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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 1998
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POLYVISION CORPORATION
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(Exact name of registrant as specified in its charter)
NEW YORK 1-10555 13-3482597
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
48-62 36th Street, Long Island City, New York 11101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 729-1050
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29 Laing Avenue, Dixonville, Pennsylvania 15734
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(Former name or former address, if changed since last report)
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CURRENT REPORT ON FORM 8-K
POLYVISION CORPORATION
November 20, 1998
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On November 20, 1998, pursuant to a Stock Purchase Agreement, dated
as of September 1, 1998 and amended on November 20, 1998, PolyVision
Corporation (the "Company") acquired from Wind Point Partners III, L.P. and
certain minority stockholders all of the outstanding capital stock of
Alliance International Group, Inc. ("Alliance") for $75.0 million, consisting
of $67.0 million in cash (including approximately $36.2 million of debt which
was assumed or refinanced) and $8.0 million in a 10% convertible subordinated
promissory note due 2007. The purchase price was determined as a result of
arm's length negotiations between the parties.
Alliance is a leading manufacturer of ceramic on steel products used in
writing surfaces for schools, conference rooms and other business environments.
Alliance also produces proprietary projection screen surfaces and various
building components using screen printed and non-screen printed ceramic on steel
such as exterior panels, tunnel walls and ceilings, and other interior surfaces.
Alliance is headquartered in Norcross, Georgia, with manufacturing facilities in
Oklahoma, Belgium, France and Denmark.
The cash portion of the transaction and the refinancing of the Company's
existing credit facility was funded by a $60.0 million senior secured credit
facility, a $25.0 million senior subordinated credit facility and $5.0 million
in cash proceeds from the sale of the Company's shares of 9% Series C
Convertible Preferred Stock to The Alpine Group, Inc.
Alliance has no material relationship or association with the Company.
(b) Michael H. Dunn, the former Chairman and Chief Executive Officer of
Alliance, has been named the President and Chief Operating Officer of the
Company, and elected to the Company's Board of Directors. Richard J. Still,
the former Senior Vice President and Chief Financial Officer of Alliance, has
been named the Chief Financial Officer of the Company. There are presently no
significant changes anticipated in the business or product lines of either
Alliance or Greensteel, Inc.
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Item 5. OTHER EVENTS
On November 16, 1998, pursuant to an Exchange Agreement between the Company
and Alpine, Alpine exchanged $25.2 million in Series A Preferred Stock of the
Company (and associated accrued dividends) and indebtedness of approximately
$7.5 million due from the Company for approximately 5.2 million shares of the
Company's Common Stock and approximately $12.5 million in 9% Series B
Convertible Preferred Stock of the Company. As a result, Alpine owns directly
approximately 48% of the Company's current outstanding shares of Common Stock
(inclusive of 17% of such shares previously owned).
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
In accordance with Item 7(a), the financial statements of Alliance
International Group, Inc. shall be provided not later than February 3,
1999.
(b) PRO FORMA FINANCIAL INFORMATION.
In accordance with Item 7(b), the pro forma financial information
shall be provided not later than February 3, 1999.
(c) EXHIBITS.
2.2 Stock Purchase Agreement, dated as of September 1, 1998, by
and among PolyVision Corporation, Alliance International
Group, Inc. ("Alliance"), Wind Point Partners III, L.P. and
the other stockholders of Alliance, as amended by letter
agreement dated November 20, 1998.
10.32 Credit Agreement, dated as of November 20, 1998, between
PolyVision Corporation, Greensteel, Inc. and Posterloid
Corporation, as borrowers, and a syndicate of banks,
financial institutions and other institutional lenders named
therein and Fleet National Bank, as administrative agent and
in certain other capacities.
10.33 Credit Facility Agreement, dated as of November 20, 1998,
between Alliance Europe N.V., Alliance Graphics N.V.,
Emailleries de Blanc Misseron A. Aubecq S.A. and Alliance
Pentagon A/S, as borrowers, and KBC Bank N.V.
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10.34 Credit Facility Agreement, dated as of November 20, 1998,
between PolyVision Belgium N.V. and PolyVision France EURL,
as borrowers, and KBC Bank N.V.
10.35 Senior Subordinated Loan Agreement, dated as of November 20,
1998, between PolyVision Corporation and Fleet Corporate
Finance, Inc.
10.36 Exchange Agreement, dated as of November 16, 1998, between
PolyVision Corporation and The Alpine Group, Inc. and Kirkbi
Projekt A/S.
10.37 Series C Preferred Stock Purchase Agreement, dated as of
November 20, 1998, between PolyVision Corporation and The
Alpine Group, Inc.
99.1 Press Release issued by PolyVision Corporation on
November 20, 1998.
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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.
POLYVISION CORPORATION
Dated: December 7, 1998 By: /s/ Joseph A. Menniti
--------------------------------
Joseph A. Menniti
Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE
2.2 Stock Purchase Agreement, dated as of September 1, 1998, by and
among PolyVision Corporation, Alliance International Group, Inc.
(Alliance), Wind Point Partners III, L.P. and the other
stockholders of Alliance, as amended by letter agreement dated
November 20, 1998.
10.32 Credit Agreement, dated as of November 20, 1998, between
PolyVision Corporation, Greensteel, Inc. and Posterloid
Corporation, as borrowers, and a syndicate of banks, financial
institutions and other institutional lenders named therein and
Fleet National Bank, as administrative agent and in certain other
capacities.
10.33 Credit Facility Agreement, dated as of November 20, 1998, between
Alliance Europe N.V., Alliance Graphics N.V., Emailleries de
Blanc Misseron A. Aubecq S.A. and Alliance Pentagon A/S, as
borrowers, and KBC Bank N.V.
10.34 Credit Facility Agreement, dated as of November 20, 1998, between
PolyVision Belgium N.V. and PolyVision France EURL, as borrowers,
and KBC Bank N.V.
10.35 Senior Subordinated Loan Agreement, dated as of November 20,
1998, between PolyVision Corporation and Fleet Corporate Finance,
Inc.
10.36 Exchange Agreement, dated as of November 16, 1998, between
PolyVision Corporation and The Alpine Group, Inc. and Kirkbi
Projekt A/S.
10.37 Series C Preferred Stock Purchase Agreement, dated as of November
20, 1998, between PolyVision Corporation and The Alpine Group,
Inc.
99.1 Press Release issued by PolyVision Corporation on
November 20, 1998.
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Exhibit 2.2
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
POLYVISION CORPORATION (THE "BUYER"),
ALLIANCE INTERNATIONAL GROUP, INC. ("AIG")
AND
THE STOCKHOLDERS OF AIG (THE "SELLERS")
----------------
DATED AS OF SEPTEMBER 1, 1998
========================================
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; SALE OF STOCK AND TERMS OF PAYMENT. . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 The Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Escrowed Purchase Price. . . . . . . . . . . . . . . . . . . . . . 6
1.5 Time and Place of Closing. . . . . . . . . . . . . . . . . . . . . 6
1.6 Deliveries by the Sellers. . . . . . . . . . . . . . . . . . . . . 7
1.7 Deliveries by the Buyer. . . . . . . . . . . . . . . . . . . . . . 7
1.8 Designation of Sellers' Agent. . . . . . . . . . . . . . . . . . . 7
1.9 Indemnification of Sellers' Agent. . . . . . . . . . . . . . . . . 8
ARTICLE II REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS AND
THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Execution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Consents and Approvals; No Violation . . . . . . . . . . . . . . . 9
ARTICLE III REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANIES . . . . 9
3.1 Corporate Organization; Etc. . . . . . . . . . . . . . . . . . . . 9
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Authority Relating to this Agreement . . . . . . . . . . . . . . . 10
3.5 Consents and Approvals; No Violations. . . . . . . . . . . . . . . 10
3.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 11
3.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . 11
3.8 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Contracts and Commitments. . . . . . . . . . . . . . . . . . . . . 12
3.10 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . 12
3.11 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.14 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . 14
3.15 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . 15
3.17 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.18 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 15
3.19 Governmental Permits . . . . . . . . . . . . . . . . . . . . . . . 16
3.20 Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.21 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.22 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . 17
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3.23 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.24 Certain Business Relationships with AIG. . . . . . . . . . . . . . 18
3.25 Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . 19
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Authority Relative to this Agreement . . . . . . . . . . . . . . . 19
4.3 Consents and Approvals; No Violation . . . . . . . . . . . . . . . 19
4.4 Acquisition of Stock for Investment. . . . . . . . . . . . . . . . 19
4.5 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.7 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . 20
4.8 Projections. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V COVENANTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . 20
5.1 Conduct of the Business of AIG . . . . . . . . . . . . . . . . . . 20
5.2 Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . 21
5.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 21
5.4 Access and Information . . . . . . . . . . . . . . . . . . . . . . 22
5.5 HSR Act and Other Filings. . . . . . . . . . . . . . . . . . . . . 23
5.6 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . 23
5.7 Discharge of Obligations . . . . . . . . . . . . . . . . . . . . . 23
5.8 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.10 Disclosure Supplements . . . . . . . . . . . . . . . . . . . . . . 24
5.11 Certain Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . 24
5.12 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.13 Qualifying Shares. . . . . . . . . . . . . . . . . . . . . . . . . 25
5.14 Notice of Developments . . . . . . . . . . . . . . . . . . . . . . 25
5.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.16 Non-Competition; Non-Solicitation. . . . . . . . . . . . . . . . . 25
ARTICLE VI CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . 26
6.1 Conditions to the Obligations of the Sellers . . . . . . . . . . . 26
6.2 Conditions to the Obligations of the Buyer . . . . . . . . . . . . 27
ARTICLE VII TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . . . . 29
7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.2 Procedure and Effect of Termination. . . . . . . . . . . . . . . . 29
7.3 Certain Payments Upon Termination. . . . . . . . . . . . . . . . . 30
ARTICLE VIII SURVIVAL AND INDEMNIFICATION. . . . . . . . . . . . . . . . . . 31
8.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2 Limitations on Certain Indemnity . . . . . . . . . . . . . . . . . 31
8.3 Claims for Indemnity . . . . . . . . . . . . . . . . . . . . . . . 33
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8.4 Right to Defend. . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IX MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . 33
9.1 Amendment and Modification . . . . . . . . . . . . . . . . . . . . 33
9.2 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . 34
9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.4 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.5 Governing Law; Consent to Jurisdiction . . . . . . . . . . . . . . 35
9.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.7 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.9 Facsimile Signature. . . . . . . . . . . . . . . . . . . . . . . . 35
LIST OF EXHIBITS
EXHIBIT A: Outstanding Indebtedness
EXHIBIT B: List of Sellers
EXHIBIT C: Financial Statements
EXHIBIT D: Debt Commitments
EXHIBIT E: Escrow Agreement
EXHIBIT F: Royalty Agreement
EXHIBIT G: Opinion of Sellers' Counsel
EXHIBIT H: Employment Agreement of Michael H. Dunn
LIST OF SCHEDULES
Section 3.2(a) Capitalization of the Companies
Section 3.2(b) Derivative Securities of AIG
Section 3.3(a) Subsidiaries
Section 3.3(b) Derivative Securities of the Subsidiaries
Section 3.5 Consents and Approvals
Section 3.7 Absence of Certain Changes
Section 3.8 Compliance with Law
Section 3.9(a) Contracts and Commitments
Section 3.9(b) Contract Defaults
Section 3.10 Undisclosed Liabilities
Section 3.11 Legal Defaults
Section 3.12(a) Litigation
Section 3.12(b) Orders
Section 3.13 Taxes
Section 3.15 Title to Properties
Section 3.16 Intellectual Property
Section 3.17 Insurance
Section 3.18 Environmental Matters
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Section 3.19 Governmental Permits
Section 3.20 Warranties
Section 3.21 Employees
Section 3.22 Employee Benefits
Section 3.23 Guarantees
Section 3.24 Certain Business Relationships
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of September 1, 1998, by and among PolyVision
Corporation, a New York corporation (the "Buyer"), Alliance International Group,
Inc., a Delaware corporation ("AIG"), and Wind Point Partners III, L.P., a
Delaware limited partnership ("Wind Point"), and the other stockholders of AIG
listed on the signature page hereto (together with Wind Point, individually, a
"Seller" and, collectively, the "Sellers").
RECITALS
A. The Sellers own all of the issued and outstanding common stock of
AIG; and
B. The Sellers desire to sell to the Buyer, and the Buyer desires to
purchase from the Sellers, all (and not less than all) of the issued and
outstanding common stock of AIG, on the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; SALE OF STOCK AND TERMS OF PAYMENT
1.1 DEFINITIONS. The terms defined in this SECTION 1.1, whenever
used herein, shall have the following meanings for all purposes of this
Agreement.
"Actions" shall have the meaning set forth in Section 3.12 hereof.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Sec. 1504.
"AIG" means Alliance International Group, Inc. (formerly known as AIG
Holdings, Inc), a Delaware corporation.
"Alliance America" means Alliance America Corporation, a Georgia
corporation and wholly-owned Subsidiary of AIG.
"Alliance Europe" means Alliance Europe N.V., a Belgian corporation.
"Alliance Graphics" means Alliance Graphics, N.V., a Belgian
corporation.
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"Alliance Pacific" means Alliance Pacific Ceramicsteel Ltd., a Hong Kong
corporation.
"Alliance Pentagon" means Alliance Pentagon A/S, a Danish corporation.
"Arrangements" shall have the meaning set forth in Section 3.19 hereof.
"Aubecq" means Emailleries de Blanc Misseron A. Aubecq S.A., a French
corporation.
"Basis" means any past or present fact, situation, condition, activity,
practice, plan, occurrence, failure to act or transaction that forms or could
form the basis for any specified consequence.
"Benefit Agreement" shall have the meaning set forth in Section 5.12
hereof.
"Business" means the businesses engaged in by the Companies on or prior
to the Closing Date, which consists of, among other things, in the United
States, Europe and Asia, (a) the manufacture and supply of porcelain on steel
materials to fabricators of marker boards and chalkboards, (b) the manufacture,
distribution and sale of porcelain on steel screen and non-screen printed
interior/exterior panels, (c) the manufacture, distribution and sale of
porcelain on steel applied through thick film technology for use in various
industrial applications, (d) the manufacture, distribution and sale of
continuous coil process ceramic steel products, and (e) the manufacture,
distribution and sale of ceramic steel projection screens.
"Closing Date" shall have the meaning set forth in Section 1.5 hereof
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the common stock of AIG, par value $.001 per share.
"Companies" means AIG, Alliance America and the Foreign Subsidiaries,
and "Company" means any of them.
"Confidential Information" means all confidential information and trade
secrets of the Companies including, without limitation, the identities, lists or
descriptions of any customers, referral sources or organizations; financial
statements, cost reports or other financial information; contract proposals or
bidding information; business plans and training and operations methods and
manuals; personnel records; fee structure; and management systems, policies or
procedures, including related forms and manuals.
"Controlled Group of Corporations" has the meaning set forth in Code
Sec. 1563.
"Debt Commitments" shall have the meaning set forth in Section 4.5
hereof.
"Deferred Intercompany Transaction" has the meaning set forth in Treas.
Reg. Section 1.1502-13.
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"Disclosure Schedule" means the Disclosure Schedule prepared by the
Seller and dated the date of this Agreement, providing disclosures as required
under Article III of this Agreement.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Encumbrance" means any lien, encumbrance, security interest, charge,
pledge or restriction on transfer of any nature whatsoever.
"Environmental and OSHA Requirements" shall mean any Legal Requirements
relating to Environmental Laws and Occupational Safety and Health Laws and all
Permits related thereto.
"Environmental Laws" shall mean any Legal Requirements relating to
protection or regulation of the environment or regulating or relating to the
emission, discharge, disposal, treatment, transportation, storage, release or
threatened release of Hazardous Materials into the environment, including
ambient air, surface water, ground water, land surface or subsurface strata, or
otherwise regulating or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
and Orders, notices and demands issued, entered, promulgated or approved
thereunder.
"Equitable Exceptions" shall have the meaning set forth in Section 2.2
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" shall mean the Escrow Agent under the Escrow Agreement or
any other Escrow Agent or Agents appointed pursuant to such Agreement.
"Escrow Agreement" shall mean the Escrow Agreement to be entered into
among the Buyer, the Sellers and the Escrow Agent.
"Excess Loss Account" has the meaning set forth in Treas. Reg. Section
1.1502-19.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financing" shall have the meaning set forth in Section 4.5 hereof.
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"Foreign Subsidiaries" means Alliance Pacific, Alliance Europe and its
Subsidiaries, including Alliance Graphics, Alliance Pentagon and Aubecq.
"GAAP" shall have the meaning set forth in Section 3.6 hereof.
"Governmental Entity" shall have the meaning set forth in Section 3.5
hereof.
"Hazardous Materials" means any pollutant, contaminant, toxic substance,
hazardous substance, hazardous material, hazardous chemical or hazardous waste
defined, listed, regulated or qualifying as such in (or for the purposes of) any
Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and all rules and regulations promulgated thereunder.
"Insurance Policies" shall have the meaning set forth in Section 3.17
hereof.
"Intellectual Property" means all present and future rights in patents,
copyrights, trademarks, service marks, trade names, logos, trade secrets,
computer software, technical know-how and applications and registration therefor
used in connection with the Business, including without limitation, the
Intellectual Property listed in SCHEDULE 3.16 to the Disclosure Schedule.
"Key Employee" shall mean each of Michael H. Dunn and Richard J. Still.
"Legal Requirements" means all foreign, federal, state and local
statutes, laws, decrees, ordinances, codes, rules and regulations or Orders of
any Governmental Entity.
"Liability" means any known liability (whether absolute or contingent,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.
"Material Adverse Effect" shall be deemed to mean a material adverse
impact on (a) the business, operations, assets, liabilities or condition
(financial or otherwise) of the Companies taken as a whole, (b) the ability of
AIG or the Sellers to perform their respective obligations in any material
respect under this Agreement or (c) the validity or enforceability of this
Agreement in any material respect. As to all of the matters qualified in this
Agreement by reference to a Material Adverse Effect (whether stated in one or
more than one Section hereof), the effects thereof shall be considered
cumulatively and in the aggregate in determining materiality.
"Most Recent Balance Sheet" means the Companies' consolidated and
consolidating balance sheet as of the date of the Most Recent Financial
Statements.
"Most Recent Financial Statements" has the meaning set forth in SECTION
3.6.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37) or
ERISA Sec. 4001(a).
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"Occupational Safety and Health Law" means the Occupational Safety and
Health Act of 1970 and any other Legal Requirements or Orders regulating,
relating to or imposing liability or standards of conduct concerning employee
health and/or safety, as amended.
"Order" shall mean any order, writ, injunction, decree, judgment, award,
determination or written direction of any court, arbitrator or Governmental
Entity.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency) since January 1, 1998.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" has the meaning set forth in Section 3.19.
"Person" means any individual, corporation, limited liability company,
partnership, trust, government, governmental agency or authority, or other
entity.
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406 and
Code Sec. 4975.
"Purchase Price" shall have the meaning set forth in Section 1.3 hereof.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Sellers' Knowledge" means the actual knowledge as of the date hereof of
Richard R. Kracum, James E. Forrest, Jeffrey Gonyo and, following the reasonable
investigation of the records of the Companies, Michael H. Dunn, Richard J.
Still, Robert Krol, Lynn M. Turner, Richard Berry and Gerard Thys.
"Royalty Agreement" shall mean the Royalty Agreement to be entered into
between AIG and the Sellers.
"Shares" shall have the meaning set forth in Section 1.2 hereof.
"Subsidiary" of a Person means a corporation of which such Person owns,
directly or indirectly, 50% or more of the outstanding voting stock.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, stamp, customs duties,
franchise, withholding, social security (or similar), real property, personal
property, sales, use, transfer, value added or other tax including any interest,
penalty or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
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Additional definitions are set forth within this Agreement and shall
have the meanings given them in this Agreement.
1.2 THE SALE. Upon the terms and subject to the conditions contained
in this Agreement, at the Closing (as defined in Section 1.5 hereof), the
Sellers will sell, assign, transfer and deliver to the Buyer, and the Buyer will
accept and purchase from the Sellers, an aggregate of 86,500 shares of Class A
Common Stock, par value $.01 per share, and 82,000 shares of Class B Common
Stock, par value $.01 per share, of AIG (collectively, the "Shares"),
constituting all of the issued and outstanding capital stock of AIG on the
Closing Date. In addition, Richard Kracum shall transfer the single shares of
Alliance Europe and Alliance Graphics held by him, and Richard Kracum and
Jeffrey Gonyo shall transfer the shares of Aubecq held by them (such shares, the
"Qualifying Shares"), to the Buyer or the Buyer's designee(s) at the Closing for
a consideration of $1.00 per Qualifying Share.
1.3 CONSIDERATION. Upon the terms and subject to the conditions
contained in this Agreement, and in consideration of the aforesaid sale,
assignment, transfer and delivery of the Shares, the Buyer will pay to the
Seller the aggregate sum (the "Purchase Price"), of (a) $75,000,000 minus (i)
the principal and interest and all other charges of indebtedness set forth on
EXHIBIT A attached hereto other than the prepayment premium to The Northwestern
Mutual Life Insurance Company ("NML") plus (ii) one half of the prepayment
premium on the indebtedness owed to NML (up to a maximum payment by the Buyer of
$800,000) (the "Cash Portion"), plus (b) all amounts payable by AIG from time to
time pursuant to the Royalty Agreement (the "Deferred Portion"). The Cash
Portion shall be payable by the Buyer at the Closing by (i) delivering to and
depositing with the Escrow Agent under the Escrow Agreement, on behalf of the
Sellers, $2,000,000 pursuant to Section 1.4 and (ii) paying to the Sellers the
remaining Cash Portion in cash, by wire transfer of immediately available funds
to an account designated by the Sellers' Agent (as such term is defined in
Section 1.8), for the benefit of the Sellers, in writing to the Buyer. The
Deferred Portion shall be payable in accordance with the Royalty Agreement.
1.4 ESCROWED PURCHASE PRICE. At the Closing, the Buyer shall deliver
to and deposit with the Escrow Agent under the Escrow Agreement, $2,000,000 in
cash (the "Escrow Deposit"), by wire transfer of immediately available funds to
such account designated by such Escrow Agent in writing to the Buyer.
1.5 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated in Sections 1.2, 1.3 and 1.4 of this Agreement (the "Closing") will
take place at the offices of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
The MetLife Building, 200 Park Avenue, 15th Floor, New York, New York 10166 at
10:00 a.m. on or before October 6, 1998, or at such other place or time as the
parties may agree. The date and time at which the Closing actually occurs is
hereinafter referred to as the "Closing Date."
1.6 DELIVERIES BY THE SELLERS. At the Closing, the Sellers will
deliver the following to the Buyer:
(a) stock certificates representing all of the Shares, duly
endorsed for transfer or accompanied by stock powers duly executed in blank, and
any other documents that are
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necessary to transfer to the Buyer good and valid title to all of the Shares
(transfer of the Shares of any Foreign Subsidiaries which are not certificated
shall be effectuated and evidenced by the recording of such transfer of
ownership on the respective shareholders' registers of Alliance Europe, Alliance
Graphics and Aubecq);
(b) the certificate contemplated by Section 6.2(e); and
(c) all other documents, instruments and writings reasonably
requested by the Buyer or required hereby.
1.7 DELIVERIES BY THE BUYER. At the Closing, the Buyer will deliver
the following to the Sellers:
(a) the Purchase Price to be paid to the Sellers;
(b) the certificate contemplated by Section 6.1(e); and
(c) all other documents, instruments and writings reasonably
requested by the Sellers or required hereby.
1.8 DESIGNATION OF SELLERS' AGENT. Each Seller hereby irrevocably
appoints Wind Point (the "Sellers' Agent") as the true and lawful agent and
attorney-in-fact of such Seller with full power of substitution (a) to receive
and act upon all notices and advices required or permitted under this Agreement,
the Escrow Agreement and the Royalty Agreement, including, without limitation,
all notices pursuant to Section 9.3 hereunder; (b) to give all notices and
advices required or permitted hereunder or thereunder; (c) to deliver or
authorize the delivery of the Shares to be sold by such Seller pursuant to this
Agreement, with all accompanying evidences of transfer and authenticity, to the
Buyer in accordance with the terms of this Agreement; (d) to accept from Buyer
on behalf of the Sellers the entire Purchase Price paid to the Sellers for all
of the Shares, to direct the payment of expenses contemplated to be paid by the
Sellers and to remit the net proceeds to each of the Sellers in accordance with
each such Seller's pro rata portion of the Purchase Price pursuant to this
Agreement, the Escrow Agreement and the Royalty Agreement; (e) to present
certificates representing such Shares for transfer on the books of AIG; and (f)
unless otherwise provided herein, to take all such other actions and execute
such other documents, agreements, certificates and instruments on behalf of such
Seller as may be necessary or desirable in order to consummate the sale of the
Shares to be sold by such Seller pursuant to this Agreement, the Escrow
Agreement and the Royalty Agreement. Notwithstanding the foregoing, the
Sellers' Agent may not, on behalf of the Sellers, agree to any waiver or
amendment to this Agreement without the prior written consent of the Sellers
holding a majority of the Shares. This power of attorney is a power coupled
with an interest, and each such Seller declares that it is irrevocable and that
it shall survive the death, disability, incapacity or incompetency of such
Seller and in all other circumstances. The Buyer may rely on any action or
document of Wind Point taken or executed pursuant to this power of attorney.
1.9 INDEMNIFICATION OF SELLERS' AGENT. Each Seller shall reimburse
and indemnify the Sellers' Agent to the fullest extent permitted, in proportion
to such Seller's respective interest in
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the Shares being purchased by the Buyer, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever (including all expenses) which may be imposed on,
incurred by or asserted against the Sellers' Agent in performing its duties
hereunder or in any way relating to or arising out of this Agreement, provided
that no Seller shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Sellers' Agent's gross negligence or willful
misconduct.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
RELATING TO THE SELLERS AND THE SHARES
Each Seller hereby represents and warrants to the Buyer with respect to
itself and its Shares as follows:
2.1 OWNERSHIP. EXHIBIT B hereto contains a true and complete list of
the names and addresses of the holders of record of all of the Shares, and the
number of Shares held by each such Seller. All of the Shares are owned
beneficially and of record by such Seller. Other than this Agreement, there is
no subscription, option, warrant, call, right, agreement or commitment relating
to the issuance, sale, delivery or transfer by such Seller (including any right
of conversion or exchange under any outstanding security or other instrument) of
such Shares. Upon consummation of the transactions contemplated hereby, the
Buyer will acquire good and valid title to all of the Shares, free and clear of
all Encumbrances, options, warrants or other rights.
2.2 EXECUTION. This Agreement has been duly and validly executed and
delivered by such Seller and constitutes a valid and binding agreement of such
Seller, enforceable against such Seller in accordance with its terms, except
that (a) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium (whether general or specific) or other similar laws
now or hereafter in effect relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought (collectively, the
"Equitable Exceptions"). Such Seller has full power and authority to execute and
deliver this Agreement and to perform his or its obligations hereunder.
2.3 CONSENTS AND APPROVALS; NO VIOLATION. Except for consents under
the HSR Act and a possible competition filing in Belgium, there is no
requirement applicable to such Seller to make any filing with, or to obtain any
Permit of, any Governmental Entity as a condition to the lawful consummation by
such Seller of the sale of the Shares pursuant to this Agreement, other than any
such requirement that is applicable to such Seller as a result of the specific
legal or regulatory status of the Buyer or as a result of any other facts that
specifically relate to the business or activities in which the Buyer is or
proposes to be engaged (other than the Business). Neither the execution and
delivery of this Agreement by such Seller nor the sale by such Seller
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of the Shares pursuant to this Agreement will (a) conflict with, violate or
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of the
Certificate of Incorporation or By-laws of such Seller if it is a corporation or
of the Agreement of Limited Partnership of such Seller if it is a partnership,
or any agreement, lease or other instrument or obligation to which such Seller
is a party, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been or shall prior
to the Closing be obtained, or (b) violate any Order applicable to such Seller
or any of such Seller's assets, excluding from the foregoing clauses (a) and (b)
such defaults, rights and violations which, in the aggregate, would not have a
material adverse effect on the ability of such Seller to consummate the
transactions contemplated by this Agreement and such defaults, rights and
violations which would occur as a result of the specific legal or regulatory
status of the Buyer or as a result of any other facts that specifically relate
to the business or activities in which the Buyer is or proposes to be engaged
(other than the Business).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
RELATING TO THE COMPANIES
Each of the Sellers hereby jointly and severally, subject to Section
8.1(c) hereof, further represents and warrants to the Buyer as follows:
3.1 CORPORATE ORGANIZATION; ETC. Each of the Companies is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to conduct its business as it is now being conducted and to own,
lease and operate its properties and assets, except where the failure to be so
organized, existing and in good standing or to have such power or authority is
not, in the aggregate, reasonably likely to have a Material Adverse Effect. Each
of the Companies is qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which ownership of
property or the conduct of its business requires such qualification or license,
except where the failure to be so qualified or licensed is not reasonably likely
to have a Material Adverse Effect. True and complete copies of the Certificate
of Incorporation and By-laws (or other comparable governing documents) of AIG,
Alliance America and each of the Foreign Subsidiaries, in each case as presently
in effect, have previously been delivered to the Buyer.
3.2 CAPITALIZATION. The capitalization of each of the Companies is
set forth on SECTION 3.2(A) of the Disclosure Schedule. Immediately prior to or
simultaneously with the Closing, all shares of capital stock of AIG other than
the Shares shall be canceled or redeemed. All of the issued and outstanding
shares of capital stock of the Companies are duly authorized, validly issued,
fully paid and nonassessable and free of any preemptive rights. SECTION 3.2(B)
of the Disclosure Schedule sets forth as of the date of this Agreement all
outstanding (a) securities convertible into or exchangeable for the capital
stock of AIG, (b) options, warrants or other rights to purchase or subscribe for
capital stock of AIG or (c) contracts, commitments, agreements,
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understandings or arrangements of any kind relating to the issuance of any
capital stock of AIG, any such convertible or exchangeable securities or any
such options, warrants or rights, pursuant to which, in any of the foregoing
cases, AIG is subject or bound. Immediately prior to the Closing, all such
securities, contracts and other rights referred to in the previous sentence
shall have been canceled and Buyer will upon Closing, directly or indirectly, be
the owner of the capital stock of all of the Companies free and clear of all
Encumbrances, options, warrants or other rights. There are no voting trusts,
proxies, or any other agreements or understandings with respect to the voting of
the capital stock of any Company.
3.3 SUBSIDIARIES. All of the Subsidiaries of AIG are listed in
SECTION 3.3(A) of the Disclosure Schedule, together with their jurisdiction of
incorporation or organization and the percentage interest held directly or
indirectly by AIG. Except as set forth in SECTION 3.3(A) of the Disclosure
Schedule, all issued and outstanding shares of capital stock of such
Subsidiaries are validly issued, fully paid and nonassessable, and are owned
free and clear of all Encumbrances. Except as set forth in SECTION 3.3(B) of the
Disclosure Schedule, as of the date of this Agreement, there are no outstanding
(a) securities convertible into or exchangeable for the capital stock of any of
such Subsidiaries, (b) options, warrants or other rights to purchase or
subscribe for capital stock of any of such Subsidiaries or (c) contracts,
commitments, agreements, understandings or arrangements of any kind relating to
the issuance of any capital stock of any of such Subsidiaries, any such
convertible or exchangeable securities or any such options, warrants or rights
pursuant to which, in any of the foregoing cases, any such Subsidiary is bound.
3.4 AUTHORITY RELATING TO THIS AGREEMENT. No corporate authorization
or other corporate proceedings are required on the part of any of the Companies
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
3.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth in
SECTION 3.5 of the Disclosure Schedule, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(a) violate any provision of the Certificate of Incorporation or By-laws (or
other comparable governing documents) of any of the Companies, (b) require any
Permit of, or filing with or notification to, any governmental or regulatory
authority, agency or commission, including courts of competent jurisdiction,
domestic or foreign (a "Governmental Entity"), except for (i) such filings as
may be required as a result of the specific legal or regulatory status of the
Buyer, or as a result of any other facts that specifically relate to the
business or activities in which the Buyer is or proposes to be engaged (other
than the Business), (ii) non-material Permits, filings or notifications, (c)
result in a material violation or a breach of, or constitute (with or without
due notice or lapse of time or both) a material default (or give rise to any
right of termination, cancellation or acceleration or any obligation to repay)
under, any of the terms, conditions or provisions of any Contracts to which any
of the Companies is a party or by which any of the Companies may be bound, or
with respect to which requisite waivers or consents have been or shall prior to
the Closing be obtained or (d) violate in any material respect any applicable
Legal Requirements or Orders of any Governmental Entity.
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3.6 FINANCIAL STATEMENTS. Attached hereto as EXHIBIT C are the
following financial statements (collectively, the "Financial Statements"): (i)
audited consolidated and consolidating balance sheets, consolidated statements
of income, consolidated statements of retained earnings and consolidated
statements of cash flows of AIG as of and for the fiscal years ended December
31, 1994, December 31, 1995, December 31, 1996 and December 31, 1997, in each
case with related footnotes (collectively, the "Historical Financial
Statements"); and (ii) unaudited consolidated and consolidating balance sheet
and consolidated and consolidating statement of income for the six months ended
June 30, 1998 of AIG ("Most Recent Financial Statements"). The Historical
Financial Statements fairly present in all material respects the consolidated
financial position, operations and cash flows of AIG, as of the dates and for
the periods presented therein in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
periods involved, except as otherwise noted therein. The Most Recent Financial
Statements fairly present in all material respects the financial position and
operations of AIG as of the dates and for the periods presented therein, subject
to normal year-end adjustment and absence of footnotes and other presentation
items.
3.7 ABSENCE OF CERTAIN CHANGES. Except as set forth in SECTION 3.7
of the Disclosure Schedule, since June 30, 1998, none of the Companies has (a)
suffered any material change in its business, operations or financial position,
(b) conducted its business in any material respect not in the ordinary and usual
course consistent with past practice, (c) except in the Ordinary Course of
Business and consistent with past practice, (i) incurred any non-working capital
or long-term indebtedness for borrowed money or issued any debt securities, or
(ii) assumed, guaranteed or endorsed the obligations of any other Person except
for obligations of the Subsidiaries of AIG, (d) except in the Ordinary Course of
Business consistent with past practice, (i) sold, transferred or otherwise
disposed of any property or assets having an aggregate fair market value in
excess of $100,000, or (ii) mortgaged or encumbered any of its material property
or assets. Except as set forth in SECTION 3.7 of the Disclosure Schedule, since
June 30, 1998, AIG has not paid any dividend or made any distribution to its
shareholders or Affiliates of its shareholders.
3.8 COMPLIANCE WITH LAW. Except as set forth in SECTION 3.8 of the
Disclosure Schedule, as of the date of this Agreement:
(a) The businesses of the Companies are not being conducted
in violation of any Legal Requirements or any applicable Order of any
Governmental Entity, except where any such violation would not have a Material
Adverse Effect.
(b) No written charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against any Company which is currently pending and alleges any failure to comply
with any Legal Requirements.
(c) Each Company has filed in a timely manner all reports,
documents and other materials it was required to file (and, to Sellers'
Knowledge, the information contained therein was correct and complete in all
material respects) under all applicable Legal Requirements.
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(d) Each Company has possession of all records and documents
it was required to retain under all applicable Legal Requirements.
3.9 CONTRACTS AND COMMITMENTS. SECTION 3.9(A) of the Disclosure
Schedule sets forth a list of all material contracts, agreements, Benefit
Agreements, Insurance Policies, real and personal property leases involving
annual payments in excess of $100,000, and indentures, mortgages and notes or
other instruments evidencing indebtedness (contingent or otherwise), in each
case whether written or, to Sellers' Knowledge, oral (collectively, the
"Contracts"), to which any of the Companies is a party. Except as set forth in
SECTION 3.9(B) of the Disclosure Schedule, as of the date of this Agreement,
none of the Companies are in default under any of the Contracts, except where
any such default(s) would not have a Material Adverse Effect, or will otherwise
be subject to cancellation, modification or termination or become subject to a
default or event of default upon a change of control of any of the Companies.
The Company has delivered or made available to the Buyer a correct and complete
copy of each written arrangement and a detailed written summary of each oral
arrangement listed in SECTION 3.9(A) of the Disclosure Schedule (each, an
"Arrangement" and collectively, "Arrangements"). With respect to each material
contract or agreement so listed: (A) the Arrangement is legal, valid, binding,
enforceable, and in full force and effect in all material respects, except for
the Equitable Exceptions; (B) the Arrangement will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms immediately
following the Closing, except for the Equitable Exceptions; (C) to Sellers'
Knowledge, no other party thereto is in breach or default in any material
respect, and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification or
acceleration, under the Arrangement; and (D) no party has repudiated in writing
any provision of the Arrangement.
3.10 NO UNDISCLOSED LIABILITIES. Except as and to the extent set
forth in the Most Recent Balance Sheet, AIG and its subsidiaries did not have,
at June 30, 1998, any Liabilities required by GAAP to be reflected on a
consolidated balance sheet of AIG. Except as and to the extent set forth in
SECTION 3.10 of the Disclosure Schedule, since June 30, 1998, none of the
Companies has incurred any Liabilities required by GAAP to be reflected on a
consolidated balance sheet of AIG, except Liabilities incurred in the Ordinary
Course of Business.
3.11 NO DEFAULT. Except as set forth in SECTION 3.11 of the
Disclosure Schedule, none of the Companies is in default or violation (and no
event has occurred which with notice or the lapse of time or both would
constitute such a default or violation) of any term, condition or provision of
(i) its Certificate of Incorporation or By-laws (or other comparable governing
documents) or (ii) any Legal Requirements or any Order of any Governmental
Entity applicable to such Company (except where any such default(s) or
violation(s) would not have a Material Adverse Effect).
3.12 LITIGATION. Except as set forth in SECTION 3.12(A) of the
Disclosure Schedule, as of the date of this Agreement, there is no complaint,
action, suit, proceeding, hearing or investigation (collectively, "Actions")
pending, or, to Sellers' Knowledge, threatened, against any of the Companies
before any Governmental Entity. Except as set forth in SECTION 3.12(B) of the
Disclosure Schedule, as of the date of this Agreement, none of the Companies has
received
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notice that it is subject to any outstanding material Order of any Governmental
Entity. Except as set forth in SECTION 3.12(A) AND (B) of the Disclosure
Schedule, to Seller's Knowledge, there is no reason to believe that any such
Actions may be brought or threatened against any of the Companies.
3.13 TAXES.
(a) Each Company has filed all material Tax Returns that it
was required to file. All such Tax Returns were correct and complete in all
material respects. Except for Taxes not yet due and payable, all Taxes shown on
any Tax Return have been paid. Other than as set forth in SECTION 3.13 of the
Disclosure Schedule, no Company is currently the beneficiary of any extension of
time within which to file any Tax Return. To Sellers' Knowledge, no claim has
ever been made by an authority in a jurisdiction where a Company does not file
Tax Returns that it is or may be subject to taxation by that jurisdiction. To
Seller's Knowledge there are no material Encumbrances on any of the assets of
any Company that arose in connection with any failure (or alleged failure) to
pay any Tax. AIG and Alliance America have been affiliated corporations filing
consolidated federal income tax returns since 1988.
(b) Each Company has withheld and paid all material Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, creditor, independent contractor, or other third party.
(c) To Sellers' Knowledge, no authority is expected to assess
any additional Taxes for any period for which Tax Returns have been filed. There
is no dispute, audit or claim concerning any Tax Liability of the Companies
either (i) claimed or raised by any authority in writing or, (ii) to Seller's
Knowledge, based upon personal contact with any agent of such authority.
(d) No Company has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(e) No Company has filed a consent under Code Sec. 341(f)
concerning collapsible corporations. No Company has been a United States real
property holding corporation within the meaning of Code Sec. 897(c)(2) during
the applicable period specified in Code Sec. 897(c)(1)(A)(11). No Company is a
party to any Tax allocation or sharing agreement. No Company has ever been (nor
does it have any Liability for unpaid Taxes because it once was) a member of an
Affiliated Group other than an Affiliated Group comprised solely of one or more
of the Companies.
(f) The unpaid material Taxes of the Companies do not exceed
the reserve for Tax Liability set forth on the face of the Balance Sheet
contained in the Most Recent Financial Statements (rather than in any notes
thereto) as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of AIG in filing its Tax Returns.
3.14 BROKERS AND FINDERS. None of the Companies or the
Sellers or any of their respective officers, directors or employees has employed
any broker or finder or incurred any
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liability for any investment banking fees, brokerage fees, commissions or
finders' fees in connection with the transactions contemplated by this
Agreement.
3.15 TITLE TO PROPERTIES. Except as set forth in SECTION 3.15 of the
Disclosure Schedule, each of the Companies has good title to all of the material
assets and properties which it owns and which are reflected on the Most Recent
Balance Sheet (except for assets and properties sold, consumed or otherwise
disposed of by the Companies in the Ordinary Course of Business since the date
of the Most Recent Balance Sheet), and such assets and properties are owned free
and clear of all Encumbrances, except for (a) Encumbrances listed in SECTION
3.15 of the Disclosure Schedule, (b) liens for current Taxes not yet due and
payable or for Taxes the validity of which is being contested in good faith, (c)
Encumbrances to secure indebtedness reflected on the Most Recent Balance Sheet
or indebtedness incurred in the Ordinary Course of Business and consistent with
past practice after the date thereof (all of which indebtedness is detailed in
SECTION 3.15 of the Disclosure Schedule), (d) mechanic's, materialmen's and
other encumbrances which have arisen in the Ordinary Course of Business, and (e)
other liens and Encumbrances which do not, individually or in the aggregate,
materially detract from the value of the affected assets or the use of such
assets in the Business. Each Company owns or leases all tangible assets
necessary for the conduct of its businesses as presently conducted and as
presently proposed to be conducted. Each Company does not own nor does it have
any interest in any real property or improvements thereon (other than the leases
disclosed in SECTION 3.15 of the Disclosure Schedule, and the leasehold
improvements relating to the same) nor does any Company have any options,
agreements or contracts under which it has the right or obligation to acquire
any interest in any real property or improvements (other than as disclosed in
SECTION 3.15 of the Disclosure Schedule). Except as set forth in SCHEDULE 3.15
of the Disclosure Schedule, to Sellers' Knowledge there are no covenants,
easements, rights-of-way, or regulations of record which impair the uses of any
Company's properties for which they are now operated in the Business.
3.16 INTELLECTUAL PROPERTY. Except as set forth in SECTION 3.16 of
the Disclosure Schedule, (i) the Companies own or possess adequate licenses or
other valid rights to use all Intellectual Property which are material to the
conduct of the business of the Companies taken as a whole, (ii) as of the date
of this Agreement, the validity of the Intellectual Property and the title
thereto of the Companies are not being questioned in any litigation to which any
Company is a party, nor to Sellers' Knowledge, is any such litigation
threatened, (iii) as of the date of this Agreement, to Sellers' Knowledge, the
conduct of the business of the Companies as now conducted does not conflict with
any material Intellectual Property rights of others, and (iv) each Company has a
valid and enforceable license or lease (as against the licensor or lessor) to
use or to license all such material Intellectual Property utilized by it,
without the payment of any royalty or similar payment. All material Intellectual
Property of the Companies is listed on SECTION 3.16 of the Disclosure Schedule.
3.17 INSURANCE. Attached hereto as SECTION 3.17 of the Disclosure
Schedule is a list of all policies of fire, liability, or other forms of
insurance and all fidelity bonds held by or applicable to the Business within
the past seven years (the "Insurance Policies"). With respect to each Insurance
Policy for which a claim is currently pending, or under which a claim may still
be made, to Sellers' Knowledge after due inquiry: (a) no notice of termination
and/or cancellation
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has been received by any Company; (b) neither AIG nor any other party to the
Insurance Policy is in breach or default (including with respect to the payment
of premiums or the giving of notices), and no event has occurred which, with
notice or the lapse of time, would constitute such a breach or default or permit
termination, modification (including retroactive or prospective upward
adjustment of premiums), or acceleration, under the Insurance Policy; and (c) no
party to the policy has repudiated any provision thereof. SECTION 3.17 of the
Disclosure Schedule describes any self-insurance arrangements affecting the
Companies. Except as set forth in SECTION 3.17 of the Disclosure Schedule,
there are no disputes with insurers and there are no pending Actions as to which
the insurers have denied liability or are defending under a reservation of
rights, and, to Sellers' Knowledge, there exist no claims under such insurance
that have not been properly filed.
3.18 ENVIRONMENTAL MATTERS.
(a) Except as set forth in SECTION 3.18 of the Disclosure
Schedule, each of the Companies and each property, operation and facility that
any Company may "own," "operate" or "control" (as each such term is defined by
applicable Environmental Laws) with respect to the Business ("Real Property"):
(i) is in compliance with all Environmental and OSHA
Requirements;
(ii) is not subject to any pending or, to Sellers'
Knowledge, threatened judicial or administrative proceeding alleging the
violation of or liability under any Environmental and OSHA Requirements;
(iii) has not filed any notice under or relating to any
Environmental and OSHA Requirements indicating or reporting any past or present
spillage, disposal or release into the environment of any Hazardous Material;
(iv) has obtained and is in compliance with all
Permits, Orders or other authorizations required under any Environmental and
OSHA Requirements; and
(v) does not manufacture, maintain, treat, store,
process, utilize, transport or dispose of any Hazardous Materials, other than
those listed in SECTION 3.18 of the Disclosure Schedule, which, unless otherwise
noted in such SECTION 3.18, are used or maintained in accordance with all
applicable Legal Requirements.
(b) All underground storage tanks ("UST's") located at or
beneath any Real Property are described in the Reports listed in SECTION 3.18 of
the Disclosure Schedule, and such UST's are in compliance with all applicable
Legal Requirements.
(c) All written notices received by each Company from a
governmental, administrative or judicial agency or authority or third party
regarding any material investigation or liability of the Companies under
Environmental and OSHA Requirements or Section 104 of CERCLA are described in
the Reports listed in SECTION 3.18 of the Disclosure Schedule.
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3.19 GOVERNMENTAL PERMITS. All permits, authorizations, consents,
licenses, qualifications, approvals or filings (collectively, "Permits")
required to conduct the Business are set forth in SECTION 3.19 of the Disclosure
Schedule, all of which have been obtained by the Companies, and such Permits are
valid and in full force and effect. The Companies are not in violation of any
such Permits set forth in SECTION 3.19 of the Disclosure Schedule, except where
any violation(s) would not have a Material Adverse Effect. No additional
material Permit is required from any Governmental Entity in connection with the
conduct of the Business.
3.20 WARRANTIES. Except as disclosed in SECTION 3.20 of the
Disclosure Schedule, there is no outstanding claim, action or investigation
against any Company and, to Sellers' Knowledge, no threatened claim, action or
investigation against any Company for product liability to any Person or for
breach of product warranty liability to any customer of the Business.
3.21 EMPLOYEES. SECTION 3.21 of the Disclosure Schedule lists all
current employees and officers of the Companies with an annual salary in excess
of $100,000 on the date hereof, together with the amount of the current annual
salaries and total compensation paid or due for services to each such employee
or officer and a full and complete description of any commitments to such
employees and officers with respect to compensation payable thereafter. Except
as set forth in SECTION 3.21 of the Disclosure Schedule, no Company is a party
to or bound by any collective bargaining agreement, nor has it experienced any
strikes or claims in writing of unfair labor practices. To Sellers' Knowledge,
no Company has committed any unfair labor practice. To Sellers' Knowledge,
except as set forth in SECTION 3.21 of the Disclosure Schedule, no
organizational effort is presently being made or threatened by or on behalf of
any labor union with respect to the employees of the Companies. Except as
disclosed on SECTION 3.21 of the Disclosure Schedule, each Company is in
material compliance with all Legal Requirements respecting employment and
employment practices, terms and conditions of employment, and wages and hours.
Except as disclosed on SECTION 3.21 of the Disclosure Schedule, there are no
severance contracts with any employees of the Companies, whether upon a change
of control or otherwise. The Sellers understand that Buyer may make changes in
the management personnel of the Companies, and makes no representations or
warranties with respect to the advisability or the merit of any such changes,
including the hiring of new employees. SECTION 3.21 of the Disclosure Schedule
further sets forth (a) as of June 30, 1998, all employment, severance,
termination and retirement agreements and arrangements, and (b) all
indemnification and/or exculpation agreements.
3.22 EMPLOYEE BENEFITS. SECTION 3.22 of the Disclosure Schedule lists
all Employee Benefit Plans that any Company or any member of any Controlled
Group of Corporations sponsors or maintains or to which any Company or any
member of any Controlled Group of Corporations contributes, or is obligated to
contribute, for the benefit of any current or former employee of any Company.
(a) Except as set forth in SECTION 3.22 of the Disclosure
Schedule, each Employee Benefit Plan (and each related trust or insurance
contract) complies in form and in operation in all material respects with the
applicable requirements of ERISA and the Code.
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(b) Except as set forth in SECTION 3.22 of the Disclosure
Schedule, all required reports and descriptions (including Forms 5500 Annual
Reports, Summary Annual Reports, PBGC-1's and Summary Plan Descriptions) have
been filed or distributed appropriately with respect to each Employee Benefit
Plan. Except as set forth in SECTION 3.22 of the Disclosure Schedule, the
requirements of Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the
Code and all similar state or local laws and ordinances have been met with
respect to each Employee Welfare Benefit Plan.
(c) All contributions (including all employer contributions
and employee salary reduction contributions) which are due as of the date of
this Agreement have been paid to each Employee Pension Benefit Plan and all
contributions for any complete or partial period ending on or before the Closing
Date which are not yet due have been paid to each Employee Pension Benefit Plan
or accrued in accordance with the past custom and practice of each of the
Companies. All premiums or other payments for all complete or partial periods
ending on or before the Closing Date have been paid with respect to each
Employee Welfare Benefit Plan.
(d) Except as set forth in SECTION 3.22 of the Disclosure
Schedule, each Employee Pension Benefit Plan which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service as to its qualified status, and nothing has
occurred which could reasonably be expected to jeopardize such qualified status.
(e) Except as set forth in SECTION 3.22 of the Disclosure
Schedule, there have been no Prohibited Transactions with respect to any
Employee Benefit Plan. Except as set forth in SECTION 3.22 of the Disclosure
Schedule, no Fiduciary has any Liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration or
investment of the assets of any Employee Benefit Plans. Except as set forth in
SECTION 3.22 of the Disclosure Schedule, no charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand with respect to the
administration or the investment of the assets of any Employee Benefit Plan
(other than routine claims for benefits) is pending or, to Sellers' Knowledge,
threatened.
(f) SECTION 3.22 of the Disclosure Schedule sets forth
correct and complete copies of (i) the plan documents and summary plan
descriptions, (ii) the most recent determination letter received from the
Internal Revenue Service, (iii) the most recent Form 5500 Annual Report, and
(iv) all related trust agreements, insurance contracts, and other funding
agreements which implement each Employee Benefit Plan.
(g) Except as set forth in SECTION 3.22 of the Disclosure
Schedule, no Company nor any member of any Controlled Group of Corporations
contributes to, has ever contributed to, nor ever has been required to
contribute to any Multiemployer Plan or has any Liability (including withdrawal
Liability) under any Multiemployer Plan. Except as set forth in SECTION 3.22 of
the Disclosure Schedule, no Company nor any member of any Controlled Group of
Corporations has ever incurred, and to Sellers' Knowledge, there is no reason to
expect that any Company nor any member of any Controlled Group of Corporations
will incur any Liability to the PBGC (other than PBGC premium payments) or
otherwise under Title IV of ERISA
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(including any withdrawal Liability) or under the Code with respect to any
Employee Pension Benefit Plan that such Company nor any member of any Controlled
Group of Corporations maintains or ever has maintained or to which it
contributes, ever has contributed, or ever has been required to contribute.
SECTION 3.22 of the Disclosure Schedule sets forth whether or not any Company
nor any member of any Controlled Group of Corporations maintains or has ever
maintained or contributes, ever has contributed, or ever has been required to
contribute to any Employee Welfare Benefit Plan providing health, accident, or
life insurance benefits to former employees, their spouses, or their dependents.
3.23 GUARANTEES. Except as set forth in SECTION 3.23 of the
Disclosure Schedule, none of the Companies is a guarantor nor is it otherwise
liable for any Liability of any other Person, including the Companies.
3.24 CERTAIN BUSINESS RELATIONSHIPS WITH AIG. Except as set forth in
SECTION 3.24 of the Disclosure Schedule, none of the Companies has been involved
in any business arrangement or relationship with the Sellers or any of their
respective Affiliates within the past twelve (12) months, and none of the
Sellers or any of their respective Affiliates owns any material property or
right, tangible or intangible, which is used in the Business.
3.25 OBLIGATIONS. Attached hereto as EXHIBIT A is a list of all
outstanding funded indebtedness of AIG (including accrued interest and dividends
thereon), all of which is to be repaid and discharged on or prior to the Closing
in accordance with Section 5.7 hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to each Seller as follows:
4.1 ORGANIZATION. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted except where the
failure to be so organized, existing and in good standing or to have such power
or authority (a) is not, in the aggregate, reasonably likely to have a material
adverse effect on the business, assets or financial condition of the Buyer or
(b) would not impair, hinder or adversely affect the ability of the Buyer to
perform any of its obligations under this Agreement or to consummate the
transactions contemplated hereby. The Buyer has heretofore delivered or made
available to the Sellers complete and correct copies of its Certificate of
Incorporation and By-laws (or other similar charter documents), as currently in
effect.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The Buyer has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of the Buyer and no
other corporate proceedings on the part of the Buyer are necessary
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to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by the
Buyer and constitutes a valid and binding agreement of the Buyer, enforceable
against the Buyer in accordance with its terms, except for the Equitable
Exceptions.
4.3 CONSENTS AND APPROVALS; NO VIOLATION. Except for consents under
the HSR Act, there is no requirement applicable to the Buyer to make any filing
with, or to obtain any Permit of, any Governmental Entity as a condition to
lawful consummation by the Buyer of the purchase of, the Shares pursuant to this
Agreement. Neither the execution and delivery of this Agreement by the Buyer nor
the purchase by the Buyer of the Shares pursuant to this Agreement will (a)
conflict with or result in any breach of any provision of the Certificate of
Incorporation or By-laws (or other similar charter documents) of the Buyer, (b)
require any Permit of, or filing with or notification to, any Governmental
Entity, except for non-material Permits, filings or notifications, (c) result in
a material default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any agreement,
lease or other instrument or obligation to which the Buyer or any of its
subsidiaries is a party, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been or shall prior to the Closing be obtained or (d) violate any applicable
Order.
4.4 ACQUISITION OF STOCK FOR INVESTMENT. The Buyer is acquiring the
Shares for investment and not with a view toward, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing
or selling such Shares. The Buyer agrees that none of the Shares may be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act of 1933, as amended, except
pursuant to an exemption from such registration available under such Act.
4.5 FINANCING. Attached hereto as EXHIBIT D are valid and
enforceable commitment letters (the "Debt Commitments") from (a) Fleet National
Bank to provide up to the full amount of $90.0 million in senior secured credit
facilities to the Buyer and (b) a syndicate of institutional purchasers to
provide up to $25.0 million in senior subordinated financing to the Buyer
(together, the "Financing"). The Buyer will use its best efforts to satisfy all
requirements to be satisfied or complied with by the Buyer which are conditions
to closing all transactions constituting the Financing and which are within its
control.
4.6 LITIGATION. There is no Action pending or, to the knowledge of
the Buyer, threatened against or involving the Buyer, and there is no
investigation pending or threatened against or involving the Buyer, in each case
before any Governmental Entity that questions the validity of this Agreement or
any action taken or to be taken by the Buyer in connection herewith.
4.7 BROKERS AND FINDERS. None of the Buyer or any of its officers,
directors or employees has employed any investment banker, broker or finder or
incurred any liability for any investment banking fees, brokerage fees,
commissions or finders' fees in connection with the transactions contemplated by
this Agreement.
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4.8 PROJECTIONS. In connection with the Buyer's investigation of the
Companies, the Buyer has received from AIG certain estimates, projections,
forecasts, plans and budgets for the Companies. The Buyer acknowledges that
there are uncertainties inherent in attempting to make such estimates,
projections, forecasts, plans and budgets, that the Buyer is familiar with such
uncertainties, that the Buyer is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all estimates, projections,
forecasts, plans and budgets so furnished to it. Nothing herein shall relieve
the Sellers from any obligations they may have with respect to any of the
representations and warranties made by them pursuant to this Agreement.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 CONDUCT OF THE BUSINESS OF AIG. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the Closing
Date, the Sellers will cause the Companies to conduct their business and
operations in the Ordinary Course of Business. Without limiting the generality
of the foregoing, the Sellers will not, without the prior written consent of the
Buyer (which consent shall not be unreasonably withheld), permit any Company to:
(a) (i) create, incur or assume any indebtedness for money
borrowed, including obligations in respect of capital leases but excluding
short-term, working capital indebtedness; or (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person; PROVIDED that the Companies
may endorse negotiable instruments for deposit in the Ordinary Course of
Business;
(b) redeem or otherwise acquire any Shares or other
securities;
(c) (i) increase the rate or terms of compensation payable or
to become payable by any Company to its directors, officers and employees,
except for increases occurring in the Ordinary Course of Business in accordance
with its past customary practices or in connection with any new collective
bargaining agreement between Alliance America and the United Steel Workers Union
of America; or (ii) increase the rate or terms of any bonus, insurance, pension
or other employee benefit plan, payment or arrangement made to, for or with any
such directors, officers and employees;
(d) except in the Ordinary Course of Business consistent with
past practice, (i) sell, transfer or otherwise dispose of any property or
assets, or (ii) mortgage or encumber any property or assets;
(e) enter into any agreement, commitment or transaction
(including without limitation any borrowing, capital expenditure or capital
financing) material to the Companies, except agreements, commitments or
transactions in the Ordinary Course of Business or as contemplated herein;
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(f) materially change the accounting methods, principles or
practices employed by the Companies;
(g) delay or reduce any budgeted capital expenditures;
(h) declare or pay any dividend or distribution on any shares
of the capital stock of AIG; or
(i) agree to do any of the foregoing.
5.2 CONFIDENTIALITY AGREEMENTS. Any information provided pursuant to
this Agreement shall be held by the parties hereto in accordance with and shall
be subject to the terms of the Confidentiality Agreements, dated June 12, 1998,
among the Buyer, Wind Point Partners and AIG (together, the "Confidentiality
Agreements").
5.3 FURTHER ASSURANCES. Subject to the terms and conditions herein
provided, the Sellers and the Buyer agree to use their respective best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective by
October 6, 1998, and in any case no later than October 31, 1998, the
transactions contemplated by this Agreement and to cooperate in connection with
the foregoing, including using their respective commercially reasonable efforts
(a) to obtain all necessary waivers, consents and approvals from other parties
to material loan agreements, leases and other contracts, (b) to obtain all
consents, Permits, approvals and authorizations that are required to be obtained
under any Legal Requirements, (c) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
hereto to consummate the transactions contemplated hereby, (d) to effect all
necessary registrations and filings and submissions of information requested by
Governmental Entities, including, without limitation, under the HSR Act, and (e)
to fulfill all conditions to this Agreement. The Sellers and the Buyer further
covenant and agree, with respect to a threatened or pending preliminary or
permanent injunction or other Order or Legal Requirements that would adversely
affect the ability of the parties hereto to consummate the transactions
contemplated hereby, to use their respective best efforts to prevent the entry,
enactment or promulgation thereof, as the case may be. From time to time after
the Closing Date, without further consideration, each Seller will, at his or its
own expense, execute and deliver such documents to the Buyer as the Buyer may
reasonably request in order more effectively to vest in the Buyer good title to
the Shares sold by such Seller pursuant hereto, and to effect an orderly
transition of the ownership and management of the Business. From time to time
after the Closing Date, without further consideration, the Buyer will, at
Sellers' expense, execute and deliver such documents to any Seller as such
Seller may reasonably request in order more effectively to consummate the sale
of the Shares pursuant to this Agreement.
5.4 ACCESS AND INFORMATION. The Sellers (a) shall permit the Buyer
and its representatives (including, for purposes of this Section 5.4,
prospective lenders), after the date of execution of this Agreement and prior to
the Closing Date, to have reasonable access, during regular business hours and
upon reasonable advance notice, to the offices, plants, properties, books and
records, personnel, counsel and auditors of AIG, (b) shall furnish, or cause to
be furnished, to the Buyer or its representatives any financial and operating
data and other
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information with respect to the business and properties of AIG as the Buyer or
its representatives shall from time to time reasonably request for the purpose
of verifying the representations and warranties of the Sellers hereunder and (c)
shall cause its auditors to permit the Buyer and its representatives to examine
their records and working papers to the extent such records and papers pertain
to the Business; PROVIDED, HOWEVER, that no investigation by the Buyer or its
representatives shall affect or limit the scope of the Sellers' representations
and warranties herein or limit the Sellers' liability for any breach of such
representations and warranties. In the event of the termination of this
Agreement, the Buyer shall (i) promptly deliver to the Sellers all documents
containing confidential information obtained by the Buyer from the Sellers, AIG
or their representatives and (ii) certify to the Sellers that the Buyer has
destroyed, or caused to be destroyed, documents, work papers and other material
generated by the Buyer reflecting confidential information obtained from the
Sellers, AIG or their representatives as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution hereof.
The Buyer shall at all times prior to the Closing Date, and in the event of
termination of this Agreement, cause any information so obtained to be kept
confidential and will not use, or permit the use of, such documents, work papers
and other materials in its business or in any other manner or for any other
purpose except as contemplated hereby and except for any such information that
is now or hereafter becomes available to the public through no fault of the
Buyer or its representatives or was in fact known to the Buyer prior to its
disclosure hereunder as evidenced by written records.
5.5 HSR ACT AND OTHER FILINGS. Promptly after the date of this
Agreement, the parties shall cooperate with one another in connection with
filing all required notifications with the United States Federal Trade
Commission and the Department of Justice under the HSR Act, and shall
thereafter, as and to the extent requested by either or both of such
Governmental Entities, timely provide such additional information as may be
requested in order to obtain, as promptly as reasonably possible, the required
consents of such Governmental Agencies under the HSR Act or obtain early
termination of the applicable waiting period.
5.6 PUBLIC ANNOUNCEMENTS. The Sellers and the Buyer will consult
with each other before issuing any press releases or otherwise making any public
statements with respect to this Agreement and the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation. The Buyer shall make no announcement,
statement, comment, response to inquiries or other disclosure, public or
otherwise, relating to the transactions contemplated hereby or the substance
thereof prior to the Closing except to the extent the Buyer is advised by its
legal counsel that disclosure is required by applicable law.
5.7 DISCHARGE OF OBLIGATIONS. Unless otherwise instructed by the
Buyer in writing, on or prior to the Closing, the Sellers shall have provided
for the payment in full by the Companies of the indebtedness (including all
accrued interest and obligations through the Closing Date) of the Companies set
forth on EXHIBIT A attached hereto. Such indebtedness as of June 30, 1998, is
listed on the Most Recent Balance Sheet. The Sellers shall have also provided
for the termination of all Encumbrances of record on the properties of the
Companies, except for those noted in SECTION 3.15 of the Disclosure Schedule as
surviving the Closing. All liens or UCC
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filings against the Companies shall have been terminated as of the Closing.
Unless otherwise paid or discharged in full, any such payments shall be paid by
the Buyer and subtracted from the Purchase Price.
5.8 EMPLOYEE MATTERS. The Sellers shall have provided for the
cancellation, at or prior to the Closing, of any stock options, warrants,
deferred bonus programs, and phantom equity plans outstanding with respect to
the Companies, at no cost to the Buyer and/or AIG. In conjunction with the
cancellation of such programs, all eligible employees shall have signed
cancellation agreements in form and substance reasonably acceptable to Buyer.
5.9 EXPENSES. Whether or not the transactions contemplated hereby
are consummated, all costs and expenses incurred by the Buyer or the Sellers in
connection with this Agreement and the transactions contemplated hereby will be
paid by the Buyer or the Sellers, respectively.
5.10 DISCLOSURE SUPPLEMENTS. From time to time prior to the Closing,
the Sellers will supplement or amend the Disclosure Schedule with respect to any
matter hereafter arising which, if existing or occurring at or prior to the date
of this Agreement, would have been required to be set forth or described in the
Disclosure Schedule or which is necessary to complete or correct any information
in the Disclosure Schedule or in any representation or warranty of the Sellers
or AIG which has been rendered inaccurate thereby. For purposes of determining
the satisfaction of the conditions set forth in Article VI hereof (including,
without limitation, Section 6.2(a) hereof), no such supplement or amendment
shall be given effect.
5.11 CERTAIN TAX MATTERS.
(a) The Sellers shall file all Tax Returns for the short-year
period ending on the Closing Date. The Buyer shall or shall cause AIG to
provide the Sellers, with such assistance as may reasonably be requested in
connection with the preparation of any Tax Return with respect to periods ending
on or prior to the Closing Date, any notice, letter, correspondence, claim,
audit or other examination by any taxing authority, or any judicial or
administrative proceedings relating to liability for Taxes, and for a period of
at least ten years from the Closing Date each will retain and provide the other
with any records or information which may be relevant to such return, audit or
examination, proceedings or determination. Any information obtained pursuant to
this Section or any other Section hereof providing for the sharing of
information or the review of any Tax Return or other schedule relating to Taxes
shall be kept confidential by the parties hereto.
(b) The Buyer shall notify the Sellers in writing within ten
days after its receipt of any notice, letter, correspondence, claim, audit or
other administrative proceeding, dispute or contest by any taxing authority
("Tax Dispute") concerning any Tax Return of AIG filed with respect to any
taxable year or period ending on or before the Closing Date. Such notice
hereunder shall include a complete copy of any such notice, letter,
correspondence or claim.
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(c) Any sales, use, VAT, stock transfer, real property
transfer, real property transfer gains or other transfer or similar Taxes
incurred as a result of the sale of the Shares contemplated by this Agreement
shall be paid by the Sellers.
5.12 NO SOLICITATION. The Sellers and AIG agree that, prior to any
termination of this Agreement pursuant to Article VII hereof, none of the
Companies, any of their Subsidiaries or any of the Sellers (a) will solicit,
initiate or negotiate with respect to any inquiries or proposals relating to (i)
the possible direct or indirect acquisition of the Shares or of all or a portion
of the assets or business of the Companies or any Subsidiary of the Companies or
(ii) any merger or consolidation with AIG or any Subsidiary of AIG, and/or (b)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any person to do or seek any of the
foregoing. In the event that any person makes any proposal, offer, inquiry or
contact with respect to any of the foregoing, the Sellers shall promptly notify
any such offer or that AIG is not available for purchase.
5.13 QUALIFYING SHARES. The transfer of the Shares of the Foreign
Subsidiaries shall be inscribed as of the Closing in the shareholders' register
of each of Alliance Europe and Alliance Graphics and signed by the Buyer,
Richard Kracum and/or Jeffrey Gonyo (or their representatives pursuant to a
valid power of attorney). The parties shall take any and all other steps as are
required to transfer effectively such Shares under the laws of the appropriate
foreign jurisdictions.
5.14 NOTICE OF DEVELOPMENTS. Each party will keep the other parties
reasonably informed of any material development affecting the ability of the
parties to consummate the transactions contemplated by this Agreement.
5.15 CONFIDENTIALITY. Each of the Sellers will treat and hold as such
all of the Confidential Information, and refrain from using any of the
Confidential Information except in connection with this Agreement for a period
of three (3) years from the Closing. In the event that any of the Sellers is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, such Seller will
notify the Buyer as reasonably early as the circumstances permit of the request
or requirement so that the Buyer may seek an appropriate protective order or
waive compliance with the provisions of this Section 5.15. If, in the absence
of a protective order or the receipt of a waiver hereunder, any of the Sellers
is compelled to disclose any Confidential Information to any tribunal, such
Seller may disclose the Confidential Information to the tribunal; PROVIDED,
HOWEVER, that the disclosing Seller shall cooperate with the Buyer to obtain, at
the reasonable request of the Buyer and at the sole expense of Buyer, an order
or other assurance that confidential treatment will be accorded to such portion
of the Confidential Information required to be disclosed as the Buyer shall
designate. The foregoing provisions shall not apply to any Confidential
Information which is generally available to the public immediately prior to the
time of disclosure.
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5.16 NON-COMPETITION; NON-SOLICITATION.
(a) For a period of three (3) years after the Closing Date,
without the prior written consent of the Buyer, none of the Sellers nor any of
their Affiliates shall, directly or indirectly, own, manage, operate or control,
or participate in the ownership, management, operation or control of, any
business which derives any material amount of revenues from any business
activities similar to or competitive with the Business, except that nothing
contained herein shall prevent the Sellers and their Affiliates from owning less
than one percent (1%) of the outstanding shares of a publicly-traded company.
(b) For a period of two (2) years after the Closing Date,
none of the Sellers nor any of their Affiliates shall, without the prior written
approval of the Buyer, directly or indirectly, solicit, encourage, entice or
induce any person who is an employee of any of the Companies at any time on or
after the date hereof to terminate his or her employment with such Company.
(c) Each of the Sellers agrees that any remedy at law for any
breach by it or any of their Affiliates of this Section 5.16 would be
inadequate, and the Buyer shall be entitled, without requirement of posting any
bond or indemnity, to injunctive relief in such a case. The parties hereby
acknowledge the reasonableness of the time, geographic scope and nature of the
foregoing restrictions; nonetheless, if it is ever held that any restriction
placed upon the Sellers by this Section 5.16 is too onerous or is not necessary
for the protection of the Buyer, the Sellers agree that any court of competent
jurisdiction may impose such lesser restriction that such court may consider to
be necessary or appropriate to properly protect the Buyer.
5.17 NEW AIG STOCKHOLDERS. AIG and each of the Sellers agrees that
any Person who after the date of this Agreement is offered shares of Common
Stock shall, as a condition precedent to the acquisition of such shares of
Common Stock, become a party to this Agreement by executing this Agreement and
delivering the same to the Buyer at its address specified in Section 9.3 hereof.
Upon such execution and delivery, such Person shall be a Seller for all purposes
of this Agreement.
ARTICLE VI
CLOSING CONDITIONS
6.1 CONDITIONS TO THE OBLIGATIONS OF THE SELLERS. The obligations of
each Seller to consummate the transactions contemplated hereby shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions,
any one or more of which may be waived in writing by the Sellers holding a
majority of the Shares:
(a) The representations and warranties of the Buyer contained
herein, taken as a whole, shall be true and correct in all material respects at
and as of the Closing Date as though such representations and warranties were
made at and as of such date.
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(b) The Buyer shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
(c) No statute, rule, regulation, executive order, decree,
preliminary or permanent injunction or restraining order shall have been
enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits or restricts the consummation of the transactions contemplated hereby.
No action or proceeding by any Governmental Entity shall have been commenced
(and be pending) against the Sellers, the Companies or any of their respective
Affiliates, associates, officers or directors seeking to prevent or delay the
transactions contemplated hereby or challenging any of the terms or provisions
of this Agreement or seeking material damages in connection therewith.
(d) All consents and approvals of Governmental Entities
(including, without limitation, consents under the HSR Act or termination or
expiration of the applicable waiting period thereunder) or third parties
necessary for consummation by the Sellers and/or AIG of the transactions
contemplated hereby shall have been obtained, other than those which, if not
obtained, would not have a material adverse effect on the business, operations,
assets, liabilities or condition (financial or otherwise) of AIG.
(e) The Buyer shall have furnished the Sellers with such
certificates of its officers and others to evidence its compliance with the
conditions set forth in Section 6.01(a)-(d) as may be reasonably requested by
the Sellers.
(f) The Buyer, the Sellers' Agent, the Sellers and the Escrow
Agent shall have entered into the Escrow Agreement, in substantially the form
attached hereto as EXHIBIT E.
(g) AIG, the Sellers' Agent and the Sellers shall have
entered into the Royalty Agreement, in substantially the form attached hereto as
EXHIBIT F.
6.2 CONDITIONS TO THE OBLIGATIONS OF THE BUYER. The obligations of
the Buyer to consummate the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions, any
one or more of which may be waived in writing by the Buyer:
(a) The representations and warranties of the Sellers contained
herein, taken as a whole, shall be true and correct in all material respects at
and as of the Closing Date as though such representations and warranties were
made at and as of such date.
(b) The Sellers shall have performed and complied in all material
respects with all agreements, obligations, covenants and conditions required by
this Agreement to be performed or complied with by the Sellers on or prior to
the Closing Date.
(c) No statute, rule, regulation, executive order, decree,
preliminary or permanent injunction or restraining order shall have been
enacted, entered, promulgated or enforced by any Governmental Entity which
prohibits or restricts the consummation of the
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transactions contemplated hereby. No action or proceeding by any Governmental
Entity shall have been commenced (and be pending) against the Buyer or any of
its Affiliates, associates, officers or directors seeking to prevent or delay
the transactions contemplated hereby or challenging any of the terms or
provisions of this Agreement or seeking material damages in connection
therewith.
(d) All consents and approvals of Governmental Entities
(including, without limitation, consents under the HSR Act or termination or
expiration of the applicable waiting period thereunder) or third parties
necessary for consummation by the Buyer of the transactions contemplated hereby
or the ongoing operation of the Business subsequent to the Closing shall have
been obtained, other than those which, if not obtained, would not have a
Material Adverse Effect.
(e) The Sellers shall have furnished the Buyer with such
certificates of the Sellers' Agent to evidence the compliance with the
conditions set forth in Section 6.2(a) to (d) as may be reasonably requested by
the Buyer.
(f) The Buyer, the Sellers' Agent, the Sellers and the Escrow
Agent shall have entered into the Escrow Agreement, in substantially the form
attached hereto as EXHIBIT E.
(g) AIG, the Sellers' Agent and the Sellers shall have
entered into the Royalty Agreement, in substantially the form attached hereto as
EXHIBIT F.
(h) The Buyer shall have received from counsel to the Sellers
an opinion with respect to the matters set forth in EXHIBIT G attached hereto,
addressed to the Buyer and dated as of the Closing Date.
(i) The Sellers shall, at their expense (and at no cost to
the Buyer and/or AIG), have caused to be cancelled (i) all outstanding options,
warrants, convertible securities or other rights to purchase or subscribe for
any capital stock of AIG, and (ii) any options, warrants, convertible securities
or other such rights in any of the other Companies held by employees of any such
Companies.
(j) No Material Adverse Effect, or event or condition which
could reasonably be expected to result in or give rise to a Material Adverse
Effect, shall have occurred since the date hereof.
(k) No unsatisfied liens for the failure to pay Taxes of any
nature whatsoever shall exist against the Companies, or against or in any way
affecting any Shares.
(l) The Buyer shall have received the proceeds of the
Financing pursuant to the Debt Commitments.
(m) The Buyer shall have entered into an employment
agreement, on terms satisfactory to the Buyer, with Michael H. Dunn, in
substantially the form attached hereto as EXHIBIT H.
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(n) Except for any directors as to whom the Buyer has waived
this condition, each of the Companies shall deliver the written resignations of
all directors of each such Company effective as of the Closing Date.
(o) The agreements set forth in SECTION 3.24 of the
Disclosure Schedule and any other similar agreements providing for management or
consulting fees payable to Wind Point, the other Sellers or any of their
respective Affiliates (other than agreements entered into as of the date hereof)
shall be terminated with no further liability or obligation on the part of AIG,
the Buyer or any of their respective Affiliates following the Closing Date.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 TERMINATION. This Agreement may be terminated at any time prior
to the Closing Date:
(a) by mutual consent of the Buyer and Sellers holding a
majority of the Shares;
(b) by the Sellers holding a majority of the Shares or by the
Buyer at any time on or after 5:00 p.m. on October 31, 1998, PROVIDED, HOWEVER,
that (i) such October 31, 1998 date shall be extended in the event that there
shall then exist, and to the extent reasonably required in order for either
party to respond to, any pending request for further information in connection
with compliance under the HSR Act, and (ii) the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any party (A) who
shall then be in material breach or default of any of its representations,
warranties or covenants under this Agreement, or (B) whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date;
(c) by the Buyer, if there has been a material violation or
breach by the Sellers of any agreement, representation or warranty contained in
this Agreement which has rendered the satisfaction of any condition to the
obligations of the Buyer impossible and such violation or breach has not been
waived by the Buyer or cured by the Sellers (following reasonable notice) to the
Buyer's reasonable satisfaction;
(d) by the Buyer, if a matter or problem resulting in a
Material Adverse Effect has occurred or been discovered and, following
reasonable notice to the Sellers, not been resolved to the Buyer's sole
satisfaction;
(e) by the Buyer, if there shall be in effect or announced to
occur any labor strike, work stoppage, slowdown or other such event or condition
relating to any material portion of the operations of AIG; or
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(f) by the Sellers holding a majority of the Shares, if there
has been a material violation or breach by the Buyer of any agreement,
representation or warranty contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of the Sellers impossible and
such violation or breach has not been waived by the Sellers or cured by the
Buyer (following reasonable notice) to the Sellers' reasonable satisfaction.
7.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination
of this Agreement and abandonment of the transactions contemplated hereby by
either party pursuant to Section 7.1, written notice thereof shall forthwith be
given to the other party and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by the parties
hereto. If this Agreement is terminated as provided herein, this Agreement,
other than the obligations of each party under Sections 5.6, 5.9, 5.15 and 7.3
hereof, shall forthwith become null and void, without any liability on the part
of either party hereto, or any Subsidiaries or Affiliates of, or any officers,
directors or employees of, either party. Nothing contained in this Section 7.2
shall relieve either party of liability for a breach of any of its covenants or
agreements contained in this Agreement.
7.3 CERTAIN PAYMENTS UPON TERMINATION.
(a) Upon any termination of this Agreement (i) by the Buyer,
or (ii) by the Sellers pursuant to Section 7.1(f) hereof, then, provided that
the representations and warranties made by the Sellers in this Agreement are
then true and correct in all material respects and the Sellers have performed
all of their covenants and obligations under this Agreement, the Buyer shall
immediately pay to the Sellers' Agent (for the ratable benefit of the Sellers),
by wire transfer of immediately available funds, the sum of $750,000 in
reimbursement for and in consideration of, among other things, the Sellers'
time, expenses and lost opportunity costs; PROVIDED, HOWEVER, that no payment
shall be required under this Section 7.3(a) if, at the time of termination of
this Agreement, (A) there exists a material deviation (as hereinafter defined)
affecting AIG, (B) Michael H. Dunn is not ready, willing and able to enter into
and perform his employment agreement substantially in the form of EXHIBIT H, (C)
there is in effect or announced to occur any labor strike, work stoppage,
slowdown or other such event or condition relating to any material portion of
the operations of AIG, (D) there is pending any litigation, action, proceeding
or Order enjoining or restraining, or which seeks to enjoin or restrain, the
consummation of the transactions contemplated by this Agreement, or (E) the
required consent of any governmental agency has not been obtained or is not in
effect. As used herein, the term "material deviation" means either of (x) a
reduction of 5% or more in AIG's aggregate net asset value from that reflected
in the consolidated balance sheet of AIG as of June 30, 1998, or (y) a negative
variation of 10% or more in AIG's consolidated earnings before interest, taxes,
depreciation and amortization from that reflected in AIG's budgeted performance
for the period of January 1, 1998 through the close of the most recent fiscal
month of AIG prior to the date of termination of this Agreement, in either case
without giving effect to adjustments relating to foreign currency translation or
current and deferred income tax expenses; and PROVIDED, FURTHER, HOWEVER, that
no payment shall be required under this Section 7.3(a) if the Buyer has
terminated this Agreement pursuant to Section 7.1(b) of this Agreement and the
reason for such termination is the failure of the Buyer to satisfy the closing
condition set forth in Section 6.2(l) hereof due to
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the absence of a new union contract in effect with respect to the union
employees at AIG's Okmulgee, Oklahoma manufacturing facility.
(b) Upon any termination of this Agreement (i) by the Buyer
pursuant to Section 7.1(c) hereof, or (ii) by the Sellers other than pursuant to
Section 7.1(b) if such termination occurs after December 31, 1998, or 7.1(f)
hereof, then the Sellers shall, jointly and severally, immediately pay to the
Buyer, by wire transfer of immediately available funds, the sum of $750,000 in
reimbursement for and in consideration of, among other things, the Buyer's time,
expenses and lost opportunity costs.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 GENERAL.
(a) From and after the Closing Date, the Sellers shall
defend, indemnify and hold harmless the Buyer (which shall, for purposes of this
Article VIII, include its Affiliates, each of their respective directors and
officers, and each of their heirs, executors, successors and assigns of any of
the foregoing) from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties, costs of investigation and reasonable attorneys'
fees, that the Buyer may incur, sustain or suffer ("Losses") as a result of any
breach of, or failure by the Sellers to perform, any of the representations,
warranties, covenants or agreements of the Sellers contained in this Agreement.
Notwithstanding the foregoing, Losses shall not include claims for
misrepresentation or breach of warranty under Section 3.6 of this Agreement.
(b) From and after the Closing Date, the Buyer shall defend,
indemnify and hold harmless the Sellers (which shall, for purposes of this
Article VIII, include its Affiliates, each of their respective directors and
officers, and each of their heirs, executors, successors and assigns of any of
the foregoing) from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties, costs of investigation and reasonable attorneys'
fees, that the Sellers may incur, sustain or suffer as a result of any breach
of, or failure by Buyer to perform, any of the representations, warranties,
covenants or agreements of the Buyer contained in this Agreement.
(c) The obligations of indemnity of each of the Sellers
described in Section 8.1(a) of this Agreement shall be several, and not joint,
in accordance with their proportionate interests in the Shares as reflected in
EXHIBIT B hereto; PROVIDED, HOWEVER, that if the Buyer is unable, after
exercising reasonable efforts to collect on any specific Losses from one or more
of the Sellers who are not then affiliated with the Buyer, including, but not
limited to, Henry Fleck and Richard Krant (the "Defaulting Sellers"), then Wind
Point shall perform and satisfy the indemnification obligation of the Defaulting
Sellers hereunder to the Buyer with respect to such Losses on a several basis.
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8.2 LIMITATIONS ON CERTAIN INDEMNITY.
(a) Notwithstanding any other provision of this Agreement to
the contrary, except with respect to any Losses involving proven fraud by any of
the Sellers and except as specified in Section 8.2(c) with respect to
Environmental Claims (as defined below), the Sellers shall not be liable to the
Buyer with respect to Losses unless and then only to the extent that the
aggregate amount of all Losses incurred by the Buyer and not paid for by
applicable insurance shall exceed the sum of $500,000 (the "General Basket").
Except as specified in Section 8.2(c), the Sellers shall thereafter be liable
for all Losses in excess of the Basket, up to a maximum aggregate liability
equal to $4,000,000 (the "Cap"), provided that there shall not be counted
against the General Basket or such limitation of liability, and the General
Basket and such limitation of liability shall not apply to, any Losses involving
proven fraud by any of the Sellers.
(b) The Buyer shall be entitled to indemnification by the
Sellers for Losses only in respect of claims for which notice of claim shall
have been given to the Sellers on or before December 31, 1999, or, (i) with
respect to Losses relating to a breach of any warranties under Sections 3.13 and
3.22 hereof, the expiration of the final statute of limitations for those tax
returns and/or reports covered by the warranties under Sections 3.13 and 3.22
hereof, (ii) with respect to Losses for which indemnification may be sought
under Section 3.18 hereof ("Environmental Claims"), on or before the third
anniversary of the Closing Date unless, prior to such date, the Buyer has
notified in reasonable detail the Sellers of a claim for indemnity hereunder;
PROVIDED, HOWEVER, that the Buyer shall not be entitled to indemnification
hereunder in the event that the subject claim for indemnification relates to a
third-party claim and the Buyer delayed giving notice thereof to the Sellers to
such an extent as to cause material prejudice to the defense of such third-party
claim, or (iii) with respect to Losses relating to a breach of warranties under
Article II hereof, without limitation as to time. Any claim for indemnification
by the Buyer under this Section 8.2 shall be paid first from the Escrow Fund in
accordance with the procedures set forth in the Escrow Agreement.
(c) Notwithstanding the provisions of Section 8.2(a) as to
the limitations of liability payable by the Sellers hereunder, the following
provisions shall apply to any Environmental Claims by the Buyer for
indemnification:
(i) As to any Environmental Claims relating to or
involving AIG's existing manfacturing facility located in Crespin, France or
AIG's former facility located in Port Carbon, Pennsylvania (together, the
"Special Facilities"), the Buyer shall be entitled to indemnification only if
the subject Losses involve proven fraud by any of the Sellers or if the
aggregate amount of all such other (i.e., non-fraud) Losses for which
indemnification is otherwise available hereunder exceeds $600,000 (the "Special
Environmental Basket"). If the Special Environmental Basket has been reached,
then, with respect to non-fraud Losses relating to the Special Facilities only,
the Sellers shall promptly pay, as incurred, two-thirds of the amount of any
such Losses incurred by the Buyer or AIG in excess of the Special Environmental
Basket, with the Buyer retaining the balance of any such Losses, but the
additional amount of indemnification payable by the Sellers under this Section
8.2(c), when aggregated with all other
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indemnification payments by the Sellers under this Article VIII (other than
Losses involving proven fraud by any of the Sellers) shall not exceed the Cap.
(ii) As to any Environmental Claims relating to or
involving any facilities of AIG other than the Special Facilities, the Buyer
shall be entitled to indemnification from the Sellers who shall promptly pay, as
incurred, two-thirds of the amount of any Losses incurred by the Buyer or AIG,
with the Buyer retaining the balance of any such Losses, with no deduction with
respect to the General Basket or Special Environmental Basket, except that the
aggregate amount of indemnification payable by the Sellers under this Article
VIII (other than Losses involving proven fraud by any of the Sellers) shall not
exceed the Cap.
8.3 CLAIMS FOR INDEMNITY. Whenever a claim shall arise for which any
party shall be entitled to indemnification hereunder, the indemnified party
shall notify the indemnifying party in writing within thirty (30) days of the
indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties shall attempt to settle and compromise the same or may
agree to submit the same to arbitration or, if unable or unwilling to do any of
the foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement, compromise,
arbitration or litigation shall promptly thereafter be paid and satisfied by
those indemnifying parties obligated to make indemnification hereunder.
8.4 RIGHT TO DEFEND. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its Affiliates, the
indemnifying party shall be entitled (without prejudice to the indemnified
party's right to participate at its own expense through counsel of its own
choosing), at its expense and through a single counsel of its own choosing, to
defend or prosecute such claim in the name of the indemnifying party, or if
necessary, in the name of the indemnified party. In any event, the indemnified
party shall give the indemnifying party advance written notice of any proposed
compromise or settlement of any such claim. If the remedy sought in any such
action or demand is solely money damages, the indemnifying party shall have
fifteen (15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the indemnifying
party shall be required to undertake, conduct and control, though counsel of its
own choosing and at its sole expense, the settlement or defense thereof, and the
indemnified party shall cooperate with the indemnifying party in connection
therewith.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
the parties at any time prior to the Closing Date with respect to any of the
terms contained herein.
9.2 WAIVER OF COMPLIANCE; CONSENTS. Any failure of any of the
parties to comply with any obligation, covenant, agreement or condition
contained herein may be waived by the party entitled to the benefits thereof,
but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
9.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
If to the Sellers or
Sellers' Agent to: ; Wind Point Partners
676 North Michigan Avenue, Suite 3300
Chicago, IL 60611
Attention: Mr. Richard Kracum
with a copy to: Hogan & Hartson, LLP
555 Thirteenth Street, NW
Washington, DC 20004
Attention: J. Hovey Kemp, Esq.
If to the Buyer to: PolyVision Corporation
48-62 36th Street
Long Island City, NY 11101
Attention: Mr. Joseph A. Menniti
President and
Chief Executive Officer
-and-
Mr. Bragi F. Schut, Director
c/o The Alpine Group, Inc.
1790 Broadway, 15th Floor
New York, NY 10019
with a copy to: Greenberg Traurig
The MetLife Building
200 Park Avenue, 15th Floor
New York, NY 10166
Attention: Richard M. Zaroff, Esq. and
Spencer G. Feldman, Esq.
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or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
9.4 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party hereto without the prior written consent of the other party, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder, PROVIDED, HOWEVER, that the Buyer may, without
requirement of any consent of any of the Sellers, assign (a) any or all of its
rights and interests hereunder to a wholly-owned Subsidiary (in any or all of
which cases the Buyer nonetheless shall remain liable and responsible for the
performance of all of its obligations hereunder), and (b) any or all of its
rights (including, without limitation, rights to indemnification) hereunder to
any financial institution(s) or other lender(s) providing financing to the Buyer
and/or AIG from time to time.
9.5 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by the laws of the State of New York (regardless of the laws that might
otherwise govern under applicable New York principles of conflicts of law) as to
all matters, including but not limited to matters relating to validity,
construction, effect, performance and remedies. Each of the parties agrees to
(i) the irrevocable designation of the Secretary of State of the State of New
York as its agent upon whom process against it may be served and (ii) personal
jurisdiction in any action brought in any court, federal or state, within the
State of New York, County of New York having subject matter jurisdiction arising
under this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.7 INTERPRETATION. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
9.8 ENTIRE AGREEMENT. This Agreement, including the documents,
schedules, certificates and instruments referred to herein, the letter dated
June 29, 1998 to Steven Elbaum from Michael H. Dunn and the Confidentiality
Agreements, embody the entire agreement and understanding of the parties hereto
in respect of the transactions contemplated by this Agreement. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such transactions other than the Confidentiality Agreements.
9.9 FACSIMILE SIGNATURE. This Agreement may be executed manually or
by facsimile signature, receipt of which is confirmed. In the case of signatures
sent by facsimile, signatures manually affixed shall be subsequently sent to all
parties.
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IN WITNESS WHEREOF, the Sellers and the Buyer have caused to be signed
by their duly authorized officers this Agreement as of the date first above
written.
POLYVISION CORPORATION
By: /s/ JOSEPH A. MENNITI
---------------------------
Name: Joseph A. Menniti
Title: President and CEO
ALLIANCE INTERNATIONAL GROUP, INC.
By: /s/ MICHAEL H. DUNN
---------------------------
Name: Michael H. Dunn
Title: President and CEO
SELLERS:
WIND POINT PARTNERS III, L.P.
By: Wind Point Partners, its General Partner
(As a Seller and Sellers' Agent)
By: /s/ RICHARD R. KRACUM
---------------------------
Name: Richard R. Kracum
Title: Managing Member
/s/ MICHAEL H. DUNN
------------------------------
Michael H. Dunn
/s/ HENRY FLECK
------------------------------
Henry Fleck
/s/ ROBERT KROL
------------------------------
Robert Krol
/s/ RICHARD J. STILL
------------------------------
Richard J. Still
/s/ RICHARD BERRY
------------------------------
Richard Berry
/s/ RICHARD KRANT
------------------------------
Richard Krant
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POLYVISION CORPORATION
48-62 36th Street
Long Island City, New York 11101
November 20, 1998
Wind Point Partners
676 North Michigan Avenue
Suite 3300
Chicago, Illinois 60611
Attention: Mr. Richard R. Kracum
Dear Sirs:
PolyVision Corporation, a New York corporation (the "Buyer"),
Alliance International Group, Inc., a Delaware corporation ("AIG"), Wind
Point Partners III, L.P., a Delaware limited partnership ("Wind Point"), and
the other stockholders of AIG (together with Wind Point, the "Sellers") have
entered into a Stock Purchase Agreement, dated as of September 1, 1998 (the
"Purchase Agreement"), which they now desire to amend and modify as follows.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
1. SEPARATE PURCHASE OF FOREIGN SUBSIDIARIES. The Buyer,
AIG and the Sellers have agreed to restructure the transactions contemplated
by the Purchase Agreement to permit the Buyer to purchase the outstanding
capital stock of each of Alliance Europe and Aubecq (together, the "European
Subsidiaries") in separate transactions. In this regard, the parties agree
that (i) the closings of such separate acquisitions shall be occur
immediately prior to the Closing, (ii) the Purchase Price shall be allocated
as set forth below to reflect such separate acquisitions, and shall be paid
in the same manner as provided in Section 1.3 of the Purchase Agreement,
(iii) Section 1.3(b) of the Purchase Agreement shall apply as if AIG and the
European Subsidiaries were acquired in a single transaction, (iv) the Buyer
shall bear all out-of-pocket costs of implementing such restructuring, and
shall indemnify and reimburse the Sellers for any such costs, including but
not limited to Taxes paid and reasonable attorneys' fees of the Sellers, and
(v) the terms and conditions of the purchase and sale of the capital stock of
the European Subsidiaries otherwise shall be made on the same terms and
conditions as the purchase and sale of the Shares under the Purchase
Agreement to the extent such terms and conditions are relevant to the
purchase and sale of the capital stock of the European Subsidiaries. The
indemnities made by the Sellers in the Purchase Agreement shall be applicable
to and enforceable by each Purchaser under, and as defined in, the Share
Purchase Agreements relating to the sale of the capital stock of the European
Subsidiaries, the forms of which are attached as EXHIBIT 1 hereto.
Accordingly, immediately prior to the Closing, the Sellers
shall cause (a) first, AIG to cause Alliance Europe and Alliance Pentagon to
assign, convey and transfer to a wholly-owned French subsidiary of the Buyer
all of the outstanding capital stock of Aubecq in consideration for
U.S.$4,000,000, and (b) second, AIG to assign, convey and transfer to a
wholly-owned Belgian subsidiary of the Buyer all of the outstanding capital
stock of Alliance Europe in consideration for U.S.$7,000,000. Alliance
Europe shall use the purchase price received in the sale of its capital stock
<PAGE>
of Aubecq to reduce the outstanding revolving credit borrowings of Alliance
Europe to KBC Bank N.V. (formerly Kredietbank N.V.). Each of the Sellers,
AIG and the Buyer shall use their best efforts to obtain any and all
approvals and consents required for these separate transactions prior to the
Closing Date.
2. NEW AIG SHAREHOLDERS. Wind Point has advised the Buyer
that, subsequent to the execution of the Purchase Agreement, there have been
certain changes to the list of Sellers attached as Exhibit B to the Purchase
Agreement, including the addition of new AIG shareholders and transfers by
certain of the Sellers. EXHIBIT 2 hereto contains a true and complete list
of the names and addresses of the holders of record of all of the Shares, and
the number of Shares held by each such Seller, on the date hereof. Pursuant
to Section 5.17 of the Purchase Agreement, by executing this letter
agreement, each of the new AIG shareholders, namely Gerard Thys, Lynn M.
Turner, Immaculate Conception Congregation and Wind Point III Executive
Advisor Partners, L.P., agrees with the Buyer and the other parties to the
Purchase Agreement to be a "Seller" for all purposes of the Purchase
Agreement and this letter agreement and to be bound by and comply with all
the provisions of the Purchase Agreement governing the Sellers, and all
Shares acquired by them shall be held subject to the provisions of the
Purchase Agreement.
As indicated on EXHIBIT 2, it is understood that The
Northwestern Mutual Life Insurance Company ("NML"), which holds warrants to
acquire certain shares of capital stock of AIG, intends prior to Closing to
exchange its warrants for a pro rata portion of the Purchase Price which will
be paid to NML as though it were a Seller under the Purchase Agreement,
Seller Note (as defined below) and Royalty Agreement, notwithstanding that
NML will not execute such agreements. Pursuant to a warrant exchange
agreement between AIG and NML, under which NML's warrant will be surrendered
and cancelled, NML shall also be entitled to its pro rata portion of any
rights or obligations under the Seller Note and Royalty Agreement.
3. MODIFICATION OF PURCHASE PRICE CONSIDERATION. The
Sellers have agreed to accept, in payment of $8,000,000 of the Cash Portion
of the Purchase Price, a Convertible Subordinated Promissory Note of the
Buyer in the principal amount of $8,000,000 payable to the Sellers' Agent on
behalf of the Sellers, in the form of EXHIBIT 3 hereto (the "Seller Note").
Accordingly, on the Closing Date, the Buyer (a) shall pay to the Sellers, in
accordance with the terms of Section 1.3 of the Purchase Agreement,
$67,000,000 of the Cash Portion of the Purchase Price (minus (i) the
principal and interest and all other charges of indebtedness other than the
prepayment premium to NML, plus (ii) one-half of the prepayment premium on
the indebtedness owed to NML, up to a maximum payment by the Buyer of
$800,000) and (b) shall deliver the Seller Note to the Sellers' Agent.
4. MODIFICATION OF ROYALTY AGREEMENT. The Sellers and AIG
have agreed that the Sellers who are currently employees of AIG and the
Immaculate Conception Congregation shall forego their participation in any
payments which may be due to them now or in the future under the Royalty
Agreement, which has been modified to reflect this arrangement, and that the
Sellers listed on EXHIBIT 4 shall sign and be the beneficiaries of the
Royalty Agreement in the percentages listed thereon.
5. ELIMINATION OF ESCROW AGREEMENT. The Buyer and the
Sellers agree to eliminate the requirement of an Escrow Deposit pursuant to
Section 1.4 of the Purchase Agreement.
2
<PAGE>
Notwithstanding the foregoing, the Sellers acknowledge and agree that the
principal amount of the Seller Note shall be subject to offset by
indemnifiable Losses of the Buyer arising under Section 8.2 of the Purchase
Agreement in the same manner and to the same extent as previously described
in the Escrow Agreement attached as Exhibit E to the Purchase Agreement.
6. CLARIFICATION TO SECTION 8.2(C). Notwithstanding the
disclosures set forth in the Environmental Reports referred to in Section
3.18 of the Disclosure Schedule, the environmental indemnity obligations of
the Sellers contained in Section 8.2(c) of the Purchase Agreement include the
remediation requirements under Environmental Laws with respect to Crespin,
France and Port Carbon, Pennsylvania.
7. ALPINE EQUITY INVESTMENT. The Buyer will, on or prior to
the Closing, receive $5,000,000 cash from The Alpine Group, Inc. in
consideration of shares of the Buyer's Series C Convertible Preferred Stock
having the rights, restrictions, privileges and preferences as set forth in
the Certificate of Amendment of the Certificate of Incorporation of the
Buyer, a copy of which has been previously delivered to the Sellers' Agent.
8. CONFIDENTIALITY. The Buyer and the Sellers agree that
none of them will disclose, or permit any disclosure of, the existence, terms
or conditions of this letter agreement, except as, and only to the extent,
required by law or valid judicial process. Each of the Buyer and the Sellers
shall exhaust all legal defenses and remedies reasonably available to avoid
any such disclosure in the event that any legal claim or other judicial
process is asserted or utilized seeking to compel such disclosure.
9. THIRD PARTY RIGHTS. Except as otherwise expressly set
forth in Section 9.4 of the Purchase Agreement or, with respect to NML, as
set forth in the second paragraph of Section 2 above, the Purchase Agreement
as amended by this letter agreement shall inure to the sole benefit of the
parties thereto, and the Purchase Agreement as amended by this letter
agreement shall create no rights or benefits in any other Person.
10. EFFECT ON PURCHASE AGREEMENT; MISCELLANEOUS. The
Purchase Agreement shall be deemed to be amended and modified by the terms of
this letter agreement. Except as so amended and modified, all of the terms
and conditions of the Purchase Agreement shall remain in full force and
effect. This letter agreement shall be governed by the laws of the State of
New York and may be executed in one or more counterparts which together shall
constitute one instrument.
3
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to the Buyer the enclosed counterpart of this letter,
whereupon this letter shall constitute a binding agreement between the Buyer,
AIG and the Sellers in accordance with its terms.
Very truly yours,
POLYVISION CORPORATION
By: /s/ JOSEPH A. MENNITI
----------------------------
Joseph A. Menniti
President and Chief Executive Officer
Agreed to and Accepted
as of the date first written above:
ALLIANCE INTERNATIONAL GROUP, INC.
By: /s/ MICHAEL H. DUNN
------------------------------
Michael H. Dunn
President and Chief Executive Officer
WIND POINT PARTNERS III, L.P.
By: Wind Point Partners, its General Partner
(as a Seller and Sellers' Agent)
By: /s/ RICHARD R. KRACUM
------------------------------
Richard R. Kracum
Managing Member
/s/ MICHAEL H. DUNN
- ---------------------------------
Michael H. Dunn
/s/ HENRY FLECK
- ---------------------------------
Henry Fleck
/s/ ROBERT KROL
- ---------------------------------
Robert Krol
/s/ RICHARD J. STILL
- ---------------------------------
Richard J. Still
/s/ RICHARD BERRY
- ---------------------------------
Richard Berry
4
<PAGE>
/s/ RICHARD KRANT
- ---------------------------------
Richard Krant
/s/ GERARD THYS
- ---------------------------------
Gerard Thys
/s/ LYNN M. TURNER
- ---------------------------------
Lynn M. Turner
IMMACULATE CONCEPTION CONGREGATION
(a non-profit religious organization)
By: /s/ DAVID H. REITH
------------------------------
Name: David H. Reith
Title: Authorized Signatory
WIND POINT III EXECUTIVE ADVISOR PARTNERS, L.P.
By: Wind Point Partners, its General Partner
By: /s/ RICHARD R. KRACUM
------------------------------
Richard R. Kracum
Managing Member
5
<PAGE>
Exhibit 10.32
CREDIT AGREEMENT
Dated as of November 20, 1998
among
POLYVISION CORPORATION,
POSTERLOID CORPORATION AND GREENSTEEL, INC.,
AS BORROWERS,
THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
AS INITIAL LENDERS,
FLEET NATIONAL BANK,
as European Letter of Credit Bank,
as Initial Issuing Bank,
as Swing Line Bank
and
AS ADMINISTRATIVE AGENT
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . 2
SECTION 1.2 Computation of Time Periods. . . . . . . . . . . . . . . . 34
SECTION 1.3 Accounting Terms; Foreign Currency . . . . . . . . . . . . 34
SECTION 1.4 Other Definitional Provisions. . . . . . . . . . . . . . . 34
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT 35
SECTION 2.1 The Advances . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.2 Making the Advances. . . . . . . . . . . . . . . . . . . . 37
SECTION 2.3 Issuance of and Drawings and Reimbursement
Under Letters of Credit . . . . . . . . . . . . . . . . 40
SECTION 2.4 Repayment of Advances. . . . . . . . . . . . . . . . . . . 41
SECTION 2.5 Reduction or Termination of the Commitments. . . . . . . . 43
SECTION 2.6 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.7 Interest . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 2.8 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 2.9 Conversion of Advances . . . . . . . . . . . . . . . . . . 50
SECTION 2.10 Increased Costs, Etc. . . . . . . . . . . . . . . . . . . 51
SECTION 2.11 Payments and Computations . . . . . . . . . . . . . . . . 53
SECTION 2.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 2.13 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . 56
SECTION 2.14 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 57
SECTION 2.15 Defaulting Lenders. . . . . . . . . . . . . . . . . . . . 57
SECTION 2.16 Domicile of Loans. . . . . . . . . . . . . . . . . . . . 59
SECTION 2.17 European Letters of Credit. . . . . . . . . . . . . . . . 59
SECTION 2.18 Joint and Several Liability of Borrowers. . . . . . . . . 61
ARTICLE 3
CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 3.1 Conditions Precedent to Initial Extension of Credit. . . . 63
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance. . . . 71
SECTION 3.3 Conditions Precedent to Issuance of European
Letters of Credit. . . . . . . . . . . . . . . . . . . . . 72
SECTION 3.4 Determinations Under Section 3.1 . . . . . . . . . . . . . 73
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS . . . . . . . . . . . . 73
<PAGE>
SECTION 4.1 Corporate Existence. . . . . . . . . . . . . . . . . . . . 73
SECTION 4.2 Organization and Subsidiaries. . . . . . . . . . . . . . . 73
SECTION 4.3 Corporate Power, Authorization . . . . . . . . . . . . . . 74
SECTION 4.4 Governmental and Other Authorizations, Approvals . . . . . 74
SECTION 4.5 Due Execution, Validity, Enforceability. . . . . . . . . . 74
SECTION 4.6 Financial Statements . . . . . . . . . . . . . . . . . . . 75
SECTION 4.7 Pro Forma Financial Statements; Projections. . . . . . . . 75
SECTION 4.8 Accurate Information . . . . . . . . . . . . . . . . . . . 75
SECTION 4.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 4.10 Regulation U . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 4.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 4.12 Casualty. . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 4.13 Environmental Matters. . . . . . . . . . . . . . . . . . . 76
SECTION 4.14 Burdensome Documents . . . . . . . . . . . . . . . . . . . 78
SECTION 4.15 Priority of Liens. . . . . . . . . . . . . . . . . . . . . 78
SECTION 4.16 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 4.17 Compliance with Securities Laws . . . . . . . . . . . . . 79
SECTION 4.18 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 4.19 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 4.20 No Defaults, Compliance with Laws. . . . . . . . . . . . . 79
SECTION 4.21 Owned Real Property. . . . . . . . . . . . . . . . . . . . 80
SECTION 4.22 Leased Real Property . . . . . . . . . . . . . . . . . . . 80
SECTION 4.23 Material Contracts . . . . . . . . . . . . . . . . . . . . 80
SECTION 4.24 Investments. . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 4.25 Intellectual Property. . . . . . . . . . . . . . . . . . . 80
SECTION 4.26 AIG Acquisition Documents. . . . . . . . . . . . . . . . . 81
SECTION 4.27 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 4.28 Government Consents for Conduct of Business. . . . . . . . 81
SECTION 4.29 Mergers. . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE 5
AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 5.1 Compliance with Law. . . . . . . . . . . . . . . . . . . . 82
SECTION 5.2 Payment of Taxes, Etc. . . . . . . . . . . . . . . . . . . 82
SECTION 5.3 Compliance with Environmental Laws . . . . . . . . . . . . 83
SECTION 5.4 Preparation of Environmental Reports . . . . . . . . . . . 83
SECTION 5.5 Maintenance of Insurance . . . . . . . . . . . . . . . . . 84
SECTION 5.6 Preservation of Corporate Existence, Etc. . . . . . . . . 84
SECTION 5.7 Visitation Rights. . . . . . . . . . . . . . . . . . . . 84
SECTION 5.8 Keeping of Books . . . . . . . . . . . . . . . . . . . . . 85
SECTION 5.9 Maintenance of Properties, Etc . . . . . . . . . . . . . . 85
SECTION 5.10 Compliance with Terms of Leaseholds . . . . . . . . . . . 85
SECTION 5.11 Performance of Material Contracts . . . . . . . . . . . . 85
ii
<PAGE>
SECTION 5.12 Transactions with Affiliates . . . . . . . . . . . . . . . 85
SECTION 5.13 Agreement to Grant Additional Security. . . . . . . . . . 85
Section 5.14 Interest Rate Protection. . . . . . . . . . . . . . . . . 87
SECTION 5.15 Performance of AIG Acquisition Documents . . . . . . . . 87
SECTION 5.16 Year 2000 Compatibility . . . . . . . . . . . . . . . . . 88
SECTION 5.17 Cash Concentration or Blocked Accounts. . . . . . . . . . 88
SECTION 5.18 Intercompany Subordination Agreement . . . . . . . . . . . 88
SECTION 5.19 Capital Contributions to PolyVision France. . . . . . . . 88
SECTION 5.20 Pledge of Certain Shares. . . . . . . . . . . . . . . . . 89
SECTION 5.21 Grant of Security Interest in Foreign Debt. . . . . . . . 89
ARTICLE 6
NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 6.1 Liens, Etc.. . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 6.2 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 6.3 Accounts Payable. . . . . . . . . . . . . . . . . . . . . . 92
SECTION 6.4 Fundamental Changes. . . . . . . . . . . . . . . . . . . . 92
SECTION 6.5 Sales, Etc. of Assets. . . . . . . . . . . . . . . . . . . 93
SECTION 6.6 Investments in Other Persons . . . . . . . . . . . . . . . 93
SECTION 6.7 Dividends, Etc . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 6.8 Change in Nature of Business . . . . . . . . . . . . . . . 96
SECTION 6.9 Charter Amendments . . . . . . . . . . . . . . . . . . . . 96
SECTION 6.10 Accounting Changes. . . . . . . . . . . . . . . . . . . . 96
SECTION 6.11 Repayments or Prepayments, Etc. of Debt. . . . . . . . . . 96
SECTION 6.12 Amendment, Etc. of AIG Acquisition Documents . . . . . . . 96
SECTION 6.13 Amendment, Etc. of Material Contracts . . . . . . . . . . 97
SECTION 6.14 Negative Pledge . . . . . . . . . . . . . . . . . . . . . 97
SECTION 6.15 Partnerships, New Subsidiaries . . . . . . . . . . . . . . 98
SECTION 6.16 Speculative Transactions . . . . . . . . . . . . . . . . . 98
SECTION 6.17 Capital Expenditures . . . . . . . . . . . . . . . . . . . 98
SECTION 6.18 Issuance of Stock . . . . . . . . . . . . . . . . . . . . 99
SECTION 6.19 Limitations on Operating Leases . . . . . . . . . . . . . 99
SECTION 6.20 No Consignment Sales. . . . . . . . . . . . . . . . . . . 99
SECTION 6.21 Certain Inactive Subsidiaries. . . . . . . . . . . . . . . 99
SECTION 6.22 Retention of Cash . . . . . . . . . . . . . . . . . . . . 99
SECTION 6.23 Management Fees. . . . . . . . . . . . . . . . . . . . . . 100
ARTICLE 7
REPORTING REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 7.1 Default Notice . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 7.2 Monthly Financials . . . . . . . . . . . . . . . . . . . . 100
SECTION 7.3 Quarterly Financials . . . . . . . . . . . . . . . . . . . 100
SECTION 7.4 Annual Financials . . . . . . . . . . . . . . . . . . . . . 101
iii
<PAGE>
SECTION 7.5 Annual Forecasts. . . . . . . . . . . . . . . . . . . . . . 101
SECTION 7.6 ERISA Events and ERISA Reports . . . . . . . . . . . . . . 101
SECTION 7.7 Plan Terminations. . . . . . . . . . . . . . . . . . . . . 102
SECTION 7.8 Actuarial Reports . . . . . . . . . . . . . . . . . . . . . 102
SECTION 7.9 Plan Annual Reports . . . . . . . . . . . . . . . . . . . . 102
SECTION 7.10 Annual Plan Summaries. . . . . . . . . . . . . . . . . . . 102
SECTION 7.11 Multiemployer Plan Notices . . . . . . . . . . . . . . . . 102
SECTION 7.12 Litigation. . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 7.13 Securities Reports . . . . . . . . . . . . . . . . . . . . 103
SECTION 7.14 Creditor Reports . . . . . . . . . . . . . . . . . . . . . 103
SECTION 7.15 Agreement Notices . . . . . . . . . . . . . . . . . . . . 103
SECTION 7.16 Revenue Agent Reports . . . . . . . . . . . . . . . . . . 103
SECTION 7.17 Environmental Conditions. . . . . . . . . . . . . . . . . 103
SECTION 7.18 Real Property. . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 7.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 7.20 Borrowing Base Certificate. . . . . . . . . . . . . . . . 104
SECTION 7.21 Management Letters. . . . . . . . . . . . . . . . . . . . 104
SECTION 7.22 Permitted Acquisition Documents . . . . . . . . . . . . . 104
SECTION 7.23 Other Information . . . . . . . . . . . . . . . . . . . . 104
ARTICLE 8
FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 8.1 Consolidated Debt to EBITDA Ratio. . . . . . . . . . . . . 104
SECTION 8.2 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . 105
SECTION 8.3 Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . 106
ARTICLE 9
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 9.1 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 9.2 Representations and Warranties . . . . . . . . . . . . . . 108
SECTION 9.3 Certain Covenants . . . . . . . . . . . . . . . . . . . . . 108
SECTION 9.4 Other Covenants. . . . . . . . . . . . . . . . . . . . . . 108
SECTION 9.5 Other Defaults . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 9.6 Bankruptcy, Etc. . . . . . . . . . . . . . . . . . . . . . 109
SECTION 9.7 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 9.8 Loan Documents. . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 9.9 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 9.10 Change of Control. . . . . . . . . . . . . . . . . . . . . 109
SECTION 9.11 ERISA Events . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 9.12 Borrowing Base Deficiency . . . . . . . . . . . . . . . . 110
SECTION 9.13 Subordination Provisions. . . . . . . . . . . . . . . . . 110
SECTION 9.14 Management . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 9.15 Business Condemnation . . . . . . . . . . . . . . . . . . 111
iv
<PAGE>
SECTION 9.16 Uninsured Losses . . . . . . . . . . . . . . . . . . . . 111
SECTION 9.17 Criminal Forfeiture. . . . . . . . . . . . . . . . . . . 111
SECTION 9.18 Environmental Matters. . . . . . . . . . . . . . . . . . 111
SECTION 9.19 Actions in Respect of the Letters of Credit Upon Default. 112
ARTICLE 10
THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 10.1 Authorization and Action. . . . . . . . . . . . . . . . . 112
SECTION 10.2 Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . 113
SECTION 10.3 Fleet and Affiliates. . . . . . . . . . . . . . . . . . . 113
SECTION 10.4 Lender Party Credit Decision. . . . . . . . . . . . . . . 113
SECTION 10.5 Indemnification . . . . . . . . . . . . . . . . . . . . . 114
SECTION 10.6 Successor Administrative Agents . . . . . . . . . . . . . 115
SECTION 10.7 Events of Default . . . . . . . . . . . . . . . . . . . . 116
ARTICLE 11
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
SECTION 11.1 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 116
SECTION 11.2 Notices Etc . . . . . . . . . . . . . . . . . . . . . . . 117
SECTION 11.3 No Waiver; Remedies; Counterclaims. . . . . . . . . . . . 119
SECTION 11.4 Costs and Expenses. . . . . . . . . . . . . . . . . . . . 119
SECTION 11.5 Right of Set-off. . . . . . . . . . . . . . . . . . . . . 121
SECTION 11.6 Binding Effect. . . . . . . . . . . . . . . . . . . . . . 122
SECTION 11.7 Assignments and Participations. . . . . . . . . . . . . . 122
SECTION 11.8 Execution in Counterparts . . . . . . . . . . . . . . . . 125
SECTION 11.9 No Liability of the Issuing Bank. . . . . . . . . . . . . 125
SECTION 11.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . 126
SECTION 11.11 Termination by Borrower . . . . . . . . . . . . . . . . . 126
SECTION 11.12 Effect of Termination.. . . . . . . . . . . . . . . . . . 126
SECTION 11.13 Further Assurances. . . . . . . . . . . . . . . . . . . . 127
SECTION 11.14 Severability. . . . . . . . . . . . . . . . . . . . . . . 127
Section 11.15 Foreign Exchange Indemnity. . . . . . . . . . . . . . . . 128
SECTION 11.16 Survival of Agreements and Representations; Construction. 128
SECTION 11.17 JURISDICTION, ETC . . . . . . . . . . . . . . . . . . . . 128
SECTION 11.18 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 129
SECTION 11.19 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . 129
SECTION 11.20 FINAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . 129
v
<PAGE>
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Term A Note
Exhibit E - Form of Term B Note
Exhibit F - Form of Notice of Borrowing
Exhibit G-1 - Form of Initial Security Agreement
Exhibit G-2 - Form of AIG Security Agreement
Exhibit H - Form of Collateral Assignment of Lease
Exhibit I - Form of Intellectual Property Security Agreement
Exhibit J - Form of KBC Guaranty
Exhibit K - Form of Subsidiary Guaranty
Exhibit L - Form of Swing Line Note
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule 4.2 - Organization and Subsidiaries
Schedule 4.4 - Required Authorizations and Approvals
Schedule 4.9 - Disclosed Litigation
Schedule 4.11 - Welfare Plans
Schedule 4.13 - Environmental Assessment Reports
Schedule 4.14 - Burdensome Documents
Schedule 4.16 - Open Tax Years
Schedule 4.19(a) - Existing Debt
Schedule 4.19(b) - Surviving Debt
Schedule 4.20 - No Defaults
Schedule 4.21 - Owned Real Estate
Schedule 4.22 - Leased Real Estate
Schedule 4.23 - Material Contracts
Schedule 4.24 - Investments
Schedule 4.25 - Intellectual Property
Schedule 5.5 - Insurance
Schedule 6.1 - Liens
Schedule 6.6(a) - Investments in Subsidiaries
Schedule 6.6(f) - Existing Investments
Schedule 6.18 - Existing Issuances, Etc. of Stock
vi
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of November 20, 1998 by and among
POLYVISION CORPORATION., a New York corporation ("POLYVISION"), POSTERLOID
CORPORATION, a Delaware corporation ("POSTERLOID"), GREENSTEEL, INC., a Delaware
corporation (which is expected to be merged with Alliance America Corporation
and whose name will remain Greensteel, Inc.) (as it exists prior to and after
giving effect to such merger, "GREENSTEEL") (each of PolyVision, Posterloid and
Greensteel, a "BORROWER," and collectively, the "BORROWERS"); the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "INITIAL LENDERS"), FLEET NATIONAL
BANK, as Initial Issuing Bank (the "INITIAL ISSUING BANK"), FLEET NATIONAL BANK,
as the Swing Line Bank (the "SWING LINE BANK"), FLEET NATIONAL BANK, as
administrative agent (together with any successor appointed pursuant to Article
10, the "ADMINISTRATIVE AGENT") for the Lender Parties (as hereinafter defined)
and FLEET NATIONAL BANK, as European Letter of Credit Bank (the "EUROPEAN LETTER
OF CREDIT BANK").
PRELIMINARY STATEMENTS:
(1) Pursuant to a Stock Purchase Agreement, dated September 1, 1998 (as
it may from time to time be amended, supplemented, restated or otherwise
modified to the extent not prohibited under this Agreement, the "AIG ACQUISITION
AGREEMENT"), by and between PolyVision, Alliance International Group, Inc.
("AIG") and the stockholders of AIG, as amended and supplemented by an Amendment
dated on or about the date hereof, PolyVision has agreed to purchase all of the
issued and outstanding common stock of AIG, PolyVision Belgium (such term and
all other undefined terms used in these Preliminary Statements having the
meanings ascribed thereto in Section 1.1) has agreed to purchase all (other than
directors' qualifying shares) of the issued and outstanding common stock of AE
and PolyVision France has agreed to purchase all (other than directors'
qualifying shares) of the issued and outstanding common stock of Aubecq (such
transactions being hereinafter called the "AIG ACQUISITION").
(2) The Borrowers have requested that the Lender Parties make loans to
the Borrowers having an aggregate principal amount at any one time outstanding
of up to Thirty Three Million Eight Hundred Sixty-Nine Thousand Three Hundred
Ninety-Two Dollars ($33,869,392) and issue the European Letters of Credit (more
fully described below) in Belgian Francs ("BEF") in an aggregate face amount at
any one time outstanding of up to approximately Twenty-Sive Million One Hundred
Thirty Thousand Six Hundred Eight ($26,130,608), to be used by the Borrowers (a)
to finance, in part, the AIG Acquisition, (b) to pay transaction fees and
expenses incurred in connection with the AIG Acquisition, (c) to refinance
certain indebtedness of the Borrowers and of AIG, (d) to provide working capital
and finance capital expenditures for the Borrowers, and (e) (with the consent of
the Required Lenders) to
<PAGE>
finance additional acquisitions by the Borrowers, and the Lender Parties have
agreed to make such loans and issue such letters of credit all on and subject to
the terms and conditions of this Agreement;
(3) (a) PolyVision Belgium, PolyVision France, Alliance Europe N.V.
(currently a wholly-owned subsidiary of AIG and which shall on the Closing Date
become a wholly-owned subsidiary of PolyVision Belgium) with its chief executive
office at Zuiderring 56, 3600 Genk Belgium ("AE") and the other European
Borrowers have requested that KBC Bank N.V. (formerly known as Kredietbank
N.V.), a limited liability company incorporated under the laws of Belgium
(hereinafter in its capacity as lender under any of the KBC Loan Agreements,
"KBC"), make available to certain of the European Borrowers a credit facility in
the aggregate principal amount of BEF640,240,846 and (b) AE, Alliance Graphics,
Aubecq and Pentagon have requested that KBC amend and restate a certain existing
credit facility made available to those European Borrowers, and (c) the European
Borrowers have requested that Fleet National Bank issue to KBC (in satisfaction
of certain conditions precedent to the availability of the aforementioned KBC
credit facilities) certain letters of credit denominated in BEF having an
aggregate face amount equal to approximately Twenty-Six Million One Hundred
Thirty Thousand Six Hundred Eight ($26,130,608) Dollars (the "EUROPEAN LETTERS
OF CREDIT"), which European Letters of Credit shall be available to be drawn by
KBC upon the occurrence of certain events as set forth in the European Letter of
Credit Agreements, and Fleet National Bank has agreed to issue such European
Letters of Credit all on and subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 CERTAIN 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):
"ACCOUNTING CHANGES" has the meaning specified in Section 1.3.
"ADDITIONAL COLLATERAL" has the meaning specified in Section 5.13(a).
"ADDITIONAL COLLATERAL DOCUMENTS" has the meaning specified in Section
5.13(e).
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of parties
to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the Administrative
Agent maintained by the Administrative Agent with Fleet at its office at Fleet
National Bank relating to funds received from the Lender Parties in respect of
this Agreement or the Advances.
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"ADVANCE" means a Term A Advance, a Term B Advance, a Revolving Credit
Advance, a Swing Line Advance, a Letter of Credit Advance, or a European Letter
of Credit Advance.
"AE" has the meaning specified in the Preliminary Statements.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 50% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"AFTER-ACQUIRED MORTGAGED PROPERTY" means any parcel (or adjoining parcels)
of real property (including any leaseholds) acquired by any Loan Party after the
Closing Date subject to a Mortgage granted to the Administrative Agent for the
benefit of the Secured Parties pursuant to SECTION 5.13.
"AIG" has the meaning specified in the Preliminary Statements.
"AIG ACQUISITION" has the meaning specified in the Preliminary Statements.
"AIG ACQUISITION AGREEMENT" has the meaning specified in the Preliminary
Statements.
"AIG ACQUISITION DATE" means the date on which the AIG Acquisition shall
have been consummated in accordance with the AIG Acquisition Documents.
"AIG ACQUISITION DOCUMENTS" means the AIG Acquisition Agreement and each of
the other agreements, instruments, and documents executed or delivered by any of
the parties thereto or their Subsidiaries pursuant thereto or in connection
herewith, and all schedules and exhibits related to each such agreement.
"AIG SECURITY AGREEMENT" has the meaning specified in Section 3.1(a)(viii).
"ALLIANCE GRAPHICS" means Alliance Graphics N.V., a limited liability
company incorporated under the laws of Belgium, having an office at Zuiderring
56, 3600 Genk, Belgium, and a wholly owned Subsidiary of AE.
"ALPINE" means The Alpine Group, Inc., a Delaware corporation.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender Party, such
Lender Party's Domestic Lending Office in the case of a Prime Rate Advance and
such Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
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"APPLICABLE MARGIN" means at any time and from time to time a percentage
per annum determined pursuant to the last paragraph of this definition by
reference to the Consolidated Debt to EBITDA Ratio at such time, as set forth
below:
Applicable Margin for Revolving Credit Advances and
Term A Advances
- ----------------------------- ------------------------ ---------------------
Consolidated Debt Applicable Margin for Applicable Margin for
to EBITDA Ratio Eurodollar Rate Advances Prime Rate Advances
- ----------------------------- ------------------------ ---------------------
Equal to or greater
than 5.0 to 1.0 3% 1.75%
- ----------------------------- ------------------------ ---------------------
Equal to or greater
than 4.5 to 1.0 but
less than 5.0 to 1.0 2.75% 1.50%
- ----------------------------- ------------------------ ---------------------
Equal to or greater than
4.0 to 1.0 but less than
4.5 to 1.0 2.50% 1.250%
- ----------------------------- ------------------------ ---------------------
Less than 4.0 to 1.0 2.25% 1.00%
- ----------------------------- ------------------------ ---------------------
APPLICABLE MARGIN FOR TERM B ADVANCES
- ----------------------------- ------------------------ ---------------------
Consolidated Debt
to EBITDA Ratio Eurodollar Rate Advances Prime Rate Advances
- ----------------------------- ------------------------ ---------------------
Equal to or greater
than 5.0 to 1.0 3.25% 2.00%
- ----------------------------- ------------------------ ---------------------
Equal to or greater
than 4.0 to 1.0 but less
than 5.0 to 1.0 3.00% 1.75%
- ----------------------------- ------------------------ ---------------------
Less than 4.0 to 1.0 2.75% 1.50%
- ----------------------------- ------------------------ ---------------------
The Applicable Margin for each Prime Rate Advance and each Eurodollar Rate
Advance shall be the highest applicable percentage per annum set forth above for
the period from the Closing Date until the adjustment to the Applicable Margin
made in accordance with this paragraph based on the January 31, 1999 financial
statements delivered by the Borrowers pursuant to Section 7.3 and thereafter
shall be determined by reference to the Consolidated Debt to EBITDA Ratio which
shall be determined five (5) Business Days after the date on which the
Administrative Agent receives financial statements pursuant to Section 7.3 or
7.4 and a certificate of the chief financial officer of each Borrower
demonstrating the Consolidated Debt to EBITDA Ratio. If the Borrowers have not
submitted to the Administrative Agent the information described above as and
when required under Section 7.3 or 7.4, as the case may be, the Applicable
Margin shall be as determined by the Administrative Agent in its
<PAGE>
reasonable discretion (taking into account, among other things, the Consolidated
Debt to EBITDA Ratio theretofore in effect) for so long as such information has
not been received by the Administrative Agent. The Applicable Margin shall be
adjusted, if applicable, as of the first day of the month following the date of
determination described in the two preceding sentences. In the event that the
financial statements received pursuant to Section 7.4 indicate that the
Applicable Margin determined on the basis of financial statements theretofore
received pursuant to Section 7.3 is lower than the Applicable Margin that would
have been determined on the basis of the Section 7.4 financial statements, the
Applicable Margin shall be adjusted retroactively for the relevant period.
"APV" means APV, Inc., a Delaware corporation and a Wholly-Owned Subsidiary
of PolyVision.
"ASSET DISPOSITION" means the disposition of any or all of the fixed assets
of any Borrower or any of its Subsidiaries whether by sale, lease, transfer,
loss, damage, destruction, condemnation or otherwise; PROVIDED, HOWEVER, that
for purposes of Section 2.6(b), the term "Asset Disposition" shall not include
any sale, lease, transfer or other disposition of Inventory in the ordinary
course of business.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Lender Party and an Eligible Assignee, and accepted by the Administrative
Agent and, so long as no Event of Default shall have occurred and be continuing,
by the Borrowers, in accordance with Section 11.7 and in substantially the form
of EXHIBIT A.
"AUBECQ" means Emailleries De Blanc Misseron A. Aubecq, a limited
liability company incorporated as a "societe anonyme" under the laws of France,
having an office at Rue des Deportes 70, 59154 Crespin France, and a wholly
owned Subsidiary of PolyVision France (after giving effect to the Transaction).
"AVAILABLE AMOUNT" of any Letter of Credit or European Letter of Credit
means, at any time, the maximum amount available to be drawn under such Letter
of Credit or European Letter of Credit, as the case may be, at such time
(assuming compliance at such time with all conditions to drawing).
"BANK HEDGE AGREEMENT" means any interest rate Hedge Agreement required or
permitted under Section 5.14 that is entered into by and between the Borrowers
and any Hedge Bank.
"BEF" has the meaning specified in the Preliminary Statements.
"BORROWERS" have the meanings specified in the recital of parties to this
Agreement.
"BORROWERS ACCOUNT" means the account of the Borrowers maintained by the
Borrowers with Fleet National Bank at its office at One Federal Street, Boston,
Massachusetts 02110.
"BORROWING" means a Term A Borrowing, a Term B Borrowing, a Revolving
Credit Borrowing, or a Swing Line Borrowing.
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<PAGE>
"BORROWING BASE" on any date means the sum of (a) 85% of the value of the
Eligible Receivables PLUS (b) 60% of the value of the Eligible Inventory, in
each case as set forth in the most recent Borrowing Base Certificate delivered
to the Administrative Agent pursuant to the terms of this Agreement on or prior
to such date.
"BORROWING BASE CERTIFICATE" means a certificate in substantially the form
of EXHIBIT B, duly certified by the chief financial officer or any financial
Vice President of the Borrowers.
"BORROWING BASE DEFICIENCY" means, at any time, the failure of the
Borrowing Base at such time to equal or exceed the sum of (a) the aggregate
principal amount of the Revolving Credit Advances, the Letter of Credit Advances
and the Swing Line Advances outstanding at such time PLUS (b) the aggregate
Available Amount under all Letters of Credit outstanding at such time.
"BUSINESS DAY" means a day of the year on which banks are not required or
authorized by law to close in Boston, Massachusetts and New York, New York and,
if the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period, the sum of all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for Equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or Equipment on a Consolidated balance sheet of
such Person; PROVIDED, that Capital Expenditures shall not include capital
expenditures to the extent that such expenditures constitute a reinvestment of
Net Cash Proceeds from any Asset Disposition permitted under this Agreement in
similar fixed assets, which investment is made or committed to be made under
contract with an unaffiliated third party to be made before or within one
hundred eighty days after receipt of such Net Cash Proceeds (or three hundred
sixty (360) days after receipt of such Net Cash Proceeds in respect of real
estate or improvements thereon subject to a casualty loss or condemnation).
"CAPITALIZED LEASES" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"CASH DOMINION EVENT" has the meaning specified in Section 5.17.
"CASH EQUIVALENTS" means any of the following, to the extent owned by the
Borrowers or any of their Subsidiaries, free and clear of all Liens other than
Liens created under the Collateral Documents: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States having a maturity of not
greater than 360 days from the date of issuance thereof, (b) insured
certificates of deposit of or time deposits having a maturity of not greater
than 360 days from the date of issuance thereof with any commercial bank that is
a Lender Party or a member of the Federal Reserve System that issues (or the
parent of which issues) commercial paper rated as described in clause (c) and is
organized under the laws of the United States or any State thereof
6
<PAGE>
and has combined capital and surplus of at least $1 billion or (c) commercial
paper having a maturity of not greater than 180 days from the date of issuance
thereof in an aggregate amount of no more than $2,500,000 per issuer outstanding
at any time, issued by any corporation organized under the laws of any State of
the United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended from time to
time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
"CHANGE OF CONTROL" means any of the following events: (a) Alpine shall at
any time cease to own and control (directly or through a Wholly-Owned
Subsidiary) at least 30% of the outstanding capital stock or voting power of
PolyVision; or (b) PolyVision shall at any time cease to own directly or
indirectly one hundred (100%) percent of the outstanding capital stock or voting
power of any of its Subsidiaries (other than directors' qualifying shares); or
(c) with respect to Alpine, a change of control of Alpine or PolyVision that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A, as in effect on the date hereof, promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") shall occur;
provided that, without limitation, such a Change of Control shall be deemed to
occur if: (i) any "Person" (as such term is used in Section 13(d) and Section
14(d) of the Exchange Act), (except for (with respect to the Borrowers) Alpine,
Steven Elbaum or any employee benefit plan of Alpine or any Borrower or any
Subsidiary or related corporation, or any entity holding voting securities of
Alpine or any Borrower for or pursuant to the terms of any such plan), shall
become the beneficial owner, directly or indirectly, of securities of Alpine
representing 30% or more of the combined voting power of Alpine's then
outstanding securities or of securities of PolyVision representing 30% or more
(excluding, in respect of ownership of PolyVision, Alpine in this clause and the
following clause (ii)) of the combined voting power of PolyVision's then
outstanding securities; (ii) there shall occur a contested proxy solicitation of
Alpine's or PolyVision's shareholders that results in the contesting party
obtaining the ability to vote securities representing 30% or more of the
combined voting power of Alpine's or PolyVision's then outstanding securities;
(iii) there shall occur: (A) a sale, lease, exchange, transfer or other
disposition in one or a series of related transactions of all or substantially
all of the assets of Alpine or PolyVision to another Person or entity or group
(as such term is defined in Section 13(d)(3) of the Securities Act as amended),
(B) a merger or consolidation in which Alpine or any Borrower is a constituent
unless the surviving entity is controlled directly or indirectly by the same
Persons (as defined in this Agreement) that controlled Alpine or such Borrower
immediately prior to such merger or consolidation or (C) the adoption of a plan
of liquidation or dissolution of Alpine other than pursuant to bankruptcy or
insolvency laws; or (iv) during any period of twelve (12) calendar months,
individuals who at the beginning of such period constituted the Board of
Directors of Alpine or PolyVision shall cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
Alpine's shareholders or by PolyVision's shareholders, as applicable, of each
new director shall be approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of the
period. For purposes of
7
<PAGE>
this definition "control", when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract, by
family relationship or otherwise; and the terms "controlling" and "controlled"
have the meanings correlative to the foregoing.
"CLOSING DATE" means the date on which all of the conditions precedent set
forth in Section 3.1 to the Initial Extension of Credit shall have been
satisfied or waived, and the initial Advances are made hereunder.
"COLLATERAL" means all "Collateral" referred to in the Collateral Documents
and all other property that is or is intended to be subject to any Lien in favor
of the Administrative Agent for the benefit of the Secured Parties.
"COLLATERAL ASSIGNMENT OF LEASE" has the meaning specified in Section
3.1(a)(iii).
"COLLATERAL DOCUMENTS" means the Security Agreements, the Intellectual
Property Security Agreement, the Collateral Assignments of Lease, the Mortgages,
the Pledge Agreement, and any other agreement that creates or purports to create
a Lien in favor of the Administrative Agent for the benefit of the Secured
Parties, including the Additional Collateral Documents delivered pursuant to
Section 5.13.
"COLLECTING BANKS" has the meaning specified in Section 5.17.
"COMMITMENT" means a Term A Commitment, a Term B Commitment, a Revolving
Credit Commitment, a Letter of Credit Commitment or a European Letter of Credit
Commitment.
"COMPLIANCE CERTIFICATE" with respect to the Borrowers and their
Subsidiaries, a certificate to the effect that: (a) as of the effective date of
the certificate, no Default or Event of Default under this Agreement exists or
would exist after giving effect to the action intended to be taken by any Loan
Party, as described in such certificate, including, without limitation, that the
covenants set forth in Article 8 hereof would not be breached after giving
effect to such action, together with a calculation in reasonable detail, and in
form reasonably satisfactory to the Administrative Agent, of such compliance,
and (b) the representations and warranties contained in Article 4 hereof are
true and with the same effect as though such representations and warranties were
made on the date of such certificate, unless stated to relate to a specific
earlier date in which case such specified representations and warranties shall
be true and correct as of such earlier date, and except for changes in the
ordinary course of business not prohibited by this Agreement, none of which,
either singly or in the aggregate, have had a Material Adverse Effect on the
Borrowers and their Subsidiaries taken as a whole, which certificate shall be
executed and delivered by the chief financial officer, any financial vice
president, the president or chief executive officer of each Borrower.
"CONFIDENTIAL INFORMATION" means information that any Loan Party furnishes
to the Administrative Agent or any Lender Party in a writing designated as
confidential, but does not include
8
<PAGE>
any such information that is or becomes generally available to the public other
than as a result of a breach by the Administrative Agent or any Lender Party of
its obligations hereunder or that is or becomes available to the Administrative
Agent or such Lender Party from a source other than the Borrowers that is not,
to the best of the Administrative Agent's or such Lender Party's knowledge,
acting in violation of a confidentiality agreement with any Loan Party.
"CONSOLIDATED" refers to the consolidation of accounts, in accordance with
GAAP, of any Person and all of its Subsidiaries on a Consolidated basis and if
not specified, PolyVision and all of its Subsidiaries.
"CONSOLIDATED DEBT TO EBITDA RATIO" means, as of any date of determination,
a ratio of (a) Debt of PolyVision and its Subsidiaries as at the end of such
fiscal quarter to (b) EBITDA for the most recently completed four fiscal
quarters of PolyVision and its Subsidiaries.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.9 or
2.10.
"CURRENT ASSETS" of any Person means all assets of such Person that would,
in accordance with GAAP, be classified as current assets of a company conducting
a business the same as or similar to that of such Person, after deducting
adequate reserves in each case in which a reserve is proper in accordance with
GAAP.
"CURRENT LIABILITIES" of any Person means (a) Debt of such Person, except
Funded Debt, that by its terms is payable on demand or matures within one year
after the date of determination (excluding any Debt renewable or extendible, at
the option of such Person, to a date more than one year from such date or
arising under a revolving credit or similar agreement that obligates the lender
or lenders to extend credit during a period of more than one year from such
date), (b) all amounts of Funded Debt of such Person required to be paid or
prepaid within one year after such date and (c) all other items (including taxes
accrued as estimated) that in accordance with GAAP would be classified as
current liabilities of such Person.
"DEBT" of any Person means, without duplication,
(a) all indebtedness of such Person for borrowed money,
(b) all Obligations of such Person for the deferred purchase price
of property or services,
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments,
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and
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<PAGE>
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under Capitalized
Leases,
(f) all Obligations, contingent or otherwise, of such Person under
bankers acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of (i) any capital stock of or
other ownership or profit interest in such Person or any other Person or (ii)
any warrants, rights or options to acquire such capital stock,
(h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h) above
or clause (j) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Debt against loss in respect thereof, (C) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (D) otherwise to assure the holder of such Debt against loss in
respect thereof, and
(j) all Debt referred to in clauses (a) through (i) above of
another Person secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts, contract rights or inventory) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt.
"DEBT ISSUANCE" means any issuance or sale or other incurrence by any
Borrower or any of its Subsidiaries of any Debt; PROVIDED, HOWEVER, that for
purposes of determination of Net Cash Proceeds under Section 2.6(b)(iii), the
term "Debt Issuance" shall not include the incurrence of Debt permitted under
Section 6.2 (but shall include any Subordinated Debt other than the Senior
Subordinated Notes and the Junior Subordinated Note).
"DEFAULT" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"DEFAULTED ADVANCE" means, with respect to any Lender Party at any time,
the portion of any Advance required to be made by such Lender Party to the
Borrowers pursuant to Section 2.1 or 2.2 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.2(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining
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portion of such Defaulted Advance shall be considered a Defaulted Advance
originally required to be made pursuant to Section 2.1 on the same date as the
Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at any time, any
amount required to be paid by such Lender Party to the Administrative Agent or
any other Lender Party hereunder or under any other Loan Document at or prior to
such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (a) the Swing
Line Bank pursuant to Section 2.2(b) to purchase a portion of a Swing Line
Advance made by the Swing Line Bank, (b) the Issuing Bank pursuant to Section
2.3(c) to purchase a portion of a Letter of Credit Advance made by the Issuing
Bank, (c) the Administrative Agent pursuant to Section 2.2(e) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (d) any other Lender Party pursuant
to Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (e) the Administrative Agent or the Issuing Bank pursuant to
Section 10.5 to reimburse the Administrative Agent or the Issuing Bank for such
Lender Party's ratable share of any amount required to be paid by the Lender
Parties to the Administrative Agent or the Issuing Bank as provided therein. In
the event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder or under
any other Loan Document on the same date as the Defaulted Amount so deemed paid
in part.
"DEFAULTING LENDER" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 9.6.
"DISCLOSED LITIGATION" has the meaning specified in Section 4.9.
"DISPOSAL" means the discharge, deposit, injection, dumping, spilling,
leaking or placing of any solid waste or hazardous waste, as those terms are
defined by any federal, state, local or foreign law, into or on any land or
water so that such solid waste or hazardous waste or any constituents thereof
may enter the environment or be emitted into the air or discharged into any
waters, including ground waters.
"DOLLAR EQUIVALENT" means, at any time with respect to any monetary amount
in any currency other than U.S. Dollars, the amount of U.S. Dollars obtained by
converting such currency into U.S. Dollars at the spot rate for such
transactions as quoted by Fleet National Bank at such time.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on SCHEDULE I or in the Assignment and Acceptance pursuant to which it
became a Lender Party, as the case may be, or such other office of such Lender
Party as such Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of the
United States of America or any State thereof.
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"EBITDA" means, for any period, the sum, for the Borrowers and their
Subsidiaries determined on a Consolidated basis, of (i) Net Income (or net
loss), (ii) Interest Expense, (iii) income tax expense, (iv) depreciation
expense, (v) extraordinary and nonrecurring losses (which shall not be deemed to
include direct or indirect enviromental remediation expenses, or costs of any
kind, other than routine maintenance), (vi) amortization expense and other
non-ordinary non-cash charges deducted in the calculation of Net Income or net
losses including, without limitation, amortization of fees and expenses related
to the AIG Acquisition and compensation expense not paid in cash, and (vii) to
the extent deducted in the computation of Net Income, non-recurring
restructuring charges resulting from plant closing expenses, severance
obligations and reorganization expenses relating to consummation of the AIG
Acquisition, MINUS extraordinary and nonrecurring gains (or plus extraordinary
losses) (in each case determined in accordance with GAAP), PLUS the pro forma
effect on EBITDA for such period of any Permitted Acquisition made by the
Borrowers (such pro forma effect to be determined in a manner reasonably
acceptable to the Administrative Agent).
"ELIGIBLE ASSIGNEE" means with respect to any Facility (other than the
Letter of Credit Facility and the European Letter of Credit Facility), (a) a
Lender; (b) an Affiliate of a Lender; and (c) subject to the prior approval of
the Administrative Agent and, so long as no Event of Default shall have occurred
and be continuing, the Borrowers, such approval by the Borrowers not to be
unreasonably withheld or delayed, (i) a commercial bank organized under the laws
of the United States, or any State thereof, and having total assets in excess of
$500,000,000; (ii) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $500,000,000; (iii) a commercial bank organized under the
laws of any other country that is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency located
in the United States; (iv) the central bank of any country that is a member of
the OECD; and (v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and having total assets in excess of
$500,000,000; and, with respect to the Letter of Credit Facility and the
European Letter of Credit Facility, a Person that is an Eligible Assignee under
subclause (i) or (iii) of clause (c) of this definition and is approved by the
Administrative Agent and the Borrower, such approval by the Borrower not to be
unreasonably withheld or delayed; PROVIDED, HOWEVER, that no Loan Party or
Affiliate of a Loan Party shall qualify as an Eligible Assignee under this
definition.
"ELIGIBLE INVENTORY" means Inventory of a Borrower or any Domestic
Subsidiary located in the continental United States (minus any reserves
reasonably requested by the Administrative Agent) as to which (a) a Borrower or
any Domestic Subsidiary has acquired title, (b) the Administrative Agent has
have a first and only (other than Permitted Liens) perfected security interest
and (c) the Borrowers or any Domestic Subsidiary shall have furnished to the
Administrative Agent information adequate for purposes of identification at
times and in form and substance as may be reasonably requested by the
Administrative Agent; PROVIDED, that Inventory shall not constitute Eligible
Inventory (i) if and when a Borrower or any Domestic Subsidiary sells it,
otherwise passes title thereto or consumes it, (ii) if the
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Lenders release their security interest therein, or (iii) to the extent that it
(A) is obsolete or not currently useable or salable in the ordinary course of
the Borrowers' businesses, (B) is produced in violation of the Fair Labor
Standards Act and subject to the so-called "hot goods" provision contained in
Title 29, Section 215(a) (1) of the United States Code, (C) is Inventory in
excess of one year's supply unless useable in the ordinary course, or (D) is
non-raw material or non-component Inventory held for consumption by the
Borrowers or a Domestic Subsidiary and not for sale in the ordinary course of
business. Any Inventory which is Eligible Inventory at any time, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory until such time as it once again meets all of the
foregoing requirements.
"ELIGIBLE RECEIVABLES" means only such Receivables of a Borrower or a
Domestic Subsidiary as the Administrative Agent, in its reasonable judgment,
shall from time to time determine to be Eligible Receivables for purposes of
this Agreement. The value of such Receivables shall be determined by the
Administrative Agent in its reasonable judgment taking into consideration, among
other factors, their book value determined in accordance with GAAP. By way of
example only, and without limiting the discretion of the Administrative Agent to
consider any Receivables not to be Eligible Receivables, the Administrative
Agent shall consider any of the following classes of Receivables not to be
Eligible Receivables:
(a) Receivables that do not arise out of sales of goods or rendering of
services in the ordinary course of any Borrower's or a Domestic Subsidiary's
business;
(b) Receivables on terms other than those normal or customary in the
Borrower's or a Domestic Subsidiary's business;
(c) Receivables owing from any Person that is an Affiliate of a
Borrower or a European Borrower;
(d) Receivables more than 120 days past original invoice date or more
than 60 days past the date due;
(e) Receivables owing from any Person from which an aggregate amount of
more than 50% of the Receivables owing is more than 90 days past due;
(f) Receivables owing from any Person that shall take or be the subject
of any action or proceeding of a type described in Section 9.6;
(g) Receivables (i) owing from any Person that is also a supplier to or
creditor of a Borrower or a Domestic Subsidiary unless such Person has waived
any right of set-off in a manner reasonably acceptable to the Administrative
Agent or (ii) representing any manufacturer's or supplier's credits, discounts,
incentive plans or similar arrangements entitling a Borrower or a Domestic
Subsidiary to discounts on future purchases therefrom;
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(h) Receivables arising out of sales on a bill-and-hold, guaranteed
sale, sale-or-return, sale on approval or consignment basis or subject to any
right of return, set-off or charge-back (other than normal product or service
warranties);
(i) Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State thereof unless a
Borrower or Domestic Subsidiary shall have satisfied the requirements of the
Assignment of Claims Act of 1940, as amended, and any similar State legislation
and the Administrative Agent is satisfied as to the absence of set-offs,
counterclaims and other defenses on the part of such account debtor; or
receivables that are sold to account debtors in the states of Indiana, Minnesota
or New Jersey unless the applicable Borrower shall have duly filed all legally
required Notice of Business Activities Reports and comparable reports with
appropriate governmental authorities;
(j) Receivables the full and timely payment of which the Administrative
Agent in its reasonable judgment, after consultation with a Borrower, believes
to be doubtful; and
(k) Receivables in respect of which a Security Agreement, after giving
effect to the related filings of financing statements that have then been made,
if any, does not or has ceased to create a valid and perfected first and only
(other than Permitted Liens) priority lien or security interest in favor of the
Administrative Agent securing the Secured Obligations.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any international or transnational law, federal,
state, local or foreign statute, law, ordinance, rule, regulation, code, order,
writ, judgment, injunction, decree or judicial or agency interpretation, policy
or guidance relating to pollution or protection of the environment or natural
resources, including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, threatened release, release or
discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
"EQUIPMENT" has the meaning specified in Section 1(a) of the Initial
Security Agreement.
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"EQUITY INTEREST" means, in any Person, any and all shares, interests,
participations, rights or other equivalents (however designated) of any capital
stock or other ownership of any profit interest, and any and all warrants,
rights, options, obligations or other equity securities of or in such Person,
and rights to acquire any of the foregoing, including, without limitation,
partnership interests and joint venture (whether general or limited) and any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, such
partnership or joint venture, but excluding debt for borrowed money and
excluding any debt security that is convertible into, or exchangeable for any of
the foregoing equity interests.
"EQUITY ISSUANCE" means any issuance or sale by any Borrower or any of its
Subsidiaries of its capital stock or other equity securities or any obligations
convertible into or exchangeable for, or giving any Person a right, option or
warrant to acquire such securities or such convertible or exchangeable
obligations; PROVIDED, HOWEVER, that for purposes of Section 2.6(b)(iii), the
term "Equity Issuance" shall not include any issuance or sale of (a) capital
stock or other equity securities of PolyVision or to any Person as consideration
paid in connection with a Permitted Acquisition; (b) capital stock or other
equity securities of PolyVision issued on or before the Closing Date in
connection with the AIG Acquisition; (c) common stock of PolyVision or any
Borrower issued to any director of PolyVision or such Borrower required by
applicable law in connection with such Person acting in such capacity; (d)
options and/or common stock of PolyVision to management, employees and/or
consultants thereof pursuant to any stock option plan permitted hereunder or the
exercise of options issued pursuant thereto so long as the aggregate
consideration received by PolyVision in respect of all such issuances and sales
does not exceed $500,000 in any single year or $1,500,000 in the aggregate from
and after the Closing Date; and (e) conversion of Alpine's or Kirkbi Project,
A/S' preferred stock in PolyVision into common stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of any Borrower, or under common control
with any Borrower, within the meaning of Section 414 of the Internal Revenue
Code.
"ERISA EVENT" means, if same could give rise to any liability on the part
of any Borrower or any of its Subsidiaries, (a) (i) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan unless the 30-day notice requirement with respect to such event has
been waived by the PBGC, or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA,
of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan under ERISA Section 4041(c),
pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect
to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations
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at a facility of any Loan Party or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or
any ERISA Affiliate from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f)
the conditions for imposition of a lien under Section 302(f) of ERISA shall have
been met with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the termination
of, or the appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on SCHEDULE I or in the Assignment and Acceptance pursuant to
which it became a Lender Party (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender Party as such Lender Party
may from time to time specify to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum
(rounded upward, if necessary, to the nearest 1/32 of one percent) as determined
on the basis of the offered rates for deposits in U.S. dollars, for a period of
time comparable to such Interest Period which appears on the Telerate Page 3750
as of 11:00 a.m. (London time) two (2) Business Days before the first day of
such Interest Period in an amount substantially equal to Fleet's Eurodollar
Advance comprising part of such Borrowing; PROVIDED, HOWEVER, that if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the Eurodollar Rate shall be the rate (rounded
upward as described above, if necessary) for deposits in U.S. dollars for a
period substantially equal to the interest period on the Reuters Page "LIBO" (or
such other page as may replace the LIBO page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London time) two (2) Business Days
before the first day of such Interest Period in an amount substantially equal to
Fleet's Eurodollar Advance comprising part of such Borrowing.
If both the Telerate and Reuters system are unavailable, then the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for a period of time comparable to such Interest Period which are
offered by four major banks in the London interbank market at approximately
11:00 a.m. (London time) two (2) Business Days before the first day of such
Interest Period as selected by the Administrative Agent. The principal London
office of each of the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time comparable to
such Interest Period offered by major banks in New York City at approximately
11:00
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a.m. (New York time) two (2) Business Days before the first day of such Interest
Period. In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be deemed that the Eurodollar Rate for such
Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Eurodollar Rate Reserve Percentage with respect to Eurocurrency
Liabilities, the Eurodollar Rate for an Interest Period shall be equal to the
amount determined above for such Interest Period divided by a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest as provided
in Section 2.7(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"EUROPEAN BORROWING BASE CERTIFICATE" means a certificate in substantially
the form of Exhibit B, duly certified by the chief financial officer or any
financial vice president of AE, Aubecq, Pentagon and Alliance Graphics.
"EUROPEAN BORROWERS" means AE together with each of Aubecq, Pentagon,
Alliance Graphics, PolyVision Belgium and PolyVision France.
"EUROPEAN LETTER(S) OF CREDIT" means those certain standby letters of
credit issued by the European Letter of Credit Bank for the account of the
Borrowers to secure repayment of loans made by KBC to the European Borrowers
under the KBC Loan Agreements, as the same are issued pursuant to, and from time
to time extended or amended in accordance with, the terms hereof and of the
European Letter of Credit Agreements.
"EUROPEAN LETTER OF CREDIT AGREEMENT(S)" means each of the Letter of Credit
Agreements by and between the European Letter of Credit Bank and KBC of even
date herewith as amended from time to time relating to any European Letter(s) of
Credit.
"EUROPEAN LETTER OF CREDIT BANK" means Fleet as issuer of the European
Letter(s) of Credit.
"EUROPEAN LETTER OF CREDIT COMMITMENT" means, with respect to any Lender,
the amount set forth opposite such Lender's name on SCHEDULE I under the caption
"European Letter of Credit
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Commitment" or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 11.7(d) as such Lender's "European
Letter of Credit Commitment," as such amount may be reduced at or prior to such
time pursuant to Section 2.5(a)(i).
"EUROPEAN LETTER OF CREDIT LENDERS SHARE" means the product of (a) the
aggregate principal amount of loans outstanding at any one time under the KBC
Loan Agreements MULTIPLIED BY (b) the "L/C Percentage" set forth in the European
Letter of Credit Agreements (as such percentage may be amended from time to
time), which L/C Percentage shall be equal to 71.298% as of the date hereof.
"EUROPEAN LETTER OF CREDIT FACILITY" means, at any time, an amount equal to
the aggregate amount of the European Letter of Credit Commitments of all the
Lenders at such time, as such amount may be reduced pursuant to Section 2.5.
"EVENTS OF DEFAULT" has the meaning specified in Article 9.
"EXCESS CASH FLOW" means for any period the sum of (a) EBITDA of PolyVision
and its Subsidiaries for such period PLUS (b) the aggregate amount of any and
all non-cash charges deducted from Consolidated Net Income for such period, but
not added back in the calculation of EBITDA PLUS (c) if there was a net increase
in Consolidated Current Liabilities of PolyVision and its Subsidiaries during
such period, the amount of such net increase other than arising out of Debt
permitted pursuant to Section 6.2 PLUS (d) if there was a net decrease in
Consolidated Current Assets (excluding cash and Cash Equivalents) of PolyVision
and its Subsidiaries during such period the amount of such net decrease MINUS
(e) the aggregate amount of mandatory and optional prepayments (other than
optional prepayments of the Swing Line Advances, Letter of Credit Advances or
Revolving Credit Advances made pursuant to clause (i) of the second sentence of
Section 2.6(a)) and repayments of principal made by PolyVision and its
Subsidiaries on any Funded Debt of PolyVision and its Subsidiaries during such
period MINUS (f) Capital Expenditures of PolyVision and its Subsidiaries during
such period MINUS (g) the aggregate amount of all federal, state, local and
foreign taxes paid by the Borrowers and its Subsidiaries during such period
MINUS (h) the aggregate amount of interest paid on any Debt of PolyVision and
its Subsidiaries during such period MINUS (i) the aggregate amount of all
non-cash credits included in arriving at such EBITDA MINUS (j) if there was a
net decrease in Consolidated Current Liabilities of PolyVision and its
Subsidiaries during such period, the amount of such net decrease MINUS (k) if
there was a net increase in Consolidated Current Assets (excluding cash and Cash
Equivalents) of PolyVision and its Subsidiaries during such period the amount of
such increase MINUS (l) dividends paid by PolyVision to the holders of its
preferred stock in respect of such period to the extent that PolyVision is
expressly permitted under Section 6.7(d) to pay such dividends under this
Agreement.
"EXCHANGE ACT" has the meaning specified in the definition "Change of
Control".
"EXISTING DEBT" means Debt of the Borrowers and their Subsidiaries
outstanding immediately before giving effect to the Transaction and described in
SCHEDULE 4.19(A).
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"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for the
account of any Person not in the ordinary course of business (other than by
sale, lease or transfer), including, without limitation, tax refunds, pension
plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings), condemnation awards (and payments in lieu thereof) and indemnity
payments; PROVIDED, HOWEVER, that an Extraordinary Receipt shall not include
cash receipts of less than $500,000 per occurrence or $1,000,000 in the
aggregate received from proceeds of insurance, condemnation awards (and payments
in lieu thereof) or indemnity payments to the extent that such proceeds, awards
or payments (a) in respect of loss or damage to Equipment, fixed assets or real
property are applied (or in respect of which expenditures were previously
incurred) to replace or repair the Equipment, fixed assets or real property in
respect of which such proceeds, awards or payments were received in accordance
with the terms of the Loan Documents, so long as (i) such application is made
within one hundred eighty (180) days (or three hundred sixty (360) days, with
respect to real estate or improvements on real estate), after such Person's
receipt of such proceeds, awards or payments and (ii) such proceeds, awards or
payments are received by such Person within fifteen (15) months after the
occurrence of such damage or loss; or (b) are received by any Person in respect
of any third party claim against such Person and applied to pay (or to reimburse
such Person for its prior payment of) such claim and the costs and expenses of
such Person with respect thereto.
"FACILITY" means the Term A Facility, the Term B Facility, the Revolving
Credit Facility, the Letter of Credit Facility, the European Letter of Credit
Facility or the Swing Line Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum 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 that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FISCAL YEAR" means a fiscal year of the Borrowers and their Consolidated
Subsidiaries ending on April 30 in any calendar year.
"FIXED CHARGES" means the sum, for PolyVision and its Subsidiaries on a
Consolidated basis for any period, of (i) cash Interest Expense, PLUS (ii)
scheduled amortization of Debt payable during such period, plus (iii) income
taxes and other taxes payable in respect of such period, plus (iv) Capital
Expenditures (net of new purchase money financing in order to avoid double
counting of any such new financing committed to but not yet expended and
subsequently expended in cash) during such period to the extent permitted by
this Agreement.
"FIXED CHARGE COVERAGE RATIO" means, for the four consecutive fiscal
quarters of the Borrowers ending on the date of determination, the ratio of (a)
EBITDA of PolyVision and its Subsidiaries for such
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four fiscal quarters (or other period specified in Section 8.3), to (b) Fixed
Charges for such four fiscal quarters (or other period specified in Section
8.3).
"FLEET" means Fleet National Bank in its capacity as a Lender or Issuing
Bank or Swing Line Bank or European Letter of Credit Bank hereunder.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws of any
jurisdiction other than the United States of America or any State thereof.
"FUNDED DEBT" means, with respect to the Borrowers, the Advances, and with
respect to the Borrowers and the other Loan Parties and any other Person, all
other Debt of such Person that by its terms matures more than one year after the
date of determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one year after
such date or arises under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year
after such date, including the current portion of all such Debt.
"GAAP" means generally accepted accounting principles (a) set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination, and (b) as applicable to the
European Borrowers, in effect from time to time in the country of domicile of
the respective European Borrowers and their respective Subsidiaries.
"GREENSTEEL" has the meaning specified in the recital of parties to this
Agreement.
"GUARANTEED OBLIGATIONS" has the meaning specified in the Guaranties.
"GUARANTORS" means (a) each Borrower, and (b) APV and each other Person
which shall have executed and delivered or become a party to the Subsidiary
Guaranty hereunder.
"GUARANTY" means each of the Subsidiary Guaranty and the KBC Guaranty.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
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"HEDGE BANK" means any Lender Party (including, without limitation, any
affiliate of Fleet) in its capacity as a party to a Bank Hedge Agreement.
"INDEMNIFIED PARTY" has the meaning specified in Section 11.4(b).
"INFORMATION MEMORANDUM" means the information memorandum, dated September
23, 1998, delivered by the Administrative Agent to the Lenders.
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit.
"INITIAL ISSUING BANK" has the meaning specified in the recital of parties
to this Agreement.
"INITIAL LENDERS" has the meaning specified in the recital of parties to
this Agreement.
"INITIAL SECURITY AGREEMENT" has the meaning specified in Section
3.1(a)(ii).
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" has the meaning specified in
Section 3.1(a)(v).
"INTERCOMPANY SUBORDINATION AGREEMENT" has the meaning specified in Section
5.18.
"INTEREST EXPENSE" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period whether paid or
accrued, determined on a Consolidated basis for such Person and its Subsidiaries
and in accordance with GAAP, and including, without limitation, (a) in the case
of the Borrowers, interest expense in respect of Debt resulting from Advances,
(b) the interest component of all obligations under Capitalized Leases, (c)
commissions, discounts and other fees and charges payable in connection with
letters of credit (including, without limitation, Letters of Credit), (d) the
net payment, if any, payable in connection with Hedge Agreements less the net
credit, if any, received in connection with Hedge Agreements and (e) all fees
paid by PolyVision or any of its Subsidiaries pursuant to Section 2.8(a) and the
KBC Loan Agreements.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Prime Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrowers pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrowers pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrowers may, upon notice received by the
Administrative Agent not later than 12:00 noon (New York time) on the third
Business Day prior to the first day of such Interest Period, select; PROVIDED,
HOWEVER, that:
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(a) The Borrowers may not select any Interest Period, with
respect to any Eurodollar Rate Advance under a Facility, that ends after
any principal repayment installment date for such Facility unless, after
giving effect to such selection, the aggregate principal amount of Prime
Rate Advances and of Eurodollar Rate Advances having Interest Periods that
end on or prior to such principal repayment installment date for such
Facility shall be at least equal to the aggregate principal amount of
Advances under such Facility due and payable on or prior to such date;
(b) Whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
PROVIDED, HOWEVER, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day
of such Interest Period shall occur on the next preceding Business Day;
(c) Whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial calendar
month, such Interest Period shall end on the last Business Day of such
succeeding calendar month; and
(d) Until the earlier of (i) 120 days after the Closing Date or
(ii) the date on which the Administrative Agent notifies the Borrowers that
the syndication of the Facilities has been completed, only Interest Periods
with a duration of seven days, if available to all the Lenders, shall be
available to the Borrowers for Eurodollar Rate Advances, or if such
Interest Periods are not available to all the Lenders, Interest Periods of
such duration as may be selected by the Administrative Agent and are
acceptable to all the Lenders.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVENTORY" of any person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
"INVESTMENT" by any Person means:
(a) the amount paid or committed to be paid, or the value of
property or services contributed or committed to be contributed, by such Person
for or in connection with the acquisition by such Person of any stock, bonds,
notes, debentures, future contracts, partnership or other ownership or profit
interests, warrants, rights, options, or other securities of any other Person;
and (b) the amount
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of any advance, loan or extension of credit by such Person to any other Person,
or guaranty or other similar obligation of such Person with respect to any
Indebtedness of such other Person, and (without duplication) any amount
committed to be advanced, loaned, or extended by such Person to any other
Person, or any amount the payment of which is committed to be assured by a
guaranty or similar obligation by such Person for the benefit of, such other
Person (including, without limitation, any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (i) or (j) of the
definition of "Debt" in respect of such Person);
PROVIDED that: (i) the value of property contributed shall be the lower of fair
market value at the time of contribution, determined in good faith by a
Borrower's Board of Directors, or the book value of such property at the time of
contribution on the books of the Person making such contribution; and (ii) the
amount of any Investment shall be the original cost of such Investment plus the
cost of all additional Investments by the Borrowers or any of their Subsidiaries
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment reduced by the fair
market value of all interest, dividends and other distributions (in whatever
form and however designated) made by such Person since the date of its creation
to the applicable holders of such Investments (and their Affiliates), PROVIDED
that in no event shall the aggregate amount of interest, dividends and other
distributions made to any holder of an Investment in a Person (or its
Affiliates) operate to reduce the Investment of such Person by more than the
total contributions to such Person (per clauses (a) and (b) above) (and its
Affiliates).
"ISSUING BANK" means the Initial Issuing Bank and each Eligible Assignee to
which a Letter of Credit Commitment hereunder has been assigned pursuant to
Section 11.7.
"JUNIOR SUBORDINATED NOTE" means the Subordinated Promissory Note issued or
to be issued by PolyVision to Wind Point Partners III, L.P., as agent for the
sellers under the AIG Acquisition Agreement, in the amount of $8,000,000.
"KBC" has the meaning specified in the Preliminary Statements.
"KBC GUARANTY" has the meaning specified in Section 3.1(a)(vi).
"KBC LOAN AGREEMENT(S)" means individually or collectively as the context
may require (a) the Credit Facility Agreement of even date herewith by and among
KBC, AE, Alliance Graphics, Aubecq and Pentagon amending and restating that
certain Credit Facility Agreement dated as of October 2, 1997, as it was amended
on January 27, 1998, and (b) the Credit Facility Agreement by and among KBC,
PolyVision Belgium and PolyVision France of even date herewith, in respect of
each of the foregoing, as amended from time to time with the consent of the
European Letter of Credit Bank.
"KBC LOAN DOCUMENTS" means the KBC Loan Agreements and any and all other
agreements, instruments and documents heretofore, now or hereafter executed by
any European Borrower, any Guarantor, or any other third party and delivered to
KBC in respect of the transactions contemplated
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by any of the KBC Loan Agreements, including, without limitation, each security
agreement, pledge, mortgage and other similar collateral documents executed or
delivered pursuant thereto.
"KBC REVOLVING CREDIT FACILITY" means the revolving credit portion of the
KBC Loan Agreement referred to in clause (a) of the definition "KBC Loan
Agreement(s)."
"KBC SHARE" means the principal amount of loans outstanding at any one time
under the KBC Loan Agreements, MINUS the European Letter of Credit Lenders
Share.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the Initial
Security Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section 2.4(f)(ii)(A).
"LENDER PARTY" means any Lender, the Issuing Bank, the Swing Line Bank or
the European Letter of Credit Bank.
"LENDERS" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 11.7.
"LETTER OF CREDIT" means any Letter of Credit, other than a European Letter
of Credit, issued hereunder (as specified in Section 2.3(a)).
"LETTER OF CREDIT ADVANCE" means an advance made by the Issuing Bank or any
Revolving Credit Lender pursuant to Section 2.3(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in Section 2.3(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to the Issuing Bank, the
amount set forth opposite the Issuing Bank's name on SCHEDULE I under the
caption "Letter of Credit Commitment" which is a sublimit of the Revolving
Credit Commitment or, if the Issuing Bank has entered into one or more
Assignments and Acceptances, set forth for the Issuing Bank in the Register
maintained by the Administrative Agent pursuant to Section 11.7(d) as the
Issuing Bank's "Letter of Credit Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.5.
"LETTER OF CREDIT FACILITY" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment (which is a sublimit of
the Revolving Credit Facility) at such time, as such amount may be reduced
pursuant to Section 2.5.
"LIEN" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
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"LOAN DOCUMENTS" means (a) this Agreement, (b) the Notes, (c) each
Guaranty, (d) the Collateral Documents, (e) each Letter of Credit Agreement, (f)
the KBC Loan Documents, (g) the European Letter of Credit Agreements, (h) each
Bank Hedge Agreement, (i) each Additional Collateral Document, (j) the
Intercompany Subordination Agreement, and all other agreements, instruments and
documents executed in connection therewith, in each case as the same may at any
time be amended, supplemented, restated or otherwise modified and in effect.
"LOAN PARTIES" means the Borrowers, each Guarantor, each Subsidiary of each
Borrower whose stock shall have been pledged to the Administrative Agent, each
of the European Borrowers and each other Person (other than a Lender Party, a
landlord under a landlord waiver or a Collateral Assignment of Lease, a holder
of Subordinated Debt, legal counsel and accounting firms) who shall, at any
time, have outstanding a Loan Document.
"MANAGEMENT FEES" for any period, all fees, emoluments or similar
compensation paid to or incurred with respect to any Person (other than any such
fees, emoluments or similar compensation paid to or incurred and payable to any
Loan Party) in respect of services rendered in connection with the management or
supervision of the management of any Loan Party, other than (a) salaries,
bonuses and other compensation paid to any full-time executive employee in
respect of such full-time employment and (b) fees paid in the ordinary course
of business by any Loan Party to any Person who is not an Affiliate thereof.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE EFFECT" means after giving effect to the consummation of
the AIG Acquisition on the Closing Date (a) a material adverse effect on the
business, condition (financial or otherwise), results of operations,
performance, prospects or properties of the Borrowers and their Subsidiaries
(taken as a whole), (b) unless such event is not material, an adverse effect on
the ability of any Loan Party to perform its obligations under the Loan
Documents to which it is a party, or (c) an adverse effect on the rights and
remedies of the Administrative Agent and the Lender Parties under any of the
Loan Documents. In determining whether any individual event would result in a
Material Adverse Effect, notwithstanding that such event does not of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other existing events would result in a
Material Adverse Effect.
"MATERIAL CONTRACT" means, with respect to the Borrowers, each contract
listed on SCHEDULE 4.23, each contract which is a replacement or a substitute
for any contract listed on such Schedule and with respect to the Borrower and
any other Person who is a party which is material to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
such Person.
"MERGER(S)" means each of (a) the merger to occur on the Closing Date of
Greensteel and Alliance America Corporation, with Greensteel to be the surviving
entity, and (b) the merger to occur on the Closing Date of Alliance
International Group, Inc. with and into PolyVision, with PolyVision to be the
surviving entity.
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"MERGER AGREEMENTS" has the meaning assigned to that term in Section 4.29.
"MERGER DOCUMENTS" has the meaning assigned to that term in Section 4.29.
"MORTGAGE" means each mortgage, deed of trust, leasehold mortgage,
leasehold deed of trust or other similar real estate security document executed
and delivered by the appropriate Loan Party, in form and substance acceptable to
the Administrative Agent and the Lenders in order (a) to provide that such Loan
Party is the mortgagor or grantor, as the case may be, (b) to comply with and/or
provide for specific laws of the jurisdictions in which the real property or
leasehold property to be encumbered is located, and (c) to assure that the
Administrative Agent for the benefit of the Secured Parties has a perfected Lien
on such real property or leasehold property.
"MORTGAGE POLICIES" has the meaning assigned to that term in Section
3.1(a)(iv)(B).
"MORTGAGED PROPERTY" means each owned real property or leasehold property
specified on SCHEDULE 4.21 or 4.22, respectively, that is subject to a Mortgage
and shall include After-Acquired Mortgaged Property.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Borrower or any ERISA Affiliate and at least one Person other than the Borrower
or any ERISA Affiliate or (b) was so maintained and in respect of which any
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer or
other disposition of any asset or any Debt Issuance or Equity Issuance by any
Person, or any Extraordinary Receipt received by or paid to or for the account
of any Person, the aggregate amount of cash received from time to time (whether
as initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal and
accounting fees, finder's fees, printing costs and other similar out-of-pocket
costs, (b) the amount of taxes payable in connection with or as a result of such
transaction and (c) with respect to any asset, the amount of any Debt secured by
a Lien on such asset that, by the terms of such transaction or the terms of such
Debt, is required to be repaid upon such disposition, in each case to the
extent, but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid or due and payable or set aside for payment
(because due and payable) within ten (10) Business Days after receipt by the
applicable Loan Party to a Person that is not an Affiliate of such Person or any
Loan
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Party or any Affiliate of any Loan Party and are properly attributable to such
transaction or to the asset that is the subject thereof.
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, after provision for or benefit from income and franchise taxes
determined in accordance with GAAP and before any reduction in respect of
preferred stock dividends, excluding, however, (a) any gain (but not loss),
together with any related provision for taxes on such gain (but not loss),
realized in connection with (i) any Asset Disposition (including, without
limitation, dispositions pursuant to sale and leaseback transactions), or (ii)
the disposition of any securities or the extinguishment of any Debt of such
Person or any of its Subsidiaries, and (b) any extraordinary gain (but not
loss), together with any related provision for taxes on such extraordinary gain
(but not loss).
"NOTE" means a Term A Note, a Term B Note, a Revolving Credit Note, or the
Swing Line Note.
"NOTICE OF BORROWING" has the meaning specified in Section 2.2(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section 2.3(a).
"NOTICE OF RENEWAL" has the meaning specified in Section 2.1(f).
"NOTICE OF SWING LINE BORROWING" has the meaning specified in Section
2.2(b).
"NOTICE OF TERMINATION" has the meaning specified in Section 2.1(f).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 9.6.
Without limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit and European Letter of Credit reimbursements, Letter
of Credit and European Letter of Credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document, (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender Party
may, after the occurrence and during the continuance of an Event of Default,
elect to pay or advance on behalf of such Loan Party, and (c) any other
obligations arising out of or under, based upon or relating to the Loan
Documents.
"OECD" means the Organization for Economic Cooperation and Development.
"OPEN YEAR" has the meaning specified in Section 4.16.
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"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"PENTAGON" means Alliance Pentagon A/S, a limited liability corporation
incorporated under the laws of Denmark having an office at Krogagervej 2, 5340
Odense NO, Denmark, and a Wholly-Owned Subsidiary of AE.
"PERMITTED ACQUISITIONS" means any acquisition by the Borrowers or any
Domestic Subsidiaries of all or substantially all of the assets or all of the
capital stock (whether by direct purchase or merger) of any Person which has
been consented to in writing by the Administrative Agent and the Required
Lenders at any time during which a Default or an Event of Default shall not
exist and be continuing or would not exist after giving effect to such
acquisition.
"PERMITTED ACQUISITION DOCUMENTS" means, in respect of a Permitted
Acquisition, the final executed copy of the asset or stock purchase agreement
or the merger agreement, as the case may be, and all other material agreements,
documents or instruments executed and/or delivered by any Loan Party in
connection with such Permitted Acquisition.
"PERMITTED LIENS" means any of the following: (a) Liens for taxes,
assessments and governmental charges or levies (i) not yet due and payable or
(ii) that are due and payable and that are being contested in good faith and by
appropriate proceedings diligently conducted, PROVIDED that in the case of Liens
under this clause (ii), reserves or other appropriate provisions shall have been
established therefor in accordance with GAAP; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than sixty (60) days or which are
being contested in good faith and by appropriate proceedings diligently
conducted, PROVIDED that reserves or other appropriate provisions shall have
been established therefor in accordance with GAAP; (c) pledges or deposits to
secure obligations under workers' compensation laws, social security,
unemployment insurance or similar legislation or to secure public or statutory
obligations or deposits of cash or U.S. Government Bonds to secure bids,
tenders, contracts (other than for payment of money), performance or other
similar bonds to which such person is a party; customary deposits of security
for import duties or for the payment of rent in each of the foregoing cases,
arising in the ordinary course of business; (d) Permitted Real Property
Encumbrances; (e) judgment Liens that have been stayed or bonded; and (f)
purchase money security interests and other Liens to the extent permitted
pursuant to Section 6.1.
"PERMITTED REAL PROPERTY ENCUMBRANCES" means, with respect to any
particular real property, easements, zoning restrictions or other restrictions,
rights-of-way, minor encroachments, covenants or encumbrances on real property
imposed by law or arising in the ordinary course of business that do not arise
out of the incurrence of any Debt and that do not and could not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrowers or any of their Subsidiaries or materially
impair the use thereof to the Borrowers or any Subsidiary.
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"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGE AGREEMENT" means that portion of the Security Agreements providing
for a pledge of capital stock as security for Obligations under Loan Documents.
"POLYVISION" has the meaning specified in the recital of parties to this
Agreement.
"POLYVISION BELGIUM" means PolyVision Belgium N.V., a Belgian corporation
(a limited liability company).
"POLYVISION FRANCE" means PolyVision France EURL, a French EURL
"POSTERLOID" has the meaning specified in the recital of parties to this
Agreement.
"PRE-COMMITMENT INFORMATION" has the meaning specified in Section 3.1(i).
"PRIME RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Fleet in Boston,
Massachusetts, from time to time, as Fleet's prime rate, which is not
necessarily the lowest rate made available by Fleet; or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"PRIME RATE ADVANCE" means an Advance that bears interest as provided in
Section 2.7(a)(i).
"PRO FORMA FINANCIALS" means the pro forma financial statements relating to
the Borrowers and their Subsidiaries delivered to the Administrative Agent on
the Closing Date after giving effect to the AIG Acquisition and the Initial
Extension of Credit.
"PRO RATA SHARE" of any amount means, with respect to any Lender at any
time, the product of such amount times a fraction the numerator of which is the
amount of such Lender's Term B Commitment at such time and the denominator of
which is the Term B Facility at such time or, if the Term B Commitments are no
longer outstanding, the numerator of which is the aggregate outstanding
principal amount of such Lender's Advances and the denominator of which is the
aggregate outstanding principal amount of all Advances. For purposes of this
definition, the aggregate principal amount of Swing Line Advances owing to the
Swing Line Bank, Letter of Credit Advances owing to the Issuing
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Bank and the Available Amount of each Letter of Credit shall be considered to be
owed to the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit Commitments.
"RECEIVABLES" means all Receivables referred to in Section 1(c) of the
Security Agreements.
"REDUCTION AMOUNT" has the meaning specified in Section 2.6(b)(v).
"REGISTER" has the meaning specified in Section 11.7(d).
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REGULATORY AGENCY" means any federal, state, local or other United States
of America or foreign governmental authority, bureau or agency.
"RELEASE" means any release, spill, emission, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) or into or from any property, including, without limitation, the
movement of any Hazardous Materials through the air, soil, surface waters or
ground water.
"REMEDIAL" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(24) and/or any other applicable Environmental Laws.
"REMOVAL" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(23) and/or any other applicable Environmental Laws.
"REQUIRED LENDERS" means at any time Lenders owed or holding greater than
50% of the sum of (a) the aggregate principal amount of the Advances outstanding
at such time and (b) the aggregate Available Amount of all Letters of Credit and
European Letters of Credit outstanding at such time (or 662/3% of such sum at
any time when Fleet is owed or holds more than 49% of such sum), or, if no such
principal amount and no Letters of Credit or European Letters of Credit are
outstanding at such time, Lenders holding greater than 50% of the aggregate
amount of the Term A Commitments, Term B Commitments, and Revolving Credit
Commitments (or 662/3% of such aggregate amount at any time when Fleet holds
more than 49% of such aggregate amount); PROVIDED, HOWEVER, that if any Lender
shall be a Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (i) the aggregate principal
amount of the Advances owing to such Lender (in its
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capacity as a Lender) and outstanding at such time, and (ii) the aggregate Term
A Commitment, Term B Commitment, and Revolving Credit Commitment of such Lender
at such time. For purposes of this definition, the aggregate principal amount
of Swing Line Advances owing to the Swing Line Bank, Letter of Credit Advances
owing to the Issuing Bank and the Available Amount of each Letter of Credit
shall be considered to be owed to the Revolving Credit Lenders ratably in
accordance with their respective Revolving Credit Commitments.
"RESPONSE" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(25) and/or any other applicable Environmental Laws.
"RESPONSIBLE OFFICER" means, with respect to any Loan Party, the chief
executive officer, the president, the chief financial officer, any vice
president, the controller or the treasurer of such Loan Party.
"REVOLVING CREDIT ADVANCE" has the meaning specified in Section 2.1(c).
"REVOLVING CREDIT AVAILABILITY" means, at any time, the lesser of (a) the
Revolving Credit Facility and (b) the Borrowing Base.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.
"REVOLVING CREDIT COMMITMENT" means, with respect to any Revolving Credit
Lender at any time, the amount set forth opposite such Lender's name on SCHEDULE
I under the caption "Revolving Credit Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 11.7(d) as
such Lender's "Revolving Credit Commitment," as such amount may be reduced at or
prior to such time pursuant to Section 2.5.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate amount of the
Revolving Credit Lenders' Revolving Credit Commitments at such time.
"REVOLVING CREDIT LENDER" means any Lender that has a Revolving Credit
Commitment.
"REVOLVING CREDIT NOTE" means a promissory note of the Borrowers payable to
the order of any Revolving Credit Lender, in substantially the form of EXHIBIT
C, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Credit Advances made by such Lender.
"REVOLVING CREDIT TERMINATION DATE" means the earlier of (a) the sixth
anniversary of the Closing Date, and (b) the Termination Date.
"SECURED OBLIGATIONS" has the meaning specified in the Security Agreements.
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"SECURED PARTIES" means the Administrative Agent, the Lender Parties, KBC
in its capacity as "Lender" under each KBC Loan Agreement and the Hedge Banks
and the other Persons the Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Collateral Documents.
"SECURITY AGREEMENTS" means the Initial Security Agreement, the AIG
Security Agreement and each other security agreement delivered pursuant to
Section 5.13.
"SENIOR SUBORDINATED NOTE AGREEMENT" means, collectively, the Senior
Subordinated Loan Agreement dated the date hereof between PolyVision and the
lenders thereunder, relating to the issuance of $25,000,000 in senior
subordinated notes, together with all exhibits, annexes and schedules thereto
and all agreements, instruments and documents executed or delivered pursuant
thereto, all as in effect on the Closing Date with such amendments,
modifications and supplements thereto or replacements thereof, as are permitted
to be made in accordance with the terms of this Agreement.
"SENIOR SUBORDINATED NOTES" means the senior subordinated notes issued or
to be issued by PolyVision in the aggregate principal amount of $25,000,000
pursuant to the Senior Subordinated Note Agreement.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Borrower or
any ERISA Affiliate and no Person other than the Borrower or any ERISA Affiliate
or (b) was so maintained and in respect of which any Borrower or any ERISA
Affiliate could have liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the assets of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's assets would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"STANDBY LETTER OF CREDIT" means any Letter of Credit or European Letter of
Credit other than a Trade Letter of Credit.
"SUBORDINATED DEBT" means any Debt of the Borrowers that is subordinated to
the Obligations of the Borrowers under the Loan Documents on, and that otherwise
contains, terms and conditions
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satisfactory to the Administrative Agent and Required Lenders including, without
limitation, the Senior Subordinated Notes and the Junior Subordinated Note.
"SUBORDINATED DEBT DOCUMENTS" means, collectively, the Senior Subordinated
Note Agreement and the documents evidencing any other Subordinated Debt incurred
in accordance with the terms of this Agreement.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits or distributions or
general or limited partnership interests of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such trust or
estate, is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries. Unless otherwise specified herein,
the term Subsidiary used herein shall mean a Subsidiary of the Borrower.
"SUBSIDIARY GUARANTY" has the meaning specified Section 3.1(a)(vii).
"SURVIVING DEBT" shall have the meaning specified in Section 3.1(e).
"SWING LINE ADVANCE" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.1(d) or (b) any Revolving Credit Lender pursuant to
Section 2.2(b).
"SWING LINE BANK" has the meaning specified in the recital of parties to
this Agreement.
"SWING LINE BORROWING" means a borrowing consisting of a Swing Line Advance
made by the Swing Line Bank.
"SWING LINE FACILITY" has the meaning specified in Section 2.1(d).
"SWING LINE NOTE" means a promissory note of the Borrowers payable to the
order of the Swing Line Bank, in substantially the form of EXHIBIT L, evidencing
the indebtedness of the Borrowers to such Swing Line Bank resulting from the
Swing Line Advances made by such Swing Line Bank.
"TAXES" has the meaning specified in Section 2.12(a).
"TERM A ADVANCE" has the meaning specified in Section 2.1(a).
"TERM A BORROWING" means a borrowing consisting of simultaneous Term A
Advances of the same Type made by the Term A Lenders.
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"TERM A COMMITMENT" means, with respect to any Term A Lender at any time,
the amount set forth opposite such Lender's name on SCHEDULE I under the caption
"Term A Commitment" or, if such Lender has entered into one or more Assignments
and Acceptances, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 11.7(d) as such Lender's "Term A
Commitment," as such amount may be reduced at or prior to such time pursuant to
Section 2.5.
"TERM A FACILITY" means, at any time, the aggregate Four Million Three
Hundred Twenty-Seven Thousand Four Hundred Thirty ($4,327,430.00) Dollars
principal amount of the Term A Lenders' Term A Commitments at such time.
"TERM A LENDER" means any Lender that has a Term A Commitment.
"TERM A NOTE" means a promissory note of the Borrower payable to the order
of any Term A Lender, in substantially the form of EXHIBIT D, evidencing the
indebtedness of the Borrower to such Lender resulting from the Term A Advance
made by such Lender.
"TERM B ADVANCE" has the meaning specified in Section 2.1(b).
"TERM B BORROWING" means a borrowing consisting of simultaneous Term B
Advances of the same Type made by the Term B Lenders.
"TERM B COMMITMENT" means, with respect to any Term B Lender at any time,
the amount set forth opposite such Lender's name on SCHEDULE I under the caption
"Term B Commitment" or, if such Lender has entered into one or more Assignments
and Acceptances, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 11.7 as such Lender's "Term B
Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.5.
"TERM B FACILITY" means, at any time, the aggregate Twenty Million
($20,000,000) Dollars principal amount of the Term B Lenders' Term B Commitments
at such time.
"TERM B LENDER" means any Lender that has a Term B Commitment.
"TERM B NOTE" means a promissory note of the Borrower payable to the order
of any Term B Lender, in substantially the form of EXHIBIT E, evidencing the
indebtedness of the Borrower to such Lender resulting from the Term B Advance
made by such Lender.
"TERM FACILITIES" means the Term A Facility and the Term B Facility.
"TERMINATION DATE" means the date of termination in whole of the
Commitments pursuant to Section 2.5 or Article 9.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is issued for the
benefit of a supplier of Inventory to the Borrowers or any of their Subsidiaries
to effect payment for such Inventory, the
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conditions to drawing under which include the presentation to the Issuing Bank
of negotiable bills of lading, invoices and related documents sufficient, in the
judgment of the Issuing Bank, to create a valid and perfected lien on or
security interest in such Inventory, bills of lading, invoices and related
documents in favor of the Issuing Bank.
"TRANSACTION" means the transactions contemplated by the AIG Acquisition
Documents and the Loan Documents.
"TYPE" refers to the distinction between Advances bearing interest at the
Prime Rate and Advances bearing interest at the Eurodollar Rate.
"UNUSED REVOLVING CREDIT COMMITMENT" means, with respect to any Revolving
Credit Lender, at any time, (a) such Lender's Revolving Credit Commitment at
such time MINUS (b) the sum of (i) the aggregate principal amount of all
Revolving Credit Advances and Letter of Credit Advances made by such Lender (in
its capacity as a Lender) and outstanding at such time, PLUS (ii) such Lender's
Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time and (B) the aggregate principal amount of all Letter of
Credit Advances made by the Issuing Bank pursuant to Section 2.3(c) and
outstanding at such time.
"VOTING STOCK" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of ERISA,
that is maintained for employees of any Loan Party or in respect of which any
Borrower or any of its Subsidiaries could have liability.
"WHOLLY-OWNED SUBSIDIARY" of any Person means a Subsidiary of such Person
all of the outstanding Equity Interests of which shall at the time be owned by
such Person or by one or more Wholly-Owned Subsidiaries of that Person or a
combination thereof.
"WITHDRAWAL LIABILITIES" has the meaning specified in Part I of Subtitle E
of Title IV of ERISA.
SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.3 ACCOUNTING TERMS; FOREIGN CURRENCY.
(a) ACCOUNTING CHANGES. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to Lender pursuant to Sections 7.3 and 7.4 shall be prepared
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in accordance with GAAP (as in effect at the time of such preparation) on a
consistent basis. In the event any "Accounting Changes" (as defined below)
shall occur and such changes affect financial covenants, standards or terms in
this Agreement, then the Borrowers and the Lender Parties agree to enter into
good faith negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of the Borrowers shall be the
same after such Accounting Changes as if such Accounting Changes had not been
made, and until such time as such an amendment shall have been executed and
delivered by the Borrowers and the Lender Parties, (a) all financial covenants,
standards and terms in this Agreement shall be calculated and/or construed as if
such Accounting Changes had not been made, and (b) the Borrowers shall prepare
footnotes to each Compliance Certificate and the financial statements required
to be delivered hereunder that show the differences between the financial
statements delivered (which reflect such Accounting Changes) and the basis for
calculating financial covenant compliance (without reflecting such Accounting
Changes). "Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by the Borrowers; (b) changes in accounting
principles recommended by Borrowers' certified public accountants; and (c)
changes in carrying value of the Borrowers' or any of their Subsidiaries'
assets, liabilities or equity accounts resulting from adjustments that, in each
case, were applicable to, but not included in, the Pro Forma Financials.
(b) FOREIGN CURRENCY. Calculation for purposes of determining compliance
with the covenant and Default limitations expressed in U.S. Dollars in this
Agreement shall be made by aggregating the applicable items denominated in U.S.
Dollars with the Dollar Equivalent of all such items denominated in foreign
currencies.
SECTION 1.4 OTHER DEFINITIONAL PROVISIONS. References to "Sections",
"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference. In this Agreement, words importing any gender include the other
genders; the words "including," "includes" and "include" shall be deemed to be
followed by the words "without limitation"; references to agreements and other
contractual instruments shall be deemed to include subsequent amendments,
assignments, and other modifications thereto, but only to the extent such
amendments, assignments and other modifications are not prohibited by the terms
of this Agreement or any other Loan Document; references to Persons include
their respective permitted successors and assigns or, in the case of
governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.
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ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.1 THE ADVANCES.
(a) THE TERM A ADVANCES. Each Term A Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "TERM A
ADVANCE") to the Borrowers on the Closing Date in an amount not to exceed such
Lender's Term A Commitment at such time. The Term A Borrowing shall consist of
Term A Advances made simultaneously by the Term A Lenders ratably according to
their Term A Commitments. Amounts borrowed under this Section 2.1(a) and repaid
or prepaid may not be reborrowed.
(b) THE TERM B ADVANCES. Each Term B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "TERM B
ADVANCE") to the Borrowers on the Closing Date in an amount not to exceed such
Lender's Term B Commitment at such time. The Term B Borrowing shall consist of
Term B Advances made simultaneously by the Term B Lenders ratably according to
their Term B Commitments. Amounts borrowed under this Section 2.1(b) and repaid
or prepaid may not be reborrowed.
(c) THE REVOLVING CREDIT ADVANCES. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "REVOLVING CREDIT ADVANCE") to the Borrowers from time to time
on any Business Day during the period from the date hereof until the Revolving
Credit Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Revolving Credit Commitment at such time; PROVIDED, HOWEVER,
that no Revolving Credit Lender shall have any obligation to make a Revolving
Credit Advance under this Section 2.1(c) to the extent such Revolving Credit
Advance would (after giving effect to any immediate application of the proceeds
thereof) exceed the lesser of (i) the Revolving Credit Availability or (ii) an
amount equal to (x) the aggregate of the Unused Revolving Credit Commitments of
the Revolving Credit Lenders at such time MINUS (y) the aggregate Swing Line
Advances outstanding at such time. Each Revolving Credit Borrowing shall be in
an aggregate amount of $500,000 or an integral multiple of $500,000 in excess
thereof (other than, in each case, a Borrowing the proceeds of which shall be
used solely to repay or prepay in full outstanding Swing Line Advances or
outstanding Letter of Credit Advances) and shall consist of Revolving Credit
Advances made simultaneously by the Revolving Credit Lenders ratably according
to their Revolving Credit Commitments; PROVIDED, that the failure of any
Revolving Credit Lender to timely fund any Revolving Credit Advances shall not
excuse any other Revolving Credit Lender from timely funding its share of the
subject Revolving Credit Advances. Within the limits of each Revolving Credit
Lender's Unused Revolving Credit Commitment in effect from time to time, the
Borrowers may borrow, repay and reborrow Revolving Credit Advances.
(d) THE SWING LINE ADVANCES. The Borrowers may request the Swing Line
Bank to make, and the Swing Line Bank may, if in its discretion it elects to do
so, make, on the terms and conditions hereinafter set forth, Swing Line Advances
to the Borrowers from time to time on any Business Day
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during the period from the date hereof until the Revolving Credit Termination
Date (i) in an aggregate principal amount not to exceed at any time outstanding
$3,000,000 (the "SWING LINE FACILITY") and (ii) in an amount for each such Swing
Line Borrowing not to exceed the lesser of (A) the Revolving Credit Availability
and (B) an amount equal to (x) the aggregate of the Unused Revolving Credit
Commitments of the Revolving Credit Lenders at such time MINUS (y) the aggregate
Swing Line Advances outstanding at such time. No Swing Line Advance shall be
used for the purpose of funding the payment of principal of any other Swing Line
Advance. Each Swing Line Borrowing shall be made as a Prime Rate Advance.
Within the limits of the Swing Line Facility and within the limits referred to
in clause (ii) above, so long as the Swing Line Bank, in its discretion, elects
to make Swing Line Advances, the Borrowers may borrow and reborrow under this
Section 2.1(e) and may repay or prepay the Swing Line Advances at such times
prior to the Termination Date, and in such integral multiples, as the Borrowers
may elect.
(e) LETTERS OF CREDIT. The Letters of Credit issued pursuant to this
subsection (e) constitute usage of a sublimit of the Revolving Credit
Commitments of the Lender Parties. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit for the account of
the Borrowers from time to time on any Business Day during the period from the
Closing Date until sixty (60) days before the Revolving Credit Termination Date
(i) in an aggregate Available Amount for all Letters of Credit not to exceed at
any time the Issuing Bank's Letter of Credit Commitment at such time and (ii) in
an Available Amount for each such Letter of Credit not to exceed the lesser of
(A) the Revolving Credit Availability and (B) an amount equal to (x) the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time MINUS
(y) the aggregate Swing Line Advances outstanding at such time. No Letter of
Credit shall have an expiration date (including all rights of the Borrowers or
the beneficiary to require renewal) later than the earlier of (A) sixty (60)
days before the Revolving Credit Termination Date, (B) in the case of a Standby
Letter of Credit, 365 days after the date of issuance thereof and (C) in the
case of a Trade Letter of Credit, 180 days after the date of issuance thereof.
The foregoing notwithstanding, any Standby Letter of Credit may, by its terms,
be renewable annually upon notice (a "NOTICE OF RENEWAL") given to the Issuing
Bank and the Administrative Agent on or prior to any date for notice of renewal
set forth in such Letter of Credit (but in any event at least five (5) Business
Days prior to the date of the proposed renewal of such Standby Letter of Credit)
and upon fulfillment of the applicable conditions set forth in Article 3 unless
such Issuing Bank shall have notified the Borrowers (with a copy to the
Administrative Agent) on or prior to the date for notice of termination set
forth in such Standby Letter of Credit (but in any event at least thirty (30)
Business Days prior to the date of automatic renewal) of its election not to
renew such Standby Letter of Credit (a "NOTICE OF TERMINATION"); PROVIDED that
the terms of each Standby Letter of Credit that is automatically renewable
annually shall not permit the expiration date (after giving effect to any
renewal) of such Standby Letter of Credit in any event to be extended to a date
later than sixty (60) days before the Revolving Credit Termination Date. If
either a Notice of Renewal is not given by the Borrowers or a Notice of
Termination is given by the Issuing Bank pursuant to the immediately preceding
sentence, such Standby Letter of Credit shall expire on the date on which it
otherwise would have been automatically renewed; PROVIDED, HOWEVER, that even in
the absence of receipt of a Notice of Renewal, the Issuing Bank may, in its
discretion unless instructed to the contrary by the Administrative Agent or the
Borrowers, deem that a Notice of Renewal had been timely
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delivered and, in such case, a Notice of Renewal shall be deemed to have been so
delivered for all purposes under this Agreement. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrowers may request the issuance of Letters of Credit under this Section
2.1(f), repay any Letter of Credit Advances resulting from drawings under
Letters of Credit pursuant to Section 2.3(c), and request the issuance of
additional Letters of Credit under this Section 2.1(f).
(f) EUROPEAN LETTERS OF CREDIT. The issuance of the European Letters
of Credit shall be governed by the terms of Section 2.17, not Section 2.1(e) or
Section 2.3, and such European Letters of Credit do not constitute usage of the
Revolving Credit Commitments.
(g) JOINT AND SEVERAL LIABILITY. The Borrowers shall be jointly and
severally liable for any and all indebtedness, liabilities and obligations
hereunder, whether or not a reference to joint and several liability is made.
(h) KBC ADVANCES. PolyVision and each of the other Borrowers shall be
jointly and severally liable with the European Borrowers for and shall guarantee
payment of all Obligations under the KBC Loan Agreements and the performance of
all of the terms and conditions of the KBC Loan Agreements.
SECTION 2.2 MAKING THE ADVANCES. (a) Except as otherwise provided in
Section 2.3 or, with respect to Swing Line Advances, in Section 2.2(b), each
Borrowing shall be made on notice, given not later than 1:00 P.M. (New York
time) on the third Business Day prior to the date of the proposed Borrowing in
the case of Eurodollar Rate Advances and on the first Business Day prior to the
date of the proposed Borrowing in the case of Prime Rate Advances, by the
Borrowers to the Administrative Agent, which shall give to each appropriate
Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "NOTICE OF BORROWING") may be by telephone, confirmed immediately
in writing, or telex or telecopier in substantially the form of EXHIBIT F,
specifying therein the requested (i) date of such Borrowing, (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances comprising such
Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Each appropriate Lender shall, before 11:00 A.M. (New York
time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments under the applicable
Facility of such Lender and the other appropriate Lenders. Upon and to the
extent of the Administrative Agent's receipt of such funds and upon fulfillment
of the applicable conditions set forth in Article 3, the Administrative Agent
will, notwithstanding the failure of any Lender to fund its portion of the
subject Advance, make such received funds available to the Borrowers by
crediting the Borrowers' Account; PROVIDED, HOWEVER, that in the case of any
Revolving Credit Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Swing Line Advances
and Letter of Credit Advances made by the Swing Line Bank, the Issuing Bank and
by any other Revolving Credit Lender and outstanding on the date of such
Revolving Credit Borrowing, PLUS interest accrued and unpaid
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thereon to and as of such date, available to the Swing Line Bank, the Issuing
Bank and such other Revolving Credit Lenders for repayment of such Swing Line
Advances and Letter of Credit Advances.
(b) Each Swing Line Borrowing shall be made either (x) on notice, given
not later than 1:00 P.M. (New York time) on the date of the proposed Swing Line
Borrowing, by the Borrowers to the Swing Line Bank and the Administrative Agent
or (y) pursuant to other arrangements, including, by way of example and not of
limitation, arrangements for daily repayments and borrowings on each Business
Day, which are satisfactory in form and substance to the Swing Line Bank, the
Administrative Agent and the Borrowers. Each notice of a Swing Line Borrowing
pursuant to clause (x) in the immediately preceding sentence (a "NOTICE OF SWING
LINE BORROWING") shall be by telephone, confirmed immediately in writing, or
telex or telecopier, specifying therein the requested (i) date of such
Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing
(which maturity shall be no later than the seventh day after the requested date
of such Borrowing). If, in its discretion, the Swing Line Bank elects to make a
requested Swing Line Advance, the Swing Line Bank will make the amount thereof
available to the Administrative Agent at the Administrative Agent's Account, in
same day funds. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article 3, the
Administrative Agent will make such funds available to the Borrowers by
crediting the Borrowers' Account. Upon written demand by the Swing Line Bank,
with a copy of such demand to the Administrative Agent, each other Revolving
Credit Lender shall purchase from the Swing Line Bank, and the Swing Line Bank
shall sell and assign to each such other Revolving Credit Lender, such other
Lender's Pro Rata Share of all outstanding Swing Line Advances as of the date of
such demand, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
Swing Line Advances to be purchased by such Lender. The Borrowers hereby agree
to each such sale and assignment. Each Revolving Credit Lender agrees to
purchase its Pro Rata Share of outstanding Swing Line Advances on (i) the
Business Day on which demand therefor is made by the Swing Line Bank; PROVIDED
that notice of such demand is given not later than 3:00 P.M. (New York time) on
such Business Day, or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Swing Line Bank to any other Revolving Credit Lender of a portion of a Swing
Line Advance, the Swing Line Bank represents and warrants to such other Lender
that the Swing Line Bank is the legal and beneficial owner of such interest
being assigned by it, but makes no other representation or warranty and assumes
no responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Revolving Credit Lender shall not
have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent, for the account of the Swing Line Bank, forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Swing Line Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate. If such Lender shall pay to
the Administrative Agent such amount for the account of the Swing Line Bank on
any Business Day, such amount so paid in respect of principal shall constitute a
Swing Line Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Swing Line Advance made
by the Swing Line Bank shall be reduced by such amount on such Business Day.
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(c) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrowers may not select Eurodollar Rate Advances if the obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.9 or Section 2.10, and (ii) the Eurodollar Rate Advances
made on any date may not be outstanding as part of more than ten (10) separate
Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall
be irrevocable and binding on the Borrowers. In the case of any Borrowing that
the related Notice of Borrowing specifies is to be comprised of or to include
Eurodollar Rate Advances, the Borrowers shall jointly and severally indemnify
each appropriate Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth
in Article 3, including, without limitation, any loss (including loss of
anticipated profits as reasonably determined by such Lender), cost or expense
incurred by reason of the liquidation or redeployment of deposits or other funds
acquired by such Lender to fund the Eurodollar Rate Advance to be made by such
Lender as part of such Borrowing when such Eurodollar Rate Advance, as a result
of such failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from an
appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.2 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrowers severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrowers until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrowers, the interest rate applicable at such time under Section
2.7 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, or relieve the
Administrative Agent of its obligation to deliver all funded amounts of Advances
to the Borrowers in accordance herewith; but no Lender shall be responsible for
the failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Borrowing.
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SECTION 2.3 ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF
CREDIT.
(a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued upon
notice, given not later than 1:00 P.M. (New York time) on the fifth Business Day
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrowers to the Issuing Bank, which shall give to the Administrative Agent and
each Revolving Credit Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "NOTICE OF ISSUANCE") shall be
by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of such issuance (which shall be a
Business Day), (ii) Available Amount of such Letter of Credit, (iii) expiration
date of such Letter of Credit, (iv) name and address of the beneficiary of such
Letter of Credit and (v) form of such Letter of Credit, and shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrower for use in connection with such requested Letter of
Credit (a "LETTER OF CREDIT AGREEMENT"). If the requested form of such Letter
of Credit is acceptable to the Issuing Bank, in its sole discretion, the Issuing
Bank will, upon fulfillment of the applicable conditions set forth in Article 3,
make such Letter of Credit available to the Borrowers at their office referred
to in Section 11.2 or as otherwise agreed with the Borrowers in connection with
such issuance. In the event and to the extent that the provisions of any such
Letter of Credit Agreement shall conflict with this Agreement, the provisions of
this Agreement shall govern.
(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish (i) to
the Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the Administrative Agent, the Borrowers and each Revolving Credit Lender on the
first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (iii) to the
Administrative Agent, the Borrowers and each Revolving Credit Lender on the
first Business Day of each calendar quarter a written report setting forth the
average daily aggregate Available Amount during the preceding calendar quarter
of all Letters of Credit.
(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance which
shall be a Prime Rate Advance in the amount of such draft. Each of the
Borrowers, the Administrative Agent and each Revolving Credit Lender hereby
acknowledges and agrees that Letter of Credit Advances may be made, or deemed
made, by the Issuing Bank in respect of any Letter of Credit, and each Revolving
Credit Lender shall participate in all Letter of Credit Advances made hereunder
as provided herein. Upon written demand by the Issuing Bank, with a copy of
such demand to the Administrative Agent, each Revolving Credit Lender shall
purchase from the Issuing Bank, and the Issuing Bank shall sell and assign to
each such Revolving Credit Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by making
available (for the account of its Applicable Lending Office) to the
Administrative Agent (for the account of the Issuing Bank), by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. Promptly after receipt thereof, the Administrative
Agent shall transfer
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such funds to the Issuing Bank. The Borrowers hereby agree to each such sale
and assignment. Each Revolving Credit Lender agrees to purchase its Pro Rata
Share of an outstanding Letter of Credit Advance on (i) the Business Day on
which demand therefor is made by the Issuing Bank; PROVIDED that notice of such
demand is given not later than 11:00 A.M. (New York time) on such Business Day
or (ii) the first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by the Issuing Bank
to any other Revolving Credit Lender of a portion of a Letter of Credit Advance,
the Issuing Bank represents and warrants to such other Lender that the Issuing
Bank is the legal and beneficial owner of such interest being assigned by it,
free and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Revolving
Credit Lender shall not have so made its Pro Rata Share of such Letter of Credit
Advance available to the Administrative Agent, such Revolving Credit Lender
agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount
for the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by the Issuing Bank shall
be reduced by such amount on such Business Day.
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of any
Lender to make any Letter of Credit Advance to be made by it on the date
specified in Section 2.3(c) shall not relieve any other Lender of its obligation
hereunder to make its Letter of Credit Advance on such date, but no Lender shall
be responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.4 REPAYMENT OF ADVANCES.
(a) TERM A ADVANCES. The Borrowers shall repay to the Administrative
Agent for the ratable account of the Term A Lenders principal of the Term A
Advances on the following dates in the amounts indicated (which amounts shall be
reduced as a result of the application of prepayments in accordance with the
order of priority set forth in Section 2.6):
- ---------------------------------- --------------------------
Date Amount
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 1999 $ 6,491.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2000 86,549.00
- ---------------------------------- --------------------------
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- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2001 209,880.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2002 238,009.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2003 259,646.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2004 281,282.50
- ---------------------------------- --------------------------
; PROVIDED, HOWEVER, that the final principal installment shall be in an amount
equal to the aggregate principal amount of the Term A Advances outstanding on
the due date of such final installment.
(b) TERM B ADVANCES. The Borrowers shall repay to the Administrative
Agent for the ratable account of the Term B Lenders principal of the Term B
Advances on the following dates in the amounts indicated (which amounts shall be
reduced as a result of the application of prepayments in accordance with the
order of priority set forth in Section 2.6):
- ---------------------------------- --------------------------
Date Amount
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 1999 $ 37,500.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2000
thereafter continuing until
(and including) October 31, 2003 50,000.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2004 1,037,500.00
- ---------------------------------- --------------------------
Each of January 31, April 30,
July 31 and October 31, 2005 3,725,000.00
- ---------------------------------- --------------------------
PROVIDED, HOWEVER, that the final principal installment shall be equal to the
aggregate principal amount of the Term B Advances outstanding on the due date of
such final installment.
(c) REVOLVING CREDIT ADVANCES. The Borrowers shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Revolving Credit Termination Date the aggregate principal amount of the
Revolving Credit Advances then outstanding.
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(d) SWING LINE ADVANCES. The Borrowers shall repay to the
Administrative Agent for the account of the Swing Line Bank and each other
Revolving Credit Lender that has made a Swing Line Advance the outstanding
principal amount of each Swing Line Advance made by each of them on the earlier
of the maturity date for such Swing Line Advance (which maturity date shall be
no later than the seventh day after the requested date of such Swing Line
Advance) and the Revolving Credit Termination Date.
(e) LETTER OF CREDIT ADVANCES. (i) The Borrowers shall repay to the
Administrative Agent for the account of the Issuing Bank and each other
Revolving Credit Lender that has made a Letter of Credit Advance on the earlier
of demand and the Revolving Credit Termination Date the outstanding principal
amount of each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrowers under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument (except as set forth in clause
(D) below) including, without limitation, under the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating to any of the foregoing (all of the
foregoing being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrowers in
respect of any L/C Related Document or any other amendment or waiver of or
any consent to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right
that the Borrowers may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a 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
(unless payment thereagainst by the Issuing Bank is determined to
constitute gross negligence or willful misconduct by the Issuing Bank based
on failure by the Issuing Bank, due to insufficiency of documents presented
or statements made, to observe the terms of the subject Letter of Credit
itself); or
(E) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any Guaranty
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or any other guarantee, for all or any of the Obligations of the Borrowers
in respect of the L/C Related Documents.
(f) EUROPEAN BORROWERS; EUROPEAN LETTER OF CREDIT. Principal payable on
account of loans made to the European Borrowers shall be payable to KBC as and
when provided in the applicable KBC Loan Agreements. Certain provisions
relating to the obligations of the Borrowers to reimburse the Lender Parties in
respect of draws under the European Letters of Credit are set forth in
Section 2.17.
SECTION 2.5 REDUCTION OR TERMINATION OF THE COMMITMENTS.
(a) (i) OPTIONAL REDUCTION. The Borrowers jointly may, upon at least
three Business Days' written notice to the Administrative Agent delivered not
more than once in any calendar year, permanently reduce the Revolving Credit
Facility; PROVIDED, HOWEVER, that each partial reduction of such Facility (i)
shall be in an aggregate amount of $1,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (ii) shall be made ratably among the
appropriate Lenders in accordance with their Commitments with respect to such
Facility; PROVIDED, HOWEVER, that (A) the Revolving Credit Advances shall be
repaid as and when necessary to cause the aggregate outstanding principal amount
of all Revolving Credit Advances PLUS Letter Credit Advances PLUS Swingline
Advances PLUS the Available Amount of all Letters of Credit not to exceed the
Revolving Credit Facility as so reduced. In the event of any reduction in the
KBC Revolving Credit Facility, each of the European Letter of Credit Lender
Share and the KBC Share shall be reduced on a pro rata basis.
(ii) OPTIONAL TERMINATION. The Borrowers jointly may, upon at least
ten Business Days' written notice to the Administrative Agent, terminate this
Agreement; PROVIDED, HOWEVER, that no such termination shall be effective unless
(i) both KBC Loan Agreements shall terminate concurrently, (ii) the Borrowers
shall have paid in full all of the Obligations under the Loan Documents
(including all "Obligations" under and as defined in each KBC Loan Agreement
which shall not have been paid by the European Borrowers) in immediately
available funds, and (iii) all European Letters of Credit and Letters of Credit
shall have either expired or have been cash collateralized to the Administrative
Agent's satisfaction. Any notice of termination given by the Borrowers shall be
irrevocable unless all Lenders otherwise agree in writing, and no Lender shall
have any obligation to make any Advances or issue any Letters of Credit or
European Letters of Credit on or after the termination date stated in such
notice. Except with respect to those Sections of this Agreement and of the KBC
Loan Agreements which specifically provide that they are to survive termination,
this Agreement and the KBC Loan Agreements may be terminated in their entirety
only, and neither this Agreement nor either KBC Loan Agreement nor any section
of any such Agreement nor any type of Loan or other extension of credit
available hereunder or thereunder may be terminated singly.
(b) MANDATORY. (i) On the date of the Term A Borrowing, after giving
effect to such Term A Borrowing, and from time to time thereafter upon each
repayment or prepayment of the Term A Advances, the aggregate Term A Commitments
of the Term A Lenders shall be automatically and permanently reduced, on a
ratable basis as among such Term A Lenders in proportion to their respective
Term A Commitments by an amount equal to the amount by which the aggregate Term
A Commitments
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immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Term A Advances then outstanding; PROVIDED, HOWEVER, that the Term A
Commitments shall terminate, and all Advances made thereunder shall be repaid in
full, no later than October 31, 2004.
(ii) On the date of the Term B Borrowing, after giving effect to such
Term B Borrowing, and from time to time thereafter upon each repayment or
prepayment of the Term B Advances, the aggregate Term B Commitments of the Term
B Lenders shall be automatically and permanently reduced, on a ratable basis as
among such Term B Lenders in proportion to their respective Term B Commitments,
by an amount equal to the amount by which the aggregate Term B Commitments
immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Term B Advances then outstanding; PROVIDED, HOWEVER, that the Term B
Commitments shall terminate, and all Advances made thereunder shall be repaid in
full, no later than October 31, 2005.
(iii) The Letter of Credit Facility shall be permanently reduced
from time to time on the date of each reduction in the Revolving Credit Facility
by the amount, if any, by which the amount of the Letter of Credit Facility
exceeds the Revolving Credit Facility after giving effect to such reduction of
the Revolving Credit Facility.
(iv) In the event the Closing Date shall not have occurred by December
15, 1998, then all of the Commitments shall be automatically terminated and this
Agreement shall be of no further force or effect.
(c) EUROPEAN BORROWERS. The European Borrowers may reduce, and shall
reduce, any and all commitments in effect under the terms of the KBC Loan
Agreements as provided therein with respect to optional and mandatory reductions
of commitments. Any permanent reduction of such commitments will cause a
concurrent proportionate reduction in the European Letter of Credit Commitment.
SECTION 2.6 PREPAYMENTS.
(a) OPTIONAL. The Borrowers may, without premium or penalty, upon at
least one (1) Business Day's notice in the case of Prime Rate Advances and three
(3) Business Days' notice in the case of Eurodollar Rate Advances, in each case
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the Borrowers shall,
prepay the outstanding aggregate principal amount of the Advances, in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the aggregate principal amount prepaid; PROVIDED, HOWEVER, that (i) each
partial prepayment shall be in an aggregate principal amount of at least
$1,000,000, or an integral multiple of $1,000,000 in excess thereof and (ii) no
such prepayment of a Eurodollar Rate Advance shall be made other than on the
last day of an Interest Period therefor without payment by the Borrowers of the
amounts provided for in Section 11.4(c). Each prepayment made pursuant to this
Section 2.6(a) shall, at the Borrowers' joint option be applied to either (i)
repay the Facilities in the following manner: FIRST, to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full; SECOND, to
prepay Swing Line Advances then outstanding until such Advances are paid in
full; and THIRD, to prepay Revolving Credit Advances then outstanding until such
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Revolving Credit Advances are paid in full; or (ii) repay the Facilities in the
following manner: FIRST, ratably to the Term A Facility and the Term B Facility,
and ratably to each unpaid installment of principal of each of the Term
Facilities until such installments are paid in full; SECOND, to prepay Letter of
Credit Advances then outstanding until such Advances are paid in full; THIRD, to
prepay Swing Line Advances then outstanding until such Advances are paid in
full; FOURTH, to prepay Revolving Credit Advances then outstanding until such
Revolving Credit Advances are paid in full; and FIFTH, deposited in the L/C Cash
Collateral Account to cash collateralize 100% of the Available Amount of the
Letters of Credit then outstanding. Upon the drawing under any Letter of Credit
for which funds are on deposit in the L/C Cash Collateral Account, such funds
shall be applied to reimburse the Issuing Bank or the Revolving Credit Lenders,
as applicable.
(b) MANDATORY. (i) Within ninety (90) days following the end of each
Fiscal Year, the Borrowers shall execute and deliver to the Administrative Agent
a certificate of each Borrower's chief executive officer or chief financial
officer demonstrating the Borrowers' calculation of Excess Cash Flow for such
Fiscal Year along with a prepayment of the then outstanding Advances equal to
seventy-five percent (75%) of the Borrowers' PRO RATA share (calculated as set
forth below) of Excess Cash Flow for such Fiscal Year; PROVIDED, HOWEVER, that
(A) if the Consolidated Debt to EBITDA Ratio, measured at the end of such Fiscal
Year of the Borrowers, for such Fiscal Year of the Borrowers, is less than or
equal to 4.0 to 1.0, then the required prepayment of the then outstanding
Advances shall be in the amount of fifty percent (50%) of the Borrowers' PRO
RATA share of the Excess Cash Flow for such Fiscal Year rather than
seventy-five percent (75%) of the Borrowers' PRO RATA share of such Excess Cash
Flow; (B) in respect of payments required to be made hereunder based on Excess
Cash Flow for the Fiscal Year ended April 30, 1999, such Excess Cash Flow shall
be computed for the two fiscal quarters ending on April 30, 1999 (in lieu of the
full Fiscal Year then ended); and (C) the Borrowers may retain from Excess Cash
Flow otherwise required to be used to prepay the outstanding Advances not later
than July 31, 1999 (and assuming no Default or Event of Default then exists) the
amount of One Million Five Hundred Thousand ($1,500,000) Dollars (reflecting the
expected net decrease in accounts receivable (as a component in changes in
Consolidated Current Assets)). For purposes of this subsection 2.6(b)(i), (1)
the Borrowers' PRO RATA share of Excess Cash Flow will be determined by
calculating the percentage that the outstanding principal balance of the Term
Loans are of the total of (A) all Term Loans outstanding to the Borrowers plus
(B) all term loans outstanding to the European Borrowers under the KBC Loan
Agreements and (2) in any event, Excess Cash Flow for the Foreign Subsidiaries
shall be computed for the periods comprising the fiscal quarters or fiscal year
of PolyVision, without regard to the existence during any relevant period of a
different fiscal year end of any Foreign Subsidiary.
(ii) Within fifteen (15) days after receipt by any Borrower or any of
its Domestic Subsidiaries of Net Cash Proceeds from Asset Dispositions (other
than Extraordinary Receipts the disposition of which shall be governed by the
terms of subsection 2.6(b)(iv) below), the Borrowers shall prepay the then
outstanding Advances in an amount equal to one-hundred percent (100%) of such
Net Cash Proceeds in excess of $500,000 in any Fiscal Year (such $500,000
computed on a Consolidated basis with respect to PolyVision and all of its
Subsidiaries), PROVIDED that no such prepayment need be made (A) unless the Net
Cash Proceeds from any single Asset Disposition or series of related Asset
Dispositions exceed $500,000 (in which case a prepayment shall be made in the
amount of the entire
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Asset Disposition) or until the cumulative Net Cash Proceeds from all Asset
Dispositions by the Borrowers in any particular Fiscal Year exceed $500,000 (in
which case a prepayment shall be made in the amount of the Net Cash Proceeds
from the specific Asset Disposition (or portion thereof) causing the limit to be
exceeded), except that the terms of this subsection (A) shall not be applicable
in respect of Net Cash Proceeds reinvested in accordance with the terms of the
following subsection (B); and (B) with respect to Asset Dispositions by the
Borrowers or any Domestic Subsidiary, if the Net Cash Proceeds therefrom are
used to reinvest in fixed assets (for use in its business or the business of the
Domestic Subsidiaries) within 180 days (or 360 days with respect to real estate
and improvements on real estate) of such Asset Disposition, PROVIDED that any
such Net Cash Proceeds not so reinvested shall be used to prepay the Advances on
the 181st day (or 361st day with respect to real estate and improvements on real
estate).
(iii) Within fifteen (15) days after receipt by any Borrower or any
of its Domestic Subsidiaries of Net Cash Proceeds from any Debt Issuance or
Equity Issuance, the Borrowers shall prepay the then outstanding Advances in an
amount equal to, with respect to any (A) Debt Issuance, one hundred percent
(100%) and (B) Equity Issuance, seventy-five percent (75%), of such Net Cash
Proceeds; PROVIDED, HOWEVER, that a Borrower may retain one hundred percent
(100%) of the proceeds of any Equity Issuance (1) used as part of the
consideration for a Permitted Acquisition consummated within one-hundred eighty
(180) days after receipt of such Net Cash Proceeds or (2) reinvested in fixed
assets (for use in its business or the business of any Borrower's Domestic
Subsidiaries) within one-hundred eighty (180) days after receipt of such Net
Cash Proceeds.
(iv) Within fifteen (15) days after receipt of Net Cash Proceeds by
any Borrower or any of its Domestic Subsidiaries from any Extraordinary Receipt
received by or paid to or for the account of any Borrower or any of its Domestic
Subsidiaries and not otherwise included in clause (i), (ii) or (iii) above, the
Borrowers shall prepay the then outstanding Advances in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds in excess of $500,000 in the
aggregate.
(v) Each prepayment made pursuant to clause (i), (ii), (iii) or (iv)
shall be subject to the provisions of Section 11.4(c) and shall be applied to
prepay the Facilities in the following manner: FIRST, ratably to the Term A
Facility and the Term B Facility and ratably to each unpaid installment of
principal of each of the Term Facilities until such installments are paid in
full; SECOND, to prepay Letter of Credit Advances then outstanding until such
Advances are paid in full; THIRD, to prepay Swing Line Advances then outstanding
until such Advances are paid in full; FOURTH, to prepay Revolving Credit
Advances then outstanding until such Advances are paid in full; and FIFTH,
deposited in the L/C Cash Collateral Account to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding. Upon the drawing
under any Letter of Credit for which funds are on deposit in the L/C Cash
Collateral Account, such funds shall be applied to reimburse the Issuing Bank or
the Revolving Credit Lenders, as applicable. The amount remaining (if any)
after the required prepayment of the Advances then outstanding and the 100% cash
collateralization of the aggregate Available Amount of Letters of Credit then
outstanding (the sum of such prepayment amounts, cash collateralization amounts
and remaining amount being referred to herein as the "REDUCTION AMOUNT") may be
retained by the Borrowers. Upon the termination of all of the Commitments and
the payment in full of all Obligations
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under the Loan Documents, including, without limitation, termination or
expiration of all Letters of Credit and the indefeasible payment in full of all
Obligations in respect of all Letters of Credit, then all amounts remaining on
deposit in the L/C Cash Collateral Account shall be returned to the Borrowers.
(vi) The Borrowers shall, within fifteen (15) days following the end
of each month in each Fiscal Year, pay to the Administrative Agent for deposit
in the L/C Cash Collateral Account an amount sufficient to cause the aggregate
amount on deposit in such Account to equal the amount (if any) by which the
aggregate Available Amount of all Letters of Credit then outstanding exceeds the
Letter of Credit Facility on such Business Day.
(vii) At any time that the aggregate principal amount of the
Revolving Credit Advances, the Letter of Credit Advances and the Swing Line
Advances PLUS the aggregate Available Amount of all outstanding Letters of
Credit exceeds the Revolving Credit Availability, the Borrowers shall
immediately repay Revolving Credit Advances to the extent necessary to eliminate
such excess.
(viii) The foregoing notwithstanding, the provisions of this
Section 2.6(b) shall not be construed to permit any Equity Issuance, Debt
Issuance or Asset Disposition otherwise prohibited under the terms of this
Agreement.
(c) APPLICATION OF PREPAYMENTS TO THE TERM A FACILITY AND THE TERM B
FACILITY. Upon receipt of any amounts to be applied to the prepayment in
respect of the Term A Facility and the Term B Facility, the Administrative Agent
shall apply such amounts to the prepayment of the Term A Advances and Term B
Advances ratably based on the proportions that the Term A Advances and Term B
Advances respectively represent of the aggregate of all such Advances, and such
prepayments within such separate Facilities shall be applied ratably to each
unpaid installment of principal thereof.
(d) EUROPEAN BORROWERS. Mandatory and optional prepayments by the
European Borrowers shall be made as provided in the applicable KBC Loan
Agreements.
SECTION 2.7 INTEREST.
(a) SCHEDULED INTEREST. The Borrowers shall pay to the Administrative
Agent, for the benefit of the Lenders, interest on the unpaid principal amount
of each Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) PRIME RATE ADVANCES. During such periods as such Advance is a
Prime Rate Advance, a rate per annum equal at all times to the sum of (x) the
Prime Rate in effect from time to time PLUS (y) the Applicable Margin for such
Advance in effect from time to time, payable in arrears quarterly on the last
day of each fiscal quarter of PolyVision during such periods and on the date
such Prime Rate Advance shall be Converted or paid in full.
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(ii) EURODOLLAR RATE ADVANCES. During such periods as such Advance is
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Advance PLUS (y) the Applicable Margin for such Advance
in effect on the first day of such Interest Period, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a duration of
more than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on the date
such Eurodollar Rate Advance shall be Converted or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of
any Event of Default, the Borrowers shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender payable, in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and from time to time on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) the amount of any interest, fee or other amount payable
hereunder not paid when due (whether at the stated maturity, by acceleration or
otherwise) the Borrowers shall pay interest on such amount to the fullest extent
permitted by law from the date such amount shall be due until such amount shall
be paid in full, in arrears on the dates when such amounts are due and from time
to time on demand, at a rate per annum equal at all times to 2% per annum above
the rate per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii)
above (but in no event less than the interest rate in effect on the due date)
and, in all other cases, on Prime Rate Advances pursuant to clause (a)(i) above
(but in no event less than the interest rate in effect on the due date).
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(a), the Administrative Agent shall give notice
to the Borrowers and each appropriate Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii)
above.
(d) LIMITATION ON INTEREST. All agreements between and among the
Borrowers, any Guarantors, any other Loan Party and the Lender Party and/or the
Administrative Agent are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the
Indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to any Lender Party for the use or the forbearance of the Indebtedness
incurred hereunder exceed the maximum permissible under applicable law. As used
herein the term "applicable law" shall mean the law in effect as of the date
hereof; PROVIDED, HOWEVER, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Agreement and the
Notes issued hereunder shall be governed by such new law as of its effective
date. In this regard it is expressly agreed that it is the intent of the
Borrowers, the Lender Parties and the Administrative Agent in execution,
delivery and acceptance of this Agreement to contract in strict compliance with
the laws of the State of New York from time to time in effect. If under any
circumstances whatsoever, fulfillment of any provision hereof or of any of the
Loan Documents at the time performance of such provision shall be due shall
involve transcending the limits of such validity prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limits
of such validity, and if under or
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from any circumstance whatsoever the Administrative Agent or any Lender Party
should ever receive as interest any amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance of the Revolving Credit Notes and then the
principal amounts evidenced by the other Notes issued hereunder and not to the
payment of interest. This provision shall control every other provision of all
agreements between and among the Borrowers, any Guarantors, any other Loan
Party, the Administrative Agent and the Lender Parties.
(e) EUROPEAN BORROWERS. Interest, including default interest, shall
accrue on the principal amount of all loans made to the European Borrowers under
the KBC Loan Agreements as provided therein. Interest payments made by the
European Borrowers to KBC pursuant to the terms of the applicable KBC Loan
Agreements and passed through to the Administrative Agent under the terms of the
European Letter of Credit Agreements shall be paid by the Administrative Agent
to the Lenders on a pro rata basis in accordance with each Lender's respective
European Letter of Credit Commitment as a percentage of the aggregate European
Letter of Credit Commitments.
SECTION 2.8 FEES.
(a) COMMITMENT FEES. The Borrowers shall pay to the Administrative Agent,
for the account of the Lenders, a commitment fee, from the Closing Date in the
case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender, until the Revolving Credit Termination Date, payable in
arrears quarterly on the last Business Day of each January, April, July and
October, commencing on the first such day to occur after the date hereof and on
the Revolving Credit Termination Date at a rate per annum equal to one-half of
one percent (1/2 of 1%) per annum on the average daily Unused Revolving Credit
Commitment of each such Lender; PROVIDED, HOWEVER, that the commitment fee shall
be decreased to three-eighths of one percent (3/8 of 1%) per annum for any
periods (and only during such periods) when the Consolidated Debt to EBITDA
Ratio is less than 4.0 to 1 determined in the same manner and with the same
method for adjustments as is the Applicable Margin. For purposes of this
subsection (a), Swing Line Advances shall not constitute utilization of the
Revolving Credit Commitments of the Revolving Credit Lenders.
(b) LETTER OF CREDIT FEES AND EUROPEAN LETTER OF CREDIT FEES. (i) The
Borrowers shall pay to the Administrative Agent for the account of each
Revolving Credit Lender a commission, payable in arrears quarterly on the last
Business Day of each January, April, July and October, commencing on the first
such date to occur after the Closing Date and on the earliest to occur of the
full drawing, expiration, termination or cancellation of any such Letter of
Credit and on the Revolving Credit Termination Date, on such Lender's Pro Rata
Share of the average daily aggregate Available Amount during such quarter of all
Letters of Credit outstanding from time to time at the rate per annum equal to
the Applicable Margin then in effect for Eurodollar Advances under the Revolving
Credit Facility.
(ii) In addition to the foregoing fees described in subsection (i)
above, the Borrowers shall pay to the Issuing Bank, for its own account, (A) on
the Available Amount of each Letter of Credit
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and each European Letter of Credit, a fronting fee, for the period from the date
of issuance of such Letter of Credit and each European Letter of Credit to and
including the termination thereof, computed at the rate of one quarter of one
percent (1/4%) per annum, payable in arrears quarterly on the last Business Day
of each January, April, July and October of each year and on the date of
termination thereof and (B) transfer fees and other customary fees and charges
in connection with the issuance or administration of each Letter of Credit and
each European Letter of Credit as the Borrower and the Issuing Bank shall agree.
(c) ADMINISTRATIVE AGENT'S FEES. The Borrowers shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrowers and the Administrative Agent.
(d) EUROPEAN BORROWERS. The European Borrowers will pay fees, including
commitment fees, to KBC in accordance with the applicable KBC Loan Agreements.
SECTION 2.9 CONVERSION OF ADVANCES.
(a) OPTIONAL. The Borrowers may on any Business Day, upon notice given to
the Administrative Agent not later than 1:00 P.M. (New York time) on the third
Business Day prior to the date of the proposed Conversion and subject to the
provisions of Sections 2.7 and 2.10, Convert all or any portion of the Advances
of one Type comprising the same Borrowing into Advances of the other Type;
PROVIDED, HOWEVER, that (i) any Conversion of Eurodollar Rate Advances into
Prime Rate Advances shall be effective only on the last day of an Interest
Period for such Eurodollar Rate Advances unless the Borrowers pay the amounts,
if any, provided for in Section 11.4(c), (ii) any Conversion of Prime Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than the
minimum amount specified in Section 2.1(c), (iii) no Conversion of any Advances
shall result in more separate Borrowings than permitted under Section 2.2(c) and
(iv) each Conversion of Advances comprising part of the same Borrowing under any
Facility shall be made ratably among the appropriate Lenders in accordance with
their Commitments under such Facility. Each such notice of Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period for
such Advances. Each notice of Conversion shall be irrevocable and binding on
the Borrowers.
(b) MANDATORY. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $250,000, such Advances shall
automatically Convert into Prime Rate Advances.
(ii) If the Borrowers shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.1, the
Administrative Agent will forthwith so notify the Borrowers and the appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
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(iii) Upon the occurrence and during the continuance of any Event
of Default and the acceleration of the Notes, interest thereon and other amounts
payable by the Borrowers under this Agreement and the other Loan Documents
pursuant to Article 9, (A) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10 INCREASED COSTS, ETC.
(a) If, after the date hereof, due to (i) the introduction or
effectiveness of any change in reserve requirements included in the Eurodollar
Rate Reserve Percentage, or any change in the interpretation of or any change in
any law or regulation, or (ii) the compliance with any new guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender Party of
agreeing to make or of making, funding or maintaining Eurodollar Rate or Prime
Rate Advances or of agreeing to issue or of issuing or maintaining Letters of
Credit or of agreeing to make or of making or maintaining Letter of Credit
Advances (excluding for purposes of this Section 2.10 any such increased costs
resulting from (A) Taxes or Other Taxes (as to which Section 2.12 shall govern)
and (B) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrowers shall from time
to time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; PROVIDED, HOWEVER, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A certificate as to
the amount of such increased cost, submitted to the Borrowers by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.
(b) If, after the date hereof, due to (i) the introduction or
effectiveness of, any change in, or any change in the interpretation of any law
or regulation, or (ii) the compliance with any new guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the amount of capital required or
reasonably expected to be maintained by any Lender Party or any corporation
controlling such Lender Party as a result of or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit or the European
Letters of Credit hereunder and other commitments of such type or the issuance
or maintenance of the Letters of Credit or the European Letters of Credit (or
similar contingent obligations), then, upon demand by such Lender Party (with a
copy of such demand to the Administrative Agent), the Borrowers shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts sufficient to compensate such
Lender Party in respect of such circumstances, to the extent that such Lender
Party
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reasonably determines such increase in capital to be allocable to the existence
of such Lender Party's commitment to lend or to issue Letters of Credit or the
European Letters of Credit hereunder or to the issuance or maintenance of any
Letters of Credit or the European Letters of Credit. A certificate as to such
amounts submitted to the Borrowers by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any Facility,
Lenders who are owed greater than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and the appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Prime Rate Advance and (ii)
the obligation of the appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrowers that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if hereafter
the introduction or effectiveness of, any change in the interpretation of, or
any change in any law or regulation shall make it unlawful, or any central bank
or other governmental authority shall assert that it is unlawful, for any Lender
or its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrowers through the Administrative Agent, (i) each Eurodollar Rate
Advance affected by the foregoing under each Facility under which such Lender
has a Commitment will automatically, upon such demand, Convert into a Prime Rate
Advance and (ii) the obligation of the appropriate Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrowers that such Lender has determined
that the circumstances causing such suspension no longer exist; PROVIDED,
HOWEVER, that before making any such demand, such Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would allow such Lender or its Eurodollar Lending Office
to continue to perform its obligations to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.11 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.15), not later than 11:00 A.M. (New York time) on the day
when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrowers is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one
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Lender Party, to such Lender Parties for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective Obligations then payable to such Lender Parties and (ii) if such
payment by the Borrowers is in respect of any Obligation then payable hereunder
to one Lender Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 11.7(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender Party assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify or the Borrowers have not specified the Advances or the
Facility to which, or the manner in which, such funds are to be applied, the
Administrative Agent shall distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances and the Available Amount of all Letters of Credit
then outstanding in repayment or prepayment of such of the outstanding Advances
or other Obligations hereunder owed to such Lender Party, and for application to
such principal installments, as the Administrative Agent shall direct.
(c) The Borrowers hereby authorize each Lender Party, if and to the extent
payment owed to such Lender Party is not made when due hereunder or, in the case
of a Lender, under the Note held by such Lender, to charge from time to time
against any or all of the Borrowers' accounts with such Lender Party any amount
so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; PROVIDED, HOWEVER, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to any Lender Party
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance
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upon such assumption, cause to be distributed to each such Lender Party on such
due date an amount equal to the amount then due such Lender Party. If and to
the extent the Borrowers shall not have so made such payment in full to the
Administrative Agent, each such Lender Party shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender Party together
with interest thereon, for each day from the date such amount is distributed to
such Lender Party until the date such Lender Party repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.12 TAXES.
(a) Any and all payments by the Borrowers hereunder or under the Notes
shall be made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
in the case of each Lender Party and the Administrative Agent, net income taxes
that are imposed by the United States and net income taxes (or franchise taxes
imposed in lieu thereof) that are imposed on such Lender Party or the
Administrative Agent by the state or foreign jurisdiction under the laws of
which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof, (ii) in the case of each Lender
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Lender Party by the state or foreign jurisdiction of such Lender
Party's Applicable Lending Office or any political subdivision thereof, and
(iii) in the case of any Lender Party that becomes a Lender Party after the
Closing Date pursuant to Section 11.7, any taxes imposed by the United States
solely by reason of the organization or incorporation of such Lender Party
outside the United States (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being hereinafter referred to as "TAXES"). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note to any Lender Party or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender Party or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrowers shall
make such deductions and (iii) the Borrowers shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrowers shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrowers shall indemnify each Lender Party and the Administrative
Agent for the full amount of Taxes and Other Taxes, and for the full amount of
taxes imposed by any jurisdiction on amounts payable under this Section 2.12,
imposed on or paid by such Lender Party or the Administrative Agent (as the case
may be) and any liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto, except with respect to any
Lender Party or the Administrative Agent, as the case may be, for such a
liability arising from such Lender Party's
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or the Administrative Agent's, as the case may be, willful misconduct or gross
negligence. This indemnification shall be made within thirty (30) days from the
date such Lender Party or the Administrative Agent, as the case may be, makes
written demand specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, the
Borrowers shall furnish to the Administrative Agent, at its address referred to
in Section 11.2, the original receipt of payment thereof or a certified copy of
such receipt. In the case of any payment hereunder or under the Notes by or on
behalf of the Borrowers through an account or branch outside the United States
or by or on behalf of the Borrowers by a payor that is not a United States
person, if the Borrowers determine that no Taxes are payable in respect thereof,
the Borrowers shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel reasonably
acceptable to the Administrative Agent stating that such payment is exempt from
Taxes. For purposes of this subsection (d) and subsection (e), the terms
"UNITED STATES" and "UNITED STATES PERSON" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender or Initial Issuing Bank, as
the case may be, and on the date of the Assignment and Acceptance pursuant to
which it became a Lender Party in the case of each other Lender Party, and from
time to time thereafter as reasonably requested in writing by the Borrowers or
the Administrative Agent (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide each of the Administrative Agent and
the Borrowers with two (2) original Internal Revenue Service forms 1001 or 4224,
as appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that such Lender is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes. If the forms provided by a Lender Party at the time
such Lender Party first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; PROVIDED, HOWEVER, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender Party becomes a party
to this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender Party reasonably considers to be confidential, the Lender
Party shall give notice thereof to the Borrowers and shall not be obligated to
include in such form or document such confidential information.
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(f) For any period with respect to which a Lender Party has failed to
provide the Borrowers with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; PROVIDED, HOWEVER, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrowers shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable pursuant to
this Section 2.12 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party.
SECTION 2.13 SHARING OF PAYMENTS, ETC. If any Lender Party shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) (i) on account of Obligations due and
payable to such Lender Party hereunder or under the Notes at such time in excess
of its ratable share (according to the proportion of (x) the amount of such
Obligations hereunder due and payable to such Lender Party at such time to (y)
the aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder or under the Notes
at such time obtained by all the Lender Parties at such time or (ii) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (x) the amount of such Obligations hereunder owing to such
Lender Party at such time to (y) the aggregate amount of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all of the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and each such other
Lender Party shall repay to the purchasing Lender Party the purchase price to
the extent of such Lender Party's ratable share (according to the proportion of
(x) the purchase price paid to such Lender Party to (y) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (x) the
amount of such other Lender Party's required repayment to (y) the total amount
of all such required repayments to the purchasing Lender Party) of any interest
or other amount paid or payable by the purchasing Lender Party in respect of the
total amount so recovered.
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The Borrowers agree that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrowers in the amount of such participation.
SECTION 2.14 USE OF PROCEEDS. The proceeds of the Advances and issuances
of Letters of Credit shall be available, and the Borrowers shall use such
proceeds and Letters of Credit solely (a) to finance in part the AIG
Acquisition, (b) to pay fees and expenses incurred in connection with the AIG
Acquisition and the Transaction, and (c) to finance working capital and capital
expenditures of the Borrowers.
SECTION 2.15 DEFAULTING LENDERS. (a) In the event that, at any one time,
(i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrowers and (iii) the Borrowers shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrowers may, so long as no
Default shall occur or be continuing at such time and to the fullest extent
permitted by applicable law, set off and otherwise apply the obligation of the
Borrowers to make such payment to or for the account of such Defaulting Lender
against the obligation of such Defaulting Lender to make such Defaulted Advance.
In the event that, on any date, the Borrowers shall so set off and otherwise
apply its obligation to make any such payment against the obligation of such
Defaulting Lender to make any such Defaulted Advance on or prior to such date,
the amount so set off and otherwise applied by the Borrowers shall constitute
for all purposes of this Agreement and the other Loan Documents an Advance by
such Defaulting Lender made on the date under the Facility pursuant to which
such Defaulted Advance was originally required to have been made pursuant to
Section 2.1. Such Advance shall be a Prime Rate Advance and shall be considered,
for all purposes of this Agreement, to comprise part of the Borrowing in
connection with which such Defaulted Advance was originally required to have
been made pursuant to Section 2.1, even if the other Advances comprising such
Borrowing shall be Eurodollar Rate Advances on the date such Advance is deemed
to be made pursuant to this subsection (a). The Borrowers shall notify the
Administrative Agent at any time the Borrowers exercise their right of set-off
pursuant to this subsection (a) and shall set forth in such notice (A) the name
of the Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in respect of
such Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrowers to or for the account of
such Defaulting Lender which is paid by the Borrowers, after giving effect to
the amount set off and otherwise applied by the Borrowers pursuant to this
subsection (a), shall be applied by the Administrative Agent as specified in
subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrowers shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrowers to or for the
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account of such Defaulting Lender to the payment of each such Defaulted Amount
to the extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan
Documents, payment, to such extent, of such Defaulted Amount on such date. Any
such amount so applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent to such other
Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent and such
other Lender Parties and, if the amount of such payment made by the Borrowers
shall at such time be insufficient to pay all Defaulted Amounts owing at such
time to the Administrative Agent and the other Lender Parties, in the following
order of priority:
(i) FIRST, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) SECOND, to the Lender Parties for any Defaulted Amounts then
owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
Any portion of such amount paid by the Borrowers for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrowers, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrowers or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow
under this subsection (c) shall be deposited by the Administrative Agent in an
account with Fleet, in the name and under the control of the Administrative
Agent, but subject to the provisions of this subsection (c). The terms
applicable to such account, including the rate of interest payable with respect
to the credit balance of such account from time to time, shall be Fleet's
standard terms applicable to escrow accounts maintained with it. Any interest
credited to such account from time to time shall be held by the Administrative
Agent in escrow under, and applied by the Administrative Agent from time to time
in accordance with the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all funds
so held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required
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to be made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:
(i) FIRST, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) SECOND, to the Lender Parties for any amount then due and payable
by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
(iii) THIRD, to the Borrowers for any Advance then required to be made
by such Defaulting Lender pursuant to a Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations then or theretofore due and payable to such
Lender Party at such time under this Agreement and the other Loan Documents in
such manner as the Administrative Agent shall reasonably direct (or, if no such
Obligations are then due and payable to such Lender Party, or, if no such
Obligations are otherwise then due and payable to any Lender Party or the
Administrative Agent hereunder or under any of the other Loan Documents or the
amounts distributable to such Lender Party exceed such Obligations, the excess
amounts shall be paid over to the Borrowers).
(d) The rights and remedies against a Defaulting Lender under this Section
2.15 are in addition to other rights and remedies that the Borrowers may have
against such Defaulting Lender with respect to any Defaulted Advance and that
the Administrative Agent or any Lender Party may have against such Defaulting
Lender with respect to any Defaulted Amount.
SECTION 2.16 DOMICILE OF LOANS.
Each Lender may transfer and carry its Loans at, to or for the account of
any office, subsidiary or affiliate of such Lender. Notwithstanding anything to
the contrary contained herein, to the extent that a transfer of Loans pursuant
to this Section 2.16 would, at the time of such transfer, result in increased
costs under Section 2.10 or 2.12 hereof from those being charged by the
respective Lender prior to such transfer, then the Borrowers shall not be
obligated to pay such increased costs (although the Borrowers shall be obligated
to pay any other reasonable increased costs of the type described above
resulting from changes after the date of the respective transfer).
SECTION 2.17 EUROPEAN LETTERS OF CREDIT.
(a) ISSUANCE OF EUROPEAN LETTERS OF CREDIT; PARTICIPATION BY LENDERS.
Provided each of the conditions precedent set forth in Article 3 hereof shall
have been fulfilled to the satisfaction of the
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European Letter of Credit Bank, the European Letters of Credit shall be issued
on the Closing Date. Each notice of reduction with respect to, a European
Letter of Credit shall specify therein the requested date of such reduction
(which shall be a Business Day). The European Letter of Credit Bank shall have
no obligation to issue the European Letters of Credit in the event the Lenders
shall, for any reason, have no obligation to participate therein as hereinafter
provided. All European Letters of Credit shall comply with the terms and
conditions of the European Letter of Credit Agreements.
(b) PARTICIPATION IN EUROPEAN LETTERS OF CREDIT. Immediately upon the
issuance of the European Letters of Credit, each Lender that has a European
Letter of Credit Commitment shall be deemed to, and hereby severally agrees to,
have irrevocably purchased from the European Letter of Credit Bank a
participation in each European Letter of Credit and drawings thereunder in an
amount equal to such Lender's pro rata share (based upon the proportion that its
European Letter of Credit Commitment bears to the aggregate European Letter of
Credit Commitments of all of the Lenders) of the maximum amount which is or at
any time may become available to be drawn under such European Letters of Credit.
(c) REIMBURSEMENT OBLIGATION. The European Letter of Credit Bank shall
immediately notify the Borrowers and the Administrative Agent of its
determination to honor a request for drawing under any European Letter of
Credit, and the Borrowers shall reimburse the European Letter of Credit Bank on
the date on which such drawing is honored (such date, the "DISBURSEMENT DATE")
in same day funds equal to the amount of such drawing, together with interest
thereon, if reimbursement is not made on such date, at a rate per annum equal to
2% per annum above the rate per annum from time to time in effect for Prime Rate
Revolving Credit Advances from the Disbursement Date to the date of
reimbursement.
(d) LENDERS' FUNDING OBLIGATIONS.
(i) In the event that the Borrowers shall fail for any reason to
reimburse the European Letter of Credit Bank as provided in paragraph (c) above,
the Administrative Agent shall promptly notify each Lender that has a European
Letter of Credit Commitment of the unreimbursed amount of such drawing and of
such Lender's respective participation therein based on such Lender's European
Letter of Credit Commitment, and each such Lender shall make available to the
Administrative Agent an amount equal to its respective participation in same day
funds, at the office of the Administrative Agent specified in such notice, not
later than 11:00 a.m. (New York time) on the first Business Day after the date
notified by the Administrative Agent. In the event that any such Lender shall
fail to make available to the Administrative Agent on such Business Day the
amount of such Lender's participation in the European Letters of Credit, as
provided in this paragraph (d), the Administrative Agent shall be entitled to
recover such amount on demand from such Lender together with interest thereon at
the rate per annum equal to the Prime Rate for and determined as of each day
during such period. Nothing in this paragraph (d) shall be deemed to relieve the
Borrowers from their obligation to reimburse the Administrative Agent as
provided in the foregoing paragraph (c).
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(ii) In the event that the Administrative Agent shall have been
reimbursed by the Lenders that have European Letter of Credit Commitments for
all or any portion of any drawing honored by the European Letter of Credit Bank
under any European Letter of Credit, the Administrative Agent shall distribute
to each Lender which has paid all amounts payable by it hereunder with respect
to such drawing such Lender's pro rata share (based upon the proportion that its
European Letter of Credit Commitment bears to the aggregate European Letter of
Credit Commitments of all of the Lenders) of all payments subsequently received
by the Administrative Agent from the Borrowers in reimbursement of such drawing
when such payments are received. Promptly upon receipt by the Administrative
Agent of any payment of interest in respect of the Borrowers' reimbursement
obligation with respect to a drawing, in the event the Administrative Agent
shall have been reimbursed by any Lender that has a European Letter of Credit
Commitment for all or any portion of such drawing, the Administrative Agent
shall distribute to such Lender which has paid all amounts payable by it
hereunder with respect to such drawing such Lender's pro rata share (based upon
the proportion that its European Letter of Credit Commitment bears to the
aggregate European Letter of Credit Commitments of all of the Lenders) of any
interest received by the Administrative Agent in respect of that portion of such
drawing so reimbursed by such Lender.
(e) FEES. Certain matters relating to fees payable in respect of the
European Letters of Credit are referred to in Section 2.8.
SECTION 2.18 JOINT AND SEVERAL LIABILITY OF BORROWERS
(a) Notwithstanding any other provision or implication in this Agreement,
or any failure to designate whether liability is joint or several, each Borrower
hereby agrees that such Borrower is jointly and severally liable for the full
and prompt payment (whether at stated maturity, by acceleration or otherwise)
and performance of all Obligations under the Loan Documents owed or hereafter
owing to the Secured Parties by each other Borrower. Each Borrower agrees that
its liability for such Obligations is absolute and unconditional, irrespective
of, and unaffected by,
(i) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(ii) the absence of any action to enforce this Agreement (including
this Section 2.18) or any other Loan Document or any waiver or consent by the
Lender Parties with respect to any of the provisions thereof;
(iii) the existence, value or condition of, or failure to perfect
its Lien against, any security for such Obligations or any action, or the
absence of any action, by the Administrative Agent or the Lender Parties in
respect thereof (including, without limitation, the release of any such
security);
(iv) the insolvency of any Loan Party; or
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(v) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being agreed by each Borrower that its Obligations under this Agreement and
the other Loan Documents shall not be discharged until the payment and
performance, in full, of such Obligations has occurred, and any allocations of
any payments or prepayments made hereunder shall not affect the Borrowers' joint
and several liability for such Obligations. Each Borrower shall be regarded as
principal debtor with respect to such Obligations. Each Borrower expressly
waives all rights it may have now or in the future under any statute, or at
common law, or at law or in equity, or otherwise to compel the Administrative
Agent or the Secured Parties to marshal assets or to proceed in respect of the
Obligations against any other Loan Party, any other party or against any
security for the payment and performance of the Obligations before proceeding
against, or as a condition to proceeding against, such Borrower. It is agreed
among the Borrowers, the Administrative Agent and the Secured Parties that the
foregoing waivers are of the essence of the transaction contemplated by this
Agreement and the other Loan Documents and that, but for the provisions of this
Section 2.18 and such waivers, the Administrative Agent and the Lender Parties
would decline to enter into this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement or in any
other Loan Document, each Borrower hereby expressly and irrevocably subordinates
to payment of the Obligations under the Loan Documents any and all rights at law
or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defense available to a surety,
guarantor or accommodation co-obligor until such Obligations are indefeasibly
paid in full in cash. Each Borrower acknowledges and agrees that this waiver is
intended to benefit the Administrative Agent and the Secured Parties and shall
not limit or otherwise affect such Borrower's liability hereunder or the
enforceability of this Section 2.18 and that the Administrative Agent, the
Lender Parties and their respective successors and assigns are intended third
party beneficiaries of the waivers and agreements set forth in this Section
2.18.
(c) If the Administrative Agent on behalf of the Secured Parties may,
under applicable law, proceed to realize its benefits under any of the Loan
Documents giving the Administrative Agent a Lien, for the ratable benefit of the
Secured Parties upon any Collateral, whether owned by any Borrower or by any
other Person, either by judicial foreclosure or by non-judicial sale or
enforcement, the Administrative Agent may, at its sole option, determine which
of its remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 2.18 or otherwise. If, in the exercise of any of
its rights and remedies, the Administrative Agent shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against
any Borrower or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or the like, each Borrower hereby consents
to such action by the Administrative Agent and waives any claim based upon such
action, even if such action by the Administrative Agent shall result in a full
or partial loss of any rights of subrogation which each Borrower might otherwise
have had but for such action by the Administrative Agent. Any election of
remedies which result in the denial or impairment of the right of the
Administrative Agent to seek a deficiency judgment against any Borrower shall
not impair any other Borrower's obligation to pay the full amount of the
Obligations under the Loan Documents. In the
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event the Administrative Agent shall bid at any foreclosure or trustee's sale or
at any private sale permitted by law or the Loan Documents, the Administrative
Agent may bid all or less than the amount of the Obligations under the Loan
Documents and the amount of such bid need not be paid by the Administrative
Agent but shall be credited against such Obligations. The amount of the
successful bid at any such sale which is conducted in a commercially reasonable
manner (to the extent so required by applicable law) and in accordance with
applicable law, whether the Administrative Agent or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral and the difference between such bid amount and the remaining
balance of the Obligations under the Loan Documents shall be conclusively deemed
to be the amount of such Obligations guaranteed under this Section 2.18,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which the
Administrative Agent or Secured Parties might otherwise be entitled but for such
bidding at any such sale.
(d) FRAUDULENT CONVEYANCES. Notwithstanding Sections 2.18(a), (b) and (c)
above, it is the intent of the parties hereto that the liability incurred by a
Borrower in respect of the Obligations hereunder of the other Borrowers (and any
Lien granted by a Borrower to secure such Obligations), not constitute a
Fraudulent Conveyance. Consequently, each Borrower, the Administrative Agent and
each Lender Party hereby agrees that if a court of competent jurisdiction
determines that the incurrence of liability by a Borrower in respect of the
Obligations hereunder of any other Borrower (or any Liens granted by a Borrower
to secure such Obligations) would, but for the application of this sentence,
constitute a Fraudulent Conveyance, such liability (and such Liens) shall be
valid and enforceable only to the maximum extent that would not cause the same
to constitute a Fraudulent Conveyance and this Agreement and the other Loan
Documents shall automatically be deemed to have been amended accordingly. For
purposes of this Section, "Fraudulent Conveyance" shall mean a fraudulent
conveyance under Section 548 of the United States Bankruptcy Code or a
fraudulent conveyance or fraudulent transfer under the provisions of any
applicable fraudulent conveyance or fraudulent transfer law or similar law of
any state, province, nation or other governmental unit, as in effect from time
to time.
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT. The
obligation of each Lender to make an Advance or of the Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction of each of the following conditions precedent before
or concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day of
the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent and the Lenders, and in sufficient copies (except for the Notes), for the
Administrative Agent and each Initial Lender:
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(i) The Notes payable to the order of the Initial Lenders duly
executed by the Borrowers.
(ii) A security agreement in substantially the form of EXHIBIT G-1
granting to the Administrative Agent, for the ratable benefit of the Secured
Parties, a first and only (subject to Permitted Liens) priority security
interest in all of the personal property and assets of each Borrower and each
Domestic Subsidiary (as hereafter amended, supplemented or otherwise modified
from time to time in accordance with its terms, the "INITIAL SECURITY
AGREEMENT"), duly executed by each Borrower and each Domestic Subsidiary,
together with:
(A) proper, duly executed financing statements under the
Uniform Commercial Code of all jurisdictions that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the first
and only (subject to Permitted Liens) priority Liens and security interests
created under the Initial Security Agreement, covering the Collateral
described in the Initial Security Agreement;
(B) completed requests for information, dated on or before
the date of the Initial Extension of Credit, listing all effective
financing statements filed that name any Borrower or any Domestic
Subsidiary as debtor, together with copies of such financing statements;
(C) evidence of the completion of all other recordings and
filings of or with respect to the Initial Security Agreement that the
Administrative Agent may deem necessary or desirable in order to perfect
and protect the Liens created thereby;
(D) evidence of the insurance required by the terms of the
Initial Security Agreement;
(E) copies of the Assigned Agreements, if any, referred to
in the Initial Security Agreement, together with a consent to such
assignments, if any, in substantially the form of Exhibit B to the Initial
Security Agreement, duly executed by each party to such Assigned Agreements
other than the Borrowers or Subsidiaries;
(F) certificates representing the Pledged Shares referred
to in the Initial Security Agreement, accompanied by undated stock powers
executed in blank and irrevocable proxies (exercisable only during the
continuance of an Event of Default);
(G) in the case of each of any Borrower's Foreign
Subsidiaries, all action necessary to allow the Administrative Agent to
obtain a valid and enforceable, first priority, perfected security interest
in 65% (or up to 100% if not prohibited by applicable law or resulting in
materially adverse tax consequences to any Borrower or any Subsidiary) of
the stock of such Foreign Subsidiary and opinions in form and substance
satisfactory to (and addressed to) the Lenders and the Administrative Agent
from appropriate local and foreign counsel; and
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(H) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the
first and only (subject to Permitted Liens) priority liens and security
interests created under the Initial Security Agreement has been taken by
the applicable Loan Party, INCLUDING, without limitation payment of all
necessary or appropriate filing and recording fees and taxes.
(iii) A collateral assignment of lease in substantially the form of
EXHIBIT H assigning to the Administrative Agent, for the ratable benefit of the
Secured Parties, by Posterloid, the leasehold interest in the lease of
Posterloid's facility located in Long Island City, New York, and by Greensteel,
the leasehold interest in the lease of Greensteel's facility located in
Riverside, California (each, as hereafter amended, supplemented or otherwise
modified from time to time in accordance with its terms, a "COLLATERAL
ASSIGNMENT OF LEASE"), duly executed by the applicable Loan Party, together with
a recognition agreement duly executed by the property owner pursuant to which
the property owner shall (A) consent to such collateral assignment, (B)
acknowledge the interest of the Administrative Agent, for the ratable benefit of
the Secured Parties and (C) permit the Administrative Agent to become the
successor in interest to the applicable Loan Party under the lease.
(iv) (A) Fully executed counterparts of Mortgages duly executed
by the applicable Loan Party, together with evidence that counterparts of the
Mortgages have been delivered to a title insurance company (reasonably
acceptable to the Administrative Agent) insuring the Lien of the Mortgages for
recording in all places to the extent necessary or desirable, in the reasonable
judgment of the Lenders, to create a valid and enforceable first priority lien
on each Mortgaged Property listed on SCHEDULE 4.21 (subject only to Permitted
Real Property Encumbrances) in favor of the Administrative Agent (or a trustee
acting on behalf of the Administrative Agent required or desired under local
law) for the benefit of the Secured Parties;
(B) If required by the Administrative Agent, mortgagee
title insurance policies (or binding commitments to issue such title
insurance policies) which shall (1) be issued to the Administrative Agent
for the benefit of the Secured Parties by title insurance companies
reasonably satisfactory to the Administrative Agent (the "MORTGAGE
POLICIES") in amounts reasonably satisfactory to the Administrative Agent
insuring that the Mortgages are valid and enforceable first priority
mortgage liens on the respective Mortgaged Properties, free and clear of
all defects, encumbrances and other Liens except Permitted Real Property
Encumbrances, (2) be in form and substance reasonably satisfactory to the
Administrative Agent, (3) include, as appropriate, an endorsement for
future advances under this Agreement, the Notes and the Mortgages and such
other endorsements that the Administrative Agent in its discretion may
reasonably request, (4) not include an exception for mechanics' liens, and
(5) provide for affirmative insurance and such reinsurance (including
direct access agreements) as the Administrative Agent in its discretion may
reasonably request; and
(C) If required by the Administrative Agent, surveys,
in form and substance satisfactory to the Administrative Agent, of each
Mortgaged Property listed on SCHEDULE 4.21, dated a recent date reasonably
acceptable to the Administrative Agent, certified by a licensed
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professional surveyor in a manner satisfactory to the Administrative Agent
for the benefit of the Lenders.
(v) An intellectual property security agreement in substantially
the form of EXHIBIT I granting to the Administrative Agent for the ratable
benefit of the Secured Parties a first and only priority security interest in
all of each Borrower's and each Domestic Subsidiary's intellectual property
(together with each other intellectual property security agreement delivered
pursuant to Section 5.13, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, each an "INTELLECTUAL
PROPERTY SECURITY AGREEMENT"), duly executed by each Borrower and each Domestic
Subsidiary, together with evidence that all action that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the first and
only priority Liens and security interests created under the Intellectual
Property Security Agreement has been taken.
(vi) A guaranty in substantially the form of EXHIBIT J guarantying
the prompt payment, when and as due, of all obligations of the European
Borrowers under the KBC Loan Documents (as hereafter amended, supplemented or
otherwise modified from time to time in accordance with its terms, the "KBC
GUARANTY"), duly executed by each Borrower.
(vii) A guaranty in substantially the form of EXHIBIT K guarantying
the prompt payment, when and as due, of all Obligations of the Loan Parties
under the Loan Documents, including all obligations under any Hedge Agreements
or other hedging agreements (as hereafter amended, supplemented or otherwise
modified from time to time in accordance with its terms (the "SUBSIDIARY
GUARANTY"), duly executed by APV.
(viii) A security agreement in substantially the form of Exhibit G-2
granting to the Administrative Agent, for the ratable benefit of the Secured
Parties, a first and only (subject to Permitted Liens) priority security
interest in all of the personal property and assets of AIG (as hereafter
amended, supplemented or otherwise modified from time to time in accordance with
its terms, the "AIG Security Agreement"), duly executed by AIG, together with:
(A) certificates representing all of the issued and
outstanding capital stock of Alliance America Corporation, accompanied by
undated stock powers executed in blank; and
(B) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and protect the
first and only (subject to Permitted Liens) priority liens and security
interests created under the AIG Security Agreement has been taken by AIG,
INCLUDING, without limitation payment of all necessary or appropriate
filing and recording fees and taxes.
(b) The Administrative Agent shall have received on or before the day of
the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent and the Lenders, and in sufficient copies (except for the Notes), for the
Administrative Agent and each Initial Lender:
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(i) Certified copies of the resolutions of the Board of Directors
of each Loan Party approving the AIG Acquisition, this Agreement, the Notes, and
each other Loan Document and AIG Acquisition Document to which it is or is to be
a party and each of the Merger Documents to which it is to be a party, and of
all documents evidencing other necessary corporate action and governmental and
other third party approvals and consents, if any, with respect to the AIG
Acquisition, this Agreement, the Notes, and each other Loan Document and AIG
Acquisition Document and certified copies of each of the Merger Documents.
(ii) A copy of the charter of each Loan Party and each amendment
thereto, certified (as of a date reasonably near the date of the Initial
Extension of Credit) by the Secretary of State of the jurisdiction of its
incorporation as being a true and correct copy thereof.
(iii) A copy of a certificate of the Secretary of State of the
jurisdiction of its incorporation, dated within ten (10) Business Days prior to
the date of the Initial Extension of Credit, listing the charter of each Loan
Party and each amendment thereto on file in its office and certifying that (A)
such amendments are the only amendments to such Loan Party's charter on file in
its office, (B) such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and in good standing
under the laws of the State of the jurisdiction of its incorporation.
(iv) A copy of a certificate of the Secretary of State of each
State listed on SCHEDULE 4.2, dated reasonably near the date of the Initial
Extension of Credit, stating that each Loan Party specified for such State on
SCHEDULE 4.2 is duly qualified and in good standing as a foreign corporation in
such State and has filed all annual reports required to be filed to the date of
such certificate.
(v) A certificate of each Loan Party signed on behalf of such Loan
Party by a Responsible Officer and the Secretary or an Assistant Secretary of
such Loan Party, dated the date of the Initial Extension of Credit (and the
statements made in such certificate shall be true on and as of the date of the
Initial Extension of Credit), certifying as to (A) the absence of any amendments
to the charter of such Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.1(a), (B) a true and correct copy of the
bylaws of such Loan Party as in effect on the date of the Initial Extension of
Credit, (C) the due incorporation and good standing of such Loan Party as a
corporation organized under the laws of the jurisdiction of its incorporation,
and the absence of any proceeding for the dissolution or liquidation of such
Loan Party, (D) the truth of the representations and warranties made by such
Loan Party in the Information Memorandum, any Pre-Commitment Information, the
Loan Documents and the AIG Acquisition Documents as though made on and as of the
date of the Initial Extension of Credit and (E) the absence of any event
occurring and continuing, or resulting from the Initial Extension of Credit,
that constitutes a Default or an Event of Default.
(vi) A certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying the names and true signatures of the officers of such
Loan Party authorized to sign this Agreement, the Notes, each other Loan
Document to which they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
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(vii) Such financial, business and other information regarding each
Loan Party and each such Person's Subsidiaries as any of the Lenders shall have
reasonably requested, including, without limitation, information as to possible
contingent liabilities, tax matters, Environmental Actions, Environmental
Permits, obligations under Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with employees, audited
annual financial statements dated April 30, 1998 for PolyVision and its
Subsidiaries and December 31, 1997 for AIG and its Subsidiaries, interim
financial statements dated the end of the most recent fiscal quarter for which
financial statements are available (or, in the event the Initial Lenders' due
diligence review reveals material changes since such financial statements, as of
a later date within thirty (30) days of the day of the Initial Extension of
Credit), pro forma financial statements as to each of the Borrowers and
forecasts prepared by management of the Borrowers, all in form and substance
reasonably satisfactory to the Lenders.
(viii) A Notice of Borrowing pursuant to which the Borrowers shall
request an Initial Extension of Credit in such amounts so that the aggregate
principal amount of the Senior Subordinated Notes and indebtedness outstanding
under the Facilities, including the face amount of all European Letters of
Credit, on the Closing Date shall not exceed Seventy-Four Million Dollars
($74,000,000).
(ix) A Borrowing Base Certificate.
(c) (i) The conversion of Alpine's and Kirkbi Project A/S' preferred
stock and accrued dividends in PolyVision into common stock and/or preferred
stock of PolyVision shall have occurred all upon terms and conditions
satisfactory to the Administrative Agent.
(ii) Alpine shall have contributed not less than Five Million
($5,000,000) Dollars cash as a capital contribution to PolyVision in
consideration for the issuance by PolyVision to Alpine of shares of PolyVision
Preferred Stock on terms and conditions satisfactory to the Administrative
Agent.
(iii) The Junior Subordinated Note shall have been issued on terms
and conditions satisfactory to the Administrative Agent.
(iv) PolyVision shall have issued and received the full gross
proceeds of not less than Twenty-Five Million ($25,000,000) Dollars (less
customary transaction costs) of the Senior Subordinated Notes with a current pay
cash coupon of not greater than thirteen percent (13%) per annum and maturity
and amortization of at least eight (8) years following the Closing Date, all
upon terms and conditions satisfactory to the Administrative Agent.
(v) The Administrative Agent shall have received copies of all
agreements, instruments and documents evidencing or relating to the foregoing
described in this subsection (c), all of which shall be satisfactory in form and
substance to the Administrative Agent, and certified as true and complete by a
Responsible Officer.
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(d) The Initial Lenders shall be satisfied with the corporate, tax and
legal structure and capitalization of PolyVision and each of its Subsidiaries on
a pro forma basis after giving effect to the AIG Acquisition, including, without
limitation, the terms and conditions of the charter, by-laws and each class of
capital stock of PolyVision and each such Subsidiary and of each agreement or
instrument relating to such structure or capitalization.
(e) The Initial Lenders shall be satisfied that all Existing Debt, other
than the Debt identified on SCHEDULE 4.19(B) which shall remain outstanding from
and after the Closing Date (the "SURVIVING DEBT"), has been (or upon
consummation of the AIG Acquisition will be) prepaid, redeemed or defeased in
full or otherwise satisfied and extinguished and that all Surviving Debt shall
be on terms and conditions satisfactory to the Initial Lenders.
(f) There shall have occurred no change (i) since April 30, 1998 with
respect to the Borrowers and their Subsidiaries (excluding AIG and its
Subsidiaries) and (ii) since December 31, 1997, with respect to AIG and its
Subsidiaries, that could reasonably be expected to result in a Material Adverse
Effect.
(g) There shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental or regulatory agency or authority that could reasonably be expected
to have a Material Adverse Effect, nor shall there have been any change in the
status or financial effect on Alpine, the Borrower or any of its respective
Subsidiaries of the Disclosed Litigation from that described on SCHEDULE 4.9
which change could reasonably be expected to have a Material Adverse Effect.
(h) All governmental and third party consents and approvals necessary in
connection with each aspect of the AIG Acquisition, the Mergers and the
Facilities shall have been obtained (without the imposition of any conditions
that are not acceptable to the Initial Lenders) and shall remain in effect; all
applicable waiting periods shall have expired without any adverse action being
taken by any governmental authority; and no law or regulation shall be
applicable in the reasonable judgment of the Initial Lenders that restrains,
prevents or imposes materially adverse conditions upon any aspect of the AIG
Acquisition, the Mergers or the Facilities.
(i) The Initial Lenders shall have completed a due diligence investigation
of the Borrowers, the other Loan Parties and their respective Subsidiaries in
scope, and with results, satisfactory to the Initial Lenders; the Borrowers and
each of the other Loan Parties shall have given the Administrative Agent such
access to their respective books and records as the Administrative Agent may
have requested upon reasonable notice in order to carry out its investigations,
appraisals and analyses, including, but not limited to, calculation of the value
of Eligible Receivables and Eligible Inventory, and the Administrative Agent
shall have received all additional financial, business and other information
regarding the Borrowers and their Subsidiaries and properties as they shall have
reasonably requested. All of the information, taken as a whole, provided by or
on behalf of the Borrowers or any of their Subsidiaries to the Administrative
Agent and the Initial Lenders prior to their commitment in respect of the
Facilities (the "PRE-COMMITMENT INFORMATION") shall be true and correct in all
material
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respects, and no development or change shall have occurred, and no additional
information shall have come to the attention of the Administrative Agent or the
Initial Lenders, that (i) has resulted in or could reasonably be expected to
result in a material change in, or material deviation from, the Pre-Commitment
Information, taken as a whole, or (ii) has had or could reasonably be expected
to have a Material Adverse Effect. The Administrative Agent shall be reasonably
satisfied with the results, taken as a whole, of interviews conducted and other
investigations made with respect to the Borrower's relationships with its
customers.
(j) The Borrowers and each Guarantor (other than APV) shall have delivered
a certificate, in form and substance reasonably satisfactory to the
Administrative Agent, attesting to the Solvency of the Borrowers or such
Guarantor, as applicable, immediately before and immediately after giving effect
to the Transaction, from its respective chief financial officer or any financial
vice president.
(k) The Borrowers shall have demonstrated to the Administrative Agent's
reasonable satisfaction that: (i) the operations of the Borrowers and their
Subsidiaries comply in all material respects with applicable Environmental Laws
and health and safety statutes and regulations, including, without limitation,
regulations promulgated under the Federal Resource Conservation and Recovery
Act; (ii) except as set forth in SCHEDULE 3.1(K), such operations are not the
subject of any federal, state or local investigation evaluating the need for
remedial action involving an expenditure exceeding $100,000 individually or
$250,000 in the aggregate to respond to such Environmental Actions;
(iii) neither PolyVision nor any Borrower nor any of its Subsidiaries has or
could reasonably be expected to have any material contingent liability in
connection with any Environmental Action; (iv) Borrowers have completed such
environmental audits and investigations (including "Phase I" and "Phase II"
environmental audits), as the Administrative Agent may reasonably request with
respect to the operations of the Borrowers and their Subsidiaries and such
audits and investigations have not uncovered any condition or conditions not
disclosed in the Pre-Commitment Information which could be reasonably expected
to have a Material Adverse Effect on the Borrowers and their Subsidiaries.
(l) The Lenders shall be satisfied that (i) the Borrowers and their
Subsidiaries will be able to meet their respective obligations under all
employee and retiree welfare plans, (ii) the employee benefit plans of the
Borrowers and their Subsidiaries are, in all material respects, funded in
accordance with the minimum statutory requirements, (iii) no ERISA Event has
occurred (but excluding events for which reporting has been waived) as to any
such employee benefit plan, (iv) no termination of, or withdrawal from, any such
employee benefit plan has occurred or is contemplated that could reasonably be
expected to result in a material liability and (v) no withdrawal liability has
occurred in connection with any Multiemployer Plan contributed to by a Borrower
or an ERISA Affiliate. The Borrowers shall have delivered to the Administrative
Agent certified copies of each employment agreement and other compensation
arrangement with each executive officer (including, without limitation, Michael
Dunn) of such Borrower.
(m) The Administrative Agent shall be satisfied with the amount, types and
terms and conditions of all insurance maintained by the Borrowers and their
Subsidiaries, and the Administrative Agent shall have received endorsements
naming the Administrative Agent, on behalf of the Lenders,
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as loss payee or an additional insured, as applicable, under all insurance
policies to be maintained with respect to the properties of the Borrowers and
their Subsidiaries forming any part of the Lenders' Collateral under the Initial
Security Agreement and the other Loan Documents and Collateral Documents.
(n) The Administrative Agent shall have received satisfactory opinions of
counsel for Alpine, the Borrowers and the other Loan Parties and local, foreign
and special counsel thereto, to the extent requested by the Administrative
Agent, as to the Transaction.
(o) There shall exist no Default or Event of Default under any of the Loan
Documents, and all legal matters incident to the Initial Extension of Credit
shall be reasonably satisfactory to counsel for the Administrative Agent.
(p) All accrued reasonable fees and expenses of the Administrative Agent
(including the reasonable fees and expenses of counsel for the Administrative
Agent and local counsel for the Administrative Agent) shall have been paid at
Closing.
(q) The AIG Acquisition shall have been consummated (prior to or
simultaneously with the Initial Extension of Credit) pursuant to the terms and
conditions of the AIG Acquisition Agreement (and none of the material terms or
conditions of the AIG Acquisition Agreement shall have been waived or modified
except with the consent of the Administrative Agent and the Required Lenders,
not unreasonably withheld or delayed) and in compliance with all applicable laws
and with all necessary consents and approvals (except immaterial consents the
absence of which shall have been consented to by the Administrative Agent, not
unreasonably withheld or delayed). The final terms and conditions of the AIG
Acquisition Documents and the resulting corporate structure of the Borrowers and
their Subsidiaries following the AIG Acquisition shall be satisfactory in all
respects to the Administrative Agent and the Lenders, and the Administrative
Agent shall have received certified copies of each of the AIG Acquisition
Documents, each of which shall be satisfactory to the Lenders and in full force
and effect.
(r) The Mergers shall have been consummated (prior to or simultaneously
with the Initial Extension of Credit) pursuant to the terms and conditions of
the Merger Documents (and none of the material terms or conditions of any of the
Merger Documents shall have been waived or modified except with the consent of
the Administrative Agent and the Required Lenders, not unreasonably withheld or
delayed) and in compliance with all applicable laws and with all necessary
consents and approvals (except immaterial consents the absence of which shall
have been consented to by the Administrative Agent, not unreasonably withheld or
delayed). The final terms and conditions of the Merger Documents and the
resulting corporate structure of the Borrowers and their Subsidiaries following
the Mergers shall be satisfactory in all respects to the Administrative Agent
and the Lenders, and the Administrative Agent shall have received certified
copies of each of the Merger Documents, each of which shall be satisfactory to
the Lenders and in full force and effect.
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(s) The Administrative Agent shall be satisfied that there are no state
takeover laws and no supermajority charter provisions applicable to the AIG
Acquisition, or that any conditions to avoiding such restrictions have been
satisfied.
(t) All Advances made under this Agreement shall be in full compliance
with all applicable requirements of law, including, without limitation, Federal
Reserve Regulations T, U, and X.
(u) The Administrative Agent shall have received a duly executed and
delivered counterpart of landlord waivers from all landlords and bailee letters
from all warehousemen and bailees with respect to any Inventory located at a
location that is not owned by the Borrowers or their Subsidiaries, as deemed
necessary or desirable in the Administrative Agent's sole discretion, to
preserve or otherwise in respect of the Administrative Agent's rights in
Collateral except in respect of immaterial amounts as described by the Borrowers
to the Administrative Agent in writing prior to the Closing Date. The
Administrative Agent shall also have received such bank consent agreements,
third party consents, intercreditor agreements or other agreements, as deemed
necessary or desirable in the Administrative Agent's sole discretion, to
preserve or otherwise in respect of the Administrative Agent's rights in the
Collateral, subject to Permitted Liens.
(v) The Administrative Agent shall have received such other approvals,
opinions or documents as any Initial Lender through the Administrative Agent may
reasonably request, and all legal matters incident to such Borrowing shall be
satisfactory to counsel for the Administrative Agent.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE. The
obligation of each appropriate Lender to make an Advance (other than a Letter of
Credit Advance made by the Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.3(c) and a Swing Line Advance made by a Revolving Credit Lender
pursuant to Section 2.2(b)), and the obligation of the Issuing Bank to issue a
Letter of Credit (including the initial issuance thereof) or renew a Letter of
Credit and the right of the Borrowers to request the issuance or renewal of a
Letter of Credit, shall each be subject to the further conditions precedent that
on the date of each such Borrowing or issuance or renewal:
(a) Each of the conditions precedent listed in Section 3.1 shall
have been satisfied or waived in accordance with this Agreement.
(b) The following statements shall be true and the Administrative
Agent shall have received a certificate signed on behalf of the Borrowers by a
duly authorized Responsible Officer of each Borrower, dated the date of such
Borrowing or issuance or renewal, stating that (and each of the giving of the
applicable Notice of Borrowing, Notice of Swing Line Borrowing, or Notice of
Issuance or Notice of Renewal and the acceptance by the Borrowers of the
proceeds of a Borrowing or of a Letter of Credit or the renewal of a Letter of
Credit shall constitute a representation and warranty by the Borrowers that both
on the date of such notice and on the date of such Borrowing or issuance or
renewal such statements are true):
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(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date (subject to
changes not prohibited by this Agreement which have occurred in the ordinary
course of business, and do not individually or in the aggregate have a Material
Adverse Effect) before and after giving effect to such Borrowing or issuance or
renewal and to the application of the proceeds therefrom, as though made on and
as of such date;
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or renewal or from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default; and
(iii) for each Revolving Credit Advance, Swing Line Advance made by
the Swing Line Bank or issuance or renewal of any Letter of Credit, the
Borrowing Base equals or exceeds the aggregate principal amount of the Revolving
Credit Advances PLUS Swing Line Advances PLUS Letter of Credit Advances PLUS the
aggregate Available Amount of all Letters of Credit then outstanding after
giving effect to such Advances or issuance or renewal, respectively.
(c) The Administrative Agent shall have received such other documents as
the Administrative Agent may reasonably request, and all legal matters incident
to such Borrowing or issuance of such Letter of Credit shall be reasonably
satisfactory to counsel for the Administrative Agent.
SECTION 3.3 CONDITIONS PRECEDENT TO ISSUANCE OF EUROPEAN LETTERS OF
CREDIT. The obligation of the European Letter of Credit Bank to issue the
European Letters of Credit shall be subject to the further conditions precedent
that on the date of such issuance:
(a) Each of the conditions precedent listed in Section 3.1 shall have been
satisfied or waived in accordance with this Agreement.
(b) The European Borrowers and KBC shall have entered into each of the KBC
Loan Agreements, a copy of which (together with all related KBC Loan Documents)
shall have been delivered to the Administrative Agent and shall be satisfactory
in all respects to the European Letter of Credit Bank, and KBC shall have made
the initial extensions of credit to be made thereunder.
(c) The European Letter of Credit Bank and KBC shall have entered into the
European Letter of Credit Agreements.
(d) The Administrative Agent shall have received such other approvals,
opinions or documents as the European Letter of Credit Bank may reasonably
request, and all legal matters incident to such issuance of such European
Letters of Credit shall be satisfactory to counsel for the Administrative Agent.
SECTION 3.4 DETERMINATIONS UNDER SECTION 3.1. For purposes of determining
compliance with the conditions specified in Section 3.1, each Initial Lender
shall be deemed to have consented to,
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approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Initial Lenders unless (a) an officer of the Administrative
Agent responsible for the transactions contemplated by the Loan Documents shall
have received written notice from such Initial Lender prior to the Initial
Extension of Credit specifying its objection thereto and (b) if the Initial
Extension of Credit consists of a Borrowing, such Initial Lender shall not have
made available to the Administrative Agent such Initial Lender's ratable portion
of such Borrowing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
The Borrowers jointly and severally represent and warrant to the Lender
Parties and the Administrative Agent as follows:
SECTION 4.1 CORPORATE EXISTENCE. Each Loan Party (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) is duly qualified and in good standing as
a foreign corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify
except where the failure to so qualify could not reasonably be expected to have
a Material Adverse Effect and (c) has all requisite corporate power and
authority (including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to carry on its
business as now conducted and as currently proposed to be conducted.
SECTION 4.2 ORGANIZATION AND SUBSIDIARIES. Set forth on SCHEDULE 4.2 is a
complete and accurate list of the Borrowers and all Subsidiaries, showing as of
the date hereof (and updated on a quarterly basis to reflect changes permitted
under this Agreement) (i) the jurisdiction of its incorporation or formation,
(ii) the jurisdictions in which such Loan Party is duly qualified and in good
standing as a foreign corporation or Person, (iii) the number of shares of each
class of capital stock or other equity interests authorized, and the number
outstanding, as to each of them, and the owners (other than shares of the
Borrowers publicly held other than by Affiliates) of such equity interests
(including the identity of any partner thereof as a general or limited partner),
in each case after giving effect to the AIG Acquisition and any Permitted
Acquisitions and the percentage of the outstanding shares or other interests of
each such class owned (directly or indirectly) by a Loan Party and the number of
shares or other interests covered by all outstanding options, warrants, rights
of conversion or purchase and similar rights after giving effect to the AIG
Acquisition. All of the outstanding capital stock or other interests of all of
the Borrowers and each of such Subsidiaries has been validly issued, is fully
paid and non-assessable and, except for shares of PolyVision and directors'
qualifying shares of Foreign Subsidiaries, is owned by a Loan Party or one or
more of its Subsidiaries free and clear of all Liens, except those created under
the Collateral Documents.
SECTION 4.3 CORPORATE POWER, AUTHORIZATION. The execution, delivery and
performance by each Loan Party of this Agreement, the Notes, each other Loan
Document and each AIG Acquisition
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Document to which it is or is to be a party, and consummation of the
Transaction, are within such Loan Party's corporate powers, have been duly
authorized by all necessary corporate action, and do not (a) contravene such
Loan Party's charter or bylaws, (b) violate any law (including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (c) conflict with or result in the breach of, or
constitute a default under, any loan agreement, indenture, mortgage, deed of
trust, lease or other material contract, instrument or agreement binding on or
affecting any Loan Party, any of its Subsidiaries or any of their respective
properties or (d) except for the Liens created under the Collateral Documents,
result in or require the creation or imposition of any Lien upon or with respect
to any of the properties of any Loan Party or any of its Subsidiaries.
SECTION 4.4 GOVERNMENTAL AND OTHER AUTHORIZATIONS, APPROVALS. No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is or
will be required for (a) the due execution, delivery, recordation, filing or
performance by any Loan Party of this Agreement, the Notes, any other Loan
Document or any AIG Acquisition Document to which it is or is to be a party, or
for the consummation of the Transaction, (b) the grant by any Loan Party of the
Liens granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created by the Collateral Documents (including the
first and only priority nature thereof, subject to Permitted Liens) or (d) the
exercise by the Administrative Agent or any Lender Party of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals, actions, notices
and filings listed on SCHEDULE 4.4, all of which have been duly obtained, taken,
given or made and are in full force and effect. All applicable waiting periods
in connection with the Transaction have expired without any action having been
taken by any competent authority restraining, preventing or imposing materially
adverse conditions upon the Transaction or the rights of the Loan Parties or
their Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them.
SECTION 4.5 DUE EXECUTION, VALIDITY, ENFORCEABILITY. This Agreement and
each AIG Acquisition Document has been, and each of the Notes and each other
Loan Document has been or when delivered hereunder will have been, duly executed
and delivered by each Loan Party party thereto. This Agreement and each AIG
Acquisition Document is, and each of the Notes and each other Loan Document has
been or when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party thereto, enforceable against such Loan Party in
accordance with its terms.
SECTION 4.6 FINANCIAL STATEMENTS. The consolidated and consolidating
balance sheets of the Borrowers and their Subsidiaries as at April 30, 1998 for
PolyVision and December 31, 1997 for AIG and the related consolidated and
consolidating statements of income and consolidated and consolidating statements
of cash flows of the Borrowers and their Subsidiaries or AIG and its
Subsidiaries as applicable for the Fiscal Year then ended, accompanied by (in
the case of such Consolidated financial statements) an opinion of Arthur
Andersen with respect to PolyVision and Ernst & Young with respect
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to AIG, independent public accountants, and the Consolidated balance sheet of
the Borrowers and their Subsidiaries or AIG and its Subsidiaries as applicable
as at July 31, 1998 and (to the extent in existence) October 31, 1998 and the
related Consolidated statement of income and Consolidated statement of cash
flows of the Borrowers and their Subsidiaries for the three months (for
PolyVision) or seven months (for AIG) then ended, duly certified by the chief
financial officer of each Borrower, copies of which have been furnished to each
Initial Lender, fairly present, subject, in the case of said interim balance
sheet, statements of income and cash flows, to normal year-end audit
adjustments, the Consolidated (and, with respect to the balance sheets dated
July 31, 1998, consolidating) financial condition of the Borrowers and their
Subsidiaries and AIG and its Subsidiaries as at such dates and the Consolidated
(and, with respect to the statements of income dated July 31, 1998
consolidating) results of the operations of the Borrowers and their Subsidiaries
and AIG and its Subsidiaries for the period ended on such date, all in
accordance with GAAP applied on a consistent basis, and, since July 31, 1998
there has been no change which could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.7 PRO FORMA FINANCIAL STATEMENTS; PROJECTIONS. (a) The
Consolidated pro forma balance sheet of the Borrowers and their Subsidiaries as
at July 31, 1998 and (to the extent in existence) October 31, 1998 and the
related Consolidated pro forma statement of income and cash flows of the
Borrowers and their Subsidiaries for the period then ended, certified by the
chief executive officer or chief financial officer of each Borrower, copies of
which have been furnished to each Initial Lender, fairly present the
Consolidated pro forma financial condition of the Borrowers and their
Subsidiaries as at such date and the Consolidated pro forma results of
operations of the Borrowers and their Subsidiaries for the period ended on such
date, in each case after giving effect to the Transaction, all in accordance
with GAAP (to the extent that pro forma information can comply with GAAP).
(b) The projections and the budget delivered on the Closing Date (and
after the date of this Agreement, the budgets and projections delivered to the
Lenders pursuant to Section 7.5 hereof) have been prepared on the basis of the
assumptions accompanying them and reflect as of the date thereof the Borrowers'
good faith projections, after reasonable analysis, of the matters set forth
therein, based on such assumptions (it being understood that projected financial
information is not to be viewed as facts and that the actual results during the
period or periods covered thereby may differ from the projected results and that
the differences may be material).
SECTION 4.8 ACCURATE INFORMATION. None of the Information Memorandum, any
Pre-Commitment Information or any information, exhibit or report furnished by
any Loan Party or any of the European Borrowers to the Administrative Agent or
any Lender Party in connection with the Loan Documents or pursuant to the terms
of the Loan Documents contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements made therein
not misleading.
SECTION 4.9 LITIGATION. Other than the litigation disclosed on SCHEDULE
4.9 (the "DISCLOSED LITIGATION"), there is no action, suit, investigation,
litigation or proceeding affecting any Borrower, any other Loan Party or any of
their respective Subsidiaries (excluding, from the scope of this Section 4.9,
any Subsidiary of Alpine which is not a Loan Party), including, without
limitation, any Regulatory
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Agency or Environmental Action, pending or, to the Borrowers' knowledge,
threatened before any court, governmental bureau, authority or agency or
arbitrator that could reasonably be expected to have a Material Adverse Effect,
and there has been no change in the status, or financial effect on any Loan
Party or any of its Subsidiaries, of the Disclosed Litigation from that
described on SCHEDULE 4.9 that could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.10 REGULATION U. Neither the Borrowers nor any other Loan Party
nor any of their respective Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
SECTION 4.11 ERISA.
(a) Except as set forth on SCHEDULE 4.11, no Borrower nor any of its ERISA
Affiliates maintains or has maintained any Plans or Multiemployer Plans. Set
forth on SCHEDULE 4.11 is a complete and accurate list of all Welfare Plans and
all defined contribution plans in respect of which any Loan Party could have
liability.
(b) Except as set forth in the financial statements referred to in Section
4.6 and in Article 7, neither Borrower nor any of the other Loan Parties nor any
of their respective Subsidiaries (excluding, from the scope of this Section
4.11(b), any Subsidiaries of Alpine which are not Loan Parties) has any material
liability with respect to "expected post retirement benefit obligations" within
the meaning of Statement of Financial Accounting Standards No. 106.
SECTION 4.12 CASUALTY. On the date hereof, neither the business nor the
properties of any Borrower or any of its Subsidiaries are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could reasonably be expected to have
a Material Adverse Effect.
SECTION 4.13 ENVIRONMENTAL MATTERS. Anything elsewhere contained in this
Section 4.13 to the contrary notwithstanding, no representation or warranty is
made in this Section 4.13 with respect to any Subsidiary of Alpine which is not
a Loan Party.
(a) Except as disclosed in the environmental assessment reports listed on
SCHEDULE 4.13, the operations and properties of each Loan Party and each of its
Subsidiaries comply in all known material respects with all applicable
Environmental Laws and Environmental Permits, all known past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs, and no circumstances exist that could reasonably
be expected to (i) form the basis of an Environmental Action against any Loan
Party or any of its Subsidiaries or any of their properties, or (ii) cause any
such property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law. The only matters
referred to in this Section that could reasonably be expected to have a Material
Adverse Effect are the Port Carbon and Crespin matters referred to in Section
4.13(d) below.
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(b) Except as disclosed in the environmental assessment reports listed on
SCHEDULE 4.13, (i) none of the properties currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state or local
list or is, to the Borrowers' knowledge, adjacent to any such property; (ii)
there are no and, to the best of its knowledge, never have been any underground
or aboveground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or, to the best of its
knowledge, have been treated, stored or disposed on any real property currently
owned or operated by any Loan Party or any of its Subsidiaries or on any
property formerly owned or operated by any Loan Party or any of its
Subsidiaries; (iii) there is no friable asbestos or asbestos-containing material
on any property currently owned or operated by any Loan Party or any of its
Subsidiaries; and (iv) except in compliance in all material respects with
applicable laws, Hazardous Materials have not been released, discharged or
disposed of on any real property currently owned or operated by any Loan Party
or any of its Subsidiaries, or any property formerly owned or operated (but, if
such Loan Party's potential responsibility or liability therefor is limited to
its period of ownership or operation, solely during the period of such ownership
or operation) by any Loan Party or any of its Subsidiaries. The only matters
referred to in this Section that could reasonably be expected to have a Material
Adverse Effect are the Port Carbon and Crespin matters referred to in Section
4.13(d) below.
(c) Except as disclosed in the environmental assessment reports listed on
Schedule 4.13, no Loan Party nor any of its Subsidiaries is undertaking or has
not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or Remedial, Response or
Removal action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law, and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
real property currently owned or operated by any Loan Party or any of its
Subsidiaries or any property formerly owned or operated (but, if such Loan
Party's potential responsibility or liability therefor is limited to its period
of ownership or operation, solely during the period of such ownership or
operation) by any Loan Party or any of its Subsidiaries have been disposed of in
a manner not reasonably expected to result in material liability to any Loan
Party or any of its Subsidiaries. The only matters referred to in this Section
that could reasonably be expected to have a Material Adverse Effect are the Port
Carbon and Crespin matters referred to in Section 4.13(d) below.
(d) Notwithstanding any of the provisions contained in Section 4.13,
except for environmental Remediation matters related to the facility formerly
owned by Alliance American Corporation located in Port Carbon, Pennsylvania and
the facility of Aubecq located in Crespin, France, none of the matters disclosed
in the environmental assessment reports listed on Schedule 4.13 could reasonably
be expected or have a Material Adverse Effect.
SECTION 4.14 BURDENSOME DOCUMENTS. Except as set forth on SCHEDULE 4.14,
no Loan Party nor any of its Subsidiaries (excluding, from the scope of this
Section 4.14, any Subsidiary of Alpine which is not a Loan Party) is a party to
any indenture, loan or credit agreement or any lease or other
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agreement or instrument or subject to any charter or corporate restriction that
could reasonably be expected to have a Material Adverse Effect.
SECTION 4.15 PRIORITY OF LIENS. The Collateral Documents create in favor
of the Administrative Agent, for the ratable benefit of the Lenders, a valid and
perfected first priority security interest (subject to Permitted Liens) in the
Collateral (which Collateral includes all of the assets and real and personal
property, whether now owned or hereafter acquired and all of the products and
proceeds of any of the foregoing, of each Borrower, and all of the outstanding
capital stock of the Borrowers' Domestic Subsidiaries and 65% of the capital
stock of each of the Borrowers' Foreign Subsidiaries), securing the payment of
the Secured Obligations; and all filings and other actions necessary or
reasonably desirable to perfect and protect such security interest have been
duly taken. The subject Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for the liens and security
interests created or expressly permitted under the Loan Documents.
SECTION 4.16 TAXES. Anything elsewhere contained in this Section 4.16 to
the contrary notwithstanding, no representation or warranty is made in this
Section 4.16 with respect to any Subsidiary of Alpine which is not a Loan
Party.
(a) Each Loan Party and each of its Subsidiaries has filed, has caused to
be filed or has been included in all tax returns (Federal, state, local and
foreign) required to be filed by it or on its behalf, and has paid all taxes
shown thereon to be due, together with any applicable interest and penalties.
(b) Set forth on SCHEDULE 4.16 is a complete and accurate list of each
taxable year of each Loan Party and each of its Subsidiaries for which Federal
income tax returns have been filed and for which the expiration of the
applicable statute of limitations for assessment or collection has not occurred
by reason of extension or otherwise (an "OPEN YEAR").
(c) Except as set forth in SCHEDULE 4.16, there is no unpaid amount of
adjustments to the Federal income tax liability of any Loan Party or any of its
Subsidiaries proposed by the Internal Revenue Service with respect to Open
Years, and no issues have been raised by the Internal Revenue Service in respect
of Open Years that, in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(d) Except as set forth in SCHEDULE 4.16, there is no unpaid amount of
adjustments to the state, local and foreign tax liability of each Loan Party and
each of its Subsidiaries proposed by any state, local or foreign taxing
authorities (other than amounts arising from adjustments to Federal income tax
returns), and no issues have been raised by such taxing authorities that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(e) Except as set forth in SCHEDULE 4.16, no "ownership change" as defined
in Section 382(g) of the Internal Revenue Code, and no event that would result
in the application of the "separate return limitation year" or "consolidated
return change of ownership" limitations under the Federal income tax
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consolidated return regulations, has occurred with respect to PolyVision or any
of its Subsidiaries prior to the Closing Date.
SECTION 4.17 COMPLIANCE WITH SECURITIES LAWS. No Borrower and none of any
Borrower's Subsidiaries is an "investment company," or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
Neither the making of any Advances, nor the issuance of any Letters of Credit,
nor the application of the proceeds or repayment thereof by the Borrowers, nor
the consummation of the Transaction, will violate any provision of such Act or
any rule, regulation or order of the Securities and Exchange Commission
thereunder or any takeover, disclosure or other federal, state or foreign
securities law or Regulations T, U or X of the Federal Reserve Board. The
Borrowers are not subject to regulation under any federal, state or foreign
statute or regulation which limits its ability to incur Debt.
SECTION 4.18 SOLVENCY. Each Loan Party is, individually and together with
its Subsidiaries, Solvent.
SECTION 4.19 DEBT.
(a) Set forth on SCHEDULE 4.19(A) is a complete and accurate list of all
Existing Debt the principal amount of which is greater than $250,000, showing as
of a recent date the principal amount outstanding thereunder, the maturity date
thereof and, as to Surviving Debt, the amortization schedule therefor.
(b) Set forth on SCHEDULE 4.19(B) is a complete and accurate list of all
Surviving Debt the principal amount of which is greater than $100,000, showing
as of the date hereof the principal amount outstanding thereunder, the maturity
date thereof and the amortization schedule therefor.
SECTION 4.20 NO DEFAULTS, COMPLIANCE WITH LAWS.
(a) Except as set forth on SCHEDULE 4.20, no Loan Party is in default
under any agreement, ordinance, resolution, decree, determination, award, bond,
note, indenture, mortgage, deed of trust, lease, writ, order or judgment to
which it is a party or by which it is bound, or any other agreement or other
instrument by which any of the properties or assets owned by it or used in the
conduct of its business is affected, which default could have a Material Adverse
Effect.
(b) Each Loan Party has complied and is in compliance in all respects with
all applicable laws, ordinances, rules, regulations, resolutions, decrees and
other similar documents and instruments of all courts and governmental
authorities, bureaus and agencies, domestic and foreign, including, without
limitation, any Regulatory Agency and all applicable provisions of the American
Disabilities Act (42 U.S.C. Section 12101-12213) and the regulations issued
thereunder and all applicable Environmental Laws and Regulations, except where
non-compliance could not reasonably be expected to have a Material Adverse
Effect.
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SECTION 4.21 OWNED REAL PROPERTY. Set forth on SCHEDULE 4.21 is a complete
and accurate list of all real property owned by any Loan Party or any of its
Subsidiaries or in which any Loan Party has an interest as a contract vendee
showing as of the date hereof the street address, county or other relevant
jurisdiction, state, record owner and book and estimated fair value thereof.
Such Loan Party or such Subsidiary has good, marketable and insurable fee simple
title to such real property, free and clear of all Liens, other than Permitted
Real Property Encumbrances. Each Mortgage creates, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien on all of the Mortgaged Property (and will create
a valid and enforceable perfected security interest in and Lien on all fixtures
and improvements related to such Mortgaged Property and affixed or added thereto
on or after the Closing Date) in favor of the Administrative Agent (or such
other trustees that may be named therein) for the benefit of the Secured
Parties, superior to and prior to the rights of all third Persons (except that
the security interest created in the Mortgaged Property may be subject to the
Permitted Real Property Encumbrances related thereto) and subject to no other
Liens (other than Permitted Real Property Encumbrances).
SECTION 4.22 LEASED REAL PROPERTY. Set forth on SCHEDULE 4.22 is a
complete and accurate list of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessee, showing as of the date hereof
the street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof. To the best knowledge
of each Borrower, each such lease is the legal, valid and binding obligation of
the lessor thereof, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws relating to creditors' rights generally, and by general limitations
on the availability of equitable remedies.
SECTION 4.23 MATERIAL CONTRACTS. Set forth on SCHEDULE 4.23 is a complete
and accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof the parties, subject matter and term
thereof. Except as could not reasonably be expected to have a Material Adverse
Effect, each such Material Contract has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise modified, is
in full force and effect and is binding upon and enforceable against all parties
thereto in accordance with its terms. There exists no material default under
any Material Contract by the Borrowers or any of their Subsidiaries party
thereto and, to the best knowledge of each Borrower, there exists no material
default under any Material Contract by any other party thereto.
SECTION 4.24 INVESTMENTS. Set forth on SCHEDULE 4.24 is a complete and
accurate list of all Investments in excess of $250,000 held by any Loan Party or
any of its Subsidiaries, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
SECTION 4.25 INTELLECTUAL PROPERTY. Set forth on SCHEDULE 4.25 is a
complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date. Each such Loan Party and each of their
respective Subsidiaries owns or has rights to use all patents,
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trademarks, trade names, service marks, copyrights and other intellectual
property necessary to conduct its business as now or heretofore conducted by it
or proposed to be conducted by it. Each such Loan Party and each of their
respective Subsidiaries conducts its business and affairs without infringement
of or interference with any patent, trademark, trade name, service mark,
copyright or other intellectual property of any other Person. The Intellectual
Property Security Agreement creates, as security for the obligations purported
to be secured thereby, a valid and enforceable perfected security interest in
and Lien on all of the Collateral purported to be covered thereby in favor of
the Administrative Agent for the benefit of the Secured Parties, superior to and
prior to the rights of all third Persons.
SECTION 4.26 AIG ACQUISITION DOCUMENTS. Each AIG Acquisition Document to
which any Loan Party or any of its respective Subsidiaries is a party has been
duly executed and delivered by such Loan Party or such Subsidiary, as the case
may be, and, to the best knowledge of the Borrowers, each AIG Acquisition
Document has been duly executed and delivered by the parties thereto other than
the Borrowers and their Subsidiaries, and is in full force and effect. The
representations and warranties of any Loan Party and each of its respective
Subsidiaries contained in each AIG Acquisition Document to which such Loan Party
or such Subsidiary, as the case may be, is a party are true and correct in all
material respects on the date hereof and will be true and correct in all
material respects on the Closing Date and the AIG Acquisition Date, as if made
on each of such dates, and the Administrative Agent and each Lender Party shall
be entitled to rely upon such representations and warranties with the same force
and effect as if they were incorporated in this Agreement and made to the
Administrative Agent and each Lender Party directly as of the date hereof, the
Closing Date, and the AIG Acquisition Date.
SECTION 4.27 FEES. Except for a $750,000 fee payable to Alpine in common
stock and preferred stock of PolyVision, and certain warrants in PolyVision
issuable as described on SCHEDULE 4.2, no broker's or finder's fees or
commissions or any similar fees or commissions will be payable by any Loan Party
or any of its Subsidiaries with respect to the incurrence and maintenance of the
Obligations hereunder, any other transaction contemplated by the Loan Documents
or any services rendered in connection with any such transactions. The
Borrowers hereby covenant and agree to indemnify the Administrative Agent and
each Lender Party against and hold the Administrative Agent and each Lender
Party harmless from any claim, demand or liability for broker's or finder's fees
or similar fees or commissions relating to the Transaction.
SECTION 4.28 GOVERNMENT CONSENTS FOR CONDUCT OF BUSINESS.
(a) Except as set forth on SCHEDULE 4.4, each Loan Party has, and
is in good standing with respect to, all approvals, permits, licenses, consents,
authorizations, franchises, certificates, and inspections of all Regulatory
Agencies that are necessary for such Loan Party to continue to conduct its
business and own, use, operate, and maintain its property and assets as
heretofore conducted, owned, used, operated, and maintained which, if not
obtained (whether directly or by lawful and effective assignment) or not
maintained in good standing, would have a Material Adverse Effect. No such
approval, permit, license, consent, authorization, franchise, or certificate is
conditioned or limited any more so than as is generally the case with respect to
Persons engaged in the same or similar lines of business. Each such approval,
permit, license, consent, authorization, franchise, or certificate was duly
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and validly granted or issued, is in full force and effect, and neither has
been, nor has been threatened to be, amended, modified, suspended, rescinded,
revoked, forfeited, or assigned. Further, no condition(s) exist(s) or event(s)
has (have) occurred that, with the giving of notice or lapse of time or both,
could result in the amendment, modification, suspension, rescission, revocation,
forfeiture, or non-renewal of any such approval, permit, license, consent,
authorization, franchise, or certificate, excluding in any instance any such
condition or event the effect of which is immaterial.
SECTION 4.29 MERGERS.
(a) The copies of the merger plans and agreements between PolyVision and
AIG and between Greensteel and Alliance America Corporation dated the date
hereof (collectively, the "MERGER AGREEMENTS") and all agreements, instruments,
and documents executed and delivered in connection therewith, and all exhibits,
annexes and schedules annexed thereto, and all amendments and modifications to
any of the foregoing (collectively, all of the foregoing, including the Merger
Agreement, are referred to as the "MERGER DOCUMENTS") heretofore delivered by
the Borrowers to the Administrative Agent are true, complete and accurate copies
thereof. None of the parties to the Merger Documents waived compliance by any
of the other parties thereto with any term, covenant or condition thereof, and
no party thereto has breached any covenant set forth therein or failed to
perform any of its obligations thereunder.
(b) Simultaneously with the execution and delivery of this Agreement and
the making of the initial Loans, the Mergers shall have been consummated
pursuant to the Merger Documents and applicable law. Upon such consummation all
of the assets and properties of Alliance America Corporation shall have been
vested in Greensteel, subject to the liabilities of Alliance American
Corporation, and all of the assets of AIG shall have been vested in PolyVision
subject to the liabilities of AIG. Neither the execution and delivery of the
Merger Documents, nor the performance by any party thereto or the Borrowers of
any obligations thereunder, or of any obligations of any party thereto incurred
by any Borrower by virtue of the Mergers, violate any provision of law or will
conflict with or result in a breach of or create (with or without the giving of
notice or lapse of time, or both) a default under any agreement to which any
party to a Merger is a party or by which it is bound or any of its properties is
affected.
ARTICLE 5
AFFIRMATIVE COVENANTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as the Borrowers or any other Loan Party are
indebted to any of the Lender Parties or the Administrative Agent under any of
the Loan Documents, any Letter of Credit or European Letter of Credit is
outstanding and until payment in full of the Notes and full and complete
performance of all of their other obligations arising hereunder, each Borrower
shall:
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SECTION 5.1 COMPLIANCE WITH LAW. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA.
SECTION 5.2 PAYMENT OF TAXES, ETC. Timely pay and discharge, and cause
each of their Subsidiaries to timely pay and discharge, (a) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (b) all lawful claims that, if unpaid, might by law become a Lien
upon its property; PROVIDED, HOWEVER, that the Borrowers and their Subsidiaries
shall not be required to pay or discharge any such tax, assessment, charge or
claim that is being contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable against the
Borrowers or any of their Subsidiaries.
SECTION 5.3 COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of
their Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause each of
their Subsidiaries to obtain and renew all Environmental Permits reasonably
necessary for its operations and properties; and conduct, and cause each of
their Subsidiaries to conduct, any investigation, study, sampling and testing,
and undertake any Removal, Remedial or other Response action necessary to remove
and clean up all Hazardous Materials from any of its properties, in accordance
with the requirements of all applicable Environmental Laws; PROVIDED, HOWEVER,
that the Borrowers and their Subsidiaries shall not be required to undertake any
such cleanup, Removal, Remedial or Response action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and adequate reserves as determined by the Administrative Agent are being
maintained with respect to such circumstances.
SECTION 5.4 PREPARATION OF ENVIRONMENTAL REPORTS. The Borrowers agree
that the Administrative Agent may, upon reasonable prior notice, from time to
time in its reasonable discretion, retain, at the Borrowers' expense, an
independent professional consultant to prepare environmental site assessment
reports for the Borrowers or any of their Subsidiaries and/or to review any
report relating to Hazardous Materials prepared by or for the Borrowers and,
upon a reasonable belief that the Borrowers or any of their Subsidiaries have
breached any covenant or representation with respect to environmental matters or
that there has been a material violation of Environmental Laws by the Borrowers
or one of their Subsidiaries, the Administrative Agent may conduct its own
investigation of such matter at any facility or property currently owned,
leased, operated or used by the Borrowers or one of their Subsidiaries and the
Borrower agrees to use reasonable efforts (but without requirement of any
material expense) to obtain permission for the Administrative Agent's
professional consultant to conduct its own investigation of any such matter at
any facility or property previously owned, leased, operated or used by the
Borrowers or one of their Subsidiaries. The Borrowers and their Subsidiaries
hereby grant to the Administrative Agent, its employees, consultants and
contractors, the right to enter into or onto the facilities or properties
currently owned, leased, operated or used by the Borrowers or their Subsidiaries
upon reasonable notice to the Borrowers to perform such assessments on such
property as are necessary to conduct such a review and/or investigation. Any
such investigation of any
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such facility or property shall be conducted, unless otherwise agreed to by the
Borrowers and the Administrative Agent, during normal business hours and, to the
extent reasonably practicable, shall be conducted so as not to interfere with
the ongoing operations at any facility or property or to cause any damage or
loss to any facility or property. The Borrowers and the Administrative Agent
hereby acknowledge and agree that any report of any investigation conducted at
the request of the Administrative Agent will be obtained and shall be used by
the Administrative Agent and Lender Parties for the purpose of internal credit
decisions to monitor and police the Advances and/or protect the Administrative
Agent's and Lender Parties' security interests in the Collateral. The
Administrative Agent agrees promptly to deliver a copy of any such report to
the Borrowers with the understanding that the Borrowers acknowledge and agree
that (i) the Borrowers will indemnify and hold harmless the Administrative Agent
and each Lender Party from any costs, losses or liabilities relating to the
Borrowers' use of or reliance on such report and (ii) neither the Administrative
Agent nor any Lender Party makes any representation or warranty with respect to
such report.
SECTION 5.5 MAINTENANCE OF INSURANCE. (a) Maintain, and cause each of
their Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which such Borrower or such Subsidiary
operates including, without limitation, the policies described on SCHEDULE 5.5
(or other policies comparable thereto); (b) file with the Administrative Agent,
within 10 days after written request therefor, a detailed list of the insurance
then in effect, stating the names of the insurance companies, the amounts and
rates of the insurance, the dates of the expiration thereof and the properties
and risks covered thereby; and (c) deliver to the Administrative Agent, in form
and substance reasonably satisfactory to the Administrative Agent, endorsements
to (A) all "all-risk" and casualty and (if any) business interruption insurance
naming the Administrative Agent, on behalf of itself and the Lenders, as loss
payee if permitted thereunder (or assignee, in the case of business interruption
insurance, if any) insuring in the case of "all-risk" against loss or damage by
fire, lightning, windstorm, explosion, hail, tornado, and if to the extent in a
flood hazard area, a flood insurance policy, and (B) all general liability and
other liability policies naming the Administrative Agent, on behalf of itself
and the Lenders, as additional insured if permitted thereunder, and providing,
in any event, that such insurance policies shall not be canceled without thirty
(30) days' prior written notice thereof by the respective insurer to the
Administrative Agent and shall contain standard non-contributory mortgagee
clause endorsement in favor of the Administrative Agent with respect to hazard
insurance coverage.
SECTION 5.6 PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause each of their Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises required for the normal operation
of its business.
SECTION 5.7 VISITATION RIGHTS.
(a) At any reasonable time and from time to time, upon reasonable
notice and during normal business hours, permit the Administrative Agent and the
Lender Parties or any agents or
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representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of the Borrowers and
their Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrowers and any such Subsidiaries with any of their officers or directors.
(b) Permit the Administrative Agent and the Lender Parties or any
agents or representatives thereof to conduct commercial finance examinations
and/or Collateral audits of the Borrowers and their Subsidiaries during each
calendar year, at the expense of the Borrowers once per year and in any event at
the Borrowers' expense following the occurrence and during the continuance of
any Default, as the Administrative Agent may reasonably request.
SECTION 5.8 KEEPING OF BOOKS. Keep, and cause each of their Subsidiaries
to keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each Subsidiary in accordance with GAAP.
SECTION 5.9 MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each of their Subsidiaries to maintain and preserve, all of its properties
that are reasonably necessary in the conduct of its business in normal working
order and condition, ordinary wear and tear excepted.
SECTION 5.10 COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrowers or any of their Subsidiaries is a party, keep such leases in
full force and effect and not allow such leases to lapse or be terminated or any
rights to renew such leases to be forfeited or canceled (except in the exercise
of reasonable business judgment), notify the Administrative Agent upon obtaining
actual knowledge of any default by any party with respect to such leases and
cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of their Subsidiaries to do so except, in any case,
where the failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.11 PERFORMANCE OF MATERIAL CONTRACTS. Perform and observe, and
cause each of their Subsidiaries to perform and observe, all of the terms and
provisions of each Material Contract to be performed or observed by it,
maintain, and cause each of their Subsidiaries to maintain, each such Material
Contract in full force and effect, and, subject to the exercise of reasonable
business judgment, enforce, and cause each of their Subsidiaries to enforce,
each such Material Contract in accordance with its terms.
SECTION 5.12 TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of
their Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to such Borrower or such Subsidiary than it
would obtain in a comparable arms-length transaction with a Person not an
Affiliate.
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SECTION 5.13 AGREEMENT TO GRANT ADDITIONAL SECURITY.
(a) Promptly, and in any event not later than ten (10) days prior to the
acquisition of assets of the type that would have constituted Collateral at the
date hereof and investments of the type that would have constituted Collateral
on the date hereof (other than assets with a fair market value of less than
$50,000), including the capital stock of any direct or indirect Subsidiary of a
Borrower, notify the Administrative Agent of the proposed acquisition of such
assets or investments (if permitted hereunder) and, to the extent not already
Collateral in which the Administrative Agent has a perfected security interest
pursuant to the Collateral Documents, such assets and investments will become
additional Collateral hereunder to the extent the Administrative Agent deems the
pledge of such assets practicable (the "ADDITIONAL COLLATERAL"), and the
Borrowers will, and will cause each of its direct and indirect Subsidiaries to,
take all necessary action, including the filing of appropriate financing
statements under the provisions of the UCC, applicable foreign, domestic or
local laws, rules or regulations in each of the offices where such filing is
necessary or appropriate to grant Administrative Agent a perfected Lien in such
Collateral (or comparable interest under foreign law in the case of foreign
Collateral) pursuant to and to the full extent required by the Collateral
Documents and this Agreement.
(b) Promptly, and in any event no later than the date on which an entity
becomes a direct or indirect Domestic Subsidiary of a Borrower (or if acceptable
to the Administrative Agent in the exercise of its sole discretion, not later
than thirty (30) days after a request with respect thereto), cause each of the
Borrowers' direct and indirect Domestic Subsidiaries as the Administrative Agent
shall request to become party to the Subsidiary Guaranty (pursuant to the
execution and delivery of a supplement thereto in the form of Exhibit A
thereto).
(c) Promptly, and in any event no later than the date on which an entity
becomes a direct or indirect Domestic Subsidiary of a Borrower (or if acceptable
to the Administrative Agent in the exercise of its sole discretion, not later
than thirty (30) days after a request with respect thereto), cause each
Guarantor created or established after the date hereof to grant to the
Administrative Agent, for the ratable benefit of the Lenders, a first priority
Lien (subject to Permitted Liens) on all property (tangible and intangible) of
such Guarantor, including, without limitation, all of the outstanding capital
stock of any of its Domestic Subsidiaries and 65% of the outstanding stock of
any of its Foreign Subsidiaries and each Borrower and Domestic Subsidiary shall
grant such lien on the outstanding capital stock of any Foreign Subsidiary owned
by such Borrower or Domestic Subsidiary (in the same percentages as set forth
above) in each case, upon terms similar to those set forth in the Collateral
Documents and otherwise reasonably satisfactory in form and substance to
Administrative Agent. The Borrowers shall cause each Guarantor, at its own
expense, to become a party to the Initial Security Agreement (pursuant to the
execution and delivery of a supplement thereto in the form of Exhibit C
thereto), an Intellectual Property Security Agreement, a Mortgage and any other
Collateral Document (to the extent applicable to such Guarantor and its assets)
and to execute, acknowledge and deliver, or cause the execution, acknowledgment
and delivery of, and thereafter register, file or record in any appropriate
governmental office, any document or instrument reasonably deemed by
Administrative Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens (including UCC, tax and judgment lien
searches, legal opinions, title insurance, consents, corporate documents and any
additional or substitute
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security agreements or mortgages or deeds of trust), provided that no Mortgage
will be required in respect of any leasehold for a location at which a Borrower
or any Subsidiary maintains and continues to maintain less than $500,000 of
Collateral or is not otherwise significant to such entity's continued
operations. The Borrowers will cause each such Loan Party to take all actions
requested by Administrative Agent (including, without limitation, the filing of
UCC-1's) in connection with the granting of such security interests.
(d) Promptly, and in any event not later than thirty (30) days after a
request with respect thereto, (i) deliver to the Administrative Agent the
original of all instruments, documents and chattel paper, and all other
Collateral of which the Administrative Agent determines it should have physical
possession in order to perfect and protect its security interest therein, duly
pledged, endorsed or assigned to the Administrative Agent without restriction;
(ii) obtain landlord waivers, in form and substance satisfactory to the
Administrative Agent, with respect to any Inventory or other Collateral located
at a location that is not owned by a Borrower or a Subsidiary and at which a
Borrower or any Subsidiary maintains and continues to maintain Collateral having
a book value in excess of $250,000; (iii) deliver to the Administrative Agent
warehouse receipts covering any portion of the Inventory or other Collateral
located in warehouses and for which warehouse receipts are issued; (iv) when an
Event of Default exists, transfer Inventory to locations designated by the
Administrative Agent; (v) if any Collateral (except immaterial amounts if the
specific exclusion thereof from the terms of this clause shall have been
consented to in writing by the Administrative Agent) is at any time in the
possession or control of any warehousemen, bailee or any Borrower's agents or
processors, notify the Administrative Agent thereof and notify such person of
the Administrative Agent's security interest in such Collateral and obtain a
landlord waiver or bailee letter, in form and substance reasonably satisfactory
to the Administrative Agent, from such person and instruct such person to hold
all such Collateral for the Administrative Agent's account subject to the
Administrative Agent's instructions; (vi) if at any time any Inventory or other
Collateral is located on any real property owned by a Borrower which is subject
to a mortgage or other Lien (other than in favor of the Administrative Agent for
the ratable benefit of the Lender Parties), obtain a mortgagee waiver, in form
and substance satisfactory to the Administrative Agent, from the holder of each
mortgage or other Lien on such real property; and (vii) take all such other
actions and obtain all such other agreements as the Administrative Agent may
reasonably deem necessary or desirable in respect of any Collateral.
(e) The security interests required to be granted pursuant to this Section
shall be granted pursuant to the Collateral Documents or, in the Administrative
Agent's discretion, such other security documentation (which shall be
substantially similar to the Collateral Documents already executed and delivered
by the Borrowers and the Guarantors) as is satisfactory in form and substance to
Administrative Agent (the "ADDITIONAL COLLATERAL DOCUMENTS") and shall
constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens except Liens permitted
under Section 6.1. The Additional Collateral Documents and other instruments
related thereto shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of Administrative Agent for the ratable benefit
of the Lender Parties, granted pursuant to the Additional Collateral Documents,
and all taxes, fees and other charges payable in connection therewith shall be
paid in full by the
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Borrowers. At the time of the execution and delivery of Additional Collateral
Documents, the Borrowers shall cause to be delivered to Administrative Agent
such agreements, opinions of counsel, and other related documents (including,
without limitation, certified copies of certificates of incorporation, by-laws,
corporate resolutions, incumbency certificates, good standing certificates, lien
searches, and loss-payee endorsements) as may be reasonably requested by the
Administrative Agent or the Required Lenders to assure themselves that this
Section has been complied with.
SECTION 5.14 INTEREST RATE PROTECTION. Within ninety (90) days after the
Closing Date, the Borrowers shall obtain and thereafter keep in effect one or
more interest rate Bank Hedge Agreements (the terms and other provisions of all
such Bank Hedge Agreements to be subject to the prior written consent of the
Administrative Agent) covering at least fifty percent (50%) of the combined Term
A and Term B Advances outstanding on the Closing Date for an aggregate period of
not less than three (3) years commencing on the Closing Date.
SECTION 5.15 PERFORMANCE OF AIG ACQUISITION DOCUMENTS. Perform and
observe (except for immaterial non-performance or non-observance based on the
exercise of reasonable business judgment) or, cause the relevant Subsidiary to
perform and observe all of the terms and provisions of each AIG Acquisition
Document to be performed or observed by it or such Subsidiary, maintain each
such AIG Acquisition Document in full force and effect, enforce (subject to the
exercise of reasonable business judgment) each such AIG Acquisition Document in
accordance with its terms and take all such action to such end as may be from
time to time requested by the Administrative Agent; and, upon request of the
Administrative Agent, make such demands and requests for action or for
information and reports as PolyVision, a Borrower or any Subsidiary is entitled
to make under any AIG Acquisition Document.
SECTION 5.16 YEAR 2000 COMPATIBILITY. Take all action necessary to assure
that its computer-based systems, hardware and software are able to operate and
effectively receive, transmit, process, store, retrieve or retransmit data
including dates on and after January 1, 2000, and, at the request of the
Administrative Agent, the Borrowers shall provide evidence to the satisfaction
of the Required Lenders of such year 2000 compatibility.
SECTION 5.17 CASH CONCENTRATION OR BLOCKED ACCOUNTS. After written
request by the Administrative Agent if delivered from and after the date of
occurrence and during the continuance of an Event of Default hereunder, each
Borrower will, and will cause each of its Subsidiaries, if any, to, either (i)
maintain its main cash concentration accounts with the Administrative Agent or
(ii) establish blocked accounts (collectively, the "BLOCKED ACCOUNTS") with such
banks (collectively the "COLLECTING BANKS") as are acceptable to the
Administrative Agent (subject to irrevocable instructions acceptable to the
Administrative Agent as hereinafter set forth) to which all account debtors
shall directly remit all payments on Receivables and in which the Borrowers will
immediately deposit all payments received for Inventory or other payments
constituting proceeds of Collateral in the identical form in which such payment
was received, whether by cash or check. The Borrowers shall thereupon promptly
and irrevocably instruct each Collecting Bank that, upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent may
instruct such Collecting Bank to send by wire
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transfer all amounts deposited in the applicable Blocked Account(s) to the
Administrative Agent's Account or as the Administrative Agent shall direct and
that, upon receipt of any such instructions from the Administrative Agent, such
Collecting Bank shall promptly comply with all such instructions. The (a)
occurrence and continuance of an Event of Default and (b) Administrative Agent
so instructing any Collecting Bank as provided in the immediately preceding
sentence is hereinafter referred to as a "CASH DOMINION EVENT." Prior to the
occurrence of a Cash Dominion Event, the Collecting Banks shall make all
available funds in the applicable Blocked Account(s) available to the Borrower.
SECTION 5.18 INTERCOMPANY SUBORDINATION AGREEMENT. At the request of the
Administrative Agent, the Borrowers will cause to be delivered to the
Administrative Agent an intercompany subordination agreement in form and
substance reasonably satisfactory to the Administrative Agent (as amended,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Intercompany Subordination Agreement").
SECTION 5.19 CAPITAL CONTRIBUTIONS TO POLYVISION FRANCE. PolyVision will
make subordinated loans or capital contributions to PolyVision France to the
extent required to enable PolyVision France to make payments due and owing by it
under the KBC Loan Documents, unless otherwise instructed by the Administrative
Agent.
SECTION 5.20 PLEDGE OF CERTAIN SHARES. PolyVision hereby approves and
agrees to confirm at any time or from time to time upon the request of the
Administrative Agent that PolyVision approves the identity of the purchaser of
any shares transferred (by any method directly or indirectly) to such purchaser
by Fleet or by any other purchaser of shares, in each case of the stock of
PolyVision France upon and following enforcement of the pledge of such shares
and agrees to approve each and every shareholders' resolution required in
connection therewith and to vote in favor of each such transfer and any such
purchaser.
Section 5.21 GRANT OF SECURITY INTEREST IN FOREIGN DEBT. Within ninety
(90) days after the Closing Date, PolyVision shall cause each Foreign Subsidiary
to which PolyVision and/or any Domestic Subsidiary owes Debt (collectively, the
"FOREIGN DEBT") to grant the Administrative Agent, for the ratable benefit of
the Lenders, a perfected security interest in all Foreign Debt, and PolyVision
will, and will cause each of its Subsidiaries to, take all necessary action,
including the filing of appropriate financing statements under the provisions of
the Uniform Commercial Code, applicable foreign, domestic or local laws, rules
or regulations in each of the offices where such filing is necessary or
appropriate to grant the Administrative Agent a perfected Lien on such
collateral (or comparable interest under foreign law) pursuant to this
Agreement. The security interests required to be granted pursuant to this
Section 5.21 shall be granted pursuant to the collateral documents reasonably
satisfactory to the Administrative Agent in form and substance, and shall
constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens, except Liens
permitted under Section 6.1. The collateral documents and other instruments
related thereto shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of the Administrative
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Agent, granted pursuant to such collateral documents, and all taxes, fees and
other charges payable in connection therewith shall be paid in full by
PolyVision.
ARTICLE 6
NEGATIVE COVENANTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as any Borrower or any other Loan Party is indebted
to any of the Lender Parties or the Administrative Agent under any of the Loan
Documents, any Letter of Credit is outstanding and until payment in full of the
Notes and full and complete performance of all of its other obligations arising
hereunder, each of the Borrowers covenants that it shall not and shall not
permit any Subsidiary to do, agree to do or permit to be done, any of the
following:
SECTION 6.1 LIENS, ETC. Create, incur, assume or suffer to exist, or
permit any of their Subsidiaries to create, incur, assume or suffer to exist,
any Lien on or with respect to any of its properties of any character
(including, without limitation, accounts, Inventory and other Collateral)
whether now owned or hereafter acquired, or sign or file or suffer to exist, or
permit any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code or any other statute of any domestic or foreign
jurisdiction, a financing statement or comparable instruments that names any
Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist, or
permit any of its Subsidiaries to sign or suffer to exist, any security
agreement or comparable instruments authorizing any secured party thereunder to
file any such financing statement or comparable instruments, or assign, or
permit any of its Subsidiaries to assign, any accounts or other right to receive
income, EXCLUDING, HOWEVER, from the operation of the foregoing restrictions the
following:
(a) Liens created under the Loan Documents or the KBC Loan Documents;
(b) Permitted Liens;
(c) Liens existing on the date hereof and described on SCHEDULE 6.1;
(d) Purchase money Liens securing Debt permitted under Section 6.2(c)(i)
upon real property or Equipment acquired or held by the Borrowers or any of
their Subsidiaries in the ordinary course of business to secure the purchase
price of such real property or Equipment or to secure Debt incurred solely for
the purpose of financing the acquisition, construction or improvement of any
such real property or Equipment to be subject to such Liens, or Liens existing
on any such real property or Equipment at the time of acquisition (other than
any such Liens created in contemplation of such acquisition that do not secure
the purchase price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; PROVIDED, HOWEVER, that no such Lien
shall extend to or cover any property other than the real property or Equipment
being acquired, constructed or improved, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore subject to the
Lien being extended, renewed or replaced;
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(e) Liens arising in connection with Capitalized Leases permitted under
Section 6.2(c)(i); PROVIDED, that no such Lien shall extend to or cover any
Collateral or any assets other than the assets subject to such Capitalized
Leases; and
(f) The Lien required to be granted to the holders of the Senior
Subordinated Notes (or their agent) pursuant to Section 4.14(a) of the Senior
Subordinated Note Agreement.
(g) The replacement, extension or renewal of any Lien permitted by clauses
(c) through (f) above upon or in the same property theretofore subject thereto
in connection with the replacement, extension or renewal (without increase over
the original amount or any change in any direct or contingent obligor) of the
Debt secured thereby.
SECTION 6.2 DEBT. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(a) Debt incurred pursuant to the Loan Documents;
(b) In the case of any of the Subsidiaries of the Borrowers, Debt owed by
a Subsidiary of any of the Borrowers to a Borrower or to a Wholly-Owned
Subsidiary of a Borrower; PROVIDED, that such Debt shall be evidenced by a
promissory note, such promissory note shall be pledged to the Administrative
Agent pursuant to the terms of a Security Agreement and there shall be no
restrictions whatsoever on the ability of such Subsidiary to repay such Debt
(other than pursuant to any subordination agreement required by the
Administrative Agent or any Lenders); and PROVIDED, FURTHER, that Debt owed by a
Foreign Subsidiary to a Borrower or to a Domestic Subsidiary shall be subject to
the terms and conditions of Section 6.6(a); and
(c) In the case of the Borrowers and any of their Subsidiaries:
(i) (A) Debt secured by Liens permitted by Section 6.1(d)
and (B) Debt in respect of Capitalized Leases, collectively not to exceed in the
aggregate $750,000.00 at any time outstanding;
(ii) the Surviving Debt; and any Debt extending the maturity
of, or refunding or refinancing, in whole or in part, such Surviving Debt;
PROVIDED, that the terms of any such extending, refunding or refinancing Debt,
and of any agreement entered into and of any instrument issued in connection
therewith, are consented to in writing by the Administrative Agent, with the
approval of the Required Lenders (which approval shall be promptly given if the
terms of the extension, refunding or refinancing are substantially similar to
that of the Debt being extended, refunded or refinanced), and otherwise
permitted by this Agreement and the other Loan Documents; and, PROVIDED,
FURTHER, that the principal amount of such Surviving Debt shall not be increased
above the principal amount thereof permitted to be outstanding after the Initial
Extension of Credit, and the direct and contingent obligors therefor shall not
be changed, as a result of or in connection with such extension, refunding or
refinancing;
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(iii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(iv) Subordinated Debt (including refinancing of the Senior
Subordinated Notes, approval of which shall be promptly given if the terms
applicable to such refinancing are no less favorable (except in immaterial
respects) to the issuer thereof and to the Lender Parties than the terms and
conditions in effect with respect to the Subordinated Debt being refinanced and
if no Default or Event of Default then exists or would exist after giving effect
to the consummation of any such refinancing), PROVIDED that principal and
interest thereof shall be payable or paid by the Borrower only in accordance
with the terms and conditions of the applicable Subordinated Debt Documents; the
guarantees of the Senior Subordinated Notes as set forth in the Senior
Subordinated Note Agreement; and guarantees of other Subordinated Debt (other
than the Junior Subordinated Note) but only on the condition that such
guarantees are subordinated on terms and conditions no less favorable to the
Lender Parties than the subordination terms of the underlying Subordinated Debt
and otherwise are reasonably acceptable to the Required Lenders; and
(v) Indebtedness in respect of interest rate swap, cap, or
collar agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contractors or similar agreements designed
to hedge against fluctuations in interest rates incurred in the ordinary course
of business and consistent with prudent business practice;
(d) Debt incurred under or as permitted by the KBC Loan Documents;
(e) Guarantees by Borrowers of obligations of the other
Borrowers and their Subsidiaries, guarantees by the Borrowers of obligations of
Wholly-Owned Subsidiaries, and guarantees by Wholly-Owned Subsidiaries of
obligations of Borrowers or Wholly-Owned Subsidiaries, subject in the case of
guarantees of Subordinated Debt to the provisions of Section 6.2(c)(iv) above;
(f) (i) The unsecured Debt owed by PolyVision to AE in the
outstanding principal amount of approximately $13,000,000 existing on the date
hereof, and (ii) other unsecured Debt owed by Borrowers to Foreign Subsidiaries
which in the aggregate, when taken together with the existing Debt described in
the preceding clause (i), shall in principal amount not be reduced so as to be
less than $12,000,000 or increased so as to be in excess of $14,000,000 at any
one time outstanding, subject, however, to the terms of the Intercompany
Subordination Agreement; and
(g) Unsecured Debt not included in the preceding paragraphs of
this Section 6.2 which does not exceed at any time the principal sum of
$250,000, in the aggregate for the Borrowers and their Subsidiaries (including,
without limitation, the Foreign Subsidiaries, but excluding unsecured Debt owed
by any Foreign Subsidiary to any other Foreign Subsidiary) including the Dollar
Equivalent amount denominated in non-U.S. currencies.
Section 6.3 ACCOUNTS PAYABLE. (a) Have accounts payable of the Borrowers
or any of their Subsidiaries arising from the purchase of property or services,
including, without limitation, Inventory
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acquired for resale outstanding for longer than 120 days from the date of
incurrence, except (i) accounts payable which by their terms become payable
after 120 days from incurrence or (ii) accounts payable that are subject to good
faith dispute by the Borrowers; or (b) have outstanding taxes, assessments or
governmental charges or accrued liabilities for longer than 120 days past due
from the original due date thereof or have any non-interest bearing deferred
liabilities (E.G., deferred compensation and deferred taxes) (excluding for
purposes of this clause liabilities for borrowed money) except in each case
incurred and continuing in the ordinary course of business and except if
contesting taxes, assessments or charges as and to the extent not constituting a
Default or Event of Default hereunder.
SECTION 6.4 FUNDAMENTAL CHANGES.
(a) Merge with and into or consolidate with any Person or permit any
Person to merge with and into it, or permit any of their Subsidiaries to do so,
except that, so long as no Default or Event of Default shall have occurred and
be continuing and so long as no Default or Event of Default would result
therefrom, (i) the Borrowers and Wholly-Owned Subsidiaries may make Permitted
Acquisitions and (ii) any Subsidiary of a Borrower may merge with and into or
consolidate with any Borrower (provided that a Borrower is the surviving entity)
or any other Subsidiary of a Borrower (provided that a Wholly-Owned Subsidiary
of a Borrower is the surviving entity); PROVIDED, HOWEVER, that Foreign
Subsidiaries may only effectuate the foregoing transactions if the
Administrative Agent has received fifteen (15) days' prior written notice
thereof and such documents (including, without limitation, opinions of counsel)
as it may request to confirm that any such transaction shall not have an adverse
effect on the rights and remedies of the Administrative Agent and the Lenders
under the Loan Documents.
(b) Liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), convey, sell, assign, lease, transfer or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or substantially all of
its property, business or assets, or permit any of their Subsidiaries to do any
of the foregoing; and
(c) Acquire or permit any Subsidiary to acquire all or substantially all
of the assets or the capital stock of any other Person, except that (i)
PolyVision may consummate the AIG Acquisition in accordance with the terms and
conditions of the AIG Acquisition Documents and (ii) the Borrowers and
Wholly-Owned Subsidiaries may make Permitted Acquisitions.
SECTION 6.5 SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of their Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets, except:
(a) Sales of Inventory in the ordinary course of business;
(b) Sales of obsolete Equipment in the ordinary course of business; and
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(c) The sale of any assets that are fixed assets (and not in any event
securities pledged as Collateral by the Borrowers or any of their Subsidiaries
and other than an asset included in Section 6.5(b)) so long as (i) the purchase
price paid to the Borrower or such Subsidiary for such asset shall be no less
than the fair market value of such asset at the time of such sale, (ii) the
purchase price for such asset shall be paid to such Borrower or such Subsidiary
solely in cash and (iii) the aggregate purchase price paid to the Borrowers and
all of their Subsidiaries for such asset and all other assets sold by the
Borrowers and their Subsidiaries (other than an asset included in Section 6.5(a)
or 6.5(b)) from and after the Closing Date pursuant to this clause (c) shall not
exceed $1,000,000; and no sale of any fixed asset shall be made if such sale
would materially impair the value or composition of the Collateral;
PROVIDED that in the case of sales of assets pursuant to Section 6.5(c), the
Borrowers shall, on the date of receipt thereof, apply the entire Net Cash
Proceeds from such sale in accordance with Section 2.6(b)(ii).
SECTION 6.6 INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any of
their Subsidiaries to make or hold, any Investment in any Person other than:
(a) Investments by the Borrowers and their Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on SCHEDULE 6.6(A),
and additional investments in Wholly-Owned Subsidiaries of the Borrowers;
PROVIDED, HOWEVER, that:
(i) with respect to Investments in any newly acquired or created
Domestic Subsidiary, any such Subsidiary shall (to the extent required by the
terms of Section 5.13) become a Guarantor and an additional grantor pursuant to
the terms of a Security Agreement and Intellectual Property Security Agreement,
and the applicable Loan Parties shall have executed and delivered any other
documents and delivered additional Collateral in accordance with and pursuant to
Section 5.13; and
(ii) Investments in Foreign Subsidiaries shall be subject to each
of the following conditions:
(A) the aggregate amount of Investments made subsequent to
the date hereof by the Borrowers and their Domestic Subsidiaries in Foreign
Subsidiaries (including equity Investments not returned) outstanding at any one
time (after giving effect to cash repayments (at no discount) of the portion of
such Investments constituting Debt of such Foreign Subsidiaries) shall not
exceed the lesser of (1) $3,000,000 (including the Dollar Equivalent of any such
Debt denominated in non-U.S. currencies) and (2) the excess of (I) the Borrowing
Base (as shown on the most recently delivered Borrowing Base Certificate) as it
relates exclusively to the Borrowers and their Domestic Subsidiaries over (II)
the sum of the then outstanding aggregate principal amount of all Revolving
Credit Advances, Swingline Advances and Letter of Credit Advances plus the
Available Amount of all Letters of Credit outstanding at such time; and
(B) all such Investments constituting Debt shall satisfy
the terms and conditions of Section 6.2(b);
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(b) Loans and advances to officers and other employees in the ordinary
course of the business of the Borrowers and their Subsidiaries in an aggregate
principal amount not to exceed $250,000 at any time outstanding;
(c) Investments by the Borrowers and their Subsidiaries in Cash
Equivalents;
(d) Investments by the Borrowers and their Subsidiaries in Bank Hedge
Agreements permitted under Section 5.14;
(e) Investments consisting of intercompany Debt permitted under Sections
6.2(b) and (e);
(f) Investments existing on the date hereof and described on SCHEDULE
6.6(F);
(g) Investments by the Borrowers and their Subsidiaries in deposit
accounts opened in the ordinary course of business;
(h) Investments consisting of accounts receivable in the ordinary course
of business; and
(i) Investments in the form of Permitted Acquisitions, PROVIDED that any
newly acquired or created Domestic Subsidiary shall (to the extent required by
the terms of Section 5.13) become a Guarantor pursuant to the terms of the
guaranty executed pursuant to Section 5.13(b) and an additional grantor pursuant
to the terms of the Security Agreement and Intellectual Property Security
Agreement, and the applicable Loan Parties (including Foreign Subsidiaries)
shall have executed and delivered any other documents and delivered additional
Collateral in accordance with and pursuant to Section 5.13.
Following the Closing Date, Fleet will endeavor, with the approval of
the Lenders, and subject to the capital markets and the performance of
PolyVision and its Subsidiaries, to finance acquisitions by the Borrowers
under, and subject to the terms and provisions of, this Agreement in amounts to
be negotiated.
SECTION 6.7 DIVIDENDS, ETC. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its capital stock
or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of
their Subsidiaries to do any of the foregoing or permit any of their
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of PolyVision or the Borrowers or any warrants, rights or
options to acquire such capital stock or to issue or sell any such capital stock
or any warrants, rights or options to acquire such capital stock, except:
(a) PolyVision and any Borrower may declare and pay dividends and
distributions payable solely in common stock of PolyVision or such Borrower; and
the Borrowers and Subsidiaries may, subject to the applicable subordination
provisions of the Senior Subordinated Note Agreement, pay
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dividends and distributions to PolyVision in an amount equal to interest
payments (but no sooner than two (2) days prior to the due date of such interest
payments) payable from time to time in respect of the Senior Subordinated Notes,
and PolyVision may, at any time and from time to time, for such consideration as
the Board of Directors of PolyVision may approve, issue shares of its capital
stock (but if preferred stock, only on terms and conditions satisfactory to the
Required Lenders) and warrants, options, convertible securities and other rights
to purchase capital stock of PolyVision (including the stock contemplated by
Section 3.1(c)(i) above); PROVIDED that no material expense in connection
therewith shall be incurred after the date hereof if, before or after giving
effect to the incurrence thereof, any Default or Event of Default then exists or
would exist;
(b) A Subsidiary of a Borrower may declare and pay dividends and
distributions to any Borrower;
(c) The Borrowers (other than PolyVision) and their Subsidiaries may pay
dividends and distributions to PolyVision;
(d) PolyVision may declare and pay dividends in cash with respect to its
preferred stock subject to the satisfaction of each of the following conditions
on the date of such dividend payment and after giving effect thereto:
(i) no Default or Event of Default shall have occurred and be
continuing or would exist after giving effect thereto;
(ii) the ratio of Consolidated Debt to EBITDA for PolyVision and its
Subsidiaries for the preceding four fiscal quarters as at the last day of the
fiscal quarter most recently ended prior to the date of such dividend payments
shall not exceed 4.75:1;
(iii) such dividends shall not exceed $500,000 in the aggregate in
any Fiscal Year; PROVIDED, HOWEVER, that if the ratio referred to in
subparagraph (ii) above does not exceed 4:1, such dividends may exceed $500,000
but may in no event exceed $1,000,000 in the aggregate in any Fiscal Year;
(iv) no such dividend shall be declared or paid except quarterly
within thirty (30) days after delivery of required quarterly financial
statements; and
(v) PolyVision shall have delivered to the Administrative Agent, at
least five (5) Business Days prior to the date of the proposed dividend payment,
a certificate of a senior financial officer setting forth computations in
reasonable detail demonstrating satisfaction of the foregoing conditions as at
the date of such certificate; and
(e) For issuances of stock expressly permitted by Section 6.18.
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SECTION 6.8 CHANGE IN NATURE OF BUSINESS. Make, or permit any of their
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
SECTION 6.9 CHARTER AMENDMENTS. Amend, or permit any of their
Subsidiaries to amend, its certificate or articles of incorporation or bylaws if
such amendment could impair the interests or rights of the Administrative Agent
or any Lender Party.
SECTION 6.10 ACCOUNTING CHANGES. Make or permit, or permit any of their
Subsidiaries to make or permit, any change in (a) accounting policies or
reporting practices, except as mandated by GAAP, or (b) its Fiscal Year except
that from and after the Closing Date the fiscal year of each of the Foreign
Subsidiaries shall be deemed changed to become the same as that of PolyVision.
SECTION 6.11 REPAYMENTS OR PREPAYMENTS, ETC. OF DEBT. (a) Make any payment
of principal of, or interest on, the Junior Subordinated Note, (b) prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any subordination
terms of, any Debt, other than (i) the prepayment of the Advances in accordance
with the terms of this Agreement, (ii) regularly scheduled or required
repayments or redemptions of Surviving Debt, (iii) prepayments of Debt to the
extent that such Debt is simultaneously refinanced in compliance with this
Agreement, and (iv) prepayments and redemptions (other than in respect of the
Subordinated Debt) not exceeding Two Hundred Fifty Thousand ($250,000) Dollars
in the aggregate from and after the Closing Date, to be made only as of dates
when no Default or Event of Default then exists or would exist after giving
effect thereto; (c) amend, modify or change in any manner any term or condition
of any Surviving Debt except as permitted under Section 6.2, (d) permit any of
their Subsidiaries to do any of the foregoing other than to repay any Debt
payable to the Borrowers, or (e) exercise any right of set-off permitted under
the Junior Subordinated Note.
SECTION 6.12 AMENDMENT, ETC. OF AIG ACQUISITION DOCUMENTS. Cancel or
terminate any AIG Acquisition Document or consent to or accept any cancellation
or termination thereof, amend, modify or change in any manner any term or
condition of any AIG Acquisition Document or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term or
condition of any AIG Acquisition Document or take any other action in connection
with any AIG Acquisition Document that would, in any such case, impair the value
of the interests or rights of the Borrowers thereunder (except for immaterial
changes, waivers or consents), or would impair the interests or rights of the
Administrative Agent or any Lender Party, or permit any of their Subsidiaries to
do any of the foregoing.
SECTION 6.13 AMENDMENT, ETC. OF MATERIAL CONTRACTS.
(a) Except in the exercise of reasonable business judgment,
cancel or terminate any Material Contract or consent to or accept any
cancellation or termination thereof, amend or otherwise modify any Material
Contract or give any consent, waiver or approval thereunder, waive any default
under or breach of any Material Contract or take any other action in connection
with any Material Contract that would materially impair the value of the
interests or rights of the Borrowers thereunder
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or that could impair the interests or rights of the Administrative Agent or any
Lender Party, or permit any of their Subsidiaries to do any of the foregoing.
(b) Modify, amend or supplement:
(i) any documentation entered into in connection with
any Subordinated Debt (excluding for purposes of this clause (i) the Senior
Subordinated Note Agreement); or
(ii) the Senior Subordinated Note Agreement if the
effect of such amendment, supplement or modification is to: (i) increase the
interest rate on the Senior Subordinated Note by more than one percent (1%)
(that is, not to exceed in any event 13%) per annum (provided that nothing
contained herein shall preclude imposition of any default rate of interest in
the amount provided in the Senior Subordinated Note Agreement), (ii) accelerate
or shorten the dates upon which payments of principal or interest are due on the
Senior Subordinated Note; (iii) change the redemption or prepayment provisions
of the Senior Subordinated Note (other than any such change which would reduce
the amount of any scheduled redemption or prepayment or of any premium or
interest payable in connection therewith or that would defer the date on which
any such redemption or prepayment is otherwise scheduled to be made); (iv) make
more restrictive any of the covenants contained in the Senior Subordinated Note
Agreement, or add any events of default, or modify any events of default so as
to be triggered sooner in each case in comparison with any such covenants or
events of default contained in the Senior Subordinated Note Agreement as in
effect prior to such proposed amendment, (v) change any provisions of Article 7
or 11 or Section 12.5 (or comparable provisions) of the Senior Subordinated Note
Agreement or modify any of the defined terms used in such Article 7 or 11 (or
comparable provisions), or (vi) provide for any security in respect of the
obligations under the Senior Subordinated Note Agreement, in each case, without
the prior written consent of the Required Lenders.
(c) Modify, amend, supplement or terminate any agreements,
instruments or documents relating to the incurrence (if consented to by the
Administrative Agent) of any Debt or other obligations, contingent or otherwise,
of the Borrowers or any Subsidiary permitted under Section 6.2 owing under any
Permitted Acquisition Documents or arising in connection with any Permitted
Acquisition other than modifications, amendments and/or supplements which are
immaterial.
SECTION 6.14 NEGATIVE PLEDGE. Enter into or suffer to exist, or permit
any of the Subsidiaries of the Borrowers to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its properties or assets, other than as provided in the Loan
Documents, and in the Senior Subordinated Note Agreement, and (with respect to
the specific assets so financed) pursuant to any purchase money financing and/or
Capitalized Leases permitted pursuant to Sections 6.1 and 6.2 (so long as such
provisions do not prohibit or restrict the ability to grant Liens to the
Administrative Agent for the ratable benefit of the Lenders).
SECTION 6.15 PARTNERSHIPS, NEW SUBSIDIARIES.
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(a) Become a general partner in any general or limited partnership or
joint venture or permit any of their Subsidiaries to do so, or
(b) Create any new Subsidiary (Domestic or Foreign), unless such newly
created Domestic Subsidiary shall become a Guarantor and an additional grantor
pursuant to the terms of a Security Agreement and Intellectual Property Security
Agreement and all of the capital stock of such Domestic Subsidiary or the
requisite percentage of the outstanding capital stock of such Foreign Subsidiary
are pledged to the Administrative Agent pursuant to a Security Agreement or
other appropriate security document, except that no Foreign Subsidiary shall be
created without the prior written consent of the Required Lenders if the
Administrative Agent shall not have obtained a Lien upon substantially all of
the assets of and capital stock issued by such Foreign Subsidiary and then only
upon the Administrative Agent's and its counsel's prior satisfaction with all
legal and accounting matters relating thereto including the delivery of such
opinions of counsel as the Administrative Agent may request
SECTION 6.16 SPECULATIVE TRANSACTIONS. Engage, or permit any of their
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or derivatives or any similar speculative transactions, except
for Bank Hedge Agreements expressly permitted under Section 5.14 and except for
foreign exchange contracts entered into for the benefit of the Borrowers and
their Subsidiaries in the ordinary course of business and not as a speculation.
SECTION 6.17 CAPITAL EXPENDITURES. Make, or permit any of their
Subsidiaries to make, any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by the Borrowers and their Subsidiaries in
any period set forth below to exceed the amount set forth below for such period.
PERIOD AMOUNT
------ ------
Closing Date through and including April 30, 1999 $1,300,000
May 1, 1999 through and including April 30, 2000 $2,000,000
Each fiscal year thereafter $3,000,000
PROVIDED, HOWEVER, (a) that amounts permitted to be expended in a Fiscal Year
that are not expended in such Fiscal Year, but not in excess of fifty (50%)
percent of such prior year's unused amount (not including any amount permitted
to be carried forward from a prior year) shall be permitted to be expended in
(but only in) the subsequent Fiscal Year; (b) amounts comprising Excess Cash
Flow after giving effect to the prepayments required under Section 2.6 shall be
permitted to be expended for Capital Expenditures (over and above the amounts
set forth above) in the twelve months following the date of required prepayment
in any year; and (c) Permitted Acquisitions and amounts representing Capital
Expenditures paid or incurred with respect to an acquisition permitted under
Section 6.4 in the ordinary course of its business prior to consummation of a
Permitted Acquisition shall not be deemed included in the calculation of the
aggregate amount of Capital Expenditures for purposes of determining
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the maximum annual Capital Expenditures permitted to be made hereunder, so long
as such amounts representing Capital Expenditures paid prior to a Permitted
Acquisition were incurred prior to the date of consummation of such Permitted
Acquisition and were not incurred in anticipation of such Permitted Acquisition,
and otherwise conform with the terms and conditions of Section 6.2.
SECTION 6.18 ISSUANCE OF STOCK. The Borrowers will not, and will not
permit any of their Subsidiaries to, directly or indirectly, issue, sell,
assign, pledge or otherwise encumber or dispose of any shares of capital stock
of any Borrower or any Subsidiary of any Borrower, except (a) to the Borrower
subject to the continuing Lien thereon in favor of the Administrative Agent
(except to the extent not required under Section 5.13), (b) to qualify directors
if required by applicable law, (c) as set forth in SCHEDULE 6.18, (d) pursuant
to the AIG Acquisition in accordance with the AIG Acquisition Documents, and (e)
the pledge thereof pursuant to the Loan Documents.
SECTION 6.19 LIMITATIONS ON OPERATING LEASES. Become a lessee under any
operating lease (other than a lease which any Borrower or any of its
Subsidiaries, as the case may be, is lessor) of Property, including, without
limitation, real estate operating leases, if the aggregate Rentals (estimated in
good faith by the Borrowers with respect to amounts payable pursuant to
escalation clauses) payable during any current or future period of 12
consecutive months under the lease in question and all other leases under which
any Borrower or any of its other Subsidiaries, as the case may be, is then
lessee would exceed One Million ($1,000,000.00) Dollars, including the Dollar
Equivalent of amounts denominated in non-U.S. currencies (the term "Rentals"
meaning, as of the date of determination, all payments which the lessee is
required to make by the terms of any lease; the term "Property" meaning any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible).
SECTION 6.20 NO CONSIGNMENT SALES. Make a sale to any customer on a
bill-and-hold, guaranteed sale, sale and return, sale on approval or consignment
basis, or any sale on a repurchase or return basis, except for consignment sales
made by the Borrowers and/or Pentagon, as the case may be, in Australia
involving Inventory not to exceed $250,000 in book value in any single fiscal
year.
SECTION 6.21 CERTAIN INACTIVE SUBSIDIARIES. Permit or suffer any Domestic
Subsidiary that has not become a party to a Subsidiary Guaranty and Security
Agreement to engage in any business activities or to acquire any assets (other
than immaterial assets not exceeding $250,000 in the aggregate in market value)
or have any Investments or incur any Indebtedness or liabilities except in order
to maintain corporate existence and except as otherwise in existence on the date
of this Agreement as set forth on Schedule 6.6(a).
SECTION 6.22 RETENTION OF CASH. Retain cash at PolyVision or in any
accounts of PolyVision except for such amounts as are reasonably expected to be
used for the payment of amounts contemplated hereunder and are due within a
reasonably short period of time (not in any event to exceed thirty (30) days),
PROVIDED that all cash (to the extent in excess of $100,000) that is not so
needed within such period of time shall be contributed to the other Borrowers.
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SECTION 6.23 MANAGEMENT FEES. Notwithstanding any other provision
contained in this Agreement or any of the other Loan Documents, pay, or be or
become obligated to pay, any Management Fees to any Person or any interest on
any deferred obligation therefor, including, without limitation, to any
shareholder, director, officer or employee of any Borrower, or any Loan Party.
ARTICLE 7
REPORTING REQUIREMENTS
While any of the Commitments is outstanding and, in the event any
Advance remains outstanding, so long as any Borrower or any other Loan Party is
indebted to any of the Lender Parties or the Administrative Agent under any of
the Loan Documents, any Letter of Credit is outstanding and until payment in
full of the Notes and full and complete performance of all of its other
obligations arising hereunder, the Borrowers shall furnish to the Administrative
Agent and Lenders:
SECTION 7.1 DEFAULT NOTICE. As soon as possible and in any event within
two (2) Business Days after a Responsible Officer of a Borrower obtains actual
knowledge of the occurrence of any continuing Default, or any event, development
or occurrence reasonably likely to have a Material Adverse Effect, a statement
signed on behalf of the Borrowers by a Responsible Officer thereof of the chief
financial officer of the Borrower setting forth details of such Default and the
action that the Borrower has taken, is taking and/or proposes to take with
respect thereto.
SECTION 7.2 MONTHLY FINANCIALS. As soon as available and in any event
within thirty (30) days after the end of each month which is not a fiscal
quarter end, (a) Consolidated and consolidating balance sheets of the Borrowers
and their Subsidiaries as of the end of such month, (b) Consolidated and
consolidating statements of income and a Consolidated statement of cash flows of
the Borrowers and their Subsidiaries for the period commencing at the end of the
previous month and ending with the end of such month, and (c) Consolidated and
consolidating statements of income and a Consolidated statement of cash flows of
the Borrowers and their Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth in
each case in comparative form the corresponding figures for the corresponding
period of the prior Fiscal Year, all in reasonable detail and duly certified by
the chief financial officer or a financial vice president of each Borrower.
SECTION 7.3 QUARTERLY FINANCIALS. As soon as available and in any event
within forty-five (45) days after the end of each fiscal quarter of each Fiscal
Year, (a) Consolidated and consolidating balance sheets of the Borrowers and
their Subsidiaries as of the end of such quarter, (b) Consolidated and
consolidating statements of income and Consolidated and consolidating statements
of cash flows of the Borrowers and their Subsidiaries, for the period commencing
at the end of the previous fiscal quarter and ending with the end of such fiscal
quarter, and (c) Consolidated and consolidating statements of income and
Consolidated and consolidating statements of cash flows of the Borrowers
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and their Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such fiscal quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
period of the preceding Fiscal Year and the corresponding figures from the
budgets for such period and for the Fiscal Year which includes such period, all
in reasonable detail and duly certified by the chief financial officer or a
financial vice president each Borrower as having been prepared in accordance
with GAAP (subject to normal year-end audit adjustments), together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that such Borrower has taken, is taking and/or
proposes to take with respect thereto, and (ii) a schedule in form reasonably
satisfactory to the Administrative Agent of the computations used by the
Borrowers in determining compliance with the financial covenants contained in
Article 8, PROVIDED, that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrowers shall also provide, if
necessary for the determination of compliance with Article 8, a statement of
reconciliation conforming such financial statements to GAAP.
SECTION 7.4 ANNUAL FINANCIALS. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrowers and their Subsidiaries, including
therein (a) Consolidated and consolidating balance sheets of the Borrowers and
their Subsidiaries as of the end of such Fiscal Year, and (b) Consolidated and
consolidating statements of income and Consolidated and consolidating statements
of cash flows of the Borrowers and their Subsidiaries, for such Fiscal Year, in
each case setting forth in comparative form the corresponding figures for the
prior Fiscal Year and the corresponding figures from the budget for such Fiscal
Year and in each case accompanied (in the case of such Consolidated financial
statements) by an opinion acceptable to the Administrative Agent of any "Big
Five" accounting firm, together with (a) a letter of such accounting firm to the
Administrative Agent and Lender Parties stating that in the course of the
regular audit of the business of the Borrowers and their Subsidiaries, which
audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge that
a Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as to the
nature thereof, (b) a schedule in form satisfactory to the Administrative Agent
of the computations used by such accountants in determining, as of the end of
such Fiscal Year, compliance with the covenants contained in Article 8,
PROVIDED, that in the event of any change in GAAP used in the preparation of
such financial statements, the Borrowers shall also provide, if necessary for
the determination of compliance with Article 8, a statement of reconciliation
conforming such financial statements to GAAP and (c) a certificate signed on
behalf of each Borrower by its chief financial officer of each Borrower stating
that no Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that such
Borrower has taken, is taking and/or proposes to take with respect thereto.
SECTION 7.5 ANNUAL FORECASTS. As soon as available and in any event no
later than sixty (60) days after the end of each Fiscal Year, (i) an annual
operating budget prepared by management of the Borrowers, including projected
consolidated and consolidating balance sheets, income statements and
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cash flow statements on a quarterly basis, and (ii) a business plan, in each
case for the Fiscal Year following such Fiscal Year then ended and in form
reasonably satisfactory to the Administrative Agent.
SECTION 7.6 ERISA EVENTS AND ERISA REPORTS. (i) Promptly and in any event
within twenty (20) days after any Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the Chief
Financial Officer or a financial vice president of each Borrower describing such
ERISA Event and the action, if any, that such Borrower or such ERISA Affiliate
has taken, is taking and/or proposes to take with respect thereto and (ii) on
the date any records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
SECTION 7.7 PLAN TERMINATIONS. Promptly and in any event within five (5)
Business Days after receipt thereof by any Borrower or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan or correspondence from the
PBGC indicating it is considering termination of any Plan.
SECTION 7.8 ACTUARIAL REPORTS. Promptly upon receipt thereof by any
Borrower or any ERISA Affiliate, a copy of the annual actuarial valuation report
for each Plan the funded current liability percentage (as defined in Section
302(d)(8)(B) of ERISA) of which is shown in such report to be less than 90% or
the unfunded current liability (as defined in Section 302(d)(8)(A) of ERISA) of
which is shown in such report to exceed $500,000.
SECTION 7.9 PLAN ANNUAL REPORTS. Upon the request, from time to time, of
the Administrative Agent, promptly and in any event within thirty (30) days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the most recently filed annual report
(Form 5500 Series) with respect to each Plan.
SECTION 7.10 ANNUAL PLAN SUMMARIES. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, an annual summary of
actuarial valuation and other information with respect to each Plan in form,
substance and detail reasonably satisfactory to the Administrative Agent.
SECTION 7.11 MULTIEMPLOYER PLAN NOTICES. Promptly and in any event within
five (5) Business Days after receipt thereof by any Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning, or other correspondence with respect to, (i) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or (iii) the amount of liability incurred, or that may be incurred, by such
Borrower or any ERISA Affiliate in connection with any event described in clause
(i) or (ii).
SECTION 7.12 LITIGATION. Promptly after the commencement thereof, notice
of all material actions, suits, investigations, litigation and proceedings
before any court or governmental department, commission, board, bureau, agency
or instrumentality, Federal, state, local or foreign, affecting any
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Loan Party or any of its Subsidiaries (exclusive of Subsidiaries of Alpine which
are not Loan Parties) and, promptly after the occurrence thereof, notice of any
change in the status or the financial effect on any Loan Party or any of its
Subsidiaries (exclusive of Subsidiaries of Alpine which are not Loan Parties) of
the Disclosed Litigation from that described on SCHEDULE 4.9 that could
reasonably be expected to have a Material Adverse Effect.
SECTION 7.13 SECURITIES REPORTS. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports that
any Loan Party or any of its Subsidiaries (exclusive of Subsidiaries of Alpine
which are not Loan Parties) sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries (exclusive of Subsidiaries of Alpine which
are not Loan Parties) files with the Securities and Exchange Commission or any
other governmental authority or with any national securities exchange.
SECTION 7.14 CREDITOR REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of the
securities of any Borrower or of any of its Subsidiaries pursuant to the terms
of any indenture, loan or credit agreement or similar agreement or instrument
and not otherwise required to be furnished to the Lender Parties pursuant to any
other clause of this Article 7.
SECTION 7.15 AGREEMENT NOTICES. Promptly upon receipt thereof, copies of
all notices, requests and other documents received by any Loan Party or any of
its Subsidiaries (exclusive of Subsidiaries of Alpine which are not Loan
Parties) under or pursuant to any Material Contract or indenture, loan or credit
agreement or similar agreement or instrument regarding or related to any
material breach or default by any party thereto or any event that could
materially impair the value of the interests or the rights of any Loan Party or
any of its Subsidiaries (exclusive of Subsidiaries of Alpine which are not Loan
Parties) or otherwise have a Material Adverse Effect and copies of any material
amendment, modification or waiver of any provision of any Material Contract or
indenture, loan or credit agreement or similar agreement and, from time to time
upon request by the Administrative Agent, such information and reports regarding
the foregoing as the Administrative Agent may reasonably request.
SECTION 7.16 REVENUE AGENT REPORTS. Within ten (10) days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form 886), or
other written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth any adjustments to the Federal income tax liability of
the affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which each Borrower is a member aggregating $250,000 or more.
SECTION 7.17 ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence (to the Borrowers' knowledge) thereof, notice of any Environmental
Action against or of any noncompliance by any Loan Party or any of its
Subsidiaries (exclusive of Subsidiaries of Alpine which are not Loan Parties)
with any Environmental Law or Environmental Permit that could reasonably be
expected to have a Material Adverse Effect.
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SECTION 7.18 REAL PROPERTY. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
any such request, a report supplementing SCHEDULES 4.21 and 4.22, including an
identification of all real and leased property disposed of by the Borrowers or
any of their Subsidiaries during such Fiscal Year, a list and description
(including the street address, county or other relevant jurisdiction, state,
record owner and, in the case of leases of property, lessor, lessee, expiration
date and annual rental cost thereof) of all real property acquired or leased
during such Fiscal Year and a description of such other changes in the
information included in such Schedules as may be necessary for such Schedules to
remain accurate and complete in all respects.
SECTION 7.19 INSURANCE. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
any such request, a report summarizing the insurance coverage (specifying type,
amount and carrier) in effect for each Borrower and its Subsidiaries and
containing such additional information as the Administrative Agent may
reasonably request.
SECTION 7.20 BORROWING BASE CERTIFICATE. As soon as available and in any
event by the 15th day of each calendar month, a Borrowing Base Certificate which
shall include a European Borrowing Base Certificate, as at the end of the
previous month, certified by the chief financial officer or a financial vice
president of a Borrower.
SECTION 7.21 MANAGEMENT LETTERS. As soon as available and in any event
within five (5) Business Days after the receipt thereof, copies of any
"management letter" or similar letter received by any Borrower or its Board of
Directors (or any Committee thereof) from its independent public accountants.
SECTION 7.22 PERMITTED ACQUISITION DOCUMENTS. Within thirty (30) days
following the consummation of each Permitted Acquisition, complete copies of the
related Permitted Acquisition Documents, certified as true and correct by a
Responsible Officer of the Borrower.
SECTION 7.23 OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries (exclusive
of Subsidiaries of Alpine which are not Loan Parties) or the Collateral as the
Administrative Agent or any Lender Party (through the Administrative Agent) may
from time to time reasonably request, subject to such confidentiality agreements
as may reasonably be required by the Person providing such information.
ARTICLE 8
FINANCIAL COVENANTS
While any of the Commitments is outstanding and, in the event any Advance
remains outstanding, so long as any Borrower or any other Loan Party is indebted
to any of the Lender Parties or the Administrative Agent under any of the Loan
Documents, any Letter of Credit is outstanding and
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until payment in full of the Notes and full and complete performance of all of
its other obligations arising hereunder, the Borrowers shall:
SECTION 8.1 CONSOLIDATED DEBT TO EBITDA RATIO. Maintain as of the end of
each fiscal quarter of the Borrowers a Consolidated Debt to EBITDA Ratio of not
more than the ratio set forth below:
------------------------------ ---------------------
Date of Determination: Maximum Ratio
------------------------------ ---------------------
January 31, 1999 6.00 to 1.0
------------------------------ ---------------------
April 30, 1999 6.00 to 1.0
------------------------------ ---------------------
July 31, 1999 5.75 to 1.0
------------------------------ ---------------------
October 31, 1999 5.50 to 1.0
------------------------------ ---------------------
January 31, 2000 5.25 to 1.0
------------------------------ ---------------------
April 30, 2000 5.25 to 1.0
------------------------------ ---------------------
July 31, 2000 5.25 to 1.0
------------------------------ ---------------------
October 31, 2000 5.00 to 1.0
------------------------------ ---------------------
January 31, 2001 5.00 to 1.0
------------------------------ ---------------------
April 30, 2001 4.50 to 1.0
------------------------------ ---------------------
July 31, 2001 4.50 to 1.0
------------------------------ ---------------------
October 31, 2001 4.50 to 1.0
------------------------------ ---------------------
January 31, 2002 4.50 to 1.0
------------------------------ ---------------------
April 30, 2002 through (and
including) October 31, 2005 4.00 to 1.0
------------------------------ ---------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Borrowers ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case estimated cost savings resulting from the AIG
Acquisition):
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------------------------------ ---------------------
Date Amount
------------------------------ ---------------------
January 31, 1999 $2,000,000
------------------------------ ---------------------
April 30, 1999 $1,750,000
------------------------------ ---------------------
July 31, 1999 $1,250,000
------------------------------ ---------------------
October 31, 1999 $ 500,000
------------------------------ ---------------------
SECTION 8.2 INTEREST COVERAGE RATIO. Maintain as of each date set forth
below, a ratio of (i) EBITDA for the most recently completed four fiscal
quarters of the Borrowers to (ii) Consolidated Interest Expense (to the extent
paid in cash during such period) for such period of not less than the ratio set
forth below for such period:
------------------------------ ---------------------
Date of Determination: Minimum Ratio
------------------------------ ---------------------
January 31, 1999 1.70 to 1.0
------------------------------ ---------------------
April 30, 1999 1.70 to 1.0
------------------------------ ---------------------
July 31, 1999 1.75 to 1.0
------------------------------ ---------------------
October 31, 1999 1.85 to 1.0
------------------------------ ---------------------
January 31, 2000 1.85 to 1.0
------------------------------ ---------------------
April 30, 2000 2.00 to 1.0
------------------------------ ---------------------
July 31, 2000 2.00 to 1.0
------------------------------ ---------------------
October 31, 2000 2.00 to 1.0
------------------------------ ---------------------
January 31, 2001 2.00 to 1.0
------------------------------ ---------------------
April 30, 2001 2.25 to 1.0
------------------------------ ---------------------
July 31, 2001 2.25 to 1.0
------------------------------ ---------------------
October 31, 2001 2.25 to 1.0
------------------------------ ---------------------
January 31, 2002 2.25 to 1.0
------------------------------ ---------------------
April 30, 2002 through (and
including) October 31, 2005 2.50 to 1.0
------------------------------ ---------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Borrowers ending on each of the following
dates, there shall be added to such EBITDA
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the amounts set forth next to such dates (representing in each case estimated
cost savings resulting from the AIG Acquisition):
------------------------------ ---------------------
Date Amount
------------------------------ ---------------------
January 31, 1999 $2,000,000
------------------------------ ---------------------
April 30, 1999 $1,750,000
------------------------------ ---------------------
July 31, 1999 $1,250,000
------------------------------ ---------------------
October 31, 1999 $ 500,000
------------------------------ ---------------------
SECTION 8.3 FIXED CHARGE COVERAGE RATIO. Maintain as of the end of each
fiscal quarter of the Borrowers a Fixed Charge Coverage Ratio for the most
recently completed four fiscal quarters of the Borrowers of not less than the
following ratios for the requisite periods set forth below (except that in
respect of the first three testing periods referred to below, EBITDA and Fixed
Charges shall be computed only for the one, two and three fiscal quarterly
periods respectively described below, provided that Capital Expenditures shall
be computed within fixed charges in an amount equal to the greater of
one-quarter of the Capital Expenditures permitted during the twelve month period
during which a testing period ends and actual Capital Expenditures made during
the testing period specified below):
------------------------------ ---------------------
Four Fiscal Quarters ending on:
------------------------------ ---------------------
Each October 31, January 31, 1.10 to 1.0
April 30 and July 31 after the
Closing Date and continuing
through (and including)
October 31, 2005
------------------------------ ---------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Borrowers ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case estimated cost savings resulting from the AIG
Acquisition):
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------------------------------ ---------------------
Date Amount
------------------------------ ---------------------
January 31, 1999 $2,000,000
------------------------------ ---------------------
April 30, 1999 $1,750,000
------------------------------ ---------------------
July 31, 1999 $1,250,000
------------------------------ ---------------------
October 31, 1999 $ 500,000
------------------------------ ---------------------
ARTICLE 9
EVENTS OF DEFAULT
If any of the following ("EVENTS OF DEFAULT") shall occur and be
continuing, then, and in any such event, the Administrative Agent (i) shall at
the request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the Commitments of each appropriate Lender (other than the
Commitment in respect of Letter of Credit Advances by the Issuing Bank, European
Letter of Credit Advances by the European Letter of Credit Bank, or a Revolving
Credit Lender pursuant to Section 2.3(c) and Swing Line Advances by a Revolving
Credit Lender pursuant to Section 2.2(b)) and of the Issuing Bank to issue
Letters of Credit and of the European Letter of Credit Bank to issue European
Letter of Credit to be terminated, whereupon the same shall forthwith terminate,
and (ii) shall at the request, or may with the consent, of the Required Lenders,
(A) by notice to the Borrowers, declare the Notes, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrowers and (B) by notice to each party
required under the terms of any agreement in support of which a Letter of Credit
is issued, request that all Obligations under such agreement be declared to be
due and payable; PROVIDED, HOWEVER, that in the event of an actual or deemed
entry of an order for relief with respect to any Loan Party or Alpine under the
Federal Bankruptcy Code, (x) the obligation of each Lender to make Advances
(other than Letter of Credit Advances by the Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.3(c) and Swing Line Advances by a Revolving Credit
Lender pursuant to Section 2.2(b)) and of the Issuing Bank to issue Letters of
Credit shall automatically be terminated and (y) the Notes, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. Anything elsewhere contained in this
Agreement to the contrary notwithstanding, no Lender shall have the right (x)
absent automatic acceleration is hereinabove provided, to accelerate any of its
Notes or any other Obligations under the Loan Documents, or take any action
against any Loan Party, without the request or consent of the Required Lenders
as hereinabove provided, and/or (y) to take any action against any of the
Collateral except through or at the direction of the Administrative Agent.
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SECTION 9.1 PAYMENT. (a) The Borrowers shall fail to pay any principal of
any Advance when the same shall become due and payable or (b) the Borrowers
shall fail to pay any interest on any Advance, or any Loan Party shall fail to
make any other payment under any Loan Document, in each case under this clause
(b) within two (2) Business Days after the same becomes due and payable; or
SECTION 9.2 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by (a) any Loan Party (or any of its officers) under or in
connection with any Loan Document or (b) by any European Borrowers in any of the
KBC Loan Documents, shall prove to have been incorrect in any material respect
when made or confirmed; or
SECTION 9.3 CERTAIN COVENANTS. The Borrowers shall fail to perform or
observe any term, covenant, agreement, obligation or undertaking contained in
Section 2.14, 5.5, 5.6 , 5.7, 5.13, 5.14, 5.15 or 5.17, Article 6 or Article 8.
SECTION 9.4 OTHER COVENANTS. Any Loan Party shall fail to perform any
other term, covenant or agreement contained in any Loan Document on its part to
be performed or observed if such failure shall remain unremedied for thirty (30)
days after the earlier of the date on which (a) a Responsible Officer of any
Loan Party becomes aware of such failure or (b) written notice thereof shall
have been given to the Borrowers by the Administrative Agent or any Lender
Party; or
SECTION 9.5 OTHER DEFAULTS. Any Loan Party or any of its Subsidiaries
(exclusive of Subsidiaries of Alpine which are not Loan Parties) shall fail to
pay any principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding and for which it is liable in a
principal or notional amount of at least $500,000 either individually or in the
aggregate but excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise);
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt, in each case if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or any Event of Default shall occur and shall
not have been cured or waived under any KBC Loan Agreement; or
SECTION 9.6 BANKRUPTCY, ETC.. Any Loan Party or any of its Subsidiaries
or Alpine shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries or Alpine
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or for any substantial part of its property and, in the case
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of any such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of sixty (60) days or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur, or any Loan Party or any of its Subsidiaries or Alpine
shall take any corporate action to authorize any of the actions set forth above
in this Section 9.6; or
SECTION 9.7 JUDGMENTS. (a) Any judgment or order for the payment of
money in excess of $500,000 (other than such a judgment or order which is fully
covered by insurance (subject to ordinary deductibles) for which the appropriate
insurer has acknowledged responsibility in writing) shall be rendered against
any Loan Party or any of its Subsidiaries, including the European Borrowers and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be a period of seven (7)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(b) Any non-monetary judgment or order shall be rendered against any Loan
Party or any of its Subsidiaries, including the European Borrowers that is
reasonably likely to have a Material Adverse Effect; or
SECTION 9.8 LOAN DOCUMENTS. Any material provision of any Loan Document
after delivery thereof shall for any reason cease to be valid and binding on or
enforceable against any Loan Party which is party to it, or any such Loan Party
shall so state in writing; or any Guarantor shall revoke or attempt to revoke
the Guaranty signed by such Guarantor, or shall repudiate such Guarantor's
liability thereunder or shall be in default under the terms thereof; or
SECTION 9.9 LIENS. On of after the Closing Date, there shall for any
reason cease to exist a valid and perfected first and only priority lien on and
security interest in the Collateral in favor of the Administrative Agent subject
only to Permitted Liens; or
SECTION 9.10 CHANGE OF CONTROL. Any Change of Control shall occur; or
SECTION 9.11 ERISA EVENTS.
(a) Any ERISA Event shall have occurred with respect to a Plan and the sum
(determined as of the date of occurrence of the last such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Events) exceeds $500,000; or
(b) Any Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Borrower or ERISA Affiliate has
incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to
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Multiemployer Plans by the Borrowers and their ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds $500,000 or
requires payments exceeding $200,000 per annum; or
(c) Any Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Borrowers and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $200,000; or
SECTION 9.12 BORROWING BASE DEFICIENCY. Any Borrowing Base Deficiency
shall occur and be continuing which is not eliminated by the Borrowers'
prepayment within seven (7) Business Days of then outstanding Swing Line
Advances and Revolving Credit Advances in an amount sufficient to eliminate such
Borrowing Base Deficiency; or
SECTION 9.13 SUBORDINATION PROVISIONS. The subordination provisions
contained in any instrument pursuant to which any Subordinated Debt permitted
under Section 6.2(c) was created or in any instrument evidencing such
Subordinated Debt shall cease, for any reason, to be in full force and effect or
enforceable in accordance with their terms (other than as the result of payment
or prepayment in accordance with the terms hereof); or
SECTION 9.14 MANAGEMENT. Steven Elbaum, Joseph Menniti (whose name shall
be deemed excluded from this Section 9.14 following his retirement) or Michael
Dunn shall cease for any reason whatsoever, including, without limitation, death
or disability (as such disability shall be determined in the sole and absolute
judgment of the Administrative Agent), to be and continuously perform the duties
of senior executives in their current respective capacities or, if such
cessation shall occur as a result of the death or such disability, no successor
satisfactory to the Administrative Agent, in its sole discretion, shall have
become and shall have commenced to perform the duties of the affected
individual(s) within ninety (90) days (but one hundred twenty (120) days in
respect of Steven Elbaum if the cessation shall have been due to death or
disability, not for any other cause and fifteen (15) days if due to another
cause) days after such cessation; PROVIDED, HOWEVER, that if any satisfactory
successor shall have been so elected and shall have commenced performance of
such duties within such period, the name of such successor shall be deemed to
have been inserted in place of Steven Elbaum, Joseph Menniti or Michael Dunn, as
the case may be, in this Section 9.14; or
SECTION 9.15 BUSINESS CONDEMNATION. There shall occur a cessation of a
substantial part of the business of any Borrower, any Subsidiary of any Borrower
or any Guarantor for a period which significantly affects Borrower's or such
Guarantor's capacity to continue its business, on a profitable basis; or any
Borrower, any Subsidiary of any Borrower or any Guarantor shall suffer the loss
or revocation for a period in excess of 30 consecutive days of any material
license or permit now held or hereafter acquired by any Borrower or such
Subsidiary or Guarantor which is necessary to the continued
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or lawful operation of any material portion of its business; or Borrower or any
Guarantor shall be enjoined, restrained or in any way prevented by court,
governmental or administrative order from conducting all or any material part of
its business affairs for a period in excess of 30 consecutive days; or any
material lease or agreement pursuant to which any Borrower or any Guarantor
leases, uses or occupies any Property shall be canceled or terminated (other
than by reason of casualty) prior to the expiration of its stated term, and
adequate or comparable alternate premises are not secured within 90 days; or any
material portion of the Collateral shall be taken through condemnation or the
value of such Property shall be impaired through condemnation, unless
replacement Collateral of comparable value is obtained within 30 days after the
taking of the condemned Collateral; or
SECTION 9.16 UNINSURED LOSSES. Any material loss, theft, damage or
destruction of any portion of the Collateral having a fair market value of
$250,000 or more in the aggregate for the Borrowers and the European Borrowers,
including the Dollar Equivalent of amounts denominated in non-U.S. currencies,
if not fully covered (subject to ordinary deductibles) as Administrative Agent
shall have permitted) by insurance; or
SECTION 9.17 CRIMINAL FORFEITURE. Any Borrower, any Subsidiary of any
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could lead to a forfeiture of any Property (having a fair market value
of $100,000 or more individually or in the aggregate) of any Borrower, any
Subsidiary of any Borrower or any Guarantor; or
SECTION 9.18 ENVIRONMENTAL MATTERS. If the Borrowers or their
Subsidiaries shall make aggregate net cash expenditures (net of amounts
collected as reimbursement, indemnification, contribution or otherwise from
unaffiliated third parties) that exceed $2,600,000 between the date hereof and
April 29, 2001 in respect of environmental remediation of (a) the real property
and improvements formerly owned by Alliance America in Port Carbon,
Pennsylvania, and/or (b) the real property and improvements now owned by Aubecq
in Crespin, France; PROVIDED, HOWEVER, that notwithstanding the foregoing, if
such aggregate net cash expenditures during such period at any time or from time
to time exceed $2,600,000 but are less than $4,000,000, then , if and so long as
the Borrowers and their Subsidiaries promptly commence and thereafter continue
to make diligent efforts to collect from unaffiliated third parties amounts
sufficient to reduce such aggregate net cash expenditures to an amount equal to
or less than $2,600,000, no Event of Default shall be deemed to have occurred
unless and until such excess expenditure condition shall have continued for nine
(9) months after such condition arose.
SECTION 9.19 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT. If
any Event of Default shall have occurred and be continuing, the Administrative
Agent may, or shall at the request of the Required Lenders, irrespective of
whether it is taking any of the actions described in Article 9 or otherwise,
make demand upon the Borrowers to, and forthwith upon such demand the Borrowers
will, pay to the Administrative Agent on behalf of the Lender Parties in same
day funds at the Administrative Agent's office designated in such demand, for
deposit in the L/C Cash Collateral
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Account, an amount equal to the aggregate Available Amount of all Letters of
Credit then outstanding. If at any time the Administrative Agent determines
that any funds held in the L/C Cash Collateral Account are subject to any right
or claim of any Person other than the Administrative Agent and the Lender
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrowers will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Administrative Agent determines to be free and clear of any such right and
claim.
ARTICLE 10
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION. (a) Each Lender Party (in its
capacity as a Lender, the Issuing Bank, the European Letter of Credit Bank, the
Swing Line Bank and/or any Hedge Bank) hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
The Administrative Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Loan Documents and shall not
be a trustee for any Lender Party or Hedge Bank.
(b) As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; and any action taken or failure to act
pursuant there shall be binding on all of the Lender Parties; PROVIDED, HOWEVER,
that the Administrative Agent shall not be required to take any action that
exposes the Administrative Agent to personal liability or that is contrary to
this Agreement, any other Loan Document or applicable law and except for action
expressly required of the Administrative Agent hereunder or under the Loan
Documents, the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or thereunder unless it shall be
indemnified to its satisfaction by the Lender Parties and Hedge Banks against
any and all liability and expense that may be incurred by it by reason of taking
or continuing to take any such action.
SECTION 10.2 AGENT'S RELIANCE, ETC. Neither the Administrative Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts
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an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 11.7; (b) may consult with legal counsel (including counsel for any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any recitals, statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document or the KBC Loan Documents on the part of any Loan Party or to
inspect the property (including the books and records) of any Loan Party or of
any European Borrowers; (e) shall not be responsible to any Lender Party for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by or on
behalf of the proper party or parties; and (g) may employ agents or
attorneys-in-fact and shall not be answerable for the negligence or misconduct
of any such agent or attorneys-in-fact selected by it with reasonable care.
SECTION 10.3 FLEET AND AFFILIATES. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Fleet shall have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise
the same as though it were not the Administrative Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated, include
Fleet in its individual capacity. Fleet and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party including without limitation, the European Borrowers, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party, including without limitation, the European Borrowers, or any such
Subsidiary and may accept fees and other consideration from the Borrowers or
their Affiliates, for services in connection with this Agreement, the other Loan
Documents or otherwise, all as if Fleet were not the Administrative Agent and
without any duty to account therefor to the Lender Parties.
SECTION 10.4 LENDER PARTY CREDIT DECISION. Each Lender Party acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, including, without limitation, as it relates to the European
Borrowers. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
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The Administrative Agent shall not have any duty or responsibility,
either initially or on an ongoing basis, to provide any Lender with any credit
or other information regarding the Borrower, any other Loan Party or any
European Borrowers.
SECTION 10.5 INDEMNIFICATION.
(a) Each Lender Party severally agrees to indemnify the Administrative
Agent (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent (in its
capacity as such) in any way relating to or arising out of any of the Loan
Documents or any transaction contemplated hereby and thereby or any action taken
or omitted by the Administrative Agent under any of the Loan Documents;
PROVIDED, HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the Administrative
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender Party agrees to reimburse the Administrative Agent
promptly upon demand for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the Borrowers under
Section 11.4, to the extent that the Administrative Agent is not promptly
reimbursed for such costs and expenses by the Borrowers.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank (to
the extent not promptly reimbursed by the Borrowers) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank (in its capacity
as such) in any way relating to or arising out of any of the Loan Documents, the
KBC Loan Documents or any action taken or omitted by the Issuing Bank under any
of the Loan Documents; PROVIDED, HOWEVER, that no Lender Party shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Issuing Bank's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender Party agrees to reimburse the Issuing Bank promptly
upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under Section
11.4, to the extent that the Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrower.
(c) For purposes of Sections 10.5(a) and 10.5(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, (iii) their respective pro rata shares (based
upon the proportion that their respective European Letter of Credit Commitments
bear to the aggregate European Letter of Credit Commitments of all of the Lender
Parties) of the aggregate Available Amount of all European Letters
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of Credit outstanding at such time, (iv) the aggregate unused portions of their
respective Term A Commitments and Term B Commitments at such time and (v) their
respective Unused Revolving Credit Commitments at such time; PROVIDED, that the
aggregate principal amount of Swing Line Advances owing to the Swing Line Bank
and Letter of Credit Advances owing to the Issuing Bank shall be considered to
be owed to the Revolving Credit Lenders ratably in accordance with their
respective Revolving Credit Commitments. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such Lender Party's
Commitment with respect to the Facility under which such Defaulted Advance was
required to have been made shall be considered to be unused for purposes of this
Section 10.5 to the extent of the amount of such Defaulted Advance. The failure
of any Lender Party to reimburse the Administrative Agent or the Issuing Bank,
as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Administrative Agent or the
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse the Administrative Agent
or the Issuing Bank, as the case may be, for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Administrative Agent or the Issuing Bank, as the case may
be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreements of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
10.5 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
SECTION 10.6 SUCCESSOR ADMINISTRATIVE AGENTS. The Administrative Agent
may resign as to any or all of the Facilities at any time by giving written
notice thereof to the Lender Parties and the Borrowers and may be removed as to
all of the Facilities at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent as to such of the Facilities as to
which the Administrative Agent has resigned or been removed. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lender Parties, appoint a successor Administrative
Agent, which shall be a Lender which is a commercial bank organized under the
laws of the United States or of any State thereof and having a combined capital
and surplus of at least $250,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to all of
the Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from all of its duties and obligations under this Agreement and
the other Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to less
than all of the Facilities and upon the execution and filing or recording of
such financing statements, or amendments thereto, and such other
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instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent
as to such Facilities, other than with respect to funds transfers and other
similar aspects of the administration of Borrowings under such Facilities,
issuances of Letters of Credit (notwithstanding any resignation as
Administrative Agent with respect to the Letter of Credit Facility) and payments
by the Borrowers in respect of such Facilities, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement
as to such Facilities, other than as aforesaid. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent
as to all of the Facilities, the provisions of this Article 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent as to any Facilities under this Agreement.
SECTION 10.7 EVENTS OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans) unless the Administrative
Agent has received notice from a Lender or a Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give notice thereof to the Lenders (and shall give
each Lender notice of each such non-payment). The Administrative Agent shall
(subject to Section 10.1(b) hereof) take such action with respect to such
Default as shall be directed by the Required Lenders.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrowers therefrom, shall in any event be effective unless the
same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) change the percentage of (A) the Commitments, (B) the
aggregate unpaid principal amount of the Advances or (C) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder; (ii) release all or
substantially all of the Collateral in any transaction or series of related
transactions or permit the creation, incurrence, assumption or existence of any
Lien (other than a Permitted Lien) on any material portion of the Collateral in
any transaction or series of related transactions to secure any liabilities or
obligations other than Obligations owing to the Secured Parties under the Loan
Documents; (iii) release any of the Guarantors from their Guaranty; (iv) amend
this Section 11.1 or the definition of Required Lenders; or (v) limit the
liability of any Loan Party under any of the Loan Documents and (b) no
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amendment, waiver or consent shall, unless in writing and signed by the Required
Lenders and each Lender that has a Commitment under the Term A Facility, Term B
Facility, Revolving Credit Facility or European Letter of Credit Facility if
affected by such amendment, waiver or consent, (i) increase the Commitments of
such Lender or subject such Lender to any additional obligations, (ii) reduce
the principal of, or interest on, the Notes held by such Lender or any fees or
other amounts payable hereunder to such Lender (PROVIDED that any waiver of
post-default interest shall not be deemed to constitute a reduction of
interest), (iii) change any date fixed for any payment of principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender, (iv) change the order of application of any prepayment
set forth in Section 2.6 in any manner that materially affects such Lender or
(v) change the European Letter of Credit Lenders Share and the KBC Share;
PROVIDED, FURTHER, that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank or the Issuing Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Swing Line Bank or the Issuing Bank, as the case may be,
under this Agreement or any other Loan Document; and PROVIDED, FURTHER, that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document.
SECTION 11.2 NOTICES ETC. All notices and other communications provided
for hereunder shall (unless telephonic communication thereof is expressly
permitted hereunder) be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered by
overnight courier service or personally served,
(a) if to any Borrower:
PolyVision Corporation
48-62 36th Street
Long Island City, New York 11101
Attention: Joseph Menniti
Telephone No.: (718) 729-1050
Facsimile No.: (718) 786-9310
with a copy to:
Greenberg Traurig
200 Park Avenue
New York, NY 10166
Attention: Richard M. Zaroff, Esq.
Spencer G. Feldman, Esq.
Telephone No.: (212) 801-9200
Facsimile No.: (212) 801-6400
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(b) if to the Administrative Agent:
Fleet National Bank
One Federal Street
Boston, Massachusetts 02211
Attention: Howard Diamond
Telephone No.: (617) 346-0042
Facsimile No.: (617) 347-5093
with a copy in the case of any Borrowing requests, to:
Fleet National Bank
Agency Services
One Federal Street
Boston, Massachusetts 02110
Attention: John Mann
Telephone No.: (617) 346-0429
Facsimile No.: (617) 346-5833
Winston & Strawn
200 Park Avenue
New York, New York 10166
Attention: Susan Berkwitt-Malefakis, Esq.
Telephone No.: (212) 294-6700
Facsimile No.: (212) 294-4700
(c) if to any Initial Lender or the Initial Issuing Bank, at its Domestic
Lending Office specified opposite its name on SCHEDULE I.
(d) if to any other Lender Party, at its Domestic Lending Office specified
in the Assignment and Acceptance pursuant to which it became a Lender Party;
or, as to the Borrowers or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrowers and the Administrative Agent. All
such notices and communications shall, (i) when mailed by certified mail, return
receipt requested, be effective three (3) Business Days after mailing, (ii) when
telegraphed, telecopied or telexed, be effective upon delivery to the telegraph
company, upon transmission by telecopier or upon confirmation by telex
answerback, (iii) when delivered in person, be effective when delivered and
(iv) when delivered by overnight courier, be effective two (2) Business Days
after delivery to the courier properly addressed, except that notices and
communications to the Administrative Agent pursuant to Article 2, 3 or 10 shall
not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed
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counterpart of this Agreement, the Notes or any other Loan Document or of any
Exhibit hereto or thereto or of any amendment or waiver of any provision thereof
shall be as effective as delivery of a manually executed counterpart thereof.
Notwithstanding any other provision contained in this Agreement or any of the
other Loan Documents, the Lenders and the Administrative Agent shall be entitled
to rely on any instruction or authorization contained in any notice given,
executed and delivered by any one of the Borrowers pursuant to this Agreement,
and any such notice shall be and be deemed to be given on behalf of and binding
on each of the Borrowers. Each of the Borrowers hereby appoints each of the
other Borrowers as its agent for delivering and receiving notices pursuant to
this Agreement.
SECTION 11.3 NO WAIVER; REMEDIES; COUNTERCLAIMS. No failure on the part
of any Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law or in equity. The due payment and
performance of the Obligations shall be without regard to any counterclaim,
right of offset or any other claim whatsoever that the Borrowers or other Loan
Party may have against any Lender Party, Hedge Bank or the Administrative Agent
and without regard to any other obligation of any nature whatsoever that any
Lender Party, Hedge Bank or the Administrative Agent may have to the Borrowers
or Loan Party, and no such counterclaim or offset shall be asserted by any
Borrower (unless such counterclaim or offset would, under applicable law, be
permanently and irrevocably lost if not brought in such action) in any action,
suit or proceeding instituted by any Lender Party, Hedge Bank or the
Administrative Agent for payment or performance of the Obligations under the
Loan Documents.
SECTION 11.4 COSTS AND EXPENSES.
(a) The Borrowers jointly and severally agree to pay on demand (i) all
reasonable costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses, and (B) the
reasonable fees and expenses of counsel for the Administrative Agent with
respect thereto, including advising the Administrative Agent as to its rights
and responsibilities, or the perfection, protection or preservation of rights or
interests under the Loan Documents, negotiating with any Loan Party or with
other creditors of any Loan Party, including, without limitation, any European
Borrowers or any of its Subsidiaries arising out of any Default or any events or
circumstances that may foreseeably give rise to a Default, and presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the
Administrative Agent and the Lender Parties in connection with the enforcement
of the Loan Documents, whether in any action, suit or litigation or any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally or otherwise (including, without limitation, the reasonable fees and
expenses
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of counsel for the Administrative Agent and each Lender Party with respect
thereto, which shall be a single counsel unless a Lender Party is permitted to
act separately in accordance with this Agreement).
(b) The Borrowers agree to indemnify and hold harmless the Administrative
Agent, each Lender Party and each of their respective Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any commenced
or threatened investigation, litigation or proceeding arising out of, related to
or in connection with (and whether under any federal securities law or any other
statutes of any jurisdiction or any regulation or at common law or otherwise
against any Indemnified Parties) (i) any of the Transactions or any related
Transaction of the Borrowers or any of their Subsidiaries or other Affiliates
and any of the other transactions contemplated by the Loan Documents, including
with respect to the European Letters of Credit and the European Borrowers, (ii)
any Permitted Acquisition and any other acquisition or proposed acquisition or
similar business combination or proposed business combination by any Borrower or
any of their Subsidiaries of all or any portion of the shares of capital stock
or substantially all of the property and assets of any other Person or any acts,
practices or omissions of any Borrower or any of its Subsidiaries or any of the
Loan Parties or any of its agents related thereto or any withdrawal, termination
or cancellation of any such proposed transaction for any reason, (iii) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit by any Borrower or any of its Subsidiaries or other Affiliates
and any of the other transactions contemplated by the Loan Documents, including
with respect to the European Letters of Credit and the European Borrowers, or
(iv) the actual or alleged presence of Hazardous Materials on any property of
any Borrower or any of its Subsidiaries or any Environmental Action relating in
any way to any Borrower or any of its Subsidiaries, in each case whether or not
such investigation, litigation or proceeding is brought by any Loan Party, its
directors, officers, employees, stockholders or creditors or an Indemnified
Party or any Indemnified Party is otherwise a party thereto and whether or not
the Transaction or any other transaction contemplated hereby is consummated,
except in each instance to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from an Indemnified Party's gross negligence or
willful misconduct. The Borrowers also agree not to assert any claim against
the Administrative Agent, any Lender Party or any of their respective
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the AIG Acquisition,
the Facilities, the KBC Loan Documents and the transaction contemplated thereby,
the actual or proposed use of the proceeds of the Advances or the Letters of
Credit, or the European Letters of Credit, the Loan Documents, any of the
Transaction or other transaction contemplated thereby, other than claims for
direct, as opposed to consequential, damages, which shall have been determined
in a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Person's gross negligence or wilful misconduct.
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(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrowers to or for the account of a Lender Party other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.9(b)(i) or 2.10(d) or a prepayment
pursuant to Section 2.6(a) or (b), acceleration of the maturity of the Notes
pursuant to Article 9 or for any other reason, or by an Eligible Assignee to a
Lender Party other than on the last day of the Interest Period for such Advance
upon an assignment of rights and obligations under this Agreement pursuant to
Section 11.7, the Borrowers shall, upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or re-employment of deposits or other funds required by any Lender
Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Administrative Agent, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of the Borrowers contained in Sections 2.10 and 2.12 and this Section 11.4 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.
SECTION 11.5 RIGHT OF SET-OFF. The Borrowers and each Guarantor hereby
grant to each Lender a lien, security interest and right of set-off as security
for all liabilities and obligations of the Borrowers and such Guarantor under
the Loan Documents and the KBC Loan Agreements, whether now existing or
hereafter arising, upon and against all deposits, credit, collateral and
property of such Persons (other than funds or property expressly designated as
trust funds), now or hereafter in the possession, custody, safekeeping or
control of any Lender and any entity under the control of Fleet Financial Group,
Inc. or in transit to any of them. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Article 9 to authorize the Administrative
Agent to declare the Notes due and payable pursuant to the provisions of Article
9, each Lender Party and each of its respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final, other than trust funds) at any time held and other
indebtedness at any time owing by such Lender Party or such Affiliate to or for
the credit or the account of the Borrowers or any of their Subsidiaries against
any and all of the Obligations of the Borrowers now or hereafter existing under
this Agreement and the Note or Notes (if any) held by such Lender Party,
irrespective of whether such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such Obligations may be unmatured.
Each Lender Party shall promptly notify the Borrowers and the Administrative
Agent after any such set-off
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and application; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Lender Party and its respective Affiliates under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender Party and its respective Affiliates may have at law,
in equity or otherwise. ANY AND ALL RIGHTS TO REQUIRE THE ADMINISTRATIVE AGENT
OR ANY LENDER TO EXERCISE ANY RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE ADVANCES PRIOR TO EXERCISING ANY RIGHT OF SET-OFF
WITH RESPECT TO ANY DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER OR ANY
GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
SECTION 11.6 BINDING EFFECT This Agreement shall become effective when it
shall have been executed by the Borrowers and the Administrative Agent and when
the Administrative Agent shall have been notified by each Initial Lender and the
Initial Issuing Bank and the European Letter of Credit Bank that each such
Initial Lender and the Initial Issuing Bank and the European Letter of Credit
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrowers, the Administrative Agent and each Lender Party and
their respective successors and assigns, except that no Borrower shall have the
right to assign any of its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 11.7 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); PROVIDED, HOWEVER, that (i) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of each of the Facilities with
respect to which such Lender has a Commitment on a pro rata basis with respect
to each such Facility, and no Facility may be assigned in full or in part
without a contemporaneous assignment to the same assignee of each of the other
Facilities with respect to which such Lender has a Commitment, (ii) except in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000, (iii) no such assignments shall be permitted
without the prior consent of the Administrative Agent (which may be withheld for
any reason) until the Administrative Agent shall have notified the Lender
Parties that syndication of the Commitments hereunder has been completed, but in
any event not later than ninety (90) days following the Closing Date, (iv) no
such assignment shall be permitted if, immediately after giving effect thereto,
the Borrowers would be required to make payments to or on behalf of the assignee
Lender Party pursuant to Section 2.10(a) or (b) and the assignor Lender Party
was not, at the time of such assignment, entitled to receive any payment
pursuant to Section 2.10(a) or (b), and (v) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
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recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and other documents, instruments or
agreements as may be necessary in connection therewith and a processing and
recordation fee of $3,500. Any Note issued to an assignee Lender Party
hereunder shall be issued in replacement of, but not in discharge of, the
promissory note held by the assigning Lender Party prior to such assignment and
shall reflect the amount of the respective Commitments and Advances held by such
assignee Lender Party and assignor Lender Party after giving effect to such
assignment.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the Lender
Party assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.6 and such other documents and information as it has
deemed appropriate in order to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender Party or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their
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terms all of the Obligations which by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to in
Section 11.2 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lender Parties and the Commitment under each Facility of, and principal amount
of the Advances owing under each Facility to, each Lender Party from time to
time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrowers, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender Party at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and the required processing and recordation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of EXHIBIT A, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt written notice thereof to the Borrowers. In the case of any
assignment by a Lender, within five (5) Business Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the Commitment assumed
by it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of EXHIBIT C, D or
E, as the case may be .
(f) The Issuing Bank may assign to an Eligible Assignee all of its rights
and obligations under the undrawn portion of its Letter of Credit Commitment at
any time; PROVIDED, HOWEVER, that (i) each such assignment shall be to an
Eligible Assignee and (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates, or any Person engaged in a
business similar or comparable to that of the Borrowers or any Subsidiaries) in
or to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it and the Note, or Notes, if any, held by it) at any time and
from time to time and without the consent or notice to the Borrowers or any
other Loan Parties; PROVIDED, HOWEVER, that (i) such Lender Party's obligations
under this Agreement (including, without limitation, its Commitments) shall
remain
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unchanged, (ii) such Lender Party shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender Party
shall remain the holder of any such Note for all purposes of this Agreement,
(iv) the Borrowers, the Administrative Agent and the other Lender Parties shall
continue to deal solely and directly with such Lender Party in connection with
such Lender Party's rights and obligations under this Agreement and (v) no
participant under any such participation shall have any right to approve any
amendment, waiver or other modification of any provision of this Agreement or
any other Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver, modification or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.7, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
Party by or on behalf of the Borrowers; PROVIDED, HOWEVER, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement, any
Lender Party may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act 12
U.S.C. Section 341 in accordance with Regulation A of the Board of Governors of
the Federal Reserve System. No such pledge or enforcement thereof shall release
any Lender Party from its obligations under any of the Loan Documents.
(j) Fleet may syndicate the Facilities to other lenders. Any such
syndication will be managed by Fleet. The Borrowers shall assist Fleet in
forming such syndication and shall provide Fleet and any potential lender,
assignee or participant, promptly upon request, with all information deemed
reasonably necessary by them to complete successfully such syndication,
including, without limitation, all information and projections prepared by the
Borrowers or their officers or advisers relating to the transactions
contemplated herein. The Borrowers shall make appropriate officers and
representatives of the Borrowers and their Subsidiaries available to participate
in information meetings for potential syndicate members and participants at such
times and places as Fleet may reasonably request. In connection with such
syndication, Fleet may, in its sole discretion, allocate to other Lenders
portions of any fees payable to Fleet in connection with the Facilities.
SECTION 11.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
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agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be as effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 11.9 NO LIABILITY OF THE ISSUING BANK. The Borrowers assume all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit (or European Letter of
Credit). Neither the Issuing Bank or the European Letter of Credit Bank nor any
of their respective officers, directors, employees or agents shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit (or
European Letter of Credit) or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Issuing Bank against presentation of documents that do not comply
with the terms of a Letter of Credit (or European Letter of Credit), including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit (or European Letter of Credit); or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit (or
European Letter of Credit); except that the Borrowers shall have a claim against
the Issuing Bank, and such Bank shall be liable to the Borrowers, to the extent
of any direct, but not consequential, damages suffered by the Borrowers that the
Borrowers prove were caused by (i) such Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of Credit
(or European Letter of Credit) are genuine and/or comply with the terms of the
Letter of Credit (or European Letter of Credit) or (ii) the Issuing Bank's
willful failure to make lawful payment under a Letter of Credit (or European
Letter of Credit) after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit (or
European Letter of Credit). In furtherance and not in limitation of the
foregoing, the Issuing Bank and the European Letter of Credit Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
SECTION 11.10 CONFIDENTIALITY. Neither the Administrative Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the prior written consent of the Borrowers, other than (a) to the Administrative
Agent or to the Administrative Agent's or such Lender Party's Affiliates and
their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process and
(c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
SECTION 11.11 TERMINATION BY BORROWER. As provided in Section 2.5(a), upon
at least 10 days prior written notice to the Administrative Agent, the Borrowers
may, at their option, terminate this Agreement; provided, however, no such
termination shall be effective unless the European Borrowers have also
terminated the KBC Loan Agreements on the same day as this Agreement is
terminated, and until the Borrower has paid all of the Obligations under the
Loan Documents (including all "Obligations" under and as defined in the KBC Loan
Agreements not paid by the European Borrowers) in immediately available funds
and all European Letters of Credit, and all Letters of Credit have expired
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<PAGE>
or have been cash collateralized to the Administrative Agent's satisfaction.
This Agreement and each of the KBC Loan Agreements may be terminated in their
entirety only. Neither this Agreement nor either of the KBC Loan Agreements nor
any section of this Agreement or either of the KBC Loan Agreements nor any type
of Loan available hereunder or thereunder may be terminated singly.
SECTION 11.12 EFFECT OF TERMINATION. All of the Obligations under the Loan
Documents (including all "Obligations" under and as defined in the KBC Loan
Agreements) shall be immediately due and payable upon the termination date
stated in any notice of termination of this Agreement. All undertakings,
agreements, covenants, warranties and representations of the Borrowers contained
in the Loan Documents shall survive any such termination, the Administrative
Agent shall retain its Liens in the Collateral and the Administrative Agent and
each Lender shall retain all of its rights and remedies under the Loan Documents
notwithstanding such termination until the Borrowers and each European Borrower
has paid the Obligations under the Loan Documents to the Administrative Agent,
in full, in immediately available funds, together with the applicable
termination charge, if any. Notwithstanding the payment in full of the
Obligations, the Administrative Agent shall not be required to terminate
security interests in the Collateral unless, with respect to any loss or damage
the Administrative Agent may incur as a result of dishonored checks or other
items of payment received by the Administrative Agent or any Secured Party from
the Borrowers or any Account Debtor and applied to the Obligations, the
Administrative Agent shall, at its option, (i) have received a written
agreement, executed by the Borrowers and by any Person whose Loans or other
advances to the Borrowers are used in whole or in part to satisfy the
Obligations, indemnifying the Administrative Agent and each Secured Party from
any such loss or damage for up to sixty (60) days after termination; or (ii)
have retained such monetary reserves for such period of time (not to exceed 60
days) as the Administrative Agent, in its reasonable discretion, may deem
necessary to protect the Administrative Agent and each Secured Party from any
such loss or damage.
SECTION 11.13 FURTHER ASSURANCES.
(a) At any time and from time to time, upon the request of the
Administrative Agent, the Borrowers and each other Loan Party shall execute,
deliver and acknowledge or cause to be executed, delivered and acknowledged,
such further documents and instruments and do such other acts and things as the
Administrative Agent may reasonably request in order to fully effect the
purposes of this Agreement, the other Loan Documents and any other agreements,
instruments and documents delivered pursuant hereto or in connection with the
Advances, including, without limitation, to the extent required pursuant to this
Agreement, the execution and delivery to the Administrative Agent of mortgages
in form and substance satisfactory to the Administrative Agent covering all real
property or interests therein acquired by the Borrower or any Subsidiary, and
all leases of real property entered into by the Borrower or any Subsidiary as
tenant or lessee, after the date of this Agreement, promptly after such
acquisition or the entering into of any such lease.
(b) Upon receipt of an affidavit of an officer of the Administrative Agent
or any Lender as to the loss, theft, destruction or mutilation of any Note or
Collateral Document which is not of public
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<PAGE>
record, and, in the case of any such mutilation, upon the surrender and
cancellation of such Note or Collateral Document, the Borrowers will issue, in
lieu thereof, a replacement Note or other Collateral Document in the same
principal amount thereof (in the case of any Note) and otherwise of like tenor.
SECTION 11.14 SEVERABILITY.
The provisions of this Agreement are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Agreement in any jurisdiction. Each of the
covenants, agreements and conditions contained in this Agreement is independent
and compliance by the Borrowers with any of them shall not excuse non-compliance
by the Borrowers with any other. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 11.15 FOREIGN EXCHANGE INDEMNITY. If any sum due from any
Borrower or any Subsidiary under this Agreement or any other Loan Document or
any order or judgment given or made in relation hereto or thereto has to be
converted from the currency (the "first currency") in which the same is payable
hereunder or under such order or judgment into another currency (the "second
currency") for the purpose of (i) making or filing a claim or proof against any
Borrower or any Subsidiary with any Regulatory Agency or in any court or
tribunal or (ii) enforcing any order or judgment given or made in relation
hereto, any Borrower shall indemnify and hold harmless each of the Persons to
whom such sum is due from and against any loss actually suffered as a result of
any discrepancy between (a) the rate of exchange used to convert the amount in
question from the first currency into the second currency and (b) the rate or
rates of exchange at which such Person, acting in good faith in a commercially
reasonable manner, purchased the first currency with the second currency after
receipt of a sum paid to it in the second currency in satisfaction, in whole or
in part, of any such order, judgment, claim or proof. The foregoing indemnity
shall constitute a separate obligation of each Borrower distinct from its other
obligations hereunder and shall survive the giving or making of any judgment or
order in relation to all or any of such other obligations.
SECTION 11.16 SURVIVAL OF AGREEMENTS AND REPRESENTATIONS; CONSTRUCTION.
All agreements, representations and warranties made herein shall survive the
delivery of this Agreement and the Notes. The headings used in this Agreement
and the table of contents are for convenience only and shall not be deemed to
constitute a part hereof.
SECTION 11.17 JURISDICTION, ETC.
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(A) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT IN THE COUNTY OF NEW YORK, NEW YORK OR UNITED STATES
DISTRICT COURT IN THE SOUTHERN DISTRICT OF NEW YORK, NEW YORK AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEW YORK STATE
COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT
SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE
COURTS OF ANY JURISDICTION.
(B) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.
SECTION 11.18 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS (OTHER THAN THE MORTGAGES WHICH SHALL BE GOVERNED BY THE LAW OF THE
JURISDICTION WHERE THE PROPERTY COVERED THEREBY IS LOCATED) SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS OTHER THAN
GENERAL OBLIGATIONS LAW SECTION 5-1401.
SECTION 11.19 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES VOLUNTARILY,
INTENTIONALLY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
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OTHER LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR
ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDER PARTIES
AND ADMINISTRATIVE AGENT TO ENTER INTO THIS AGREEMENT AND TO MAKE ADVANCES
HEREUNDER.
SECTION 11.20 FINAL AGREEMENT. THIS WRITTEN AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. THE PARTIES HERETO ACKNOWLEDGE AND AFFIRM THE STATEMENT MADE IN THE
PRECEDING SENTENCE.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
POLYVISION CORPORATION
By: /s/ JOSEPH A. MENNITI
_________________________________
Name: Joseph A. Menniti
________________________________
Title: President and CEO
________________________________
POSTERLOID CORPORATION
By: /s/ JOSEPH A. MENNITI
_________________________________
Name: Joseph A. Menniti
________________________________
Title: President
________________________________
GREENSTEEL, INC.
By: /s/ JOSEPH A. MENNITI
_________________________________
Name: Joseph A. Menniti
________________________________
Title: President
________________________________
<PAGE>
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT, AS EUROPEAN
LETTER OF CREDIT BANK,
AS INITIAL ISSUING BANK,
AS SWING LINE BANK
By: /s/ Alex Sade
---------------
Name: Alex Sade
---------------
Title: Director
---------------
<PAGE>
INITIAL LENDERS
FLEET NATIONAL BANK
By: /s/ Alex Sade
---------------------
Name: Alex Sade
--------------------
Title: Director
--------------------
KBC BANK N.V.
By: /s/ Raymond F. Murray
------------------------
Name: Raymond F. Murray
---------------------
Title: Vice President
---------------------
By: /s/ Robert Snauffer
------------------------
Name: Robert Snauffer
-----------------------
Title: First Vice President
----------------------
<PAGE>
Exhibit 10.33
_______________________________
CREDIT FACILITY AGREEMENT
_______________________________
between
ALLIANCE EUROPE NV
and
ALLIANCE GRAPHICS NV
and
EMAILLERIES DE BLANC MISSERON, A. AUBECQ
and
ALLIANCE PENTAGON A/S
as Borrowers
and
KBC BANK N.V.
<PAGE>
TABLE OF CONTENTS
PAGE
PART I - INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PART II - AE CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . 5
2. TOTAL AE CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . 5
3. AE REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . . . . 5
4. AE TERM CREDIT FACILITY. . . . . . . . . . . . . . . . . . . . . . 7
PART III - PENTAGON CREDIT FACILITY. . . . . . . . . . . . . . . . . . . . . 7
5. PENTAGON REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . 7
PART IV - INTEREST, FEES AND CHARGES . . . . . . . . . . . . . . . . . . . . 8
6. INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. DEFAULT RATE OF INTEREST . . . . . . . . . . . . . . . . . . . . . 9
8. MAXIMUM INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. COMPUTATION OF INTEREST AND FEES . . . . . . . . . . . . . . . . . 10
10. UNUSED LINE FEE. . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. FINANCIAL ANALYSIS FEES. . . . . . . . . . . . . . . . . . . . . . 10
12. SERVICE FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
13. REIMBURSEMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . . 11
14. TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 12
PART V - LOAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . 13
15. MANNER OF BORROWING ADVANCES AND OVERDRAFT ADVANCES. . . . . . . . 13
16. REPAYMENT OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 14
17. MANDATORY AND OPTIONAL PREPAYMENTS . . . . . . . . . . . . . . . . 17
18. ACCOUNTS RECEIVABLE MANAGEMENT . . . . . . . . . . . . . . . . . . 19
19. APPLICATION OF PAYMENTS AND COLLECTIONS. . . . . . . . . . . . . . 21
20. LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
21. STATEMENTS OF ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . 22
PART VI - TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 22
22. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PART VII - SECURITY INTERESTS. . . . . . . . . . . . . . . . . . . . . . . . 23
i
<PAGE>
24. SECURITY ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . 23
PART VIII - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 27
25. GENERAL REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 27
26. CONTINUOUS NATURE OF REPRESENTATIONS AND WARRANTIES. . . . . . . . 34
27. SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 34
PART IX - COVENANTS AND CONTINUING AGREEMENTS. . . . . . . . . . . . . . . . 34
28. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 34
29. BORROWING BASE CERTIFICATES AND INFORMATION. . . . . . . . . . . . 37
30. INSURANCE OF COLLATERAL. . . . . . . . . . . . . . . . . . . . . . 38
31. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 39
32. SPECIFIC FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . 46
PART X - CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . 46
33. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 46
PART XI - EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT. . . . . . . . . 48
34. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 48
35. ACCELERATION OF THE OBLIGATIONS. . . . . . . . . . . . . . . . . . 51
36. OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 51
37. REMEDIES CUMULATIVE; NO WAIVER . . . . . . . . . . . . . . . . . . 51
PART XII - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 52
38. INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
39. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
40. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
41. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . 52
42. CUMULATIVE EFFECT; CONFLICT OF TERMS . . . . . . . . . . . . . . . 53
43. EXECUTION IN COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . 53
44. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
45. CREDIT INQUIRIES . . . . . . . . . . . . . . . . . . . . . . . . . 55
46. TIME OF ESSENCE. . . . . . . . . . . . . . . . . . . . . . . . . . 55
47. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 55
48. INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . 56
49. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . . 56
50. GOVERNING LAW; CONSENT TO FORUM. . . . . . . . . . . . . . . . . . 56
ii
<PAGE>
LIST OF EXHIBITS AND APPENDICES
Appendix A General Definitions
Appendix B Credit Regulations
Appendix C Tax Identification Numbers of Subsidiaries
Appendix D Costs and Expenses
Exhibit A Repayment Schedule
Exhibit 25.2 Jurisdictions in which Borrowers and Pentagon are Authorized
to do Business
Exhibit 25.6 Capital Structure of Borrowers and Pentagon
Exhibit 25.10 Corporate Names
Exhibit 25.11 Mergers, Etc.
Exhibit 25.12 Business Locations
Exhibit 25.13 same as Exhibit 25.12
Exhibit 25.14 same as Exhibit 25.12
Exhibit 25.15 same as Exhibit 25.12
Exhibit 25.29 Aubecq's Taxes
Exhibit 25.32 Patents, Trademarks, Copyrights and Licenses
Exhibit 25.34 Compliance with Law
Exhibit 25.37 Contracts Restricting Borrowers' and Pentagon's Right to
Incur Debts
Exhibit 25.38 Litigation
Exhibit 25.41 Capitalized Leases
Exhibit 25.41 Operating Leases
Exhibit 25.43 Plans
Exhibit 25.47 Labor Contracts
Exhibit 28.3 Compliance Certificate
Exhibit 31.1 Permitted Liens
Exhibit 32.1 Financial Covenants
iii
<PAGE>
CREDIT FACILITY AGREEMENT
THIS CREDIT FACILITY AGREEMENT this 20th November 1998,
BY AND AMONG:
(1) ALLIANCE EUROPE NV (formerly known as Alliance Enamelsteel Corporation NV),
a limited liability company incorporated under the laws of Belgium as a
"NAAMLOZE VENNOOTSCHAP", registered with the Registry of Commerce of
Tongeren under number 58.120, having its registered office at Zuiderring
56, 3600 Genk, Belgium, represented for the purposes of this Agreement by
Robert Krol (sometimes referred to herein, individually, as "ALLIANCE
EUROPE" or "BORROWER", and, together with Alliance Graphics and Aubecq, as
"BORROWERS");
(2) ALLIANCE GRAPHICS NV, a limited liability company incorporated under the
laws of Belgium as a "NAAMLOZE VENNOOTSCHAP", registered with the Registry
of Commerce of Tongeren under number 67.288, having its registered office
at Zuiderring 56, 3600 Genk, Belgium, represented for the purposes of this
Agreement by Robert Krol (sometimes referred to herein, individually, as
"ALLIANCE GRAPHICS" or "BORROWER", and, together with Alliance Europe and
Aubecq, as "BORROWERS");
(3) EMAILLERIES DE BLANC MISSERON, A. AUBECQ Societe Anonyme, a limited
liability company incorporated as a "SOCIETE ANONYME" under the laws of
France, having its registered office at Crespin (Nord), Rue des DEportEs,
R.C.S. Valenciennes, France, represented for the purposes of this Agreement
by Robert Krol (sometimes referred to herein, individually, as "AUBECQ" or
"BORROWER", and, together with Alliance Europe and, Alliance Graphics, as
"BORROWERS");
(4) ALLIANCE PENTAGON A/S, a limited liability company incorporated under the
laws of Denmark under no. 40.019, having its registered office at 2,
Krogagervej, DK - 5240 Odense, Denmark, represented for the purposes of
this Agreement by Robert Krol (hereinafter referred to as "PENTAGON");
AND:
(5) K.C. BANK N.V. (formerly known as KREDIETBANK NV), a limited liability
company incorporated under the laws of Belgium as a "NAAMLOZE
VENNOOTSCHAP", having its registered office at 1080, Brussels Havenlaan 2,
registered with the Registry of Commerce of Brussels under number 623.074
and licensed as a bank in Belgium, acting through its Genk branch located
at 3600 Genk, Onderwijslaan 72 Box 11, registered with the Commercial
Registry of Tongeren under number 2.254, bank account number
488-6088351-83, represented for the purposes of this Agreement by Wim
Leemen (hereinafter referred to as "LENDER");
<PAGE>
WHEREAS:
(A) The parties hereto entered into that certain Credit Facility Agreement
dated 2 October 1997 (the "ORIGINAL CREDIT AGREEMENT") in which Lender
agreed to make Loans and other financial accommodations to Borrowers and
Pentagon on the terms and conditions set forth therein;
(B) The Original Credit Agreement was amended and restated on January 27, 1998,
effective as of 2 October 1997 (the "FIRST AMENDED AND RESTATED
AGREEMENT");
(C) As partial security for such loans and other financial accommodations,
Lender required that Lender be provided with two irrevocable standby
letters of credit, in the amount of BEF254,549,873.00 and BEF12,063,975.00,
respectively;
(D) On 2 October 1997,
(i) Fleet Capital Corporation, a corporation organized under the laws
of Rhode Island, United States of America, having an office at One
North Franklin Street, Suite 3600, Chicago, Illinois 60606, United
States of America, individually and as Agent for itself and any
other Lender ("FLEET CAPITAL"); and
(ii) Alliance America Corporation, a corporation organized under the
laws of Georgia, United States of America, having its chief
executive office and principal place of business at 4888 South Old
Peachtree Road, Norcross, Georgia 30071, United States of America
("ALLIANCE AMERICA"),
entered into a Loan and Security Agreement (the "LOAN AND SECURITY
AGREEMENT"), pursuant to which Fleet Capital issued, or caused to be issued
by one of its Affiliates, two irrevocable standby letters of credit, one in
the face amount of BEF254,549,873.00 (together with any amendments thereto
and substitutions therefor, the "AE STANDBY LETTER OF CREDIT"), and one in
the face amount of BEF12,063,975.00 (together with any amendments thereto
and substitutions therefor, the "PENTAGON STANDBY LETTER OF CREDIT"),
respectively;
(E) Concurrently with the execution and delivery of this Agreement,
(i) Fleet National Bank, a United States national banking association,
having an office at 1185 Avenue of the Americas, New York, New York
10036, United States of America, individually and as Administrative
Agent for itself and the other lenders party thereto (in its
individual capacity, "FLEET" and in such capacity as Administrative
Agent, together with any successors in its capacity as
Administrative Agent, the "FLEET AGENT");
(ii) certain financial institutions from time to time parties thereto
(collectively the "FLEET LENDERS"); and
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(iii) PolyVision Corporation, a corporation organized under the laws of
New York, United States of America ("POLYVISION"), Posterloid
Corporation, a corporation organized under the laws of Delaware,
United States of America ("POSTERLOID"); and Greensteel, Inc., a
corporation organized under the laws of Delaware, United States of
America ("GREENSTEEL");
have entered into a Credit Agreement (as it may be amended, modified or
supplemented from time to time, the "FLEET CREDIT AGREEMENT"), pursuant to
which Fleet has agreed, among other things, to issue a replacement AE and
Pentagon Standby Letter of Credit up to an amount of BEF134,758,619.00 and
to, among other things, increase the face amount of the AE Term Credit
Standby Letter of Credit to BEF235,964,990.00; and
(F) The parties hereto desire to amend the First Amended and Restated Credit
Agreement in certain respects, with such amendments to be deemed effective
as of the date hereof, it being specified that this Agreement shall not
result in a novation of the First Amended and Restated Credit Agreement.
NOW, THEREFORE, in consideration of the premises and covenants and in reliance
upon the representations and warranties set out below, the parties hereto agree
as follows:
PART I - INTERPRETATION
1. DEFINITIONS
1.1. For the purposes of this Agreement, capitalized words and expressions shall
have the meanings assigned to them in APPENDIX A, GENERAL DEFINITIONS.
1.2. Accounting terms not otherwise specifically defined herein shall be
construed in accordance with the generally accepted accounting principles
in effect in the country in which the relevant party is located, applied on
a consistent basis ("GAAP").
1.3. For the purpose of determining compliance with the covenant and Default
limitations set out in this Agreement, amounts expressed in US Dollars
shall be measured by aggregating the applicable items denominated in US
Dollars with the Dollar Equivalent of all such items in foreign currencies.
1.4. In this Agreement and its Appendices, Exhibits and Schedules, unless the
context otherwise requires:
(a) references to this Agreement and/or its Appendices, Exhibits and/or
Schedules or any other document, include this Agreement and its
Appendices, Exhibits and/or Schedules or such other document as
varied, modified or supplemented in any manner from time to time;
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(b) references to any party shall, where relevant, be deemed to be
references to or to include, as appropriate, their respective
permitted successors, assigns or transferees;
(c) references to recitals, clauses and schedules and sub-divisions of
them are references to the recitals and clauses of, and schedules
to, this Agreement and sub-divisions of them respectively;
(d) references to any enactment include references to such enactment as
reenacted, amended or extended on or before the date of this
Agreement and any subordinate legislation made from time to time
under it;
(e) references to a "person" include any individual, company,
corporation, firm, partnership, joint venture, association,
organization, institution, trust or agency, whether or not having a
separate legal personality;
(f) references to the one gender include all genders, and references to
the singular include the plural and vice versa;
(g) any reference to indemnifying any person against any circumstance
includes indemnifying and holding that person harmless from all
actions, claims, demands and proceedings of any nature made against
that person and all losses, damages, payments, awards, costs or
expenses made, suffered or incurred by that person as a consequence
of, or which would not have arisen but for, that circumstance; and
(h) headings are inserted for convenience only and shall be ignored in
construing this Agreement.
1.5. The Appendices, Exhibits and Schedules and the Recitals form part of this
Agreement and shall be construed and shall have the same full force and
effect as if expressly set out in the body of this Agreement.
1.6. Any reference in this Agreement to a document being "in the agreed terms"
is to a document in the terms agreed between the parties and for
identification purposes only signed or initialed by them or on their behalf
on or before the date of this Agreement.
1.7. Where under the terms of this Agreement any party accepts an obligation to
use its "best endeavors" in and towards the fulfillment of any objective or
occurrence the full extent of that party's obligation shall be to take all
such steps which a prudent, determined and reasonable person, acting in its
own interests and intent on the fulfillment of such obligation, would take
irrespective of the costs of or associated with taking such steps.
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PART II - AE CREDIT FACILITY
2. TOTAL AE CREDIT FACILITY
2.1. In reliance upon the representations and warranties and subject to the
terms and conditions set out in this Agreement and the Loan Documents,
Lender agrees, provided that no Default or Event of Default then exists, to
make available to Borrowers a credit facility ("OUVERTURE DE CREDIT",
"KREDIETOPENING") up to a total aggregate principal amount of
BEF519,963,347.00 (the "AE CREDIT FACILITY") in the form of:
(a) a Revolving Credit Facility, up to an aggregate principal amount of
BEF189,007,500.00 (the "AE REVOLVING CREDIT FACILITY"); and
(b) a Term Credit Facility, up to an aggregate principal amount of
BEF330,955,847.00 (the "AE TERM CREDIT FACILITY").
3. AE REVOLVING CREDIT FACILITY
3.1. In reliance upon the representations and warranties and subject to the
terms and conditions set out in this Agreement and the Loan Documents,
Lender agrees, provided that no Default or Event of Default then exists, to
make from time to time Revolving Credit Loans available to each Borrower,
as requested by that Borrower in the manner set forth in Article 15 below,
up to a total aggregate principal amount equal to BEF189,007,500.00, for
all Borrowers together,
PROVIDED, THAT,
(a) Subject to clause (d) of this proviso, the maximum aggregate
principal amount of the AE Revolving Credit Facility at any time
outstanding with respect to Alliance Europe, individually, shall
not exceed BEF189,007,500.00;
(b) Subject to clause (d) of this proviso, the maximum aggregate
principal amount of the AE Revolving Credit Facility at any time
outstanding with respect to Alliance Graphics, individually, shall
not exceed BEF7,311,500.00;
(c) Subject to clause (d) of this proviso, the maximum aggregate
principal amount of the AE Revolving Credit Facility at any time
outstanding with respect to Aubecq, individually, shall not exceed
BEF146,230,000.00; and
(d) the maximum aggregate principal of the AE Revolving Credit Facility
at any time outstanding with respect to Alliance Europe, Alliance
Graphics and Aubecq shall not exceed an amount equal to
BEF189,007,500.00 minus the then outstanding principal amount
borrowed by Pentagon under the Pentagon Revolving Credit Facility.
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3.2. Until the Borrowers and Lender shall agree otherwise, the AE Revolving
Credit Facility shall be made available to the Borrowers to be drawn in the
form of:
(a) cash advances in current account in Belgian francs ("BEF"),
including Letters of Credit by which Lender shall guarantee the
payment or performance or reimbursement obligations with respect to
Letters of Credit (the "AE REVOLVING CREDIT OVERDRAFT ADVANCES");
and/or,
(b) fixed short term advances (i.e., different interest periods) in BEF
for a term of one (1) month, two (2) months, three (3) months or
six (6) months, which may not be repaid before maturity (the "AE
REVOLVING CREDIT ADVANCES");
PROVIDED, THAT:
(a) the maximum aggregate principal amount of all AE Revolving Credit
Overdraft Advances at any time outstanding for all Borrowers
together shall not at any time exceed BEF25,590,250.00, which shall
include an LC Amount not to exceed BEF18,287,750.00;
(b) the maximum aggregate principal amount of all AE Revolving Credit
Advances at any time outstanding for all Borrowers together shall
not at any time exceed BEF189,007,500.00, which shall include no LC
Amount; and
(c) the LC Amount at any time outstanding for all Borrowers together
shall not at any time exceed BEF18,278,750.00.
3.3. Lender shall have the right to restrict the AE Revolving Credit Facility in
whole or in part by establishing reserves in such amounts, and with respect
to such matters, as Lender shall reasonably deem necessary or appropriate
in its reasonable credit judgment, against the amount of any AE Revolving
Credit Advances and any AE Revolving Credit Overdraft Advances which any
Borrower may otherwise request under this Article 3 ("RESERVES"),
including, without limitation, with respect to:
(a) sums chargeable against a Borrower's Loan Account as AE Revolving
Credit Advances under any section of this Agreement;
(b) amounts owing by a Borrower to any Person to the extent secured by
a Lien on any Collateral which Lender deems eligible under the
definition of the AE Borrowing Base; and
(c) such other matters, events, conditions or contingencies as to which
Lender, in the exercise of its reasonable credit judgment,
determines reserves should be established from time to time
hereunder;
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PROVIDED, THAT any such Reserves will not duplicate decreases in the amount
of Accounts or the value of Inventory already made, due to their
ineligibility.
4. AE TERM CREDIT FACILITY
4.1. In reliance upon the representations and warranties and subject to the
terms and conditions set out in this Agreement and the Loan Documents,
Lender agrees, provided that no Default or Event of Default is then
existing, to make a Term Credit Facility available to Alliance Europe on or
about the Closing Date in a principal amount equal to BEF330,955,847.00 to
be drawn down in full by Alliance Europe on the Closing Date.
4.2. Until the Borrowers and Lender shall agree otherwise, the AE Term Credit
Facility made available to Alliance Europe shall bear interest for interest
periods (I.E., BIBOR Periods), applicable to the different BIBOR Term
Portions selected in accordance with the provisions of Section 11 hereof,
having durations of minimum one (1) month, two (2) months, three (3) months
or maximum six (6) months, which may not be repaid before expiration of
such BIBOR Periods respectively (each such BIBOR Term Portion is sometimes
hereinafter referred to as "AE TERM CREDIT ADVANCE(S)");
PROVIDED, THAT Alliance Europe shall select AE Term Credit Advances in a
manner consistent with the repayment schedule attached hereto in EXHIBIT A.
PART III - PENTAGON CREDIT FACILITY
5. PENTAGON REVOLVING CREDIT FACILITY
5.1. In reliance upon the representations and warranties and subject to the
terms and conditions set out in this Agreement and the Loan Documents,
Lender agrees, for so long as no Default or Event of Default exists, to
make available to Pentagon a credit facility ("OUVERTURE DE CREDIT",
"KREDIETOPENING") up to a total aggregate principal amount of
BEF36,557,500.00 in the form of a Revolving Credit Facility (the "PENTAGON
REVOLVING CREDIT FACILITY"),
PROVIDED, THAT the maximum aggregate principal amount of the Pentagon
Revolving Credit Facility at any time outstanding shall never exceed the
lesser of (a) Pentagon Borrowing Base MINUS the aggregate amount of all
Reserves applicable to Pentagon, if any, at such time and (b) the then
unused portion of the AE Revolving Credit Facility (taking into account all
then outstanding AE Revolving Credit Overdraft Advances, AE Revolving
Credit Advances and LC Amounts).
5.2. Until Pentagon and Lender shall agree otherwise, the Pentagon Revolving
Credit Facility shall be made available to Pentagon to be drawn in the form
of fixed short term advances in BEF for a term of one (1) month, two (2)
months, three (3) months or six (6) months, as requested by Pentagon in the
manner set out in Article 15 below, not to be repaid before maturity (the
"PENTAGON REVOLVING CREDIT ADVANCES");
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PROVIDED, THAT the maximum aggregate principal amount of all Pentagon
Revolving Credit Advances at any time outstanding shall not at any time
exceed BEF36,557,500.00.
5.3. Lender shall have the right to restrict the Pentagon Revolving Credit
Facility in whole or in part by establishing reserves in such amounts, and
with respect to such matters, as Lender shall reasonably deem necessary or
appropriate in its reasonable credit judgment, against the amount of any
Pentagon Revolving Credit Advances which Pentagon may otherwise request
under this Article 5 ("RESERVES"), including, without limitation, with
respect to:
(a) sums chargeable against Pentagon's Loan Account as Pentagon
Revolving Credit Advances under any section of this Agreement;
(b) amounts owing by Pentagon to any Person to the extent secured by a
Lien on any Collateral which Lender deems eligible under the
definition of the Pentagon Borrowing Base; and
(c) such other matters, events, conditions or contingencies as to which
Lender, in the exercise of its reasonable credit judgment,
determines reserves should be established from time to time
hereunder;
PROVIDED, THAT any such Reserves will not duplicate decreases in the amount
of Accounts or the value of Inventory already made, due to their
ineligibility.
PART IV - INTEREST, FEES AND CHARGES
6. INTEREST
6.1. BASE RATE REVOLVING CREDIT PORTION
6.1.1. Interest shall accrue on the principal amount of each Base Rate
Revolving Credit Portion outstanding at the end of each day at a
fluctuating rate per annum equal to the Base Rate then in effect PLUS
the Applicable Margin.
6.1.2. Said rate of interest shall increase or decrease by an amount equal to
any increase or decrease in the Base Rate, effective as of the opening
of business on the day that such change in the Base Rate occurs.
6.2. BIBOR REVOLVING CREDIT PORTION
6.2.1. Interest shall accrue on the principal amount of each BIBOR Revolving
Credit Portion at an annual rate equal to the BIBOR Rate applicable to
such BIBOR Revolving Credit Portion for the corresponding BIBOR Period
PLUS the Applicable Margin.
6.3. BIBOR TERM PORTION
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6.3.1. Interest shall accrue on the principal amount of each BIBOR Term Portion
at an annual rate equal to the BIBOR Rate applicable to such BIBOR Term
Portion for the corresponding BIBOR Period PLUS the Applicable Margin.
6.4. BIBOR PERIODS AND BIBOR RATE
6.4.1. BIBOR Periods and the BIBOR Rate applicable to each BIBOR Portion shall
be determined in accordance with the terms of this Agreement.
6.4.2. The total number of all AE Revolving Credit Advances, AE Term Credit
Advances and Pentagon Revolving Credit Advances at any time outstanding
for all Borrowers and Pentagon together shall not at any time exceed ten
(10).
7. DEFAULT RATE OF INTEREST
7.1. Upon and after the occurrence of an Event of Default, and during the
continuation thereof, the principal amount of all Loans shall, at the
option of Lender, bear interest at a rate per annum equal to the
interest rate otherwise applicable thereto plus 2%, or, in the event of
termination of the credit facility provided hereunder, in whole or in
part, such other rate as is provided in the Credit Regulations (the
"DEFAULT RATE").
8. MAXIMUM INTEREST
8.1. In no event whatsoever shall the aggregate of all amounts deemed
interest hereunder and charged or collected pursuant to the terms of
this Agreement exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem
applicable hereto.
8.2. If any provisions of this Agreement are in contravention of any such
law, such provisions shall be deemed amended to conform thereto.
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9. COMPUTATION OF INTEREST AND FEES
9.1. Interest, unused line fees, financial analysis fees and service fees
hereunder shall be calculated daily and shall be computed on the actual
number of days elapsed over a year of 360 days.
10. UNUSED LINE FEE
10.1. Borrowers shall pay to Lender a fee equal to 0.50% per annum on the
amount by which BEF189,007,500.00 exceeds the average daily outstanding
balance of the AE Revolving Credit Facility and (without duplication)
Pentagon shall pay to Lender a fee equal to 0.50% per annum of the
amount by which BEF36,557,500.00 exceeds the average daily outstanding
balance of the Pentagon Revolving Credit Facility, PROVIDED, THAT each
reference to "0.50%" shall be deemed changed to "0.375%" from and after
the date (if any) on which the "Commitment Fee" (as defined in the Fleet
Credit Agreement) changes from 0.50% to 0.375%.
10.2. The unused line fee shall be payable quarterly in arrears on the first
day of each calendar quarter hereafter.
11. FINANCIAL ANALYSIS FEES
11.1. Borrowers and Pentagon shall from time to time pay to Lender or to
Lender's designated representative in connection with periodic visits to
Borrowers' or Pentagon's places of business in order to perform
financial and collateral analysis all reasonable out-of-pocket expenses
incurred by Lender or Lender's designated representative in connection
with such visits.
11.2. Expenses under Article 11.1 shall be payable on the first day of the
quarter following the date of issuance by Lender or by Lender's
designated representative of a request for payment thereof to Borrowers
or Pentagon, as the case may be.
12. SERVICE FEE
12.1. During the term of this Agreement, Pentagon and Borrowers shall pay to
Lender a service fee equal to 1/8% per annum of the outstanding balance
of the Revolving Credit Facility and the Term Credit Facility of
Borrowers and of the outstanding balance of the Revolving Credit
Facility of Pentagon, as the case may be.
12.2. The service fee shall be payable at the end of each relevant BIBOR
Period in the case of BIBOR Portions and quarterly in the case of Base
Rate Revolving Credit Portions.
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13. REIMBURSEMENT OF EXPENSES
13.1. If, at any time or times regardless of whether or not an Event of
Default then exists, Lender incurs legal or accounting expenses or any
other reasonable costs or out-of-pocket expenses in connection with:
(a) the negotiation and preparation of this Agreement or any of the
other Loan Documents, any amendment of or modification of this
Agreement or any of the other Loan Documents;
(b) the administration of this Agreement or any of the other Loan
Documents and the transactions contemplated hereby and thereby;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Lender, any Borrower, Pentagon or any
other Person) in any way relating to the Collateral, this
Agreement or any of the other Loan Documents or any Borrower's or
Pentagon's affairs;
(d) any attempt to enforce any rights of Lender against any Borrower,
Pentagon or any other Person which may be obligated to Lender by
virtue of this Agreement or any of the other Loan Documents,
including, without limitation, the Account Debtors; or
(e) any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon
the Collateral;
then, to the extent permitted by applicable law, all such legal and
accounting expenses, other reasonable costs and out-of-pocket expenses
of Lender shall be charged to the Borrower(s) and/or Pentagon on whose
behalf such legal and accounting expenses or other costs and
out-of-pocket expenses have been incurred by Lender. Borrowers and
Pentagon shall also reimburse Lender for any costs or expenses incurred
by Lender or Fleet in connection with the transfer of funds by Lender to
Fleet pursuant to the Letter of Credit Agreement, excluding however any
costs or expenses incurred as a result of currency rate fluctuations.
13.2. All expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping the Collateral, any and all excise, property,
sales, and use taxes imposed by any national or local authority on any
of the Collateral or in respect of the sale thereof shall, to the extent
permitted by applicable law, be borne and paid by the Borrower(s) and/or
Pentagon on whose behalf such expenses have been incurred by Lender.
13.3. If any party fails to promptly pay any portion thereof when due, Lender
may, at its option, but shall not be required to, pay the same and
charge such party therefor.
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13.4. Borrowers and Pentagon shall pay to Lender, on demand, any and all fees,
costs or expenses which Lender is required to pay to a bank or other
similar institution (including, without limitation, any fees paid by
Lender to any other Person) arising out of or in connection with:
(a) the forwarding to any Borrower, Pentagon or any other Person on
behalf of such Borrower or Pentagon, by Lender, of proceeds of
loans made by Lender to such Borrower or to Pentagon pursuant to
this Agreement; and
(b) the depositing for collection, by Lender, of any check or item of
payment received or delivered to Lender on account of the AE
Obligations or on account of the Pentagon Obligations.
13.5. All amounts chargeable to Borrowers or to Pentagon under Part IV hereof
shall be AE Obligations or Pentagon Obligations, respectively, secured
by all of the Collateral, shall be payable on demand and shall bear
interest from the date such amounts become payable until paid in full at
the rate applicable to Base Rate Revolving Credit Portions from time to
time.
14. TAX CONSIDERATIONS
14.1. All payments by Borrowers and by Pentagon to Lender under this
Agreement, whether in respect of principal, interest, fees or any other
item, and all payments by Lender to Fleet under the Letter of Credit
Agreement, shall be made in full without any deduction or withholding
(whether in respect of set off, counterclaim, duties, taxes, charges or
otherwise whatsoever) unless the deduction or withholding is required by
law, in which case Borrowers or Pentagon, as the case may be, shall:
(a) ensure that the deduction or withholding does not exceed the
minimum amount legally required;
(b) forthwith pay to Lender or Fleet, as the case may be, such
additional amount so that the net amount received by Lender or
Fleet, as the case may be, will equal the full amount which would
have been received by it had no such deduction or withholding
been made;
(c) pay to the relevant taxation or other authorities within the
period for payment permitted by applicable law the full amount of
the deduction or withholding (including, but without limitation,
the full amount of any deduction or withholding from any
additional amount paid pursuant to this sub-clause); and
(d) furnish to Lender or Fleet, as the case may be, within the period
for payment permitted by the relevant law, either:
(i) an official receipt of the relevant taxation authorities
involved in respect of all amounts so deducted or
withheld; or
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(ii) if such receipts are not issued by the taxation
authorities concerned on payment to them of amounts so
deducted or held, a certificate of deduction or
equivalent evidence of the relevant deduction or
withholding.
PART V - LOAN ADMINISTRATION.
15. MANNER OF BORROWING ADVANCES AND OVERDRAFT ADVANCES
15.1. A request for an Advance (other than an overdraft advance) shall be
made, or shall be deemed to be made, in the following manner:
(a) Any Borrower or Pentagon, as the case may be, may from time to
time give Lender notice of its intention to borrow, by sending to
Lender and Fleet simultaneously, by telex or facsimile
transmission, not later than 11:00 AM Brussels time, four (4)
Business Days prior to the proposed Borrowing Date, a duly
completed Advance Request,
PROVIDED, THAT
(i) no such request may be made at a time when there exists a
Default or an Event of Default;
(ii) the becoming due of any amount required to be paid under
this Agreement, whether as interest or for any of the
other AE Obligations or Pentagon Obligations, as the case
may be, shall be deemed irrevocably to be a request for
an AE Revolving Credit Advance or Pentagon Revolving
Credit Advance, respectively, on the due date in the
amount required to pay such interest or other AE
Obligation or Pentagon Obligation, as the case may be;
and
(iii) the minimum amount of any Revolving Credit Advance
requested shall never be lower than BEF 1,000,000.00.
(b) Each Advance Request sent to Lender and Fleet pursuant to Article
15.1 (a) above shall be irrevocable and shall specify:
(i) the date on which the Borrower or Pentagon, as the case
may be, proposes to draw down the proposed AE Revolving
Credit Advance or Pentagon Revolving Credit Advance, as
the case may be, which shall be a Business Day;
(ii) the amount of the proposed AE Revolving Credit Advance,
which shall not exceed the total aggregate amount not yet
drawn down under the AE
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Revolving Credit Facility or the Pentagon Revolving
Credit Facility, as the case may be, on the proposed date
for draw down; and
(iii) the BIBOR Period of the proposed AE Revolving Credit
Advance or Pentagon Revolving Credit Advance (if
applicable).
15.2. Each Borrower and Pentagon hereby irrevocably authorize Lender to
advance to that Borrower or to Pentagon, as the case may be, in
accordance with Article 15.1 hereof, and to charge to their respective
Loan Account hereunder as a Revolving Credit Advance, a sum sufficient
to pay all interest accrued on the AE Obligations and/or the Pentagon
Obligations, respectively, during the immediately preceding month or
quarter or applicable BIBOR Interest Payment Date and to pay all costs,
fees and expenses at any time owed by Borrowers or by Pentagon, as the
case may be, to Lender under this Agreement.
15.3. If any Borrower or Pentagon fails to give a timely borrowing notice with
respect to the re-borrowing of any maturing BIBOR Portion, Lender shall
be entitled to treat such failure as a request for a new BIBOR Portion
having the same BIBOR Period as the maturing BIBOR Portion, taking into
account the repayment schedule of the Term Loan set forth in EXHIBIT A.
16. REPAYMENT OF OBLIGATIONS
16.1. Except where evidenced by notes or other instruments issued or made by
Borrowers or by Pentagon, as the case may be, to Lender and accepted by
Lender specifically containing payment provisions which are in conflict
with this Article 16 (in which event the conflicting provisions of said
notes or other instruments shall govern and control), the AE Obligations
and the Pentagon Obligations, respectively, shall be payable as follows:
(a) Principal payable on account of AE Revolving Credit Advances or
Pentagon Revolving Credit Advances shall be due and payable by
the relevant Borrower or Pentagon to Lender immediately upon the
earliest of:
(i) the maturity date of such advance;
(ii) the occurrence of an Event of Default in consequence of
which Lender elects to accelerate the maturity and
payment of the AE Obligations or the Pentagon
Obligations, respectively; or
(iii) termination of this Agreement pursuant to Article 22 or
23 hereof.
(b) If an Overadvance shall exist at any time, Borrowers and
Pentagon, as the case may be, shall, on demand, repay the
Overadvance to Lender.
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(c) Interest accrued on Base Rate Revolving Credit Portions shall be
due and payable on the earliest of:
(i) the first calendar day of each calendar quarter (for the
immediately preceding calendar quarter), computed through
the last calendar day of the preceding calendar quarter;
(ii) the occurrence and continuance of an Event of Default in
consequence of which Lender elects to accelerate the
maturity and payment of the AE Obligations or the
Pentagon Obligations, respectively; or
(iii) termination of this Agreement pursuant to Article 22 or
23 hereof.
(d) Interest accrued on each BIBOR Revolving Credit Portion shall be
due and payable on each BIBOR Interest Payment Date, as the case
may be, and on the earliest of:
(i) the last day of the Interest Period applicable to such
BIBOR Revolving Credit Portion;
(ii) the occurrence and continuance of an Event of Default in
consequence of which Lender elects to accelerate the
maturity and payment of the AE Obligations or the
Pentagon Obligations, respectively; or
(iii) termination of this Agreement pursuant to Article 22 or
23 hereof.
(e) Principal payable on account of the AE Term Credit Facility shall
be due and payable on a quarterly basis in installments as set
out in EXHIBIT A hereto, PROVIDED THAT:
(i) the entire remaining principal amount then outstanding,
together with any and all other amounts due hereunder,
shall be due and payable on October 31, 2004 at the
latest; and
(ii) the entire unpaid principal balance and accrued interest
on any AE Term Credit Advance shall, notwithstanding the
foregoing, be due and payable immediately upon any
termination of this Agreement pursuant to Article 22 or
23 hereof.
(f) Interest accrued on any BIBOR Term Portion shall be due and
payable on each BIBOR Interest Payment Date, as the case may be,
and on the earliest of;
(i) the last day of the Interest Period applicable to such
BIBOR Term Credit Portion;
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(ii) the occurrence and continuance of an Event of Default in
consequence of which Lender elects to accelerate the
maturity and payment of the AE Obligations; or
(iii) termination of this Agreement pursuant to Article 22 or
23 hereof.
(g) Costs, fees and charges payable pursuant to this Agreement shall
be payable by Borrowers and/or Pentagon, as the case may be, as
and when provided in Part IV hereof, to Lender or to any other
Person designated by Lender in writing.
(h) The balance of the AE Obligations and the Pentagon Obligations
requiring the payment of money, if any, shall be payable by
Borrowers and/or Pentagon, as the case may be, to Lender as and
when provided in this Agreement, the Other Agreements or the
Security Documents, or on demand, whichever is earlier.
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17. MANDATORY AND OPTIONAL PREPAYMENTS
17.1. Within fifteen (15) days after any receipt by any Borrower or Pentagon
of Net Cash Proceeds from Asset Dispositions (other than Extraordinary
Receipts the disposition of which shall be governed by the terms of
subsection 17.1(a) below), the applicable Borrower or Pentagon shall
prepay the then outstanding Loans in an amount equal to one-hundred
percent (100%) of such Net Cash Proceeds in excess of $500,000
(including in such computation of $500,000, all Net Cash Proceeds
received by PolyVision and any one or more of its Subsidiaries) in any
Fiscal Year, PROVIDED that no such prepayment need be made (A) unless
the Net Cash Proceeds from any single Asset Disposition or series of
related Asset Dispositions (in either case, by PolyVision and all of its
Subsidiaries) exceed $500,000 (in which case a prepayment shall be made
in the amount of the entire Asset Disposition) or until the cumulative
Net Cash Proceeds from all Asset Dispositions by any Borrowers, Pentagon
and any of its Subsidiaries in any particular fiscal year exceed
$500,000 (in which case a prepayment shall be made in the amount of the
Net Cash Proceeds from the specific Asset Disposition (or portion
thereof) causing the limit to be exceeded), except that the terms of
this subsection (A) shall not be applicable in respect of Net Cash
Proceeds reinvested in accordance with the terms of the following
subsection (B); and (B) with respect to Asset Dispositions by any
Borrower, or Pentagon, if the Net Cash Proceeds therefrom are used to
reinvest in fixed assets (for use in its business or the business of the
Subsidiaries) within 180 days (or 360 days with respect to real estate
and improvements on real estate) of such Asset Disposition, PROVIDED
that any such Net Cash Proceeds not so reinvested shall be used to
prepay the Loans on the 181st day (or 361st day with respect to real
estate and improvements on real estate).
(a) Within fifteen (15) days after receipt of Net Cash Proceeds by a
Borrower or Pentagon, from any Extraordinary Receipt received by
or paid to or for the account of such party and not otherwise
included in Article 17.1 above, such party shall prepay the then
outstanding Loans in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds in excess of $500,000 in the
aggregate.
17.2. The applicable prepayment shall be applied:
(a) in the case of Borrowers, first, to the installments of principal
due under the AE Term Credit Loans either, at the option of the
Borrowers, PRO RATA based on the remaining amounts of such
installments until paid in full, or in the inverse order of the
maturity of installments until paid in full; and
(b) second, to reduce the outstanding principal balance of the
applicable Revolving Credit Facility.
17.3. [Intentionally Omitted]
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17.4. Notwithstanding the foregoing, if the proceeds of insurance with respect
to any loss or destruction of Equipment, Inventory or real Property:
(a) are less than BEF18,278,750.00, unless an Event of Default is
then in existence, Lender shall remit such proceeds to the
applicable Borrower or Pentagon, as the case may be, for use in
replacing or repairing the damaged Collateral; or
(b) are equal to or greater than BEF18,278,750.00 and the applicable
Borrower or Pentagon, as the case may be, has requested that
Lender permit such Borrower or Pentagon to repair or replace the
damaged Collateral, such amounts shall, unless an Event of
Default shall then be continuing, be provisionally applied to
reduce the outstanding principal balance of the applicable
Revolving Credit Facility until such funds are made available for
such repair or replacement (but if such funds are greater than
BEF36,557,500.00 per occurrence or in the aggregate with respect
to PolyVision and all of its Subsidiaries, only if Lender agrees
in its reasonable judgement to permit such proceeds to be made
available for such repair or replacement) subject to such
controlled disbursement procedures as Lender may reasonably
establish.
17.5. Borrowers shall prepay the AE Term Credit Facility in amounts equal to
their pro-rata share (calculated as set forth below) of Excess Cash Flow
with respect to each fiscal year of Parent during the term hereof, such
prepayments to be made within two (2) Business Days following the due
date for delivery by Borrowers or Pentagon, as the case may be, to
Lender of the annual financial statements required by Article 28.1
(c)(i) hereof and each such prepayment shall be applied to the
installments of principal due under the AE Term Credit Facility on a
pro-rata basis until payment of the AE Term Credit Facility in full.
For purposes of Article 17.5, Borrowers' pro-rata share of Excess Cash
Flow will be determined by calculating the percentage that the
outstanding principal balance of the AE Term Credit Facility is of the
total of such principal balance plus the outstanding balance of the
"Term Loans" under the Fleet Credit Agreement plus the term loans under
the Other KBC Loan Agreement and multiplying total Excess Cash Flow by
such percentage.
17.6. Borrowers may, at their option, from time to time prepay installments of
the AE Term Credit Facility at the Borrowers option, either in the
inverse order of maturity or pro-rata with respect to the remaining
installments.
17.7. Any such optional prepayment shall be credited against the amount of the
mandatory prepayment required under Article 17.5 for the fiscal year in
which such optional prepayment was made.
17.8. Except for charges under APPENDIX D applicable to prepayments of BIBOR
Portions, such prepayments shall be without premium or penalty.
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17.9. Borrowers, acting jointly with Pentagon may, at their option,
exercisable annually on each anniversary of the Closing Date,
permanently reduce the Revolving Loan Commitment by an amount of the
Belgian Franc equivalent of USD1,000,000.00, less any corresponding
reduction under the Fleet Credit Agreement.
17.10. Any reductions in the Revolving Loan Commitment will be attributed to
the Borrowing Base of each Borrower and Pentagon, as directed by
Borrowers or Pentagon, as the case may be.
17.11 This Agreement may not be prepaid in full or terminated unless the Other
KBC Loan Agreement is prepaid in full and terminated concurrently
therewith, and all Obligations hereunder and "Obligations" under (and as
defined in) the Other KBC Loan Agreement shall have been paid in full.
18. ACCOUNTS RECEIVABLE MANAGEMENT.
18.1. Following the occurrence and during the continuation of an Event of
Default, any of Lender's officers, employees or agents shall have the
right, at any time or times thereafter during normal business hours, in
the name of Lender, any designee of Lender or any Borrower or Pentagon,
as the case may be, to verify the validity, amount or any other matter
relating to any Accounts by mail, telephone, telegraph or otherwise.
18.2. Borrowers and Pentagon shall cooperate fully with Lender in an effort to
facilitate and promptly conclude any such verification process.
18.3. Lender will notify Borrowers and Pentagon, as the case may be, of the
reasonable procedure or procedures Lender intends to use in making such
verification during any period when no Event of Default exists and will
only use such procedures during such periods.
18.4. At any time a Default or an Event of Default exists, Lender will not be
obligated to notify any Borrower or Pentagon of such Account
verification, and Lender may use any method or procedure for Account
verification.
18.5. To expedite collection, each Borrower and Pentagon shall endeavor in the
first instance to make collection of their Accounts for the payment of
Lender.
18.6. To the extent permitted by applicable law, all remittances received by a
Borrower or Pentagon on account of Accounts, together with the proceeds
of any other Collateral, shall be held as Lender's property by such
Borrower or Pentagon, as the case may be, for Lender's benefit and shall
immediately be deposited in their respective accounts with Lender.
18.7. Lender may rely, in determining which Accounts are Eligible Accounts, on
all statements and representations made by a Borrower and/or Pentagon,
as the case may be, with respect to any Account or Accounts, and, with
respect to Accounts shown on any borrowing base certificate as Eligible
Accounts.
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18.8. Unless otherwise indicated in writing to Lender, with respect to each
Account, Borrowers, jointly and severally, represent and Pentagon
represents, that:
(a) it is genuine and in all respects what it purports to be, and it
is not evidenced by a judgment;
(b) it arises out of a completed, BONA FIDE sale and delivery of
goods or rendition of services in the ordinary course of business
and in accordance, in all material respects, with the terms and
conditions of all purchase orders, contracts or other documents
relating thereto and forming a part of the contract between such
Borrower or Pentagon, and the Account Debtor is not an Affiliate
of a Borrower or of Pentagon;
(c) it is for a liquidated amount maturing as stated in the duplicate
invoice covering such sale or rendition of services, a copy of
which has been furnished or is available to Lender;
(d) such account, and Lender's Lien therein, is not, and will not (by
voluntary act or omission of a Borrower or of Pentagon, as the
case may be) be in the future, subject to any offset, Lien,
deduction, defense, dispute, counterclaim or any other adverse
condition (PROVIDED, THAT in the case of such an off-set, or any
such other impairment, affecting less than the full amount of the
Account, only the affected portion of such Account shall be
considered not Eligible under this clause), except for disputes
resulting in returned goods where the amount in controversy is
deemed by Lender to be immaterial, and each such Account is
absolutely owing to a Borrower or to Pentagon, as the case may
be, and is not contingent in any respect or for any reason;
(e) neither Pentagon, nor any of the Borrowers has made any agreement
with any Account Debtor thereunder for any extension, compromise,
settlement or modification of any such Account or any deduction
therefrom, except discounts or allowances which are granted by a
Borrower in the ordinary course of its business and which are
reflected in the calculation of the net amount of each respective
invoice related thereto and are reflected in the most recent
Borrowing Base Certificates submitted to Lender pursuant to
Article 29 hereof;
(f) there are no facts, events or occurrences which in any way impair
the validity or enforceability of any Accounts or tend to reduce
the amount payable thereunder from the face amount of the invoice
and statements delivered to Lender with respect thereto unless
the full amount of such potential defect or reduction has been
reserved for;
(g) to the best of Pentagon's and each Borrower's knowledge:
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(i) the Account Debtor thereunder had the capacity to
contract at the time any contract or other document
giving rise to the Account was executed; and
(ii) such Account Debtor is Solvent; and
(iii) there are no proceedings or actions which are threatened
or pending against the Account Debtor thereunder which
might result in any material adverse change in such
Account Debtor's financial condition or the
collectibility of such Account;
(h) if and to the extent any of the foregoing representations with
respect to an Account are not true and correct such Account or
portion thereof shall cease to be an Eligible Account.
19. APPLICATION OF PAYMENTS AND COLLECTIONS
19.1. During any period in which an Event of Default exists, Pentagon and each
of the Borrowers irrevocably waive the right to direct the application
of any and all payments and collections at any time or times hereafter
received by Lender from or on behalf of any Borrower or of Pentagon, as
the case may be, and Pentagon and each of the Borrowers do hereby
irrevocably agree that Lender shall have the continuing exclusive right
(subject to the provisions of this Agreement) to apply and reapply any
and all such payments and collections received at any time or times
hereafter by Lender or its agents against the AE Obligations and/or the
Pentagon Obligations, as the case may be, in such manner as Lender may
deem advisable, notwithstanding any entry by Lender upon any of its
books and records.
20. LIABILITY
20.1. All of the Borrowers shall be jointly and severally liable for and bound
by all of the AE Obligations and all of the Pentagon Obligations under
or pursuant to this Agreement, PROVIDED THAT:
20.1.1 The maximum liability of Alliance Graphics for such Obligations shall
(i) in no event exceed a sum equal to the principal amount actually
permitted to be borrowed by Alliance Graphics hereunder plus any amount
lent or invested by Alliance Europe to or in Alliance Graphics after the
date hereof directly or indirectly out of proceeds of Loans made
hereunder, (ii) in no event shall Alliance Graphics be liable for any of
the Pentagon Obligations; and (iii) Lender shall not be entitled to
enforce any of the security mentioned in Article 24(b) below for an
aggregate amount in excess of the maximum liability of Alliance Graphics
as set forth in (i) above;
20.1.2 Pentagon shall only be liable for and bound by the Pentagon Obligations,
and in no event shall Pentagon be liable for any of the AE Obligations.
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20.1.3 From and after the date hereof, Aubecq shall only be liable for (A)
amounts actually borrowed by Aubecq from Lender plus (B) funds (if any)
borrowed by Aubecq from any of Aubecq's Affiliates which funds derive
directly or indirectly from loans from Lender to such Affiliates of
Aubecq plus (C) all accrued interest thereon and related costs on the
amounts described in the preceding clauses (A) and (B) (the "Maximum
Aubecq Liability") and in no event shall Aubecq be liable for any of the
obligations of other Borrowers.
21. STATEMENTS OF ACCOUNT
21.1. Lender will account to Pentagon and to Borrowers from time to time with
a statement of Loans, charges and payments made pursuant to this
Agreement, and such account rendered by Lender shall be deemed final,
binding and conclusive upon Pentagon and Borrowers, absent manifest
error.
PART VI - TERM AND TERMINATION
22. TERM
22.1. Subject to the right of Lender to cease making Loans to Borrowers and to
Pentagon upon or after the occurrence and during the continuance of any
Default or Event of Default, this Agreement shall be in effect until
October 31, 2004, unless it is terminated as provided in Section 23
hereof.
23. TERMINATION
23.1. In accordance with and without prejudice to Article 13 of the Credit
Regulations, Lender may terminate this Agreement in accordance with Part
VI hereof without notice upon or after the occurrence and during the
continuance of an Event of Default.
23.2. Upon at least ten (10) Business Days prior written notice to Lender,
Borrowers and Pentagon may, at their option, terminate this Agreement;
PROVIDED, HOWEVER, THAT no such termination may be made prior to the
first anniversary of the date of this Agreement and shall be effective
until Borrowers and Pentagon have paid all of the AE Obligations and the
Pentagon Obligations (including without limitation all amounts payable
as described in Section 2.2.3 of Appendix D annexed hereto),
respectively, in immediately available funds.
23.3. Any notice of termination given by Borrowers and by Pentagon shall be
irrevocable unless Lender otherwise agrees in writing, and Lender shall
have no obligation to make any Loans on or after the termination date
stated in such notice.
23.4. Borrowers and Pentagon may elect to terminate this Agreement in its
entirety only. No section of this Agreement or type of Loan available
hereunder may be terminated singly.
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23.5. All of the AE Obligations and the Pentagon Obligations shall be
immediately due and payable upon the termination date stated in any
notice of termination of this Agreement.
23.6. Notwithstanding any such termination, all undertakings, agreements,
covenants, warranties and representations of Borrowers and Pentagon
contained in the Loan Documents shall survive any such termination,
Lender shall retain its Liens in the Collateral, and Lender shall retain
all of its rights and remedies under the Loan Documents, until Borrowers
and Pentagon, respectively, have paid the AE Obligations and the
Pentagon Obligations to Lender, in full, in immediately available funds,
together with the applicable termination charge, if any.
23.7. Notwithstanding the payment in full of the AE Obligations and the
Pentagon Obligations, Lender shall not be required to terminate its
security interests in the Collateral unless, with respect to any loss or
damage Lender may incur as a result of dishonored checks or other items
of payment received by Lender from any Borrower or Pentagon, as the case
may be, or from any Account Debtor and applied to the AE Obligations
and/or the Pentagon Obligations, as the case may be, Lender shall, at
its option:
(a) have received a written agreement, executed by Borrowers and by
Pentagon and by any Person whose loans or other advances to
Borrowers or to Pentagon, as the case may be, are used in whole
or in part to satisfy the AE Obligations and the Pentagon
Obligations, as the case may be, indemnifying Lender from any
such loss or damage for a period of up to 60 days after the
effective date of termination; or
(b) have retained such monetary reserves for such period of time as
Lender, in its reasonable discretion, may deem necessary to
protect Lender from any such loss or damage.
PART VII - SECURITY INTERESTS
24. SECURITY ASSETS
24.1. To secure the prompt payment and performance by the Borrowers to Lender
of the
AE Obligations:
(a) Alliance Europe on or about the Original Closing Date granted to
Lender and hereby reaffirms in all respects the existing and
continuing grant to Lender of:
(i) a first ranking mortgage ("HYPOTHEQUE") on its real
property up to an amount of BEF75,000,000.00 in principal
and BEF7,500,000.00 in related costs;
(ii) a first ranking pledge over its business ("GAGE SUR FONDS
DE COMMERCE") (including "INVENTAIRES", "VALEURS" AND
"CREANCES") in the amount of BEF75,000,000.00 in
principal and BEF7,500,000.00 in related costs;
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(iii) a second ranking pledge over its business ("GAGE SUR
FONDS DE COMMERCE") (INCLUDING "INVENTAIRES", "VALEURS"
AND "CREANCES") in the amount of BEF225,000,000.00 in
principal and BEF22,500,000.00 in related costs;
(iv) a first ranking pledge ("GAGE COMMERCIAL") on all the
shares it owns in Pentagon;
(v) an irrevocable power of attorney to establish a mortgage
("HYPOTHEQUE") on its real property up to an amount of
BEF75,000,000.00 in principal and BEF7,500,000.00 in
related costs;
(vi) an irrevocable power of attorney to establish a pledge
over its business ("GAGE SUR FONDS DE COMMERCE")
(INCLUDING "INVENTAIRES", "VALEURS" AND CREANCES") in the
amount of BEF75,000,000.00 in principal and
BEF7,500,000.00 in related costs;
(vii) Alliance Europe on or about the date hereof shall grant
to Lender a second ranking mortgage ("HYPOTHEQUE") on its
real property up to an amount of BEF20,000,000.00 in
principal and BEF2,000,000.00 in related costs.
(viii) a third ranking pledge over its business ("GAGE SUR FONDS
DE COMMERCE") (including "INVENTAIRES", "VALEURS" AND
"CREANCES") in the amount of BEF20,000,000.00 in
principal and BEF2,000,000.00 in related costs; and
(ix) a fourth ranking pledge over its business ("GAGE SUR
FONDS DE COMMERCE") (INCLUDING "INVENTAIRES", "VALEURS"
AND "CREANCES") in the amount of BEF55,000,000.00 in
principal and BEF5,500,000.00 in related costs.
(x) a first ranking pledge ("gage commercial") on all the
shares it owns in Alliance Graphics and in Pentagon;
(b) Alliance Graphics on or about the Original Closing Date granted
to Lender and hereby reaffirms to Lender the existing and
continuing grant to Lender of :
(i) a first ranking pledge over its business ("GAGE SUR FONDS
DE COMMERCE") (including "INVENTAIRES", "VALEURS" AND
"CREANCES") in the amount of BEF75,000,000.00 in
principal and BEF7,500,000.00 in related costs;
(ii) a second ranking pledge over its business ("GAGE SUR
FONDS DE COMMERCE") (INCLUDING "INVENTAIRES", "VALEURS"
AND "CREANCES") in the amount of BEF225,000,000.00 in
principal and BEF22,500,000.00 in related costs;
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(iii) an irrevocable power of attorney to establish a mortgage
("HYPOTHEQUE") on its real property up to an amount of
BEF75,000,000.00 in principal and BEF7,500,000.00 in
related costs;
(iv) an irrevocable power of attorney to establish a pledge
over its business ("GAGE SUR FONDS DE COMMERCE")
(INCLUDING "INVENTAIRES", "VALEURS" and CREANCES") in the
amount of BEF75,000,000.00 in principal and
BEF7,500,000.00 in related costs.
(c) Aubecq on or about January 27, 1998 granted to Lender and hereby
reaffirms in all respects the grant to Lender:
(i) a first ranking mortgage ("HYPOTHEQUE") on its real
property up to an amount in French francs equivalent to
BEF75,000,000.00 in principal and BEF7,500,000.00 in
related costs;
(ii) a first ranking pledge over its business ("NANTISSEMENT
SUR FONDS DE COMMERCE") securing an amount in French
francs equivalent to BEF60,000,000.00 in principal and
BEF6,000,000.00 in related costs;
(iii) an assignment of title by way of security ("CESSION EN
TOUTE PROPRIETE A TITRE DE GARANTIE") securing an amount
in French francs equivalent to BEF105,000,000.00 of all
of Aubecq's receivables under the Law dated 2 January
1981 (the so-called "LOI DAILLY");
PROVIDED, THAT the security described in this Article 24.1(c) shall not
secure the Pentagon Obligations, and shall only secure the AE
Obligations that represent amounts actually borrowed by Aubecq in an
amount equal to the Maximum Aubecq Liability (plus interest and related
costs and expenses thereon), PROVIDED FURTHER, THAT the security
described in Article 24.1(b) shall not secure the Pentagon Obligations
and shall only secure the maximum liability of Alliance Graphics as set
forth in Section 20.7(iv) above.
24.2. To secure the prompt payment and performance by Pentagon to Lender of
the Pentagon Obligations; Pentagon on or about the Original Closing Date
granted to Lender and hereby reaffirms in all respects the grant to
Lender a first ranking mortgage ("HYPOTHEQUE") on its real property up
to an amount of BEF50,000,000.00 in principal and BEF5,000,000.00 in
related costs (but actually denominated in Danish Kroners);
24.3. The mortgage mentioned in Article 24.1(a)(i) and the pledges mentioned
in Articles 24.1(a) (ii) and 24.1(b)(i) shall be granted in a single
deed and the pledges mentioned in Articles 24.1(a)(iii) and 24.1(b)(ii)
shall be granted in a single deed and the mortgages mentioned in Article
24.1(a)(vii) and the pledge mentioned in Article 24.1(a)(viii) shall be
granted in a single deed and the irrevocable powers of attorney
mentioned in Articles 24.1(a)(v) and (vi)
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and Articles 24.1(b)(iii) and (iv) shall be granted in a single deed, so
that Lender's rights in respect of these security interests will be
limited:
(a) to a total aggregate amount of BEF95,000,000.00 and
BEF9,500,000.00 in related costs, with respect to the mortgage
mentioned in Article 24.1(a)(i) and 24.1(a)(vii) and with respect
to the pledges mentioned in Article 24.1(a)(ii), Article
24.1(a)(viii) and Article 24.1(b)(i);
(b) to BEF225,000,000.00 in principal and BEF22,500,000.00 in related
costs, with respect to the pledges mentioned in Articles
24.1(a)(iii) and 24.1 (b)(ii); and
(c) to BEF75,000,000.00 in principal and BEF7,500,000.00 in related
costs with respect to the irrevocable powers of attorney
mentioned in Articles 24.1(a)(v), 24.1(a)(vi), 24.1(b)(iii) and
24.1(b)(iv);
24.4. (a) To secure the prompt payment and performance by the Borrowers and
Pentagon of the Obligations, PolyVision, Posterloid and
Greensteel shall at the latest on the date of this Agreement
execute one or more Guaranties of the Obligations, secured by a
first ranking pledge on 65% of the shares PolyVision owns in
PolyVision Belgium and PolyVision France.
(b) To secure the prompt payment and performance by the Borrowers and
Pentagon of the Obligations, PolyVision Belgium shall at the
latest on the date of this Agreement execute a Guaranty of the
Obligations secured by a first ranking pledge on all the shares
it owns in Alliance Europe.
24.5. To secure the payment and performance of the Obligations, Fleet has
issued the AE Standby Letter of Credit and the Pentagon Standby Letter
of Credit as described in the Letter of Credit Agreement dated the date
hereof.
24.6. All Security Interests in favor of Lender, except for those referred to
in Article 24.2 and to the extent limited in Article 24.3 above, shall
(except as provided therein) be supplemental to each other.
24.7. Without prejudice to any other rights of Lender under this Agreement,
but subject to any express requirements under this Agreement, Lender
shall at all times be entitled to apply in its discretion all monies
arising from the enforcement of any security interest or guarantee
towards the discharge of any of the obligations secured by such security
interest or guarantee.
24.8. Each Borrower and Pentagon agrees that all Security Interests granted
prior to the date hereof (except as expressly released or canceled on
the date hereof by KBC or by Fleet Capital Corporation) shall continue
uninterrupted in full force and effect from and after the date on which
originally granted and shall secure the Obligations as provided above.
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PART VIII - REPRESENTATIONS AND WARRANTIES
25. GENERAL REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to enter into this Agreement and to make Loans
hereunder, Borrowers and Pentagon warrant, represent and covenant to
Lender, the Fleet Lenders and Fleet Agent that:
25.1. Pentagon and each of the Borrowers is a company duly organized, validly
existing
and in good standing under the laws of the jurisdiction of its
incorporation:
(a) Alliance Europe is a limited liability company ("NAAMLOZE
VENNOOTSCHAP"), duly organized, validly existing and in good
standing under the laws of Belgium;
(b) Alliance Graphics is a limited liability company ("NAAMLOZE
VENNOOTSCHAP"), duly organized, validly existing and in good
standing under the laws of Belgium;
(c) Pentagon is a limited liability company, duly organized, validly
existing and in good standing under the laws of Denmark; and
(d) Aubecq is a limited liability company, duly organized, validly
existing and in good standing under the laws of France.
25.2. Each of the Borrowers and Pentagon is duly qualified and authorized to
do business and is in good standing as a foreign company in each state
or jurisdiction listed on EXHIBIT 25.2 hereto and in all other states
and jurisdictions in which the failure of a Borrower or of Pentagon, as
the case may be, to be so qualified would have a Material Adverse
Effect.
25.3. Each of the Borrowers and Pentagon is duly authorized and empowered to
enter into, execute, deliver and perform this Agreement and each of the
other Loan Documents to which it is a party.
25.4. The execution, delivery and performance of this Agreement and each of
the other Loan Documents have been duly authorized by all necessary
corporate action and do not and will not:
(a) require any consent or approval of the shareholders of either
Borrower or Pentagon;
(b) contravene Pentagon's or any Borrower's charter, articles or
certificate of incorporation or by-laws;
(c) violate, or cause Pentagon or any Borrower to be in default
under, any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award in effect
having applicability to Pentagon or any Borrower, as the case may
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be, the violation of which would be reasonably likely to have a
Material Adverse Effect;
(d) result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or Pentagon, as the case may be,
is a party or by which it or its Properties may be bound or
affected, the breach of or default under which would be
reasonably likely to have a Material Adverse Effect; or
(e) result in, or require, the creation or imposition of any Lien
(other than Permitted Liens) upon or with respect to any of the
Properties now owned or hereafter acquired by any Borrower and/or
Pentagon, as the case may be.
Within 30 days from execution hereof, Aubecq's shareholders shall meet
in a general meeting and approve/ratify this Agreement and Loan
Documents and the pledge to be granted by PolyVision France over its
shares in Aubecq in favor of the Lender.
25.5. This Agreement is, and each of the other Loan Documents when delivered
under this Agreement will be, a legal, valid and binding obligation of
Pentagon and of each Borrower party thereto, enforceable against it in
accordance with their respective terms.
25.6. EXHIBIT 25.6 hereto states:
(a) the correct name of Pentagon and of each Borrower, its
jurisdiction of incorporation and the percentage of its Voting
Stock owned by another Borrower or by Pentagon;
(b) the name of Pentagon's and of each Borrower's corporate or joint
venture Affiliates and the nature of the affiliation;
(c) the number, nature and holder of all outstanding securities of
Pentagon and of each Borrower; and
(d) the number of authorized, issued and treasury shares of Pentagon
and of each Borrower.
25.7. All such shares have been duly issued and are fully paid and
non-assessable.
25.8. There are no outstanding options to purchase, or any rights or warrants
to subscribe for, or any commitments or agreements to issue or sell, or
any securities or obligations convertible into, or any powers of
attorney relating to, shares of the capital stock of Pentagon or any
Borrower except the Option Agreements between Bragi F. Schut and the
Lender relating to (i) one share of Class A common stock in Alliance
Europe, and (ii) one share of common stock in Alliance Graphics.
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25.9. Except as described in Section 25.8, there are no outstanding agreements
or instruments binding upon any of Pentagon's or any Borrower's
shareholders relating to the ownership of its shares of capital stock.
25.10. Neither Pentagon, nor any of the Borrowers has in the past six years
been known as or used any corporate, fictitious or trade names except
those listed on EXHIBIT 25.10 hereto.
25.11. Except as set forth on EXHIBIT 25.11 hereto, neither Pentagon, nor any
of the Borrowers has in the past six years been the surviving company of
a merger or consolidation or has acquired all or substantially all of
the assets of any Person.
25.12. Pentagon's and each of the Borrowers' chief executive office and other
places of business are as listed on EXHIBIT 25.12 hereto, as updated
from time to time.
25.13. During the preceding one-year period, neither Pentagon, nor any of the
Borrowers has had an office, place of business or agent for service of
process other than as listed on
EXHIBIT 25.13 hereto.
25.14. All Collateral other than Inventory in transit and motor vehicles, is
and will at all times be kept by Pentagon and by Borrowers at one or
more of the locations set forth on EXHIBIT 25.14 hereto, as updated from
time to time, and shall not, without the prior written approval of
Lender, be moved therefrom except, prior to an Event of Default and
Lender's acceleration of the maturity of the AE Obligations and/or the
Pentagon Obligations, as the case may be, in consequence thereof, for
sales of Inventory and movement of motor vehicles in the ordinary course
of business.
25.15. Except as shown on EXHIBIT 25.15, as updated from time to time, or for
the Australian Inventory included in Eligible Inventory, no Inventory is
stored with a bailee, warehouseman or similar party, nor is any
Inventory consigned to any Person.
25.16. Each Borrower and Pentagon has good, indefeasible and marketable title
to all of its real Property, and good title to all of the Collateral and
all of its other Property, in each case, free and clear of all Liens
except Permitted Liens.
25.17. Pentagon and each of the Borrowers has paid or discharged all lawful
claims in particular those which, if unpaid, might become a Lien against
any of their Properties that is not a Permitted Lien.
25.18. The Liens granted to Lender under Article 24 hereof, (except and to the
extent those pledges and mortgages referred to in Article 24 and
expressly stated in Article 24 to be second, third or fourth ranking)
are first priority Liens, subject only to Permitted Liens (except and to
the extent those pledges and mortgages referred to in Article 24 and
expressly stated in Article 24 to be second, third or fourth ranking).
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25.19. The Equipment is in good operating condition and repair, and all
necessary and commercially reasonable replacements of and repairs
thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved, reasonable wear and tear
excepted.
25.20. Neither Pentagon, nor any of the Borrowers will permit any material
portion of the Equipment to become affixed to any real Property leased
to Pentagon or to such Borrower, as the case may be, so that an interest
arises therein under the real estate laws of the applicable jurisdiction
unless the landlord of such real Property has executed a landlord waiver
or leasehold mortgage in favor of and in form acceptable to Lender, and
neither Pentagon, nor any of the Borrowers will permit any material
portion of the Equipment to become an accession to any personal Property
other than Equipment that is subject to first priority (except for
Permitted Liens) Liens in favor of Lender.
25.21. The consolidated and consolidating balance sheets of Parent, Pentagon,
each of the Borrowers and such other Persons described therein
(including the accounts of Pentagon and each of the Borrowers for the
respective periods during which a Subsidiary relationship existed) as of
December 31, 1997 for the year then ended and the related statements of
income, changes in stockholder's equity, and cash flow statements for
the periods ended on such dates, and such interim statements for the
seven months ended July 31, 1998 have been prepared in accordance with
generally accepted accounting principles, applied on a consistent basis,
and present fairly in accordance with accounting principles, in each
case, in effect for the applicable country in which it is located, the
financial positions of Parent, Pentagon, each of the Borrowers and such
other Persons at such dates and the results of Parent's and such
Persons' operations for such periods (in each case to the extent each
such entity is covered by such statements).
25.22. Since 31 January 1998 and to the date hereof, there has been no material
adverse change in the condition, financial or otherwise, of Parent,
Pentagon, each of the Borrowers (taken as a whole) and such other
Persons as shown on the Consolidated balance sheet as of such date and
no change in the aggregate value of Equipment and real Property owned by
Parent, Pentagon, each of the Borrowers and such other Persons, except
changes in the ordinary course of business, none of which individually
or in the aggregate have represented a material adverse change.
25.23. The fiscal year of Pentagon and of each of the Borrowers ends on
December 31 of each year, but shall, from and after the Closing Date,
end on April 30 of each year.
25.24. The financial statements referred to in Article 25.21 hereof do not, nor
does this Agreement or any other written statement of Parent, Pentagon
and/or each of the Borrowers to Lender, contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading.
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25.25. There is no fact which Parent, Pentagon or any of the Borrowers has
failed to disclose to Lender in writing which is reasonably likely to
have a Material Adverse Effect.
25.26. Pentagon and each of the Borrowers is now and, after giving effect to
the Loans to be made and the Letters of Credit to be issued hereunder,
is fully Solvent.
25.27. Neither Pentagon, nor any of the Borrowers is obligated as surety or
indemnitor under any surety or similar bond or other contract issued or
entered into to assure payment, performance or completion of performance
of any undertaking or obligation of any Person.
25.28. Pentagon and each of the Borrowers has filed all national, federal,
state and local tax returns and other reports it is required by law to
file, except where the failure to so file such tax return would not be
reasonably likely to have a Material Adverse Effect, and has paid, or
made provision for the payment of, all taxes, assessments, fees, levies
and other governmental charges upon it, its income and Properties as and
when such taxes, assessments, fees, levies and charges are due and
payable, unless and to the extent any thereof are being actively
contested in good faith and by appropriate proceedings and such Borrower
or Pentagon, as the case may be, maintains reasonable reserves on its
books therefor. Pentagon and each Borrower's tax identification number
is set forth on APPENDIX C hereto.
25.29. The provision for taxes on the books of Pentagon and each of the
Borrowers are adequate for all years not closed by applicable statutes,
and for its current fiscal year. There are no claims for taxes which
are outstanding or potentially existing against Aubecq, except as set
forth on Exhibit 25.29.
25.30. There are no claims for brokerage commissions, finder's fees or
investment banking fees in connection with the transactions contemplated
by this Agreement.
25.31. Pentagon and each of the Borrowers owns or possesses all the patents,
trademarks, service marks, trade names, copyrights and licenses
necessary for the present and planned future conduct of its business
without any known conflict with the rights of others except where the
failure to own or possess such property, or the existence of such
conflict, would not be reasonably likely to have a Material Adverse
Effect.
25.32. All such patents, trademarks, service marks, trade names, copyrights,
licenses and other similar rights are listed on EXHIBIT 25.32 hereto.
25.33. Pentagon and each of the Borrowers has been at all times, and presently
is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections
and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and
operate its Properties as now owned or leased by it, except where the
failure to possess or so maintain such rights would not be reasonably
likely to have a Material Adverse Effect.
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25.34. Except as set forth on EXHIBIT 25.34 hereto, Pentagon and each of the
Borrowers has duly complied, in all material respects with, and its
Properties, business operations and leaseholds are in compliance in all
material respects with, the provisions of all national, state and local
laws, rules and regulations applicable to Pentagon or to such Borrower,
as the case may be, as applicable, its Properties or the conduct of its
business and there have been no citations, notices or orders of
noncompliance issued to such Borrower or to Pentagon, as the case may
be, under any such law, rule or regulation, except where such
noncompliance is not reasonably likely to have a Material Adverse
Effect.
25.35. Pentagon and each of the Borrowers has established and maintains an
adequate monitoring system to insure that it remains in compliance with
all national, state and local laws, rules and regulations applicable to
it.
25.36. Neither Pentagon, nor any of the Borrowers is a party or subject to any
contract, agreement, or charter or other corporate restriction, which
materially and adversely affects its business or the use or ownership of
any of its Properties.
25.37. Neither Pentagon, nor any of the Borrowers is a party or subject to any
contract or agreement which restricts its right or ability to incur
Indebtedness, other than as set forth on EXHIBIT 25.37 hereto, none of
which prohibit the execution of or compliance with this Agreement or the
other Loan Documents by Pentagon and/or any of the Borrowers, as the
case may be.
25.38. Except as set forth on EXHIBIT 25.38 hereto, there are no actions,
suits, proceedings or investigations pending, or to the knowledge of
Pentagon or any of the Borrowers, threatened, against or affecting
Pentagon or any Borrower, as the case may be, or the business,
operations, Properties, prospects, profits or condition of Pentagon or
any Borrower, as the case may be, which, if adversely decided, are
reasonably likely to have a Material Adverse Effect.
25.39. Neither Pentagon, nor any of the Borrowers is in default with respect to
any order, writ, injunction, judgment, decree or rule of any court,
governmental authority or arbitration board or tribunal, which default
would be reasonably likely to cause a Material Adverse Effect.
25.40. No event has occurred and no condition exists which would, upon or after
the execution and delivery of this Agreement or Pentagon' or any of the
Borrowers' performance hereunder, constitute a Default or an Event of
Default.
25.41. EXHIBIT 25.41-1 hereto is a complete listing of all Capitalized Leases
of Pentagon and of Borrowers and EXHIBIT 25.41-2 hereto is a complete
listing of all operating leases of Pentagon and of Borrowers.
25.42. Pentagon and each of the Borrowers is in full compliance with all of the
terms of each of its respective capitalized and operating leases, except
where the failure to so comply would not be likely to cause a Material
Adverse Effect.
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25.43. Except as disclosed on EXHIBIT 25.43 hereto, neither Pentagon, nor any
of the Borrowers has any Plan.
25.44. Pentagon and each of the Borrowers and each of their respective
Subsidiaries is in compliance with the applicable legal requirements and
regulations promulgated thereunder with respect to each Plan, except
where the failure to so comply would not be reasonably likely to have a
Material Adverse Effect.
25.45. No fact or situation that could result in a material adverse change in
the financial condition of Pentagon and/or any of the Borrowers exists
in connection with any Plan.
25.46. There exists no actual or threatened termination, cancellation or
limitation of, or any modification or change in, the business
relationship between Pentagon and any customer or any group of customers
whose purchases individually or in the aggregate are material to the
business of Pentagon, taken as a whole, or with any material supplier,
and between any Borrower and any customer or any group of customers
whose purchases individually or in the aggregate are material to the
business of such Borrower, taken as a whole, or with any material
supplier, except in each case, where the same would not be reasonably
likely to cause a Material Adverse Effect, and there exists no present
condition or state of facts or circumstances which would materially
affect adversely Pentagon and/or the Borrowers, as the case may be, or
prevent Pentagon and/or any Borrower, as the case may be, from
conducting such business after the consummation of the transactions
contemplated by this Agreement in substantially the same manner in which
it has heretofore been conducted.
25.47. Except as described on EXHIBIT 25.47 hereto, neither Pentagon nor any of
the Borrowers is a party to any collective bargaining agreement.
25.48. There are no material grievances, disputes or controversies with any
union or any other organization of Pentagon's and/or any Borrower's
employees, or threats of strikes, work stoppages or any asserted pending
demands for collective bargaining by any union or organization, except
those that would not be reasonably likely to have a Material Adverse
Effect.
25.49. There exists no outstanding credit facility between Aubecq and Girobank
and no outstanding claim of Girobank against Aubecq of any kind
whatsoever.
26. CONTINUOUS NATURE OF REPRESENTATIONS AND WARRANTIES
26.1. Each representation and warranty contained in this Agreement and the
other Loan Documents shall be continuous in nature and shall remain
accurate, complete and not misleading at all times during the term of
this Agreement, except for changes in the nature of the business or
operations of either Borrower that would render the information in any
exhibit attached hereto or to any other Loan Document either inaccurate,
incomplete or
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misleading, so long as Lender has consented to such changes or such
changes are expressly permitted by this Agreement.
27. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
27.1. All representations and warranties of Pentagon and each of the Borrowers
contained in this Agreement or any of the other Loan Documents shall
survive the execution, delivery and acceptance thereof by Lender and the
parties thereto and the closing of the transactions described therein or
related thereto.
PART IX - COVENANTS AND CONTINUING AGREEMENTS
28. AFFIRMATIVE COVENANTS
28.1. During the term of this Agreement, and thereafter for so long as there
are any AE Obligations and/or Pentagon Obligations, as the case may be,
outstanding, Pentagon and Borrowers covenant that, unless otherwise
consented to by Lender in writing, Pentagon and each Borrower shall:
(a) permit representatives of Lender and any person designated by
Lender, from time to time, as often as may be reasonably
requested, but only during normal business hours, to visit and
inspect the Properties of Pentagon and of each Borrower, inspect,
audit and make extracts from its books and records, and discuss
with its officers, its employees and its independent accountants,
each Borrower's and Pentagon's business, assets, liabilities,
financial condition, business prospects and results of
operations; Lender, if no Default or Event of Default then
exists, shall give Pentagon and/or Borrowers, as the case may be,
reasonable prior notice of any such inspection or audit;
(b) promptly notify Lender in writing, with a simultaneous copy to
Fleet Agent and each Fleet Lender, of the occurrence of any event
or the existence of any fact which renders any representation or
warranty in this Agreement or any of the other Loan Documents
inaccurate, incomplete or misleading in any material respect.
(c) keep adequate records and books of account with respect to its
business activities in which proper entries are made in
accordance with generally accepted accounting principles in
effect for the country in which it is located applied on a
consistent basis, reflecting all its financial transactions; and
cause to be prepared and furnished to Lender, with a simultaneous
copy to Fleet Agent and each of the Fleet Lenders, each of the
following (all to be prepared in accordance with generally
accepted accounting principles in effect for the country in which
it is located applied on a consistent basis, unless Pentagon's or
a Borrower's certified public accountant concurs in any change
therein and such change is disclosed to Lender and Fleet Agent
and is consistent with
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generally accepted accounting principles in effect for the
country in which it is located):
(i) not later than 90 days after the close of each fiscal
year of Parent, unqualified (except for a qualification
for a change in accounting principles with which the
accountant concurs) audited financial statements of
Pentagon and of each of the Borrowers as of the end of
such year, on a Consolidated and consolidating basis,
certified by a firm of independent certified public
accountants of recognized standing selected by Borrowers
and/or Pentagon, as the case may be, but reasonably
acceptable to Lender, together with a copy of any
management letter issued in connection therewith;
(ii) not later than 30 days after the end of each month
hereafter, including the last month of Parent's fiscal
year, unaudited interim financial statements of Pentagon
and of each Borrower as of the end of such month and for
the portion of Pentagon's and of each Borrower's fiscal
year then elapsed, on a Consolidated and consolidating
basis, certified by the principal financial officer of
such Parent as prepared in accordance with generally
accepted accounting principles in effect for the country
in which it is located applied on a consistent basis, and
fairly presenting the consolidating and Consolidated
financial position and results of operations of Parent
and Pentagon and each Borrower for such month and period
subject only to changes from audit and year-end
adjustments and except that such statements need not
contain notes;
(iii) within 10 days after each delivery of financial
statements pursuant to clauses (i) and (ii) of this
Article 28.1 during the first 8 months following the
Closing Date and on the date of each such delivery
thereafter, a management report:
(1) describing the operations and financial condition
of Pentagon and of the Borrowers for the month
then ended and the portion of the current fiscal
year then elapsed (or for the fiscal year then
ended in the case of year-end financials);
(2) setting forth in comparative form the
corresponding figures for the corresponding
periods of the previous fiscal year and the
corresponding figures from the most recent
Projections for the current fiscal year delivered
to Lender pursuant to Article 29.2; and
(3) discussing the reasons for any significant
variations;
the information above shall be presented in reasonable
detail and shall be certified on behalf of Pentagon and
each Borrower by the chief financial officer or a
financial vice president of Pentagon and of each
Borrower, as the
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case may be, to the effect that such information fairly
presents the results of operation and financial condition
of Pentagon and of each Borrower, as the case may be, as
at the dates and for the periods indicated;
(iv) promptly after the sending or filing thereof, as the case
may be, copies of any proxy statements, financial
statements or reports which Pentagon and/or any of the
Borrowers has made available to its shareholders and
copies of any regular, periodic and special reports or
registration statements which Pentagon and/or any of the
Borrowers files with the competent national securities
exchange and/or any governmental authority which may be
substituted therefor;
(v) upon request by Lender, copies of any annual report to be
filed pursuant to the applicable legal requirements in
particular in connection with each Plan; and
(vi) such other data and information (financial and otherwise)
as Lender, from time to time, may reasonably request,
bearing upon or related to the Collateral or Pentagon's
or any Borrower's financial condition or results of
operations.
28.2. Concurrently with the delivery of the financial statements described in
Article 28.1(c)(i), Pentagon and/or each of the Borrowers shall forward
to Lender, with a simultaneous copy to the Fleet Agent, a copy of any
accountants' letter or report to Pentagon's and Borrowers' management
and of any Borrower's Management Report, as the case may be, that is
prepared in connection with such financial statements.
28.3. Concurrently with the delivery of the financial statements described in
Articles 28.1(c)(i) and 28.1(c)(ii), or more frequently if requested by
Lender, Alliance Europe shall cause to be prepared and furnished to
Lender, with a simultaneous copy to the Fleet Agent and each of the
Fleet Lenders, a Compliance Certificate in the form of EXHIBIT 28.3
hereto executed on behalf of Alliance Europe by the Chief Financial
Officer or a financial vice president of Alliance Europe.
28.4 Within ninety (90) days after the Closing Date, Alliance Europe on
behalf of itself shall obtain or Parent shall have caused to be obtained
on behalf of Alliance Europe and thereafter keep in effect one or more
interest rate Bank Hedge Agreements (the terms and other provisions of
all such Bank Hedge Agreements to be subject to the prior written
consent of Lender) covering at least fifty percent (50%) of the AE Term
Credit Facility outstanding on the Closing Date for an aggregate period
of not less than three (3) years commencing on the Closing Date.
28.5 If PolyVision France is financially able, it will guarantee the
obligations of Aubecq under this Agreement.
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29. BORROWING BASE CERTIFICATES AND INFORMATION
29.1. On or before the 20th day of each calendar month from and after the date
hereof, Pentagon and each Borrower shall deliver to Lender, with a
simultaneous copy to the Fleet Agent and each of the Fleet Lenders, in a
form reasonably acceptable to Lender and the Fleet Agent, a borrowing
base certificate relating to its Eligible Accounts and Eligible
Inventory as of the last day of the immediately preceding month, with
such supporting materials as Lender shall reasonably request.
29.2. If requested by Lender, or if Pentagon or any Borrower deems it
advisable, Pentagon and Borrowers, as the case may be, shall:
(a) execute and deliver to Lender, with a simultaneous copy to the
Fleet Agent, borrowing base certificates with respect to their
Eligible Accounts and Eligible Inventory more frequently than
monthly;
(b) provide Lender, and the Fleet Agent by simultaneous copy, with
copies of all material written agreements between Pentagon or
such Borrower, as the case may be, and any landlord or
warehouseman which owns any premises at which any Inventory may,
from time to time, be kept;
(c) deliver or cause to be delivered to Lender, with a simultaneous
copy to the Fleet Agent, financial statements for Parent (to the
extent not consolidated with the financial statements delivered
to Lender under Article 28.1) in form and substance satisfactory
to Lender at such intervals and covering such time periods as
Lender may reasonably request; and
(d) no later than the end of each fiscal year of Borrowers, as the
case may be, deliver to Lender, with a simultaneous copy to the
Fleet Agent, Projections of each Borrower for the forthcoming
fiscal year, month by month;
30. INSURANCE OF COLLATERAL
30.1. In accordance with the provisions of Article 14 of the Credit
Regulations, Pentagon and Borrowers shall maintain and pay for insurance
upon all Collateral wherever located and with respect to Pentagon's
and/or each Borrower's business, covering casualty, hazard, flood,
public liability and such other risks in such amounts and with such
insurance companies as are reasonably satisfactory to Lender.
30.2. Within seven (7) days after the date hereof and as long as there are not
yet in place already, Pentagon and Borrowers, as the case may be, shall
deliver to Lender, with a simultaneous copy to the Fleet Agent,
certified copies of such policies with satisfactory Lender's loss
payable endorsements, naming Lender as loss payee, assignee or
additional insured, as appropriate.
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30.3. Each policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 30 days prior written notice to Lender
in the event of cancellation of the policy for any reason whatsoever and
a clause specifying that the interest of Lender shall not be impaired or
invalidated by any act or neglect of Pentagon and/or any Borrower, as
the case may be, or the owner of the Property or by the occupation of
the premises for purposes more hazardous than are permitted by said
policy.
30.4. Except as provided in any Mortgage with respect to Collateral that is
real Property, if any insured loss occurs and no Default then exists,
Borrowers and Pentagon, as the case may be, shall have the right to
adjust such loss and Lender will permit Pentagon and Borrowers, as the
case may be, to use the proceeds of insurance of such loss to repair or
replace the Collateral that was damaged, destroyed or lost, PROVIDED,
THAT if there are then any Term Loans outstanding to Pentagon or to a
Borrower receiving such proceeds, any excess insurance proceeds shall be
paid to Lender for application to such Term Loans.
30.5. If Pentagon or any of the Borrowers fails to provide and pay for such
insurance, Lender may, at its option, but shall not be required to,
procure the same and charge Pentagon and/or the Borrowers, as the case
may be, therefor.
30.6. Pentagon and Borrowers agree to deliver to Lender, promptly as rendered,
with a simultaneous copy to the Fleet Agent, true copies of all reports
made in any reporting forms to insurance companies.
30.7. All proceeds of Pentagon's or any Borrower's business interruption
insurance (if any) shall be remitted to Lender for application to the
outstanding balance of the Revolving Credit Facility; PROVIDED, THAT,
unless a Default or an Event of Default is then in existence, Pentagon
and/or Borrowers, as the case may be, may settle or adjust any claim
with respect to such insurance and Lender shall remit such proceeds to
Pentagon and/or Borrowers, as the case may be, for use in the ordinary
course of their respective businesses.
31. NEGATIVE COVENANTS
During the term of this Agreement, and thereafter for so long as there
are any AE Obligations outstanding, each of the Borrowers, jointly and
severally, covenants that, unless otherwise consented to by Lender in
writing, no Borrower shall, nor shall it permit any Subsidiary, and, for
so long as there are any Pentagon Obligations outstanding, Pentagon
covenants that, unless otherwise consented to by Lender in writing, it
shall not permit any Subsidiary to:
(a) merge or consolidate with any Person, or acquire all or any
substantial part of the Properties of any Person, merge or
consolidate with any Person, or acquire all or any substantial
part of the Properties or any of the share capital of any Person,
except for a transfer of the assets of any Borrower to its parent
company, any merger
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or consolidation of any Borrower with any of their respective
Subsidiaries, any merger of any such Subsidiary into a
wholly-owned Subsidiary or any transfer of the assets of any
Subsidiary of any Borrower to the parent of such Subsidiary;
PROVIDED that Lender shall have received at least thirty (30)
days written notice of any of the foregoing and Lender shall be
satisfied in its sole discretion, as evidenced by its written
consent, that there would be no adverse impact on Lender's rights
in respect of the Collateral or its rights and remedies generally
hereunder or in respect of any collateral or its rights and
remedies generally under the Other KBC Loan Agreement and
PROVIDED, FURTHER, that in no event shall Aubecq merge with
PolyVision France;
(b) make any loans or other advances of money (other than for salary,
travel advances, advances against commissions and other similar
advances in the ordinary course of business) to any Person,
except as permitted hereby;
(c) create, incur, assume, or suffer to exist any Indebtedness,
except:
(i) Obligations owing to Lender under this Agreement or
hereafter consented to by Lender;
(ii) Subordinated Debt existing on the date of this Agreement
or hereafter consented to by Lender;
(iii) [Intentionally Omitted]
(iv) accounts payable to trade creditors and current operating
expenses (other than for Money Borrowed) which are not
aged more than 120 days from billing date or more than 30
days from the due date, in each case incurred in the
ordinary course of business and paid within such time
period, unless the same are being actively contested in
good faith and by appropriate and lawful proceedings and
Pentagon and/or such Borrower, as the case may be, shall
have set aside such reserves, if any, with respect
thereto as are required by generally accepted accounting
principles in effect for the country in which it is
located and deemed adequate by Pentagon and/or such
Borrower, as the case may be, and its independent
accountants;
(v) Obligations to pay Rentals permitted by Article 31(m);
(vi) Permitted Purchase Money Indebtedness and Capital Lease
Obligations, PROVIDED, THAT the aggregate total thereof
for PolyVision and all of its Subsidiaries, including the
Borrowers and Pentagon does not exceed the limitation set
forth in the definition of Permitted Purchase Money
Indebtedness;
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(vii) contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or
collection in the ordinary course of business;
(viii) Indebtedness in respect of interest rate swap, cap, or
collar agreements, interest rate future or option
contracts, currency swap agreements, currency future or
option contractors or similar agreements designed to
hedge against fluctuations in interest rates incurred in
the ordinary course of business and consistent with
prudent business practice;
(ix) to the extent not mentioned above, accruals in the
ordinary course of business not for Money Borrowed;
(x) guaranties of Indebtedness permitted hereunder;
(xi) unsecured indebtedness incurred for the purpose of paying
taxes, vacation pay and Christmas bonuses to employees,
in an amount not to exceed BEF 18,278,750.00 in the
aggregate with respect to the Borrowers and their
Subsidiaries at any time outstanding;
(xii) non-interest bearing grants from any governmental entity
shown as a liability on the balance sheet but not
required to be repaid;
(xiii) Unsecured Indebtedness not included in paragraphs (i)
through (xii) above which does not exceed at any time the
sum of USD250,000.00 in the aggregate for Borrowers,
Pentagon and PolyVision and its other Subsidiaries;
(xiv) [Intentionally Omitted]
(xv) loans made by Alliance Europe to PolyVision or any of its
U.S. Subsidiaries after the Closing Date in an aggregate
outstanding amount at any one time not to exceed
BEF36,557,500.00, PROVIDED, THAT, prior to making any
such loan Alliance Europe establishes to the satisfaction
of Lender that its Board of Directors has determined that
Alliance Europe will continue to be Solvent after making
such loan, and PROVIDED FURTHER THAT Alliance Europe will
have excess Availability of not less than
BEF36,557,500.00 after giving effect to each such loan;
(xvi) Guarantees by PolyVision of obligations of the Borrowers,
Pentagon and their Subsidiaries, guarantees by the
Borrowers or Pentagon of obligations of Wholly-Owned
Subsidiaries, and guarantees by Wholly-Owned Subsidiaries
of obligations of Borrowers or Pentagon;
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(xvii) loans made by Alliance Europe to AIG on the date of
closing of the Original Credit Agreement in an amount
equal to BEF 493,526,250.00 which were used by AIG solely
for the purposes of repaying its subordinated notes and
PIK notes and redeeming its senior and junior preferred
stock, the outstanding balance of which shall not
increase to an amount exceeding USD14,000,000 and shall
not be repaid to less than [USD12,000,000] and the
repayment of which shall also be subject to the terms of
the Intercompany Subordination Agreement; and
(xviii) the loan made by Aubecq to Alliance Europe existing on
the date hereof in the amount of BEF48,520,920.00 in
accordance with the Promissory Note delivered to Lender
on the Closing Date;
(d) except for transactions otherwise expressly permitted hereunder,
enter into, or be a party to enter into or be a party to, any
transaction (including the payment of management fees) with any
Affiliate or stockholder of Pentagon or of any Borrower and
except in the ordinary course of and pursuant to the reasonable
requirements of Pentagon's or such Borrower's business, as the
case may be, and upon fair and reasonable terms which are fully
disclosed to Lender and are no less favorable to Pentagon and/or
the applicable Borrower, as the case may be, than would obtain in
a comparable arm's length transaction with a Person not an
Affiliate or stockholder of such Borrower or Pentagon, as the
case may be; PROVIDED, THAT Borrowers and Pentagon may pay
management fees to PolyVision in an aggregate amount not to
exceed BEF36,557,500 per annum;
(e) create or suffer to exist any Lien upon any of its Property,
income or profits, whether now owned or hereafter acquired,
except:
(i) Liens at any time granted in favor of Lender;
(ii) Liens for taxes, assessments or governmental charges
(excluding any Lien imposed pursuant to any applicable
pension laws) not yet due, or being contested in the
manner described in Article 25.28 hereto, but only if the
existence of such Lien would not be likely to have a
Material Adverse Effect;
(iii) Liens arising in the ordinary course of business of
Pentagon or of a Borrower, as the case may be, by
operation of law or Regulation, but only if payment in
respect of any such Lien is not at the time required and
such Liens do not, in the aggregate, materially detract
from the value of the Property of Pentagon or of such
Borrower, as the case may be, or materially impair the
use thereof in the operation of Pentagon's or such
Borrower's business, as the case may be;
(iv) Purchase Money Liens securing Permitted Purchase Money
Indebtedness;
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(v) Liens incurred or deposits made in the ordinary course of
business:
(1) in connection with worker's compensation, social
security, unemployment insurance and other like
laws; or
(2) in connection with sales contracts, leases,
statutory obligations, work in progress advances
and other similar obligations not incurred in
connection with the borrowing of money or the
payment of the deferred purchase price of
property;
(vi) Title exceptions or encumbrances granted in the ordinary
course of business, affecting real property owned by
Pentagon or by a Borrower, as the case may be, PROVIDED,
THAT such exceptions do not in the aggregate materially
detract from the value of such property or materially
interfere with its use in the ordinary conduct of
Pentagon's or such Borrower's business, as the case may
be;
(vii) Liens arising in connection with Capitalized Lease
Obligations permitted hereunder; PROVIDED, THAT no such
Lien shall extend to or cover any assets other than the
assets subject to such Capitalized Lease Obligations;
(viii) Liens with respect to judgments, attachments and the like
which do not constitute Events of Default hereunder;
(ix) Liens arising from leases or subleases granted to others
which do not interfere in any material respects with the
business of Pentagon or of a Borrower, as the case may
be;
(x) such other Liens as appear on EXHIBIT 31.1 hereto; and
(xi) such other Liens as Lender may hereafter approve in
writing;
(f) make any payment of any part or all of any Subordinated Debt or
take any other action or omit to take any other action in respect
of any Subordinated Debt, except in accordance with the
subordination agreement relative thereto;
(g) declare or make any Distributions to their respective
shareholders without the prior written consent of Lender,
PROVIDED, THAT Alliance Graphics, and Pentagon may make
Distributions to Alliance Europe and Alliance Europe may make
Distributions to PolyVision Belgium, and Aubecq may make
Distributions to PolyVision France, which are used to make
Distributions to PolyVision as necessary, subject to the
subordination provisions contained in the Subordinated Debt, to
enable PolyVision to pay the regularly-scheduled interest
payments on the Subordinated Debt and dividends on preferred
stock of PolyVision as and to the extent permitted
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by the Fleet Credit Agreement; and in the case of Aubecq which
are used for the repayment of PolyVision France's own
indebtedness to the Lender under the Other KBC Loan Agreement it
being specified that all distributions made by Aubecq to
PolyVision France shall be applied in priority to the repayment
of PolyVision France's obligations under the Other KBC Loan
Agreement;
(h) make Capital Expenditures (including, without limitation, by way
of capitalized leases) which, in the aggregate, as to Borrowers,
Pentagon, PolyVision and its Subsidiaries exceed
(1) USD1,300,000.00 for the Closing Date through April 1, 1999,
(2) USD2,000,000.00 for the period from May 1, 1999 through
April 30, 2000, and (3) USD3,000,000 during any fiscal year of
such parties thereafter;
PROVIDED, HOWEVER, (a) that amounts permitted to be expended in a
Fiscal Year that are not expended in such Fiscal Year, but not in
excess of fifty (50%) percent of such prior year's unused amount
(not including any amount permitted to be carried forward from a
prior year) shall be permitted to be expended in (but only in)
the subsequent Fiscal Year; (b) amounts comprising Excess Cash
Flow after giving effect to the prepayments required under
Article 17.1 shall be permitted to be expended for Capital
Expenditures (over and above the amounts set forth above) in the
twelve months following the date of required prepayment in any
year; and (c) Permitted Acquisitions and amounts representing
Capital Expenditures paid or incurred with respect to an
acquisition permitted under Article 31(a) hereof in the ordinary
course of its business prior to consummation of a Permitted
Acquisition shall not be deemed included in the calculation of
the aggregate amount of Capital Expenditures for purposes of
determining the maximum annual Capital Expenditures permitted to
be made hereunder, so long as such amounts representing Capital
Expenditures paid prior to a Permitted Acquisition were incurred
prior to the date of consummation of such Permitted Acquisition
and were not incurred in anticipation of such Permitted
Acquisition, and otherwise conform with the terms and conditions
of Article 31(c) hereof.
(i) sell, lease or otherwise dispose of any of its Properties,
including any disposition of Property as part of a sale and
leaseback transaction, to or in favor of any Person, except:
(i) sales of Inventory in the ordinary course of business for
so long as no Event of Default exists hereunder;
(ii) Sales of obsolete Equipment in the ordinary course of
business;
(iii) The sale of any assets that are fixed assets (and not in
any event securities pledged as Collateral by the
Borrowers or Pentagon and other than an asset included in
Article 31(i)(i) or 31(i)(ii)) so long as (A) the
purchase price paid to the Borrower or Pentagon for such
asset shall be no less than the
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fair market value of such asset at the time of such sale,
(B) the purchase price for such asset shall be paid to
such Borrower or Pentagon solely in cash and (C) the
aggregate purchase price paid to the Borrower and
Pentagon and PolyVision and its Subsidiaries for such
asset and all other assets sold by such parties (other
than an asset included in Article 31(i)(ii)) from and
after the Closing Date pursuant to this clause (iii) or
the applicable provisions of the Fleet Credit Agreement
or the Other KBC Loan Agreement shall not exceed
$1,000,000; and no sale of any fixed asset shall be made
if such sale would materially impair the value or
composition of the Collateral;
PROVIDED that in the case of sales of assets pursuant to
Article 31(i)(iii) the Borrower or Pentagon or PolyVision
or any of its Subsidiaries shall, on the date of receipt
thereof, apply the entire Net Cash Proceeds from such
sale in accordance with Article 17.1.
(j) issue any additional shares of its share capital;
(k) make a sale to any customer on a bill-and-hold,
guaranteed sale, sale and return, sale on approval or
consignment basis, or any sale on a repurchase or return
basis, except for consignment sales made by the Borrowers
and/or Pentagon, as the case may be, in Australia
involving Inventory not to exceed BEF7,311,500.00 in
value;
(l) make or have any Restricted Investment;
(m) become a lessee under any operating lease (other than a
lease under which Pentagon, any Borrower or PolyVision or
any of its other Subsidiaries, as the case may be, is
lessor) of Property, including, without limitation, real
estate operating leases, if the aggregate Rentals payable
during any current or future period of 12 consecutive
months under the lease in question and all other leases
under which Pentagon, any Borrower or PolyVision or any
of its other Subsidiaries, as the case may be, is then
lessee would exceed USD1,000,000.00, including the Dollar
Equivalent of amounts denominated in non-U.S. currencies
(the term "Rentals" meaning, as of the date of
determination, all payments which the lessee is required
to make by the terms of any lease);
(n) borrow any amount under any credit facility between
Aubecq and Girobank;
(o) fail to charge an appropriate market rate of interest on
loans to Affiliates;
(p) establish or maintain any bank accounts at any financial
institution other than Lender provided, however, that
this Article 31(p) shall not apply to Pentagon,
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and the foregoing shall not be deemed to prohibit
accounts of Aubecq existing on the date hereof at other
financial institutions in which amounts on deposit remain
after the date hereof levels consistent with past
practice;
(q) fail to provide to Lender (or to deliver to third parties
as Lender may direct) such agreements and documents as
Lender may request in order to notify account debtors of
the pledge to Lender of any of any Borrower's accounts
receivable, and in order to restrict any Borrower's
access, following the occurrence and during the
continuance of any Default, to funds in its bank
accounts.
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32. SPECIFIC FINANCIAL COVENANTS
32.1. During the term of this Agreement, and thereafter for so long as there
are any AE Obligations and Pentagon Obligations to Lender, Borrowers and
Pentagon covenant that they will be in full compliance with each of the
financial covenants set forth on EXHIBIT 32.1 hereto.
32.2. If the generally accepted accounting principles in effect for the
country in which Pentagon or any Borrower is located change from the
basis used in preparing the audited financial statements delivered to
Lender by Pentagon or Borrowers, as the case may be, on or before the
Closing Date, Pentagon and Borrowers will provide Lender with
certificates demonstrating compliance with such financial covenants and
will include, at the election of Pentagon and Borrowers or upon the
request of Lender, calculations setting forth the adjustments necessary
to demonstrate how Pentagon and Borrowers are in compliance with such
financial covenants based upon the generally accepted accounting
principles in effect for the country in which they are located as in
effect on the Closing Date.
PART X - CONDITIONS PRECEDENT
33. CONDITIONS PRECEDENT
33.1. Notwithstanding any other provision of this Agreement or any of the
other Loan Documents, and without affecting in any manner the rights of
Lender under the other sections of this Agreement, Lender shall not be
required to make any Loan or issue or procure any Letter of Credit under
this Agreement unless and until each of the following conditions has
been and continues to be satisfied:
(a) Lender shall have received, in form and substance satisfactory to
Lender and its counsel, a duly executed copy of this Agreement
and the other Loan Documents, together with such additional
documents, instruments and certificates as Lender and its counsel
shall require in connection therewith from time to time, all in
form and substance satisfactory to Lender and its counsel;
(b) no Default or Event of Default shall exist;
(c) each of the conditions precedent set forth in the Loan Documents
shall have been satisfied;
(d) Lender shall have determined that immediately after Lender has
made the initial Loans contemplated hereby, and paid all closing
costs incurred in connection with the transactions contemplated
hereby, combined Availability for all Borrowers and Pentagon
shall not be less than BEF36,557,500.00 in the aggregate;
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(e) no action, proceeding, investigation, regulation or legislation
shall be pending or threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related
to or arises out of this Agreement or the consummation of the
transactions contemplated hereby;
(f) the Acquisition shall have been consummated substantially in
accordance with the terms of the Purchase Documents;
(g) the due execution and the entry into full force and effect of the
Fleet Credit Agreement, the Other KBC Loan Agreement and of the
Senior Subordinated Loan Agreement (as defined in the Fleet
Credit Agreement) and all related documents and agreements;
(h) the issuance by Fleet of the AE Standby Letter of Credit and of
the Pentagon Standby Letter of Credit;
(i) Confirmation of the continued full force and effect of an
amendment dated October 2, 1997 to the Amended Credit Facility
Agreement between Alliance Europe, Alliance Graphics and KBC;
(j) the due execution of all documents needed to create or maintain
the security interests pursuant to Article 24 and submission to
Lender of satisfactory evidence of:
(a) the due perfection of the security interests referred to
in Article 24; and
(b) the filing with the Competent Registrar of Mortgages of
the documents creating or maintaining the security
interests referred to in Article 24;
(k) delivery to the Lender of such loss payee endorsements (naming
Lender as loss payee and naming Lender as additional insured or
otherwise as Lender may reasonably require) in respect of
insurance as and to the extent reasonably required by Lender and
submission to the Lender of satisfactory evidence that customary
business interruption insurance has been taken out by Pentagon
and each of the Borrowers;
(l) the issuance by Derks, Star, Busmann & Hanotiau in Belgium and
ASA-Avocats Associes in France and Schluter & Hald in Denmark, of
legal opinions in form and substance satisfactory to the Lender,
and to the extent requested by Fleet, Fleet shall be entitled to
rely thereupon (to the extent, in respect of the opinion of
Derks, Star, Busmann and Hanotiau, specified in the letter of
said firm dated November 20, 1998).
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PART XI - EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
34. EVENTS OF DEFAULT
34.1. In accordance with, and without prejudice to the provisions of Article
13 of the Credit Regulations, the occurrence of one or more of the
following events shall constitute an "EVENT OF DEFAULT":
(a) Pentagon and/or any of the Borrowers shall fail to pay (i) any
installment of principal owing on the AE Term Credit Facility on
the due date of such installment, or (ii) any interest or premium
or any other sum, if any, due on any Loan under the AE Term
Credit Facility or AE Revolving Credit Facility and such failure
shall continue for a period of 5 days or (iii) any amount payable
on account of the AE Revolving Credit Facility on the due date
thereof, whether as mandatory prepayments, as payments necessary
to eliminate Overadvances or otherwise, provided that in respect
of (and only in respect of) a payment necessary to eliminate
Overadvances, an Event of Default in respect thereof shall exist
if such failure shall continue for a period of 5 days;
(b) Pentagon and/or any of the Borrowers shall fail to pay any of
their Obligations not covered by Article 34.1(a) on the due date
thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise) and such failure shall continue for a
period of 5 days;
(c) any representation, warranty or other statement made or furnished
to Lender by or on behalf of Pentagon and/or any Borrower in this
Agreement, any of the other Loan Documents or any instrument,
certificate or financial statement furnished in compliance with
or in reference thereto (excluding the Account representations
contained in Article 18.8) proves to have been false or
misleading in any material respect when made or furnished or when
reaffirmed;
(d) Pentagon and/or any Borrower shall fail or neglect to perform,
keep or observe any covenant contained in Articles 18, 28.1(a),
28.1(c)(i), (ii), (iii) or (vi), 29.1, 29.2(c) or (d), 30, 31 or
32 hereof on the date that such covenant is required to be
performed, kept or observed or contained in 28.1(c)(iv) and (v)
within 10 days following the
date that such covenant is required to be performed, kept or
observed;
(e) Pentagon and/or any Borrower shall fail or neglect to perform,
keep or observe any covenant contained in this Agreement (other
than a covenant which is dealt with specifically elsewhere in
Article 34.1 hereof) and the breach of such other covenant is not
cured within 30 days after the sooner to occur of Pentagon's or
Borrowers' receipt, as the case may be, of notice of such breach
from Lender or the date on which such failure or neglect first
becomes known to any officer of Pentagon and/or any Borrower, as
the case may be;
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(f) any event of default shall occur under, or Pentagon or any
Borrower shall default (after applicable notice or grace periods,
if any) in the performance or observance of any term, covenant,
obligation, undertaking, condition or agreement contained in, any
of the Security Documents, the Other Agreements or the Purchase
Documents or the Fleet Credit Agreement or the Other KBC Loan
Agreement and such default shall continue beyond any applicable
grace period;
(g) there shall occur any default or event of default on the part of
Pentagon, any Borrower or PolyVision, or any of their
Subsidiaries under any agreement, document or instrument to which
Pentagon, such Borrower or PolyVision, or any of their
Subsidiaries, as the case may be, is a party or by which
Pentagon, such Borrower or PolyVision, or any of its Subsidiaries
or any of their respective Property is bound, creating or
relating to any Indebtedness for an aggregate principal amount in
excess of USD250,000.00 (other than the Obligations), if the
payment or maturity of such Indebtedness is accelerated or is
permitted to be accelerated in consequence of such event of
default or demand for payment of such Indebtedness is made or the
holder of any such Indebtedness is permitted to cause such
Indebtedness to mature; or any such Indebtedness shall be
declared to be due and payable or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be required
to be made, in each case prior to the stated maturity thereof;
(h) any material loss, theft, damage or destruction of any portion of
the Collateral under this Agreement or the Other KBC Loan
Agreement or the Fleet Credit Agreement having a fair market
value of USD500,000.00, in the aggregate for Borrowers, Pentagon
and Parent and its other Subsidiaries, if not fully covered
(subject to ordinary deductibles) by insurance;
(i) either Pentagon or any Borrower shall cease to be Solvent or
shall suffer the appointment of a receiver, trustee or
administrator in bankruptcy, custodian or similar fiduciary, or
shall make an assignment for the benefit of creditors, or any
petition for an order for relief shall be filed by or against
Pentagon or any Borrower under the applicable bankruptcy laws (if
against Pentagon or any Borrower, the continuation of such
proceeding for more than 60 days), or Pentagon or any Borrower
shall make any offer of settlement, extension or composition to
their respective unsecured creditors generally;
(j) there shall occur a cessation of a substantial part of the
business of Pentagon or any Borrower for a period which
significantly affects Pentagon's or such Borrower's capacity, as
the case may be, to continue its business, on a profitable basis;
or Pentagon or any Borrower, as the case may be, shall suffer the
loss or revocation for a period in excess of 30 consecutive days
of any material license or permit now held or hereafter acquired
by Pentagon or such Borrower, as the case may be, which is
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necessary to the continued or lawful operation of any material
portion of its business; or Pentagon or any Borrower, as the case
may be, shall be enjoined, restrained or in any way prevented by
court, governmental or administrative order from conducting all
or any material part of any material portion of its business
affairs for a period in excess of 30 consecutive days; or any
material lease or agreement pursuant to which Pentagon or such
Borrower, as the case may be, leases, uses or occupies any
Property shall be canceled or terminated (other than by reason of
casualty) prior to the expiration of its stated term and adequate
or comparable alternate premises are not secured within 30 days;
or any material portion of the Collateral shall be taken through
condemnation or the value of such Property shall be impaired
through condemnation, unless replacement Collateral of comparable
value is obtained within 30 days of the taking of the condemned
Collateral;
(k) a Change of Control;
(l) Pentagon or any of the Borrowers, or any Affiliate of any of
them, shall challenge or contest in any action, suit or
proceeding the validity or enforceability of this Agreement or
any of the other Loan Documents, the legality or enforceability
of any of the Obligations or the perfection or priority of any
Lien granted to Lender;
(m) any money judgments, writ of attachment or similar processes are
issued or rendered against Pentagon or any Borrower, or any of
their respective Property in an amount of BEF3,655,750.00 or more
for any single judgment, attachment or process or BEF9,139,375.00
or more for all such judgments, attachments or processes in the
aggregate, in each case in excess of any applicable insurance
(subject to ordinary deductibles) with respect to which the
insurer has admitted liability (or defended subject to normal
reservation of rights) and which judgment, attachment or process
is not stayed, released or discharged within 30 days; or
(n) an Event of Default shall occur and be continuing under the Fleet
Credit Agreement or the Other KBC Loan Agreement; or
(o) on or before February 15, 1999, Aubecq's corporate existence
shall fail to have been extended beyond the year 2002.
(p) on or before December 31, 1998, Aubecq shall fail to procure that
its shareholders approve and ratify this Agreement and all
transactions contemplated herein without any restrictions.
35. ACCELERATION OF THE OBLIGATIONS
35.1. Without in any way limiting the right of Lender to demand payment of any
portion of the Obligations payable on demand in accordance with Article
16 hereof, upon or at any time after the occurrence and during the
continuance of an Event of Default, all or any portion of
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the Obligations shall, at the option of Lender and without presentment,
demand, protest or further notice by Lender, become at once due and
payable and Pentagon and Borrowers shall forthwith pay to Lender the
full amount of such Obligations, PROVIDED, THAT upon the occurrence of
an Event of Default specified in Article 34.1(i) hereof, all of the
Obligations shall become automatically due and payable without
declaration, notice or demand by Agent including any "mise en demeure."
36. OTHER REMEDIES
36.1. Upon the occurrence and during the continuance of an Event of Default,
Lender shall, have and may exercise from time to time all of the rights
and remedies of a secured party under other applicable law, and all
other legal and equitable rights to which Lender may be entitled, all of
which rights and remedies shall be cumulative and shall be in addition
to any other rights or remedies contained in this Agreement or any of
the other Loan Documents, and none of which shall be exclusive.
37. REMEDIES CUMULATIVE; NO WAIVER
37.1. All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of Pentagon and/or any Borrowers
contained in this Agreement and the other Loan Documents, or in any
document referred to herein or contained in any agreement supplementary
hereto or in any schedule or in any Guaranty Agreement given to Lender
or contained in any other agreement between Lender and Pentagon or any
of the Borrowers, heretofore, concurrently, or hereafter entered into,
shall be deemed cumulative to and not in derogation or substitution of
any of the terms, covenants, conditions, or agreements of Pentagon or
any of the Borrowers herein contained.
37.2. The failure or delay of Lender to require strict performance by Pentagon
and/or any of the Borrowers of any provision of this Agreement or to
exercise or enforce any rights, Liens, powers, or remedies hereunder or
under any of the aforesaid agreements or other documents or security or
Collateral shall not operate as a waiver of such performance, Liens,
rights, powers and remedies, but all such requirements, Liens, rights,
powers, and remedies shall continue in full force and effect until all
Loans and all other Obligations owing or to become owing from Borrowers
and/or Pentagon, as the case may be, to Lender shall have been fully
satisfied.
37.3. None of the undertakings, agreements, warranties, covenants and
representations of Pentagon and of the Borrowers contained in this
Agreement or any of the other Loan Documents and no Event of Default by
Borrowers and Pentagon under this Agreement or any other Loan Documents
shall be deemed to have been suspended or waived by Lender, unless such
suspension or waiver is by an instrument in writing specifying such
suspension or waiver and is signed by a duly authorized representative
of Lender and directed to Pentagon and/or Borrowers, as the case may be.
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PART XII - MISCELLANEOUS
38. INDEMNITY
38.1. Borrowers and Pentagon agree to indemnify Lender, Fleet Agent and each
Fleet Lender and to hold Lender, Fleet Agent and each Fleet Lender
harmless from and against any liability, loss, damage, suit, action or
proceeding which may be suffered or incurred by Lender or any Fleet
Lender (including reasonable attorneys fees and legal expenses) as the
result of Pentagon's or Borrowers' failure to observe, perform or
discharge Pentagon's or Borrowers' duties hereunder.
38.2. In addition, Pentagon and Borrowers shall defend Lender, Fleet Agent and
each Fleet Lender against and save them harmless from all claims of any
Person with respect to the Collateral (except those resulting from the
gross negligence or intentional misconduct of Lender or Fleet Agent or a
Fleet Lender, as applicable, as determined by a judgment of a court of
competent jurisdiction after final appeal or the expiration of time for
appeal).
39. ASSIGNMENT
39.1. Pentagon and Borrowers may not sell, assign or transfer any interest in
this Agreement, any of the other Loan Documents, or any of the
Obligations, or any portion thereof, including, without limitation,
Pentagon's and/or Borrowers' rights, title, interests, remedies, powers,
and duties hereunder or thereunder.
40. SEVERABILITY
40.1. Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if
any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
41. SUCCESSORS AND ASSIGNS
41.1. This Agreement, the Other Agreements and the Security Documents shall be
binding upon the successors and assigns of Pentagon and Borrowers and
Lender and shall inure to the benefit of Lender and its successors and
assigns.
42. CUMULATIVE EFFECT; CONFLICT OF TERMS
42.1. The provisions of the Other Agreements and the Security Documents are
hereby made cumulative with the provisions of this Agreement.
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42.2. Except as otherwise provided in Article 16.1 hereof and except as
otherwise provided in any of the other Loan Documents by specific
reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
42.3. Each of the Revolving Credit Facility and the Term Credit Facility will
be governed by the terms and conditions and by the special provisions
set out in the Credit Regulations, which form an integral part of this
Agreement, save to the extent that they are modified or amended, whether
expressly or by implication, by the other provisions of this Agreement.
In the Credit Regulations the term "credit" refers, as the case may be,
to the Revolving Credit Facility or the Term Credit Facility, unless the
context requires otherwise.
43. EXECUTION IN COUNTERPARTS
43.1. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument.
44. NOTICES
44.1. Except as otherwise provided herein, all notices, requests and demands
to or upon a party hereto, to be effective, shall be in writing and
shall be sent by certified or registered mail, return receipt requested,
by personal delivery against receipt, by overnight courier or by
facsimile and, unless otherwise expressly provided herein, shall be
deemed to have been validly served, given or delivered immediately when
delivered against receipt, three Business Day after deposit in the mail,
postage prepaid, or two days after delivery to an overnight courier
properly addressed or, in the case of facsimile notice, when sent,
addressed as follows:
If to Fleet: Fleet National Bank
One Federal Street, 31st Floor
Boston, Massachusetts 02211
Attention: Howard Diamond
Facsimile No.: (617) 346-5093
With a copy to: Winston & Strawn
200 Park Avenue
New York, New York 10166
Attention: Susan Berkwitt-Malefakis
Facsimile No.: (212) 294-4700
53
<PAGE>
If to Lender: KBC Bank NV
Onderwijslaan 72
3600 Genk
Attention: Wim Leemen, Branch Manager
Facsimile No.: 32-89-84-46-75
With a copy to: KBC Bank N.V.
125 West 55th Street
New York, New York 10019
United States
Attention: Robert Surdam
Facsimile No.: (212) 541-0793
If to Borrowers: c/o Alliance Europe
GZ-Zone 6B, Zuiderring 3600 Genk 56
Attention: G. Thys
Facsimile No.: 32-89-32-31-31
With a copy to: Greenberg Traurig
200 Park Avenue
New York, New York 10166
Attention: Richard M. Zaroff
Facsimile No.: (212) 801-6400
Derks, Star Busmann, Hanotiau
Avenue Louise 200 Louizalaan
B-1050 Brussels
Belgium
Attention: Bruno Duquesne
Facsimile No.: 011-322-626-22-54
and
ASA-Advocats Associes
44, Rue Francois ler
75008 Paris
France
Attention: Thierry Gontard
Facsimile No.: 011-33-1-4070-1832
If to Pentagon: Alliance Pentagon A/S
2, Krogagervej
DK - 5240
Odense, Denmark
54
<PAGE>
or to such other address as each party may designate for itself
by notice given in accordance with this Article 44; PROVIDED,
HOWEVER, THAT any notice,
request or demand to or upon Lender pursuant to Article 15 or
23.2 hereof shall not be effective until received by Lender.
45. CREDIT INQUIRIES
45.1. Pentagon and Borrowers hereby authorize and permit Lenders and the Fleet
Agent to respond to usual and customary credit inquiries from third
parties (other than persons engaged in similar or comparable businesses
to those of Pentagon and Borrowers) concerning Borrowers.
46. TIME OF ESSENCE
46.1. Time is of the essence in respect of this Agreement, the Other
Agreements and the Security Documents.
47. ENTIRE AGREEMENT
47.1. This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in
connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements, understandings and inducements, whether express or implied,
oral or written. There are no unwritten oral agreements between the
parties. Any amendment hereof must be in writing signed by all parties
to be charged therewith subject to the terms of the Letter of Credit
Agreement.
48. INTERPRETATION
48.1. No provision of this Agreement or any of the other Loan Documents shall
be construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or
dictated such provision.
49. CONFIDENTIALITY
49.1 Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may
make disclosure reasonably required by a prospective participant or
assignee in connection with the contemplated participation or assignment
or as required or requested by any governmental authority or
representative thereof or pursuant to legal process and
55
<PAGE>
shall require any such participant or assignee to agree to comply with
this Article 49; PROVIDED, THAT Lender may disclose any such non-public
information available to the Fleet Agent and the Fleet Lenders.
50. GOVERNING LAW; CONSENT TO FORUM
50.1. This agreement has been negotiated, executed and delivered in and shall
be deemed to have been made in Brussels, Belgium.
50.2. In accordance with Article 40 of the Credit Regulations, this Agreement
is governed by, and shall be construed in accordance with, the laws of
Belgium, without reference to its conflict of law rules.
50.3. For the benefit of Lender, all the parties agree that the courts of
Brussels (Belgium) and of Tongeren (Belgium) are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement, and for such purpose all the parties submit to the
jurisdiction of such courts.
50.4. Pentagon and each of the Borrowers expressly submit and consent in
advance to such jurisdiction in any action or suit commenced in any such
court, and Pentagon and each of the Borrowers hereby waive any objection
which they may have based upon lack of personal jurisdiction, improper
venue or FORUM NON CONVENIENS and hereby consents to the granting of
such legal or equitable relief as is deemed appropriate by such court.
56
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed in Brussels, Belgium,
on the day and year specified at the beginning of this Agreement.
ALLIANCE EUROPE NV
By /s/ Bragi F. Schut
--------------------------
Its Director
--------------------------
ALLIANCE GRAPHICS NV
By /s/ Bragi F. Schut
--------------------------
Its Director
--------------------------
EMAILLERIES DE BLANC MISSERON, A.
AUBECQ SA
By /s/ Patrice Alberge
--------------------------
Its Director
-------------------------
ALLIANCE PENTAGON A/S
By /s/ Bragi F. Schut
--------------------------
Its Director
-------------------------
KBC BANK N.V. (formerly known as
KREDIETBANK NV)
By /s/ Wim Leeman
--------------------------
Its Branch Manager
-------------------------
<PAGE>
APPENDIX A
GENERAL DEFINITIONS
When used in the Credit Facility Agreement dated as of 20 November 1998, by and
among (1) ALLIANCE EUROPE NV, (2) ALLIANCE GRAPHICS NV, (3) EMAILLERIES DE BLANC
MISSERON, A. AUBECQ SA., (4) ALLIANCE PENTAGON A/S and (5) KBC BANK N.V.
(formerly known as KREDIETBANK NV), as Lender, the following terms shall have
the following meanings (terms defined in the singular to have the same meaning
when used in the plural and vice versa):
ACCOUNT DEBTOR - any Person who is or may become obligated under or on account
of an Account.
ACCOUNTS - all accounts, contract rights, chattel paper, instruments and
documents, whether now owned or hereafter created or acquired by Pentagon or by
any Borrower or in which Pentagon or any Borrower now has or hereafter acquires
any interest.
ACQUISITION - the Acquisition by PolyVision of all of the issued and outstanding
stock of Alliance International Group, Inc., a Georgia corporation, and the
acquisition by PolyVision Belgium of all (other than directors' qualifying
shares) of the issued and outstanding stock of Alliance Europe and the
acquisition by PolyVision France of all (other than directors' qualifying
shares) of the issued and outstanding stock of Aubecq, pursuant to the Purchase
Documents.
ADVANCE - depending on the context in which the term is used, an AE Revolving
Credit Advance, a Pentagon Revolving Credit Advance, an AE Term Credit Advance
or an AE Revolving Credit Overdraft.
ADVANCE REQUEST - a request for an Advance (other than an overdraft advance)
made in accordance with the provisions of Article 15 of the Agreement.
AE BORROWING BASE - as at any date of determination thereof, an amount equal to
the lesser of-
(a) BEF187,412,500.00; or
(b) an amount equal to:
(i) 85% of the net amount of Borrowers' Eligible Accounts outstanding
at such date;
PLUS
(ii) the lesser of:
Appendix A-1
<PAGE>
(1) [BEF131,607,000.00] minus the amount of Revolving Credit
Loans to Borrowers based on Inventory outstanding to
Borrowers at such date; or with respect to Inventory
owned by Aubecq is BEF36,557,500.00 and the maximum
amount which may be borrowed with respect to Inventory
owned by Alliance Graphics is BEF7,311,500.00; or
(2) 50% of the value of Eligible Inventory of Borrowers at
such date calculated on the basis of the lower of cost or
market with the cost calculated on a first-in, first-out
basis;
PROVIDED, THAT the maximum amount which may be borrowed with respect to
Inventory owned by Aubecq is BEF36,557,500.00 and the maximum amount which may
be borrowed with respect to Inventory owned by Alliance Graphics is
BEF7,311,500.00.
For purposes hereof, the net amount of Eligible Accounts at any time shall be
the face amount of such Eligible Accounts less any and all returns, rebates,
discounts (which may, at Lender's option, be calculated on shortest terms),
credits, allowances or excise taxes of any nature at any time issued, owing,
claimed by Account Debtors, granted, outstanding or payable in connection with
such Account at such time.
AE OBLIGATIONS - all Loans and all other advances, debts, liabilities,
obligations, reimbursement obligations, covenants and duties, together with all
interest, fees and other charges thereon, owing, arising, due or payable from
Borrowers to Lender of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under the Agreement
or any of the other Loan Documents whether direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising, and however acquired, and, in respect of Aubecq, excluding
the Pentagon Obligations and the Excluded Aubecq Liability.
AE CREDIT FACILITY as defined in Section 2.1
AE REVOLVING CREDIT FACILITY - as defined in Article 2.1.
AE TERM CREDIT ADVANCES - as defined in Article 4.2.
AE TERM CREDIT FACILITY - as defined in Article 2.1.
AFFILIATE - a Person (other than a Subsidiary):
(a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, a
Person;
(b) which beneficially owns or holds 5% or more of any class of the Voting
Stock of a Person; or
Appendix A-2
<PAGE>
(c) 5% or more of the Voting Stock (or in the case of a Person which is not
a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by a Person or a Subsidiary of a Person.
Without limiting the foregoing, Borrowers, Pentagon, PolyVision and each of
PolyVision's other Subsidiaries shall all be deemed to be Affiliates of each
other.
AGREEMENT - the Credit Facility Agreement referred to in the first sentence of
this APPENDIX A, including all Appendices and Exhibits thereto.
AIG - Alliance International Group, Inc., a Delaware corporation, and the sole
stockholder of Alliance Europe prior to the consummation of the Acquisition, and
Alliance International Group, Inc. is intended to merge with and into PolyVision
on the Closing Date.
APPLICABLE MARGIN - the percentages set forth below with respect to the Base
Rate Revolving Credit Portions, the BIBOR Revolving Credit Portions and the
BIBOR Term Portions determined pursuant to the last paragraph of this definition
by reference to the Consolidated Debt to EBITDA Ratio at such time, as set forth
below:
Applicable Margin for BIBOR Revolving Credit Portions,
Base Rate Revolving Credit Portions and Bibor Term Portions
-----------------------------------------------------------
- ---------------------------- --------------------------- -----------------------
Applicable Margin
for BIBOR Revolving Applicable Margin for
Consolidated Debt Credit Portions and for Base Rate Revolving
to EBITDA Ratio BIBOR Term Portions Credit Portions
- ---------------------------- --------------------------- -----------------------
Equal to or greater
than 5.0 to 1.0 3% 1.75%
- ---------------------------- --------------------------- -----------------------
Equal to or greater
than 4.5 to 1.0 but less
than 5.0 to 1.0 2.75% 1.50%
- ---------------------------- --------------------------- -----------------------
Equal to or greater than
4.0 to 1.0 but less than
4.5 to 1.0 2.50% 1.250%
- ---------------------------- --------------------------- -----------------------
Less than 4.0 to 1.0 2.25% 1.00%
- ---------------------------- --------------------------- -----------------------
The Applicable Margin for each Base Rate Revolving Credit Portion, BIBOR
Revolving Credit Portion and BIBOR Term Portion shall be determined by reference
to the Consolidated Debt to EBITDA Ratio which shall be determined five (5)
Business Days after the date on which the Lender receives financial statements
pursuant to Article 28(c)(i) or (ii) and a certificate of the chief financial
officer or any financial vice president of PolyVision, the Borrowers and
Pentagon demonstrating the Consolidated Debt to EBITDA Ratio. If the Borrowers
have not submitted to the Lender the information described above as and when
required under Article 28(c)(i) or (ii),
Appendix A-3
<PAGE>
as the case may be, the Applicable Margin shall be as determined by the Lender
in its reasonable discretion (after consultation and agreement with the Fleet
Agent and taking into account, among other things, the Consolidated Debt to
EBITDA Ratio theretofore in effect) for so long as such information has not been
received by the Lender. The Applicable Margin shall be adjusted, if applicable,
as of the first day of the month following the date of determination described
in the two preceding sentences. In the event that the financial statements
received pursuant to Article 28(c)(i) indicate that the Applicable Margin
determined on the basis of financial statements theretofore received pursuant to
Article 28(c)(i) is lower than the Applicable Margin that would have been
determined on the basis of the Article 28(c)(i) financial statements, the
Applicable Margin shall be adjusted retroactively for the relevant period.
ASSET DISPOSITION - the disposition of any or all of the fixed assets of any
Borrower or Pentagon whether by sale, lease, transfer, loss, damage,
destruction, condemnation or otherwise; PROVIDED, HOWEVER, that for purposes of
Article 17.1, the term "Asset Disposition" shall not include any sale, lease,
transfer or other disposition of Inventory in the ordinary course of business.
AVAILABILITY - with respect to Pentagon or Borrowers, the amount of money which
Pentagon and each of the Borrowers is entitled to borrow from time to time as
Revolving Credit Loans, such amount being the difference derived when the sum of
the principal amount of Revolving Credit Loans then outstanding to such Borrower
or Pentagon, as the case may be (including any amounts which Lender may have
paid for the account of such Borrower or Pentagon, as the case may be, pursuant
to any of the Loan Documents and which have not been reimbursed by Borrowers or
Pentagon) and the amount of any Reserves are subtracted from the Borrowing Base
applicable to that Borrower. If the amount outstanding to a Borrower or
Pentagon, as the case may be, is equal to or greater than the Borrowing Base
applicable to that Borrower or Pentagon, as the case may be, Availability for
that Borrower is 0.
BANK HEDGE AGREEMENT means any interest rate Hedge Agreement required or
permitted under Article 23.4 that is entered into by and between any Borrower
(or Parent on behalf of any Borrower) and any of Lender, Fleet Agent or any
Fleet Lender or any affiliate thereof.
BASE RATE - the rate of interest announced or quoted by Lender from time to time
as published in the "Financieel Economische Tijd" for advances in current
account.
BASE RATE REVOLVING CREDIT PORTION - that portion of the Revolving Credit Loans
that is not a BIBOR Portion.
BIBOR INTEREST PAYMENT DATE - with respect to any BIBOR Portion, the last day of
the applicable BIBOR Period.
BIBOR PERIOD - any period of one (1), two (2), three (3) or six (6) months
commencing on a Business Day, selected as provided in Article 15; PROVIDED,
however that no BIBOR Period shall extend beyond the last day of the Term,
unless Pentagon and/or Borrowers and Lender have agreed to an extension of the
Term beyond the expiration of the BIBOR Period in question and that, with
Appendix A-4
<PAGE>
respect to any BIBOR Term Portion, no applicable BIBOR Period shall extend
beyond the scheduled installment payment date for such BIBOR Term Portion. If
any BIBOR Period so selected shall end on a date that is not a Business Day,
such BIBOR Period shall instead end on the next preceding or succeeding Business
Day as determined by Lender in accordance with the then current lender practice
in Brussels; PROVIDED, THAT Borrowers and Pentagon shall not be required to pay
double interest, even though the preceding BIBOR Period ends and the new BIBOR
Period begins on the same day. Each determination by Lender of the BIBOR Period
shall, in the absence of manifest error, be conclusive.
BIBOR PORTION - a BIBOR Revolving Credit Portion or a BIBOR Term Portion.
BIBOR RATE - with respect to any BIBOR Portion for the related BIBOR Period, (i)
the rate for Belgian Francs for the relevant term appearing on page 3288 of the
Telerate screen (or such other page which may replace such page from time to
time on the Telerate screen) at or about 11 a.m. Brussels time on the relevant
Interest Determination Date; or (ii) if the relevant page is not displayed on
the Telerate screen or the Telerate screen is not operating at the relevant time
or if no such offered rate appears on the Telerate screen, the rate for Belgian
Francs for the relevant term which appears on page "BELO" of the Reuters screen
(or such other pages which may replace such page from time to time on the
Reuters screen) at or about 11 a.m. Brussels time on the relevant Interest
Determination Date; or (iii) if the relevant page is not displayed on the
Reuters screen or the Reuters screen is not operating at the relevant time or if
such offered rate does not appear on the Reuters screen, the rate determined by
Lender to be that at which loans in Belgian Francs and in an amount comparable
with the amount in relation to which BIBOR is to be determined and for a period
equal to the relevant period were being offered to Lender in the Brussels
Interbank Market at or about 11 a.m. (Brussels time) on the relevant Interest
Determination Date; PROVIDED, that if such loans are not offered, then BIBOR
shall be determined by Lender in its reasonable discretion.
BIBOR REVOLVING CREDIT PORTION - each portion of the Revolving Credit Loans
outstanding to any Borrower or Pentagon with respect to which a BIBOR Period has
commenced and has not terminated; PROVIDED, THAT each BIBOR Revolving Credit
Portion shall be in an amount not less than BEF1,000,000.00.
BIBOR TERM PORTION - each portion of the Term Loans outstanding to Alliance
Europe with respect to which a BIBOR Period has commenced and has not
terminated; PROVIDED, that each BIBOR Term Portion shall be in an amount not
less than BEF5,000,000.00, subject to the repayment schedule set forth in
EXHIBIT A.
BORROWING BASE - when used with reference to Alliance Europe, Aubecq and
Alliance Graphics, the AE Borrowing Base, and, when used with reference to
Pentagon, the Pentagon Borrowing Base.
BUSINESS DAY - shall mean any day which is not a legal holiday under the laws of
Belgium or is a day on which banking institutions located in Brussels are open.
Appendix A-5
<PAGE>
CAPITAL EXPENDITURES - shall mean, for any Person for any period, the sum of all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for Equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or Equipment on a Consolidated balance sheet of
such Person; PROVIDED, that Capital Expenditures shall not include capital
expenditures to the extent that such expenditures constitute a reinvestment of
Net Cash Proceeds from any Asset Disposition permitted under this Agreement in
similar fixed assets, which investment is made or committed to be made under
contract with an unaffiliated third party to be made before or within one
hundred eighty days after receipt of such Net Cash Proceeds (or three hundred
sixty (360) days after receipt of such Net Cash Proceeds in respect of real
estate or improvements thereon subject to a casualty loss or condemnation).
CAPITALIZED LEASE OBLIGATIONS - any indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles in effect
in the country in which the relevant party is located, applied on a consistent
basis.
CHANGE OF CONTROL shall mean any of the following events: (a) Alpine shall at
any time cease to own and control (directly or through any wholly-owned
subsidiary) at least 30% of the outstanding capital stock or voting power of
PolyVision; or (b) PolyVision shall at any time cease to own directly or
indirectly one hundred (100%) percent of the outstanding capital stock or voting
power of any of its Subsidiaries (other than directors' qualifying shares); or
(c) with respect to Alpine, a change of control of Alpine or PolyVision that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A, as in effect on the date hereof, promulgated under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") shall occur;
PROVIDED that, without limitation, such a Change of Control shall be deemed to
occur if: (i) any "Person" (as such term is used in Section 13(d) and Section
14(d) of the Exchange Act), (except for (with respect to the Borrowers) Alpine,
Steven Elbaum or any employee benefit plan of Alpine or any Borrower or any
Subsidiary or related corporation, or any entity holding voting securities of
Alpine or either Borrower for or pursuant to the terms of any such plan), shall
become the beneficial owner, directly or indirectly, of securities of Alpine
representing 30% or more of the combined voting power of Alpine's then
outstanding securities or of securities of PolyVision representing 30% or more
(excluding, in respect of ownership of PolyVision, Alpine and/or its
wholly-owned subsidiaries in this clause and the following clause (ii)) of the
combined voting power of PolyVision's then outstanding securities; (ii) there
shall occur a contested proxy solicitation of Alpine's or PolyVision's
shareholders that results in the contesting party obtaining the ability to vote
securities representing 30% or more of the combined voting power of Alpine's or
PolyVision's then outstanding securities; (iii) there shall occur: (A) a sale,
lease, exchange, transfer or other disposition in one or a series of related
transactions of all or substantially all of the assets of Alpine or PolyVision
to another Person or entity or group (as such term is defined in Section
13(d)(3) of the Securities Act as amended), (B) a merger or consolidation in
which Alpine is a constituent unless the surviving entity is controlled directly
or indirectly by the same Persons (as defined in this Agreement) that controlled
Alpine immediately prior to such merger or consolidation or (C) the adoption of
a plan of liquidation or
Appendix A-6
<PAGE>
dissolution of Alpine other than pursuant to bankruptcy or insolvency laws; or
(iv) during any period of twelve (12) calendar months, individuals who at the
beginning of such period constituted the Board of Directors of Alpine or
PolyVision shall cease for any reason to constitute at least a majority thereof
unless the election, or the nomination for election by Alpine's shareholders or
by PolyVision's shareholders, as applicable, of each new director shall be
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of the period provided, however, that
no Change of Control shall be deemed to have occurred under clause (iii) (A),
(B) or (C) or clause (iv) in respect, in each such case, of Alpine if so
excluded from the definition of "Change of Control" under the Fleet Credit
Agreement. For purposes of this definition "control", when used with respect to
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract, by family relationship or otherwise; and the terms
"controlling" and "controlled" have the meanings correlative to the foregoing;
or (d) PolyVision France shall at any time cease to control Aubecq and/or to own
directly all of the shares of the share capital of Aubecq (except qualifying
director's shares); or (e) PolyVision Belgium shall at any time cease to own
directly the same number of shares of Alliance Europe that PolyVision Belgium
owns on the Closing Date after giving effect to the Acquisition (except for any
merger permitted in accordance with the terms of Section 31(a)). All references
to "outstanding" set forth in this definition shall mean shares outstanding at
any time.
CLOSING DATE - the date of this Agreement in November 1998.
COLLATERAL - all of the Property and interests in Property described in Article
24 of the Agreement, and all other Property and interests in Property that now
or hereafter secure the payment and performance of any of the Obligations.
CONSOLIDATED - the consolidation in accordance with that which is required to be
consolidated for financial reporting purposes in accordance with generally
accepted accounting principles in effect in the country in which the relevant
party is located of the accounts or other items as to which such term applies.
CONSOLIDATED DEBT TO EBITDA RATIO - as defined in Exhibit 32.1.
CREDIT REGULATIONS - the Credit Regulations attached to the Agreement as
APPENDIX B, with such amendments as Lender shall enact in the ordinary course of
business (provided that any such amendment shall not apply to the Agreement
unless approved by the Fleet Agent).
CURRENT ASSETS - at any date means the amount at which all of the current assets
of a Person would be properly classified as current assets shown on a balance
sheet at such date in accordance with generally accepted accounting principles
in effect in the country in which the relevant party is located.
DEFAULT - an event or condition the occurrence of which would, with the lapse of
time or the giving of notice, or both, become an Event of Default.
Appendix A-7
<PAGE>
DEFAULT RATE - as defined in Article 7 of the Agreement.
DISTRIBUTION - in respect of any company means and includes:
(a) the payment of any dividends or other distributions on share capital
stock of the company (except distributions in such stock); and
(b) the redemption or acquisition of securities of such company unless made
contemporaneously from the net proceeds of the sale of securities.
DOLLAR EQUIVALENT - with respect to any monetary amount in any currency other
than US Dollars, at any time, the amount of US Dollars obtained by converting
such currency into US Dollars at the spot rate for such transaction as quoted by
KBC Bank N.V. at such time.
EBITDA - as defined in EXHIBIT 32.1.
ELIGIBLE ACCOUNT - an Account arising in the ordinary course of a Borrower's or
Pentagon's business from the sale of goods or rendition of services if:
(a) it does not arise out of a sale made by any Borrower or Pentagon to an
Affiliate of a Borrower or Pentagon or to a Person controlled by a
Borrower or Pentagon or an Affiliate of a Borrower or Pentagon;
(b) it is an Account that is at all times from and after the 90th day
following the Closing Date fully insured by credit insurance acceptable
to Lender and assigned to Lender in a manner satisfactory to Lender, in
each case in Lender's sole discretion, and it does not remain unpaid for
more than 120 days past original invoice date or 60 days after the
original due date shown on the invoice;
(c) 75% or more of the Accounts from the Account Debtor are Eligible
Accounts hereunder;
(d) the total unpaid Accounts of the Account Debtor do not exceed 20% of the
net amount of all Eligible Accounts, but only such excess (which shall
consist of the oldest unpaid Accounts of the subject Account Debtor)
shall not be Eligible Accounts;
(e) no covenant, representation or warranty contained in the Agreement with
respect to such Account has been breached;
(f) the Account Debtor is not also a creditor or supplier of any Borrower or
Pentagon, and the Account Debtor has not disputed liability with respect
to such Account, and the Account Debtor has not made any claim with
respect to any other Account due from such Account Debtor, and the
Account is not or may not otherwise become subject to any right of
set-off by the Account Debtor, PROVIDED, THAT any such Account shall be
eligible to the extent the amount thereof exceeds such contract,
dispute, claim, setoff or similar right;
Appendix A-8
<PAGE>
(g) the Account Debtor has not commenced a voluntary case under the
applicable bankruptcy or insolvency laws and has not made an assignment
for the benefit of creditors, nor has a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect
of the Account Debtor in an involuntary case under the applicable
bankruptcy or insolvency laws, as now constituted or hereafter amended,
nor has any other petition or other application for relief under the
applicable bankruptcy or insolvency laws been filed against the Account
Debtor, nor has the Account Debtor failed, suspended business, ceased to
be Solvent, or consented to or suffered a receiver, trustee, liquidator
or custodian to be appointed for it or for all or a significant portion
of its assets or affairs;
(h) it does not arise from a sale to the Account Debtor on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment or any
other repurchase or return basis;
(i) the Account Debtor is not a governmental unit or any department, agency
or instrumentality thereof, unless the relevant Borrower or Pentagon
assigns its right to payment of such Account to Lender, in a manner
satisfactory to Lender, so as to comply with the relevant provisions of
the applicable laws and regulations concerning such assignment;
(j) it is at all times subject to Lender's duly perfected, first priority
security interest and to no other Lien that is not a Permitted Lien;
(k) the goods giving rise to such Account have been delivered to and
accepted by the Account Debtor or the services giving rise to such
Account have been performed by a Borrower or Pentagon and accepted by
the Account Debtor or the Account otherwise represents a final sale;
(1) the Account is not evidenced by chattel paper or an instrument of any
kind and has not been reduced to judgment;
(m) neither Pentagon, nor any Borrower has made an agreement with the
Account Debtor to extend the time of payment thereof beyond the time
periods set forth in clause (b) above, as applicable; and
(n) it has been fully earned by Pentagon or the applicable Borrower and is
payable: PROVIDED, that if there is a holdback, the Account shall be
ineligible only to the extent of the holdback.
ELIGIBLE INVENTORY - Inventory of any Borrower or Pentagon (other than packaging
materials and supplies) if:
(a) it is raw materials or work-in-process or finished goods;
(b) it is in good, new and saleable condition;
(c) it is not slow-moving, obsolete or unmerchantable;
Appendix A-9
<PAGE>
(d) it meets all standards imposed by any governmental agency or authority;
(e) it conforms in all respects to any covenants, warranties and
representations set forth in the Agreement;
(f) it is at all times subject to Lender's duly perfected, first priority
security interest and no other Lien except a Permitted Lien and except
for Inventory sold on consignment and located in Australia having a
value of not more than BEF7,311,500.00 at any one time; and
(g) it is situated at a location in compliance with the Agreement or is in
transit.
ENVIRONMENTAL LAWS - all national, state and local laws, rules, regulations,
ordinances, programs, permits, guidances, orders and consent decrees relating to
health, safety and environmental matters.
EQUIPMENT - all machinery, apparatus, equipment, fittings, furniture, fixtures,
motor vehicles and other tangible personal Property (other than Inventory) of
every kind and description used in Pentagon's or any Borrower's operations or
owned by Pentagon or any Borrower or in which Pentagon or a Borrower has an
interest, whether now owned or hereafter acquired by such Borrower or Pentagon
and wherever located, and all parts, accessories and tools and all increases and
accessions thereto and substitutions and replacements therefor.
EVENT OF DEFAULT - as defined in Article 34 of the Agreement.
EXCESS CASH FLOW - an amount determined to be Excess Cash Flow as defined in and
pursuant to the Fleet Credit Agreement, as such amount is set forth in writing
delivered by the Fleet Agent to the Lender.
EXTRAORDINARY RECEIPT - any cash received by or paid to or for the account of
any Person not in the ordinary course of business (other than by sale, lease or
transfer), including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption insurance to
the extent such proceeds constitute compensation for lost earnings),
condemnation awards (and payments in lieu thereof) and indemnity payments;
PROVIDED, HOWEVER, that an Extraordinary Receipt shall not include cash receipts
received from proceeds of insurance, condemnation awards (and payments in lieu
thereof) or indemnity payments to the extent that such proceeds, awards or
payments (a) in respect of loss or damage to Equipment, fixed assets or real
property are applied (or in respect of which expenditures were previously
incurred) to replace or repair the Equipment, fixed assets or real property in
respect of which such proceeds, awards or payments were received in accordance
with the terms of the Loan Documents, so long as (i) such application is made
within one hundred eighty (180) days (or three hundred sixty (360) days, with
respect to real estate or improvements on real estate), after such Person's
receipt of such proceeds, awards or payments and (ii) such proceeds, awards or
payments are received by such Person within fifteen (15) months after the
occurrence of such damage or loss; or (b) are received by any Person in respect
of any third party claim against such
Appendix A-10
<PAGE>
Person and applied to pay (or to reimburse such Person for its prior payment of)
such claim and the costs and expenses of such Person with respect thereto.
FIRST AMENDED AND RESTATED LOAN AGREEMENT - as defined in the Recitals to the
Agreement.
FISCAL YEAR - a fiscal year of PolyVision and its Consolidated Subsidiaries
ending on April 30 in any calendar year.
FLEET - as defined in the Recitals to the Agreement.
FLEET AGENT - as defined in the Recitals to the Agreement.
FLEET CAPITAL - as defined in the Recitals to the Agreement.
FLEET CREDIT AGREEMENT - as defined in the Recitals to the Agreement.
FLEET LENDERS - as defined in the Recitals to the Agreement.
FRAUDULENT CONVEYANCE - a fraudulent conveyance or transfer under the provisions
of any applicable fraudulent conveyance or fraudulent transfer law or similar
law of any state, province, nation or other governmental unit, as in effect from
time to time.
GENERAL INTANGIBLES - all personal property of any Borrower or Pentagon
(including things in action) other than goods, accounts, chattel paper,
documents, instruments and money, whether now owned or hereafter created or
acquired by any Borrower or Pentagon.
GIROBANK - erste bank der oster eichisher sparkassen AG.
GUARANTORS - PolyVision, Posterloid and Greensteel and any other Person who may
on the date of the Agreement or hereafter guarantee payment or performance of
the whole or any part of the Obligations under this Agreement.
GUARANTY AGREEMENTS - the Continuing Guaranty Agreements which are to be
executed by
each Guarantor in form and substance satisfactory to Lender.
INDEBTEDNESS - as applied to a Person means, without duplication:
(a) all items which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet of
such Person as at the date as of which Indebtedness is to be determined,
including, without limitation, Capitalized Lease Obligations;
(b) all obligations of other Persons which such Person has guaranteed or for
which such Person is liable;
Appendix A-11
<PAGE>
(c) all reimbursement obligations in connection with letters of credit or
letter of credit guaranties issued for the account of any Person;
(d) in the case of a Borrower (without duplication), the AE Obligations; and
(e) in the case of Pentagon (without duplication), the Pentagon Obligations.
INTERCOMPANY SUBORDINATION AGREEMENT - that certain Subordination Agreement
dated the Closing Date in favor of Lender and Administrative Agent executed by
PolyVision and certain of its Subsidiaries pursuant to which the repayment of
certain intercompany obligations is made subject and subordinate on the terms
set forth therein to the repayment of obligations owing to Lender under this
Agreement and the Other KBC Loan Agreement and owing to the Fleet Lenders and
Fleet Agent, as it may from time to time be amended with the consent of the
Administrative Agent.
INTEREST COVERAGE RATIO - as defined in EXHIBIT 32.1.
INTEREST DETERMINATION DATE - with respect to any BIBOR Period for which BIBOR
is to be determined, the second Business Day prior to the first day of such
period.
INVENTORY - all of Pentagon's or any Borrower's inventory, whether now owned or
hereafter acquired including, but not limited to, all goods intended for sale or
lease by Pentagon or a Borrower, or for display or demonstration; all work in
process; all raw materials and other materials and supplies of every nature and
description used or which might be used in connection with the manufacture,
printing, packing, shipping, advertising, selling, leasing or furnishing of such
goods or otherwise used or consumed in Pentagon's or a Borrower's business; and
all documents evidencing and General Intangibles relating to any of the
foregoing, whether now owned or hereafter acquired by a Borrower or Pentagon.
INVESTMENT PROPERTY - all of any Borrower's or Pentagon's investment property,
whether now owned or hereafter acquired, including, but not limited to, all
securities (certificated or uncertificated), securities accounts, securities
entitlements, commodity accounts and commodity contracts.
ISSUER - Fleet National Bank, a national banking association organized under the
laws of the United States of America.
KBC - KBC Bank N.V.
LC AMOUNT - at any time, the aggregate undrawn face amount of all Letters of
Credit then outstanding and, with respect to Pentagon or any Borrower, the
aggregate undrawn face amount of all Letters of Credit issued for the account of
that Borrower or of Pentagon and then outstanding.
LEGAL REQUIREMENT - any requirement imposed upon Lender by any law, regulation,
order, interpretation, ruling or official directive (whether or not having the
force of law) of any board,
Appendix A-12
<PAGE>
central bank or governmental or administrative agency, institution or authority
or any political subdivision of either thereof.
LETTER OF CREDIT - any standby letter of credit or first demand guaranty, issued
by Lender or any of its Affiliates for the account of Pentagon or any Borrower.
LETTER OF CREDIT AGREEMENT - the Letter of Credit Agreement dated the date of
the Agreement between Lender and Fleet, providing, among other things, for the
allocation of various administrative and monitoring responsibilities relating to
the Credit Facility between Lender and Fleet.
LIEN - any interest in Property securing an obligation owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is based on
common law, statute or contract. The term "Lien" shall also include rights of
seller under conditional sales contracts or title retention agreements,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, a Borrower shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.
LOAN AMOUNT - the loan account established for Pentagon and each Borrower on the
books of Lender.
LOAN DOCUMENTS - the Agreement, the Other Agreements and the Security Documents.
LOANS - all loans and advances of any kind made by Lender pursuant to the
Agreement.
MATERIAL ADVERSE EFFECT -
(a) a material adverse effect on the business, condition (financial or
otherwise), operation, performance or properties of Pentagon or any
Borrower;
(b) a material adverse effect on the rights and remedies of Lender under the
Loan Documents; or
Appendix A-13
<PAGE>
(c) the material impairment of the ability of any Borrower or Pentagon to
perform its obligations hereunder or under any Loan Document.
MONEY BORROWED - means:
(a) Indebtedness arising from the lending of money by any Person to a
Borrower or Pentagon;
(b) Indebtedness, whether or not in any such case arising from the lending
by any Person of money to a Borrower or Pentagon:
(i) which is represented by notes payable or drafts accepted that
evidence extensions of credit;
(ii) which constitutes obligations evidenced by bonds, debentures,
notes or similar instruments; or
(iii) upon which interest charges are customarily paid (other than
accounts payable) or that was issued or assumed as full or
partial payment for Property;
(c) Indebtedness that constitutes a Capitalized Lease Obligation;
(d) reimbursement obligations with respect to letters of credit or
guaranties of letters of credit or guaranties, generally; and
(e) Indebtedness of Pentagon or a Borrower under any guaranty of obligations
that would constitute Indebtedness for Money Borrowed under clauses (a)
through (c) hereof, if owed directly by Pentagon or a Borrower.
MORTGAGES - the mortgages, deeds of trust or other documents to be executed by
Pentagon or Borrower on or about the Original Closing Date or the date of this
Agreement, or, in the case of Aubecq, on or about the date of the First Amended
and Restated Loan Agreement, in favor of Lender and by which the relevant
Borrower or Pentagon shall grant and convey to Lender as security for the
Obligations, a Lien upon the real Property owned by such Borrower or Pentagon.
NET CASH PROCEEDS - with respect to any sale, lease, transfer or other
disposition of any asset by any Person, or any Extraordinary Receipt received by
or paid to or for the account of any Person, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal and accounting fees, finder's fees, printing costs and
other similar out-of-pocket costs, (b) the amount of taxes payable in connection
with or as a result of such transaction and (c) with respect to any asset, the
amount of any indebtedness secured by a Lien on such asset that, by the terms of
such transaction or the terms of such indebtedness, is required to be repaid
upon such disposition, in each case to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash, actually paid
or due and payable or set aside for payment (because due and payable) within ten
(10) Business Days after receipt by the applicable Borrower or Pentagon or
PolyVision or other Subsidiary of PolyVision to a Person that is not an
Affiliate of such Borrower or Pentagon or PolyVision or other Subsidiary of
PolyVision and are properly attributable to such transaction or to the asset
that is the subject thereof.
OBLIGATIONS - the AE Obligations and Pentagon Obligations together.
Appendix A-14
<PAGE>
OLD NML SUBORDINATED DEBT- Indebtedness owing by Alliance Europe in an aggregate
principal amount of USD4,700,000 and any guaranties thereof, all as in effect on
the Original Closing Date pursuant to that certain Senior Subordinated Loan
Agreement dated as of October 2, 1997 among Alliance, America Alliance Europe,
AIG and Northwestern Mutual Life Insurance Company.
ORIGINAL CLOSING DATE - October 2, 1997.
OTHER AGREEMENTS - any and all agreements, instruments and documents (other than
the Agreement and the Security Documents), heretofore, now or hereafter executed
by Pentagon or a Borrower, or any other third party (other than legal counsel or
accountants), and delivered to Lender in respect of the transactions
contemplated by the Agreement.
OTHER KBC LOAN AGREEMENT - means the Credit Facility Agreement dated the Closing
Date by and among PolyVision Belgium, PolyVision France and KBC, as it may be
amended, supplemented, restated or otherwise modified from time to time.
OVERADVANCE - the amount, if any, by which the outstanding principal amount of
Revolving Credit Loans outstanding to any Borrower or Pentagon exceeds such
Borrower's or Pentagon's Borrowing Base or exceeds any other limit or sublimit
set forth in this Agreement.
PARENT - PolyVision.
PENTAGON BORROWING BASE - as at any date of determination thereof, an amount
equal to the lesser of:
(a) BEF36,557,500.00; or
(b) an amount equal to:
(i) 85% of the net amount of Pentagon's Eligible Accounts outstanding
at such date;
PLUS
(ii) the lesser of:
(1) BEF14,623,000.00 minus the amount of Revolving Credit
Loans based on Inventory outstanding to Pentagon at such
date; or
(2) 50% of the value of Eligible Inventory of Pentagon at
such date calculated on the basis of the lower of cost or
market with the cost calculated on a first-in, first-out
basis.
For purposes hereof, the net amount of Eligible Accounts at any time shall be
the face amount of such Eligible Accounts less any and all returns, rebates,
discounts (which may, at Lender's option,
Appendix A-15
<PAGE>
be calculated on shortest terms), credits, allowances or excise taxes of any
nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time.
PENTAGON OBLIGATIONS - all Loans and all other advances, debts, liabilities,
obligations, reimbursement obligations, covenants and duties, together with all
interest, fees and other charges thereon, owing, arising, due or payable from
Pentagon to Lender of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under the Agreement
or any of the other Loan Documents, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising.
PENTAGON REVOLVING CREDIT FACILITY - a revolving credit facility, up to an
aggregate principal amount of BEF36,557,500.00, pursuant to which Lender agrees
to make from time to time revolving credit loans available to Pentagon, as
requested by Pentagon in the manner set forth in Article 15 of the Agreement.
PERMITTED ACQUISITION - an acquisition which constitutes a "Permitted
Acquisition" as defined in and under the Fleet Credit Agreement.
PERMITTED LIENS - any Lien permitted by Article 31(e) of the Agreement.
PERMITTED PURCHASE MONEY INDEBTEDNESS - Purchase Money Indebtedness of Borrowers
and/or Pentagon existing on the date hereof and incurred after the date hereof
which is secured by a Purchase Money Lien and which, when aggregated with the
principal amount of all other such Indebtedness and Capitalized Lease
Obligations of all Borrowers, Pentagon, PolyVision and its other Subsidiaries at
the time outstanding, does not exceed $750,000.00. For the purposes of this
definition, the principal amount of any Purchase Money Indebtedness consisting
of capitalized leases shall be computed as a Capitalized Lease Obligation.
PERSON - an individual, partnership, corporation, limited liability company,
joint stock company, land trust, business trust or unincorporated organization,
or a government or agency or political subdivision thereof.
PLAN - an employee benefit plan now or hereafter maintained for employees of any
Borrower or Pentagon under the relevant provisions of the laws and regulations
applicable to such Borrower or Pentagon.
POLYVISION - as defined in the Recitals to the Agreement.
POLYVISION BELGIUM - PolyVision Belgium N.V., a limited liability company
incorporated under the laws of Belgium as a "NAAMLOZE VENNOOTSCHAP,";
POLYVISION FRANCE - PolyVision France EURL, a limited liability company
incorporated under the laws of France.
Appendix A-16
<PAGE>
PROJECTIONS - Pentagon's and Borrowers' forecasted Consolidated and
consolidating:
(a) balance sheets;
(b) profit and loss statements;
(c) cash flow statement; and
(d) capitalization statements;
all prepared on a consistent basis with Pentagon's and Borrowers' historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
PROPERTY - any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.
PURCHASE DOCUMENTS - the Stock Purchase Agreement dated as of September 1, 1998
(as amended prior to the date of this Agreement) by and between PolyVision
Corporation, PolyVision Belgium and PolyVision France, Alliance International
Group, Inc. ("AIG") and the stockholders of AIG and AIG Holdings, Inc., pursuant
to which the Acquisition shall have been consummated.
PURCHASE MONEY INDEBTEDNESS - means and includes:
(a) Indebtedness (other than the Obligations) for the payment of all or any
part of the purchase price of any fixed assets;
(b) any Indebtedness (other than the Obligations) incurred at the time of or
within 10 days prior to or after the acquisition of any fixed assets for
the purpose of financing all or any part of the purchase price thereof;
and
(c) any renewals, extensions or refinancings thereof, but not any increases
in the principal amounts thereof outstanding at the time.
PURCHASE MONEY LIEN - a Lien upon fixed assets which secures Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
fixed assets (and insurance for same) the purchase price of which was financed
through the incurrence of the Purchase Money Indebtedness secured by such Lien.
RENTALS - as defined in Article 31(m) of the Agreement.
RESTRICTED INVESTMENT - any investment made in cash or by delivery of Property
to any Person, whether by acquisition of stock, Indebtedness or other obligation
or Security, or by loan, advance or capital contributions, or otherwise, or in
any Property except the following:
Appendix A-17
<PAGE>
(a) investments, to the extent existing on the Closing Date, by that
Borrower or Pentagon;
(b) Property to be used in the ordinary course of business;
(c) Current Assets arising from the sale of goods and services in the
ordinary course of business of any Borrower or Pentagon;
(d) investments in direct obligations of any of the jurisdictions in which
any Borrower's or Pentagon's registered office is located, or any agency
thereof or obligations guaranteed by any such jurisdictions, or any
agency thereof, PROVIDED, THAT such obligations mature within one year
from the date of acquisition thereof;
(e) investments in certificates of deposit maturing within one year from the
date of acquisition issued by a bank or trust company organized under
the laws of any of the jurisdictions in which any Borrower or Pentagon's
registered office is located, or any agency thereof having capital
surplus and undivided profits aggregating at least the Dollar Equivalent
of $100,000,000;
(f) investments in commercial paper given the highest rating by a national
credit rating agency and maturing not more than 360 days from the date
of creation thereof; and
(g) investments permitted under the Agreement.
REVOLVING CREDIT LOAN - a Loan made by Lender as provided in Articles 3 and 5 of
the Agreement.
REVOLVING LOAN COMMITMENTS - the amount of Lender's commitment pursuant to
Articles 3 and 5 of the Agreement.
SECURITY DOCUMENTS - all instruments, agreements and documents now or at any
time hereafter securing the whole or any part of the Obligations, including
without limitation all of the security documents described in Article 24 of the
Agreement.
SELLER - has the meaning provided in the definition of Purchase Documents.
SENIOR SUBORDINATED LOAN AGREEMENT - as defined in the Fleet Credit Agreement.
SENIOR SUBORDINATED NOTE - has the meaning provided in the Fleet Credit
Agreement.
SOLVENT - as to any Person, such Person:
(a) owns Property whose fair saleable value is greater than the amount
required to pay all of such Person's Indebtedness (including contingent
debts);
(b) is able to pay all of its Indebtedness as such Indebtedness matures; and
Appendix A-18
<PAGE>
(c) has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage.
STATUTORY RESERVES - a fraction (expressed as a decimal) the numerator of which
is the number one, and the denominator of which is the number one MINUS the
aggregate of the maximum reserve percentages (including, without limitation, any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by any banking authority to which Lender is subject for Eurocurrency
Liabilities. BIBOR Portions shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
SUBORDINATED DEBT - Indebtedness evidenced by the Senior Subordinated Note owing
by PolyVision in an aggregate principal amount of USD25,000,000 and any
guaranties thereof, as in effect on the Closing Date and as may be amended or
refinanced in compliance with the Fleet Credit Agreement, and any other
indebtedness of a Borrower or Pentagon that is subordinated to the Obligations
in a manner satisfactory to Lender.
SUBSIDIARY - any company of which a Person owns, directly or indirectly through
one or more intermediaries, more than 50% of the Voting Stock at the time of
determination.
TERM LOAN COMMITMENT - the amount of Lender's commitment pursuant to Article 4
of the Agreement.
TERM LOANS - the Loans described in Article 4 of the Agreement.
VOTING STOCK - securities of any class or classes of a corporation the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
WHOLLY-OWNED SUBSIDIAR(IES) - of any Person, means a Subsidiary of such Person
all of the outstanding Voting Stock of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly-Owned
Subsidiaries of that Person or a combination thereof.
Appendix A-19
<PAGE>
APPENDIX D
to the
Credit Facility Agreement dated as of 20 November 1998
by and among (1) ALLIANCE EUROPE NV, (2) ALLIANCE GRAPHICS NV,
(3)EMAILLERIES DE BLANC MISSERON, A. AUBECQ SA.,
(4) ALLIANCE PENTAGON A/S,
and (5) KBC N.V., as Lender (the "AGREEMENT")
1. All capitalized terms used but not defined in this Appendix shall have
the meanings given to those terms in the Agreement.
2. In addition to the terms and conditions set out in the Agreement, Lender
and Borrowers and Pentagon agree as follows:
2.1. INCREASED COSTS
2.1.1. Subject to paragraph (b) below, where Lender determines that, as a
result of the introduction or variation of any law or any change in the
interpretation or application of any law, or compliance with any request
(whether or not having the force of law but, if not having the force of
law, being of a type with which Lender is accustomed to comply and
including any request or requirement which affect the manner in which
Lender is required to or does maintain capital resources in relation to
its obligations under this Agreement) from any central bank or other
fiscal, monetary or other authority or agency, the cost to Lender of
maintaining or funding the Revolving Credit Facility and/or the AE Term
Credit Facility, as the case may be, is increased or the amount of any
sum received or receivable by it in respect of this Agreement or the
effective return to it under this Agreement is reduced or it is
obligated to make any payment (except in respect of tax on its overall
net income) or foregoes any interest or other return on, or calculated
by reference to, the amount of any sum received or receivable by it from
Borrowers or Pentagon, as the case may be, under this Agreement, then:
(a) Lender shall notify Borrowers and Pentagon of the event promptly
upon becoming aware of it and deliver to Borrowers and Pentagon a
certificate to that effect containing relevant details; and
(b) Borrowers and Pentagon shall on demand pay to Lender such amounts
as Lender from time to time and at any time notifies Borrowers
and Pentagon to be necessary to compensate it for such increased
cost, reduction, payment or foregone interest or return.
Appendix D-1
<PAGE>
2.2. INDEMNIFICATION
2.2.1. In accordance with Article 20 of the Credit Regulations, Borrowers and
Pentagon shall on demand pay, in each case on the basis of a full
indemnity to Lender all reasonable expenses (including legal, printing
and out-of-pocket expense and taxes) incurred in connection with the
negotiation, preparation or completion of this Agreement or in
connection with the preservation, enforcement or the attempted
preservation or enforcement of any of Lender's rights under this
Agreement.
2.2.2. Without prejudice to Clause 2.2.3 below, Borrowers and Pentagon shall
fully indemnify Lender from and against any expense, loss, damage or
liability which it may incur as a consequence of the occurrence of any
Event of Default or otherwise in connection with this Agreement and the
indemnity shall include, without limitation (but without duplication of
the interest charged under the Agreement), any interest, fees or other
sums whatsoever paid or payable on account of any funds borrowed in
order to carry any unpaid amount.
2.2.3. If Lender incurs any loss or expense by reason of the liquidation or
reemployment of deposits or other funds acquired by Lender to make or
maintain all or any portion of the AE Term Credit Facility or any
Advance as a result of any repayment of all or any portion of the
principal amounts of the AE Term Credit Facility or of an Advance in
each case bearing interest based on a BIBOR Interest Period on a date
other than the scheduled due dates therefore (such loss or expense to be
referred to as the "FUNDING LOSS"), Borrowers and/or Pentagon, as the
case may be, shall, at the first demand of Lender, pay to Lender such
amount as will reimburse Lender for such loss or expense.
(a) The Funding Loss shall be calculated on an actuarial basis.
Consequently, the Funding Loss shall be equal to the discounted
difference between the income that Lender would have received
from making the AE Term Credit Facility and/or the Advance
available if no early repayment had been made and the income that
Lender will receive upon reinvestment at the prevailing market
rate of the amounts repaid early. In the event of partial early
repayments, the income Lender continues to receive from the
amount of the AE Term Credit Facility or any Advance not repaid
early must be added to the income it receives upon reinvestment.
(b) The Funding Loss shall be calculated on the amount of the early
repayment and for the period commencing from the date of early
repayment and lasting until the date originally agreed for the
repayment of the relevant amount. The interbank deposit rate
prevailing at the time of early repayment plus 200 basis points
shall serve as the discount rate.
(c) A statement setting forth the amount of any such loss or expense
shall be submitted by Lender to Borrowers or Pentagon, as the
case may be, and shall, in the absence of demonstrable error, be
conclusive on Borrowers and Pentagon.
Appendix D-2
<PAGE>
2.2.4. Should the above-mentioned calculation of the Funding Loss result in a
negative amount, Lender shall transfer such amount ("FUNDING PROFIT") to
Borrowers or Pentagon, as the case may be, having deducted all taxes,
duties, charges or otherwise required by law.
2.2.5. Clauses 2.2.3 and 2.2.4 shall not apply to any repayment or prepayments
pursuant to Article 11, 12 and 13 of the Credit Regulations.
Appendix D-3
<PAGE>
EXHIBIT A
TO
ALLIANCE EUROPE, ALLIANCE GRAPHICS,
AUBECQ AND PENTAGON LOAN AGREEMENT
REPAYMENT SCHEDULE FOR AE TERM CREDIT FACILITY
Principal shall be due and payable quarterly, commencing January 31, 1999 and
continuing on the last day of each calendar quarter thereafter to and including
the last day of October 2004 in installments as set forth below:
Date of Payment:
Each January 31, April 30,
July 31, and October 31 Quarterly Principal
Commencing January 31, 1999 Amount Due
--------------------------- -----------------
1999 496,434.00
2000 6,619,117.00
2001 16,051,359.00
2002 18,202,572.00
2003 19,857,351.00
2004 21,512,131.00
PROVIDED that in any event the entire remaining principal balance then
outstanding, together with any other amounts due hereunder, shall be due on
October 31, 2004.
Appendix D-4
<PAGE>
EXHIBIT 32.1
FINANCIAL COVENANTS
CONSOLIDATED DEBT TO EBITDA RATIO shall mean, as of any date of determination, a
ratio of (a) Debt of PolyVision and its Subsidiaries as at the end of such
fiscal quarter to (b) EBITDA for the most recently completed four fiscal
quarters of PolyVision and its Subsidiaries.
DEBT of any Person means, without duplication,
(a) all indebtedness of such Person for borrowed money,
(b) all Obligations (for all purposes of this definition of Debt, as
defined below in this Exhibit 32.1) of such Person for the deferred purchase
price of property or services,
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments,
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property),
(e) all Obligations of such Person as lessee under Capitalized
Leases,
(f) all Obligations, contingent or otherwise, of such Person under
bankers acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of (i) any capital stock of or
other ownership or profit interest in such Person or any other Person or (ii)
any warrants, rights or options to acquire such capital stock,
(h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h) above
or clause (j) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Debt against loss in respect thereof, (C) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (D) otherwise to assure the holder of such Debt against loss in
respect thereof, and
(j) all Debt referred to in clauses (a) through (i) above of another
Person secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts, contract rights or inventory) owned
Appendix D-5
<PAGE>
by such Person, even though such Person has not assumed or become liable for the
payment of such Debt.
EBITDA shall mean, for any period, the sum, for PolyVision and its Subsidiaries
determined on a Consolidated basis, of (i) Net Income (or net loss), (ii)
Interest Expense, (iii) income tax expense, (iv) depreciation expense, (v)
extraordinary and nonrecurring losses, (vi) amortization expense and other
non-ordinary non-cash charges deducted in the calculation of Net Income or net
losses (including, without limitation, amortization of fees and expenses related
to the Acquisition and compensation expense not paid in cash), and (vii) to the
extent deducted in the computation of Net Income, non-recurring restructuring
charges resulting from plant closing expenses, severance obligations and
reorganization expenses relating to the consummation of the Acquisition as
described in the Pro-Forma Financials or Projections (as defined in the Fleet
Credit Agreement) delivered on the Closing Date, MINUS extraordinary and
nonrecurring gains (or plus extraordinary losses) (in each case determined in
accordance with GAAP), PLUS the pro forma effect on EBITDA for such period of
any Permitted Acquisition made by PolyVision or its Subsidiaries (such pro forma
effect to be determined in a manner reasonably acceptable to the Fleet Agent).
FIXED CHARGE COVERAGE RATIO shall mean, for the four consecutive fiscal quarters
of PolyVision and its Subsidiaries ending on the date of determination, the
ratio of (a) EBITDA of PolyVision and its Subsidiaries for such four fiscal
quarters (or such other period specified in the covenants set forth below
entitled "Fixed Charge Coverage Ratio"), to (b) Fixed Charges for such four
fiscal quarters (or other period specified in such covenant).
FIXED CHARGES means the sum, for PolyVision and its Subsidiaries on a
Consolidated basis for any period, of (i) Interest Expense, PLUS (ii) scheduled
amortization of Debt payable during such period, plus (iii) income taxes and
other taxes payable in respect of such period, plus (iv) Capital Expenditures
during such period to the extent permitted by this Agreement or the KBC Loan
Agreements.
HEDGE AGREEMENTS - shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
INTEREST EXPENSE shall mean, with respect to any Person for any period,
interest expense on all Debt of such Person for such period whether paid or
accrued, determined on a Consolidated basis for such Person and its Subsidiaries
and in accordance with GAAP, and including, without limitation, (a) in the case
of PolyVision and its Subsidiaries, interest expense in respect of Debt
resulting from Advances under this Agreement, the Fleet Credit Agreement or the
Other KBC Loan Agreement, (b) the interest component of all obligations under
Capitalized Leases, (c) commissions, discounts and other fees and charges
payable in connection with letters of credit (including, without limitation,
Letters of Credit), (d) the net payment, if any, payable in connection with
Hedge Agreements less the net credit, if any, received in connection with Hedge
Agreements and (e) all fees paid by PolyVision or any of its Subsidiaries
pursuant to in connection with the commitments hereunder or under the Fleet
Credit Agreement or under the Other KBC Loan Agreement.
OBLIGATION - shall mean, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment,
Appendix D-6
<PAGE>
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 34.1(j). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit and European Letter of
Credit reimbursements, Letter of Credit and European Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document,
(b) the obligation of any Loan Party to reimburse any amount in respect of any
of the foregoing that any Lender Party may, after the occurrence and during the
continuance of an Event of Default, elect to pay or advance on behalf of such
Loan Party, and (c) any other obligations arising out of or under, based upon or
relating to the Loan Documents.
Appendix D-7
<PAGE>
COVENANTS
CONSOLIDATED DEBT TO EBITDA RATIO. Maintain as of the end of each fiscal
quarter of the Borrowers a Consolidated Debt to EBITDA Ratio of not more than
the ratio set forth below:
------------------------------ ----------------
Date of Determination: Maximum Ratio
------------------------------ ----------------
January 31, 1999 6.00 to 1.0
------------------------------ ----------------
April 30, 1999 6.00 to 1.0
------------------------------ ----------------
July 31, 1999 5.75 to 1.0
------------------------------ ----------------
October 31, 1999 5.50 to 1.0
------------------------------ ----------------
January 31, 2000 5.25 to 1.0
------------------------------ ----------------
April 30, 2000 5.25 to 1.0
------------------------------ ----------------
July 31, 2000 5.25 to 1.0
------------------------------ ----------------
October 31, 2000 5.00 to 1.0
------------------------------ ----------------
January 31, 2001 5.00 to 1.0
------------------------------ ----------------
April 30, 2001 4.50 to 1.0
------------------------------ ----------------
July 31, 2001 4.50 to 1.0
------------------------------ ----------------
October 31, 2001 4.50 to 1.0
------------------------------ ----------------
January 31, 2002 4.50 to 1.0
------------------------------ ----------------
April 30, 2002 through (and
including) October 31, 2005 4.0 to 1.0
------------------------------ ----------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of PolyVision ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case cost savings resulting from the Acquisition):
Date Amount
------------------------------ ----------------
January 31, 1999 $2,000,000
------------------------------ ----------------
April 30, 1999 $1,750,000
------------------------------ ----------------
July 31, 1999 $1,250,000
------------------------------ ----------------
October 31, 1999 $ 500,000
------------------------------ ----------------
Appendix D-8
<PAGE>
INTEREST COVERAGE RATIO. Maintain as of each date set forth below, a ratio of
(i) EBITDA for the most recently completed four fiscal quarters of PolyVision to
(ii) Consolidated cash Interest Expense for such period of not less than the
ratio set forth below for such period:
------------------------------ ----------------
Date of Determination: Minimum Ratio
------------------------------ ----------------
January 31, 1999 1.70 to 1.0
------------------------------ ----------------
April 30, 1999 1.70 to 1.0
------------------------------ ----------------
July 31, 1999 1.75 to 1.0
------------------------------ ----------------
October 31, 1999 1.85 to 1.0
------------------------------ ----------------
January 31, 2000 1.85 to 1.0
------------------------------ ----------------
April 30, 2000 2.00 to 1.0
------------------------------ ----------------
July 31, 2000 2.00 to 1.0
------------------------------ ----------------
October 31, 2000 2.00 to 1.0
------------------------------ ----------------
January 31, 2001 2.00 to 1.0
------------------------------ ----------------
April 30, 2001 2.25 to 1.0
------------------------------ ----------------
July 31, 2001 2.25 to 1.0
------------------------------ ----------------
October 31, 2001 2.25 to 1.0
------------------------------ ----------------
January 31, 2002 2.25 to 1.0
------------------------------ ----------------
April 30, 2002 through (and
including) October 31, 2005 2.50 to 1.0
------------------------------ ----------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Borrowers ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case cost savings resulting from the Acquisition):
------------------------------ ----------------
Date Amount
------------------------------ ----------------
January 31, 1999 $2,000,000
------------------------------ ----------------
April 30, 1999 $1,750,000
------------------------------ ----------------
July 31, 1999 $1,250,000
------------------------------ ----------------
October 31, 1999 $ 500,000
------------------------------ ----------------
Appendix D-9
<PAGE>
FIXED CHARGE COVERAGE RATIO. Maintain as of the end of each fiscal quarter of
PolyVision a Fixed Charge Coverage Ratio for the most recently completed four
fiscal quarters of PolyVision and its Subsidiaries on a Consolidated basis of
not less than the following ratios for the requisite periods set forth below
(except that in respect of the first three testing periods referred to below,
EBITDA and Fixed Charges shall be computed only for the one, two and three
fiscal quarterly periods respectively described below, provided that Capital
Expenditures shall be computed within fixed charges in an amount equal to the
greater of one-quarter of the Capital Expenditures permitted during [the twelve
month period] during which a testing period ends and actual Capital Expenditures
made during the testing period specified below):
-------------------------------- ----------------
Four Fiscal Quarters ending on:
-------------------------------- ----------------
Each October 31, January 31, 1.10 to 1.0
April 30 and July 31 after the
Closing Date and continuing
through (and including)
October 31, 2005
-------------------------------- ----------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of PolyVision ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case cost savings resulting from the Acquisition):
-------------------------------- ----------------
Date Amount
-------------------------------- ----------------
January 31, 1999 $2,000,000
-------------------------------- ----------------
April 30, 1999 $1,750,000
-------------------------------- ----------------
July 31, 1999 $1,250,000
-------------------------------- ----------------
October 31, 1999 $ 500,000
-------------------------------- ----------------
Appendix D-10
<PAGE>
Exhibit 10.34
_______________________________
CREDIT FACILITY AGREEMENT
_______________________________
between
POLYVISION BELGIUM NV
and
POLYVISION FRANCE EURL
as Borrowers
and
KBC BANK N.V.
<PAGE>
TABLE OF CONTENTS
PART I - INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PART II - BELGIUM CREDIT FACILITY. . . . . . . . . . . . . . . . . . . . . . 4
2. BELGIUM TERM CREDIT FACILITY . . . . . . . . . . . . . . . . . . 4
PART III - FRANCE CREDIT FACILITY. . . . . . . . . . . . . . . . . . . . . . 4
3. FRANCE TERM CREDIT FACILITY. . . . . . . . . . . . . . . . . . . 4
PART IV - INTEREST, FEES AND CHARGES . . . . . . . . . . . . . . . . . . . . 5
4. INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. DEFAULT RATE OF INTEREST . . . . . . . . . . . . . . . . . . . . 5
6. MAXIMUM INTEREST . . . . . . . . . . . . . . . . . . . . . . . . 6
7. COMPUTATION OF INTEREST AND FEES . . . . . . . . . . . . . . . . 6
8. FINANCIAL ANALYSIS AND OTHER FEES. . . . . . . . . . . . . . . . 6
9. REIMBURSEMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . 6
10. TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . 8
PART V - LOAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . 9
11. MANNER OF SETTING BIBOR TERM PORTIONS. . . . . . . . . . . . . . 9
12. REPAYMENT OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . 10
13. MANDATORY AND OPTIONAL PREPAYMENTS . . . . . . . . . . . . . . . 11
14. APPLICATION OF PAYMENTS AND COLLECTIONS. . . . . . . . . . . . . 12
15. LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
16. STATEMENTS OF ACCOUNT. . . . . . . . . . . . . . . . . . . . . . 13
PART VI - TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 13
17. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
18. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART VII - SECURITY INTERESTS. . . . . . . . . . . . . . . . . . . . . . . . 14
19. SECURITY ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . 14
PART VIII - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 15
20. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 15
21. CONTINUOUS NATURE OF REPRESENTATIONS
AND WARRANTEES . . . . . . . . . . . . . . . . . . . . . . . . . 21
22. SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 22
i
<PAGE>
PART IX - COVENANTS AND CONTINUING AGREEMENTS. . . . . . . . . . . . . . . . 22
23. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 22
24. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 25
25. SPECIFIC FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . 30
PART X - CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . 31
26. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 31
PART XI - EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT. . . . . . . . . 32
27. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 32
28. ACCELERATION OF THE OBLIGATIONS. . . . . . . . . . . . . . . . . 35
29. OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 35
30. REMEDIES CUMULATIVE; NO WAIVER . . . . . . . . . . . . . . . . . 36
PART XII - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 36
31. INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
32. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
33. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 37
34. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . 37
35. CUMULATIVE EFFECT; CONFLICT OF TERMS . . . . . . . . . . . . . . 37
36. EXECUTION IN COUNTERPARTS. . . . . . . . . . . . . . . . . . . . 38
37. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
38. CREDIT INQUIRIES . . . . . . . . . . . . . . . . . . . . . . . . 40
39. TIME OF ESSENCE. . . . . . . . . . . . . . . . . . . . . . . . . 40
40. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 40
41. INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . 40
42. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . 41
43. GOVERNING LAW; CONSENT TO FORUM. . . . . . . . . . . . . . . . . 41
INTEREST COVERAGE RATIO . . . . . . . . . . . . . . . . . . . COVENANTS - 2
FIXED CHARGE COVERAGE RATIO . . . . . . . . . . . . . . . . . COVENANTS - 3
ii
<PAGE>
LIST OF EXHIBITS AND APPENDICES
Appendix A General Definitions
Appendix B Credit Regulations
Appendix C Tax Identification Numbers of Subsidiaries
Appendix D Costs and Expenses
Exhibit A Repayment Schedule
Exhibit 20.2 Jurisdictions in which Borrowers are Authorized to do Business
Exhibit 20.6 Capital Structure of Borrowers
Exhibits 20.10 Corporate Names
Exhibit 20.13 Business Locations
Exhibit 20.15 Same as Exhibit 20.13
Exhibit 20.36 Plans
Exhibit 23.3 Compliance Certificate
Exhibit 25.1 Financial Covenants
iii
<PAGE>
CREDIT FACILITY AGREEMENT
THIS CREDIT FACILITY AGREEMENT this 20th November 1998,
BY AND AMONG:
(1) POLYVISION BELGIUM NV, a limited liability company incorporated under the
laws of Belgium as a "NAAMLOZE VENNOOTSCHAP", in the process of
registration with the Registry of Commerce of Tongeren, having its
registered office at Zuiderring 56, 3600 Genk, Belgium, represented for
the purposes of this Agreement by Robert Krol (sometimes referred to
herein, individually, as "POLYVISION BELGIUM" or "BORROWER", and,
together with PolyVision France EURL, as "BORROWERS");
(2) POLYVISION FRANCE EURL, a limited liability company incorporated as a
"ENTREPRISE UNIPERSONNELLE A RESPONSABILITE LIMITEE (EURL)" under the
laws of France and registered with the Companies' Registry of
Valenciennes under number B 420 517 476, having its registered office at
Crespin (Nord), Rue des Deportes, R.C.S. Valenciennes, France,
represented for the purposes of this Agreement by Robert Krol (sometimes
referred to herein, individually, as "POLYVISION FRANCE" or "BORROWER",
and, together with PolyVision Belgium, as "BORROWERS");
AND:
(3) KBC BANK N.V., a limited liability company incorporated under the laws of
Belgium as a "NAAMLOZE VENNOOTSCHAP", having its registered office at
1080, Brussels, Havenlaan 2, registered with the Registry of Commerce of
Brussels under number 623.074 and licensed as a bank in Belgium, acting
through its Genk branch located at 3600 Genk, Onderwijslaan 72, Box 11
registered with the Commercial Registry of Tongeren under number 2.254,
bank account number 4886088351-83, represented for the purposes of this
Agreement by Wim Leemen (hereinafter referred to as "LENDER");
WHEREAS:
(A) Lender is willing to make Loans and other financial accommodations to
Borrowers on the terms and conditions set forth herein;
(B) As partial security for such loans and other financial accommodations,
Lender has required that Lender be provided with two irrevocable standby
letters of credit, in the amounts referred to in clause (C) (iii) below;
and
(C) Concurrently with the execution and delivery of this Agreement,
<PAGE>
(i) Fleet National Bank, a United States national banking
association, having an office at 1185 Avenue of the Americas, New
York, New York 10036, United States of America, individually and
as Administrative Agent for itself and the other lenders party
thereto (in its individual capacity, "FLEET" and in such capacity
as Administrative Agent, together with any successors in its
capacity as Administrative Agent, the "FLEET AGENT");
(ii) certain financial institutions from time to time parties thereto
(collectively the "FLEET LENDERS"); and
(iii) PolyVision Corporation, a corporation organized under the laws of
New York, United States of America ("POLYVISION"), Posterloid
Corporation, a corporation organized under the laws of Delaware,
United States of America ("POSTERLOID"); and Greensteel, Inc., a
corporation organized under the laws of Delaware, United States
of America ("GREENSTEEL"),
have entered into a Credit Agreement (as it may be amended, modified or
supplemented from time to time, the "FLEET CREDIT AGREEMENT"), pursuant
to which Fleet has agreed, among other things, to issue two irrevocable
standby letters of credit, one in the face amount of BEF171,510,970.00
(together with any amendments thereto and substitutions therefor, the
"BELGIUM STANDBY LETTER OF CREDIT"), and one in the face amount of
BEF98,006,268.00 (together with any amendments thereto and substitutions
therefor, the "FRANCE STANDBY LETTER OF CREDIT"), respectively.
NOW, THEREFORE, in consideration of the premises and covenants and in reliance
upon the representations and warranties set out below, the parties hereto agree
as follows:
PART I - INTERPRETATION
1. DEFINITIONS
1.1 For the purposes of this Agreement, capitalized words and
expressions shall have the meanings assigned to them in APPENDIX
A, GENERAL DEFINITIONS.
1.2. Accounting terms not otherwise specifically defined herein shall
be construed in accordance with the generally accepted accounting
principles in effect in the country in which the relevant party
is located, applied on a consistent basis ("GAAP").
1.3 For the purpose of determining compliance with the covenant and
Default limitations set out in this Agreement, amounts expressed
in US Dollars shall be measured by aggregating the applicable
items denominated in US Dollars with the Dollar Equivalent of all
such items in foreign currencies.
2
<PAGE>
1.4 In this Agreement and its Appendices, Exhibits and Schedules,
unless the context otherwise requires:
(a) references to this Agreement and/or its Appendices,
Exhibits and/or Schedules or any other document, include
this Agreement and its Appendices, Exhibits and/or
Schedules or such other document as varied, modified or
supplemented in any manner from time to time;
(b) references to any party shall, where relevant, be deemed
to be references to or to include, as appropriate, their
respective permitted successors, assigns or transferees;
(c) references to recitals, clauses and schedules and
sub-divisions of them are references to the recitals and
clauses of, and schedules to, this Agreement and
sub-divisions of them respectively;
(d) references to any enactment include references to such
enactment as reenacted, amended or extended on or before
the date of this Agreement and any subordinate legislation
made from time to time under it;
(e) references to a "person" include any individual, company,
corporation, firm, partnership, joint venture,
association, organization, institution, trust or agency,
whether or not having a separate legal personality;
(f) references to the one gender include all genders, and
references to the singular include the plural and vice
versa;
(g) any reference to indemnifying any person against any
circumstance includes indemnifying and holding that person
harmless from all actions, claims, demands and proceedings
of any nature made against that person and all losses,
damages, payments, awards, costs or expenses made,
suffered or incurred by that person as a consequence of,
or which would not have arisen but for, that circumstance;
and
(h) headings are inserted for convenience only and shall be
ignored in construing this Agreement.
1.5 The Appendices, Exhibits and Schedules and the Recitals form part
of this Agreement and shall be construed and shall have the same
full force and effect as if expressly set out in the body of this
Agreement.
3
<PAGE>
1.6 Any reference in this Agreement to a document being "in the
agreed terms" is to a document in the terms agreed between the
parties and for identification purposes only signed or initialed
by them or on their behalf on or before the date of this
Agreement.
1.7 Where under the terms of this Agreement any party accepts an
obligation to use its "best endeavors" in and towards the
fulfillment of any objective or occurrence the full extent of
that party's obligation shall be to take all such steps which a
prudent, determined and reasonable person, acting in its own
interests and intent on the fulfillment of such obligation, would
take irrespective of the costs of or associated with taking such
steps.
PART II - BELGIUM CREDIT FACILITY
2. BELGIUM TERM CREDIT FACILITY
2.1 In reliance upon the representations and warranties and subject
to the terms and conditions set out in this Agreement and the
Loan Documents, Lender agrees, provided that no Default or Event
of Default then exists, to make a term credit facility (the
"BELGIUM TERM CREDIT FACILITY") available to PolyVision Belgium
on or about the Closing Date in a principal amount equal to
BEF240,555,000.00 to be drawn down in full by PolyVision Belgium
on the Closing Date (the "BELGIUM TERM LOAN").
2.2 Until the Borrowers and Lender shall agree otherwise, the Belgium
Term Credit Facility shall bear interest for interest periods,
applicable to the different BIBOR Term Portions, having durations
of minimum one (1) month, two (2) months, three (3) months or
maximum six (6) months, which may not be repaid before maturity,
such interest periods (i.e., BIBOR Periods) to be selected for
the BIBOR Term Portions in accordance with the provisions and as
more fully described in Section 11 hereof;
PROVIDED, THAT PolyVision Belgium shall select BIBOR Term Portions in a
manner consistent with the repayment schedule attached hereto in EXHIBIT
A.
PART III - FRANCE CREDIT FACILITY
3. FRANCE TERM CREDIT FACILITY
3.1 In reliance upon the representations and warranties and subject
to the terms and conditions set out in this Agreement and the
Loan Documents, Lender agrees, provided that no Default or Event
of Default then exists, to make a term credit facility (the
"France Term Credit Facility") available to PolyVision France on
or about the Closing Date in a principal amount equal to
BEF137,460,000.00 to be
4
<PAGE>
drawn down in full by PolyVision France on the Closing Date ( the
"FRANCE TERM LOAN").
3.2 Until the Borrowers and Lender shall agree otherwise, the France
Term Credit Facility shall bear interest for interest periods,
applicable to the different BIBOR Term Portions, having durations
of minimum one (1) month, two (2) months, three (3) months or
maximum six (6) months, which may not be repaid before maturity,
such interest periods (i.e., BIBOR Periods) to be selected for
the BIBOR Term Portions in accordance with the provisions and as
more fully described in Section 11 hereof;
PROVIDED, THAT PolyVision France shall select BIBOR Term Portions in a
manner consistent with the repayment schedule attached hereto in EXHIBIT
A.
PART IV - INTEREST, FEES AND CHARGES
4. INTEREST
4.1 BIBOR TERM PORTION
4.1.1 Interest shall accrue on the principal amount of each
BIBOR Term Portion at an annual rate equal to the BIBOR
Rate applicable to such BIBOR Term Portion for the
corresponding BIBOR Period PLUS the Applicable Margin.
4.2 BIBOR PERIODS AND BIBOR RATE
4.2.1 BIBOR Periods and the BIBOR Rate applicable to each BIBOR
Term Portion shall be determined in accordance with the
terms of this Agreement.
4.2.2 The total number of all BIBOR Periods at any time
outstanding for all Borrowers together shall not at any
time exceed six (6).
5. DEFAULT RATE OF INTEREST
5.1 Upon and after the occurrence of an Event of Default, and during
the continuation thereof, the principal amount of all Loans
shall, at the option of Lender, bear interest at a rate per annum
equal to the interest rate otherwise applicable thereto plus 2%,
or, in the event of termination of the credit facility provided
hereunder, in whole or in part, such other rate as is provided in
the Credit Regulations (the "DEFAULT RATE").
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6. MAXIMUM INTEREST
6.1 In no event whatsoever shall the aggregate of all amounts deemed
interest hereunder and charged or collected pursuant to the terms
of this Agreement exceed the highest rate permissible under any
law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto.
6.2 If any provisions of this Agreement are in contravention of any
such law, such provisions shall be deemed amended to conform
thereto.
7. COMPUTATION OF INTEREST AND FEES
7.1 Interest, financial analysis fees and service fees hereunder
shall be calculated daily and shall be computed on the actual
number of days elapsed over a year of 360 days.
8. FINANCIAL ANALYSIS AND OTHER FEES
8.1 Borrowers shall from time to time pay to Lender or to Lender's
designated representative in connection with periodic visits to
Borrowers' places of business in order to perform financial and
collateral analysis all reasonable out-of-pocket expenses
incurred by Lender or Lender's designated representative in
connection with such visits.
8.2 Expenses under Article 8.1 shall be payable on the first day of
the quarter following the date of issuance by Lender or by
Lender's designated representative of a request for payment
thereof to the applicable Borrower as the case may be.
8.3 During the term of this Agreement, Borrowers shall pay to Lender
a service fee equal to 1/8% per annum of the outstanding
principal balance of the respective Belgium Term Loan and the
France Term Loan, as the case may be.
8.4 The service fee shall be payable at the end of each relevant
BIBOR Period in respect of the BIBOR Term Portions.
9. REIMBURSEMENT OF EXPENSES
9.1 If, at any time or times regardless of whether or not an Event of
Default then exists, Lender incurs legal or accounting expenses
or any other reasonable costs or out-of-pocket expenses in
connection with:
(a) the negotiation and preparation of this Agreement or any
of the other Loan Documents, any amendment of or
modification of this Agreement or any of the other Loan
Documents;
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(b) the administration of this Agreement or any of the other
Loan Documents and the transactions contemplated hereby
and thereby;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Lender, any Borrower or any
other Person) in any way relating to the Collateral, this
Agreement or any of the other Loan Documents or any
Borrower's affairs;
(d) any attempt to enforce any rights of Lender against any
Borrower or any other Person which may be obligated to
Lender by virtue of this Agreement or any of the other
Loan Documents, including, without limitation, the Account
Debtors; or
(e) any attempt to inspect, verify, protect, preserve,
restore, collect, sell, liquidate or otherwise dispose of
or realize upon the Collateral;
then, to the extent permitted by applicable law, all such legal and
accounting expenses, other reasonable costs and out-of-pocket expenses of
Lender shall be charged to the Borrower(s) on whose behalf such legal and
accounting expenses or other costs and out-of-pocket expenses have been
incurred by Lender. Borrowers shall also reimburse Lender for any costs
or expenses incurred by Lender or Fleet in connection with the transfer
of funds by Lender to Fleet pursuant to the Letter of Credit Agreement,
excluding however any costs or expenses incurred as a result of currency
rate fluctuations.
9.2 All expenses of protecting, storing, warehousing, insuring,
handling, maintaining and shipping the Collateral, any and all
excise, property, sales, and use taxes imposed by any national or
local authority on any of the Collateral or in respect of the
sale thereof shall, to the extent permitted by applicable law, be
borne and paid by the Borrower(s) on whose behalf such expenses
have been incurred by Lender.
9.3 If any party fails to promptly pay any portion thereof when due,
Lender may, at its option, but shall not be required to, pay the
same and charge such party therefor.
9.4 Borrowers shall pay to Lender, on demand, any and all fees, costs
or expenses which Lender is required to pay to a bank or other
similar institution (including, without limitation, any fees paid
by Lender to any other Person) arising out of or in connection
with:
(a) the forwarding to any Borrower or any other Person on
behalf of such Borrower, by Lender, of proceeds of loans
made by Lender to such Borrower pursuant to this
Agreement; and
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(b) the depositing for collection, by Lender, of any check or
item of payment received or delivered to Lender on account
of the Belgium Obligations or on account of the France
Obligations.
9.5 All amounts chargeable to Borrowers under Part IV hereof shall be
Belgium Obligations or France Obligations, respectively, secured
by all of the Collateral, shall be payable on demand and shall
bear interest from the date such amounts become payable until
paid in full at the highest rate then applicable to any BIBOR
Term Portion from time to time.
10. TAX CONSIDERATIONS
10.1 All payments by Borrowers to Lender under this Agreement, whether
in respect of principal, interest, fees or any other item, and
all payments by Lender to Fleet under the Letter of Credit
Agreement, shall be made in full without any deduction or
withholding (whether in respect of set off, counterclaim, duties,
taxes, charges or otherwise whatsoever) unless the deduction or
withholding is required by law, in which case the applicable
Borrower as the case may be, shall:
(a) ensure that the deduction or withholding does not exceed
the minimum amount legally required;
(b) forthwith pay to Lender or Fleet, as the case may be, such
additional amount so that the net amount received by
Lender or Fleet, as the case may be, will equal the full
amount which would have been received by it had no such
deduction or withholding been made;
(c) pay to the relevant taxation or other authorities within
the period for payment permitted by applicable law the
full amount of the deduction or withholding (including,
but without limitation, the full amount of any deduction
of withholding from any additional amount paid pursuant to
this sub-clause); and
(d) furnish to Lender or Fleet, as the case may be, within the
period for payment permitted by the relevant law, either:
(i) an official receipt of the relevant taxation
authorities involved in respect of all amounts so
deducted or withheld; or
(ii) if such receipts are not issued by the taxation
authorities concerned on payment to them of
amounts so deducted or held, a certificate of
deduction or equivalent evidence of the relevant
deduction or withholding.
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PART V - LOAN ADMINISTRATION.
11. MANNER OF SETTING BIBOR TERM PORTIONS
11.1 The borrowings hereunder shall be drawn in full on the date
hereof but may bear interest at interest rates applicable to
different portions of such borrowings from time to time, and the
rates applicable thereto are applicable to the different BIBOR
Term Portions. The request for establishing or changing the
BIBOR Periods applicable to BIBOR Term Portions shall be made, or
shall be deemed to be made, in the following manner:
(a) Any Borrower may give Lender notice of its intention to
establish a BIBOR Term Portion, by sending to Lender and
Fleet simultaneously, by telex or facsimile transmission,
not later than 11:00 AM Brussels time, four (4) Business
Days prior to the date hereof or date of termination of
any then terminating BIBOR Term Portion, a duly completed
BIBOR Period Request,
PROVIDED, THAT no such request may be made at a time when there
exists a Default or an Event of Default.
(b) Each BIBOR Period Request sent to Lender and Fleet
pursuant to Article 11.1(a) above shall be irrevocable and
shall specify:
(i) the date on which the applicable Borrower, as the
case may be, proposes to commerce a BIBOR Period
for a BIBOR Term Portion, which shall be a
Business Day;
(ii) the BIBOR Period of the proposed BIBOR Term
Portion.
11.2 Each Borrower hereby irrevocably authorizes Lender to charge to
its respective Loan Account hereunder, a sum sufficient to pay
all interest accrued on the Belgium Obligations and/or the France
Obligations, respectively, during the immediately preceding month
or quarter or applicable BIBOR Interest Payment Date and to pay
all costs, fees and expenses at any time owed by the applicable
Borrower, as the case may be, to Lender under this Agreement.
11.3. If any Borrower fails to give a timely borrowing notice with
respect to the commencement of a new BIBOR Period after any
maturing BIBOR Term Portion, Lender shall be entitled to treat
such failure as a request for a new BIBOR Term Portion having the
same BIBOR Period as the maturing BIBOR Term Portion, taking into
account the repayment schedule of the applicable Term Loan set
forth in EXHIBIT A.
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12. REPAYMENT OF OBLIGATIONS
12.1 Except where evidenced by notes or other instruments issued or
made by the applicable Borrower, as the case may be, to Lender
and accepted by Lender specifically containing payment provisions
which are in conflict with this Article 12 (in which event the
conflicting provisions of said notes or other instruments shall
govern and control), the Belgium Obligations and the France
Obligations, respectively, shall be payable as follows:
(a) Principal payable on account of the Belgium Term Credit
Facility or on the France Term Credit Facility shall be
due and payable on a quarterly basis in installments as
set out in EXHIBIT A hereto, PROVIDED THAT:
(i) the entire remaining principal amount then
outstanding, together with any and all other
amounts due hereunder, shall be due and payable on
October 31, 2004 at the latest; and
(ii) the entire unpaid principal balance and accrued
interest on the Belgium Term Loan or the France
Term Loan shall, notwithstanding the foregoing, be
due and payable immediately upon any termination
of this Agreement pursuant to Article 17 or 18
hereof.
(b) Interest accrued on any BIBOR Term Portion shall be due
and payable on each BIBOR Interest Payment Date, as the
case may be, and on the earliest of;
(i) the last day of the BIBOR Period applicable to
such BIBOR Term Portion;
(ii) the occurrence and continuance of an Event of
Default in consequence of which Lender elects to
accelerate the maturity and payment of the Belgium
Obligations and/or France Obligations; or
(iii) termination of this Agreement pursuant to Article
17 or 18 hereof.
(c) Costs, fees and charges payable pursuant to this Agreement
shall be payable by the applicable Borrower, as and when
provided in Part IV hereof, to Lender or to any other
Person designated by Lender in writing.
(d) the payment of money, if any, shall be payable by the
applicable Borrower, as the case may be, to Lender as and
when provided in this Agreement, the Other Agreements or
the Security Documents, or on demand, whichever is
earlier.
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13. MANDATORY AND OPTIONAL PREPAYMENTS
13.1 Within fifteen (15) days after any receipt by any Borrower of Net
Cash Proceeds from Asset Dispositions (other than Extraordinary
Receipts the disposition of which shall be governed by the terms
of subsection 13.1(a) below) made by any Subsidiary of such
Borrower, the applicable Borrower shall prepay the then
outstanding Loans in an amount equal to one-hundred percent
(100%) of such Net Cash Proceeds in excess of $500,000 (including
in such computation of $500,000, all Net Cash Proceeds received
by PolyVision and any one or more of its Subsidiaries) in any
Fiscal Year, PROVIDED that no such prepayment need be made (A)
unless the Net Cash Proceeds from any single Asset Disposition or
series of related Asset Dispositions (in either case, by
PolyVision and all of its Subsidiaries) exceed $500,000 (in which
case a prepayment shall be made in the amount of the entire Asset
Disposition) or until the cumulative Net Cash Proceeds from all
Asset Dispositions by PolyVision and any one or more of its
Subsidiaries in any particular fiscal year exceed $500,000 (in
which case a prepayment shall be made in the amount of the Net
Cash Proceeds from the specific Asset Disposition (or portion
thereof) causing the limit to be exceeded), except that the terms
of this subsection (A) shall not be applicable in respect of Net
Cash Proceeds reinvested in accordance with the terms of the
following subsection (B); and (B) with respect to Asset
Dispositions by a Subsidiary of any Borrower, if the Net Cash
Proceeds therefrom are used to reinvest in fixed assets (for use
in its business or the business of the Subsidiaries) within 180
days (or 360 days with respect to real estate and improvements on
real estate) of such Asset Disposition, PROVIDED that any such
Net Cash Proceeds not so reinvested shall be used to prepay the
Loans on the 181st day (or 361st day with respect to real estate
and improvements on real estate).
(a) Within fifteen (15) days after receipt of Net Cash
Proceeds by a Borrower from any Extraordinary Receipt
received by or paid to or for the account of such party or
its Subsidiaries and not otherwise included in Article
13.1 above, such party shall prepay the then outstanding
Loans in an amount equal to one hundred percent (100%) of
such Net Cash Proceeds in excess of $500,000 as computed
in the aggregate with respect to PolyVision and all of its
Subsidiaries.
13.2 The applicable prepayment shall be applied in the case of the
applicable Borrower to the installments of principal due under
its respective Term Loans PRO RATA based on the remaining amounts
of such installments until paid in full.
13.3 [INTENTIONALLY OMITTED]
13.4 Each Borrower shall prepay its respective Term Credit Facility in
amounts equal to their respective pro-rata share (calculated as
set forth below) of Excess Cash Flow
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with respect to each fiscal year of Parent during the Term
hereof, such prepayments to be made within two (2) Business Days
following the due date for delivery by Borrowers to Lender of the
annual financial statements required by Article 23.1(c)(i) hereof
and each such prepayment shall be applied to the installments of
principal due under its respective Term Credit Facility on a
pro-rata basis until payment of the Term Credit Facility in full.
For purposes of this Article 13.4, Borrowers' pro-rata share of
Excess Cash Flow will be determined by calculating the percentage
that the outstanding principal balance of the Term Credit
Facility is of the total of such principal balance plus the
outstanding balance of the "Term Loans" under the Fleet Credit
Agreement and the "Term Loans" under the Other KBC Loan Agreement
and multiplying total Excess Cash Flow by such percentage.
13.5 Borrowers may, at their option, from time to time prepay
installments of their Term Credit Facility at the Borrowers
option, either in the inverse order of maturity or pro-rata with
respect to the remaining installments.
13.6 Any such optional prepayment shall be credited against the amount
of the mandatory prepayment required under Article 13.4 for the
fiscal year in which such optional prepayment was made.
13.7 Except for charges under APPENDIX D applicable to prepayments of
BIBOR Term Portions, such prepayments shall be without premium or
penalty.
13.8 This Agreement may not be prepaid in full or terminated unless
the Other KBC Loan Agreement is prepaid in full and terminated
concurrently therewith, and all Obligations hereunder and
"Obligations" under (and as defined in) the Other KBC Loan
Agreement shall have been paid in full.
14. APPLICATION OF PAYMENTS AND COLLECTIONS
14.1 During any period in which an Event of Default exists, each of
the Borrowers irrevocably waives the right to direct the
application of any and all payments and collections at any time
or times hereafter received by Lender from or on behalf of such
Borrower, and each of the Borrowers does hereby irrevocably agree
that Lender shall have the continuing exclusive right (subject to
the provisions of this Agreement) to apply and reapply any and
all such payments and collections received in respect of such
Borrower at any time or times hereafter by Lender or its agents
against the Belgium Obligations (in respect of payments or
collections from or on behalf of PolyVision Belgium), and/or the
France Obligations (in respect of payments or collections from or
on behalf of PolyVision France), as the case may be, in such
manner as Lender may deem advisable, notwithstanding any entry by
Lender upon any of its books and records.
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15. LIABILITY
15.1 PolyVision Belgium shall be liable for and bound by the Belgium
Obligations, and in no event shall PolyVision Belgium be liable
for any of the France Obligations.
15.2 PolyVision France shall only be liable for and bound by the
France Obligations, and in no event shall PolyVision France be
liable for any of the Belgium Obligations.
16. STATEMENTS OF ACCOUNT
16.1 Lender will account to Borrowers from time to time with a
statement of Loans, charges and payments made pursuant to this
Agreement, and such account rendered by Lender shall be deemed
final, binding and conclusive upon Borrowers, absent manifest
error.
PART VI - TERM AND TERMINATION
17. TERM
17.1 Subject to the right of Lender to cease making Loans to Borrowers
upon or after the occurrence and during the continuance of any
Event of Default, this Agreement shall be in effect until
October 31, 2004, unless it is terminated as provided in
Section 18 hereof.
18. TERMINATION
18.1 In accordance with and without prejudice to Article 13 of the
Credit Regulations, Lender may terminate this Agreement in
accordance with Part VI hereof without notice upon or after the
occurrence and during the continuance of an Event of Default.
18.2 Upon at least ten (10) Business Days prior written notice to
Lender, Borrowers may, at their option, terminate this Agreement;
PROVIDED, HOWEVER, THAT no such termination may be made prior to
the first anniversary date of this Agreement and no such
termination shall be effective until Borrowers have paid all of
the Belgium Obligations and the France Obligations (including,
without limitation, all amounts payable, as described in Section
2.2.3 of Appendix D annexed hereto), respectively, in immediately
available funds.
18.3 Any notice of termination given by Borrowers shall be irrevocable
unless Lender otherwise agrees in writing, and Lender shall have
no obligation to make any Loans on or after the termination date
stated in such notice.
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18.4 Borrowers may elect to terminate this Agreement in its entirety
only. No section of this Agreement or type of Loan available
hereunder may be terminated singly.
18.5 All of the Belgium Obligations and the France Obligations shall
be immediately due and payable upon the termination date stated
in any notice of termination of this Agreement.
18.6 Notwithstanding any such termination, all undertakings,
agreements, covenants, warranties and representations of
Borrowers contained in the Loan Documents shall survive any such
termination, Lender shall retain its Liens in the Collateral, and
Lender shall retain all of its rights and remedies under the Loan
Documents, until Borrowers, respectively, have paid the Belgium
Obligations and the France Obligations to Lender, in full, in
immediately available funds, together with the applicable
termination charge, if any.
18.7 Notwithstanding the payment in full of the Belgium Obligations
and the France Obligations, Lender shall not be required to
terminate its security interests in the Collateral unless, with
respect to any loss or damage Lender may incur as a result of
dishonored checks or other items of payment received by Lender
from any Borrower and applied to the Belgium Obligations and/or
the France Obligations, as the case may be, Lender shall, at its
option:
(a) have received a written agreement, executed by Borrowers,
indemnifying Lender from any such loss or damage for a
period of up to 60 days after the effective date of
termination; or
(b) have retained such monetary reserves for such period of
time as Lender, in its reasonable discretion, may deem
necessary to protect Lender from any such loss or damage.
PART VII - SECURITY INTERESTS
19. SECURITY ASSETS
19.1 To secure the prompt payment and performance by the Borrowers to
Lender of the Belgium Obligations:
(a) PolyVision Belgium on the Closing Date shall grant to
Lender a first ranking pledge ("GAGE COMMERCIAL") on all
the shares it owns in Alliance Europe;
(b) PolyVision France on the Closing Date shall grant to
Lender a first ranking pledge ("NANTISSEMENT D'ACTIONS ET
DE COMPTE D'INSTRUMENTS FINANCIERS Y RELATIFS") on all the
shares it owns in Aubecq (the "Shares");
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PROVIDED, THAT the security described in Article 19.1(b) shall not secure
the Belgium Obligations and the security described in Article 19.1(a)
shall not secure the France Obligations.
19.2 To secure the prompt payment and performance by the Borrowers of
the Obligations, PolyVision, Posterloid and Greensteel shall at
the latest on the date of this Agreement execute one or more
Guaranties of the Obligations, secured by a first ranking pledge
on 65% of all the shares PolyVision owns in PolyVision Belgium
and PolyVision France.
19.3 To secure the payment and performance of the Obligations, Fleet
has issued the Belgium Standby Letter of Credit and the France
Standby Letter of Credit.
19.4 All security interests in favor of Lender hereunder shall (except
as provided therein) be supplemental to each other.
19.5 Without prejudice to any other rights of Lender under this
Agreement, but subject to any express requirements under this
Agreement, Lender shall at all times be entitled to apply in its
discretion all monies arising from the enforcement of any
security interest or guarantee towards the discharge of any of
the obligations secured by such security interest or guarantee.
PART VIII - REPRESENTATIONS AND WARRANTIES
20. REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to enter into this Agreement and to make Loans
hereunder, Borrowers warrant, represent and covenant to Lender, the Fleet
Lenders and Fleet Agent that:
20.1 Each of the Borrowers is a company duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation:
(a) PolyVision Belgium is a limited liability company
("NAAMLOZE VENNOOTSCHAP"), duly organized, validly
existing and in good standing under the laws of Belgium;
(b) PolyVision France is a limited liability company
"ENTREPRISE UNIPERSONNELLE A RESPONSABILITE LIMITEE EURL,
duly organized, validly existing and in good standing
under the laws of France.
20.2 Each of the Borrowers is duly qualified and authorized to do
business in its jurisdiction of incorporation and is in good
standing as a foreign company in each state or jurisdiction
listed on EXHIBIT 20.2 hereto and in all other states and
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jurisdictions in which the failure of such Borrower to be so
qualified would have a Material Adverse Effect.
20.3 Each of the Borrowers is duly authorized and empowered to enter
into, execute, deliver and perform this Agreement and each of the
other Loan Documents to which it is a party.
20.4 The execution, delivery and performance of this Agreement and
each of the other Loan Documents have been duly authorized by all
necessary corporate and other action of Borrowers and relevant
Subsidiaries and do not and will not:
(a) require any consent or approval of the shareholders of
either Borrower or any Subsidiary except as shall have
been obtained and is in full force and effect on the
Closing Date;
(b) contravene any Borrower's or Subsidiary's charter,
articles or certificate of incorporation or by-laws;
(c) violate, or cause any Borrower or Subsidiary to be in
default under any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination
or award in effect having applicability to any Borrower,
or Subsidiary;
(d) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Borrower or
Subsidiary is a party or by which it or their Properties
may be bound or affected, the breach of or default under
which would be reasonably likely to have a Material
Adverse Effect; or
(e) result in, or require, the creation or imposition of any
Lien (other than Permitted Liens) upon or with respect to
any of the Properties now owned or hereafter acquired by
any Borrower or Subsidiary.
20.5 This Agreement is, and each of the other Loan Documents when
delivered under this Agreement will be, a legal, valid and
binding obligation of each Borrower party thereto, enforceable
against it in accordance with their respective terms.
20.6 EXHIBIT 20.6 hereto states:
(a) the correct name of each Borrower, its jurisdiction of
incorporation and the percentage of its Voting Stock owned
by any Person;
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(b) the correct name of each Borrower's corporate or joint
venture Affiliates and the nature of the affiliation;
(c) the correct number, nature and holder of all outstanding
securities of each Borrower; and
(d) the correct number of authorized and issued and treasury
(I.E., shares redeemed or repurchased by a Borrower)
shares of each Borrower.
20.7 All such shares have been duly issued and are fully paid and
non-assessable.
20.8 There are no outstanding options to purchase, or any rights or
warrants to subscribe for, or any commitments or agreements to
issue or sell, or any securities or obligations convertible into,
or any powers of attorney relating to, shares of the capital
stock of any Borrower except the Option Agreement between Bragi
F. Schut and the Lender relating to ten shares of common stock in
PolyVision Belgium.
20.9 Except for the pledge to Lender or Fleet of the outstanding
shares of each Borrower, there are no outstanding agreements or
instruments binding upon any of Borrower's shareholders relating
to the ownership of its shares of capital stock except the
Option Agreement between Bragi I. Schut and the Lender relating
to the Shares of Common Stock in PolyVision Belgium.
20.10 Neither of the Borrowers has in the past six years been known as
or used any corporate, fictitious or trade names.
20.11 Neither of the Borrowers has in the past six years been the
surviving company of a merger or consolidation or has acquired
all or substantially all of the assets of any Person.
20.12 Neither of the Borrowers has conducted any business since its
formation other than acquisition of the shares acquired by them
respectively pursuant to consummation of the Acquisition, and as
of the Closing Date has no liabilities other than as set forth in
the Purchase Documents, in connection with this Agreement and the
ordinary costs of formation and consummation of the Acquisition.
20.13 Each of the Borrower's chief executive office and other places of
business are as listed on EXHIBIT 20.13 hereto, as updated from
time to time.
20.14 During the preceding one-year period, neither Borrower has had an
office, place of business or agent for service of process.
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20.15 If applicable, all Collateral other than Inventory in transit and
motor vehicles, is and will at all times be kept by Borrowers or
Subsidiaries at one or more of the locations set forth on EXHIBIT
20.15 hereto, as updated from time to time, and shall not,
without the prior written approval of Lender, be moved therefrom
except, prior to an Event of Default and Lender's acceleration of
the maturity of the Belgium Obligations and/or the France
Obligations, as the case may be, in consequence thereof, for
sales of Inventory and movement of motor vehicles in the ordinary
course of business.
20.16 Each Borrower has good, indefeasible and marketable title to all
of its real Property (if any), and good title to all of the
Collateral and all of its other Property, in each case, free and
clear of all Liens except Permitted Liens.
20.17 Each of the Borrowers has paid or discharged all lawful claims,
in particular those which, if unpaid, might become a Lien against
any of their Properties or Collateral that is not a Permitted
Lien.
20.18 The Liens granted to Lender under Article 19 hereof are first
priority Liens, subject only to Permitted Liens.
20.19 The consolidated and consolidating balance sheets of Parent, and
such other Persons described therein as of (as to Parent) April
30, 1998, or (as to the Subsidiaries of the Borrowers) December
31, 1997, and the related statements of income, changes in
stockholder's equity, and cash flow statements for the periods
ended on such dates, (and the interim financial statements
delivered to Lender on the date hereof and certified as delivered
pursuant to this Agreement or the Fleet Credit Agreement) have
been prepared in accordance with generally accepted accounting
principles, applied on a consistent basis, and present fairly in
accordance with accounting principles, in each case, in effect
for the applicable country in which it is located, the financial
positions of Parent, each of the Borrowers and Subsidiaries and
such other Persons at such dates and the results of Parent's ,
Borrower's, Subsidiaries' and such Person's operations for such
periods (in each case, to the extent each such entity is covered
by such statements).
20.20 Since 31 January 1998 and to the date hereof, there has been no
material adverse change in the condition, financial or otherwise,
of Parent, the Borrowers and their Subsidiaries (taken as a
whole) and such other Persons as shown on the applicable
Consolidated balance sheet as of such date and no change in the
aggregate value of Equipment and real Property owned by Parent,
and such other Persons covered by any such financial statement,
except changes in the ordinary course of business, none of which
individually or in the aggregate have represented a material
adverse change.
20.21 The fiscal year of PolyVision France ends on April 30 of each
year and the fiscal year of PolyVision Belgium ends on December
31 of each year.
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20.22 The financial statements referred to in Article 20.19 hereof do
not, nor does this Agreement or any other written statement of
Parent and/or each of the Borrowers and/or Subsidiaries to
Lender, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein
or herein not misleading.
20.23 There is no fact which Parent or any of the Borrowers has failed
to disclose to Lender in writing which is reasonably likely to
have a Material Adverse Effect.
20.24 Each of the Borrowers is now and, after giving effect to the
Loans to be made and the Letters of Credit to be issued
hereunder, is fully Solvent.
20.25 Neither of the Borrowers is obligated as surety or indemnitor
under any surety or similar bond or other contract issued or
entered into to assure payment, performance or completion of
performance of any undertaking or obligation of any Person.
20.26 Each of the Borrowers has filed all national, state and local tax
returns and other reports it is required by law to file, except
where the failure to so file such tax return would not be
reasonably likely to have a Material Adverse Effect, and has paid
or made sufficient provision for the payment of, all taxes,
assessments, fees, levies and other governmental charges upon it,
its income and Properties as and when such taxes, assessments,
fees, levies and charges are due and payable, unless and to the
extent any thereof are being actively contested in good faith and
by appropriate proceedings and such Borrower maintains reasonable
reserves on its books therefor. Each Borrower's tax
identification number is set forth on APPENDIX C hereto.
20.27 There are no claims for taxes, brokerage commissions, finder's
fees or investment banking fees in connection with the
transactions contemplated by this Agreement.
20.28 Each of the Borrowers has been at all times, and presently is in
good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates,
inspections and franchises necessary to continue to conduct its
business as heretofore or proposed to be conducted by it and to
own or lease and operate its Properties as now owned or leased by
it, except for immaterial non-compliance, and except that the
registration of PolyVision Belgium with the Registry of Commerce
of Tongeren is still pending as of the date hereof.
20.29 Each of the Borrowers has duly complied, in all material respects
with, and its Properties, business operations and leaseholds are
in compliance in all material respects with, the provisions of
all national, state and local laws, rules and regulations
applicable to such Borrower, as applicable, its Properties or the
conduct of its business and there have been no citations, notices
or orders of noncompliance
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issued to such Borrower under any such law, rule or regulation,
except for immaterial non-compliance.
20.30 Each of the Borrowers has established and maintains an adequate
monitoring system to insure that it remains in compliance with
all national, state and local laws, rules and regulations
applicable to it.
20.31 Neither of the Borrowers is a party or subject to any contract,
agreement, or charter or other corporate restriction, which
materially and adversely affects its business or the use or
ownership of any of its Properties.
20.32 Except for this Agreement and the Other KBC Loan Agreement,
neither of the Borrowers is a party or subject to any contract or
agreement which restricts its right or ability to incur
Indebtedness, none of which prohibit the execution of or
compliance with this Agreement or the other Loan Documents by any
of the Borrowers, as the case may be.
20.33 Except as disclosed in Exhibit 20.33, there are no actions,
suits, proceedings or litigation or investigations pending,
threatened, against or affecting any Borrower or their
Subsidiaries, as the case may be, or the business, operations,
Properties, prospects, profits or condition of any Borrower or
their Subsidiaries, as the case may be, involving partial loss or
liability in excess of $250,000 in the aggregate with respect to
the Borrowers and their Subsidiaries or which in any case is
reasonably likely to have a Material Adverse Effect.
20.34 Neither of the Borrowers is in default with respect to any order,
writ, injunction, judgment, decree or rule of any court,
governmental authority or arbitration board or tribunal.
20.35 No event has occurred and no condition exists which would, upon
or after the execution and delivery of this Agreement or any of
the Borrower's performance hereunder, constitute a Default or an
Event of Default.
20.36 Except as disclosed on EXHIBIT 20.36 hereto, neither of the
Borrowers has any Plan, and each of the Borrowers and each of
their respective Subsidiaries is in compliance with the
applicable legal requirements and regulations promulgated
thereunder with respect to each Plan, except where the failure to
so comply would not be reasonably likely to have a Material
Adverse Effect.
20.37 No fact or situation that could result in a material adverse
change in the financial condition of any of the Borrowers or
their Subsidiaries exists in connection with any Plan.
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20.38 There exists no actual or threatened termination, cancellation or
limitation of, or any modification or change in, the business
relationship between any Borrower or any of its Subsidiaries or
between Alliance Europe and Aubecq and any customer or any group
of customers whose purchases individually or in the aggregate are
material to the business of such Borrower and its Subsidiaries,
taken as a whole, or with any material supplier, except in each
case, where the same would not be reasonably likely to cause a
Material Adverse Effect, and there exists no present condition or
state of facts or circumstances which would materially adversely
affect any Borrower, Alliance Europe or any of its Subsidiaries,
as the case may be, or prevent any Borrower, as the case may be,
from conducting such business after the consummation of the
transactions contemplated by this Agreement in substantially the
same manner in which it has heretofore been conducted.
20.39 Neither of the Borrowers is a party to any collective bargaining
agreement, and neither of the Borrowers or their Subsidiaries is
the subject of a bankruptcy or similar procedure or, to the best
of its respective knowledge, is in a condition which could or
should result in such a procedure.
20.40 There are no material grievances, disputes or controversies with
any union or any other organization of any employees of either
Borrower or their Subsidiaries, or threats of strikes, work
stoppages or any asserted pending demands for collective
bargaining by any union or organization, except those that would
not be reasonably likely to have a Material Adverse Effect.
20.41 The Acquisition has been consummated substantially in accordance
with the terms of the Purchase Documents.
20.42 Each Borrower has made appropriate analysis of the Projections of
each of its Subsidiary's current and future financial condition
and capacity, and has reasonable grounds to believe that such
Subsidiaries will be able to generate and distribute sufficient
dividends in order to enable such Borrower to comply with its
respective obligations hereunder. The Borrowers have ensured
that they will have sufficient support from PolyVision in order
to meet their obligations under the Loan Documents.
21. CONTINUOUS NATURE OF REPRESENTATIONS AND WARRANTEES
21.1 Each representation and warranty contained in this Agreement and
the other Loan Documents shall be continuous in nature and shall
remain accurate, complete and not misleading at all times during
the term of this Agreement, except for changes in the nature of
the business or operations of either Borrower that would render
the information in any exhibit attached hereto or to any other
Loan Document either
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inaccurate, incomplete or misleading, so long as Lender has
consented to such changes or such changes are expressly permitted
by this Agreement.
22. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
22.1 All representations and warranties of each of the Borrowers
contained in this Agreement or any of the other Loan Documents
shall survive the execution, delivery and acceptance thereof by
Lender and the parties thereto and the closing of the
transactions described therein or related thereto.
PART IX - COVENANTS AND CONTINUING AGREEMENTS
23. AFFIRMATIVE COVENANTS
23.1 During the term of this Agreement, and thereafter for so long as
there are any Belgium Obligations and/or France Obligations, as
the case may be, outstanding, Borrowers covenant that, unless
otherwise consented to by Lender in writing, each Borrower shall:
(a) permit representatives of Lender and any person designated
by Lender, from time to time, as often as may be
reasonably requested, but only during normal business
hours, to visit and inspect the Properties of each
Borrower, inspect, audit and make extracts from its books
and records, and discuss with its officers, its employees
and its independent accountants, each Borrower's business,
assets, liabilities, financial condition, business
prospects and results of operations; Lender, if no Default
or Event of Default then exists, shall give the applicable
Borrower, as the case may be, reasonable prior notice of
any such inspection or audit;
(b) promptly notify Lender in writing, with a simultaneous
copy to Fleet Agent and each Fleet Lender, of the
occurrence of any event or the existence of any fact which
renders any representation or warranty in this Agreement
or any of the other Loan Documents inaccurate, incomplete
or misleading in any material respect.
(c) keep adequate records and books of account with respect to
its business activities in which proper entries are made
in accordance with generally accepted accounting
principles in effect for the country in which it is
located applied on a consistent basis, reflecting all its
financial transactions; and cause to be prepared and
furnished to Lender, with a simultaneous copy to Fleet
Agent and each of the Fleet Lenders, each of the following
(all to be prepared in accordance with generally accepted
accounting principles in effect for the country in which
it is located applied on a consistent basis,
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unless a Borrower's certified public accountant concurs in
any change therein and such change is disclosed to Lender
and Fleet Agent and is consistent with generally accepted
accounting principles in effect for the country in which
it is located):
(i) not later than 90 days after the close of each
fiscal year of Parent, unqualified (except for a
qualification for a change in accounting
principles with which the accountant concurs)
audited financial statements of each of the
Borrowers and Subsidiaries as of the end of such
year, on a Consolidated and consolidating basis,
certified by a firm of independent certified
public accountants of recognized standing selected
by Borrowers, but reasonably acceptable to Lender,
together with a copy of any management letter
issued in connection therewith;
(ii) not later than 30 days after the end of each month
hereafter which is not a fiscal quarter end,
unaudited interim financial statements of each
Borrower as of the end of such month and for the
portion of each Borrower's fiscal year then
elapsed, on a Consolidated and consolidating
basis, certified by the principal financial
officer of such Parent as prepared in accordance
with generally accepted accounting principles in
effect for the country in which it is located
applied on a consistent basis, and fairly
presenting the consolidating and Consolidated
financial position and results of operations of
Parent and each Borrower for such month and period
subject only to changes from audit and year-end
adjustments and except that such statements need
not contain notes;
(iii) if requested at any time by Lender, within 10 days
after each delivery of financial statements
pursuant to clauses (i) and (ii) of this Article
23.1 during the first 8 months following the
Closing Date and on the date of each such delivery
thereafter, a management report:
(1) describing the operations and financial
condition of the Borrowers for the month
then ended and the portion of the current
fiscal year then elapsed (or for the fiscal
year then ended in the case of year-end
financials);
(2) setting forth in comparative form the
corresponding figures for the corresponding
periods of the previous fiscal year and the
corresponding figures from the most recent
Projections for the current fiscal year
delivered to Lender pursuant to this
Agreement; and
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(3) discussing the reasons for any significant
variations;
the information above shall be presented in reasonable
detail and shall be certified on behalf of each Borrower
by the chief financial officer or a financial vice
president or "Gerant" of each Borrower, as the case may
be, to the effect that such information fairly presents
the results of operation and financial condition of each
Borrower, as the case may be, as at the dates and for the
periods indicated;
(iv) promptly after the sending or filing thereof, as
the case may be, copies of any proxy statements,
financial statements or reports which any of the
Borrowers has made available to its shareholders
and copies of any regular, periodic and special
reports or registration statements which any of
the Borrowers files with the competent companies
registry, national securities exchange and/or any
tax administration or any governmental authority;
(v) upon request by Lender, copies of any annual
report to be filed pursuant to the applicable
legal requirements in particular in connection
with each Plan; and
(vi) such other data and information (financial and
otherwise) as Lender, from time to time, may
reasonably request, bearing upon or related to the
Collateral or any Borrower's or Subsidiaries'
properties, financial condition or results of
operations.
23.2 Concurrently with the delivery of the financial statements
described in Article 23.1(c)(i), each of the Borrowers shall
forward to Lender, with a simultaneous copy to the Fleet Agent, a
copy of any accountants' letter or report to Borrowers'
management, and of any Borrower's management report, as the case
may be, that is prepared in connection with such financial
statements.
23.3 Concurrently with the delivery of the financial statements
described in Articles 23.1(c)(I) and 23.1(c)(i), or more
frequently if requested by Lender, each of the Borrowers shall
cause to be prepared and furnished to Lender, with a simultaneous
copy to the Fleet Agent and each of the Fleet Lenders, a
Compliance Certificate in the form of EXHIBIT 23.3 hereto
executed on behalf of each Borrower by the Chief Financial
Officer or a financial vice president or "Gerant" of such
Borrower.
23.4 Within ninety (90) days after the Closing Date, each Borrower on
behalf of itself shall obtain or Parent shall have caused to be
obtained on behalf of each Borrower and thereafter keep in effect
one or more interest rate Bank Hedge Agreements (the terms and
other provisions of all such Bank Hedge Agreements to be subject
to the
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prior written consent of Lender) covering at least fifty percent
(50%) of the Belgium Term Loan and France Term Loan,
respectively, outstanding on the Closing Date for an aggregate
period of not less than three (3) years commencing on the Closing
Date.
23.5 Take all necessary measures in order to preserve and maintain the
Collateral until all Obligations are satisfied.
23.6 On the Lender's first request, take all necessary measures in
order to maintain the Loan Documents in full force and effect,
and sign all documents as and when necessary for this purpose and
for the purpose of the enforcement of the Lender's Rights under
the Loan Documents.
23.7 PolyVision France agrees that it shall cause the pledge granted
by it over the shares of Aubecq to secure Aubecq's obligations to
KBC Bank N.V. under the Other KBC Loan Agreement, and if
PolyVision France is financially able it will promptly execute
and delivery a guaranty to such effect.
24. NEGATIVE COVENANTS
24.1 During the term of this Agreement, and thereafter for so long as
there are any France Obligations or Belgium Obligations
outstanding, each of the Borrowers, severally, covenants that,
unless otherwise consented to by Lender in writing, no Borrower
shall, nor shall it permit any Subsidiary (to the extent that a
limitation is expressly made applicable to a Subsidiary in any
particular subsection(s) of this Article 24), unless otherwise
consented to by Lender in writing (or, with respect to any
Subsidiary, if permitted under the Other KBC Loan Agreement), to:
(a) merge or consolidate with any Person, or acquire all or
any substantial part of the Properties of any Person,
except for a transfer of the assets of any Borrower to its
parent company, any merger or consolidation of any
Borrower with any of their respective Subsidiaries, any
merger of any such Subsidiary into a wholly-owned
Subsidiary or any transfer of the assets of any Subsidiary
of any Borrower to the parent of such Subsidiary; PROVIDED
that Lender shall have received at least thirty (30) days'
written notice of any of the foregoing and Lender shall be
satisfied in its sole discretion, as evidenced by its
written consent, that there would be no adverse impact on
Lender's rights in respect of the Collateral or its rights
and remedies generally hereunder or in respect of any
collateral or its rights and remedies generally under the
Other KBC Loan Agreement;
(b) make any loans or other advances of money (other than for
salary, travel advances, advances against commissions and
other similar advances in the ordinary course of business)
to any Person, except as permitted hereby;
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(c) create, incur, assume, or suffer to exist any
Indebtedness, except:
(i) Obligations owing to Lender under this Agreement
or hereafter consented to by Lender;
(ii) Subordinated Debt existing on the date of this
Agreement or hereafter consented to by Lender;
(iii) accounts payable to trade creditors and current
operating expenses (other than for Money Borrowed)
which are not aged more than 120 days from billing
date or more than (30) days from the due date, in
each case incurred in the ordinary course of
business and paid within such time period, unless
the same are being actively contested in good
faith and by appropriate and lawful proceedings
and such Borrower shall have set aside such
reserves, if any, with respect thereto as are
required by generally accepted accounting
principles in effect for the country in which it
is located and deemed adequate by such Borrower,
as the case may be, and its independent
accountants;
(iv) Obligations to pay Rentals permitted by Article
31.1(k);
(v) contingent liabilities arising out of endorsements
of checks and other negotiable instruments for
deposit or collection in the ordinary course of
business;
(vi) Indebtedness in respect of interest rate swap,
cap, or collar agreements, interest rate future or
option contracts, currency swap agreements,
currency future or option contractors or similar
agreements designed to hedge against fluctuations
in interest rates incurred in the ordinary course
of business and consistent with prudent business
practice;
(vii) to the extent not mentioned above, accruals in the
ordinary course of business not for Money
Borrowed;
(viii) guaranties of Indebtedness permitted hereunder;
(ix) unsecured indebtedness incurred for the purpose of
paying taxes, vacation pay and Christmas bonuses
to employees, in an amount not to exceed BEF
18,278,750.00 in the aggregate with respect to the
Borrowers and their Subsidiaries at any time
outstanding;
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(x) non-interest bearing grants from any governmental
entity shown as a liability on the balance sheet
but not required to be repaid;
(xi) unsecured indebtedness not included in paragraphs
(i) through (xii) above which does not exceed at
any time the sum of USD250,000.00 in the aggregate
for Borrowers and PolyVision and its other
Subsidiaries;
(xii) loans made by any Borrower or by Alliance Europe
to PolyVision or any of its U.S. Subsidiaries
after the Closing Date in an aggregate outstanding
amount with respect to all of the foregoing at any
one time not to exceed BEF36,557,500.00, PROVIDED,
THAT, prior to making any such loan Alliance
Europe or the applicable Borrower establishes to
the satisfaction of Lender that (i) its Board of
Directors or GERANT has determined that Alliance
Europe or the applicable Borrower will continue to
be Solvent after making such loan and (ii) such
loans do not infringe any applicable law, and
conform to the Borrower's corporate interest, and
PROVIDED FURTHER THAT Alliance Europe will have
excess Availability of not less than
BEF36,557,500.00 after giving effect to each such
loan by Alliance Europe;
(xiii) Guarantees by PolyVision of obligations of the
Borrowers and their Subsidiaries, guarantees by
the Borrowers (if such guarantees do not infringe
any applicable law) of obligations of Wholly-Owned
Subsidiaries;
(d) except for transactions otherwise expressly permitted
hereunder, enter into, or be a party to enter into or be a
party to, any transaction (including the payment of
management fees) with any Affiliate or stockholder of any
Borrower and except in the ordinary course of and pursuant
to the reasonable requirements of such Borrower's
business, as the case may be, and upon fair and reasonable
terms which are fully disclosed to Lender and are no less
favorable to the applicable Borrower, as the case may be,
than would obtain in a comparable arm's length transaction
with a Person not an Affiliate or stockholder of such
Borrower, as the case may be; PROVIDED, THAT Borrowers and
their Subsidiaries may pay management fees to PARENT in an
aggregate amount not to exceed BEF36,557,500 per annum and
Subsidiaries of a Borrower may pay management fees, if
appropriate, and in full compliance with all applicable
laws and regulations, to their respective shareholder
corporation in an aggregate amount not to exceed
USD300,000.00 per annum for each such Subsidiary; provided
further, that profits arising from such management fees
shall be used exclusively for the
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repayment (to the extent then due and payable) of the
Borrowers' Obligations under the Loan Documents;
(e) create or suffer to exist any Lien upon any of its
Property, income or profits, whether now owned or
hereafter acquired, except:
(i) Liens at any time granted in favor of Lender;
(ii) Liens for taxes, assessments or governmental
charges (excluding any Lien imposed pursuant to
any applicable pension laws) not yet due, or being
contested in the manner described in Article 20.26
hereof, but only if the existence of such Lien
would not be likely to have a Material Adverse
Effect;
(iii) Liens arising in the ordinary course of business
of a Borrower by operation of law or Regulation,
but only if payment in respect of any such Lien is
not at the time required and such Liens do not, in
the aggregate, materially detract from the value
of the Property of such Borrower, or materially
impair the use thereof in the operation of such
Borrower's business;
(iv) Liens incurred or deposits made in the ordinary
course of business:
(1) in connection with worker's compensation,
social security, unemployment insurance and
other like laws; or
(2) in connection with sales contracts, leases,
statutory obligations, work in progress
advances and other similar obligations not
incurred in connection with the borrowing
of money or the payment of the deferred
purchase price of property;
(v) Liens with respect to judgments, attachments and
the like which do not constitute Events of Default
hereunder;
(vi) Liens arising from leases or subleases granted to
others which do not interfere in any material
respects with the business of a Borrower or any of
its Subsidiaries;
(vii) such other Liens as Lender may hereafter approve
in writing;
(f) make any payment of any part or all of any Subordinated
Debt or take any other action or omit to take any other
action in respect of any Subordinated
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Debt, except in accordance with the Subordination
Agreement relative thereto;
(g) declare or make any Distributions to their respective
shareholders without the prior written consent of Lender,
PROVIDED, THAT any Subsidiary of a Borrower may make
Distributions to its Borrower shareholder in accordance
with applicable law to enable such Borrower to make
payments payable under this Agreement; and Alliance
Graphics and Pentagon may make Distributions to Alliance
Europe and Alliance Europe may make Distributions to
PolyVision Belgium, and Aubecq may make Distributions to
PolyVision France (i) all of the foregoing of which are
used (except to the extent otherwise permitted in clause
(g)(ii) and/or (g)(iii) below) to make Distributions to
PolyVision as necessary (A) subject to the subordination
provisions contained in the Subordinated Debt, to enable
PolyVision to pay the regularly-scheduled interest
payments on the Subordinated Debt, (B) to pay Obligations
to Lender Parties under the Fleet Credit Agreement, and/or
(C) to enable PolyVision to pay dividends on its
outstanding preferred stock as and to the extent permitted
by the Fleet Credit Agreement, or (ii) in the case of
Aubecq's Distributions, to pay indebtedness of PolyVision
France to Lender or (iii) in the case of distributions to
PolyVision Belgium, to pay indebtedness of PolyVision
Belgium;
(h) make Capital Expenditures;
(i) sell, lease or otherwise dispose of any of its Properties,
including any disposition of Property as part of a sale
and leaseback transaction, to or in favor of any Person.
(j) issue equity or debt instruments or additional shares of
its share capital or reduce its share capital;
(k) make or have any Restricted Investment;
(l) become a lessee under any operating lease (other than a
lease under which any Borrower or PolyVision or any of its
other Subsidiaries, as the case may be, is lessor) of
Property, including, without limitation, real estate
operating leases;
(m) fail to charge an appropriate market rate of interest on
loans to Affiliates;
(n) permit its respective Subsidiary's(ies) share capital to
be reduced by redemption of rights or otherwise, and
neither Borrower shall fail to cause all
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new shares issued by any such Subsidiary to be pledged in
favor of Lender in form and substance satisfactory to the
Lender;
(o) purchase shares or interests in other companies or
entities or engage in activities other than holding the
shares, respectively, in Alliance Europe (PolyVision
Belgium) and Aubecq (PolyVision France) without Lender's
prior written consent;
(p) amend, supplement or terminate the management agreement
referred in Article 26 hereof without the prior written
consent of Lender;
(q) notwithstanding any provision to the contrary contained in
this Article 24, incur any liabilities to any third party
(other than related to the Obligations owing under this
Agreement or the Other KBC Loan Agreement or to Affiliates
(as and to the extent permitted hereunder) or taxes or
customary amounts required for maintenance of business
existence) even if otherwise permitted hereunder or
acquire assets after the date hereof having an aggregate
value in excess of USD250,000.00 even if otherwise
permitted hereunder, in each case unless Lender shall have
received fifteen Business Days prior notice thereof in
order to enable Lender to confirm or obtain security from
the applicable Borrower of a type or types and perfected
in a manner and upon terms and conditions satisfactory to
Lender in its sole discretion;
(r) amend its by-laws or articles of association ("statuts");
(s) change or modify its corporate purpose; or
(t) allow or permit its Subsidiaries to engage in activities
which could have a Material Adverse Effect on the
Borrowers or which could reasonably be expected to
adversely affect the Collateral or could adversely affect
the rights of Lender under the Loan Documents.
(u) establish or maintain any Bank accounts at any financial
institution other than Lender.
25. SPECIFIC FINANCIAL COVENANTS
25.1 During the term of this Agreement, and thereafter for so long as
there are outstanding any Belgium Obligations or France
Obligations to Lender, Borrowers covenant that they will be in
full compliance with each of the financial covenants set forth on
EXHIBIT 25.1 hereto.
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25.2 If the generally accepted accounting principles in effect for the
country in which any Borrower is located change from the basis
used in preparing the audited financial statements delivered to
Lender by Borrowers on or before the Closing Date, Borrowers will
provide Lender with certificates demonstrating compliance with
such financial covenants and will include, at the election of
Borrowers or upon the request of Lender, calculations setting
forth the adjustments necessary to demonstrate how Borrowers are
in compliance with such financial covenants based upon the
generally accepted accounting principles in effect for the
country in which they are located as in effect on the Closing
Date.
PART X - CONDITIONS PRECEDENT
26. CONDITIONS PRECEDENT
26.1 Notwithstanding any other provision of this Agreement or any of
the other Loan Documents, and without affecting in any manner the
rights of Lender under the other sections of this Agreement,
Lender shall not be required to make any Loan under this
Agreement unless and until each of the following conditions has
been and continues to be satisfied:
(a) Lender shall have received, in form and substance
satisfactory to Lender and its counsel, a duly executed
copy of this Agreement and the other Loan Documents,
together with such additional documents, instruments and
certificates as Lender and its counsel shall require in
connection therewith from time to time, all in form and
substance satisfactory to Lender and its counsel;
(b) no Default or Event of Default shall exist;
(c) each of the conditions precedent set forth in the Loan
Documents shall have been satisfied;
(d) no action, proceeding, investigation, regulation or
legislation be pending or threatened or proposed before
any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of this
Agreement or the consummation of the transactions
contemplated hereby;
(e) the Acquisition shall have been consummated substantially
in accordance with the terms of the Purchase Documents;
(f) the due execution and the entry into full force and effect
of the Fleet Credit Agreement, the Other KBC Loan
Agreement and of the Senior Subordinated
31
<PAGE>
Loan Agreement (as defined in the Fleet Credit Agreement)
and all related documents and agreements;
(g) the issuance by Fleet of the Belgium Standby Letter of
Credit and of the France Standby Letter of Credit;
(h) confirmation that the security interests, mortgages, liens
and pledges in respect of the Other KBC Loan Agreement are
in full force and effect and secure all obligations
thereunder after giving effect to the execution and
delivery of such Other KBC Loan Agreement;
(i) the due execution of all documents needed to create or
maintain the security interests pursuant to Article 19 and
submission to Lender of satisfactory evidence of the due
perfection of the security interests referred to in
Article 19, creating or maintaining the security interests
referred to in Article 19;
(j) submission to Lender, if required by Lender, of
satisfactory evidence that customary business interruption
insurance has been taken out by each of the Borrower's
Subsidiaries; and
(k) the issuance by Derks, Star Busmann, Hanotiau in Belgium
and ASA-Avocats Associes in France of legal opinions in
form and substance satisfactory to Lender, and to the
extent requested by Fleet, Fleet shall be entitled to rely
thereupon (to the extent, in respect of the opinion of
Derks, Star, Busmann and Hanotiau, specified in the letter
of said firm dated November 20, 1998).
PART XI - EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
27. EVENTS OF DEFAULT
27.1 In accordance with, and without prejudice to the provisions of
Article 13 of the Credit Regulations, the occurrence of one or
more of the following events shall constitute an "EVENT OF
DEFAULT":
(a) any of the Borrowers shall fail to pay (i) any installment
of principal owing on the Term Credit Facility on the due
date of such installment, or (ii) any interest or premium,
if any, due on any Loan under the Term Credit Facility and
such failure shall continue for a period of 5 days;
(b) any of the Borrowers shall fail to pay any of their
Obligations not covered by Article 27.1(a) on the due date
thereof (whether due at stated maturity, on
32
<PAGE>
demand, upon acceleration or otherwise) and such failure
shall continue for a period of 5 days;
(c) any representation, warranty or other statement made or
furnished to Lender by or on behalf of any Borrower in
this Agreement, any of the other Loan Documents or any
instrument, certificate or financial statement furnished
in compliance with or in reference thereto or any
representation, warranty or other statement made or
furnished in the Other KBC Loan Agreement in relation to
the Borrowers' Subsidiaries proves to have been false or
misleading in any material respect when made or furnished
or when reaffirmed;
(d) any Borrower shall fail or neglect to perform, keep or
observe any covenant contained in Articles 23.1(a),
23.1(c)(i), (ii), (iii) or (vi), 23.5, 23.6, 24 or 25
hereof on the date that such covenant is required to be
performed, kept or observed or contained in 23.1(c)(iv)
and (v) within 10 days following the date that such
covenant is required to be performed, kept or observed;
(e) any Borrower shall fail or neglect to perform, keep or
observe any covenant contained in this Agreement (other
than a covenant which is dealt with specifically elsewhere
in Article 27.1 hereof) and the breach of such other
covenant is not cured within 30 days after the sooner to
occur of Borrowers' receipt of notice of such breach from
Lender or the date on which such failure or neglect first
becomes known to any officer of any Borrower;
(f) any event of default shall occur under, or any Borrower
shall default (after applicable notice or grace periods,
if any) in the performance or observance of any material
term, covenant, undertaking, obligation, condition or
agreement contained in, or any representation, warranty or
other statement by any Borrower or any Subsidiary is or
becomes false or misleading in any material respect which
is contained in, any of the Security Documents, the Other
Agreements or the Purchase Documents or the Fleet Credit
Agreement or the Other KBC Loan Agreement and such default
shall continue beyond any applicable grace period;
(g) there shall occur any default or event of default on the
part of any Borrower or PolyVision, or any of its
Subsidiaries under any agreement, document or instrument
to which such Borrower or PolyVision, or any of its
Subsidiaries, as the case may be, is a party or by which
such Borrower or PolyVision, or any of its Subsidiaries or
any of their respective Property is bound, creating or
relating to any Indebtedness for an aggregate principal
amount in excess of USD500,000.00 (other than the
Obligations), if the payment or maturity of such
Indebtedness is accelerated or is permitted to be
accelerated in
33
<PAGE>
consequence of such event of default or demand for payment
of such Indebtedness is made or the holder of any such
Indebtedness is permitted to cause such Indebtedness to
mature; or any such Indebtedness shall be declared to be
due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Indebtedness
shall be required to be made, in each case prior to the
stated maturity thereof;
(h) any material loss, theft, damage or destruction of any
portion of the Collateral covered by this Agreement or the
Other KBC Loan Agreement or the Fleet Credit Agreement
having a fair market value of USD500,000.00, in the
aggregate for Borrowers and Parent and its other
Subsidiaries, if not fully covered (subject to ordinary
deductibles) by insurance;
(i) any Borrower and/or its Subsidiaries shall cease to be
Solvent or shall suffer the appointment of a receiver,
trustee or administrator in bankruptcy, custodian or
similar fiduciary, or shall make an assignment for the
benefit of creditors, or any petition for an order for
relief shall be filed by or against any Borrower under the
applicable bankruptcy laws (if against any Borrower, the
continuation of such proceeding for more than 60 days), or
any Borrower shall make any offer of settlement, extension
or composition to their respective unsecured creditors
generally;
(j) there shall occur a cessation of a substantial part of the
business of any Borrower and/or its Subsidiary for a
period which significantly affects such Borrower's or
Subsidiary's capacity, as the case may be, to continue its
business, on a profitable basis for a period in excess of
30 consecutive days; or any Borrower shall suffer the loss
or revocation of any material license or permit now held
or hereafter acquired by such Borrower which is necessary
to the continued or lawful operation of any material
portion of its business; or any Borrower shall be
enjoined, restrained or in any way prevented by court,
governmental or administrative order from conducting all
or any material part of its business affairs for a period
in excess of 30 consecutive days; or any material lease or
agreement pursuant to which such Borrower leases, uses or
occupies any Property shall be canceled or terminated
(other than by reason of casualty) prior to the expiration
of its stated term, and adequate or comparable alternate
premises are not secured within 30 days; or any material
portion of the Collateral shall be taken through
condemnation or the value of such Property shall be
impaired through condemnation, unless replacement
Collateral of comparable value is obtained within 30 days
after the taking of the condemned Collateral;
34
<PAGE>
(k) a Change of Control;
(l) any of the Borrowers, or any Subsidiary or Affiliate of
any of them, shall challenge or contest in any action,
suit or proceeding the validity or enforceability of this
Agreement or any of the other Loan Documents, the legality
or enforceability of any of the Obligations or the
perfection or priority of any Lien granted to Lender;
(m) any money judgments, writ of attachment or similar
processes are issued or rendered against any Borrower, or
any of their respective Property in an amount of
BEF3,655,750.00 or more for any single judgment,
attachment or process or BEF9,139,375.00 or more for all
such judgments, attachments or processes in the aggregate,
in each case in excess of any applicable insurance
(subject to ordinary deductibles) with respect to which
the insurer has admitted liability (or defended subject to
normal reservation of rights) and which judgment,
attachment or process is not stayed, released or
discharged within 30 days; or
(n) any Loan Document or the Other KBC Loan Agreement and
related documents cease to be in full force and effect, or
is not enforceable at any time or from time to time under
any applicable law.
28. ACCELERATION OF THE OBLIGATIONS
28.1 Without in any way limiting the right of Lender to demand payment
of any portion of the Obligations payable on demand in accordance
with Article 12 hereof, upon or at any time after the occurrence
and during the continuance of an Event of Default, all or any
portion of the Obligations shall, at the option of Lender and
without presentment, demand, protest or further notice by Lender,
become at once due and payable and Borrowers shall forthwith pay
to Lender the full amount of such Obligations, PROVIDED, THAT
upon the occurrence of an Event of Default specified in Article
27.1(i) hereof, all of the Obligations for which such Borrower is
liable hereunder or under the Security Documents or under the
Other Agreements shall become automatically due and payable
without declaration, notice or demand by Lender, including any
"mise en demeure."
29. OTHER REMEDIES
29.1 Upon the occurrence and during the continuance of an Event of
Default, Lender may exercise from time to time all of the rights
and remedies of a secured party under other applicable law, and
all other legal and equitable rights to which Lender may be
entitled, all of which rights and remedies shall be cumulative
and shall be in addition
35
<PAGE>
to any other rights or remedies contained in this Agreement or
any of the other Loan Documents, and none of which shall be
exclusive.
30. REMEDIES CUMULATIVE; NO WAIVER
30.1 All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of any Borrowers contained in
this Agreement and the other Loan Documents, or in any document
referred to herein or contained in any agreement supplementary
hereto or in any schedule or in any Guaranty Agreement given to
Lender or contained in any other agreement between Lender and any
of the Borrowers, heretofore, concurrently, or hereafter entered
into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or
agreements of any of the Borrowers herein contained.
30.2 The failure or delay of Lender to require strict performance by
any of the Borrowers of any provision of this Agreement or to
exercise or enforce any rights, Liens, powers, or remedies
hereunder or under any of the aforesaid agreements or other
documents or security or Collateral shall not operate as a waiver
of such performance, Liens, rights, powers and remedies, but all
such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and all other
Obligations owing or to become owing from Borrowers, to Lender
shall have been fully satisfied.
30.3 None of the undertakings, agreements, warranties, covenants and
representations of the Borrowers contained in this Agreement or
any of the other Loan Documents and no Event of Default by
Borrowers under this Agreement or any other Loan Documents shall
be deemed to have been suspended or waived by Lender, unless such
suspension or waiver is by an instrument in writing specifying
such suspension or waiver and is signed by a duly authorized
representative of Lender and directed to the Borrowers.
PART XII - MISCELLANEOUS
31. INDEMNITY
31.1 Borrowers agree to indemnify Lender and (in particular as a
result of the subrogation of Fleet Agent and each Fleet Lender in
or to Lender's rights of the transfer of such rights herein and
under the Loan Documents), Fleet Agent and each Fleet Lender and
to hold Lender, Fleet Agent and each Fleet Lender harmless from
and against any liability, loss, damage, suit, action or
proceeding which may be suffered or incurred by Lender or any
Fleet Lender (including reasonable attorneys fees and legal
expenses) as the result of the Borrowers' failure to observe,
perform or discharge the Borrowers' duties hereunder.
36
<PAGE>
31.2 In addition, Borrowers shall defend Lender, Fleet Agent and each
Fleet Lender against and save them harmless from all claims of
any Person with respect to the Collateral (except those resulting
from the gross negligence or intentional misconduct of Lender or
Fleet Agent or a Fleet Lender, as applicable, as determined by a
judgment of a court of competent jurisdiction after final appeal
or expiration of time for appeal).
32. ASSIGNMENT
32.1 Borrowers may not sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the
Obligations, or any portion thereof, including, without
limitation, the Borrowers' rights, title, interests, remedies,
powers, and duties hereunder or thereunder.
33. SEVERABILITY
33.1 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
34. SUCCESSORS AND ASSIGNS
34.1 This Agreement, the Other Agreements and the Security Documents
shall be binding upon the successors and assigns of Borrowers and
Lender and shall inure to the benefit of Lender and its
successors and assigns.
35. CUMULATIVE EFFECT; CONFLICT OF TERMS
35.1 The provisions of the Other Agreements and the Security Documents
are hereby made cumulative with the provisions of this Agreement.
35.2 Except as otherwise provided in any of the other Loan Documents
by specific reference to the applicable provision of this
Agreement, if any provision contained in this Agreement is in
direct conflict with, or inconsistent with, any provision in any
of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
35.3 The Term Credit Facility will be governed by the terms and
conditions and by the special provisions set out in the Credit
Regulations, which form an integral part of this Agreement, save
to the extent that they are modified or amended, whether
37
<PAGE>
expressly or by implication, by the other provisions of this
Agreement. In the Credit Regulations the term "credit" refers,
to the Term Credit Facility, unless the context requires
otherwise.
36. EXECUTION IN COUNTERPARTS
36.1 This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall
constitute but one and the same instrument.
37. NOTICES
37.1 Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto, to be effective, shall be in
writing and shall be sent by certified or registered mail, return
receipt requested, by personal delivery against receipt, by
overnight courier or by facsimile and, unless otherwise expressly
provided herein, shall be deemed to have been validly served,
given or delivered immediately when delivered against receipt,
three Business Days after deposit in the mail, postage prepaid,
or two days after delivery to an overnight courier properly
addressed or, in the case of facsimile notice, when sent,
addressed as follows:
If to Lender: KBC Bank NV
Onderwijslaan 72
3600 Genk
Attention: Wim Leemen, Branch Manager
Facsimile No.: 32-89-84-46-75
With a copy to: KBC Bank N.V.
125 West 55th Street
New York, New York 10019
United States
Attention: Robert Surdam
Facsimile No.: (212) 541-0793
and to: Fleet National Bank
One Federal Street, 31st Floor
Boston, Massachusetts 02211
Attention: Howard Diamond
Facsimile No.: (617) 346-5093
38
<PAGE>
With a copy to: Winston & Strawn
200 Park Avenue
New York, New York 10166
Attention: Susan Berkwitt-Malefakis
Facsimile No.: (212) 294-4700
Oppenheimer Wolff & Donnelly LLP
Avenue Louise 240
1050 Brussels Belgium
Attention: Didier de Vliegher
Facsimile No.: 011-32-2-626-05-10
Lovell White &
Durrant, 37 Avenue
Pierre 1er de Serbie,
75008 Paris, France
Attention: Richard Jadot
Facsimile No.: 011-331 47 23 9612
If to Borrowers: c/o Alliance Europe
GZ-Zone 6B, Zuiderring 56, 3600 Genk
Attention: G. Thys
Facsimile No.: 32-89-32-31-31
PolyVision France Eurl
Crespin (Nord)
Rue des Deportes
R.C.S. Valenciennes, France
With a copy to: Greenberg Traurig
200 Park Avenue
New York, New York 10166
Attention: Richard M. Zaroff
Facsimile No.: (212) 801-6400
Derks, Star Busmann, Hanotiau
Avenue Louise 200 Louizalaan
B-1050 Brussels
Belgium
Attention: Bruno Duquesne
Facsimile No.: 011-322-626-22-54
and
39
<PAGE>
ASA-Avocats Associes
44, Rue Francois ler
75008 Paris
France
Attention: Thierry Gontard
Facsimile No.: : 011-33-1-4070-1832
or to such other address as each party may designate for itself
by notice given in accordance with this Article 37; PROVIDED,
HOWEVER, THAT any notice, request or demand to or upon Lender
pursuant to Article 11 or 18.2 hereof shall not be effective
until received by Lender.
38. CREDIT INQUIRIES
38.1 Borrowers hereby authorize and permit Lenders and the Fleet Agent
to respond to usual and customary credit inquiries from third
parties (other than persons engaged in similar or comparable
businesses to those of Borrowers) concerning Borrowers.
39. TIME OF ESSENCE
39.1 Time is of the essence in respect of this Agreement, the Other
Agreements and the Security Documents.
40. ENTIRE AGREEMENT
40.1 This Agreement and the other Loan Documents, together with all
other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto, embody
the entire understanding and agreement between the parties hereto
and thereto with respect to the subject matter hereof and thereof
and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written. There
are no unwritten oral agreements between the parties. Any
amendment or waiver of any provision hereof must be in writing
signed by all parties to be charged therewith, subject to the
terms of the Letter of Credit Agreement.
41. INTERPRETATION
41.1 No provision of this Agreement or any of the other Loan Documents
shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have
structured or dictated such provision.
40
<PAGE>
42. CONFIDENTIALITY
42.1 Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with Lender's
customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably
required by a prospective participant or assignee in connection
with the contemplated participation or assignment or as required
or requested by any governmental authority or representative
thereof or pursuant to legal process and shall require any such
participant or assignee to agree to comply with this Article 42;
PROVIDED, THAT Lender may disclose any such non-public
information available to the Fleet Agent and the Fleet Lenders.
43. GOVERNING LAW; CONSENT TO FORUM
43.1 This agreement has been negotiated, executed and delivered in and
is made in Brussels, Belgium.
43.2 In accordance with Article 40 of the Credit Regulations, this
Agreement is governed by, and shall be construed in accordance
with, the laws of Belgium, without reference to its conflict of
law rules.
43.3 For the benefit of Lender, all the parties agree that the courts
of Brussels (Belgium) and of Tongeren (Belgium) are to have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement, and for such purpose all the
parties submit to the jurisdiction of such courts.
43.4 Each of the Borrowers expressly submits and consents in advance
to such jurisdiction in any action or suit commenced in any such
court, and each of the Borrowers hereby waives any objection
which it may have based upon lack of personal jurisdiction,
improper venue or FORUM NON CONVENIENS and hereby consents to the
granting of such legal or equitable relief as is deemed
appropriate by such court.
41
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed in Brussels, Belgium,
on the day and year specified at the beginning of this Agreement.
WITNESS: POLYVISION BELGIUM NV
/s/ Stewart Wahsager By /s/ Bragi F. Schut
- ------------------------------ ----------------------------
Its Director
----------------------------
/s/ Dana P. Sidur
- ------------------------------
POLYVISION FRANCE EURL
/s/ Dawn Surace By /s/ Bragi F. Schut
- ------------------------------ ----------------------------
Its Director
----------------------------
KBC BANK N.V.
By /s/ Wim Leeman
----------------------------
Its Branch Manager
----------------------------
42
<PAGE>
APPENDIX A
GENERAL DEFINITIONS
When used in the Credit Facility Agreement dated as of 20 November 1998, by and
among (1) POLYVISION BELGIUM NV, (2) POLYVISION FRANCE EURL and (3) KBC BANK
N.V., as Lender, the following terms shall have the following meanings (terms
defined in the singular to have the same meaning when used in the plural and
vice versa):
ACQUISITION - the acquisition by PolyVision of all of the issued and
outstanding stock of Alliance International Group, Inc., a Georgia corporation,
and the acquisition by PolyVision Belgium of all (other than directors'
qualifying shares) of the issued and outstanding stock of Alliance Europe and
the acquisition by PolyVision France of 9,620 shares in Aubecq's share capital,
pursuant to the Purchase Documents, including, without limitation, through
"ORDRES DE MOUVEMENT" as far as French law is concerned relating to Aubecq's
shares.
BIBOR Period Request- a request for an advance made in accordance with the
provisions of Article 11 of the Agreement.
AFFILIATE - a Person (other than a Subsidiary):
(a) which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, a Person;
(b) which beneficially owns or holds 5% or more of any class of the Voting
Stock of a Person; or
(c) 5% or more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is beneficially
owned or held by a Person or a Subsidiary of a Person.
Without limiting the foregoing, Borrowers, PolyVision and each of PolyVision's
other Subsidiaries shall all be deemed to be Affiliates of each other.
AGREEMENT - the Credit Facility Agreement referred to in the first sentence of
this APPENDIX A, including all Appendices and Exhibits thereto.
AIG - Alliance International Group, Inc., a Delaware corporation, and the sole
stockholder of Alliance Europe prior to the consummation of the Acquisition,
and Alliance International Group, Inc. is intended to merge with and into
PolyVision on the Closing Date.
ALLIANCE EUROPE - Alliance Europe NV, a Belgium limited liability company.
Appendix A-1
<PAGE>
ALLIANCE GRAPHICS - Alliance Graphics NV, a Belgium limited liability company.
APPLICABLE MARGIN - the percentages set forth below with respect to the BIBOR
Term Portions determined pursuant to the last paragraph of this definition by
reference to the Consolidated Debt to EBITDA Ratio at such time, as set forth
below:
APPLICABLE MARGIN FOR BIBOR TERM PORTIONS
Applicable Margin for
Consolidated Debt to EBITDA Ratio BIBOR Term Portions
--------------------------------- -------------------
Equal to or greater than 5.0 to 1.0 3%
Equal to or greater than 4.5 to 1.0 but
less than 5.0 to 1.0 2.75%
Equal to or greater than 4.0 to 1.0 but
less than 4.5 to 1.0 2.50%
Less than 4.0 to 1.0 2.25%
The Applicable Margin for each BIBOR Term Portion shall be determined by
reference to the Consolidated Debt to EBITDA Ratio which shall be determined
five (5) Business Days after the date on which Lender receives financial
statements pursuant to Article 23.1(c)(i) or (ii) and a certificate of the chief
financial officer or any financial vice president of PolyVision and the
Borrowers demonstrating the Consolidated Debt to EBITDA Ratio. If the Borrowers
have not submitted to Lender the information described above as and when
required under Article 23.1(c)(i) or (ii), as the case may be, the Applicable
Margin shall be as determined by Lender in its reasonable discretion (upon
consultation and agreement with the Fleet Agent and taking into account, among
other things, the Consolidated Debt to EBITDA Ratio theretofore in effect) for
so long as such information has not been received by Lender. The Applicable
Margin shall be adjusted, if applicable, as of the first day of the month
following the date of determination described in the two preceding sentences.
In the event that the financial statements received pursuant to Article
23.1(c)(i) indicate that the Applicable Margin determined on the basis of
financial statements theretofore received pursuant to Article 23.1(c)(i) is
lower than the Applicable Margin that would have been determined on the basis of
the Article 23.1(c)(i) financial statements, the Applicable Margin shall be
adjusted retroactively for the relevant period.
ASSET DISPOSITION - the disposition of any or all of the fixed assets of any
Borrower whether by sale, lease, transfer, loss, damage, destruction,
condemnation or otherwise; PROVIDED, HOWEVER, that for purposes of Article 13.1,
the term "Asset Disposition" shall not include any sale, lease, transfer or
other disposition of Inventory in the ordinary course of business.
AUBECQ - Emailleries de Blanc Misseron, A. Aubecq SA., a french limited
liability company.
Appendix A-2
<PAGE>
BANK HEDGE AGREEMENT means any interest rate Hedge Agreement required or
permitted under Article 23.4 that is entered into by and between any Borrower
(or Parent on behalf of any Borrower) and any of Lender, Fleet Agent or any
Fleet Lender or any affiliate thereof.
BELGIUM OBLIGATIONS - all Loans and all other advances, debts, liabilities,
obligations, reimbursement obligations, covenants and duties, together with all
interest, fees and other charges thereon, owing, arising, due or payable from
Borrowers to Lender of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under the Agreement
or any of the other Loan Documents, whether direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising.
BELGIUM TERM CREDIT FACILITY - as defined in Article 2.1.
BELGIUM TERM LOAN - as defined in Article 2.1.
BIBOR INTEREST PAYMENT DATE - with respect to any BIBOR Term Portion, the last
day of the applicable BIBOR Period.
BIBOR PERIOD - any period of one (1), two (2), three (3) or six (6) months
commencing on a Business Day, selected as provided in Article 11; PROVIDED,
however that no BIBOR Period shall extend beyond the final scheduled principal
installment due hereunder, unless Borrowers and Lender have agreed to an
extension of the final maturity date beyond the expiration of the BIBOR Period
in question and that, with respect to any BIBOR Term Portion, no applicable
BIBOR Period shall extend beyond the scheduled installment payment date for such
BIBOR Term Portion. If any BIBOR Period so selected shall end on a date that is
not a Business Day, such BIBOR Period shall instead end on the next preceding or
succeeding Business Day as determined by Lender in accordance with the then
current lender practice in Brussels; PROVIDED, THAT Borrowers shall not be
required to pay double interest, even though the preceding BIBOR Period ends and
the new BIBOR Period begins on the same day. Each determination by Lender of
the BIBOR Period shall, in the absence of manifest error, be conclusive.
BIBOR RATE - with respect to any BIBOR Period, (i) the rate for Belgian Francs
for the relevant term appearing on page 3288 of the Telerate screen (or such
other page which may replace such page from time to time on the Telerate screen)
at or about 11 a.m. Brussels time on the relevant Interest Determination Date;
or (ii) if the relevant page is not displayed on the Telerate screen or the
Telerate screen is not operating at the relevant time or if no such offered rate
appears on the Telerate screen, the rate for Belgian Francs for the relevant
term which appears on page "BELO" of the Reuters screen (or such other pages
which may replace such page from time to time on the Reuters screen) at or about
11 a.m. Brussels time on the relevant Interest Determination Date; or (iii) if
the relevant page is not displayed on the Reuters screen or the Reuters screen
is not operating at the relevant time or if such offered rate does not appear on
the Reuters screen, the rate determined by Lender to be that at which loans in
Belgian Francs and in an amount comparable with the amount in relation to which
Appendix A-3
<PAGE>
BIBOR is to be determined and for a period equal to the relevant period were
being offered to Lender in the Brussels Interbank Market at or about 11 a.m.
(Brussels time) on the relevant Interest Determination Date; PROVIDED, that if
such loans are not offered, then BIBOR shall be determined by Lender in its
reasonable discretion.
BIBOR TERM PORTION - each portion of the Term Loans outstanding to a Borrower
with respect to which a BIBOR Period has commenced and has not terminated;
PROVIDED, that each BIBOR Term Portion shall be in an amount not less than
BEF5,000,000.00, subject to the repayment schedule set forth in EXHIBIT A.
BUSINESS DAY - shall mean any day which is not a legal holiday under the laws of
Belgium or is a day on which banking institutions located in Brussels are open.
CAPITAL EXPENDITURES - shall mean, for any Person for any period, the sum of all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for Equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or Equipment on a Consolidated balance sheet of
such Person; PROVIDED, that Capital Expenditures shall not include capital
expenditures to the extent that such expenditures constitute a reinvestment of
Net Cash Proceeds from any Asset Disposition permitted under this Agreement in
similar fixed assets, which investment is made or committed to be made under
contract with an unaffiliated third party to be made before or within one
hundred eighty days after receipt of such Net Cash Proceeds (or three hundred
sixty (360) days after receipt of such Net Cash Proceeds in respect of real
estate or improvements thereon subject to a casualty loss or condemnation).
CAPITALIZED LEASE OBLIGATIONS - any indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles in effect
in the country in which the relevant party is located, applied on a consistent
basis.
CHANGE OF CONTROL shall mean any of the following events: (a) Alpine shall at
any time cease to own and control (directly or through any Wholly-Owned
Subsidiary) at least 30% of the outstanding capital stock or voting power of
PolyVision; or (b) PolyVision (directly or through any wholly-owned Subsidiary)
shall at any time cease to own directly or indirectly one hundred (100%) percent
of the outstanding capital stock or voting power of any of its Subsidiaries
(other than the directors' qualifying shares); or (c) with respect to Alpine, a
change of control of Alpine or PolyVision that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A, as in effect on the
date hereof, promulgated under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") shall occur; PROVIDED that, without limitation, such a
Change of Control shall be deemed to occur if: (i) any "Person" (as such term is
used in Section 13(d) and Section 14(d) of the Exchange Act), (except for (with
respect to the Borrowers) Alpine, Steven Elbaum or any employee benefit plan of
Alpine or any Borrower or any Subsidiary or related corporation, or any entity
holding voting securities of Alpine or either Borrower for or pursuant to the
terms of any such plan), shall become
Appendix A-4
<PAGE>
the beneficial owner, directly or indirectly, of securities of Alpine
representing 30% or more of the combined voting power of Alpine's then
outstanding securities or of securities of PolyVision representing 30% or more
(excluding in respect of ownership of PolyVision Alpine in this clause and the
following clause (ii)) of the combined voting power of PolyVision's then
outstanding securities; (ii) there shall occur a contested proxy solicitation of
Alpine's or PolyVision's shareholders that results in the contesting party
obtaining the ability to vote securities representing 30% or more of the
combined voting power of Alpine's or PolyVision's then outstanding securities;
(iii) there shall occur: (A) a sale, lease, exchange, transfer or other
disposition in one or a series of related transactions of all or substantially
all of the assets of Alpine or PolyVision to another Person or entity or group
(as such term is defined in Section 13(d)(3) of the Securities Act as amended),
(B) a merger or consolidation in which Alpine is a constituent unless the
surviving entity is controlled directly or indirectly by the same Persons (as
defined in this Agreement) that controlled Alpine immediately prior to such
merger or consolidation or (C) the adoption of a plan of liquidation or
dissolution of Alpine other than pursuant to bankruptcy or insolvency laws; or
(iv) during any period of twelve (12) calendar months, individuals who at the
beginning of such period constituted the Board of Directors of Alpine or
PolyVision shall cease for any reason to constitute at least a majority thereof
unless the election, or the nomination for election by Alpine's shareholders or
by PolyVision's shareholders, as applicable, of each new director shall be
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of the period provided, however, that
no Change of Control shall be deemed to have occurred under clause (iii) (A),
(B) or (C) or clause (iv) in respect, in each such case, of Alpine if so
excluded from the definition of "Change of Control" under the Fleet Credit
Agreement, or (d) either Borrower shall at any time cease to own directly all of
the shares issued by its respective Subsidiaries (except director's qualifying
shares). For purposes of this definition "control", when used with respect to
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract, by family relationship or otherwise; and the terms
"controlling" and "controlled" have the meanings correlative to the foregoing.
CLOSING DATE - the date of this Agreement in October 1998.
COLLATERAL - all of the Shares and interests in Shares described in Article 19
of the Agreement, and all other Property and interests in Property that now or
hereafter secure the payment and performance of any of the Obligations.
CONSOLIDATED - the consolidation in accordance with that which is required to be
consolidated for financial reporting purposes in accordance with generally
accepted accounting principles in effect in the country in which the relevant
party is located of the accounts or other items as to which such term applies.
CONSOLIDATED DEBT TO EBITDA RATIO - as defined in Exhibit 25.1.
Appendix A-5
<PAGE>
CREDIT REGULATIONS - the Credit Regulations attached to the Agreement as
APPENDIX B, with such amendments as Lender shall enact in the ordinary course of
business (provided that any such amendment shall not apply to the Agreement
unless approved by the Fleet Agent).
CURRENT ASSETS - at any date means the amount at which all of the current assets
of a Person would be properly classified as current assets shown on a balance
sheet at such date in accordance with generally accepted accounting principles
in effect in the country in which the relevant party is located.
DEFAULT - an event or condition the occurrence of which would, with the lapse of
time or the giving of notice, or both, become an Event of Default.
DEFAULT RATE - as defined in Article 5 of the Agreement.
DISTRIBUTION - in respect of any company means and includes:
(a) the payment of any dividends or other distributions on share capital of
the company (except distributions in such stock); and
(b) the redemption or acquisition of securities of such company unless made
contemporaneously from the net proceeds of the sale of securities.
DOLLAR EQUIVALENT - with respect to any monetary amount in any currency other
than US Dollars, at any time, the amount of US Dollars obtained by converting
such currency into US Dollars at the spot rate for such transaction as quoted by
Lender at such time.
EBITDA - as defined in EXHIBIT 25.1.
ENVIRONMENTAL LAWS - all national, state and local laws, rules, regulations,
ordinances, programs, permits, guidances, orders and consent decrees relating to
health, safety and environmental matters.
EQUIPMENT - all machinery, apparatus, equipment, fittings, furniture, fixtures,
motor vehicles and other tangible personal Property (other than Inventory) of
every kind and description used in any Borrower's operations or owned by any
Borrower or in which a Borrower has an interest, whether now owned or hereafter
acquired by such Borrower and wherever located, and all parts, accessories and
tools and all increases and accessions thereto and substitutions and
replacements therefor.
EVENT OF DEFAULT - as defined in Article 27 of the Agreement.
EXCESS CASH FLOW - an amount determined to be Excess Cash Flow as defined in and
pursuant to the Fleet Credit Agreement, as such amount is set forth in writing
delivered by the Fleet Agent to Lender.
Appendix A-6
<PAGE>
EXTRAORDINARY RECEIPT - any cash received by or paid to or for the account of
any Person not in the ordinary course of business (other than by sale, lease or
transfer), including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption insurance to
the extent such proceeds constitute compensation for lost earnings),
condemnation awards (and payments in lieu thereof) and indemnity payments;
PROVIDED, HOWEVER, that an Extraordinary Receipt shall not include cash receipts
received from proceeds of insurance, condemnation awards (and payments in lieu
thereof) or indemnity payments to the extent that such proceeds, awards or
payments (a) in respect of loss or damage to Equipment, fixed assets or real
property are applied (or in respect of which expenditures were previously
incurred) to replace or repair the Equipment, fixed assets or real property in
respect of which such proceeds, awards or payments were received in accordance
with the terms of the Loan Documents, so long as (i) such application is made
within one hundred eighty (180) days (or three hundred sixty (360) days, with
respect to real estate or improvements on real estate), after such Person's
receipt of such proceeds, awards or payments and (ii) such proceeds, awards or
payments are received by such Person within fifteen (15) months after the
occurrence of such damage or loss; or (b) are received by any Person in respect
of any third party claim against such Person and applied to pay (or to reimburse
such Person for its prior payment of) such claim and the costs and expenses of
such Person with respect thereto.
FISCAL YEAR - a fiscal year of PolyVision and its Consolidated Subsidiaries
ending on April 30 in any calendar year, except for PolyVision Belgium the
fiscal year of which ends on December 31.
FLEET - as defined in the Recitals to the Agreement.
FLEET AGENT - as defined in the Recitals to the Agreement.
FLEET CREDIT AGREEMENT - as defined in the Recitals to the Agreement.
FLEET LENDERS - as defined in the Recitals to the Agreement.
FRANCE OBLIGATIONS - the France Term Loan and all other advances, debts,
liabilities, obligations, reimbursement obligations, covenants and duties,
together with all interest, fees and other charges thereon, owing, arising, due
or payable from PolyVision France to Lender of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
arising under the Agreement or any of the other Loan Documents, whether direct
or indirect, absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising.
FRANCE TERM CREDIT FACILITY - as defined in Article 3.1.
FRANCE TERM LOAN - as defined in Article 3.1.
Appendix A-7
<PAGE>
FRAUDULENT CONVEYANCE - a fraudulent conveyance or transfer under the provisions
of any applicable fraudulent conveyance or fraudulent transfer law or similar
law of any state, province, nation or other governmental unit, as in effect from
time to time.
GENERAL INTANGIBLES - all personal property of any Borrower (including things in
action) other than goods, accounts, chattel paper, documents, instruments and
money, whether now owned or hereafter created or acquired by any Borrower.
GUARANTORS - PolyVision, Posterloid and Greensteel and any other Person who may
on the date of the Agreement or hereafter guarantee payment or performance of
the whole or any part of the Obligations under this Agreement.
GUARANTY AGREEMENTS - the Continuing Guaranty Agreements which are to be
executed by each Guarantor in form and substance satisfactory to Lender.
HEDGE AGREEMENTS - means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other similar agreements.
INDEBTEDNESS - as applied to a Person means, without duplication:
(a) all items which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet of
such Person as at the date as of which Indebtedness is to be determined,
including, without limitation, Capitalized Lease Obligations;
(b) all obligations of other Persons which such Person has guaranteed or for
which such Person is liable;
(c) all reimbursement obligations in connection with letters of credit or
letter of credit guaranties issued for the account of any Person;
(d) in the case of PolyVision Belgium (without duplication), the Belgium
Obligations; and
(e) in the case of PolyVision France (without duplication), the France
Obligations.
INTERCOMPANY SUBORDINATION AGREEMENT - that certain Subordination Agreement
dated the Closing Date in favor of Lender and Administrative Agent executed by
PolyVision and certain of its Subsidiaries pursuant to which the repayment of
certain intercompany obligations is made subject and subordinate on the terms
set forth therein to the repayment of obligations owing to Lender under this
Agreement and the Other KBC Loan Agreement and owing to the Fleet Lenders and
Fleet Agent
Appendix A-8
<PAGE>
under the Fleet Credit Agreement, as it may from time to time be amended with
the consent of the Administrative Agent.
INTEREST COVERAGE RATIO - as defined in EXHIBIT 25.1.
INTEREST DETERMINATION DATE - with respect to any BIBOR Period for which BIBOR
is to be determined, the second Business Day prior to the first day of such
period.
INVENTORY - all of any Borrower's (if any) and its Subsidiaries' inventory,
whether now owned or hereafter acquired including, but not limited to, all goods
intended for sale or lease by a Borrower or its Subsidiaries, or for display or
demonstration; all work in process; all raw materials and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in a
Borrower's or its Subsidiaries' business; and all documents evidencing and
General Intangibles relating to any of the foregoing, whether now owned or
hereafter acquired by a Borrower or its Subsidiaries.
INVESTMENT PROPERTY - all of any Borrower's investment property, whether now
owned or hereafter acquired, including, but not limited to, all securities
(certificated or uncertificated), securities accounts, securities entitlement,
commodity accounts and commodity contracts.
ISSUER - Fleet National Bank, a national banking association organized under the
laws of the United States of America.
KBC - KBC Bank N.V.
LEGAL REQUIREMENT - any requirement imposed upon Lender by any law, regulation,
order, interpretation, ruling or official directive (whether or not having the
force of law) of any board, central bank or governmental or administrative
agency, institution or authority or any political subdivision of either thereof.
LETTER OF CREDIT AGREEMENT - the Letter of Credit Agreement dated the date of
the Agreement between Lender and Fleet, providing, among other things, for the
allocation of various administrative and monitoring responsibilities relating to
the Agreement between Lender and Fleet.
LIEN - any interest in Property securing an obligation owed to, or a claim by, a
Person other than the owner of the Property, whether such interest is based on
common law, statute or contract. The term "Lien" shall also include rights of
seller under conditional sales contracts or title retention agreements,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, a Borrower shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.
Appendix A-9
<PAGE>
LOAN ACCOUNT - the loan account established for each Borrower on the books of
Lender.
LOAN DOCUMENTS - the Agreement, the Other Agreements and the Security Documents.
LOANS - all loans and advances of any kind made by Lender pursuant to this
Agreement.
MATERIAL ADVERSE EFFECT -
(a) a material adverse effect on the business, condition (financial or
otherwise), operation, performance or properties of any Borrower;
(b) a material adverse effect on the rights and remedies of Lender under the
Loan Documents; or
(c) the material impairment of the ability of any Borrower to perform its
obligations hereunder or under any Loan Document including, regarding
PolyVision France or Aubecq, the incapacity to meet its current
liabilities with its available assets.
MONEY BORROWED - means:
(a) Indebtedness arising from the lending of money by any Person to a
Borrower;
(b) Indebtedness, whether or not in any such case arising from the lending by
any Person of money to a Borrower:
(i) which is represented by notes payable or drafts accepted that
evidence extensions of credit;
(ii) which constitutes obligations evidenced by bonds, debentures,
notes or similar instruments; or
(iii) upon which interest charges are customarily paid (other than
accounts payable) or that was issued or assumed as full or
partial payment for Property;
(c) Indebtedness that constitutes a Capitalized Lease Obligation;
(d) reimbursement obligations with respect to letters of credit or guaranties
of letters of credit or guarantees generally; and
(e) Indebtedness of a Borrower under any guaranty of obligations that would
constitute Indebtedness for Money Borrowed under clauses (a) through (c)
hereof, if owed directly by a Borrower.
Appendix A-10
<PAGE>
NET CASH PROCEEDS - with respect to any sale, lease, transfer or other
disposition of any asset by any Person, or any Extraordinary Receipt received by
or paid to or for the account of any Person, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal and accounting fees, finder's fees, printing costs and
other similar out-of-pocket costs, (b) the amount of taxes payable in connection
with or as a result of such transaction and (c) with respect to any asset, the
amount of any indebtedness secured by a Lien on such asset that, by the terms of
such transaction or the terms of such indebtedness, is required to be repaid
upon such disposition, in each case to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash, actually paid
or due and payable or set aside for payment (because due and payable) within ten
(10) Business Days after receipt by the applicable Borrower or PolyVision or
other Subsidiary of PolyVision to a Person that is not an Affiliate of such
Borrower or PolyVision or other Subsidiary of PolyVision and are properly
attributable to such transaction or to the asset that is the subject thereof.
OBLIGATIONS - the Belgium Obligations and France Obligations together.
OTHER AGREEMENTS - any and all agreements, instruments and documents (other than
the Agreement and the Security Documents), heretofore, now or hereafter executed
by a Borrower, or any other third party (other than legal counsel or
accountants), and delivered to Lender in respect of the transactions
contemplated by the Agreement.
OTHER KBC LOAN AGREEMENT - means the Credit Facility Agreement dated the Closing
Date by and among Alliance Europe, Alliance Graphics, Aubecq and Pentagon and
KBC, as it may be amended, supplemented, restated or otherwise modified from
time to time.
PARENT - PolyVision.
PENTAGON - Alliance Pentagon A/S, a Danish limited liability company.
PERMITTED LIENS - any Lien permitted by Article 24.1(e) of the Agreement.
PERSON - an individual, partnership, corporation, limited liability company,
joint stock company, land trust, business trust or unincorporated organization,
or a government or agency or political subdivision thereof.
PLAN - an employee benefit plan now or hereafter maintained for employees of any
Borrower or Pentagon under the relevant provisions of the laws and regulations
applicable to such Borrower or Pentagon.
POLYVISION - as defined in the Recitals to the Agreement.
Appendix A-11
<PAGE>
POLYVISION BELGIUM - as defined in the Recitals to the Agreement.
POLYVISION FRANCE - as defined in the Recitals to the Agreement.
PROJECTIONS - Borrowers' forecasted Consolidated and consolidating:
(a) balance sheets;
(b) profit and loss statements;
(c) cash flow statement; and
(d) capitalization statements;
all prepared on a consistent basis with Borrowers' historical financial
statements, together with appropriate supporting details and a statement of
underlying assumptions.
PROPERTY - any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible including shares in registered capital of
companies.
PURCHASE DOCUMENTS - the Stock Purchase Agreement dated as of September 1, 1998
(as amended prior to the date of this Agreement) by and between PolyVision
Corporation, PolyVision Belgium and PolyVision France, AIG and the stockholders
of AIG and AIG Holdings, Inc., pursuant to which the Acquisition shall have
been consummated.
RESTRICTED INVESTMENT - any investment made in cash or by delivery of Property
to any Person, whether by acquisition of stock, Indebtedness or other obligation
or security, or by loan, advance or capital contributions, or otherwise, or in
any Property except the following:
(a) investments, to the extent existing on the Closing Date, by that Borrower
or any Subsidiary;
(b) Property to be used in the ordinary course of business;
(c) Current Assets arising from the sale (to the extent expressly permitted
hereunder) of goods and services in the ordinary course of business of
any Borrower;
(d) investments in direct obligations of any of the jurisdictions in which
any Borrower's registered office is located, or any agency thereof or
obligations guaranteed by any such jurisdictions, or any agency thereof,
PROVIDED, THAT such obligations mature within one year from the date of
acquisition thereof;
(e) investments in certificates of deposit maturing within one year from the
date of acquisition issued by a bank or trust company organized under the
laws of any of the jurisdictions in
Appendix A-12
<PAGE>
which any Borrower registered office is located, or any agency thereof
having capital surplus and undivided profits aggregating at least the
Dollar Equivalent of $100,000,000;
(f) investments in commercial paper given the highest rating by a national
credit rating agency and maturing not more than 360 days from the date of
creation thereof; and
(g) investments permitted under the Agreement.
SECURITY DOCUMENTS - all instruments, agreements and documents now or at any
time hereafter securing the whole or any part of the Obligations, including
without limitation all of the security documents described in Article 19 of the
Agreement.
SENIOR SUBORDINATED LOAN AGREEMENT - as defined in the Fleet Credit Agreement.
SENIOR SUBORDINATED NOTE - has the meaning provided in the Fleet Credit
Agreement.
SOLVENT - as to any Person, such Person:
(a) owns Property whose fair saleable value is greater than the amount
required to pay all of such Person's Indebtedness (including contingent
debts);
(b) is able to pay all of its Indebtedness as such Indebtedness matures; and
(c) has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage.
STATUTORY RESERVES - a fraction (expressed as a decimal) the numerator of which
is the number one, and the denominator of which is the number one MINUS the
aggregate of the maximum reserve percentages (including, without limitation, any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by any banking authority to which Lender is subject for Eurocurrency
Liabilities. BIBOR Term Portions shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
SUBORDINATED DEBT - Indebtedness evidenced by the Senior Subordinated Note owing
by PolyVision in an aggregate principal amount of USD25,000,000 and any
guaranties thereof, as in effect on the Closing Date or as amended or
refinanced as permitted under the Fleet Credit Agreement, and any other
indebtedness of a Borrower that is subordinated to the Obligations in a manner
satisfactory to Lender.
Appendix A-13
<PAGE>
SUBSIDIARY - any company of which a Person owns, directly or indirectly through
one or more intermediaries, more than 50% of the Voting Stock at the time of
determination. Unless otherwise stated, references in the Agreement to
Subsidiaries refer to Subsidiaries of the respective Borrowers.
TERM CREDIT FACILITY - collectively the Belgium Term Credit Facility and the
France Term Credit Facility.
TERM LOANS - the Loans described in Articles 2 and 3.
TERM LOAN COMMITMENT - the amount of Lender's commitment pursuant to Articles 2
and 3 of the Agreement.
VOTING STOCK - securities of any class or classes of a corporation the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions
such as a "GERANT").
WHOLLY-OWNED SUBSIDIARIES - of any Person, means a Subsidiary of such Person all
of the outstanding Voting Stock (other than directors' qualifying shares) of
which shall at the time be owned by such Person or by one or more Wholly-Owned
Subsidiaries of that Person or a combination thereof.
Appendix A-14
<PAGE>
APPENDIX D
to the
Credit Facility Agreement dated as of 20 November 1998
by and among
(1) POLYVISION BELGIUM NV,
(2) POLYVISION FRANCE EURL, and
(3) KBC BANK N.V., as Lender (the "AGREEMENT")
1. All capitalized terms used but not defined in this Appendix shall have
the meanings given to those terms in the Agreement.
2. In addition to the terms and conditions set out in the Agreement, Lender
and Borrowers agree as follows:
2.1. INCREASED COSTS
2.1.1. Subject to paragraph (b) below, where Lender determines
that, as a result of the introduction or variation of any
law or any change in the interpretation or application of
any law, or compliance with any request (whether or not
having the force of law but, if not having the force of
law, being of a type with which Lender is accustomed to
comply and including any request or requirement which
affect the manner in which Lender is required to or does
maintain capital resources in relation to its obligations
under this Agreement) from any central bank or other
fiscal, monetary or other authority or agency, the cost to
Lender of maintaining or funding the Loans is increased or
the amount of any sum received or receivable by it in
respect of this Agreement or the effective return to it
under this Agreement is reduced or it is obligated to make
any payment (except in respect of tax on its overall net
income) or foregoes any interest or other return on, or
calculated by reference to, the amount of any sum received
or receivable by it from Borrowers under this Agreement,
then:
(a) Lender shall notify Borrowers of the event
promptly upon becoming aware of it and deliver to
Borrowers a certificate to that effect containing
relevant details; and
(b) Borrowers shall on demand pay to Lender such
amounts as Lender from time to time and at any
time notifies Borrowers to be necessary to
compensate it for such increased cost, reduction,
payment or foregone interest or return (provided
that PolyVision France shall not be liable for any
obligations of PolyVision Belgium and PolyVision
Appendix D-1
<PAGE>
Belgium shall not be liable for any of the
obligations of PolyVision France) under this
Section 2.1 or under Section 2.2.3 of this
Appendix D.
2.2. INDEMNIFICATION
2.2.1. In accordance with Article 20 of the Credit Regulations,
Borrowers shall on demand pay, in each case on the basis
of a full indemnity to Lender all expenses (including
legal, printing and reasonable out-of-pocket expense and
taxes) incurred in connection with the negotiation,
preparation or completion of this Agreement or in
connection with the preservation, enforcement or the
attempted preservation or enforcement of any of Lender's
rights under this Agreement.
2.2.2. Without prejudice to Clause 2.2.3 below, Borrowers shall
fully indemnify Lender from and against any expense, loss,
damage or liability which it may incur as a consequence of
the occurrence of any Event of Default or otherwise in
connection with this Agreement and the indemnity shall
include, without limitation (but without duplication of
the interest charged under the Agreement), any interest,
fees or other sums whatsoever paid or payable on account
of any funds borrowed in order to carry any unpaid amount.
2.2.3. If Lender incurs any loss or expense by reason of the
liquidation or reemployment of deposits or other funds
acquired by Lender to make or maintain all or any portion
of the Term Credit Facility or any BIBOR Term Portion as
a result of any repayment of all or any portion of the
principal amounts of the Term Credit Facility or of a
BIBOR Term Portion in each case bearing interest based on
a BIBOR Interest Period on a date other than the scheduled
due dates therefore (such loss or expense to be referred
to as the "FUNDING LOSS"), Borrowers shall, at the first
demand of Lender, pay to Lender such amount as will
reimburse Lender for such loss or expense.
(a) The Funding Loss shall be calculated on an
actuarial basis. Consequently, the Funding Loss
shall be equal to the discounted difference
between the income that Lender would have received
from making the Belgium Term Credit Facility or
France Term Credit Facility (as the case may be)
and/or the BIBOR Term Portion available if no
early repayment had been made and the income that
Lender will receive upon reinvestment at the
prevailing market rate of the amounts repaid
early. In the event of partial early repayments,
the income Lender continues to receive from the
amount of the Belgium Term Credit Facility or
France Term Credit Facility or any
Appendix D-2
<PAGE>
BIBOR Term Portion not repaid early must be added
to the income it receives upon reinvestment.
(b) The Funding Loss shall be calculated on the amount
of the early repayment and for the period
commencing from the date of early repayment and
lasting until the date originally agreed for the
repayment of the relevant amount. The interbank
deposit rate prevailing at the time of early
repayment plus 200 basis points shall serve as the
discount rate.
(c) A statement setting forth the amount of any such
loss or expense shall be submitted by Lender to
Borrowers and shall, in the absence of
demonstrable error, be conclusive on Borrowers.
2.2.4. Should the above-mentioned calculation of the Funding Loss
result in a negative amount, Lender shall transfer such
amount ("FUNDING PROFIT") to Borrowers having deducted all
taxes, duties, charges or otherwise required by law.
2.2.5. Clauses 2.2.3 and 2.2.4 shall not apply to any repayment
or prepayments pursuant to Article 11, 12 and 13 of the
Credit Regulations.
Appendix D-3
<PAGE>
EXHIBIT A
TO
POLYVISION BELGIUM AND POLYVISION
FRANCE LOAN AGREEMENT
POLYVISION BELGIUM PAYMENT SCHEDULE
Principal shall be due and payable quarterly, commencing January 31, 1999 and
continuing on the last day of each three months thereafter to and including the
last day of October 2004 in installments as set forth below:
Date of Payment:
Each January 31, April 30,
July 31, and October 31 Quarterly Principal
Commencing January 31, 1999 Amount Due
--------------------------- -------------------
1999 360,833.00
2000 4,811,100.00
2001 11,666,918.00
2002 13,230,525.00
2003 14,433,300.00
2004 15,636,075.00
PROVIDED that in any event the entire remaining principal balance then
outstanding, together with any other amounts due hereunder, shall be due on
October 31, 2004.
POLYVISION FRANCE PAYMENT SCHEDULE
Principal shall be due and payable quarterly, commencing January 31, 1999 and
continuing on the last day of each three months thereafter to and including the
last day of October 2004 in installments as set forth below:
Date of Payment:
Each January 31, April 30,
July 31, and October 31 Quarterly Principal
Commencing January 31, 1999 Amount Due
--------------------------- -------------------
1999 206,190.00
2000 2,749,200.00
2001 6,666,810.00
2002 7,560,300.00
2003 8,247,600.00
2004 8,934,900.00
PROVIDED that in any event the entire remaining principal balance then
outstanding, together with any other amounts due hereunder ,shall be due on
October 31, 2004.
Exhibit A-1
<PAGE>
EXHIBIT 25.1
FINANCIAL COVENANTS
CONSOLIDATED DEBT TO EBITDA RATIO shall mean, as of any date of determination, a
ratio of (a) Debt of PolyVision and its Subsidiaries as at the end of such
fiscal quarter (exclusive of Subordinated Debt held by Alpine or its Affiliates
but excluding for purposes of this parenthetical any portion of the Senior
Subordinated Note which may be held by Alpine or its Affiliates) to (b) EBITDA
for the most recently completed four fiscal quarters of PolyVision and its
Subsidiaries.
DEBT of any Person means, without duplication,
(a) all indebtedness of such Person for borrowed money,
(b) all Obligations (for all purposes of this definition of Debt, as
defined below in this Exhibit 25.1) of such Person for the deferred purchase
price of property or services,
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments,
(d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property),
(e) all Obligations of such Person as lessee under Capitalized
Leases,
(f) all Obligations, contingent or otherwise, of such Person under
bankers acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of (i) any capital stock of or
other ownership or profit interest in such Person or any other Person or (ii)
any warrants, rights or options to acquire such capital stock,
(h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h) above
or clause (j) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Debt against loss in respect thereof, (C)
Exhibit 25.1-1
<PAGE>
to supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (D) otherwise to assure the holder
of such Debt against loss in respect thereof, and
(j) all Debt referred to in clauses (a) through (i) above of another
Person secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts, contract rights or inventory) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Debt.
EBITDA shall mean, for any period, the sum, for PolyVision and its Subsidiaries
determined on a Consolidated basis, of (i) Net Income (or net loss), (ii)
Interest Expense, (iii) income tax expense, (iv) depreciation expense, (v)
extraordinary and nonrecurring losses, (vi) amortization expense and other
non-ordinary non-cash charges deducted in the calculation of Net Income or net
losses (including, without limitation, amortization of fees and expenses related
to the Acquisition and compensation expense not paid in cash) and (vii) to the
extent deducted in the computation of Net Income, non-recurring restructuring
charges resulting from plant closing expenses, severance obligations and
reorganization expenses relating to the consummation of the Acquisition as
described in the Projections (as defined in the Fleet Credit Agreement)
delivered on the Closing Date, MINUS extraordinary and nonrecurring gains (or
plus extraordinary losses) (in each case determined in accordance with GAAP),
PLUS the pro forma effect on EBITDA for such period of any permitted acquisition
(permitted by the Fleet Agent) made by PolyVision or its Subsidiaries (such pro
forma effect to be determined in a manner reasonably acceptable to the Fleet
Agent).
FIXED CHARGE COVERAGE RATIO shall mean, for the four consecutive fiscal quarters
of PolyVision and its Subsidiaries ending on the date of determination, the
ratio of (a) EBITDA of PolyVision and its Subsidiaries for such four fiscal
quarters (or such other period specified in the covenants set forth below
entitled "Fixed Charge Coverage Ratio"), to (b) Fixed Charges for such four
fiscal quarters (or other period specified in such covenant).
FIXED CHARGES means the sum, for PolyVision and its Subsidiaries on a
Consolidated basis for any period, of (i) Interest Expense, PLUS (ii) scheduled
amortization of Debt payable during such period, plus (iii) income taxes and
other taxes payable in respect of such period, plus (iv) Capital Expenditures
during such period to the extent permitted by the Fleet Credit Agreement, this
Agreement or the Other KBC Loan Agreement.
HEDGE AGREEMENTS - shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
INTEREST EXPENSE shall mean, with respect to PolyVision and its Subsidiaries
for any period, interest expense on all Debt of such Person for such period
whether paid or accrued, determined on a Consolidated basis for such Person and
its Subsidiaries and in accordance with GAAP, and
Exhibit 25.1-2
<PAGE>
including, without limitation, (a) in the case of PolyVision and its
Subsidiaries, interest expense in respect of Debt resulting from Loans under
this Agreement, the Fleet Credit Agreement or the Other KBC Loan Agreement, (b)
the interest component of all obligations under Capitalized Leases, (c)
commissions, discounts and other fees and charges payable in connection with
letters of credit (including, without limitation, Letters of Credit), (d) the
net payment, if any, payable in connection with Hedge Agreements less the net
credit, if any, received in connection with Hedge Agreements and (e) all fees
paid by PolyVision or any of its Subsidiaries pursuant to in connection with the
commitments hereunder or under the Fleet Credit Agreement or under the Other KBC
Loan Agreement.
OBLIGATION - shall mean, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 27.1(i).
Without limiting the generality of the foregoing, the Obligations of the
Borrowers under this Agreement, the Security Documents and the Other Agreements
include (a) the obligation to pay principal, interest, letter of credit
reimbursements, commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Borrower under any
of this Agreement, the Security Documents and the Other Agreements, (b) the
obligation of any Borrower to reimburse any amount in respect of any of the
foregoing that Lender may, after the occurrence and during the continuance of an
Event of Default, elect to pay or advance on behalf of such Borrower, and (c)
any other obligations arising out of or under, based upon or relating to this
Agreement, the Security Documents and the Other Agreements, and shall, with
respect to the Borrowers' Subsidiaries, the "Obligations" as defined in the
Other KBC Loan Agreement, and with respect to PolyVision and its Subsidiaries,
"Obligations" as defined in the Fleet Credit Agreement.
Any capitalized terms used in this Exhibit 25.1 not otherwise defined herein
shall have the respective meanings ascribed thereto in the Fleet Credit
Agreement.
Exhibit 25.1-3
<PAGE>
COVENANTS
CONSOLIDATED DEBT TO EBITDA RATIO. Maintain as of the end of each fiscal
quarter of PolyVision a Consolidated Debt to EBITDA Ratio of not more than the
ratio set forth below:
------------------------------------------- --------------------
Date of Determination: Maximum Ratio
------------------------------------------- --------------------
January 31, 1999 6.0 to 1.0
------------------------------------------- --------------------
April 30, 1999 6.0 to 1.0
------------------------------------------- --------------------
July 31, 1999 5.75 to 1.0
------------------------------------------- --------------------
October 31, 1999 5.5 to 1.0
------------------------------------------- --------------------
January 31, 2000 5.25 to 1.0
------------------------------------------- --------------------
April 30, 2000 5.25 to 1.0
------------------------------------------- --------------------
July 31, 2000 5.25 to 1.0
------------------------------------------- --------------------
October 31, 2000 5.00 to 1.0
------------------------------------------- --------------------
January 31, 2001 5.00 to 1.0
------------------------------------------- --------------------
April 30, 2001 4.50 to 1.0
------------------------------------------- --------------------
July 31, 2001 4.50 to 1.0
------------------------------------------- --------------------
October 31, 2001 4.50 to 1.0
------------------------------------------- --------------------
January 31, 2002 4.50 to 1.0
------------------------------------------- --------------------
April 30, 2002 through (and including)
October 31, 2005 4.0 to 1.0
------------------------------------------- --------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of PolyVision ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case cost savings resulting from the Acquisition):
------------------------------------------- --------------------
Date Amount
------------------------------------------- --------------------
January 31, 1999 $2,000,000
------------------------------------------- --------------------
April 30, 1999 $1,750,000
------------------------------------------- --------------------
July 31, 1999 $1,250,000
------------------------------------------- --------------------
October 31, 1999 $ 500,000
------------------------------------------- --------------------
Covenants-1
<PAGE>
INTEREST COVERAGE RATIO. Maintain as of each date set forth below, a ratio of
(i) EBITDA for the most recently completed four fiscal quarters of PolyVision to
(ii) cash Interest Expense for such period of not less than the ratio set forth
below for such period:
------------------------------------------- --------------------
Date of Determination: Minimum Ratio
------------------------------------------- --------------------
January 31, 1999 1.70 to 1.0
------------------------------------------- --------------------
April 30, 1999 1.70 to 1.0
------------------------------------------- --------------------
July 31, 1999 1.75 to 1.0
------------------------------------------- --------------------
October 31, 1999 1.85 to 1.0
------------------------------------------- --------------------
January 31, 2000 1.85 to 1.0
------------------------------------------- --------------------
April 30, 2000 2.00 to 1.0
------------------------------------------- --------------------
July 31, 2000 2.00 to 1.0
------------------------------------------- --------------------
October 31, 2000 2.00 to 1.0
------------------------------------------- --------------------
January 31, 2001 2.00 to 1.0
------------------------------------------- --------------------
April 30, 2001 2.25 to 1.0
------------------------------------------- --------------------
July 31, 2001 2.25 to 1.0
------------------------------------------- --------------------
October 31, 2001 2.25 to 1.0
------------------------------------------- --------------------
January 31, 2002 2.25 to 1.0
------------------------------------------- --------------------
April 30, 2002 through (and including)
October 31, 2005 2.50 to 1.0
------------------------------------------- --------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of PolyVision ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case cost savings resulting from the Acquisition):
------------------------------------------- --------------------
Date Amount
------------------------------------------- --------------------
January 31, 1999 $2,000,000
------------------------------------------- --------------------
April 30, 1999 $1,750,000
------------------------------------------- --------------------
July 31, 1999 $1,250,000
------------------------------------------- --------------------
October 31, 1999 $ 500,000
------------------------------------------- --------------------
Covenants-2
<PAGE>
FIXED CHARGE COVERAGE RATIO. Maintain as of the end of each fiscal quarter of
PolyVision a Fixed Charge Coverage Ratio for the most recently completed four
fiscal quarters of PolyVision and its Subsidiaries on a Consolidated basis of
not less than the following ratios for the requisite periods set forth below
(except that in respect of the first three testing periods referred to below,
EBITDA and Fixed Charges shall be computed only for the one, two and three
fiscal quarterly periods respectively described below, provided that Capital
Expenditures shall be computed within fixed charges in an amount equal to the
greater of one-quarter of the Capital Expenditures permitted during [the twelve
month period] during which a testing period ends and actual Capital Expenditures
made during the testing period specified below):
------------------------------------------- --------------------
Four Fiscal Quarters ending on:
------------------------------------------- --------------------
Each October 31, January 31, April 30 and
July 31 after the Closing Date and
continuing through (and including)
October 31, 2005 1.10 to 1.0
------------------------------------------- --------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of PolyVision ending on each of the following
dates, there shall be added to such EBITDA the amounts set forth next to such
dates (representing in each case cost savings resulting from the Acquisition):
------------------------------------------- --------------------
Date Amount
------------------------------------------- --------------------
January 31, 1999 $2,000,000
------------------------------------------- --------------------
April 30, 1999 $1,750,000
------------------------------------------- --------------------
July 31, 1999 $1,250,000
------------------------------------------- --------------------
October 31, 1999 $ 500,000
------------------------------------------- --------------------
Covenants-3
<PAGE>
Exhibit 10.35
================================================================================
POLYVISION CORPORATION
___________________________________________
SENIOR SUBORDINATED LOAN AGREEMENT
____________________________________________
DATED AS OF NOVEMBER 20, 1998
$25,000,000 SENIOR SUBORDINATED NOTES DUE NOVEMBER 20, 2006
================================================================================
<PAGE>
TABLE OF CONTENTS
SECTION 1 AMOUNT AND TERMS OF LOAN COMMITMENTS
AND LOAN; NOTES; PAYMENTS. . . . . . . . . . . . . . . . . . . . 1
1.1 Loan and Note. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Reserved.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Interest on the Loan . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Optional Principal Payments. . . . . . . . . . . . . . . . . . . 4
1.5 Offer to Pay Upon Change in Control. . . . . . . . . . . . . . . 5
1.6 Issuance of Warrants; Delivery of Notes in Payment
of Warrant Purchase Price. . . . . . . . . . . . . . . . . . . . 6
1.7 Application of Payments; Payments Among Noteholders. . . . . . . 7
1.8 Notation of Payments on Notes. . . . . . . . . . . . . . . . . . 7
1.9 No Other Payments of Principal . . . . . . . . . . . . . . . . . 8
1.10 Manner of Payments . . . . . . . . . . . . . . . . . . . . . . . 8
1.11 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2 LOAN RECORDATION; EXCHANGE; SUBSTITUTION OF NOTES; TAXES . . . . 9
2.1 Loan Recordation.. . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Exchange of Notes. . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Replacement of Notes . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3 GENERAL COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Payment of Taxes and Claims. . . . . . . . . . . . . . . . . . . 12
3.2 Maintenance of Properties; Corporate Existence; etc. . . . . . . 13
3.3 Payment of Notes and Maintenance of Office . . . . . . . . . . . 14
3.4 Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . . . . . 15
3.6 Increase in Authorized Capital Stock . . . . . . . . . . . . . . 15
SECTION 4 NEGATIVE AND FINANCIAL COVENANTS. . . . . . . . . . . . . . . . 15
4.1 Mergers and Consolidations . . . . . . . . . . . . . . . . . . . 15
4.2 Asset Sales; Subsidiary Stock. . . . . . . . . . . . . . . . . . 16
4.3 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.4 Capital Expenditures.. . . . . . . . . . . . . . . . . . . . . . 21
4.5 Incurrence of Debt and Issuance of Preferred Stock.. . . . . . . 22
4.6 Restricted Payments, Restricted Repurchases and
Restricted Investments.. . . . . . . . . . . . . . . . . . . . . 24
4.7 Seniority to Junior Subordinated Debt. . . . . . . . . . . . . . 25
4.8 Line of Business.. . . . . . . . . . . . . . . . . . . . . . . . 25
4.9 Transactions with Affiliates . . . . . . . . . . . . . . . . . . 25
i
<PAGE>
4.10 Management Fees. . . . . . . . . . . . . . . . . . . . . . . . . 26
4.11 Seller Documents; Subordination Documents. . . . . . . . . . . . 26
4.12 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . 26
4.13 Limitations on Operating Leases. . . . . . . . . . . . . . . . 29
4.14 Debt to Foreign Subsidiaries; Agreement to Grant Collateral
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5 REPORTING COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 30
5.1 Financial and Business Information . . . . . . . . . . . . . . . 30
5.2 Extension of Time to File SEC Reports. . . . . . . . . . . . . . 33
5.3 Officer's Certificates . . . . . . . . . . . . . . . . . . . . . 34
5.4 Accountants' Certificates. . . . . . . . . . . . . . . . . . . . 34
5.5 Inspection.. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.6 Confidential Information.. . . . . . . . . . . . . . . . . . . . 35
5.7 Board Observer . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 37
6.2 Default Remedies.. . . . . . . . . . . . . . . . . . . . . . . . 39
6.3 Annulment of Acceleration of Notes.. . . . . . . . . . . . . . . 41
SECTION 7 SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2 Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.3 Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . 43
7.4 Payment Default in Respect of Senior Debt. . . . . . . . . . . . 43
7.5 Significant Nonpayment Default in Respect of Senior Debt.. . . . 44
7.6 Enforcement Notice.. . . . . . . . . . . . . . . . . . . . . . . 45
7.7 Standstill . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.8 Turnover of Payments . . . . . . . . . . . . . . . . . . . . . . 46
7.9 Subordination Unaffected by Certain Events . . . . . . . . . . . 46
7.10 Waiver and Consent . . . . . . . . . . . . . . . . . . . . . . . 47
7.11 Reinstatement of Subordination.. . . . . . . . . . . . . . . . . 47
7.12 Obligations Not Impaired. . . . . . . . . . . . . . . . . . . . 47
7.13 Payment of Senior Debt; Subrogation. . . . . . . . . . . . . . . 48
7.14 Reliance of Holders of Senior Debt.. . . . . . . . . . . . . . . 48
7.15 Identity of Holders of Senior Debt.. . . . . . . . . . . . . . . 48
7.16 Amendments to Senior Credit Facility. . . . . . . . . . . . . . 49
SECTION 8 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . 49
8.1 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . 49
8.2 Financial Statements; Debt; Material Adverse Change. . . . . . . 49
8.3 Subsidiaries and Affiliates. . . . . . . . . . . . . . . . . . . 51
8.4 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . 51
8.5 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.6 Pending Litigation . . . . . . . . . . . . . . . . . . . . . . . 52
ii
<PAGE>
8.7 Corporate Organization and Authority . . . . . . . . . . . . . . 52
8.8 Charter Instruments, Other Agreements. . . . . . . . . . . . . . 53
8.9 Restrictions on the Company. . . . . . . . . . . . . . . . . . . 53
8.10 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . 54
8.11 Pension Plans. . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.12 Environmental Compliance . . . . . . . . . . . . . . . . . . . . 55
8.13 Due Authorization; Enforceability. . . . . . . . . . . . . . . . 56
8.14 Governmental Consent to Issuance of Notes and Warrants.. . . . . 57
8.15 Hart-Scott-Rodino Compliance . . . . . . . . . . . . . . . . . . 57
8.16 No Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.17 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 58
8.18 Capitalization.. . . . . . . . . . . . . . . . . . . . . . . . . 58
8.19 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.20 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9 CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . 60
9.1 Conditions to Loan . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10 INTERPRETATION OF THIS AGREEMENT . . . . . . . . . . . . . . . 67
10.1 Terms Defined. . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.2 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . 94
10.3 Accounting Principles. . . . . . . . . . . . . . . . . . . . . . 94
10.4 Directly or Indirectly.. . . . . . . . . . . . . . . . . . . . . 95
10.5 Section Headings and Table of Contents and Construction. . . . . 95
10.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.7 General Interest Provisions. . . . . . . . . . . . . . . . . . . 96
SECTION 11 GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.1 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.2 Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.3 Relative Rights. . . . . . . . . . . . . . . . . . . . . . . . . 99
11.4 Notice by a Guarantor. . . . . . . . . . . . . . . . . . . . . . 99
11.5 Subordination May Not Be Impaired by Guarantor . . . . . . . . . 99
11.6 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.7 Limitations of Guarantor's Liability . . . . . . . . . . . . . . 100
SECTION 12 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 100
12.1 Communications.. . . . . . . . . . . . . . . . . . . . . . . . . 100
12.2 Reproduction of Documents. . . . . . . . . . . . . . . . . . . . 101
12.3 Survival, Entire Agreement.. . . . . . . . . . . . . . . . . . . 101
12.4 Successors and Assigns.. . . . . . . . . . . . . . . . . . . . . 102
12.5 Amendment and Waiver.. . . . . . . . . . . . . . . . . . . . . . 102
12.6 Costs and Expenses.. . . . . . . . . . . . . . . . . . . . . . . 104
12.7 Waiver of Jury Trial; Consent to Jurisdiction, etc . . . . . . . 105
12.8 Execution in Counterpart.. . . . . . . . . . . . . . . . . . . . 107
iii
<PAGE>
Annex 1 - Address of Lenders; Payment Instructions
Annex 2 - Address of Company
Annex 3 - Schedules
Attachment A - Form of Note
Attachment B - Form of Warrant Agreement
Attachment C - Form of Notice of Borrowing
iv
<PAGE>
SENIOR SUBORDINATED LOAN AGREEMENT
SENIOR SUBORDINATED LOAN AGREEMENT, dated as of November 20, 1998, among
POLYVISION CORPORATION, a New York corporation (together with its successors and
assigns, the "COMPANY"), FLEET CORPORATE FINANCE, INC. ("FLEET" and together
with its successors and assigns, whether one or more, the "LENDERS"), POSTERLOID
CORPORATION, a Delaware corporation ("POSTERLOID"), and GREENSTEEL, INC. a
Delaware corporation (which is expected to be merged with ALLIANCE AMERICA
CORPORATION, and whose name will continue to be GREENSTEEL, INC.) as it exists
prior to and after giving effect to such merger ("GREENSTEEL") (Posterloid and
Greensteel being individually referred to herein as a "GUARANTOR" and
collectively herein as the "GUARANTORS").
RECITALS
WHEREAS, the Company wishes to borrow from the Lenders and the Lenders are
willing upon and subject to the terms and conditions of this Agreement, to lend
the Company Twenty-Five Million ($25,000,000) Dollars in connection with the AIG
Acquisition (as hereinafter defined) and the refinancing of certain debt of the
Company and AIG; and
WHEREAS, the Company and the Lenders wish to enter into this Agreement to
govern the terms of the Notes (as hereinafter defined);
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:
SECTION 1 AMOUNT AND TERMS OF LOAN COMMITMENTS
AND LOAN; NOTES; PAYMENTS
1.1 LOAN AND NOTE.
(a) LOAN COMMITMENT. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lenders hereby agree to lend to the
Company on the Closing Date $25,000,000 in the aggregate (the "LOAN"), each
such Lender committing to lend the amount set forth next to such Lender's
name on ANNEX 1, and the Company hereby agrees to borrow the Loan from the
Lenders. The Lenders' commitments to make the Loan to the Company pursuant
to this Section 1.1(a) are herein referred to as, individually, the "LOAN
COMMITMENT" and, collectively, the "LOAN COMMITMENTS". Amounts borrowed
under this Section 1.1(a) and repaid or prepaid may not be reborrowed.
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(b) NOTICE OF BORROWING. When the Company desires to borrow
under this Section 1.1, it shall deliver to the Lenders a Notice of
Borrowing no later than 11:00 A.M. (New York time), at least one (1)
Business Day in advance of the Closing Date or such later date as shall be
agreed to by the Lenders. The Notice of Borrowing shall specify the
applicable date of borrowing (which shall be a Business Day).
(c) DISBURSEMENT OF FUNDS.
(i) No later than 12:00 Noon (New York time) on the
Closing Date, each Lender will release to the Company in U.S.
dollars and immediately available funds such Lender's pro rata share
of the Loan requested to be made on such date by depositing to the
Company Account such Lender's pro rata amount. Unless notified by a
Lender (the "NOTIFYING LENDER") prior to the Closing Date that such
Notifying Lender does not intend to make available to the Company
its portion of the Loan to be made on such date, all the other
Lenders may assume that each Lender has made its pro rata amount
available to the Company on such date, and the other Lenders, in
reliance upon such assumption, may (in their sole discretion and
without any obligation to do so) make available to the Company a
corresponding amount. If such corresponding amount is not in fact
made available to the Company by such Notifying Lender, the other
Lenders shall be entitled to recover such corresponding amount from
such Notifying Lender. If such Notifying Lender does not pay such
corresponding amount forthwith upon the other Lender's demand
therefor, the other Lenders shall promptly notify the Company, and
the Company shall immediately pay such corresponding amount to the
other Lenders. The other Lenders shall also be entitled to recover
from the Notifying Lender or the Company, 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 other
Lenders to the Company to the date such corresponding amount is
recovered by the other Lenders, at a rate per annum equal to (x) if
paid by such Notifying Lender, the overnight Federal Funds Rate or
(y) if paid by the Company, the then applicable rate of interest on
the Loan.
(ii) Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Loan Commitment hereunder or to
prejudice any rights which the Company may have against any Lender
as a result of any default by Lender hereunder.
(d) PRO RATA BORROWINGS. The Loan made under this Agreement
shall be made by the Lenders pro rata on the basis of their respective Loan
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make its portion of the
Loan hereunder and
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that each Lender shall be obligated to make its portion of the Loan
hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder.
(e) NOTES. The Company shall execute and deliver to each Lender
on the Closing Date a Note dated the Closing Date substantially in the form
of ATTACHMENT A to evidence the portion of the Loan made on such date by
such Lender and with appropriate insertions (each a "NOTE" and,
collectively, the "NOTES").
(f) TERMINATION OF LOAN COMMITMENTS. The Loan Commitments
hereunder shall terminate on December 15, 1998.
(g) MATURITY OF LOAN. The Loan shall mature and the Company
shall pay in full the outstanding principal amount thereof and accrued and
unpaid interest thereon, on the eighth (8th) anniversary of the Closing
Date (the "MATURITY DATE").
1.2 Reserved.
1.3 INTEREST ON THE LOAN. The Company shall pay to the Lenders interest
on the unpaid principal amount of the Loan owing to each Lender at the rates,
time and manner set forth below.
(a) RATE OF INTEREST. The Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity
(whether by prepayment, acceleration or otherwise) at the rate of twelve
and one-half percent (12.5%) per annum.
(b) INTEREST PAYMENTS. Interest shall be payable in arrears on
APRIL 30, JULY 31, OCTOBER 31 AND JANUARY 31 of each year, commencing on
the first of such dates to follow the Closing Date, upon any prepayment of
the Loan (to the extent accrued on the amount being prepaid) and at
maturity whether by acceleration or otherwise of the Loan.
(c) POST-MATURITY INTEREST. Any principal payments on the Loan
not paid when due and, to the extent permitted by applicable law, any
interest payment on the Loan not paid when due, in each case whether at
stated maturity, by notice of pre-payment, by acceleration or otherwise,
shall thereafter bear interest payable upon demand at a rate PER ANNUM (the
"DEFAULT RATE") equal to the lesser of:
(i) the highest rate allowed by applicable law; or
(ii) fourteen and fifty one-hundredths percent (14.5%).
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(d) COMPUTATION OF INTEREST. Interest on the Loan shall be
computed on the basis of a 360-day year and twelve 30-day months. In
computing interest on the Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; PROVIDED, HOWEVER, that
if the Loan is repaid on the same day on which it is made, one day's
interest shall be paid on the Loan.
1.4 OPTIONAL PRINCIPAL PAYMENTS.
(a) OPTIONAL PRINCIPAL PAYMENTS WITH PREPAYMENT COMPENSATION
AMOUNT. The Company may prepay the principal amount of the Notes, in
whole or in part, in multiples of One Hundred Thousand Dollars ($100,000)
(or, if the aggregate outstanding principal amount of the Notes is less
than One Hundred Thousand Dollars ($100,000) at such time, then such
principal amount) together with (1) interest on such principal amount then
being paid accrued to the payment date and (2) the Prepayment Compensation
Amount as of the date of such prepayment.
(b) NOTICE OF OPTIONAL PAYMENT. The Company will give notice of
any optional payment of the Notes pursuant to this Section 1.4 to each
holder of Notes not less than ten (10) days nor more than thirty (30) days
before the specified payment date, stating:
(i) the specified payment date;
(ii) that such payment is to be made pursuant to this
Section 1.4;
(iii) the principal amount of each Note to be paid on such
date;
(iv) the interest to be paid on each such Note, accrued
to the specified payment date;
(v) reserved; and
(vi) if such payment is to be made after the date which
shall be six months after the Closing Date, but prior to May 20,
2002, the calculation (with details) of an estimated Standard Prepayment
Compensation Amount, if any (calculated as if the date of such notice was the
date of payment), due in connection with such payment; and, if such payment is
to be made on or after May 20, 2002, the Modified Prepayment Compensation
Amount; in each case, with respect to the principal amount to be so paid, if
any, which is subject to the payment of such Prepayment Compensation Amount.
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Notice of payment having been so given, the aggregate principal amount of the
Notes to be paid stated in such notice, together with the Prepayment
Compensation Amount determined as of the specified payment date, if any, and
interest thereon accrued to the specified payment date, shall become due and
payable on the specified payment date.
With respect to any optional prepayment, if such payment is made after the
date which shall be six (6) months after the Closing Date, then, two (2)
Business Days prior to the making of such payment, the Company shall deliver to
each holder of Notes by facsimile transmission (confirmed by nationwide
overnight courier) a certificate of a Senior Financial Officer specifying the
details of the calculation of the Prepayment Compensation Amount as of the
specified payment date, and including a copy of the source of interest rate
information used in the calculation thereof.
1.5 OFFER TO PAY UPON CHANGE IN CONTROL.
(a) OFFER IN RESPECT OF A CHANGE IN CONTROL. In the event of a
Change in Control, the Company will, within fifteen (15) Business Days
after the occurrence of such event, give notice of such Change in Control
to each holder of Notes. Such notice shall contain an irrevocable separate
offer to each holder of Notes to prepay all, but not less than all, of the
Notes held by such holder on a date (the "CHANGE IN CONTROL PAYMENT DATE")
specified in such notice that is not less than thirty (30) days and not
more than ninety (90) days after the date of such notice, at a prepayment
price equal to one hundred one percent (101%) of the aggregate principal
amount thereof and all interest accrued and unpaid on the principal amount
thereof to the Change in Control Payment Date. Each such notice shall:
(i) be dated the date of the sending of such notice;
(ii) be executed by a Senior Officer;
(iii) specify, in reasonable detail, the nature and date
of the Change in Control;
(iv) specify the Change in Control Payment Date;
(v) specify the principal amount of each Note
outstanding;
(vi) specify the interest that would be due on each Note
offered to be prepaid, accrued to the Change in Control Payment
Date; and
(vii) specify that the Notes shall be prepaid at a
prepayment price equal to one hundred one percent (101%) of the
aggregate principal amount thereof and all interest accrued and
unpaid on the principal amount thereof to the Change in Control
Payment Date.
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If the Company shall not have received a written response to such notice
from any holder of Notes within ten (10) Business Days after the date of
posting of such notice to such holder of Notes, then the Company shall
immediately send a second notice to each such holder of Notes.
(b) ACCEPTANCE, REJECTION. Each holder of Notes shall have the
option to accept or reject such offered payment. In order to accept such
offered payment, a holder of Notes shall cause a notice of such acceptance
to be delivered to the Company not more than twenty (20) days after the
date of the notice under Section 1.5(a). A failure to accept in writing
such written offer of payment as provided in this Section 1.5(b), or a
written rejection of such offered prepayment, shall be deemed to constitute
a rejection of such offer.
(c) PAYMENT. The offered payment shall be made at one hundred
one percent (101%) of the principal amount of the Notes to be prepaid,
together with interest accrued to and determined as of the Change in
Control Payment Date.
1.6 ISSUANCE OF WARRANTS; DELIVERY OF NOTES IN PAYMENT OF WARRANT
PURCHASE PRICE.
(a) ISSUANCE OF WARRANTS. On the Closing Date, Warrants to
purchase 12.5% of the Common Stock, on a fully diluted basis, shall be
issued pursuant to and on the terms contained in the Warrant Agreement;
PROVIDED, HOWEVER, that in the event the Loan shall not have been paid in
full or to the extent that the Company or the Lenders have not secured
ready, willing and able purchasers for the Notes as of the six month
anniversary of the Closing Date, Warrants to purchase additional shares of
Common Stock shall be issued to Fleet, in a number equal to the product of
(i) one and a half percent (1.5)% of the outstanding Common Stock on a
fully diluted basis, multiplied by (ii) a fraction, the numerator of which
is the principal amount of the Loan remaining unpaid or the Notes remaining
unsold, and the denominator of which is $25,000,000.
(b) TENDER OF NOTES. The Warrant Agreement provides that a
holder of Warrants may tender Notes to the Company in partial or complete
payment of the purchase price for the shares of Common Stock issuable upon
exercise of the Warrants. Promptly following the receipt of any Note so
tendered, the Company shall immediately cancel and retire the same (and no
such Note shall be reissued), and shall issue to the holder thereof a new
Note in the principal amount of such tendered Note remaining after
deduction of the principal amount thereof applied to payment of the
purchase price for the shares of Common Stock. For purposes of Rule 144
under the Securities Act, 17 C.F.R. Sections 230.144, and for purposes of
applicable subordination provisions, the Company and each Lender agree that
a tender of Notes in payment of the exercise price in respect of the
Warrants shall not be deemed a prepayment of the Notes, but rather a
conversion of such Notes,
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pursuant to the terms of the Warrant Agreement and the Warrants, into
Common Stock.
1.7 APPLICATION OF PAYMENTS; PAYMENTS AMONG NOTEHOLDERS.
(a) EFFECT OF PARTIAL PAYMENTS ON PRINCIPAL PAYMENTS. Each
payment of principal of any Notes made pursuant to Section 1.4, Section 1.5
or Section 1.6 shall be applied, with respect to any Note being prepaid, to
reduce the outstanding principal amount of such Note.
(b) APPLICATION AMONG NOTEHOLDERS. If at the time any payment
of the principal of the Notes made pursuant to Section 1.4 is due there is
more than one Note outstanding, the aggregate principal amount of each such
optional partial payment of the Notes shall be allocated among the Notes at
the time outstanding pro rata in proportion to the respective unpaid
principal amounts of all such outstanding Notes. If, at the time any
payment of the principal of the Notes made pursuant to Section 1.5 or 1.6
is due, there is more than one Note outstanding, the aggregate principal
amount of each such payment of the Notes shall be allocated solely to the
Note or Notes so being paid.
1.8 NOTATION OF PAYMENTS ON NOTES.
(a) Upon any partial payment of a Note, the holder of such Note
may (but shall not be required to), at its option:
(i) surrender such Note to the Company pursuant to
Section 2.2 in exchange for a new Note in a principal amount equal
to the principal amount remaining unpaid on the surrendered Note;
(ii) make such Note available to the Company for notation
thereon of the portion of the principal so paid or so added to the
principal amount thereof in respect of capitalized interest; or
(iii) mark such Note with a notation thereon of the
portion of the principal so paid or so added to the principal amount
thereof in respect of capitalized interest.
(b) In case the entire principal amount of any Note, together
with any interest accrued and unpaid thereon, is paid in full, such Note
shall be surrendered to the Company for cancellation and shall not be
reissued, and no Note shall be issued in lieu of the paid principal amount
of any Note.
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1.9 NO OTHER PAYMENTS OF PRINCIPAL.
Except for payments of principal made in accordance with this Section 1,
the Company may not make any payment of principal in respect of the Notes.
1.10 MANNER OF PAYMENTS.
(a) MANNER OF PAYMENT. The Company shall pay all amounts
payable with respect to each Note (without any presentment of such Notes
and without any notation of such payment being made thereon) by crediting,
by federal funds bank wire transfer, the account of the holder thereof in
any bank in the United States of America as may be designated in writing by
such holder, or in such other manner as may be reasonably directed or to
such other address in the United States of America as may be reasonably
designated in writing by such holder (and as to which (absent subsequent
notice from such holder pursuant to this Section 1.10(a)) the Company may
conclusively rely). ANNEX 1 shall be deemed to constitute notice,
direction or designation (as appropriate) by the Lender to the Company with
respect to payments to be made to the Lender as aforesaid. In the absence
of such written direction, all amounts payable with respect to each Note
shall be paid by check mailed and addressed to the applicable Lender at
such Lender's Lending Office. All payments of principal and interest and
fees hereunder and under the Notes by the Company shall be made without
defense, set-off or counterclaim.
(b) PAYMENTS DUE ON HOLIDAYS. If any payment due on, or with
respect to, any Note shall fall due on a day other than a Business Day,
then such payment shall be made on the first Business Day following the day
on which such payment shall have so fallen due; provided that if all or any
portion of such payment shall consist of a payment of interest, for
purposes of calculating such interest, such payment shall be deemed to have
been originally due on such first following Business Day, such interest
shall accrue and be payable to (but not including) the actual date of
payment, and the amount of the next succeeding interest payment shall be
adjusted accordingly.
(c) PAYMENTS, WHEN RECEIVED. Any payment to be made to the
holders of Notes hereunder or under the Notes shall be deemed to have been
made on the Business Day such payment actually becomes available at such
holder's bank prior to the close of business of such bank, PROVIDED that
interest for one (1) day at the non-default interest rate of the Notes
shall be due on the amount of any such payment that actually becomes
available to such holder at such holder's bank after 1:00 pm (local time of
such bank).
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1.11 USE OF PROCEEDS.
(a) LOAN. The proceeds of the Loan shall be applied by the
Company to pay a portion of the consideration for the AIG Acquisition, to
refinance certain debt and to the payment of Transaction Costs.
(b) MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Company in any manner
which might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Exchange Act, in each case
as in effect on the date or dates of such borrowing and such use of
proceeds.
SECTION 2 LOAN RECORDATION; EXCHANGE; SUBSTITUTION OF NOTES; TAXES
2.1 Loan Recordation.
Each Lender shall maintain at its applicable Lending Office a register
(each a "REGISTER") for the recordation of its Loan Commitments, the portion of
the Loan made by it and the principal amount owing thereunder, and each
repayment in respect of the principal amount thereof. The entries in such
Register shall be conclusive and binding for all purposes, absent manifest
error. The Register shall be available for inspection by the Company at any
reasonable time and from time to time upon reasonable prior notice. Each
Lender, prior to any assignment or transfer of its rights and obligations
hereunder, shall give prompt notice to the Company of such assignment and
transfer.
2.2 EXCHANGE OF NOTES.
(a) EXCHANGE OF NOTES. Upon surrender of any Note at the office
of the Company maintained pursuant to Section 3.3, duly endorsed or
accompanied by a written instrument of transfer duly executed by the holder
of such Note or such holder's attorney duly authorized in writing, the
Company will execute and deliver, at the Company's expense (except as
provided in Section 2.2(b)), a new Note or Notes in exchange therefor, in
an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be issued in the name of such
Person as such holder may request and shall be substantially in the form of
ATTACHMENT A. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid
thereon. Each such new Note shall carry the same rights to unpaid interest
and interest to accrue that were carried by the Note so exchanged or
transferred.
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(b) COSTS. The Company will pay the cost of delivering to or
from such holder's applicable lending or home office or custodian bank from
or to the Company, insured to the reasonable satisfaction of such holder,
the surrendered Note and any Note issued in substitution or replacement for
the surrendered Note. The Company may require payment of a sum sufficient
to cover any stamp tax or governmental charge imposed in respect of any
such transfer of Notes.
2.3 REPLACEMENT OF NOTES.
Upon receipt by the Company from the holder of a Note of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an institutional
investor, notice from such institutional investor of such loss, theft,
destruction or mutilation), and:
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company; PROVIDED, HOWEVER, that if the
holder of such Note is a financial institution or a nominee of a financial
institution, the unsecured agreement of indemnity of such Lender or such
financial institution or such nominee of a financial institution (but not
of any nominee therefor) shall be deemed to be satisfactory; or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense will execute and deliver, in lieu thereof, a
replacement Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
2.4 TAXES.
(a) Any and all payments by the Company hereunder or under the
Notes shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, (i) in
the case of each Lender, net income taxes that are imposed by the United
States and net income taxes (or franchise taxes imposed in lieu thereof)
that are imposed on such Lender by the state or foreign jurisdiction under
the laws of which such Lender is organized or any political subdivision
thereof, (ii) in the case of each Lender, net income taxes (or franchise
taxes imposed in lieu thereof) that are imposed on such Lender by the state
or foreign jurisdiction of such Lender's applicable lending office or any
political subdivision thereof and (iii) in the case of any Lender that
becomes a party after the Closing Date, any taxes imposed by the United
States solely by reason of the organization or incorporation of such Lender
outside the United States (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of
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payments hereunder or under the Notes being hereinafter referred to as
"TAXES"). If the Company shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender,
(i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 2.4) such Lender receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Company shall make such deductions and (iii) the Company
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Company shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies
that arise from or in connection with or as a result of the issuance of the
Notes, any payment made hereunder or under the Notes or the execution,
delivery or registration of, performing under, or otherwise with respect
to, this Agreement or the Notes, or any modification, waiver or amendment
of this Agreement, the Notes or any other Financing Document (hereinafter
referred to as "OTHER TAXES").
(c) The Company shall indemnify each Lender for the full amount
of Taxes and Other Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 2.4, imposed on or paid
by such Lender and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto, except
with respect to any Lender for such a liability arising from such Lender's
willful misconduct or gross negligence. This indemnification shall be made
within thirty (30) days from the date such Lender makes written demand
specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of
Taxes, the Company shall furnish to the subject Lender a copy of the
original receipt, certified as true and correct by a Senior Officer. If
the Company determines that no Taxes are payable in respect thereof, the
Company shall furnish, or shall cause such payor to furnish, to the Company
an opinion of counsel stating that such payment is exempt from Taxes. For
purposes of this subsection (d) and subsection (e), the terms "UNITED
STATES" and "UNITED STATES PERSON" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, as reasonably requested in writing by the
Company (but only so long thereafter as such Lender remains lawfully able
to do so), provide the Company with two (2) original Internal Revenue
Service forms 1001 or 4224, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax
on payments pursuant to this Agreement or the Notes. If the forms provided
by a Lender at the time such Lender first becomes a party to
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this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods
governed by such form; PROVIDED, HOWEVER, that, if at the date of the
assignment and acceptance agreement pursuant to which a Lender becomes a
party to this Agreement, the Lender assignor was entitled to payments under
subsection (a) above in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to the Lender assignee on
such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by
Internal Revenue Service Form 1001 or 4224, that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the
Company and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Company with the appropriate form described in subsection (e)
above (other than if such failure is due to a change in law occurring after
the date on which a form originally was required to be provided or if such
form otherwise is not required under subsection (e)), such Lender shall not
be entitled to indemnification under subsection (a) or (c) above with
respect to Taxes imposed by the United States by reason of such failure;
PROVIDED, HOWEVER, that should a Lender become subject to Taxes because of
its failure to deliver a form required hereunder, the Company shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
SECTION 3 GENERAL COVENANTS
The Company covenants that on and after the Closing Date and so long as any
of the Notes shall be outstanding:
3.1 PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each Subsidiary to, pay before they become
delinquent:
(a) all taxes, assessments and governmental charges or levies
imposed upon it or its Property; and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons that, if unpaid,
might
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result in the creation of a statutory, regulatory or common law Lien upon
its Property;
PROVIDED, that items of the foregoing description need not be paid so long as
such items are being actively contested in good faith and by appropriate
proceedings and reasonable book reserves in accordance with GAAP have been
established and maintained with respect thereto.
3.2 MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC.
The Company will, and will cause each Subsidiary to:
(a) PROPERTY -- maintain its Property in good condition,
ordinary wear and tear and obsolescence excepted, and make all necessary
renewals, replacements, additions, betterments and improvements (as
determined in each case in the Company's judgment) thereto; PROVIDED,
HOWEVER, that this Section 3.2(a) shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of
its Properties if such discontinuance is desirable in the conduct of its
business and such discontinuance could not reasonably be expected to have a
Material Adverse Effect;
(b) INSURANCE -- maintain, with financially sound and reputable
insurers, insurance with respect to its Property and business against such
casualties and contingencies, of such types and in such amounts as is
customary in the case of corporations of established reputations engaged in
the same or a similar business and similarly situated;
(c) FINANCIAL RECORDS -- keep proper books of record and
account, in which full and correct entries shall be made of all dealings
and transactions of or in relation to the Properties and business thereof,
and which will permit the production of financial statements in accordance
with GAAP;
(d) CORPORATE EXISTENCE AND RIGHTS -- do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate existence, corporate rights (charter and statutory) and corporate
franchises except as permitted by Section 4.1;
(e) COMPLIANCE WITH LAW -- comply with all laws, ordinances and
governmental rules and regulations to which it is subject (including,
without limitation, any Environmental Protection Law) and obtain all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its Properties and the conduct
of its business except for such violations and failures to obtain that, in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect; and
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(f) ENVIRONMENTAL LIABILITIES -- conduct its business so as not
to become subject to any liability under any Environmental Protection Law
that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
3.3 PAYMENT OF NOTES AND MAINTENANCE OF OFFICE.
The Company will punctually pay, or cause to be paid, the principal of and
interest (and Prepayment Compensation Amount, if any) on the Notes, as and when
the same shall become due according to the terms hereof and of the Notes, and
will maintain an office at the address of the Company as provided in Section
12.1 where notices, presentations and demands in respect hereof or the Notes may
be made upon it. Such office will be maintained at such address until such time
as the Company notifies the holders of the Notes of any change of location of
such office, which will in any event be located within the United States of
America.
3.4 PENSION PLANS.
(a) COMPLIANCE. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to each Plan, comply with all
applicable provisions of ERISA and the IRC, except for such failures to
comply that, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) PROHIBITED ACTIONS. The Company will not, and will not
permit any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such term
is defined in section 406 of ERISA or section 4975 of the IRC) or
"reportable event" (as such term is defined in section 4043 of
ERISA) that could result in the imposition of a tax or penalty in an
amount in excess of $500,000;
(ii) incur with respect to any Plan any "accumulated
funding deficiency" (as such term is defined in section 302 of
ERISA), whether or not waived, in an amount in excess of $500,000;
(iii) terminate any Plan in a manner that could result in
the imposition of a Lien on the Property of the Company or any
Subsidiary pursuant to section 4068 of ERISA or the creation of any
liability under section 4062 of ERISA, in an amount in excess of
$500,000;
(iv) fail to make any payment required by section 515 of
ERISA, in an amount in excess of $500,000;
(v) incur any withdrawal liability under Title IV of
ERISA with respect to any Multiemployer Plan or any liability as a
result of the
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termination of any Multiemployer Plan, in an amount in excess of
$500,000; or
(vi) incur any liability or suffer the existence of any
Lien on the Property of the Company pursuant to Title I or Title IV
of ERISA or pursuant to the penalty or excise tax or security
provisions of the IRC, in an amount in excess of $500,000;
if the aggregate amount of the taxes, penalties, funding deficiencies,
interest, amounts secured by Liens, and other liabilities in respect of any
of the foregoing at any time exceeds the threshold stated above and could
reasonably be expected to have a Material Adverse Effect.
3.5 SUBSIDIARY GUARANTY.
The Company will cause each Domestic Subsidiary whether now existing or
hereafter existing to become a Guarantor by executing and delivering to each
holder of Notes a counterpart of this Agreement. Such counterpart of this
Agreement shall be accompanied by copies of the organizational documents of such
Domestic Subsidiary and corporate resolutions (or equivalent) authorizing such
transaction, in each case certified as true and correct by an appropriate
officer of such Domestic Subsidiary.
3.6 INCREASE IN AUTHORIZED CAPITAL STOCK. Within 180 days after the
Closing Date, the Company shall have authorized and reserved enough shares of
Common Stock to permit the Company to comply fully with its obligation to issue
Common Stock upon exercise of the Warrant.
SECTION 4 NEGATIVE AND FINANCIAL COVENANTS
4.1 MERGERS AND CONSOLIDATIONS.
The Company will not, and will not permit any Subsidiary to, merge with or
into or consolidate with any other Person, permit any other Person to merge or
consolidate with or into it or sell all or substantially all of its Property to
any other Person; PROVIDED, HOWEVER, that the foregoing restriction does not
apply to the merger or consolidation of the Company or any Subsidiary with
another corporation or transfer of all or substantially all of the Property of
the Company to any other Person if:
(a) the corporation that results from such merger or
consolidation or to which all or substantially all of the Property of the
Company is Transferred (the "SURVIVING CORPORATION") is organized under the
laws of, and conducts substantially all of its business and has
substantially all of its Properties within, the United States of America or
any jurisdiction or jurisdictions thereof;
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(b) the due and punctual payment of the principal of and
Prepayment Compensation Amount, if any, and interest on all of the Notes,
according to their tenor, and the due and punctual performance and
observance of all the covenants in the Notes, this Agreement and each other
Financing Document to be performed or observed by the Company, are
expressly assumed, or assumed by operation of law, by the Surviving
Corporation pursuant to such assumption agreements and instruments in such
forms as shall be reasonably acceptable to the Required Holders, and the
Company causes to be delivered to each holder of Notes an opinion,
reasonably satisfactory in form and substance to the Required Holders, of
independent counsel to the effect that such agreements and instruments are
enforceable in accordance with their terms;
(c) no Change in Control occurs as a result of such merger,
consolidation or Transfer; and
(d) immediately prior to, and immediately after the consummation
of the transaction, and after giving effect thereto, no Default or Event of
Default exists or would exist.
Notwithstanding the foregoing, a Subsidiary may merge with and into the Company
so long as the Company is the Surviving Corporation, and a Subsidiary may merge
with or into a Wholly-Owned Subsidiary, so long as the Wholly-Owned Subsidiary
is the Surviving Corporation.
4.2 ASSET SALES; SUBSIDIARY STOCK.
(a) (i) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Subsidiary, as the case may be) receives consideration at
the time of such Asset Sale at least equal to the fair market value
(evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Lenders) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 85% of
the consideration therefor received by the Company or such Subsidiary is in
the form of cash; PROVIDED, that the amount of (x) any liabilities (as
shown on the Company's or such Subsidiary's most recent balance sheet), of
the Company or any Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any
Guaranty) that are assumed by the transferee of any such assets pursuant to
a customary novation agreement that releases the Company or such Subsidiary
from further liability and (y) any securities, notes or other obligations
received by the Company or any such Subsidiary from such transferee that
are contemporaneously (subject to ordinary settlement periods) converted by
the Company or such Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision.
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(ii) Within 180 days (360 days with respect to real
estate and improvements on real estate) after the receipt of any Net Cash
Proceeds from an Asset Sale, the Company or the Restricted Subsidiary, as
the case may be, shall apply such Net Cash Proceeds to permanently reduce
Senior Debt in accordance with the terms of the Senior Credit Agreement in
an amount equal to one-hundred percent (100%) of such Net Cash Proceeds in
excess of $500,000 in any fiscal year, provided that no prepayment need to
be made (A) unless the Net Cash Proceeds from any single Asset Sale or
series of related Asset Sales exceed $500,000 (in which case a prepayment
shall be made in the amount of the entire Asset Sale) or until the
cumulative Net Cash Proceeds from all Asset Sales in any particular fiscal
year exceed $500,000 (in which case a prepayment shall be made in the
amount of the Net Cash Proceeds from the specific Asset Sale (or portion
thereof) causing the limit to be exceeded), except that the terms of this
subsection (A) shall not be applicable in respect of (B) Net Cash Proceeds
used to reinvest in fixed assets (for use in the business of the Company or
such Restricted Subsidiary, as the case may be) within such 180 day period.
Pending the final application of any such Net Cash Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest such
Net Cash Proceeds in any manner that is not prohibited by this Agreement.
Any Net Cash Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to
constitute "EXCESS PROCEEDS."
(iii) Subject to the consent of the "Required Lenders"
under and as defined in the Senior Credit Agreement, when the aggregate
amount of Excess Proceeds exceeds $1.0 million, the Company will be
required to make an offer to all holders of Notes (an "ASSET SALE OFFER")
to purchase the maximum principal amount of Notes that may be purchased out
of the Excess Proceeds, at an offer price in cash in an amount equal to
101% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of purchase, in accordance with the procedures
set forth in this Agreement. To the extent that any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Company may use such Excess
Proceeds for any purpose not otherwise prohibited by this Agreement. If
the aggregate principal amount of Notes tendered into such Asset Sale Offer
surrendered by holders of Notes thereof exceeds the amount of Excess
Proceeds, the Required Holders shall select the Notes to be purchased on a
ratable basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
(iv) Within 180 days (360 days with respect to real
estate and improvements on real estate) after a Foreign Subsidiary receives
any Net Cash Proceeds from an Asset Sale, the Company shall cause such
Foreign Subsidiary to apply such Net Cash Proceeds to permanently reduce
its indebtedness under the KBC Loan Agreements in an amount equal to
one-hundred percent (100%) of such Net Cash Proceeds in excess of $500,000
in any fiscal year, provided that no prepayment need be made of Net Cash
Proceeds used to reinvest in fixed assets.
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Pending the final application of any such Net Cash Proceeds, the Subsidiary
may temporarily reduce revolving credit borrowings or otherwise invest such
Net Cash Proceeds in any manner that is not prohibited by this Agreement.
(b) DISPOSITION OF SUBSIDIARY STOCK. The Company will not, and
will not permit any Subsidiary to, sell or otherwise dispose of any shares
of the stock or Rights of a Subsidiary (such stock and Rights herein called
"SUBSIDIARY STOCK"), nor will any Subsidiary issue, sell or otherwise
dispose of any shares of, or Rights to purchase shares of, its own
Subsidiary Stock; PROVIDED, HOWEVER, that the foregoing restrictions do not
apply to:
(i) transfers by the Company or a Subsidiary of shares
of Subsidiary Stock to the Company or a Wholly-Owned Subsidiary;
(ii) the issuance by a Subsidiary of shares of its own
Subsidiary Stock to the Company or a Wholly-Owned Subsidiary;
(iii) the issuance by a Subsidiary of directors'
qualifying shares;
(iv) the issuance by a Subsidiary of shares of its own
Subsidiary Stock in the form of a dividend payable in such shares,
or the other issuance by a Subsidiary of shares of its own
Subsidiary Stock; PROVIDED, HOWEVER, that, in each case, the
Company's direct or indirect percentage ownership of no class of the
Voting Stock or of any other Subsidiary Stock of such Subsidiary is
decreased as a result of such issuance; or
(v) the transfer of all of the Subsidiary Stock of a
Subsidiary owned by the Company and its other Subsidiaries if:
(A) such transfer satisfies the requirements of
Section 4.2(a);
(B) in connection with such transfer, the entire
Investment (whether represented by stock, Debt, claims or
otherwise) of the Company and its other Subsidiaries in such
Subsidiary is transferred to a Person other than the Company
or a Subsidiary not being simultaneously disposed of; and
(C) the Subsidiary being disposed of has no
continuing Investment in any other Subsidiary not being
simultaneously disposed of or in the Company.
The foregoing notwithstanding, in no event shall the Company or any Domestic
Subsidiary issue, sell or otherwise dispose of any Subsidiary Stock to any
Foreign Subsidiary.
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4.3 LIENS.
(a) NEGATIVE PLEDGE. The Company will not, and will not permit
any Subsidiary to, cause or permit, or agree or consent to cause or permit
in the future (upon the happening of a contingency or otherwise), any of
their Property, whether now owned or hereafter acquired, at any time to be
subject to a Lien except:
(i) CLOSING DATE LIENS -- Liens in existence on the
Closing Date and described in PART 8.2(C) OF ANNEX 3;
(ii) ORDINARY COURSE OF BUSINESS LIENS --
(A) PERFORMANCE BONDS -- Liens incurred or
deposits made in the ordinary course of business:
(I) in connection with workers'
compensation, unemployment insurance, social
security and other like laws; and
(II) to secure the performance of letters
of credit, bids, tenders, sales contracts, leases,
statutory obligations, surety and performance bonds
(of a type other than set forth in SECTION
4.3(a)(iii)) and other similar obligations not
incurred in connection with the borrowing of money,
the obtaining of advances or the payment of the
deferred purchase price of Property;
(B) REAL ESTATE -- Liens in the nature of
reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases
and other similar title exceptions or encumbrances affecting
real property; PROVIDED, HOWEVER, that such exceptions and
encumbrances do not in the aggregate materially detract from
the value of said Properties or materially interfere with
the use of such Properties in the ordinary conduct of the
business of the Company and the Subsidiaries; and
(C) TAXES, ETC. -- Liens securing taxes,
assessments or governmental charges or levies or the claims
or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons;
PROVIDED, HOWEVER, that the payment thereof is not required
by Section 3.1;
(iii) JUDICIAL LIENS -- Liens arising from judicial
attachments and judgments, securing appeal bonds or supersedeas
bonds, and arising in
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connection with court proceedings (including, without limitation,
surety bonds and letters of credit or any other instrument serving a
similar purpose); PROVIDED, HOWEVER, that the execution or other
enforcement of such Liens is effectively stayed, that the claims
secured thereby are being actively contested in good faith and by
appropriate proceedings, and that adequate reserves have been made
against such claims;
(iv) INTERGROUP LIENS -- Liens on Property of a
Subsidiary; PROVIDED, HOWEVER, that such Liens secure only
obligations owing to the Company or a Wholly-Owned Subsidiary, and
PROVIDED, FURTHER, that in no event shall any such Lien on the
Property of a Domestic Subsidiary secure obligations owing to a
Foreign Subsidiary;
(v) ACQUISITION/PURCHASE MONEY LIENS -- any Lien (x) on
Property acquired or constructed by the Company or any Subsidiary or
leased by the Company or any Subsidiary as lessee under any Capital
Lease; or (y) existing on Property owned by any Person at the time
such Person became a Subsidiary or merges or consolidates with the
Company (including, without limitation, by means of a Capital
Lease); PROVIDED, HOWEVER, that such Lien:
(A) (I) secures Debt incurred to pay all or a
portion of the related purchase price or
construction costs of such Property or the Capital
Stock of any acquired Subsidiary and no other Debt;
PROVIDED, FURTHER, that such purchase price or
construction costs shall not exceed the Fair Market
Value of such Property or such Capital Stock,
determined at the time of the creation of such Lien;
(II) is created contemporaneously with, or
within one hundred twenty (120) days of, such
acquisition or construction;
(III) encumbers only Property so purchased,
constructed or acquired after the Closing Date; and
(IV) is not, after the creation thereof,
extended to any other Property; or
(B) (I) existed on Property of any Person at
the time of acquisition thereof by the Company or a
Subsidiary or at the time such Person is merged or
consolidated into or with the Company or a
Subsidiary (whether or not the Debt secured thereby
is assumed by the Company or such Subsidiary);
PROVIDED, FURTHER, that such Debt does not exceed
the lesser of
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the acquisition cost or the Fair Market Value of
such Property, as determined at the date of the
acquisition thereof; and
(II) shall not extend to or cover any
Property other than the Property subject to such
Lien at the time of any such acquisition;
and PROVIDED FURTHER that, in the case of each of clause (A) and
clause (B) above, immediately prior to the incurrence of, and after
giving effect to the incurrence of, any Debt secured by the Liens
referred to in such clauses, no Default or Event of Default exists
or would exist; and
(vi) LIENS SECURING SENIOR DEBT -- Liens securing Senior
Debt and on assets of Foreign Subsidiaries securing Debt of Foreign
Subsidiaries under the KBC Loan Agreements, not otherwise permitted
by clauses (i) through (v), inclusive, of this Section 4.3(a).
(b) CONSTRUCTION. Nothing in this Section 4.3 shall be
construed to permit the incurrence or existence of any Debt not otherwise
permitted by this Agreement. Nothing in this Agreement that permits the
incurrence or existence of any Debt shall be construed to permit the
incurrence or existence of a Lien securing such Debt unless such Lien is
permitted by Section 4.3(a).
4.4 CAPITAL EXPENDITURES. The Company shall not, and shall not permit
any of its Subsidiaries to, make any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by the Company and its
Subsidiaries in any period set forth below to exceed the amount set forth below
for such period.
PERIOD AMOUNT
------ ------
Closing Date through and including April 30, 1999 $1,560,000
May 1, 1999 through and including April 30, 2000 $2,400,000
Each fiscal year thereafter $3,600,000
PROVIDED, HOWEVER, (a) that amounts permitted to be expended in a Fiscal Year
that are not expended in such Fiscal Year, but not in excess of fifty (50%)
percent of such prior year's unused amount (not including any amount permitted
to be carried forward from a prior year) shall be permitted to be expended in
(but only in) the subsequent Fiscal Year; (B) amounts comprising Excess Cash
Flow permitted to be expended as permitted under Section 6.17(b) of the Senior
Credit Agreement as such section is in effect on the date hereof after giving
effect to the prepayments required under Section 2.6 of the Senior Credit
Agreement shall be permitted to be expended for Capital Expenditures (over and
above the amounts
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set forth above) in the twelve months following the date of required prepayment
in any year; and (c) if an acquisition otherwise prohibited hereunder is
consented to by the Required Holders, then such permitted acquisition and
amounts representing Capital Expenditures paid or incurred with respect thereto
in the ordinary course of its business prior to consummation of a permitted
acquisition shall not be deemed included in the calculation of the aggregate
amount of Capital Expenditures for purposes of determining the maximum annual
Capital Expenditures permitted to be made hereunder, so long as such amounts
representing Capital Expenditures paid prior to a permitted acquisition were
incurred prior to the date of consummation of such permitted acquisition and
were not incurred in anticipation of such permitted acquisition, and otherwise
conform with the terms and conditions of Section 6.2 of the Senior Credit
Agreement.
4.5 INCURRENCE OF DEBT AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Debt and the Company will not issue
any Disqualified Stock and the Company will not permit any of its Subsidiaries
to issue any shares of preferred stock.
The foregoing provisions shall not apply to:
(i) the incurrence by the Company or any Subsidiary of
term Debt under Credit Facilities; PROVIDED that the aggregate principal amount
of all term Debt outstanding under all Credit Facilities after giving effect to
such incurrence does not exceed an amount equal to $45.0 million less the sum of
all principal payments in respect of term Debt under Credit Facilities that have
actually been made (whether optional or mandatory) since the date of this
Agreement;
(ii) the incurrence by the Company or any Subsidiary of
revolving credit Debt and letters of credit pursuant to Credit Facilities;
PROVIDED that the aggregate principal amount of all revolving credit Debt and
letters of credit (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company or any Subsidiary
thereunder) of the Company or any Subsidiary outstanding under all Credit
Facilities (other than the "European Letters of Credit" under and as defined in
the Senior Credit Agreement) after giving effect to such incurrence does not
exceed $15.0 million less the sum of all permanent commitment reductions under
Credit Facilities that have been made since the date of this Agreement;
(iii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Debt and the European Letters of Credit;
(iv) the incurrence by the Company of Debt represented by
the Notes and this Agreement, and the incurrence by the Subsidiaries of Debt
represented by
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the Guaranties and this Agreement, in each case, as required or permitted to be
incurred under this Agreement;
(v) so long as no Default or Event of Default has
occurred and is continuing at the time of incurrence thereof, the incurrence by
the Company or any of its Subsidiaries of Debt represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each case
incurred for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used in the
business of the Company or such Subsidiary, in an aggregate principal amount not
to exceed $1,000,000 at any time outstanding;
(vi) the incurrence by the Company or any of its
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Debt (other than
intercompany Debt) that is permitted by this Agreement to be incurred under the
first paragraph of this Section 4.5 or clauses (i), (ii), (iii), or (v) of this
paragraph;
(vii) the incurrence by the Company or any of its
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging (x) interest rate risk with respect to any floating rate Debt that is
permitted by the terms of this Agreement to be outstanding or (y) foreign
currency exchange rate risk with respect to any foreign currency exchange
agreements entered into in the ordinary course of business of the Company or
such Subsidiary;
(viii) the Existing Debt owed by the Company and/or
Domestic Subsidiaries to certain Foreign Subsidiaries, and other unsecured Debt
owed by the Company and/or Domestic Subsidiaries to certain Foreign Subsidiaries
which in the aggregate, when taken together with the Existing Debt, shall in
principal amount not be reduced so as to be less than $12,000,000 or increased
so as to be in excess of $14,000,000 at any one time outstanding;
(ix) so long as no Default or Event of Default has
occurred and is continuing at the time of any such borrowing, the incurrence by
the Company or any Domestic Subsidiaries of up to $20,000,000 in principal
amount of additional term debt under the Senior Credit Facility; PROVIDED,
however, that in connection with any such incurrence, (A) the proceeds of such
borrowings are used solely to fund the purchase price of additional Domestic
Subsidiaries, and (B) the incurrence qualifies as a De-leveraging Transaction
for the Company on a consolidated basis;
(x) so long as no Default or Event of Default has
occurred and is continuing, the incurrence by the Company or any Subsidiaries of
Acquired Debt in an aggregate principal amount not to exceed $5,000,000 in
connection with acquisitions referred to in (ix)(A) above;
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(xi) the Guaranty by the Company or any of the Guarantors
of Debt of the Company or a Subsidiary of the Company that was permitted to be
incurred by another provision of this covenant.
For purposes of determining compliance with this Section, in the
event that an item of Debt meets the criteria of more than one of the categories
of debt permitted to be incurred pursuant to clauses (i) through (xi) above
(collectively, "PERMITTED DEBT") or is entitled to be incurred pursuant to the
first paragraph of this Section, the Company shall, in its sole discretion,
classify such item of Debt in any manner that complies with this Section.
Accrual of interest, accretion or amortization of original issue discount, the
payment of interest on any Debt in the form of additional Debt with the same
terms, and the payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock will not be deemed to
be an incurrence of Debt or an issuance of Disqualified Stock for purposes of
this Section 4.05; PROVIDED, in each such case, that the amount thereof is
included in Fixed Charges of the Company as accrued.
4.6 RESTRICTED PAYMENTS, RESTRICTED REPURCHASES AND RESTRICTED
INVESTMENTS.
The Company will not, nor will it permit any Subsidiary to, at any
time declare or make or incur any liability to declare or make any Restricted
Payment or any Restricted Repurchase, or make or authorize, or permit any
Subsidiary to make or authorize, any Restricted Investment. Notwithstanding the
foregoing, after July 31, 2000 the Company may declare and pay quarterly cash
dividends on its Series B and Series C Preferred Stock, at an annual rate not
exceeding nine percent (9%) of the liquidation value thereof, provided that:
(i) no Default or an Event of Default would exist at the time of
or after giving effect to the payment of any such dividend;
(ii) the ratio of total Debt to EBITDA for the Company and its
Subsidiaries for the preceding four fiscal quarters as at the last day of the
fiscal quarter most recently ended prior to the date of such dividend payments
shall not exceed 4.0 to 1;
(iii) such dividends shall not exceed $450,000 in the aggregate in
any Fiscal Year and the aggregate amount paid during any calendar quarter shall
not exceed $112,500;
(iv) no such dividend shall be declared or paid except quarterly
within thirty (30) days after delivery of required quarterly financial
statements; and
(v) the Company shall have delivered to the Lenders, at least
five (5) Business Days prior to the date of the proposed dividend payment, a
certificate of a senior financial officer setting forth computations in
reasonable detail demonstrating satisfaction of the foregoing conditions as at
the date of such certificate.
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4.7 SENIORITY TO JUNIOR SUBORDINATED DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
incur, assume or Guaranty any Debt which is subordinated in right of payment to
any other Debt of the Company or any Restricted Subsidiary unless such Debt is
also subordinated in right of payment to the obligations of the Company in
respect of the Notes and this Agreement on terms reasonably acceptable to the
Required Holders in their discretion. The Company will not, and will not permit
any Restricted Subsidiary to, incur or create any Debt in favor of an Affiliate
or another Subsidiary (other than Debt in favor of the Company or a Wholly-Owned
Subsidiary which is a Guarantor) unless such Debt is also subordinated in right
of payment to the obligations of the Company in respect of the Notes and this
Agreement on terms reasonably acceptable to the Required Holders in their
discretion. THE COMPANY AND THE GUARANTORS EXPRESSLY ACKNOWLEDGE AND AGREE THAT
DEBT EVIDENCED BY THE SELLER NOTE, AND ALL DEBT OWED BY THE COMPANY OR ANY
DOMESTIC SUBSIDIARY TO ANY FOREIGN SUBSIDIARY, IS SUBORDINATE IN RIGHT OF
PAYMENT TO THE OBLIGATIONS OF THE COMPANY AND THE GUARANTORS IN RESPECT OF THIS
AGREEMENT AND THE NOTES.
4.8 LINE OF BUSINESS.
The Company will not, and will not permit any Subsidiary to, engage in any
business if, as a result, the general nature of the business in which the
Company and the Subsidiaries, taken as a whole, would then be engaged would be
substantially changed from the general nature of the business in which the
Company and the Subsidiaries, taken as a whole, are engaged on the Closing Date.
4.9 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any Subsidiary to, enter into any
transaction, including, without limitation, the purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate, except
in the ordinary course of and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
4.10 MANAGEMENT FEES.
The Company will not, pay, or be or become obligated to pay, any Management
Fees, or any interest on any deferred obligation therefor. The Company will not
permit any Subsidiary to pay, or become obligated to pay, any Management Fees
except to the Company or Wholly Owned Subsidiaries of the Company (except that
Domestic Subsidiaries shall not pay Management Fees to Foreign Subsidiaries).
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4.11 SELLER DOCUMENTS; SUBORDINATION DOCUMENTS. The Company will not and
will not permit any Subsidiary to amend in any material respect any of the
Seller Documents without the consent of the Required Holders.
4.12 FINANCIAL COVENANTS.
Until payment in full of the Notes, each of the Company and its
Subsidiaries shall:
(a) CONSOLIDATED DEBT TO EBITDA RATIO. Maintain as of the end
of each fiscal quarter of the Company and its Subsidiaries a Consolidated Debt
to EBITDA Ratio of not more than the ratio set forth below:
-----------------------------------------------------------------
Date of Determination: Maximum Ratio
-----------------------------------------------------------------
January 31, 1999 6.3 to 1.0
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April 30, 1999 6.3 to 1.0
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July 31, 1999 6.05 to 1.0
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October 31, 1999 5.8 to 1.0
-----------------------------------------------------------------
January 31, 2000 5.55 to 1.0
-----------------------------------------------------------------
April 30, 2000 5.55 to 1.0
-----------------------------------------------------------------
July 31, 2000 5.55 to 1.0
-----------------------------------------------------------------
October 31, 2000 5.3 to 1.0
-----------------------------------------------------------------
January 31, 2001 5.3 to 1.0
-----------------------------------------------------------------
April 30, 2001 5.0 to 1.0
-----------------------------------------------------------------
July 31, 2001 5.0 to 1.0
-----------------------------------------------------------------
October 31, 2001 5.0 to 1.0
-----------------------------------------------------------------
January 31, 2002 5.0 to 1.0
-----------------------------------------------------------------
April 30, 2002 through (and including)
the maturity of the Loan 4.5 to 1.0
-----------------------------------------------------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Company and its Subsidiaries ending on
each of the following dates, there shall be added to such EBITDA the amounts set
forth next to such dates (representing in each case estimated cost savings
resulting from the AIG Acquisition):
26
<PAGE>
-----------------------------------------------------------------
Date Amount
-----------------------------------------------------------------
January 31, 1999 $2,000,000
-----------------------------------------------------------------
April 30, 1999 $1,750,000
-----------------------------------------------------------------
July 31, 1999 $1,250,000
-----------------------------------------------------------------
October 31, 1999 $ 500,000
-----------------------------------------------------------------
(b) INTEREST COVERAGE RATIO. Maintain as of each date set forth
below, a ratio of (i) EBITDA for the most recently completed four fiscal
quarters of the Company and its Subsidiaries to (ii) Consolidated Interest
Expense (to the extent paid in cash during such period) for such period of not
less than the ratio set forth below for such period:
-----------------------------------------------------------------
Date of Determination: Minimum Ratio
-----------------------------------------------------------------
January 31, 1999 1.40 to 1.0
-----------------------------------------------------------------
April 30, 1999 1.40 to 1.0
-----------------------------------------------------------------
July 31, 1999 1.40 to 1.0
-----------------------------------------------------------------
October 31, 1999 1.55 to 1.0
-----------------------------------------------------------------
January 31, 2000 1.55 to 1.0
-----------------------------------------------------------------
April 30, 2000 1.70 to 1.0
-----------------------------------------------------------------
July 31, 2000 1.70 to 1.0
-----------------------------------------------------------------
October 31, 2000 1.70 to 1.0
-----------------------------------------------------------------
January 31, 2001 1.70 to 1.0
-----------------------------------------------------------------
April 30, 2001 1.95 to 1.0
-----------------------------------------------------------------
July 31, 2001 1.95 to 1.0
-----------------------------------------------------------------
October 31, 2001 1.95 to 1.0
-----------------------------------------------------------------
January 31, 2002 1.95 to 1.0
-----------------------------------------------------------------
April 30, 2002 through (and including)
the maturity of the Loan 2.0 to 1.0
-----------------------------------------------------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Company and its Subsidiaries ending on
each of the following dates, there shall be added to such EBITDA the amounts set
forth next to such dates (representing in each case estimated cost savings
resulting from the AIG Acquisition):
27
<PAGE>
-----------------------------------------------------------------
Date Amount
-----------------------------------------------------------------
January 31, 1999 $2,000,000
-----------------------------------------------------------------
April 30, 1999 $1,750,000
-----------------------------------------------------------------
July 31, 1999 $1,250,000
-----------------------------------------------------------------
October 31, 1999 $ 500,000
-----------------------------------------------------------------
(c) FIXED CHARGE COVERAGE RATIO. Maintain as of the end of
each fiscal quarter of the Company and its Subsidiaries a Fixed Charge Coverage
Ratio for the most recently completed four fiscal quarters of the Company and
its Subsidiaries of not less than the following ratios for the requisite periods
set forth below (except that in respect of the first three testing periods
referred to below, EBITDA and Fixed Charges shall be computed only for the one,
two and three fiscal quarterly periods respectively described below, provided
that Capital Expenditures shall be computed within fixed charges in an amount
equal to the greater of one-quarter of the Capital Expenditures permitted during
the twelve month period during which a testing period ends and actual Capital
Expenditures made during the testing period specified below):
-----------------------------------------------------------------
Four Fiscal Quarters ending on:
-----------------------------------------------------------------
Each October 31, January 31, April 30
and July 31 after the Closing Date and
continuing through (and including) the
maturity of the Loan. 1.00 to 1.0
-----------------------------------------------------------------
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Company and its Subsidiaries ending on
each of the following dates, there shall be added to such EBITDA the amounts set
forth next to such dates (representing in each case estimated cost savings
resulting from the AIG Acquisition):
-----------------------------------------------------------------
Date Amount
-----------------------------------------------------------------
January 31, 1999 $2,000,000
-----------------------------------------------------------------
April 30, 1999 $1,750,000
-----------------------------------------------------------------
July 31, 1999 $1,250,000
-----------------------------------------------------------------
October 31, 1999 $ 500,000
-----------------------------------------------------------------
28
<PAGE>
4.13 Limitations on Operating Leases.
The Company shall not, and shall not permit any of its Subsidiaries
to, become a lessee under any operating lease (other than a lease which any
Subsidiary is lessor) of Property, including, without limitation, real estate
operating leases, if the aggregate Rentals (estimated in good faith by the
Company with respect to amounts payable pursuant to escalation clauses) payable
during any current or future period of 12 consecutive months under the lease in
question and all other leases under which the Company or any of its Subsidiaries
is then lessee would exceed One Million ($1,000,000.00) Dollars, including the
Dollar Equivalent (as defined in the Senior Credit Agreement) of amounts
denominated in non-U.S. currencies (the term "Rentals" meaning, as of the date
of determination, all payments which the lessee is required to make by the terms
of any lease; the term "Property" meaning any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or intangible).
4.14 DEBT TO FOREIGN SUBSIDIARIES; AGREEMENT TO GRANT COLLATERAL SECURITY.
(a) Within ninety (90) days after the Closing Date, the Company shall
cause each Foreign Subsidiary to which the Company and/or any Domestic
Subsidiary owes Debt (collectively, the "Foreign Debt") to grant the Lenders (or
their agent) a perfected security interest in all Foreign Debt, and the Company
will, and will cause each of its direct and indirect Subsidiaries to, take all
necessary action, including the filing of appropriate financing statements under
the provisions of the UCC, applicable foreign, domestic or local laws, rules or
regulations in each of the offices where such filing is necessary or appropriate
to grant the Lenders or their agent a perfected Lien in such collateral (or
comparable interest under foreign law) pursuant to this Agreement. The security
interests required to be granted pursuant to this Section shall be granted
pursuant to the collateral documents reasonably satisfactory to the Company and
the Lenders (or their agent) in form and substance, and shall constitute valid
and enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except Liens permitted under Section 4.3.
The collateral documents and other instruments related thereto shall be duly
recorded or filed in such manner and in such places and at such times as are
required by law to establish, perfect, preserve and protect the Liens, in favor
of the Lenders or their agent, granted pursuant to such collateral documents,
and all taxes, fees and other charges payable in connection therewith shall be
paid in full by the Company and the Guarantors.
(b) The Company shall cause each Foreign Subsidiary to apply all
payments or proceeds received by it with respect to the Foreign Debt to the
reduction of Debt owed by such Foreign Subsidiary under the KBC Loan Agreement.
29
<PAGE>
SECTION 5 REPORTING COVENANTS
5.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes:
(a) QUARTERLY FINANCIAL STATEMENTS -- as soon as practicable
after the end of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each such fiscal
year), and in any event within forty-five (45) days thereafter:
(i) an unaudited consolidated balance sheet as at the
end of such quarter; and
(ii) unaudited consolidated statements of income and cash
flows for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such
quarter;
for the Company and the Subsidiaries, setting forth in each case, in
comparative form, the financial statements for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP applicable to quarterly financial statements generally, and
certified as complete and correct by a Senior Financial Officer, and
accompanied by the certificate required by Section 5.3; PROVIDED, that
timely delivery of copies of the Company's Quarterly Report on Form 10-Q
filed with the SEC shall be deemed to satisfy the requirements of this
Section 5.1(a) so long as such Quarterly Report contains or is accompanied
by the information specified in this Section 5.1(a);
(b) ANNUAL FINANCIAL STATEMENTS -- as soon as practicable after
the end of each fiscal year of the Company, and in any event within ninety
(90) days thereafter:
(i) a consolidated balance sheet as at the end of such
year; and
(ii) consolidated statements of income, stockholders'
equity and cash flows for such year;
for the Company and the Subsidiaries, setting forth, in comparative form,
the financial statements for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied by:
(A) an audit report thereon of independent
certified public accountants of recognized national
standing, which report shall state without qualification
(including, without limitation, qualifications related
30
<PAGE>
to the scope of the audit, the compliance of the audit with
generally accepted auditing standards, or the ability of the
Company or a material subsidiary thereof to continue as a
going concern), that such financial statements have been
prepared and are in conformity with GAAP; and
(B) the certificates required by Section 5.3 and
Section 5.4;
PROVIDED, that timely delivery of the Company's Annual Report on Form 10-K
for such fiscal year filed with the SEC shall be deemed to satisfy the
requirements of this Section 5.1(b) so long as such Annual Report contains
or is accompanied by the reports and other information otherwise specified
in this Section 5.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, and in any event within fifteen (15) days thereafter:
(i) each financial statement, report, notice or proxy
statement sent by the Company to stockholders generally;
(ii) each regular or periodic report (including, without
limitation, each Form 10-K, Form 10-Q and Form 8-K), any
registration statement which shall have become effective, and each
final prospectus and all amendments thereto filed by the Company or
any Subsidiary with the SEC; and
(iii) all press releases and other statements made
available by the Company or any Subsidiary to the public concerning
material developments in the business of the Company or the
Subsidiaries;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- within two (2)
Business Days of becoming aware:
(i) of the existence of any condition or event which
constitutes a Default or an Event of Default; or
(ii) that the holder of any Note, or of any Debt, in a
principal amount, individually or in the aggregate, of $500,000 or
more, shall have given notice or taken any other action with respect
to a claimed Default, Event of Default or default or event of
default;
a notice specifying the nature of the claimed Default, Event of Default or
default or event of default and the notice given or action taken (if any)
by such holder and what action the Company has taken, is taking or proposes
to take with respect thereto;
31
<PAGE>
(e) ERISA --
(i) within twenty (20) days of becoming aware of the
occurrence of any "reportable event" (as such term is defined in
section 4043 of ERISA) for which notice thereof has not been waived
pursuant to regulations of the DOL or "prohibited transaction" (as
such term is defined in section 406 of ERISA or section 4975 of the
IRC) in connection with any Plan or any trust created thereunder, a
notice specifying the nature thereof, what action the Company has
taken, is taking or proposes to take with respect thereto, and, when
known, any action taken by the Internal Revenue Service, the DOL or
the PBGC with respect thereto; and
(ii) prompt notice of and, where applicable, a
description of:
(A) any notice from the PBGC in respect of the
commencement of any proceedings pursuant to section 4042 of
ERISA to terminate any Plan or for the appointment of a
trustee to administer any Plan, and any distress termination
notice delivered to the PBGC under section 4041 of ERISA in
respect of any Plan, and any determination of the PBGC in
respect thereof;
(B) the placement of any Multiemployer Plan in
reorganization status under Title IV of ERISA, any
Multiemployer Plan becoming "insolvent" (as such term is
defined in section 4245 of ERISA) under Title IV of ERISA,
or the whole or partial withdrawal of the Company or any
ERISA Affiliate from any Multiemployer Plan and the
withdrawal liability incurred in connection therewith; or
(C) the occurrence of any event, transaction or
condition that could result in the incurrence of any
liability of the Company or any ERISA Affiliate or the
imposition of a Lien on the Property of the Company or any
ERISA Affiliate, in either case pursuant to Title I or Title
IV of ERISA or pursuant to the penalty or excise tax or
security provisions of the IRC;
PROVIDED, HOWEVER, that the Company shall not be required to deliver any
such notice at any time when the aggregate amount of the actual or
potential liability of the Company and the Subsidiaries in respect of all
such events at such time could not reasonably be expected to exceed
$500,000 and have a Material Adverse Effect;
(f) AUDITOR'S REPORTS -- promptly upon receipt thereof, a copy
of each report or management letter submitted to the Company or any
Subsidiary by independent accountants in connection with any annual,
interim or special audit made of the books of the Company or any
Subsidiary;
32
<PAGE>
(g) ACTIONS, PROCEEDINGS -- promptly after the commencement of
any action or proceeding relating to the Company or any Subsidiary in any
court or before any Governmental Authority or arbitration board or tribunal
as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected to have a
Material Adverse Effect, a notice specifying the nature and period of
existence thereof and what action the Company has taken, is taking or
proposes to take with respect thereto;
(h) OTHER CREDITORS -- promptly upon the reasonable request of
any holder of Notes, copies of any statement, report or certificate
furnished to any holder of Debt to the extent that the information
contained in such statement, report or certificate has not already been
delivered to each holder of Notes;
(i) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information as from time to time may be reasonably requested
by any holder of Notes.
5.2 EXTENSION OF TIME TO FILE SEC REPORTS.
If the rules and regulations of the SEC under the Exchange Act and the
rules and regulations of the AMEX or the NASDAQ National Market, as applicable,
are amended to extend the deadline for delivery to the SEC and the AMEX or the
NASDAQ National Market of Quarterly Reports, as applicable, on Form 10-Q (or any
successor form) beyond the forty-five (45) days following the end of each fiscal
quarter of the Company (other than its last fiscal quarter) as currently
required, then the forty-five (45) day period within which quarterly financial
statements are required to be delivered in accordance with the provisions of
Section 5.1(a) shall be similarly extended. If the rules and regulations of the
SEC under the Exchange Act and the rules and regulations of the AMEX or the
NASDAQ National Market, as applicable, are amended to extend the deadline for
delivery to the SEC and the AMEX or the NASDAQ National Market, as applicable,
of Annual Reports on Form 10-K (or any successor form) beyond the ninety (90)
days following the end of the Company's fiscal year as currently required, then
the ninety (90) day period within which annual financial statements are required
to be delivered in accordance with the provisions of Section 5.1(b) shall be
similarly extended.
5.3 OFFICER'S CERTIFICATES.
Each set of financial statements delivered to each holder of Notes pursuant
to Section 5.1(a) or Section 5.1(b) shall be accompanied by a certificate signed
on behalf of the Company by a Senior Financial Officer, setting forth:
(a) COVENANT COMPLIANCE -- the financial information (including
detailed calculations and a detailed computation of EBITDA for the relevant
period) required in order to establish whether the Company was in
compliance with the requirements
33
<PAGE>
of Section 4 (in each case where such Section imposes numerical financial
requirements) as of the end of the period covered by the financial
statements then being furnished (including with respect to such Section,
where applicable, the calculations of the maximum or minimum amount, ratio
or percentage, as the case may be, permissible under the terms of such
Section, and the calculation of the amount, ratio or percentage then in
existence); and
(b) EVENT OF DEFAULT -- a statement that the signer has reviewed
the relevant terms hereof and has made, or caused to be made, under his or
her supervision or authority, a review of the transactions and conditions
of the Company and the Subsidiaries from the beginning of the accounting
period covered by the income statements being delivered therewith to the
date of the certificate and that such review shall not have disclosed the
existence during such period of any condition or event that constitutes a
Default or an Event of Default or, if any such condition or event existed
or exists, specifying the nature and period of existence thereof and what
action the Company has taken, is taking or proposes to take with respect
thereto.
5.4 ACCOUNTANTS' CERTIFICATES.
Each set of annual financial statements delivered pursuant to
Section 5.1(b) shall be accompanied by a certificate of the accountants who were
engaged to audit such financial statements, stating that they have reviewed this
Agreement and stating further, whether, in making their audit, such accountants
have become aware of any condition or event that then constitutes a Default or
an Event of Default, and, if such accountants are aware that any such condition
or event then exists, specifying the nature and period of existence thereof.
5.5 INSPECTION.
(a) The Company will permit the representatives of each holder
of Notes to visit and inspect any of the Properties of the Company or any of the
Subsidiaries, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the finances and affairs of the Company
and the Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. At all times during which there exists a Default or Event
of Default, any reasonable out-of-pocket expenses incurred by the holders of the
Notes in connection with this Section 5.5 shall be paid in accordance with
Section 12.6(b).
34
<PAGE>
5.6 CONFIDENTIAL INFORMATION.
Each holder of Notes, by its acceptance thereof, agrees that it will
maintain the confidentiality of all Confidential Information in accordance with
procedures adopted by such holder in good faith to protect confidential
information of third parties delivered to such holder; PROVIDED, HOWEVER, that
any holder of Notes may deliver or disclose Confidential Information to:
(a) such holder's directors, officers, trustees, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by the Notes
held by such holder, which Persons shall be instructed to maintain the
confidentiality of all Confidential Information);
(b) such holder's financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 5.6;
(c) any other holder of any Note;
(d) any financial institution or institutional investor to which
such holder assigns or transfers such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of
this Section 5.6);
(e) any Person from which such holder offers to purchase any
security of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of
this Section 5.6);
(f) any federal, state or local regulatory authority having
jurisdiction over such holder;
(g) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that
requires access to information about the investment portfolio of such
holder; or
(h) any other Person to which such delivery or disclosure may be
necessary or appropriate:
(i) to effect compliance with any law, rule, regulation
or order applicable to such holder; or
(ii) in response to any subpoena or other legal process;
PROVIDED, HOWEVER, that each holder agrees to use its reasonable
best efforts to inform the Company of the service upon it of such
subpoena or legal process, and
35
<PAGE>
to reasonably cooperate with the Company should the Company wish (at
the Company's expense) to seek a protective order or similar relief
relating to such disclosure; or
(iii) in connection with any litigation to which such
holder and the Company or any Subsidiary are parties; PROVIDED,
HOWEVER, that such holder shall use its reasonable efforts to
preserve the confidentiality of the Confidential Information to the
extent not necessary to prosecute or defend such litigation; or
(iv) if an Event of Default has occurred and is
continuing, to the extent such holder may reasonably determine such
delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies of such
holder in respect of such holder's Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 5.6 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 5.6.
5.7 Board Observer.
The Company shall provide Fleet all written materials and other
information related to each meeting of the Board of Directors of each Subsidiary
of the Company (including copies of all minutes and all resolutions adopted by
the Board of Directors of the Company and by the Board of Directors of each
Subsidiary promptly upon the approval or adoption thereof at the same time and
in the same manner as notice and such written materials and other information
is given to members of the Board of Directors of the Company and of the Board of
Directors of each Subsidiary of the Company.
SECTION 6 EVENTS OF DEFAULT
6.1 Events of Default.
An "EVENT OF DEFAULT" exists at any time if any of the following both
occurs and is continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
(a) PAYMENTS ON NOTES --
36
<PAGE>
(i) PRINCIPAL OR PREPAYMENT COMPENSATION AMOUNT PAYMENTS
-- the Company fails to make any payment of principal or Prepayment
Compensation Amount on any Note on or before the date such payment
is due; or
(ii) INTEREST PAYMENTS -- the Company fails to make any
payment of interest on any Note on or before five (5) Business Days
after the date such payment is due; or
(b) OTHER DEFAULTS --
(i) COVENANT DEFAULTS -- the Company or any Subsidiary
fails to comply with any provision of Section 4; or
(ii) OTHER DEFAULTS -- the Company or any Subsidiary
fails to comply with any other provision hereof, and such failure
continues for more than thirty (30) days after the earlier of the
date on which (a) a Senior Officer obtains actual knowledge of such
failure or (b) written notice thereof shall have been given to the
Company by any holder of a Note; or
(c) WARRANTIES OR REPRESENTATIONS -- any warranty,
representation or other statement by or on behalf of the Company contained
in this Agreement, the Notes, and any other agreement, certificate or
instrument executed pursuant to the terms of each of the foregoing, or in
any written amendment, supplement, modification or waiver with respect to
any such agreement or document or in any instrument furnished in compliance
herewith or therewith or in reference hereto or thereto, shall have been
false or misleading in any material respect when made; or
(d) ACCELERATION OF DEBT -- any event shall occur or any
condition shall exist in respect of Debt of the Company or any Subsidiary,
or under any agreement securing or relating to such Debt, and in either
case, as a result thereof:
(i) the maturity of such Debt, or a portion
thereof, is accelerated; or
(ii) any one or more of the holders thereof or a
trustee therefor is permitted to require the Company or any
Subsidiary to repurchase such Debt from the holders thereof,
and any such trustee or holder exercises such option;
PROVIDED that the aggregate amount of all obligations in respect of
all such defaulted Debt exceeds at such time Three Million Dollars
($3,000,000); or
37
<PAGE>
(e) INSOLVENCY --
(i) INVOLUNTARY BANKRUPTCY PROCEEDINGS --
(A) a receiver, liquidator, custodian or trustee
of the Company or any Subsidiary, or of all or any
substantial part of the Property of either, is appointed by
court order and such order remains in effect for more than
sixty (60) days; or an order for relief is entered with
respect to the Company or any Subsidiary, or the Company or
any Subsidiary is adjudicated a bankrupt or insolvent;
(B) all or any substantial part of the Property
of the Company or any Subsidiary is sequestered by court
order and such order remains in effect for more than sixty
(60) days; or
(C) a petition is filed against the Company or
any Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution
or liquidation law of any jurisdiction, whether now or
hereafter in effect, and is not dismissed within sixty (60)
days after such filing;
(ii) VOLUNTARY PETITIONS -- the Company or any Subsidiary
files a petition in voluntary bankruptcy or seeks relief under any
provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, or consents to
the filing of any petition against it under any such law; or
(iii) ASSIGNMENTS FOR BENEFIT OF CREDITORS, ETC. -- the
Company or a Subsidiary makes an assignment for the benefit of its
creditors, or admits in writing its inability, or fails, to pay its
debts generally as they become due. or consents to the appointment
of a receiver, liquidator or trustee of the Company or a Subsidiary
or of all or a substantial part of its Property; or
(f) UNDISCHARGED FINAL JUDGMENTS -- a final, non-appealable
judgment or final, non-appealable judgments for the payment of money
aggregating an uninsured amount(s) in excess of One Million Dollars
($1,000,000) is or are outstanding against one or more of the Company and
the Subsidiaries and any one of such judgments shall have been outstanding
for more than sixty (60) days from the date of its entry and shall not have
been discharged in full or stayed; or
(g) Guaranty -- (i) the Guaranty set forth in Article XI shall
cease to be in full force and effect or shall be declared by a court or
other Governmental Authority
38
<PAGE>
of competent jurisdiction to be void, voidable or unenforceable against any
Guarantor,
(ii) the validity or enforceability of the Guaranty set
forth in Article XI against any Guarantor shall be contested by such
Guarantor, the Company or any Affiliate, or
(iii) any Guarantor, the Company or any Affiliate shall
deny that such Guarantor has any further liability or obligation
under the Guaranty, or
(h) ENVIRONMENTAL MATTERS. The Borrowers or their Subsidiaries
shall make aggregate net cash expenditures (net of amounts collected as
reimbursement, indemnification, contribution or otherwise from unaffiliated
third parties) that exceed $5,000,000 between the date hereof and April 29,
2001 in respect of environmental remediation of (a) the real property and
improvements formerly owned by Alliance America in Port Carbon,
Pennsylvania, and/or (b) the real property and improvements now owned by
Aubecq in Crespin, France.
6.2 Default Remedies.
(a) ACCELERATION OF MATURITY OF NOTES.
(i) ACCELERATION ON EVENT OF DEFAULT.
(A) AUTOMATIC. If any Event of Default specified
in Section 6.1(e) shall exist, all of the Notes at the time
outstanding shall automatically become immediately due and
payable together with interest accrued thereon and, to the
extent permitted by law, the Prepayment Compensation Amount
at such time with respect to the principal amount of such
Notes, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived.
(B) BY ACTION OF HOLDERS. Subject to Section
6.3, 7.6 and Section 7.7, if any Event of Default other than
those specified in Section 6.1(e) shall exist, the Required
Holders may exercise any right, power or Remedy permitted to
such holder or holders by law, and shall have, in
particular, without limiting the generality of the
foregoing, the right, upon written notice to the Company to
declare the entire principal of, and all interest accrued
on, all the Notes then outstanding to be, and such Notes
shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, and the
Company shall forthwith pay to the holder or holders of all
the Notes then outstanding the entire principal of, and
interest accrued on, the
39
<PAGE>
Notes and, to the extent permitted by law, the Prepayment
Compensation Amount at such time with respect to such
principal amount of such Notes.
(ii) ACCELERATION ON PAYMENT DEFAULT. Subject to Section
7.6 and Section 7.7, during the existence of an Event of Default
described in Section 6.1(a), and irrespective of whether the Notes
then outstanding shall have become due and payable pursuant to
Section 6.2(a)(i)(B), any holder of Notes who or which shall have
not consented to any waiver with respect to such Event of Default
may, at his or its option, by notice in writing to the Company,
declare the Notes then held by such holder to be, and such Notes
shall thereupon become, forthwith due and payable together with all
interest accrued thereon, without any presentment, demand, protest
or other notice of any kind, all of which are hereby expressly
waived, and the Company shall forthwith pay to such holder the
entire principal of and interest accrued on such Notes and, to the
extent permitted by law, the Prepayment Compensation Amount at such
time with respect to such principal amount of such Notes.
(b) VALUABLE RIGHTS. The Company acknowledges, and the parties
hereto agree, that the right of each holder to maintain its investment in
the Notes free from repayment by the Company (except as herein specifically
provided for) is a valuable right and that the provision for payment of a
Prepayment Compensation Amount by the Company in the event that the Notes
are prepaid or are accelerated as a result of an Event of Default is
intended to provide compensation for the deprivation of such right under
such circumstances.
(c) OTHER REMEDIES. During the existence of an Event of Default
and irrespective of whether the Notes then outstanding shall become due and
payable pursuant to Section 6.2(a), and irrespective of whether any holder
of Notes then outstanding shall otherwise have pursued or be pursuing any
other rights or Remedies, subject to Section 7.6 and Section 7.7, any
holder of Notes may proceed to protect and enforce its rights hereunder and
under such Notes by exercising such Remedies as are available to such
holder in respect thereof under applicable law, either by suit in equity or
by action at law, or both, whether for specific performance of any
agreement contained herein or in aid of the exercise of any power granted
herein; PROVIDED, HOWEVER, that the maturity of such holder's Notes may be
accelerated only in accordance with Section 6.2(a).
(d) NONWAIVER; REMEDIES CUMULATIVE. No course of dealing on the
part of any holder of Notes nor any delay or failure on the part of any
holder of Notes to exercise any right shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers and Remedies.
All rights and Remedies of each holder of
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Notes hereunder and under applicable law are cumulative to, and not
exclusive of, any other rights or Remedies any such holder of Notes would
otherwise have.
(e) SUBORDINATION. The rights of the holders of the Notes to
receive payments in respect of this Agreement and the Notes, and to
exercise any Remedies, solely as between the holders of the Notes and the
holders of the Senior Debt, shall be subject in all respects to the
provisions of Section 7; PROVIDED, HOWEVER, that all such rights shall
remain unconditional and absolute as between the holders of the Notes and
the Company.
6.3 Annulment of Acceleration of Notes.
(a) ANNULMENT AT HOLDERS' OPTION. If a declaration is made
pursuant to Section 6.2(a)(i)(B), then and in every such case, the holders
of sixty-six and two-thirds percent (66-2/3%) in principal amount of the
Notes at the time outstanding (exclusive of Notes then owned by any one or
more of the Company, any Subsidiary or any Affiliate) may, by written
instrument filed with the Company, rescind and annul such declaration, and
the consequences thereof; PROVIDED, HOWEVER, that at the time such
declaration is annulled and rescinded:
(i) no judgment or decree shall have been entered for
the payment of any moneys due on or pursuant hereto or the Notes;
(ii) all arrears of interest upon all of the Notes and
all of the other sums payable hereunder and under the Notes (except
any principal of, or interest or Prepayment Compensation Amount on,
the Notes which shall have become due and payable by reason of such
declaration under Section 6.2(a)(i)(B)) shall have been duly paid;
and
(iii) each and every other Default and Event of Default
shall have been waived pursuant to Section 12.5 or otherwise made
good or cured;
and; PROVIDED, FURTHER that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
(b) REQUIRED ANNULMENT. If a declaration is made pursuant to
Section 6.2(a)(i)(B) arising solely out of an Event of Default described in
Section 6.1(d) regarding the Senior Debt, then and in every such case, if
the holders of the Senior Debt waive such default in respect of the Senior
Debt or such default is cured, and the holders of the Senior Debt rescind
or annul any and all accelerations of the maturity of all or any portion of
the Senior Debt and any required or demanded repurchase of all or any
portion thereof, then, upon written notice to the holders of the Notes of
such events with respect to the Senior Debt, any declaration made pursuant
to Section 6.2(a)(i)(B), and the consequences thereof, shall automatically
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and without any further action on the part of the holders of the Notes, be
annulled and rescinded; PROVIDED, HOWEVER, that at the time such
declaration is deemed annulled and rescinded:
(i) no judgment or decree shall have been entered for
the payment of any moneys due on or pursuant hereto or the Notes;
(ii) no other Default and Event of Default shall be
continuing;
and, PROVIDED, FURTHER that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
SECTION 7 SUBORDINATION
7.1 GENERAL
The Subordinated Debt is subordinate and junior in right of payment to all
Senior Debt to the extent provided in this Section 7. Without the prior written
consent of the holders of Senior Debt or their Agent, there shall be no
prepayment of principal of the Subordinated Debt.
7.2 INSOLVENCY.
In the event of:
(a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Company, its creditors or its Property;
(b) any proceeding for the liquidation, dissolution or other
winding-up of the Company, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings;
(c) any assignment by the Company for the benefit of creditors;
or
(d) any other marshaling of the assets of the Company;
all Senior Debt shall first be paid in full, in cash or cash equivalents, before
any payment or distribution, whether in cash, Securities or other Property,
shall be made to any holder of any Subordinated Debt on account of any
Subordinated Debt. Any payment or distribution, whether in cash, Securities or
other Property (other than Securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Section 7 with respect to
Subordinated Debt, to the payment of all Senior Debt at the time outstanding and
to any Securities issued in respect thereof under any such plan of
reorganization or
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readjustment), which would otherwise (but for this Section 7) be payable or
deliverable in respect of Subordinated Debt shall be paid or delivered directly
to the holders of Senior Debt in accordance with the priorities then existing
among such holders until all Senior Debt shall have been paid in full, in cash
or cash equivalents.
7.3 PROOFS OF CLAIM.
If any holder of Subordinated Debt does not file a proper claim or proof of
debt therefor prior to twenty (20) days before the expiration of the time to
file such claim or proof, then the Senior Agent is hereby authorized and
empowered (but not obligated) as the agent and attorney-in-fact for such holder
for the specific and limited purpose set forth in this Section 7.3 to file such
claim or proof for or on behalf of such holder; PROVIDED, HOWEVER, that the
Senior Agent shall have, prior to taking any such action, given fifteen (15)
days prior written notice (which notice may be given up to sixty (60) days prior
to the expiration of the time to file such claim) to such holder of Subordinated
Debt that it intends to file such claim or proof of debt. In no event may the
Senior Agent or any holder of the Senior Debt vote any claim on behalf of any
holder of the Subordinated Debt, and such agency and appointment of
attorney-in-fact shall not extend to any such right to vote any such claim.
7.4 PAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.
If:
(a) the Company shall default in the payment of any principal of
or premium, if any, or interest on any Senior Debt (a "SENIOR PAYMENT
DEFAULT") when the same becomes due and payable, whether at maturity, at a
date fixed for prepayment, by declaration of acceleration or otherwise; and
(b) the Company receives from the Senior Agent written notice (a
"PAYMENT DEFAULT NOTICE") of the happening of such Senior Payment Default,
stating that such notice is a payment blockage notice pursuant to this
Section 7.4;
then no direct or indirect payment (in cash, Property or Securities or by
set-off or otherwise) shall be made or agreed to be made on account of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any redemption, retirement, purchase, prepayment or other acquisition or
payment of any Subordinated Debt, unless and until such Senior Payment Default
shall have been cured or waived or otherwise shall have ceased to exist.
The Company shall give prompt written notice to each holder of Subordinated
Debt of its receipt of any Payment Default Notice under this Section 7.4 such
notice to be delivered in any event no later than 2 Business Days after receipt
of any such Payment Default Notice.
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7.5 SIGNIFICANT NONPAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.
If:
(a) any Significant Nonpayment Default shall have occurred; and
(b) the Company receives from the Senior Agent written notice (a
"NONPAYMENT DEFAULT NOTICE") of the happening of such Significant
Nonpayment Default, stating that such notice is a payment blockage notice
pursuant to this Section 7.5;
then no direct or indirect payment (in cash, property or Securities or by
set-off or otherwise) shall be made or agreed to be made for or on account of
any Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in
respect of any redemption, retirement, repurchase, prepayment, purchase or other
acquisition or payment of any Subordinated Debt, for a period (each, a "PAYMENT
BLOCKAGE PERIOD") commencing on the date the Nonpayment Default Notice is
delivered to the Company and ending on the Payment Blockage Period Termination
Date; PROVIDED, HOWEVER, that:
(i) only three (3) such Payment Blockage Periods may
arise in any period of three hundred sixty-five (365) consecutive
days;
(ii) Payment Blockage Periods may not be in effect for
more than one hundred eighty (180) days during any period of three
hundred sixty-five (365) consecutive days, and if any Payment
Blockage Period is in effect on the one hundred eightieth (180th)
day (whether or not such days are or were consecutive) in any period
of three hundred sixty-five (365) consecutive days, such Payment
Blockage Period shall terminate immediately;
(iii) no Payment Blockage Period may be imposed as a
result of any Significant Nonpayment Default which served as the
basis for or was continuing during a previous Payment Blockage
Period; and
(iv) no more than four (4) Payment Blockage Periods may
arise in the aggregate.
All payments in respect of Subordinated Debt postponed during any Payment
Blockage Period shall be immediately due and payable upon the Payment Blockage
Period Termination Date thereof (together with such additional interest as is
provided for herein and in the Notes for late payment of principal, Prepayment
Compensation Amount and interest).
The Company shall give prompt written notice to each holder of Subordinated
Debt of its receipt of any Nonpayment Default Notice under this Section 7.5 such
notice to be
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delivered in any event, no later than 2 Business Days after receipt of any such
payment Default Notice.
7.6 ENFORCEMENT NOTICE.
If, at any time during which the Senior Credit Facility is in effect, any
holder or holders of Notes elect to exercise any Remedies in respect of any
Event of Default, such holder or holders shall deliver to the Company and to the
Senior Agent written notice (an "ENFORCEMENT NOTICE") specifying the Event or
Events of Default which are the basis for the exercise of such Remedies and
stating the holder or holders intends to exercise Remedies; PROVIDED, HOWEVER,
that the failure to deliver such Enforcement Notice to the Senior Agent shall
not affect the validity of the Enforcement Notice as between such holder or
holders and the Company.
7.7 STANDSTILL.
Notwithstanding anything contained in this Agreement or any other Financing
Document to the contrary, for so long as any amount is outstanding under the
Senior Credit Facility, no holder of any Subordinated Debt may exercise any
Remedies in respect thereof (and no acceleration or purported acceleration
pursuant to Section 6.2(a)(i)(B) or Section 6.2(a)(ii) shall become effective)
during any period (a "STANDSTILL PERIOD") commencing on the first date the
holders of the Subordinated Debt, but for the provisions of this Section 7,
would have been entitled to accelerate the maturity of the Subordinated Debt
pursuant to Section 6.2(a)(i)(B) or Section 6.2(a)(ii) and ending upon the
earliest of:
(a) the date which is ten (10) days after the Enforcement Notice
is delivered to the Company and the Senior Agent pursuant to Section 7.6;
provided however that if a Payment Blockage Period is in effect on such
tenth (10th) day, as the case may be, after the Enforcement Notice is so
delivered or there shall be any prohibition on payment of any Subordinated
Debt pursuant to Section 7.4 then in effect, this clause (a) shall be
ineffective to terminate such Standstill Period;
(b) in the event that a Payment Blockage is in effect on the
date which is ten (10) days after the Enforcement Notice is delivered to
the Company and the Senior Agent pursuant to Section 7.6, the Payment
Blockage Period Termination Date relating to the Significant Nonpayment
Default giving rise to such Payment Blockage Period;
(c) the date that any holder of any Senior Debt commences the
exercise of any Remedies in respect of such Debt; or
(d) the first date upon which any of the Events of Default
described in Section 6.1(e) shall have occurred and be continuing beyond
any period of grace specified therein; and, in such event, the automatic
acceleration of the Notes
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contemplated in respect of such Event of Default pursuant to Section
6.2(a)(i)(A) shall occur immediately upon the termination of the Standstill
Period.
7.8 Turnover of Payments.
If:
(a) any payment or distribution shall be paid to or collected or
received by any holders of Subordinated Debt in contravention of any of the
terms of this Section 7; and
(b) the Senior Agent shall have notified the holders of
Subordinated Debt in writing, within thirty (30) days after the date such
payment or distribution is made, of the facts by reason of which such
payment or collection or receipt so contravenes this Section 7 or
constituted a Significant Nonpayment Default;
then such holders of Subordinated Debt will deliver such payment or
distribution, to the extent necessary to pay all such Senior Debt in full, in
cash or cash equivalents, to the Senior Agent, on behalf of the holders of the
Senior Debt, and, until so delivered, the same shall be held in trust by such
holders of Subordinated Debt as the property of the holders of such Senior Debt.
If any amount is delivered to the Senior Agent pursuant to this Section 7.8,
whether or not such amounts have been applied to the payment of Senior Debt, and
the outstanding Senior Debt shall thereafter be paid in full, in cash or cash
equivalents, by the Company or otherwise other than pursuant to this Section
7.8, the holders of Senior Debt shall return to such holders of Subordinated
Debt an amount equal to the amount delivered to such holders of Senior Debt
pursuant to this Section 7.8, so long as after the return of such amounts the
Senior Debt shall remain paid in full, in cash or cash equivalents.
7.9 SUBORDINATION UNAFFECTED BY CERTAIN EVENTS.
The rights set forth in this Section 7 of the holders of the Senior Debt as
against each holder of Subordinated Debt shall remain in full force and effect
without regard to, and shall not be impaired by:
(a) any act or failure to act on the part of the Company;
(b) any extension or indulgence in respect of any payment or
prepayment of the Senior Debt or any part therefor in respect of any other
amount payable to any holder of Senior Debt;
(c) any amendment, modification, restatement, refinancing or
waiver of, or addition or supplement to, or deletion from, or compromise,
release, consent or other action in respect of, any of the terms of any
Senior Debt or any other
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agreement which may be relating to any Senior Debt, other than such as
would cause all or any portion of such Debt to fail to meet the definition
of "Senior Debt;"
(d) any exercise or non-exercise by any holder of Senior Debt of
any right, power, privilege or remedy under or in respect of any Senior
Debt or Subordinated Debt or any waiver of any such right, power, privilege
or remedy or any default in respect of any Senior Debt or the Subordinated
Debt, any dealing with or action against any collateral security therefor
or any receipt by any holder of Senior Debt of any security, or any failure
by any holder of Senior Debt to perfect a security interest in, or any
release by any such holder of Senior Debt of, any security for the payment
of any Senior Debt;
(e) any merger or consolidation of the Company or any of the
Subsidiaries into or with any of the Subsidiaries or into or with any
Person, or any transfer of any or all of the Property of the Company or any
of the Subsidiaries to any other Person; or
(f) the absence of any notice to, or knowledge by, any holder of
Subordinated Debt of the existence or occurrence of any of the matters or
events set forth in the foregoing clauses (a) through (e).
7.10 WAIVER AND CONSENT.
Each holder of Subordinated Debt waives any and all notices of the
acceptance of the provisions of this Section 7 or of the creation, renewal,
extension or accrual, now or at any time in the future, of any Senior Debt.
7.11 REINSTATEMENT OF SUBORDINATION.
The obligations of each holder of Subordinated Debt under the provisions
set forth in this Section 7 shall continue to be effective, or be reinstated, as
the case may be, as to any payment in respect of any Senior Debt that is
rescinded or must otherwise be returned by the holder of such Senior Debt upon
the occurrence or as a result of any bankruptcy or judicial proceeding, all as
though such payment had not been made.
7.12 OBLIGATIONS NOT IMPAIRED.
Nothing contained in this Section 7 shall impair, as between the Company
and any holder of Subordinated Debt, the obligation of the Company to pay to
such holder the principal thereof and Prepayment Compensation Amount, if any,
and interest thereon as and when the same shall become due and payable in
accordance with the terms thereof and to comply with each and every provision of
the Notes and this Agreement or prevent any holder of any Subordinated Debt from
exercising all rights, powers and remedies otherwise permitted by applicable law
or under this Agreement, all subject to the rights of
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the holders of the Senior Debt to receive cash, Securities or other Property
otherwise payable or deliverable to the holders of Subordinated Debt.
7.13 Payment of Senior Debt; Subrogation.
Upon the payment in full of all Senior Debt, the holders of Subordinated
Debt shall be subrogated to all rights of any holder of Senior Debt to receive
any further payments or distributions applicable to the Senior Debt until the
Subordinated Debt shall have been paid in full, and such payments or
distributions received by the holders of Subordinated Debt by reason of such
subrogation, of cash, Securities or other Property which otherwise would be paid
or distributed to the holders of Senior Debt, shall, as between the Company and
its creditors other than the holders of Senior Debt, on the one hand, and the
holders of Subordinated Debt, on the other hand, be deemed to be a payment by
the Company on account of Senior Debt and not on account of Subordinated Debt.
7.14 RELIANCE OF HOLDERS OF SENIOR DEBT.
Each holder of Subordinated Debt by its acceptance thereof shall be deemed
to acknowledge and agree that the foregoing subordination provisions are, and
are intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of Subordinated Debt, to acquire and hold, or to continue to hold,
such Senior Debt, and such holder of Senior Debt shall be deemed conclusively to
have relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 7. Each holder
of Subordinated Debt acknowledges and agrees that the provisions set forth in
this Section 7 shall be enforceable against such Persons by the holders of the
Senior Debt. Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, none of the provisions of this Section 7
(including, without limitation, this Section 7.14) may, directly or indirectly,
be amended, modified, supplemented or waived without the prior written consent
of the Senior Agent, on behalf of the holders of the Senior Debt.
7.15 IDENTITY OF HOLDERS OF SENIOR DEBT.
Upon the request of any holder of Subordinated Debt, the Company shall
deliver to such holder a list of all holders of Senior Debt outstanding at such
time, providing the name and address of each such holder of Senior Debt and the
principal amount of Senior Debt held by each such holder; PROVIDED, HOWEVER,
that if any holder of Senior Debt shall have appointed an agent or other
representative with respect to the Senior Debt held by it, the Company may
provide the name and address of such agent or representative in lieu of the name
and address of such holder of Senior Debt.
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7.16 AMENDMENTS TO SENIOR CREDIT FACILITY.
Notwithstanding the other provisions of this Section 7, no amendment to or
Refinancing of the Senior Debt or any agreement or instrument related thereto
shall be effective as to the holders of the Subordinated Debt or be entitled to
the benefits of this Section 7 without the consent of Required Holders of Notes
to the extent that such amendment would (a) prohibit directly the Company or
any Subsidiary from making scheduled payments in respect of the Subordinated
Debt in any manner which is not specifically set forth in this Agreement or the
Senior Credit Agreement, as in effect on the Closing Date or (b) make the terms
and conditions thereof less favorable to the holders of the Subordinated Debt
and/or the Company.
SECTION 8 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
To induce the Lenders to enter into this Agreement and to make the Loan,
the Company represents and warrants to the Lenders, as of the Closing Date, as
follows:
8.1 NATURE OF BUSINESS.
The 10-K describes correctly in all material respects the general nature of
the business and principal Properties and assets of the Company.
8.2 FINANCIAL STATEMENTS; DEBT; MATERIAL ADVERSE CHANGE.
(a) FINANCIAL STATEMENTS. The Company has provided each Lender
with the historical financial statements of the Company contained in the
10-K and those described on PART 8.2(A) OF ANNEX 3. Such financial
statements present fairly in all material respects the financial position
of the Company and the Subsidiaries on a consolidated basis as of the
respective dates specified therein and the results of their consolidated
operations and cash flows for the respective periods so specified in
conformity with GAAP applied on a consistent basis throughout the periods
involved.
(b) DEBT. PART 8.2(B) OF ANNEX 3 lists all Debt of the Company
and the Subsidiaries as of the Closing Date, both before and after giving
effect to the transactions contemplated by the Financing Documents, and
provides the following information with respect to each item of such Debt:
the obligor, each guarantor thereof and each other Person similarly liable
in respect thereof, the holder thereof, the aggregate amount of all
commitments thereunder (and the allocation of such commitments, if any, as
among revolving credit Debt, term loan or similar Debt and other credits
such as letter of credit or banker's acceptance facilities), the
approximate outstanding amount thereunder and under each individual
facility thereunder, the approximate current portion of the outstanding
amount, the final
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maturity, required sinking fund payments, and a description of the
collateral securing such Debt.
(c) LIENS. PART 8.2(C) OF ANNEX 3 lists all Liens securing
Debt of the Company and the Subsidiaries in existence as of the Closing
Date, both before and after giving effect to the transactions contemplated
by the Financing Documents, and provides the following information with
respect to each Lien: the holder thereof, the approximate outstanding
amount of the Debt secured by such Lien and a description of the
collateral.
(d) CONTINGENT OBLIGATIONS. Other than (i) Guaranties by the
Company or Subsidiaries of obligations of other Domestic Subsidiaries and
(ii) Guaranties by the Company and Domestic Subsidiaries of indebtedness of
Foreign Subsidiaries to KBC, there are no Guaranties or other contingent
obligations in respect of which disclosure is required, or for which
provisions are required to be made in the consolidated financial statements
of the Company and the Subsidiaries in accordance with GAAP, other than
those so disclosed, and for which such provision has been made, in the
financial statements referred to in Section 8.2(a).
(e) MATERIAL ADVERSE CHANGE. Since April 30, 1998, there has
been no change in the business, operations, profits, financial condition,
Properties or business prospects of the Company and the Subsidiaries,
except changes that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(f) PROJECTIONS. The Company has delivered to the Lenders
projected financial statements of the Company contained in Part 8.2(f) of
ANNEX 3 attached hereto (collectively, the "PROJECTIONS"). The assumptions
used in preparation of the Projections were reasonable when made and
continue to be reasonable. Such Projections have been prepared by the
executive and financial personnel of the Company and the Subsidiaries in
the light of the business of the Company and the Subsidiaries. Such
Projections have been prepared in good faith, have a reasonable basis and
represent the good faith opinion of the Company as to the projected results
of the operations of the Company and the Subsidiaries. No material facts
have occurred since the preparation of the Projections that, if the Company
were to prepare new projections on the Closing Date, would cause such new
projections, taken as a whole, to be materially different from the
Projections, and the Company and the Subsidiaries do not have, on the
Closing Date, any material obligations (whether accrued, matured, absolute,
actual, contingent or otherwise) that are not reflected in the Projections.
(g) INVESTMENTS. PART 8.2(G) OF ANNEX 3 lists all Investments
of the Company and the Subsidiaries outstanding on the Closing Date which,
but for clause (h) of the definition of Restricted Investments, would be
classified as Restricted Investments in accordance with the provisions of
this Agreement.
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8.3 SUBSIDIARIES AND AFFILIATES.
(a) OWNERSHIP OF THE COMPANY AND ITS SUBSIDIARIES. PART 8.3(A)
OF ANNEX 3 sets forth for the Company and each Subsidiary:
(i) its full legal name;
(ii) its jurisdiction of incorporation or organization;
and
(iii) in the case of the Subsidiaries, the percentage of
the Voting Stock of which is held by the Company and each other
Subsidiary.
(b) AFFILIATES. PART 8.3(B) OF ANNEX 3 sets forth the name of
each Affiliate (other than members of the families of officers and
directors of the Company) and the nature of the affiliation of such
Affiliate.
8.4 TITLE TO PROPERTIES.
(a) GENERAL. Each of the Company and the Subsidiaries has good
and marketable title to all of the Property reflected in the most recent
balance sheet referred to in Section 8.2(a) (except as sold or otherwise
disposed of in the ordinary course of business), free from Liens not
otherwise permitted by provisions of this Agreement. Each of the Company
and the Subsidiaries has maintained and kept, or caused to be maintained
and kept, its respective properties in good repair, working order and
condition (ordinary wear and tear excepted).
(b) LEASES. All leases necessary for the conduct of the
business of the Company and the Subsidiaries are valid and subsisting and
are in full force and effect, except for such failures to be valid and
subsisting that, in the aggregate for all such failures, could not
reasonably be expected to have a Material Adverse Effect. Each such lease
grants to the Company or the Subsidiary party thereto the right to the
quiet enjoyment of the premises leased thereunder during the term thereof.
(c) INTELLECTUAL PROPERTY. Each of the Company and the
Subsidiaries owns, possesses or has the right to use all of the
intellectual property, licenses, patents, copyrights, trademarks, service
marks and trade names necessary for the present and currently planned
future conduct of its business, without any known conflict with the rights
of others, except for such failures to own, possess, or have the right to
use, that, in the aggregate for all such failures, could not reasonably be
expected to have a Material Adverse Effect.
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8.5 TAXES.
(a) RETURNS FILED; TAXES PAID. All tax returns required to be
filed by the Company, any Subsidiary and each other Person with which the
Company or any Subsidiary files or has filed a consolidated return in any
jurisdiction have in fact been filed on a timely basis. All taxes,
assessments, fees and other governmental charges upon the Company and any
such Person, and upon any of their respective Properties, income or
franchises, that are due and payable have been paid, except for such
failures to pay that, in the aggregate for all such Persons, could not
reasonably be expected to have a Material Adverse Effect. The Company knows
of no proposed additional tax assessment against it or any such Person that
could reasonably be expected to have a Material Adverse Effect.
(b) BOOK PROVISIONS ADEQUATE. The amount of the liability for
taxes reflected in each of the balance sheets referred to in Section 8.2(a)
is in each case an adequate provision in all material respects for taxes as
of the dates of such balance sheets (including, without limitation, any
payment due pursuant to any tax sharing agreement) as are or may become
payable by any one or more of the Company and the other Persons
consolidated with the Company in such financial statements in respect of
all tax periods ending on or prior to such dates.
8.6 PENDING LITIGATION.
(a) PENDING LITIGATION. There are no proceedings, actions or
investigations pending or, to the Company's knowledge, threatened, against
or affecting the Company or any of the Subsidiaries in any court or before
any Governmental Authority or arbitration board or tribunal that, in the
aggregate for all such proceedings, actions and investigations, could
reasonably be expected to have a Material Adverse Effect.
(b) NO VIOLATIONS. Neither the Company nor any Subsidiary is in
violation of any judgment, order, writ, injunction or decree of any court,
Governmental Authority, arbitration board or tribunal that, in the
aggregate for all such violations, could reasonably be expected to have a
Material Adverse Effect.
8.7 CORPORATE ORGANIZATION AND AUTHORITY.
Each of the Company and each Subsidiary:
(a) is a corporation duly incorporated, validly existing and in
good standing under the laws of its state of incorporation;
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(b) has all corporate power and authority necessary to own and
operate its Properties and to carry on its business as now conducted and as
presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as presently
proposed to be conducted, except where the failure to have such licenses,
certificates, permits, franchises and other governmental authorizations, in
the aggregate for all such failures, could not reasonably be expected to
have a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation, in each state in the United States of America and in each
other jurisdiction where it is required to do so, except where the failure
to be so qualified or licensed and authorized and in good standing, in the
aggregate for all such failures, could not reasonably be expected to have a
Material Adverse Effect.
8.8 CHARTER INSTRUMENTS, OTHER AGREEMENTS.
Neither the Company nor any Subsidiary is in violation in any respect of:
(a) any term of its certificate of incorporation or bylaws; or
(b) any term in any agreement or other instrument to which it is
a party or by which it or any of its Property may be bound, except for such
violations that, in the aggregate for all such violations, could not
reasonably be expected to have a Material Adverse Effect.
8.9 RESTRICTIONS ON THE COMPANY.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement that restricts its
right or ability to incur Debt or to issue Rights of the Company, as the
case may be, other than the Financing Documents and the agreements listed
on PART 8.9(A) OF ANNEX 3, none of which restricts the issuance of the
Notes or the Warrants by the Company or the execution and delivery by the
Company and the Subsidiary Guarantors of, or compliance with, the other
Financing Documents to which each is a party; or
(b) has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its Property,
whether now owned or hereafter acquired, to be subject to a Lien not
permitted by the provisions of this Agreement.
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True, correct and complete copies of each of the agreements, if any, listed on
PART 8.9(A) OF ANNEX 3 have been provided to the Lenders.
8.10 COMPLIANCE WITH LAW.
Except as disclosed in PART 8.12(B) OF ANNEX 3, neither the Company nor any
Subsidiary is in violation of any law, ordinance, governmental rule or
regulation to which it is subject, except for such violations that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
8.11 PENSION PLANS.
(a) OPERATION OF PLANS; LIABILITIES. The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred
any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the IRC relating to employee benefit plans (as defined in
section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any
such liability by the Company or any ERISA Affiliate, or in the imposition
of any Lien on any of the rights, Properties or assets of the Company or
any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or
to such penalty or excise tax provisions or to section 401 (a)(29) or 412
of the IRC, other than such liabilities or Liens as individually or in the
aggregate would not have a Material Adverse Effect.
(b) RELATIONSHIP OF BENEFIT LIABILITIES TO PLAN ASSETS. The
present value of the aggregate benefit liabilities under each of the Plans
(other than Multiemployer Plans), determined as of the end of such Plan's
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets
of such Plan allocable to such benefit liabilities. The term "BENEFIT
LIABILITIES" has the meaning specified in section 4001 of ERISA and the
terms "CURRENT VALUE" AND "PRESENT VALUE" have the meaning specified in
section 3 of ERISA.
(c) WITHDRAWAL LIABILITIES. The Company and its ERISA
Affiliates have not incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans, other than such liabilities as individually
or in the aggregate would not have a Material Adverse Effect.
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(d) POSTRETIREMENT BENEFIT OBLIGATIONS. The expected
postretirement benefit obligation (determined as of the last day of the
Company's most recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the IRC)
of the Company will not have a Material Adverse Effect.
(e) PROHIBITED TRANSACTIONS. The execution and delivery of the
Financing Documents and the issuance of the Notes and Warrants hereunder
and under the other Financing Documents will not involve any transaction
that is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the IRC.
(f) FOREIGN PENSION PLANS. The Company does not have or
maintain, and is not required to contribute to, any foreign pension plan.
8.12 ENVIRONMENTAL COMPLIANCE.
(a) COMPLIANCE -- Except as disclosed on PART 8.12(A) OF ANNEX
3, each of the Company and the Subsidiaries is in compliance with all
Environmental Protection Laws in effect in each jurisdiction where it is
presently doing business or is located, other than any non-compliance which
could not reasonably be expected to have a Material Adverse Effect.
(b) LIABILITY -- Except as disclosed on PART 8.12(B) OF ANNEX 3,
neither the Company nor any Subsidiary is subject to any liability under
any Environmental Protection Law that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(c) NOTICES -- Except as disclosed on PART 8.12(C) OF ANNEX 3,
neither the Company nor any Subsidiary has received any:
(i) written notice from any Governmental Authority by
which any of its present or previously-owned or leased real
Properties has been designated, listed, or identified in any manner
by any Governmental Authority charged with administering or
enforcing any Environmental Protection Law as a hazardous substance
disposal or removal site, "Super Fund" clean-up site, or candidate
for removal or closure pursuant to any Environmental Protection Law;
(ii) written notice of any Lien arising under or in
connection with any Environmental Protection Law that has attached
to any revenues of, or to, any of its owned or leased real
Properties; or
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(iii) summons, citation, notice, directive, letter, or
other written communication from any Governmental Authority
concerning any intentional or unintentional action or omission by
the Company or any Subsidiary in connection with its ownership or
leasing of any real Property resulting in the releasing, spilling,
leaking, pumping, pouring, emitting, emptying, dumping, or otherwise
disposing of any hazardous substance into the environment resulting
in any material violation of any Environmental Protection Law;
which, in any such case, relates to or makes reference to an event or condition
which could reasonably be expected to have a Material Adverse Effect.
8.13 DUE AUTHORIZATION; ENFORCEABILITY.
(a) BORROWING IS LEGAL AND AUTHORIZED. The borrowing of the
Loans by the Company, the issuance of the Notes and the Warrants by the
Company, the execution and delivery by the Company of the Financing
Documents to which it is a party and compliance by the Company with all of
the provisions of such Financing Documents:
(i) are within the corporate powers of the Company; and
(ii) do not conflict with, result in any breach of any of
the provisions of, constitute a default under, or result in the
creation of any Lien upon any Property of the Company under the
provisions of:
(A) any agreement, charter instrument, bylaw or
other instrument to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is or may be
bound;
(B) any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to
the Company or any of its Property; or
(C) any statute or other rule or regulation of
any Governmental Authority applicable to the Company or any
of its Property.
(b) OBLIGATIONS ARE ENFORCEABLE. The Company has duly
authorized by all necessary action on its part each of the Financing
Documents to which it is a party. Each of such Financing Documents has been
executed and delivered by one or more duly authorized officers of the
Company, and constitutes a legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, except that:
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(i) the enforceability thereof may be limited by
applicable bankruptcy, reorganization, arrangement, insolvency,
moratorium, or other similar laws affecting the enforceability of
creditors' rights generally and subject to the availability of
equitable remedies; and
(ii) waivers of statutes of limitations, and rights to
indemnity and contribution contained therein, may be limited by
applicable law or public policy.
8.14 GOVERNMENTAL CONSENT TO ISSUANCE OF NOTES AND WARRANTS.
(a) Neither the issuance of the Notes or the Warrants, nor the
execution and delivery of any Financing Document by the Company, nor the
performance of the obligations of the Company thereunder, is such as to
require a consent, approval or authorization of, or pre-filing,
registration or qualification with, any Governmental Authority on the part
of the Company as a condition thereto, except for such consents, approvals,
authorizations, pre-filings, registrations and qualifications described on
PART 8.14(A) OF ANNEX 3, all of which have been obtained on or prior to the
Closing Date.
(b) Neither the issuance of the Notes and the Warrants, nor the
incurrence of the Debt and the other obligations represented thereby, nor
the execution and delivery by the Company of the Financing Documents to
which it is a party or the performance of its obligations hereunder and
thereunder:
(i) is subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company
Act of 1935, as amended, the Transportation Acts of the United
States of America (49 U.S.C.), as amended, or the Federal Power Act,
as amended; or
(ii) violates any provision of any statute or other rule
or regulation of any Governmental Authority applicable to the
Company.
8.15 HART-SCOTT-RODINO COMPLIANCE.
The Warrants are "convertible voting securities" as such term is defined in
16 C.F.R. Section 801.1 (f)(2) which do not entitle the holders of the Notes to
presently vote in respect of the election of directors of the Company. Assuming
that, notwithstanding the fact that the Warrants are not currently exercisable
on the Closing Date, the Warrants were all exercised on the Closing Date, the
holders of the Notes would not hold (as such term is defined in 16 C.F.R.
Section 801.1 (c)) on the Closing Date either:
(a) fifteen percent (15%) or more of the total number of shares
of the Common Stock of the Company; or
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(b) Common Stock having a Fair Market Value of Fifteen Million
Dollars ($15,000,000) or more.
8.16 NO DEFAULTS.
No event has occurred and no condition exists that, upon the execution and
delivery of the Financing Documents and the issuance of the Notes, would
constitute a Default or an Event of Default.
8.17 USE OF PROCEEDS.
(a) USE OF PROCEEDS. The Company shall apply the proceeds from
the Loan as specified on PART 8.17(A) OF ANNEX 3.
(b) MARGIN REGULATIONS. None of the transactions contemplated
in any of the Financing Documents (including, without limitation, the use
of the proceeds from the Loan) violates, will violate or will result in a
violation of section 7 of the Exchange Act, or any regulation issued
pursuant thereto, including, without limitation, Regulation U, Regulation T
or Regulation X of the Board of Governors of the Federal Reserve System, 12
C.F.R., Chapter 11.
(c) ABSENCE OF FOREIGN OR ENEMY STATUS. Neither the issuance of
the Notes, nor the use of proceeds from the Loan will result in a violation
of any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), or any
ruling issued thereunder or any enabling legislation or Presidential
Executive Order in connection therewith.
8.18 CAPITALIZATION.
(a) CAPITALIZATION. PART 8.18(A) OF ANNEX 3 correctly sets
forth, after giving effect to the issuance of the Notes and the
consummation of all other transactions contemplated hereby and by the
Financing Documents on the Closing Date:
(i) the authorized and outstanding shares of the Capital
Stock, Rights and other Securities of the Company (specifying the
type, class or series of all such Capital Stock and other Securities
and whether such Capital Stock and other Securities are voting or
non-voting) and, in the case of any Rights, the number of shares of
Common Stock into which such Rights are currently exercisable or
convertible;
(ii) for all such shares of Capital Stock, Rights and
other Securities of the Company, descriptions of the terms thereof;
and
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(iii) all obligations (contingent or otherwise) of the
Company to repurchase or otherwise acquire or retire any shares of
Capital Stock or Rights of the Company.
All such outstanding shares of Capital Stock have been duly authorized and
validly issued and are fully paid and non-assessable. There are no preemptive
rights, subscription rights, or other contractual rights similar in nature to
preemptive rights with respect to any Capital Stock of the Company.
(b) RESERVATION OF COMMON STOCK. Subject to shareholder
approval of a charter amendment to authorize additional Common Stock, the
Company will have authorized and unissued, and reserved for issuance, a
sufficient number of shares of Common Stock to permit, after giving effect
to the transactions contemplated by the Financing Documents, the exercise
of all of the Warrants and all other Rights exercisable or convertible into
Common Stock. Each share of Common Stock reserved for issuance upon
exercise of the Warrants, when issued, will be fully paid and
nonassessable, free and clear of any Lien created by the Company and not
subject to any preemptive rights.
(c) STOCKHOLDERS AGREEMENTS. Other than the Warrant Agreement
and as specified on PART 8.18(C) OF ANNEX 3, there is no other agreement or
understanding known to the Company between or among any holders of the
Capital Stock or Rights of the Company regarding the Capital Stock of the
Company. The Company has provided the Lenders with true, accurate and
complete copies of all agreements referred to in PART 8.19(C) OF ANNEX 3.
8.19 SOLVENCY.
(a) ASSETS GREATER THAN LIABILITIES. The fair value of the
business and assets of the Company (and of the Company and the
Subsidiaries, on a consolidated basis) exceeds, as of and after giving
effect to the transactions consummated on the Closing Date, the liabilities
of the Company (including, without limitation, the Notes and all other Debt
of the Company (and, as the case may be, of the Company and the
Subsidiaries, on a consolidated basis)) as of such time.
(b) MEETING LIABILITIES. After giving effect to the
transactions contemplated by the Financing Documents, the Company (and the
Company and the Subsidiaries, on a consolidated basis):
(i) will not be engaged in any business or transaction,
or about to engage in any business or transaction, for which the
Company (or, as the case may be, the Company and the Subsidiaries,
on a consolidated basis) has unreasonably small assets or capital
(within the meaning of the Uniform
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Fraudulent Transfer Act, the Uniform Fraudulent Conveyance Act and
section 548 of the Federal Bankruptcy Code); and
(ii) will be able to pay its debts as they mature.
(c) INTENT. The Company is entering into the Financing
Documents with no intent to hinder, delay, or defraud either current
creditors or future creditors of the Company.
8.20 FULL DISCLOSURE.
Neither the statements made in this Agreement, the financial statements
referred to in Section 8.2(a), nor any other written statement furnished by or
on behalf of the Company to the holder of the Notes in connection with any of
the Transactions or the negotiation of any of the Financing Documents, taken as
a whole, contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein and herein, taken as a whole,
not misleading. There is no fact known to the Company that the Company has not
disclosed to the holder of the Notes in writing that has had or, so far as the
Company can now reasonably foresee, could reasonably be expected to have, a
Material Adverse Effect.
SECTION 9 CLOSING CONDITIONS
9.1 CONDITIONS TO LOAN.
The obligation of the Lenders to make the Loan is subject to prior
or concurrent satisfaction of each of the following conditions:
(a) On or before the Closing Date, all corporate and other
proceedings taken or to be taken in connection with the Transactions and
all documents incidental hereto and thereto shall be reasonably
satisfactory in form and substance to the Lenders, and the Lenders shall
have received the following items, each of which shall be in form and
substance reasonably satisfactory to the Lenders and, unless otherwise
noted, dated the Closing Date, and in sufficient copies (except for the
Notes), for each Lender:
(1) Certified copies of resolutions of the board of
directors of each Loan Party approving this Agreement, the Notes,
each other Financing Document and the Senior Credit Agreement to
which it is or is to be a party, and of all documents evidencing
other necessary corporate action and governmental and other third
party approvals and consents, if any, with respect to this
Agreement, the Notes, and each other Financing Document.
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(2) A copy of the charter of each Loan Party and each
amendment thereto, certified (as of a date reasonably near the date
of the Closing Date) by the Secretary of State of the jurisdiction
of its incorporation as being a true and correct copy thereof.
(3) A copy of a certificate of the Secretary of State of
the jurisdiction of its incorporation, dated within ten (10)
Business Days prior to the date of the Closing Date listing the
charter of each Loan Party and each amendment thereto on file in its
office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter on file in its office, (B)
such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and in good
standing under the laws of the State of the jurisdiction of its
incorporation.
(4) A copy of a certificate of the Secretary of State of
each State listed on PART 8.3(A) OF ANNEX 3 dated reasonably near
the date of the Closing Date, stating that each applicable Loan
Party is duly qualified and in good standing as a foreign
corporation in such State and has filed all annual reports required
to be filed to the date of such certificate.
(5) A certificate of each Loan Party signed on behalf of
such Loan Party by a Senior Officer and the Secretary or an
Assistant Secretary of such Loan Party, dated the date of the
Closing Date (and the statements made in such certificate shall be
true on and as of the date of the Closing Date) certifying as to (A)
the absence of any amendments to the charter of such Loan Party
since the date of the Secretary of State's certificate referred to
in clause (4) above, (B) a true and correct copy of the by-laws of
such Loan Party as in effect on the date of the Closing Date, (C)
the absence of any proceeding for the dissolution or liquidation of
such Loan Party, (D) the truth of the representations and warranties
contained in the Financing Documents in all respects on and as of
the Closing Date to the same extent as though made on and as of the
date of the Closing Date, and (E) the absence of any event occurring
and continuing, or resulting from the Closing Date, that constitutes
a Default or an Event of Default.
(6) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to sign
this Agreement, the Notes, each other Financing Document to which
they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(7) Executed originals of this Agreement and the Notes
substantially in the form of ATTACHMENT A issued to each Lender in
the respective principal amounts set forth below the Lender's name
on ANNEX 1.
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(8) An original Warrant Agreement executed by the
Company in substantially the form of ATTACHMENT B.
(9) An original executed Notice of Borrowing
substantially in the form of ATTACHMENT C signed by a Senior Officer
of the Company on behalf of the Company.
(10) Originally executed copies of one or more favorable
written opinions of special counsel for the Company and the
Guarantors, in a form reasonably acceptable to the Lenders and as to
such matters as Lenders may reasonably request, and addressed to the
Lenders.
(11) A certificate signed on behalf of the Company and each
Guarantor by a Senior Officer thereof, in form and substance
reasonably satisfactory to the Lenders, attesting to the Solvency
(as hereinafter defined) of the Company and each Guarantor, as the
case may be, in each case individually and together with its
subsidiaries, taken as a whole, immediately before and immediately
after giving effect to consummation of the Transactions. As used
herein, the term "SOLVENCY" of any Person means (i) the fair value
of the property of such Person exceeds its total liabilities
(including, without limitation, contingent liabilities), (ii) the
present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay its probable liability
on its debts as they become absolute and matured, (iii) such Person
does not intend to, and does not believe that it will, incur debts
or liabilities beyond its ability to pay as such debts and
liabilities mature and (iv) such Person is not engaged, and is not
about to engage, in business or a transaction for which its property
would constitute an unreasonably small capital.
(12) True and correct copies of the AIG Acquisition
Documents, which shall not have been amended in any material respect
without the Lender's consent and which shall be in full force and
effect and each of the conditions contained therein shall have been
satisfied and not waived or amended in any material respect without
the Lender's prior written consent, which consent shall not be
unreasonably withheld and a copy of all closing documents relating
to the AIG Acquisition, all certified by a Senior Officer as being
true and correct copies.
(13) (i) Executed or conformed copies of the documents
relating to the Senior Credit Agreement and any amendments thereto
made on or prior to the Closing Date and a copy of each legal
opinion delivered in connection therewith, and the terms and
provisions of the Senior Credit Agreement and all such documents and
instruments relating thereto shall be reasonably satisfactory to the
Lenders, (ii) a Senior Officer's certificate from the Company
certifying that the Senior Credit Agreement is in full force and
effect
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on the Closing Date and (iii) a Senior Officer's certificate from
the Company certifying to the effect that such party has performed
or complied in all material respects with all agreements and
conditions contained in the Senior Credit Agreement and any
agreements or documents referred to therein required to be performed
or complied with by such party on or before the Closing Date, and
the Company is not in default in the performance or compliance with
any of the terms or provisions thereof.
(14) All such counterpart originals or certified copies
of such documents, instruments, certificates and opinions as the
Lenders may reasonably request.
(b) The Lenders shall have received reports and other information in
form, scope and substance satisfactory to the Lenders concerning
environmental liabilities of the Company, the Subsidiaries and the Acquired
Business, and the Company shall have demonstrated to the Lenders'
satisfaction that (i) the operations of the Company and its Subsidiaries
comply in all material respects with applicable environmental, health and
safety statutes and regulations, including, without limitation, regulations
promulgated under the Federal Resource Conservation and Recovery Act; (ii)
such operations are not the subject of any federal, state or local
investigation evaluating the need for remedial action involving an
expenditure to respond to a release or threatened release of any toxic or
hazardous waste or substance into the environment; (iii) neither the
Company nor any of its Subsidiaries has or could reasonably be expected to
have any contingent liability in connection with any release of any toxic
or hazardous waste or substance into the environment; and (iv) the Company
has completed such environmental audits and investigations (including
"Phase I" and "Phase II" environmental audits), as the Lenders may request
with respect to the operations of the Company and its Subsidiaries, and
such audits and investigations have not uncovered any condition or
conditions which could have a Material Adverse Effect.
(c) On or before the Closing Date, all authorizations, consents
and approvals necessary in connection with the Transactions shall have been
obtained without the imposition of any conditions that are not acceptable
to the Lenders and shall remain in full force and effect, all applicable
waiting periods under law applicable to the AIG Acquisition shall have
expired without any action being taken by any competent authority, and no
law or regulation shall be applicable in the judgment of the Lenders which
restrains, prevents or imposes materially adverse conditions upon the
completion of the AIG Acquisition, the financing thereof (including without
limitation, the Loan) or the operation of the Acquired Business.
(d) On or before the Closing Date, all documentation relating to
the Senior Credit Agreement shall have been executed and delivered by all
parties thereto. No default or event of default shall have occurred under
the Senior Credit Agreement, all conditions to borrowing under the Senior
Credit Agreement shall have been
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satisfied without waiver (except for any written waivers delivered in
respect of a condition that in the opinion of the Lenders is immaterial)
and the Company shall have available received funds pursuant to the Senior
Credit Agreement.
(e) On or before the Closing Date, all existing Debt of the
Company and its Subsidiaries (other than the debt set forth on PART 8.2(B)
OF ANNEX 3) shall be repaid in full and all commitments thereunder shall be
terminated.
(f) On or before the Closing Date, the Company shall have paid
to the Lenders, by wire transfer of immediately available funds as set
forth on ANNEX 1, (i) the fees payable on the Closing Date pursuant to a
separate agreement between the Company and Fleet and (ii) all accrued
reasonable fees and expenses of Lenders (including the fees and expenses of
counsel for the Lenders) pursuant to Section 11.6.
(g) On or before the Closing Date, the Company shall have
performed and complied in all material respects with all agreements and
conditions which this Agreement and each of the other Financing Documents
provides shall be performed or complied with on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by the Lenders.
(h) Simultaneously with the making of the Loan by the Lenders,
the Company shall have delivered to the Lenders a Senior Officer's
certificate from the Company in form and substance reasonably satisfactory
to the Lenders to the effect that (i) on or prior to the Closing Date, the
Company and each Guarantor has performed and complied with in all material
respects all covenants and conditions required to be performed and observed
by it on or prior to the Closing Date, and the representations and
warranties made by the Company or any other Loan Party herein or in any
other Financing Document are true and correct immediately prior to and
after giving effect to the making of the Loan and (ii) all conditions to
the consummation of the AIG Acquisition in the AIG Acquisition Documents
have been satisfied in all material respects substantially on the terms set
forth therein and have not been waived or amended without the Lenders'
prior written consent, which consent shall not be unreasonably withheld.
(i) The final terms, conditions and resulting corporate
structure of the Company and its Subsidiaries, after giving effect to the
AIG Acquisition, shall be satisfactory in all respects to the Lenders, and
the AIG Acquisition shall have been consummated in accordance with the AIG
Acquisition Documents, which shall be satisfactory to the Lenders and
without the waiver of any material conditions precedent thereto without the
Lenders' consent, which shall not be unreasonably withheld, and the AIG
Acquisition shall have been effected in compliance with all applicable
laws. The Lenders shall be satisfied with all matters relating to the
organization, structure, capitalization and ownership of the Company and
its Subsidiaries.
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(j) Neither the Company nor any Subsidiary of the Company shall
have sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, which loss or interference, in the sole judgment
of the Lenders, could reasonably be expected to have a Material Adverse
Effect; since April 30, 1998 with respect to the Company and its
Subsidiaries, and since December 31, 1997 with respect to AIG and its
subsidiaries, there shall not have been, in the reasonable judgement of the
Lenders, any change, or any development involving a prospective change, in
the business, condition (financial or other), operations, performance,
Properties or prospects of the Company and its Subsidiaries or of AIG and
its subsidiaries, as the case may be, taken as a whole, which could
reasonably be expected to have a Material Adverse Effect.
(k) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default or a Default.
(l) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lenders from
making the Loan.
(m) There shall not be pending or, to the knowledge of the
Company, threatened any action, suit, proceeding, investigation, litigation
or arbitration against or affecting the Company or any Subsidiary, or AIG
or any subsidiary of AIG or any property or asset of the Company or any
Subsidiary or of AIG or any subsidiary of AIG which singly or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
No injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or proceeding
seeking to restrain, enjoin, delay, prohibit or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of,
the Transactions. There shall not be threatened, instituted or pending any
action, proceeding or application before or by any arbitrator or
governmental or regulatory agency or authority, or any other Person,
domestic or foreign (i) challenging the Transactions or seeking to
restrain, delay or prohibit the consummation thereof; (ii) seeking to
prohibit or impose material limitations on the Company's ownership or
operation of all or any material portion of the Company's business or
assets (including the business or assets of any Subsidiary of the Company
and the Acquired Business) or to compel the Company to dispose of or hold
separate all or any material portion of the Company's business or assets
(including the business or assets of any Subsidiary of the Company) as a
result of the AIG Acquisition; (iii) which, in any event, might adversely
affect the Loan; and or (iv) seeking to impose any materially adverse
conditions upon the Transactions.
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(n) The making of the Loan in the manner contemplated in this
Agreement shall not violate the applicable provisions of Regulation T, U or
X of the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
(o) The pro forma consolidated capital structure of the Company
and its Subsidiaries, after giving effect to the Transactions, shall be
satisfactory in all respects to the Lenders.
(p) Reserved.
(q) All of the information provided by or on behalf of the
Company or any of its Subsidiaries to any Lender prior to its commitment
(the "PRE-COMMITMENT INFORMATION") shall be true and correct in all
material aspects; and no development or change shall have occurred, and no
additional information shall have come to the attention of the Lenders,
that (i) has resulted in or could reasonably be expected to result in a
material change in, or material deviation from, the Pre-Commitment
Information or (ii) has had or could reasonably be expected to have a
Material Adverse Effect. The Lenders shall be satisfied with their review
of the Company operating strategy, including, without limitation, any
planned asset dispositions and the tax implications of any such
dispositions and the operating income and cash flow budgets of the Company
and Subsidiaries of the Company for the first year following the Closing
Date, and the Lenders shall have received all additional financial,
business and other information regarding the Company and its Subsidiaries
and properties as they shall have reasonably requested.
(r) The Senior Agent and the Company shall have executed and
delivered to the Lenders an agreement, in form and substance acceptable to
the Lenders, consenting to the transactions contemplated by the Financing
Documents, permitting the Company to incur and have outstanding the Debt
and all other obligations in respect of this Agreement, the Warrant
Agreement and the Notes, the issuance of the Notes and the Warrants and the
issuance of Common Stock to the holders of the Warrants upon exercise of
the Warrants, permitting each Guarantor to enter into this Agreement, and
waiving any default or event of default under the Senior Credit Agreement
which might have occurred by virtue of the execution and delivery of this
Agreement and the other Financing Documents.
(s) The Lenders shall be satisfied that (i) the Company and its
Subsidiaries will be able to meet their respective obligations under all
employee and retiree welfare plans, (ii) the employee benefit plans of the
Company and its Subsidiaries are, in all material respects, funded in
accordance with the minimum statutory requirements, (iii) no material
"reportable event" (as defined in ERISA, but excluding events for which
reporting has been waived) has occurred as to any such employee benefit
plan and (iv) no termination of, or withdrawal from, any such employee
benefit plan has occurred or is contemplated that could reasonably be
expected to result in a material liability.
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(t) All of the Company preferred stock and accrued dividends
thereon owned by or owed to Alpine shall have been converted into Common
Stock or other preferred stock upon terms and conditions acceptable to the
Lenders.
(u) The Lenders shall have received satisfactory evidence of the
contribution by Alpine of $5,000,000 in cash to the Company in exchange
for equity interests issued by the Company on terms and conditions
satisfactory to the Lenders.
(v) The Lenders shall have received copies, certified as true
and complete by a Senior Officer of the Company, of any and all notes,
documents, agreements, instruments or other writings (collectively, the
"SELLER DOCUMENTS") setting forth or evidencing the terms and conditions of
any obligation due from the Company, Alpine, AIG or any of their respective
subsidiaries to Wind Point Partners, or to any other Person who shall be a
seller with respect to the AIG Acquisition (each, a "SELLER"), such
documents to include without limitation the Seller Note, each of which
Seller Documents shall be satisfactory to the Lenders in all respects, none
of which shall (i) include any financial covenant or cross default
provision with respect to the Subordinated Debt or Senior Debt, (ii)
evidence a repayment schedule commencing prior to payment in full of the
Subordinated Debt or (iii) provide for an interest rate in excess of 10%,
and which shall provide for payment in kind with respect to any interest
due thereunder after the Closing Date without penalty to the Company.
SECTION 10 INTERPRETATION OF THIS AGREEMENT
10.1 TERMS DEFINED.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
ACCEPTABLE REVOLVING CREDIT FACILITY - means and includes a revolving
credit agreement or similar agreement, including, without limitation, the Senior
Credit Agreement:
(a) pursuant to which the lender commits to permit the Company,
subject to the conditions therein, to obtain from time to time thereunder
loans or advances of cash, letters of credit or bankers acceptances and
periodically repay the same;
(b) the obligations under which are secured by a Lien upon
(among any other Property subject to such Lien) all or substantially all
Inventory and Receivables of the Company and the Subsidiaries which are
included in calculating the Borrowing Base;
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(c) in the case of any replacement facility, having terms no
less favorable (taken as a whole and in all material respects) to the
Company than the revolving credit facility available to the Company under
the Senior Credit Agreement; and
(d) having an aggregate commitment thereunder of $15,000,000 or
less.
ACQUIRED BUSINESS - means AIG, together with all of the issued and
outstanding capital stock of its Subsidiaries and the assets thereof, as
described in the AIG Acquisition Documents.
ACQUIRED DEBT - means, with respect to any specified Person, (i) Debt of
any other Person existing at the time such other Person is merged with or into
or becomes a Subsidiary of such specified Person, including, without limitation,
Debt incurred in connection with, or in contemplation of, such other Person
merging with or into or becoming a Subsidiary of such specified Person, and (ii)
Debt secured by a Lien encumbering any assets acquired by such specified Person.
AFFILIATE - means and includes, at any time, each Person (other than a
Subsidiary):
(a) that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, the Company;
(b) that beneficially owns or holds five percent (5%) or more of
any class of the Voting Stock of the Company;
(c) five percent (5%) or more of the Voting Stock (or in the
case of a Person that is not a corporation, five percent (5%) or more of
the equity interest) of which is beneficially owned or held by the Company;
or
(d) that is an officer or director of the Company;
at such time; PROVIDED, HOWEVER, that neither of the Lender nor any of their
affiliates shall be deemed to be an "Affiliate," and no Person holding any one
or more of the Notes or Warrants shall be deemed to be an "Affiliate" solely by
virtue of the ownership of such securities. As used in this definition:
CONTROL - means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
AGREEMENT, THIS - and references thereto shall mean this Senior
Subordinated Loan Agreement as it may from time to time be amended or
supplemented or otherwise modified.
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AIG - means Alliance International Group, Inc.
AIG ACQUISITION - means the acquisition by the Company of all of the issued
and outstanding shares of common stock of Alliance International Group, Inc.
("AIG"), the acquisition by PolyVision Belgium of all of the issued and
outstanding common stock (other than directors' qualifying shares) of Alliance
Europe and the acquisition by PolyVision France of all of the issued and
outstanding common stock (other than directors' qualifying shares) of Aubecq;
all acquisitions pursuant to a Stock Purchase Agreement, dated September 1, 1998
(as it may from time to time be amended, supplemented, restated or otherwise
modified) by and between the Company, AIG and the stockholders of AIG, as
amended and supplemented by an amendment dated on or about the date hereof (the
"AIG ACQUISITION AGREEMENT)."
AIG ACQUISITION AGREEMENT - has the meaning set forth in the definition of
AIG Acquisition.
AIG ACQUISITION DOCUMENTS - means the AIG Acquisition Agreement, the Seller
Note and each of the other agreements and instruments executed and delivered
pursuant thereto or in connection therewith, and all schedules and exhibits
related to each such agreement.
ALLIANCE GRAPHICS - means Alliance Graphics N.V., a limited liability
company incorporated under the laws of Belgium, having an office at Zuiderring
St. 3600 Genk, Belgium, a wholly-owned subsidiary of Alliance Europe.
ALLIANCE EUROPE - means Alliance Europe N.V., (currently a wholly-owned
subsidiary of AIG, and which shall on the Closing Date become a wholly-owned
subsidiary of PolyVision Belgium).
ALPINE - means The Alpine Group, Inc., a Delaware corporation.
AMEX - means the American Stock Exchange or any successor thereto.
ANNEX 3 - means Annex 3 to this Agreement.
APPLICABLE INTEREST LAW - means any present or future law (including,
without limitation, the laws of the State of New York and the United States of
America) which has application to the interest and other charges pursuant to
this Agreement and the Notes.
ASSET SALE -- means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) by the Company or any Subsidiary other than sales of inventory or
disposition of obsolete machinery and equipment in the ordinary course of
business consistent with past practices (PROVIDED that the sale, lease,
conveyance or other disposition of all or substantially all of
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the assets of the Company and its Subsidiaries taken as a whole will be governed
by the provisions of this Agreement in Section 4.1 and not by the provisions of
Section 4.2) and (ii) the issue or sale by the Company or any of its
Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single transaction or a series
of related transactions (a) that have a Fair Market Value in excess of $500,000
or (b) for net proceeds in excess of $500,000. Notwithstanding the foregoing,
the following shall not be deemed to be an Asset Sale: (i) a transfer of assets
by the Company to a Wholly Owned Restricted Subsidiary that is a Guarantor or by
a Wholly Owned Restricted Subsidiary to the Company or to another Subsidiary
that is a Guarantor, (ii) an issuance of Equity Interests by a Subsidiary to the
Company or to another Wholly Owned Restricted Subsidiary that is a Guarantor and
(iii) a Restricted Payment that is permitted in Section 4.6.
ASSET SALE OFFER -- has the meaning specified in Section 4.2(a).
AUBECQ - means Emailleries de Blanc Misseron A. Aubecq, a limited liability
company incorporated as a "societe anonyme" under the laws of France, having an
office at Rue des Deports 70, 59154 Crespin France, and a wholly owned
subsidiary of PolyVision France (after giving effect to the Transactions).
BOARD OF DIRECTORS - means, at any time, the board of directors of the
Company or any of its Subsidiaries or any committee thereof that, in the
instance, shall have the lawful power to exercise the power and authority of
such board of directors.
BUSINESS DAY - means a day other than a Saturday, a Sunday or a day on
which banks in the State of New York are required or permitted by law (other
than a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.
CAPITAL EXPENDITURES - means, for any Person for any period, the sum of all
expenditures made, directly or indirectly, by such Person or any of its
subsidiaries during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a consolidated balance sheet of
such Person.
CAPITAL LEASE - means, at any time, a lease of any Property with respect to
which the lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
CAPITAL LEASE OBLIGATION - means, at the time any determination thereof is
to be made, the amount of the liability in respect of a Capital Lease.
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CAPITAL STOCK - means any class of preferred, common or other capital
stock, share capital or similar equity interest of a Person including, without
limitation, any partnership interest in any partnership or limited partnership
and any membership interest in any limited liability company.
CHANGE IN CONTROL -means any of the following events: (a) Alpine shall at
any time cease to own and control (directly or through a Wholly-Owned
Subsidiary) at least 30% of the outstanding capital stock or voting power of the
Company (other than by reason of the conversion thereof into Common Stock), or
Alpine sells or otherwise disposes of more than 33% of its Common Stock or more
than 33% of its holdings of any other class of Capital Stock of the Company; or
(b) the Company shall at any time cease to own directly or indirectly one
hundred (100%) percent of the outstanding capital stock or voting power of any
of its Subsidiaries (other than directors' qualifying shares); or (c) with
respect to Alpine, a change of control of Alpine or the Company that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A, as in effect on the date hereof, promulgated under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT") shall occur; provided that, without
limitation, such a Change of Control shall be deemed to occur if: (i) any
"Person" (as such term is used in Section 13(d) and Section 14(d) of the
Exchange Act), (except for (with respect to the Company or its Subsidiaries)
Alpine, Steven Elbaum or any employee benefit plan of Alpine or any Borrower or
any Subsidiary or related corporation, or any entity holding voting securities
of Alpine or the Company or any Subsidiary for or pursuant to the terms of any
such plan), shall become the beneficial owner, directly or indirectly, of
securities of Alpine representing 30% or more of the combined voting power of
Alpine's then outstanding securities or of securities of the Company
representing 30% or more (excluding, in respect of ownership of the Company,
Alpine in this clause and the following clause (ii)) of the combined voting
power of the Company's then outstanding securities; (ii) there shall occur a
contested proxy solicitation of Alpine's or the Company's shareholders that
results in the contesting party obtaining the ability to vote securities
representing 30% or more of the combined voting power of Alpine's or the
Company's then outstanding securities; (iii) there shall occur: (A) a sale,
lease, exchange, transfer or other disposition in one or a series of related
transactions of all or substantially all of the assets of Alpine or the Company
to another Person or entity or group (as such term is defined in Section
13(d)(3) of the Securities Act as amended), (B) a merger or consolidation in
which Alpine or the Company or any Subsidiary is a constituent unless the
surviving entity is controlled directly or indirectly by the same Persons (as
defined in this Agreement) that controlled Alpine or the Company or any
Subsidiary immediately prior to such merger or consolidation or (C) the adoption
of a plan of liquidation or dissolution of Alpine other than pursuant to
bankruptcy or insolvency laws; or (iv) during any period of twelve (12) calendar
months, individuals who at the beginning of such period constituted the Board of
Directors of Alpine or the Company shall cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
Alpine's shareholders or by the Company's shareholders, as applicable, of each
new director shall be approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of the
period. For purposes of this definition
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"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract, by family
relationship or otherwise; and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing.
CLOSING DATE - means the date on which the Loan is made and the conditions
set forth in Section 9.1 are satisfied.
COMMON STOCK - means the Common Stock, par value $.01 per share, of the
Company.
COMPANY - has the meaning specified in the introductory paragraph.
COMPANY ACCOUNT - means the account of the Company maintained by the
Company with Fleet National Bank.
CONFIDENTIAL INFORMATION - means information delivered to any holder of
Notes by or on behalf of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by such holder as being confidential
information of the Company or such Subsidiary; PROVIDED, HOWEVER, that such term
does not include information that:
(a) was publicly known or otherwise known to such holder prior
to the time of such disclosure;
(b) subsequently becomes publicly known through no act or
omission by such holder or any Person acting on behalf of such holder;
(c) otherwise becomes known to such holder other than through:
(i) disclosure by the Company or any Subsidiary; or
(ii) disclosure to such holder which, to such holder's
actual knowledge, was made to such holder by any Person in violation
of a duty of confidentiality to the Company or any Subsidiary; or
(d) constitutes financial statements delivered to such holder
under Section 5.1 that are otherwise publicly available.
CREDIT FACILITIES - means, with respect to the Company or its Subsidiaries,
one or more debt facilities (including, without limitation, the Senior Credit
Agreement) or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including, through the sale of receivables
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to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded or replaced or refinanced in
whole or in part from time to time. Debt under Credit Facilities outstanding on
the date on which Notes are first issued and authenticated under this Agreement
shall be deemed to have been incurred on such date in reliance on the exception
provided by clauses (i) and (ii) of the definition of Permitted Debt (as defined
in Section 4.5).
DEBT - with respect to any Person, means, without duplication, the
liabilities of such Person with respect to:
(a) BORROWED MONEY - borrowed money;
(b) DEFERRED PURCHASE PRICE OF PROPERTY - the deferred purchase
price of Property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such Property);
(c) SECURED LIABILITIES - borrowed money secured by any Lien
existing on Property owned by such Person (whether or not such liabilities
have been assumed);
(d) CAPITAL LEASES - Capital Leases of such Person;
(e) LETTERS OF CREDIT - letters of credit, bankers acceptances
or similar instruments serving a similar function issued or accepted by
banks and other financial institutions for the account of such Person
(whether or not representing obligations for borrowed money), other than
undrawn trade letters of credit in the ordinary course of business;
(f) SWAPS - Swaps of such Person; and
(g) GUARANTEES - any Guaranty by such Person of any obligation
or liability of another Person of obligations of the type listed in clause
(a) through clause (f) of this definition of Debt;
PROVIDED that, with respect to the Company, Debt shall not include any unfunded
obligations which may now or hereafter exist with respect to the Company's
Plans.
As used in this definition,
SWAPS - means, with respect to any Person, obligations with respect
to interest rate swaps and currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a
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contingency, except that if any agreement relating to such obligation
provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment
of amounts by and to such Person, then in each such case, the amount of
such obligations shall be the net amount thereof. The aggregate net
obligation of Swaps at any time shall be the aggregate amount of the
obligations of such Person under all Swaps assuming all such Swaps had been
terminated by such Person as of the end of the then most recently ended
fiscal quarter of such Person. If such net aggregate obligation shall be
an amount owing to such Person, then the amount shall be deemed to be Zero
Dollars ($O).
Unless the context otherwise requires, "Debt" means Debt of the Company or of a
Subsidiary.
DEBT ISSUANCE - means any issuance or sale or other incurrence by the
Company or any its Subsidiaries of any Debt.
DEFAULT - means any event which, with the giving of notice or the passage
of time, or both, would become an Event of Default.
DEFAULT RATE - has the meaning specified in Section 1.3(c).
DE-LEVERAGING TRANSACTION - means any transaction of a Person, the result
of which (when calculated giving pro forma effect to such transaction as if it
had occurred at the beginning of the applicable four-quarter reference period)
shall be (i) to lower the ratio of the aggregate Debt of such Person to the
EBITDA of such Person and (ii) to increase the Fixed Charge Coverage Ratio of
such Person.
DISQUALIFIED STOCK - means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 180 days after the date on
which the Notes mature.
DOL - means the United States Department of Labor and any successor agency.
DOMESTIC SUBSIDIARY - means any Subsidiary organized or formed under the
laws of the United States or any State or commonwealth thereof.
ENFORCEMENT NOTICE - has the meaning specified in Section 7.6.
ENVIRONMENTAL PROTECTION LAW - means any law, statute or regulation enacted
by any Governmental Authority in connection with or relating to the protection
or regulation of
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the environment, including, without limitation, those laws, statutes and
regulations regulating the disposal, removal, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Materials and
any applicable orders, decrees or judgments issued by any court of competent
jurisdiction in connection with any of the foregoing.
EQUIPMENT - means all of the Company's and/or its Subsidiaries' machinery
and equipment in all its forms, whether now owned or hereafter arising or
acquired wherever located, now or hereafter existing, all fixtures and all parts
thereof and all accessories thereto.
EQUITY INTEREST - means, in any Person, any and all shares, interests,
participations, rights or other equivalents (however designated) of any Capital
Stock or other ownership of any profit interest, and any and all warrants,
rights, options, obligations or other equity securities of or in such Person,
and rights to acquire any of the foregoing, including, without limitation,
partnership interests and joint venture (whether general or limited) and any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, such
partnership or joint venture, but excluding debt for borrowed money and
excluding any debt security that is convertible into, or exchangeable for, any
of the foregoing equity interests.
EQUITY ISSUANCE means any issuance or sale by the Company or any of its
Subsidiaries of its Capital Stock or other equity securities or any obligations
convertible into or exchangeable for, or giving any Person a right, option or
warrant to acquire, such securities or such convertible or exchangeable
obligations.
ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA AFFILIATE - means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the IRC.
EUROPEAN LETTER OF CREDIT AGREEMENT(s) - means each of the Letter of Credit
Agreements by and between Fleet National Bank and KBC of even date with the
Senior Credit Agreement as amended from time to time relating to any European
Letter(s) of Credit.
EUROPEAN LETTER(s) OF CREDIT - means those certain standby letters of
credit issued by Fleet National Bank for the account of the Company and its
Subsidiaries to secure repayment of loans made by KBC to Alliance Europe,
Aubecq, Pentagon, Alliance Graphics, PolyVision Belgium and PolyVision France
under the KBC Loan Agreements, as the same are issued pursuant to, and from time
to time extended or amended in accordance with, the terms hereof and of the
European Letter of Credit Agreements.
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EVENT OF DEFAULT - has the meaning specified in Section 6.1.
EXCESS PROCEEDS - has the meaning specified in Section 4.2(a)(ii).
EXCHANGE ACT - means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations of the SEC thereunder.
EXISTING DEBT - Means debt of the Company and its Subsidiaries outstanding
immediately before giving effect to the Transactions.
EXTRAORDINARY RECEIPT - means any cash received by or paid to or for the
account of any Person not in the ordinary course of business (other than by
sale, lease or transfer), including, without limitation, tax refunds, pension
plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings), condemnation awards (and payments in lieu thereof) and indemnity
payments; PROVIDED, HOWEVER, that an Extraordinary Receipt shall not include
cash receipts of less than $500,000 per occurrence or $1,000,000 in the
aggregate received from proceeds of insurance, condemnation awards (and payments
in lieu thereof) or indemnity payments to the extent that such proceeds, awards
or payments (a) in respect of loss or damage to Equipment, fixed assets or real
property are applied (or in respect of which expenditures were previously
incurred) in accordance with the terms of the Financing Documents, to replace or
repair the Equipment, fixed assets or real property in respect of which such
proceeds, awards or payments were received so long as (i) such application is
made within one hundred eighty (180) days (or three hundred sixty (360) days,
with respect to real estate or improvements on real estate), after such Person's
receipt of such proceeds, awards or payments and (ii) such proceeds, awards or
payments are received by such Person within fifteen (15) months after the
occurrence of such damage or loss; or (b) are received by any Person in respect
of any third party claim against such Person and applied to pay (or to reimburse
such Person for its prior payment of) such claim and the costs and expenses of
such Person with respect thereto.
FAIR MARKET VALUE - means, with respect to any Property, the sale value of
such Property that would be realized in an arm's-length sale at such time
between an informed and willing buyer, and an informed and willing seller, under
no compulsion to buy or sell, respectively.
FEDERAL FUNDS RATE - means, for any period, a fluctuating interest rate per
annum 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 that
is a Business Day, the average of the quotations for such day for such
transactions received by the Lenders from three Federal funds brokers of
recognized standing selected by them.
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FINANCING DOCUMENTS - means and includes this Agreement, the Notes, the
Warrant Agreement, the Warrant certificates, the Registration Rights Agreement
and the other agreements, certificates and instruments to be executed pursuant
to the terms of each of the foregoing, as each may be amended, restated or
otherwise modified from time to time.
FIXED CHARGES - means the sum, for the Company and its Subsidiaries on a
Consolidated basis for any period, of (i) cash Interest Expense, PLUS (ii) in
determining whether a Transaction is a De-leveraging Transaction, current
maturities of Debt, and otherwise, scheduled amortization of Debt payable during
such period, plus (iii) income taxes and other taxes payable in respect of such
period, plus (iv) Capital Expenditures (net of new purchase money financing in
order to avoid double counting of any such new financing committed to but not
yet expended and subsequently expended in cash) during such period to the extent
permitted by the Senior Credit Agreement.
FIXED CHARGE COVERAGE RATIO - means, for the four consecutive fiscal
quarters of the Company and its Subsidiaries ending on the date of
determination, the ratio of (a) EBITDA of the Company and its Subsidiaries for
such four fiscal quarters, to (b) Fixed Charges for such four fiscal quarters.
FLEET - has the meaning specified in the introductory paragraph.
FOREIGN SUBSIDIARY - means any Subsidiary other than a Domestic Subsidiary.
GAAP - means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
GOVERNMENTAL AUTHORITY - means:
(a) the government of:
(i) the United States of America and any state or other
political subdivision thereof; or
(ii) any other jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that asserts
any jurisdiction over the conduct of the affairs of, or the Property
of, the Company or any such Subsidiary; and
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(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
GUARANTOR - has the meaning specified in the preamble to this Agreement,
together with any Domestic Subsidiary of the Company that becomes a Guarantor
pursuant to Section 3.5.
GUARANTY - means with respect to any Person (for the purposes of this
definition, the "GUARANTOR") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any debt, dividend or
other obligation of any other Person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by the Guarantor:
(a) to purchase such debt or obligation or any Property
constituting security therefor;
(b) to advance or supply funds
(i) for the purchase or payment of such debt, dividend
or obligation; or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary Obligor
or otherwise to advance or make available funds for the purchase or
payment of such debt, dividend or obligation;
(c) to lease Property or to purchase securities or other
Property or services primarily for the purpose of assuring the owner of
such debt or obligation of the ability of the Primary Obligor to make
payment of the debt or obligation; or
(d) otherwise to assure the owner of the debt or obligation of
the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty, in connection with any
computation of debt or other liability:
(i) in each case where the obligation that is the
subject of such Guaranty is in the nature of debt for money borrowed
it shall be assumed (unless otherwise limited in the agreement or
instrument evidencing such Guaranty) that the amount of the Guaranty
is the amount of the direct obligation then outstanding; and
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(ii) in each case where the obligation that is the
subject of such Guaranty is not in the nature of debt for money
borrowed it shall be assumed that the amount of the Guaranty is the
amount (if any) of the direct obligation that is then due.
HAZARDOUS MATERIAL - means all or any of the following:
(a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable Environmental Protection Laws as
"hazardous substances", "hazardous materials", "hazardous wastes", "toxic
substances" or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, "TLCP
toxicity" or "EP toxicity";
(b) oil, petroleum or petroleum derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters
and other wastes associated with the exploration, development or production
of crude oil, natural gas or geothermal resources;
(c) any flammable substances or explosives or any radioactive
materials;
(d) asbestos or urea formaldehyde in any form; and
(e) dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million.
INDEMNIFIED PARTY - has the meaning specified in Section 12.6(d).
INTERCOMPANY SUBORDINATION AGREEMENT - means the Intercompany Subordination
Agreement dated as of the date hereof among Fleet, the Company and certain
foreign Subsidiaries, as amended, modified or supplemented from time to time.
INVESTMENTS - means all investments, made in cash or by delivery of
Property, by the Company and the Subsidiaries:
(a) in any Person, whether by acquisition of stock, Debt or
other obligation or Security, or by loan, Guaranty, advance or capital
contribution, or otherwise; or
(b) in any Property.
IRC - means the Internal Revenue Code of 1986, together with all rules and
regulations promulgated pursuant thereto, as amended from time to time.
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JUNIOR SUBORDINATED DEBT - means any Debt of the Company or any Subsidiary
which is:
(a) issued on or after the date of this Agreement and which is
expressly subordinated in right of payment to any Debt of the Company
including, the Seller Note and any Debt owed to a Foreign Subsidiary; or
(b) owing to any Subsidiary or any Affiliate.
KBC - means KBC Bank NV, a Belgium limited liability company.
KBC LOAN AGREEMENT(s) - means individually or collectively as the context
may require (a) the Credit Facility Agreement of even date with the Senior
Credit Agreement by and among KBC, Alliance Europe, Alliance Graphics, Aubecq
and Pentagon amending and restating that certain Credit Facility Agreement dated
as of October 2, 1997, as it was amended on January 27, 1998, and (b) the Credit
Facility Agreement by and among KBC, PolyVision Belgium and PolyVision France of
even date with the Senior Credit Agreement, in respect of each of the foregoing,
as amended from time to time in accordance with the terms thereof and the Senior
Credit Agreement.
LENDER - has the meaning specified in the introductory paragraph, as a
holder of a Note.
LENDING OFFICE - means, with respect to any Lender, the office of such
Lender specified as its Lending Office opposite its name on ANNEX 1, or such
other office of such Lender as such Lender may from time to time specify to the
Company.
LIEN - means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property (for purposes of this
definition, the "OWNER"), whether such interest is based on the common law,
statute or contract, and includes but is not limited to:
(a) the security interest or lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes, and the filing of any
financing statement under the Uniform Commercial Code of any jurisdiction,
or an agreement to give any of the foregoing;
(b) reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting real Property;
(c) stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements affecting the Owner's rights in
stock owned by the Owner; and
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(d) any interest in any Property held by the Owner evidenced by
a conditional sale agreement, Capital Lease or other arrangement pursuant
to which title to such Property has been retained by or vested in some
other Person for security purposes.
The term "Lien" does not include negative pledge clauses in loan agreements and
equal and ratable security clauses in loan agreements.
LOAN - has the meaning specified in Section 1.1(a).
LOAN COMMITMENT(s) - has the meaning specified in Section 1.1(a).
LOAN PARTY - means each of the Company and each Subsidiary Guarantor.
MANAGEMENT FEES - for any period, all fees, emoluments or similar
compensation paid or incurred by any Person (other than any such fees,
emoluments or similar compensation paid to or incurred and payable to the
Company or any of its Subsidiaries) to any of its Affiliates in respect of
services rendered in connection with the management or supervision of the
management of such Person, other than salaries, bonuses and other compensation
paid to any full-time executive employee in respect of such full-time
employment.
MATERIAL ADVERSE EFFECT - means, after giving effect to the consummation of
the AIG Acquisition on the Closing Date, (a) a material adverse effect on the
business, condition (financial or otherwise), results of operations,
performance, prospects or properties of the Company and its Subsidiaries (taken
as a whole), (b) unless such event is not material, an adverse effect on the
ability of any Loan Party to perform its obligations under the Financing
Documents to which it is a party, or (c) an adverse effect on the rights and
remedies of Fleet and the Lenders under any of the Financing Documents. In
determining whether any individual event would result in a Material Adverse
Effect, notwithstanding that such event does not of itself have such effect, a
Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other existing events would result in a Material
Adverse Effect.
MATURITY DATE - has the meaning specified in Section 1.1(g).
MAXIMUM LEGAL RATE OF INTEREST - means the maximum rate of interest that a
holder of Notes may from time to time legally charge the Company by agreement
and in regard to which the Company would be prevented successfully from raising
the claim or defense of usury under the Applicable Interest Law as now or
hereafter construed by courts having appropriate jurisdiction.
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MODIFIED PREPAYMENT COMPENSATION AMOUNT - means, with respect to Prepaid
Principal and the date the payment thereof is due, an amount equal to the
applicable percentage set out below of the Prepaid Principal:
================================================================================
If Prepayment Occurs During the Period
Specified Below Percentage of Prepaid Principal:
- --------------------------------------------------------------------------------
From and including May 20, 2002 up to
and including May 19, 2003 5%
- --------------------------------------------------------------------------------
From and including May 20, 2003 up to
and including May 19, 2004 4%
- --------------------------------------------------------------------------------
From and including May 20, 2004 up to
and including May 19, 2005 3%
- --------------------------------------------------------------------------------
after May 19, 2005 0%
================================================================================
MULTIEMPLOYER PLAN - means any "multiemployer plan" (as defined in section
3(37) of ERISA) in respect of which the Company or any ERISA Affiliate is an
"employer" (as such term is defined in section 3 of ERISA).
NASDAQ - means the NASDAQ Stock Market, Inc., a subsidiary of the NASD, or
any successor thereto.
NASDAQ NATIONAL MARKET - has the meaning ascribed thereto in Rule 4200(r)
of NASDAQ.
NET CASH PROCEEDS - means, with respect to any sale, lease, transfer or
other disposition of any asset or any Debt Issuance or Equity Issuance by any
Person, or any Extraordinary Receipt received by or paid to or for the account
of any Person, the aggregate amount of cash received from time to time (whether
as initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal and
accounting fees, finder's fees, printing costs and other similar out-of-pocket
costs, (b) the amount of taxes payable in connection with or as a result of such
transaction and (c) with respect to any asset, the amount of any Debt secured by
a Lien on such asset that, by the terms of such transaction or the terms of such
Debt, is required to be repaid upon such disposition, in each case to the
extent, but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid or due and payable or set aside for payment
(because due and payable) within ten (10) Business Days after receipt by the
applicable Loan Party to a Person that is not an Affiliate of such Person or any
Loan Party or any Affiliate of any Loan Party and are properly attributable to
such transaction or to the asset that is the subject thereof.
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NONPAYMENT DEFAULT NOTICE - has the meaning specified in Section 7.5(b).
NOTES - has the meaning specified in Section 1.1(e).
NOTICE OF BORROWING - means a notice substantially in the form of
ATTACHMENT C with respect to a proposed borrowing.
NOTIFYING LENDER - has the meaning specified in Section 1.1(c)(i).
OBSERVER - shall have the meaning specified in Section 5.7.
OFFICERS' CERTIFICATE - means a certificate signed on behalf of the Company
by two officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that includes: (1) a statement that the
Person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, he or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and (4) a statement as to whether or
not, in the opinion of such Person, such condition or covenant has been
satisfied.
OTHER TAXES - has the meaning specified in Section 2.4(b).
PAYMENT BLOCKAGE PERIOD - has the meaning specified in Section 7.5.
PAYMENT BLOCKAGE PERIOD TERMINATION DATE - means, with respect to any
Significant Nonpayment Default, the earliest of:
(a) the last day of the period equal to the difference of:
(i) one hundred eighty (180) days; MINUS
(ii) the aggregate number of days during the three
hundred sixty-five (365) calendar days immediately preceding
the date upon which the Nonpayment Default Notice relating
to such Significant Nonpayment Default during which a
payment blockage pursuant to Section 7.5 has been in effect
with respect to any other Significant Nonpayment Default;
commencing with the earlier of:
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(A) the date upon which the Nonpayment
Default Notice was given; and
(B) the date that any Standstill Period
arising out of such Significant Payment Default
commenced;
(b) the date on which such Significant Nonpayment Default shall
have been cured or waived in writing (whether by amendment of any provision
of the Senior Credit Agreement or otherwise) or shall have ceased to exist;
(c) the date such Payment Blockage Period shall have been
terminated by written notice to the Company from the Senior Agent; and
(d) the date of the repayment in full in cash or cash
equivalents of the Senior Debt and the termination of any commitment to
make any further loans or advances in respect of the Senior Debt.
PAYMENT DATE - has the meaning specified in the definition "Standard
Prepayment Compensation Amount".
PAYMENT DEFAULT NOTICE - has the meaning specified in Section 7.4.
PBGC - means the Pension Benefit Guaranty Corporation, or any other Person
succeeding to the duties thereof.
PENTAGON - means Alliance Pentagon A/S, a limited liability corporation
incorporated under the laws of Denmark having an office at Krogagervej 2 5340
Odense No, Denmark, and a wholly-owned Subsidiary of Alliance Europe.
PERMITTED DEBT - as defined in Section 4.5.
PERMITTED REFINANCING INDEBTEDNESS - means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other Debt of
the Company or any of its Subsidiaries (other than intercompany Debt); PROVIDED,
that (i) the maximum principal amount (or accreted value, if applicable)
permitted to be outstanding under such Permitted Refinancing Indebtedness does
not exceed the principal amount (or accreted value, if applicable) then
permitted to be outstanding under the Debt so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of the debt being extended, refinanced, renewed, replaced, defeased or refunded;
(iii) if the Debt being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment
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to the Notes, such Permitted Refinancing Indebtedness is subordinated in right
of payment to the Notes on terms at least as favorable to the Holders of Notes
as those contained in the documentation governing the Debt being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Debt is
incurred either by the Company or by the Subsidiary who is the obligor on the
Debt being extended, refinanced, renewed, replaced, defeased or refunded.
PERMITTED REVOLVING CREDIT DEBT - means and includes all Debt incurred
pursuant to an Acceptable Revolving Credit Facility which, at the time of
incurrence thereof, was incurred in compliance with Section 4.5.
PERSON - means an individual, partnership, corporation, limited liability
company, joint venture, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
PLAN - means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
POLYVISION BELGIUM - means PolyVision Belgium, N.V., a Belgium corporation
(a limited liability company).
POLYVISION FRANCE - means PolyVision France, a French E.U.R.L.
PREPAID PRINCIPAL - means any portion of the principal amount of any Note
being paid for any reason (including, without limitation, optional payment or
mandatory payment required because of the occurrence of a contingency) prior to
its regularly scheduled maturity date.
PREPAYMENT COMPENSATION AMOUNT - at any time, means:
(a) if such time is after the Closing Date but prior to such
date as shall be six (6) months after the Closing Date, zero (0);
(b) if such time is on or after the date six (6) months after
the Closing Date but prior to May 20, 2002, the Standard Prepayment
Compensation Amount; and
(c) if such time is on or after May 20, 2002, the Modified
Prepayment Compensation Amount.
PRIME RATE - means a fluctuating interest rate per annum in effect from
time to time, equal to the rate of interest announced publicly by Fleet in
Boston, Massachusetts, from
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time to time, as Fleet's prime rate, which is not necessarily the lowest rate
made available by Fleet.
PROJECTIONS - has the meaning specified in Section 8.2(f).
PROPERTY - means any ownership interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
REFINANCING - means and includes, with respect to any Debt, any renewal,
extension, replacement, refinancing or refunding of such Debt; and the terms
"Refinance" and "Refinanced" have correlative meanings.
REGISTER - has the meaning specified in Section 2.1.
REMEDIES - means and includes, with respect to any Debt (including,
without limitation, the Senior Debt and the Subordinated Debt):
(a) the acceleration of the maturity of any of such Debt;
(b) the exercise of any put right or other similar right to
require the Company or any Subsidiary to repurchase any of such Debt prior
to the stated maturity thereof;
(c) the commencement of proceedings against the Company, any
Subsidiary or any other Person obligated on such Debt or any of their
respective Property, to enforce or collect any of such Debt;
(d) taking possession of or foreclosing upon (whether by
judicial proceedings or otherwise) any Liens or other collateral security
for such Debt; or causing a marshaling of any Property of the Company or
any Subsidiary in connection with any collection of such Debt;
(e) the making of a demand in respect of any Guaranty given by
the Company or any Subsidiary of such Debt; or
(f) exercising any other remedies with respect to such Debt or
any claim with respect thereto.
REQUIRED HOLDERS - means, at any time, the holders of not less than
sixty-six and two-thirds percent (66-2/3%) in principal amount of the Notes at
the time outstanding (exclusive of Notes then owned by any one or more of the
Company, any Subsidiary or any Affiliate).
RESTRICTED INVESTMENT - means, at any time, all Investments except the
following:
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(a) Property (including, without limitation, real Property and
interests therein) to be used in the ordinary course of business and
current assets arising from the sale of goods and services in the ordinary
course of business of the Company and the Subsidiaries;
(b) Investments in one or more Subsidiaries or any corporation
that concurrently with such Investment becomes a Subsidiary;
(c) Investments in direct obligations of the United States of
America, any agency thereof or obligations guaranteed by the United States
of America, so long as such obligations are backed by the full faith and
credit of the United States of America; PROVIDED that such obligations
mature within three (3) years from the date of acquisition thereof;
(d) Investments in any obligation of any state or municipality
thereof given either of the two (2) highest ratings by at least one credit
rating agency of recognized national standing and maturing within three (3)
years from the date of acquisition;
(e) Investments in certificates of deposit or banker's
acceptances given one (1) of the two (2) highest ratings by at least one
credit rating agency of recognized national standing, issued by a bank or
trust company organized under the laws of the United States of America or
any state thereof having capital, surplus and undivided profits aggregating
at least One Hundred Million Dollars ($100,000,000) and maturing within one
(1) year from the date of acquisition;
(f) Investments in money market mutual funds that invest solely
in so-called "money market" instruments maturing not more than one year
after the acquisition thereof and given one of the two (2) highest ratings
by at least one credit rating agency of recognized national standing;
(g) Investments in commercial paper given either of the two (2)
highest ratings by at least one credit rating agency of recognized national
standing and maturing not more than two hundred seventy (270) days from the
date of creation thereof; and
(h) Investments outstanding on the Closing Date and listed on
PART 8.1(G) OF ANNEX 3.
Investments shall be valued at cost less any net return of capital through
the sale or liquidation thereof or other return of capital thereon.
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RESTRICTED PAYMENT - means and includes:
(a) any dividend or other distribution, direct or indirect, on
account of any shares of Capital Stock (including, without limitation, the
Common Stock) or Rights of the Company, now or hereafter outstanding,
except a dividend payable solely in shares of Common Stock; or
(b) any dividend or other distribution, direct or indirect, on
account of any shares of Capital Stock or Rights of any Subsidiary, now or
hereafter outstanding, except:
(i) a dividend payable solely in shares of common stock
of such Subsidiary; or
(ii) to the extent that such dividend or distribution is,
directly or indirectly, payable to the Company or a Domestic
Wholly-Owned Subsidiary or by a Foreign Subsidiary to another
Foreign Subsidiary; and
(c) any payment, whether in respect of principal, premium,
interest, fees, expenses or otherwise, in respect of, or any redemption,
retirement, purchase or other acquisition, direct or indirect, of, any
Junior Subordinated Debt.
RESTRICTED REPURCHASE -- means and includes:
(a) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any shares of Capital Stock or Rights of the Company
now or hereafter outstanding, except in the case of Rights, the retirement
of such Rights by virtue of the exercise or conversion thereof into Common
Stock; or
(b) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any shares of Capital Stock or Rights of any
Subsidiary now or hereafter outstanding, except to the extent that such
redemption, retirement, purchase or other acquisition is made from, and the
payment in respect of such redemption, retirement, purchase or other
acquisition is paid, directly or indirectly, to the Company.
RESTRICTED SUBSIDIARY - means and includes any Subsidiary that is or
becomes a Guarantor.
RIGHT - with respect to any class of Capital Stock (including, without
limitation, Common Stock) of the Company or any Subsidiary, means and includes:
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(a) any warrant (including, without limitation, any Warrant) or
any option (including, without limitation, employee stock options) to
acquire any such Capital Stock;
(b) any right issued to holders of such Capital Stock,
permitting such holders to subscribe to shares of any such Capital Stock or
Rights (pursuant to a rights offering or otherwise);
(c) any right to acquire such Capital Stock pursuant to the
provisions of any Security (including, without limitation, any Series A
Preferred Stock, as and when issued) convertible or exchangeable into such
Capital Stock; and
(d) any similar right permitting the holder thereof to subscribe
for or purchase shares of such Capital Stock.
SEC - means, at any time, the Securities and Exchange Commission or any
other federal agency at such time administering the Securities Act.
SECURITIES ACT - means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
SECURITY - means "security" as defined by section 2(1) of the Securities
Act.
SELLER - has the meaning specified in Section 9.1(v).
SELLER DOCUMENTS - has the meaning specified in Section 9.1(v).
SELLER NOTE - means the 10% Convertible Subordinated Note, in the original
principal amount of $8,000,000, issued on the Closing Date by the Borrower to
Wind Point Partners III, L.P., as agent, pursuant to the AIG Acquisition
Agreement.
SENIOR AGENT - means, for so long as the Senior Credit Agreement remains
outstanding, Fleet National Bank, as agent in respect of the Senior Credit
Agreement, and thereafter, any one agent or lender in respect of the Senior
Credit Facility, or representative of either, designated in writing to each
holder of Notes by the predecessor Senior Agent and the Company as being the
"Senior Agent".
SENIOR CREDIT AGREEMENT - means the Credit Agreement, dated November ___,
1998, among the Company, the banks, financial institutions and other
institutional lenders named therein, and Fleet National Bank, as Administrative
Agent, as Initial Issuing Bank and as Swing Line Bank, as thereafter amended in
compliance with the provisions of Section 7.16.
SENIOR CREDIT FACILITY - means and includes:
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(a) the Senior Credit Agreement; and
(b) any Acceptable Revolving Credit Facility and/or other Credit
Facilities incurred in compliance with Section 4.5, which Refinance the
Senior Credit Agreement, which Acceptable Revolving Credit Facility or
other Credit Facilities has Refinanced the Senior Debt governed by the
terms of a Senior Credit Facility which both the Company and the Senior
Agent under the predecessor Senior Credit Facility (or, if no such other
agreement is then in effect, the Company) have designated in writing to
each holder of Notes as being the "Senior Credit Facility;" PROVIDED,
HOWEVER, that, by making such designation, the predecessor Senior Credit
Facility shall cease to be the Senior Credit Facility (but any Debt
outstanding or incurred thereunder shall continue to be Senior Debt for so
long as such Debt meets the definition thereof).
SENIOR DEBT - means and includes all obligations, liabilities and debt of
the Company now or hereafter existing, whether fixed or contingent, and whether
for principal, interest (including interest accruing after the filing of a
petition under the Bankruptcy Code, whether or not allowed), fees, expenses,
indemnification or otherwise, in respect of:
(a) the Senior Credit Facility, in a principal amount which does
not exceed a maximum principal commitment amount of 60 Million Dollars
($60,000,000) less (i) the sum of all principal payments in respect of term
Debt that at any time are actually made, and less (ii) the sum of all
permanent commitment reductions with respect to revolving credit Debt;
(b) Debt and other obligations outstanding on the Closing Date
and listed as "Senior Debt" on PART 8.2(B) OF ANNEX 3.
Notwithstanding the foregoing, in no event shall "Senior Debt" include any
Junior Subordinated Debt.
SENIOR FINANCIAL OFFICER - means any one of the chief financial officer,
the treasurer and the principal accounting officer of the Company.
SENIOR OFFICER - means any one of the chairman of the board of directors,
the chief executive officer, the chief operating officer, and the president, of
the Company,
SENIOR PAYMENT DEFAULT - Section 7.4(a).
SIGNIFICANT NONPAYMENT DEFAULT - means and includes:
(a) an event of default under the Senior Credit Facility in
respect of the failure of the Company to comply with any material covenant
or agreement in respect of the Senior Credit Facility (it being understood
that the provisions of
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Articles 6 and 8 of the Senior Credit Agreement, as in effect on the date
hereof, are "material covenants" for such purpose); and
(b) an event of default in respect of the Senior Credit Facility
arising out of any Event of Default in respect of this Agreement.
STANDARD PREPAYMENT COMPENSATION AMOUNT - means, with respect to Prepaid
Principal and the date the payment thereof is due (for purposes of this
definition, the "Payment Date"), an amount equal to the excess (if any) of the
Present Value of the Prepaid Cash Flows over the amount of, an amount equal to
such Prepaid Principal, determined in respect of such Prepaid Principal as of
such Payment Date. As used in this definition:
Present Value of the Prepaid Cash Flows means the sum of the present values of
the then remaining scheduled payments of principal and interest that would have
been payable in respect of such Prepaid Principal but that are no longer payable
as a result of the early payment of such Prepaid Principal, and in determining
such present values:
(i) the amount of interest accrued through and including the day immediately
preceding such Payment Date on such Prepaid Principal since the scheduled
interest payment date immediately preceding such Payment Date shall be deducted
from the first of such payments of interest; and
(ii) a discount rate per annum equal to the Make Whole Discount Rate determined
with respect to such Prepaid Principal and such Payment Date divided by four
(4), and a discount period of one (1) quarter, shall be used.
Make Whole Discount Rate means the sum of:
(i) one percent (1.00%) per annum; plus the per annum percentage rate (rounded
to the nearest three (3) decimal places) equal to the bond equivalent yield to
maturity derived from the Bloomberg Rate, or if the Bloomberg Rate is not then
available, the Applicable H.15 Rate, determined as of the date that is two (2)
Business Days prior to such Payment Date.
APPLICABLE H. 15 - means, at any time, the United States Federal
Reserve Statistical Release H.15(519) then most recently published and
available to the public, or if such publication is not available, then any
other source of current information in respect of interest rates on
securities of the United States of America that is generally available and,
in the reasonable judgment of the Required Holders, provides information
reasonably comparable to the H.15(519) report.
APPLICABLE H. 15 RATE - means, at any time, the then most current
annual yield to maturity of the hypothetical United States Treasury
obligation listed in the
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Applicable H. 15 with a Treasury Constant Maturity (as such term is defined
in such Applicable H.15) equal to the Weighted Average Life to Maturity of
such Prepaid Principal. If no such United States Treasury obligation with a
Treasury Constant Maturity corresponding exactly to such Weighted Average
Life to Maturity is listed, then the yields for the two (2) then most
current hypothetical United States Treasury obligations with Treasury
Constant Maturities most closely corresponding to such Weighted Average
Life to Maturity (one (1) with a longer maturity and one (1) with a shorter
maturity, if available) shall be calculated pursuant to the immediately
preceding sentence and the Make-Whole Discount Rate shall be interpolated
or extrapolated from such yields on a straight-line basis.
BLOOMBERG RATE - means the per annum yield reported on the Bloomberg
Financial Markets System at 10:00 a.m. (New York time) on the second (2nd)
Business Day preceding such Payment Date for United States government
securities having a maturity (rounded to the nearest month) corresponding
to the Weighted Average Life to Maturity of such Prepaid Principal. Page
USD shall be used as the source of such yields, or if not then available,
such other screen available on the Bloomberg Financial Markets System as
shall, in the opinion of the Required Holders, provide equivalent
information.
TREASURY CONSTANT MATURITY - has the meaning specified in the
definition Applicable H.15.
WEIGHTED AVERAGE LIFE TO MATURITY - means the number of years
(calculated to the nearest one-twelfth (1/12th)) obtained by dividing the
Remaining Dollar-Years of such Prepaid Principal by such Prepaid Principal,
determined as of such Payment Date.
REMAINING DOLLAR-YEARS - means the result obtained by:
(a) multiplying, in the case of each then remaining
scheduled payment of principal that would have been payable in
respect of Prepaid Principal but is no longer payable as a result of
the payment of such Prepaid Principal;
(i) an amount equal to such scheduled payment of
principal; by
(ii) the number of years (calculated to the
nearest one-twelfth) that will elapse between such Payment
Date and the date such scheduled principal payment would be
due if such Prepaid Principal had not been so prepaid; and
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(b) calculating the sum of each of the products obtained in the
preceding subsection (a).
STANDSTILL PERIOD - has the meaning specified in Section 7.7.
SUBORDINATED DEBT - means and includes all obligations, liabilities and
debt of the Company now or hereafter existing, whether fixed or contingent, and
whether for principal, interest (including interest accruing after the filing of
a petition under the Bankruptcy Code, to the extent allowed), fees, expenses,
indemnification or otherwise, in respect of this Agreement and the Notes.
SUBSIDIARY - means (i) a corporation of which the Company owns, directly or
indirectly, more than fifty percent (50%) (by number of votes) of each class of
Voting Stock, or (ii) any other entity of which the Company owns, directly or
indirectly, more than fifty percent (50%) of the rights to profits and losses.
SUBSIDIARY STOCK - has the meaning specified in Section 4.2(b).
SURVIVING CORPORATION - has the meaning specified Section 4.1(a).
TAXES- has the meaning specified in Section 2.4(a).
TRANSACTIONS - shall mean, collectively, (i) the AIG Acquisition, (ii) the
execution and initial funding of the Senior Credit Agreement, (iii) the
incurrence of the Loan hereunder on the Closing Date, (iv) the repayment of all
Debt and other obligations of the Company and Subsidiaries of the Company
(except for Debt listed on PART 8.2(B) OF ANNEX 3, which may remain
outstanding), (v) the investment of $5 million in cash by Alpine in new equity
securities of the Borrower, (vi) any other transaction on the Closing Date
contemplated in relation to the foregoing and (vii) the payment of Transaction
Costs.
TRANSACTION COSTS - means the fees, costs and expenses payable by the
Company pursuant hereto and other fees, costs and expenses payable by the
Company or a Subsidiary of the Company in connection with the Transactions.
10-K - means the Form 10-K of the Company for the fiscal year ended April
30, 1998.
VOTING STOCK - means, with respect to any corporation, any shares of stock
of such corporation whose holders are entitled under ordinary circumstances to
vote for the election of directors of such corporation (irrespective of whether
at the time any stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency), and, in the case of
the Company, shall include the Common Stock. Except as otherwise provided,
references herein to "Voting Stock" shall mean Voting Stock of the Company.
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WARRANT - means each warrant to purchase Common Stock (or, at the option of
the Lenders non-voting common stock) issued or which may be issued pursuant to
the Warrant Agreement.
WARRANT AGREEMENT - means the Warrant Agreement, dated as of the date
hereof, between the Company and the Fleet, pursuant to which the Warrants may be
issued, as it may be amended, restated or otherwise modified from time to time.
WHOLLY-OWNED SUBSIDIARY - means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity Securities (except directors' qualifying
shares) and Voting Stock (except directors' qualifying shares) of which are
owned by any one or more of the Company and the Company's other Wholly-Owned
Subsidiaries at such time.
10.2 OTHER DEFINITIONS.
The following terms shall have the respective meanings ascribed to such
terms in the Senior Credit Agreement, as in effect on the Closing Date and
WITHOUT GIVING EFFECT TO ANY AMENDMENT TO the Senior Credit Agreement subsequent
to the date thereof:
Consolidated
Consolidated Debt to EBITDA Ratio
EBITDA
Hedge Agreements
Hedging Obligations
Interest Expense
Inventory
Receivables
10.3 ACCOUNTING PRINCIPLES.
(a) GENERALLY. Unless otherwise provided herein, all financial
statements delivered in connection herewith will be prepared in accordance
with GAAP. Where the character or amount of any asset or liability or item
of income or expense, or any consolidation or other accounting computation
is required to be made for any purpose hereunder, it shall be done in
accordance with GAAP; PROVIDED, HOWEVER, that if any term defined herein
includes or excludes amounts, items or concepts that would not be included
in or excluded from such term if such term were defined with reference
solely to GAAP, such term will be deemed to include or exclude such
amounts, items or concepts as set forth herein.
(b) CONSOLIDATION. Whenever accounting amounts of a group of
Persons are to be determined "on a consolidated basis" it shall mean that,
as to balance sheet amounts to be determined as of a specific time, the
amount that would appear on a consolidated balance sheet of such Persons
prepared as of such time, and as
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to income statement amounts to be determined for a specific period, the
amount that would appear on a consolidated income statement of such Persons
prepared in respect of such period, in each case with all transactions
among such Persons eliminated, and prepared in accordance with GAAP except
as otherwise required hereby.
(c) CURRENCY. With respect to any determination, consolidation
or accounting computation required hereby, any amounts not denominated in
the currency in which this Agreement specifies shall be converted to such
currency in accordance with the requirements of GAAP (as such requirements
relate to such determination, consolidation or computation) and, if no such
requirements shall exist, converted to such currency in accordance with
normal banking procedures, at the closing rate as reported in The Wall
Street Journal published most recently as of the date of such
determination, consolidation or computation or, if no such quotation shall
then be available, as quoted on such date by any bank or trust company
reasonably acceptable to the Required Holders.
10.4 DIRECTLY OR INDIRECTLY.
Where any provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
10.5 SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION.
(a) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of
the Sections of this Agreement and the Table of Contents of this Agreement
appear as a matter of convenience only, do not constitute a part hereof and
shall not affect the construction hereof. The words "herein," "hereof,"
"hereunder" and "hereto" refer to this Agreement as a whole and not to any
particular Section or other subdivision. References to Sections are, unless
otherwise specified, references to Sections of this Agreement. References
to Annexes and Exhibits are, unless otherwise specified, references to
Annexes and Exhibits attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance with
any one covenant shall not (absent such an express contrary provision) be
deemed to excuse compliance with one or more other covenants.
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10.6 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ANY CONFLICTS OF LAW RULES WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF
ANY OTHER JURISDICTION. IN ADDITION, THE PARTIES HERETO SELECT, TO THE EXTENT
THEY MAY LAWFULLY DO SO, THE INTERNAL LAWS OF THE STATE OF NEW YORK AS THE
APPLICABLE INTEREST LAW.
10.7 GENERAL INTEREST PROVISIONS.
(a) INTEREST IN RESPECT OF THE NOTES. It is the intention of
the Company and the holders of the Notes to conform strictly to the
Applicable Interest Law. Accordingly, it is agreed that, notwithstanding
any provisions to the contrary in this Agreement or in the Notes, the
aggregate of all interest, and any other charges or consideration
constituting interest under the Applicable Interest Law that is taken,
reserved, contracted for, charged or received pursuant to this Agreement or
the Notes shall under no circumstances exceed the maximum amount of
interest allowed by the Applicable Interest Law. If any such excess
interest is ever charged, received or collected on account of or relating
to this Agreement and the Notes (including any charge or amount which is
not denominated as "interest" but is legally deemed to be interest under
Applicable Interest Law), then in such event:
(i) the provisions of this Section 10.7 shall govern and
control;
(ii) the Company shall not be obligated to pay the amount
of such interest to the extent that it is in excess of the maximum
amount of interest allowed by the Applicable Interest Law;
(iii) any excess shall be deemed a mistake and canceled
automatically and, if theretofore paid, shall be promptly repaid to
the Company; and
(iv) the effective rate of interest shall be
automatically subject to reduction to the Maximum Legal Rate of
Interest.
If at any time thereafter, the Maximum Legal Rate of Interest is increased,
then, to the extent that it shall be permissible under the Applicable Interest
Law, the Company shall forthwith pay to the holders of the Notes, on a pro rata
basis, all amounts of such excess interest that the holders of the Notes would
have been entitled to receive pursuant to the terms of this Agreement and the
Notes had such increased Maximum Legal Rate of Interest been in effect at all
times when such excess interest accrued. To the extent permitted by the
Applicable Interest Law, all sums paid or agreed to be paid to the holders
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of the Notes for the use, forbearance or detention of the debt evidenced thereby
shall be amortized, prorated, allocated and spread throughout the full term of
the Notes.
(b) EFFECT OF ISSUANCE OF NOTES TOGETHER WITH WARRANTS.
Having considered all facts relevant to a determination of the value
of the Notes and the Warrants being acquired by the Lenders, the Company and the
Lenders have concluded and do hereby agree that the present value of all
scheduled payments of principal of and interest on the Notes is $25,000,000,
based on yields of comparable debt instruments of comparable issuers.
Accordingly, the Company and the Lenders agree that for purposes of the IRC, and
for purposes of determining any issue discount with respect to the Notes
thereunder, the "issue price" of the Notes is $25,000,000. Neither the Company
nor any of the Lenders shall take a position on any income tax return, before
any governmental agency charged with the collection of any income tax or in any
judicial proceeding that is inconsistent with the terms of this Section 10.7(b).
SECTION 11 GUARANTEES
11.1 GUARANTEES.
Each Domestic Subsidiary which, in accordance with Section 3.5, is required
to guarantee the obligations of the Company under the Notes, upon execution of a
counterpart of this Agreement, hereby jointly and severally unconditionally
guarantees to each holder of any Note and its successors and assigns,
irrespective of the validity or enforceability of this Agreement, the Notes or
the obligations of the Company under this Agreement or the Notes, that: (i) the
principal of, premium (if any) and interest on the Notes will be paid in full
when due, whether at the maturity or interest payment date by acceleration,
mandatory prepayment or otherwise, and interest on the overdue principal of, or
interest on the Notes and all other obligations of the Company under the Notes
to the holders of the Notes will be promptly paid in full or performed, all in
accordance with the terms of this Agreement and the Notes; and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, they will be paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at maturity, by acceleration,
mandatory prepayment or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Guarantor will be obligated to pay the same
whether or not such failure to pay has become an Event of Default which could
cause acceleration pursuant to Section 6.2 hereof. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
Each Guarantor hereby agrees that its obligations with regard to this
Guarantee shall be joint and several and unconditional, irrespective of the
validity or enforceability of the Notes or the obligations of the Company under
this Agreement, the absence of any action to enforce the same, the recovery of
any judgment against the Company or any other obligor with respect to this
Agreement, the Notes or the obligations of the Company under this Agreement or
the Notes, any action to enforce the same or any other circumstances
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(other than complete performance) which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor further, to the
extent permitted by law, waives and relinquishes all claims, rights and remedies
accorded by applicable law to guarantors and agrees not to assert or take
advantage of any such claims, rights or remedies, including but not limited to:
(a) any right to require any holder of any Note or the Company (each, a
"Benefitted Party") to proceed against the Company or any other Person or to
proceed against or exhaust any security held by a Benefitted Party at any time
or to pursue any other remedy in any Benefitted Party's power before proceeding
against such Guarantor; (b) the defense of the statute of limitations in any
action hereunder or in any action for the collection of any Debt or the
performance of any obligation hereby Guaranteed; (c) any defense that may arise
by reason of the incapacity, lack of authority, death or disability of any other
Person or the failure of a Benefitted Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any other
Person; (d) demand, protest and notice of any kind including but not limited to
notice of the existence, creation or incurring of any new or additional Debt or
obligation or of any action or non-action on the part of such Guarantor, the
Company, any Benefitted Party, any creditor of such Guarantor, the Company or on
the part of any other Person whomsoever in connection with any Debt or
obligations hereby guaranteed; (e) any defense based upon an election of
remedies by a Benefitted Party, including but not limited to an election to
proceed against such Guarantor for reimbursements; (f) any defense based upon
any statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more burdensome than that of
the principal; (g) any defense arising because of a Benefitted Party's election,
in any proceeding instituted under Bankruptcy Law, of the application of 11
U.S.C. Section 1111(b)(2); or (h) any defense based on any borrowing or grant of
a security interest under 11 U.S.C. Section 364. Each Guarantor hereby
covenants that its Guaranty hereunder will not be discharged except by waiver,
release or complete performance of the obligations guaranteed in this Guaranty.
If any holder of any Note is required by any court or otherwise to return
to either the Company or any Guarantor, or any custodian or trustee in
bankruptcy acting in relation to either the Company or such Guarantor, any
amount paid by the Company or such Guarantor to such holder, the applicable
Guaranty, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the holders of the Notes in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
Each Guarantor further agrees that, as between such Guarantor, on the one
hand, and the holders of the Notes, on the other hand, (i) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 6.2
hereof for the purposes of this Guaranty, notwithstanding any stay, injunction
or other prohibition preventing such acceleration as to the Company or any other
obligor on the Notes or the obligations guaranteed hereby, and (ii) in the event
of any declaration of acceleration of those obligations as provided in Section
6.2 hereof, those obligations (whether or not due and payable) will forthwith
become due and payable by such Guarantor for the purpose of this Guaranty.
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11.2 Subordination.
The obligations of the Guarantors under this Agreement are subordinate and
subject in right of payment in full in cash to any guarantee by the Guarantors
in respect of the Senior Debt to the same extent and in the same manner as set
forth in Section 7 hereof with respect to the subordination of the Subordinated
Debt to such Senior Debt and, for purposes of applying this Section 11.2,
references in such Section 7 to "the Company" shall be deemed to refer to the
relevant Guarantor.
11.3 RELATIVE RIGHTS.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided in this Section 11 will at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Guarantor
or by any act or failure to act by any such holders, or by any noncompliance by
the Guarantor with the terms hereof, regardless of any knowledge thereof which
any such holders may have or otherwise be charged with. The holders of Senior
Debt may increase (to the extent otherwise permitted hereunder) extend, renew,
modify or amend the terms of the Senior Debt or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Senior Debt, all without affecting the liabilities and obligations of the
Guarantors. No amendment to these provisions will be effective against the
holders of the Senior Debt of any Guarantor who have not consented thereto in
writing.
11.4 Notice by a Guarantor.
Each Guarantor shall promptly notify the holders of the Senior Debt of any
facts known to such Guarantor that would causes a payment of any obligations
with respect to the Notes or its Guaranty to violate this Article 11, but
failure to give such notice shall not affect the subordination of its Guaranty
or of the Notes to the Senior Debt of such Guarantor as provided in this Section
11.
11.5 SUBORDINATION MAY NOT BE IMPAIRED BY GUARANTOR.
No right of any holder of Senior Debt to enforce the subordination of the
Debt evidenced by a Guaranty shall be impaired by any act or failure to act by
the Guarantor or any holder of any Subordinated Debt or by the failure of the
Guarantor or any holder of any Subordinated Debt to comply with this Agreement.
11.6 AMENDMENTS.
With respect to any Guarantor, the provisions of this Section 11 shall not
be amended or modified without the prior written consent of such Guarantor and
the holders of the Senior Debt (or such percentage of such holders as may be
provided in the agreements evidencing such Senior Debt).
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11.7 LIMITATIONS OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof, each beneficiary hereof,
hereby confirms that it is its intention that the Guaranty of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law to the extent applicable to any Guarantee.
To effectuate the foregoing intention, each such Person hereby irrevocably
agrees that the obligation of such Guarantor under its Guaranty under this
Section 11 shall be limited to the maximum amount as will, after giving effect
to such maximum amount and all other (contingent or otherwise) liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Section 11, result in the obligations of such Guarantor in
respect of such maximum amount not constituting a fraudulent conveyance. Each
beneficiary under the Guaranties, by accepting the benefits hereof, confirms its
intention that, in the event of a bankruptcy, reorganization or other similar
proceeding of the Company or any Guarantor in which concurrent claims are made
upon such Guarantor hereunder, to the extent such claims will not be fully
satisfied, each such claimant with a valid claim against the Company shall be
entitled to a ratable share of all payments by such Guarantor in respect of such
concurrent claims.
SECTION 12 MISCELLANEOUS
12.1 COMMUNICATIONS.
(a) METHOD; ADDRESS. All communications hereunder or under the
Notes shall be in writing and shall be delivered either by nationwide
overnight courier or by facsimile transmission (confirmed by delivery by
nationwide overnight courier sent on the day of the sending of such
facsimile transmission). Communications to the Company shall be addressed
as set forth on ANNEX 2, or at such other address of which the Company
shall have notified each holder of Notes. Communications to the holders of
the Notes shall be addressed as set forth on ANNEX 1 by such holder, or at
such other address of which such holder shall have notified the Company.
(b) WHEN GIVEN. Any communication addressed and delivered as
herein provided shall be deemed to be received when actually delivered to
the address of the addressee (whether or not delivery is accepted) or
received by the telecopy machine of the recipient. Any communication not so
addressed and delivered shall be ineffective.
(c) SERVICE OF PROCESS. Notwithstanding the foregoing
provisions of this Section 12.1, service of process in any suit, action or
proceeding arising out of or relating to this Agreement or any document,
agreement or transaction contemplated hereby, or any action or proceeding
to execute or otherwise enforce any judgment
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in respect of any breach hereunder or under any document or agreement
contemplated hereby, shall be delivered in the manner provided in Section
12.8(c).
12.2 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, consents, waivers and modifications that may hereafter be executed,
documents received by the holders of the Notes on the Closing Date (except the
Notes themselves), and financial statements, certificates and other information
previously or hereafter furnished to any holder of Notes, may be reproduced by
the Company or any holder of Notes by means of any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process
and each holder of Notes may destroy any original document so reproduced. Any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Company or such
holder of Notes in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence. Nothing in this Section 12.2 shall prohibit the Company
or any holder of Notes from contesting the accuracy or validity of any such
reproduction.
12.3 Survival, Entire Agreement.
All warranties, representations, certifications and covenants contained
herein, or in any certificate or other instrument delivered hereunder shall be
considered to have been relied upon by the other parties hereto and shall
survive the delivery to the Lenders of the Notes regardless of any investigation
made by or on behalf of any party hereto. All obligations hereunder (other than
payment of the Notes, but including, without limitation, reimbursement
obligations in respect of costs, expenses and fees) and including the agreements
and obligations of the Company contained in Sections 1.12 and 2.4 and Section
12.6 shall survive the payment in full of principal and interest on the Notes
and all other amounts payable hereunder and under any of the other Financing
Documents. Subject to the preceding sentence, this Agreement, the Notes and the
other Financing Documents embody the entire agreement and understanding between
the Company and the holders of the Notes, and supersede all prior agreements and
understandings relating to the subject matter hereof.
12.4 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING NOTEHOLDERS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Lenders, all future holders of the Notes and their respective
successors and assigns (including without limitation any receiver, trustee or
debtor-in-possession), except that the Company may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of each Lender.
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(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any portion of the Loan
owing to such Lender, any Note held by such Lender, or any other interest of
such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged.
(c) Any Lender may at any time (i) assign to an Affiliate of such
Lender, or (ii) in the ordinary course of its business and in accordance with
applicable law, assign to one or more banks or other entities (individually a
"PURCHASING NOTEHOLDER" and collectively "PURCHASING NOTEHOLDERS") all or any
part of its rights and obligations under this Agreement and the Note. Upon such
assignment, the Purchasing Noteholder shall become a party hereto and have the
rights and obligations of the transferor Lender hereunder based on the
percentage of the outstanding principal amount of the Loan owing hereunder
purchased by such Purchasing Noteholder.
(d) The Company authorizes each Lender to disclose to any Participant or
Purchasing Noteholder (each, a "TRANSFEREE") and any prospective Transferee any
and all financial information in such Lender's possession concerning the Company
and its Affiliates which has been delivered to such Lender by or on behalf of
the Company pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Company in connection with such Lender's credit
evaluation of the Company and its Affiliates prior to becoming a party to this
Agreement, PROVIDED any such prospective Transferee executes and delivers to the
Company a confidentiality agreement in form reasonably satisfactory to the
Company.
(e) Nothing in this Agreement shall prevent or prohibit any Lender from
Pledging its Loan and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such lender from such Federal Reserve Bank.
12.4 Amendment and Waiver.
(a) REQUIREMENTS. This Agreement may be amended, and the
observance of any term hereof may be waived, with (and only with) the written
consent of the Company and the Required Holders; provided, however, that no such
amendment or waiver shall, without the written consent of the holders of all
Notes (exclusive of Notes held by the Company, any Subsidiary or any Affiliate)
at the time outstanding:
(i) change the amount or time of any prepayment or
payment of principal or Prepayment Compensation Amount or the rate
or time of payment of interest;
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(ii) amend or waive the provisions of Section 6.1,
Section 6.2, Section 6.3 or Section 7, or amend or waive any defined
term to the extent used therein;
(iii) amend or waive the definition of "Required Holders"
or otherwise amend the percentage of Notes required to be held by
holders of Notes consenting to any action under this Agreement; or
(iv) amend or waive this Section 12.5 or amend or waive
any defined term to the extent used herein.
The holder of any Note may specify that any such written consent executed by it
shall be effective only with respect to a portion of the Notes held by it (in
which case it shall specify, by dollar amount, the aggregate principal amount of
Notes with respect to which such consent shall be effective) and in the event of
any such specification such holder shall be deemed to have executed such written
consent only with respect to the portion of the Notes so specified.
No amendment, supplement or modification of the provisions of Section 7, or
any defined term to the extent used therein, shall be effective to any holder of
Senior Debt who has not consented to such amendment, supplement or modification.
(b) SOLICITATION OF NOTEHOLDERS.
(i) SOLICITATION. Each holder of the Notes
(irrespective of the amount of Notes then owned by it) shall be
provided by the Company with all material information provided by
the Company to any other holder of Notes with respect to any
proposed waiver or amendment of any of the provisions hereof or the
Notes. Executed or true and correct copies of any amendment or
waiver effected pursuant to the provisions of this Section 12.5
shall be delivered by the Company to each holder of outstanding
Notes forthwith following the date on which such amendment or waiver
becomes effective.
(ii) PAYMENT. The Company shall not, nor shall any
Subsidiary or Affiliate, directly or indirectly, pay or cause to be
paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of
Notes as consideration for or as an inducement to the entering into
by any holder of Notes of any waiver or amendment of any of the
provisions hereof or of the Notes unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to the holders of all Notes then outstanding.
(iii) SCOPE OF CONSENT. Any amendment or waiver made
pursuant to this Section 12.5 by a holder of Notes that has
transferred or has agreed
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to transfer its Notes to the Company, any Subsidiary or any
Affiliate and has provided or has agreed to provide such amendment
or waiver as a condition to such transfer shall be void and of no
force and effect except solely as to such holder, and any amendments
effected or waivers granted that would not have been or would not be
so effected or granted but for such amendment or waiver (and the
amendments or waivers of all other holders of Notes that were
acquired under the same or similar conditions) shall be void and of
no force and effect, retroactive to the date such amendment or
waiver initially took or takes effect, except solely as to such
holder.
(c) BINDING EFFECT. Except as provided in Section 12.5(b)(iii),
any amendment or waiver consented to as provided in this Section 12.5 shall
apply equally to all holders of Notes and shall be binding upon them and
upon each future holder of any Note and upon the Company whether or not
such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon.
12.5 COSTS AND EXPENSES.
(a) FINANCING DOCUMENTS. The Company shall pay on demand the
reasonable costs and expenses (including reasonable attorneys' fees)
incurred by the holders of the Notes in connection with the consideration,
negotiation, preparation or execution of this Agreement, the other
Financing Documents, any amendments, waivers, consents, standstill
agreements and other similar agreements with respect to this Agreement or
any other Financing Document (whether or not any such amendments, waivers,
consents, standstill agreements or other similar agreements are executed),
including, without limitation, the reasonable costs of all due diligence
investigations, syndication (including the costs of printing, distribution
and meetings), transportation, computer, duplication, appraisal, audit,
insurance, consultant, lien search, filing and recording fees and all other
reasonable out-of pocket expenses.
(b) RESTRUCTURING AND WORKOUT, INSPECTIONS. At any time when
the Company and the holders of Notes are conducting restructuring or
workout negotiations in respect hereof, or a Default or Event of Default
exists, the Company shall pay when billed the reasonable costs and expenses
(including reasonable attorneys' fees and the fees of professional
advisors) incurred by the holders of the Notes in connection with the
assessment, analysis or enforcement of any rights or remedies that are or
may be available to the holders of Notes, including, without limitation, in
connection with inspections made pursuant to Section 5.5; PROVIDED,
HOWEVER, that at all other times inspections will be at the expense of the
inspecting holder of Notes.
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(c) COLLECTION. If the Company shall fail to pay when due any
principal of, or Prepayment Compensation Amount or interest on, any Note,
the Company shall pay to each holder of Notes, to the extent permitted by
law, such amounts as shall be sufficient to cover the reasonable costs and
expenses, including but not limited to reasonable attorneys' fees, incurred
by such holder in collecting any sums due on such Note.
(d) INDEMNIFICATION. The Company agrees to indemnify and hold
harmless each Lender and each of their respective Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection
with or by reason of, or in connection with the preparation for a defense
of, any investigation, litigation or proceeding arising out of, related to
or in connection with (i) the Transactions and any other transactions
contemplated by this Agreement, (ii) any acquisition or proposed business
acquisition or similar business combination or proposed combination by the
Company or any of its Subsidiaries of all or any portion of the shares of
capital stock or substantially all of the property and assets of any other
Person, (iii) the Loan, the actual or proposed use of the proceeds of the
Loan by the Company or any of its Subsidiaries or other Affiliates, the
Transactions and any of the other transactions contemplated by the
Financing Documents, (iv) misrepresentation or breach of warranty by the
Company in this Agreement, or any untrue statements made or omitted to be
made, whether written or oral, in connection with the Loan or any resale of
the Notes or (v) the actual or alleged presence of Hazardous Materials on
any property of the Company or any of its Subsidiaries or any environmental
action relating in any way to the Company or any of its Subsidiaries or any
of their respective properties, in each case whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, officers, employees, stockholders or creditors or an Indemnified
Party or any Indemnified Party is otherwise a party thereto and whether or
not the Transactions or any other transactions contemplated by this
Agreement are consummated, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from any Indemnified
Party's gross negligence or willful misconduct. The Company also agrees
that no Indemnified Party shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to the Company or any of its
Subsidiaries or to their respective securityholders or creditors for
special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Loan, the actual or proposed use of the proceeds
of the Loan, the Financing Documents or any of the Transactions or any
other transactions contemplated by this Agreement, other than claims for
direct, as opposed to consequential, damages resulting from such
Indemnified
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Party's gross negligence or willful misconduct as determined by a court of
competent jurisdiction after final judgement no longer subject to appeal.
12.6 WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION, ETC.
(a) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES, THE OTHER FINANCING DOCUMENTS OR ANY OF THE
DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY.
(b) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES, THE OTHER
FINANCING DOCUMENTS OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS
CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE
ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS AGREEMENT, THE
NOTES, THE OTHER FINANCING DOCUMENTS OR ANY DOCUMENT OR AGREEMENT
CONTEMPLATED HEREBY MAY BE BROUGHT BY SUCH PARTY IN ANY FEDERAL DISTRICT
COURT LOCATED IN NEW YORK COUNTY, NEW YORK, OR ANY NEW YORK STATE COURT
LOCATED IN NEW YORK COUNTY, NEW YORK AS SUCH PARTY MAY IN ITS SOLE
DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE
PERSONAL JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY
SUCH TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT
IT IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN
ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTES, THE OTHER FINANCING DOCUMENTS OR ANY
DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH
COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(c) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES
THAT PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
PERMITTED BY LAW, ADEQUATE
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SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTES, THE OTHER FINANCING DOCUMENTS OR ANY
DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION OR
PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY
BREACH HEREUNDER OR UNDER THE NOTES, THE OTHER FINANCING DOCUMENTS OR ANY
DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. RECEIPT OF PROCESS SO SERVED
SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT FURNISHED
BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE.
(d) OTHER FORUMS. NOTHING HEREIN SHALL IN ANYWAY BE DEEMED TO
LIMIT THE ABILITY OF ANY HOLDER OF NOTES TO SERVE ANY WRITS, PROCESS OR
SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
JURISDICTION OVER THE COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER
MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.
12.7 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by each
party hereto shall constitute one duplicate original.
[Signature page follows.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered by one of its duly authorized officers or
representatives.
POLYVISION CORPORATION
By: /s/ Joseph A. Menniti
----------------------------------
Name: Joseph A. Menniti
Title: CEO/President
POSTERLOID CORPORATION
By: /s/ Joseph A. Menniti
----------------------------------
Name: Joseph A. Menniti
Title: President
GREENSTEEL, INC.
By: /s/ Joseph A. Menniti
----------------------------------
Name: Joseph A. Menniti
Title: President
FLEET CORPORATE FINANCE, INC.
By: /s/ Rob Ziemer
----------------------------------
Name: Rob Ziemer
Title: Director
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Exhibit 10.36
EXCHANGE AGREEMENT
AGREEMENT, dated as of November16, 1998, among PolyVision Corporation, a
New York corporation ("POLYVISION"), The Alpine Group, Inc., a Delaware
corporation ("ALPINE"), and, if executed by such party in accordance with
Section 5.02, Kirkbi Projekt A/S ("KIRKBI," and each of Alpine and Kirkbi are
sometimes referred to herein as a "TRANSFEROR" and together as the
"TRANSFERORS").
R E C I T A L S
The Boards of Directors of each of the parties hereto, deeming it advisable
for the benefit of each of the parties hereto and their respective stockholders
that the Transferors exchange certain shares of preferred stock and certain
indebtedness of PolyVision for shares of common stock of PolyVision and other
preferred stock of PolyVision.
THEREFORE, for and in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
THE EXCHANGE
1.01 TRANSFER AND EXCHANGE. Subject to and in accordance with the terms
and conditions of this Agreement, on the date hereof
(a) each of the Transferors shall transfer and deliver to PolyVision
the number shares of the Series A Preferred Stock, par value $.01 per
share, of PolyVision, together with accrued and unpaid dividends (the
"SERIES A PREFERRED STOCK") as set forth on Exhibit A hereto, and
PolyVision shall issue, transfer and deliver to the Transferors the number
of duly authorized, validly issued, fully paid and nonassessable shares of
Series B Convertible Preferred Stock, par value $.01 per share, of
PolyVision, having the terms and conditions set forth on Exhibit B hereto
(the "SERIES B PREFERRED STOCK"), and common stock, par value $.001 per
share, of PolyVision ("POLYVISION COMMON STOCK"), each as set forth on
Exhibit A hereto, and
(b) Alpine shall transfer and deliver to PolyVision the principal
amount of indebtedness of PolyVision as set forth on Exhibit A hereto (the
"POLYVISION DEBT"), and PolyVision shall issue, transfer and deliver to
Alpine the number of duly authorized, validly issued, fully paid and
nonassessable shares of PolyVision Common Stock as set forth on Exhibit A
hereto.
1.02 THE CLOSING. The closing of the transfer and exchange described in
Section 1.01 (the "CLOSING") shall take place at the offices of Alpine on the
date hereof and, if
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executed after such date by Kirkbi in accordance with Section 5.02, then as to
Kirkbi on the date of execution by Kirkbi.
1.03 DELIVERIES BY TRANSFERORS
At the Closing, the Transferors, as applicable, shall deliver to
PolyVision:
(a) certificates representing the Series A Preferred Stock to be
exchanged, duly endorsed in blank, in proper form for transfer; and
(b) evidence of the surrender and cancellation of the PolyVision Debt in
form and substance reasonably satisfactory to counsel to each of the parties.
1.04 DELIVERIES BY POLYVISION. PolyVision shall deliver to the
Transferors, as applicable, against delivery of the Series A Preferred Stock and
PolyVision Debt to be exchanged hereunder, and in payment of all accrued and
unpaid dividends on such Series A Preferred Stock,
(a) certificates registered in the name of each Transferors representing
the appropriate number of shares PolyVision Common Stock as set forth on Exhibit
A, and
(b) certificates registered in the name of each Transferors representing
the appropriate number of shares Series B Preferred Stock as set forth on
Exhibit A.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF THE TRANSFERORS
Each Transferor represents and warrants to, and agrees with, PolyVision as
follows:
2.01 VALIDITY OF TRANSACTION. Such Transferor has all requisite power and
authority to execute, deliver, and perform this Agreement and to transfer and
deliver to PolyVision the shares of Series A Preferred Stock and the PolyVision
Debt, as applicable. All necessary corporate proceedings of such Transferor
have been duly taken to authorize the execution, delivery, and performance of
this Agreement. This Agreement has been duly authorized, executed, and
delivered by such Transferor, is the legal, valid, and binding obligation of
such Transferor, and is enforceable as to such Transferor in accordance with
its terms. No consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any Federal, state, local, or
other governmental authority or of any court or other tribunal is required by
such Transferor for the execution, delivery, or performance of this Agreement by
such Transferor. No consent of any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which such
Transferor is a party, or by which any of its
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properties or assets is bound, is required for the execution, delivery, or
performance by such Transferor of this Agreement, except for such consents as
have been obtained at or prior to the date of this Agreement; and the execution,
delivery, and performance of this Agreement by such Transferor will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a default
under any such contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate or result in a breach of any term of the Certificate
of Incorporation or by-laws of such Transferor, or violate, result in a breach
of, or conflict with any law, rule, regulation, order, judgment, or decree
binding on such Transferor or to which any of its operations, business,
properties, or assets is subject. Such Transferor has good and marketable title
to the shares of Series A Preferred Stock and the PolyVision Debt being
transferred by it hereunder, as applicable.
2.02 FINDER OR BROKER. Neither such Transferor nor any person acting on
behalf of such Transferor has negotiated with any finder, broker, intermediary,
or similar person in connection with the transactions contemplated hereby.
2.03 ACCREDITED INVESTOR. Such Transferor is an "accredited investor," as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933 (the "SECURITIES ACT").
2.04 INVESTMENT INTENT. Such Transferor is acquiring the shares of
PolyVision Common Stock and Series B Preferred Stock pursuant hereto for its own
account for investment and not with a view to, or for sale in connection with,
any public distribution thereof in violation of the Securities Act. Such
Transferor understands that such shares of PolyVision Common Stock and Series B
Preferred Stock are "restricted securities" and have not been registered for
sale under the Securities Act or qualified under applicable state securities
laws and that the PolyVision Common Stock and Series B Preferred Stock will be
delivered to such Transferor pursuant to one or more exemptions from the
registration or qualification requirements of such securities laws and that the
representations and warranties contained in this Article II are given with the
intention that PolyVision may rely thereon for purposes of claiming such
exemptions. Such Transferor understands that it must bear the economic risk of
its investment in PolyVision for an indefinite period of time, as the PolyVision
Common Stock and Series B Preferred Stock cannot be sold unless registered under
the Securities Act and qualified under state securities laws, unless an
exemption from such registration and qualification is available.
2.05 TRANSFER OF SHARES. Such Transferor will not sell or otherwise
dispose of any PolyVision Common Stock or Series B Preferred Stock unless (a) a
registration statement with respect thereto has become effective under the
Securities Act and such shares have been qualified under applicable state
securities laws or (b) there is presented to PolyVision notice of the proposed
transfer and, if PolyVision so requests, there is also presented to PolyVision a
legal opinion reasonably satisfactory to PolyVision that such registration and
qualification are not required. Such Transferor consents that the transfer
agent for the PolyVision Common Stock and Series B Preferred Stock may be
instructed not to transfer the PolyVision Common Stock or Series B Preferred
Stock acquired pursuant hereto unless it receives satisfactory evidence of
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compliance with the foregoing provisions, and that there may be endorsed upon
any certificate representing the PolyVision Common Stock or Series B Preferred
Stock acquired pursuant hereto (and any certificates issued in substitution
therefor) the following legend calling attention to the foregoing restrictions
on transferability and stating in substance:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR QUALIFIED UNDER ANY STATE SECURITIES LAW. THESE SECURITIES
MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS THEY
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES OR BLUE SKY LAWS OR AN EXEMPTION IS AVAILABLE."
PolyVision shall, upon the request of any holder of a certificate bearing the
foregoing legend and the surrender of such certificate, issue a new certificate
without such legend if (i) the security evidenced by such certificate has been
effectively registered under the Securities Act and qualified under any
applicable state securities law and sold by the holder thereof in accordance
with such registration and qualification or (ii) such holder shall have
delivered to such Transferor a legal opinion reasonably satisfactory to such
Transferor to the effect that the restrictions set forth herein are no longer
required or necessary under the Securities Act or any applicable state law.
ARTICLE III
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF POLYVISION
PolyVision represents and warrants to, and agrees with, the Transferors as
follows:
3.01 VALIDITY OF TRANSACTION. PolyVision has all requisite power and
authority to execute, deliver, and perform this Agreement and to issue and sell
to the Transferors the shares of PolyVision Common Stock and Series B Preferred
Stock. All necessary corporate proceedings of PolyVision have been duly taken
to authorize the execution, delivery, and performance of this Agreement, and the
issuance and sale to the Transferors of the shares of PolyVision Common Stock
and Series B Preferred Stock. This Agreement has been duly authorized,
executed, and delivered by PolyVision, is the legal, valid, and binding
obligation of PolyVision, and is enforceable as to PolyVision in accordance with
its terms. No consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any Federal, state, local, or
other governmental authority or of any court or other tribunal or stock exchange
is required by PolyVision for the execution, delivery, or performance of this
Agreement by PolyVision. No consent of any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which PolyVision is
a party, or by which any of
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its properties or assets is bound, is required for the execution, delivery, or
performance by PolyVision of this Agreement, except for such consents as have
been obtained at or prior to the date of this Agreement; and the execution,
delivery, and performance of this Agreement by PolyVision will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a default
under any such contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate or result in a breach of any term of the Certificate
of Incorporation or by-laws of PolyVision, or violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or decree binding on
PolyVision or to which any of its operations, business, properties, or assets is
subject. The shares of PolyVision Common Stock and Series B Preferred Stock
have been duly authorized and, upon receipt by PolyVision from the Transferors
of the Series A Preferred Stock and the PolyVision Debt being transferred
pursuant to this Agreement, will be validly issued, fully paid, and
nonassessable, will not have been issued in violation of any preemptive right of
stockholders or rights of first refusal, and the Transferors will receive good
title to the shares of PolyVision Common Stock and Series B Preferred Stock,
free and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders agreements, and voting trusts (other than any created by such
Transferor).
3.02 FINDER OR BROKER. Neither PolyVision nor any person acting on behalf
of PolyVision has negotiated with any finder, broker, intermediary, or similar
person in connection with the transactions contemplated herein.
3.03 ACCREDITED INVESTOR. PolyVision is an "accredited investor," as that
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act.
3.04 FULL DISCLOSURE. All documents filed by PolyVision pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") since December
31, 1993 (i) were prepared in accordance with the requirements of the Exchange
Act and the rules and regulations thereunder, (ii) did not at the time they were
filed contain any untrue statement of a material fact, and (iii) did not at the
time they were filed omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. From the date as of which information is given in the most
recent report filed by PolyVision under the Exchange Act to the date of this
Agreement, there has not been any material adverse change in, or any adverse
development which materially affects, the business, results of operations, or
financial condition of PolyVision and its subsidiaries taken as a whole.
ARTICLE IV
COVENANTS OF POLYVISION
4.01 REGISTRATION OF THE POLYVISION COMMON STOCK. PolyVision will use its
best efforts to effect the registration under the Securities Act of the
PolyVision Common Stock issued hereunder and issuable upon conversion of the
Series B Preferred Stock as requested by Alpine from time to time, but not
sooner than 180 days after the Closing Date. In addition,
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PolyVision shall advise the Transferors by written notice at least thirty days
prior to the filing of any registration statement under the Securities Act
covering securities of PolyVision (except with respect to registration
statements on Form S-4, Form S-8 or similar forms) and will, upon the request of
any Transferor, include in any such registration statement such information as
may be required to permit a public offering of the PolyVision Common Stock,
subject to any restrictions imposed by any managing underwriter in connection
with an underwritten public offering on behalf of PolyVision. In connection
therewith, PolyVision will:
(a) promptly prepare and file with the Securities and Exchange Commission
(the "SEC") a registration statement with respect to the PolyVision Common Stock
and use its best efforts to cause such registration statement to become
effective;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and current for a period
sufficient to enable the Transferors to complete the distribution of the
PolyVision Common Stock covered by such registration statement, and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Transferors thereof
as set forth in such registration statement;
(c) furnish to the Transferors such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus), and such
other documents as the Transferors may reasonably request in order to facilitate
the disposition of the PolyVision Common Stock owned by the Transferors;
(d) use its best efforts to register or qualify the PolyVision Common
Stock under the securities or blue sky laws of such jurisdictions of the United
States as the Transferors may reasonably request and do any other related acts
which may be reasonably necessary to enable the Transferors to consummate the
disposition in such jurisdictions of the PolyVision Common Stock owned by the
Transferors; PROVIDED, HOWEVER, that PolyVision will not be required to (i)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 4.02(d); (ii) subject itself to
taxation in any jurisdiction; or (iii) consent to general service of process in
any such jurisdiction;
(e) notify the Transferors at any time when a prospectus relating to the
PolyVision Common Stock is required to be delivered under the Securities Act, of
the happening of any event as a result of which, or the fact that, the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of a Transferor, PolyVision will prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of PolyVision Common Stock, such prospectus will not contain any
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
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(f) use its best efforts to cause the PolyVision Common Stock to be listed
or quoted on each securities exchange or interdealer quotation system on which
similar securities issued by PolyVision are then listed or quoted;
(g) provide a transfer agent for all such PolyVision Common Stock not
later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements on customary terms) and take all such other actions as the
Transferors may reasonably request in order to expedite or facilitate the
disposition of the PolyVision Common Stock; and
(i) make available for inspection by the Transferors or any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant, or any other agent retained by the Transferors or any
such underwriter, all financial and other records, pertinent corporate documents
and properties of PolyVision, and cause PolyVision's officers, directors, and
employees to supply all information reasonably requested by the Transferors, any
such underwriter, attorney, accountant, or agent in connection with such
registration statement.
4.02 REGISTRATION EXPENSES. All expenses ("REGISTRATION EXPENSES")
incident to PolyVision's performance of or compliance with this Article IV with
respect to any registration of the PolyVision Common Stock will be borne by
PolyVision, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, the expense of any audit, and the
expenses and fees for listing or quoting the securities to be registered on each
securities exchange or interdealer quotation system on which similar securities
issued by PolyVision are then listed or quoted. Notwithstanding the foregoing,
however, all underwriters' discounts and commissions in respect of the sale of
PolyVision Common Stock and the fees and disbursements of counsel for the
Transferors, shall be paid by the Transferors.
4.03 PRECONDITIONS TO PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. Neither
of the Transferors may participate in any underwritten registration hereunder
unless it (i) agrees to its securities on the basis provided in any customary
underwriting arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, and other documents
required under the terms of such underwriting arrangements.
4.04 INDEMNIFICATION AND CONTRIBUTION.
(a) PolyVision shall indemnify and hold harmless the Transferors and each
of their officers, directors, employees, agents, partners, legal counsel, and
accountants, and each controlling person of each of the foregoing (within the
meaning of the Securities Act) against any losses, claims, damages, or
liabilities, joint or several (or actions in respect thereof),
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including any of the foregoing incurred in the settlement of any litigation,
commenced or threatened, to which any of them may be subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement (or alleged untrue statement) of any
material fact contained in any registration statement under which the PolyVision
Common Stock was registered under the Securities Act or in any preliminary
prospectus or final prospectus contained therein, or in any amendment or
supplement thereto, (ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any other violation by PolyVision of the
Securities Act or any state securities law in connection with any such
registration, and shall reimburse each such person entitled to indemnification
under this Section 4.04(a) for any legal or other expenses reasonably incurred
by such person in connection with investigating or defending any such loss,
claim, damage, liability, or action, as and when such expenses are incurred;
PROVIDED, HOWEVER, that PolyVision shall not be liable to any such person in any
such case to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or omission made in such
registration statement, preliminary prospectus, or amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
PolyVision by such person, specifically for use therein.
(b) Each Transferor shall indemnify PolyVision and each of PolyVision's
officers, employees, agents, directors, legal counsel, and accountants, and each
controlling person of each of the foregoing (within the meaning of the
Securities Act) against any losses, claims, damages, or liabilities (or actions
in respect thereof), including any of the foregoing incurred in the settlement
of any litigation, commenced or threatened, joint or several, to which any of
them may be subject under the Securities Act or any other statute or at common
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement (or alleged
untrue statement) of any material fact contained in any registration statement
under which the PolyVision Common Stock was registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or in any
amendment or supplement thereto or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) was
made in such registration statement, preliminary prospectus, or amendment or
supplement thereto solely in reliance upon and in conformity with written
information furnished to PolyVision by such Transferor specifically for use
therein, and to reimburse such persons for any legal or other expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability, or action, as and when such expenses are incurred.
(c) If (i) an indemnified party makes a claim for indemnification pursuant
to this Section 4.04 (subject to the limitations hereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case or (ii) an indemnified party
seeks contribution under the Securities Act, the Exchange Act, or otherwise,
then PolyVision (including for this purpose any contribution made by or on
8
<PAGE>
behalf of any director of PolyVision, any officer of PolyVision who signed the
registration statement, and any controlling person of PolyVision) as one entity
and the Transferors (including for this purpose any contribution by or on behalf
of a person who would be indemnified by PolyVision) as a second entity, shall
contribute to the losses, liabilities, claims, damages, and expenses whatsoever
to which any of them may be subject, so that PolyVision and the Transferors are
each responsible for the proportion thereof which reflects as nearly as possible
the relative fault of the Transferors and PolyVision in connection with the
facts which resulted in such losses, liabilities, claims, damages, or expenses.
The relative fault, in the case of an untrue statement, alleged untrue
statement, omission, or alleged omission, shall be determined by, among other
things, whether such statement, alleged statement, omission, or alleged omission
relates to information supplied by the Transferors or by PolyVision, and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement, alleged statement, omission, or alleged
omission. No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. Anything in this Section 4.04 to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 4.04 is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
(d) Each party entitled to indemnification under this Section 4.04 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has knowledge of the commencement of any action, proceeding, or investigation in
respect of which indemnity or reimbursement may be sought as provided above;
PROVIDED, HOWEVER, that the failure of such Indemnified Party to notify the
Indemnifying Party with respect to a particular action, proceeding, or
investigation shall not relieve the Indemnifying Party from any obligation or
liability (i) which it may have pursuant to this Agreement to the extent that
the Indemnifying Party is not prejudiced by the failure to notify or (ii) which
it may have otherwise than pursuant to this Agreement. The Indemnifying Party
shall promptly assume the defense of any Indemnified Party with counsel
reasonably satisfactory to such Indemnified Party, and the fees and expenses of
such counsel shall be at the sole cost and expense of the Indemnifying Party.
The Indemnified Party will cooperate with the Indemnifying Party in the defense
of any action, proceeding, or investigation for which the Indemnifying Party
assumes the defense. Notwithstanding the foregoing, any such Indemnified Party
shall have the right to employ separate counsel of its own selection in any such
action, proceeding, or investigation and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (x) the Indemnifying Party has agreed to pay such fees
and expenses, (y) the Indemnifying Party shall have failed promptly to assume
the defense of such action, proceeding, or investigation and employ counsel
reasonably satisfactory to such Indemnified Party, or (z) in the reasonable
judgment of such Indemnified Party there may be one or more defenses available
to such Indemnified Party which are not available to the Indemnifying Party in
respect of such action, proceeding, or investigation, in which case the
Indemnifying Party shall not have the right to assume the defense of such
action, proceeding, or investigation
9
<PAGE>
on behalf of such Indemnified Party. An Indemnifying Party who is not entitled
to, or elects not to, assume the defense of an action, proceeding, or
investigation shall not be obligated to pay the fees and expenses of more than
one counsel and appropriate local counsel for all parties indemnified by such
Indemnifying Party pursuant to this Section 4.04 with respect to the same
action, proceeding, or investigation, unless in the reasonable judgment of any
such Indemnified Party a conflict of interest may exist between such Indemnified
Party and any other such Indemnified Party with respect to such action, claim,
or proceeding. The Indemnifying Party shall not be liable for the settlement by
any Indemnified Party of any action, proceeding, or investigation effected
without its consent, which consent shall not be unreasonably withheld. The
Indemnifying Party shall not enter into any settlement in any action, suit, or
proceeding to which an Indemnified Party is party unless such settlement
includes a general release of the Indemnified Party, with no payment by the
Indemnified Party of consideration.
ARTICLE V
MISCELLANEOUS
5.01 NOTICES. All notices or other communications hereunder shall be in
writing and shall be given by registered or certified mail (postage prepaid and
return receipt requested), by an overnight courier service which obtains a
receipt to evidence delivery, or by facsimile transmission (provided that
written confirmation of receipt is provided), addressed to the appropriate party
at the following addresses (or such other address as any party may designate to
the other in accordance with the aforesaid procedure):
(a) if to Alpine:
The Alpine Group, Inc.
1790 Broadway
New York, New York 10019
Attention: Stewart H. Wahrsager, Esq.
Fax: (212) 757-3423
(b) if to Kirkbi, at the address set forth on the signature page hereof.
(c) if to PolyVision:
PolyVision Corporation
48-62 36th Street
Long island City, NY 11101
Attention: Joseph A. Menniti, President and CEO
Fax: (718) 786-9310
10
<PAGE>
All notices and other communications sent by overnight courier service shall be
deemed to have been given as of the second Business Day after delivery thereof
to such courier service, those given by facsimile transmission shall be deemed
given when sent, and all notices and other communications sent by mail shall be
deemed given as of the fifth Business Day after the date of deposit with the
United States Postal Service. As used herein, "BUSINESS DAY" shall mean any day
other than Saturday, Sunday, or any other day when banks in New York City are
required or permitted by law or other governmental actions to be closed.
5.02 BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall become
binding on and inure to the benefit of Alpine and PolyVision upon execution by
such parties. This Agreement shall become binding on Kirkbi and inure to its
benefit, and Kirkbi shall become a party hereto, only if and when it executes
this Agreement, provided that Kirkbi executes this Agreement within 30 days
after the date hereof. This Agreement shall be binding on each party hereto and
any successor of a party in accordance with the following sentence. Neither the
Transferors nor PolyVision may sell, assign, transfer, or otherwise convey any
of its rights or delegate any of its duties under this Agreement, except to a
corporation which has succeeded to substantially all of the business and assets
of such party and has assumed in writing its obligations under this Agreement.
Without limiting the generality of the foregoing, any transferee of PolyVision
Common Stock shall have the rights set forth in Article IV, and such rights
shall be enforceable against PolyVision by such transferees as third party
beneficiaries.
5.03 AMENDMENTS AND WAIVERS. Neither this Agreement nor any term hereof
may be changed or waived (either generally or in a particular instance and
either retroactively or prospectively) absent the written consent of the
Transferors and PolyVision.
5.04 EXPENSES. Each of the Transferors and PolyVision will be responsible
for the payment of all expenses incurred by it in connection with the
preparation, execution, and delivery of this Agreement, any other documents
relating to the transactions contemplated by this Agreement, and the
consummation of the transactions herein described, except that PolyVision shall
reimburse Alpine on demand for Alpine's reasonable costs and expenses in
connection with the preparation and negotiation of this Agreement and such other
documents, including legal fees and expenses and the cost of any fairness
opinion obtained by Alpine in connection with the transactions contemplated
hereby.
5.05 SURVIVAL OF REPRESENTATIONS, ETC. The representations, warranties,
covenants, and agreements made herein or in any certificate or document executed
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions herein described, regardless
of any investigation made at any time by or on behalf of any of the parties
hereto.
5.06 DELAYS OR OMISSIONS; WAIVER. No delay or omission to exercise any
right, power, or remedy accruing to either of the Transferors or PolyVision upon
any breach or default by the other under this Agreement shall impair any such
right, power, or remedy nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein or in any
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<PAGE>
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.
5.07 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and all prior
negotiations, discussions, commitments, and understandings heretofore had
between them with respect thereto are merged herein.
5.08 COUNTERPARTS; GOVERNING LAW. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to conflicts of laws rules or principles.
5.09 FURTHER ACTIONS. At any time and from time to time, each party
agrees, without further consideration, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.This Agreement has been duly executed on the date hereinabove
set forth.
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<PAGE>
THE ALPINE GROUP, INC.
By /s/ Bragi F. Schut
------------------------------
Name: Bragi F. Schut
Title: Executive Vice President
POLYVISION CORPORATION
By /s/ Joseph A. Menniti
------------------------------
Name: Joseph A. Menniti
Title: President and CEO
KIRKBI PROJEKT A/S
/s/ Bjarne Ammitzboll Nielsen
By /s/ Georg Jensen
----------------------------------------------
Name: Bjarne Ammitzboll Nielsen/Georg Jensen
Address: Aastvej I
------------------------
DK-7190 Billund
------------------------
Denmark
------------------------
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<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
POLYVISION PREFERRED STOCK (SERIES B LIQUIDATION PREFERENCE $50 PER SHARE)
- --------------------------------------------------------------------------------------------------------------------------
EXISTING: EXCHANGED FOR:
- ------------------ --------------- ----------- ----------- --------------- ------------------- ------------
SERIES A SERIES B SERIES B
PREFERRED STOCK LIQUIDATION ACCRUED PREFERRED STOCK PREFERRED STOCK COMMON STOCK
(SHARES) VALUE DIVIDENDS (SHARES) (LIQUIDATION VALUE) (SHARES)
- ------------------ --------------- ----------- ----------- --------------- ------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ALPINE 1,009,177 $25,229,425 $5,532,931 246,000 $12,300,000 -0-
- ------------------ --------------- ----------- ----------- --------------- ------------------- ------------
KIRKBI 20,076 501,900 110,069 1,951 97,550 102,888
- ------------------ --------------- ----------- ----------- --------------- ------------------- ------------
TOTAL 1,029,253 $25,731,325 $5,643,000 247,951 $12,397,550 102,888
- ------------------ --------------- ----------- ----------- --------------- ------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
POLYVISION DEBT EFFECTIVE EXCHANGE PRICE
- ------------------- ------------------- -------------- ------------------------ ------------
EXISTING: EXCHANGED FOR: LIQUIDATION VALUE $25,731,325
- ------------------- ------------------- -------------- ------------------------ ------------
POLYVISION DEBT ACCRUED DIVIDENDS 5,643,000
(PRINCIPAL AND COMMON STOCK -------------------------------------
INTEREST) (SHARES) POLYVISION DEBT 7,388,940
- ------------------- ------------------- -------------- ------------------------ ------------
ALPINE $7,388,940 5,171,977 TOTAL $38,763,265
- ------------------- ------------------- -------------- ------------------------ ------------
KIRKBI - 0 - - 0 - SHARES ISSUABLE 9,407,382
- ------------------- ------------------- -------------- ------------------------ ------------
TOTAL $7,388,940 5,171,977 EFFECTIVE EXCHANGE PRICE $4.12
- ------------------- ------------------- -------------- ------------------------ ------------
</TABLE>
<PAGE>
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
-------------------------------------------
AGREEMENT, dated as of November 20, 1998, between PolyVision Corporation, a
New York corporation ("PolyVision"), and The Alpine Group, Inc., a Delaware
corporation ("Alpine").
R E C I T A L S
- - - - - - - -
The Boards of Directors of each of the parties hereto, deeming it advisable
for the benefit of each of the parties hereto and their respective stockholders
that Alpine subscribe for and purchase shares of preferred stock of PolyVision.
THEREFORE, for and in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
SUBSCRIPTION FOR AND PURCHASE OF PREFERRED STOCK
1.01 SUBSCRIPTION FOR SHARES. Subject to and in accordance with the terms
and conditions of this Agreement, on the date hereof, Alpine hereby subscribes
for and agrees to purchase, and PolyVision hereby agrees to issue and sell to
Alpine, 100,000 duly authorized, validly issued, fully paid and nonassessable
shares of Series C Convertible Preferred Stock, par value $.01 and liquidation
value $50.00 per share (the "Series C Preferred Stock"), of PolyVision,
convertible into shares of PolyVision's Common Stock, par value $.001 per share
(the "PolyVision Common Stock"), and having the other terms and conditions set
forth in the Certificate of Amendment of the Certificate of Incorporation of
PolyVision attached as EXHIBIT A hereto, at a purchase price of $50.00 per
share, or an aggregate purchase price of $5,000,000, payable in cash.
1.02 THE CLOSING. The closing of the subscription for and purchase of the
Series C Preferred Stock described in Section 1.01 (the "Closing") shall take
place at the offices of Alpine on the date hereof. At the Closing, PolyVision
shall deliver to Alpine one certificate registered in the name of Alpine
representing 100,000 shares of Series C Preferred Stock.
ARTICLE II
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS OF ALPINE
Alpine represents and warrants to, and agrees with, PolyVision as follows:
<PAGE>
2.01 VALIDITY OF TRANSACTION. Alpine has all requisite power and authority
to execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Alpine have been duly taken to authorize the execution, delivery,
and performance of this Agreement. This Agreement has been duly authorized,
executed, and delivered by Alpine, is the legal, valid, and binding obligation
of Alpine, and is enforceable as to Alpine in accordance with its terms. No
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any Federal, state, local, or other
governmental authority or of any court or other tribunal is required by Alpine
for the execution, delivery, or performance of this Agreement by Alpine. No
consent of any party to any contract, agreement, instrument, lease, license,
arrangement, or understanding to which Alpine is a party, or by which any of its
properties or assets is bound, is required for the execution, delivery, or
performance by Alpine of this Agreement, except for such consents as have been
obtained at or prior to the date of this Agreement; and the execution, delivery,
and performance of this Agreement by Alpine will not violate, result in a breach
of, conflict with, or (with or without the giving of notice or the passage of
time or both) entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement, or understanding,
or violate or result in a breach of any term of the Certificate of Incorporation
or by-laws of Alpine, or violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on Alpine or to which
any of its operations, business, properties, or assets is subject.
2.02 FINDER OR BROKER. Neither Alpine nor any person acting on behalf of
Alpine has negotiated with any finder, broker, intermediary, or similar person
in connection with the transactions contemplated hereby.
2.03 ACCREDITED INVESTOR. Alpine is an "accredited investor," as that term
is defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933 (the "Securities Act").
2.04 INVESTMENT INTENT. Alpine is acquiring the shares of Series C
Preferred Stock pursuant hereto for its own account for investment and not with
a view to, or for sale in connection with, any public distribution thereof in
violation of the Securities Act. Alpine understands that such shares of Series
C Preferred Stock are "restricted securities" and have not been registered for
sale under the Securities Act or qualified under applicable state securities
laws and that the Series C Preferred Stock will be delivered to Alpine pursuant
to one or more exemptions from the registration or qualification requirements of
such securities laws and that the representations and warranties contained in
this Article II are given with the intention that PolyVision may rely thereon
for purposes of claiming such exemptions. Alpine understands that it must bear
the economic risk of its investment in PolyVision for an indefinite period of
time, as the Series C Preferred Stock cannot be sold unless registered under the
Securities Act and qualified under state securities laws, unless an exemption
from such registration and qualification is available.
2.05 TRANSFER OF SHARES. Alpine will not sell or otherwise dispose of any
Series C Preferred Stock or PolyVision Common Stock issuable upon conversion of
the Series C
2
<PAGE>
Preferred Stock unless (a) a registration statement with respect thereto has
become effective under the Securities Act and such shares have been qualified
under applicable state securities laws or (b) there is presented to PolyVision
notice of the proposed transfer and, if PolyVision so requests, there is also
presented to PolyVision a legal opinion reasonably satisfactory to PolyVision
that such registration and qualification are not required. Alpine consents that
the transfer agent for the Series B Preferred Stock and PolyVision Common Stock
may be instructed not to transfer the Series B Preferred Stock or PolyVision
Common Stock acquired pursuant hereto unless it receives satisfactory evidence
of compliance with the foregoing provisions, and that there may be endorsed upon
any certificate representing the Series C Preferred Stock or PolyVision Common
Stock acquired pursuant hereto (and any certificates issued in substitution
therefor) the following legend calling attention to the foregoing restrictions
on transferability and stating in substance:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR QUALIFIED UNDER ANY STATE SECURITIES LAW. THESE SECURITIES
MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS THEY
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES OR BLUE SKY LAWS OR AN EXEMPTION IS AVAILABLE."
PolyVision shall, upon the request of any holder of a certificate bearing the
foregoing legend and the surrender of such certificate, issue a new certificate
without such legend if (i) the security evidenced by such certificate has been
effectively registered under the Securities Act and qualified under any
applicable state securities law and sold by the holder thereof in accordance
with such registration and qualification or (ii) such holder shall have
delivered to Alpine a legal opinion reasonably satisfactory to Alpine to the
effect that the restrictions set forth herein are no longer required or
necessary under the Securities Act or any applicable state law.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF POLYVISION
PolyVision represents and warrants to, and agrees with, Alpine as follows:
3.01 VALIDITY OF TRANSACTION. PolyVision has all requisite power and
authority to execute, deliver, and perform this Agreement and to issue and sell
to Alpine the shares of Series C Preferred Stock. All necessary corporate
proceedings of PolyVision have been duly taken to authorize the execution,
delivery, and performance of this Agreement, and the issuance and sale to Alpine
of the shares of Series C Preferred Stock. This Agreement has been duly
authorized, executed, and delivered by PolyVision, is the legal, valid, and
binding obligation of PolyVision, and is enforceable as to PolyVision in
accordance with its terms. No consent,
3
<PAGE>
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any Federal, state, local, or other governmental
authority or of any court or other tribunal or stock exchange is required by
PolyVision for the execution, delivery, or performance of this Agreement by
PolyVision. No consent of any party to any contract, agreement, instrument,
lease, license, arrangement, or understanding to which PolyVision is a party, or
by which any of its properties or assets is bound, is required for the
execution, delivery, or performance by PolyVision of this Agreement, except for
such consents as have been obtained at or prior to the date of this Agreement;
and the execution, delivery, and performance of this Agreement by PolyVision
will not violate, result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any party to terminate
or call a default under any such contract, agreement, instrument, lease,
license, arrangement, or understanding, or violate or result in a breach of any
term of the Certificate of Incorporation or by-laws of PolyVision, or violate,
result in a breach of, or conflict with any law, rule, regulation, order,
judgment, or decree binding on PolyVision or to which any of its operations,
business, properties, or assets is subject. The shares of Series C Preferred
Stock and PolyVision Common Stock issuable upon conversion of the Series C
Preferred Stock have been duly authorized and, upon receipt by PolyVision from
Alpine of payment therefor pursuant to this Agreement and Exhibit A hereto, will
be validly issued, fully paid, and nonassessable, will not have been issued in
violation of any preemptive right of stockholders or rights of first refusal,
and Alpine will receive good title to the shares of Series C Preferred Stock and
PolyVision Common Stock, free and clear of all liens, security interests,
pledges, charges, encumbrances, stockholders agreements, and voting trusts
(other than any created by Alpine).
3.02 FINDER OR BROKER. Neither PolyVision nor any person acting on behalf
of PolyVision has negotiated with any finder, broker, intermediary, or similar
person in connection with the transactions contemplated herein.
3.03 FULL DISCLOSURE. All documents filed by PolyVision pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since December
31, 1993 (i) were prepared in accordance with the requirements of the Exchange
Act and the rules and regulations thereunder, (ii) did not at the time they were
filed contain any untrue statement of a material fact, and (iii) did not at the
time they were filed omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. From the date as of which information is given in the most
recent report filed by PolyVision under the Exchange Act to the date of this
Agreement, there has not been any material adverse change in, or any adverse
development which materially affects, the business, results of operations, or
financial condition of PolyVision and its subsidiaries taken as a whole.
ARTICLE IV
COVENANTS OF POLYVISION
4.01 REGISTRATION OF THE POLYVISION COMMON STOCK. PolyVision will use its
best efforts to effect the registration under the Securities Act of the
PolyVision Common Stock
4
<PAGE>
issuable upon conversion of the Series C Preferred Stock as requested by Alpine
from time to time, but not sooner than 180 days after the Closing Date. In
addition, PolyVision shall advise Alpine by written notice at least thirty days
prior to the filing of any registration statement under the Securities Act
covering securities of PolyVision (except with respect to registration
statements on Form S-4, Form S-8 or similar forms) and will, upon the request of
Alpine, include in any such registration statement such information as may be
required to permit a public offering of the PolyVision Common Stock, subject to
any restrictions imposed by any managing underwriter in connection with an
underwritten public offering on behalf of PolyVision. In connection therewith,
PolyVision will:
(a) promptly prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to the PolyVision
Common Stock and use its best efforts to cause such registration statement to
become effective;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and current for a
period sufficient to enable Alpine to complete the distribution of the
PolyVision Common Stock covered by such registration statement, and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by Alpine thereof as set
forth in such registration statement;
(c) furnish to Alpine such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus), and such
other documents as Alpine may reasonably request in order to facilitate the
disposition of the PolyVision Common Stock owned by Alpine;
(d) use its best efforts to register or qualify the PolyVision Common
Stock under the securities or blue sky laws of such jurisdictions of the United
States as Alpine may reasonably request and do any other related acts which may
be reasonably necessary to enable Alpine to consummate the disposition in such
jurisdictions of the PolyVision Common Stock owned by Alpine; PROVIDED, HOWEVER,
that PolyVision will not be required to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 4.02(d); (ii) subject itself to taxation in any jurisdiction; or (iii)
consent to general service of process in any such jurisdiction;
(e) notify Alpine at any time when a prospectus relating to the
PolyVision Common Stock is required to be delivered under the Securities Act, of
the happening of any event as a result of which, or the fact that, the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of Alpine, PolyVision will prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of PolyVision Common Stock, such prospectus will not contain any
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading;
5
<PAGE>
(f) use its best efforts to cause the PolyVision Common Stock to be
listed or quoted on each securities exchange or interdealer quotation system on
which similar securities issued by PolyVision are then listed or quoted;
(g) provide a transfer agent for all such PolyVision Common Stock not
later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements on customary terms) and take all such other actions as Alpine may
reasonably request in order to expedite or facilitate the disposition of the
PolyVision Common Stock; and
(i) make available for inspection by Alpine or any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant, or any other agent retained by Alpine or any such
underwriter, all financial and other records, pertinent corporate documents and
properties of PolyVision, and cause PolyVision's officers, directors, and
employees to supply all information reasonably requested by Alpine, any such
underwriter, attorney, accountant, or agent in connection with such registration
statement.
4.02 REGISTRATION EXPENSES. All expenses ("Registration Expenses")
incident to PolyVision's performance of or compliance with this Article IV with
respect to any registration of the PolyVision Common Stock will be borne by
PolyVision, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, the expense of any audit, and the
expenses and fees for listing or quoting the securities to be registered on each
securities exchange or interdealer quotation system on which similar securities
issued by PolyVision are then listed or quoted. Notwithstanding the foregoing,
however, all underwriters' discounts and commissions in respect of the sale of
PolyVision Common Stock and the fees and disbursements of counsel for Alpine,
shall be paid by Alpine.
4.03 PRECONDITIONS TO PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. Alpine
may not participate in any underwritten registration hereunder unless it (i)
agrees to its securities on the basis provided in any customary underwriting
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents required
under the terms of such underwriting arrangements.
4.04 INDEMNIFICATION AND CONTRIBUTION.
(a) PolyVision shall indemnify and hold harmless Alpine and each of
its officers, directors, employees, agents, partners, legal counsel, and
accountants, and each controlling person of each of the foregoing (within the
meaning of the Securities Act) against any losses, claims, damages, or
liabilities, joint or several (or actions in respect thereof), including any of
the foregoing incurred in the settlement of any litigation, commenced or
threatened, to which any of them may be subject under the Securities Act or any
other statute or at common
6
<PAGE>
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement (or
alleged untrue statement) of any material fact contained in any registration
statement under which the PolyVision Common Stock was registered under the
Securities Act or in any preliminary prospectus or final prospectus contained
therein, or in any amendment or supplement thereto, (ii) any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) any other
violation by PolyVision of the Securities Act or any state securities law in
connection with any such registration, and shall reimburse each such person
entitled to indemnification under this Section 4.04(a) for any legal or other
expenses reasonably incurred by such person in connection with investigating or
defending any such loss, claim, damage, liability, or action, as and when such
expenses are incurred; PROVIDED, HOWEVER, that PolyVision shall not be liable to
any such person in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon any untrue statement or
omission made in such registration statement, preliminary prospectus, or
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to PolyVision by such person, specifically for use
therein.
(b) Alpine shall indemnify PolyVision and each of its officers,
employees, agents, directors, legal counsel, and accountants, and each
controlling person of each of the foregoing (within the meaning of the
Securities Act) against any losses, claims, damages, or liabilities (or actions
in respect thereof), including any of the foregoing incurred in the settlement
of any litigation, commenced or threatened, joint or several, to which any of
them may be subject under the Securities Act or any other statute or at common
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement (or alleged
untrue statement) of any material fact contained in any registration statement
under which the PolyVision Common Stock was registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or in any
amendment or supplement thereto or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) was
made in such registration statement, preliminary prospectus, or amendment or
supplement thereto solely in reliance upon and in conformity with written
information furnished to PolyVision by Alpine specifically for use therein, and
to reimburse such persons for any legal or other expenses reasonably incurred in
connection with investigating or defending any such loss, claim, damage,
liability, or action, as and when such expenses are incurred.
(c) If (i) an indemnified party makes a claim for indemnification
pursuant to this Section 4.04 (subject to the limitations hereof) but it is
found in a final judicial determination, not subject to further appeal, that
such indemnification may not be enforced in such case or (ii) an indemnified
party seeks contribution under the Securities Act, the Exchange Act, or
otherwise, then PolyVision (including for this purpose any contribution made by
or on behalf of any director of PolyVision, any officer of PolyVision who signed
the registration statement, and any controlling person of PolyVision) as one
entity and Alpine (including for this purpose any contribution by or on behalf
of a person who would be indemnified by PolyVision)
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as a second entity, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be subject, so that
PolyVision and Alpine are each responsible for the proportion thereof which
reflects as nearly as possible the relative fault of Alpine and PolyVision in
connection with the facts which resulted in such losses, liabilities, claims,
damages, or expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission, or alleged omission, shall be determined by,
among other things, whether such statement, alleged statement, omission, or
alleged omission relates to information supplied by Alpine or by PolyVision, and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement, alleged statement, omission, or alleged
omission. No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. Anything in this Section 4.04 to the contrary
notwithstanding, no party shall be liable for contribution with respect to the
settlement of any claim or action effected without its written consent. This
Section 4.04 is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
(d) Each party entitled to indemnification under this Section 4.04
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has knowledge of the commencement of any action, proceeding, or investigation in
respect of which indemnity or reimbursement may be sought as provided above;
PROVIDED, HOWEVER, that the failure of such Indemnified Party to notify the
Indemnifying Party with respect to a particular action, proceeding, or
investigation shall not relieve the Indemnifying Party from any obligation or
liability (i) which it may have pursuant to this Agreement to the extent that
the Indemnifying Party is not prejudiced by the failure to notify or (ii) which
it may have otherwise than pursuant to this Agreement. The Indemnifying Party
shall promptly assume the defense of any Indemnified Party with counsel
reasonably satisfactory to such Indemnified Party, and the fees and expenses of
such counsel shall be at the sole cost and expense of the Indemnifying Party.
The Indemnified Party will cooperate with the Indemnifying Party in the defense
of any action, proceeding, or investigation for which the Indemnifying Party
assumes the defense. Notwithstanding the foregoing, any such Indemnified Party
shall have the right to employ separate counsel of its own selection in any such
action, proceeding, or investigation and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (x) the Indemnifying Party has agreed to pay such fees
and expenses, (y) the Indemnifying Party shall have failed promptly to assume
the defense of such action, proceeding, or investigation and employ counsel
reasonably satisfactory to such Indemnified Party, or (z) in the reasonable
judgment of such Indemnified Party there may be one or more defenses available
to such Indemnified Party which are not available to the Indemnifying Party in
respect of such action, proceeding, or investigation, in which case the
Indemnifying Party shall not have the right to assume the defense of such
action, proceeding, or investigation on behalf of such Indemnified Party. An
Indemnifying Party who is not entitled to, or elects not to, assume the defense
of an action, proceeding, or investigation shall not be obligated to pay the
fees and expenses of more than one counsel and appropriate local counsel for all
parties indemnified by such Indemnifying Party pursuant to this Section 4.04
with respect to the same
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action, proceeding, or investigation, unless in the reasonable judgment of any
such Indemnified Party a conflict of interest may exist between such Indemnified
Party and any other such Indemnified Party with respect to such action, claim,
or proceeding. The Indemnifying Party shall not be liable for the settlement by
any Indemnified Party of any action, proceeding, or investigation effected
without its consent, which consent shall not be unreasonably withheld. The
Indemnifying Party shall not enter into any settlement in any action, suit, or
proceeding to which an Indemnified Party is party unless such settlement
includes a general release of the Indemnified Party, with no payment by the
Indemnified Party of consideration.
ARTICLE V
MISCELLANEOUS
5.01 NOTICES. All notices or other communications hereunder shall be in
writing and shall be given by registered or certified mail (postage prepaid and
return receipt requested), by an overnight courier service which obtains a
receipt to evidence delivery, or by facsimile transmission (provided that
written confirmation of receipt is provided), addressed to the appropriate party
at the following addresses (or such other address as any party may designate to
the other in accordance with the aforesaid procedure):
(a) if to Alpine:
The Alpine Group, Inc.
1790 Broadway
New York, New York 10019
Attention: Stewart H. Wahrsager, Esq.
Fax: (212) 757-3423
(b) if to PolyVision:
PolyVision Corporation
48-62 36th Street
Long island City, NY 11101
Attention: Joseph A. Menniti, President and
Chief Executive Officer
Fax: (718) 786-9310
All notices and other communications sent by overnight courier service shall be
deemed to have been given as of the second Business Day after delivery thereof
to such courier service, those given by facsimile transmission shall be deemed
given when sent, and all notices and other communications sent by mail shall be
deemed given as of the fifth Business Day after the date of deposit with the
United States Postal Service. As used herein, "Business Day" shall mean any day
other than Saturday, Sunday, or any other day when banks in New York City are
required or permitted by law or other governmental actions to be closed.
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5.02 BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall become
binding on and inure to the benefit of Alpine and PolyVision upon execution by
such parties. This Agreement shall be binding on each party hereto and any
successor of a party in accordance with the following sentence. Neither Alpine
nor PolyVision may sell, assign, transfer, or otherwise convey any of its rights
or delegate any of its duties under this Agreement, except to a corporation
which has succeeded to substantially all of the business and assets of such
party and has assumed in writing its obligations under this Agreement. Without
limiting the generality of the foregoing, any transferee of PolyVision Common
Stock shall have the rights set forth in Article IV, and such rights shall be
enforceable against PolyVision by such transferees as third party beneficiaries.
5.03 AMENDMENTS AND WAIVERS. Neither this Agreement nor any term hereof
may be changed or waived (either generally or in a particular instance and
either retroactively or prospectively) absent the written consent of Alpine and
PolyVision.
5.04 EXPENSES. Each of Alpine and PolyVision will be responsible for the
payment of all expenses incurred by it in connection with the preparation,
execution, and delivery of this Agreement, any other documents relating to the
transactions contemplated by this Agreement, and the consummation of the
transactions herein described, except that PolyVision shall reimburse Alpine on
demand for Alpine's reasonable costs and expenses in connection with the
preparation and negotiation of this Agreement and such other documents,
including legal fees and expenses and the cost of any fairness opinion obtained
by Alpine in connection with the transactions contemplated hereby.
5.05 SURVIVAL OF REPRESENTATIONS, ETC. The representations, warranties,
covenants, and agreements made herein or in any certificate or document executed
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions herein described, regardless
of any investigation made at any time by or on behalf of any of the parties
hereto.
5.06 DELAYS OR OMISSIONS; WAIVER. No delay or omission to exercise any
right, power, or remedy accruing to either Alpine or PolyVision upon any breach
or default by the other under this Agreement shall impair any such right, power,
or remedy nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.
5.07 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and all prior
negotiations, discussions, commitments, and understandings heretofore had
between them with respect thereto are merged herein.
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5.08 COUNTERPARTS; GOVERNING LAW. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to conflicts of laws rules or principles.
5.09 FURTHER ACTIONS. At any time and from time to time, each party
agrees, without further consideration, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
This Agreement has been duly executed on the date hereinabove set forth.
THE ALPINE GROUP, INC.
By: /s/ Bragi F. Schut
------------------------------
Name: Bragi F. Schut
Title: Executive Vice President
POLYVISION CORPORATION
By: /s/ Joseph A. Menniti
------------------------------
Joseph A. Menniti
President and Chief Executive Officer
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Exhibit 99.1
FINANCIAL COMMUNICATIONS CONTACT: THE ALPINE GROUP CONTACT: POLYVISION CONTACT:
- --------------------------------- ------------------------- -------------------
John G. Nesbett Suzanne D. Fernandez Joseph A. Menniti
Lippert/Heilshorn & Associates Corporate Communications President & CEO
212-838-3777, ext. 303 212-757-3333 718-433-2170
E-mail: [email protected]
POLYVISION COMPLETES ALLIANCE INTERNATIONAL GROUP ACQUISITION AND
RECAPITALIZATION WITH ALPINE
New York, New York, November 20, 1998 - PolyVision Corporation
(AMEX:PLI), and its largest shareholder The Alpine Group, Inc. (NYSE:AGI)
jointly announced today that PolyVision Corporation completed the previously
reported acquisition of Alliance International Group, Inc. Formerly owned by
Wind Point Partners III, L.P. and certain minority stockholders, Alliance is a
leading manufacturer of ceramic on steel products used in visual displays and
writing surfaces for schools, conference rooms and other business environments.
The purchase price was approximately $67.0 million in cash and $8.0 million in a
10% convertible subordinated note due 2007. The acquisition followed the
government's favorable review of the transaction under the Hart-Scott-Rodino Act
and PolyVision's recapitalization transaction with Alpine.
Joseph A. Menniti, Chief Executive Officer of PolyVision, stated that
"Alliance more than doubles the revenues of our writing surface and visual
communications manufacturing businesses to approximately $100.0 million."
"Completing this acquisition will have an immediate impact across a wide range
of activities. Coupling Alliance's existing sales network with PolyVision's
distribution system opens new domestic and international channels that will lead
to higher sales of writing surfaces and other visual communications products and
will also enhance manufacturing and support efficiencies."
<PAGE>
He continued, "Taking full advantage of the well established Alliance
brand name, customer base, international sales force and other assets of both
Alliance and our wholly-owned subsidiaries, Greensteel, Inc. and Posterloid
Corp., provides an extensive foundation from which to expand ceramic on
steel-related uses and develop other proprietary industrial products."
Mr. Menniti concluded, "PolyVision now stands at or very near the top
of the nation's manufacturers of ceramic writing surfaces and visual
communications products. From this prominent position, we will accelerate our
penetration in this growing marketplace, while at the same time increase our
worldwide position through the introduction of new and existing products."
Alliance manufactures ceramic on steel for various applications. It
has been principally involved in producing writing surfaces for use in schools,
conference rooms and other business environments. Alliance also produces
proprietary projection screen surfaces and various building components using
screen printed and non-screen printed ceramic on steel such as exterior panels,
tunnel walls and ceilings, and other interior surfaces. Alliance is
headquartered in Norcross, Georgia, with manufacturing facilities in Oklahoma,
Belgium, France and Denmark. It had approximately $60.0 million in revenues
during calendar 1997.
Following the closing of the acquisition, Michael H. Dunn, the former
Chairman and Chief Executive Officer of AIG, was named the President and Chief
Operating Officer of PolyVision, and elected to PolyVision's Board of Directors.
Mr. Dunn commented, "We at AIG are pleased to be combining with a strategic
owner like PolyVision. Having the opportunity to
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run the combined companies allows us to create a unique and substantial player
in the markets we serve."
Fleet National Bank served as the lead bank in a financing syndicate
which provided $85.0 million of senior debt, working capital and subordinated
debt financing to complete the acquisition and fund existing operations. A line
of credit for further synergistic acquisitions is expected to be put into place
after closing. Additionally, The Alpine Group, Inc. purchased for $5.0 million
cash from PolyVision shares of a 9% Series C Convertible Preferred Stock, the
proceeds of which PolyVision applied to the purchase price for Alliance.
Prior to the completion of the Alliance acquisition, PolyVision and
Alpine also completed their previously reported recapitalization. Pursuant to
that transaction, Alpine exchanged $25.2 million preferred stock in PolyVision
(and associated accrued dividends) and indebtedness of approximately $7.5
million due from PolyVision for approximately 5.2 million shares of PolyVision
common stock and approximately $12.5 million in 9% convertible preferred stock
of PolyVision. As a result, Alpine owns directly approximately 48% of
PolyVision's current outstanding common stock, inclusive of 17% of its common
stock currently owned. The recapitalization will not result in any material
gain or loss by Alpine.
Steven S. Elbaum, Chairman and Chief Executive Officer of Alpine,
commented that "We strongly supported PolyVision's acquisition of Alliance. We
believe that PolyVision's expanded operations, focused strategy and strong
management team will enhance shareholder value. The recapitalization with
Alpine will also facilitate PolyVision's continuing growth strategy and enhance
Alpine shareholder value."
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PolyVision, headquartered in Long Island City, New York, operates
through two subsidiaries, Greensteel, Inc. and Posterloid Corp. Greensteel
manufactures custom-designed and engineered writing, projection and other
display surfaces and casework for educational and institutional markets.
Posterloid manufactures point-of-sale display products for the fast food and
financial services markets.
The Alpine Group, Inc., headquartered in New York, NY, is a holding
company with operations in two principal businesses. Superior TeleCom
(NYSE:SUT), Alpine's 50.1% owned subsidiary, is the leading manufacturer and
supplier of telecommunications copper wire and cable products to telephone
companies in North America. Superior also develops and manufactures voice and
data multiplexers and other electronics and signal processing components and
systems. Alpine's 83.4% owned refractories business, Premier Refractories
International, Inc. is a global manufacturer and supplier of refractory products
and services to steel makers, aluminum, cement, glassmaking and other industries
around the world.
* * *
EXCEPT FOR THE HISTORICAL INFORMATION HEREIN, THE MATTERS DISCUSSED IN
THIS NEWS RELEASE INCLUDE FORWARD-LOOKING STATEMENTS THAT MAY INVOLVE A NUMBER
OF RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY SIGNIFICANTLY BASED ON A
NUMBER OF FACTORS, INCLUDING, BUT NOT LIMITED TO, RISKS RELATED TO POLYVISION'S
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT, PRODUCT AND TECHNOLOGY
DEVELOPMENT, MARKET ACCEPTANCE OF NEW PRODUCTS AND CONTINUING PRODUCT DEMAND,
THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, POLYVISION'S DEPENDENCE ON THE
CONSTRUCTION MARKET GENERALLY, FUTURE CAPITAL REQUIREMENTS, CHANGING ECONOMIC
CONDITIONS, INCLUDING CHANGES IN SHORT-TERM INTEREST RATES, AND OTHER RISK
FACTORS DETAILED IN THE COMPANY'S MOST RECENT ANNUAL REPORT AND OTHER FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION.
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