or at the Refraco Real Property (the "Refraco Environmental Permits"), which
are required under applicable Environmental Laws, Refraco is in compliance with
the terms and conditions of all such Environmental Permits, and no reason exists
why Refraco is not capable of continued operation of its business in full
compliance with the Refraco Environmental Permits and the applicable
Environmental Laws, except for the absence of such permits or any
non-compliances with the terms and conditions of such permits which will not,
individually or in the aggregate, have an Alpine Material Adverse Effect.
(g) Refraco has made available to the APHI Shareholders those
material and final environmental reports, assessments, audits, studies,
investigations,
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data, Refraco Environmental Permits and other written environmental information
set forth in Section 3.15 of the Alpine Disclosure Schedule that concern its
business and the Refraco Real Property that were prepared or are dated within
the past five years.
SECTION 3.16. Employment Matters.
(a) Except as set forth in Section 3.16(a) of the Alpine Disclosure
Schedule or which would not have an Alpine Material Adverse Effect, each of
Refraco and its Subsidiaries: (i) is in compliance in all material respects with
all applicable federal, state and provincial laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment,
pay equity and wages and hours, in each case, with respect to current, former,
or retired employees or consultants of Refraco or any of its Subsidiaries
(collectively "Refraco Employees"); (ii) has timely withheld and paid over to
the appropriate federal, state, provincial or local governmental authority all
amounts required by law or by agreement to be withheld from the wages, salaries,
and other payments to Refraco Employees; (iii) is not liable for any arrears of
wages or any taxes or any penalty for failure to comply with any of the
foregoing; and (iv) (other than routine payments to be made in the ordinary
course of business and consistent with past practice) is not liable for any
payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, social security
or other benefits for Refraco Employees, except in each case, for immaterial
amounts.
(b) Except as set forth in Section 3.16(b) of the Alpine Disclosure
Schedule or which would not have an Alpine Material Adverse Effect, neither
Refraco nor any of its Subsidiaries is involved in or threatened with any labor
dispute, grievance, or litigation relating to labor, safety or discrimination
matters involving any Refraco Employee, including, without limitation, charges
of unfair labor practices or discrimination complaints. Except as set forth in
Section 3.16(b) of the Alpine Disclosure Schedule or which would not have an
Alpine Material Adverse Effect, neither Refraco nor any of its Subsidiaries has
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act or similar such legislation of foreign jurisdictions. Except as
set forth in Section 3.16(b) of the Alpine Disclosure Schedule or which would
not have an Alpine Material Adverse Effect, neither Refraco nor any of its
Subsidiaries is presently or has been in the past a party to, or bound by, any
collective bargaining agreement or union contract with respect to Refraco
Employees and no collective bargaining agreement is being negotiated by Refraco
or any of its Subsidiaries.
(c) Except as set forth in Section 3.16(c) of the Alpine Disclosure
Schedule or which would not have an Alpine Material Adverse Effect, each of
Alpine, Refraco and Refraco's Subsidiaries is in compliance in all material
respects with all laws, regulations and orders relating to workers' compensation
and the Worker Adjustment and Retraining Notification Act or similar such
legislation of foreign jurisdictions.
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SECTION 3.17. Transactions with Affiliates.
Except as set forth in Section 3.17 of the Alpine Disclosure Schedule,
since January 1, 1996, neither Refraco nor any of its Subsidiaries has had any
direct or indirect dealings with Alpine, its Subsidiaries or its affiliates
(other than Refraco and its Subsidiaries) or with any key employee of Alpine,
its Subsidiaries or its affiliates (other than Refraco and its Subsidiaries) or
with any of their affiliates, associates or relatives. Except as set forth in
such Section of the Alpine Disclosure Schedule and except for employment
arrangements with their employees, Refraco and its Subsidiaries have no
obligation to or claim against Alpine or any key employee of Alpine or its
Subsidiaries, or any of their affiliates, associates or relatives, and no such
person or entity has any obligation to or claim against Refraco or its
Subsidiaries. Such Section of the Alpine Disclosure Schedule reasonably
describes the nature and extent of any products, services or benefits provided
to Refraco and its Subsidiaries by any such person or entity without a
corresponding charge equal to the fair market value of such products, services
or benefits.
SECTION 3.18. Books and Records.
The books and records of Alpine, Refraco and Refraco's Subsidiaries
are complete and correct in all material respects and have been maintained in
accordance with good business practices. The minute books of Alpine, Refraco
and each of its Subsidiaries, as previously made available to the APHI
Shareholders, contain complete and accurate records of all meetings and
accurately reflect all other corporate action of the shareholders and boards of
directors of such entities.
SECTION 3.19. Improper Payments.
Neither Alpine, Refraco or Refraco's Subsidiaries nor their respective
officers and agents have made any illegal or improper payments to, or provided
any illegal or improper benefit or inducement for, any governmental official,
supplier, customer or other person, in an attempt to influence any such person
to take or to refrain from taking any action relating to Alpine, Refraco or
Refraco's Subsidiaries. The employees of Alpine, Refraco and Refraco's
Subsidiaries may from time to time have made customary holiday gifts of nominal
value to suppliers or customers.
SECTION 3.20. Full Disclosure.
No statement in this Article III or in the Alpine Disclosure Schedule
hereto or in any certificate delivered pursuant to the requirements of this
Agreement or the Ancillary Agreements by or on behalf of Alpine or Refraco
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact
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necessary in order to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
SECTION 3.21. Tax Returns, Audits and Liabilities.
Except as set forth in Section 3.21 of the Alpine Disclosure Schedule,
each of Alpine, Refraco and Refraco's Subsidiaries has (i) timely filed in
accordance with all applicable laws, all Returns (as defined in Section 4.21(c))
required to be filed by them, (ii) paid all Taxes (as defined in
Section 4.21(c)) shown to have become due pursuant to such Returns, and
(iii) paid all Taxes (other than those being contested in good faith, all of
which are disclosed in Section 3.21 of the Alpine Disclosure Schedule) for which
a notice of, or assessment or demand for, payment has been received or which are
otherwise due and payable, in each case other than failures to file or pay that
would not, in the aggregate, have an Alpine Material Adverse Effect. All Income
Tax (as defined in Section 4.21(c)) and other material Tax Returns filed by each
of Alpine, Refraco and each of Refraco's Subsidiaries with respect to Taxes were
true and correct in all material respects as of the date on which they were
filed or as subsequently amended to the date hereof.
Except as set forth in Section 3.21 of the Alpine Disclosure Schedule,
(A) there is no action, suit, proceeding, investigation, audit, claim or
assessment pending or proposed with respect to any liability for Tax that
relates to Alpine, Refraco or any of Refraco's Subsidiaries for which a material
amount of Tax is at issue and (B) all material amounts required to be collected
or withheld by Alpine, Refraco and each of Refraco's Subsidiaries with respect
to Taxes have been duly collected or withheld and any such amounts that are
required to be remitted to any taxing authority have been duly remitted.
Except as set forth in Section 3.21 of the Alpine Disclosure Schedule,
neither Refraco nor any of its Subsidiaries has any deferred gain or loss
arising from deferred intercompany transactions (as referred to in Treasury
Regulation Section 1.1502-13).
Alpine has filed a consolidated Return for federal Income Tax purposes
on behalf of itself and other members of the affiliated group (within the
meaning of Section 1504 of the Code) of which it is the parent corporation since
at least the date on which it was incorporated. The accruals for deferred Taxes
reflected in the audited financial statements of Alpine for the year ended April
30, 1997 and in the unaudited consolidated financial statements of Alpine and
its Subsidiaries for the period ended October 31, 1997 are adequate in all
material respects to cover any deferred Tax liability of Alpine and its
Subsidiaries determined in accordance with generally accepted accounting
principles through the date thereof. The accruals and reserves for Taxes in
such financial statements are adequate in all material respects to cover any
liability of Alpine and its Subsidiaries for Taxes for periods through the date
thereof.
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SECTION 3.22. Title to Properties; Absence of Encumbrances.
Except as set forth in Section 3.22 of the Alpine Disclosure Schedule,
Alpine, Refraco and Refraco's Subsidiaries have good and marketable title to or,
in the case of leases and licenses, valid and subsisting leasehold interests or
licenses in, all of their properties and assets of whatever kind (whether real
or personal, tangible or intangible), including, without limitation, all
properties and assets that are shown on the financial statements attached as
Sections 3.6(d)(i) and (ii) to the Alpine Disclosure Schedule (except for assets
sold in the ordinary course of business since the dates of such statements), in
each case free and clear of any and all liens, mortgages, pledges, security
interests, restrictions, prior assignments, claims and encumbrances of any kind
whatsoever, except as may be set forth in such financial statements or in the
Alpine Disclosure Schedule and except for those: (i) securing Taxes,
assessments and other governmental charges or levies not yet due and payable
(excluding any imposed pursuant to any of the provisions of ERISA) or the claims
of materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business; (ii)
consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation or under surety or
performance bonds, in each case arising in the ordinary course of business; and
(iii) constituting encumbrances in the nature of zoning restrictions, easements
and rights or restrictions on the use of Alpine's real property, provided the
same do not materially interfere with or prohibit the present use or continued
existence of structures on the properties. Except as set forth in Section 3.22
of the Alpine Disclosure Schedule, all assets, properties and rights relating to
Refraco's business have been entered into, incurred and conducted by, Refraco or
its Subsidiaries rather than any of their respective affiliates.
SECTION 3.23. Real Property.
Section 3.23 of the Alpine Disclosure Schedule contains a complete and
correct list of all material real property owned or leased by Alpine, Refraco
and Refraco's Subsidiaries. All such real property, buildings and structures,
and the equipment therein, and the operations and maintenance thereof, comply
with any applicable agreements and restrictive covenants and conform to all
applicable legal requirements, including those relating to the environment,
health and safety, land use and zoning, except in each case where the failure to
so comply or conform would not be reasonably likely to have an Alpine Material
Adverse Effect, and all work required to be done by Alpine, Refraco or Refraco's
Subsidiaries as landlord or tenant has been duly performed, except for such work
the failure to so duly perform would not be reasonably likely to have an Alpine
Material Adverse Effect. No condemnation or other proceeding is pending or
threatened which would affect the use of any such property by Alpine, Refraco or
Refraco's Subsidiaries. Alpine, Refraco and Refraco's Subsidiaries' buildings
and other structures,
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equipment and other assets (whether leased or owned) are in good operating
condition and repair, subject to ordinary wear and tear, except for such
variations as would not, either individually or in the aggregate, have an Alpine
Material Adverse Effect.
SECTION 3.24. Financing.
Attached as Section 3.24 of the Alpine Disclosure Schedule is a true,
correct and complete copy of a commitment letter provided to Refraco and Adience
by Bankers Trust Company (the "Lender") with respect to the financing to be
provided to Refraco and Adience in connection with this transaction (the
"Commitment Letter").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE APHI SHAREHOLDERS
Each of the APHI Shareholders (to its or his respective actual
knowledge after reasonable investigation and inquiry, except for the
representations and warranties set forth in Sections 4.2, 4.3, 4.4, 4.7, 4.8,
4.26 and 4.27 below, which expressly are not qualified as to such actual
knowledge) hereby represents and warrants to Alpine and Refraco that, except as
set forth in the Disclosure Schedule delivered by the APHI Shareholders to
Alpine and Refraco and attached hereto and made a part hereof (the "APHI
Disclosure Schedule") or in the AMI Disclosure Schedule (as defined below):
SECTION 4.1. Organization and Qualification; Subsidiaries.
Each of APHI and its Subsidiaries is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority and any
necessary governmental authority to own, operate, or lease the properties that
it purports to own, operate, or lease and to carry on its business as it is now
being conducted, and is in good standing in each jurisdiction where the
character of its properties owned, operated, or leased or the nature of its
activities makes such qualification necessary, except for such failures which,
individually or in the aggregate, would not have an APHI Material Adverse
Effect. The term "APHI Material Adverse Effect," as used in this Agreement
means any change, effect, event or situation that is materially adverse to the
business, results of operations, assets, liabilities, condition (financial or
otherwise), or prospects of APHI and its Subsidiaries taken as a whole prior to
the Effective Time. Section 4.1 of the APHI Disclosure Schedule sets forth the
name, jurisdiction of incorporation, capitalization, and percentage of
outstanding capital stock owned, directly or indirectly, by APHI with respect to
each of its Subsidiaries. Except as set forth in Section 4.1 of the APHI
Disclosure Schedule, all the outstanding capital stock and other ownership
interests or equity equivalents of each of the Subsidiaries of APHI is duly
authorized, validly issued, fully paid, and non-assessable
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and is owned by APHI or another Subsidiary of APHI free and clear of any claim,
lien, or encumbrance. Except as disclosed in Section 4.1 of the APHI Disclosure
Schedule, neither APHI nor any of its Subsidiaries directly or indirectly
controls or owns any interest in any other corporation, partnership, joint
venture, or other business association or entity.
SECTION 4.2. Authority Relative to this Agreement and Related
Matters.
APHI has all necessary corporate power and authority to enter into
this Agreement and the Ancillary Agreements to which it will be a party and to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and the Ancillary Agreements to which it will be a party by
APHI and the consummation by APHI of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of APHI. This Agreement has been, and at the Closing, the Ancillary Agreements
to which it will be a party will be, duly executed and delivered by APHI, and,
assuming the due authorization, execution, and delivery hereof and thereof by
each of the other parties hereto and thereto, constitutes, or in the case of the
applicable Ancillary Agreement, will constitute, legal, valid, and binding
obligations of APHI, enforceable against APHI in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other similar laws relating to or affecting
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 4.3. Certificate of Incorporation and By-Laws.
APHI has heretofore furnished to Alpine and Refraco a true, complete
and correct copy of the Certificate of Incorporation and By-Laws, each as
amended to date, of APHI and its Subsidiaries. Such Certificates of
Incorporation and By-Laws are in full force and effect. Neither APHI nor any of
its Subsidiaries is in violation of any of the provisions of its Certificate of
Incorporation or By-Laws.
SECTION 4.4. Capitalization.
The authorized capital stock of APHI consists of 1,000 shares of APHI
Common Stock and 840 shares of preferred stock, par value $0.01 per share, all
of which have been designated as Redeemable Preferred Stock ("APHI Preferred
Stock"). As of the date hereof, (i) no shares of APHI Preferred Stock are
outstanding or reserved for issuance and (ii) 1,000 shares of APHI Common Stock
are issued and outstanding and no shares thereof are reserved for issuance. The
authorized capital stock of each of APHI's Subsidiaries is set forth in
Section 4.1 of the APHI Disclosure Schedule. There are no securities
convertible into or exchangeable for capital stock or other ownership interests
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or equity equivalents, options, warrants, or other rights, agreements,
arrangements, or commitments of any character (except for this Agreement, the
Ancillary Agreements and the Amended and Restated Stockholders' and Debtholders'
Agreement, dated as of November 24, 1993, among APHI and the other parties
listed therein, as amended) (the "Stockholders' and Debtholders' Agreement")
relating to the issued or unissued capital stock, or ownership or equity
equivalent, of APHI or any Subsidiary thereof or obligating APHI or any
Subsidiary thereof to issue or sell any shares of capital stock of, or other
ownership interests or equity equivalents in, APHI or any Subsidiary thereof or
any agreement to issue any such capital stock or any such convertible or
exchangeable securities, options, warrants, rights, agreements, arrangements, or
commitments. All issued and outstanding shares of APHI Common Stock are duly
authorized, validly issued, fully paid, and non-assessable. Except as set forth
in this Section 4.4, there are no voting trusts or other agreements or
understandings to which APHI or any Subsidiary thereof is a party with respect
to the voting of the capital stock of APHI or any Subsidiary thereof.
SECTION 4.5. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by APHI do not and
the execution and delivery of the Ancillary Agreements to which it will be a
party will not, and neither the performance of this Agreement or the Ancillary
Agreements to which it will be a party by APHI nor the Merger or other
transactions contemplated hereby or thereby, will (i) conflict with or violate
the Certificate of Incorporation or By-Laws of APHI or any of its Subsidiaries,
(ii) conflict with or violate any law, rule, regulation, order, judgment, or
decree applicable to APHI or any of its Subsidiaries or by which any of them or
their respective properties are bound or affected (except as provided in
Section 4.5(b)) or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration, or
cancellation of, or give to others any other rights pursuant to, or result in
the creation of a lien or encumbrance on any of the properties or assets of APHI
or any of its Subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise, or other instrument or
obligation to which APHI or its Subsidiaries is a party or by which APHI or its
Subsidiaries or any of their properties is bound or affected, except as set
forth in Section 4.5(a) of the APHI Disclosure Schedule and except for any such
breaches, defaults, or other occurrences which would not individually result or
be reasonably likely to result in an expenditure by APHI or any of its
Subsidiaries of more than $250,000 or which would not, in the aggregate, result
or be reasonably likely to result in an expenditure by APHI and its Subsidiaries
of more than $400,000 (in either case, an "APHI Threshold Expenditure").
(b) The execution and delivery of this Agreement and the Ancillary
Agreements to which it will be a party by APHI do not, and the performance of
this
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Agreement and such Ancillary Agreements by APHI will not, require APHI or any of
its Subsidiaries to obtain any consent, approval, authorization, or permit of,
or to make any filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except (i) for applicable requirements of Blue
Sky Laws, the Exchange Act, and filing and recordation of the Certificate of
Merger as required by the GCL, (ii) for filings required pursuant to the HSR
Act, and (iii) where failure to obtain such consents, approvals, authorizations,
or permits, or to make such filings or notifications, would not either (x)
prevent or materially delay consummation of the Merger, or otherwise prevent
APHI from performing its obligations under this Agreement and the Ancillary
Agreements to which it will be a party or (y) cause an APHI Threshold
Expenditure.
SECTION 4.6. Financial Statements; Liabilities.
(a) The consolidated balance sheet of APHI and its consolidated
Subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, common stockholders' equity (deficit), and cash flows
for the years then ended (including the related notes thereto) accompanied by
the report of KPMG Peat Marwick LLP previously delivered to Refraco and attached
hereto as Section 4.6(a)(i) to the APHI Disclosure Schedule and the unaudited
consolidated balance sheet of APHI and its consolidated Subsidiaries as of
September 30, 1997, and the related consolidated statements of operations,
common stockholders' equity (deficit), and cash flows for the nine-month period
then ended, certified by the principal financial and accounting officer of APHI
(including the related notes thereto) previously delivered to Refraco and
attached hereto as Section 4.6(a)(ii) to the APHI Disclosure Schedule have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and fairly present the consolidated financial position of
APHI and its consolidated Subsidiaries as at the date thereof and the
consolidated results of its operations and changes in financial position for the
period indicated, except that the unaudited interim
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financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount. The
unaudited pro forma consolidated balance sheet of APHI and its consolidated
Subsidiaries (excluding the AM Division) as of September 30, 1997, and the
related consolidated statements of operations, common stockholders' equity
(deficit), and cash flows for the nine-month period then ended, certified by the
principal financial and accounting officer of APHI (including the related notes
thereto) previously delivered to Refraco and attached hereto as
Section 4.6(a)(iii) to the APHI Disclosure Schedule have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto), and fairly present the consolidated financial position of APHI and its
consolidated Subsidiaries (excluding the AM Division) as at the date thereof and
the consolidated results of its operations and changes in financial position for
the period indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not
or are not expected to be material in amount.
(b) Neither APHI nor any Subsidiary thereof has any liability or
obligation of any nature whatsoever of the type required to be set forth on the
balance sheet of APHI (including the notes thereto) in accordance with generally
accepted accounting principles, consistently applied (whether known or unknown,
due or to become due, accrued, fixed, contingent, liquidated, unliquidated, or
otherwise), other than liabilities and obligations (i) which are reflected in
the consolidated balance sheet of APHI and its consolidated Subsidiaries as of
December 31, 1996 or reflected in the notes thereto, (ii) which arose in the
ordinary course since December 31, 1996 and do not and will not cause an APHI
Threshold Expenditure, or (iii) are set forth in Section 4.6(b) of the APHI
Disclosure Schedule.
SECTION 4.7. Brokers.
No broker, finder, or investment banker is entitled to any brokerage,
finder's, or similar fee or commission in connection with the transactions
contemplated by this Agreement, based upon arrangements made by or on behalf of
APHI.
SECTION 4.8. Board and Stockholder Approvals.
Prior to the Closing, the Board of Directors of APHI, at a meeting of
such board duly called, will have (a) approved and adopted this Agreement, the
Ancillary Agreements to which it will be a party, the Merger and the other
transactions contemplated hereby and thereby to which it will be a party in
accordance with APHI's Certificate of Incorporation and the GCL and (b) resolved
to recommend approval and adoption of this Agreement, the Ancillary Agreements
to which it will be a party, the Merger and the other transactions contemplated
hereby and thereby to which it will be a party by the APHI Shareholders. Prior
to the Closing, the APHI Shareholders, at a meeting duly called, by unanimous
vote of the holders of all shares of capital stock of APHI outstanding, approved
and adopted this Agreement, the Ancillary Agreements to which APHI will be a
party, the Merger and the other transactions contemplated hereby and thereby to
which APHI will be a party in accordance with APHI's Certificate of
Incorporation and the GCL.
SECTION 4.9. Intentionally Omitted.
SECTION 4.10. Absence of Certain Changes or Events.
Except as contemplated by this Agreement or disclosed in Section 4.10
of the APHI Disclosure Schedule, since December 31, 1996, APHI and its
Subsidiaries have operated their respective businesses diligently and only in
the ordinary course of business
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as theretofore conducted, and, since such date, there has been no: (i) APHI
Material Adverse Effect; (ii) property damage or destruction resulting in a loss
or cost to APHI of more than $250,000 in the aggregate, whether or not covered
by insurance; or (iii) any material transaction entered into by APHI or any of
its Subsidiaries with any third party.
SECTION 4.11. Absence of Litigation.
Except as set forth in Section 4.11 of the APHI Disclosure Schedule,
no claim, action, proceeding, or investigation is pending or threatened against
APHI or its Subsidiaries which would, if adversely determined, cause an APHI
Threshold Expenditure. As of the date hereof, there are no actions, suits, or
proceedings pending or threatened against APHI or any of its Subsidiaries
arising out of or in any way related to this Agreement, the Ancillary Agreements
or any of the transactions contemplated hereby or thereby.
SECTION 4.12. Employee Benefit Plans.
True, correct, and complete copies, as in effect on the date hereof,
of the employee benefit plans (as defined in Section 3(3) of ERISA) and related
trust or funding agreements, summary plan descriptions and summaries of material
modifications, currently or previously established, maintained, sponsored or
contributed to (or with respect to which any obligation to contribute has been
undertaken) by APHI or its Subsidiaries or any entity that would be deemed a
"single employer" with APHI (an "APHI ERISA Affiliate") within the meaning of
Section 414(b), (c), (m) or (o) of the Code, and all material bonus, stock
option, stock purchase, stock appreciation right, incentive, deferred
compensation, supplemental retirement, post-retirement or post-termination
health or welfare benefit, severance, welfare, medical, life, vacation,
sickness, change in control, death benefit, and other similar fringe or employee
benefit plans, programs, policies, or arrangements, all employment, consulting,
or executive compensation agreements, in each case, whether domestic or foreign,
for the benefit of, or relating to, any employee, former employee, consultant,
director, or retiree of APHI or any Subsidiary thereof or any APHI ERISA
Affiliate (including their family members and other beneficiaries)
(collectively, the "APHI Employee Plans"), and written descriptions of any oral
arrangements or agreements with respect to the foregoing which, individually or
in the aggregate, are material, have been provided or made available to Alpine
and Refraco prior to the date hereof and are listed in Section 4.12 of the APHI
Disclosure Schedule; provided that an APHI Employee Plan that is no longer
maintained by APHI or an APHI ERISA Affiliate shall not be listed in
Section 4.12 of the APHI Disclosure Schedule and copies thereof need not have
been made available to Alpine and Refraco prior to the date hereof. Except as
which would not, individually or in the aggregate, have an APHI Material Adverse
Effect, with respect to any of the APHI Employee Plans (i) each APHI Employee
Plan intended to qualify under Section 401(a) of the Code (or similar provisions
for tax-registered or tax-favored plans of foreign
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jurisdictions) has received a favorable determination letter from the IRS (or,
if applicable, similar approvals of foreign governmental authorities) and such
letters have been delivered to Alpine and Refraco for any such APHI Employee
Plan evidencing its qualified status, and with respect to each such APHI
Employee Plan, no event has occurred or condition exists that could disqualify
such APHI Employee Plan; (ii) except as set forth in Section 4.12 of the APHI
Disclosure Schedule, no such APHI Employee Plan is or has ever been a
Multiemployer Plan or Multiple Employer Plan and neither APHI nor any APHI ERISA
Affiliate has had an obligation to contribute to any Multiemployer Plan or
Multiple Employer Plan, and if APHI, any Subsidiary thereof or any APHI ERISA
Affiliate were to have a complete or partial withdrawal as of the Closing Date,
no obligation to pay withdrawal liability would exist with respect to any
Multiemployer Plan and no liability, whether direct or contingent, exists with
regard to any Multiemployer Plan; (iii) there has been no "prohibited
transaction" within the meaning of Section 4975(c) of the Code or Section 406 of
ERISA, involving the assets of the APHI Employee Plans, in connection with which
APHI or any of the APHI ERISA Affiliates could subject either APHI or its
Subsidiaries to a civil penalty assessed pursuant to Section 502(i) of ERISA or
a tax imposed by Section 4975 of the Code; (iv) all payments or contributions
required by any APHI Employee Plan, any collective bargaining agreement, or by
law to have been made shall have been made prior to the Closing or accrued by
APHI on its financial statements in accordance with generally accepted
accounting principles; (v) no "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has been or could be
expected to be incurred, whether or not waived, and no excise or other taxes
have been or could be expected to be incurred or are due and owing with respect
to the APHI Employee Plans because of any failure to comply with the minimum
funding standards of the Code and ERISA; (vi) no claim, lawsuit, arbitration or
other action is threatened or anticipated or has been asserted or instituted
against the APHI Employee Plans (other than non-material routine claims for
benefits, and appeals of such claims), any trustee or fiduciaries thereof, APHI,
any APHI ERISA Affiliate, any director, officer, or employee thereof, or any of
the assets of any trust of the APHI Employee Plans; (vii) each APHI Employee
Plan complies and has been maintained and operated in all respects in accordance
with its terms and applicable law, including, without limitation, ERISA and the
Code; (viii) no APHI Employee Plan is or expected to be under audit or
investigation by the IRS, U.S. Department of Labor, or any other governmental
authority and no such completed audit, if any, has resulted in the imposition of
any tax or penalty; (ix) with respect to each APHI Employee Plan that is funded
mostly or partially through an insurance policy, neither APHI nor any APHI ERISA
Affiliate has any liability in the nature of retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly or
partially out of events occurring on or before the Closing; and (x) APHI has
made available to Alpine and Refraco as to each APHI Employee Plan, a true and
correct copy of the most recent annual report (Form 5500) filed with the IRS and
other like reports required to be filed in foreign jurisdictions and the most
recent actuarial report.
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Except as listed in Section 4.12 of the APHI Disclosure Schedule or as
required by Section 4980B(f) of the Code, no APHI Employee Plan provides
medical, death, or welfare benefits (whether or not insured) with respect to
current or former employees of APHI or its Subsidiaries beyond their retirement
or other termination of employment.
Each of APHI and its Subsidiaries which maintains a "group health
plan" within the meaning of Section 5000(b)(1) of the Code has complied in all
material respects with the notice and continuation requirements of Section 4980B
of the Code and Part 6 of Subtitle B of Title I of ERISA and the regulations
thereunder.
No "reportable event" within the meaning of Section 4043(c) of ERISA,
other than any such event for which the 30-day notice requirement under ERISA
has been waived, and the regulations thereunder has occurred or is expected to
occur, and, except as disclosed in Section 4.12 of the APHI Disclosure Schedule,
the consummation of the transaction contemplated by this Agreement will not
result in a reportable event with respect to any APHI Employee Plan or any plan
of an APHI ERISA Affiliate.
Except as disclosed in Section 4.12 of the APHI Disclosure Schedule or
which would not have an APHI Material Adverse Effect, the consummation of the
transactions contemplated by this Agreement will not give rise to any liability,
including, without limitation, liability for severance pay, unemployment
compensation, termination pay, or withdrawal liability, or accelerate the time
of payment or vesting or increase the amount of compensation or benefits due to
any employee, or director of APHI, its Subsidiaries or the APHI ERISA Affiliates
(whether current, former, or retired) or their beneficiaries solely by reason of
such transactions. Neither APHI nor any APHI ERISA Affiliate, or any officer or
employee thereof, has made any promises or commitments, whether legally binding
or not, to create any additional plan, agreement, or arrangement, or to modify
or change any existing APHI Employee Plan. Except as disclosed in Section 4.12
of the APHI Disclosure Schedule or which would not have an APHI Adverse Effect,
neither APHI nor any APHI ERISA Affiliate maintains a pension plan (as defined
in Section 3(2) of ERISA or similar provisions of foreign jurisdictions),
including, without limitation, a nonqualified deferred compensation plan or
excess benefit plan, that is unfunded. Neither APHI nor its Subsidiaries nor
any of their respective directors, officers or employees has taken any action or
failed to take any action which would impede the right to amend or terminate any
APHI Employee Plan.
SECTION 4.13. Permits and Licenses.
Except as set forth in Section 4.13 of the APHI Disclosure Schedule,
APHI and its Subsidiaries are now, and on the Closing Date will be, the holder
of all licenses, franchises, ordinances, authorizations, permits, and
certificates, domestic or foreign, necessary to enable them to continue to
conduct their businesses in all material
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respects as presently conducted (collectively, the "APHI Licenses"), except
where the failure to have such APHI Licenses would not cause an APHI Threshold
Expenditure. Except as set forth in Section 4.13 of the APHI Disclosure
Schedule, all of the APHI Licenses are now, and on the Closing Date will be, in
full force and effect, except those that lapse in accordance with their terms.
APHI and the APHI Shareholders have no reason to believe that any federal,
state, or local government or agency having jurisdiction will revoke, cancel,
rescind, refuse to renew in the ordinary course, or modify any of the APHI
Licenses. Except as set forth in Section 4.13 of the APHI Disclosure Schedule,
there is not now pending or threatened any investigation before any such
federal, state, or local governments or agencies which would cause an APHI
Threshold Expenditure. Each of APHI and its Subsidiaries has conducted its
business so as to comply with all applicable laws, regulations, ordinances, and
codes, domestic and foreign, including, without limitation, laws, regulations,
ordinances, and codes relating to the protection of the environment, the failure
to comply with which would be reasonably likely to cause an APHI Threshold
Expenditure.
SECTION 4.14. Properties, Contracts and Insurance.
(a) Except as set forth in Section 4.14(a) to the APHI Disclosure
Schedule, APHI and its Subsidiaries own, or are licensed to use, or lease, all
property and assets, real and personal, tangible and intangible (including, but
not limited to, all patents, trademarks, trade names, copyrights, technology,
know-how, and processes), used in or necessary for the conduct of their
businesses as currently conducted, except where the failure so to own, license,
or lease would not cause an APHI Threshold Expenditure. Except as set forth in
Section 4.14(a) of the APHI Disclosure Schedule, the use of such patents,
trademarks, trade names, copyrights, technology, know-how, and processes by APHI
or its Subsidiaries does not infringe on the rights of any person, subject to
such claims and infringement which have not had and will not cause an APHI
Threshold Expenditure.
(b) APHI and the APHI Shareholders have furnished to Refraco true
copies of the contracts, leases and commitments listed in Section 4.14(b) to the
APHI Disclosure Schedule, including summaries of the terms of any unwritten
commitments. Except as set forth in that Section of the APHI Disclosure
Schedule: (1) APHI and its Subsidiaries and each of the other parties thereto
have complied in all material respects with such contracts, leases and
commitments, all of which are valid and enforceable; (2) such contracts, leases
and commitments are in full force and effect and there exists no event or
condition which with or without notice or lapse of time would be a default
thereunder, give rise to a right to accelerate or terminate any provision
thereof or give rise to any lien, claim, encumbrance or restriction on any of
the assets or properties of APHI or its Subsidiaries; (3) all of such contracts,
leases and commitments have been entered into on an arm's-length basis, and none
is materially burdensome to the business of APHI and its Subsidiaries; and (4)
none of the purchase commitments of APHI or its
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Subsidiaries is in excess of the normal requirements of its business or at an
excessive price. Neither APHI nor its Subsidiaries is a party, nor are any of
their respective assets or business subject, to any contract, lease or
commitment not listed in Section 4.14(b) of the APHI Disclosure Schedule
(including, without limitation, purchase or sales commitments, financing or
security agreements or guaranties, repurchase agreements, agency agreements,
manufacturers representative agreements, commission agreements, employment or
collective bargaining agreements, pension, bonus or profit-sharing agreements,
group insurance, medical or other fringe benefit plans, and leases of real or
personal property), other than contracts terminable without penalty on not more
than 30 days' notice or that do not involve, individually or in the aggregate,
the receipt or expenditure of more than $250,000 in any one year.
Section 4.14(b)(i) of the APHI Disclosure Schedule contains a list of APHI's ten
largest customers and suppliers (measured by dollar volume of purchases and
sales, as applicable) and the dollar amount and percentage of APHI's business
which each such customer or supplier represented during the period January 1,
1995 through December 31, 1996. Neither APHI nor its Subsidiaries is engaged in
any material disputes with customers or suppliers. No customer or supplier is
considering termination, non-renewal or any adverse modification of its
arrangements with APHI or its Subsidiaries, and the transactions contemplated by
this Agreement will not have a material adverse effect on APHI's relationship
with any of its suppliers or customers. APHI and its Subsidiaries have adequate
sources of supply for raw materials and other supplies.
(c) Section 4.14(c) of the APHI Disclosure Schedule sets forth a true
and correct list of all insurance coverage currently maintained by or for the
benefit of APHI and its Subsidiaries with respect to their operations or any
incident, event, or thing arising therefrom or relating thereto, setting forth
(i) the name of the carrier, (ii) the nature and dollar limits of the coverage,
(iii) the policy number and scheduled expiration date, (iv) the premium rate and
date through which paid, and (v) the named insureds thereunder. Except as set
forth in Section 4.14(c) of the APHI Disclosure Schedule, all such policies are
in full force and effect, no notice of default or termination has been given
thereunder, and no effect, occurrence, or thing has occurred which, with notice
or lapse of time or both, could result in the early termination thereof.
SECTION 4.15. Compliance with Environmental Laws.
For the purposes of this Section 4.15, the definitions set forth in
Section 3.15 above shall apply, mutatis mutandis, to reflect their applicability
to the business, operations and properties of APHI. All references in this
Section to APHI shall include any of its Subsidiaries and all predecessors
thereof and any person or entity the liabilities of which, pursuant to the
Environmental Laws, contractually, by common law, by operation of law or
otherwise, APHI or any of its Subsidiaries or such predecessors may have
succeeded to.
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Except as set forth in Section 4.15 of the APHI Disclosure Schedule:
(a) All of the current and past operations of APHI comply and have at
all times complied with all applicable Environmental Laws, and any APHI real
property presently or formerly owned, used, leased, occupied, managed or
operated by APHI or its Subsidiaries (collectively, the "APHI Real Property")
meets the requirements and standards of all applicable Environmental Laws,
except for such non-compliances or failures of the APHI Real Property to meet
the requirements and standards of applicable Environmental Laws which would not
reasonably be likely to result in liability or expenditures to bring into
compliance in excess of the APHI Threshold Expenditure with respect to or at any
individual APHI Real Property.
(b) The APHI Real Property does not contain any Hazardous Substances
in, on, over, under or at it, in concentrations which would presently violate
any applicable Environmental Laws or would be reasonably likely to result in the
imposition of liability or obligations on the present or former owner, manager,
or operator of the APHI Real Property under any applicable Environmental Laws,
including any violation, liability or obligations for the investigation,
corrective action, remediation or monitoring of Hazardous Substances in, on,
over, under or at the APHI Real Property, except those which would not
reasonably be likely to result in liability or expenditures in excess of the
APHI Threshold Expenditure with respect to or at any individual APHI Real
Property.
(c) None of the APHI Real Property is listed or proposed for listing
on the National Priorities List pursuant to CERCLA or any similar inventory of
sites requiring investigation or remediation maintained by any state or
locality. APHI has not received any notice, whether oral or written, from any
governmental entity or third party of any actual or threatened Environmental
Liability which is outstanding, pending or unresolved with respect to the APHI
Real Property, except for such notices relating to Environmental Liabilities as
would not reasonably be likely to result in liability or expenditures in excess
of the APHI Threshold Expenditure with respect to or at any individual APHI Real
Property.
(d) There are no underground storage tanks, asbestos or asbestos
containing materials, polychlorinated biphenyls, urea formaldehyde, or other
Hazardous Substances in, on, over, under or at any APHI Real Property, except
for such underground storage tanks, asbestos or asbestos containing materials,
polychlorinated biphenyls, urea formaldehyde, or other Hazardous Substances as
would not reasonably be likely to result in liability or expenditures in excess
of the APHI Threshold Expenditure with respect to or at any individual APHI Real
Property.
(e) There are no conditions existing at any APHI Real Property or
with respect to the business of APHI or its Subsidiaries, that require, or which
with the giving
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of notice or the passage of time or both will reasonably likely require,
remedial or corrective action, removal, monitoring or closure pursuant to the
Environmental Laws that is reasonably likely to result in liability or
expenditures in excess of the APHI Threshold Expenditure with respect to or at
any individual APHI Real Property.
(f) APHI and its Subsidiaries have all the permits, licenses,
authorizations and approvals necessary for the conduct of its business and for
the operations on, in or at the APHI Real Property (the "APHI Environmental
Permits"), which are required under applicable Environmental Laws, APHI is in
compliance with the terms and conditions of all such APHI Environmental Permits,
and no reason exists why Refraco would not be capable of continued operation of
APHI's business in compliance with the APHI Environmental Permits and the
applicable Environmental Laws following the Merger, except for the absence of
such permits or any non-compliances with the terms and conditions of such
permits as would not reasonably be likely to result in liability, losses or
expenditures in excess of the APHI Threshold Expenditure with respect to or at
any individual APHI Real Property.
(g) APHI has made available to Refraco those material and final
environmental reports, assessments, audits, studies, investigations, data, APHI
Environmental Permits and other written environmental information in their
custody, possession or control concerning the business of APHI and its
Subsidiaries and the APHI Real Property that were prepared or are dated within
the past five years.
SECTION 4.16. Employment Matters.
(a) Except as set forth in Section 4.16(a) of the APHI Disclosure
Schedule or which would not have an APHI Material Adverse Effect, each of APHI
and its Subsidiaries: (i) is in compliance in all material respects with all
applicable federal, state and provincial laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment, pay equity
and wages and hours, in each case, with respect to current, former, or retired
employees or consultants of APHI or any of its Subsidiaries (collectively "APHI
Employees"); (ii) has timely withheld and paid over to the appropriate federal,
state, provincial or local governmental authority all amounts required by law or
by agreement to be withheld from the wages, salaries and other payments to APHI
Employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) (other than
routine payments to be made in the ordinary course of business and consistent
with past practice) is not liable for any payment to any trust or other fund or
to any governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits for APHI Employees,
except in each case, for immaterial amounts.
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(b) Except as set forth in Section 4.16(b) of the APHI Disclosure
Schedule or which would not have an APHI Material Adverse Effect, no APHI
Employee Plans, employment or other agreements, or trusts exist that expressly
or impliedly make reference to, or provide that payments be made or benefits
provided, upon any "change in ownership or control," pursuant to which, with or
without notice, the lapse of time or action by APHI or any of its Subsidiaries
or by any APHI Employee or other person, the payment, vesting, or funding of
compensation or benefits is or may be provided or accelerated, or a reversion to
APHI or any of its Subsidiaries of assets from an APHI Employee Plan may be
prohibited, or an obligation to sell assets may arise, by reason of or in
connection with the consummation of a transaction contemplated by this Agreement
and the Ancillary Agreements ("Change of Control Provisions").
(c) Except as set forth in Section 4.16(c) of the APHI Disclosure
Schedule or which would not have an APHI Material Adverse Effect, neither APHI
nor any of its Subsidiaries is involved in or threatened with any labor dispute,
grievance, or litigation relating to labor, safety or discrimination matters
involving any APHI Employee, including, without limitation, charges of unfair
labor practices or discrimination complaints. Except as set forth in
Section 4.16(c) of the APHI Disclosure Schedule or which would not have an APHI
Material Adverse Effect, neither APHI nor any of its Subsidiaries has engaged in
any unfair labor practices within the meaning of the National Labor Relations
Act or similar such legislation of foreign jurisdictions. Except as set forth
in Section 4.16(c) of the APHI Disclosure Schedule or which would not have an
APHI Material Adverse Effect, neither APHI nor any of its Subsidiaries is
presently or has been in the past a party to, or bound by, any collective
bargaining agreement or union contract with respect to APHI Employees and no
collective bargaining agreement is being negotiated by APHI or any of its
Subsidiaries.
(d) Except as set forth in Section 4.16(d) of the APHI Disclosure
Schedule or which would not have an APHI Material Adverse Effect, each of APHI
and its Subsidiaries is in compliance in all material respects with all laws,
regulations and orders relating to workers' compensation and the Worker
Adjustment and Retraining Notification Act or similar such legislation of
foreign jurisdictions.
(e) Except as set forth in Section 4.12 of the APHI Disclosure
Schedule or which would not have an APHI Material Adverse Effect, no APHI
Employee has any agreement as to length of notice or severance payment required
to terminate his or her employment, other than such as results by law from the
employment of an employee without an agreement as to notice or severance.
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SECTION 4.17. Transactions with Affiliates.
Except as set forth in Section 4.17 of the APHI Disclosure Schedule,
since January 1, 1996, neither APHI nor any of its Subsidiaries has had any
direct or indirect dealings with any APHI Shareholder or (except for employment
arrangements with their employees) with any key employee of APHI or its
Subsidiaries or, in either case, with any of their affiliates, associates or
relatives. Except as set forth in such Section of the APHI Disclosure Schedule
and except for employment arrangements with their employees, APHI and its
Subsidiaries have no obligation to or claim against any APHI Shareholder or any
key employee of APHI or its Subsidiaries, or any of their affiliates, associates
or relatives, and no such person or entity has any obligation to or claim
against APHI or its Subsidiaries. Such Section of the APHI Disclosure Schedule
reasonably describes the nature and extent of any products, services or benefits
provided to APHI and its Subsidiaries by any such person or entity without a
corresponding charge equal to the fair market value of such products, services
or benefits.
SECTION 4.18. Books and Records.
The books and records of APHI and its Subsidiaries are complete and
correct in all material respects and have been maintained in accordance with
good business practices. The minute books of APHI and each of its Subsidiaries,
as previously made available to Refraco, contain complete and accurate records
of all meetings and accurately reflect all other corporate action of the
shareholders and board of directors of such entities.
SECTION 4.19. Improper Payments.
Neither APHI or its Subsidiaries nor their respective officers and
agents have made any illegal or improper payments to, or provided any illegal or
improper benefit or inducement for, any governmental official, supplier,
customer or other person, in an attempt to influence any such person to take or
to refrain from taking any action relating to APHI or its Subsidiaries. The
employees of APHI and its Subsidiaries may from time to time have made customary
holiday gifts of nominal value to suppliers or customers.
SECTION 4.20. Full Disclosure.
No statement in this Article IV or in the APHI Disclosure Schedule
hereto or in any certificate relating to Article IV delivered pursuant to the
requirements of this Agreement by or on behalf of APHI or any APHI Shareholder
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which they were made, not
misleading.
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SECTION 4.21. Tax Returns, Audits and Liabilities.
(a) Except as set forth in Section 4.21 of the APHI Disclosure
Schedule, each of APHI and its Subsidiaries has (i) timely filed in accordance
with all applicable laws, all Returns (as defined below) required to be filed by
them, (ii) paid all Taxes (as defined below) shown to have become due pursuant
to such Returns, and (iii) paid all Taxes (other than those being contested in
good faith, all of which are disclosed in Section 4.21 of the APHI Disclosure
Schedule) for which a notice of, or assessment or demand for, payment has been
received or which are otherwise due and payable, in each case other than
failures to file or pay that would not, in the aggregate, have an APHI Material
Adverse Effect. All Income Tax and other material Tax Returns filed by each of
APHI and each of its Subsidiaries with respect to Taxes were true and correct in
all material respects as of the date on which they were filed or as subsequently
amended to the date hereof. Except as set forth in Section 4.21 of the APHI
Disclosure Schedule, complete copies of (i) consolidated federal Income Tax
Returns (as defined below) for APHI and its Subsidiaries and (ii) state and
local Income Tax and other Tax Returns of APHI and its Subsidiaries for each of
the years ended December 31, 1994, 1995 and 1996, have heretofore been delivered
or made available to Alpine and Refraco.
Except as set forth in Section 4.21 of the APHI Disclosure Schedule,
(A) there is no action, suit, proceeding, investigation, audit, claim or
assessment pending or proposed with respect to any liability for Tax that
relates to APHI or any of its Subsidiaries for which a material amount of Tax is
at issue, (B) all material amounts required to be collected or withheld by APHI
and each of its Subsidiaries with respect to Taxes have been duly collected or
withheld and any such amounts that are required to be remitted to any taxing
authority have been duly remitted, (C) no extension of time within which to file
any material Return that relates to APHI or any of its Subsidiaries has been
requested which Return has not since been filed, (D) there are no waivers or
extensions of any applicable statute of limitations for the assessment or
collection of Taxes with respect to any material Return that relates to APHI or
any of its Subsidiaries which remain in effect, (E) there are no tax rulings,
requests for rulings, closing agreements or changes of accounting method
relating to APHI or any of its Subsidiaries which could materially affect their
liability for Taxes for any period after the Effective Time, (F) all material
federal, state, and local Income Tax Returns of APHI and each of its
Subsidiaries with respect to taxable periods through the year ended December 31,
1990 have been examined and closed or are Returns with respect to which the
applicable statute of limitations has expired without extension or waiver,
(G) no power of attorney has been granted by APHI or any of its Subsidiaries
with respect to any matter relating to Taxes of APHI and its Subsidiaries which
is currently in force, (H) no excess loss account (as referred to in Treasury
Regulation Section 1.1502-19) exists with respect to any Subsidiary of APHI
determined after giving effect to the Split-Off and immediately prior to the
Effective Time, (I) neither APHI nor any of its Subsidiaries has any deferred
gain or loss (i) arising from deferred intercompany transactions (as referred to
in Treasury
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Regulation Section 1.1502-13), or (ii) with respect to the stock or
obligations of any other member of APHI's affiliated group (as described in
Treasury Regulation Section 1.1502-14), (J) neither APHI nor any Subsidiary has
filed a consent under Section 341(f) of the Code or any comparable provision of
state revenue statutes, (K) no property or APHI or its Subsidiaries is
"tax-exempt use property" within the meaning of Section 168(h) of the Code; (L)
neither APHI nor its Subsidiaries is a party to any lease made pursuant to
Section 168(f) of the Code; (M) none of APHI or its Subsidiaries will be
required to include in a taxable period ending after the Effective Time taxable
income attributable to a prior taxable period that was not recognized in that
prior taxable period as a result of the installment method of accounting, the
completed contract method of accounting, the long-term contract method of
accounting, the cash method of accounting or Section 481 of the Code or
comparable provisions of state or local or foreign tax law, (N) to the extent
applicable, APHI and its Subsidiaries have properly and in a timely manner
documented their transfer pricing methodology in compliance with Section 482 and
related provisions of the Code; and (O) any amount or other entitlement that
could be received (whether in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this Agreement by any
employee, officer or director of APHI or any of its Subsidiaries who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any APHI Employee Plans or other compensation
arrangement entered into or in effect prior to the Closing would not be
characterized as an "excess parachute payment" or a "parachute payment" (as such
terms are defined in Section 280G(b)(1) of the Code).
APHI has filed a consolidated Return for federal Income Tax purposes
on behalf of itself and other members of the affiliated group (within the
meaning of Section 1504 of the Code) of which it is the parent corporation since
at least the date on which it was incorporated. The accruals for deferred Taxes
reflected in the audited financial statements of APHI for the year ended
December 31, 1996 and in the unaudited consolidated financial statements of APHI
and its Subsidiaries for the period ended September 30, 1997 are adequate in all
material respects to cover any deferred Tax liability of APHI and its
Subsidiaries determined in accordance with generally accepted accounting
principles through the date thereof. The accruals and reserves for Taxes in
such financial statements are adequate in all material respects to cover any
liability of APHI and its Subsidiaries for Taxes for periods through the date
thereof.
(b) APHI has heretofore provided Alpine and Refraco with complete
copies (or, if oral, written descriptions) of any Tax Sharing Arrangement to
which APHI or any of its Subsidiaries is a party.
(c) For purposes of this Agreement, except as otherwise expressly
provided, unless the context otherwise requires:
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"Income Taxes" means any federal, state, local, or foreign
income, or franchise Tax and in each instance any interest, penalties, or
additions to tax attributable to such Tax;
"Return" means any report, return, statement, estimate,
declaration, form, or other information required to be supplied to a taxing
authority in connection with Taxes;
"Tax" or "Taxes" means taxes of any kind, levies or other like
assessments, customs, duties, imposts, charges or, including, without
limitation, income, gross receipts, ad valorem, value added, excise, real or
personal property, asset, sales, use, license, payroll, transaction, capital,
net worth and franchise taxes, estimated taxes, withholding, employment, social
security, workers compensation, utility, severance, production, unemployment
compensation, occupation, premium, windfall profits, transfer and gains taxes or
other governmental taxes imposed or payable to the United States, or any state,
county, local, or foreign government or subdivision or agency thereof, and in
each instance such term shall include any interest, penalties, or additions to
tax attributable to any such Tax; and
"Tax Sharing Arrangement" means any written or unwritten
agreement or arrangement for the allocation or payment of or with respect to Tax
liabilities or Tax benefits.
SECTION 4.22. Title to Properties; Absence of Encumbrances.
Except as set forth in Section 4.22 of the APHI Disclosure
Schedule, APHI and its Subsidiaries have good and marketable title to or, in
the case of leases and licenses, valid and subsisting leasehold interests or
licenses in, all of its properties and assets of whatever kind (whether real
or personal, tangible or intangible), including, without limitation, all
properties and assets that are shown on the financial statements attached as
Sections 4.6(a)(i) and (ii) to the APHI Disclosure Schedule (except for
assets sold in the ordinary course of business since the dates of such
statements) and to properties and assets that are shown on the APHI
Disclosure Schedule, in each case free and clear of any and all liens,
mortgages, pledges, security interests, restrictions, prior assignments,
claims and encumbrances of any kind whatsoever, except as may be set forth in
the APHI Disclosure Schedule and except for those: (i) securing Taxes,
assessments and other governmental charges or levies not yet due and payable
(excluding any imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen or landlords for
labor, materials, supplies or rentals incurred in the ordinary course of
business; (ii) consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or under
surety or performance bonds, in each case arising in the ordinary course of
business; and
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(iii) constituting encumbrances in the nature of zoning restrictions, easements
and rights or restrictions on the use of the APHI Real Property, provided the
same do not materially interfere with or prohibit the present use or continued
existence of structures on the properties. Except as set forth in Sections 4.17
and Section 4.22 of the APHI Disclosure Schedule, all assets, properties and
rights relating to APHI's business are held by, and all agreements, obligations
and transactions relating to APHI's business have been entered into, incurred
and conducted by, APHI or its Subsidiaries rather than any of their respective
affiliates.
SECTION 4.23. Real and Personal Property.
Section 4.23 of the APHI Disclosure Schedule contains a complete and
correct list of all real property (including buildings and structures) owned or
leased by APHI and its Subsidiaries and all interests therein (including a brief
description of the property, the record title holder, the location and the
improvements thereon). APHI has delivered to Refraco title insurance policies
or signed title insurance commitments, surveys and copies of all recorded
documents referred to in such title insurance policies or commitments for
abstracts of title for all owned real property as to which APHI has obtained
title insurance or commitments and has such documents related thereto in its
possession. All such real property, buildings and structures, and the equipment
therein, and the operations and maintenance thereof, comply with any applicable
agreements and restrictive covenants and conform to all applicable legal
requirements, including those relating to the environment, health and safety,
land use and zoning, except in each case where the failure to so comply or
conform would not be reasonably likely to cause an APHI Threshold Expenditure,
and all work required to be done by APHI or its Subsidiaries as landlord or
tenant has been duly performed, except for such work the failure to so duly
perform would not be reasonably likely to cause an APHI Threshold Expenditure.
No condemnation or other proceeding is pending or threatened which would affect
the use of any such property by APHI or its Subsidiaries. Section 4.23 of the
APHI Disclosure Schedule hereto contains a complete and correct list and brief
description of all equipment, machinery, computers, furniture, leasehold
improvements, vehicles and other personal property owned or leased by APHI and
its Subsidiaries with an original cost in excess of $1,000 individually or, in
the case of each lease, involving annual payments by APHI or its Subsidiaries in
excess of $1,000 and all interests therein. APHI and its Subsidiaries'
buildings and other structures, equipment and other assets (whether leased or
owned) are in good operating condition and repair, subject to ordinary wear and
tear, except as will not cause an APHI Threshold Expenditure.
SECTION 4.24. Inventory.
APHI previously has provided to Refraco a list of the inventory of
APHI and its Subsidiaries as at November 30, 1997, setting forth a brief
description of each item by category and quantity, and by unit and aggregate
values. Such inventory is in
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good and marketable condition, does not and will not include a material amount
of items which are obsolete, damaged or slow moving, and (other than the
obsolete, damaged or slow moving items) such inventory is saleable in the normal
course of the business of APHI and its Subsidiaries as currently conducted, at
current applicable prices and within normal inventory "turn" experience. Each
item of such inventory is carried on the consolidated balance sheet of APHI and
its subsidiaries at the lower of cost or market, with cost determined as
indicated on such list on a first-in or last-in, first-out basis.
SECTION 4.25. Accounts Receivable.
APHI previously has provided to Refraco an aged list of the Company's
accounts receivable as at November 30, 1997. The accounts receivable of APHI
and its Subsidiaries arose in the ordinary course of business for goods or
services delivered or rendered, constitute only valid, undisputed claims and are
not subject to counterclaims or setoffs (except for credits and adjustments made
or to be made by APHI in the ordinary course of business, consistent with past
practice) and have been or will be collected at their aggregate recorded amounts
less the amount of the applicable reserve for doubtful accounts in the ordinary
course of business without resort to litigation.
SECTION 4.26. Active Conduct of Business, Etc.
(a) Subject to the Adjustment (as defined in Section 2.4(a) of the
Exchange Agreement), the capital stock of AMI to be received by MTI in exchange
for the portion of its APHI Common Stock surrendered in the Split-Off represents
consideration bargained for in an arm's-length transaction.
(b) No part of the capital stock of AMI to be distributed by APHI to
MTI will be received by MTI as a creditor or in any other capacity other than
that of a shareholder of APHI.
(c) The AM Division has been engaged in the active conduct of a trade
or business (within the meaning of Section 355(b) of the Code) throughout the
five-year period ending on the date hereof and as of the date of the Split-Off.
Such trade or business was not acquired by either APHI or API within the
five-year period ending on the date hereof and as of the date of the Split-Off
in a transaction in which gain or loss was recognized in whole or in part by any
party, within the meaning of Section 355(b)(2)(C) (except for the Drop-Down,
Dividend or Split-Off).
(d) APHI has been engaged in the active conduct of a trade or
business (within the meaning of Section 355(b) of the Code) throughout the
five-year period ending on the date hereof and as of the date of the Split-Off.
Such trade or business was not acquired by either APHI or API within the
five-year period ending on the date hereof and as of the date of the Split-Off
in a transaction in which gain or loss was recognized in
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whole or in part by any party, within the meaning of Section 355(b)(2)(C)
(except for the Drop-Down, Dividend or Split-Off). Following the Split-Off and
through the Effective Time, APHI intends to continue the active conduct of such
trade or business independently from AMI and with its own employees, except as
contemplated by the Supply Agreement and the Services Agreement.
(e) APHI did not acquire control (within the meaning of
Section 355(b)(2)(D)) of API at any time within the five-year period ending as
of the date hereof and as of the date of the Split-Off.
(f) APHI did not acquire any equity interest in API within the
five-year period ending as of the date hereof and as of the date of the
Split-Off in a transaction in which gain or loss was recognized in whole or in
part by any party.
(g) API did not acquire control (within the meaning of
Section 355(b)(2)(D)) of AMI at any time within the five-year period ending as
of the date hereof and as of the date of the Split-Off in a transaction in which
gain or loss was recognized in whole or in part by any party (except for the
Drop-Down, Dividend or Split-Off) .
(h) APHI did not acquire control (within the meaning of
Section 355(b)(2)(D)) of AMI at any time during the five-year period ending as
of the date hereof and as of the date of the Split-Off in a transaction in which
gain or loss was recognized in whole or in part by any party (except for the
Drop-Down, Dividend or Split-Off).
(i) APHI and API are members of an affiliated group within the
meaning of Treas. Reg. 1.355-3(b)(4) as of the date hereof and will be as of the
date of the Split-Off.
(j) The Split-Off is being carried out for the corporate business
purpose of facilitating the Merger. The Split-Off is motivated, in whole or in
substantial part, by this corporate business purpose.
(k) Except in connection with the Merger, there is no plan or
intention by APHI, directly or through any subsidiary corporation, to purchase
any of its outstanding capital stock after the Split-Off and through the
Effective Time.
(l) The total adjusted basis and the fair market value of the assets
transferred to AMI by each of API and API Technologies in the Drop-Down each
equals or exceeds the sum of the liabilities assumed by AMI plus any liabilities
to which the transferred assets are subject.
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(m) The Assumed Liabilities (as defined in the Drop-Down Documents)
and the liabilities to which the transferred assets are subject were incurred in
the ordinary course of business and are associated with the assets being
transferred.
(n) APHI neither accumulated its receivables nor made extraordinary
payments of its payables in anticipation of the Split-Off.
(o) Except as contemplated by the Supply Agreement and the Services
Agreement, no intercorporate debt will exist between APHI and AMI at the time
of, or subsequent to, the Split-Off and through the Effective Time and any such
intercorporate debt will not constitute stock or securities.
(p) Neither AMI nor APHI is an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv).
(q) Immediately before the Split-Off, APHI will be in control of AMI
(within the meaning of Section 368(c)).
(r) As of the date of the Split-Off, neither APHI nor AMI will have
planned, arranged or negotiated (within the meaning of Rev. Proc. 96-39, 1996-33
IRB 11) any transaction scheduled for closing or completion after the date of
the Split-Off which would result in APHI failing to have control of AMI (within
the meaning of Section 368(c)) if such transaction had occurred prior to the
date of the Split-Off.
SECTION 4.27 Certain Additional Representations.
(a) The liabilities of APHI to be succeeded to by Refraco in the
Merger, and the liabilities to which the assets of APHI to be acquired by
Refraco in the Merger will be subject, were incurred by APHI in the ordinary
course of its business.
(b) APHI is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
(c) Except as provided in Section 12.11, APHI will pay its own
expenses, if any, incurred in connection with the Merger.
(d) There is no intercorporate indebtedness existing between APHI and
Refraco.
(e) The Refraco Class B Common Stock and cash, as the case may be,
received by each APHI Shareholder in exchange for the APHI Common Stock
surrendered in the Merger represents consideration bargained for in an
arm's-length transaction.
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ARTICLE IV A
CERTAIN ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF THE APHI SHAREHOLDERS
Each of the APHI Shareholders (to its or his respective actual
knowledge after reasonable investigation and inquiry, with respect to the
representations and warranties set forth in Sections 4A.3 and 4A.8) hereby
represents and warrants (as to itself or himself only, except that MTI also
represents and warrants with respect to IMETAL SA, a French corporation
("IMETAL"), in the case of Section 4A.2) to Alpine and Refraco, that except as
set forth in the APHI Disclosure Schedule:
SECTION 4A.1. Title to Shares.
Each APHI Shareholder is the record and beneficial owner of the number
of shares of APHI Common Stock set forth opposite his or its name on Exhibit K,
free and clear of all claims, liens, security interests, pledges, charges,
encumbrances, stockholders' agreements and voting trusts (other than under the
Stockholders' and Debtholders' Agreement).
SECTION 4A.2. Authority Relative to this Agreement.
MTI has all necessary corporate power and authority to enter into this
Agreement and the Ancillary Agreements to which it will be a party and to carry
out its obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Ancillary Agreements to which it will be a party by MTI
and the consummation by MTI of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of MTI.
Each Individual Shareholder has the full right, power and authority to enter
into and to perform this Agreement and the Ancillary Agreements to which it will
be a party and all other agreements, certificates and documents executed or
delivered, or to be executed or delivered, by such individual in connection
herewith and therewith. This Agreement has been, and at the Closing, the
Ancillary Agreements to which each APHI Shareholder will be a party will be,
duly executed and delivered by each of the APHI Shareholders, and, assuming the
due authorization, execution, and delivery by each of the other parties hereto
and thereto, constitutes, or in the case of the applicable Ancillary Agreement,
will constitute, legal, valid, and binding obligations of the APHI Shareholders,
enforceable against each in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium, and other
similar laws relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law). IMETAL has all necessary corporate power and
authority to enter into the IMETAL Letter (as defined below) and to carry out
its obligations thereunder. The execution and delivery of the
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IMETAL Letter and the performance by IMETAL of its obligations thereunder have
been duly authorized by all necessary corporate action on the part of IMETAL.
The IMETAL Letter has been duly executed and delivered by IMETAL, and
constitutes the legal, valid, and binding obligation of IMETAL, enforceable
against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, and other similar laws
relating to or affecting creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
SECTION 4A.3. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by MTI do not, and
the execution and delivery of the Ancillary Agreements to which it will be a
party will not, and neither the performance by MTI of this Agreement or the
Ancillary Agreements to which it will be a party nor the Merger or other
transactions contemplated hereby or thereby, will (i) conflict with or violate
the Certificate of Incorporation or By-Laws of MTI, (ii) conflict with or
violate any law, rule, regulation, order, judgment, or decree applicable to MTI
(except as provided in Section 4A.3(b)), or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration, or cancellation of, or give to others any other rights
pursuant to, or result in the creation of a lien or encumbrance on any of the
properties or assets of MTI pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise, or other instrument or
obligation to which MTI is a party or by which MTI or any of its properties is
bound or affected.
(b) The execution and delivery of this Agreement by MTI do not, and
the performance of this Agreement by MTI will not, require MTI to obtain any
consent, approval, authorization, or permit of, or to make any filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements of federal securities laws, Blue Sky
Laws, and filing and recordation of the Certificate of Merger as required by the
GCL, (ii) for filings required pursuant to the HSR Act, and (iii) where failure
to obtain such consents, approvals, authorizations, or permits, or to make such
filings or notifications, would not prevent or materially delay consummation of
the Merger, or otherwise prevent MTI from performing its obligations under this
Agreement and the Ancillary Agreements to which it will be a party.
(c) The execution and delivery of this Agreement by each of the
Individual Shareholders do not, and the execution and delivery of the Ancillary
Agreements to which each of the Individual Shareholders will be a party will
not, and neither the performance by each of the Individual Shareholders of this
Agreement or the Ancillary Agreements to which each of the Individual
Shareholders will be a party nor the Merger or other transactions contemplated
hereby or thereby, will (i) conflict with or
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violate any law, rule, regulation, order, judgment, or decree applicable to such
Individual Shareholder (except as provided in Section 4A.3(d)), or (ii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration, or cancellation of, or give to others any
other rights pursuant to, or result in the creation of a lien or encumbrance on
any of the properties or assets of such Individual Shareholder pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise, or other instrument or obligation to which such Individual
Shareholder is a party or by which such Individual Shareholder or any of his
properties is bound or affected.
(d) The execution and delivery of this Agreement by each of the
Individual Shareholders do not, and the performance of this Agreement by the
Individual Shareholders will not, require any Individual Shareholder to obtain
any consent, approval, authorization, or permit of, or to make any filing with
or notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements of federal securities laws, Blue
Sky Laws, and filing and recordation of the Certificate of Merger as required by
the GCL, (ii) for filings required pursuant to the HSR Act, and (iii) where
failure to obtain such consents, approvals, authorizations, or permits, or to
make such filings or notifications, would not prevent or materially delay
consummation of the Merger, or otherwise prevent an Individual Shareholder from
performing his obligations under this Agreement and the Ancillary Agreements to
which it will be a party.
SECTION 4A.4. No Intention of Disposition, Etc.
(a) Each APHI Shareholder that receives shares of Refraco Class B
Common Stock as Merger Consideration hereby represents and warrants that it or
he has no plan or intention to sell, exchange, distribute or otherwise dispose
of, or reduce the risk of loss by short sale or otherwise with respect to, any
of its or his Refraco Class B Common Stock after the Merger, or enter into any
contract or arrangement with respect to any of the foregoing matters. MTI
hereby represents and warrants that there is no plan or intention by MTI to
sell, exchange, distribute or otherwise dispose of, or reduce the risk of loss
by short sale or otherwise with respect to, any of its stock in AMI subsequent
to the Split-Off, or enter into any contract or arrangement with respect to any
of the foregoing matters, or permit AMI to liquidate or to sell, exchange,
distribute or otherwise dispose of any of its assets other than in the ordinary
course of business.
(b) MTI represents and warrants that, subject to the Adjustment (as
defined in the Exchange Agreement), the capital stock of AMI to be received by
MTI in exchange for the portion of its APHI Common Stock surrendered in the
Split-Off represents consideration bargained for in an arm's-length transaction.
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(c) MTI acknowledges that the AMI Shares may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of by
it without registration under the Securities Act, except pursuant to Regulation
S under the Securities Act or pursuant to another exemption from registration
under the Securities Act, and without compliance with applicable Blue Sky Laws.
MTI has received all requested documents and other information from APHI and the
Individual Shareholders and has had an opportunity to ask questions of and to
receive answers from the Individual Shareholders and the officers of APHI with
respect to the business, results of operations, financial conditions and
prospects of AMI.
(d) MTI represents and warrants that it did not acquire "control"
(within the meaning of Section 355 (b)(2)(D) of the Code) of APHI at any time
within the five-year period ending on the date hereof and as of the date of the
Split-Off.
(e) Each APHI Shareholder has not taken any action nor has failed to
take any action, the taking of which (or the failure of taking) would be
inconsistent with the treatment of the Deferred Interest Bonds ("DIBs") or
Subordinated Notes of APHI as indebtedness of APHI.
(f) At all times since April 1, 1995, each APHI Shareholder has (i)
owned the shares of APHI Common Stock set forth opposite his or its name on
Exhibit K and (ii) owned such shares free and clear of all claims, liens,
security interests, pledges, charges, encumbrances, stockholders' agreements and
voting trusts (other than the Stockholders' and Debtholders' Agreement).
(g) The Individual Shareholders represent and warrant that none of
the compensation to be received after the Merger from the Surviving Corporation
or its Subsidiaries by any employee of the Surviving Corporation or its
Subsidiaries who is also an Individual Shareholder was bargained for as
consideration for any of their shares of APHI Common Stock; none of the shares
of Refraco Class B Common Stock received in the Merger by any employee of APHI
or its Subsidiaries who is also an Individual Shareholder was bargained for as
consideration for any employment agreement.
(h) The Individual Shareholders represent and warrant that, except as
provided in Section 12.11, the Individual Shareholders will pay their own
expenses, if any, incurred in connection with the Merger.
(i) MTI represents and warrants that following the Split-Off, MTI
intends to cause AMI to continue the active conduct of the AM Division
independently from Refraco and API and with its own employees, except as
contemplated by the Supply Agreement and the Services Agreement.
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(j) MTI represents and warrants that there is no plan or intention by
MTI to sell, exchange, transfer or otherwise dispose of any capital stock of AMI
or, except in connection with the Merger, APHI after the Split-Off.
(k) The Individual Shareholders represent and warrant that, except in
connection with the Merger, there is no plan or intention by the Individual
Shareholders to sell, exchange, transfer or otherwise dispose of any stock in
APHI after the Split-Off.
(l) MTI represents and warrants that there is no plan or intention by
AMI, directly or through any subsidiary corporation, to purchase any of its
outstanding capital stock after the Split-Off, other than stock purchases
meeting the requirements of Section 4.05(1)(b) of Rev. Proc. 96-30.
(m) MTI represents and warrants that payments made in connection with
all continuing transactions between AMI and APHI will be for fair market value
based on terms and conditions arrived at by the parties bargaining at
arm's-length.
(n) MTI represents and warrants that, except as contemplated by the
Supply Agreement and the Services Agreement, no intercorporate debt will exist
between Refraco and AMI following the Split-Off and any such intercorporate debt
will not constitute stock or securities.
SECTION 4A.5. Acquisition of Stock for Investment.
Each of the APHI Shareholders that receives Refraco Class B Common
Stock as part of the Merger Consideration hereunder (as set forth on Exhibit C)
acknowledges that such shares of Refraco Class B Common Stock may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of by
him or it without registration under the Securities Act, except pursuant to
Regulation S under the Securities Act or pursuant to another exemption from
registration under the Securities Act, and without compliance with applicable
Blue Sky Laws. Certain provisions with respect to the rights of holders of such
shares with respect to the registration of such shares of Refraco Class B Common
Stock under the Securities Act are contained in the form of Registration Rights
Agreement attached hereto as Exhibit F. Each APHI Shareholder is an "accredited
investor" as that term is defined in Rule 501 promulgated under the Securities
Act. Each APHI Shareholder has received all requested documents and other
information from Refraco, and has had an opportunity to ask questions of and to
receive answers from the officers of Refraco with respect to the business,
results of operations, financial conditions and prospects of Refraco.
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SECTION 4A.6. Brokers.
No broker, finder, or investment banker is entitled to any brokerage,
finder's, or similar fee or commission in connection with the transactions
contemplated by this Agreement, based upon arrangements made by or on behalf of
such APHI Shareholder.
SECTION 4A.7. Absence of Litigation.
As of the date hereof, there are no actions, suits, or proceedings
pending or (to the actual knowledge of such APHI Shareholder after reasonable
investigation and inquiry) threatened against such APHI Shareholder arising out
of or in any way related to this Agreement, the Ancillary Agreements or any of
the transactions contemplated hereby or thereby.
SECTION 4A.8. Full Disclosure.
No statement in this Article IVA or in the APHI Disclosure Schedule
hereto or in any certificate relating to Article IVA delivered pursuant to the
requirements of this Agreement by or on behalf of such APHI Shareholder contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE INDIVIDUAL SHAREHOLDERS WITH RESPECT TO
THE AM DIVISION AND AMI
Each of the Individual Shareholders hereby represents and warrants to
MTI that, except as set forth in the Disclosure Schedule delivered by the
Individual Shareholders to MTI and attached hereto and made a part hereof (the
"AMI Disclosure Schedule"), to his respective actual knowledge after reasonable
investigation and inquiry (except for the representations and warranties set
forth in Section 5.20 below, which expressly are not qualified as to such actual
knowledge):
SECTION 5.1. Intentionally Omitted.
SECTION 5.2. Intentionally Omitted.
SECTION 5.3. Intentionally Omitted.
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SECTION 5.4. Intentionally Omitted.
SECTION 5.5. Financial Statements; Liabilities.
(a) The unaudited pro forma balance sheet of the AM Division as of
September 30, 1997, and the related statements of operations and cash flows for
the nine-month period then ended, certified by the principal financial and
accounting officer of APHI (including the related notes thereto) attached hereto
as Section 5.5(a) to the AMI Disclosure Schedule have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto), and fairly present the financial position of the AM Division as at the
date thereof and the results of its operations and changes in financial position
for the period indicated, subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
(b) Except as set forth on Section 5.5(b) of the AMI Disclosure
Schedule, API does not have any liability or obligation of any nature whatsoever
relating to the AM Division of the type required to be set forth on the balance
sheet of the AM Division (including the notes thereto) in accordance with
generally accepted accounting principles, consistently applied (whether known or
unknown, due or to become due, accrued, fixed, contingent, liquidated,
unliquidated, or otherwise), other than liabilities and obligations (i) which
are reflected in the balance sheet of the AM Division as of September 30, 1997
or reflected in the notes thereto or (ii) which arose in the ordinary course
since September 30, 1997 and do not and will not cause an expenditure by the AM
Division or AMI of more than $250,000 or which do not and will not, in the
aggregate, cause an expenditure by the AM Division or AMI of more than $400,000
(in either case, an "AMI Threshold Expenditure").
(c) API Technologies does not conduct any business other than the
ownership and licensing of intellectual property used by APHI and its
Subsidiaries.
SECTION 5.6. Intentionally Omitted.
SECTION 5.7. Absence of Certain Changes or Events.
Except as contemplated by this Agreement or disclosed in Section 5.7
of the AMI Disclosure Schedule, since December 31, 1996, the AM Division has
been operated diligently and only in the ordinary course of business as
theretofore conducted, and there has been no: (i) AMI Material Adverse Effect;
(ii) property damage or destruction resulting in a loss or cost to the AM
Division of more than $250,000 in the aggregate, whether or not covered by
insurance; or (iii) material transaction in connection with or concerning the AM
Division entered into by API with any third party. The term "AMI Material
Adverse Effect," as used in this Agreement, means any change, effect,
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event or situation that is materially adverse to the business, results of
operations, assets, liabilities, condition (financial or otherwise) or prospects
of the AM Division (excluding those certain intercompany accounts referenced in
Section 1.1).
SECTION 5.8. Absence of Litigation.
Except as set forth in Section 5.8 of the AMI Disclosure Schedule, no
claim, action, proceeding, or investigation is pending or threatened against
APHI or its Subsidiaries arising out of the operations of or relating to the
properties, assets or operations of the AM Division which would, if adversely
determined, cause an AMI Threshold Expenditure.
SECTION 5.9. Employee Benefit Plans.
True, correct, and complete copies, as in effect on the date hereof,
of the employee benefit plans (as defined in Section 3(3) of ERISA) and related
trust or funding agreements, summary plan descriptions and summaries of material
modifications, currently or previously established, maintained, sponsored or
contributed to (or with respect to which any obligation to contribute has been
undertaken) by API in connection with the operations of the AM Division or any
entity that would be deemed a "single employer" with API in connection with the
operations of the AM Division (an "AMI ERISA Affiliate") within the meaning of
Section 414(b), (c), (m) or (o) of the Code, and all bonus, stock option, stock
purchase, stock appreciation right, incentive, deferred compensation,
supplemental retirement, post-retirement or post-termination health or welfare
benefit, severance, welfare, medical, life, vacation, sickness, change in
control, death benefit, and other similar fringe or employee benefit plans,
programs, policies, or arrangements, all employment, consulting, or executive
compensation agreements, in each case, whether domestic or foreign, for the
benefit of, or relating to, any employee, former employee, consultant, director,
or retiree of API in the business or operations of the AM Division or any AMI
ERISA Affiliate (including their family members and other beneficiaries)
(collectively, the "AMI Employee Plans"), and written descriptions of any oral
arrangements or agreements with respect to the foregoing which, individually or
in the aggregate, are material, have been provided or made available to MTI
prior to the date hereof and are listed in Section 5.9 of the AMI Disclosure
Schedule; provided that an AMI Employee Plan that is no longer maintained by the
AM Division or an AMI ERISA Affiliate shall not be listed in Section 5.9 of the
AMI Disclosure Schedule and copies thereof need not have been made available to
MTI prior to the date hereof. Except as which would not, individually or in the
aggregate, have an AMI Material Adverse Effect, with respect to any of the AMI
Employee Plans: (i) each AMI Employee Plan intended to qualify under
Section 401(a) of the Code (or similar provisions for tax-registered or
tax-favored plans of foreign jurisdictions) has received a favorable
determination letter from the IRS (or, if applicable, similar approval of
foreign governmental authorities) and such letters have been delivered to MTI
for any such AMI Employee Plan evidencing its
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qualified status, and with respect to each such AMI Employee Plan, no event has
occurred or condition exists that could disqualify such AMI Employee Plan;
(ii) except as set forth in Section 5.9 of the AMI Disclosure Schedule, no such
AMI Employee Plan is or has ever been a Multiemployer Plan or a Multiple
Employer Plan, and neither the AM Division nor any AMI ERISA Affiliate has had
an obligation to contribute to any multiemployer plan; (iii) no such AMI
Employee Plan is or has ever been a defined benefit plan (whether qualified or
not under Section 401(a) of the Code); (iv) there has been no "prohibited
transaction" within the meaning of Section 4975(c) of the Code or Section 406 of
ERISA, involving the assets of the AMI Employee Plans, in connection with which
the AM Division or any of its AMI ERISA Affiliates could subject AMI to a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code; (v) all payments or contributions required by any AMI
Employee Plan, any collective bargaining agreement, or by law to have been made
shall have been made prior to the Split-Off or accrued by the AM Division on its
financial statements in accordance with generally accepted accounting
principles; (vi) no "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has been or could be expected
to be incurred, whether or not waived, and no excise or other taxes have been or
could be expected to be incurred or are due and owing with respect to the AMI
Employee Plans because of any failure to comply with the minimum funding
standards of the Code and ERISA; (vii) no claim, lawsuit, arbitration or other
action is threatened or anticipated or has been asserted or instituted against
the AMI Employee Plans (other than non-material routine claims for benefits, and
appeals of such claims), any trustee or fiduciaries thereof, the AM Division,
any AMI ERISA Affiliate, any director, officer, or employee thereof, or any of
the assets of any trust of the AMI Employee Plans; (viii) each AMI Employee Plan
complies and has been maintained and operated in all respects in accordance with
its terms and applicable law, including, without limitation, ERISA and the Code;
(ix) no AMI Employee Plan is or expected to be under audit or investigation by
the IRS, U.S. Department of Labor, or any other governmental authority and no
such completed audit, if any, has resulted in the imposition of any tax or
penalty; (x) with respect to each AMI Employee Plan that is funded mostly or
partially through an insurance policy, neither the AM Division nor any AMI ERISA
Affiliate has any liability in the nature of retroactive rate adjustment, loss
sharing arrangement or other actual or contingent liability arising wholly or
partially out of events occurring on or before the Split-Off; and (xi) the
Individual Shareholders will make available to MTI as to each AMI Employee Plan,
a true and correct copy of the most recent annual report (Form 5500) filed with
the IRS and other like reports required to be filed in foreign jurisdictions and
the most recent actuarial report.
No "reportable event" within the meaning of Section 4043(c) of ERISA,
other than any such event for which the 30-day notice requirement under ERISA
has been waived, and the regulations thereunder has occurred or is expected to
occur, and, except as disclosed in Section 5.9 of the AMI Disclosure Schedule,
the consummation of the
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transaction contemplated by this Agreement will not result in a reportable event
with respect to any AMI Employee Plan or any plan of an AMI ERISA Affiliate.
Except as listed in Section 5.9 of the AMI Disclosure Schedule or as
required by Section 4980B(f) of the Code, no AMI Employee Plan provides medical,
death, or welfare benefits (whether or not insured) with respect to current or
former employees of the AM Division beyond their retirement or other termination
of employment.
Except as disclosed in Section 5.9 of the AMI Disclosure Schedule or
which would not have an AMI Material Adverse Effect, the consummation of the
transactions contemplated by this Agreement will not give rise to any liability,
including, without limitation, liability for severance pay, unemployment
compensation, termination pay, or withdrawal liability, or accelerate the time
of payment or vesting or increase the amount of compensation or benefits due to
any employee, or director of the AM Division or the AMI ERISA Affiliates
(whether current, former, or retired) or their beneficiaries solely by reason of
such transactions. Neither API in connection with the AM Division nor any AMI
ERISA Affiliate, or any officer or employee thereof, has made any promises or
commitments, whether legally binding or not, to create any additional plan,
agreement, or arrangement, or to modify or change any existing AMI Employee
Plan. Except as disclosed in Section 5.9 of the AMI Disclosure Schedule or
which would not have an AMI Material Adverse Effect, neither API in connection
with the AM Division nor any AMI ERISA Affiliate maintains a pension plan (as
defined in Section 3(2) of ERISA or similar provisions of foreign
jurisdictions), including, without limitation, a nonqualified deferred
compensation plan or excess benefit plan, that is unfunded. Neither APHI nor
its Subsidiaries nor any of their respective directors, officers or employees
has taken any action or failed to take any action which would impede the right
to amend or terminate any AMI Employee Plan.
SECTION 5.10. Permits and Licenses.
Except as set forth in Section 5.10 of the AMI Disclosure Schedule, on
the date hereof API is, and immediately after the Split-Off AMI will be, the
holder of all licenses, franchises, ordinances, authorizations, permits, and
certificates, domestic or foreign (collectively, the "AMI Licenses"), necessary
to enable AMI to continue to conduct the business of the AM Division in all
material respects as presently conducted, except where the failure to have such
AMI Licenses would not cause an AMI Threshold Expenditure. Except as set forth
in Section 5.10 of the AMI Disclosure Schedule, all of the AMI Licenses are now,
and on the date of the Split-Off will be, in full force and effect, except those
that lapse in accordance with their terms. The Individual Shareholders have no
reason to believe that any federal, state, or local government or agency having
jurisdiction will revoke, cancel, rescind, refuse to renew in the ordinary
course, or modify any of the AMI Licenses. Except as set forth in Section 5.10
of the
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AMI Disclosure Schedule, there is not now pending or threatened any
investigation before any such federal, state, or local governments or agencies
which would cause an AMI Threshold Expenditure. The AM Division has conducted
its business so as to comply with all applicable laws, regulations, ordinances,
and codes, domestic and foreign, including, without limitation, laws,
regulations, ordinances, and codes relating to the protection of the
environment, the failure to comply with which would reasonably be likely to
cause an AMI Threshold Expenditure.
SECTION 5.11. Properties, Contracts and Insurance.
(a) Except as set forth in Section 5.11(a) of the AMI Disclosure
Schedule, on the date hereof API or API Technologies owns, is licensed to use or
leases, and immediately after the Split-Off AMI will own, be licensed to use, or
lease, all property and assets, real and personal, tangible and intangible
(including, but not limited to, all patents, trademarks, trade names,
copyrights, technology, know-how, and processes), used in or necessary for the
conduct of the businesses of the AM Division as currently conducted except where
the failure so to own, license, or lease would not cause an AMI Threshold
Expenditure. The use of such patents, trademarks, trade names, copyrights,
technology, know-how, and processes by the AM Division does not infringe on the
rights of any person, subject to such claims and infringement which have not
caused and will not cause an AMI Threshold Expenditure.
(b) The Individual Shareholders have furnished to MTI true copies of
the contracts, leases and commitments listed in Section 5.11(b)(i) to the AMI
Disclosure Schedule, including summaries of the terms of any unwritten
commitments. Except as set forth in that Section of the AMI Disclosure
Schedule: (1) API and each of the other parties thereto have complied in all
material respects with such contracts, leases and commitments, all of which are
valid and enforceable; (2) such contracts, leases and commitments are in full
force and effect and there exists no event or condition which with or without
notice or lapse of time would be a default thereunder, give rise to a right to
accelerate or terminate any provision thereof or give rise to any lien, claim,
encumbrance or restriction on any of the assets or properties of the AM
Division; (3) all of such contracts, leases and commitments have been entered
into on an arm's-length basis, and none is materially burdensome to the business
of the AM Division; and (4) none of the purchase commitments of API with respect
to the AM Division is in excess of the normal requirements of its business or at
an excessive price. API is not a party, nor are any of the assets or business
of the AM Division subject, to any contract, lease or commitment relating to the
AM Division not listed in Section 5.11(b)(i) of the AMI Disclosure Schedule
(including, without limitation, purchase or sales commitments, financing or
security agreements or guaranties, repurchase agreements, agency agreements,
manufacturers representative agreements, commission agreements, employment or
collective bargaining agreements, pension, bonus or profit-sharing agreements,
group insurance, medical or other fringe benefit plans, and leases of real or
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personal property), other than contracts terminable without penalty on not more
than 30 days' notice or that do not involve, individually or in the aggregate,
the receipt or expenditure of more than $250,000 in any one year.
Section 5.11(b)(ii) of the AMI Disclosure Schedule contains a list of the ten
largest customers and seven largest suppliers (measured by dollar volume of
purchases and sales, as applicable) of the AM Division and the dollar amount and
percentage of the business of the AM Division which each such customer or
supplier represented during the period January 1, 1995 through December 31,
1996. API is not engaged in any material disputes with customers or suppliers
relating to the AM Division. No customer or supplier is considering
termination, non-renewal or any adverse modification of its arrangements
relating to the AM Division with API, and the transactions contemplated by this
Agreement will not have a material adverse effect on API's relationship with any
of its suppliers or customers relating to the AM Division. API has adequate
sources of supply for raw materials and other supplies relating to the AM
Division.
(c) Section 5.11(c) of the AMI Disclosure Schedule sets forth a true
and correct list of all insurance coverage currently maintained by or for the
benefit of the AM Division with respect to its operations or any incident,
event, or thing arising therefrom or relating thereto, setting forth (i) the
name of the carrier, (ii) the nature and dollar limits of the coverage, (iii)
the policy number and scheduled expiration date, (iv) the premium rate and date
through which paid, and (v) the named insureds thereunder. Except as set forth
in Section 5.11(c) of the AMI Disclosure Schedule, all such policies are in full
force and effect, no notice of default or termination has been given thereunder,
and no effect, occurrence, or thing has occurred which, with notice or lapse of
time or both, could result in the early termination thereof. It is acknowledged
by the parties that such insurance coverage for the benefit of the AM Division
will be canceled as of the Closing Date (except as set forth in Section 3(e) of
the assumption agreement between API and AMI included in the Drop-Down
Documents) and that AMI shall be responsible for obtaining such insurance
coverage thereafter, except as may be provided in the Drop-Down Documents.
SECTION 5.12. Compliance with Environmental Laws.
For the purposes of this Section 5.12, the definitions set forth in
Section 3.15 above shall apply, mutatis mutandis, to reflect their applicability
to the business, operations and properties of the AM Division. All references
in this Section to the AM Division shall include any and all predecessors
thereof and any person or entity the liabilities of which, pursuant to the
Environmental Laws, contractually, by common law, by operation of law or
otherwise, the AM Division or any such predecessors may have succeeded to.
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Except as set forth in Section 5.12 of the AMI Disclosure Schedule:
(a) All of the current and past operations of the AM Division comply
and have at all times complied with all applicable Environmental Laws, and any
real property presently or formerly owned, used, leased, occupied, managed or
operated by the AM Division (collectively, the "AM Real Property") meets the
requirements and standards of all applicable Environmental Laws, except for such
non-compliances or failures of the AMI Real Property to meet the requirements
and standards of applicable Environmental Laws which would not be reasonably
likely to result in liability or expenditures to bring into compliance in excess
of the AMI Threshold Expenditure with respect to or at an individual AM Real
Property.
(b) The AM Real Property does not contain any Hazardous Substances
in, on, over, under or at it, in concentrations which would presently violate
any applicable Environmental Laws or would be reasonably likely to result in the
imposition of liability or obligations on the present or former owner, manager,
or operator of the AM Real Property under any applicable Environmental Laws,
including any violation, liability or obligations for the investigation,
corrective action, remediation or monitoring of Hazardous Substances in, on,
over, under or at the AM Real Property, except those which would not be
reasonably likely to result in liability or expenditures in excess of the AMI
Threshold Expenditure with respect to or at any individual AM Real Property.
(c) None of the AM Real Property is listed or proposed for listing on
the National Priorities List pursuant to CERCLA or any similar inventory of
sites requiring investigation or remediation maintained by any state or
locality. APHI has not received any notice, whether oral or written, from any
governmental entity or third party of any actual or threatened Environmental
Liability which is outstanding, pending or unresolved with respect to the AM
Real Property, except for such notices relating to Environmental Liabilities as
would not reasonably be likely to result in liability or expenditures in excess
of the AMI Threshold Expenditure with respect to or at any individual AM Real
Property.
(d) There are no underground storage tanks, asbestos or asbestos
containing materials, polychlorinated biphenyls, urea formaldehyde, or other
Hazardous Substances in, on, over, under or at any AM Real Property, except for
such underground storage tanks, asbestos or asbestos containing materials,
polychlorinated biphenyls, urea formaldehyde, or other Hazardous Substances as
would not reasonably be likely to result in liability or expenditures in excess
of the AMI Threshold Expenditure with respect to or at any individual AM Real
Property.
(e) There are no conditions existing at any AM Real Property or with
respect to the business of the AM Division that require, or which with the
giving of notice or the passage of time or both will reasonably likely require,
remedial or corrective
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action, removal, monitoring or closure pursuant to the Environmental Laws that
is reasonably likely to result in liability or expenditures in excess of the AMI
Threshold Expenditure with respect to or at any individual AM Real Property.
(f) The AM Division has all the permits, licenses, authorizations and
approvals necessary for the conduct of its business and for the operations on,
in or at the AM Real Property (the "AM Environmental Permits"), which are
required under applicable Environmental Laws, the AM Division is in compliance
with the terms and conditions of all such AM Environmental Permits, and no
reason exists why AMI would not be capable of continued operation of the
business of the AM Division in compliance with the AM Environmental Permits and
the applicable Environmental Laws following the Split-Off, except for the
absence of such permits or any non-compliances with the terms and conditions of
such permits as would not reasonably be likely to result in liability or
expenditures in excess of the AMI Threshold Expenditure with respect to or at
any individual AM Real Property.
(g) APHI has made available to MTI those material and final
environmental reports, assessments, audits, studies, investigations, data, AM
Environmental Permits and other written environmental information in its
custody, possession or control concerning the business of the AM Division and
the AM Real Property that were prepared or are dated within the past five years.
SECTION 5.13. Employment Matters.
(a) Except as set forth in Section 5.13(a) of the AMI Disclosure
Schedule or which would not have an AMI Material Adverse Effect, as of the date
hereof API: (i) is, and immediately after the Split-Off AMI will be, in
compliance in all material respects with all applicable federal, state and
provincial laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment, pay equity and wages and hours,
in each case, with respect to current, former, or retired employees or
consultants of API in the business of the AM Division (collectively "AMI
Employees"); (ii) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries, and other payments to AMI Employees; (iii) is
not, and immediately after the Split-Off AMI will not be, liable for any arrears
of wages or any taxes or any penalty for failure to comply with any of the
foregoing; and (iv) (other than routine payments to be made in the ordinary
course of business and consistent with past practice) is not, and immediately
after the Split-Off AMI will not be, liable for any payment to any trust or
other fund or to any governmental or administrative authority, with respect to
unemployment compensation benefits, social security or other benefits for AMI
Employees, except in each case, for immaterial amounts.
(b) Except as set forth in Section 5.13(b) of the AMI Disclosure
Schedule or which would not have an AMI Material Adverse Effect, no AMI Employee
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Plans, employment or other agreements, or trusts exist that expressly or
impliedly make reference to, or provide that payments be made or benefits
provided, upon any "change in ownership or control," pursuant to which, with or
without notice, the lapse of time or action by the AM Division or by any AMI
Employee or other person, the payment, vesting, or funding of compensation or
benefits is or may be provided or accelerated, or a reversion to the AM Division
of assets from an AMI Employee Plan may be prohibited, or an obligation to sell
assets may arise, by reason of or in connection with the consummation of a
transaction contemplated by this Agreement ("AMI Change of Control Provisions").
(c) Except as set forth in Section 5.13(c) of the AMI Disclosure
Schedule or which would not have an AMI Material Adverse Effect, the AM Division
is not involved in or threatened with, any labor dispute, grievance, or
litigation relating to labor, safety or discrimination matters involving any AMI
Employee, including, without limitation, charges of unfair labor practices or
discrimination complaints. Except as set forth in Section 5.13(c) of the AMI
Disclosure Schedule or which would not have an AMI Material Adverse Effect, the
AM Division has not engaged in any unfair labor practices within the meaning of
the National Labor Relations Act or similar such legislation of foreign
jurisdictions which would, individually or in the aggregate, directly or
indirectly, have an AMI Material Adverse Effect. Except as set forth in
Section 5.13(c) of the AMI Disclosure Schedule or which would not have an AMI
Material Adverse Effect, the AM Division is not presently nor has been in the
past a party to, or bound by, any collective bargaining agreement or union
contract with respect to AMI Employees and no collective bargaining agreement is
being negotiated by the AM Division.
(d) Except as set forth in Section 5.9 of the AMI Disclosure Schedule
or which would not have an AMI Material Adverse Effect, no AMI Employee has any
agreement as to length of notice or severance payment required to terminate his
or her employment, other than such as results by law from the employment of an
employee without an agreement as to notice or severance.
SECTION 5.14. Transactions with Affiliates.
Except as set forth in Section 5.14 of the AMI Disclosure Schedule,
since January 1, 1996, neither APHI nor any of its Subsidiaries has had, in
connection with or relating to the AM Division, any direct or indirect dealings
with any Individual Shareholder or (except for employment arrangements with
their employees) with any key employee of APHI or its Subsidiaries or, in either
case, with any of their
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affiliates, associates or relatives. Except as set forth in such Section of the
AMI Disclosure Schedule and except for employment arrangements with their
employees, APHI and its Subsidiaries have no obligation to or claim relating to
the AM Division against any Individual Shareholder or any key employee of APHI
or its Subsidiaries, or any of their affiliates, associates or relatives, and no
such person or entity has any obligation to or claim against APHI or its
Subsidiaries relating to the AM Division. Such Section of the AMI Disclosure
Schedule reasonably describes the nature and extent of any products, services or
benefits provided to APHI or its Subsidiaries relating to the AM Division by any
such person or entity or provided by APHI or its Subsidiaries to any such person
or entity and relating to the AM Division, in each case without a corresponding
charge equal to the fair market value of such products, services or benefits.
SECTION 5.15. Books and Records.
The books and records of the AM Division are complete and correct in
all material respects and have been maintained in accordance with good business
practices.
SECTION 5.16. Improper Payments.
Neither APHI or API nor their respective officers and agents have made
any illegal or improper payments to, or provided any illegal or improper benefit
or inducement for, any governmental official, supplier, customer or other
person, in an attempt to influence any such person to take or to refrain from
taking any action relating to the AM Division. The employees of the AM Division
may from time to time have made customary holiday gifts of nominal value to
suppliers or customers.
SECTION 5.17. Full Disclosure.
No statement in this Article V or in the AMI Disclosure Schedule
hereto or in any certificate relating to Article V delivered pursuant to the
requirements of this Agreement by or on behalf of the Individual Shareholders
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which they were made, not
misleading.
SECTION 5.18. Title to Properties; Absence of Encumbrances.
Except as set forth in Section 5.18 of the AMI Disclosure Schedule,
following the consummation of the Split-Off, AMI will have good and marketable
title to or, in the case of leases and licenses, valid and subsisting leasehold
interests or licenses in, all of its properties and assets of whatever kind
(whether real or personal, tangible or intangible), including, without
limitation, all properties and assets that are shown on the balance sheet
attached as Section 5.5(a) to the AMI Disclosure Schedule (except for assets
sold in the ordinary course of business since the date of such balance sheet)
and to the properties and assets that are shown on the AMI Disclosure Schedule,
in each case free and clear of any and all liens, mortgages, pledges, security
interests, restrictions, prior assignments, claims and encumbrances of any kind
whatsoever, except as may be
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set forth in the AMI Disclosure Schedule and except for those: (i) securing
Taxes, assessments and other governmental charges or levies not yet due and
payable (excluding any imposed pursuant to any of the provisions of ERISA) or
the claims of materialmen, mechanics, carriers, warehousemen or landlords for
labor, materials, supplies or rentals incurred in the ordinary course of
business; (ii) consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation or under surety or
performance bonds, in each case arising in the ordinary course of business; and
(iii) constituting encumbrances in the nature of zoning restrictions, easements
and rights or restrictions on the use of the APHI Real Property, provided the
same do not materially interfere with or prohibit the present use or continued
existence of structures on the properties. Except as set forth in Sections 5.14
and 5.18 of the AMI Disclosure Schedule, all assets, properties and rights
relating to the business of the AM Division are held by, and all agreements,
obligations and transactions relating to the business of the AM Division have
been entered into, incurred and conducted by, API or API Technologies rather
than any of their respective affiliates.
SECTION 5.19. Real and Personal Property.
Section 5.19 of the AMI Disclosure Schedule contains a complete and
correct list of all real property (including buildings and structures) owned or
leased by API and used in the operation of the AM Division and all interests
therein (including a brief description of the property, the record title holder,
the location and the improvements thereon). The Individual Shareholders have
delivered to MTI title insurance policies or signed title insurance commitments,
surveys and copies of all recorded documents referred to in such title insurance
policies or commitments for all owned real property used in the operation of the
AM Division and as to which APHI has obtained title insurance or commitments and
has such documents related thereto in its possession. All such real property,
buildings and structures, and the equipment therein, and the operations and
maintenance thereof, comply with any applicable agreements and restrictive
covenants and conform to all applicable legal requirements, including those
relating to the environment, health and safety, land use and zoning, except in
each case where the failure to so comply or conform would not be reasonably
likely to cause an AMI Threshold Expenditure, and all work required to be done
by API as landlord or tenant has been duly performed, except for such work the
failure to so duly perform would not be reasonably likely to cause an AMI
Threshold Expenditure. No condemnation or other proceeding is pending or
threatened which would affect the use of any such property by AMI after the
Drop-Down. Section 5.19 of the AMI Disclosure Schedule hereto contains a
complete and correct list and brief description of all equipment, machinery,
computers, furniture, leasehold improvements, vehicles and other personal
property owned or leased by API and used in the operation of the AM Division
with an original cost in excess of $1,000 individually or, in the case of each
lease, involve annual payments by APHI or its Subsidiaries in excess of $1,000
and all interests therein.
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The buildings and other structures, equipment and other assets of API used in
the operation of the AM Division (whether leased or owned) are in good operating
condition and repair, subject to ordinary wear and tear.
SECTION 5.20. Active Conduct of Business, Etc.
(a) The AM Division has been engaged in the active conduct of a trade
or business (within the meaning of Section 355(b) of the Code) throughout the
five-year period ending on the date hereof and as of the date of the Split-Off.
Such trade or business was not acquired by either APHI or API within the
five-year period ending on the date hereof and as of the date of the Split-Off
in a transaction in which gain or loss was recognized in whole or in part by any
party, within the meaning of Section 355(b)(2)(C) (except for the Drop-Down,
Dividend or Split-Off).
(b) APHI has been engaged in the active conduct of a trade or
business (within the meaning of Section 355(b) of the Code) throughout the
five-year period ending on the date hereof and as of the date of the Split-Off.
Such trade or business was not acquired by either APHI or API within the
five-year period ending on the date hereof and as of the date of the Split-Off
in a transaction in which gain or loss was recognized in whole or in part by any
party, within the meaning of Section 355(b)(2)(C) (except for the Drop-Down,
Dividend or Split-Off). Following the Split-Off and through the Effective Time,
APHI intends to continue the active conduct of such trade or business
independently from AMI and with its own employees, except as contemplated by the
Supply Agreement referred to in Section 2.9(c)(iii) and the Services Agreement
contemplated by Section 3.6 of the Exchange Agreement.
(c) APHI did not acquire control (within the meaning of
Section 355(b)(2)(D)) of API at any time within the five-year period ending as
of the date hereof and as of the date of the Split-Off.
(d) APHI did not acquire any equity interest in API within the
five-year period ending as of the date hereof and as of the date of the
Split-Off in a transaction in which gain or loss was recognized in whole or in
part by any party.
(e) API did not acquire control (within the meaning of
Section 355(b)(2)(D)) of AMI at any time within the five-year period ending as
of the date hereof and as of the date of the Split-Off in a transaction in which
gain or loss was recognized in whole or in part by any party (except for the
Drop-Down, Dividend or Split-Off) .
(f) APHI did not acquire control (within the meaning of
Section 355(b)(2)(D)) of AMI at any time during the five-year period ending as
of the date hereof and as of the date of the Split-Off in a transaction in which
gain or loss was
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recognized in whole or in part by any party (except for the Drop-Down, Dividend
or Split-Off).
(g) APHI and API are members of an affiliated group within the
meaning of Treas. Reg. 1.355-3(b)(4) as of the date hereof and will be as of the
date of the Split-Off.
(h) Except in connection with the Merger, there is no plan or
intention by APHI, directly or through any subsidiary corporation, to purchase
any of its outstanding capital stock after the Split-Off and through the
Effective Time.
(i) The total adjusted basis and the fair market value of the assets
transferred to AMI by each of API and API Technologies in the Drop-Down each
equals or exceeds the sum of the liabilities assumed by AMI plus any liabilities
to which the transferred assets are subject.
(j) The Assumed Liabilities (as defined in the Drop-Down Documents)
and the liabilities to which the transferred assets are subject were incurred in
the ordinary course of business and are associated with the assets being
transferred.
(k) APHI neither accumulated its receivables nor made extraordinary
payments of its payables in anticipation of the Split-Off.
(l) Neither AMI nor APHI is an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv).
(m) Immediately before the Split-Off, APHI will be in control of AMI
(within the meaning of Section 368(c)).
(n) As of the date of the Split-Off, neither APHI nor AMI will have
planned, arranged or negotiated (within the meaning of Rev. Proc. 96-39, 1996-33
IRB 11) any transaction scheduled for closing or completion after the date of
the Split-Off which would result in APHI failing to have control of AMI (within
the meaning of Section 368(c)) if such transaction had occurred prior to the
date of the Split-Off.
(o) The Refraco Class B Common Stock and cash, as the case may be,
received by each APHI Shareholder in exchange for the APHI Common Stock
surrendered in the Merger represents consideration bargained for in an
arm's-length transaction.
(p) Each Individual Shareholder that receives shares of Refraco Class
B Common Stock as Merger Consideration hereby represents and warrants that he
has no plan or intention to sell, exchange, distribute or otherwise dispose of,
or reduce the risk of loss by short sale or otherwise with respect to, any of
his Refraco Class B Common Stock
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after the Merger, or enter into any contract or arrangement with respect to any
of the foregoing matters.
(q) Each Individual Shareholder has not taken any action nor has
failed to take any action, the taking of which (or the failure of taking) would
be inconsistent with the treatment of the Deferred Interest Bonds ("DIBs") of
APHI as indebtedness of APHI.
(r) Except as provided in Section 12.11, the Individual Shareholders
will pay their own expenses, if any, incurred in connection with the Merger.
(s) Except in connection with the Merger, there is no plan or
intention by the Individual Shareholders to sell, exchange, transfer or
otherwise dispose of any stock in APHI after the Split-Off.
ARTICLE VI
COVENANTS OF APHI AND THE APHI SHAREHOLDERS
SECTION 6.1. Conduct of Business by APHI Pending the Merger.
APHI and each of the APHI Shareholders covenant and agree that, except
as otherwise contemplated by this Agreement or unless Refraco shall otherwise
give its prior written consent, the business of APHI and its Subsidiaries shall
be conducted only in, and APHI shall not take any action except in, the ordinary
course of business and in a manner consistent with past practice, and APHI will
use its commercially reasonable efforts to continue its business development
activities, to maintain in effect all licenses, approvals, and authorizations,
to preserve intact its business organization and to maintain existing
relationships with licensors, licensees, suppliers, contractors, distributors,
customers and others having business relationships with it, and Refraco agrees
to cooperate reasonably, if required by APHI, with APHI in connection with the
foregoing. By way of amplification and not limitation, except as contemplated
by this Agreement, neither APHI nor any of its Subsidiaries shall, between the
date of this Agreement and the Effective Time, do or agree to do any of the
following without the prior written consent of Refraco:
(a) amend or otherwise change its Certificate of Incorporation or
By-Laws;
(b) issue, sell, pledge, dispose of, encumber or authorize the
issuance, sale, pledge, disposition, or encumbrance of (i) any shares of capital
stock of any class, or any options, warrants, convertible securities,
subscriptions, or other rights of any kind to
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acquire any shares of capital stock, or any other ownership interest or equity
equivalent, of APHI or any of its Subsidiaries (including, without limitation,
stock appreciation rights or "phantom stock") or any other securities in respect
of, in lieu of, or in substitution for any outstanding shares or (ii) any
material assets of APHI or any of its Subsidiaries, except for sales of goods or
services in the ordinary course of business and in a manner consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property, or otherwise, with respect to
any of its capital stock or any other ownership interest, or equity equivalent
or any other securities (except that the Subsidiaries of APHI may do so), or
reclassify, combine, split, subdivide, redeem, purchase, or otherwise acquire,
directly or indirectly, any such capital stock, ownership interest, equity
equivalent or other securities, or adopt a plan of complete or partial
liquidation or resolutions providing for or authorizing such liquidation or a
dissolution, restructuring, recapitalization or other reorganization, or a
merger or consolidation; provided that, prior to the Closing, the APHI
Shareholders shall cause APHI to contribute to the capital of API any
intercompany receivables owed by API to APHI;
(d) (i) except in the ordinary course of business and consistent with
past practice, issue any debt securities or assume, guarantee or endorse the
obligations of any other person, except for immaterial amounts; (ii) except in
the ordinary course of business and consistent with past practice, make any
loans, advances, or capital contributions to, or investments in, any other
person (other than to or in APHI or its Subsidiaries or affiliates or customary
loans or advances to employees in amounts not material to the maker of such loan
or advance); (iii) pledge or otherwise encumber shares of capital stock of or
other ownership interests or equity equivalents in APHI or any of its
Subsidiaries; or (iv) except in the ordinary course of business and consistent
with past practice, mortgage or pledge any of its material assets, tangible or
intangible, or create or suffer to exist any material lien thereupon;
(e) enter into, adopt, establish or (except as may be required by
law) amend or terminate any collective bargaining agreement, bonus, profit
sharing, thrift, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, performance unit, stock equivalent, stock
purchase agreement, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund, or other
arrangement for the benefit or welfare of any director, officer, or employee, or
(except for normal increases in the ordinary course of business consistent with
past practice that, in the aggregate, do not result in a material increase in
benefits or compensation expenses) increase in any manner the compensation or
benefits of any director, officer or employee or pay any benefit not required by
any plan or arrangement as in effect as of the date hereof (including, without
limitation, the granting of stock appreciation rights or performance units), or
increase the amount or change in any material respect the terms of any insurance
covering directors or officers, except for the
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payment of bonuses, and other incentive or performance-based compensation to any
APHI Employee in respect of calendar year 1997;
(f) except as set forth in Section 6.1(f) to the APHI Disclosure
Schedule, acquire, sell, license, lease, or dispose of any assets outside the
ordinary course of business or enter into any commitment or transaction outside
the ordinary course of business consistent with past practice;
(g) change any of the accounting principles or practices used by it,
except as required by generally accepted accounting principles (in which event,
the APHI Shareholders promptly shall notify Refraco of such change);
(h) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership, or other business organization or division
thereof or any interest therein; (ii) enter into any partnership, joint venture,
or similar agreement or arrangement or any contract or agreement other than in
the ordinary course of business consistent with past practice; (iii) authorize
any capital expenditure(s) (other than those already subject to a commitment)
which, individually, is in excess of $50,000, or, in the aggregate, are in
excess of $250,000; or (iv) amend or modify any material existing agreement,
arrangement, or understanding which would increase the obligations or impair or
diminish the rights of APHI or any of its Subsidiaries in any material respect;
(i) make any tax election or settlement or compromise any income tax
liability, in each case that is material to APHI or its Subsidiaries;
(j) pay, discharge, or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business
consistent with past practice or in accordance with their terms, of liabilities
reflected or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of APHI and its consolidated Subsidiaries or
incurred in the ordinary course of business consistent with past practice,
except as required by applicable law; provided, however, that APHI or any of its
Subsidiaries may repay indebtedness of APHI and its Subsidiaries for borrowed
money and may settle the Patent Litigation on substantially the terms set forth
on Schedule 6.1(j);
(k) enter into (in writing or otherwise) any contract, agreement,
commitment, arrangement, or understanding (whether or not legally enforceable)
to do any of the foregoing; or
(l) take or fail to take, or agree to take or fail to take, any
action which would make any representation or warranty made in Article IV or
Article IVA by any APHI Shareholder untrue or incorrect in any material respect.
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SECTION 6.2. No Solicitation of Transactions.
From and after the date hereof through the earlier to occur of the
Effective Date and the date of termination of this Agreement, APHI and the APHI
Shareholders shall not, directly or indirectly, through any officer, director,
agent, or otherwise, solicit, initiate, or encourage submission of, proposals or
offers from any person relating to any acquisition or purchase of all or a
substantial portion of the assets (other than the Lime Quarry Sale) of, or any
equity interest in, APHI or any of its Subsidiaries or any business combination
with APHI or any of its Subsidiaries or participate in any negotiations
regarding, or furnish to any other person any information with respect to, or
encourage, any effort or attempt by any other person to do or seek any of the
foregoing. APHI and the APHI Shareholders will immediately cease and cause to
be terminated any existing activities, discussions, or negotiations with any
parties conducted heretofore with respect to any of the foregoing, and shall
immediately demand the return or destruction of any non-public information
concerning APHI distributed to other persons for the purpose of soliciting or
encouraging any of the foregoing. APHI and the APHI Shareholders shall as soon
as practicable (a) notify Refraco if any such proposal or offer, or any inquiry
or contact with any person with respect thereto, is made and (b) disclose to
Refraco the terms and conditions of such proposal or offer and the identity of
the offeror or potential offeror.
SECTION 6.3. Notification of Certain Events.
From the date hereof until the Effective Time, APHI and the APHI
Shareholders shall promptly advise Alpine and Refraco if any claim, suit,
governmental proceeding, or litigation is commenced against APHI or any of its
Subsidiaries or (to the actual knowledge of any APHI Shareholder) is threatened
against APHI or any of its Subsidiaries, which either (a) arise out of or are in
any way related to this Agreement or any of the transactions contemplated hereby
or (b) would, individually or in the aggregate, if adversely determined, have an
APHI Material Adverse Effect. From the date hereof until the Effective Time,
the Individual Shareholders shall promptly advise MTI if any claim, suit,
governmental proceeding or litigation is commenced against APHI or its
Subsidiaries arising out of the operations of or relative to the AM Division or
(to the actual knowledge of any Individual Shareholder) any such event is
threatened.
SECTION 6.4. Consents and Approvals.
The APHI Shareholders shall cause APHI to use commercially reasonable
efforts to obtain the consents and approvals required with respect to the items
described in Section 4.5(a) of the APHI Disclosure Schedule and
Section 4.5(b)(ii) hereof.
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SECTION 6.5. Limitations on Dispositions of Interests.
(a) Each APHI Shareholder that receives shares of Refraco Class B
Common Stock as Merger Consideration (as indicated on Exhibit C) agrees that he
or it will not sell, exchange, distribute or otherwise dispose of, or reduce the
risk of loss by short sale or otherwise with respect to, any of his or its
Refraco Class B Common Stock received as Merger Consideration, or enter into any
contract or arrangement with respect to any of the foregoing matters, during the
period commencing on the Closing Date and ending on the thirty-third monthly
anniversary thereof; provided, however, that such limitation shall not apply to
any sale or other transfer (A) that is expressly permitted by (i) the provisions
of the Shareholders' Agreement, (ii) the terms of the Registration Rights
Agreement, (iii) the terms of the Guaranty, or (iv) pursuant to the exercise of
the Put Right (as defined in the Refraco Charter Amendment) following
acceleration, if any, of such right as provided in the Refraco Charter Amendment
or (B) by reason of a transaction described in clause (z) of Section 7.4(a).
(b) MTI agrees that it will not, and will not enter into any contract
or agreement or adopt any resolution to, (i) sell, exchange, distribute or
otherwise dispose of, or reduce the risk of loss by short sale or otherwise with
respect to, any of its shares of capital stock of AMI, or enter into any
contract or arrangement with respect to any of the foregoing matters,
(ii) cause or permit AMI to liquidate or to sell, exchange, distribute or
otherwise dispose of any of its assets other than in the ordinary course of
business and except for transfers to a wholly-owned subsidiary of AMI or
(iii) cause or permit AMI to issue or redeem any shares of capital stock of AMI
other than stock purchases meeting the requirements of Section 4.05(1)(b) Rev.
Proc. 96-30, in the case of each of (i), (ii) and (iii), during the period
commencing on the Closing Date and ending on the thirty-third monthly
anniversary thereof.
SECTION 6.6. Lime Quarry Sale.
(a) Notwithstanding any other provision of this Agreement, each APHI
Shareholder shall, prior to the Closing, (i) purchase from APHI or its
Subsidiary, PSC Investments, Inc. ("PSC"), and (ii) cause APHI or PSC to sell
and assign to each APHI Shareholder, its or his proportionate share (based on
its or his ownership of APHI Common Stock prior to the Closing) of the
promissory note in the principal amount of $3,000,000 that was delivered to PSC
upon the consummation of the transactions (the "Lime Quarry Sale") contemplated
by the Asset Purchase Agreement, dated as of December 30, 1997, among PSC,
Premier Services Corporation and Carmeuse Ohio, Inc. (the "Lime Quarry
Agreement"), in consideration of payment to PSC or APHI of $3,000,000 in cash,
which amount may be used to repay indebtedness for borrowed money in accordance
with the provisions of Section 6.1.
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(b) To the extent the amount of taxes and other expenses incurred by
APHI or its Subsidiaries in connection with the Lime Quarry Sale and paid by
APHI after the Closing exceeds the Quarry Amount (as hereinafter defined), the
APHI Shareholders shall pay or reimburse APHI or its Subsidiaries on demand for
such excess. The Quarry Amount shall equal $1,900,000 less the amount of such
taxes and expenses paid on and after December 30, 1997 and prior to the Closing.
SECTION 6.7. Stockholders' and Debtholders' Agreement.
APHI and the APHI Shareholders each hereby waives any and all
provisions of the Stockholders' and Debtholders' Agreement, including, without
limitation, the allocation provisions of Section 15 thereof, to the extent
necessary to permit the execution and delivery of, and the consummation of the
transactions contemplated by, this Agreement and the Ancillary Agreements. In
addition, by its or his signature below, each of APHI and the APHI Shareholders
hereby agrees that the Stockholders' and Debtholders' Agreement shall terminate
and be of no further force and effect effective as of the Effective Time and
that such termination shall occur automatically and without any other action of
the parties thereto or otherwise.
SECTION 6.8. Contracts.
If any of the contracts listed in Section 4.13(b) of the APHI
Disclosure Schedule should provide for expiration or be subject to termination
before the Closing, the APHI Shareholders shall cause APHI to use commercially
reasonable efforts to extend such contracts on reasonable terms in accordance
with APHI's past practice, after consultation with Refraco.
SECTION Employee Plans.
APHI and each of the APHI Shareholders covenant and agree that from
the date hereof until the Effective Time they shall, at the direction, expense
and reasonable request of Refraco, cause APHI to prepare such changes to the
APHI Employee Plans as are deemed necessary by Refraco; provided, however, that
such changes shall become effective only at the Closing and not before.
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ARTICLE VII
COVENANTS OF ALPINE AND REFRACO
SECTION 7.1. Certain Actions Pending the Merger.
Alpine and Refraco covenant and agree that, except as otherwise
contemplated by this Agreement or unless the APHI Shareholders shall otherwise
give their prior written consent, neither Refraco nor any of its Subsidiaries
shall, between the date of this Agreement and the Effective Time, do or agree to
do any of the following:
(a) amend or otherwise change its Certificate of Incorporation or
By-Laws;
(b) issue, sell, or authorize the issuance or sale of any shares of
capital stock of any class, or any options, warrants, convertible securities,
subscriptions, or other rights of any kind to acquire any shares of capital
stock, or any other ownership interest or equity equivalent, of Refraco or any
of its Subsidiaries (including, without limitation, stock appreciation rights or
"phantom stock") or any other securities in respect of, in lieu of, or in
substitution for any outstanding shares;
(c) declare, set aside, make, or pay any dividend or other
distribution, payable in cash, stock, property, or otherwise, with respect to
any of its capital stock or any other ownership interest, or equity equivalent
or any other securities, or reclassify, combine, split, subdivide, redeem,
purchase, or otherwise acquire, directly or indirectly, any such capital stock,
ownership interest, equity equivalent, or other securities, or adopt a plan of
complete or partial liquidation or resolutions providing for or authorizing such
liquidation or a dissolution, restructuring, recapitalization or other
reorganization, or a merger or consolidation;
(d) change any of the accounting principles or practices used by it,
except as required by generally accepted accounting principles (in which event,
Refraco promptly shall notify the APHI Shareholders of such change); or
(e) take or fail to take, or agree to take or fail to take, any
action which would make any representation or warranty made by Alpine or Refraco
herein untrue or incorrect in any material respect.
SECTION 7.2. Notification of Certain Events.
From the date hereof until the Effective Time, Alpine and Refraco
shall promptly advise the APHI Shareholders if any claim, suit, governmental
proceeding, or litigation is commenced against Alpine, Refraco or any of their
respective Subsidiaries or
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(to the actual knowledge of Alpine or Refraco) is threatened against Alpine,
Refraco or any of their respective Subsidiaries,
which either (a) arise out of or are in any way related to this Agreement, any
of the Ancillary Agreements or any of the transactions contemplated hereby or
thereby or (b) would, individually or in the aggregate, if adversely determined,
have an Alpine Material Adverse Effect.
SECTION 7.3. Consents and Approvals.
Alpine and Refraco shall use commercially reasonable efforts to obtain
the consents and approvals required with respect to the items described in
Section 3.5(a) of the Alpine Disclosure Schedule and Section 3.5(b)(ii) hereof.
SECTION 7.4. Limitations on Dispositions of Interests.
(a) Alpine agrees that it will not, and will not enter into any
contract or agreement or adopt any resolution to, (i) sell, exchange,
distribute or otherwise dispose of, or reduce the risk of loss by short sale or
otherwise with respect to, any of its equity interest in Refraco or the capital
stock of API, or enter into any contract or arrangement with respect to any of
the foregoing matters, or (ii) cause or permit Refraco to liquidate or to sell,
exchange, distribute or otherwise dispose of any of the assets of API (other
than in the ordinary course of its business and except for transfers to a
wholly-owned subsidiary of Refraco) during the period commencing on the Closing
Date and ending on the second anniversary thereof; provided, however, that
nothing herein will prevent Alpine from (x) responding to, negotiating with
respect to or completing a transaction resulting from, an unsolicited offer
received prior to that time which the Board of Directors of Alpine determines is
necessary in order to comply with its fiduciary obligations to Alpine's public
shareholders, (y) causing the merger of API, API Technologies and Adience, or
(z) causing the acquisition of Refraco in a transaction that qualifies as a
reorganization within the meaning of Section 368(a)(1) of the Code in which the
shareholders of Refraco receive solely stock of the acquiring corporation as
consideration for their capital stock of Refraco and that does not affect the
treatment for tax purposes of the Split-Off as a tax free distribution to MTI
under Section 355(a) of the Code and the Merger as an "A" reorganization under
Section 368(a)(1)(A) of the Code.
(b) Refraco will not redeem or otherwise reacquire any Refraco
Class B Common Stock issued as part of the Merger Consideration, except as
expressly permitted by the terms of such Refraco Class B Common Stock.
SECTION 7.5. Blue-Sky Compliance.
Alpine and Refraco shall use commercially reasonable efforts to
qualify the shares of Refraco Class B Common Stock and the Conversion Shares
under the Blue
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Sky Laws of the appropriate states to the extent required in connection with the
consummation of the transactions contemplated hereby.
ARTICLE VIII
ADDITIONAL AGREEMENTS OF THE PARTIES
SECTION 8.1. Access to Information; Confidentiality.
(a) Subject to applicable law, from the date hereof to the Effective
Time, APHI and the APHI Shareholders shall afford the officers, employees, and
authorized agents of Refraco reasonable access, upon reasonable notice, to
APHI's officers, employees, authorized agents, properties, offices, books and
records and shall furnish Refraco with all financial and operating data and
other information regarding the assets, properties, goodwill and business of
APHI as Refraco may from time to time reasonably request. Refraco has retained
an environmental consultant reasonably acceptable to APHI (ENSR Corporation
("ENSR") having been previously designated by Refraco and accepted by APHI) to
undertake an environmental assessment of the APHI Real Property and APHI's
business, including, without limitation, a Phase I assessment for each APHI Real
Property (including, without limitation, the AM Real Property). APHI and the
APHI Shareholders shall provide reasonable access to the APHI Real Property and
APHI's business for the conduct of the environmental assessments, and shall
provide to the environmental consultant all known and available information and
documentation concerning any environmental matters pertaining to the APHI Real
Property and the APHI business.
(b) In the event of the termination of this Agreement, Alpine and
Refraco shall, and shall cause their respective affiliates and their respective
officers, directors, employees, and agents to, (i) return promptly every
document furnished to them by APHI, the APHI Shareholders or any of their
respective officers, directors, employees, and agents in connection with the
transactions contemplated hereby and any copies thereof, and shall use their
respective best efforts to cause others to whom such documents may have been
furnished promptly to return such documents and any copies thereof any of them
may have made, other than documents filed with the SEC or otherwise publicly
available and (ii) destroy promptly all documents created by them from any data,
information, or document furnished by APHI or any of its officers, directors,
employees, and agents in connection with the transactions contemplated hereby
and any copies thereof, and shall use their respective best efforts to cause
others to whom such documents may have been furnished promptly to destroy the
same and any copies thereof, other than documents created from data, information
or documents filed with the SEC or otherwise publicly available.
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(c) Subject to applicable law, from the date hereof to the Effective
Time, APHI shall afford the officers, employees, and authorized agents of MTI
reasonable access, during normal business hours and upon reasonable notice, to
the officers, employees, authorized agents, properties, offices, books, and
records of APHI, APHI's Subsidiaries and the AM Division and shall furnish MTI
with all financial and operating data and other information regarding the
assets, properties, goodwill, and business of APHI, APHI's Subsidiaries and the
AM Division as MTI may from time to time reasonably request. MTI has retained
ENSR to undertake an environmental assessment of the AM Real Property and the
business of the AM Division, including, without limitation, a Phase I assessment
for each AM Real Property. APHI shall provide reasonable access to the AM Real
Property and the business of the AM Division for the conduct of the
environmental assessments, and shall provide to the environmental consultant all
known and available information and documentation concerning any environmental
matters pertaining to the AM Real Property and the business of the AM Division.
(d) Subject to applicable law, from the date hereof to the Effective
Time, Alpine and Refraco shall afford the APHI Shareholders and their officers,
employees and authorized agents reasonable access, upon reasonable notice, to
Alpine and Refraco's officers, employees, authorized agents, properties,
offices, books and records and shall furnish the APHI Shareholders with all
environmental reports, assessments, audits, studies, investigations, data, and
other written environmental information in their custody or control that are
listed in the Alpine Disclosure Schedule or that concern APHI and its
Subsidiaries that were prepared on behalf of Alpine or Refraco, and financial
and operating data and other information regarding the assets, properties,
goodwill and business of Alpine and Refraco as the APHI Shareholders may from
time to time reasonably request.
(e) Subject to applicable law, from the date hereof to the Effective
Time, MTI shall afford the Individual Shareholders and their employees and
authorized agents reasonable access, upon reasonable notice, to MTI's officers,
employees, authorized agents, properties, offices, books and records and shall
furnish the Individual Shareholders with all environmental reports, assessments,
audits, studies, investigations, data, and other written environmental
information concerning the AM Division prepared on behalf of MTI and in its
custody or control as the Individual Shareholders may from time to time
reasonably request.
(f) In the event of the termination of this Agreement, the APHI
Shareholders shall, and shall cause their affiliates and officers, directors,
employees and agents to, (i) return promptly every document furnished to them by
Alpine or Refraco or any of their employees and agents in connection with the
transactions contemplated hereby and any copies thereof, and shall use their
respective best efforts to cause others to whom such documents may have been
furnished promptly to return such documents and any
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copies thereof any of them may have made, other than documents publicly
available and (ii) destroy promptly all documents created by them from any data,
information, or document furnished by Alpine or Refraco or any of their
respective employees and agents in connection with the transactions contemplated
hereby and any copies thereof, and shall use their respective best efforts to
cause others to whom such documents may have been furnished promptly to destroy
the same and any copies thereof, other than documents created from data,
information or documents publicly available.
(g) Except as provided in Section 11.5(c), no investigation pursuant
to this Section 8.1 or other investigation shall affect any representations or
warranties of the parties herein or the conditions to the obligations of the
parties hereto. The terms of the Confidentiality Agreement, dated October 24,
1996, between Alpine and APHI shall survive the termination of this Agreement.
SECTION 8.2. Notification of Certain Matters.
(a) APHI and each of the APHI Shareholders shall give prompt notice
to Alpine and Refraco of (i) the occurrence, or non-occurrence, of any event of
which it or he has actual knowledge, the occurrence or non-occurrence of which
would be likely to cause any representation or warranty of such APHI Shareholder
contained in this Agreement to be untrue or inaccurate at or prior to the
Effective Time and (ii) any failure of APHI and such APHI Shareholder to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it or him hereunder; provided, however, that the delivery of any
notice pursuant to this Section 8.2 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
(b) Alpine and Refraco shall give prompt notice to APHI and the APHI
Shareholders of (i) the occurrence, or non-occurrence, of any event of which it
has actual knowledge, the occurrence or non-occurrence of which would be likely
to cause any representation or warranty of Alpine or Refraco contained in this
Agreement to be untrue or inaccurate at or prior to the Effective Time and
(ii) any failure of Alpine or Refraco to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 8.2
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 8.3. Further Action.
Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all other things necessary, proper,
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to obtain in a timely manner all
necessary waivers, consents, and approvals and to effect
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all necessary registrations and filings, including, but not limited to:
(i) reasonable efforts to lift or rescind any injunction or restraining order or
other order which may be entered; (ii) cooperation in reasonable tax planning
measures for APHI and the Surviving Corporation in light of the transactions
contemplated hereby; and (iii) reasonable cooperation in respect of any filings
to be made in connection with the Merger and the transactions contemplated
hereby.
SECTION 8.4. Tax Matters.
(a) The parties agree and acknowledge that the Merger is intended to
qualify as an "A" reorganization under Section 368(a)(1)(A) of the Code.
(b) The parties agree and acknowledge that, notwithstanding any other
provision of this Agreement and the Ancillary Agreements, the Drop-Down,
Dividend and Split-Off will be treated by them for tax purposes as follows:
(i) No gain or loss will be recognized by API or API
Technologies on the contributions by API and API Technologies to AMI
of the assets and liabilities of the AM Division;
(ii) AMI will take a carryover tax basis (i.e., equal to the tax
basis of API and API Technologies in the assets of the AM Division) in
the assets of the AM Division received; and
(iii) API and API Technologies will realize a deferred
intercompany gain or loss, as applicable, on the distribution of the
shares of capital stock of AMI to APHI. Such gain or loss will be
taken into account, as required by law, upon the Split-Off.
(c) If, in connection with a tax examination of APHI, Refraco or MTI
(a "Tax Examination") or otherwise, a revenue agent or other representative of
the IRS or any other taxing authority raises any question as to the status for
tax purposes of the Merger, the party that is the subject of (or successor by
merger to the subject of) the Tax Examination or inquiry (the "Examined Party")
shall promptly notify the other party to this Agreement (the "Other Party") in
writing of the fact of the raising of such questions and describe with
particularity the nature of any questions raised with regard to the Merger. The
Examined Party shall promptly notify, in writing, the Other Party of all
developments relating to the Tax Examination or inquiry insofar as such Tax
Examination or inquiry relates to the Merger, and shall afford such Other Party
(in the event such other party is APHI, Alpine also shall have the right to so
participate) in advance of engaging in any substantive oral or any written
communications with representatives of any taxing authority, the opportunity to
fully participate in every aspect of the conduct and resolution of the portion
of such Tax Examination or inquiry that relates to the Merger including,
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without limitation, the preparation of any response, brief, or memorandum to the
taxing authority.
SECTION 8.5. Public Announcements.
Refraco, APHI and the APHI Shareholders shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to the Merger and shall not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
law or by the New York Stock Exchange.
SECTION 8.6. Government Compliance.
Each of APHI, each APHI Shareholder, Alpine and Refraco agrees
promptly to effect all necessary registrations, filings, applications, and
submissions of information requested by governmental authorities. Alpine and
MTI represent to the Individual Shareholders that the applicable waiting period
under the HSR Act has been terminated.
SECTION 8.7. Non-Competition Agreement.
(a) Each Individual Shareholder agrees (for himself only) that, for a
period of five years after the Closing (the "Restricted Period"), he will not
engage or have any interest, directly or indirectly, in any business engaged in
the refractories business or the minerals business (involving minerals of the
type sold by the AM Division at any time during the two years preceding the
Closing) anywhere throughout the world, except that the parties acknowledge that
CG's provision of consulting services to AMI shall not be a violation of this
provision;
(b) MTI agrees (and agrees to cause AMI) during the Restricted Period
not to engage or have any interest, directly or indirectly, in any business
engaged anywhere in North America in the refractories business except in
connection with acquisitions, as long as the competing business is not the
principal business of the acquired business;
(c) Refraco will not during the Restricted Period engage or have any
interest in the minerals business (involving minerals of the type sold by the AM
Division at any time during the two years preceding the Closing) anywhere in
North America, except (i) that upon expiration of the Supply Agreement or its
termination due to breach by MTI or AMI, Refraco shall be free to purchase
magnesite for its own internal use, (ii) for the manufacture, purchase and sale
of chemical magnesite on a basis consistent with past practice, and (z) in
connection with acquisitions, as long as the competing business is not the
principal business of the acquired business; and
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(d) Without limiting or restricting in any manner the provisions of
Section 8.7 (a), (b) and (c), the parties agree that, during the Restricted
Period: (i) AMI will not engage in any direct or (after reasonable inquiry)
indirect sales of chemical magnesite products to the animal feed industry;
provided, however, this provision is not meant to limit or prohibit AMI from
providing its existing chemical magnesite products to its existing customers, in
each case, as of the date of this Agreement, consistent with its past practice;
(ii) AMI will not engage in any direct or (after reasonable inquiry) indirect
sales of chemical magnesite products to the utility markets, such as to PECO;
provided, however, that, in the event Refraco determines that it cannot supply
any such customer or customers competitively out of its own plants, i.e., Gabbs,
NV and/or Port St. Joe, FL, Refraco and AMI shall negotiate in good faith to use
AMI's plants for this business; and (iii) Refraco will not engage in any direct
or (after reasonable inquiry) indirect sales of chemical magnesite products in
competition with AMI's ENVIROBLEND-Registered Trademark- product line for such
applications for which ENVIROBLEND-Registered Trademark- products are sold as of
the date of this Agreement. Unless terminated by AMI or Refraco on not less
than one year's notice to the other, from and after the Closing the parties
shall continue the arrangement, on a basis consistent with past practice,
pursuant to which, prior to the date hereof, API has manufactured certain
products at its Port St. Joe, FL plant for the AM Division, and the AM Division
has manufactured certain products at its Wilmington, DE plant for API;
provided, however, that (A) MTI's use of its Blend Plant at Mulcoa shall not be
a violation of the foregoing provisions; (B) MTI agrees not to use in North
America during the Restricted Period the know-how relating to "spray cast"
products given to MTI/Plibrico by APHI, which shall not in any event include any
such know-how in the possession of MTI/Plibrico prior to Imetal's acquisition of
Plibrico/Europe or which was or is independently developed by MTI/Plibrico at
any time; and (C) Refraco agrees not to use in Europe during the Restricted
Period the know-how relating to the production of "tap holes clays" given by
Plibrico to APHI, which shall not in any event include any such know-how already
in the possession of Refraco prior to the Closing or in the possession of APHI
prior to Imetal's acquisition of Plibrico/Europe, or which was or is
independently developed by Refraco or APHI at any time.
SECTION 8.8. Subsidiary Merger.
At the Effective Time, Refraco shall cause the Merger of API,
API Technologies and Adience.
SECTION 8.9. Intentionally Omitted.
SECTION 8.10 1997 Bonus Amount.
Prior to the Closing, the parties shall agree as to the aggregate
amount payable after the Closing as bonuses and other incentive or
performance-based
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compensation to APHI Employees in respect of calendar year 1997 (the "1997 Bonus
Amount").
SECTION 8.11 Organizational Matters Pertaining to AMI.
Prior to the Closing, the APHI Shareholders will cause the following
to occur: AMI shall be organized under the GCL with all necessary corporate
power and authority to enter into the Ancillary Agreements to which it will be a
party and to carry out its obligations thereunder. The execution and delivery
of the Ancillary Agreements to which it will be a party by AMI and the
consummation by AMI of the transactions contemplated thereby to which it will be
a party shall be duly authorized by all necessary corporate action on the part
of AMI.
ARTICLE IX
CONDITIONS TO THE CLOSING
SECTION 9.1. Conditions to Obligations of Each Party.
The respective obligations of each party to effect the Closing
Transactions shall be subject to the fulfillment, at or prior to the Effective
Time, of each of the following conditions, any of which may be waived by all of
the parties hereto in writing, and each party shall use its or his commercially
reasonable efforts to cause such conditions to be fulfilled:
At the Effective Time, there shall be no effective injunction, writ,
or preliminary restraining order or any order of any nature issued by a court or
governmental agency of competent jurisdiction directing that the Drop-Down,
Dividend, Split-Off, Merger or any other transaction contemplated hereby or by
the Ancillary Agreements not be consummated as herein provided and there shall
not have been any action taken, or any statute, rule, regulation, or order
enacted, promulgated or issued or deemed applicable to the Drop-Down, Split-Off,
Merger or any other transaction contemplated hereby or by the Ancillary
Agreements, by any federal or state government or governmental authority or
court, which would (i) prohibit the Surviving Corporation's ownership or
operation of all or a material portion of APHI's business or assets, or compel
the Surviving Corporation or Alpine to dispose of or hold separate all or a
material portion of APHI's business or assets, as a result of the Merger or
(ii) make the consummation of the Merger illegal, and no such action shall have
been taken or any such statute, rule, regulation, or order enacted, promulgated,
issued, or deemed applicable to the Merger which would be reasonably likely to
produce such result.
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SECTION 9.2. Additional Conditions to Obligations of Refraco.
The obligation of Refraco to effect the Closing Transactions shall
also be subject to the fulfillment, at or prior to the Effective Time, of each
of the following conditions, any of which may be waived by Refraco in writing,
and APHI and the APHI Shareholders shall use its or his commercially reasonable
efforts to cause such conditions to be fulfilled:
(a) The representations and warranties of each of the APHI
Shareholders set forth in Article IV and Article IVA of this Agreement shall be
true and correct in all material respects at and as of the Effective Time as if
made at and as of such time, except for changes contemplated by this Agreement
and by the Disclosure Schedule, and except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct in all material
respects as of such date.
(b) APHI and each of the APHI Shareholders shall in all material
respects have performed each obligation to be performed by it or him hereunder
at or prior to the Effective Time.
(c) Refraco shall have received a certificate of APHI, dated the
Closing Date, signed by the Chief Executive Officer of APHI, to the effect that,
to the best of the knowledge, information, and belief of such officer, the
conditions specified in Sections 9.2(a) and (b) have been fulfilled.
(d) There shall not have been an APHI Material Adverse Effect or an
AM Material Adverse Effect.
(e) Each of the documents referred to in Section 2.9(c) shall have
been executed and delivered by each of the parties thereto other than Alpine and
Refraco.
(f) Refraco shall have received evidence, in form and substance
reasonably satisfactory to it, that such licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and third
parties as are required in connection with the consummation of the transactions
contemplated hereby or necessary to conduct the business of APHI and its
Subsidiaries as presently conducted have been obtained and are in full force and
effect other than those which, if not obtained, would not, either individually
or in the aggregate, have an APHI Material Adverse Effect.
(g) Alpine and Refraco shall have received an opinion from Duane,
Morris & Heckscher LLP, as counsel to APHI, dated the Closing Date, in form and
substance reasonably satisfactory to Refraco, as to (i) the valid existence and
good standing of APHI and its Subsidiaries in their respective jurisdictions of
incorporation,
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(ii) the corporate power and authority of APHI and its Subsidiaries to own their
respective assets and properties and to conduct their respective businesses,
(iii) the corporate power and authority of APHI to execute and deliver this
Agreement and the Ancillary Agreements to which it will be a party and the due
authorization thereof by APHI, (iv) the due execution and delivery by APHI and
enforceability against APHI of this Agreement and the Ancillary Agreements to
which APHI will be a party (other than with respect to the enforceability of the
provisions thereof regarding confidentiality and non-competition obligations),
(v) the absence of conflicts with the charter, bylaws or (except as set forth in
Section 4.5(a) of the APHI Disclosure Schedule) agreements of APHI listed in
Section 4.14(b) of the APHI Disclosure Schedule, and (vi) the absence of
material consents or approvals of or from any governmental or regulatory
authority (except as set forth in Section 4.5(b)) required to be obtained by
APHI in order to consummate the transactions contemplated by this Agreement and
the Ancillary Agreements.
(h) Alpine and Refraco shall have received an opinion from Weil,
Gotshal & Manges LLP, as counsel to AMI, dated the Closing Date, in form and
substance reasonably satisfactory to Refraco, as to (i) the due organization,
valid existence and good standing of AMI in its jurisdiction of incorporation,
(ii) the corporate power and authority of AMI to own the assets and properties
of the AM Division and to conduct the business formerly conducted as the AM
Division, (iii) the corporate power and authority of AMI to execute and deliver
the Ancillary Agreements to which it will be a party and the due authorization
thereof by AMI, (iv) the due execution and delivery by AMI and enforceability
against AMI of the Ancillary Agreements to which AMI will be a party (other than
with respect to the enforceability of the provisions thereof regarding
confidentiality and non-competition obligations), (v) the absence of conflicts
with the charter, bylaws or agreements of AMI listed in Section 5.11(b)(i) of
the AMI Disclosure Schedule, and (vi) the absence of material consents or
approvals of or from any governmental or regulatory authority required to be
obtained by AMI in order to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
(i) Alpine and Refraco shall have received (A) an opinion from Weil,
Gotshal & Manges LLP, counsel to MTI, dated the Closing Date, in form and
substance reasonably satisfactory to Refraco, as to (i) the valid existence and
good standing of MTI in its jurisdiction of incorporation, (ii) the corporate
power and authority of MTI to own its properties and to conduct its businesses,
(iii) the corporate power and authority of MTI to execute and deliver this
Agreement and the Ancillary Agreements to which it will be a party and the due
authorization thereof by MTI, (iv) the due execution and delivery by MTI and
enforceability against MTI of this Agreement and the Ancillary Agreements to
which MTI will be a party (other than with respect to the enforceability of the
provisions thereof regarding confidentiality and non-competition obligations),
(v) the absence of conflicts with the charter, bylaws or agreements of MTI set
forth on a schedule attached to such opinion (there also being attached to such
opinion an Officers' Certificate signed by
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an officer of MTI certifying that the agreements listed on such schedule are all
the agreements that are material to MTI), and (vi) the absence of material
consents or approvals of or from any governmental or regulatory authority
(except as set forth in Section 4A.3(b)) required to be obtained by MTI in order
to consummate the transactions contemplated by this Agreement and the Ancillary
Agreements, and (B) an opinion from counsel to IMETAL and the indirect sole
shareholder of MTI, dated the Closing Date, in form and substance reasonably
satisfactory to Refraco, as to (i) the valid existence and good standing of
IMETAL in its jurisdiction of incorporation, (ii) the corporate power and
authority of IMETAL to execute and deliver the IMETAL Letter and the due
authorization thereof by IMETAL, and (iii) the due execution and delivery by
IMETAL of the IMETAL Letter.
(j) There shall not have been any action taken, or any statute, rule,
regulation, or order enacted, promulgated, or issued or deemed applicable to the
Closing Transactions by any federal or state government or governmental
authority or court, which would impose or confirm material limitations on the
ability of Alpine effectively to exercise full rights of ownership of shares of
the capital stock of the Surviving Corporation, including without limitation,
the right to vote any such shares on all matters properly presented to the
stockholders of the Surviving Corporation, and no such action shall have been
taken or any such statute, rule, regulation, or order enacted, promulgated,
issued, or deemed applicable to the Merger which in the reasonable judgment of
Refraco would produce such result.
(k) All actions, proceedings, instruments, and documents required to
carry out the Closing Transactions and all other related legal matters shall
have been reasonably satisfactory to and approved by counsel for Alpine and
Refraco and such counsel shall have been furnished with such certified copies of
such corporate actions and proceedings and such other instruments and documents
as it shall have reasonably requested.
(l) The conditions precedent (other than those within Refraco's
control) to the Lender's obligation to provide financing to Refraco, as set
forth in the Commitment Letter, shall have been satisfied or waived.
(m) At or prior to the Effective Time, APHI shall have received
waivers, in form and substance satisfactory to Refraco, from each employee,
director, officer, or consultant who is a party to any of the agreements listed
in Section 4.15(b) of the APHI Disclosure Schedule and who will not be offered
employment with the Surviving Corporation after the Effective Time, of his or
her rights under such Change of Control Provisions in such agreements.
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(n) At or prior to the Effective Time, APHI shall have received all
the consents or approvals required with respect to the items described in
Exhibit L and made a part hereof .
(o) The letter agreement between IMETAL and Refraco attached hereto
as Exhibit M and made a part hereof (the "IMETAL Letter") shall remain in full
force and effect.
SECTION 9.3. Additional Conditions to Obligations of APHI and the
APHI Shareholders.
The obligations of APHI and the APHI Shareholders to effect the
Closing Transactions are also subject to the fulfillment, at or prior to the
Effective Time, of each of the following conditions, any of which may be waived
by all of such parties in writing, and each of Alpine and Refraco shall use its
commercially reasonable efforts to cause such conditions to be fulfilled:
(a) The representations and warranties of Alpine and Refraco set
forth in this Agreement shall be true and correct in all material respects at
and as of the Effective Time as if made at and as of such time, except for
changes contemplated by this Agreement, and except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct in all material
respects as of such date.
(b) Alpine and Refraco shall in all material respects have performed
each obligation to be performed by it hereunder at or prior to the Effective
Time.
(c) Each of the APHI Shareholders shall have received a certificate
of Alpine and Refraco, dated the Closing Date, signed by the Chief Executive
Officer of Alpine, to the effect that, to the best of the knowledge, information
and belief of such officer, the conditions specified in Sections 9.3(a) and (b)
have been fulfilled.
(d) There shall not have been an Alpine Material Adverse Effect.
(e) Each of the documents and actions referred to in Section 2.9(c)
shall have been executed or taken by the parties thereto other than APHI, the
APHI Shareholders and AMI.
(f) The APHI Shareholders shall have received evidence, in form and
substance reasonably satisfactory to them, that such licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and third parties as are required in connection with the
consummation of the Closing Transactions or necessary for Refraco to conduct the
business of APHI and its Subsidiaries as presently
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conducted have been obtained and are in full force and effect other than those
which, if not obtained, would not, either individually or in the aggregate, have
an Alpine Material Adverse Effect.
(g) The APHI Shareholders shall have received an opinion from
Proskauer Rose LLP, counsel to Alpine and Refraco, dated the Closing Date, in
form and substance reasonably satisfactory to the APHI Shareholders, as to
(i) the valid existence and good standing of Alpine, Refraco and certain of the
Refraco Subsidiaries set forth in Section 9.3(g) of the Alpine Disclosure
Schedule in their respective jurisdictions of incorporation and qualification,
(ii) the corporate power and authority of Alpine, Refraco and the Refraco
Subsidiaries to own their properties and to conduct their businesses, (iii) the
corporate power and authority of Alpine and Refraco to execute and deliver this
Agreement and the Ancillary Agreements to which they will be a party and the due
authorization thereof by Alpine, (iv) the due execution and delivery by Alpine
and Refraco and enforceability against Alpine and Refraco of this Agreement and
the Ancillary Agreements to which each will be a party (other than with respect
to the enforceability of the provisions thereof regarding confidentiality and
non-competition obligations), (v) the absence of conflicts with Alpine or
Refraco's charter, bylaws or agreements listed as material agreements in the SEC
Reports (which include all material agreements of Refraco), (vi) the absence of
material consents or approvals of or from any governmental or regulatory
authority required to be obtained by Alpine or Refraco in order to consummate
the transactions contemplated by this Agreement and the Ancillary Agreements,
and (vii) the provisions of Article FOURTH of the Refraco Certificate of
Incorporation, as amended, are legal, valid and binding on, and enforceable
against, Refraco in accordance with their terms; and (viii) the shares of
Refraco Class B Common Stock issued as Merger Consideration and the shares of
Refraco Class B Common Stock issued pursuant to the provisions of Section 2.7,
if applicable, are duly authorized, validly issued, fully paid and
non-assessable, and the Conversion Shares are duly authorized, and when issued
as contemplated by the Refraco Certificate of Incorporation, will be validly
issued, fully paid and non-assessable.
(h) All actions, proceedings, instruments, and documents required to
carry out the Closing Transactions and all other related legal matters shall
have been reasonably satisfactory to and approved by counsel for each of the
Individual Shareholders and MTI and such counsel shall have been furnished with
such certified copies of such corporate actions and proceedings and such other
instruments and documents as it shall have reasonably requested.
(i) The financing obtained by Refraco to complete the transactions
contemplated hereby shall not be materially less favorable to Refraco than that
described in the Commitment Letter.
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(j) At or prior to the Effective Time, Alpine and Refraco shall have
received all the consents or approvals required with respect to the items
described in Exhibit N and made a part hereof.
SECTION 9.4. Additional Conditions to Obligations of MTI.
The obligations of MTI to effect the Closing Transactions are also
subject to the fulfillment, at or prior to the Effective Time, of each of the
following conditions, any of which may be waived by MTI in writing, and each of
the Individual Shareholders shall use its commercially reasonable efforts to
cause such conditions to be fulfilled:
(a) The representations and warranties of the Individual Shareholders
set forth in Article V shall be true and correct in all material respects at and
as of the Effective Time as if made at and as of such time, except for changes
contemplated by this Agreement, and except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct in all material
respects as of such date.
(b) MTI shall have received a certificate of the Individual
Shareholders, dated the Closing Date, signed by each of them, to the effect
that, to the best of the knowledge, information and belief of such parties, the
conditions specified in Section 9.4(a) have been fulfilled.
(c) There shall not have been an AM Material Adverse Effect.
(d) MTI shall have received evidence, in form and substance
reasonably satisfactory to it, that such licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and third
parties as are required in connection with the consummation of the Closing
Transactions or necessary to conduct the business of the AM Division as
presently conducted have been obtained and are in full force and effect other
than those which, if not obtained, would not, either individually or in the
aggregate, have an AM Material Adverse Effect.
(e) There shall not have been any action taken, or any statute, rule,
regulation, or order enacted, promulgated, or issued or deemed applicable to the
Closing Transactions by any federal or state government or governmental
authority or court, which would impose or confirm material limitations on the
ability of AMI effectively to operate the business of the AM Division as it
previously has been conducted, and no such action shall have been taken or any
such statute, rule, regulation, or order enacted, promulgated, issued, or deemed
applicable to the Drop-Down, Dividend, Split-Off or Merger which in the
reasonable judgment of MTI would produce such result.
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(f) All actions, proceedings, instruments, and documents required to
carry out the Closing Transactions and all other related legal matters shall
have been reasonably satisfactory to and approved by counsel for MTI and such
counsel shall have been furnished with such certified copies of such corporate
actions and proceedings and such other instruments and documents as it shall
have reasonably requested.
(g) At or prior to the Effective Time, APHI shall have received all
the consents or approvals required with respect to the items described in
Exhibit O and made a part hereof.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.1. Termination.
This Agreement may be terminated at any time prior to the Effective
Time:
(a) By mutual written consent, duly authorized by the Boards of
Directors of Refraco and APHI;
(b) By either Refraco or APHI, if the Merger shall not have been
consummated by February 15, 1998, unless the absence of such consummation shall
be due to the failure of the party seeking to terminate this Agreement (or its
subsidiaries or affiliates) to perform its obligations under this Agreement
required to be performed by it at or prior to the Effective Time;
(c) By either Refraco or APHI, if a United States or state
governmental authority, agency, or commission or United States or state court of
competent jurisdiction shall have issued an order, decree, or ruling or taken
any other action (which order, decree, ruling, or action the parties hereto
shall use their commercially reasonable efforts to lift), in each case
permanently restraining, enjoining, or otherwise prohibiting the Merger, and
such order, decree, ruling, or action shall have become final and
non-appealable;
(d) (i)by APHI, if Refraco or Alpine shall breach or fail to perform
in any material respect any of their respective material covenants or agreements
contained herein, or by Refraco, if APHI or any of the APHI Shareholders shall
breach or fail to perform in any material respect any of their respective
material covenants or agreements contained herein;
(e) (i)by Refraco, if prior to the Effective Time an event or
condition occurs which has had or which reasonably may be expected to have an
APHI Material
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Adverse Effect, by APHI, if prior to the Effective Time, an event or condition
occurs which has had or which reasonably may be expected to have an Alpine
Material Adverse Effect or by Refraco, APHI or MTI, if prior to the Effective
Time an event or condition occurs which has had or which reasonably may be
expected to have an AM Material Adverse Effect; provided, however, that the
termination right set forth in the foregoing clause (iii) shall be exercisable
only prior to the Split-Off.
SECTION 10.2. Effect of Termination.
In the event of termination of this Agreement as provided in
Section 10.1, there shall be no liability or further obligation on the part of
any party hereto except (i) as set forth in Section 12.11 hereof and
(ii) nothing herein shall relieve any party from liability for any willful or
intentional breach of this Agreement.
ARTICLE XI
INDEMNIFICATION PROVISIONS
SECTION 11.1. APHI Shareholders' Indemnification Obligation.
Each of the APHI Shareholders agrees that, from and after the Closing,
it or he shall, subject to the limitations set forth in Section 11.5(b)(iv)
hereof, indemnify, defend and hold harmless Alpine, Refraco and their respective
affiliates and their and their affiliates' respective directors, officers,
shareholders, partners, attorneys, accountants, agents and employees and their
heirs, successors and assigns (any party entitled to be indemnified under this
Article XI, an "Indemnified Party" and any party obligated to provide
indemnification under this Article XI, the "Indemnifying Party"), from, against
and in respect of any damages, claims, losses, charges, actions, suits,
proceedings, deficiencies, Taxes, interest, penalties, and reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements, removal costs, remediation costs, closure costs, fines, penalties
and expenses of investigation and ongoing monitoring) (each, a "Liability" and
collectively, "Liabilities") (including any claim by a third party which,
without regard to the merits of the claim, would result in Liability if such
third party's allegations were true) imposed on, sustained, incurred or suffered
by or asserted against any such party, directly or indirectly, in connection
with, relating to or arising out of any breach of (a) any representation or
warranty of the APHI Shareholders contained in Article IV of this Agreement and
any representation or warranty of such APHI Shareholder contained in Article IVA
of this Agreement or (b) any covenant or other agreement of APHI or such APHI
Shareholder contained in this Agreement; provided, however, that the foregoing
obligation of the APHI Shareholders is subject to the applicable limitations set
forth in Section 11.5 below.
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SECTION 11.2. Alpine and Refraco Indemnification Obligation.
Each of Alpine and Refraco agrees that, from and after the Closing, it
shall indemnify, defend and hold harmless the APHI Shareholders and their
respective affiliates, and their and their affiliates' respective directors,
officers, shareholders, partners, attorneys, accountants, agents and employees
and their heirs, successors and assigns, from, against and in respect of any
Liabilities (including any claim by a third party which, without regard to the
merits of the claim, would result in Liability if such third party's allegations
were true) imposed on, sustained, incurred or suffered by or asserted against
any such party, directly or indirectly, in connection with, relating to, arising
out of or based upon any breach of (a) any representation or warranty of Alpine
or Refraco contained in this Agreement or (b) any covenant or other agreement of
Alpine or Refraco contained in this Agreement; provided, however, that the
foregoing obligation of Alpine and Refraco is subject to the applicable
limitations set forth in Section 11.5 below.
SECTION 11.3. Individual Shareholders' Indemnification Obligation.
Each of the Individual Shareholders agrees that, from and after the
Closing, he shall, subject to the limitations set forth in Section 11.5(b)(iv)
hereof, indemnify, defend and hold harmless MTI and its affiliates and its and
its affiliates' respective directors, officers, shareholders, partners,
attorneys, accountants, agents and employees and their heirs, successors and
assigns, from, against and in respect of any Liabilities (including any claim by
a third party which, without regard to the merits of the claim, would result in
Liability if such third party's allegations were true) imposed on, sustained,
incurred or suffered by or asserted against any such party, directly or
indirectly, in connection with, relating to or arising out of any breach of (a)
any representation or warranty of the Individual Shareholders contained in
Article V of this Agreement or (b) any covenant or other agreement of such
Individual Shareholder contained in Section 6.5(a); provided, however, that the
foregoing obligation of the Individual Shareholders is subject to the applicable
limitations set forth in Section 11.5 below; provided, further, that the
foregoing indemnity with respect to the breach of any representation or warranty
contained in Section 5.20 and the breach of any covenant or other agreement
contained in Section 6.5(a) shall apply only to Liabilities relating to the
taxability of the Split-Off and not to any other Liabilities, including, without
limitation, Liabilities relating to the Merger.
SECTION 11.4. Procedures for Indemnification for Third Party Claims.
The obligations and liabilities of the parties under this Agreement
with respect to, relating to, caused (in whole or in part) by or arising out of
claims of third
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parties (individually, a "Third Party Claim" and collectively, the "Third Party
Claims") shall be subject to the following terms and conditions:
(a) The Indemnified Party shall give the Indemnifying Party prompt
notice of any Third Party Claim, and, provided that the Indemnifying Party
acknowledges in writing its obligation to indemnify in accordance with the terms
of this Agreement, the Indemnifying Party may undertake the defense of that
claim by representatives chosen by it. Any such notice of a Third Party Claim
shall identify with reasonable specificity the basis for the Third Party Claim,
the facts giving rise to the Third Party Claim, and the amount of the Third
Party Claim (or, if such amount is not yet known, a reasonable estimate of the
amount of the Third Party Claim). The Indemnified Party shall make available to
the Indemnifying Party copies of all relevant documents and records in its
possession. Failure of an Indemnified Party to give prompt notice shall not
relieve the Indemnifying Party of its obligation to indemnify except to the
extent that the Indemnifying Party is actually prejudiced by the delay in giving
notice.
(b) If the Indemnifying Party, within 30 days after notice of any
such Third Party Claim (or such lesser time as is reasonable), fails to assume
the defense in accordance with Section 11.4(a) of this Agreement, the
Indemnified Party shall (upon further notice to the Indemnifying Party) have the
right to undertake the defense, compromise or settlement of the Third Party
Claim, subject to the right of the Indemnifying Party to assume the defense of
such Third Party Claim at any time prior to settlement, compromise or final
determination thereof; provided, however, that at the time of the assumption of
defense the Indemnifying Party shall acknowledge in writing its obligation to
indemnify as provided in Section 11.4(a) of this Agreement and reimburse the
Indemnified Party for its out-of-pocket expenses incurred prior to the
assumption of defense by the Indemnifying Party.
(c) Anything in this Section 11.4 to the contrary notwithstanding,
the Indemnifying Party shall not, without the written consent of the Indemnified
Party, settle or compromise any Third Party Claim or consent to the entry of
judgment which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party of an unconditional
release from all liability in respect of the Third Party Claim. The Indemnified
Party shall not, without the written consent of the Indemnifying Party, settle,
compromise or pay any Third Party Claim or consent to the entry of judgment with
respect thereto.
(d) If more than one party hereto comprise the Indemnifying Party,
they shall use their best efforts to cooperate in the defense of the Third Party
Claim with a view to avoiding duplication of expenses.
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SECTION 11.5. Indemnification Deductibles and Caps.
(a) Deductibles.
(i) No claim for indemnification under Section 11.1(a) may be
made except to the extent such claim, together with all other claims under
Section 11.1 in the aggregate, equals or exceeds $500,000, except that such
limitation shall not apply with respect to breaches of the representations and
warranties set forth in Sections 4.4, 4.12, 4.21, 4.26, 4.27, 4A.1, 4A.2 and
4A.4.
(ii) No claim for indemnification under Section 11.2(a) may
be made except to the extent such claim, together with all other claims under
Section 11.2(a) in the aggregate, equals or exceeds $500,000, except that such
limitation shall not apply with respect to breaches of representations and
warranties set forth in Sections 3.2, 3.4, 3.9, 3.12 and 3.21.
(iii) No claim for indemnification under Section 11.3(a) may
be made except to the extent such claim, together with all other claims under
Section 11.3(a) in the aggregate, equals or exceeds $500,000, except that such
limitation shall not apply with respect to breaches of representations and
warranties set forth in Sections 5.9 and 5.20.
(b) Caps.
(i) In no event whatsoever shall the liability of the APHI
Shareholders with respect to Liabilities under Section 11.1(a) (other than
Liabilities arising out of or relating to any breach of the representations and
warranties made in Sections 4A.1 and 4A.2, plus the amount incurred by each such
APHI Shareholder for reasonable attorneys' fees and disbursements and other
expenses in defending any Third Party Claim pursuant to Sections 11.1(a) and
11.4, exceed the following amounts:
(A) in the case of MTI, (I) $10.6 million plus (II) the
difference, if any, between $4.4 million and the aggregate amount, if any, of
the AMI Indemnity Payments made by MTI (as set forth in Section 11.5(b)(vii)),
up to a maximum total liability of $15.0 million; and
(B) in the case of each of the Individual Shareholders,
(I) $2.65 million plus (II) the difference, if any, between $1.1 million and the
aggregate amount, if any, of the AMI Indemnity Payments made by such Individual
Shareholder (as set forth in Section 11.5(b)(vi)), up to a maximum total
liability of $3.75 million.
(ii) In no event whatsoever shall the liability of Alpine and
Refraco with respect to Liabilities under Section 11.2(a) (other than
Liabilities arising out of or relating to any breach of the representations and
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warranties made in Sections 3.2 and 3.4), plus the amount incurred by such
parties for reasonable attorneys' fees and disbursements and other expenses in
defending any Third Party Claim pursuant to Sections 11.2(a) and 11.4, exceed
$8.8 million total liability in the aggregate.
(iii) In no event whatsoever shall any Individual Shareholder
be required to make an aggregate amount of AMI Indemnity Payments in excess of
$1.1 million. In no event whatsoever shall the sum of (A) the aggregate
liability of any Individual Shareholder with respect to Liabilities under
Section 11.1(a) (other than Liabilities arising out of or relating to any breach
of the representations and warranties made in Sections 4A.1 and 4A.2), plus the
amount incurred by such Individual Shareholder for reasonable attorneys' fees
and disbursements and other expenses in defending any Third Party Claim pursuant
to Sections 11.1(a) and 11.4, and (B) the AMI Indemnity Payments made by such
Individual Shareholder, exceed $3.75 million total liability in the aggregate
for such Individual Shareholder.
(iv) Each of the APHI Shareholders will be liable for all
breaches by any of them of representations and warranties made under Article IV,
but each APHI Shareholder will only be liable for the following proportionate
shares of Liabilities due to breaches of such representations and warranties:
(A) in the case of MTI, 50%, and (B) in the case of each Individual Shareholder,
12.5%. Each of the Individual Shareholders will be liable for all breaches by
any of them of representations and warranties made under Article V, but each
Individual Shareholder will be liable for only 25% of such Liabilities due to
breaches of such representations and warranties. If an Indemnified Party
recovers any Liability from an APHI Shareholder pursuant to Section 11.1(a),
such APHI Shareholder shall not be permitted to seek contribution for such
Liability from any other APHI Shareholder except to the extent such APHI
Shareholder has paid less than its or his proportionate share (as set forth
above) of the aggregate amount paid by all APHI Shareholders with respect to
such Liability. If an Indemnified Party recovers any Liability from an
Individual Shareholder pursuant to Section 11.3, such Individual Shareholder
shall not be permitted to seek contribution for such Liability from any other
Individual Shareholder. Each APHI Shareholder shall be liable for all
Liabilities due to breaches by such APHI Shareholder of representations and
warranties made by it or him under Article IVA, but no other APHI Shareholder
shall be liable for such Liabilities.
(v) (A) The liability of the Individual Shareholders for
Liabilities under Section 11.3(a) (other than as it relates to the breach of any
representation or warranty contained in Section 5.20) shall be limited to 50% of
the amount of such Liabilities, which amount (the "Liability Payments") shall be
payable to AMI. In the event that any Liability Payments are due and payable,
the Individual Shareholders shall make such payments within two Business Days of
having received notice from MTI that MTI has contributed the same amount to the
capital of AMI.
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(B) The liability of the Individual Shareholders for
Liabilities under Section 11.3(a) as it relates to the breach of any
representation or warranty contained in Sections 5.20(a) through (o) shall be
limited to 50% of the amount of such Liabilities, and as it relates to the
breach of any representation or warranty contained in Sections 5.20(p) through
(s) shall not be subject to such 50% limitation, which amount (the "Section 5.20
Liability Payments") in either case shall be payable to MTI.
(C) MTI shall reimburse the Individual Shareholders for 50%
of the reasonable attorneys' fees and disbursements and other expenses (the
"Legal Expenses") incurred by the Individual Shareholders in defending any Third
Party Claim pursuant to Sections 11.3(a) and 11.4 (other than a Third Party
Claim relating to Sections 5.20(p) through (s)) within two Business Days of
having received a request from the Individual Shareholders to do so.
(D) Notwithstanding the foregoing, in the event that MTI
pays to a third party in accordance with the provisions of Section 11.4 the
entire amount of any such Liabilities under Section 11.3(a), the Individual
Shareholders shall reimburse MTI for the applicable percentage of such amount
within two Business Days of having received notice from MTI that MTI has made
such payment.
(vi) The AMI Indemnity Payments made by an Individual Shareholder
shall equal the aggregate of (A) the Liability Payments made by such Individual
Shareholder, (B) the Section 5.20 Liability Payments made by such Individual
Shareholder, (C) the Legal Expenses incurred by such Individual Shareholder that
have not been reimbursed by MTI, and (D) any reimbursement payment made by such
Individual Shareholder pursuant to Section 11.5(b)(v)(D).
(vii) The AMI Indemnity Payments made by MTI shall equal the
aggregate of (A) the contributions to the capital of AMI pursuant to
Section 11.5(b)(v)(A), (B) any reimbursement payment made by MTI pursuant to
Section 11.5(b)(v)(C), and (C) the amount of Liabilities paid by MTI as
described in Section 11.5(b)(v)(D) that have not been reimbursed by the
Individual Shareholders.
(c) Additional Limits on Indemnification. (i) If, at the Closing,
(A) Refraco has actual knowledge that any of the representations and warranties
of the APHI Shareholders contained in Article IV or Article IVA of this
Agreement are untrue, and (B) Refraco elects to consummate the Closing
Transactions, then the APHI Shareholders shall have no liability hereunder by
reason of any such misrepresentation or breach of warranty to the extent it
would have constituted a failure of a condition to Refraco's obligation to
effect the Closing Transactions as set forth in Article IX.
(ii) If, at the Closing, (A) MTI has actual knowledge that any
of the representations and warranties of the Individual Shareholders contained
in Article V of
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this Agreement are untrue, and (B) MTI elects to consummate the Closing
Transactions, then the Individual Shareholders shall have no liability hereunder
by reason of any such misrepresentation or breach of warranty to the extent it
would have constituted a failure of a condition to MTI's obligation to effect
the Closing Transactions as set forth in Article IX.
(iii) If, at the Closing, (A) the APHI Shareholders have actual
knowledge that any of the representations and warranties of Alpine and Refraco
contained in Article III of this Agreement are untrue, and (B) the APHI
Shareholders elect to consummate the Closing Transactions, then Alpine and
Refraco shall have no liability hereunder by reason of any such
misrepresentation or breach of warranty to the extent it would have constituted
a failure of a condition to the APHI Shareholders' obligation to effect the
Closing Transactions as set forth in Article IX.
(d) Time Limits On Indemnification. No claim on account of breach of
representation or warranty shall be made after the survival periods referred to
in Section 12.1 of this Agreement.
(e) Net Recovery. The amount which an Indemnified Party shall be
entitled to receive from an Indemnifying Party under this Article XI with
respect to a Liability shall be net of any recovery actually received by such
Indemnified Party from third parties (including insurance proceeds,
counterclaims, subrogation actions and the like) after all costs of collection
on account of such Liability.
(f) Tax Benefits. In case any event shall occur which would
otherwise entitle any party to assert a claim for indemnification hereunder, no
Liability shall be deemed to have been sustained by such party to the extent of
any actual net tax benefit as and when realized by such party with respect
thereto. The amount of any Liability for which indemnification is provided
hereunder shall be increased to take into account any actual net tax cost
incurred by the Indemnified Party arising from the receipt of indemnity payments
hereunder.
(g) Timing Issues. (i) If, prior to the time the amounts of the
limitations set forth in Sections 11.5(b)(i)(A) and 11.5(b)(i)(B) are finally
determined, an Indemnifying Party under Section 11.1(a) is required to pay to an
Indemnified Party the amount of a Liability under such Section 11.1(a) which
would cause the aggregate Liabilities paid or payable by such Indemnifying Party
under such Section, plus the aggregate amount incurred by such Indemnifying
Party for reasonable attorneys' fees and disbursements and other expenses in
defending any Third Party Claim pursuant to Sections 11.1(a) and 11.4, to exceed
the applicable limitation under Section 11.5(b)(i) assuming the amounts
described in Sections 11.5(b)(i)(A)(II) and 11.5(b)(i)(B)(II) were zero, then
the Indemnifying Party shall deposit the portion of such amount representing the
excess of such limitation into an interest-bearing escrow account in accordance
with the terms of the form of escrow agreement attached hereto as Exhibit P (the
"Escrow Agreement"). In such
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event, the parties shall enter into an agreement substantially in the form of
the Escrow Agreement with a mutually acceptable escrow agent, and the funds so
deposited shall be held and disbursed in accordance with the terms thereof and
this Section 11.5(g).
(ii) If, prior to the release of all the funds deposited in
escrow, (A) any payment or reimbursement or contribution is due in accordance
with the provisions of Section 11.5(b)(v), (B) the party required to make such a
payment or reimbursement or contribution previously has deposited funds into
escrow as provided herein and (C) the amount of such payment or reimbursement or
contribution, together with the amount of funds deposited in escrow by such
party and prior AMI Indemnity Payments made by such party, would exceed the
applicable limitation under the first sentence of Section 11.5(b)(iii), then the
party to which such payment or reimbursement or contribution is to be made shall
be entitled to withdraw all or a portion of the funds deposited in escrow in an
amount equal to such excess (or, if less than such amount is in escrow, the
entire amount in escrow) plus a proportionate share of the interest earned
thereon, which amount shall be deemed paid by the party required to make such
payment or reimbursement or contribution.
(iii) The aggregate amount of the funds deposited and remaining
in escrow together with all interest earned thereon shall be released to the
Indemnified Party or Indemnified Parties entitled thereto under Section 11.1(a)
upon the later of (A) the fifth anniversary of the Closing Date, or (B) the
final resolution of any claims under Section 11.3 that have been asserted as of
the fifth anniversary of the Closing Date, unless the parties agree to release
such funds earlier.
SECTION 11.6. Exclusive Remedy.
The remedies provided in this Article XI shall be the exclusive
remedies of the parties with respect to the matters covered by Sections 11.1,
11.2, 11.3 and 11.8 (but not with respect to matters not covered thereby),
except that nothing herein shall prevent a party from seeking specific
performance pursuant to Section 12.10, subject to the provisions thereof.
SECTION 11.7. Certain Rights to Recover.
(a) If an Indemnified Party recovers any Liability from Alpine
pursuant to Section 11.2, Alpine shall not be permitted to seek contribution for
such Liability from Refraco.
(b) Either Alpine or Refraco (or other Indemnified Party) shall be
entitled to recover for any Liability for which an Indemnifying Party is liable
under Section 11.1 and the determination of the amount of the Liability shall
not in any way be
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affected by whether Alpine, Refraco or another Indemnified Party is the party
that asserts the claim for such liability; provided, however, that Alpine shall
not be entitled to recover any more than its proportionate share (based on its
ownership of capital stock of Refraco) of any such Liability incurred by
Refraco.
SECTION 11.8. Lime Quarry Indemnification.
The APHI Shareholders agree that, from and after the Closing, they
shall, jointly and severally, indemnify, defend and hold harmless Refraco and
its Subsidiaries, from, against and in respect of any damages, claims, losses,
charges, actions, suits, proceedings, deficiencies, Taxes, interest, penalties,
and reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements, removal costs, remediation costs, closure
costs, fines, penalties and expenses of investigation and ongoing monitoring)
(including any claim by a third party which, without regard to the merits of the
claim, would result in liability if such third party's allegations were true)
imposed on, sustained, incurred or suffered by or asserted against any such
party, directly or indirectly, in connection with, relating to or arising out of
(i) taxes and other expenses incurred in connection with the Lime Quarry Sale to
the extent such taxes and other expenses payable after the Closing exceed the
Quarry Amount, or (ii) the indemnification obligations of PSC under the Lime
Quarry Agreement.
ARTICLE XII
GENERAL PROVISIONS
SECTION 12.1. Survival of Representations and Warranties.
The representations and warranties made by the APHI Shareholders in
Article IV and Article IVA of this Agreement shall survive the Effective Time
until August 31, 1999, except that those made in Sections 4.12, 4.21, 4.26, 4.27
and 4A.4 shall survive until the expiration of the statute of limitations
applicable thereto and except that the representations and warranties made in
Sections 4A.1 and 4A.2 shall survive indefinitely, in each case notwithstanding
any investigation by any party. The representations and warranties made by
Alpine and Refraco in Article III of this Agreement shall survive the Effective
Time until August 31, 1999, except that those made in Sections 3.9, 3.12 and
3.21 shall survive until the expiration of the statute of limitations applicable
thereto and except that the representations and warranties made in Sections 3.2
and 3.4 shall survive indefinitely, in each case notwithstanding any
investigation by any party. The representations and warranties made by the
Individual Shareholders in Article V of this Agreement shall survive the
Effective Time until August 31, 1999, except that those made in Sections 5.9 and
5.20 shall survive until the expiration of the statute of limitations applicable
thereto, notwithstanding any investigation by any party.
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SECTION 12.2. Notices.
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered, if delivered personally or mailed by registered or certified
mail (postage prepaid, return receipt requested) or sent by overnight delivery
or courier service or by telecopy to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):
(a) if to Alpine, Refraco or APHI:
The Alpine Group, Inc.
1790 Broadway
New York, New York 10019
Attention: Stewart H. Wahrsager, Esq.
Telecopier: (212) 757-3423
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
Attention: Ronald R. Papa, Esq.
Telecopier: (212) 969-2900
(b) if to MTI:
c/o CE Minerals Inc.
901 East 8th Avenue
King of Prussia, PA 19406
Attention: Timothy J. McCarthy
Telecopier: (610) 337-1387
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Ellen J. Odoner, Esq.
Telecopier: (212) 310-8007
96
<PAGE>
(c) If to the Individual Shareholders, to:
Ralph Feuerring
11111 Biscayne Blvd.
Miami, FL 33161
Telecopier: (305) 893-3843
Charles Gehret
5275 Militia Hill Road
Plymouth Meeting, PA 19462
Telecopier: (610) 649-5639
John Gehret
56 Crosby Brown Road
Gladwyne, PA 19035
Telecopier: (610) 649-5639
Stanley Weiss
American Premier, Inc.
1717 Pennsylvania Avenue, NW
Suite 350
Washington, DC 20006-4603
Telecopier: (202) 296-8099
with copies to:
Duane, Morris & Heckscher LLP
122 East 42nd Street, Suite 3300
New York, New York 10168
Attention: Robert J. Hasday, Esq.
Telecopier: (212) 692-1020
and
Bernard Petrie, Esq.
633 Battery Street
San Francisco, California 94111
Telecopier: (415) 982-4746
97
<PAGE>
SECTION 12.3. Certain Definitions.
For purposes of this Agreement, the term:
(a) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned person;
(b) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise; and
(c) "person" means an individual, corporation, partnership,
association, trust, or any unincorporated organization.
SECTION 12.4. Headings.
The headings contained in this Agreement and the Disclosure Schedules
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or the Disclosure Schedules.
SECTION 12.5. Entire Agreement.
This Agreement, together with the Exhibits and Schedules attached
hereto, constitutes the entire agreement and supersedes all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof and, except as otherwise expressly provided
herein, is not intended to confer upon any other person any rights or remedies
hereunder.
SECTION 12.6. Assignment: Parties in Interest.
Neither this Agreement nor any benefits or obligations hereunder shall
be assigned by any party without the consent of the other parties; provided,
however, that (a) the benefits and obligations hereof may be assigned by Refraco
after the Closing to its successor or to a transferee of all or substantially
all of the business of API (excluding the AM Division), in each case that agrees
in writing to be bound by the terms hereof as if it were a party hereto or
otherwise accepts the obligations of Refraco hereunder (but Refraco shall remain
obligated hereunder in the case of such a transfer) and (b) the benefits hereof
may be assigned by Refraco by collateral assignment to any bank or institutional
lender to Alpine or Refraco. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their successors, heirs, personal
representatives and permitted
98
<PAGE>
assigns, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under this Agreement, except that any of the Indemnified Parties shall be
entitled after the Effective Time to enforce the provisions of Article XI.
SECTION 12.7. Governing Law; Consent to Jurisdiction.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts executed in and to be
performed entirely in that State, without regard to conflicts of laws, except
that the GCL shall apply to the Merger. The parties hereto hereby irrevocably
submit to the jurisdiction of any New York state or federal court sitting in the
County of New York, State of New York, in any action or proceeding arising out
of or relating to this Agreement, and the parties hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York state or federal court. The parties hereto hereby irrevocably
waive, to the fullest extent permitted by law, any objection which they or any
of them may now or hereafter have to the laying of the venue of any such action
or proceeding brought in any such court, and any claim that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 12.8. Counterparts.
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 12.9. Severability.
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
SECTION 12.10. Specific Performance.
Since a breach of the provisions of this Agreement could not
adequately be compensated by money damages, any party shall be entitled, in
addition to any other right or remedy available to it, to an injunction
restraining such breach or a threatened breach and to specific performance of
any such provision of this Agreement, and in either case no bond or other
security shall be required in connection therewith, and the parties hereby
consent to the issuance of such injunction and to the ordering of specific
performance. Notwithstanding the foregoing, the parties agree that the APHI
Shareholders shall not be
99
<PAGE>
entitled to, and shall not seek, an injunction or other temporary relief
restraining the breach, alleged breach or threatened breach of the covenant of
Alpine set forth in Section 7.4(a) in the event that such breach, alleged breach
or threatened breach arises out of or relates to a transaction that Alpine has
notified the APHI Shareholders is intended to qualify as a reorganization that
is described in clause (z) of Section 7.4(a), and the APHI Shareholders shall
not be entitled to, and shall not seek, the ordering of specific performance
with respect to any such matter; provided, however, that nothing herein shall
limit, or be deemed to waive, the rights of the APHI Shareholders to seek
monetary relief against Alpine or any other person.
SECTION 12.11. Fees and Expenses.
Except as provided in Exhibit Q and made a part hereof, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses,
regardless of the termination, if any, of this Agreement pursuant to
Section 10.1.
SECTION 12.12. Action by Individual Shareholders.
Any act, notice, election or similar matter that under the terms of
this Agreement is to be made, taken or given by the Individual Shareholders
shall be determined by the vote or consent of the Individual Shareholders
holding a majority of the APHI Common Stock held in the aggregate by all of the
Individual Shareholders. Alpine, Refraco and MTI shall be entitled to rely for
all purposes under this Agreement and the Ancillary Agreements on any notice or
other communication from an Individual Shareholder that purports to be made on
behalf of the Individual Shareholders. The Individual Shareholders agree to
indemnify Alpine, Refraco and MTI and hold each of them harmless against any
claim or expense incurred by it as a result of its reliance on the foregoing.
SECTION 12.13. Amendment.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 12.14. Waiver.
At any time prior to the Effective Time, any party hereto may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto,
and (c) waive compliance with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid if set forth in
100
<PAGE>
an instrument in writing signed by the parties hereto. The failure of any party
hereto to assert any of its rights hereunder shall not constitute a waiver of
such rights.
SECTION 12.15. Definitions.
The following terms are defined in the following locations in this
Agreement.
<TABLE>
<CAPTION>
Term Defined in Section
------ --------------------
<S> <C>
1997 Bonus Amount 8.10
Adience 3.9(c)
affiliate 12.3
Agreement Preamble
Alpine Preamble
Alpine Disclosure Schedule Article III Preamble
Alpine Employee Plans 3.12
Alpine ERISA Affiliate 3.12
Alpine Licenses 3.13
Alpine Material Adverse Effect 3.1
AM Division 1.1
AM Environmental Permits 5.12(f)
AMI 1.1
AMI Change of Control Provisions 5.13(b)
AMI Disclosure Schedule Article V Preamble
AMI Employee Plans 5.9
AMI Employees 5.13(a)
AMI ERISA Affiliate 5.9
AMI Indemnity Payments 11.5(b)(vi) and (vii)
AMI Licenses 5.10
</TABLE>
101
<PAGE>
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
AMI Material Adverse Effect 5.7
AMI Threshold Expenditure 5.5(c)
AM Real Property 5.12(a)
Ancillary Agreements 3.2
APHI Preamble
APHI Bank Debt Repayment 2.9(b)(ii)
APHI Common Stock 2.6(a)
APHI Disclosure Schedule Article IV Preamble
APHI Employee Plans 4.12
APHI Employees 4.16(a)
APHI Environmental Permits 4.15(f)
APHI ERISA Affiliate 4.12
APHI Licenses 4.13
APHI Material Adverse Effect 4.1
APHI Preferred Stock 4.4
APHI Real Property 4.15(a)
APHI Shareholders Preamble
APHI Shareholder Debt Repayment 2.9(b)(vii)
APHI Stockholders' Agreement 6.7
APHI Threshold Expenditure 4.5(a)
API 1.1
API Technologies 1.1
Blue Sky Laws 3.5(b)
Business Day 2.6(c)
CE Preamble
</TABLE>
102
<PAGE>
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
CERCLA 3.15(c)
Certificate of Merger 2.2
CG Preamble
CG Consulting Agreement 2.9(c)
Change of Control Provisions 4.16(b)
Closing 2.9(a)
Closing Date 2.9(a)
Closing Transactions 2.9(b)
Code Recitals
Commitment Letter 3.24
control 12.3
Conversion Shares 3.4(d)
DIBs 4.27(d)
Dividend 1.1
Drop-Down 1.1
Drop-Down Documents 1.1
Effective Time 2.2
ENSR 8.1(a)
Environment 3.15
Environmental Laws 3.15
Environmental Liabilities 3.15
ERISA 3.12
Escrow Agreement 11.5(g)
Examined Party 8.4(c)
Exchange Act 3.5(b)
</TABLE>
103
<PAGE>
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
Exchange Agreement 1.1
GCL Recitals
Guaranty 2.9(c)
Hazardous Substances 3.15
HSR Act 3.5(b)
IMETAL Article IVA Preamble
IMETAL Letter 9.2(o)
Income Taxes 4.21(c)
Indemnified Party 11.1
Indemnifying Party 11.1
Individual Shareholders Recitals
IRS 3.12
JG Preamble
JG Employment Agreement 2.9(c)
Legal Expenses 11.5(b)(v)(B)
Lender 3.24
Liabilities 11.1
Liability 11.1
Liability Payments 11.5(b)(v)(A)
Lien 8.11(c)
Lime Quarry Agreement 6.6(a)
Lime Quarry Sale 6.6(a)
Merger Recitals
Merger Consideration 2.6(a)
Merger Consideration Adjustment 2.6(c)
</TABLE>
104
<PAGE>
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
MTI Preamble
Multiemployer Plan 3.12
Multiple Employer Plan 3.12
Other Party 8.4(c)
Patent Litigation 2.6(c)
person 12.3
PSC 6.6(a)
Quarry Amount 6.6(b)
Refraco Preamble
Refraco Charter Amendment 2.9(i)
Refraco Class B Common Stock 2.6(a)
Refraco Class B Common
Stock Purchase 2.7
Refraco Common Stock 2.6(a)
Refraco Employees 3.16(a)
Refraco Environmental Permits 3.15(f)
Refraco Ordinary Common Stock 2.6(a)
Refraco Per Share Dollar Value 2.6(a)
Refraco Preferred Stock 3.4(a)
Refraco Real Property 3.15(a)
Registration Rights Agreement 2.9(c)
Return 4.21(c)
RF Preamble
SEC 3.6(a)
SEC Reports 3.6(a)
Section 5.20 Liability Payments 11.5(b)(v)(B)
</TABLE>
105
<PAGE>
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
Securities Act 3.6(a)
Services Agreement 3.9(m)
Shareholders' Agreement 2.5
Split-Off 1.1
Stockholders' and Debtholders'
Agreement 4.4
Subsidiary 3.1
Supply Agreement 2.9(c)(iii)
Surviving Corporation 2.1
SW Preamble
Tax or Taxes 4.21(c)
Tax Examination 8.4(c)
Tax Sharing Agreement 2.9(c)
Tax Sharing Arrangement 4.21(c)
Third Party Claim(s) 11.4
</TABLE>
106
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
THE ALPINE GROUP, INC.
By /s/ Bragi F. Schut
-----------------------------------
Name: Bragi F. Schut
Title: Executive Vice President
REFRACO INC.
By /s/ Bragi F. Schut
-----------------------------------
Name: Bragi F. Schut
Title: Executive Vice President
AMERICAN PREMIER HOLDINGS, INC.
By /s/ Nicole Hill
-----------------------------------
Name: Nicole Hill
Title: Vice President and Chief
Financial Officer
MINERALS TRADING, INC.
By /s/ Timothy J. McCarthy
-----------------------------------
Name: Timothy J. McCarthy
Title: President
/s/ Ralph Feuerring
----------------------------------
Ralph Feuerring
/s/ Charles Gehret
----------------------------------
Charles Gehret
/s/ John Gehret
----------------------------------
John Gehret
/s/ Marcia A. Johnston
----------------------------------
Attorney-in-fact for
Stanley Weiss
<PAGE>
Exhibit 2
==============================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
among
REFRACO INC.,
ADIENCE, INC.,
REFRACO HOLDINGS LIMITED,
REFRACO (UK) LIMITED,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
__________________________________
Dated as of April 15, 1997
and
Amended and Restated as of January 30, 1998
__________________________________
==============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1 Amount and Terms of Credit..................................1
1.01 The Commitments............................................1
1.02 Minimum Amount of Each Borrowing............................8
1.03 Notice of Borrowing.........................................8
1.04 Disbursement of Funds.......................................9
1.05 Notes......................................................10
1.06 Conversions................................................13
1.07 Pro Rata Borrowings........................................14
1.08 Interest...................................................14
1.09 Interest Periods...........................................16
1.10 Increased Costs, Illegality, etc...........................17
1.11 Compensation...............................................20
1.12 Lending Offices; Changes Thereto...........................20
1.13 Replacement of Banks.......................................21
SECTION 2. Letters of Credit..........................................22
2.01 Letters of Credit..........................................22
2.02 Maximum Letter of Credit Outstandings; Final Maturities....23
2.03 Letter of Credit Requests; Notices of Issuance; Minimum
Stated Amount..............................................24
2.04 Letter of Credit Participations............................25
2.05 Agreement to Repay Letter of Credit Drawings...............27
2.06 Increased Costs............................................28
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.....29
3.01 Fees.......................................................29
3.02 Voluntary Termination of Unutilized Commitments............30
3.03 Mandatory Reduction of Commitments.........................30
SECTION 4. Prepayments; Payments; Taxes...............................31
4.01 Voluntary Prepayments......................................31
4.02 Mandatory Repayments and Commitment Reductions.............32
4.03 Method and Place of Payment................................44
SECTION 5. Conditions Precedent to Restatement Effective Date.........47
5.01 Execution of Agreement; Notes..............................47
5.02 Opinions of Counsel........................................47
5.03 Corporate Documents; Proceedings; etc......................48
<PAGE>
5.04 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining Agreements;
Existing Indebtedness Agreements..........................48
5.05 Floating Rate Loans........................................50
5.06 Consummation of Acquisition; Etc...........................50
5.07 Indebtedness to be Refinanced..............................50
5.08 Adverse Change, etc........................................51
5.09 Litigation.................................................52
5.10 Acknowledgments; Assumptions...............................52
5.11 U.S. Pledge Agreement......................................52
5.12 U.S. Security Agreement....................................52
5.13 U.K. Security Documents....................................53
5.14 Mortgage; Title Insurance..................................53
5.15 Projections; Pro Forma Balance Sheet.......................55
5.16 Solvency Certificate; Environmental Analyses; Insurance
Analyses...................................................55
5.17 Fees, etc..................................................55
5.18 Original Credit Agreement..................................55
5.19. Officer's Certificate.....................................56
SECTION 6. Conditions Precedent to All Credit Events...................56
6.01 No Default; Representations and Warranties..................56
6.02 Notice of Borrowing; Letter of Credit Request...............56
SECTION 7. Representations, Warranties and Agreements..................57
7.01 Corporate and Other Status..................................57
7.02 Corporate and Other Power and Authority.....................57
7.03 No Violation................................................57
7.04 Governmental Approvals......................................58
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc...............................58
7.06 Litigation..................................................59
7.07 True and Complete Disclosure................................59
7.08 Use of Proceeds; Margin Regulations.........................60
7.09 Tax Returns and Payments....................................60
7.10 Compliance with ERISA.......................................61
7.11 The Security Documents......................................62
7.12 Representations and Warranties in Other Documents...........63
7.13 Properties..................................................63
7.14 Capitalization..............................................64
7.15 Subsidiaries................................................64
7.16 Compliance with Statutes, etc. .............................64
7.17 Investment Company Act......................................64
7.18 Public Utility Holding Company Act..........................64
7.19 Environmental Matters.......................................64
7.20 Labor Relations.............................................65
(ii)
<PAGE>
7.21 Patents, Licenses, Franchises and Formulas..................65
7.22 Indebtedness................................................66
7.23 Transaction.................................................66
7.24 Special Purpose Corporation.................................66
7.25 No Tax Sharing Agreements...................................66
7.26 Updated Security Agreement and Pledge Agreement Schedules...66
SECTION 8. Affirmative Covenants.......................................67
8.01 Information Covenants.......................................67
(a) Monthly Reports.....................................67
(b) Quarterly Financial Statements......................67
(c) Annual Financial Statements.........................67
(d) Management Letters..................................68
(e) Budgets.............................................68
(f) Officer's Certificates..............................68
(g) Notice of Default or Litigation.....................68
(h) Other Reports and Filings...........................68
(i) Environmental Matters...............................69
(j) Annual Meetings with Banks..........................70
(k) Notices Pursuant to Acquisition Documents...........70
(l) Canadian Working Capital Outstandings...............70
(m) Other Information...................................70
8.02 Books, Records and Inspections..............................70
8.03 Maintenance of Property; Insurance..........................70
8.04 Corporate Franchises........................................71
8.05 Compliance with Statutes, etc. .............................71
8.06 Compliance with Environmental Laws..........................72
8.07 ERISA.......................................................72
8.08 End of Fiscal Years; Fiscal Quarters........................74
8.09 Performance of Obligations..................................74
8.10 Payment of Taxes............................................74
8.11 Additional Security; Further Assurances.....................74
8.12 Foreign Subsidiaries Security...............................76
8.13 Maintenance of Corporate Separateness.......................76
8.14 Ownership of Certain Subsidiaries...........................77
8.15 Acquisition Documents.......................................77
8.16 Permitted Acquisitions......................................77
SECTION 9. Negative Covenants..........................................78
9.01 Liens ......................................................78
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc......81
9.03 Restricted Payments.........................................82
9.04 Indebtedness................................................84
9.05 Advances, Investments and Loans.............................86
9.06 Transactions with Affiliates................................87
(iii)
<PAGE>
9.07 Capital Expenditures.......................................88
9.08 Consolidated Fixed Charge Coverage Ratio...................89
9.09 Consolidated Interest Coverage Ratio.......................89
9.10 Maximum Leverage Ratio.....................................89
9.11 Minimum Consolidated EBITDA................................91
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc.................92
9.13 Limitation on Certain Restrictions on Subsidiaries.........92
9.14 Limitation on Issuance of Capital Stock....................92
9.15 Business...................................................93
9.16 Limitation on Creation of Subsidiaries.....................93
SECTION 10. Events of Default.........................................94
10.01 Payments...................................................94
10.02 Representations, etc.......................................94
10.03 Covenants..................................................94
10.04 Default Under Other Agreements.............................94
10.05 Bankruptcy, etc............................................94
10.06 ERISA......................................................95
10.07 Security Documents.........................................96
10.08 Guaranties.................................................96
10.09 Judgments..................................................96
10.10 Change of Control..........................................96
SECTION 11. Definitions and Accounting Terms..........................97
11.01 Defined Terms..............................................97
SECTION 12. The Administrative Agent.................................134
12.01 Appointment...............................................134
12.02 Nature of Duties..........................................134
12.03 Lack of Reliance on the Administrative Agent..............134
12.04 Certain Rights of the Administrative Agent................135
12.05 Reliance..................................................135
12.06 Indemnification...........................................135
12.07 The Administrative Agent in its Individual Capacity.......135
12.08 Holders...................................................136
12.09 Resignation by the Administrative Agent...................136
SECTION 13. Miscellaneous............................................136
13.01 Payment of Expenses, etc..................................137
13.02 Right of Setoff...........................................138
13.03 Notices...................................................138
13.04 Benefit of Agreement; Assignments; Participations.........138
(iv)
<PAGE>
13.05 No Waiver; Remedies Cumulative............................140
13.06 Payments Pro Rata.........................................141
13.07 Calculations; Computations................................141
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL............................................142
13.09 Counterparts..............................................143
13.10 Effectiveness.............................................143
13.11 Headings Descriptive......................................144
13.12 Amendment or Waiver; etc..................................144
13.13 Survival..................................................146
13.14 Domicile of Loans.........................................146
13.15 Register..................................................146
13.16 Judgment Currency.........................................146
13.17 Confidentiality...........................................147
13.18 Acknowledgment............................................148
13.19 Limitation on Additional Amounts, etc.....................148
13.20 Acknowledgment and Agreement of Credit Parties............148
13.21 Additions of New Banks; Obligations to Pay Certain Amounts
Owing Pursuant to Original Credit Agreement; Termination of
Commitments of Non-Continuing Banks; Certain Provisions
Regarding Original Banks.................................148
13.22 Post Closing Actions.....................................149
SECTION 14. U.S. Parents Guaranty...................................150
14.01 The Guaranty.............................................150
14.02 Bankruptcy...............................................151
</TABLE>
SCHEDULE I Commitments
SCHEDULE II Bank Addresses and Applicable Lending Offices
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
SCHEDULE VIII Existing Investments
SCHEDULE IX Organization Chart
SCHEDULE X Restrictions Applicable to Adience Subsidiaries
(v)
<PAGE>
SCHEDULE XI Calculation of the MLA Cost
SCHEDULE XII Tax Matters
SCHEDULE XIII ERISA Matters
SCHEDULE XIV Labor Matters
SCHEDULE XV Phase I Reports
SCHEDULE XVI Original Letters of Credit
SCHEDULE XVII EBITDA Addback
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Adience B Term Note
EXHIBIT B-2 Newco A Term Note
EXHIBIT B-3 Newco B Term Note
EXHIBIT B-4 Dollar Revolving Note
EXHIBIT B-5 Sterling Revolving Note
EXHIBIT B-6 Swingline Note
EXHIBIT B-7 Adience A Term Note
EXHIBIT B-8 Adience B-2 Term Note
EXHIBIT B-9 Adience C Term Note
EXHIBIT B-10 Sterling Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of Proskauer Rose LLP,
U.S. counsel to the Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Subsidiary Assumption Agreement
EXHIBIT H Solvency Certificate
EXHIBIT I Assignment and Assumption Agreement
(vi)
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 15,
1997, and amended and restated as of January 30, 1998, among REFRACO INC., a
Delaware corporation ("Holdings"), ADIENCE, INC., a Delaware corporation
("Adience"), REFRACO HOLDINGS LIMITED, a private limited company organized
under the laws of England with registered number 3354257 ("Newco") and
REFRACO (UK) LIMITED, a private limited liability company organized under the
laws of England with registered number 00054713 ("Hepworth" and, together
with Adience and Newco, the "Borrowers" and each a "Borrower"), the Banks
party hereto from time to time, and BANKERS TRUST COMPANY, as Administrative
Agent (all capitalized terms used herein and defined in Section 11 are used
herein as therein defined).
W I T N E S S E T H :
WHEREAS, Holdings, the Borrowers, the Original Banks and
Bankers Trust Company, as Administrative Agent, are parties to a Credit
Agreement, dated as of April 15, 1997 (as the same has been amended, modified
or supplemented to, but not including, the Restatement Effective Date, the
"Original Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the
Original Credit Agreement in the form of this Agreement to, inter alia,
permit the Acquisition and the financing therefor on the terms and subject to
the conditions provided herein and make available to the Borrowers the
respective credit facilities provided for herein;
NOW, THEREFORE, the parties hereto agree that the Original
Credit Agreement shall be and hereby is amended and restated in its entirety
as follows:
SECTION 1 Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms
and conditions set forth in the Original Credit Agreement, each Original Bank
with an Adience B Term Loan Commitment severally agreed to make, on the
Initial Borrowing Date, a term loan or term loans (each an "Adience B Term
Loan" and, collectively, the "Adience B Term Loans") to Adience, which
Adience B Term Loans (i) were made and maintained in Dollars, (ii) were made
and initially maintained as a single Borrowing of Base Rate Loans (subject to
the option to convert such Adience B Term Loans pursuant to Section 1.06 of
the Original Credit Agreement) and (iii) were made by each such Bank in that
initial aggregate principal amount as was equal to the Adience B Term Loan
Commitment of such Bank on the Initial Borrowing Date (before giving effect
to any reductions thereto on such date pursuant to Section 3.03(b)(i) of the
Original Credit Agreement but after giving effect to any reductions thereto
on or prior to such date pursuant to Section 3.03(b)(ii) of the Original
Credit Agreement). The aggregate outstanding principal amount of the Adience
B Term Loans of each Bank, as at the date provided in Schedule I, is
accurately set forth in Schedule I. The Adience B Term Loans of each Bank
outstanding immediately prior to the Restatement Effective Date shall remain
outstanding after giving effect to the occurrence of the Restatement
Effective Date, and shall in no way be affected as a result of the occurrence
of the
<PAGE>
Restatement Effective Date. Once repaid, Adience B Term Loans incurred
hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth in
the Original Credit Agreement, each Bank with a Newco A Term Loan Commitment
severally agreed to make, on the Initial Borrowing Date, a term loan or term
loans (each a "Newco A Term Loan" and, collectively, the "Newco A Term
Loans") to Newco, which Newco A Term Loans (i) were made and maintained in
Pounds Sterling and (ii) were made by each such Bank in that initial
aggregate principal amount as was equal to the Newco A Term Loan Commitment
of such Bank on the Initial Borrowing Date (before giving effect to any
reductions thereto on such date pursuant to Section 3.03(c)(i) of the
Original Credit Agreement but after giving effect to any reductions thereto
on or prior to such date pursuant to Section 3.03(c)(ii) of the Original
Credit Agreement). The aggregate outstanding principal amount of the Newco A
Term Loans of each Bank, as at the date provided in Schedule I, is accurately
set forth in Schedule I. The Newco A Term Loans of each Bank outstanding
immediately prior to the Restatement Effective Date shall remain outstanding
after giving effect to the occurrence of the Restatement Effective Date, and
shall in no way be affected as a result of the occurrence of the Restatement
Effective Date. Once repaid, Newco A Term Loans incurred hereunder may not
be reborrowed.
(c) Subject to and upon the terms and conditions set forth in
the Original Credit Agreement, each Bank with a Newco B Term Loan Commitment
severally agreed to make, on the Initial Borrowing Date, a term loan or term
loans (each a "Newco B Term Loan" and, collectively, the "Newco B Term
Loans") to Newco, which Newco B Term Loans (i) were made and maintained in
Dollars, (ii) were made and initially maintained as a single Borrowing of
Base Rate Loans (subject to the option to convert such Newco B Term Loans
pursuant to Section 1.06 of the Original Credit Agreement) and (iii) were
made by each such Bank in that initial aggregate principal amount as was
equal to the Newco B Term Loan Commitment of such Bank on the Initial
Borrowing Date (before giving effect to any reductions thereto on such date
pursuant to Section 3.03(d)(i) of the Original Credit Agreement but after
giving effect to any reductions thereto on or prior to such date pursuant to
Section 3.03(d)(ii) of the Original Credit Agreement). The aggregate
outstanding principal amount of the Newco B Term Loans of each Bank, as at
the date provided in Schedule I, is accurately set forth in Schedule I. The
Newco B Term Loans of each Bank outstanding immediately prior to the
Restatement Effective Date shall remain outstanding after giving effect to
the occurrence of the Restatement Effective Date, and shall in no way be
affected as a result of the occurrence of the Restatement Effective Date.
Once repaid, Newco B Term Loans incurred hereunder may not be reborrowed.
(d) Subject to and upon the terms and conditions set forth
herein, each Bank with an Adience A Term Loan Commitment severally agrees to
make, on the Restatement Effective Date, a term loan or term loans (each an
"Adience A Term Loan" and, collectively, the "Adience A Term Loans") to
Adience, which Adience A Term Loans (i) shall be made and maintained in
Dollars, (ii) shall be made and initially maintained as a single Borrowing of
Base Rate Loans (subject to the option to convert such Adience A Term Loans
pursuant to Section 1.06) and (iii) shall be made by each such Bank in that
initial aggregate principal amount as is equal to the Adience A Term Loan
Commitment of such Bank on the Restatement Effective Date (before giving
effect to any reductions thereto on such date pursuant to Section 3.03(c)(i)
but after giving
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effect to any reductions thereto on or prior to such date pursuant to Section
3.03(c)(ii)). Once repaid, Adience A Term Loans incurred hereunder may not
be reborrowed.
(e) Subject to and upon the terms and conditions set forth
herein, each Bank with an Adience B-2 Term Loan Commitment severally agrees
to make, on the Restatement Effective Date, a term loan or term loans (each
an "Adience B-2 Term Loan" and, collectively, the "Adience B-2 Term Loans")
to Adience, which Adience B-2 Term Loans (i) shall be made and maintained in
Dollars, (ii) shall be made and initially maintained as a single Borrowing of
Base Rate Loans (subject to the option to convert such Adience B-2 Term Loans
pursuant to Section 1.06) and (iii) shall be made by each such Bank in that
initial aggregate principal amount as is equal to the Adience B-2 Term Loan
Commitment of such Bank on the Restatement Effective Date (before giving
effect to any reductions thereto on such date pursuant to Section 3.03(c)(i)
but after giving effect to any reductions thereto on or prior to such date
pursuant to Section 3.03(c)(ii)). Once repaid, Adience B-2 Term Loans
incurred hereunder may not be reborrowed.
(f) Subject to and upon the terms and conditions set forth
herein, each Bank with an Adience C Term Loan Commitment severally agrees to
make, on the Restatement Effective Date, a term loan or term loans (each an
"Adience C Term Loan" and, collectively, the "Adience C Term Loans") to
Adience, which Adience C Term Loans (i) shall be made and maintained in
Dollars, (ii) shall be made and initially maintained as a single Borrowing of
Base Rate Loans (subject to the option to convert such Adience C Term Loans
pursuant to Section 1.06) and (iii) shall be made by each such Bank in that
initial aggregate principal amount as is equal to the Adience C Term Loan
Commitment of such Bank on the Restatement Effective Date (before giving
effect to any reductions thereto on such date pursuant to Section 3.03(e)(i)
but after giving effect to any reductions thereto on or prior to such date
pursuant to Section 3.03(e)(ii)). Once repaid, Adience C Term Loans incurred
hereunder may not be reborrowed.
(g) Subject to and upon the terms and conditions set forth
herein, each Bank with a Revolving Loan Commitment severally agrees, at any
time and from time to time on and after the Initial Borrowing Date and prior
to the Revolving Loan Maturity Date, to make a revolving loan or revolving
loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to
the Revolving Loan Borrowers, which Revolving Loans (i) shall, in the case of
Revolving Loans made to Adience, be made and maintained in Dollars (each a
"Dollar Revolving Loan" and, collectively, the "Dollar Revolving Loans"),
which Dollar Revolving Loans shall, at the option of Adience, be incurred and
maintained as, and/or converted into, Base Rate Loans and Eurodollar Loans,
provided that, except as otherwise specifically provided in Section 1.10(b),
all Dollar Revolving Loans comprising the same Borrowing shall at all times
be of the same Type, (ii) shall, in the case of Revolving Loans made to
Hepworth, be made and maintained in Pounds Sterling (each a "Sterling
Revolving Loan" and, collectively, the "Sterling Revolving Loans"), (iii) may
be repaid and reborrowed in accordance with the provisions hereof, (iv) shall
not exceed for any Bank at the time of the making of any such Revolving
Loans, and after giving effect thereto, that aggregate principal amount (for
this purpose, using the Dollar Equivalent of each outstanding Sterling
Revolving Loan) which, when added to the sum of (I) the aggregate principal
amount of all other Revolving Loans then outstanding from such Bank (for this
purpose, using the Dollar Equivalent of each Sterling Revolving Loan then
outstanding from such Bank) and (II) the product of (A) such Bank's RL
Percentage and (B) the sum of (x) the aggregate amount (for this
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<PAGE>
purpose, using the Dollar Equivalent thereof in the case of Hepworth Letter
of Credit Outstandings) of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of Revolving Loans) at such
time, (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
Available Revolving Loan Commitment of such Bank at such time, (v) shall not,
in the case of Dollar Revolving Loans, at any time exceed in aggregate
outstanding principal amount, when added to the sum of (x) the aggregate
principal amount of all other then outstanding Dollar Revolving Loans, (y)
the aggregate amount of all Adience Letter of Credit Outstandings (exclusive
of any Unpaid Drawings with respect thereto which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Dollar Revolving Loans) and (z) the aggregate principal amount
of all Swingline Loans (exclusive of Swingline Loans which are repaid with
the proceeds of, and simultaneously with the incurrence of Dollar Revolving
Loans) then outstanding, the amount of the Dollar Revolving Sub-Limit and
(vi) shall not, in the case of Sterling Revolving Loans, at any time exceed
in aggregate outstanding principal amount, when added to the sum of (x) the
aggregate principal amount of all other then outstanding Sterling Revolving
Loans, (y) 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) at such time and (z) 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. On
and immediately after the occurrence of the Restatement Effective Date, the
Revolving Loan Commitment for each Bank shall be the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment" (as same may be (x) reduced from time to
time pursuant to Section 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04), such that the Total Revolving Loan Commitment (as of the
Restatement Effective Date) shall represent an increase of $15,000,000 over
the Total Revolving Loan Commitment as in effect immediately before the
occurrence of the Restatement Effective Date. In connection with such
increase, the Revolving Loan Borrowers shall, in coordination with the
Administrative Agent and the Banks, repay outstanding Revolving Loans of
certain Banks and, if necessary, incur additional Revolving Loans from other
Banks, in each case so that Banks participate in each Borrowing of Revolving
Loans pro rata on the basis of their Revolving Loan Commitments (as in effect
on the Restatement Effective Date) as provided herein, it being understood
and agreed that the Revolving Loan Borrowers shall pay all breakage or
similar costs of the type described in Section 1.11 incurred by the Banks in
connection with any repayment or reborrowing of Revolving Loans.
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(h) Subject to and upon the terms and conditions set forth
herein, BTCo in its individual capacity agrees to make, from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to Adience, which Swingline Loans (i) shall be made
and maintained in Dollars, (ii) shall be made and maintained as Base Rate
Loans, (iii) may be repaid and reborrowed in accordance with the provisions
hereof, (iv) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the sum of (I) the aggregate principal amount
of all other Swingline Loans then outstanding, (II) the aggregate principal
amount (for this purpose, using the Dollar Equivalent of each outstanding
Sterling Revolving Loan) of all Revolving Loans then outstanding, (III) the
aggregate amount (for this purpose, using the Dollar Equivalent of all
Hepworth Letter of Credit Outstandings) of all Letter of Credit Outstandings
at such time and (IV) the aggregate principal amount (for this purpose, using
the Dollar Equivalent thereof) of all Sterling Swingline Loans then
outstanding, an amount equal to the Total Available Revolving Loan Commitment
at such time (after giving effect to any reductions to the Total Available
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) aggregate principal amount of all Dollar Revolving Loans then
outstanding and (II) the aggregate amount of Adience Letter of Credit
Outstandings at such time, an amount equal to the Dollar Revolving Sub-Limit
and (vi) shall not exceed in aggregate principal amount at any time
outstanding, the Maximum Swingline Amount. BTCo shall not be obligated to
make any Swingline Loans at a time when a Bank Default exists unless BTCo has
entered into arrangements satisfactory to it to eliminate BTCo's risk with
respect to the Defaulting Bank's or Banks' participation in such Swingline
Loans, including by cash collateralizing such Defaulting Bank's or Banks' RL
Percentage of the outstanding Swingline Loans. Notwithstanding anything to
the contrary contained in this Section 1.01(h), BTCo shall not make any
Swingline Loan after it has received written notice from any Borrower or the
Required Banks stating that a Default or an Event of Default exists and is
continuing until such time as BTCo shall have received written notice (i) of
rescission of all such notices from the party or parties originally
delivering such notice, (ii) of the waiver of such Default or Event of
Default by the Required Banks or (iii) that the Administrative Agent in good
faith believes such Default or Event of Default has ceased to exist.
(i) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks that its outstanding Swingline Loans shall be funded with a
Borrowing of Dollar 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 Dollar
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Banks with a Revolving Loan Commitment (without giving effect to any reductions
thereto pursuant to the last paragraph of Section 10) pro rata based on each
Bank's RL Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the
proceeds thereof shall be applied directly to BTCo to repay BTCo for such
outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make
Dollar Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing
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<PAGE>
by BTCo notwithstanding (i) that the amount of the Mandatory Borrowing may
not comply with the minimum amount for Borrowings otherwise required
hereunder, (ii) whether any conditions specified in Section 6 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
the date of such Mandatory Borrowing and (v) the amount of the Total
Available Revolving Loan Commitment at such time or the Dollar Revolving
Sub-Limit. In the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including, without limitation,
as a result of the commencement of a proceeding under the Bankruptcy Code
with respect to Adience), then each such Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from Adience on or
after such date and prior to such purchase) from BTCo such participations in
the outstanding Swingline Loans as shall be necessary to cause such Banks to
share in such Swingline Loans ratably based upon their respective RL
Percentages (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10),
provided that (x) all interest payable on the Swingline Loans shall be for
the account of BTCo until the date as of which the respective participation
is required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date
and (y) at the time any purchase of participations pursuant to this sentence
is actually made, the purchasing Bank shall be required to pay BTCo interest
on the principal amount of the participation purchased for each day from and
including the day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
overnight Federal Funds Rate for the first three days and at the rate
otherwise applicable to Revolving Loans maintained as Base Rate Loans
hereunder for each day thereafter.
(j) 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(f), (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 (for this
purpose, using the Dollar Equivalent thereof) of all other then outstanding
Sterling Swingline Loans, (II) the aggregate principal amount of all
Revolving Loans (for this purpose, using the Dollar Equivalent of each
outstanding Sterling Revolving Loan) then outstanding, (III) 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 (IV) the aggregate principal amount of all Swingline Loans then
outstanding, an amount equal to the Total Available Revolving Loan Commitment
(after giving effect to any reductions to the Total Available 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 other Sterling Swingline Loans then
outstanding, (II) the aggregate principal amount of all Sterling Revolving
Loans then outstanding and (III) 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
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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
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. Notwithstanding anything to the
contrary contained in this Section 1.01(j), BTCo shall not make any Sterling
Swingline Loan after it has received written notice from any Borrower or the
Required Banks stating that a Default or an Event of Default exists and is
continuing until such time as BTCo shall have received written notice (i) of
recission of all such notices, (ii) of the waiver of such Default or Event of
Default by the Required Banks or (iii) that the Administrative Agent in good
faith believes such Default or Event of Default has ceased to exist.
(k) 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 Available 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 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
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<PAGE>
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.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Term Loans shall not be less than (x)
in the case of Newco B Term Loans, Adience A Term Loans, Adience B Term
Loans, Adience B-2 Term Loans and Adience C Term Loans, $5,000,000 and (y) in
the case of Newco A Term Loans, L2,000,000. The aggregate principal amount of
each Borrowing of Revolving Loans shall not be less than (x) in the case of
Dollar Revolving Loans, $1,000,000 and (y) in the case of Sterling Revolving
Loans, L500,000; provided that (x) Mandatory Borrowings shall be made in the
amounts required by Section 1.01(i) and (y) Mandatory Sterling Borrowings
shall be made in the amounts required by Section 1.01(k). The aggregate
principal amount of each Borrowing of (x) Swingline Loans shall be not less
than $100,000 and (y) Sterling Swingline Loans shall not be less than
L100,000. More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than 12 Borrowings of Euro Rate Loans.
1.03 Notice of Borrowing. (a) Whenever a Borrower desires
to incur Loans hereunder (excluding Borrowings (w) of Swingline Loans, (x)
Dollar Revolving Loans incurred pursuant to a Mandatory Borrowing, (y)
Sterling Swingline Loans and (z) Sterling Revolving Loans incurred pursuant
to a Mandatory Sterling Borrowing), it shall give the Administrative Agent at
the Notice Office at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Base Rate Loan and
at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each Euro Rate Loan to be incurred
hereunder, provided that any such notice shall be deemed to have been given
on a certain day only if given before 11:00 A.M. (New York time) (or 10:00
A.M. (London time) in the case of Sterling Loans) on such day. Each such
written notice or written confirmation of telephonic notice (each a "Notice
of Borrowing"), except as otherwise expressly provided in Section 1.10, shall
be irrevocable and shall be given by the respective Borrower in the form of
Exhibit A, appropriately completed to specify (i) the name of such Borrower,
(ii) the aggregate principal amount of the Loans to be incurred pursuant to
such Borrowing (stated in the Applicable Currency), (iii) the date of such
Borrowing (which shall be a Business Day), (iv) whether the Loans being
incurred pursuant to such Borrowing shall constitute Adience A Term Loans,
Adience B Term Loans, Adience B-2 Term Loans, Adience C Term Loans, Newco A
Term Loans, Newco B Term Loans, Dollar Revolving Loans or Sterling Revolving
Loans, (v) in the case of Dollar Loans, whether the Loans being incurred
pursuant to such Borrowing are to be initially maintained as Base Rate Loans
or Eurodollar Loans and (vi) in the case of Euro Rate Loans, the initial
Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Bank which is required to make Loans of the Tranche
specified in the respective Notice of Borrowing, notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other
matters required by the immediately preceding sentence to be specified in the
Notice of Borrowing.
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(b)(i) Whenever Adience desires to incur Swingline Loans
hereunder, it shall give BTCo not later than 12:00 Noon (New York time) on
the date that a Swingline Loan is to be incurred, written notice or
telephonic notice promptly confirmed in writing of each Swingline Loan to be
incurred hereunder. Each such notice shall be irrevocable and specify in
each case (A) the date of Borrowing (which shall be a Business Day) and (B)
the aggregate principal amount of the Swingline Loans to be made pursuant to
such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(i), with Adience irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings
as set forth in Section 1.01(i).
(c)(i) Whenever Hepworth desires to incur Sterling
Swingline Loans hereunder, it shall give BTCo not later than 12:00 noon
(London 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(k), 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(k).
(d) Without in any way limiting the obligation of any
Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent, BTCo (in the case of a Borrowing of
Swingline Loans or Sterling Swingline Loans or the Issuing Bank (in the case
of issuance of Letters of Credit), as the case may be, may act without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent, BTCo or the Issuing Bank, as the case may be, in good
faith to be from an Authorized Officer of such Borrower prior to receipt of
written confirmation. In each such case, each Borrower hereby waives the
right to dispute the Administrative Agent's or Issuing Bank's record of the
terms of such telephonic notice.
1.04 Disbursement of Funds. 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(i), (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(k)), 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. All such amounts will be made available in Dollars (in the case of
Dollar Loans) or Pounds Sterling (in the case of Sterling Loans), as the case
may be, and in immediately available funds at the
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appropriate Payment Office of the Administrative Agent, and the
Administrative Agent will make available to the relevant Borrower by
depositing to its account at such Payment Office the aggregate of the amounts
so made available by the Banks in the type of funds received. Unless the
Administrative Agent shall have been notified by any Bank prior to the date
of Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the relevant Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Bank. If such Bank does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the relevant Borrower and such
Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or such Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to
such Borrower until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, at the overnight Federal Funds Rate and (ii) if recovered from such
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the relevant Borrower may have against any Bank as
a result of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) Each Borrower's obligation to pay the
principal of, and interest on, the Loans made by each Bank shall be evidenced
(i) if Adience B Term Loans, by a promissory note duly executed and delivered
by Adience substantially in the form of Exhibit B-1, with blanks
appropriately completed in conformity herewith (each an "Adience B Term Note"
and, collectively, the "Adience B Term Notes"), (ii) if Newco A Term Loans,
by a promissory note duly executed and delivered by Newco substantially in
the form of Exhibit B-2, with blanks appropriately completed in conformity
herewith (each a "Newco A Term Note" and, collectively, the "Newco A Term
Notes"), (iii) if Newco B Term Loans, by a promissory note duly executed and
delivered by Newco substantially in the form of Exhibit B-3, with blanks
appropriately completed in conformity herewith (each a "Newco B Term Note"
and, collectively, the "Newco B Term Notes"), (iv) if Dollar Revolving Loans,
by a promissory note duly executed and delivered by Adience substantially in
the form of Exhibit B-4, with blanks appropriately completed in conformity
herewith (each a "Dollar Revolving Note" and, collectively, the "Dollar
Revolving Notes"), (v) if Sterling Revolving Loans, by a promissory note duly
executed and delivered by Hepworth substantially in the form of Exhibit B-5,
with blanks appropriately completed in conformity herewith (each a "Sterling
Revolving Note" and, collectively, the "Sterling Revolving Notes"), (vi) if
Swingline Loans, by a promissory note substantially in the form of Exhibit
B-6, with blanks appropriately completed in conformity herewith (the
"Swingline Note"), (vii) if Adience A Term Loans, by a promissory note duly
executed and delivered by Adience substantially in the form of Exhibit B-7
with blanks appropriately completed in conformity herewith (each an "Adience
A Term Note" and, collectively, the "Adience A Term Notes"), (viii) if
Adience B-2
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Term Loans, by a promissory note duly executed and delivered by Adience
substantially in the form of Exhibit B-8 with blanks appropriately completed
in conformity herewith (each an "Adience B-2 Term Note" and, collectively,
the "Adience B-2 Term Notes"), (ix) if Adience C Term Loans, by a promissory
note duly executed and delivered by Adience substantially in the form of
Exhibit B-9 with blanks appropriately completed in conformity herewith (each
an "Adience C Term Note" and, collectively, the "Adience C Term Notes") and
(x) if Sterling Swingline Loans, by a promissory note substantially in the
form of Exhibit B-10, with blanks appropriately completed in conformity
herewith (the "Sterling Swingline Note").
(b) The Adience B Term Note issued to each Bank that has an
Adience B Term Loan Commitment or outstanding Adience B Term Loans shall (i)
be executed by Adience, (ii) be payable to the order of such Bank and be
dated the Initial Borrowing Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Adience B Term
Loans made by such Bank and be payable in Dollars in the outstanding
principal amount of Adience B Term Loans evidenced thereby, (iv) mature on
the B Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents (to the extent and in the manner
provided therein).
(c) The Newco A Term Note issued to each Bank that has a
Newco A Term Loan Commitment or outstanding Newco A Term Loans shall (i) be
executed by Newco, (ii) be payable to the order of such Bank and be dated the
Initial Borrowing Date (or if issued thereafter, the date of issuance), (iii)
be in a stated principal amount equal to the Newco A Term Loans made by such
Bank and be payable in Pounds Sterling in the outstanding principal amount of
Newco A Term Loans evidenced thereby, (iv) mature on the A Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08
in respect of the Newco A Term Loans evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents (to the extent and in the manner
provided therein).
(d) The Newco B Term Note issued to each Bank that has a
Newco B Term Loan Commitment or outstanding Newco B Term Loans shall (i) be
executed by Newco, (ii) be payable to the order of such Bank and be dated the
Initial Borrowing Date (or if issued thereafter, the date of issuance), (iii)
be in a stated principal amount equal to the Newco B Term Loans made by such
Bank and be payable in Dollars in the outstanding principal amount of Newco B
Term Loans evidenced thereby, (iv) mature on the B Term Loan Maturity Date,
(v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents
(to the extent and in the manner provided therein).
(e) The Adience B-2 Term Note issued to each Bank that has an
Adience B-2 Term Loan Commitment or outstanding Adience B-2 Term Loans shall
(i) be executed by
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<PAGE>
Adience, (ii) be payable to the order of such Bank and be dated the
Restatement Effective Date (or if issued thereafter, the date of issuance),
(iii) be in a stated principal amount equal to the Adience B-2 Term Loans
made by such Bank and be payable in Dollars in the outstanding principal
amount of Adience B-2 Term Loans evidenced thereby, (iv) mature on the B-2
Term Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar
Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01, and mandatory repayment as provided
in Section 4.02 and (vii) be entitled to the benefits of this Agreement and
the other Credit Documents (to the extent and in the manner provided therein).
(f) The Adience A Term Note issued to each Bank that has an
Adience A Term Loan Commitment or outstanding Adience A Term Loans shall (i)
be executed by Adience, (ii) be payable to the order of such Bank and be
dated the Restatement Effective Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Adience A Term
Loans made by such Bank and be payable in Dollars in the outstanding
principal amount of Adience A Term Loans evidenced thereby, (iv) mature on
the Adience A Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents (to the extent and in the manner
provided therein).
(g) The Adience C Term Note issued to each Bank that has an
Adience C Term Loan Commitment or outstanding Adience C Term Loans shall (i)
be executed by Adience, (ii) be payable to the order of such Bank and be
dated the Restatement Effective Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the Adience C Term
Loans made by such Bank and be payable in Dollars in the outstanding
principal amount of Adience C Term Loans evidenced thereby, (iv) mature on
the C Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents (to the extent and in the manner
provided therein).
(h) The Dollar Revolving Note issued to each Bank that has a
Revolving Loan Commitment or outstanding Dollar Revolving Loans shall (i) be
executed by Adience, (ii) be payable to the order of such Bank and be dated
the Initial Borrowing Date (or if issued thereafter, the date of issuance),
(iii) be in a stated principal amount equal to the Revolving Loan Commitment
of such Bank and be payable in Dollars in the outstanding principal amount of
Dollar Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents (to the extent and in the manner provided therein).
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<PAGE>
(i) The Sterling Revolving Note issued to each Bank that has
a Revolving Loan Commitment or outstanding Sterling Revolving Loans shall (i)
be executed by Hepworth, (ii) be payable to the order of such Bank and be
dated the Initial Borrowing Date (or if issued thereafter, the date of
issuance), (iii) be in a stated principal amount equal to the respective
Bank's RL Percentage of the Sterling Revolving Sub-Limit and be payable in
Pounds Sterling in the outstanding principal amount of the Sterling Revolving
Loans evidenced thereby, (iv) mature on the Revolving Loan Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Sterling Revolving Loans evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents (to the extent and in the manner
provided therein).
(j) The Swingline Note issued to BTCo shall (i) be executed
by Adience, (ii) be payable to the order of BTCo and be dated the Initial
Borrowing Date (or, if issued thereafter, the date of the issuance thereof),
(iii) be in a stated principal amount equal to the Maximum Swingline Amount
and be payable in Dollars in the principal amount of the outstanding
Swingline Loans evidenced thereby from time to time, (iv) mature on the
Swingline Expiry Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents (to the extent and
in the manner provided therein).
(k) 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).
(l) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to
any transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation or any error in such notation shall not affect the respective
Borrower's obligations in respect of such Loans.
1.06 Conversions. Adience or Newco (but not in respect of
Newco A Term Loans) as the case may be, shall have the option to convert, on
any Business Day occurring after the Restatement Effective Date (or, in the
case of the Adience A Term Loans, the Adience B-2 Term Loans or the Adience C
Term Loans, the earlier of (i) the 45th day after the Restatement Effective
Date and (ii) the Syndication Date), all or a portion equal to at least (x)
in the case of a conversion of Adience A Term Loans, Adience B Term Loans,
Adience B-2 Term Loans, Adience C Term Loans or Newco B Term Loans,
$5,000,000 and (y) in the case of a conversion
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of Dollar Revolving Loans, $1,000,000, of the outstanding principal amount of
such Dollar Loans made to Adience or Newco, as the case may be, pursuant to
one or more Borrowings (so long as of the same Tranche of Dollar Loans) of
one or more Types of Loans into a Borrowing (of the same Tranche of Dollar
Loans) of another Type of Loan, provided that, (i) except as otherwise
provided in Section 1.10(b), Eurodollar Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable to the Loans
being converted and no such partial conversion of Eurodollar Loans shall
reduce the outstanding principal amount of such Eurodollar Loans made
pursuant to a single Borrowing to less than (x) in the case of a Borrowing of
Adience A Term Loans, B Term Loans or Adience C Term Loans, $5,000,000 and
(y) in the case of a Borrowing of Dollar Revolving Loans, $1,000,000, (ii)
unless the Required Banks otherwise specifically agree, Base Rate Loans may
only be converted into Eurodollar Loans if no Default under Section 10.01 or
10.05 or Event of Default is in existence on the date of the conversion,
(iii) no conversion pursuant to this Section 1.06 shall result in a greater
number of Borrowings of Eurodollar Loans than is permitted under Section 1.02
and (iv) Swingline Loans may not be converted pursuant to this Section 1.06.
Each such conversion shall be effected by Adience or Newco, as the case may
be, by giving the Administrative Agent at its Notice Office prior to 12:00
Noon (New York time or, in the case of Newco B Term Loans, London time) at
least two Business Days' prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing or Borrowings pursuant
to which such Loans were made and, if to be converted into Eurodollar Loans,
the Interest Period to be initially applicable thereto. The Administrative
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans. Upon any such conversion the proceeds thereof
will be deemed to be applied directly on the day of such conversion to prepay
the outstanding principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Adience A Term
Loans, Adience B Term Loans, Adience B-2 Term Loans, Adience C Term Loans,
Newco A Term Loans, Newco B Term Loans and Revolving Loans under this
Agreement shall be incurred from the Banks pro rata on the basis of their
Adience A Term Loan Commitments, Adience B Term Loan Commitments, Adience B-2
Term Loan Commitments, Adience C Term Loan Commitments, Newco A Term Loan
Commitments, Newco B Term Loan Commitments or Revolving Loan Commitments, as
the case may be, provided that all Borrowings of Revolving Loans made
pursuant to a Mandatory Borrowing or a Mandatory Sterling Borrowing, as the
case may be, shall be incurred from the Banks with Revolving Loan Commitments
pro rata on the basis of their RL Percentages. It is understood that no Bank
shall be responsible for any default by any other Bank of its obligation to
make Loans hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other
Bank to make its Loans hereunder.
1.08 Interest. (a) Each of Adience and Newco hereby
severally agree to pay interest in respect of the unpaid principal amount of
each Base Rate Loan made to it from the date the proceeds thereof are made
available to Adience or Newco, as the case may be, until the earlier of (x)
the maturity thereof (whether by acceleration or otherwise) and (y) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section
1.06, at a rate per annum which shall be equal to the sum of the Base Rate in
effect from time to time plus the relevant Applicable Margin.
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(b) Each of Adience and Newco hereby severally agree to pay
interest in respect of the unpaid principal amount of each Eurodollar Loan
made to it from the date the proceeds thereof are made available to Adience
or Newco, as the case may be, until the earlier of (x) the maturity thereof
(whether by acceleration or otherwise) and (y) the conversion of such
Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10,
as applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Eurodollar Rate for such
Interest Period plus the relevant Applicable Margin.
(c) Each of Newco and Hepworth hereby severally agrees to pay
interest in respect of the unpaid principal amount of each Sterling Loan
(other than Sterling Swingline Loans) made to it from the date the proceeds
thereof are made available to Newco or Hepworth, as the case may be, until
the maturity thereof (whether by acceleration or otherwise) at a rate per
annum which shall, during each Interest Period applicable thereto, be equal
to the sum of the Sterling Euro Rate for such Interest Period plus (i) the
MLA Cost and (ii) the relevant Applicable Margin.
(d) Hepworth hereby agrees to pay interest in respect of 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.
(e) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum (1) in the
case of overdue principal of, and interest or other amounts owing with
respect to, Sterling Loans (other than Sterling Swingline Loans) and amounts
owing with respect to Hepworth Letters of Credit or Hepworth Letter of Credit
Outstandings, equal to 2% per annum in excess of the Applicable Margin plus
the Sterling Euro Rate for such successive periods not exceeding three months
as the Administrative Agent may determine from time to time in respect of
amounts comparable to the amount not paid plus the MLA Cost, (2) in the case
of overdue principal of and interest or other amounts owing with respect to,
Sterling Swingline Loans, equal to 2% in excess of the Applicable Margin for
Sterling Revolving Loans plus the Overnight LIBOR Rate plus the MLA Cost and
(3) in all other cases, equal to the greater of (x) 2% per annum in excess of
the rate otherwise applicable to Base Rate Loans of the respective Tranche
(or in the case of amounts which do not relate to a given Tranche of
outstanding Dollar Loans, 2% per annum in excess of the rate otherwise
applicable to Revolving Loans maintained as Base Rate Loans) from time to
time and (y) the rate which is 2% in excess of the rate borne by the
respective such Loans at the time of the payment default, in each case with
such interest to be payable on demand.
(f) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in the case of any Eurodollar Loan, on the date
of any conversion to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10,
as applicable (on the amount so converted), (iii) in respect of each Euro
Rate Loan, on the last day of each Interest Period applicable thereto and, in
the case of an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of such
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Interest Period, (iv) in respect of each Sterling Swingline Loan, on the date
of any conversion to a Mandatory Sterling Borrowing and (v) in respect of
each Loan, on any repayment or prepayment (on the amount repaid or prepaid),
at maturity (whether by acceleration or otherwise) and, after such maturity,
on demand.
(g) Upon each Interest Determination Date, the Administrative
Agent shall determine the respective Euro Rate for the respective Interest
Period or Interest Periods to be applicable to Euro Rate Loans and shall
promptly notify the respective Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Euro Rate Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of
an Interest Period applicable to such Euro Rate Loan (in the case of any
subsequent Interest Period), the respective Borrower shall have the right to
elect, by giving the Administrative Agent notice thereof, the interest period
(each an "Interest Period") applicable to such Euro Rate Loan, which Interest
Period shall, (x) at the option of Adience or Newco, as the case may be, be a
one, two, three or six-month period, and (y) at the option of Hepworth, be a
one, two, three or six-month period, or, if available to each of the Banks
with a Revolving Loan Commitment, a one or two-week period, provided that:
(i) all Euro Rate Loans comprising a single Borrowing shall
at all times have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Euro
Rate Loans shall commence on the date of such Borrowing (including,
in the case of Dollar Loans, the date of any conversion thereto
from a Dollar Loan of a different Type) and each Interest Period
occurring thereafter in respect of such Euro Rate Loans shall
commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period for a Euro Rate Loan begins on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Euro Rate Loan would
otherwise expire on a day which is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day;
provided, however, that if any Interest Period for a Euro Rate Loan
would otherwise expire on a day which is not a Business Day but is
a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) unless the Required Banks otherwise specifically agree, no
Interest Period may be selected at any time when a Default under
Section 10.01 or 10.05 or an Event of Default is then in existence;
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(vi) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the
respective Maturity Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of
Adience A Term Loans, Adience B Term Loans, Adience B-2 Term Loans,
Adience C Term Loans, Newco A Term Loans or Newco B Term Loans, as
the case may be, shall be selected which extends beyond any date
upon which a mandatory repayment of such Tranche of Term Loans will
be required to be made under Section 4.02(b)(i), (ii), (iii), (iv),
(v) or (vi), as the case may be, if the aggregate principal amount
of Adience A Term Loans, Adience B Term Loans, Adience B-2 Term
Loans, Adience C Term Loans, Newco A Term Loans or Newco B Term
Loans, as the case may be, which have Interest Periods which will
expire after such date will be in excess of the aggregate principal
amount of Adience A Term Loans, Adience B Term Loans, Adience B-2
Term Loans, Adience C Term Loans, Newco A Term Loans or Newco B Term
Loans, as the case may be, then outstanding less the aggregate
amount of such required repayment.
Prior to the termination of any Interest Period applicable to
Sterling Loans, the respective Borrower may, at its option, designate that
the respective Borrowing subject thereto be split into more than one
Borrowing (for purposes of electing multiple Interest Periods to be
subsequently applicable thereto), so long as each such Borrowing resulting
from the action taken pursuant to this sentence meets the minimum Borrowing
amount for Sterling Loans of the respective Tranche set forth in Section
1.02. If upon the expiration of any Interest Period applicable to a
Borrowing of Euro Rate Loans, the relevant Borrower has failed to elect, or
is not permitted to elect, a new Interest Period to be applicable to such
Euro Rate Loans as provided above, such Borrower shall be deemed to have
elected (x) if Eurodollar Loans, to convert such Eurodollar Loans into Base
Rate Loans and (y) if Sterling Loans, to select a one-month Interest Period
for such Sterling Loans, in either case effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined in good faith (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto but, with respect to clause (i) and (iv) below, may be made only by
the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the Restatement Effective Date affecting the
applicable interbank market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided
for in the definition of the respective Euro Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Euro Rate Loan because of (x) any change arising
after the Restatement Effective Date in any applicable law or
governmental rule, regulation, order, guideline or request (whether
or not having the force of law) or in the interpretation or
administration thereof and including the introduction of any new
law or governmental rule, regulation, order, guideline or request,
such as, for
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example, but not limited to: (A) a change in the basis of taxation
of payment to any Bank of the principal of or interest on the Notes
or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or
profits or franchise taxes based on net income of such Bank pursuant
to the laws of the jurisdiction in which it is organized or in which
its principal office or applicable lending office is located or any
subdivision thereof or therein) or (B) a change in official reserve
requirements (except to the extent covered by Section 1.10(d) in
respect of Sterling Loans or included in the computation of the
Eurodollar Rate) or any special deposit, assessment or similar
requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or its applicable lending office)
and/or (y) other circumstances since the Restatement Effective Date
affecting such Bank or the applicable interbank market or the
position of such Bank in such market; or
(iii) at any time after the date of this Agreement, that the
making or continuance of any Euro Rate Loan has been made (x) unlawful
by any law or governmental rule, regulation or order, (y) impossible
by compliance by any Bank in good faith with any governmental request
(whether or not having force of law) or (z) impracticable as a result
of a contingency occurring after the Restatement Effective Date which
materially and adversely affects the applicable interbank market; or
(iv) at any time that Pounds Sterling are not available in
sufficient amounts, as determined in good faith by the Administrative
Agent, to fund any Borrowing of Sterling Loans requested pursuant to
Section 1.01;
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) or (iv) above) shall promptly give notice (by telephone
promptly confirmed in writing) to the respective Borrower and, except in the
case of clauses (i) and (iv) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit
to each of the other Banks). Thereafter (w) in the case of clause (i) above,
(A) in the event that Eurodollar Loans are so affected, Eurodollar Loans
shall no longer be available until such time as the Administrative Agent
notifies Adience and the Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by Adience with respect to Eurodollar
Loans which have not yet been incurred (including by way of conversion) shall
be deemed rescinded by Adience, and (B) in the event that any Sterling Loan
is so affected, the Sterling Euro Rate shall be determined on the basis
provided in the proviso to the definition of Sterling Euro Rate, (x) in the
case of clause (ii) above, the respective Borrower shall, subject to the
provisions of Section 13.19 (to the extent applicable), pay to such Bank,
upon its written request therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing in reasonable detail the basis
for the calculation thereof, submitted to the respective Borrower by such
Bank shall, absent manifest error, be final and conclusive and binding on all
the parties hereto), (y) in the case of clause (iii) above, the respective
Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by
law and (z) in the case of clause (iv)
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above, Sterling Loans shall no longer be available until such time as the
Administrative Agent notifies Newco, Hepworth and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no
longer exists, and any Notice of Borrowing giving by Newco or Hepworth, as
the case may be, with respect to such Sterling Loans which have not been
incurred shall be deemed rescinded by Newco or Hepworth, as the case may be.
(b) At any time that any Euro Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the respective
Borrower may (and in the case of a Euro Rate Loan affected by the
circumstances described in Section 1.10(a)(iii) shall) either (x) if the
affected Euro Rate Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that such
Borrower was notified by the affected Bank or the Administrative Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Euro Rate
Loan is then outstanding, upon at least three Business Days' written notice
to the Administrative Agent, (A) in the case of a Eurodollar Loan, require
the affected Bank to convert such Eurodollar Loan into a Base Rate Loan and
(B) in the case of a Sterling Loan, repay such Sterling Loan in full,
provided that, (i) if the circumstances described in Section 1.10(a)(iii)
apply to any Sterling Loan, the Borrower may, in lieu of taking the actions
described above, maintain such Sterling Loan outstanding, in which case the
Sterling Euro Rate shall be determined on the basis provided in the proviso
to the definition of Sterling Euro Rate, unless the maintenance of such
Sterling Loan outstanding on such basis would not stop the conditions
described in Section 1.10(iii) from existing (in which case the actions
described above, without giving effect to the proviso, shall be required to
be taken) and (ii) if more than one Bank is affected at any time as described
above in this clause (b), then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If at any time after the Restatement Effective Date any
Bank determines that the introduction of or any change (which introduction or
change shall have occurred after the date of this Agreement) in any
applicable law or governmental rule, regulation, order, guideline, directive
or request (whether or not having the force of law) concerning capital
adequacy, or any change in interpretation or administration thereof by any
governmental authority, central bank or comparable agency, will have the
effect of increasing the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank based on the
existence of such Bank's Commitments hereunder or its obligations hereunder,
then the Borrowers jointly and severally agree to pay, subject to the
provisions of Section 13.19 (to the extent applicable), to such Bank, upon
its written demand therefor, such additional amounts as shall be required to
compensate such Bank or such other corporation for the increased cost to such
Bank or such other corporation or the reduction in the rate of return to such
Bank or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Bank will act reasonably and in
good faith and will use averaging and attribution methods which are
reasonable, provided that such Bank's determination of compensation owing
under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Bank, upon
determining that any additional amounts will be payable pursuant to this
Section 1.10(c), will give prompt written notice thereof to the Borrowers,
which notice shall show in reasonable detail the basis for calculation of
such additional amounts. For the avoidance of doubt, nothing in this Section
1.10(c) shall require any Borrower to pay to any Bank any amount for which it
has already been compensated by way of payment of the MLA Cost.
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(d) In the event that any Bank shall in good faith determine
(which determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto) at any time that such Bank is required to
maintain reserves (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) which
have been established by any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body with
jurisdiction over such Bank (including any branch, Affiliate or funding
office thereof) in respect of any Sterling Loans or any category of
liabilities which includes deposits by reference to which the interest rate
on any Sterling Loan is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of any Bank
to non-United States residents, then, unless such reserves are included in
the calculation of the interest rate applicable to such Sterling Loans or in
Section 1.10(a)(ii), such Bank shall promptly notify Newco and Hepworth in
writing specifying the additional amounts required to indemnify such Bank
against the cost of maintaining such reserves (such written notice to provide
in reasonable detail a computation of such additional amounts) and the
respective Borrower shall pay to such Bank such specified amounts as
additional interest at the time that the respective Borrower is otherwise
required to pay interest in respect of such Sterling Loan or, if later, on
written demand therefor by such Bank.
1.11 Compensation. Each Borrower shall, subject to the
provisions of Section 13.19 (to the extent applicable), compensate each Bank,
upon its written request (which request shall set forth in reasonable detail
the basis for requesting such compensation), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits
or other funds required by such Bank to fund its Euro Rate Loans, but
excluding loss of anticipated profits) which such Bank may sustain: (i) if
for any reason (other than a default by such Bank or the Administrative
Agent) a Borrowing of, or conversion from or into, Euro Rate Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including any repayment made pursuant to
Section 4.01 or 4.02 or as a result of an acceleration of the Loans pursuant
to Section 10) or conversion of any of such Borrower's Euro Rate Loans occurs
on a date which is not the last day of an Interest Period with respect
thereto; (iii) if any prepayment of any of such Borrower's Euro Rate Loans is
not made on any date specified in a notice of prepayment given by such
Borrower; or (iv) as a consequence of (x) any other default by such Borrower
to repay its Loans when required by the terms of this Agreement or any Note
held by such Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Lending Offices; Changes Thereto. (a) Each Bank may at
any time or from time to time designate , by written notice to the
Administrative Agent to the extent not already reflected on Schedule II, one
or more lending offices (which, for this purpose, may include Affiliates of
the respective Bank) for the various Loans made, and Letters of Credit
participated in, by such Bank (including by designating a separate lending
office (or Affiliate) to act as such with respect to Dollar Loans and Adience
Letter of Credit Outstandings versus Sterling Loans and Hepworth Letter of
Credit Outstandings); provided that, for designations made after the
Restatement Effective Date, to the extent such designation shall result in
increased costs under Section 1.10, 2.06 or 4.04 in excess of those which
would be charged in the absence of the designation of a different lending
office (including a different Affiliate of the respective Bank),
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then the Borrowers shall not be obligated to pay such excess increased costs
(although the Borrowers, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay the costs which would
apply in the absence of such designation and any subsequent increased costs
of the type described above resulting from changes after the date of the
respective designation). Each lending office and Affiliate of any Bank
designated as provided above shall, for all purposes of this Agreement, be
treated in the same manner as the respective Bank (and shall be entitled to
all indemnities and similar provisions in respect of its acting as such
hereunder).
(b) Each Bank agrees that on the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 1.10(d), Section 2.06 or Section 4.04 with respect to such
Bank, it will, if requested by the applicable Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by such
event, provided that such designation is made on such terms that such Bank
and its lending office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of any Borrower or the right of any Bank
provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Loans or
fund Unpaid Drawings, (y) upon the occurrence of an event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 1.10(d),
Section 2.06 or Section 4.04 with respect to any Bank which results in such
Bank charging to any Borrower increased costs in excess of those being
generally charged by the other Banks or (z) in the case of certain refusals
by a Bank to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks as (and to the extent) provided in Section 13.12, Adience
shall have the right, if no Default under Section 10.01 or 10.05 and no Event
of Default then exists (or, in the case of preceding clause (z), no Default
under Section 10.01 or 10.05 and no Event of Default will exist immediately
after giving effect to such replacement), to either (1) replace such Bank
(the "Replaced Bank") with one or more other Eligible Transferees, none of
whom shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") and each of whom shall be required to
be reasonably acceptable to the Administrative Agent or (2) at the option of
Adience, replace only (a) the Revolving Loan Commitment (and outstandings
pursuant thereto) of the Replaced Bank with an identical Revolving Loan
Commitment (and related outstandings) provided by the Replacement Bank or (b)
in the case of a replacement as provided in Section 13.12(b) where the
consent of the respective Bank is required with respect to less than all
Tranches of its Loans or Commitments, the Commitments and/or outstanding Term
Loans of such Bank in respect of each Tranche where the consent of such Bank
would otherwise be individually required, with identical Commitments and/or
Term Loans of the respective Tranche provided by the Replacement Bank,
provided that (i) any replacement pursuant to this Section 1.13 shall be
required to comply with the requirements of Section 13.04(b) (including
without limitation those relating to pro rata assignments) and at the time of
any replacement pursuant to this Section 1.13, the Replacement Bank shall
enter into one or more Assignment and Assumption Agreements pursuant to
Section 13.04(b) (and with all fees payable pursuant to said Section 13.04(b)
to be paid by the Replacement Bank) pursuant to which the
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Replacement Bank shall acquire all of the Commitments and outstanding Loans
(or, in the case of the replacement of only (a) the Revolving Loan
Commitment, the Revolving Loan Commitment and outstanding Revolving Loans and
participations in Letter of Credit Outstandings and/or (b) the outstanding
Term Loans and/or Term Loan Commitments of the respective Tranche or
Tranches) of, and in each case (except for the replacement of only the
outstanding Term Loans (and/or Term Loan Commitments, as the case may be) of
one or more Tranches of the respective Bank) participations in Letters of
Credit by, the Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the sum of (I) the
principal of, and all accrued interest on, all outstanding Loans (or of the
Loans of the respective Tranche or Tranches being replaced) of the Replaced
Bank, (II) all Unpaid Drawings that have been funded by (and not reimbursed
to) such Replaced Bank, together with all then unpaid interest with respect
thereto at such time and (III) all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank (but only with respect to the relevant Tranche, in
the case of the replacement of less than all Tranches of Loans then held by
the respective Replaced Bank) pursuant to Section 3.01, (y) except in the
case of the replacement of only the outstanding Term Loans of one or more
Tranches of a Replaced Bank, each Issuing Bank an amount equal to such
Replaced Bank's RL Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore
funded by such Replaced Bank to such Issuing Bank and (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 (ii) all obligations of the
Borrowers due and owing to the Replaced Bank at such time (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in
full to such Replaced Bank concurrently with such replacement. Upon the
execution of the respective Assignment and Assumption Agreements, the payment
of amounts referred to in clauses (i) and (ii) above, recordation of the
assignment on the Register by the Administrative Agent pursuant to Section
13.15 and, if so requested by the Replacement Bank, delivery to the
Replacement Bank of the appropriate Note or Notes executed by the respective
Borrower, the Replacement Bank shall become a Bank hereunder and, unless the
respective Replaced Bank continues to have outstanding Term Loans or a
Commitment hereunder, the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
12.06 and 13.01), which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, each Revolving Loan Borrower may request
that any Issuing Bank issue, at any time and from time to time on and after
the Initial Borrowing Date and prior to the third Business Day prior to the
Revolving Loan Maturity Date (or the 30th day prior to the Revolving Loan
Maturity Date in the case of Trade Letters of Credit), (x) for the account of
such Revolving Loan Borrower and for the benefit of any holder (or any
trustee, agent or other similar representative for any such holders) of L/C
Supportable Obligations of such Revolving Loan Borrower or any of its
Subsidiaries, an irrevocable sight standby letter of credit, in a form
customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank (each such standby
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letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Obligations and (y) for the account of such Revolving Loan
Borrower and for the benefit of sellers of goods, materials and services used
in the ordinary course of business of such Revolving Loan Borrower or any of
its Subsidiaries an irrevocable sight commercial letter of credit in a form
customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank (each such commercial letter of credit, a
"Trade Letter of Credit", and each such Trade Letter of Credit and each
Standby Letter of Credit, a "Letter of Credit") in support of commercial
transactions of such Revolving Loan Borrower and its Subsidiaries. On the
Restatement Effective Date, all Original Letters of Credit outstanding shall
be deemed to have been issued under this Agreement and shall for all purposes
constitute "Letters of Credit" hereunder.
(b) All (x) Adience Letters of Credit shall be issued, and
denominated, in Dollars and (y) Hepworth Letters of Credit shall be issued,
and denominated, in Pounds Sterling.
(c) Each Issuing Bank hereby agrees that it will (subject to
terms and conditions contained herein), at any time and from time to time on
and after the Initial Borrowing Date and prior to the third Business Day
prior to the Revolving Loan Maturity Date (or the 30th day prior to the
Revolving Loan Maturity Date in the case of Trade Letters of Credit),
following its receipt of the respective Letter of Credit Request, issue for
the account of the respective Revolving Loan Borrower, subject to the terms
and conditions of this Agreement, one or more Letters of Credit (x) in the
case of Standby Letters of Credit, in support of such L/C Supportable
Obligations of the respective Revolving Loan Borrower or any of its
Subsidiaries as are permitted to remain outstanding without giving rise to a
Default or an Event of Default and (y) in the case of Trade Letters of
Credit, in support of sellers of goods or materials used in the ordinary
course of business of the respective Revolving Loan Borrower or any of its
Subsidiaries as referenced in Section 2.01(a), provided that the respective
Issuing Bank shall be under no obligation to issue any Letter of Credit of
the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain such
Issuing Bank from issuing such Letter of Credit or any requirement of
law applicable to such Issuing Bank or any request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over such Issuing Bank shall prohibit, or
request that such Issuing Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit
any restriction or reserve or capital requirement (for which such
Issuing Bank is not otherwise compensated) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Bank as of the date
hereof and which such Issuing Bank reasonably and in good faith deems
material to it; or
(ii) such Issuing Bank shall have received notice from the
Required Banks prior to the issuance of such Letter of Credit of the
type described in the penultimate sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
(a) Notwithstanding anything to the contrary contained in this Agreement,
(i) no Letter of Credit shall be
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issued the Stated Amount (for this purpose, using the Dollar Equivalent of
the Stated Amount of each Hepworth Letter of Credit) of which, when added to
the Letter of Credit Outstandings (for this purpose, using the Dollar
Equivalent of all Hepworth Letter of Credit Outstandings) (exclusive of
Unpaid Drawings which are repaid on the date of, and prior to the issuance
of, the respective Letter of Credit) at such time would exceed either (x)
$20,000,000 or (y) 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 (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, the Total Available Revolving Loan Commitment at such
time, (ii) no Adience Letter of Credit shall be issued the Stated Amount
(expressed in Dollars) of which, when added to the Adience Letter of Credit
Outstandings (expressed in Dollars) (exclusive of Unpaid Drawings with
respect thereto which are repaid on the date of, and prior to the issuance
of, the respective Adience Letter of Credit) at such time would exceed, when
added to the 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, and (iv) each Letter of Credit shall by its
terms terminate (A) in the case of Standby Letters of Credit, on or before
the earlier of (x) the date which occurs 12 months after the date of the
issuance thereof (although any such Standby Letter of Credit may be
extendible for successive periods of up to 12 months, but not beyond the
third Business Day prior to the Revolving Loan Maturity Date, on terms
acceptable to the Issuing Bank thereof) and (y) the third Business Day prior
to the Revolving Loan Maturity Date and (B) in the case of Trade Letters of
Credit, on or before the earlier of (x) the date which occurs 180 days after
the date of issuance thereof and (y) 30 days prior to the Revolving Loan
Maturity Date.
(b) Notwithstanding the foregoing, in the event a Bank
Default exists, the Issuing Bank shall not be required to issue any Letter of
Credit unless the Issuing Bank has entered into arrangements satisfactory to
it and the respective Revolving Loan Borrower to eliminate the Issuing Bank's
risk with respect to the participation in Letters of Credit of the Defaulting
Bank or Banks, including by cash collateralizing (in Dollars) such Defaulting
Bank's or Banks' RL Percentage of the Letter of Credit Outstandings.
2.03 Letter of Credit Requests; Notices of Issuance; Minimum
Stated Amount. (a) Whenever a Revolving Loan Borrower desires that a Letter
of Credit be issued for its account, such Revolving Loan Borrower shall give
the Administrative Agent and the respective Issuing Bank at least two
Business Days' (or such shorter period as is acceptable to the respective
Issuing Bank) written notice thereof. Each notice shall be in the form of
Exhibit C (each a "Letter of Credit Request").
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(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the respective Revolving Loan
Borrower that (i) such Letter of Credit may be issued in accordance with, and
will not violate the requirements of, Section 2.02 and (ii) all of the
applicable conditions set forth in Section 5 and 6 shall be met at the time
of such issuance. Unless the respective Issuing Bank has received notice
from the Required Banks before it issues a Letter of Credit that one or more
of the conditions specified in Section 5 are not satisfied on the Restatement
Effective Date or Section 6 are not then satisfied, or that the issuance of
such Letter of Credit would violate Section 2.02, then such Issuing Bank may
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Bank's usual and customary practices. Upon the
issuance of or amendment or modification to any Standby Letter of Credit, the
respective Issuing Bank shall promptly notify the Banks and the
Administrative Agent of such issuance, amendment or modification and such
notification shall be accompanied by a copy of the issued Standby Letter of
Credit or amendment or modification. For Trade Letters of Credit on which
the Issuing Bank is other than the Administrative Agent, the Issuing Bank
will send to the Administrative Agent by facsimile transmission, promptly on
the first Business Day of each week, the daily aggregate Stated Amount of
Trade Letters of Credit issued by such Issuing Bank and outstanding during
the preceding week. The Administrative Agent shall deliver to each Bank,
after each calendar month end and upon each payment of the Letter of Credit
Fee, a report setting forth for the relevant period the daily aggregate
Stated Amount of all outstanding Trade Letters of Credit during such period.
(c) Each Issuing Bank shall, on the date of issuance of a
Letter of Credit by it, give the Administrative Agent, each Bank and the
Revolving Loan Borrowers written notice of the issuance of such Letter of
Credit, accompanied by a copy to the Administrative Agent of the Letter of
Credit or Letters of Credit issued by it.
(d) The initial Stated Amount of each Letter of Credit shall
not be less than (x) in the case of Adience Letters of Credit, $50,000 and
(y) in the case of Hepworth Letters of Credit, L50,000, or in each case such
lesser amount as is acceptable to the respective Issuing Bank.
2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by the respective Issuing Bank of any Letter of Credit, such
Issuing Bank shall be deemed to have sold and transferred to each Bank with a
Revolving Loan Commitment, other than such Issuing Bank (each such Bank, in
its capacity under this Section 2.04, a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from such Issuing Bank, without recourse or warranty, an
undivided interest and participation in, to the extent of such Participant's
RL Percentage in such Letter of Credit, each drawing or payment made
thereunder and the obligations of the Revolving Loan Borrowers under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto (although Letter of Credit Fees shall be paid directly to
the Administrative Agent for the ratable account of the Participants as
provided in Section 3.01(b) and the Participants shall have no right to
receive any portion of any Facing Fees). Upon any change in the Revolving
Loan Commitments or RL Percentages of the Banks pursuant to Section 1.13 or
13.04, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
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pations pursuant to this Section 2.04 to reflect the new RL Percentages of
the assignor and assignee Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the respective Issuing Bank shall have no obligation relative to the other
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing
Bank any resulting liability to either Revolving Loan Borrower, any other
Credit Party, any Bank or any other Person.
(c) In the event that any Issuing Bank makes any payment
under any Letter of Credit and the respective Revolving Loan Borrower shall
not have reimbursed such amount in full to such Issuing Bank pursuant to
Section 2.05(a), such Issuing Bank shall promptly notify the Administrative
Agent, which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to such Issuing Bank the
amount of such Participant's RL Percentage of such unreimbursed payment (x)
in Dollars and in same day funds. If the Administrative Agent so notifies,
prior to 11:00 A.M. (New York time) on any Business Day, any Participant
required to fund a payment under a Letter of Credit, such Participant shall
make available to such Issuing Bank, in Dollars, such Participant's RL
Percentage of the amount of such payment (or, in the case of payments made in
Pounds Sterling, the Dollar Equivalent thereof) on such Business Day in same
day funds. If and to the extent such Participant shall not have so made its
RL Percentage of the amount of such payment available to such Issuing Bank,
such Participant agrees to pay to such Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to such Issuing Bank at the overnight Federal Funds
Rate for the first three days and at the interest rate applicable to Dollar
Revolving Loans maintained as Base Rate Loans hereunder for each day
thereafter. The failure of any Participant to make available to such Issuing
Bank its RL Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available
to such Issuing Bank its RL Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to such Issuing Bank such
other Participant's RL Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall pay to
each Participant which has paid its RL Percentage thereof, in Dollars and in
same day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, each Issuing Bank
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such
Participant.
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<PAGE>
(f) The obligations of the Participants to make payments to
each Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the respective Revolving Loan Borrower or any of its
Subsidiaries or Affiliates may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the
Administrative Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the respective Revolving Loan Borrower
or any Subsidiary or Affiliate of the respective Revolving Loan
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) Each
Revolving Loan Borrower hereby severally agrees to reimburse the respective
Issuing Bank, by making payment in Dollars directly to such Issuing Bank, for
any payment or disbursement (or, in the case of payments or disbursements
made in Pounds Sterling, the Dollar Equivalent thereof) made by such Issuing
Bank under any Letter of Credit issued for the account of such Revolving Loan
Borrower (with each such amount so paid, until reimbursed, an "Unpaid
Drawing"), immediately after, and in any event on the date of, such payment
or disbursement, with interest on the amount so paid or disbursed by such
Issuing Bank, to the extent not reimbursed prior to 2:00 P.M. (New York time
or, in the case of Hepworth Letters of Credit, London time) on the date of
such payment or disbursement, from and including the date paid or disbursed
to but excluding the date such Issuing Bank was reimbursed by Adience or
Hepworth, as the case may be, therefor at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for
Revolving Loans maintained as Base Rate Loans; provided, however, to the
extent such amounts are not reimbursed prior to 12:00 Noon (New York time or,
in the case of Hepworth Letters of Credit, London time) on the third Business
Day following the receipt by Adience or Hepworth, as the case may be, of
notice of such payment or disbursement or upon the occurrence of a Default or
an Event of Default under Section 10.05, interest shall thereafter accrue on
the amounts so paid or disbursed by such Issuing Bank (and until reimbursed
by Adience or Hepworth, as the case may
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<PAGE>
be) at a rate per annum which shall be the Base Rate in effect from time to
time plus the Applicable Margin for Revolving Loans maintained as Base Rate
Loans plus 2%, in each such case, with interest to be payable on demand. The
respective Issuing Bank shall give Adience or Hepworth, as the case may be,
prompt written notice of each Drawing under any Letter of Credit, provided
that the failure to give any such notice shall in no way affect, impair or
diminish the respective Revolving Loan Borrower's obligations hereunder.
(b) The obligations of Adience (with respect to Adience
Letters of Credit) and of Hepworth (with respect to Hepworth Letters of
Credit) under this Section 2.05 to reimburse the respective Issuing Bank with
respect to Unpaid Drawings (including, in each case, interest thereon) shall
be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
respective Revolving Loan Borrower may have or have had against any Bank
(including in its capacity as issuer of the Letter of Credit or as
Participant), including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit (each a "Drawing") to conform
to the terms of the Letter of Credit or any nonapplication or misapplication
by the beneficiary of the proceeds of such Drawing; provided that any
reimbursement made by Adience or Hepworth, as the case may be, shall be
without prejudice to any claim it may have against such Issuing Bank as a
result of such Issuing Bank's gross negligence or willful misconduct.
2.06 Increased Costs. If at any time after the Restatement
Effective Date, the introduction of or any change in any applicable law,
rule, regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank
or any Participant with any request or directive by any such authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by any Issuing Bank or participated in by
any Participant, or (ii) impose on any Issuing Bank or any Participant any
other conditions relating, directly or indirectly, to this Agreement; and the
result of any of the foregoing is to increase the cost to any Issuing Bank or
any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by any Issuing
Bank or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on,
or determined by reference to, the net income or profits or franchise taxes
based on net income of such Issuing Bank or such Participant pursuant to the
laws of the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, upon written demand to Adience or Hepworth, as the case may
be, by such Issuing Bank or any Participant (a copy of which certificate
shall be sent by such Issuing Bank or such Participant to the Administrative
Agent), Adience or Hepworth, as the case may be, shall, subject to the
provisions of Section 13.19 (to the extent applicable), pay to such Issuing
Bank or such Participant such additional amount or amounts as will compensate
such Bank for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Any Issuing Bank or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.06, will give prompt written notice thereof to
Adience or Hepworth, as the case may be, which notice shall include a
certificate submitted to Adience or Hepworth, as the case may be, by such
Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to
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<PAGE>
the Administrative Agent), setting forth in reasonable detail the basis for
the calculation of such additional amount or amounts necessary to compensate
such Issuing Bank or such Participant. The certificate required to be
delivered pursuant to this Section 2.06 shall, absent manifest error, be
final and conclusive and binding on Adience.
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Revolving Loan Borrowers jointly and
severally agree to pay to the Administrative Agent in Dollars for
distribution to each Bank with a Revolving Loan Commitment a commitment
commission (the "Commitment Commission") for the period from and including
the Original Effective Date to but excluding the Revolving Loan Maturity Date
(or such earlier date as the Total Revolving Loan Commitment shall have been
terminated), computed at a rate for each day equal to 1/2 of 1% per annum on
the daily average Unutilized Revolving Loan Commitment of such Bank. Accrued
Commitment Commission shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Revolving Loan Maturity Date or such
earlier date upon which the Total Revolving Loan Commitment is terminated.
(b) Each of Adience and Hepworth agrees to pay to the
Administrative Agent for distribution to each Bank with a Revolving Loan
Commitment (based on their respective RL Percentages) in Dollars a fee in
respect of each Letter of Credit issued hereunder for the account of such
Revolving Loan Borrower (with all fees payable as described in this clause
(b) being herein referred to as "Letter of Credit Fees"), for the period from
and including the date of issuance of the respective Letter of Credit to and
including the date of termination of such Letter of Credit (or, in the case
of a Trade Letter of Credit, the date of the stated expiration thereof),
computed at a rate per annum equal to the Applicable Margin for Revolving
Loans maintained as Eurodollar Loans on the daily Stated Amount (for this
purpose, using the Dollar Equivalent of the Stated Amount of each Hepworth
Letter of Credit) of such Letter of Credit (or, in the case of a Trade Letter
of Credit, on the initial Stated Amount (for this purpose, using the Dollar
Equivalent of the Stated Amount of each Hepworth Letter of Credit) of such
Letter of Credit). Accrued Letter of Credit Fees payable with respect to
Standby Letters of Credit shall be due and payable by the respective
Revolving Loan Borrower quarterly in arrears on each Quarterly Payment Date
and on the first day after the termination of the Total Revolving Loan
Commitment upon which no Standby Letters of Credit remain outstanding and all
Letter of Credit Fees payable with respect to each Trade Letter of Credit
shall be due and payable on the date of issuance of such Trade Letter of
Credit.
(c) Each of Adience and Hepworth agrees to pay to each
Issuing Bank, for its own account, in Dollars a facing fee in respect of each
Letter of Credit issued by such Issuing Bank for the account of such
Revolving Loan Borrower (the "Facing Fee"), (x) in the case of each Standby
Letter of Credit, for the period from and including the date of issuance of
such Standby Letter of Credit to and including the date of the termination of
such Standby Letter of Credit, computed at a rate equal to 1/4 of 1% per
annum of the daily Stated Amount (for this purpose, using the Dollar
Equivalent of the Stated Amount of each Hepworth Letter of Credit) of such
Standby Letter of Credit, provided, that in no event shall the annual Facing
Fee with respect to any Standby Letter of Credit be less than $500 (being
herein called the "Minimum Facing Fee Amount" for any Letter of Credit), it
being agreed that, on the date of issuance of any Standby
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<PAGE>
Letter of Credit and on each anniversary thereof prior to the termination of
such Standby Letter of Credit, if the Minimum Facing Fee Amount will exceed
the amount of Facing Fees that will accrue with respect to such Standby
Letter of Credit for the immediately succeeding 12-month period, the full
Minimum Facing Fee Amount shall be payable on the date of issuance of such
Standby Letter of Credit and on each anniversary thereof prior to the
termination of such Standby Letter of Credit, and (y) in the case of each
Trade Letter of Credit, in an amount equal to the greater of (A) 1/4 of 1% of
the Stated Amount (for this purpose, using the Dollar Equivalent of the
Stated Amount of each Hepworth Letter of Credit) of such Trade Letter of
Credit as of the date of issuance thereof and (B) the Minimum Facing Fee
Amount. Except as otherwise provided in the proviso to the immediately
preceding sentence, accrued Facing Fees payable with respect to Standby
Letters of Credit shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day after the termination of the
Total Revolving Loan Commitment upon which no Standby Letters of Credit
remain outstanding and all Facing Fees payable with respect to each Trade
Letter of Credit shall be due and payable on the date of issuance of such
Trade Letter of Credit.
(d) The respective Revolving Loan Borrower shall pay, upon
each payment under, issuance of, or amendment to, any Letter of Credit, such
amount as shall at the time of such event be the administrative charge and
the reasonable expenses which the applicable Issuing Bank is generally
imposing in connection with such occurrence with respect to letters of credit
denominated in the respective Applicable Currency.
(e) The Borrowers shall pay to the Administrative Agent, for
its own account, such other fees as have been agreed to in writing by the
Borrowers and the Administrative Agent.
3.02 Voluntary Termination of Unutilized Commitments. Upon
at least three Business Days' prior notice to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit
to each of the Banks), Adience shall have the right, at any time or from time
to time, without premium or penalty, to terminate the Total Unutilized
Revolving Loan Commitment, in whole or in part, in integral multiples of
$500,000 in the case of partial reductions to the Total Unutilized Revolving
Loan Commitment, provided that each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each
Bank with such a Commitment.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitments (and the Adience A Term Loan Commitment, the Adience B-2 Term
Loan Commitment, the Adience C Term Loan Commitment, and the Revolving Loan
Commitment of each Bank) shall terminate in their entirety on February 15,
1998 and the Original Credit Agreement shall continue in effect unless the
Restatement Effective Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, each of the Total Adience B Term Loan
Commitment, the Total Newco A Term Loan Commitment and the Total Newco B
Term Loan Commitment (and the Adience B Term Loan Commitment, the Newco A
Term Loan Commitment and the Newco B Term Loan Commitment of each Bank)
terminated in full on the Initial Borrowing Date (after giving effect to the
Original Loans on such date).
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<PAGE>
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Adience A Term Loan Commitment shall
(i) terminate in its entirety on the Restatement Effective Date (after giving
effect to the making of the Adience A Term Loans on such date) and (ii) prior
to the termination of the Total Adience A Term Loan Commitment as provided in
clause (i) above, be reduced from time to time to the extent required by
Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Adience B-2 Term Loan Commitment
shall (i) terminate in its entirety on the Restatement Effective Date (after
giving effect to the making of the Adience B-2 Term Loans on such date) and
(ii) prior to the termination of the Total Adience B-2 Term Loan Commitment
as provided in clause (i) above, be reduced from time to time to the extent
required by Section 4.02.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Adience C Term Loan Commitment shall
(i) terminate in its entirety on the Restatement Effective Date (after giving
effect to the making of the Adience C Term Loans on such date) and (ii) prior
to the termination of the Total Adience C Term Loan Commitment as provided in
clause (i) above, be reduced from time to time to the extent required by
Section 4.02.
(f) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on
the Revolving Loan Maturity Date.
(g) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Restatement Effective
Date upon which a mandatory repayment of Term Loans or a mandatory reduction
to the Total Term Loan Commitment pursuant to any of Sections 4.02(c), (d),
(e) and (g) is required (and exceeds in amount the aggregate principal amount
of Term Loans then outstanding) or would be required if Term Loans were then
outstanding, the Total Revolving Loan Commitment shall be permanently reduced
by the amount, if any, by which the amount required to be applied pursuant to
said Sections (determined as if an unlimited amount of Term Loans were
actually outstanding) exceeds the aggregate principal amount of Term Loans
then outstanding.
(h) Each reduction to the Total Adience A
Term Loan Commitment, the Total Adience B-2 Term Loan Commitment, the Total
Adience C Term Loan Commitment and the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall be applied
proportionately to reduce the Adience A Term Loan Commitment, the Adience B-2
Term Loan Commitment, the Adience C Term Loan Commitment or the Revolving
Loan Commitment, as the case may be, of each Bank with such a Commitment.
SECTION 4. Prepayments; Payments; Taxes. 4.01
Voluntary Prepayments. Each Borrower shall have the right to prepay the
Loans made to such Borrower, without premium or penalty, in whole or in part
at any time and from time to time on the following terms and conditions: (i)
such Borrower shall give the Administrative Agent prior to 12:00 Noon (New
York time or, in the case of Sterling Loans,
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London time) at the Notice Office (x) in the case of Base Rate Loans, at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay such Base Rate Loans (or same
day notice in the case of (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 (y) in
all other cases, at least two Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Euro
Rate Loans, whether Adience A Term Loans, Adience B Term Loans, Adience B-2
Term Loans, Adience C Term Loans, Newco A Term Loans, Newco B Term Loans,
Dollar Revolving Loans, Sterling Revolving Loans, Swingline Loans or Sterling
Swingline Loans shall be prepaid, the amount of such prepayment and the Types
of Loans to be prepaid and, in the case of Euro Rate Loans, the specific
Borrowing or Borrowings pursuant to which made, which notice the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least (x) in the
case of Dollar Loans, $1,000,000 (or $100,000 in the case of Swingline Loans)
and (y) in the case of Sterling Loans, at least L500,000 (or L50,000 in the
case of Sterling Swingline Loans), provided that if any partial prepayment of
Euro Rate Loans made pursuant to any Borrowing shall reduce the outstanding
Euro Rate Loans made pursuant to such Borrowing to an amount less than the
respective Minimum Borrowing Amount for such Tranche and Type of Loans, then
(x) in the case of Dollar Loans, such Borrowing may not be continued as a
Borrowing of Euro Rate Loans and any election of an Interest Period with
respect thereto given by Adience or Newco, as the case may be, shall have no
force or effect and (y) in the case of a Borrowing of Sterling Loans, such
Borrowing shall be required to be prepaid in full at such time; (iii) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans; (iv) each voluntary prepayment of Newco
Term Loans pursuant to this Section 4.01(a) shall be applied pro rata to each
Tranche of Newco Term Loans (based upon the then outstanding principal amount
of Newco A Term Loans and Newco B Term Loans); (v) each voluntary prepayment
of Adience Term Loans pursuant to this Section 4.01 shall be applied pro rata
to each Tranche of Adience Term Loans (based upon the then outstanding
principal amount of each Tranche of Adience Term Loans); and (vi) each
voluntary prepayment of any Tranche of Term Loans (after giving effect to any
applicable requirements set forth above) shall apply to reduce the then
remaining Scheduled Repayments of such Tranche of Term Loans on a pro rata
basis (based upon the then remaining principal amounts of such Scheduled
Repayments of the respective Tranche of Term Loans, after giving effect to
all prior reductions thereto).
4.02 Mandatory Repayments and Commitment Reductions. (a) (i)
On any day on which the sum of (I) the aggregate outstanding principal amount
of Swingline Loans, (II) the aggregate outstanding principal amount of
Sterling Swingline Loans (for this purpose, using the Dollar Equivalent
thereof), (III) 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 (IV) 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) exceeds the Total
Available 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
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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 Available 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 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 Available Revolving
Loan Commitment as then in effect.
(ii) If on any date the sum of (I) the aggregate outstanding
principal amount of Swingline Loans, (II) the aggregate outstanding principal
amount of Dollar Revolving Loans and (III) the aggregate amount of Adience
Letter of Credit Outstandings exceeds the Dollar Revolving Sub-Limit as then
in effect, Adience shall prepay on such day principal of outstanding
Swingline Loans and, after the Swingline Loans have been repaid in full,
Dollar Revolving Loans in an amount equal to such excess. If, after giving
effect to the prepayment in full of all outstanding Swingline Loans and
Dollar Revolving Loans, the aggregate amount of the Adience Letter of Credit
Outstandings exceeds the Dollar Revolving Sub-Limit as then in effect,
Adience shall pay to the Administrative Agent at the appropriate Payment
Office on such day an amount of cash or Cash Equivalents equal to the amount
of such excess (up to a maximum amount equal to the Adience Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of Adience hereunder in a cash collateral
account to be established by the Administrative Agent, provided that, so long
as no Default under Section 10.01 or 10.05 and no Event of Default is then
existence, such cash or Cash Equivalents shall be released (subject to
continued compliance with preceding clause (i)) to Adience at such time (if
any) as, and to the extent that, the aggregate amount of such cash and Cash
Equivalents at such time on deposit with the Administrative Agent exceed the
amount by which the Adience Letter of Credit Outstandings at such time exceed
the amount of the Dollar Revolving Sub-Limit as then in effect.
(iii) If on any date the sum of (I) the aggregate
outstanding principal amount of Sterling Revolving Loans, (II) the aggregate
outstanding principal amount of Sterling Swingline Loans and (III) the
aggregate amount of Hepworth Letter of Credit Outstandings exceeds the
Sterling Revolving Sub-Limit as then in effect, Hepworth shall prepay on such
day the 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
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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.
(b)(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Adience shall be required to repay that principal amount of Adience B
Term Loans, to the extent then outstanding, as is set forth opposite such
date (each such repayment, as the same may be reduced as provided in Sections
4.01 and 4.02(h) through (j), inclusive, an "Adience B Scheduled Repayment,"
and each such date, an "Adience B Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Adience B
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
January 31, 1998 $112,500
April 30, 1998 $112,500
July 31, 1998 $112,500
October 31, 1998 $112,500
January 31, 1999 $112,500
April 30, 1999 $112,500
July 31, 1999 $112,500
October 31, 1999 $112,500
January 31, 2000 $112,500
April 30, 2000 $112,500
July 31, 2000 $112,500
October 31, 2000 $112,500
January 31, 2001 $112,500
April 30, 2001 $112,500
July 31, 2001 $112,500
October 31, 2001 $112,500
January 31, 2002 $112,500
April 30, 2002 $112,500
July 31, 2002 $112,500
October 31, 2002 $112,500
January 31, 2003 $112,500
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
April 30, 2003 $112,500
July 31, 2003 $2,900,000
October 31, 2003 $2,900,000
January 31, 2004 $2,900,000
April 30, 2004 $2,900,000
July 31, 2004 $5,175,000
October 31, 2004 $5,175,000
January 31, 2005 $5,175,000
B Term Loan Maturity Date $5,175,000
</TABLE>
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, Newco
shall be required to repay that principal amount of Newco A Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h)
through (j), inclusive, a "Newco A Scheduled Repayment," and each such date, a
"Newco A Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Newco A
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
July 31, 1998 L536,612.29
October 31, 1998 L536,612.29
January 31, 1999 L536,612.29
April 30, 1999 L536,612.29
July 31, 1999 L766,588.99
October 31, 1999 L766,588.99
January 31, 2000 L766,588.99
April 30, 2000 L766,588.99
July 31, 2000 L1,149,883.48
October 31, 2000 L1,149,883.48
January 31, 2001 L1,149,883.48
April 30, 2001 L1,149,883.48
July 31, 2001 L2,146,449.16
October 31, 2001 L2,146,449.16
January 31, 2002 L2,146,449.16
April 30, 2002 L2,146,449.16
July 31, 2002 L3,066,355.94
October 31, 2002 L3,066,355.94
January 31, 2003 L3,066,355.94
A Term Loan Maturity Date L3,066,355.94
</TABLE>
(iii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Newco shall be required to repay that principal amount of Newco B Term
Loans, to the extent then outstanding, as is set forth opposite such date
(each such repayment, as the same may be reduced as provided in Sections 4.01
and
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<PAGE>
4.02(h) through (j), inclusive, a "Newco B Scheduled Repayment," and each such
date, a "Newco B Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Newco B
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
July 31, 2003 $925,000
October 31, 2003 $925,000
January 31, 2004 $925,000
April 30, 2004 $925,000
July 31, 2004 $1,575,000
October 31, 2004 $1,575,000
January 31, 2005 $1,575,000
B Term Loan Maturity Date $1,575,000
</TABLE>
(iv) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, Adience
shall be required to repay that principal amount of Adience A Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h)
through (j), inclusive, a "Adience A Scheduled Repayment," and each such date, a
"Adience A Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Adience A
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
October 31, 1998 $ 175,000
January 31, 1999 $ 175,000
April 30, 1999 $ 175,000
July 31, 1999 $ 175,000
October 31, 1999 $ 250,000
January 31, 2000 $ 250,000
April 30, 2000 $ 250,000
July 31, 2000 $ 250,000
October 31, 2000 $ 425,000
January 31, 2001 $ 425,000
April 30, 2001 $ 425,000
July 31, 2001 $ 425,000
October 31, 2001 $ 750,000
January 31, 2002 $ 750,000
April 30, 2002 $ 750,000
July 31, 2002 $ 750,000
October 31, 2002 $1,200,000
January 31, 2003 $1,200,000
Adience A Term Loan
Maturity Date $1,200,000
</TABLE>
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<PAGE>
(v) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, Adience
shall be required to repay that principal amount of Adience B-2 Term Loans, to
the extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h)
through (j), inclusive, an "Adience B-2 Scheduled Repayment," and each such
date, an "Adience B-2 Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Adience B-2
Scheduled Repayment Date Amount
------------------------ -----------
<S> <C>
April 30, 1998 $ 96,500
July 31, 1998 $ 96,500
October 31, 1998 $ 96,500
January 31, 1999 $ 96,500
April 30, 1999 $ 96,500
July 31, 1999 $ 96,500
October 31, 1999 $ 96,500
January 31, 2000 $ 96,500
April 30, 2000 $ 96,500
July 31, 2000 $ 96,500
October 31, 2000 $ 96,500
January 31, 2001 $ 96,500
April 30, 2001 $ 96,500
July 31, 2001 $ 96,500
October 31, 2001 $ 96,500
January 31, 2002 $ 96,500
April 30, 2002 $ 96,500
July 31, 2002 $ 96,500
October 31, 2002 $ 96,500
January 31, 2003 $ 96,500
April 30, 2003 $ 96,500
July 31, 2003 $ 96,500
October 31, 2003 $ 96,500
January 31, 2004 $2,000,000
April 30, 2004 $2,000,000
July 31, 2004 $2,000,000
October 31, 2004 $2,000,000
January 31, 2005 $2,780,500
B-2 Term Loan Maturity Date $17,000,000
</TABLE>
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<PAGE>
(vi) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date set forth
below, Adience shall be required to repay that principal amount of Adience C
Term Loans, to the extent then outstanding, as is set forth opposite such
date (each such repayment, as the same may be reduced as provided in Sections
4.01 and 4.02(h) through (j), inclusive, a "Adience C Scheduled Repayment,"
and each such date, a "Adience C Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Adience C
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
April 30, 1998 $ 187,500
July 31, 1998 $ 187,500
October 31, 1998 $ 187,500
January 31, 1999 $ 187,500
April 30, 1999 $ 187,500
July 31, 1999 $ 187,500
October 31, 1999 $ 187,500
January 31, 2000 $ 187,500
April 30, 2000 $ 187,500
July 31, 2000 $ 187,500
October 31, 2000 $ 187,500
January 31, 2001 $ 187,500
April 30, 2001 $ 187,500
July 31, 2001 $ 187,500
October 31, 2001 $ 187,500
January 31, 2002 $ 187,500
April 30, 2002 $ 187,500
July 31, 2002 $ 187,500
October 31, 2002 $ 187,500
January 31, 2003 $ 187,500
April 30, 2003 $ 187,500
July 31, 2003 $ 187,500
October 31, 2003 $ 187,500
January 31, 2004 $ 2,000,000
April 30, 2004 $ 2,000,000
July 31, 2004 $ 2,000,000
October 31, 2004 $ 2,000,000
January 31, 2005 $ 2,000,000
April 30, 2005 $ 2,687,500
C Term Loan Maturity Date $58,000,000
</TABLE>
(c)(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Restatement Effective Date upon which Holdings or any of its Subsidiaries
(other than Newco and its Subsidiaries) receives any cash proceeds from any
capital contribution or any sale or issuance of its equity (other than equity
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<PAGE>
contributions to any Subsidiary of Holdings made by Holdings or any other
Subsidiary of Holdings), an amount equal to 100% (or 50% (or such greater
percentage, between 50% and 100%, as is needed to cause the Leverage Ratio
requirement hereinafter described to be satisfied) if on the date of receipt
of such cash proceeds (x) no Default or Event of Default then exists and (y)
the Leverage Ratio, after the required application pursuant to this clause
(c), is less than 4.00:1.00) of the cash proceeds of such capital
contribution or sale or issuance (net of underwriting or placement discounts
and commissions and other costs and expenses associated therewith) shall be
applied in accordance with the requirements of Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Restatement Effective Date upon which Newco or any of its Subsidiaries
receives any cash proceeds from any capital contribution or any sale or
issuance of its equity (other than equity contributions to Newco or any
Subsidiary of Newco made by Holdings or any other Subsidiary of Holdings), an
amount equal to 100% (or 50% (or such greater percentage, between 50% and
100%, as is needed to cause the Leverage Ratio requirement hereinafter
described to be satisfied) if on the date of receipt of such cash proceeds
(x) no Default or Event of Default then exists and (y) the Leverage Ratio,
after the required application pursuant to this clause (c), is less than
4.00:1.00) of the cash proceeds of such capital contribution or sale or
issuance (net of underwriting or placement discounts or commissions and other
costs and expenses associated therewith) shall be applied in accordance with
the requirements of Sections 4.02(h) and (j).
(d)(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Restatement Effective Date upon which Holdings or any of its Subsidiaries
(other than Newco and its Subsidiaries) receives any cash proceeds from any
incurrence by Holdings or any of its Subsidiaries (other than Newco and its
Subsidiaries) of Indebtedness for borrowed money (other than Indebtedness for
borrowed money permitted to be incurred pursuant to Section 9.04 as such
Section is in effect on the Restatement Effective Date), an amount equal to
100% of the cash proceeds of the respective incurrence of Indebtedness (net
of underwriting or placement discounts and commissions and other costs
associated therewith) shall be applied in accordance with the requirements of
Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Restatement Effective Date upon which Newco or any of its Subsidiaries
receives any cash proceeds from any incurrence by Newco or any of its
Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for
borrowed money permitted to be incurred pursuant to Section 9.04 as such
Section is in effect on the Restatement Effective Date), an amount equal to
100% of the cash proceeds of the respective incurrence of Indebtedness (net
of underwriting or placement discounts and commissions and other costs
associated therewith) shall be applied in accordance with the requirements of
Sections 4.02(h) and (j).
(e)(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Restatement Effective Date upon which Holdings or any of its Subsidiaries
(other than Newco and its Subsidiaries) receives cash proceeds from any sale
of assets (including capital stock and securities held thereby but excluding
(x) sales
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<PAGE>
of assets permitted by Sections 9.02(v), (vi), (viii), (ix) (except to the
extent required to be applied pursuant to the proviso to said clause (ix))
and (x), an amount equal to 100% of the Net Sale Proceeds therefrom shall be
applied in accordance with the requirements of Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Restatement Effective Date upon which Newco or any of its Subsidiaries
receives cash proceeds from any sale or assets (including capital stock and
securities held thereby but excluding (x) sales of assets permitted by
Section 9.02(v), (vi), (viii), (ix) (except to the extent required to be
applied pursuant to the proviso to said clause (ix)) and (x)), an amount
equal to 100% of the Net Sale Proceeds therefrom shall be applied in
accordance with the requirements of Sections 4.02(h) and (j).
(f)(i) In addition to any other mandatory repayments
pursuant to this Section 4.02, on each Excess Cash Payment Date, an amount
equal to 75% (or 50% (or such greater percentage, between 50% and 100%, as is
needed to cause the Leverage Ratio requirement hereinafter described to be
satisfied) if on such Excess Cash Payment Date (x) no Default or Event of
Default then exists and (y) the Leverage Ratio, after the required
application pursuant to this clause (f), is less than 3.25:1.00) of the
Holdings Excess Cash Flow for the relevant Excess Cash Payment Period shall
be applied in accordance with the requirements of Sections 4.02(i) and (j).
(ii) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each Excess Cash Payment Date, an amount equal to 75%
(or 50% (or such greater percentage, between 50% and 100%, as is needed to
cause the Leverage Ratio requirement hereinafter described to be satisfied)
if on such Excess Cash Payment Date (x) no Default or Event of Default then
exists and (y) the Leverage Ratio, after the required application pursuant to
this clause (f), is less than 3.25:1.00) of the Newco Excess Cash Flow for
the relevant Excess Cash Payment Period shall be applied in accordance with
the requirements of Section 4.02(h) and (j).
(g)(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 30 days following
each date after the Restatement Effective Date on which Holdings or any of
its Subsidiaries (other than Newco and its Subsidiaries) receives any
proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net of costs and taxes incurred in connection with such
Recovery Event) shall be applied in accordance with the requirements of
Sections 4.02(i) and (j), provided that (x) so long as no Default or Event of
Default then exists and such proceeds do not exceed $5,000,000, such proceeds
shall not be required to be so applied on such date to the extent that
Adience has delivered a certificate to the Administrative Agent on or prior
to such date stating that such proceeds shall be used to replace or restore
any properties or assets in respect of which such proceeds were paid within
365 days following the date of such Recovery Event (which certificate shall
set forth the estimates of the proceeds to be so expended) and (y) so long as
no Default or Event of Default then exists and to the extent that (a) the
amount of such proceeds exceeds $5,000,000, (b) Adience has delivered to the
Administrative Agent a certificate on or prior to the date the application
would otherwise be required pursuant to this Section 4.02(g)(i) in the form
described in clause (x) above and also certifying the sufficiency of business
interruption insurance as required by succeeding clause (c), and (c) Adience
has delivered to the
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<PAGE>
Administrative Agent such evidence as the Administrative Agent may reasonably
request in form and substance reasonably satisfactory to the Administrative
Agent establishing that Adience has sufficient business interruption
insurance and that Adience will be receiving regular payments thereunder in
such amounts and at such times as are necessary to satisfy all obligations
and expenses of Adience (including, without limitation, all debt service
requirements, including pursuant to this Agreement), without any delay or
extension thereof, for the period from the date of the respective casualty,
condemnation or other event giving rise to the Recovery Event and continuing
through the completion of the replacement or restoration of respective
properties or assets, then the entire amount and not just the portion in
excess of $5,000,000 shall be deposited as security for the Obligations with
the Administrative Agent for the benefit of the Secured Creditors pursuant to
a cash collateral arrangement reasonably satisfactory to the Administrative
Agent whereby such proceeds shall be disbursed to Adience from time to time
as needed to pay actual costs incurred by it in connection with the
replacement or restoration of the respective properties or assets (pursuant
to such reasonable certification requirements as may be established by the
Administrative Agent), provided further, that at any time while an Event of
Default has occurred and is continuing, the Required Banks may direct the
Administrative Agent (in which case the Administrative Agent shall, and is
hereby authorized by Adience to, follow said directions) to apply any or all
proceeds then on deposit in such collateral account to the repayment of
Obligations hereunder in the same manner as proceeds would be applied
pursuant to the U.S. Security Agreement, and, provided further, that if all
or any portion of such proceeds not required to be applied as a mandatory
repayment and/or commitment reduction pursuant to the second preceding
proviso (whether pursuant to clause (x) or (y) thereof) are either (A) not so
used within 365 days after the date of receipt of proceeds from the
respective Recovery Event or (B) if committed to be used within 365 days
after the date of receipt of proceeds from the respective Recovery Event and
not so used within 540 days after the date of receipt of proceeds from the
respective Recovery Event, then, in either case, such remaining portion not
used or committed to be used in the case of the preceding clause (A) and not
used in the case of preceding clause (B), shall be applied on the date which
is 365 days following the date of receipt of proceeds from the respective
Recovery Event in the case of clause (A) above, or the date which is 540 days
after the date of receipt of proceeds from the respective Recovery Event in
the case of clause (B) above, in accordance with the requirements of Section
4.02(i) and (j).
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 30 days following
each date after the Restatement Effective Date on which Newco or any of its
Subsidiaries receives any proceeds from any Recovery Event, an amount equal
to 100% of the proceeds of such Recovery Event (net of costs and taxes
incurred in connection with such Recovery Event) shall be applied in
accordance with the requirements of Sections 4.02(h) and (j), provided that
(x) so long as no Default or Event of Default then exists and such proceeds
do not exceed $5,000,000, such proceeds shall not be required to be so
applied on such date to the extent that Newco has delivered a certificate to
the Administrative Agent on or prior to such date stating that such proceeds
shall be used to replace or restore any properties or assets in respect of
which such proceeds were paid within 365 days following the date of such
Recovery Event (which certificate shall set forth the estimates of the
proceeds to be so expended) and (y) so long as no Default or Event of Default
then exists and to the extent that (a) the amount of such proceeds exceeds
$5,000,000, (b) Newco has delivered to the Administra-
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<PAGE>
tive Agent a certificate on or prior to the date the application would
otherwise be required pursuant to this Section 4.02(g)(ii) in the form
described in clause (x) above and also certifying the sufficiency of business
interruption insurance as required by succeeding clause (c), and (c) Newco
has delivered to the Administrative Agent such evidence as the Administrative
Agent may reasonably request in form and substance reasonably satisfactory to
the Administrative Agent establishing that Newco has sufficient business
interruption insurance and that Newco will be receiving regular payments
thereunder in such amounts and at such times as are necessary to satisfy all
obligations and expenses of Newco (including, without limitation, all debt
service requirements, including pursuant to this Agreement), without any
delay or extension thereof, for the period from the date of the respective
casualty, condemnation or other event giving rise to the Recovery Event and
continuing through the completion of the replacement or restoration of
respective properties or assets, then the entire amount and not just the
portion in excess of $5,000,000 shall be deposited as security for the
Obligations with the Administrative Agent for the benefit of the Secured
Creditors pursuant to a cash collateral arrangement reasonably satisfactory
to the Administrative Agent whereby such proceeds shall be disbursed to Newco
from time to time as needed to pay actual costs incurred by it in connection
with the replacement or restoration of the respective properties or assets
(pursuant to such reasonable certification requirements as may be established
by the Administrative Agent), provided further, that at any time while an
Event of Default has occurred and is continuing, the Required Banks may
direct the Administrative Agent (in which case the Administrative Agent
shall, and is hereby authorized by Newco to, follow said directions) to apply
any or all proceeds then on deposit in such collateral account to the
repayment of Obligations hereunder in the same manner as proceeds would be
applied pursuant to the U.K. Security Agreement, and, provided further, that
if all or any portion of such proceeds not required to be applied as a
mandatory repayment and/or commitment reduction pursuant to the second
preceding proviso (whether pursuant to clause (x) or (y) thereof) are either
(A) not so used within 365 days after the date of receipt of proceeds from
the respective Recovery Event or (B) if committed to be used within 365 days
after the date of receipt of proceeds from the respective Recovery Event and
not so used within 540 days after the date of receipt of proceeds from the
respective Recovery Event, then, in either case, such remaining portion not
used or committed to be used in the case of the preceding clause (A) and not
used in the case of preceding clause (B), shall be applied on the date which
is 365 days following the date of receipt of proceeds from the respective
Recovery Event in the case of clause (A) above, or the date which is 540 days
after the date of receipt of proceeds from the respective Recovery Event in
the case of clause (B) above, in accordance with the requirements of Section
4.02(h) and (j).
(h) Each amount required to be applied pursuant to this
clause (h) as a result of the requirements of Sections 4.02(c)(ii), (d)(ii),
(e)(ii), (f)(ii) and (g)(ii), and the last sentence of Section 4.02(i), shall
be applied (after the conversion by Newco of any amounts received in a
currency other than Pounds Sterling into Pounds Sterling) pro rata to each
Tranche of Newco Term Loans based upon the then remaining principal amounts
of the respective Tranches (with each Tranche of Newco Term Loans to be
allocated that percentage of the amount to be so applied as is equal to a
fraction (expressed as a percentage) the numerator of which is equal to the
outstanding principal amount of such Tranche of Newco Term Loans and the
denominator of which is equal to the then outstanding principal amount of all
Newco Term Loans). Any amount required to be applied to either Tranche of
Newco Term Loans pursuant to the requirements of
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<PAGE>
the immediately preceding sentence shall be applied to repay the outstanding
principal amount of Newco Term Loans of the respective Tranche. The amount
of each principal repayment of Newco Term Loans made as required by this
clause (h) shall be applied pro rata to reduce the then remaining Scheduled
Repayments of the respective Tranche based upon the then remaining amount of
each Scheduled Repayment of the respective Tranche, after giving effect to
all prior reductions thereto. To the extent the amount at any time required
to be applied pursuant to this Section 4.02(h) exceeds the aggregate
principal amount of Newco Term Loans then outstanding, then (x) such excess
shall instead be required to be repatriated to Adience and (y) the amount
(net of any applicable withholding taxes or other amounts required under
applicable law to be withheld in respect of the amount repatriated to
Adience) repatriated to Adience as described in this sentence shall be
applied as otherwise required by Sections 4.02(i) and (j).
(i) Each amount required to be applied to Adience Term Loans
pursuant to this clause (i) as a result of the requirements of Sections
4.02(c)(i), (d)(i), (e)(i), (f)(i) and (g)(i), and the last sentence of
Section 4.02(h), shall be applied (after the conversion by Adience of any
amounts received in a currency other than Dollars into Dollars) pro rata to
each Tranche of Adience Term Loans based upon the then remaining principal
amounts of the respective Tranches (with each Tranche of Adience Term Loans
to be allocated that percentage of the amount to be so applied as is equal to
a fraction (expressed as a percentage) the numerator of which is equal to the
outstanding principal amount of such Tranche of Adience Term Loans and the
denominator of which is equal to the then outstanding principal amount of all
Adience Term Loans). Any amount required to be applied to any Tranche of
Adience Term Loans pursuant to the requirements of the immediately preceding
sentence shall be applied to repay the outstanding principal amount of
Adience Term Loans of the respective Tranche. The amount of each principal
repayment of Adience Term Loans made as required by this clause (i) shall be
applied pro rata to reduce the then remaining Scheduled Repayments of the
respective Tranche based upon the then remaining amount of each Scheduled
Repayment of the respective Tranche, after giving effect to all prior
reductions thereto. To the extent the amount at any time required to be
applied pursuant to this Section 4.02(i) exceeds the aggregate principal
amount of Adience Term Loans then outstanding, then (x) such excess (up to
the aggregate principal amount of Newco Term Loans then outstanding) shall
instead be required to be invested in Newco and (y) the amount so invested in
Newco as described in this sentence shall be applied as otherwise required by
Sections 4.02(h) and (j).
(j) With respect to each repayment of Loans required by this
Section 4.02, the respective Borrower may designate the Types of Loans of the
respective Tranche which are to be repaid and, in the case of Euro Rate
Loans, the specific Borrowing or Borrowings of the respective Tranche
pursuant to which made, provided that: (i) in the case of repayments of
Dollar Loans, repayments of Eurodollar Loans of the respective Tranche
pursuant to this Section 4.02 may only be made on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans of the respective
Tranche with Interest Periods ending on such date of required repayment and
all Base Rate Loans of the respective Tranche have been paid in full; (ii) if
any repayment of Euro Rate Loans made pursuant to a single Borrowing shall
reduce the outstanding Loans made pursuant to such Borrowing to an amount
less than the respective Minimum Borrowing Amount for the respective Tranche
and Type of Loan, such Borrowing (x) in the case of Dollar Loans, shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans and (y) in the case of Sterling Loans, shall be repaid in
full at the end of the then current
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<PAGE>
Interest Period (with the amount of any such repayment to be applied pro rata
to reduce the then remaining Scheduled Repayments of the respective Tranche
based upon the then remaining amount of each Scheduled Repayment of the
respective Tranche after giving effect to all prior reductions thereto); and
(iii) each repayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the absence of a designation by the
respective Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in
its sole discretion.
(k) Notwithstanding anything to the contrary contained in
this Agreement or in any other Credit Document, (x) all then outstanding
Loans (other than Swingline Loans and Sterling Swingline Loans) of any
Tranche shall be repaid in full on the respective Maturity Date for such
Tranche of Loans and (y) all then outstanding Swingline Loans and Sterling
Swingline Loans shall be repaid in full on the Swingline Expiry Date.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or
Banks entitled thereto not later than 12:00 Noon (local time in the city in
which the Payment Office for the respective such payments is located) on the
date when due and shall be made in (x) Dollars in immediately available funds
at the appropriate Payment Office of the Administrative Agent in respect of
any obligation of the Borrowers under this Agreement except as otherwise
provided in the immediately following clause (y) and (y) Pounds Sterling in
immediately available funds at the appropriate Payment Office of the
Administrative Agent, if such payment is made in respect of (i) principal of
or interest on Sterling Loans, or (ii) any increased costs, indemnities or
other amounts owing with respect to Sterling Loans (or Commitments relating
thereto), in the case of this clause (ii) to the extent the respective Bank
which is charging same denominates the amounts owing in Pounds Sterling. The
Administrative Agent will thereafter cause to be distributed on the same day
(if payment was actually received by the Administrative Agent prior to 12:00
noon (local time in the city in which such payments are to be made)) like
funds relating to the payment of principal, interest or Fees ratably to the
Banks entitled thereto. Any payments under this Agreement which are made
later than 12:00 Noon (local time in the city in which such payments are to
be made) shall be deemed to have been made on the next succeeding Business
Day. Whenever any payment to be made hereunder or under any Note shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable at the applicable rate
during such extension.
4.04 Net Payments. (a) All payments made by each Borrower
hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Sections 4.04(b) and (c), all such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments
or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on or measured by the net
income or profits or franchise taxes based on net income of a Bank pursuant
to the laws of the jurisdiction in which it is organized or the jurisdiction
in which the principal office or applicable lending office of such Bank is
located or any subdivision thereof or therein) and all interest, penal-
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<PAGE>
ties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
the respective Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction
for or on account of any Taxes, will not be less than the amount provided for
herein or in such Note. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, the respective Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed
on or measured by the net income or profits of such Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending
office of such Bank is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which the principal office or
applicable lending office of such Bank is located and for any withholding of
taxes as such Bank shall determine are payable by, or withheld from, such
Bank in respect of such amounts so paid to or on behalf of such Bank pursuant
to the preceding sentence and in respect of any amounts paid to or on behalf
of such Bank pursuant to this sentence. If any Borrower pays any additional
amount under this Section 4.04 to a Bank and such Bank determines in its sole
discretion that it has actually received or realized in connection therewith
any refund or any reduction of, or credit against, its Tax liabilities in or
with respect to the taxable year in which the additional amount is paid, such
Bank shall pay to such Borrower an amount that the Bank shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was
obtained by the Bank in such year as a consequence of such refund, reduction
or credit. The respective Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
the respective Borrower. Each Borrower agrees to indemnify and hold harmless
each Bank, and reimburse such Bank upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to
Adience and the Administrative Agent on or prior to the Original Effective
Date (or the Restatement Effective Date in the case of such Banks that first
became party hereto on the Restatement Effective Date), or in the case of a
Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 13.04 (unless the respective Bank was already a
Bank hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Bank's entitlement as of such date to a
complete exemption from United States withholding tax with respect to
payments to be made under this Agreement and under any Note, or (ii) if the
Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant
to clause (i) above, (x) a certificate substantially in the form of Exhibit D
(any such certificate, a "Section 4.04(b)(ii) Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition,
each Bank agrees that from time to time after the Original Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver
to Adience
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and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as
may be required in order to confirm or establish the entitlement of such Bank
to a continued exemption from or reduction in United States withholding tax
with respect to payments under this Agreement and any Note, or it shall
immediately notify Adience and the Administrative Agent of its inability to
deliver any such Form or Certificate in which case such Bank shall not be
required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) Adience shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Bank has not provided to Adience U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) Adience shall not be obligated pursuant to
Section 4.04(a) hereof to gross-up payments to be made to a Bank in respect
of income or similar taxes imposed by the United States if (I) such Bank has
not provided to Adience the Internal Revenue Service Forms required to be
provided to Adience pursuant to this Section 4.04(b) or (II) in the case of a
payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 13.04(b), Adience agrees to pay additional
amounts and to indemnify each Bank in the manner set forth in Section 4.04(a)
(without regard to the identity of the jurisdiction requiring the deduction
or withholding) in respect of any amounts deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes
that are effective after the Original Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Taxes.
(c) Each Bank that is not a resident of the United Kingdom
for United Kingdom tax purposes agrees to (i) deliver to Newco and the
Administrative Agent such declaration of non-residence or other similar claim
as shall be requested by Newco (giving the Bank sufficient time to satisfy
such requirement), as is required by statute, treaty or regulation of the
United Kingdom existing on the Original Effective Date (or the Restatement
Effective Date in the case of such Banks that first became party to this
Agreement on the Restatement Effective Date) or which are not substantially
more onerous than those existing on the Original Effective Date (or the
Restatement Effective Date in the case of such Banks that first became party
to this Agreement on the Restatement Effective Date) and which do not impose
an unreasonable burden (in time, resources or otherwise) on the Bank, or (ii)
within 45 days after the Original Effective Date (or the Restatement
Effective Date in the case of such Banks that first became party to this
Agreement on the Restatement Effective Date), make the requisite filing with
the U.K. Inspector of Foreign Dividends (and/or the taxing authority of the
jurisdiction in which such Bank's principal office is located) as required to
establish its entitlement to an exemption from U.K. withholding under the
double tax treaty currently in force between the United States (or the
jurisdiction in which such Bank's principal office is located) and the United
Kingdom.
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Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x)
Newco shall be entitled, to the extent it is required to do so by law, to
deduct and withhold income or similar taxes imposed by the United Kingdom on
interest, Fees or other amounts payable hereunder for the account of any Bank
which is not a resident of the United Kingdom for U.K. tax purposes to the
extent that such Bank has not provided forms, declarations or other
certification required to establish a complete exemption from such deduction
or withholding and (y) Newco shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to a Bank in respect of income
or similar taxes imposed by the United Kingdom if such Bank has not provided
to Newco the forms and declaration required to be provided by such Bank
pursuant to the preceding sentence. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04, and
except as set forth in Section 13.04(b), Newco agrees to pay any additional
amounts and to indemnify each Bank in the manner set forth in Section 4.04(a)
(without regard to the identity of the jurisdiction requiring the deduction
or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes
after the Restatement Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes. For the
avoidance of doubt, nothing herein shall require any Bank to disclose any
information regarding its tax affairs or computations to Newco or any of its
Affiliates and no Bank shall be obligated to disclose any of its tax returns
to Newco or any of its Affiliates or any agent of the foregoing.
SECTION 5. Conditions Precedent to Restatement Effective
Date. The occurrence of the Restatement Effective Date, and the obligation
of each Bank to continue and/or make Loans, and the obligation of any Issuing
Bank to issue Letters of Credit, on the Restatement Effective Date, is
subject to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the
Restatement Effective Date (i) this Agreement shall have been executed and
delivered as provided in Section 13.10 and (ii) there shall have been
delivered to the Administrative Agent for the account of each of the Banks
the appropriate Adience A Term Note, Adience B-2 Term Note, Adience C Term
Note, Dollar Revolving Note and/or Sterling Revolving Note executed by the
appropriate Borrower, in each case in the amount, maturity and as otherwise
provided herein.
5.02 Opinions of Counsel. On the Restatement Effective Date,
the Administrative Agent shall have received from (i) Proskauer Rose LLP,
special U.S. counsel to the Credit Parties, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Banks and dated
the Restatement Effective Date in the form set forth as Exhibit E-1 and (ii)
local counsel (satisfactory to the Administrative Agent), legal opinions each
of which (x) shall be addressed to the Administrative Agent, the Collateral
Agent and each of the Banks, (y) shall be in form and substance reasonably
satisfactory to the Administrative Agent and (z) shall cover the perfection
of the security interests granted pursuant to the Security Documents (as
amended by the Mortgage Amendments in the case of the Original Mortgages) and
such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request.
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5.03 Corporate Documents; Proceedings; etc. (a) On the
Restatement Effective Date, the Administrative Agent shall have received a
certificate, dated the Restatement Effective Date, signed by an Authorized
Officer of Holdings, each Borrower and each Subsidiary of Adience which is to
become a Credit Party on the Restatement Effective Date (excluding any such
Subsidiary which was a Credit Party in the Original Effective Date), and
attested to by the Secretary or any Assistant Secretary of such Person, in
the form of Exhibit F with appropriate insertions, together with copies of
the certificate of incorporation (or equivalent organizational document) and
by-laws of such Person (or, in the case of Holdings and each Borrower, the
text of any changes to such certificate of incorporation or by-laws) and the
resolutions of such Person referred to in such certificate, and the foregoing
shall be reasonably acceptable to the Administrative Agent.
(b) On the Restatement Effective Date, the Administrative
Agent shall have received certificates of all Credit Parties (other than the
Credit Parties delivering certificates pursuant to preceding clause (a))
signed by an Authorized Officer of such Credit Party, and attested to by the
Secretary or any Assistant Secretary of such Credit Party, (x) certifying
that there were no changes, or providing the text of any changes, to the
certificate of incorporation and by-laws of such Credit Parties as delivered
pursuant to Section 5.03 of the Original Credit Agreement, (y) to the effect
that each such Credit Party is in good standing in its respective state of
incorporation and in those states where each such Credit Party conducts
business and (z) providing the resolutions adopted by each such Credit Party
with respect to the Acquisition and the amendment and restatement of this
Agreement, and the obligations of such Credit Party with respect to the
increased extensions of credit pursuant hereto), and the foregoing shall be
reasonably acceptable to the Administrative Agent in its reasonable
discretion.
(c) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Documents shall be reasonably satisfactory in form
and substance to the Administrative Agent and the Required Banks, and the
Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams
or facsimiles, if any, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or governmental authorities.
5.04 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining Agreements; Existing
Indebtedness Agreements. (a) On the Restatement Effective Date, there shall
have been made available to the Administrative Agent true and correct copies
of the following documents (in each case except to the extent already
delivered to or made available for review by the Administrative Agent on or
prior to the Original Effective Date), in each case as same will be in effect
on the Restatement Effective Date after consummation of the Acquisition:
(i) all Plans that, as of the Restatement Effective Date, are
maintained, sponsored or contributed to by Holdings, any Subsidiary
of Holdings, or any ERISA Affiliate (and for each such Plan that is
required to file an annual report on Internal Revenue Service Form
5500-series, a copy of the most recent such report (including, to
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the extent required, the related financial and actuarial
statements and opinions and other supporting statements,
certifications, schedules and information), and for each such
Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial
valuation therefor) and any other "employee benefit plans," as
defined in Section 3(3) of ERISA, and any other material
agreements, plans or arrangements, with or for the benefit of
current or former employees of Holdings or any of its
Subsidiaries or any ERISA Affiliate (provided that the
foregoing shall apply in the case of any multiemployer plan,
as defined in Section 4001(a)(3) of ERISA, only to the extent
that any document described therein is in the possession of
Holdings or any Subsidiary of Holdings or any ERISA Affiliate
or reasonably available thereto from the sponsor or trustee of
any such Plan) (collectively, together with any agreements,
plans or arrangements referred to in Section 5.04(i) of the
Original Credit Agreement, and any amendments thereto referred
to in Section 5.04(b), the "Employee Benefit Plans");
(ii) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to any
such entity with respect to its capital stock (collectively, together
with any agreements referred to in Section 5.04(ii) of the Original
Credit Agreement, and any amendments thereto referred to in Section
5.04(b), the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to,
the senior management and management of Holdings or any of its
Subsidiaries (collectively, together with any agreements referred to
in Section 5.04(iii) of the Original Credit Agreement, and any
amendments thereto referred to in Section 5.04(b), the "Management
Agreements");
(iv) all collective bargaining agreements applying or relating
to any employee of Holdings or any of its Subsidiaries (collectively,
together with any agreements referred to in Section 5.04(iv) of the
Original Credit Agreement, and any amendments thereto referred to in
Section 5.04(b), the "Collective Bargaining Agreements");
(v) all agreements evidencing or relating to Indebtedness of
Holdings or any of its Subsidiaries which is to remain outstanding
after giving effect to the incurrence of Loans on the Restatement
Effective Date (collectively, together with any agreements referred
to in Section 5.04(v) of the Original Credit Agreement, and any
amendments thereto referred to in Section 5.04(b), the "Existing
Indebtedness Agreements"); and
(vi) the Alpine/Holdings Tax Sharing Agreement;
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Existing Indebtedness
Agreements and the Alpine/Holdings Tax Sharing Agreement shall, except to the
extent such agreements are of no force and effect on the Restatement
Effective Date, be in form and substance satisfactory to the Administrative
Agent and the Required Banks.
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(b) On or prior to the Restatement Effective Date, the
Administrative Agent shall have received (i) a certificate of Holdings, dated
the Restatement Effective date, signed by an Authorized Officer of Holdings,
and attested to by the Secretary or Assistant Secretary of Holdings stating
that all agreements and plans referred to in Section 5.04 of the Original
Credit Agreement, previously delivered (or made available to the
Administrative Agent by each Credit Party, remain in full force and effect
(or specifying which of such agreements and plans do not remain in full force
and effect) and (ii) any amendments thereto or additional such agreements.
5.05 Floating Rate Loans. On or prior to the Restatement
Effective Date, (i) the Floating Rate Loan Documents shall have been amended
to permit the consummation of the Transaction and to incorporate any
additional changes thereto that are deemed by the Administrative Agent to be
reasonably necessary in light of the foregoing and (ii) the Administrative
Agent shall have received true and correct copies of the Floating Rate Loan
Documents as so amended and such Floating Rate Loan Documents are in form and
substance satisfactory to the Administrative Agent and the Required Banks.
5.06 Consummation of Acquisition; Etc. (a) On the
Restatement Effective Date, (i) the Acquisition shall have been consummated
in accordance with the Acquisition Documents and all applicable laws (except
insofar as moneys to be advanced under the terms of this Agreement as are
required for such purpose), (ii) each of the conditions precedent set forth
in the Acquisition Documents shall have been satisfied and not waived (unless
waived with the consent of the Administrative Agent and the Required Banks),
and (iii) the Administrative Agent shall have received true and correct
copies of the Acquisition Documents, all of which shall be in full force and
effect and required to be in form and substance (including as to all of the
terms and conditions thereof) satisfactory to the Administrative Agent and
the Required Banks.
(b) On the Restatement Effective Date, the capital structure
of Holdings and its Subsidiaries shall be as set forth in the Organization
Chart attached as Schedule IX, which shall be required to be in form and
substance satisfactory to the Administrative Agent and the Required Banks.
(c) On the Restatement Effective Date, neither Adience nor
any of its Subsidiaries shall owe any amounts, by way of intercompany loans
or otherwise, to Alpine or any of its Subsidiaries (other than Adience and
its Subsidiaries); provided that on the Restatement Effective Date Adience
and its Subsidiaries may owe up to an aggregate principal amount of
$1,000,000 of intercompany loans to Alpine.
5.07 Indebtedness to be Refinanced. (a) On or prior to the
Restatement Effective Date or concurrently with the Credit Events then
occurring, the total commitments under the Indebtedness to be Refinanced
shall have been terminated, and all loans and notes issued thereunder shall
have been repaid in full, together with interest thereon, all letters of
credit issued thereunder shall have been terminated or collateralized by new
back-to-back letters of credit in form and substance, and issued by an
issuer, satisfactory to the respective letter of credit issuers or otherwise
supported in a manner satisfactory to the respective letter of credit
issuers, and all other amounts owing pursuant to the Indebtedness to be
Refinanced shall have been repaid in full and all documents in respect of the
Indebtedness to be Refinanced shall have been terminated and
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be of no further force or effect except for continuing indemnification
obligations described therein. The Administrative Agent shall have received
evidence in form, scope and substance reasonably satisfactory to it that the
matters set forth in this Section 5.07(a) have been satisfied on such date.
(b) On or prior to the Restatement Effective Date or
concurrently with the Credit Events then occurring, the creditors in respect
of the Indebtedness to be Refinanced shall have terminated and released all
security interests and Liens on the assets owned or to be owned by Adience or
any of its Subsidiaries granted in connection with the Indebtedness to be
Refinanced. The Administrative Agent shall have received such releases of
security interests in and Liens on the assets owned or to be owned by Adience
and its Subsidiaries (including APHI and its Subsidiaries) as may have been
reasonably requested by the Administrative Agent, which releases shall be in
form and substance reasonably satisfactory to the Administrative Agent.
Without limiting the foregoing, there shall have been delivered (i) proper
termination statements (Form UCC-3 or the appropriate equivalent) for filing
under the UCC of each jurisdiction where a financing statement (Form UCC-1 or
the appropriate equivalent) was filed with respect to Adience or any of its
Subsidiaries (including APHI and its Subsidiaries), or their respective
predecessors in interest, in connection with the security interests created
with respect to the Indebtedness to be Refinanced and the documentation
related thereto, (ii) terminations or assignments of any security interest
in, or Lien on, any patents, trademarks, copyrights, or similar interests of
Adience or any of its Subsidiaries (including APHI and its Subsidiaries), on
which filings have been made and (iii) terminations of all mortgages,
leasehold mortgages and deeds of trust created with respect to property of
Adience or any of its Subsidiaries (including APHI and its Subsidiaries), or
their respective predecessors in interest, in each case, to secure the
obligations under the Indebtedness to be Refinanced, all of which shall be in
form and substance reasonably satisfactory to the Administrative Agent.
5.08 Adverse Change, etc. (a) On or prior to the
Restatement Effective Date, nothing shall have occurred (and neither the
Administrative Agent nor the Banks shall have become aware of any facts,
conditions or other information not previously known) which the
Administrative Agent or the Required Banks shall determine could reasonably
be expected to have a material adverse effect on the rights or remedies of
the Administrative Agent or the Banks, or on the ability of any Credit Party
to perform its obligations to the Administrative Agent and the Banks or which
could reasonably be expected to have a Material Adverse Effect.
(b) All necessary governmental (domestic and foreign) and
third party approvals and/or consents in connection with any Credit Event and
the Transaction, the other transactions contemplated by the Documents and
otherwise referred to herein or therein (excluding governmental approvals
and/or consents not required to be obtained on or prior to the Restatement
Effective Date) shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken
by any competent authority which restrains, prevents, or imposes materially
adverse conditions upon, the consummation of any Credit Event and the
Transaction or the other transactions contemplated by the Documents or
otherwise referred to herein or therein. Additionally, there shall not exist
any judgment, order, injunction or other restraint issued or filed or a
hearing seeking injunctive relief or other restraint
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pending or notified prohibiting or imposing materially adverse conditions
upon any Credit Event or the Transaction or the other transactions
contemplated by the Documents.
5.09 Litigation. On the Restatement Effective Date, no
litigation by any entity (private or governmental) shall be pending or
threatened with respect to this Agreement, any other Document or any
documentation executed in connection herewith or therewith or the
transactions contemplated hereby or thereby, or which the Administrative
Agent or the Required Banks shall determine could reasonably be expected to
have a material adverse effect on the Transaction or the Acquired Business or
a Material Adverse Effect.
5.10 Acknowledgments; Assumptions. (a) Each Subsidiary
Guarantor shall have executed and delivered a counterpart of this Agreement,
pursuant to which it makes the acknowledgments and agreements appearing
immediately preceding the signature pages of such Subsidiary Guarantors
appearing at the end of this Agreement.
(b) Each Subsidiary Guarantor which was not a Subsidiary
Guarantor immediately before giving effect to the Restatement Effective Date
shall have duly authorized, executed and delivered counterparts of an
assumption agreement in the form of Exhibit G (the "Subsidiary Assumption
Agreement").
5.11 U.S. Pledge Agreement. On the Restatement Effective
Date, Adience and each U.S. Subsidiary Guarantor shall furnish to the
Administrative Agent updates, as necessary, to the schedules to the U.S.
Pledge Agreement (as prepared as of the Restatement Effective Date and after
giving effect thereto) and Adience and each U.S. Subsidiary Guarantor shall
deliver to the Collateral Agent, as Pledgee thereunder, all of the Pledged
Securities, if any, referred to therein that are owned by Adience and each
U.S. Subsidiary Guarantor (to the extent not already delivered pursuant to
the U.S. Pledge Agreement), (x) endorsed in blank in the case of promissory
notes constituting Pledged Securities and (y) together with executed and
undated stock powers in the case of capital stock constituting Pledged
Securities.
5.12 U.S. Security Agreement. On the Restatement Effective
Date, Adience and each U.S. Subsidiary Guarantor shall cause to be delivered
to the Administrative Agent updated schedules to the U.S. Security Agreement,
prepared as of the Restatement Effective Date (and after giving effect
thereto), which schedules shall be true and correct in all material respects.
In addition, each U.S. Subsidiary Guarantor which becomes party to the
Subsidiary Assumption Agreement shall deliver the following:
(i) proper Financing Statements (Form UCC-1 or the equivalent)
fully executed for filing under the UCC or other appropriate filing
offices of each jurisdiction as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the U.S. Security
Agreement;
(ii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing
statements that name such U.S. Subsidiary Guarantor as debtor and
that are filed in the jurisdictions referred to in clause (i) above,
together with copies of such other financing statements that name
such U.S. Subsidiary as
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debtor (none of which shall cover the Collateral except to the extent
evidencing Permitted Liens or in respect of which the Collateral Agent
shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law fully
executed for filing);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the U.S. Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the U.S. Security Agreement; and
(iv) evidence that all other actions necessary (including the
amending of any existing financing statements) or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect
(or maintain the perfection of) the security interests purported to
be created by the U.S. Security Agreement have been taken.
5.13 U.K. Security Documents. (a) On the Restatement
Effective Date, each of the U.K. Subsidiaries, which is a party to the U.K.
Security Agreement shall deliver to the Administrative Agent a notice setting
forth details of any assets acquired by it subsequent to the date of the U.K.
Security Agreement which are subject to any of the charges created thereunder
or of any assets which, for any reason, were not subject to such charges on
the date of the U.K. Security Agreement but which have become subject to any
of such charges since that date.
(b) On the Restatement Effective Date, (x) Adience shall
deliver to the Administrative Agent, to the extent that Adience has not done
so prior to the Restatement Effective Date, share certificates in respect of
any Derivative Assets (as defined in the Adience U.K. Pledge Agreement)
together with duly executed stock transfer forms with the name of the
transferee, date and consideration left blank in respect of the shares
represented by such share certificates and (y) Newco shall deliver to the
Administrative Agent, to the extent that Newco has not done so prior to the
Restatement Effective Date, share certificates or other documents of title to
or representing any Derivative Assets (as defined in the Newco U.K. Pledge
Agreement) together with duly executed stock transfer forms, transfers or
assignments with the name of the transferee, date and consideration left
blank in respect of the Derivative Assets represented by such share
certificates or other documents of title.
5.14 Mortgage; Title Insurance. On the Restatement Effective
Date, the Collateral Agent shall have received:
(a) with respect to the New Mortgaged Properties:
(i) fully executed counterparts of mortgages, deeds of
trust or deeds to secure debt, in each case substantially in
the form of the Original Mortgages delivered to the
Administrative Agent on the Original Effective Date or in such
other form and substance as is reasonably satisfactory to the
Administrative Agent (as modified, supplemented or amended from
time to time, each a "New Mortgage" and, collectively, the "New
Mortgages"), which New Mortgages shall cover such of the Real
Property owned or leased by Adience and its Domestic Subsidiaries
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(after giving affect to the occurrence of the Restatement
Effective Date) as shall be designated on Schedule III (and is
not subject to any Original Mortgage) (each a "New Mortgaged
Property" and, collectively, the "New Mortgaged Properties"),
together with evidence that counterparts of the New Mortgages
have been delivered to the title insurance company insuring the
Lien of the New Mortgages for recording in all places to the
extent necessary or, in the reasonable opinion of the Collateral
Agent, desirable to effectively create a valid and enforceable
first priority mortgage lien on each New Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the
Secured Creditors; and
(ii) a mortgagee title insurance policy on each New Mortgaged
Property issued by Lawyers Title Insurance Company or such other
title insurer as is reasonably satisfactory to the Collateral
Agent (the "New Mortgage Policies") in amounts satisfactory to
the Administrative Agent assuring the Collateral Agent that the
New Mortgages on such New Mortgaged Properties are valid and
enforceable first priority mortgage liens on the respective New
Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances and such New Mortgage
Policies shall otherwise be in form and substance reasonably
satisfactory to the Administrative Agent and shall include,
as appropriate, an endorsement for future advances under this
Agreement and the Notes and for any other matter that the
Administrative Agent in its reasonable discretion may reasonably
request, shall not include an exception for mechanics' liens, and
shall provide for affirmative insurance as the Administrative
Agent in its discretion may reasonably request; and
(b) with respect to the Original Mortgaged Properties:
(i) fully executed counterparts of
amendments (the "Mortgage Amendments"), in form and substance
satisfactory to the agents, to each of the Original Mortgages,
together with evidence that counterparts of each of the
Mortgage Amendments have been delivered to the title
insurance company insuring the Lien of the Original Mortgages
for recording in all places to the extent necessary or, in
the reasonable opinion of the Collateral Agent, desirable to
effectively maintain a valid and enforceable first priority
(subject to Permitted Liens) mortgage lien on each Original
Mortgaged Property in favor of the Collateral Agent (or such
other trustee as may be required or desired under local law)
for the benefit of the Secured Creditors; and
(ii) endorsements of the authorized issuing agent for
title insurers reasonably satisfactory to the Collateral Agent
to each Original Mortgage Policy assuring the Collateral Agent
that each Original Mortgage is a valid and enforceable first
priority mortgage lien on the respective Original Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Liens.
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5.15 Projections; Pro Forma Balance Sheet. On or prior to
the Restatement Effective Date, there shall have been delivered to the
Administrative Agent:
(i) projected financial statements for Holdings and its
Subsidiaries for the period from the Restatement Effective
Date to and including at least December 31, 2005 (the
"Projections"), which Projections (x) shall reflect the
forecasted financial condition and income and expenses of
Holdings and its Subsidiaries after giving effect to the
Transaction and the related financing thereof and the other
transactions contemplated hereby and thereby and (y) shall be
reasonably satisfactory in form and substance to the
Administrative Agent and the Required Banks; and
(ii) an unaudited pro forma consolidated balance sheet of
Holdings and its Subsidiaries, and of each Borrower, after
giving effect to the Transaction and the incurrence of all
Indebtedness contemplated herein and prepared in accordance
with generally accepted accounting principles, which pro forma
consolidated balance sheets shall be required to be in form
and substance reasonably satisfactory to the Administrative
Agent and the Required Banks.
5.16 Solvency Certificate; Environmental Analyses; Insurance
Analyses. On the Restatement Effective Date, there shall have been delivered
to the Administrative Agent:
(i) a solvency certificate in the form of Exhibit K from
the Treasurer of Holdings and dated the Restatement Effective
Date;
(ii) Phase I environmental assessment reports with
respect to the business and properties being acquired pursuant
to the Acquisition and listed on Schedule XV, prepared by
environmental consultants reasonably satisfactory to the
Administrative Agent, the results of which do not disclose any
environmental liabilities or potential environmental
liabilities reasonably likely to result in a Material Adverse
Effect; and
(iii) analyses and evidence of insurance complying
with the requirements of Section 8.03 for the business and
properties of Holdings and its Subsidiaries (including,
without limitation, the Acquired Business), in scope, form and
substance satisfactory to the Administrative Agent and the
Required Banks and naming the Collateral Agent as an
additional insured and as loss payee, and stating that such
insurance shall not be cancelled or revised without at least
30 days prior written notice by the insurer to the Collateral
Agent.
5.17 Fees, etc. On the Restatement Effective Date, Adience
shall have paid to the Administrative Agent and each Bank all costs, fees and
expenses (including, without limitation, reasonable legal fees and expenses)
payable to the Administrative Agent and such Bank to the extent then due.
5.18 Original Credit Agreement. On the Restatement
Effective Date, (i) each Original Bank shall have received payment in full of
all amounts (including any accrued and unpaid interest and fees) then due and
owing to it under the Original Credit Agreement in respect
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of those Revolving Loans being repaid as contemplated by the last sentence of
Section 1.01(g), (ii) all accrued interest on all outstanding extensions of
credit pursuant to the Original Credit Agreement, and all regularly accruing
fees pursuant to the Original Credit Agreement, shall be repaid in full on,
and through the Restatement Effective Date (whether or not same would
otherwise be then due and payable pursuant to the Original Credit Agreement)
and (iii) the Administrative Agent shall have received evidence in form,
scope and substance satisfactory to it that the matters set forth in this
Section 5.18 have been satisfied on such date.
5.19. Officer's Certificate. On the Restatement Effective
Date, the Administrative Agent shall have received a certificate, dated the
Restatement Effective Date and signed on behalf of Holdings by the president
or vice president of Holdings, stating that all of the conditions in Sections
5.05, 5.06, 5.07, 5.18 and 6.01 have been satisfied on or prior to such date.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the
Restatement Effective Date, but excluding Mandatory Borrowings to be made
thereafter, which shall be made as provided in Section 1.01(f)), and the
obligation of any Issuing Bank to issue any Letter of Credit, is subject, at
the time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of
such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified
date).
6.02 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each Loan (excluding Swingline Loans and Sterling
Swingline Loans), the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03(a). Prior to the making
of any Swingline Loan, BTCo shall have received the notice required by
Section 1.03(b)(i). Prior to the making of any Sterling Swingline Loan, BTCo
shall have received the notice required by Section 1.03(c)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
The acceptance of the proceeds of each Loan or the making of
each Letter of Credit Request (occurring on the Restatement Effective Date
and thereafter) shall constitute a representation and warranty by each Credit
Party to the Administrative Agent and each of the Banks that all the
conditions specified in Section 5 (with respect to Credit Events on the
Restatement Effective Date) and in this Section 6 (with respect to Credit
Events on and after the Restatement Effective Date) and applicable to such
Credit Event exist as of that time. All of the
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Notes, certificates, legal opinions and other documents and papers referred
to in Section 5 and in this Section 6, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account of
each of the Banks and, except for the Notes, in sufficient counterparts or
copies for each of the Banks and shall be in form and substance satisfactory
to the Administrative Agent and the Required Banks.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans,
and issue (or participate in) the Letters of Credit as provided herein,
Holdings and each of the Borrowers make the following representations,
warranties and agreements, in each case after giving effect to the
Transaction, all of which shall survive the execution and delivery of this
Agreement and the Notes and the making of the Loans and issuance of the
Letters of Credit, with the occurrence of each Credit Event on or after the
Restatement Effective Date being deemed to constitute a representation and
warranty that the matters specified in this Section 7 are true and correct on
and as of the Restatement Effective Date and in all material respects on the
date of each such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
7.01 Corporate and Other Status. Each of Holdings and each
of its Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation,
(ii) has the requisite corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.02 Corporate and Other Power and Authority. Each Credit
Party has the requisite corporate power and authority to execute, deliver and
perform the terms and provisions of each of the Documents to which it is
party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such Documents. Each
Credit Party has duly executed and delivered each of the Documents to which
it is party, and each of such Documents constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene
any provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents and the Floating Rate Loan
Documents) upon any of the property or assets of Holdings or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agree-
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ment, contract or instrument, to which Holdings or any of its Subsidiaries is
a party or by which it or any of its property or assets is bound or to which
it may be subject or (iii) will violate any provision of the certificate of
incorporation or by-laws (or equivalent organizational documents) of Holdings
or any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except (x) as have been obtained or made on or prior to the Restatement
Effective Date and (y) as will be made pursuant to the terms of any Security
Document, provided that all such filings as described in this clause (y)
shall have been made within the time periods required by this Agreement and
the relevant Security Documents), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or
is required in connection with, (i) the execution, delivery and performance
of any Document or (ii) the legality, validity, binding effect or
enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the
Acquired Business at December 31, 1996 and December 31, 1997 and the related
statements of consolidated income, consolidated cash flows and shareholders'
equity of the Acquired Business for the respective fiscal year ended on such
date, and furnished to the Banks within 60 days following the Restatement
Effective Date in accordance with Section 13.22, will be prepared in
accordance with generally accepted accounting principles consistently applied.
(b) The unaudited consolidated balance sheets of each of (x)
Holdings and its Subsidiaries, (y) Adience and its Subsidiaries (excluding
Newco and its Subsidiaries) and (z) Newco and its Subsidiaries, each as of
April 30, 1997 and October 31, 1997, and the related unaudited consolidated
and consolidating statements of income and retained earnings and statement of
cash flows for the fiscal year or six-month period then ended, as the case
may be, in each case furnished to the Banks prior to the Restatement
Effective Date pursuant to Section 8.01(b) or (c), as the case may be, of the
Original Credit Agreement, present fairly the financial condition at the
respective dates of such balance sheets and results of operations for the
fiscal year or six-month period, as the case may be, ended on such dates, in
each case prepared in accordance with the requirements of said Sections
8.01(b) and (c) of the Original Credit Agreement.
(c) Since October 31, 1997 (but for this purpose, assuming
that the Transaction had been consummated on such date), there has been no
material adverse change in the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings, any
Borrower, Holdings and its Subsidiaries taken as a whole or any Borrower and
its Subsidiaries taken as a whole.
(d) (i) On and as of the Restatement Effective Date, after
giving effect to the Transaction and to all Indebtedness (including the
Loans) being incurred or assumed and Liens created by the Credit Parties in
connection therewith, (a) the sum of the assets, at a fair valuation, of each
of Holdings and its Subsidiaries taken as a whole and each Borrower on a
stand-alone basis will exceed their respective debts; (b) each of Holdings
and its Subsidiaries taken as a whole and each Borrower on a stand-alone
basis have not incurred and do not intend to incur, and do
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not believe that they will incur, debts beyond their ability to pay such
debts as such debts mature; and (c) each of Holdings and its Subsidiaries
taken as a whole and each Borrower on a stand-alone basis will have
sufficient capital with which to conduct their respective businesses. For
purposes of this Section 7.05(d), "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right
to an equitable remedy for breach of performance if such breach gives rise to
a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.
(e) Except (i) as disclosed in the financial statements
referred to in Sections 7.05(a) and (b) and (ii) liabilities arising in the
ordinary course of business since October 31, 1997, there were as of the
Restatement Effective Date no liabilities or obligations with respect to
Holdings or any of its Subsidiaries of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) which,
either individually or in aggregate, would be material to Holdings and its
Subsidiaries taken as a whole. As of the Restatement Effective Date, neither
Holdings nor any Borrower knows of any basis for the assertion against it or
any of its Subsidiaries of any liability or obligation of any nature
whatsoever that is not disclosed in the financial statements referred to in
Sections 7.05(a) and (b) which, either individually or in the aggregate,
could reasonably be expected to be material to Holdings, any Borrower,
Holdings and its Subsidiaries taken as a whole or any Borrower and its
Subsidiaries taken as a whole other than liabilities arising under the
Acquisition Documents.
(f) On and as of the Restatement Effective Date, the
Projections delivered to the Administrative Agent pursuant to Section 5.15
have been prepared in good faith and are based on reasonable assumptions
under the then known facts and circumstances (it being understood that
nothing contained herein shall constitute a representation that the results
forecasted in such Projections will in fact be achieved), and there are no
statements or conclusions in any of the Projections which are based upon or
include information known to Holdings or any Borrower to be misleading in any
material respect or which knowingly fail to take into account material
information regarding the matters reported therein. On the Restatement
Effective Date, Holdings and each of the Borrowers believe that the
Projections are reasonable and attainable based upon the then known facts and
circumstances, it being understood that nothing contained herein shall
constitute a representation that the results forecasted in such Projections
will in fact be achieved.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of Holdings or any Borrower, threatened (i)
with respect to any Document or (ii) that are reasonably likely to result in
a Material Adverse Effect.
7.07 True and Complete Disclosure. All factual information
(other than the Projections, which are covered in Section 7.05(f)) (taken as
a whole) furnished by any Credit Party in writing to the Administrative Agent
or any Bank (including, without limitation, all information contained in the
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter furnished by
or on behalf of any Credit Party in writing to the Administrative Agent or
any Bank will be, true and accurate in all material respects
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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.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds
of the Adience A Term Loans, Adience B-2 Term Loans and Adience C Term Loans
will be used by Adience (i) to effect the Transaction, (ii) to pay fees and
expenses related to the Transaction and (iii) to the extent that proceeds of
the Adience A term Loans, Adience B-2 Term Loans and Adience C Term Loans
remain after the application of same pursuant to clauses (i) and (ii) above,
to repay outstanding Revolving Loans.
(b) The proceeds of Revolving Loans incurred by each
Revolving Loan Borrower will be used for such Revolving Loan Borrower's and
its Subsidiaries' (excluding, in the case of Borrowings of Revolving Loans by
Adience, Hepworth and its Subsidiaries) general corporate and working capital
purposes, provided that in no circumstances shall any Revolving Loans
incurred by Hepworth be used to repay Loans incurred in connection with the
acquisition of Hepworth by Newco.
(c) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation G, T, U or
X.
7.09 Tax Returns and Payments. Except as set forth on
Schedule XII, Holdings and each of its Subsidiaries have timely filed or
caused to be timely filed with the appropriate taxing authority, all Federal,
state, local, foreign and other returns, statements, forms and reports for
taxes (the "Returns") required to be filed by or with respect to the income,
properties or operations of Holdings and/or any of its Subsidiaries. The
Returns accurately reflect all liability for taxes of Holdings and its
Subsidiaries for the periods covered thereby. Holdings and each of its
Subsidiaries have paid all taxes payable by them other than taxes contested
in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles. There is no
action, suit, proceeding, investigation, audit, or claim now pending or, to
the knowledge of any Credit Party, threatened by any authority regarding any
taxes relating to Holdings or any of its Subsidiaries. As of the Restatement
Effective Date, neither Holdings nor any of its Subsidiaries has entered into
an agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of Holdings or any of its Subsidiaries, is aware of any agreement or
waiver extending any statute of limitations relating to the payment or
collection of other taxes of Holdings or any of its Subsidiaries, or is aware
of any circumstances that would cause the taxable years or other taxable
periods of Holdings or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations. None of Holdings or any of its
Subsidiaries has provided, with respect to itself or property held by it, any
consent under Section 341 of the Code. None of Holdings or any of its
Subsidiaries has incurred, or will incur, any tax liability in connection
with the Acquisition or any other transactions contemplated hereby which
could reasonably be expected to have a Material Adverse Effect.
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7.10 Compliance with ERISA. (a) Schedule XIII sets forth
each Plan that, on the Restatement Effective Date is maintained, sponsored or
contributed to by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate; and each Plan (and each related trust, insurance contract or fund)
is in compliance with its terms and with all applicable laws, including,
without limitation, ERISA and the Code, except where noncompliance could not
reasonably be expected to result in a Material Adverse Effect. Each Plan (and
each related trust, if any) which is intended to be qualified under Section
401(a) of the Code or its prototype Plan document (to the best knowledge of
Holdings in the case of multiemployer plans (as defined in section 4001(a)(3)
of ERISA)) has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of Sections 401(a) and
501(a) of the Code. None of the following conditions exist, the liability
for which, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect: no Reportable Event has occurred with respect to a
Plan; none of Holdings or any of its ERISA Affiliates received notice that
any Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA) is insolvent or in reorganization; no Plan has an Unfunded Current
Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans, exceeds the aggregate amount of
such Unfunded Current Liabilities that existed on the Restatement Effective
Date by $2,500,000; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received
a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made; neither Holdings nor any Subsidiary of Holdings
nor any ERISA Affiliate has incurred any liability (including any indirect,
contingent or secondary liability) to or on account of a Plan (other than
with respect to the obligation to contribute to a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) in the ordinary course of business)
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code
or expects to incur any such liability under any of the foregoing Sections
with respect to any Plan; no condition exists which presents a material risk
to Holdings or any Subsidiary of Holdings or any ERISA Affiliate of incurring
a liability to or on account of a Plan pursuant to the foregoing provisions
of ERISA and the Code; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan which is subject to Title IV of
ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, or, to the
knowledge of Holdings or any Subsidiary of Holdings or any ERISA Affiliate,
expected or threatened; using actuarial assumptions and computation methods
consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of Holdings and its Subsidiaries and its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of
the most recent fiscal year of each such Plan ended prior to the date of the
most recent Credit Event, would not exceed $6,250,000; each group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of Holdings, any
Subsidiary of Holdings, or any ERISA Affiliate has at all times been operated
in substantial compliance with the provisions of Part 6 of subtitle B of
Title I of ERISA and Section 4980B of the Code and no material liability
exists or could arise as a result of any failure to so comply; and no lien
imposed under the Code or ERISA on the assets of Holdings
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or any Subsidiary of Holdings or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and Holdings and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) and which,
as of the Restatement Effective Date, could reasonably be expected to give
rise to a liability for such benefits based on the accumulated
post-retirement benefit obligation determined by Holdings' actuaries in
accordance with Statement of Financial Accounting Standards No. 106 that
exceeds $10,500,000 or any pension plan of Holdings or its Subsidiaries, that
is not tax-qualified under Section 401(a) of the Code, the obligations with
respect to which could reasonably be expected to have a Material Adverse
Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, except
where the failure to so comply would not result in a Material Adverse Effect.
Except as would not result in a Material Adverse Effect, all contributions
required to be made with respect to a Foreign Pension Plan have been timely
made. Except as would not result in a Material Adverse Effect, neither
Holdings nor any of its Subsidiaries has incurred any obligation in
connection with the termination of or withdrawal from any Foreign Pension
Plan. Except as would not result in a Material Adverse Effect, the present
value of the accrued benefit liabilities (whether or not vested) under each
Foreign Pension Plan, determined as of the end of the most recently ended
fiscal year of Holdings on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities.
7.11 The Security Documents. (a) The provisions of the U.S.
Security Agreement are effective to create in favor of the Collateral Agent
for the benefit of the Secured Creditors a legal, valid and enforceable
security interest in all right, title and interest of the Credit Parties
party thereto in the U.S. Security Agreement Collateral described therein,
subject to the provisions of the U.S. Security Agreement, and the Collateral
Agent, for the benefit of the Secured Creditors, has a fully perfected first
lien on, and security interest in, all right, title and interest in all of
the U.S. Security Agreement Collateral described therein, subject to no other
Liens other than Permitted Liens. The recordation of the Assignment of
Security Interest in U.S. Patents and Trademarks in the form attached to the
U.S. Security Agreement in the United States Patent and Trademark Office
together with filings on Form UCC-1 made pursuant to the U.S. Security
Agreement will create, as may be perfected by such filing and recordation, a
perfected security interest granted to the Collateral Agent in the trademarks
and patents covered by the U.S. Security Agreement and the recordation of the
Assignment of Security Interest in U.S. Copyrights in the form attached to
the U.S. Security Agreement with the United States Copyright Office together
with filings on Form UCC-1 made pursuant to the U.S. Security Agreement will
create, as may be perfected by such filing and recordation, a perfected
security interest granted to the Collateral Agent in the copyrights covered
by the U.S. Security Agreement. Except for filings made pursuant to Section
5.12 on or prior to the Restatement Effective Date, no additional filings
with respect to the U.S. Security Agreement are required at the time of, or
in connection with the occurrence of, the Restatement Effective Date.
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(b) Subject to the terms of the U.S. Pledge Agreement, the
security interests created in favor of the Collateral Agent, as Pledgee, for
the benefit of the Secured Creditors under the U.S Pledge Agreement
constitute first priority perfected security interests in the Pledged
Securities described in the U.S. Pledge Agreement, subject to no security
interests of any other Person. No filings or recordings are required in
order to perfect (or maintain the perfection or priority of) the security
interests created in the Pledged Securities under the U.S. Pledge Agreement.
(c) Subject to the terms of the Mortgages (as amended by the
Mortgage Amendments in the case of the Original Mortgages), the Mortgages
create, for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and mortgage lien on all of the
Mortgaged Properties in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the Secured
Creditors, superior to and prior to the rights of all third persons (except
that the security interest and mortgage lien created in the Mortgaged
Properties may be subject to the Permitted Encumbrances related thereto) and
subject to no other Liens (other than Permitted Liens). Schedule III
contains a true and complete list of each parcel of Real Property owned or
leased by Holdings and its Subsidiaries on the Restatement Effective Date,
and the type of interest therein held by Holdings or such Subsidiary.
Holdings and each of its Subsidiaries have good and marketable title to all
fee-owned Real Property and valid leasehold title to all Leaseholds, in each
case free and clear of all Liens except Permitted Liens.
(d) Subject to the terms of the respective U.K. Security
Documents, the security interests created in favor of the Collateral Agent,
as Chargee, for the benefit of the Secured Creditors under the U.K. Security
Documents constitute first priority perfected security interests in the
assets charged pursuant to the U.K. Security Documents, subject to no
security interests of any other Person. No filings or recordings are
required in order to perfect (or maintain the perfection or priority of) the
security interests created in the assets charged pursuant to the U.K.
Security Documents other than the filing of the U.K. Security Documents
together with duly completed Companies Forms M395 with the Registrar of
Companies in England and Wales within 21 days of the date of those documents
(which filings, if this representation is made at any time after the 21st day
following the Restatement Effective Date, have been made).
7.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the Documents (other than the
Credit Documents) were true and correct in all material respects at the time
as of which such representations and warranties were made (or deemed made);
provided that, to the extent such representations and warranties in the
Acquisition Documents were made by the sellers thereunder, the
representations and warranties made pursuant to this Section 7.12 are to the
best knowledge of the Credit Agreement Parties.
7.13 Properties. Holdings and each of its Subsidiaries have
good and marketable title to all material properties owned by them, including
all property reflected in the financial statements referred to in Sections
7.05(a), (b) and (c) (except as sold or otherwise disposed of since the date
of such balance sheet in the ordinary course of business), free and clear of
all Liens, other than Permitted Liens.
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7.14 Capitalization. On the Restatement Effective Date and
after giving effect to the Transaction and the other transactions
contemplated hereby, the authorized capital stock of (w) Holdings shall
consist of (i) 500,000 shares of common stock, $.01 par value per share, of
which 84,396 shares are issued and outstanding, (ii) 100,000 shares of Class
B Common Stock, par value $.01 per share, of which 16,751 shares are issued
and outstanding and (iii) 400,000 shares of preferred stock, $.01 par value
per share, (x) Adience shall consist of 1,000 shares of common stock, $.01
par value per share, (y) Newco shall consist of (i) 12,499,900 ordinary
shares of L1 each, and (ii) 10,500,000 shares of 6% fixed non-cumulative
redeemable preferred shares of L1, and (z) Hepworth shall consist of
12,500,000 ordinary shares of L1 each. All such outstanding shares have been
duly and validly issued, are fully paid and nonassessable and are free of
preemptive rights. Neither Holdings nor any of its Subsidiaries has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
7.15 Subsidiaries. Schedule IV correctly sets forth, as of
the Restatement Effective Date and after giving effect to the Transaction,
each Subsidiary of Holdings, and the direct and indirect ownership interest
of Holdings therein. Schedule IX correctly sets forth, as of the Restatement
Effective Date and after giving effect to the Transaction, an Organization
Chart showing the corporate structure of Holdings and its Subsidiaries,
consistent with Schedule IV.
7.16 Compliance with Statutes, etc. Each of Holdings and
each of its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.17 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
7.18 Public Utility Holding Company Act. Neither Holdings
nor any of its Subsidiaries is a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) Holdings and each of its
Subsidiaries have complied with, and on the date of such Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws. There are no pending or,
to the best knowledge of Holdings or any Borrower, overtly threatened
Environmental Claims against Holdings or any of its Subsidiaries (including
any such Environmental Claim arising out of the ownership or operation by
Holdings or any of its Subsidiaries of any Real Property no longer owned by
Holdings or any of its Subsidiaries) or, to the best knowl-
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edge of Holdings or any Borrower, any Real Property owned or operated by
Holdings or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences with respect to the business or operations of
Holdings or any of its Subsidiaries or any Real Property owned or operated by
Holdings or any of its Subsidiaries (including any Real Property formerly
owned or operated by Holdings or any of its Subsidiaries but no longer owned
by Holdings or any of its Subsidiaries) or, to the best knowledge of Holdings
or any Borrower, any real property adjoining or adjacent to any such Real
Property that would reasonably be expected (i) to form the basis of an
Environmental Claim against Holdings or any of its Subsidiaries or any Real
Property owned or operated by Holdings or any of its Subsidiaries, or (ii) to
cause any Real Property owned or operated by Holdings or any of its
Subsidiaries to be subject to any restrictions on the ownership, occupancy or
transferability of such Real Property by Holdings or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property
owned or operated by Holdings or any of its Subsidiaries where such
generation, use, treatment, storage or transportation has violated or would
reasonably be expected to violate any applicable Environmental Law.
Hazardous Materials have not at any time been Released on or from any Real
Property owned or operated by Holdings or any of its Subsidiaries where such
Release has violated or would reasonably be expected to violate any
applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations made in this Section 7.19 shall not be untrue
unless the aggregate effect of all violations, Environmental Claims, facts,
circumstances, conditions, occurrences, restrictions, failures and
noncompliances of the types described above would reasonably be expected to
have a Material Adverse Effect.
7.20 Labor Relations. Neither Holdings nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. Except as disclosed on Schedule
XIV, there is (i) no unfair labor practice complaint pending against Holdings
any of its Subsidiaries or, to the best knowledge of Holdings or any
Borrower, overtly threatened against any of them, before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Holdings or
any of its Subsidiaries or, to the best knowledge of Holdings or any
Borrower, overtly threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against Holdings or any of its
Subsidiaries or, to the best knowledge of Holdings or any Borrower, overtly
threatened against Holdings or any of its Subsidiaries, (iii) to the best
knowledge of Holdings or any Borrower, no union representation question
existing with respect to the employees of Holdings or any of its Subsidiaries
and (iv) no payments are due and no circumstances exist which might make any
payment due by any of the U.K. Subsidiaries under the provisions of the
Employment Rights Act 1996, except (with respect to any matter specified in
clause (i), (ii), (iii) or (iv) above, either individually or in the
aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
7.21 Patents, Licenses, Franchises and Formulas. Each of
Holdings and each of its Subsidiaries owns all the patents, trademarks,
permits, service marks, trade names, copyrights,
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licenses, franchises, proprietary information (including but not limited to
rights in computer programs and databases) and formulas, or rights with
respect to the foregoing, and has obtained assignments of all leases and
other rights of whatever nature, necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, could reasonably be expected to
result in a Material Adverse Effect.
7.22 Indebtedness. Schedule V sets forth a true and complete
list of all Indebtedness of Holdings and its Subsidiaries as of the
Restatement Effective Date and which is to remain outstanding after giving
effect to the Transaction (excluding the Loans, the Letters of Credit and the
Floating Rate Loans, the "Existing Indebtedness"), in each case, showing the
aggregate principal amount thereof and the name of the respective borrower
and any Credit Party or any of its Subsidiaries which directly or indirectly
guaranteed such debt.
7.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all material consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate the Transaction to the extent then required have been obtained,
given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time
when required, will have, expired without, in all such cases, any action
being taken by any competent authority which restrains, prevents, or imposes
material adverse conditions upon the Transaction. Additionally, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the Transaction, or the occurrence of any Credit
Event or the performance by any Credit Party of its obligations under the
Documents to which it is party.
7.24 Special Purpose Corporation. Holdings has no
significant assets (other than the capital stock of Adience) or liabilities
(other than those liabilities under this Agreement, the Floating Rate Loan
Documents and the Acquisition Documents).
7.25 No Tax Sharing Agreements. On the Restatement Effective
Date, neither Holdings nor any of its Subsidiaries is party to any tax
sharing, tax allocation or other similar agreements other than the
Alpine/Holdings Tax Sharing Agreement (collectively, including the
Alpine/Holdings Tax Sharing Agreement, the "Tax Sharing Agreements").
7.26 Updated Security Agreement and Pledge Agreement
Schedules. (a) The updated schedules to the U.S. Pledge Agreement and the
U.S. Security Agreement furnished pursuant to Sections 5.11 and 5.12 are true
and correct, in all material respects, as of the Restatement Effective Date,
and accurately present all information which was originally required to be
scheduled pursuant to the U.S. Pledge Agreement and the U.S. Security
Agreement on the Original Effective Date, but modified to reflect the
additional Credit Parties on the Restatement Effective Date and any changes
which occurred between the Original Effective Date and the Restatement
Effective Date.
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(b) The information set forth in any and all notices
delivered pursuant to Section 5.13 is true and accurate in all material
respects.
SECTION 8. Affirmative Covenants. Holdings and each Borrower
hereby covenants and agrees that on and after the Restatement Effective Date
and until the Total Commitments and all Letters of Credit have terminated and
the Loans, Notes and Unpaid Drawings, together with interest, Fees and all
other Obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Credit Agreement Parties
will furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each
fiscal month of Holdings (excluding any fiscal month which ends on the last
day of a fiscal quarter or fiscal year of Holdings), the consolidated balance
sheet of each of (x) Holdings and its Subsidiaries, (y) Adience and its
Subsidiaries and (z) Newco and its Subsidiaries, each as at the end of such
fiscal month and the related consolidated statements of income and retained
earnings and statement of cash flows for such fiscal month and for the
elapsed portion of the fiscal year ended with the last day of such fiscal
month, in each case, setting forth comparative figures for the corresponding
fiscal month in the prior fiscal year and comparable budgeted figures for
such fiscal month (provided that the Credit Agreement Parties shall only be
required to show such comparative information with respect to Hepworth and
its Subsidiaries for any period prior to the Original Effective Date to the
extent of such comparative figures may be practicably obtained).
(b) Quarterly Financial Statements. Within 45 days after the
close of each of the first three quarterly accounting periods in each fiscal
year of Holdings, (i) the consolidated (and, in the case of the statements
for Holdings and its Subsidiaries, consolidating) and consolidating balance
sheets of each of (x) Holdings and its Subsidiaries, (y) Adience and its
Subsidiaries and (z) Newco and its Subsidiaries, each as at the end of such
quarterly accounting period and the related consolidated and consolidating
statements of income and retained earnings and statement of cash flows for
such quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period, in each
case setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certified by the chief financial officer
of Holdings, subject to normal year-end audit adjustments and the absence of
footnotes and (ii) management's discussion and analysis of the important
operational and financial developments during the quarterly and year-to-date
periods.
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of Holdings, (i) the consolidated (and, in the case
of the statements for Holdings and its Subsidiaries, consolidating) balance
sheets of each of (x) Holdings and its Subsidiaries, (y) Adience and its
Subsidiaries and (z) Newco and its Subsidiaries, each as at the end of such
fiscal year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for such fiscal year setting
forth comparative figures for the preceding fiscal year and certified (x) in
the case of the consolidating financial statements, by the chief financial
officer of Holdings and (y) in the case of the consolidated financial
statements, by Arthur Andersen LLP or such other independent certified public
accountants of recognized national
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standing reasonably acceptable to the Administrative Agent, together with a
report of such accounting firm stating that in the course of its regular
audit of the respective financial statements, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such an Event of
Default has occurred and is continuing, a statement as to the nature thereof
and (ii) management's discussion and analysis of the important operational
and financial developments during the respective fiscal year.
(d) Management Letters. Promptly after Holdings' or any of
its Subsidiaries' receipt thereof, a copy of any "management letter"
addressed to the board of directors of Holdings or such Subsidiary from its
certified public accountants and the management's responses thereto.
(e) Budgets. No later than 30 days after the first day of
each fiscal year of Holdings, budgets (for (i) Holdings and its Subsidiaries
taken as a whole, (ii) Adience and its Subsidiaries and (iii) Newco and its
Subsidiaries) in form satisfactory to the Administrative Agent and the
Required Banks (including budgeted statements of income and sources and uses
of cash and balance sheets) prepared by Holdings for (x) each of the months
of such fiscal year prepared in reasonable detail and (y) the immediately
following fiscal year prepared in summary form, in each case accompanied by
the statement of the chief financial officer of Holdings to the effect that,
to the best of his knowledge, the respective budget is a reasonable estimate
for the period covered thereby.
(f) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 8.01(b) and (c), a
certificate of the chief financial officer of Holdings to the effect that, to
the best of such officer's knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof, which
certificate shall (x) set forth in reasonable detail the calculations
required to establish whether Holdings and its Subsidiaries were in
compliance with the provisions of Section 4.02(f) (to the extent delivered
with the financial statements required by Section 8.01(c)), 9.03, 9.04, 9.05
and 9.07 through 9.11, inclusive, at the end of such fiscal quarter or year,
as the case may be and (y) if delivered with the financial statements
required by Section 8.01(c), set forth in reasonable detail the amount of
Holdings Excess Cash Flow and Newco Excess Cash Flow for the respective
Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any
event within three Business Days (or five Business Days in the case of
following clause (ii)) after an executive or financial officer of any Credit
Agreement Party obtains actual knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default
and (ii) any litigation or governmental investigation or proceeding pending
(x) against Holdings or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect,
(y) with respect to any material Indebtedness of Holdings or any of its
Subsidiaries or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly after the filing or
delivery thereof, copies of all other financial information, proxy materials
and reports, if any, which Holdings or
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any of its Subsidiaries shall publicly file with the Securities and Exchange
Commission or any successor thereto (the "SEC") or the Registrar of Companies
in England and Wales or shall deliver to its shareholders or to holders of
its Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event
within ten Business Days after, an executive or financial officer of any
Credit Agreement Party obtains knowledge thereof, notice of one or more of
the following environmental matters, unless such environmental matters would
not, individually or when aggregated with all other such environmental
matters, be reasonably expected to have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Borrower or any of its Subsidiaries
that (a) results in noncompliance by the Borrower or any of its
Subsidiaries with any applicable Environmental Law or (b) would
reasonably be expected to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any
Real Property owned or operated by the Borrower or any of its
Subsidiaries that would reasonably be expected to cause such
Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by the Borrower
or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial
action in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned or operated by
the Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency (with the items described above in preceding clauses
(i) through (iv) being herein called, collectively,
"Environmental Matters").
All such notices shall describe in reasonable detail the
nature of the respective Environmental Matter and Holdings' or such
Subsidiary's intended response thereto. In addition, Holdings or any of its
Subsidiaries will provide the Banks with copies of all communications between
Holdings or any of its Subsidiaries and any government or governmental agency
relating to Environmental Laws which would reasonably be expected to have a
Material Adverse Effect, all notices of any Environmental Claims, and such
detailed reports of any outstanding Environmental Claim as may reasonably be
requested by the Banks; provided, that in any event Holdings and its
Subsidiaries shall deliver to each Bank all notices received by Holdings or
any of its Subsidiaries from any government or governmental agency under, or
pursuant to, CERCLA which identify Holdings or any of its Subsidiaries as
potentially responsible parties for response costs or which otherwise notify
Holdings or any of its Subsidiaries of potential liability under CERCLA.
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(j) Annual Meetings with Banks. At the request of the
Administrative Agent, at a date to be mutually agreed upon between the
Administrative Agent and Adience occurring on or prior to the 120th day after
the close of each fiscal year of Holdings, Adience shall hold a meeting with
all of the Banks at which meeting shall be reviewed the financial results of
the previous fiscal year and the financial condition of Holdings and its
Subsidiaries and the budgets presented for the current fiscal year of
Holdings and its Subsidiaries.
(k) Notices Pursuant to Acquisition Documents. Promptly
after the receipt or delivery thereof by any Credit Agreement Party or any of
its Subsidiaries, copies of any notices (excluding immaterial notices not
involving adjustments to the purchase price, claims for indemnities or
damages, notices of breach or similar types of claims or notices) sent or
received by any Credit Agreement Party or any of its Subsidiaries after the
Restatement Effective Date pursuant to any Acquisition Document.
(l) Canadian Working Capital Outstandings. Promptly after
the close of each fiscal month of Holdings, a certificate of an Authorized
Officer of Holdings certifying the Dollar Equivalent of the amount of
Canadian Subsidiary Working Capital Oustandings at such time.
(m) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to Holdings or
any of its Subsidiaries as any Bank may reasonably request.
8.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts
in which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Upon
prior notice, Holdings will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Administrative Agent or
any Bank to visit and inspect, during regular business hours and under
guidance of officers of Holdings or such Subsidiary, any of the properties of
Holdings or such Subsidiary, and to examine the books of account of Holdings
or such Subsidiary and discuss the affairs, finances and accounts of Holdings
or such Subsidiary with, and be advised as to the same by, its and their
officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or such
Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule VI
sets forth a true and complete listing of all insurance maintained by
Holdings and its Subsidiaries as of the Restatement Effective Date. Holdings
will, and will cause each of its Subsidiaries to, (i) keep all property
necessary to the business of the Borrower and its Subsidiaries in reasonably
good working order and condition, ordinary wear and tear excepted, (ii)
maintain insurance on all such property in at least such amounts and against
at least such risks as is consistent and in accordance with industry practice
for companies similarly situated owning similar properties in the same
general areas in which Holdings or any of its Subsidiaries operates, and
(iii) furnish to the Administrative Agent or any Bank, upon written request,
full information as to the insurance carried. At any time that insurance at
levels described on Schedule VI is not being maintained by Holdings or any
Subsidiary of Holdings, Holdings will, or will cause one of its Subsidiaries
to, promptly notify the Administrative Agent and the Banks in writing and, if
thereafter notified by the Required Banks to
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do so, Holdings or any such Subsidiary, as the case may be, shall obtain such
insurance at such levels to the extent such insurance is reasonably
available. In addition to the requirements of the two immediately preceding
sentences, Holdings will, and will cause each of its Subsidiaries to, at all
times cause property and business interruption insurance of the types
described in Schedule VI to be maintained (with the same scope of coverage as
that described in Schedule VI) at levels which are at least as great as the
respective amounts described on Schedule VI.
(b) Holdings will, and will cause each of its Subsidiaries
to, at all times keep its property insured in favor of the Collateral Agent,
and all policies or certificates (or certified copies thereof) with respect
to such insurance (and any other insurance maintained by Holdings and/or its
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction
for the benefit of the Collateral Agent (including, without limitation, by
naming the Collateral Agent as loss payee and/or additional insured), (ii)
shall state that such insurance policies shall not be cancelled or revised
without at least 30 days' prior written notice thereof by the respective
insurer to the Collateral Agent, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to
the Collateral Agent and the Secured Creditors, (iv) shall contain the
standard non-contributing mortgage clause endorsement in favor of the
Collateral Agent with respect to hazard liability insurance, (v) shall,
except in the case of public liability insurance, provide that any losses
shall be payable notwithstanding (A) any act or neglect of Holdings or any of
its Subsidiaries, (B) the occupation or use of the properties for purposes
more hazardous than those permitted by the terms of the respective policy if
such coverage is obtainable at commercially reasonable rates and is of the
kind from time to time customarily insured against by Persons owning or using
similar property and in such amounts as are customary, (C) any foreclosure or
other proceeding relating to the insured properties or (D) any change in the
title to or ownership or possession of the insured properties and (vi) shall
be deposited with the Collateral Agent (although proceeds received thereunder
shall be permitted to be used, subject to (x) the absence of any Default
under Section 10.01 and 10.05 and to the absence of any Event of Default and
(y) compliance with the relevant provisions thereof, in the manner
contemplated by Section 4.02(g)).
(c) If Holdings or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, or if Holdings, or
if Holdings any of its Subsidiaries shall fail to so endorse and deposit all
policies or certificates with respect thereto, the Collateral Agent shall
have the right (but shall be under no obligation), upon 10 Business Days'
prior notice to Adience, to procure such insurance and Holdings and each of
the Borrowers agree to reimburse the Collateral Agent for all costs and
expenses of procuring such insurance.
8.04 Corporate Franchises. Holdings will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 8.04 shall prevent (i) sales of assets by Holdings or any of its
Subsidiaries in accordance with Section 9.02 or (ii) the withdrawal by
Holdings or any of its Subsidiaries of its qualification as a foreign
corporation in any jurisdiction where such withdrawal could not reasonably be
expected to have a Material Adverse Effect.
8.05 Compliance with Statutes, etc. Holdings will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable
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restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and restrictions relating
to environmental standards and controls), except such noncompliances as could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
8.06 Compliance with Environmental Laws. (a) Holdings will
comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to the ownership or use of
its Real Property now or hereafter owned or operated by Holdings or any of
its Subsidiaries, will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, and will keep or cause
to be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws. Neither Holdings nor any of its
Subsidiaries will generate, use, treat, store, release or dispose of, or
permit the generation, use, treatment, storage, release or disposal of
Hazardous Materials on any Real Property now or hereafter owned or operated
by Holdings or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property,
except for Hazardous Materials generated, used, treated, stored, released or
disposed of at any such Real Properties in compliance in all material
respects with all applicable Environmental Laws and as is reasonably required
in connection with the operation, use and maintenance of the business or
operations of Holdings or any of its Subsidiaries.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, Adience will provide, at its
sole cost and expense, an environmental site assessment report concerning any
Real Property owned or operated by Holdings and its Subsidiaries, prepared by
an environmental consulting firm reasonably acceptable to the Administrative
Agent, indicating the presence or absence of Hazardous Materials and the
estimated reasonably likely cost of any removal or remedial action required
under Environmental Laws in connection with such Hazardous Materials on such
Real Property, provided that in no event shall such request be made more
often than once every two years for any particular Real Property unless
either (i) an Event of Default shall be in existence or (ii) the Banks
receive notice under Section 8.01(i) of any Environmental Matter for which
notice is required to be delivered for any such Real Property. If Adience
fails to provide the same within 90 days after such request was made, the
Administrative Agent may order the same, the cost of which shall be borne by
Adience, and Adience shall grant and hereby grants to the Administrative
Agent and the Banks and their agents access to such Real Property and
specifically grant the Administrative Agent and the Banks an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment using a nationally recognized environmental consulting firm
reasonably acceptable to Adience at any reasonable time upon reasonable
notice to Adience, all at the sole costs and reasonable expense of Adience.
8.07 ERISA. As soon as possible and, in any event, within 20
days after Holdings or any Subsidiary of Holdings or any ERISA Affiliate
knows or could be reasonably expected to know of the occurrence of any of the
following, Adience will deliver to each of the Banks a certificate of the
chief financial officer of Adience setting forth the full details as to such
occurrence and the action, if any, that Holdings, such Subsidiary or such
ERISA Affiliate is required
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or proposes to take, together with any notices required to be given to or
filed with or by Holdings, the Subsidiary, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that Adience has
previously delivered to the Banks a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement
of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1)
thereof), and an event described in subsection .62, .63, .64, .65, .66, .67
or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with
respect to such Plan within the following 30 days; that an accumulated
funding deficiency, within the meaning of Section 412 of the Code or Section
302 of ERISA, has been incurred or an application may be or has been made to
the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to
be made to a Plan or Foreign Pension Plan has not been timely made; that a
Plan has been or could reasonably be expected to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability which, when added to the aggregate amount of
Unfunded Current Liabilities with respect to all other Plans, exceeds the
aggregate amount of such Unfunded Current Liabilities that existed on the
Restatement Effective Date by $2,500,000 or more; that proceedings could
reasonably be expected to be or have been instituted to terminate or appoint
a trustee to administer a Plan which is subject to Title IV of ERISA; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that Holdings, any Subsidiary of Holdings
or any ERISA Affiliate will or could reasonably be expected to incur any
liabilities (including any indirect, contingent or secondary liabilities)
that, individually or in the aggregate, exceed $6,250,000 to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l)
of ERISA or with respect to a group health plan (as defined in Section 607(1)
of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code;
or that Holdings or any Subsidiaries of Holdings could reasonably be expected
to incur any liability not existing on the Restatement Effective Date
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) other than liabilities for
such benefits, determined as of the Restatement Effective Date, which could
reasonably be expected to be less than $10,500,000, based on the accumulated
post-retirement benefit obligations as calculated by Holdings' actuaries in
accordance with Statement of Financial Accounting Standard No. 106 or any
pension plan of Holdings or its Subsidiaries that is not tax-qualified under
Section 401(a) of the Code or any Foreign Pension Plan. Holdings will
deliver to each of the Banks (i) a complete copy of the annual report on
Internal Revenue Service Form 5500-series of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions
and other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service and (ii) copies of any
records, documents or other information that must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA. In addition to
any certificates or notices delivered to the Banks pursuant to the first
sentence hereof, copies of annual reports and any records, documents or
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other information required to be furnished to the PBGC and any material
notices received by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered
to the Banks no later than 10 days after the date such annual report has been
filed with the Internal Revenue Service or such notice has been received by
Holdings, the Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings will
cause (i) each of its, and each of its Subsidiaries', fiscal years to end on
April 30, and (ii) each of its, and each of its Subsidiaries', fiscal
quarters to end on July 31, October 31, January 31 and April 30.
8.09 Performance of Obligations. Holdings will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement and other debt
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.10 Payment of Taxes. Holdings will, and will cause each of
its Subsidiaries to, pay and discharge, or cause to be paid and discharged,
all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits, or upon any properties belonging to it, in each
case on a timely basis, and all lawful claims which, if unpaid, might become
a lien or charge upon any properties of Holdings or any of its Subsidiaries;
provided that neither Holdings nor any of its Subsidiaries will be required
to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by appropriate proceedings if it has maintained
adequate reserves with respect thereto in accordance with generally accepted
accounting principles.
8.11 Additional Security; Further Assurances. (a) Not later
than 30 days after any request is received by Adience from the Administrative
Agent or the Required Banks, the Credit Agreement Parties shall cause (x) any
Domestic Subsidiary which is not already a U.S. Subsidiary Guarantor to
become a U.S. Subsidiary Guarantor by executing and delivering a counterpart
of the Subsidiary Assumption Agreement and (y) any Foreign Subsidiary which
is not already a Guarantor to become an additional Guarantor by entering into
an unconditional guarantee of all obligations of the U.K. Borrowers pursuant
to this Agreement and the other Credit Documents, in each case pursuant to a
guarantee in form and substance (and governed by the laws of a jurisdiction)
satisfactory to the Administrative Agent (with each guarantee delivered
pursuant to this clause (y), or pursuant to Section 8.12, being herein called
an "Additional Guaranty"). Notwithstanding anything to the contrary contained
above, in no event shall an Immaterial Foreign Subsidiary be required to
become a Credit Party or be required to execute and delivery any Guaranty or
any Security Document.
(b) Adience will, and will cause each of its Subsidiaries
(other than the Canadian Subsidiaries of Adience which grant security
interests in their operating assets and properties in connection with the
Canadian Subsidiary Working Capital Facility; it being understood that (x)
65% of the Voting Stock (as defined in the U.S. Pledge Agreement) and (y)
100% of the non-Voting Stock of the first-tier Canadian Subsidiaries of
Adience or any U.S. Subsidiary Guarantor shall be pledged pursuant to the
U.S. Pledge Agreement) to, (x) grant to the Collateral Agent security
interests and mortgages in such assets and properties of Holdings
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and its Subsidiaries as are not covered by the original Security Documents
(without limiting the foregoing, which grant may be required in respect of
all or any part of the assets of any Person which becomes a Guarantor after
the Restatement Effective Date pursuant to the requirements of preceding
clause (a)) and (y) enter into any additional security documentation as may
be deemed by the Administrative Agent or the Required Banks as necessary or
desirable (including, in the case of any pledge of stock of a Foreign
Subsidiary by Adience or a Domestic Subsidiary, such additional documentation
or actions requested under the relevant local law of the jurisdiction of
organization of the Foreign Subsidiary as may be requested), in each case as
may be requested from time to time by the Administrative Agent or the
Required Banks (collectively, together with any security documents entered
into pursuant to Section 8.12, the "Additional Security Documents").
Notwithstanding anything to the contrary contained above in this clause (b),
in no event will Adience or any Domestic Subsidiary be required to pledge a
greater percentage of the voting stock of any Foreign Subsidiary than is
originally provided in the U.S. Pledge Agreement, except to the extent
otherwise required by following Section 8.12. All security interests and
mortgages created as required by this Section 8.11(b) shall be granted
pursuant to documentation in form and substance (and shall be governed by
law) reasonably satisfactory to the Administrative Agent and shall constitute
(after giving effect to any filings or recording required in accordance with
applicable law, which filings and recordings shall be required to be made)
valid and enforceable perfected security interests and mortgages superior to
and prior to the rights of all third Persons and subject to no other Liens
except for Permitted Liens. The Additional Security Documents or instruments
related thereto shall have been duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Security Documents and all taxes, fees and other
charges payable in connection therewith shall have been paid in full by the
Credit Agreement Parties or their respective Subsidiaries.
(c) Holdings will, and will cause each of its Subsidiaries
to, at the expense of Holdings and its Subsidiaries, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time
such vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or
instruments and take such further steps relating to the collateral covered by
any of the Security Documents as the Collateral Agent may reasonably require.
Furthermore, Holdings and each of the Borrowers will cause to be delivered to
the Collateral Agent such opinions of counsel, title insurance and other
related documents as may be reasonably requested by the Administrative Agent
to assure themselves that this Section 8.11 has been complied with.
(d) Holdings and each of the Borrowers agree that each action
required above by this Section 8.11 shall be completed within 30 days (or
such longer period as may be required under local law) after such action is
either requested to be taken by the Administrative Agent or the Required
Banks or required to be taken by Holdings and its Subsidiaries pursuant to
the terms of this Section 8.11.
(e) In the event that the Administrative Agent or the
Required Banks at any time after the Restatement Effective Date determine in
their sole discretion (whether as a result of a position taken by an
applicable bank regulatory agency or official, or otherwise) that a real
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estate appraisal satisfying the requirements set forth in 123 C.F.RA., Part
34-Subpart C, or any successor or similar statute, rule, regulation,
guideline or order (any such appraisal a "Required Appraisal") are or were
required to be obtained, or should be obtained, in connection with the
Mortgaged Property, then, within 90 days after receiving written notice
thereof from the Administrative Agent or the Required Banks, as the case may
be, Adience shall cause such Required Appraisal to be delivered, at the
expense of Adience, to the Banks which Required Appraisal, and the respective
appraiser, shall be reasonably satisfactory to the Administrative Agent.
8.12 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices
or other official pronouncements issued or promulgated thereunder, Proskauer
Rose LLP or such other counsel for Adience as may be reasonably acceptable to
the Administrative Agent does not within 30 days after a request from the
Administrative Agent or the Required Banks deliver evidence, in form and
substance mutually satisfactory to the Administrative Agent and Adience, with
respect to any Foreign Subsidiary of Adience which has not already had all of
its stock pledged pursuant to the U.S. Pledge Agreement that (i) a pledge of
66-2/3% or more of the total combined voting power of all classes of capital
stock of such Foreign Subsidiary entitled to vote, (ii) the entering into by
such Foreign Subsidiary of a security agreement in substantially the form of
the U.S. Security Agreement and (iii) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the U.S. Subsidiary
Guaranty, in any such case would cause the undistributed earnings of such
Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States
parent for Federal income tax purposes, then in the case of a failure to
deliver the evidence described in clause (i) above, that portion of such
Foreign Subsidiary's outstanding capital stock so issued by such Foreign
Subsidiary, in each case not theretofore pledged pursuant to the U.S. Pledge
Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the U.S. Pledge Agreement (or another pledge
agreement in substantially similar form, if needed), and in the case of a
failure to deliver the evidence described in clause (ii) above, such Foreign
Subsidiary will execute and deliver the U.S. Security Agreement (or another
security agreement in substantially similar form, if needed), granting the
Secured Creditors a security interest in all of such Foreign Subsidiary's
assets and securing the Obligations of all Borrowers under the Credit
Documents and under any Interest Rate Protection Agreement or Other Hedging
Agreement and, in the event that the respective Foreign Subsidiary shall have
executed and delivered a Guaranty, the obligations of such Foreign Subsidiary
thereunder, and in the case of a failure to deliver the evidence described in
clause (iii) above, such Foreign Subsidiary will execute and deliver the U.S.
Subsidiary Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of all Borrowers under the Credit
Documents and under any Interest Rate Protection Agreement or Other Hedging
Agreement, in each case to the extent that the entering into of the
respective security documents or guaranty is permitted by the laws of the
respective foreign jurisdiction and with all documents delivered pursuant to
this Section 8.12 to be in form and substance reasonably satisfactory to the
Administrative Agent.
8.13 Maintenance of Corporate Separateness. Each Credit
Agreement Party will, and will cause each of its Subsidiaries to, satisfy
customary corporate formalities, including the holding of regular board of
directors' and shareholders' meetings or action by directors or shareholders
without a meeting and the maintenance of corporate offices and records. The
Credit
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Agreement Parties shall take all actions as shall be required so that, at all
times, at least (x) one director of Holdings is not also a director of any
Borrower and (y) at least one director of the Borrower is not also a director
of Holdings. No Borrower nor any of its respective Subsidiaries shall make
any payment to a creditor of any of Holdings, Alpine or any Subsidiary of
Alpine (other than Adience and its Subsidiaries) in respect of any liability
of any such Person, and no bank account of any of Holdings, Alpine or any
Subsidiary of Alpine (other than Adience and its Subsidiaries) shall be
commingled with any bank account of Holdings, Alpine or any Subsidiary of
Alpine (other than Adience and its Subsidiaries). In dealing with their
respective creditors, none of Holdings, Alpine or any Subsidiary of Alpine
shall act in a manner which would cause its creditors to believe that any
such Person was not a separate corporate entity from the other such Persons.
Finally, no Credit Agreement Party nor any of its Subsidiaries shall take any
action, or conduct its affairs in a manner, which could result in the
corporate existence of Adience or any of its Subsidiaries being ignored, or
in the assets and liabilities of Adience or any of its respective
Subsidiaries being substantively consolidated with those of any of Holdings,
Alpine or any Subsidiary of Alpine (other than Adience and its Subsidiaries)
in a bankruptcy, reorganization or other insolvency proceeding.
8.14 Ownership of Certain Subsidiaries. Notwithstanding
anything to the contrary contained elsewhere in this Agreement, the Credit
Agreement Parties shall take all action necessary so that at all times (i)
Holdings directly owns 100% of the capital stock of Adience, (ii) Adience
directly owns 100% of the capital stock of Newco (at least 45.35% of which
capital stock shall at all times be non-voting capital stock owned by
Adience, with the remaining equity interests being voting stock owned by
Adience, and with 100% of said non-voting stock, and 65% of such voting
stock, being at all times pledged by Adience pursuant to the U.S. Pledge
Agreement), and (iii) Newco directly owns 100% of the capital stock of
Hepworth, all of which capital stock shall be pledged pursuant to the U.K.
Security Documents.
8.15 Acquisition Documents. Holdings will, and will cause
each of its Subsidiaries to, perform in all material respects all of its
obligations under the Acquisition Documents by which it is bound, and to
procure the compliance by the other parties to the Acquisition Documents of
their obligations under the Acquisition Documents.
8.16 Permitted Acquisitions. Subject to the provisions of
this Section 8.16, Section 9.02(ii) and the requirements contained in the
definition of Permitted Acquisition, Adience and its Wholly-Owned
Subsidiaries may from time to time after the Initial Borrowing Date effect
Permitted Acquisitions, so long as (i) Adience shall have given the
Administrative Agent and the Banks at least 10 Business Days' prior written
notice of any Permitted Acquisition, (ii) based on calculations made by
Adience on a Pro Forma Basis after giving effect to the respective Permitted
Acquisition and any Indebtedness (including without limitation Acquired
Indebtedness, Permitted Acquisition Subordinated Indebtedness and any
Revolving Loans) incurred, issued or assumed in connection with the
respective Permitted Acquisition or to finance same, no Default or Event of
Default will exist under, or would have existed during the periods covered
by, the financial covenants contained in Sections 9.08 through 9.11,
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inclusive, of this Agreement, (iii) based on good faith projections prepared
by Adience for the period from the date of the consummation of the Permitted
Acquisition to the date which is one year thereafter, the level of financial
performance measured by the covenants set forth in Sections 9.08 through 9.11
inclusive shall be better than or equal to such level as would be required to
provide that no Default or Event of Default would exist under the financial
covenants contained in Sections 9.08 through 9.11, inclusive, of this
Agreement as compliance with such covenants would be required through the
date which is one year from the date of the consummation of the respective
Permitted Acquisition, (iv) Adience shall certify that the proposed Permitted
Acquisition could not reasonably be expected to result in materially
increased tax (excluding income and similar taxes as a result of increased
earnings which may result from the respective Permitted Acquisition), ERISA
or environmental liabilities with respect to Holdings or any of its
Subsidiaries, it being understood that any determination of whether the
proposed Permitted Acquisition could reasonably be expected to result in such
materially increased tax, ERISA or environmental liabilities shall take into
account, inter alia, (x) any available indemnities and (y) the timing and
likelihood of payment thereunder and (v) Adience shall have delivered to the
Administrative Agent an officer's certificate executed by an Authorized
Representative of the Borrowers, certifying (A) to the best of his knowledge,
compliance with the requirements of preceding clauses (i), (ii) and (iii) and
containing the calculations required by the preceding clauses (ii) and (iii)
and (B) compliance with the requirements of Section 9.02(ii).
SECTION 9. Negative Covenants. Holdings and each of the
Borrowers hereby covenant and agree that on and after the Restatement
Effective Date and until the Total Commitments and all Letters of Credit have
terminated and the Loans, Notes and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
9.01 Liens. No Credit Agreement Party will, nor will any
Credit Agreement Party permit any of its Subsidiaries to, create, incur,
assume or suffer to exist any Lien upon or with respect to any property or
assets (real or personal, tangible or intangible) of such Credit Agreement
Party or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including
sales of accounts receivable with recourse to Holdings or any of its
Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien
under any similar recording or notice statute; provided that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption
or existence of the following (Liens described below are herein referred to
as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or
governmental charges or levies not yet due and payable or
Liens for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings
for which adequate reserves have been established in
accordance with generally accepted accounting principles;
(ii) Liens in respect of property or assets of
Adience or any of its Subsidiaries imposed by law, which were
incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and
(x) which do not in the aggregate materially detract from the
value of the Adience's or such Subsidiary's property or assets
taken as a whole or materially impair the use thereof
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in the operation of the business of Adience or such Subsidiary
or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Restatement
Effective Date which are listed, and the property subject
thereto described, in Schedule VII, but only to the respective
date, if any, set forth in such Schedule VII for the removal,
replacement and termination of any such Liens, plus renewals,
replacements and extensions of such Liens to the extent set
forth on Schedule VII, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such
Liens does not increase from that amount outstanding at the
time of any such renewal, replacement or extension and (y) any
such renewal, replacement or extension does not encumber any
additional assets or properties of Holdings or any of its
Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases, sublicenses or subleases
granted to other Persons not materially interfering with the
conduct of the business of Adience and its Subsidiaries taken
as a whole;
(vii) Liens upon assets of Adience or its
Subsidiaries subject to Capitalized Lease Obligations to the
extent such Capitalized Lease Obligations are permitted by
Section 9.04(iv), provided that (x) such Liens only serve to
secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the
asset giving rise to the Capitalized Lease Obligation does not
encumber any other asset of Adience or any Subsidiary of
Adience;
(viii) Liens placed upon equipment or
machinery used in the ordinary course of business of Adience
or any of its Subsidiaries at the time of acquisition thereof
by Adience or any such Subsidiary or within 90 days thereafter
to secure Indebtedness incurred to pay all or a portion of the
purchase price thereof or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of any
such equipment or machinery or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount, provided that (x) the aggregate outstanding principal
amount of all Indebtedness secured by Liens permitted by this
clause (viii) shall not at any time exceed $6,500,000 and (y)
in all events, the Lien encumbering the equipment or machinery
so acquired does not encumber any other asset of Adience or
such Subsidiary;
(ix) easements, rights-of-way, restrictions,
encroachments and other similar charges or encumbrances, and
minor title deficiencies, in each case not securing
Indebtedness and not materially interfering with the conduct
of the business of Adience or any of its Subsidiaries;
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(x) Liens arising from precautionary UCC
financing statement filings regarding operating leases entered
into by Adience or any of its Subsidiaries in the ordinary
course of business;
(xi) Liens arising out of the existence of
judgments, decrees or awards not constituting an Event of
Default under Section 10.09, provided that no cash or property
is deposited or delivered to secure the respective judgment or
award (or any appeal bond in respect thereof, except as
permitted by following clause (xiii));
(xii) statutory and common law landlords'
liens under leases to which Adience or any of its Subsidiaries
is a party;
(xiii) Liens (other than any Lien imposed by
ERISA) (x) incurred or deposits made in the ordinary course of
business in connection with workers' compensation,
unemployment insurance and other types of social security or
(y) to secure the performance of tenders, statutory
obligations (other than excise taxes), surety, stay, customs
and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money) and (z) deposits made in
the ordinary course of business to secure liability for
premiums to insurance carriers, provided that the aggregate
amount of deposits at any time pursuant to clauses (y) and (z)
shall not exceed $12,500,000 in the aggregate;
(xiv) the Floating Rate Loans and other
obligations pursuant to the Floating Rate Loan Documents, as
well as any obligations pursuant to Interest Rate Protection
Agreements entered into by Holdings with respect to the
Indebtedness evidenced by the Floating Rate Loans, may be
secured by the capital stock of Adience owned by Holdings (and
proceeds thereof);
(xv) Liens securing Acquired Indebtedness
incurred in accordance with Section 9.04(x) provided that (A)
such Liens secured such Acquired Indebtedness at the time of
and prior to the incurrence of such Acquired Indebtedness by
Adience or a Subsidiary of Adience and were not granted in
connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by Adience or a Subsidiary of Adience
and (B) such Liens do not extend to or cover any property or
assets of Adience or of any of its Subsidiaries other than the
property or assets that secured the Acquired Indebtedness
prior to the time such indebtedness became Acquired
Indebtedness of Adience or a Subsidiary of Adience and are no
more favorable to the lienholders than those securing the
Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by Adience or a Subsidiary of Adience;
(xvi) additional Liens, so long as neither
the fair market value of all assets subject thereto, nor the
aggregate amount of obligations secured thereby, exceeds
$1,250,000 in the aggregate at any time outstanding; and
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(xvii) Liens placed upon any of the assets
of a Canadian Subsidiary of Adience to secure any Canadian
Subsidiary Working Capital Indebtedness incurred by such
Canadian Subsidiary as permitted by Section 9.04(xiii).
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
No Credit Agreement Party will, nor will any Credit Agreement Party permit
any of its Subsidiaries to, and will not permit any of its Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions)
any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person, except that:
(i) Capital Expenditures by Adience and its
Subsidiaries shall be permitted to the extent not in violation
of Section 9.07(a), (b) and (c)(i);
(ii) the Borrowers and Adience and its
Wholly-Owned Subsidiaries shall be permitted to make Permitted
Acquisitions so long as (A) such Permitted Acquisitions are
effected in accordance with the requirements of Section 8.16,
(B) after giving effect to any Permitted Acquisition, the
aggregate amount paid (including for the purpose of this
clause (ii) all cash consideration and the fair market value
of any non-cash consideration, but excluding any Indebtedness
(and any cash proceeds thereof paid as consideration) issued,
incurred or assumed in connection with such Permitted
Acquisition, but only if outstanding pursuant to clauses (x)
and/or (xi) of Section 9.04) by Adience and its Subsidiaries
in connection with such Permitted Acquisition shall not exceed
the Permitted Acquisition Amount at such time (after giving
effect to all prior and contemporaneous adjustments thereto,
except as a result of such Permitted Acquisition); and (B)
with respect to each Permitted Acquisition, no Default or
Event of Default is in existence at the time of the
consummation of such Permitted Acquisition or would exist
after giving effect thereto;
(iii) Investments may be made to the extent
permitted by Section 9.05;
(iv) each of Adience and its Subsidiaries may
lease (as lessee) real or personal property in the ordinary
course of business (so long as any such lease does not create
a Capitalized Lease Obligation except to the extent permitted
by Section 9.04);
(v) each of Adience and its Subsidiaries may
make sales of inventory and services in the ordinary course of
business;
(vi) each of Adience and its Subsidiaries may
sell equipment and other assets, to the extent not otherwise
permitted under any other clause of this Section 9.02, at the
fair market value thereof (as determined in good faith by
management of Adience), provided that the proceeds thereof (x)
shall consist of at least 80% in cash and (y) do not exceed
$5,000,000 in the aggregate for all sales pursuant to this
clause (vi) in any fiscal year;
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(vii) Adience and its Subsidiaries may sell
the Designated Assets at fair market value, provided that the
proceeds thereof (x) shall consist of at least 80% in cash and
(y) shall be used to make mandatory repayments pursuant to
Section 4.02(e) in accordance with the terms thereof;
(viii) Adience and its Subsidiaries may, in
the ordinary course of business, license, as licensor or
licensee, patents, trademarks, copyrights and know-how to
third Persons and to one another, so long as any such license
by Adience or its Subsidiaries in its capacity as licensor is
permitted to be assigned pursuant to the Security Documents
(to the extent that a security interest in such patents,
trademarks, copyrights and know-how is granted thereunder) and
does not otherwise prohibit the granting of a Lien by Adience
or any of its Subsidiaries pursuant to the Security Documents
in the intellectual property covered by such license;
(ix) Adience and its Subsidiaries may from time
to time, in the ordinary course of business dispose of
obsolete, worn-out or outmoded equipment, so long as the
respective such sales are for fair market value (as determined
by Adience) and the proceeds thereof are used within one year
after the date of the respective such sale to purchase
replacement equipment; provided that if for any reason, and to
the extent, any Net Sale Proceeds are not so utilized on or
before the first anniversary of the date of the respective
such sale, then on such date any Net Sale Proceeds not so used
shall be applied as required by Section 4.02(e); and
(x) the Acquisition shall be permitted to be
made on the Restatement Effective Date.
To the extent the Required Banks waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02, in each case so long as the respective sale
is to a Person other than a Credit Agreement Party or any of its
Subsidiaries, such Collateral shall be sold free and clear of the Liens
created by the Security Documents, and the Administrative Agent and the
Collateral Agent shall be authorized to take any actions deemed appropriate
in order to effect the foregoing.
9.03 Restricted Payments. No Credit Agreement Party will,
nor will any Credit Agreement Party permit any of its Subsidiaries to,
authorize, declare, pay or make any Restricted Payments, except that
(i) any Subsidiary of Adience (x) may pay cash
Distributions to Adience or any Wholly-Owned Subsidiary of
Adience and (y) if such Subsidiary is not a Wholly-Owned
Subsidiary, may pay cash Distributions to its shareholders
generally so long as Adience or its respective Subsidiary
which owns the equity interest or interests in the Subsidiary
paying such Dividends receives at least its proportionate
share thereof (based upon its relative holdings of equity
interests in the Subsidiary paying such Dividends and taking
into account the relative preferences, if any, of the various
classes of equity interests in such Subsidiary);
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(ii) Adience may pay cash Distributions to
Holdings in the amounts and at the times that (a) any cash
interest payments, increased costs or other amounts (other
than principal payments), are due on the Floating Rate Loans
or under the Floating Rate Loan Credit Agreement or (b) any
cash payments are owing with respect to Interest Rate
Protection Agreements maintained as contemplated by Section
6.14 of the Floating Rate Loan Credit Agreement as originally
in effect, in each case, so long as (x) no Default or Event of
Default then exists pursuant to Section 10.01, (y) no Default
or Event of Default then exists with respect to any Credit
Agreement Party pursuant to Section 10.05 and (z) Holdings
immediately uses such cash Distributions to make such interest
or other payments; provided that (in addition to the foregoing
restrictions) at any time when any Event of Default is then in
existence (other than an Event of Default specified in
preceding clause (x) or (y)), if the Administrative Agent or
the Required Banks have given notice to Adience that payments
will not be permitted to be made pursuant to this Section
9.03(ii), then for a period (each a "Payment Blockage Period")
of 180 days after the giving of such notice (or such shorter
period ending on the first date thereafter when (i) such
notice shall have been rescinded by the Administrative Agent
or the Required Banks, as the case may be, (ii) no Event of
Default remains in existence or (iii) the immediately
succeeding proviso causes the termination of the respective
Payment Blockage Period) no Distributions may be made pursuant
to this clause (ii), provided further, that in no event shall
Payment Blockage Periods pursuant to the immediately preceding
proviso actually extend for more than 180 days in any period
of 365 consecutive days;
(iii) payments may be made by Adience and
its Subsidiaries (x) to Alpine (or to Holdings, which in turn
makes the respective payment to Alpine) for any taxable year
of Adience in which it joins in filing a consolidated federal
income tax return with Alpine or (y) to Holdings for any
taxable year of Adience in which it joins in filing a
consolidated federal income tax return with Holdings, but not
Alpine, in either case from time to time in amounts equal to
the Permitted Tax Payments owing at such time, so long as
Alpine or Holdings, as the case may be, makes all payments in
respect of the tax obligations of the type described in the
definition of Permitted Tax Payments required to be made by
the affiliated group of which such Person is the parent;
provided further, that any refund attributable to Permitted
Tax Payments (or similar such payments made prior to the
Initial Borrowing Date by Adience and its Subsidiaries)
actually received by either Alpine or Holdings shall be
promptly (and in any event within two Business Days) returned
to Adience (and if not so returned, shall reduce the amount of
payments otherwise permitted to be made in the future by
Adience and its Subsidiaries pursuant to this clause (iii));
(iv) payments may be made by Adience and its
Subsidiaries to Holdings to the extent necessary to permit
Holdings to pay its reasonable professional fees and expenses
in connection with complying with its reporting obligations
and obligations to prepare and distribute business records,
financial statements or other documents to any lender or other
persons having business dealings with Holdings, or in
connection with other corporate overhead items, provided that
the aggregate payments pursuant to this clause (iv) shall not
exceed $300,000 in any fiscal year of Holdings; and
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(v) payments may be made by Adience and its
Subsidiaries to Alpine (or, without duplication, to Holdings
so long as Holdings immediately pays such amounts to Alpine)
(i) for (and in amounts equal to) direct charges incurred by
Alpine and attributable to Holdings and its Subsidiaries plus
(but without duplication) Holdings' (and its Subsidiaries')
allocable share of insurance costs for insurance maintained by
Alpine which benefits Holdings and its Subsidiaries (with all
allocations pursuant to preceding clause (i) to be determined
by Alpine in good faith and on a fair and reasonable basis)
and (ii) so long as no Default under Section 10.01 or 10.05
and no Event of Default exists at the time of any payment
thereof, additional payments may be made to Alpine (on a
quarterly basis in equal installments) in any fiscal year of
Holdings pursuant to this clause (v) in an amount not to
exceed the Alpine Permitted Amount for such fiscal year.
Notwithstanding anything to the contrary
contained in this Agreement, neither Holdings nor any of its
Subsidiaries may authorize, declare, pay or make any
Restricted Payments with respect to the Put Obligations; it
being understood and agreed that (x) Adience Letters of Credit
may be issued in an aggregate amount not to exceed $15,000,000
in order to support the Put Obligations (such Adience Letters
of Credit, herein referred to as "Put Letters of Credit") and
(y) Alpine may satisfy the Put Obligations pursuant to, and in
accordance with, the terms of the Alpine Put Guaranty.
9.04 Indebtedness. No Credit Agreement Party will, nor will
any Credit Agreement Party permit any of its Subsidiaries to, contract,
create, incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this
Agreement and the other Credit Documents;
(ii) Indebtedness with respect to performance
bonds, surety bonds, appeal bonds or customs bonds required in
the ordinary course of business or in connection with the
enforcement of rights or claims of Adience or any of its
Subsidiaries or in connection with judgments that do not
result in a Default or an Event of Default, provided that the
aggregate outstanding amount of all such performance bonds,
surety bonds, appeal bonds and customs bonds permitted by this
clause (ii) shall not at any time exceed $12,500,000;
(iii) Indebtedness under Interest Rate
Protection Agreements entered into to protect Holdings or the
Borrowers against fluctuations in interest rates in respect of
Floating Rate Loans or the Obligations, as the case may be, on
terms reasonably satisfactory to the Administrative Agent;
(iv) Indebtedness evidenced by Capitalized
Lease Obligations to the extent permitted pursuant to Section
9.07, provided that in no event shall the aggregate principal
amount of Capitalized Lease Obligations permitted by this
clause (iv) exceed $5,000,000 at any time outstanding;
(v) Indebtedness subject to Liens permitted
under Section 9.01(viii);
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(vi) Existing Indebtedness outstanding on the
Restatement Effective Date and listed on Schedule V, without
giving effect to any subsequent extension, renewal or
refinancing thereof, except that with respect to the Existing
Indebtedness specifically identified on Schedule V as being
permitted to be refinanced, such Existing Indebtedness may be
extended, renewed or refinanced (and successively extended,
renewed or refinanced) so long as (x) the principal amount
thereof is not increased and (y) no additional security is
furnished in connection therewith;
(vii) Indebtedness of Holdings incurred
under the Floating Rate Loans in an aggregate principal amount
not to exceed $60,000,000 less any repayments or prepayments
of principal thereof actually made;
(viii) Indebtedness constituting
intercompany loans and advances to the extent permitted by
Section 9.05(iv) and/or (ix);
(ix) Indebtedness under Other Hedging
Agreements providing protection against fluctuations in
currency values in connection with Adience's or any of its
Subsidiaries' operations so long as management of Adience or
such Subsidiary, as the case may be, has determined that the
entering into of such Other Hedging Agreements are bona fide
hedging activities and are not speculative in nature;
(x) Acquired Indebtedness may be incurred or
assumed in connection with Permitted Acquisitions, so long as
the aggregate principal amount of all Acquired Indebtedness
incurred or assumed after the Restatement Effective Date does
not exceed $3,000,000;
(xi) to finance one or more Permitted
Acquisitions, Adience may issue (directly as consideration, or
for cash proceeds which are used as consideration, for such
Permitted Acquisition) unsecured subordinated indebtedness, so
long as (x) all terms thereof (including the interest rate
applicable thereto, the subordination provisions thereof, the
maturity and the required repayments thereof and the covenants
and defaults applicable thereto) are reasonably satisfactory
to the Administrative Agent and Required Banks and (y) the
aggregate principal amount of all such Indebtedness
("Permitted Acquisition Subordinated Indebtedness") issued
after the Restatement Effective Date does not exceed
$6,250,000;
(xii) in addition to Indebtedness otherwise
permitted above, Adience and its Subsidiaries may from time to
time issue or incur Indebtedness (but not in connection with,
or to finance, Permitted Acquisitions) so long as the
aggregate principal amount of all Indebtedness at any time
outstanding pursuant to this clause (xii) does not exceed
$1,500,000;
(xiii) Indebtedness of Canadian Subsidiaries
of Adience the proceeds of which Indebtedness are to be used
for such Canadian Subsidiaries' working capital purposes,
provided that the aggregate principal amount of all such
Indebtedness outstanding at any time shall not exceed
$6,000,000 (the "Canadian Subsidiary Working Capital
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Indebtedness"), and provided further, that all terms and
conditions of such Indebtedness shall be reasonably
satisfactory to the Administrative Agent and the Required
Banks;
(xiv) Indebtedness incurred pursuant to the
$2.8M Deferred Interest Bond in an aggregate principal amount
not to exceed $2,800,000; and
(xv) Indebtedness incurred pursuant to the AMI
Promissory Notes in an aggregate principal amount not to
exceed $1,200,000.
9.05 Advances, Investments and Loans. No Credit Agreement
Party will, nor will any Credit Agreement Party permit any of its
Subsidiaries to, directly or indirectly, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash, Cash Equivalents
or Foreign Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) Adience and its Subsidiaries may acquire
and hold accounts receivables, trade receivables, notes
receivables, prepaid expenses and similar items owing to any
of them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with
customary terms, and Adience and its Subsidiaries may own
Investments received in connection with the bankruptcy,
work-out, reorganization, liquidation or similar proceeding of
suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(ii) Adience and its Subsidiaries may acquire
and hold cash and Cash Equivalents and any Foreign Subsidiary
of Adience may acquire and hold Foreign Cash Equivalents;
(iii) Adience and its Subsidiaries may
receive non-cash consideration in connection with any asset
sale permitted by Section 9.02(vi) or (vii) but only to the
extent set forth in Section 9.02(vi) or (vii), as the case may
be;
(iv) Adience and its Subsidiaries may hold the
Investments held by them on the Restatement Effective Date and
described on Schedule VIII without giving effect to any
additions thereto or replacements thereof;
(v) Adience and its Subsidiaries may make
loans and advances in the ordinary course of business to their
respective employees so long as the aggregate principal amount
thereof at any time outstanding (determined without regard to
any write-downs or write-offs of such loans and advances)
shall not exceed $750,000;
(vi) the Borrowers may enter into Interest Rate
Protection Agreements to the extent permitted by Section
9.04(iii);
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(vii) Adience and its Subsidiaries may
enter into Other Hedging Agreements to the extent permitted by
Section 9.04(ix);
(viii) Adience and its Subsidiaries shall be
permitted to make Capital Expenditures to the extend permitted
by Section 9.07;
(ix) after the Restatement Effective Date, (a)
Adience and the U.S. Subsidiary Guarantors may make
intercompany loans (it being understood and agreed that
intercompany receivables and/or payables which arise as a
result of ordinary course activities and are otherwise
permitted by Section 9.06 shall not be deemed to be
intercompany loans) to each other, and any U.S. Subsidiary
Guarantor may make intercompany loans to any other U.S.
Subsidiary Guarantor, (b) the U.K. Borrowers and each Foreign
Subsidiary Guarantor may make intercompany loans to each
other, (c) at any time that Canadian Subsidiary Working
Capital Indebtedness is not provided by a third party, Adience
may make intercompany loans to Canadian Subsidiaries of
Adience in an aggregate principal amount not to exceed
$6,000,000, (d) Alpine may make intercompany loans to Adience
in an aggregate principal amount not to exceed $1,000,000 and
(e) in addition to the loans permitted pursuant to preceding
clauses (a), (b), (c) and (d), intercompany loans may be made
between Adience and its Subsidiaries, or between Subsidiaries
of Adience; provided that the aggregate principal amount of
intercompany loans at any time outstanding (determined without
regard to any write-downs or write-offs thereof) pursuant to
this clause (e) at no time outstanding shall exceed
$6,250,000; provided further, that if any loans made pursuant
to this clause (ix) are evidenced by a promissory note, the
respective promissory note shall be pledged to the extent such
pledge is required by the terms of any Security Document;
(x) Adience and its Wholly-Owned Subsidiaries
may establish Subsidiaries to the extent permitted by Section
9.16; and
(xi) Adience and its Subsidiaries may make
additional Investments which may, but shall not be required
to, be made in joint ventures or non Wholly-Owned Subsidiaries
so long as the amount of the Investment then being made
(taking the amount of any cash investment and the fair market
value of any non-cash investment) pursuant to this clause (xi)
shall not exceed the Permitted Investment Amount as then in
effect.
9.06 Transactions with Affiliates. No Credit Agreement Party
will, nor will any Credit Agreement Party permit any of its Subsidiaries to,
enter into any transaction or series of related transactions, with Alpine or
any other Affiliate of Holdings or Alpine (excluding Adience and its
Subsidiaries), other than in the ordinary course of business and on terms and
conditions substantially as favorable to Holdings or such Subsidiary as would
reasonably be obtained by Holdings or such Subsidiary at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted: (i) the
Transaction, (ii) Dividends may be paid to the extent provided in Section
9.03, (iii) loans may be made and other transactions may be entered into by
Adience and its Subsidiaries to the extent permitted by Sections 9.04 and
9.05, (iv) customary fees may be paid to non-officer directors of Holdings,
(v) Holdings and its Subsidiaries may enter into employment arrangements with
their respective
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officers in the ordinary course of business and (vi) transactions between
Adience and its Wholly-Owned Subsidiaries.
In addition to the applicable requirements provided above, any
transactions (other than as described in clauses (i) through (vi) above)
between and among Holdings and/or its Subsidiaries on the one hand, and any
of their respective Affiliates on the other hand, between and among the
aforementioned parties with a value in excess of (A) $1,000,000 shall only be
permitted if a majority of the disinterested directors of Alpine approve the
transaction as meeting the standards set forth above in this Section 9.06 and
(B) $2,500,000 shall only be permitted if the parties thereto provide a
fairness opinion from a Person, and in form and substance, satisfactory to
the Administrative Agent.
9.07 Capital Expenditures. (a) No Credit Agreement Party
will, nor will any Credit Agreement Party permit any of its Subsidiaries to,
make any Capital Expenditures, except that Adience and its Subsidiaries may
make Capital Expenditures so long as the aggregate amount of such Capital
Expenditures does not exceed (x) for the fiscal year of Holdings ending in
April, 1998, $15,000,000 and (y) in any fiscal year ended thereafter,
$12,000,000; provided that if the Leverage Ratio as determined from the last
day of any fiscal year of Holdings ending after the Restatement Effective
Date (calculating the numerator as of such date and the denominator for the
fiscal year then ended) is less than 3.25:1, the amount set forth in clause
(y) for the immediately succeeding fiscal year shall be increased by
$2,000,000.
(b) Notwithstanding anything to the contrary contained in
clause (a) above, to the extent that the amount of Capital Expenditures made
by Adience and its Subsidiaries in any fiscal year set forth in clause (a)
above is less than the amount permitted to be made in such fiscal year
(giving effect to the proviso thereto, but without giving effect to any
additional amount available as a result of this clause (b) or clause (c)
below), the amount of such difference, but not in excess of 50% of the amount
originally permitted to be spent in said fiscal year pursuant to said clause
(a) (giving effect to the proviso thereto if applicable), may be carried
forward and used to make Capital Expenditures in the immediately succeeding
fiscal year of Adience; provided that during the fiscal year of Holdings
ending in April, 1999, no more than $2,000,000 may be carried forward and
used to make Capital Expenditures pursuant to this clause (b). Any amount
carried forward into a fiscal year pursuant to this clause (b) shall, if not
used to make Capital Expenditures in such fiscal year, terminate at the end
thereof (and shall not be carried forward to a subsequent fiscal year).
(c) In addition to the Capital Expenditures permitted to be
made pursuant to preceding clauses (a) and (b) of this Section 9.07, (i)
Adience and its Subsidiaries may make additional Capital Expenditures with
the amount of insurance proceeds received by Adience or any of its
Subsidiaries from any Recovery Event so long as such proceeds are used to
replace or restore any properties or assets in respect of which such proceeds
were paid within the time periods set forth in Section 4.02(g) (and to the
extent such proceeds are not required to be applied pursuant to Section
4.02(g)) and (ii) Permitted Acquisitions shall be permitted to be made in
accordance with Sections 9.02 and 8.16. To the extent Capital Expenditures
are made as permitted by this clause (c), same shall not count as Capital
Expenditures for purposes of determining compliance with clause (a) or (b) of
this Section 9.07.
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9.08 Consolidated Fixed Charge Coverage Ratio. Holdings will
not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period
to be less than 1.0:1.0.
9.09 Consolidated Interest Coverage Ratio. The Credit
Agreement Parties will not permit the Consolidated Interest Coverage Ratio
for any Test Period ended on the last day of a fiscal quarter of Holdings set
forth below to be less than the ratio set forth opposite such fiscal quarter
below:
<TABLE>
<CAPTION>
Holdings' Fiscal Quarter
Ending Closest to the Last Day in Ratio
--------------------------------- -----
<S> <C>
April, 1998 1.85:1
July, 1998 1.85:1
October, 1998 1.85:1
January, 1999 1.85:1
April, 1999 1.95:1
July, 1999 2.00:1
October, 1999 2.05:1
January, 2000 2.10:1
April, 2000 2.10:1
July, 2000 2.15:1
October, 2000 2.20:1
January, 2001 2.25:1
April, 2001 2.30:1
July, 2001 2.35:1
October, 2001 2.40:1
January, 2002 2.50:1
April, 2002 2.55:1
July, 2002 2.60:1
October, 2002 2.70:1
January, 2003 2.80:1
Thereafter 3.00:1
</TABLE>
9.10 Maximum Leverage Ratio. The Credit Agreement Parties
will not permit the Leverage Ratio at any time during a period set forth
below to be greater than the ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Beginning February 1, 1998 and 6.00:1
ending January 31, 1999
Beginning February 1, 1999 and 5.75:1
ending April 30, 1999
</TABLE>
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<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Beginning May 1, 1999 and 5.50:1
ending July 31, 1999
Beginning August 1, 1999 and 5.40:1
ending October 31, 1999
Beginning November 1, 1999 and 5.25:1
ending January 31, 2000
Beginning February 1, 2000 and 5.00:1
ending July 31, 2000
Beginning August 1, 2000 and 4.85:1
ending October 31, 2000
Beginning November 1, 2000 and 4.70:1
ending January 31, 2001
Beginning February 1, 2001 and 4.55:1
ending July 31, 2001
Beginning August 1, 2001 and 4.35:1
ending October 31, 2001
Beginning November 1, 2001 and 4.25:1
ending January 31, 2002
Beginning February 1, 2002 and 4.05:1
ending April 30, 2002
Beginning May 1, 2002 and 3.90:1
ending July 31, 2002
Beginning August 1, 2002 and 3.80:1
ending October 31, 2002
Beginning November 1, 2002 and 3.70:1
ending January 31, 2003
Beginning February 1, 2003 and 3.60:1
ending April 30, 2003
Beginning May 1, 2003 and 3.50:1
ending July 31, 2003
</TABLE>
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<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Beginning August 1, 2003 and 3.40:1
ending October 31, 2003
Beginning November 1, 2003 and 3.30:1
ending January 31, 2004
Beginning February 1, 2004 and 3.20:1
ending April 30, 2004
Beginning May 1, 2004 and 3.10:1
ending July 31, 2004
Thereafter 3.00:1
</TABLE>
9.11 Minimum Consolidated EBITDA. The Credit Agreement
Parties will not permit Consolidated EBITDA for any Test Period ended on the
last day of a fiscal quarter of Holdings set forth below to be less than the
respective amount set forth opposite such fiscal quarter below:
<TABLE>
<CAPTION>
Holding Fiscal Quarter Ended
Closest to the Last Day In Amount
---------------------------- ------
<S> <C>
April, 1998 $49,000,000
July, 1998 $49,000,000
October, 1998 $49,000,000
January, 1999 $50,000,000
April, 1999 $52,000,000
July, 1999 $55,000,000
October, 1999 $57,000,000
January, 2000 $58,000,000
April, 2000 $61,000,000
July, 2000 $62,100,000
October, 2000 $63,000,000
January, 2001 $64,000,000
April, 2001 $65,200,000
July, 2001 $66,400,000
October, 2001 $67,600,000
January, 2002 $68,900,000
April, 2002 $69,900,000
July, 2002 $70,800,000
October, 2002 $71,800,000
January, 2003 $72,800,000
Thereafter $75,000,000
</TABLE>
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9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc. No Credit Agreement Party will, nor will any
Credit Agreement Party permit any of its Subsidiaries to, (i) make (or give
any notice in respect of) any voluntary or optional payment or prepayment on
or redemption or acquisition for value of, or make any prepayment or
redemption as a result of any asset sale, change of control or similar event
of (including, in each case, without limitation, by way of depositing with
the trustee with respect thereto or any other Person, money or securities
before due for the purpose of paying when due) any Floating Rate Loan, (ii)
amend or modify, or permit the amendment or modification of, any provision of
any Floating Rate Loan Document, other than any amendments or modifications
which do not in any way adversely affect the interests of the Banks, (iii)
amend, modify or change its certificate of incorporation (including, without
limitation, by the filing or modification of any certificate of designation)
or by-laws or any agreement entered into by it, with respect to its capital
stock (including any Shareholders' Agreement), or enter into any new
agreement with respect to its capital stock unless such amendment,
modification, change or other action contemplated by this clause (iv) could
not be adverse to the interests of the Banks under the Credit Documents in
any material respect or (v) enter into any Tax Sharing Agreement, tax
allocation agreement or similar agreement.
9.13 Limitation on Certain Restrictions on Subsidiaries. The
Credit Parties will not permit any of Adience's Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a)
pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by Adience or any
Subsidiary of Adience, or pay any Indebtedness owed to Adience or any
Subsidiary of Adience, (b) make loans or advances to Adience or any
Subsidiary of Adience or (c) transfer any of its properties or assets to
Adience or any Subsidiary of Adience, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of Adience or any Subsidiary of Adience, (iv) customary provisions
restricting assignment of any licensing agreement entered into by Adience or
any Subsidiary of Adience in the ordinary course of business, (v) the
Floating Rate Loan Documents (so long as the restrictions contained therein
are not more restrictive than those contained in such documents as in effect
as of the Restatement Effective Date), (vi) restrictions on the transfer of
any asset subject to a Lien permitted by Sections 9.01(iii), (vii) and
(viii), and (vii) restrictions existing on the Restatement Effective Date and
specifically described in Schedule X.
9.14 Limitation on Issuance of Capital Stock. (a) Holdings
will not issue (i) any preferred stock or (ii) any redeemable common stock
(except at the sole option of Holdings or such Subsidiary).
(b) The Credit Agreement Parties will not permit any
Subsidiary of Holdings to issue any capital stock (including by way of sales
of treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock, except (i) for transfers and replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock
dividends and similar issuances which do not decrease the percentage
ownership of Holdings or any of its Subsidiaries in any class
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of the capital stock of such Subsidiary, (iii) to qualify directors to the
extent required by applicable law and (iv) issuances to Adience and its
Wholly-Owned Subsidiaries, so long as such issuances in no event reduce the
percentage of the capital stock of the respective issuer (if any) pledged at
such time pursuant to the Security Documents.
9.15 Business. (a) No Credit Agreement Party will, nor will
any Credit Agreement Party permit any of its Subsidiaries to, engage
(directly or indirectly) in any business other than the businesses in which
Holdings and its Subsidiaries are engaged on the Restatement Effective Date
and reasonable extensions thereof or incidental thereto.
(b) Notwithstanding anything to the contrary contained in
this Agreement, Holdings will engage in no business activities and will not
have any significant assets (other than the capital stock of Adience) or
liabilities (other than those liabilities under this Agreement, the Floating
Rate Note Documents and the Acquisition Documents).
9.16 Limitation on Creation of Subsidiaries. (a) Except as
otherwise specifically provided in following clause (b), Holdings will not,
and will not permit any of its Subsidiaries to, establish, create or acquire
after the Restatement Effective Date any Subsidiary; provided that, (a)
Adience and its Wholly-Owned Subsidiaries shall be permitted to establish or
create Wholly-Owned Subsidiaries so long as (i) 100% of the capital stock of
such new Subsidiary that is owned by any Credit Party (or 100% of the
non-voting stock and 65% of the voting stock of any such Foreign Subsidiary
that is owned by Adience or any Domestic Subsidiary of Adience (or 100% of
such voting stock to the extent provided in Section 8.12)) is pledged
pursuant to, and to the extent required by, the U.S. Pledge Agreement or
other relevant Security Document and the certificates representing such
stock, together with stock powers duly executed in blank, are delivered to
the Collateral Agent for the benefit of the Secured Creditors, (ii) such new
Subsidiary (unless an Immaterial Foreign Subsidiary) executes a counterpart
of the U.S. Subsidiary Guaranty or a Foreign Subsidiary Guaranty, as is
appropriate, and, in the case of any Domestic Subsidiary of Adience, the U.S.
Pledge Agreement and the U.S. Security Agreement, and (iii) such new
Subsidiary, to the extent requested by the Administrative Agent or the
Required Banks, takes all actions required pursuant to Section 8.11. In
addition, each new Wholly-Owned Subsidiary shall execute and deliver, or
cause to be executed and delivered, all other relevant documentation of the
type described in Section 5 as such new Subsidiary would have had to deliver
if such new Subsidiary were a Credit Party on the Restatement Effective Date.
Without prejudice to the preceding provisions of this Section 9.16(a), the
Collateral Agent may require that the capital stock of a new Subsidiary be
pledged pursuant to an agreement in a form suitable for enforcement in the
jurisdiction in which the new Subsidiary in incorporated.
(b) In addition to Subsidiaries created or established as
permitted by preceding clause (a), after the Restatement Effective Date,
Adience may establish or acquire (x) non-Wholly-Owned Subsidiaries as a
result of Permitted Acquisitions, but only if the respective non-Wholly-Owned
Subsidiary is a Subsidiary of the Person being acquired pursuant to the
Permitted Acquisition and the requirements of the definition of Permitted
Acquisition contained herein are satisfied and (y) to the extent Investments
are made pursuant to Section 9.05(xi), such investments may be made in, or to
acquire interests in, joint ventures or non-Wholly-Owned Subsidiaries.
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(c) Notwithstanding anything to the contrary contained in
this Agreement, in no event will Holdings permit any equity interests in any
of its non-Wholly-Owned Subsidiaries to be owned by Alpine or any of its
Subsidiaries or Affiliates (other than Adience and its Subsidiaries).
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. Any Borrower shall (i) default in the
payment when due of any principal of any Loan or any Note or (ii) default,
and such default shall continue unremedied for three or more Business Days,
in the payment when due of any interest on any Loan or Note, any Unpaid
Drawing or any Fees or any other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or
in any certificate delivered to the Administrative Agent or any Bank pursuant
hereto or thereto shall prove to be untrue in any material respect on the
date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(g)(i), 8.08, 8.13, 8.14, Section 9 or Section 13.22
or (ii) default in the due performance or observance by it of any other term,
covenant or agreement contained in this Agreement or any other Credit
Document (other than those set forth in Sections 10.01 and 10.02 and clause
(i) of this Section 10.03) and such default as described in this clause (ii)
shall continue unremedied for a period of 30 days after written notice
thereof to the defaulting party by the Administrative Agent or the Required
Banks; or
10.04 Default Under Other Agreements. (i) Holdings or any of
its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Notes) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (y)
default in the observance or performance of any agreement or condition
relating to any Indebtedness (other than the Notes) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause (determined without regard to whether any notice is required), any
such Indebtedness to become due prior to its stated maturity, or (ii) any
Indebtedness (other than the Notes) of Holdings or any of its Subsidiaries
shall be declared to be (or shall become) due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, provided that it shall not be a Default or an Event
of Default under this Section 10.04 unless the aggregate principal amount of
all Indebtedness as described in preceding clauses (i) and (ii) is at least
$3,500,000 (or in the case of currencies other than Dollars, the Dollar
Equivalent thereof); or
10.05 Bankruptcy, etc. Holdings or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary
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case is commenced against Holdings or any of its Subsidiaries, and the
petition is not controverted within 15 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of Holdings or any of its Subsidiaries, or Holdings or
any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, receivership, administration or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating
to Holdings or any of its Subsidiaries, or there is commenced against
Holdings or any of its Subsidiaries any such proceeding which remains
undismissed for a period of 60 days, or Holdings or any of its Subsidiaries
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Holdings or any of its
Subsidiaries suffers any appointment of any custodian, administrator,
administrative receiver or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holdings or any of
its Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof) and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably
expected to occur with respect to such Plan within the following 30 days, any
Plan which is subject to Title IV of ERISA, shall have had or is likely to
have a trustee appointed to administer such Plan, any Plan which is subject
to Title IV of ERISA is, shall have been or is likely to be terminated or to
be the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability that exceeds $2,500,000, a contribution required
to be made with respect to a Plan or a Foreign Pension Plan has not been
timely made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate
has incurred or is likely to incur any liability that exceeds $6,000,000 to
or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of
the Code, or Holdings or any Subsidiary of Holdings has incurred or is likely
to incur liabilities pursuant to one or more employee welfare benefit plans
(as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) other than liabilities for such benefits which are less than
$10,500,000, based on the accumulated post-retirement benefit obligation as
calculated by Holdings' actuaries in accordance with Statement of Financial
Accounting Standard No. 106 or any pension plans of Holdings or its
Subsidiaries that are not tax-qualified under Section 401(a) of the Code or
Foreign Pension Plans; (b) there shall result from any such event or events
the imposition of a lien, the granting of a security interest, or a liability
or a material risk of incurring a liability; and (c) such lien, security
interest or liability,
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individually and/or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; or
10.07 Security Documents. At any time after the execution
and delivery thereof, any of the Security Documents (except as expressly
provided by the terms thereof) shall cease to be in full force and effect, or
shall cease to give the Collateral Agent for the benefit of the Secured
Creditors the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a perfected security interest in, and
Lien on, all of the Collateral, in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons (except as permitted by Section
9.01), and subject to no other Liens (except as permitted by Section 9.01),
or any Credit Party shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
10.08 Guaranties. (a) Except in accordance with the express
terms of the respective Guaranty, any Guaranty or any provision thereof shall
cease to be in full force or effect as to the relevant Guarantor, or any
Guarantor or Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under the relevant Guaranty, or (b)
any Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
such Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against Holdings or any Subsidiary of Holdings involving in the
aggregate for Holdings and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30
consecutive days, and the aggregate amount of all such judgments exceeds
$3,500,000 (or in the case of currencies other than Dollars, the Dollar
Equivalent thereof); or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Put Rights. Either (i) Alpine shall default in the due
performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to the Alpine Put Guaranty or (ii) Adience
shall make any payment in respect of the Put Obligations in excess of the
aggregate stated amount of all Put Letters of Credit;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Borrowers, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Bank or the holder of any Note to enforce its
claims against any Credit Party (provided, that, if an Event of Default
specified in Section 10.05 shall occur with respect to any Borrower, the
result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitments terminated, whereupon all Commitments of each Bank shall
forthwith terminate immediately and any
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Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued
interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Credit Party; (iii) terminate
any Letter of Credit which may be terminated in accordance with its terms;
(iv) direct Adience to pay (and Adience agrees that upon receipt of such
notice, or upon the occurrence of an Event of Default specified in Section
10.05 with respect to any Borrower, it will pay) to the Collateral Agent at
the appropriate Payment Office such additional amount of cash, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount
of all Adience Letters of Credit then outstanding; (v) direct Hepworth to pay
(and Hepworth agrees that upon receipt of such notice, or upon the occurrence
of an Event of Default specified in Section 10.05 with respect to any
Borrower, it will pay) to the Collateral Agent at the appropriate Payment
Office such additional amount of cash, to be held as security by the
Collateral Agent, as is equal to the aggregate Stated Amount of all Hepworth
Letters of Credit then outstanding; (vi) enforce, as Collateral Agent, all of
the Liens and security interests created pursuant to the Security Documents;
and (vii) apply any cash collateral held pursuant to Section 4.02 to the
repayment of the Obligations of the respective Revolving Loan Borrower.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"A Term Loan Maturity Date" shall mean April 15, 2003.
"Acquired Business" shall mean the businesses and properties
to be acquired pursuant to the Acquisition.
"Acquired Indebtedness" means, with respect to any specified
Person, Indebtedness of any other Person (the "Acquired Person") existing at
the time such Acquired Person becomes a Subsidiary of or merges or
consolidates with such specified Person or any of its Subsidiaries pursuant
to a Permitted Acquisition (and not redeemed, defeased, retired or otherwise
repaid at the time of or upon consummation of such merger or acquisition) or
Indebtedness assumed in connection with the acquisition of assets from such
Acquired Person pursuant to a Permitted Acquisition, but in each case
excluding any Indebtedness incurred or secured by Liens (on additional assets
or otherwise) in connection with, or in anticipation or contemplation of,
such Acquired Person merging or consolidating with, or becoming a Subsidiary
of, such specified Person.
"Acquisition" shall mean (x) the acquisition (as described in
that certain Confidential Information Memorandum, dated January 1998, and
previously delivered to the Banks and consummated as described below) by
Holdings of all of the issued and outstanding capital stock of APHI by way of
the merger of APHI with and into Holdings, with Holdings being the surviving
entity of such merger, and (y) the merger of American Premier Inc., a
Delaware
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corporation and a Wholly-Owned Subsidiary of APHI, with and into Adience,
pursuant to, and in accordance with, the terms of the Acquisition Documents.
"Acquisition Agreement" shall mean the Agreement and Plan of
Merger, dated as of January 18, 1998, among Alpine, Holdings, APHI, Minerals
Trading, Inc., Ralph Feuerring, John Gehret, Charles Gehret and Stanley Weiss.
"Acquisition Documents" shall mean the Acquisition Agreement
and all other agreements and documents relating to the Acquisition.
"Additional Guaranty" shall have the meaning provided in
Section 8.11.
"Additional Security Documents" shall have the meaning
provided in Section 8.11.
"Adience" shall have the meaning provided in the first
paragraph of this Agreement.
"Adience A Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(iv).
"Adience A Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(iv).
"Adience A Term Loan" shall have the meaning provided in
Section 1.01(d).
"Adience A Term Loan Commitment" shall mean, for each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below
the column entitled "Adience A Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
"Adience A Term Loan Maturity Date" shall mean April 30, 2003.
"Adience A Term Note" shall have the meaning provided in
Section 1.05(a).
"Adience B Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(i).
"Adience B Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(i).
"Adience B Term Loan" shall have the meaning provided in
Section 1.01(a).
"Adience B Term Loan Commitment" shall mean, for each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below
the column entitled "Adience B Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
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"Adience B Term Note" shall have the meaning provided in
Section 1.05(a).
"Adience B-2 Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(v).
"Adience B-2 Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(v).
"Adience B-2 Term Loan" shall have the meaning provided in
Section 1.01(e).
"Adience B-2 Term Loan Commitment" shall mean, for each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below
the column entitled "Adience B Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
"Adience B-2 Term Note" shall have the meaning provided in
Section 1.05(a).
"Adience C Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(vi).
"Adience C Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(vi).
"Adience C Term Loan" shall have the meaning provided in
Section 1.01(f).
"Adience C Term Loan Commitment" shall mean, for each Bank,
the amount set forth opposite such Bank's name in Schedule I directly below
the column entitled "Adience C Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
"Adience C Term Note" shall have the meaning provided in
Section 1.05(a).
"Adience Letter of Credit" shall mean each Letter of Credit
issued for the account of Adience pursuant to Section 2.01.
"Adience Letter of Credit Outstandings" shall mean, at any
time, the sum of (i) the aggregate Stated Amount of all outstanding Adience
Letters of Credit and (ii) the amount of all Unpaid Drawings with respect to
Adience Letters of Credit.
"Adience Term Loan" shall mean and include each Adience A Term
Loan, each Adience B Term Loan, each Adience B-2 Term Loan and each Adience C
Term Loan.
"Adience U.K. Pledge Agreement" shall mean the Charge Over
Shares, dated April 15, 1997, made between Adience and the Administrative
Agent and executed and delivered
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pursuant to Section 5.12 of the Original Credit Agreement, as same may from
time to time be amended, modified or supplemented in accordance with the
terms thereof.
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for
negotiable certificates of deposit with a three-month maturity in the
secondary market as published in the most recent Federal Reserve System
publication entitled "Select Interest Rates," published weekly on Form H.15
as of the date hereof, or if such publication or a substitute containing the
foregoing rate information shall not be published by the Federal Reserve
System for any week, the weekly average offering rate determined by the
Administrative Agent on the basis of quotations for such certificates
received by it from three certificate of deposit dealers in New York of
recognized standing or, if such quotations are unavailable, then on the basis
of other sources reasonably selected by the Administrative Agent, by (y) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily
net annual assessment rate as estimated by the Administrative Agent for
determining the current annual assessment payable by the Administrative Agent
to the Federal Deposit Insurance Corporation for insuring three-month
certificates of deposit.
"Administrative Agent" shall mean Bankers Trust Company, in
its capacity as Administrative Agent for the Banks hereunder, and shall
include any successor to the Administrative Agent appointed pursuant to
Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person; provided, however, that for
purposes of Section 9.06, an Affiliate of Holdings shall include (x) any
Person that directly or indirectly owns more than 5% of any class of the
capital stock of Holdings and (y) any executive officer or director of
Holdings. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Alpine" shall mean The Alpine Group, Inc., a Delaware
corporation.
"Alpine Permitted Amount" shall mean $2,000,000, provided that
if the Leverage Ratio as determined for the last day of any fiscal year of
Holdings ending after the Restatement Effective Date (calculating the
numerator as of such date and the denominator for the fiscal year then ended)
is (x) less than 3:1, the Alpine Permitted Amount shall instead be
$4,000,000, (y) greater than or equal to 3:1, but less than 3.25:1, the
Alpine Permitted Amount shall instead be $3,000,000 and (z) greater than or
equal to 4:1, the Alpine Permitted Amount shall instead by $0.
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"Alpine Put Guaranty" shall mean that certain Guarantee, dated
January 30, 1998, by Alpine in favor of Minerals Trading, Inc., John Gehret,
Charles Gehret, Ralph Feurring and Stanley Weiss.
"AMI Promissory Notes" shall mean (i) the $190,000 Promissory
Note Due 1995, dated December 11, 1991, made by American Premier, Inc. in
favor of Ferro Standard Corporation and (ii) the $1,000,000 Promissory Note
Due 1995, dated December 11, 1991, made by American Premier, Inc. in favor of
Ferro Metal and Chemical, Inc.
"APHI" shall mean American Premier Holdings, Inc., a Delaware
corporation.
"Applicable Currency" shall mean Dollars or Pounds Sterling,
as the case may be.
"Applicable Margin" shall mean a percentage per annum equal to
(i) in the case of Adience A Term Loans, Newco A Term Loans and Revolving
Loans that are maintained as (x) Base Rate Loans, 1.50%, and (y) Euro Rate
Loans, 2.50%, less, in each case the Interest Reduction Discount, if any,
(ii) in the case of B Term Loans that are maintained as (x) Base Rate Loans,
2.00%, and (y) Euro Rate Loans, 3.00%; and (iii) in the case of Adience C
Term Loans that are maintained as (x) Base Rate Loans, 2.25%, and (y) Euro
Rate Loans, 3.25%.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit J
(appropriately completed).
"Authorized Officer" of any Credit Party shall mean any of the
President, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, any Vice-President, the Secretary or any Assistant Secretary of
such Credit Party or any other officer of such Credit Party which is
designated in writing to the Administrative Agent, BTCo and the Issuing Bank
by any of the foregoing officers of such Credit Party as being authorized to
give such notices under this Agreement.
"Available Revolving Loan Commitment" shall mean, at any time
and for any Bank, the Revolving Loan Commitment of such Bank as in effect
less such Bank's RL Percentage of the amount of Canadian Subsidiary Working
Capital Outstandings.
"B Term Loan" shall mean each Adience B Term Loan, each
Adience B-2 Term Loan and each Newco B Term Loan.
"B Term Loan Maturity Date" shall mean April 15, 2005.
"B-2 Term Loan Maturity Date" shall mean April 30, 2005.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Bank" hereunder pursuant
to Section 1.13 or 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing (including any Mandatory Borrowing or Mandatory Sterling Borrowing)
or to fund its portion of any unreimbursed payment under Section 2.04(c) or
(ii) a Bank having notified in writing any Borrower and/or the
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Administrative Agent that such Bank does not intend to comply with its
obligations under Section 1.01(g), 1.01(i), 1.01(k) or 2.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" at any time shall mean the highest of (i) 1/2 of
1% in excess of the Adjusted Certificate of Deposit Rate, (ii) 1/2 of 1% in
excess of the overnight Federal Funds Rate and (iii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Dollar Loan designated or
deemed designated as such by Adience or Newco, as the case may be, at the
time of the incurrence thereof or conversion thereto.
"Borrowers" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Banks having Commitments of the respective
Tranche on a given date (or resulting from a conversion or conversions on
such date) having in the case of Euro Rate Loans the same Interest Period,
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of the related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual
capacity.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Euro Rate Loans and Hepworth
Letters of Credit, any day which is a Business Day described in clause (i)
above and which is also a day for trading by and between banks in the London
interbank market and which shall not be a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close in the city where the applicable Payment Office of the
Administrative Agent is located in respect of Euro Rate Loans or Hepworth
Letters of Credit, as the case may be.
"C Term Loan Maturity Date" shall mean July 30, 2005.
"Canadian Subsidiary Working Capital Facility" shall mean the
credit facility to be provided by BTCo (or another third party lender
satisfactory to the Administrative Agent) to certain Canadian Subsidiaries of
Adience, and which shall be in form and substance satisfactory to BTCo.
"Canadian Subsidiary Working Capital Indebtedness" shall have
the meaning provided in Section 9.04(xiii).
"Canadian Subsidiary Working Capital Outstandings" shall mean,
at any time, the sum of (i) all loans incurred under the Canadian Subsidiary
Working Capital Facility plus all
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amounts drawn under letters of credit issued under the Canadian Subsidiary
Working Capital Facility and (ii) the aggregate face amount of all bankers
acceptances under the Canadian Subsidiary Working Capital Facility.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be shown as capital expenditures
in accordance with generally accepted accounting principles and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.
"Capitalized Lease Obligations" of any Person shall mean all
rental obligations which, under generally accepted accounting principles, are
or will be required to be capitalized on the books of such Person, in each
case taken at the amount thereof accounted for as indebtedness in accordance
with such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (ii) time
deposits and certificates of deposit of any commercial bank having, or which
is the principal banking subsidiary of a bank holding company having, a
long-term unsecured debt rating of at least "A" or the equivalent thereof
from Standard & Poor's Ratings Group or "A2" or the equivalent thereof from
Moody's Investors Service, Inc. with maturities of not more than one year
from the date of acquisition by such Person, (iii) repurchase obligations
with a term of not more than seven days for underlying securities of the
types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued
by any Person rated at least A-1 or the equivalent thereof by Standard &
Poor's Ratings Group or at least P-1 or the equivalent thereof by Moody's
Investors Service, Inc. and in each case maturing not more than 270 days
after the date of acquisition by such Person, (v) Eurodollar certificates of
deposit maturing within one year after the date of acquisition thereof issued
by any commercial bank organized under the laws of the United States of
America or any State thereof or the District of Columbia or by any foreign
bank, which is a Bank, or United States branches of foreign banks, and in any
case having a combined capital and surplus of not less than $100,000,000 and
(vi) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v)
above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean (i) Alpine shall at any time
cease to own 100% of the capital stock of Holdings, or (ii) Holdings shall at
any time cease to own 100% of the capital stock of Adience, or (iii) Adience
shall at any time cease to own 100% of the capital stock of Newco, or (iv)
Newco shall at any time cease to own 100% of the capital stock of Hepworth,
or (v) a "change in control" or similar event shall occur as provided in the
Floating Rate Loan Credit Agreement, or (vi) the board of directors of Alpine
shall cease to consist of a majority of Continuing Directors or (vii) any
Person, entity or "group" (as such term is defined in Section
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13(d)(3) of the Securities Exchange Act of 1934, as amended) (other than a
Permitted Holder) is or becomes the beneficial owner of an amount of
outstanding Voting Stock, or of outstanding common stock, of Alpine in excess
of 25% of the total amount of fully diluted shares of outstanding Voting
Stock or common stock, as the case may be, of Alpine.
"Class B Common Stock" of Holdings shall have the meaning
provided in the Certificate of Incorporation of Holdings (as amended by the
Certificate of Amendment of Certificate of Incorporation of Holdings, dated
January 30, 1998).
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in
effect at the date of this Agreement and to any subsequent provisions of the
Code, amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purport to be granted) pursuant to any Security Document, including, without
limitation, all U.S. Pledge Agreement Collateral, all U.S. Security Agreement
Collateral, the Mortgaged Properties and all cash and Cash Equivalents
delivered as collateral pursuant to Section 4.02 or 10 hereof.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Security
Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.04.
"Commitment" shall mean any of the commitments of any Bank,
i.e., whether, the Adience A Term Loan Commitment, the Adience B Term Loan
Commitment, the Adience B-2 Term Loan Commitment, the Adience C Term Loan
Commitment, the Newco A Term Loan Commitment, the Newco B Term Loan
Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated Cash Interest Expense" shall mean, for any
period, the total consolidated interest expense of Holdings and its
Subsidiaries (including Newco and its Subsidiaries) for such period plus,
without duplication, that portion of Capitalized Lease Obligations of
Holdings and its Subsidiaries (including Newco and its Subsidiaries)
representing the implicit or imputed interest factor for such period;
provided that (x) interest expense which is not required to be, and which is
not, paid or payable in cash on a current basis and (y) the amortization of
deferred financing costs with respect to this Agreement or the Indebtedness
incurred hereunder, and with respect to the Floating Rate Loans and the
Indebtedness incurred pursuant to the Floating Rate Loan Documents, in each
case shall be excluded from Consolidated Net Cash Interest Expense to the
extent the same would otherwise have been included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income, before Consolidated Interest Expense and provision for taxes and
without giving effect to (x) any extraordinary gains or losses (including any
taxes attributable to any such extraordinary gains or
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losses) and (y) gains or losses from sales of assets other than inventory and
services sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT, adjusted by adding thereto the amount of all amortization of
intangibles and depreciation, in each case that were deducted in arriving at
Consolidated EBIT for such period; provided that (i) to the extent that
Adience has incurred non-cash charges or made non-cash write-downs of assets
of Adience in connection with the rationalization of the operations of APHI
and Adience, such amounts to the extent same reduced Consolidated EBITDA for
the respective Test Period shall be added back to Consolidated EBITDA for
such Test Period, (ii) to the extent that Adience incurs non-recurring costs
within six months after the Restatement Effective Date in connection with the
rationalization of the operations of APHI and Adience, such amounts to the
extent same reduced Consolidated EBITDA for the respective Test Period shall
be added back to Consolidated EBITDA for such Test Period, provided that in
no event shall the aggregate amount of all such non-recurring costs exceed
$4,000,000 in the aggregate, (iii) in making any determination of
Consolidated EBITDA of APHI for any Test Period, which such Test Period
includes any period occurring prior to the Restatement Effective Date, pro
forma effect will be given to the Acquisition as if same had occurred on the
first day of such Test Period and (iv) for the purpose of compliance with
Sections 9.09, 9.10 and 9.11, Consolidated EBITDA for the fiscal quarter of
Holdings ending in April, 1997 shall be increased by $4,250,000.
"Consolidated Fixed Charge Coverage Ratio" for any period
shall mean the ratio of Consolidated EBITDA to Consolidated Fixed Charges for
such period.
"Consolidated Fixed Charges" for any period shall mean the
sum, without duplication, of (i) Consolidated Interest Expense for such
period, (ii) the amount of all cash payments in respect of taxes or tax
liabilities during such period (net of any cash tax refunds actually received
during such period) and (iii) the scheduled principal amount of all
amortization payments on all Indebtedness (including, without limitation, the
principal component of all Capitalized Lease Obligations) of Holdings and its
Subsidiaries for such period (as determined on the first day of the
respective period).
"Consolidated Indebtedness" shall mean, at any time, the
aggregate amount of all Indebtedness of Holdings and its Subsidiaries
determined on a consolidated basis with respect to borrowed money or other
obligations of such Persons which would appear on the balance sheet of such
Persons as indebtedness.
"Consolidated Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Cash Interest Expense
for such period; provided that for the purposes of Section 9.09, Consolidated
EBITDA for each fiscal quarter of Holdings ending on or prior to October,
2000 shall be increased by the amount set forth on Schedule XVII set forth
opposite such fiscal quarter. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, to the extent Consolidated Cash
Interest Expense is being determined for any Test Period which begins prior
to the Restatement Effective Date, then Consolidated Cash Interest Expense
(w) for the fiscal quarter of Holdings ended in July, 1997 shall be deemed to
be $6,625,000, (x) for the fiscal quarter of Holdings ended in October,
1997, shall be deemed to be
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$6,625,000 and (y) for the fiscal quarter of Holdings ended January, 1998,
shall be deemed to be $6,625,000; provided that, to the extent any
calculation pursuant to this Agreement is to be made on a Pro Forma Basis,
such Consolidated Cash Interest Expense shall be adjusted as provided in the
definition of Pro Forma Basis for transactions occurring after the
Restatement Effective Date.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of Holdings and its Subsidiaries
(including Newco and its Subsidiaries) for such period (calculated without
regard to any limitations on the payment thereof) plus, without duplication,
that portion of Capitalized Lease Obligations of Holdings and its
Subsidiaries (including Newco and its Subsidiaries) representing the implicit
or imputed interest factor for such period; provided that the amortization of
deferred financing costs with respect to this Agreement or the Indebtedness
incurred hereunder, and with respect to the Floating Rate Loans and the
Indebtedness incurred pursuant to the Floating Rate Note Documents, shall be
excluded from Consolidated Interest Expense to the extent the same would
otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income of Holdings and its Subsidiaries (including
Newco and its subsidiaries) for such period; provided that, except to the
extent such payments have already reduced Consolidated Net Income for the
respective period, Consolidated Net Income shall be reduced by the amount of
all payments made by Holdings and its Subsidiaries during the respective
period to Alpine pursuant to clauses (iii), (iv) and (v) of Section 9.03;
provided further, that to the extent that any payment pursuant to clause (v)
of Section 9.03 (excluding for purposes of this proviso any payment in
respect of the Alpine Permitted Amount) would, in accordance with U.S. GAAP
as applied by Alpine, be capitalized by Alpine for purposes of its
consolidated financial statements, such payment shall only reduce
Consolidated Net Income when, and then to the extent, such amounts reduce
Alpine's consolidated net income (in accordance with U.S. GAAP as applied by
Alpine).
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly
or indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance
or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
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"Continuing Bank" shall mean each Original Bank with a
Commitment under this Agreement (immediately upon giving effect to the
Restatement Effective Date).
"Continuing Directors" shall mean the directors of Alpine on
the Restatement Effective Date and each other director of Alpine if such
director's nomination for election to the Board of Directors of Alpine is
recommended by a majority of the then Continuing Directors.
"Credit Agreement Parties" shall mean and include each of
Holdings and each Borrower.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, each Guaranty, each Security Document and the Hepworth Assumption
Agreement.
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean Holdings, each Borrower and each
Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Designated Assets" shall mean the parcels of real property
referred to as such on Schedule III.
"Distribution" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution,
payment or delivery of property (other than common stock of such Person) or
cash to its stockholders or partners as such, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for any consideration any
shares of any class of its capital stock or any partnership interests
outstanding on or after the Restatement Effective Date (or any options or
warrants issued by such Person with respect to its capital stock or any
partnership interests), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership interests of such Person outstanding on or after the
Restatement Effective Date (or any options or warrants issued by such Person
with respect to its capital stock). Without limiting the foregoing,
"Distributions" with respect to any Person shall also include all payments
made or required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any
similar plans or setting aside of any funds for the foregoing purposes, in
each case, except to the extent the respective such payments described in
this sentence reduced Consolidated Net Income for such period.
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"Documents" shall mean the Credit Documents, the Floating Rate
Note Documents, the Refinancing Documents and the Acquisition Documents.
"Dollar Equivalent" of an amount denominated in a currency
other than Dollars (the "Other Currency") shall mean, at any time for the
determination thereof, the amount of Dollars which could be purchased with
the amount of the respective Other Currency involved in such computation at
the spot exchange rate therefor as quoted by the Administrative Agent as of
11:00 A.M. (New York time) on the date two Business Days prior to the date of
any determination thereof for purchase on such date; provided that the Dollar
Equivalent of any Unpaid Drawing in a currency other than Dollars shall be
determined at the time the drawing under the related Letter of Credit was
paid or disbursed by the Issuing Bank; provided further, that for purposes of
(x) determining compliance with Sections 1.01(g), 1.01(h) and 2.02(a) and (y)
calculating Letter of Credit Fees pursuant to Section 3.01(b), the Dollar
Equivalent of the Stated Amount of any outstanding Letters of Credit and any
Unpaid Drawings, in each case denominated in a currency other than Dollars,
shall be revalued on a monthly basis using the spot exchange rate therefor
quoted in the Wall Street Journal on the first Business Day of each month.
"Dollar Loan" shall mean each Adience A Term Loan, each
Adience B Term Loan, each Adience B-2 Term Loan, each Adience C Term Loan,
each Newco B Term Loan, each Dollar Revolving Loan and each Swingline Loan.
"Dollar Revolving Loan" shall have the meaning provided in
Section 1.01(g).
"Dollar Revolving Note" shall have the meaning provided in
Section 1.05(a).
"Dollar Revolving Sub-Limit" shall mean $32,500,000.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in bank loans and any
other "accredited investor" (as defined in Regulation D of the Securities
Act).
"Employee Benefit Plans" shall have the meaning provided in
Section 5.04.
"End Date" shall have the meaning provided in the definition
of Interest Reduction Discount.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings arising under any Environmental Law or any permit
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issued, or any approval given, under any such Environmental Law (hereafter,
"Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
human health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section
7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. Section
11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. Section
1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. Section
651 et seq.; and any state and local or foreign counterparts or equivalents,
in each case as amended from time to time.
"Environmental Matters" shall have the meaning provided in
Section 8.01(i).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or any Subsidiary of
Holdings would be deemed to be a "single employer" within the meaning of
Section 414(b) or (c) of the Code, except that solely with respect to
liabilities to the PBGC for premiums, liabilities for excise taxes under
Section 4980B of the Code and pension funding liabilities under Section 412
of the Code, the term "ERISA Affiliate" also includes each person (as defined
in Section 3(9) of ERISA) which together with Holdings is treated as a
"single employer" within the meaning of Section 414(m) or (o) of the Code.
"Eurodollar Loan" shall mean each Dollar Loan designated as
such by Adience or Newco, as the case may be, at the time of the incurrence
thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for
Dollar deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of BTCo with maturities
comparable to the Interest Period applicable to such Eurodollar Loan
commencing two Business Days thereafter as of 10:00 A.M. (New York time) on
the date which is two
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Business Days prior to the commencement of such Interest Period, divided (and
rounded off to the nearest 1/16 of 1%) by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Euro Rate" shall mean and include each of the Eurodollar
Rate, the Sterling Euro Rate and the Overnight LIBOR Rate.
"Euro Rate Loan" shall mean each Eurodollar Loan and each
Sterling Loan.
"Event of Default" shall have the meaning provided in Section
10.
"Excess Cash Payment Date" shall mean the date occurring 90
days after the last day of each fiscal year of Holdings (beginning with its
fiscal year ending April 30, 1998).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, (x) in the case of
Holdings Excess Cash Flow, the immediately preceding fiscal year of Holdings
and (y) in the case of Newco Excess Cash Flow, the immediately preceding
fiscal year of Newco.
"Existing Indebtedness" shall have the meaning provided in
Section 7.22.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.04.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal Funds brokers of recognized standing selected by the
Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"First Amendment" shall mean the First Amendment, dated as of
June 11, 1997, to the Original Credit Agreement.
"First Amendment Effective Date" shall have the meaning
provided in the First Amendment.
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"Floating Rate Loan Credit Agreement" shall mean that certain
Term Loan Agreement, dated as of April 15, 1997, among Holdings, Bankers
Trust Company, as Administrative Agent, and the various lenders party thereto
from time to time, as in effect on the Restatement Effective Date and as the
same may be amended, modified or supplemented from time to time pursuant to
the terms hereof and thereof.
"Floating Rate Loan Documents" shall mean and include the
Floating Rate Loan Credit Agreement and all other documents and agreements
entered into in connection therewith, in each case as in effect from time to
time.
"Floating Rate Loans" shall mean term loans incurred by
Holdings pursuant to the Floating Rate Loan Credit Agreement.
"Foreign Cash Equivalents" shall mean, with respect to any
Foreign Subsidiary of Holdings (i) any evidence of Indebtedness maturing not
later than six months after the date of acquisition and issued or guaranteed
by the national government of the country in which such Foreign Subsidiary is
incorporated or organized, (ii) any time deposits, certificates of deposit or
bankers acceptances maturing not later than six months after the date of
acquisition and issued by any bank, provided that the aggregate principal
amount of the Indebtedness referred to in clause (i) above, together with the
aggregate amount of the deposits or acceptances referred to in clause (ii)
above, shall not exceed at any time $10,000,000 and (iii) investments in
money market funds substantially all of the assets of which are comprised of
securities of the types described in clauses (i) and (ii) above and/or Cash
Equivalents.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States by Holdings or any one or
more of its Subsidiaries primarily for the benefit of employees of Holdings
or such Subsidiaries residing outside the United States, which plan, fund or
other similar program provides, or results in, retirement income, a deferral
of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings
other than a Domestic Subsidiary.
"Foreign Subsidiary Guaranty" shall mean and include the U.K.
Subsidiary Guaranty and each Additional Guaranty delivered by a Foreign
Subsidiary pursuant to Section 8.11 or 8.12.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of the principal and interest on each Note issued by each
Guaranteed Party to each Bank, and Loans made to a Guaranteed Party, under
this Agreement and all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit issued for the account of a Guaranteed Party,
together with all the other obligations and liabilities (including, without
limitation, indemnities, fees and interest thereon) of each Guaranteed Party
to such Bank now existing or hereafter incurred under, arising out of or in
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connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by each Guaranteed Party and (ii) the full
and prompt payment when due (whether by acceleration or otherwise) of all
obligations of each Guaranteed Party owing under any Interest Rate Protection
Agreement or Other Hedging Agreement entered into by each Guaranteed Party or
any of its Subsidiaries with any Bank or any affiliate thereof (even if such
Bank subsequently ceases to be a Bank under this Agreement for any reason),
or in which any such Bank or affiliate participate, and their subsequent
assigns, if any, whether now in existence or hereafter arising, and the due
performance and compliance with all terms, conditions and agreements
contained therein.
"Guaranteed Party" shall mean (i) in the case of Holdings, as
Guarantor, Adience, Newco and Hepworth and (ii) in the case of Adience, as
Guarantor, Newco and Hepworth.
"Guarantor" shall mean each U.S. Parent Guarantor and each
Subsidiary Guarantor.
"Guaranty" shall mean and include each of the U.S. Parents
Guaranty, the U.S. Subsidiary Guaranty, the U.K. Subsidiary Guaranty and each
Additional Guaranty delivered pursuant to Section 8.11, 8.12 and/or 9.16.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon
gas; (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, which are regulated under any applicable
Environmental Law; and (c) any other chemical, material or substance, the
Release of which is prohibited, limited or regulated by any governmental
authority.
"Hepworth" shall have the meaning provided in the first
paragraph of this Agreement.
"Hepworth Letter of Credit" shall mean each Letter of Credit
issued for the account of Hepworth pursuant to Section 2.01.
"Hepworth Letter of Credit Outstandings" shall mean, at any
time, the sum of (i) the aggregate Stated Amount of all outstanding Hepworth
Letters of Credit and (ii) the amount of all Unpaid Drawings with respect to
Hepworth Letters of Credit.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
"Holdings Adjusted Consolidated Net Income" for any period
shall mean Holdings Consolidated Net Income for such period plus, without
duplication, the sum of the amount of all net non-cash charges (including,
without limitation, depreciation, amortization, deferred tax expense,
non-cash interest expense) and net non-cash losses which were included in
arriving at
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Holdings Consolidated Net Income for such period less all net non-cash gains
included in arriving at Holdings Consolidated Net Income for such period;
provided that gains or losses from sales of assets (other than sales of
inventory in the ordinary course of business) shall be excluded to the extent
same would otherwise be included in Holdings Adjusted Consolidated Net Income
for the respective period.
"Holdings Adjusted Consolidated Working Capital" at any time
shall mean Holdings Consolidated Current Assets (but excluding therefrom all
cash, Cash Equivalents and Foreign Cash Equivalents) less Holdings
Consolidated Current Liabilities at such time.
"Holdings Consolidated Current Assets" shall mean, at any
time, the consolidated current assets of Holdings and its Subsidiaries
(excluding Newco and its Subsidiaries) at such time.
"Holdings Consolidated Current Liabilities" shall mean, at any
time, the consolidated current liabilities of Holdings and its Subsidiaries
(excluding Newco and its Subsidiaries) at such time, but excluding (i) the
current portion of any long-term Indebtedness which would otherwise be
included therein and (ii) the current portion of Indebtedness constituting
Capitalized Lease Obligations.
"Holdings Consolidated Net Income" shall mean, for any period,
the net after tax income of Holdings and its Subsidiaries (other than Newco
and its Subsidiaries) for such period; provided that, notwithstanding any
contrary treatment required by generally accepted accounting principles, for
purposes of determining Holdings Consolidated Net Income the financial
results of Newco and its Subsidiaries shall be ignored, such entities shall
be treated as if same were not Subsidiaries of Holdings, and any income of
Holdings and its Subsidiaries (other than Newco and its Subsidiaries) from
transactions with Newco and its Subsidiaries shall be accounted for on the
same basis as if they were transactions with unrelated parties; provided
further, that the amount of cash Distributions actually received by Holdings
and its Subsidiaries (other than Newco and its Subsidiaries) during the
respective period from Newco and its Subsidiaries shall, to the extent such
payments would not have reduced Newco Consolidated Net Income for such
period, in the absence of the proviso to the definition thereof, increase
Holdings Consolidated Net Income for such period.
"Holdings Excess Cash Flow" shall mean, for any period, the
remainder of (i) the sum of (a) Holdings Adjusted Consolidated Net Income for
such period and (b) the decrease, if any, in Holdings Adjusted Consolidated
Working Capital from the first day to the last day of such period, minus (ii)
the sum of (a) the amount of Capital Expenditures (but excluding Capital
Expenditures (x) financed with Indebtedness or equity proceeds or (y) made
with insurance proceeds pursuant to Section 9.07(c)) made by Holdings and its
Subsidiaries (other than Newco and its Subsidiaries) during such period in
accordance with Section 9.07, (b) the aggregate amount of permanent principal
payments of Indebtedness for borrowed money of Holdings and its Subsidiaries
(other than Newco and its Subsidiaries) (other than repayments of Loans,
provided that repayments of Loans shall be deducted in determining Holdings
Excess Cash Flow if such repayments were (x) required as a result of a
Scheduled Repayment under Section 4.02(b)(i), (iv), (v) or (vi) or (y) made
as a voluntary prepayment by Adience with internally generated funds (but
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in the case of a voluntary prepayment of Revolving Loans or Swingline Loans,
only to the extent accompanied by a voluntary reduction to the Total
Revolving Loan Commitment)) during such period, (c) to the extent same did
not reduce Holdings Consolidated Net Income for the respective period, the
amount of cash payments made to Alpine during such period pursuant to Section
9.03(iv) and (d) the increase, if any, in Holdings Adjusted Consolidated
Working Capital from the first day to the last day of such period.
"Immaterial Foreign Subsidiary" at any time shall mean any
Foreign Subsidiary of Holdings which (x) had consolidated net income before
interest and provision for taxes (excluding non-recurring gains or losses)
for the four consecutive fiscal quarters last ended (taken as one accounting
period) prior to the date of any determination pursuant to this definition
and for which financial information is then available of less than $1,000,000
and (y) has consolidated net worth under generally accepted accounting
principles applicable to such Foreign Subsidiary of less than $4,000,000.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) the maximum amount available to be drawn under
all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of the
types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether
or not such Indebtedness has been assumed by such Person (provided, that, if
the Person has not assumed or otherwise become liable in respect of such
Indebtedness, such Indebtedness shall be deemed to be in an amount equal to
the fair market value of the property to which such Lien relates as
determined in good faith by such Person), (iv) the aggregate amount required
to be capitalized under leases under which such Person is the lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection Agreement, any Other Hedging
Agreement or under any similar type of agreement. Notwithstanding the
foregoing, Indebtedness shall not include trade payables and accrued expenses
incurred by any Person in accordance with customary practices and in the
ordinary course of business of such Person.
"Indebtedness to be Refinanced" shall mean, collectively, (i)
the Revolving Credit Facility among American Premier, Inc., Premier Services
Corporation, Premier Refractories Canada, Ltd., Bank of America Illinois, The
First National Bank of Boston, and Bank of America Canada, dated June 3,
1996, as amended, (ii) the Note Agreement among American Premier, Inc.,
Premier Services Corporation, Premier Refractories Canada, Ltd. and the
Noteholders listed therein, dated May 15, 1996, (iii) the Deferred Interest
Bonds due December 31, 2003 (other than the $2.8M Deferred Interest Bond) and
(iv) the $4,996,266.42 Subordinated Notes due December 31, 2003.
"Initial Borrowing Date" shall mean the date occurring on or
after the Original Effective Date on which the initial Borrowing of Loans
under the Original Credit Agreement occurred.
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"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.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean (i) initially zero
and (ii) from and after each day (each a "Start Date") of delivery of any
certificate delivered in accordance with the following sentence indicating an
entitlement to an Interest Reduction Discount other than zero (or, if a Start
Date has theretofore occurred with an Interest Reduction Discount of .25%,
indicating an entitlement to an Interest Reduction Discount of .50%), the
percentage set forth below opposite the Leverage Ratio indicated to have been
achieved in any certificate delivered in accordance with the following
sentence:
<TABLE>
<CAPTION>
Base Rate Euro Rate
Leverage Ratio Loans Loans
-------------- --------- ---------
<S> <C> <C>
Equal to or less than 3.25:1 0.25% 0.25%
but greater than 2.75:1
Equal to or less than 2.75:1 0.50% 0.50%
</TABLE>
The Leverage Ratio shall be determined based on the delivery of a certificate
of Holdings to the Administrative Agent (with a copy to be sent by Holdings
to each Bank), certified by an Authorized Officer of Holdings within 90 days
after the last day of any fiscal quarter of Holdings (commencing with its
fiscal quarter ending April 30, 1998), which certificate shall set forth the
calculation of the Leverage Ratio for the Test Period ended immediately prior
to the relevant Start Date and the Interest Reduction Discount which shall be
thereafter applicable (unless and until, in an instance where an Interest
Reduction Discount of .25% is indicated, such time, if any, as a subsequent
Start Date occurs where, in accordance with the requirements of this
sentence, a subsequent certificate of an Authorized Officer of Holdings
indicates an entitlement to an Interest Reduction Discount of .50%).
Notwithstanding anything to the contrary contained above in this definition,
the Interest Reduction Discount shall be reduced to zero at any time upon the
occurrence of any Default under Section 10.05 or any Event of Default, in
which case the Interest Reduction Discount shall remain at 0% until such
time, if any, as on a subsequent Start Date, no Default or Event of Default
is in existence and an Interest Reduction Discount of more than zero is
attained in accordance with the provisions of the preceding sentences of this
definition of Interest Reduction Discount.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo and any other Bank which at the
request of the Revolving Loan Borrowers (or the respective Revolving Loan
Borrower) and with the consent of
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the Administrative Agent agrees, in such Bank's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section
2. The sole Issuing Bank on the Restatement Effective Date is BTCo.
"Judgment Currency" shall have the meaning provided in Section
13.16(a).
"Judgment Currency Conversion Date" shall have the meaning
provided in Section 13.16(a).
"L/C Supportable Obligations" shall mean (i) obligations of
the respective Revolving Loan Borrower or any of its Subsidiaries (other
than, in the case of Adience Letters of Credit, Hepworth and its
Subsidiaries) incurred in the ordinary course of business and (ii) in the
case of Put Letters of Credit, the Put Obligations.
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit
and (ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Indebtedness at such time to Consolidated EBITDA for the then
most recently ended Test Period; provided that (i) in calculating the
Leverage Ratio to the extent any Permitted Acquisition or Significant
Divestiture has occurred during the relevant Test Period or thereafter but on
or prior to the date of the respective determination of the Leverage Ratio,
Consolidated EBITDA shall be determined for the respective Test Period on a
Pro Forma Basis to give effect to all such Permitted Acquisitions and/or
Significant Divestitures occurring after the first day of the respective Test
Period and (ii) for the purposes of compliance with Section 9.10,
Consolidated EBITDA for each fiscal quarter of Holdings ending on or prior to
October 31, 2000 shall be increased by the amount set forth on Schedule XVII
opposite such fiscal quarter.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing or similar statement or notice filed
under the UCC or any other similar recording or notice statute, and any lease
having substantially the same effect as any of the foregoing).
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"Loan" shall mean each Adience A Term Loan, each Adience B
Term Loan, each Adience B-2 Term Loan, each Adience C Term Loan, each Newco A
Term Loan, each Newco B Term Loan, each Revolving Loan, each Swingline Loan
and each Sterling Swingline Loan.
"Majority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated.
"Management Agreements" shall have the meaning provided in
Section 5.04.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(i).
"Mandatory Sterling Borrowing" shall have the meaning provided
in Section 1.01(k).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean any material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings, any Borrower, Holdings and
its Subsidiaries taken as a whole or any Borrower and its Subsidiaries taken
as a whole.
"Maturity Date" shall mean, with respect to any Tranche of
Loans, the A Term Loan Maturity Date, the B Term Loan Maturity Date, the B-2
Term Loan Maturity Date, the C Term Loan Maturity Date, the Adience A Term
Loan Maturity Date or the Revolving Loan Maturity Date, as the case may be.
"Maximum Sterling Swingline Amount" shall mean L5,000,000.
"Maximum Swingline Amount" shall mean $3,000,000.
"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 Adience C Term Loans, $5,000,000, (iv) in the case of Dollar
Revolving Loans, $1,000,000, (v) in the case of Sterling Revolving Loans,
L500,000, (vi) in the case of Swingline Loans, $250,000 and (vii) in the case
of Sterling Swingline Loans, L125,000.
"Minimum Facing Fee Amount" shall have the meaning provided in
Section 3.01(c).
"MLA Cost" shall mean the cost imputed to a Bank in complying
with the Mandatory Liquid Assets requirements of the Bank of England during
the period in which a Sterling Loan is outstanding determined in accordance
with Schedule XI.
"Mortgage" shall mean and include each Original Mortgage, as
amended pursuant to the respective Mortgage Amendment, each New Mortgage,
and, after the execution and
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delivery thereof, each Additional Mortgage, in each case as same may be
amended, modified or supplemented from time to time.
"Mortgage Amendments" shall have the meaning provided in
Section 5.14(b).
"Mortgage Policies" shall mean and include each Original
Mortgage Policy, each New Mortgage Policy, and, after the execution and
delivery thereof, each mortgage insurance policy issued with respect to an
Additional Mortgaged Property.
"Mortgaged Property" shall mean and include each Original
Mortgaged Property, each New Mortgaged Property, and, after the execution and
delivery of any Additional Mortgage, shall include the respective Additional
Mortgaged Property.
"Net Sale Proceeds" shall mean for any sale of assets, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from such sale of assets, net of (a) cash expenses of sale
(including, without limitation, brokerage fees, if any, transfer taxes and
payment of principal, premium and interest of Indebtedness other than the
Loans required to be repaid as a result of such asset sale) and (b) all
foreign, federal, state and local taxes to the extent payable as a direct
consequence of any such asset sale.
"New Banks" shall mean each of the Persons listed on Schedule
I hereto which is not a Continuing Bank.
"New Mortgage Policies" shall have the meaning provided in
Section 5.14(a).
"New Mortgaged Properties" shall have the meaning provided in
Section 5.14(a).
"New Mortgages" shall have the meaning provided in Section
5.14(a).
"Newco" shall have the meaning provided in the first paragraph
of this Agreement.
"Newco A Scheduled Repayment" shall have the meaning provided
in Section 4.02(b)(ii).
"Newco A Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(ii).
"Newco A Term Loan" shall have the meaning provided in Section
1.01(b).
"Newco A Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Newco A Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
"Newco A Term Note" shall have the meaning provided in Section
1.05(a).
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"Newco Adjusted Consolidated Net Income" for any period shall
mean Newco Consolidated Net Income for such period plus, without duplication,
the sum of the amount of all net non-cash charges (including, without
limitation, depreciation, amortization, deferred tax expense and non-cash
interest expense and net non-cash losses which were included in arriving at
Newco Consolidated Net Income for such period less all net non-cash gains
included in arriving at Newco Consolidated Net Income for such period;
provided that gains or losses from sales of assets (other than sales of
inventory and services in the ordinary course of business) shall be excluded
to the extent same would otherwise be included in Newco Adjusted Consolidated
Net Income for the respective period.
"Newco Adjusted Consolidated Working Capital" at any time
shall mean Newco Consolidated Current Assets (but excluding therefrom all
cash, Cash Equivalents and Foreign Cash Equivalents) less Newco Consolidated
Current Liabilities.
"Newco B Scheduled Repayment" shall have the meaning provided in
Section 4.02(b)(iii).
"Newco B Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b)(iii).
"Newco B Term Loan" shall have the meaning provided in Section
1.01(c).
"Newco B Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Newco B Term Loan Commitment", as the same may be (x)
reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10 and (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 13.04(b).
"Newco B Term Note" shall have the meaning provided in Section
1.05(a).
"Newco Consolidated Current Assets" shall mean, at any time,
the consolidated current assets of Newco and its Subsidiaries at such time.
"Newco Consolidated Current Liabilities" shall mean, at any
time, the consolidated current liabilities of Newco and its Subsidiaries at
such time, but excluding (i) the current portion of any long-term
Indebtedness which would otherwise be included therein and (ii) the current
portion of Indebtedness constituting Capitalized Lease Obligations.
"Newco Consolidated Net Income" shall mean, for any period,
the net after tax income of Newco and its Subsidiaries for such period;
provided that the amount of cash Distributions actually paid by Newco and its
Subsidiaries to Holdings and its Subsidiaries (other than Newco and its
Subsidiaries) during the respective period shall, to the extent such payments
did not reduce Newco Consolidated Net Income for such period before giving
effect to this proviso, decrease Newco Consolidated Net Income for such
period.
"Newco Excess Cash Flow" shall mean, for any period, the
remainder of (i) the sum of (a) Newco Adjusted Consolidated Net Income for
such period and (b) the decrease, if any,
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in Newco Adjusted Consolidated Working Capital from the first day to the last
day of such period, minus (ii) the sum of (a) the amount of Capital
Expenditures (but excluding Capital Expenditures (x) financed with
Indebtedness or equity proceeds or (y) made with insurance proceeds pursuant
to Section 9.07(c)) made by Newco and its Subsidiaries during such period in
accordance with Section 9.07, (b) the aggregate principal amount of permanent
principal payments of Indebtedness for borrowed money of Newco and its
Subsidiaries (other than repayments of Loans, provided that repayments of
Loans shall be deducted in determining Newco Excess Cash Flow if such
repayments were (x) required as a result of a Scheduled Repayment under
Section 4.02(b)(ii) or (iii) or (y) made as a voluntary prepayment by Newco
or any of its Subsidiaries with internally generated funds (but in the case
of a voluntary prepayment of Revolving Loans or Sterling Swingline Loans,
only to the extent accompanied by a voluntary reduction to the Total
Revolving Loan Commitment)) during such period and (c) the increase, if any,
in Newco Adjusted Consolidated Working Capital from the first day to the last
day of such period. The foregoing calculation (and all components as used
therein) shall be made in Pounds Sterling.
"Newco Term Loan" shall mean each Newco A Term Loan and each
Newco B Term Loan.
"Newco Term Loan Commitment" shall mean, for each Bank, such
Bank's Newco A Term Loan Commitment and Newco B Term Loan Commitment.
"Newco U.K. Pledge Agreement" shall mean the Change Over
Shares, dated as of April 15, 1997, made between Newco and the Administrative
Agent and executed and delivered pursuant to Section 5.12 of the Original
Credit Agreement, as same may from time to time be amended, modified or
supplemented in accordance with the terms thereof.
"Non-Continuing Bank" shall mean any Original Bank which, as a
result of the repayment in full of its outstanding Loans (under, and as
defined in, the Original Credit Agreement) and the fact that such Bank does
not become a Continuing Bank, ceases to be a Bank pursuant to this Agreement
immediately after the occurrence of the Restatement Effective Date.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Note" shall mean each Adience A Term Note, each Adience B
Term Note, each Adience B-2 Term Note, each Adience C Term Note, each Newco A
Term Note, each Newco B Term Note, each Dollar Revolving Note, each Sterling
Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York 10006, Attention:
Jim Reilly, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto; provided that
copies of all notices with respect to Sterling Loans and/or Hepworth Letters
of
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Credit shall also be sent to the office of the Administrative Agent located
at BT Services Ireland Limited, Abbey Court, Irish Life Centre, Lower Abbey
Street, Dublin 1, Ireland, Attention: Mick Murrey.
"Obligation Currency" shall have the meaning provided in
Section 13.16(a).
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Collateral Agent or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Original Banks" shall mean each Person which was a Bank
under, and as defined in, the Original Credit Agreement.
"Original Credit Agreement" shall have the meaning provided in
the first WHEREAS clause to this Agreement.
"Original Effective Date" shall mean the Effective Date under,
and as defined in, the Original Credit Agreement.
"Original Letters of Credit" shall mean the letters of credit
listed on Schedule XVI and previously issued under the Original Credit
Agreement.
"Original Loans" shall mean the Original Term Loans, the
Original Revolving Loans, the Original Swingline Loans and the Original
Sterling Swingline Loans.
"Original Mortgage Policies" shall mean each mortgage
insurance policy issued with respect to an Original Mortgage under the
Original Credit Agreement.
"Original Mortgaged Properties" shall mean all Real Property
of the Credit Parties designated as such on Schedule III.
"Original Mortgages" shall mean all Mortgages granted by the
Credit Parties pursuant to the Original Credit Agreement and which have not
been released by the lenders thereunder prior to the Restatement Effective
Date.
"Original Revolving Loans" shall mean the "Revolving Loans"
under, and as defined in, the Original Credit Agreement.
"Original Sterling Swingline Loan" shall mean the "Sterling
Swingline Loans" under, and as defined in, the Original Credit Agreement.
"Original Swingline Loans" shall mean the "Swingline Loans"
under, and as defined in, the Original Credit Agreement.
"Original Term Loans" shall mean the "Term Loans" under, and
as defined in, the Original Credit Agreement.
"Other Creditor" shall have the meaning provided in the
Security Documents.
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"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"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.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Blockage Period" shall have the meaning provided in
Section 9.03(ii). "Payment Office" shall mean (i) in respect
of Dollar Loans, Adience Letters of Credit, Fees (other than Letter of Credit
Fees and Facing Fees with respect to Hepworth Letters of Credit) and, except
as provided in clause (ii) below, all other amounts owing under this
Agreement and the other Credit Documents, the office of the Administrative
Agent located at One Bankers Trust Plaza, New York, New York 10006, ABA
Number: 021001033, Account Name: Commercial Loan Division, Account Number:
99-401-268, Attention: Shannon Farrell, and (ii) in the case of Sterling
Loans, Hepworth Letters of Credit and Letter of Credit Fees and Facing Fees
with respect to Hepworth Letters of Credit, the office of the Administrative
Agent located in London, England at the office of Midland Bank, Account Name:
Bankers Trust Company, Account Number: 00491302, Reference: Adience, Inc.,
Sort Code: 40-48-04, Attention: Mick Murrey or in each case such other
office as the Administrative Agent may hereafter designate in writing as such
to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition by Adience
or any of its Wholly-Owned Subsidiaries of assets constituting an entire
business or division of any Person not already a Subsidiary of Alpine or
Holdings or of 100% of the capital stock of any such Person which Person
shall, as a result of such acquisition, become a Wholly-Owned Subsidiary of
Adience, provided that (A) the consideration paid by the Borrowers and/or its
Subsidiaries consists solely of cash and/or the issuance or assumption, as
the case may be, of Indebtedness permitted in Section 9.04(x) and/or (xi),
(B) the assets acquired, or the business of the Person whose stock is
acquired, shall be in the same line of business in which Adience and its
Wholly-Owned Subsidiaries are already engaged, and (C) in the case of the
acquisition of 100% of the capital stock of any Person, such Person shall own
no capital stock of any other Person unless either (x) such Person owns 100%
of the capital stock of such other Person or (y) (1) such Person
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and/or its Wholly-Owned Subsidiaries own 80% of the consolidated assets of
such Person and its Subsidiaries and (2) any non-Wholly Owned Subsidiary of
such Person was non-Wholly Owned prior to the date of such Permitted
Acquisition of such Person. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, any acquisition shall be a
Permitted Acquisition only if all requirements of Sections 8.16 and 9.02(ii)
applicable to Permitted Acquisitions are met with respect thereto.
"Permitted Acquisition Amount" shall, at any time, be an
amount equal to (i) $12,500,000, less (ii) the sum of (x) the aggregate
amount of all cash consideration and the fair market value of any non-cash
consideration (but excluding any Indebtedness (and any cash proceeds thereof
paid as consideration) issued, incurred or assumed in connection with
Permitted Acquisitions theretofore made but only if the respective
Indebtedness was incurred pursuant to clauses (x) and/or (xi) of Section
9.04) and (y) the aggregate amount of reductions theretofore made to the
Permitted Investment Amount pursuant to clause (ii)(x) of the definition
thereof after the Initial Borrowing Date.
"Permitted Acquisition Subordinated Indebtedness" shall have
the meaning provided in Section 9.04(xi).
"Permitted Encumbrance" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the title
insurance policy or title commitment delivered with respect thereto, all of
which exceptions must be acceptable to the Administrative Agent in its
reasonable discretion.
"Permitted Holder" shall mean Steve Elbaum, each member of the
immediate family of the foregoing natural person and any trust or similar
device created for the benefit of any one or more of the foregoing and each
Person which acquires the direct or indirect beneficial ownership interest in
shares of capital stock of Alpine as an executor or administrator for or by
way of inheritance or bequest from the foregoing natural person following the
death of such natural person.
"Permitted Investment Amount" at any time shall mean an amount
equal to (i) $5,000,000, minus (ii) the sum of (x) the aggregate amount of
Investments (including all cash investments and the fair market value of all
non-cash investments) pursuant to Section 9.05(xi) after the Restatement
Effective Date and (y) the aggregate amount of reductions theretofore made to
the Permitted Acquisition Amount pursuant to clause (ii)(x) of the definition
thereof after the Initial Borrowing Date, but only to the extent the amount
of such reductions exceeds $7,500,000.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Permitted Tax Payment" means (for any taxable year of Adience
in which it joins in filing a consolidated federal income tax return with (x)
Alpine or (y) Holdings (but not Alpine)) a payment (including any estimated
tax payment based on any estimated tax liability for such year) by Adience
and its Subsidiaries to Alpine (in the case preceding clause (x) is
applicable) or Holdings (in the case preceding clause (y) if applicable) in
an amount equal to the separate return federal income tax liability (if any)
of the affiliated group (within the meaning of Section 1504 of
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the Code) of which Holdings would be the parent (the "Holdings Group") if it
were not a member of another affiliated group for that or any other taxable
year; provided, that such payment can be made by Adience and its Subsidiaries
no earlier than two Business Days prior to the date on which the affiliated
group of which Adience is actually a member makes federal income tax payments
(including estimated tax payments) for such year to the Internal Revenue
Service. In the event that Alpine or Holdings and any member of the Adience
Group join in filing any combined or consolidated (or similar) state or local
income or franchise tax returns, then Permitted Tax Payment shall include
payments with respect to such state or local income or franchise taxes
determined in a manner as similar as possible to that provided in the
preceding sentence for federal income taxes.
"Person" shall mean any individual, partnership, joint
venture, limited liability company, firm, corporation, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan, as defined in Section 3(2)
of ERISA, subject to Title IV of ERISA, Section 412 of the Code, or Section
401(a) of the Code, which is maintained or contributed to by (or to which
there is an obligation to contribute of) Holdings or a Subsidiary of Holdings
or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which Holdings or a Subsidiary of
Holdings or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the U.S. Pledge Agreement.
"Pounds Sterling" and "L" shall mean freely transferable
lawful money of the United Kingdom.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, as to any Person, for any of the
following events which occur subsequent to the commencement of a period for
which the financial effect of such event is being calculated, and giving
effect to the event for which such calculation is being made, such
calculation as will give pro forma effect to such event as if same had
occurred at the beginning of such period of calculation, and
(i) for purposes of the foregoing calculation,
the transaction giving rise to the need to calculate the pro
forma effect to any of the following events shall be assumed
to have occurred on the first day of the four fiscal
quarter period last ended before the occurrence of the
respective event for which such pro forma effect is being
determined (the "Reference Period"), and
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(ii) in making any determination with respect
to the incurrence or assumption of any Indebtedness during the
Reference Period or subsequent to the Reference Period and on
or prior to the date of the transaction referenced in clause
(i) above (the "Transaction Date"), (x) all Indebtedness
(including the Indebtedness incurred or assumed and for which
the financial effect is being calculated, whether incurred
under this Agreement or otherwise, but excluding normal
fluctuations in revolving indebtedness incurred for working
capital purposes and not to finance any Permitted Acquisition)
incurred or permanently repaid during the Reference Period
shall be deemed to have been incurred or repaid at the
beginning of such period, (y) Consolidated Interest Expense of
such Person attributable to interest or dividends on any
Indebtedness, as the case may be, bearing floating interest
rates should be computed on a pro forma basis as if the rate
in effect on the Transaction Date had been the applicable rate
for the entire period and (z) Consolidated Interest Expense
will be increased or reduced by the net cost (including
amortization of discount) or benefit (after giving effect to
amortization of discount) associated with the Interest Rate
Protection Agreements, which will remain in effect for the
twelve-month period after the Transaction Date and which shall
have the effect of fixing the interest rate on the date of
computation, and
(iii) in making any determination of
Consolidated EBITDA, pro forma effect shall be given to any
Permitted Acquisition or Significant Divestiture which
occurred during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date, as if such
Permitted Acquisition or Significant Divestiture occurred on
the first day of the Reference Period, taking into account
cost savings and expenses which would otherwise be accounted
for as an adjustment pursuant to Article 11 of Regulation S-X
under the Securities Act, as if such cost savings or expenses
were realized on the first day of the Reference Period.
"Projections" shall have the meaning provided in Section 5.15.
"Put Letters of Credit" shall have the meaning provided in
Section 9.03
"Put Obligations" shall mean the obligations of Holdings to
purchase its Class B Common Stock from the holders thereof pursuant to the
terms of the Certificate of Incorporation of Holdings.
"Quarterly Payment Date" shall mean the last Business Day of
each April, July, October and January occurring after the Restatement
Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards
payable (i) by reason of theft, loss, physical
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destruction or damage or any other similar event with respect to any property
or assets of Holdings or any of its Subsidiaries and (ii) under any policy of
insurance required to be maintained under Section 8.03.
"Refinancing" shall mean and include the refinancing and
repayment in full of all amounts outstanding (and any premiums owed) under,
and the termination in full of all commitments and Letters of Credit in
respect of, the Indebtedness to be Refinanced.
"Refinancing Documents" shall mean each of the agreements,
documents and instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into
the environment.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043 other
than any reportable event arising from the Acquisition under Section
4043(c)(9) or Section 4043(c)(12) of ERISA.
"Required Appraisal" shall have the meaning provided in
Section 8.11.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose outstanding Term Loans and Revolving Loan Commitments (or after the
termination thereof, outstanding
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Revolving Loans and RL Percentage of all outstanding Swingline Loans and
Sterling Swingline Loans and all Letter of Credit Outstandings) represent an
amount greater than 50% of the sum of all outstanding Term Loans of
Non-Defaulting Banks and the Total Revolving Loan Commitment less the
Revolving Loan Commitments of Defaulting Banks (or after the termination of
the Total Revolving Loan Commitment, the sum of the then total outstanding
Revolving Loans of Non-Defaulting Banks, and the aggregate RL Percentages of
all Non-Defaulting Banks of Letter of Credit Outstandings and outstanding
Swingline Loans and Sterling Swingline Loans at such time). For purposes of
determining Required Banks, all outstanding Loans and Commitments, as the
case may be, that are denominated in Dollars will be calculated in Dollars
and all Loans and Commitments, as the case may be, denominated in Pounds
Sterling will be calculated according to the Dollar Equivalent thereof.
"Restatement Effective Date" shall have the meaning provided
in Section 13.10.
"Restricted Payments" shall mean (a) any authorization,
declaration or payment of any Distributions with respect to any Credit
Agreement Party or any of its Subsidiaries or any other payment to Alpine or
any Affiliate of Adience or Alpine (excluding Adience and its Subsidiaries)
by Holdings or any of its Subsidiaries and (b) the making (or the giving of
any notice in respect thereof) by any Credit Agreement Party or any of its
Subsidiaries of any voluntary or mandatory payment, purchase, acquisition or
redemption, whether by the making of any payments of the principal, interest
or otherwise, in respect of any loan, advance or extension of credit made to
any Credit Agreement Party or any of its Subsidiaries by, or in respect of
any guarantee or Contingent Obligation made for the benefit of any Credit
Agreement Party or any of its Subsidiaries by, or in respect of any other
obligation of any Credit Agreement Party or any of its Subsidiaries owed to,
Alpine or any of its Subsidiaries (excluding Adience and its Subsidiaries) or
any other Affiliate of Adience (excluding Subsidiaries of Adience), whether
pursuant to a contractual agreement or otherwise. Notwithstanding anything to
the contrary contained above, payments made in respect of the Obligations in
accordance with the terms of this Agreement shall not constitute Restricted
Payments, even if the respective Obligations are held by Alpine or an
Affiliate of Alpine or the Borrower.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section
1.01(g).
"Revolving Loan Borrowers" shall mean and include each of
Adience and Hepworth.
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as the same may be (x) reduced
from time to time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.13 or 13.04(b).
"Revolving Loan Maturity Date" shall mean April 15, 2003.
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"Revolving Note" shall mean each Dollar Revolving Note and
each Sterling Revolving Note.
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, provided that if the RL
Percentage of any Bank is to be determined after the Total Revolving Loan
Commitment has been terminated, then the RL Percentages of the Banks shall be
determined immediately prior (and without giving effect) to such termination.
"Scheduled Repayment" shall mean an Adience A Scheduled
Repayment, an Adience B Scheduled Repayment, an Adience B-2 Scheduled
Repayment, an Adience C Scheduled Repayment, a Newco A Scheduled Repayment or
a Newco B Scheduled Repayment, as the case may be.
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Security Document" shall mean and include each U.S. Security
Document, each U.K. Security Document and each security document entered into
by Holdings or any Subsidiary of Holdings pursuant to Section 8.11, 8.12
and/or 9.16.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.04.
"Significant Divestiture" shall mean any sale or other
disposition of assets by Adience and/or its Subsidiaries, the fair market
value of which exceeds $500,000 for any transaction (or series of related
transactions).
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Start Date" shall have the meaning provided in the definition
of Interest Reduction Discount.
"Stated Amount" of each Letter of Credit shall, at any time,
mean the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met, but after giving effect to all previous drawings made
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thereunder), provided that the "Stated Amount" of each Letter of Credit
denominated in Pounds Sterling shall be, on any date of calculation, the
Dollar Equivalent of the maximum amount available to be drawn in Pounds
Sterling thereunder (determined without regard to whether any conditions to
drawing could then be met).
"Sterling Equivalent" shall mean, at any time for the
determination thereof, the amount of Pounds Sterling which could be purchased
with the amount of Dollars involved in such computation at the spot exchange
rate therefore as quoted by the Administrative Agent as of 11:00 A.M. (London
time) on the date two Business Days prior to the date of any determination
thereof for purchase on such date.
"Sterling Euro Rate" shall mean (i) the rate per annum that
appears on page 3750 of the Dow Jones Telerate Screen (or any successor page)
for Pounds Sterling deposits with maturities comparable to the Interest
Period applicable to the Sterling Loans subject to the respective Borrowing
commencing two Business Days thereafter as of 11:00 a.m. (London time) on the
date which is two Business Days prior to the commencement of the respective
Interest Period or, if such a rate does not appear on page 3750 of the Dow
Jones Telerate Screen (or any successor page), (ii) the offered quotation to
first-class banks in the London interbank Eurodollar market by BTCo for
Pounds Sterling deposits of amounts in immediately available funds comparable
to the outstanding principal amount of the Sterling Loan of BTCo with
maturities comparable to the Interest Period applicable to such Sterling Loan
commencing two Business Days thereafter as of 11:00 A.M. (London time) on the
date which is two Business Days prior to the commencement of such Interest
Period; provided, that in the event the Administrative Agent has made any
determination pursuant to Section 1.10(a)(i) in respect of Sterling Loans, or
in the circumstances described in clause (i) to the proviso to Section
1.10(b) in respect of Sterling Loans, the Sterling Euro Rate determined
pursuant to this definition shall instead be the rate determined by BTCo as
the all-in-cost of funds for BTCo to fund such Sterling Loan with maturities
comparable to the Interest Period applicable thereto.
"Sterling Loan" shall mean each Newco A Term Loan, each
Sterling Revolving Loan and each Sterling Swingline Loan.
"Sterling Revolving Loan" shall have the meaning provided in
Section 1.01(g).
"Sterling Revolving Note" shall have the meaning provided in
Section 1.05(a).
"Sterling Revolving Sub-Limit" shall mean L15,000,000.
"Sterling Swingline Loan" shall have the meaning provided in
Section 1.01(j).
"Sterling Swingline Note" shall have the meaning provided in
Section 1.05(a).
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
and/or one or more
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Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries
of such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of Holdings
which has executed and delivered a Guaranty.
"Subsidiary Guaranty" shall mean and include the U.S.
Subsidiary Guaranty and each Foreign Subsidiary Guaranty.
"Supermajority Banks" of any Tranche shall mean those
Non-Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained
therein were changed to "66-2/3%."
"Swingline Expiry Date" shall mean the date which is five (5)
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(h).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall mean that date upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrowers) that the primary syndication (and resultant addition of
institutions as Banks pursuant to Section 13.04) has been completed.
"Tax Sharing Agreements" shall have the meaning provided in
Section 7.25.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each Adience A Term Loan, each Adience
B Term Loan, each Adience B-2 Term Loan, each Adience C Term Loan, each Newco
A Term Loan and each Newco B Term Loan.
"Term Loan Commitment" shall mean each Adience A Term Loan
Commitment, each Adience B Term Loan Commitment, each Adience B-2 Term Loan
Commitment, each Adience C Term Loan Commitment, each Newco A Term Loan
Commitment and each Newco B Term Loan Commitment.
"Test Period" shall mean the four consecutive fiscal quarters
of Holdings then last ended (taken as one accounting period).
"Total Adience A Term Loan Commitment" shall mean, at any
time, the sum of the Adience A Term Loan Commitments of each of the Banks.
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"Total Adience B Term Loan Commitment" shall mean, at any
time, the sum of the Adience B Term Loan Commitments of each of the Banks.
"Total Adience B-2 Term Loan Commitment" shall mean, at any
time, the sum of the Adience B-2 Term Loan Commitments of each of the Banks.
"Total Adience C Term Loan Commitment" shall mean, at any
time, the sum of the Adience C Term Loan Commitments of each of the Banks.
"Total Available Revolving Loan Commitment" shall mean, at any
time, the Total Revolving Loan Commitment less Canadian Subsidiary Working
Capital Outstandings (for this purpose, using the Dollar Equivalent thereof).
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Newco A Term Loan Commitment" shall mean, at any time,
the sum of the Newco A Term Loan Commitments of each of the Banks.
"Total Newco B Term Loan Commitment" shall mean, at any time,
the sum of the Newco B Term Loan Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum
of the Total Adience A Term Loan Commitment, the Total Adience B Term Loan
Commitment, the Total Adience B-2 Term Loan Commitment, the Total Adience C
Term Loan Commitment, the Total Newco A Term Loan Commitment and the Total
Newco B Term Loan Commitment.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect, less (y) the sum of (I) the aggregate principal
amount of Revolving Loans then outstanding (or the Dollar Equivalent thereof
in the case of Sterling Revolving Loans then outstanding) plus (II) the
aggregate principal amount of Swingline Loans then outstanding plus (III) the
then aggregate amount of Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being eight separate Tranches,
i.e., Adience A Term Loans, Adience B Term Loans, Adience B-2 Term Loans,
Adience C Term Loans, Newco A Term Loans, Newco B Term Loans, Revolving Loans
and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation
of the Acquisition, (ii) the consummation of the Refinancing, (iii) the
incurrence of Loans on the Restatement Effective Date and (iv) the payment of
fees and expenses owing in connection with the foregoing.
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"$2.8M Deferred Interest Bond" shall mean the $2,470,000
Deferred Interest Bond Due 2003, dated May 31, 1996, made by American Premier
Holdings, Inc. to Ralph R. Feuerring.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan, a
Eurodollar Loan or a Sterling Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"U.K. GAAP" shall mean generally accepted accounting
principles in the United Kingdom.
"U.K. Pledge Agreement" shall mean each of the Adience U.K.
Pledge Agreement and the Newco U.K. Pledge Agreement.
"U.K. Security Agreement" shall mean the Guaranty and
Debenture, dated April 30, 1997, made among Newco, certain U.K. Subsidiaries
and the Administrative Agent and executed and delivered pursuant to Section
5.12 of the Original Credit Agreement, as same may from time to time be
amended, modified or supplemented in accordance with the terms thereof.
"U.K. Security Documents" shall mean the U.K. Security
Agreement, each U.K. Pledge Agreement and, after the execution and delivery
thereof, each additional Security Document executed and delivered by any
Subsidiary of Holdings incorporated or organized under the laws of England.
"U.K. Subsidiary" shall mean each Subsidiary of Holdings
incorporated under the laws of England.
"U.K. Subsidiary Guarantor" shall mean Newco, Hepworth and
each other U.K. Subsidiary of Holdings which has executed and delivered a
U.K. Security Document.
"U.K. Subsidiary Guaranty" shall mean the guarantee provided
by the U.K. Subsidiaries (excluding certain Immaterial Foreign Subsidiaries)
pursuant to the U.K. Security Agreement.
"Unfunded Current Liability" of any Plan, means the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the fair
market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan and in accordance with the provisions of ERISA for
calculating the potential liability of Holdings, any Subsidiary of Holdings
or any ERISA Affiliate on an ongoing basis to the PBGC or the Plan under
Title IV of ERISA.
"United States" and "U.S." shall each mean the United States
of America.
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"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any
Bank, at any time, shall mean such Bank's Revolving Loan Commitment at such
time less the sum of (x) the aggregate principal amount of Revolving Loans
then outstanding (taking the Dollar Equivalent thereof in the case of any
Sterling Revolving Loans then outstanding) and (y) such Bank's RL Percentage
of the Letter of Credit Outstandings.
"U.S. GAAP" shall mean generally accepted accounting
principles in the United States of America.
"U.S. Parent Guarantors" shall mean and include each of
Holdings and Adience.
"U.S. Parents Guaranty" shall mean the guaranty of the U.S.
Parent Guarantors pursuant to Section 14.
"U.S. Pledge Agreement" shall mean the Pledge Agreement, dated
as of April 15, 1997, executed and delivered pursuant to Section 5.10 of the
Original Credit Agreement, as same may from time to time be amended, modified
or supplemented (including by the addition of certain additional Credit
Parties pursuant to the Subsidiary Assumption Agreement) in accordance with
the terms thereof.
"U.S. Pledge Agreement Collateral" shall mean all "Collateral"
as defined in the U.S. Pledge Agreement.
"U.S. Security Agreement" shall mean the Security Agreement,
dated as of April 15, 1997, executed and delivered pursuant to Section 5.11
of the Original Credit Agreement, as same may from time to time be amended,
modified or supplemented (including by the addition of certain additional
Credit Parties as parties thereto pursuant to the Subsidiary Assumption
Agreement) in accordance with the terms thereof.
"U.S. Security Agreement Collateral" shall mean all
"Collateral" as defined in the U.S. Security Agreement.
"U.S. Security Document" shall mean and include each of the
U.S. Security Agreement, the U.S. Pledge Agreement, each Mortgage (as amended
by the Mortgage Amendments in the case of the Original Mortgages) and, after
the execution and delivery thereof, each Additional Security Document
executed and delivered by Holdings, Adience or any Domestic Subsidiary
thereof.
"U.S. Subsidiary Guarantor" shall mean each Domestic
Subsidiary of Holdings which has executed and delivered a U.S. Subsidiary
Guaranty or an Additional Guaranty.
"U.S. Subsidiary Guaranty" shall mean the Subsidiary Guaranty,
dated as of April 15, 1997, executed and delivered pursuant to Section 5.13
of the Original Credit Agreement, as same may from time to time be amended,
modified or supplemented (including by the addition
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of certain additional Credit Parties pursuant to the Subsidiary Assumption
Agreement) in accordance with the terms thereof.
"Voting Stock" shall mean, as to any Person, any class or
classes of capital stock of such Person pursuant to which the holders thereof
have the general voting power under ordinary circumstances to elect at least
a majority of the Board of Directors of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Administrative Agent.
12.01 Appointment. The Banks hereby designate BTCo as
Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" shall include BTCo in its capacity as Collateral Agent
pursuant to the Security Documents) to act as specified herein and in the
other Credit Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably
to authorize, the Administrative Agent to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any
other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as
are specifically delegated to or required of the Administrative Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Administrative Agent may perform any of its duties hereunder by
or through its respective officers, directors, agents, employees or
affiliates.
12.02 Nature of Duties. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative
Agent nor any of its respective officers, directors, agents, employees or
affiliates shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason
of this Agreement or any other Credit Document a fiduciary relationship in
respect of any Bank or the holder of any Note; and nothing in this Agreement
or any other Credit Document, expressed or implied, is intended to or shall
be so construed as to impose upon the Administrative Agent any obligations in
respect of this Agreement or any other Credit Document except as expressly
set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each Bank
and the holder of each Note, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of Holdings and its Subsidiaries in connection with the
making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of Holdings and its Subsidiaries and,
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except as expressly provided in this Agreement, the Administrative Agent
shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
The Administrative Agent shall not be responsible to any Bank or the holder
of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered
in connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, collectibility, priority or sufficiency
of this Agreement or any other Credit Document or the financial condition of
Holdings or any of its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or
the financial condition of Holdings or any of its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with
this Agreement or any other Credit Document, the Administrative Agent shall
be entitled to refrain from such act or taking such action unless and until
the Administrative Agent shall have received instructions from the Required
Banks; and the Administrative Agent shall not incur liability to any Person
by reason of so refraining. Without limiting the foregoing, no Bank or the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
12.05 Reliance. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to
be the proper Person, and, with respect to all legal matters pertaining to
this Agreement and any other Credit Document and its duties hereunder and
thereunder, upon advice of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative
Agent is not reimbursed and indemnified by the Borrowers or any of their
Subsidiaries, the Banks will reimburse and indemnify the Administrative
Agent, in proportion to their respective "percentages" as used in determining
the Required Banks, for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its respective
duties hereunder or under any other Credit Document, in any way relating to
or arising out of this Agreement or any other Credit Document; provided that
no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct.
12.07 The Administrative Agent in its Individual Capacity.
With respect to its obligation to make Loans, or issue or participate in
Letters of Credit, under this Agreement, the
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Administrative Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required
Banks," "Majority Banks," "Supermajority Banks," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, include
the Administrative Agent in its individual capacity. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Credit Party or any
Affiliate of any Credit Party as if it were not performing the duties
specified herein, and may accept fees and other consideration from any Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
12.08 Holders. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by
giving 15 Business Days' prior written notice to the Banks and the Borrowers.
Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Administrative Agent hereunder or thereunder which
shall be a commercial bank or trust company reasonably acceptable to Adience.
(c) If a successor Administrative Agent shall not have been
so appointed within such 15 Business Day period, the Administrative Agent,
with the consent of Adience (which consent shall not be unreasonably withheld
or delayed), shall then appoint a successor Administrative Agent which shall
serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Banks appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as
the Required Banks appoint a successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
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13.01 Payment of Expenses, etc. The Borrowers jointly and
severally agree that they shall: (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent (including, without limitation, the
reasonable fees and disbursements of White & Case and the Administrative
Agent's local and foreign counsel and consultants) in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein
and any amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent in connection with its syndication efforts with respect
to this Agreement and of the Administrative Agent and, after the occurrence
of an Event of Default, each of the Banks in connection with the enforcement
of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative
Agent); (ii) pay and hold each of the Banks harmless from and against any and
all present and future stamp, excise and other similar documentary taxes with
respect to the foregoing matters and save each of the Banks harmless from and
against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Bank) to pay such
taxes; and (iii) indemnify the Administrative Agent and each Bank, and each
of their respective officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a)
any investigation, litigation or other proceeding (whether or not the
Administrative Agent or any Bank is a party thereto) related to the entering
into and/or performance of this Agreement or any other Credit Document or the
use of any Letter of Credit or the proceeds of any Loans hereunder or the
consummation of any transactions contemplated herein or in any other Credit
Document or the exercise of any of their rights or remedies provided herein
or in the other Credit Documents, or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned or at any time operated by
Holdings or any of its Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials at any location, whether or not
owned or operated by Holdings or any of its Subsidiaries, the non-compliance
of any Real Property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder)
applicable to any Real Property, or any Environmental Claim asserted against
Holdings, any of its Subsidiaries or any Real Property owned or at any time
operated by Holdings or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation or other proceeding (but excluding any losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). To the
extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent or any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the
Borrowers shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities which is permissible under applicable
law.
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13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default,
each Bank is hereby authorized (to the extent not prohibited by applicable
law) at any time or from time to time, without presentment, demand, protest
or other notice of any kind to any Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other Indebtedness at any
time held or owing by such Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the
account of any Credit Party against and on account of the Obligations and
liabilities of such Credit Party to such Bank under this Agreement or under
any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 13.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or
not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
in writing (including telegraphic, telex, telecopier or cable communication)
and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any
Credit Party, at the address specified opposite its signature below or in the
other relevant Credit Documents; if to any Bank, at its address specified on
Schedule II; and if to the Administrative Agent, at the Notice Office; or, as
to any Credit Party or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties
hereto and, as to each Bank, at such other address as shall be designated by
such Bank in a written notice to the Borrowers and the Administrative Agent.
All such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be effective (x) three
Business Days after deposited in the mails, (y) one Business Day after
delivered to the telegraph company, cable company or a recognized overnight
courier, as the case may be, or (z) when sent by telex or telecopier, except
that notices and communications to the Administrative Agent shall not be
effective until received by the Administrative Agent.
13.04 Benefit of Agreement; Assignments; Participations. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided, however, no Borrower may assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the
Banks and, provided further, that, although any Bank may transfer, assign or
grant participations in its rights hereunder, such Bank shall remain a "Bank"
for all purposes hereunder (and may not transfer or assign all or any portion
of its Commitments hereunder except as provided in Sections 1.13 and
13.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, provided further, that no Bank
shall transfer or grant any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Loan
Maturity Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce
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the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Borrower of any of its rights and obligations under this Agreement,
(iii) release or terminate any Guaranty provided by any of Holdings, Adience,
Newco or Hepworth or (iv) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrowers hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to (i) its parent company and/or any affiliate of such Bank which
is at least 50% owned by such Bank or its parent company or to one or more
Banks or (ii) in the case of any Bank that is a fund that invests in bank
loans, any other fund that invests in bank loans and is managed by the same
investment advisor of such Bank or by an Affiliate of such investment advisor
or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Bank or assigning Banks, of
such Commitments and related outstanding Obligations (or, if the Commitments
with respect to the relevant Tranche have terminated, outstanding
Obligations) hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Bank by execution of an
Assignment and Assumption Agreement, provided that, (i) any assignment of
outstanding Adience B Term Loans or Newco B Term Loans (or, if prior to the
Original Effective Date, the related Commitments) shall be required to
consist of a pro rata assignment of such Tranches (i.e., an assignment of the
same percentage of outstanding Adience B Term Loans and Newco B Term Loans
(or related Commitments)), (ii) any assignment of all or any portion of the
Revolving Loan Commitment and related outstanding Obligations (or, if the
Revolving Loan Commitment has terminated, any assignment of Obligations
originally extended pursuant to the Revolving Loan Commitments) shall be made
on a basis such that the respective assignee participates in both Dollar
Revolving Loans and Sterling Revolving Loans, and in all Letter of Credit
Outstandings, in accordance with the Revolving Loan Commitment so assigned
(or if the Revolving Loan Commitment has terminated, on the same basis as
participated in by the Banks with Revolving Loan Commitments prior to the
termination thereof), (iii) at such time Schedule I shall be deemed modified
to reflect the Commitments (or outstanding Term Loans, as the case may be) of
such new Bank and of the existing Banks, (iv) upon the surrender of the
relevant Notes by the assigning Bank (or, upon such assigning Bank's
indemnifying the respective Borrower for any lost Note pursuant to a
customary indemnification agreement) new Notes will be issued, at the
Borrowers' expense, to such new Bank and to the assigning Bank upon the
request of such new Bank or assigning Bank,
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such new Notes to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the revised
Commitments (or outstanding Term Loans, as the case may be), (v) the consent
of the Administrative Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above, (vi) the
Administrative Agent shall receive at the time of each such assignment, from
the assigning or assignee Bank, the payment of a non-refundable assignment
fee of $3,500, and (vii) promptly after such assignment, the Borrowers shall
have received from the Administrative Agent notice of any such assignment and
of the identity, nationality and applicable lending office of any such
Eligible Transferee that is not a United States Person (as defined in Section
7701(a)(30) of the Code), together with the copy of the Assignment and
Assumption Agreement relating thereto and, provided further, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.15 hereof. To
the extent of any assignment pursuant to this Section 13.04(b), the assigning
Bank shall be relieved of its obligations hereunder with respect to its
assigned Commitments. At the time of each assignment pursuant to this
Section 13.04(b) to a Person which is not already a Bank hereunder and which
is not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for Federal income tax purposes, the respective assignee Bank
shall, to the extent legally entitled to do so, provide to Adience the
appropriate Internal Revenue Service Forms (and, if applicable, a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b)
would, at the time of such assignment, result in increased costs under
Section 1.10, 2.06 or 4.04 in excess of those being charged by the respective
assigning Bank prior to such assignment, then the Borrowers shall not be
obligated to pay such excess increased costs (although the Borrowers, in
accordance with and pursuant to the other provisions of this Agreement, shall
be obligated to pay the costs which are not in excess of those being charged
by the respective assigning Bank prior to such assignment and any subsequent
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and,
with the consent of the Administrative Agent, any Bank which is a fund may
pledge all or any portion of its Notes or Loans to its trustee in support of
its obligations to its trustee. No pledge pursuant to this clause (c) shall
release the transferor Bank from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, the Collateral Agent or any Bank in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Borrower or any other Credit
Party and the Administrative Agent, the Collateral Agent or any Bank shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent or any Bank would otherwise have.
No notice to or demand on any Credit Party in any case shall
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entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent, the Collateral Agent or any Bank to any other or further action in any
circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided
in this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of any Borrower in respect of any
Obligations hereunder, it shall distribute such payment to the Banks (other
than any Bank that has consented in writing to waive its pro rata share of
any such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or
interest on, the Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation
then owed and due to such Bank bears to the total of such Obligation then
owed and due to all of the Banks immediately prior to such receipt, then such
Bank receiving such excess payment shall purchase for cash without recourse
or warranty from the other Banks an interest in the Obligations of the
respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that if
all or any portion of such excess amount is thereafter recovered from such
Bank, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
13.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with US GAAP (or, in the case of the financial
statements of Newco and its Subsidiaries only, UK GAAP), consistently applied
throughout the periods involved (except as set forth in the notes thereto or
as otherwise disclosed in writing by the Borrowers to the Banks); provided
that the financial statements of Newco and its Subsidiaries shall also (x) be
accompanied by convenience translations pursuant to which all Pounds Sterling
(or other currencies not in Dollars) amounts will be converted into Dollars
both (i) using the Dollar Equivalent as in effect on the last day of the
respective fiscal quarter or year of Hepworth, as the case may be, and (ii)
on the basis provided in Section 13.07(b)(i), and (y) contain a
reconciliation between UK GAAP and US GAAP.
(b) Notwithstanding anything to the contrary contained in
clause (a) of this Section 13.07, (i) all calculations used in determining
Holdings Excess Cash Flow and compliance with Sections 9.08 through 9.11,
inclusive, shall convert all Pounds Sterling (or other currencies not in
Dollars) amounts into Dollars using the average rate of exchange (as quoted
in the Wall Street Journal) during the relevant fiscal period based on the
rates in effect in London, England on each Business Day during such fiscal
period, provided that in determining the Leverage Ratio at any time the
numerator thereof shall be calculated by converting all Pounds Sterling (or
other currencies not in Dollars) amounts into Dollars using the Dollar
Equivalent of the respective such amounts as in effect on the date of
determination, (ii) for purposes of determining compliance with any
incurrence tests set forth in Sections 8 and/or 9 (excluding Sections 9.08
through 9.11,
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inclusive), any amounts so incurred or expended (to the extent incurred or
expended in a currency other than Dollars) shall be converted into Dollars on
the basis of the Dollar Equivalent of the respective such amounts as in effect
on the date of such incurrence or expenditure under any provision of any such
Section that has an aggregate Dollar limitation provided for therein (and to the
extent the respective incurrence test regulates the aggregate amount outstanding
at any time and it is expressed in terms of Dollars, all outstanding amounts
originally incurred or spent in currencies other than Dollars shall be converted
into Dollars on the basis of the Dollar Equivalent of the respective such
amounts as in effect on the date any new incurrence or expenditures made under
any provision of any such Section that regulates the Dollar amount outstanding
at any time) and (iii) except as otherwise specifically provided herein, all
computations determining compliance with Sections 9.08 through 9.11, inclusive,
shall utilize accounting principles and policies in conformity with those used
to prepare the financial statements delivered to the Banks for the first fiscal
year of the Borrower ended after the Original Effective Date pursuant to Section
8.01(c) (which annual financial statements shall be generally consistent with
the historical financial statements delivered to the Banks pursuant to Section
7.05(a) and (b)) but shall be made in accordance with the requirements of clause
(i) or (ii), as the case may be, of this Section 13.07(b) and (iii) all
calculations used in determining Newco Excess Cash Flow shall be made in Pounds
Sterling, utilizing accounting principles and policies in conformity with those
used to prepare the historical financial statements delivered to the Banks prior
to the Initial Borrowing Date pursuant to Section 7.05(b) of the Original Credit
Agreement.
(c) All computations of interest, Commitment Commission and
Fees hereunder shall be made on the basis of a year of 360 days (or 365 days
in the case of interest on Sterling Loans) for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
(EXCEPT, IN THE CASE OF OTHER CREDIT DOCUMENTS, AS SPECIFICALLY OTHERWISE
PROVIDED THEREIN) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF
(X) THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, OR (Y) THE HIGH COURT OF JUSTICE IN ENGLAND AND WALES AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, HOLDINGS AND EACH BORROWER HEREBY
IRREVOCABLY ACCEPT FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS
AND EACH BORROWER HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH
COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR SUCH BORROWER, AND AGREES
NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED
COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR SUCH
BORROWER. EACH OF HOLDINGS AND EACH
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BORROWER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HOLDINGS
OR SUCH BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF HOLDINGS AND
EACH BORROWER HEREBY IRREVOCABLY WAIVE ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT
THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST HOLDINGS OR ANY
BORROWER IN ANY OTHER JURISDICTION.
(b) EACH OF HOLDINGS AND EACH BORROWER HEREBY IRREVOCABLY
WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall
be lodged with the Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective
on the date (the "Restatement Effective Date") on which (i) Holdings, each
Borrower, the Administrative Agent, Required Banks (determined immediately
before the occurrence of the Restatement Effective Date) and each of the New
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent
at the Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it and (ii) the conditions contained in Sections 5 and 6 are met to
the
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satisfaction of the Administrative Agent and the Required Banks (determined
immediately after the occurrence of the Restatement Effective Date). Unless
the Administrative Agent has received actual notice from any Bank that the
conditions contained in Sections 5 and 6 have not been met to its
satisfaction, upon the satisfaction of the condition described in clause (i)
of the immediately preceding sentence and upon the Administrative Agent's
good faith determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Restatement Effective
Date shall have been deemed to have occurred, regardless of any subsequent
determination that one or more of the conditions thereto had not been met
(although the occurrence of the Restatement Effective Date shall not release
any Borrower from any liability for failure (to the extent not waived by the
Administrative Agent and the Required Banks) to satisfy one or more of the
applicable conditions contained in Section 5 or 6). The Administrative Agent
shall give each Borrower and each Bank prompt written notice of the
occurrence of the Restatement Effective Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision
of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party
thereto and the Required Banks (except that additional parties may be added
to the various Guaranties and Security Documents in accordance with the
provisions thereof, without the consent of the other Credit Parties party
thereto or the Required Banks), provided that no such change, waiver,
discharge or termination shall, without the consent of each Bank (other than
a Defaulting Bank) with Obligations being directly modified, (i) extend the
final scheduled maturity of any Loan or Note or extend the stated expiration
date of any Letter of Credit beyond the Revolving Loan Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash),
(ii) release or terminate any Guaranty provided by any of Holdings, Adience,
Newco or Hepworth or (iii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the Security
Documents, (iv) amend, modify or waive any provision of this Section 13.12
(except for technical amendments with respect to additional extensions of
credit pursuant to this Agreement which afford the protections set forth in
the proviso below to such additional extensions of credit), (v) reduce the
percentage specified in the definition of Required Banks (it being understood
that, with the consent of the Required Banks, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Required Banks on substantially the same basis as the extensions of Term
Loans and Revolving Loan Commitments are included on the Original Effective
Date (or, in the case of Adience A Term Loans, Adience B-2 Term Loans and
Adience C Term Loans, the Restatement Effective Date) or (vi) consent to the
assignment or transfer by any Borrower of any of its rights and obligations
under this Agreement; provided further, that no such change, waiver,
discharge or termination shall (t) 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
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Borrowings, as the case may be), (u) increase the Commitments of any Bank over
the amount thereof then in effect without the consent of such Bank (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitments shall not constitute an increase of the Commitment of any Bank, and
that an increase in the available portion of any Commitment of any Bank shall
not constitute an increase of the Commitment of such Bank), (v) without the
consent of each Issuing Bank, amend, modify or waive any provision of Section 2
or alter its rights or obligations with respect to Letters of Credit, (w)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations of the Administrative Agent, (x) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (y) except in cases where additional
extensions of term loans are being afforded substantially the same treatment
afforded to the Term Loans pursuant to this Agreement as originally in effect,
without the consent of the Majority Banks of each Tranche which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Banks of
each Tranche in the case of an amendment to the definition of Majority Banks),
amend the definition of Majority Banks or alter the required application of any
prepayments or repayments (or commitment reductions), as between the various
Tranches, pursuant to Section 4.01 or 4.02 (excluding Section 4.02(b)) (although
the Required Banks may waive, in whole or in part, any such prepayment,
repayment or commitment reduction, so long as the application, as amongst the
various Tranches, of any such prepayment, repayment or commitment reduction
which is still required to be made is not altered) or (z) without the consent of
the Supermajority Banks of the respective Tranche, waive, or decrease the amount
of, any Adience B Scheduled Repayment, Adience A Scheduled Repayment, Adience
B-2 Scheduled Repayment, Adience C Scheduled Repayment, Newco A Scheduled
Repayment or Newco B Scheduled Repayment or extend the date on which the
respective Scheduled Repayment is required to be made.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the
consent of one or more of such other Banks whose consent is required is not
obtained, then Adience shall have the right, so long as all non-consenting
Banks whose individual consent is required are treated as described below, to
replace each such non-consenting Bank or Banks (or, at the option of Adience
if the respective Bank's consent is required with respect to less than all
Tranches of Loans (or related Commitments), to replace only the respective
Tranche or Tranches of Commitments and/or Loans of the respective
non-consenting Bank which gave rise to the need to obtain such Bank's
individual consent) with one or more Replacement Banks pursuant to Section
1.13 so long as at the time of such replacement, each such Replacement Bank
consents to the proposed change, waiver, discharge or termination, provided,
that in any event Adience shall not have the right to replace a Bank,
terminate its Revolving Loan Commitment or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 13.12(a).
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13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall
survive the execution, delivery and termination of this Agreement and the
Notes and the making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 1.11,
2.06 or 4.04 in excess of those being charged by the respective Bank prior to
such transfer, then the Borrowers shall not be obligated to pay such excess
increased costs (although the Borrowers, in accordance with and pursuant to
the other provisions of this Agreement, shall be obligated to pay the costs
which would apply in the absence of such designation and any subsequent
increased costs of the type described above resulting from changes after the
date of the respective transfer).
13.15 Register. Each Borrower hereby designates the
Administrative Agent to serve as such Borrower's agent, solely for purposes
of this Section 13.15, to maintain a register (the "Register") on which it
will record the Commitments from time to time of each of the Banks, the Loans
made by each of the Banks and each repayment in respect of the principal
amount of the Loans of each Bank. Failure to make any such recordation, or
any error in such recordation shall not affect the respective Borrower's
obligations in respect of such Loans. With respect to any Bank, the transfer
of the Commitments of such Bank and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Commitments
and Loans shall be recorded by the Administrative Agent on the Register only
upon the acceptance by the Administrative Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 13.04(b).
Coincident with the delivery of such an Assignment and Assumption Agreement
to the Administrative Agent for acceptance and registration of assignment or
transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Loan,
and thereupon one or more new Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or the new Bank.
Each Borrower jointly and severally agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by
the Administrative Agent in performing its duties under this Section 13.15.
13.16 Judgment Currency. (a) The Credit Parties' obligations
hereunder and under the other Credit Documents to make payments in the
respective Applicable Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent, the Collateral Agent or the respective Bank
of the full amount of the Obligation Currency expressed to be payable to the
Administrative Agent, the Collateral Agent or such Bank under this Agreement or
the other Credit Documents. If for the purpose of obtaining
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or enforcing judgment against any Credit Party in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
conversion shall be made, at the Sterling Equivalent or the Dollar Equivalent
thereof, as the case may be, and, in the case of other currencies, the rate of
exchange (as quoted by the Administrative Agent or if the Administrative Agent
does not quote a rate of exchange on such currency, by a known dealer in such
currency designated by the Administrative Agent) determined, in each case, as of
the day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment
of the amount due, the Borrowers covenant and agree to pay, or cause to be
paid, such additional amounts, if any (but in any event not a lesser amount)
as may be necessary to ensure that the amount paid in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment,
will produce the amount of the Obligation Currency which could have been
purchased with the amount of Judgment Currency stipulated in the judgment or
judicial award at the rate or exchange prevailing on the Judgment Currency
Conversion Date.
(c) For purposes of determining the Sterling Equivalent or
the Dollar Equivalent or any other rate of exchange for this Section, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
13.17 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 13.17, each Bank agrees that it will use its
reasonable efforts not to disclose without the prior consent of Adience
(other than to its employees, auditors, advisors or counsel or to another
Bank if the Bank or such Bank's holding or parent company in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 13.17 to the same extent as such Bank) any information with respect
to Holdings or any of its Subsidiaries which is now or in the future
furnished pursuant to this Agreement or any other Credit Document and which
is designated by Adience to the Banks in writing as confidential, provided
that any Bank may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in respect to any summons
or subpoena or in connection with any litigation, (d) in order to comply with
any law, order, regulation or ruling applicable to such Bank, (e) to the
Administrative Agent or the Collateral Agent or any other Bank and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or
any interest therein by such Bank, provided, that such prospective transferee
shall be subject to the provisions of this Section 13.17(a).
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(b) Each of Holdings and each of the Borrowers hereby
acknowledge and agree that each Bank may share with any of its affiliates any
information related to Holdings or any of its Subsidiaries (including,
without limitation, any nonpublic customer information regarding the
creditworthiness of Holdings and its Subsidiaries, provided such Persons
shall be subject to the provisions of this Section 13.17 to the same extent
as such Bank).
13.18 Acknowledgment. The Banks hereby acknowledge and agree
that, unless and until the provisions of Section 8.12 require further action,
(x) the guarantee of the Obligations provided by Newco in the U.K. Security
Documents shall only apply to guarantee the Obligations of Hepworth, (y) the
guarantee of the Obligations provided by Hepworth in the U.K. Security
Documents shall only apply to guarantee the Obligations of Newco and (z) the
guarantee of the Obligations provided by the Foreign Subsidiaries shall only
apply to guarantee the Obligations of the U.K. Borrowers. The Banks further
acknowledge and agree that, unless and until the provisions of Section 8.12
require further action, the security interests granted by each of Newco,
Hepworth and the Foreign Subsidiaries under the Security Documents to which
it is a party shall only secure such party's guarantee obligations provided
in the preceding sentence.
13.19 Limitation on Additional Amounts, etc. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11 or 2.06 of this
Agreement, unless a Bank gives notice to the respective Borrower that it is
obligated to pay an amount under the respective Section within one year after
the later of (x) the date the Bank incurs the respective increased costs, loss,
expense or liability, reduction in amounts received or receivable or reduction
in return on capital or (y) the date such Bank has actual knowledge of its
incurrence of the respective increased costs, loss, expense or liability,
reductions in amounts received or receivable or reduction in return on capital,
then such Bank shall only be entitled to be compensated for such amount by such
Borrower pursuant to said Section 1.10, 1.11 or 2.06, as the case may be, to the
extent the costs, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs one year prior to such Bank giving notice to such
Borrower that it is obligated to pay the respective amounts pursuant to said
Section 1.10, 1.11 or 2.06, as the case may be. This Section 13.19 shall have no
applicability to any Section of this Agreement other than said Sections 1.10,
1.11 or 2.06.
13.20 Acknowledgment and Agreement of Credit Parties. Each
of the Credit Parties, by executing and delivering a counterpart of this
Agreement, hereby consents to the increased extensions of credit pursuant to
this Agreement which will be made available as a result of the amendment and
restatement hereof on the Restatement Effective Date. All such extensions of
credit, as well as the extensions of credit pursuant to the Original Credit
Agreement shall be entitled to all benefits of (and shall be fully guaranteed
pursuant to) each of the Guaranties and shall be fully secured pursuant to,
and in accordance with the terms of, the various Security Documents.
13.21 Additions of New Banks; Obligations to Pay Certain Amounts
Owing Pursuant to Original Credit Agreement; Termination of Commitments of
Non-Continuing Banks; Certain Provisions Regarding Original Banks. (a) On and
as of the occurrence of the Restatement Effective Date in accordance with
Section 13.10 hereof, each New Bank shall become a "Bank" under, and for all
purposes of, this Agreement and the other Credit Documents.
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(b) The parties hereto acknowledge that each Original Bank
has been offered the opportunity to participate in this Agreement, after the
occurrence of the Restatement Effective Date, as a Continuing Bank hereunder,
but that no Original Bank is obligated to be a Continuing Bank.
(c) By their execution and delivery hereof, each Borrower and
the Required Banks (determined immediately before the occurrence of the
Restatement Effective Date) consent to the voluntary repayment of certain
Revolving Loans (as contemplated by the requirements of the last sentence of
Section 1.01(g)) and certain Obligations owing to the Original Banks as
required by Section 5.18.
(d) Each Non-Continuing Bank's Original Loans outstanding on the
Restatement Effective Date shall be repaid in full on such date, together with
interest thereon and all accrued Fees (and any other amounts) owing to such
Non-Continuing Bank, and the Revolving Loan Commitment (under, and defined in,
the Original Credit Agreement) of such Non-Continuing Bank, if any, shall be
terminated, effective upon the occurrence of the Restatement Effective Date.
(e) Notwithstanding anything to the contrary contained in this
Agreement, it is understood and agreed that, with respect to each Non-Continuing
Bank, although such Non-Continuing Bank shall cease to constitute a Bank
pursuant to this Agreement (on a prospective basis) on the Restatement Effective
Date, all indemnities contained in the Original Credit Agreement shall continue
to apply to such Non-Continuing Banks, and shall be deemed incorporated herein
by reference.
13.22 Post Closing Actions. Notwithstanding anything to the
contrary contained in this Agreement or the other Credit Documents, the
parties hereto acknowledge and agree that:
(a) Mortgages. The Credit Agreement Parties were not
required to satisfy the conditions precedent set forth in Section 5.14 on the
Restatement Effective Date. It is agreed that within 60 days after the
Restatement Effective Date, the Credit Agreement Parties shall take all
action as may be required to satisfy the conditions set forth in (I) Section
5.14, including by (i) delivering fully executed counterparts of the New
Mortgages and New Mortgage Policies and (ii) fully executed counterparts of
the Mortgage Amendments and endorsements to each Original Mortgage Policy and
(II) Section 5.02(ii).
(b) Audited Financials of the Acquired Business. Within 60
days of the Restatement Effective Date, there shall have been delivered to
the Administrative Agent an audited consolidated balance sheet of the
Acquired Business at April 30, 1997 and October 31, 1997 and the related
statements of consolidated income, consolidated cash flows and shareholders'
equity of the Acquired Business for the year and the six-month period ended
on such date, which consolidated balance sheets and related statements of
consolidated income, consolidated cash flows and shareholders' equity shall
be in form and substance reasonably satisfactory to the Administrative Agent
and the Required Banks.
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(c) UCC Searches; Terminations; etc. The Credit Parties were
not required to satisfy the condition precedent set forth as Section 5.07(b)
of this Agreement on the Restatement Effective Date, and have not delivered
all terminations of financing statements which would have been required in
connection with the termination of security interests in favor of Continental
Bank and Bank of America Illinois. It is agreed that, within 30 days after
the Restatement Effective Date, the Credit Parties shall take all action as
may be required to (i) satisfy the conditions set forth in Section 5.07(b),
including by returning Requests for Information or Copies (Form UCC-11), or
equivalent reports, listing all effective financing statements that name
Holdings or any of its Domestic Subsidiaries as Debtor that are filed in the
jurisdictions referred to therein, which Requests for Information or Copies
shall show no evidence of the financing statements in favor of Continental
Bank or Bank of America Illinois, which shall have been terminated and (ii)
terminate all mortgages (and make filings of such terminations reasonably
satisfactory to the Administrative Agent) securing Indebtedness repaid on or
prior to the Restatement Effective Date.
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to the
extent necessary to effect the foregoing (and to permit the taking of the
actions described above within the time periods required above, rather than
as elsewhere provided in the Credit Documents); provided, that (x) to the
extent any representation and warranty would not be true because the
foregoing actions were not taken on the Restatement Effective Date, the
respective representation and warranty shall be required to be true and
correct in all material respects at the time the respective action is taken
(or was required to be taken) in accordance with the foregoing provisions of
this Section 13.22 and (y) all representations and warranties relating to the
Security Documents shall be required to be true immediately after the actions
required to be taken by this Section 13.22 have been taken (or were required
to be taken). The acceptance of the benefits of each Credit Event shall
constitute a representation, warranty and covenant by the Borrowers to each
of the Banks that the actions required pursuant to this Section 13.22 will
be, or have been, taken within the relevant time periods referred to in this
Section 13.22 and that, at such time, all representations and warranties
contained in this Agreement and the other Credit Documents shall then be true
and correct without any modification pursuant to this Section 13.22. The
parties hereto acknowledge and agree that the failure to take any of the
actions required above, within the relevant time periods required above,
shall give rise to an immediate Event of Default pursuant to this Agreement.
SECTION 14. U.S. Parents Guaranty.
14.01 The Guaranty. In order to induce the Banks to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by each U.S. Parent Guarantor from the
proceeds of the Loans and the issuance of the Letters of Credit, each U.S.
Parent Guarantor hereby jointly and severally agrees with the Banks as
follows: each U.S. Parent Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees, as primary obligor and not merely
as surety the full and prompt payment when due, whether upon maturity,
acceleration or otherwise, of any and all of the Guaranteed Obligations of
each Guaranteed Party to the Secured Creditors. If any or all of the
Guaranteed Obligations of any Guaranteed Party to the Secured Creditors
becomes due and payable hereunder, each U.S. Parent Guarantor unconditionally
promises to pay such indebtedness to the Secured Creditors, or order,
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on demand, together with any and all expenses which may be incurred by the
Secured Creditors in collecting any of the Guaranteed Obligations.
14.02 Bankruptcy. Additionally, each U.S. Parent Guarantor,
jointly and severally, unconditionally and irrevocably guarantees the payment
of any and all of the Guaranteed Obligations of each Guaranteed Party to the
Secured Creditors whether or not due or payable by such Guaranteed Party upon
the occurrence of any of the events specified in Section 10.05, and
unconditionally promises to pay such indebtedness to the Secured Creditors,
or order, on demand. Each U.S. Parent Guarantor agrees that all payments made
by it with respect to any Guaranteed Obligations pursuant to this Guaranty
shall be made in the respective currency in which the underlying Guaranteed
Obligations are denominated or payable, as the case may be. This Guaranty
shall constitute a guaranty of payment, and not of collection.
14.03 Nature of Liability. (i) The liability of each U.S.
Parent Guarantor hereunder is exclusive and independent of any security for
or other guaranty of the Guaranteed Obligations of any Guaranteed Party
whether executed by such U.S. Parent Guarantor, any other guarantor or by any
other party, and the liability of neither U.S. Parent Guarantor hereunder
shall be affected or impaired by (a) any direction as to application of
payment by any Guaranteed Party or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the Guaranteed Obligations of any Guaranteed
Party, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or
change in personnel by any Guaranteed Party, or (e) any payment made to the
Secured Creditors on the Guaranteed Obligations which any such Secured
Creditor repays to any Guaranteed Party pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each U.S. Parent Guarantor waives any right to the deferral
or modification of its obligations hereunder by reason of any such
proceeding.
(ii) If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including any Guaranteed
Party), then and in such event each U.S. Parent Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon
each U.S. Parent Guarantor, notwithstanding any revocation hereof or other
instrument evidencing any liability of any Guaranteed Party, and such U.S.
Parent Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount
had never originally been received by any such payee.
14.04 Independent Obligation. The obligations of each U.S.
Parent Guarantor hereunder are independent of the obligations of any other
guarantor, any other party or any Guaranteed Party, and a separate action or
actions may be brought and prosecuted against each U.S. Parent Guarantor
whether or not action is brought against any other guarantor, any other party
or any Guaranteed Party and whether or not any other guarantor, any other
party or any Guaranteed Party shall be joined in any such action or actions.
Each U.S. Parent Guarantor
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waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof.
Any payment by any Guaranteed Party or other circumstance which operates to
toll any statute of limitations as to such Guaranteed Party shall operate to
toll the statute of limitations as to each U.S. Parent Guarantor. This
Guaranty is a continuing one and all liabilities to which it applies or may
apply under the terms hereof shall be conclusively presumed to have been
created in reliance hereon.
14.05 Authorization. Each U.S. Parent Guarantor authorizes
the Secured Creditors without notice or demand (except as shall be required
by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase
or decrease in the rate of interest thereon), any security therefor,
or any liability incurred directly or indirectly in respect thereof,
and the Guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including
any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any
Guaranteed Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, any Guaranteed Party or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of any Guaranteed Party to its
creditors other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of any Guaranteed Party to the
Secured Creditors regardless of what liability or liabilities of
any Guaranteed Party remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements; and/or
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(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or
equitable discharge of such U.S. Parent Guarantor from its
liabilities under this Guaranty.
14.06 Reliance. It is not necessary for the Secured
Creditors to inquire into the capacity or powers of any Guaranteed Party or
the officers, directors, partners or agents acting or purporting to act on
their behalf, and any Guaranteed Obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of any
Guaranteed Party now or hereafter owing to any U.S. Parent Guarantor is
hereby subordinated to the Guaranteed Obligations of such Guaranteed Party
owing to the Secured Creditors; and if the Administrative Agent so requests
at a time when an Event of Default exists, all such indebtedness of any
Guaranteed Party to any U.S. Parent Guarantor shall be collected, enforced
and received by such U.S. Parent Guarantor for the benefit of the Secured
Creditors and be paid over to the Administrative Agent on behalf of the
Secured Creditors on account of the Guaranteed Obligations of such Guaranteed
Party to the Secured Creditors, but without affecting or impairing in any
manner the liability of such U.S. Parent Guarantor under the other provisions
of this Guaranty. Prior to the transfer by any U.S. Parent Guarantor of any
note or negotiable instrument evidencing any of the indebtedness of any
Guaranteed Party to such U.S. Parent Guarantor, such U.S. Parent Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the
foregoing, each U.S. Parent Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at
any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Each U.S. Parent Guarantor waives any
right (except as shall be required by applicable statute and cannot be
waived) to require the Secured Creditors to (i) proceed against any
Guaranteed Party, any other guarantor or any other party, (ii) proceed
against or exhaust any security held from any Guaranteed Party, any other
guarantor or any other party or (iii) pursue any other remedy in the Secured
Creditors' power whatsoever. Each U.S. Parent Guarantor waives any defense
based on or arising out of any defense of any Guaranteed Party, any other
guarantor or any other party, other than payment in full of the Guaranteed
Obligations, based on or arising out of the disability of any Guaranteed
Party, any other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of any Guaranteed Party other than payment in
full of the Guaranteed Obligations. The Secured Creditors may, at their
election, foreclose on any security held by the Administrative Agent, the
Collateral Agent or the other Secured Creditors by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Secured Creditors may have
against any Guaranteed Party or any other party, or any security, without
affecting or impairing in any way the liability of any U.S. Parent Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in
full. Each U.S. Parent Guarantor waives any defense arising out of any such
election by the Secured Creditors, even though such election operates to
impair or extinguish any right of reimbursement
-153-
<PAGE>
or subrogation or other right or remedy of such U.S. Parent Guarantor against
any Guaranteed Party or any other party or any security.
(b) Each U.S. Parent Guarantor waives all presentments,
demands for performance, protests and notices, including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor, notices
of acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Guaranteed Obligations. Each U.S. Parent
Guarantor assumes all responsibility for being and keeping itself informed of
the each Guaranteed Party's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such U.S.
Parent Guarantor assumes and incurs hereunder, and agrees that the
Administrative Agent and the Banks shall have no duty to advise any U.S.
Parent Guarantor of information known to them regarding such circumstances or
risks.
14.09 Nature of Liability. It is the desire and intent of
each U.S. Parent Guarantor and the Secured Creditors that this Guaranty shall
be enforced against such U.S. Parent Guarantor to the fullest extent
permissible under the laws and public policies applied in each jurisdiction
in which enforcement is sought. If, however, and to the extent that, the
obligations of any U.S. Parent Guarantor under this Guaranty shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of the Guaranteed
Obligations of such U.S. Parent Guarantor shall be deemed to be reduced and
such U.S. Parent Guarantor shall pay the maximum amount of the Guaranteed
Obligations which would be permissible under applicable law.
-154-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
c/o The Alpine Group, Inc. REFRACO INC.
1790 Broadway
New York, New York 10019
Attn: Stewart H. Wahrsager, By: /s/ Bragi F. Schut
Vice President -----------------------------------------
Telephone: (212) 757-3333 Title: Executive Vice President
Facsimile: (212) 757-3423
27 Noblestown Road ADIENCE, INC.
Carnegie, Pennsylvania 15106
Attn: Stephen M. Johnson,
President By: /s/ Bragi F. Schut
Telephone: (212) 757-3333 -----------------------------------------
Facsimile: (212) 757-3423 Title Senior Vice President
Swanswick Court REFRACO HOLDINGS LIMITED
Alfreton
Derbyshire
DE557AR By: /s/ Bragi F. Schut
Attn: Company Secretary -----------------------------------------
Telephone: Title: Director and Secretary
Facsimile: (44) 01773522645
Swanswick Court REFRACO (UK) LIMITED
Alfreton
Derbyshire
DE557AR By: /s/ Bragi F. Schut
Attn: Company Secretary -----------------------------------------
Telephone: Title: Director
Facsimile: (44) 01 7735 22645
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By: /s/ Gina S. Thompson
-----------------------------------------
Title: Vice President
<PAGE>
BANKBOSTON, N.A.
By: /s/ Roger J. Roche, Jr.
-----------------------------------------
Title: Director
CORESTATES BANK, N.A.
By: /s/ Mark Supple
-----------------------------------------
Title: Vice President
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-fact and on behalf
of First America Life Insurance
Company
By: /s/ Phillip C. Robbins
-----------------------------------------
Title: Vice President
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its Investment Advisor
By: /s/ Raymond Kennedy
-----------------------------------------
Title: Vice President
PRIME INCOME TRUST
By: /s/ Rafael Scolari
-----------------------------------------
Title: SVP Portfolio Manager
<PAGE>
FLEET NATIONAL BANK
By: /s/ James E. Silva
-----------------------------------------
Title: AVP
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
KZH-ING-1 CORPORATION
By: /s/ Virginia Conway
-----------------------------------------
Title: Authorized Agent
LLOYDS BANK PLC
By: /s/ Paul D. Briamonte
-----------------------------------------
Title: Vice President
By: /s/ Windsor R. Davies
-----------------------------------------
Title: Vice President
<PAGE>
MERRILL LYNCH PRIME RATE
PORTFOLIO
By: Merrill Lynch Assets Management L.P.,
as Investment Advisor
By: /s/ Anthony R. Clemente
-----------------------------------------
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By: /s/ Anthony R. Clemente
-----------------------------------------
Title: Authorized Signatory
ML CBO IV (CAYMAN) LTD.
By: Protective Assets Management Company, as
Collateral Manager
By: /s/ James Dondero
-----------------------------------------
Title: President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO [A UNIT OF THE CHASE
MANHATTAN BANK]
By:
-----------------------------------------
Title:
<PAGE>
PARIBAS CAPITAL FUNDING LLC
By: /s/ Eric Green
-----------------------------------------
Title: Director
<PAGE>
ACKNOWLEDGEMENT AND AGREEMENT
Each of the undersigned, each being a Subsidiary Guarantor on the
Restatement Effective Date (including each Subsidiary of Holdings which was a
Subsidiary Guarantor immediately before the Restatement Effective Date and each
Subsidiary of Holdings which becomes a Subsidiary Guarantor on the Restatement
Effective Date) hereby acknowledges and agrees to the provisions of the
foregoing Amended and Restated Credit Agreement (including, without limitation,
Sections 13.20 and 13.21 thereof), and hereby agrees for the benefit of the
Banks that all extensions of credit pursuant thereto (including, with respect to
the U.S. Subsidiary Guarantors, the increased extensions of credit made as a
result of the occurrence of the Restatement Effective Date and all other
obligations pursuant to the Amended and Restated Credit Agreement), shall be
fully entitled to the benefits of (and shall be fully guaranteed and secured
pursuant to, and in accordance with, the provisions of) the respective
Guaranties and Security Documents.
DORMA INDUSTRIES LTD.
By: /s/ Bragi F. Schut
-----------------------------------------
Title: Director
PREMIER SERVICES CORPORATION
By: /s/ Bragi F. Schut
-----------------------------------------
Title: Vice President
PSC TECHNOLOGIES, INC.
By: /s/ Bragi F. Schut
-----------------------------------------
Title: Vice President
<PAGE>
PSC INVESTMENTS, INC.
By: /s/ Bragi F. Schut
-----------------------------------------
Title: Vice President
GLOBE REFRACTORIES, INC.
By: /s/ Bragi F. Schut
-----------------------------------------
Title: Vice President
API TECHNOLOGIES, INC.
By: /s/ Bragi F. Schut
-----------------------------------------
Title: Vice President
<PAGE>
SCHEDULE I
COMMITMENTS AND LOAN OUTSTANDINGS
<TABLE>
<CAPTION>
Adience A Adience B Adience B-2 Adience C Newco A Newco B Revolving
Term Loan Term Loans Term Loan Term Loan Term Loans Term Loans Loan
Bank Commitment Outstanding Commitment Commitment Outstanding Outstanding Commitment
- ---- ---------- ----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Bankers Trust Company $10,000,000 $6,071,825.41 $30,000,000 $75,000,000 L6,854,207.40 $1,746,031.75 $22,823,529.41
BankBoston, N.A. $ 0 L3,607,477.58 $ 0 $ 4,117,647.06
CoreStates, N.A. $ 0 L7,214,955.16 $ 0 $ 8,235,294.12
Cypress Tree Investment $1,655,952.36 $476,190.48
Management Company,
Inc.
Prime Income Trust $6,292,619.05 $1,809,523.80
Fleet National Bank $ 0 L3,896,075.79 $ 0 $ 8,647,058.82
The ING Capital Senior $1,655,952.39 $476,190.48
Secured Income Fund
L.P.
KZH-ING-1 Corporation $1,655,952.38 $476,190.48
Lloyds Bank PLC $ 0 L5,411,216.37 $ 0 $ 6,176,470.59
Merril Lynch Prime Rate $3,919,087.30 $1,126,984.12
Portfolio
Merrill Lynch Senior
Floating Rate Fund, Inc. $3,919,087.30 $1,126,984.13
ML CBO IV (Cayman) $1,655,952.38 $476,190.48
Ltd.
Octagon Credit Investors $6,292,619.05 $1,809,523.80
Paribas Capital Funding $ 0 L3,679,627.13 $ 0
LLC
Royalton Company $1,655,952.38 $476,190.48
TOTAL: $10,000,000 $34,775,000 $30,000,000 $75,000,000 $10,000,000 $ 50,000,000
</TABLE>
<PAGE>
SCHEDULE II
Page 3
BANK ADDRESSES AND APPLICABLE LENDING OFFICES
BANKERS TRUST COMPANY 130 Liberty Street
New York, NY 10006
Attention: Alan Freedman
Tel:(212) 250-2200
Fax:(212) 250-7200
BANK BOSTON, N.A. 100 Pearl Street, 5th Floor
Hartford, CT 06103
Attention: Roger J. Roche Jr.
Tel:(860) 727-6567
Fax:(860) 727-6575
CORESTATES BANK 1339 Chestnut Street, 4th Floor
Philadelphia, PA 19107
Attention: Mark Supple
Tel:(215) 973-2562
Fax:(215) 973-6680
CYPRESSTREE INVESTMENT 125 High Street
MANAGEMENT COMPANY, INC. Boston, MA 02110
Attention: Philip C. Robbins
Tel:(617) 946-0600
Fax:(617) 946-5671
ROYALTON COMPANY c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92658
Attention: Jason Rosiak
Tel:(714) 640-3407
Fax:(714) 725-6839
<PAGE>
PRIME INCOME TRUST Two World Trade Center,
c/o Dean Witter Intercapital, Inc. 72nd Floor
New York, NY 10048
Attention: Peter Gewirtz
Tel:(212) 392-9034
Fax:(212) 392-5345
FLEET NATIONAL BANK One Federal Street
Mail Stop: MAOFDO3J
Boston, MA 02110
Attention: Howard Diamond
Tel:(617) 346-0042
Fax:(617) 346-4806
THE ING CAPITAL SENIOR SECURED HIGH 333 South Grand Avenue,
INCOME FUND, L.P. Suite 400
Los Angeles, CA 90071
Attention: Kathleen Lenarcic
Tel:(213) 346-3971
Fax:(213) 346-3995
KZH-ING-1 CORPORATION c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Andrew Taylor
Tel:(212) 946-7861
Fax:(212) 946-7776
LLOYDS BANK PLC 575 Fifth Avenue, 18th Floor
New York, NY 10038
Attention: Paul Briamonte
Tel:(212) 607-4965
Fax:(212) 607-4999
<PAGE>
MERRILL LYNCH PRIME 800 Scudders Mill Road
RATE PORTFOLIO Plainsboro, NJ 08536
Attention: Anthony Clemente
Tel:(609) 282-2092
Fax:(609) 282-2756
MERRILL LYNCH SENIOR FLOATING 800 Scudders Mill Road
RATE FUND, INC. Plainsboro, NJ 08536
Attention: Anthony Clemente
Tel:(609) 282-2092
Fax:(609) 282-2756
ML CBO IV (CAYMAN) LTD. 1150 Two Galleria Tower
13455 Noel Road - LB#45
Dallas, TX 75240
Attention: Jim Dindero
Tel:(972) 233-4300
Fax:(972) 233-4343
OCTAGON CREDIT INVESTORS 380 Madison Avenue, 12th Floor
LOAN PORTFOLIO New York, NY 10017
[A UNIT OF THE CHASE MANHATTAN Attention: Joyce DeLuca
BANK] Tel: (212) 622-3104
Fax: (212) 622-3797
PARIBAS CAPITAL FUNDING LLC 787 Seventh Avenue
New York, NY 10019
Attention: Francois Gauvin
Tel:(212) 841-2548
Fax:(212) 841-2144
<PAGE>
SCHEDULE XI
CALCULATION OF THE MLA COST
(a) The MLA Cost for a Sterling Loan for each of its Interest Periods is
calculated in accordance with the following formula:-
BY+(Y-Z)
------------------ BY+(Y-Z)% per annum = MLA Cost
100-(B+S)
where on the day of the application of the formula:
B is the percentage of a Bank's eligible liabilities which the
Bank of England requires that Bank to hold on a non-interest-
bearing deposit account in accordance with its cash ratio
requirements;
Y is the rate at which sterling deposits are offered by the
relevant Bank to leading banks in the London interbank
market at or about 11:00 a.m. on that day for the relevant
period;
S is the percentage of the relevant Bank's eligible liabilities
which the Bank of England requires the relevant Bank to place
as a special deposit; and
Z is the interest rate per annum allowed by the Bank of England on
special deposits.
(b) For the purposes of this Schedule XI:-
(i) "eligible liabilities" and "special deposits" have the meanings
given to them at the time of application of the formula by the
Bank of England;
(ii) "relevant period" in relation to a Sterling Loan, means:-
(A) if the relevant Interest Period is 3 months or less,
its Interest Period; or
(B) if the relevant Interest Period is more than 3 months, each
successive period of 3 months and any necessary shorter period
comprised in that Interest Period.
(c) In the application of the formula, B, Y, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5% and Y =
15%, BY is calculated as 0.5 x 15.
(d) (i) The formula is applied on the first day of each relevant period
comprised in the relevant Interest Period of a Sterling Loan.
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
-176-
<PAGE>
(e) If the Administrative Agent determines that a change in circumstances
has rendered, or will render, the formula inappropriate, the
Administrative Agent (after consultation with the Banks) shall notify
the respective Borrower of the manner in which the MLA Cost will
subsequently be calculated. The manner of calculation so notified by
the Administrative Agent shall, in the absence of manifest error, be
binding on all the parties.
-177-
<PAGE>
SCHEDULE XV
<TABLE>
<CAPTION>
ORIGINAL LETTERS OF CREDIT
Letter of Credit No. Amount Issued Expiry Date Beneficiary
- -------------------- ------ ------ ----------- -----------
<S> <C> <C> <C> <C>
S11857 $ 420,000.00 4/15/97 9/9/98 Universal Bonding Insurance
Company
S11858 $ 200,000.00 4/15/97 8/29/98 First Factors Corp.
S11859 $1,946,658.00 4/15/97 10/16/98 Zurich American Insurance Co.
</TABLE>
-178-
<PAGE>
SCHEDULE XVI
EBITDA Addback
<TABLE>
<CAPTION>
Holdings' Fiscal Quarter
Ending Closest to the Last
Day In Amount
<S> <C>
April, 1998 $4,750,000
July, 1998 $4,250,000
October, 1998 $3,500,000
January, 1999 $3,000,000
April, 1999 $3,750,000
July, 1999 $2,750,000
October, 1999 $1,750,000
January, 2000 $1,000,000
April, 2000 $500,000
October, 2000 $250,000
</TABLE>
<PAGE>
Exhibit 3
THIRD AMENDMENT AND CONSENT
THIRD AMENDMENT AND CONSENT (this "Amendment"), dated as of January 30,
1998, 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.
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 (as amended,
modified or supplemented to but not including the date hereof, the "Term Loan
Agreement");
WHEREAS, the Borrower wishes to consummate a transaction (such
transaction, as described in that certain Confidential Information
Memorandum, dated January 1998 and previously distributed to the Banks, and
consummated as described below, the "Acquisition") whereby it will (i)
acquire all of the issued and outstanding capital stock of American Premier
Holdings, Inc. ("APHI") by way of the merger of APHI with and into the
Borrower, with the Borrower being the surviving entity of such merger,
pursuant to, and in accordance with, that certain Agreement and Plan of
Merger, dated as of January 13, 1998, among Alpine, the Borrower, APHI,
Minerals Trading, Inc., Ralph Feuerring, Charles Gehret, John Gehret and
Stanley Weiss and (ii) concurrently with the consummation of the Acquisition,
American Premier Inc., a Delaware corporation and a Wholly-Owned Subsidiary
of APHI, will merge with and into Adience; and
WHEREAS, in connection with the Acquisition, (i) the Borrower has
requested the Banks to grant, and the Banks have agreed (subject to the terms
and conditions hereof) to grant, the consent provided herein and (ii) the
parties hereto wish to further amend the Term Loan Agreement as provided
herein;
NOW, THEREFORE, it is agreed:
1. Notwithstanding anything to the contrary contained in the Term Loan
Agreement, including, without limitation, Sections 7.03 and 7.10(iv) of the
Term Loan Agreement, the undersigned Banks hereby consent to the consummation
of the Acquisition by the Borrower.
2. Section 7.08 of the Term Loan Agreement is hereby deleted in its
entirety and the following new Section 7.08 is inserted in lieu thereof:
<PAGE>
"7.08 Maximum Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time during a period set forth below to be greater than the
ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
--------- --------
<S> <C>
Beginning February 1, 1998
and ending January 31, 1999 6.25:1
Beginning February 1, 1999
and ending April 30, 1999 6.00:1
Beginning May 1, 1999
and ending July 31, 1999 5.75:1
Beginning August 1, 1999
and ending October 31, 1999 5.65:1
Beginning November 1, 1999
and ending January 31, 2000 5.50:1
Beginning February 1, 2000
and ending October 31, 2000 5.25:1
Beginning November 1, 2000
and ending January 31, 2001 5.15:1
Thereafter 5.00:1
</TABLE>
3. The definition of "Adience Credit Agreement" appearing in Section 9
of the Term Loan Agreement is hereby amended by deleting the reference to the
date "April 14, 1997" appearing therein and inserting the date "April 15,
1997" in lieu thereof.
4. The definition of Consolidated EBITDA appearing in Section 9 of the
Term Loan Agreement is hereby amended by inserting the following sentence at
the end thereof:
"In addition and without limitation to the foregoing, for the
purposes of compliance with Sections 7.03 and 7.08, Consolidated
EBITDA for the fiscal quarter of the Borrower ending April, 1997 shall
be increased by $4,250,000."
5. The definition of "Consolidated Fixed Charge Coverage Ratio"
appearing in Section 9 of the Term Loan Agreement is hereby amended by inserting
the following two sentences at the end thereof:
"In addition and without limitation to the foregoing, for the
purposes of compliance with Section 7.03, Consolidated EBITDA for each
fiscal quarter of the Borrower ending on or prior to October, 2000
shall be increased by the amount set forth
-2-
<PAGE>
on Schedule I attached hereto opposite such quarter. Notwithstanding
anything to the contrary contained elsewhere in this Agreement, to the
extent Consolidated Interest Expense is being determined for any Test
Period which begins prior to the Third Amendment Effective Date, then
Consolidated Interest Expense (x) for the fiscal quarter of the
Borrower ended in July, 1997 shall be deemed to be $6,960,500, (y) for
the fiscal quarter of the Borrower ended in October, 1997, shall be
deemed to be $6,960,500 and (z) for the fiscal quarter of the Borrower
ended January, 1998, shall be deemed to be $6,960,500.
6. The definition of "Leverage Ratio" appearing in Section 9 of the
Term Loan Agreement is hereby amended by deleting said definition in its
entirety and inserting the following new definition of "Leverage Ratio" in
lieu thereof:
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the then most recently
ended Test Period; provided that in calculating the Leverage Ratio (x) to the
extent any Asset Acquisition or Asset Sale has occurred during the relevant
Test Period or thereafter but on or prior to the date of the respective
determination of the Leverage Ratio, Consolidated EBITDA shall be determined
for the respective Test Period on a pro forma basis (as provided in the
definition of Consolidated Fixed Charge Coverage Ratio in calculating the
denominator thereof) to give effect to all such Asset Acquisitions and/or
Asset Sales occurring after the first day of the respective Test Period and
(y) for the purposes of compliance with Section 7.08, Consolidated EBITDA
for each fiscal quarter of Holdings ending on or prior to October 31, 2000
shall be increased by the amount set forth on Schedule I attached hereto
opposite such fiscal quarter.
7. Clause (ii) of the definition of "Permitted Indebtedness" appearing
in Section 9 of the Term Loan Agreement is hereby amended by deleting the
reference to the amount "$80,000,000" appearing therein and inserting the
amount "$210,000,000" in lieu thereof.
8. The definition of "Permitted Indebtedness" appearing in Section 9 of
the Term Loan Agreement is hereby further amended by (i) deleting the word
"and" appearing at the end of clause (xv) thereof, (ii) deleting the period
appearing at the end of clause (xvi) thereof and inserting the text "; " in
lieu thereof and (iii) inserting the following new clauses (xvii) through
(xix) immediately following existing clause (xvi):
"(xvii) Indebtedness of Canadian Subsidiaries of Adience the
proceeds of which Indebtedness are to be used for such Canadian
Subsidiaries' working capital purposes, provided that the aggregate
principal amount of all such Indebtedness outstanding at any time
shall not exceed $6,000,000 (the "Canadian Subsidiary Working Capital
Indebtedness"), and provided further, that all terms and conditions of
such Indebtedness shall be reasonably satisfactory to the
Administrative Agent and the Required Banks;
(xviii) Indebtedness incurred pursuant to the $2.8M Deferred
Interest Bond; and
(xix) Indebtedness incurred pursuant to the AMI Promissory Notes."
-3-
<PAGE>
9. The definition of "Permitted Liens" appearing in Section 9 of the
Term Loan Agreement is hereby amended by (i) deleting the word "and"
appearing at the end of clause (xix) thereof, (ii) deleting the period
appearing at the end of clause (xx) thereof and inserting the text "; and" in
lieu thereof and (iii) inserting the following new clause (xxi) immediately
following existing clause (xx):
"(xxi) Liens placed upon any of the assets of a Canadian Subsidiary
of Adience to secure any Canadian Subsidiary Working Capital
Indebtedness permitted to be incurred by such Canadian Subsidiary
under clause (xvii) of the definition of Permitted Indebtedness."
10. Section 9 of the Term Loan Agreement is hereby amended by inserting
the following definitions in the appropriate alphabetical order:
"AMI Promissory Notes" shall mean (i) the $190,000 Promissory Note
Due 1995, dated December 11, 1991, made by American Premier, Inc. in
favor of Ferro Standard Corporation and (ii) the $1,000,000 Promissory
Note Due 1995, dated December 11, 1991, made by American Premier, Inc.
in favor of Ferro Metal and Chemical, Inc.
"Canadian Subsidiary Working Capital Indebtedness" shall have the
meaning provided in clause (xvii) of the definition of Permitted
Indebtedness.
"$2.8M Deferred Interest Bond" shall mean the $2,470,000 Deferred
Interest Bond Due 2003, dated May 31, 1996, made by American Premier
Holdings, Inc. to Ralph R. Feuerring.
11. 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 Third 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 Third 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 Third 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).
12. 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.
13. 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.
-4-
<PAGE>
14. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
15. This Amendment shall become effective on the date (the "Third
Amendment Effective Date") when the Borrower, the Administrative Agent 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; provided, however, that if for any reason after the Third Amendment
Effective Date the Acquisition is not consummated, this Amendment shall
retroactively cease to have any force or effect.
16. From and after the Third Amendment Effective Date, all references
in the Term Loan Agreement and each of the other Credit Documents to the Term
Loan Agreement shall be deemed to be references to the Term Loan Agreement as
amended hereby.
* * *
-5-
<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/ Stewart H. Wahrsager
-------------------------------
Title: Vice President, General Counsel
and Secretary
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ Gina S. Thompson
-------------------------------
Title: Vice President
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Life Insurance Company
By /s/ Phillip C. Robbins
--------------------------------
Title: Vice President
DEBT STRATEGIES, FUND., INC.
By /s/ Anthony R. Clemente
-------------------------------
Title: Authorized Signatory
EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By
------------------------------
Title:
EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By
-------------------------------
Title:
<PAGE>
KZH-ING-1 CORPORATION
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 Company,
as Collateral Manager
By /s/ James Dondero
------------------------------
Title: President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO [A UNIT OF THE CHASE
MANHATTAN BANK]
By
--------------------------------
Title:
PRIME INCOME TRUST
By /s/ Rafael Scolari
-------------------------------
Title: SVP Portfolio Manager
SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ Anthony R. Clemente
-------------------------------
Title: Authorized Signatory
<PAGE>
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 and Portfolio Manager
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its Investment Advisor
By /s/ Raymond Kennedy
--------------------------------
Title: Vice President
<PAGE>
ACKNOWLEDGEMENT AND AGREEMENT
Alpine hereby acknowledges and agrees to the provisions of the Term Loan
Agreement, after giving effect to this Amendment, and hereby agrees for the
benefit of the Banks that all extensions of credit pursuant thereto shall be
fully entitled to the benefits of (and shall be fully guaranteed and secured
pursuant to the provisions of) the Alpine Guaranty and the Alpine Pledge
Agreement.
THE ALPINE GROUP, INC.
By: /s/ Stewart H. Wahrsager
--------------------------
Title: Senior Vice President,
General Counsel and Secretary
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Holdings' Fiscal Quarter
Ending Closest to the Last
Day In Amount
- --------------------------- -----------
<S> <C>
April, 1998 $4,750,000
July, 1998 $4,250,000
October, 1998 $3,500,000
January, 1999 $3,000,000
April, 1999 $3,750,000
July, 1999 $2,750,000
October, 1999 $1,750,000
January, 2000 $1,000,000
April, 2000 $ 500,000
October, 2000 $ 250,000
</TABLE>
