EXHIBIT 10.12
FIRST AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
THIS FIRST AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT (this
"Amendment"), dated as of October 2, 1996, between ALP (TX) QRS 11-28, INC., a
Texas corporation ("Landlord"), SUPERIOR TELECOM INC., a Delaware corporation
("TeleCom" or the "Company"), and THE ALPINE GROUP, INC., a Delaware corporation
("Alpine").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Landlord and Alpine entered into that certain Guaranty and
Suretyship Agreement, dated as of December 16, 1993, as modified by a Consent of
Guarantor instrument executed on or about May 10, 1995 (as modified, the
"Guaranty Agreement");
WHEREAS, the parties hereto are entering into this Amendment
concurrently with the closing of a Revolving Credit Agreement by and among
TeleCom, each subsidiary of TeleCom (including Tenant), certain lending
institutions and Bankers Trust Company dated as of October 2, 1996; and
WHEREAS, the parties hereto have agreed to amend the Guaranty
Agreement as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
1. DEFINITIONS.
a. As used herein and in the Guaranty Agreement, "Guarantor"
shall mean each of TeleCom and Alpine, together with any corporation succeeding
thereto by consolidation, merger or acquisition of its assets substantially as
an entirety.
b. Capitalized terms used herein and in Annex A hereto and not
otherwise defined shall have the meanings assigned to them in the Guaranty
Agreement.
2. WAIVER. Landlord hereby waives compliance by Alpine with the
Covenants contained in the Second Amendment to Lease, dated July 21, 1995, in
connection with the occurrence of the transactions substantially as described on
Annex A attached hereto, including such other transactions as may be incidental
to or necessary or desirable to give effect to such transactions.
3. FINANCIAL COVENANTS.
a. Alpine shall not be bound by or obliged to comply with the
Covenants contained in the Lease or in any amendment to the Lease.
b. TeleCom covenants and agrees to observe and be bound by the
covenants annexed hereto as Exhibit E.
4. SUCCESSORS AND ASSIGNS. Except as specifically amended by this
Amendment, the terms and conditions of the Guaranty Agreement shall remain in
full force and effect and shall be binding upon Landlord and Guarantor and their
respective successors and assigns.
5. GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Texas.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument.
* * *
[Signature Page to First Amendment to Guaranty and Suretyship Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
ATTEST ALP (TX) QRS 11-28, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Assistant Secretary Title: Vice President
ATTEST THE ALPINE GROUP, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By:/s/Bragi ▇. ▇▇▇▇▇
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: Bragi ▇. ▇▇▇▇▇
Title:Secretary Title: Exec. VP
ATTEST SUPERIOR TELECOM INC.
By:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By:/s/ Bragi ▇. ▇▇▇▇▇
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: Bragi ▇. ▇▇▇▇▇
Title:Secretary Title: Senior Vice President
ANNEX A
DESCRIPTION OF TRANSACTIONS
- Alpine will contribute the stock of its subsidiaries, Tenant and
DNE Systems, Inc. ("DNE") into a new subsidiary, Superior TeleCom Inc.
("Superior TeleCom").
- In connection with the foregoing reorganization, Alpine will
cause Tenant, DNE and/or Superior TeleCom to declare a dividend or dividends on
its common stock, or otherwise make a distribution to Alpine as described
further below, and permit Alpine to recapitalize Tenant, as a result of which
the Company would own all the outstanding common stock of Superior TeleCom and
shares of a new series of preferred stock of Tenant having a liquidation value
of approximately $20,000,000.
- The payment by Tenant, DNE and/or Superior TeleCom to Alpine of
an aggregate of $205 million, consisting of the repayment by Tenant of existing
intercompany debt owed to the Alpine, which was $102.9 million as of July 28,
1996, net of amounts owed by Alpine to Tenant, and the balance by payment of a
dividend or dividends to be declared or equivalent distribution to be made in
connection with the recapitalization described above.
- The sale by Superior TeleCom of up to 49.9% (approximately 53.4%
if the underwriters exercise their over-allotment option) of its common stock to
the public in a registered public offering (the "IPO"). If, in connection with
the public offering, the underwriters exercise their over-allotment option, the
proceeds of such exercise would be used to redeem a portion of the preferred
stock described above, and Alpine then would be entitled to use the proceeds
thereof to restore its ownership of Superior TeleCom to 50.1% through open
market purchases of Superior TeleCom common stock.
- Superior TeleCom has obtained a commitment from Bankers Trust
Company and Bank of Boston with respect to the provision of a $175.0 million
revolving credit facility (the "Bank Financing"). Superior TeleCom will
complete an initial borrowing of approximately $154.7 million under the Bank
Financing and will distribute approximately $151.7 million to the Company to
complete the reorganization and the purchase of Notes.
Under the Bank Financing, Superior TeleCom initially will be
permitted to have outstanding revolving credit loans of up to $175.0 million.
However, if Superior TeleCom completes a public offering of its common stock as
described above (on terms and conditions set forth in the Bank Financing), the
amount of the facility will be reduced to $150.0 million. Superior TeleCom also
will be required to reduce the commitments by $30.0 million ($25.0 million if
the commitment amount is reduced to $150.0 million as described above) in each
of 1999 and 2000, and the facility will terminate in 2001. Loans under the Bank
Financing will be based on either a LIBOR rate or the base rate of Bankers
Trust, in each case plus a margin. The facility will be secured by
substantially all of the assets of Superior TeleCom and its subsidiaries,
including Tenant. The stock of Tenant will be pledged to the lenders as
security for the Bank Financing.
- Alpine will effect an amendment to the indenture relating to its
12-1/4% Series B Senior Secured Notes due 2003 and, in connection therewith,
complete a tender offer for at least 50% of the outstanding aggregate amount of
such notes.
- Alpine will enter into a Services Agreement, a Tax
Indemnification Agreement and a Tax Sharing Agreement with Superior TeleCom and
such other related party transactions as are described in the preliminary and
any final prospectus contained in the registration statement filed with the
Securities and Exchange Commission relating to the IPO.
EXHIBIT E TO FIRST AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
SECTION 1. DEFINITIONS. As used IN THIS EXHIBIT E, the following
terms shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this EXHIBIT E shall include in the singular number
the plural and in the plural the singular:
"LEASE AGREEMENT" MEANS THE LEASE AGREEMENT, DATED AS OF DECEMBER 16,
1993, BETWEEN BETWEEN ALP (TX) QRS 11-28, INC., A TEXAS CORPORATION
("LANDLORD"), AND SUPERIOR TELECOMMUNICATIONS INC., A GEORGIA CORPORATION F/K/A
SUPERIOR TELETEC, INC. AND SUPERIOR TELETEC TRANSMISSION PRODUCTS, INC.
("TENANT" OR "SUPERIOR"), AS AMENDED.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
BTCo to the Federal Deposit Insurance Corporation for insuring three month
certificates of deposit.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise. Without limiting the foregoing,
Alpine and its Affiliates shall be deemed to be Affiliates of the Company and
its Subsidiaries so long as the Service Agreement is in place.
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"Agent" shall MEAN BANKERS TRUST COMPANY and shall include any
successor to the Agent appointed pursuant to Section 11.10 OF THE AGREEMENT.
"Agreement" shall MEAN THE REVOLVING CREDIT AGREEMENT, DATED AS OF
OCTOBER 2, 1996, AMONG SUPERIOR TELECOM INC., A DELAWARE CORPORATION, EACH OF
THE SUBSIDIARY GUARANTORS PARTY HERETO (THE "GUARANTORS"), THE LENDING
INSTITUTIONS FROM TIME TO TIME PARTY HERETO (EACH A "BANK" AND, COLLECTIVELY,
THE "BANKS") AND BANKERS TRUST COMPANY, AS ADMINISTRATIVE AGENT (IN SUCH
CAPACITY, THE "AGENT"), AND BANK OF BOSTON CONNECTICUT, AS DOCUMENTATION AGENT.
"Alpine" shall MEAN THE ALPINE GROUP, INC., A DELAWARE CORPORATION.
"Alpine Tax Allocation Agreement" shall mean the tax allocation
agreement by and among Alpine, the Company and their Affiliates dated as of
October 2, 1996, effective as of May 1, 1996.
"Applicable Base Rate Margin" shall mean a percentage per annum equal
to 1.25%, less the then applicable Interest Reduction Discount, if any; PROVIDED
that in no event shall the Applicable Base Rate Margin be less than 0%.
"Applicable Eurodollar Margin" shall mean a percentage per annum equal
to 2.25%, less the then applicable Interest Reduction Discount, if any; PROVIDED
that in no event shall the Applicable Eurodollar Margin be less than 1.00%.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Company or any of its Subsidiaries to any Person of any asset (including,
without limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of the Company or
such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business and (ii) sales of assets
pursuant to, Sections 8.02(e), (f), (g), (h), (i) and (n) OF THE AGREEMENT.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of EXHIBIT K TO THE AGREEMENT.
"Authorized Officer" shall mean any senior officer of the Company
designated as such in writing to the LANDLORD by the Company to the extent
reasonably acceptable to the LANDLORD.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) OF THE AGREEMENT or (ii) a Bank having notified the Agent
and/or the Company that it does not
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intend to comply with the obligations under Section 1.01(a), 1.01(c) or 2.04(c)
OF THE AGREEMENT, in the case of either clause (i) or (ii) above as a result of
the appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05 OF
THIS EXHIBIT E.
"Base Rate" at any time shall mean the highest of (x) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (y) the
Prime Lending Rate and (z) the rate which is 1/2 of 1% in excess of the Federal
Funds Rate.
"Borrowing" shall mean and include (i) the borrowing of Swingline
Loans from BTCo on a given date and (ii) the borrowing of one Type of Revolving
Loan from all of the Banks on a given date (or resulting from conversions on a
given date), having in the case of Eurodollar Loans the same Interest Period;
PROVIDED that Base Rate Loans incurred pursuant to Section 1.10(b) OF THE
AGREEMENT shall be considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Canadian Subsidiary" shall mean Superior Cable Corporation, an
ONTARIO corporation.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be added to the fixed assets account on
the consolidated balance sheet of such Person in accordance with GAAP (which
shall not include interest capitalized during construction but only to the
extent included in Consolidated Interest Expense), including all such
expenditures with respect to plant, property or equipment (including, without
limitation, expenditures for maintenance and repairs which should be capitalized
in accordance with GAAP) and the amount of all Capitalized Lease Obligations
incurred by such Person.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, should be accounted for as a capital lease on the balance
sheet of that Person.
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"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Company or any of its Subsidiaries in each case taken at
the amount thereof that should be accounted for as liabilities in accordance
with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) U.S. dollar denominated
time deposits, certificates of deposit and banker acceptances of (x) any Bank or
(y) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent
thereof (any such bank or Bank, an "Approved Bank"), in each case with
maturities of not more than twelve months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, as the case may be, and in each case maturing within twelve months
after the date of acquisition, (iv) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within twelve months from
the date of acquisition thereof and, at the time of acquisition having one of
the two highest ratings obtainable from either S&P or Moody's, (v) any
repurchase agreement entered into with any Approved Bank which is secured by any
obligation of the type described in any of clauses (i) through (iii) and (vi)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Company and/or any of its Subsidiaries from
such Asset Sale.
"Change of Control Event" shall mean (a) the Company shall cease to
own directly 100% on a fully diluted basis of the economic and voting interest
in the capital stock of Superior or DNE (other than the shares of Superior
Preferred Stock referred to in the recitals to this Agreement) or (b) any Person
or "group" (within the meaning of Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as in effect on the (Effective Date), other than Alpine,
shall (A) have acquired beneficial ownership of 20% or more on a fully diluted
basis of the voting and/or economic interest in the Company's capital stock
(PROVIDED, HOWEVER, such referenced percentage in this clause (A) shall be 25%
if, and so long as, Alpine directly maintains ownership of more than 30% on a
fully diluted basis of the economic and voting interests in the Company's
capital stock) or (B) obtained the power (whether or not exercised) to elect a
majority of the Company' directors or (C) the Board of Directors of the Company
shall cease to consist of a majority of Continuing Directors.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and ruling issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Pledged Collateral, Pledged
Securities and Mortgaged Property.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors.
"Commitment Fee" shall have the meaning provided in Section 3.01(a) OF
THE AGREEMENT.
"Company" shall MEAN SUPERIOR TELECOM INC.
"Company Common Stock" shall MEAN THE COMMON STOCK, PAR VALUE $.01, OF
THE COMPANY.
"Company Tax Allocation Agreement" shall mean the tax allocation
agreement by and among the Company and its Subsidiaries dated as of October 2,
1996, effective as of May 1, 1996.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Company and its Subsidiaries determined on a consolidated basis; PROVIDED that
for purposes of this definition, the amount of Indebtedness in respect of
Interest Rate Protection Agreements and Other Hedging Agreements shall be at any
time equal to the unrealized net loss position, if any, of the Company and/or
its Subsidiaries thereunder on a marked to market basis determined no more than
one month prior to such time.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income, before total interest expense (inclusive of amortization of deferred
financing fees, premiums on Interest Rate Protection Agreements and any original
issue discount) and before minority charges resulting from the existence of the
Superior Preferred Stock of the Company and its Subsidiaries determined on a
consolidated basis and provisions for taxes based on income, whether paid or
deferred.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and
amortization expense plus non-cash compensation expenses relating to restricted
stock and stock- option grants, in each case, that were deducted in determining
Consolidated EBIT for such period, plus net earnings of any Person (other than a
consolidated Subsidiary that is a Guarantor) in which the Company or any
consolidated Subsidiary has an ownership interest to the extent such net
earnings shall have actually been received by the Company or such consolidated
Subsidiary in the form of cash distributions.
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"Consolidated Fixed Charges" shall mean, for any period the sum of
Consolidated Interest Expense for such period plus (v) all dividends paid or
accrued on capital stock of the Company and its Subsidiaries held by persons
other than the Company and its Subsidiaries that are Guarantors plus (w) the
amount of all Capital Expenditures of the Company (other than Capital
Expenditures made pursuant to clause (d) or (e) of Section 8.08) and its
Subsidiaries paid or accrued with respect to such period plus (x) all cash taxes
paid or accrued with respect to such period (other than with respect to net
income taxes attributable to items that are excluded from the calculation of
Consolidated Net Income in the period) plus (y) $10,000,000 for the first
Special Dividend Period, $10,000,000 for the next succeeding Special Dividend
Period, $15,000,000 for the next succeeding Special Dividend Period, $20,000,000
for the next succeeding Special Dividend Period, and $40,000,000 for the next
succeeding Special Dividend Period and (z) mandatory principal payments on
Indebtedness (other than with respect to Loans) required to be made during such
period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to (A) any rent paid in respect of
Capital Leases which is or should be allocable to interest expense in accordance
with GAAP and (B) interest capitalized during the construction of any Capital
Expenditure) of the Company and its Subsidiaries determined on a consolidated
basis with respect to all outstanding Indebtedness of the Company and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under Interest Rate Protection
Agreements, but excluding, however, amortization of any payments made to obtain
any Interest Rate Protection Agreement and Other Hedging Agreements and deferred
financing costs and any interest expense on deferred compensation arrangements
to the extent included in total interest expense; PROVIDED, for that portion of
any Test Period prior to the Initial Borrowing Date, Consolidated Interest
Expense shall be determined on a PRO FORMA basis as if (i) no loans were
outstanding under the Existing Credit Agreement, (ii) Loans in an aggregate
principal amount equal to the amount outstanding on the Initial Borrowing Date
(after giving effect to the Transaction) had been outstanding at all times since
the first day of such Test Period and that such Loans had accrued interest at a
per annum rate equal to the Eurodollar Rate that would have been in effect on
the Initial Borrowing Date as if Eurodollar Loans were incurred on such date.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provisions for income taxes (other than with respect to net
income taxes attributable to items that are excluded from the calculation of
Consolidated Net Income in the period), of the Company and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period in
conformity with GAAP but excluding in any event (a) any extraordinary gains (net
of extraordinary losses) but with giving effect to gains or losses from sales of
assets sold in the ordinary course of business; (b) net earnings of any person
(other than a consolidated Subsidiary that is a Guarantor or the Canadian
Subsidiary) in which the Borrower or any consolidated Subsidiary has an
ownership interest unless such net earnings shall have actually been received by
the Borrower or such consolidated Subsidiary in the form of cash distributions;
(c) any portion of the net earnings of any consolidated Subsidiary which
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is unavailable for payment of dividends to the Borrower or any other
consolidated Subsidiary by reason of the provisions of any agreement or
applicable law or regulation (including, without limitation, those agreements
referred to in the exceptions set forth in Section 8.13 OF THE AGREEMENT); (d)
earnings resulting from any reappraisal, revaluation or write-up of assets; (e)
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of such Person or is merged into or consolidated with such Person or
any of its Subsidiaries or that Person's assets are acquired by such Person or
any of its Subsidiaries; (f) the aggregate net gain (or loss) during such period
arising from the revaluation (but not sale) of readily marketable securities;
(g) the income (or loss) from discontinued operations; and (h) non-cash charges
and cash charges (but only to the extent such cash charges are reimbursed by a
controlling Affiliate in cash at the time of incurrence thereof), in each case,
relating to the Transaction, repayment of Indebtedness incurred under the
Existing Credit Agreement and any Dividend paid, in accordance with the terms
hereof, from proceeds of the Initial Public Offering.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligations of the ability of the primary obligor to make payment
of such primary obligation or (d) otherwise to assure or hold harmless the owner
of such primary obligation against loss in respect thereof; PROVIDED, HOWEVER,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection or standard contractual indemnities
entered into, in each case in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of the Company on the
Initial Borrowing Date and each other director if such director's nomination for
the election to the Board of Directors of the Company is recommended by a
majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, each of the Notes and
each Security Document.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
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"Credit Party" shall mean the Company and each Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Destruction" has the meaning assigned to that term in each Mortgage.
"Dividends" shall have the meaning provided in Section 8.07 OF THIS
EXHIBIT E.
"Documents" shall mean the Credit Documents and the IPO Documents.
"Domestic Subsidiary" shall mean each Subsidiary of the Company
incorporated or organized in the United States or any State or territory
thereof.
"Effective Date" shall mean OCTOBER 2, 1996.
"Eligible Transferee" shall mean a commercial bank, financial
institution or other institutional "accredited investor" (as defined in
Regulation D of the Securities Act).
"End Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance, deficiency, liability or violation, investigations or
proceedings relating in any way to any violation or liability (or alleged
violation or liability) by the Company or any of its Subsidiaries under any
Environmental Law (hereafter "Claims") or any permit, license or other
authorization issued to the Company or any of its Subsidiaries under any such
law, including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, remedial, corrective,
response or other actions or damages pursuant to any Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law" shall mean any foreign, federal, state or local
policy, statute, law, rule, regulation, ordinance, code or rule of common law
now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment (for purposes of this definition
(collectively, "Laws")), relating to the environment or Hazardous Materials, or
E-13
health and safety to the extent such health and safety issues arise under the
Occupational Safety and Health Act of 1970, as amended, or any such similar
Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in effect
at the date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Company or any Subsidiary of the Company would
be deemed to be a "single employer" within the meaning of Section 414(b) or (c)
of the Code or (to the extent required by operation of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA) Section 414(m) or (o) of the
Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b) OF THE AGREEMENT.
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/16 of
1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by BTCo for U.S. dollar deposits of amounts in same day funds generally
comparable to the aggregate principal amount of the Eurodollar Loan for which an
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Loan, determined as of 10:00
A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall mean AN "EVENT OF DEFAULT" AS DEFINED IN THE
AGREEMENT OR PARAGRAPH 22 OF THE LEASE AGREEMENT.
"Existing Credit Agreement" means the credit facility provided to
Alpine and certain Subsidiaries pursuant to the Loan and Security Agreement
dated as of July 21, 1995 among Alpine, the Subsidiaries named therein, the
financial institutions party thereto, and Shawmut Capital Corporation as Agent,
as amended.
"Existing Indebtedness" shall have the meaning
provided in Section 6.22 OF THE AGREEMENT.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.14 OF THE AGREEMENT.
E-14
"Existing Letters of Credit" shall have the meaning provided in
Section 2.01(a) OF THE AGREEMENT.
"Facing Fee" shall have the meaning provided in Section 3.01(c) OF THE
AGREEMENT.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01 OF THE AGREEMENT.
"Final Maturity Date" shall mean October 31, 2001.
"Foreign Cash Equivalents" shall mean Canadian dollar denominated
certificates of deposit or bankers acceptances of any bank organized under the
laws of Canada, provided that the short-term commercial paper rating of such
bank from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at
least P-1 or the equivalent thereof, in each case with maturities of not more
than twelve months from the date of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company or any one or
more of its Subsidiaries primarily for the benefit of employees of the Company
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code,
or any such plan as to which the Company or any of its Subsidiaries may have any
liability.
"Foreign Subsidiary" shall mean each Subsidiary of the Company other
than a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 8 OF
THIS EXHIBIT E and the definition of Interest Reduction Discount, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 12.07(a) OF THE AGREEMENT.
E-15
"Guarantor" shall mean each Subsidiary of the Company (other than a
Foreign Subsidiary except to the extent otherwise provided in Section 8.14 OF
THIS EXHIBIT E).
"Guaranty" shall mean the Guaranty contained in Section 13 OF THE
AGREEMENT.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products or wastes (including crude oil or any fraction thereof), radioactive
materials, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous wastes," "restrictive
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect under any
Environmental Law.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed; PROVIDED, HOWEVER, that in the event that the liability of such first
Person is non-recourse to such Person and is recourse only to specified assets
of such Person, the amount of Indebtedness attributed thereto shall not exceed
the greater of the market value of such assets or the book value of such assets,
(v) all Capitalized Lease Obligations of such Person, (vi) all obligations of
such Person to pay a specified purchase price for goods or services whether or
not delivered or accepted, I.E., take-or-pay and similar obligations, (vii) all
obligations under Interest Rate Protection Agreements and Other Hedging
Agreements and (viii) all Contingent Obligations of such Person; PROVIDED that
Indebtedness shall not include trade payables and accrued expenses, in each case
arising and payable in the ordinary course of business and consistent with past
practice (so long as so paid in the ordinary course of business and consistent
with past practice).
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Initial Public Offering" shall have the meaning provided in the
recitals of this Agreement.
"Intercompany Loan" shall have the meaning provided in Section 8.05(g)
OF THIS EXHIBIT E.
E-16
"Intercompany Notes" shall mean promissory notes, in the form of
EXHIBIT L TO THE AGREEMENT, evidencing an Intercompany Loan.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09 OF
THE AGREEMENT.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean zero; PROVIDED that from and
after the first day of any Margin Reduction Period (the "Start Date") to and
including the last day of such Margin Reduction Period (the "End Date"), the
Interest Reduction Discount shall be the respective percentage per annum set
forth in clause (A), (B), (C), (D) or (E) below if, but only if, as of the last
day of the most recent fiscal quarter or year, as the case may be, ended
immediately prior to such Start Date (the "Test Date"), the applicable
conditions set forth in clause (A), (B), (C), (D) or (E) below, as the case may
be, are met:
(A) .25% if, but only if, as of the Test Date for such Start Date the
Pro Forma Leverage Ratio for the Test Period ended on such Test Date shall
be equal to or less than 3.75:1.0 and none of the conditions set forth in
clause (B), (C), (D) or (E) below, as the case may be, are satisfied;
(B) .50% if, but only if, as of the Test Date for such Start Date the
Pro Forma Leverage Ratio for the Test Period ended on such Test Date shall
be equal to or less than 3.50:1.0 and none of the conditions set forth in
clause (C), (D) or (E) below, as the case may be, are satisfied;
(C) .75% if, but only if, as of the Test Date for such Start Date the
Pro Forma Leverage Ratio for the Test Period ended on such Test Date shall
be equal to or less than 3.25:1.0 and neither of the conditions set forth
in clause (D) or (E) below is satisfied; or
(D) 1% if, but only if, as of the Test Date for such Start Date the
Pro Forma Leverage Ratio for the Test Period ended on such Test Date shall
be equal to or less than 3.00:1.0 and the condition set forth in clause (E)
below is not satisfied; or
(E) 1.25% if, but only if, as of the Test Date for such Start Date
the Pro Forma Leverage Ratio for the Test Period ended on such Test Date
shall be equal to or less than 2.50:1.0.
E-17
Notwithstanding anything to the contrary contained above in this definition, (x)
the Interest Reduction Discount shall not exceed that set forth in clause (C)
prior to the first Test Date to occur after the first anniversary of the Initial
Borrowing Date, (y) the Interest Reduction Discount shall be zero at any time
when a Default or an Event of Default shall exist and (z) upon consummation of
the Initial Public Offering, the then in effect Interest Reduction Discount
shall be adjusted to give effect to the net reduction of outstanding Loans as a
result of any repayment from the proceeds of such Initial Public Offering (net
of any incremental Borrowings) as if such net reduction had occurred on the
relevant Test Date (such adjustment to take effect upon such repayment of
Loans).
"IPO Documents" shall mean the Registration Statement relating to the
registration of the the Company Common Stock, and all other documents or
agreements related to the consummation of the IPO, including, without
limitation, all underwriting or similar agreements and all documents filed with
the SEC.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Company or its Subsidiaries incurred in the ordinary course of business with
respect to insurance obligations and workers' compensation, surety bonds and
other similar statutory obligations and (ii) such other obligations of the
Company or any of its Subsidiaries as are reasonably acceptable to the Agent and
the Letter of Credit Issuer and otherwise permitted to exist pursuant to the
terms of this Agreement.
"Lease" shall mean any lease, sublease, franchise agreement, license,
occupancy or concession agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a)
OF THE AGREEMENT.
"Letter of Credit Fees" shall have the meaning provided in Section
3.01(b) OF THE AGREEMENT.
"Letter of Credit Issuer" shall mean BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a) OF THE AGREEMENT.
"Letter of Credit Sublimit" shall mean $7,500,000.
E-18
"Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Debt as of the last day of the relevant Test Period to (y)
Consolidated EBITDA for the relevant Test Period.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c) OF THE AGREEMENT.
"Margin Reduction Period" shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
7.01(b) or (c) OF THIS EXHIBIT E, as the case may be, and which shall end on the
earlier of (i) the date of actual delivery of the next financial statements
pursuant to Section 7.01(b) or (c), as the case may be, and (ii) the latest date
on which the next financial statements are required to be delivered pursuant to
Section 7.01(b) or (c), as the case may be; PROVIDED that the first Margin
Reduction Period shall commence on the date that the financial statements are
delivered for the Company's first fiscal quarter ending after the Initial
Borrowing Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole and after giving
effect to the Transaction.
"Maximum Swingline Amount" shall mean $7,500,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $250,000.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" shall mean a revolving credit mortgage, assignment of
leases, security agreement and fixture filing, or a revolving credit deed of
trust, assignment of leases, security agreement and fixture filing creating and
evidencing a Lien on a Mortgaged Real Property, which shall be substantially in
the form of Exhibit M-1 or M-2 (as appropriate) hereto, containing such
schedules and including such additional provisions and other deviations from
such Exhibits as shall be necessary to conform such document to applicable or
local law or as shall be customary under local law and which shall be dated the
date of delivery thereof and made by the owner of the Mortgaged Real Property
described therein for
E-19
the benefit of the Collateral Agent, as mortgagee (grantee or beneficiary),
assignee and secured party, as the same may at any time be amended, modified or
supplemented in accordance with the terms thereof and hereof.
"Mortgaged Property" shall have the meaning assigned to such term in
the Mortgages.
"Mortgaged Real Property" shall mean and include the Real Properties
owned or leased by the Company and the Guarantors to the extent designated as
such on Annex IV TO THE AGREEMENT and any additional Real Property which shall
be subject to a Mortgage delivered pursuant to Section 5.13.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
(as defined in Section 4001(a)(3) of ERISA).
"Net Award" has the meaning assigned to such term in each Mortgage.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (a) cash expenses of sale (including,
without limitation, brokerage fees, if any, transfer taxes and payment of
principal, premium and interest of Indebtedness other than the Loans required to
be repaid as a result of such Asset Sale), (b) all foreign, federal, state and
local taxes to the extent payable as a direct consequence of any such Asset Sale
and (c) deduction of reasonable amounts, determined in accordance with GAAP,
required to be provided by the Company or such Subsidiary as a reserve against
any liabilities retained by the Company or any Subsidiary of the Company
associated with such assets after such Asset Sale, including, without
limitation, any indemnification, pension and other post-employment benefit
liabilities, workers compensation liabilities, liabilities associated with
retiree benefits and liabilities relating to environmental matters, except and
until such reserves are reversed, in which case the amount of such reversal
shall constitute Net Cash Proceeds.
"Net Proceeds" has the meaning assigned to that term in each Mortgage.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent or any Bank pursuant to the terms of any Credit
Document.
"Other Hedging Agreements" shall mean (x) any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values and (y) agreements
relating to the future purchase of commodities or designed to protect against
fluctuations in the prices of specific commodities.
E-20
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean, at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Loan Commitment at such time by the
Total Revolving Loan Commitment then in effect; PROVIDED that if the Total
Revolving Loan Commitment has been terminated, the Percentage of each Bank shall
be determined by dividing such Bank's Revolving Loan Commitment as in effect
immediately prior to such termination by the Total Revolving Loan Commitment as
in effect immediately prior to such termination.
"Permitted Acquisition" shall have the meaning provided in Section
8.02(l) OF THIS EXHIBIT E.
"Permitted Liens" shall have the meaning provided in Section 8.03 OF
THIS EXHIBIT E.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company or partnership, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer plan or single- employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Company, any of its
Subsidiaries or any ERISA Affiliate and each such plan for the five calendar
year period immediately following the latest date on which the Company, any of
its Subsidiaries or any ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan or any such plan as to which the Company,
any of its Subsidiaries or any ERISA Affiliate may have any liability, PROVIDED,
HOWEVER, the term "Plan" shall not include any Foreign Pension Plan.
"Pledge Agreement" shall have the meaning provided in Section 5.11(a)
OF THE AGREEMENT and shall include any additional pledge agreement executed by
the Company or any of its Subsidiaries pursuant to Section 7.11 OF THE
AGREEMENT.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledged Collateral" shall have the meaning assigned to such term in
the Security Agreement.
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime
E-21
lending rate changes. The Prime Lending Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
BTCo may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate.
"Prior Liens" shall mean Liens which, pursuant to the provisions of
any Security Document, are or may be superior to the Lien of such Security
Document.
"Pro Forma Leverage Ratio" shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Debt at such time to (y)
Consolidated EBITDA for the Test Period then last ended, with such Pro Forma
Leverage Ratio to be determined on a PRO FORMA basis as if such Permitted
Acquisition (and any other Permitted Acquisition) that occurred during such Test
Period (and the incurrence, assumption and/or repayment of any Indebtedness in
connection with any such Permitted Acquisition), as the case may be, had
occurred on the first day of such Test Period (and such Indebtedness, if any,
had remained outstanding (or had not been outstanding, as the case may be)
throughout such Test Period) it being understood that in calculating the Pro
Forma Leverage Ratio in connection with each and every Permitted Acquisition,
Consolidated EBITDA shall include the results of operations of the Person or
assets acquired pursuant to each such Permitted Acquisition on a PRO FORMA basis
as if such acquisition had occurred on the first day of the respective Test
Period. On the date of any Permitted Acquisition pursuant to which the Pro
Forma Leverage Ratio is to be calculated and on each date of calculation of Pro
Forma Leverage Ratio, the Company shall deliver to the LANDLORD a certificate of
the Company's chief financial officer setting forth in reasonable detail the PRO
FORMA calculations required to establish the Pro Forma Leverage Ratio (with such
PRO FORMA calculations to be made on a basis reasonably satisfactory to the
LANDLORD and to assume that the interest expense attributable to any
Indebtedness (whether existing or being incurred) bearing a floating interest
rate shall be computed as if the rate in effect on the date of such Permitted
Acquisition (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months) had been the applicable rate for the
entire period).
"Quarterly Payment Date" shall mean the last Business Day of each
fiscal quarter (including the fourth fiscal quarter) of the Company.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Registration Statement" shall mean the Company's Registration
Statement on Form S-1 as filed on September 12, 1996 with the SEC.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
E-22
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PGBC by regulation.
"Required Banks" shall mean collectively (and not individually)
Non-Defaulting Banks the sum of whose Revolving Loan Commitments (or, if after
the Total Revolving Loan Commitment has been terminated, outstanding Revolving
Loans and Percentages of outstanding Swingline Loans and Letter of Credit
Outstandings) constitute greater than 50% of the Total Revolving Loan Commitment
less the aggregate Revolving Loan Commitments of Defaulting Banks (or, if after
the Total Revolving Loan Commitment has been terminated, the total outstanding
Revolving Loans of Non-Defaulting Banks and the aggregate Percentages of all
Non-Defaulting Banks of the total outstanding Swingline Loans and Letter of
Credit Outstandings at such time).
"Revolving Loan" shall have the meaning provided in Section 1.01(a) OF
THE AGREEMENT.
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I TO THE AGREEMENT directly
below the column entitled "Revolving Loan Commitment," as the same may be
reduced from time to time pursuant to Section 3.02, Section 3.03, Section 9 OF
THE AGREEMENT and/or the definition of "Total Revolving Loan Commitment."
"Revolving Note" shall have the meaning provided in Section 1.05(a) OF
THE AGREEMENT.
"Rollover Amount" shall have the meaning provided in Section 8.08(b)
OF THE AGREEMENT.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Secured Creditors" shall have the meaning provided in the Security
Documents (AS DEFINED IN THE AGREEMENT).
E-23
"Security Agreement" shall have the meaning provided in Section
5.11(b) OF THE AGREEMENT and shall include any additional security agreement
executed by the Company or any of its Subsidiaries pursuant to Section 7.11 OF
THE AGREEMENT.
"Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement and each Mortgage.
"Services Agreement" shall mean the services agreement between Alpine
and the Company, dated the Initial Borrowing Date, in the form approved by the
Agent.
"S&P" shall mean Standard & Poors' Ratings Service.
"Special Dividend Period" shall mean each four consecutive fiscal
quarters of the Company commencing with the fiscal quarter beginning July 28,
1996 and each four fiscal periods thereafter commencing on the date immediately
following the last day of the immediately preceding Special Dividend Period.
"Start Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Stated Amount" of each Letter of Credit shall mean the maximum amount
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity (other than a corporation) in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the
time.
"Superior Preferred Stock" shall MEAN 20,000 SHARES OF THE 6%
CUMULATIVE PREFERRED STOCK, PAR VALUE $1.00 PER SHARE, OF SUPERIOR HAVING AN
AGGREGATE LIQUIDATION PREFERENCE OF $20,000,000 (but shall include any Company
preferred stock issued in exchange therefor pursuant to clause (vi)(y) of
Section 8.06 OF THIS EXHIBIT E).
"Survey" means a survey of any Mortgaged Real Property (and all
improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state, province or country where such Mortgaged Real
Property is located, (ii) dated (or redated) not earlier than six months prior
to the date of delivery thereof unless there shall have occurred within the six
months prior to such date of delivery any exterior construction on the site of
such Mortgaged Real Property, in which event such survey shall be dated (or
E-24
redated) after the completion of such construction or if such construction shall
not have been completed as of such date of delivery, not earlier than 20 days
prior to such date of delivery, (iii) certified by the surveyor (in a manner
reasonably acceptable to the Collateral Agent) to the Collateral Agent and the
Title Company and (iv) complying in all respects with the minimum detail
requirements of the American Land Title Association as such requirements are in
effect on the date of preparation of such survey.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b) OF
THE AGREEMENT.
"Swingline Note" shall have the meaning provided in Section 1.05(a) OF
THE AGREEMENT.
"Taking" has the meaning assigned to such term in each Mortgage.
"Target Amount" shall mean $120,000,000 except that if the gross
proceeds of the Initial Public Offering, less underwriting discounts, not to
exceed 7.00% and up to $700,000 of expenses, (the "Net Proceeds") is less than
$88,580,000, then the Target Amount shall be increased by an amount equal to the
difference between the Net Proceeds and $88,580,000, but in no event shall the
Target Amount be less than $130,580,000.
"Test Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Test Period" shall mean four consecutive fiscal quarters of the
Company (taken as one accounting period) ended, in the case of any determination
of Interest Reduction Discount, on the applicable Test Date and, in all other
cases, ended on the date indicated in the applicable Section hereof.
"Title Company" shall mean First American Title Insurance Company or
such other title insurance or abstract company as shall be designated by the
LANDLORD.
"Total Consideration Amount" shall mean (with respect to any Permitted
Acquisition, or series of related Permitted Acquisitions) $30,000,000, PROVIDED
that if at least 90% of the total consideration with respect thereto (as
determined in accordance with Section 8.02(l)) OF THIS EXHIBIT E is paid in
shares of Company Common Stock, such amount shall be $75,000,000.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks it being understood that the Total
Revolving Loan Commitment as of the Initial Borrowing Date shall be
$175,000,000, PROVIDED that if the Initial Public Offering occurs on or before
that date, the Total Revolving Loan Commitment
E-25
shall be reduced to $150,000,000 with such reduction to reduce the Revolving
Loan Commitments of each Bank proportionately in proportion to their respective
Revolving Loan Commitments.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) Total Revolving
Outstandings at such time.
"Transaction" shall have the meaning set forth in the Recitals to the
Agreement.
"Type" shall mean any type of Revolving Loan determined with respect
to the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a) OF
THIS AGREEMENT.
"Unutilized Revolving Loan Commitment" with respect to any Bank at any
time shall mean such Bank's Revolving Loan Commitment at such time less the sum
of (i) the aggregate then outstanding principal amount of all Revolving Loans
made by such Bank, (ii) such Bank's Percentage of the then Letter of Credit
Outstandings and (iii) in the case of BTCo, the aggregate then outstanding
principal amount of all Swingline Loans.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such
E-26
Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Wholly-Owned Subsidiaries of such Person
has a 100% equity interest at such time.
"Written" (whether lower or upper case) or "in writing" shall mean any
form of written communication or a communication by means of telex, facsimile
device, or telegraph or cable.
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SECTION 8. NEGATIVE COVENANTS. The Company hereby covenants and
agrees that UNLESS THE LANDLORD CONSENTS THERETO IN WRITING:
8.01 CHANGES IN BUSINESS. The Company and its Subsidiaries will not
engage in any business other than the businesses in which the Company and its
Subsidiaries are engaged in as of the Effective Date and activities incidental
thereto, and similar or related businesses.
8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. The
Company will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than inventory in the ordinary course of business, including sales
of inventory on consignment in the ordinary course of business), or enter into
any partnerships, joint ventures or sale-leaseback transactions, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any Person,
except that the following shall be permitted:
(a) the Company and its Subsidiaries may, as lessee or lessor, enter
into operating leases in the ordinary course of business with respect to
real or personal property;
(b) Capital Expenditures by the Company and its Subsidiaries to the
extent not in violation of Section 8.08;
(c) the advances, investments and loans permitted pursuant to Section
8.05 OF THIS EXHIBIT E;
(d) the Company and its Subsidiaries may sell other assets other than
Mortgaged Real Property; provided that the aggregate sale proceeds from all
assets subject to such sales pursuant to this clause (d) shall not exceed
$5,000,000 in any consecutive twelve month period of the Company (exclusive
of sale proceeds in respect of obsolete, outmoded or worn-out machinery,
equipment, furniture or fixtures) and each such asset sale subject to this
clause (d) is for at least 85% cash and at fair market value (as determined
in good faith by the Company);
(e) the Company and its Subsidiaries may sell or discount, in each
case without recourse, accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection
thereof;
(f) without limitation to clause (d), the Company and its
Subsidiaries may sell or exchange specific items of machinery or equipment,
so long as the proceeds of each such sale or exchange is used (or
contractually committed to be used) to acquire (and
E-28
results within 180 days of such sale or exchange in the acquisition of)
replacement items of machinery or equipment which are the functional
equivalent of the item of equipment so sold or exchanged;
(g) the Company and its Subsidiaries may, in the ordinary course of
business, license, as licensor or licensee, patents, trademarks, copyrights
and know-how to third Persons and to one another, so long as any such
license by the Company or its Subsidiaries in its capacity as licensor is
permitted to be assigned pursuant to the Security Agreement (to the extent
that a security interest in such patents, trademarks, copyrights and
know-how is granted thereunder) and does not otherwise prohibit the
granting of a Lien by the Company or any of its Subsidiaries pursuant to
the Security Agreement in the intellectual property covered by such
license;
(h) the assets of any Foreign Subsidiary of the Company may be
transferred to the Company or any of its Subsidiaries, and any Foreign
Subsidiary of the Company may be merged with and into, or be dissolved or
liquidated into, the Company or any of its Subsidiaries so long as the
Company or such Subsidiary is the surviving corporation of any such merger,
dissolution or liquidation;
(i) any Domestic Subsidiary of the Company may transfer assets to the
Company or to any other Domestic Subsidiary of the Company, so long as (i)
if the transferee is a Subsidiary, such Subsidiary is a Guarantor and (ii)
the security interests granted to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Security Documents in the assets so
transferred shall remain in full force and effect and perfected (to at
least the same extent as in effect immediately prior to such transfer);
(j) any Domestic Subsidiary of the Company may merge with and into,
or be dissolved or liquidated into, the Company so long as (i) the Company
is the surviving corporation of any such merger, dissolution or liquidation
and (ii) the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Domestic Subsidiary shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
(k) any Domestic Subsidiary of the Company may merge with and into,
or be dissolved or liquidated into, any Domestic Subsidiary of the Company
so long as (i) such Domestic Subsidiary is a Guarantor and is the surviving
corporation of any such merger, dissolution or liquidation and (ii) the
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of such
Domestic Subsidiary shall remain in full force and effect and perfected (to
at least the same extent as in effect immediately prior to such merger,
dissolution or liquidation);
E-29
(l) so long as no Default or Event of Default then exists or would
result therefrom (including giving pro forma effect to such acquisition and
any additional Indebtedness resulting therefrom or incurred or assumed in
connection therewith as if such acquisition had occurred and such
Indebtedness had been incurred as of the first day of the most recently
completed Test Period (including any other Permitted Acquisition that
occurred, and related Indebtedness that was incurred, during such Test
Period)), the Company and its Wholly-Owned Subsidiaries may acquire assets
or the capital stock of any Person (any such acquisition permitted by this
clause (l), a "Permitted Acquisition"); PROVIDED that (i) such Person (or
the assets so acquired) was, immediately prior to such acquisition, engaged
(or used) primarily in the business permitted pursuant to Section 8.01,
(ii) if such acquisition is structured as a stock or other equity
acquisition, then either (A) the Person so acquired becomes a Wholly-Owned
Subsidiary of the Company and a Guarantor or (B) such Person is merged with
and into the Company or a Wholly-Owned Subsidiary of the Company that is a
Guarantor (with the Company or such Wholly-Owned Subsidiary being the
surviving corporation of such merger), and in any case, all of the
provisions of Section 8.14 have been complied with in respect of such
Person, (iii) any Liens or Indebtedness assumed or issued in connection
with such acquisition is otherwise permitted under Section 8.03 or 8.04 OF
THIS EXHIBIT E, as the case may be, and (iv) after giving effect thereto,
the Unutilized Revolving Loan Commitment would be at least $15,000,000;
PROVIDED, FURTHER, that any such Permitted Acquisition (or series of
related Permitted Acquisitions) involving total consideration (including,
without limitation, any earn- out, non-compete or deferred compensation
arrangements and the value of any Company securities, but not including any
Indebtedness assumed that complies with Section 8.04(h)) OF THIS EXHIBIT E
by the Company and its Wholly-Owned Subsidiaries in excess of the Total
Consideration Amount shall not be consummated without the prior written
consent of the Required Banks; and PROVIDED, FURTHER, that the Company
shall have delivered to the LANDLORD a certificate of the Chief Financial
Officer of the Company showing compliance (in reasonable detail as to pro
forma calculations) with all of the provisions of this paragraph (l);
(m) leases or subleases granted by the Company or any of its
Subsidiaries to third Persons not interfering in any material respect with
the business of the Company or any of its Subsidiaries, including any
arm's-length lease by the Company or any Subsidiary of the Company of up to
50,000 square feet of its Wallingford, Connecticut facility;
(n) the Company and its Subsidiaries may, in the ordinary course of
business, sell, transfer or otherwise dispose of patents, trademarks,
copyrights and know-how which, in the reasonable judgment of the Company or
such Subsidiary, are determined to be uneconomical, negligible or obsolete
in the conduct of business; and
(o) "inactive" or "shell" Subsidiaries may be dissolved or otherwise
liquidated.
E-30
To the extent the LANDLORD waiveS the provisions of this Section 8.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 8.02, such Collateral
in each case shall be sold or otherwise disposed of free and clear of the Liens
created by the Security Documents and the LANDLORD shall take such actions as
are appropriate in connection therewith.
8.03 LIENS. The Company will not, and will not permit any Guarantor
to, create, incur, assume or suffer to exist any Lien upon or with respect to
any item constituting Collateral except for the Lien of the Security Documents
relating thereto, the Prior Liens applicable thereto and other Liens expressly
permitted by such Security Documents. The Company will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of the Company or such Subsidiary
which does not constitute Collateral, whether now owned or hereafter acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets or assign any
right to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute, except the following (collectively referred to as "Permitted
Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges of
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Company or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business or in connection with any Capital Expenditure permitted by the
terms of this Agreement and which have not arisen to secure Indebtedness
for borrowed money, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, and other similar Liens arising in the ordinary
course of business, and which either (x) do not in the aggregate materially
detract from the value of such property or assets or materially impair the
use thereof in the operation of the business of the Company or any of its
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex IX TO THE
AGREEMENT, and extensions, renewals or related refinancings thereof
pursuant to Section 8.04(b) OF THIS EXHIBIT E, provided that such
extensions, renewals or related refinancings thereof pursuant to Section
8.04(b) (x) OF THIS EXHIBIT E do not increase the obligations so secured
and (y) apply to additional assets not subject to the lien being extended
or renewed;
E-31
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09 OF
THE AGREEMENT;
(e) Liens incurred or deposits made (x) in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); and (y) to
secure the performance of leases of Real Property, to the extent incurred
or made in the ordinary course of business consistent with past practices;
(f) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Company or any
of its Subsidiaries;
(g) easements, zoning restrictions, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Company or any of its Subsidiaries;
(h) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(i) any interest or title of a licensor, lessor or sublessor under
any license or lease permitted by this Agreement;
(j) Liens created pursuant to Capital Leases permitted pursuant to
Section 8.04(d) OF THIS EXHIBIT E;
(k) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Initial Borrowing Date; provided
that (i) any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien (including refinancings thereof) does
not exceed 100% of the lesser of the fair market value or the purchase
price of the property being purchased at the time of the incurrence of such
Indebtedness and (iii) the Indebtedness secured thereby is permitted to be
incurred pursuant to Section 8.04(d) OF THIS EXHIBIT E;
(l) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Company in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition; PROVIDED that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 8.04(h) OF THIS EXHIBIT E, and
(ii) such Liens are not incurred in connection with, or in
E-32
contemplation or anticipation of, such Permitted Acquisition and do not
attach to any other asset of the Company or any of its Subsidiaries; and
(m) additional Liens (on assets other than the Collateral) incurred
by the Company and its Subsidiaries so long as the aggregate value of the
property subject to such Liens, and the Indebtedness and other obligations
secured thereby, do not exceed $1,000,000.
8.04 INDEBTEDNESS. The Company will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Annex VII TO THE AGREEMENT, including any extensions,
refinancings, replacements or restructurings thereof, provided that the
then outstanding principal amount thereof is not increased;
(c) Indebtedness under Interest Rate Protection Agreement, and Other
Hedging Agreements permitted by Section 8.05(d) OF THIS EXHIBIT E;
(d) Capitalized Lease Obligations and Indebtedness of the Company and
its Subsidiaries incurred pursuant to purchase money Liens permitted under
Section 8.03(k) OF THIS EXHIBIT; provided that all such Capitalized Lease
Obligations are permitted under Section 8.08 OF THIS EXHIBIT E, and (ii)
the sum of (x) the aggregate Capitalized Lease Obligations outstanding at
any time plus (y) the aggregate principal amount of such purchase money
Indebtedness outstanding at such time shall not exceed $12,000,000
(including Capital Lease Obligations referred to on Exhibit VII);
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g) OF THIS EXHIBIT E;
(f) Indebtedness of Foreign Subsidiaries to the Company or any of its
Domestic Subsidiaries as a result of any investment made pursuant to
Section 8.05(k) OF THIS EXHIBIT E;
(g) Indebtedness consisting of guaranties (x) by the Company of
Indebtedness, leases and other contractual obligations permitted to be
incurred by Subsidiaries of the Company that are Guarantors and (y) by
Foreign Subsidiaries of the Company of Indebtedness, leases and other
contractual obligations permitted to be incurred by the Company and its
Subsidiaries;
E-33
(h) Indebtedness of a Subsidiary acquired as a result of a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness); provided that (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, (ii) at the time of such
Permitted Acquisition such Indebtedness does not exceed 25% of the total
then fair market value of the assets of the Subsidiary so acquired, or of
the asset so acquired, as the case may be, (iii) so long as, before and
after giving effect to such Permitted Acquisition, no Default or Event of
Default shall have occurred or would result therefrom and (iv) such
Indebtedness is not recourse to any assets of the Company or its
Subsidiaries other than the Subsidiary and assets so acquired; and
(i) additional Indebtedness of the Company and its Subsidiaries not
otherwise permitted hereunder not exceeding $5,000,000 in aggregate
principal amount at any time outstanding.
8.05 ADVANCES, INVESTMENTS AND LOANS. The Company will not, and will
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person, or
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or hold any cash, Cash Equivalents or Foreign Cash Equivalents
(collectively, "Investments"), except:
(a) the Company and its Subsidiaries may invest in cash and Cash
Equivalents, and, in the case of Foreign Subsidiaries, Foreign Cash
Equivalents;
(b) the Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of the Company or such Subsidiary;
(c) the Company and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(d) (w) Interest Rate Protection Agreements entered into to protect
the Company against fluctuations in interest rates in respect of the
Obligations, (x) Other Hedging Agreements with respect to Canadian Dollars
to protect against fluctuations in the value of the Canadian dollar against
the U.S. dollar, but only with respect to the loans contemplated by clause
(k) of this Section 8.05, (y) Other Hedging Agreements with respect to
copper and other raw materials to be used in the business of the Company
and its Subsidiaries, provided that such purchases are entered into in the
ordinary course of business and consistent with past practices and for bona
fide
E-34
business (and not speculative) purposes and (z) Other Hedging Agreements
with respect to foreign sales by the Company and its Subsidiaries, provided
that such agreement to protect against fluctuations in currency values are
entered into the ordinary course of business and for bona fide business
(and not speculative) purposes;
(e) advances, loans and investments in existence on the Initial
Borrowing Date and listed on Annex V TO THE AGREEMENT shall be permitted,
without giving effect to any additions thereto or replacements thereof
(except those additions or replacements which are existing obligations as
of the Initial Borrowing Date but only to the extent such further
obligations are described on such Annex V);
(f) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases or other contractual
arrangements shall be permitted;
(g) the Company may make intercompany loans and advances to any of
its Subsidiaries that are Guarantors and any Subsidiary of the Company may
make intercompany loans and advances to the Company or any other Subsidiary
of the Company that is a Guarantor (collectively, "Intercompany Loans");
PROVIDED that (x) each Intercompany Loan shall contain subordination
provisions satisfactory to the LANDLORD, (y) each Intercompany Loan shall
be evidenced by an Intercompany Note and (z) each such Intercompany Note
shall be pledged to the Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Company and its Subsidiaries to
employees of the Company and its Subsidiaries for moving and travel
expenses and other similar expenses or in connection with stock purchases
in each case incurred in the ordinary course of business and consistent
with past practices shall be permitted in an aggregate principal amount not
to exceed $2,500,000 at any one time outstanding;
(i) Permitted Acquisitions shall be permitted;
(j) the Company and its Subsidiaries may acquire and hold promissory
notes and/or equity securities issued by the purchaser or purchasers in
connection with the sale of assets to the extent permitted under Section
8.02(d) OF THIS EXHIBIT E;
(k) the Company may lend, on a senior basis, funds to the Canadian
Subsidiary, provided that (x) the aggregate amount of such loans may not,
at any time, exceed $6,000,000, (y) such loans shall (i) be made pursuant
to a note, in form and substance, satisfactory to the LANDLORD, (ii) bear
interest at a rate equal to that determined in accordance with Section
1.08(a) OF THE AGREEMENT, (iii) be prepayable at any time upon demand by
the Company and (iv) be secured (at all times commencing no later than 90
days after the Initial Borrowing Date) by the assets of the Canadian
Subsidiary and its Subsidiaries, on terms and conditions satisfactory to
E-35
the LANDLORD and (z) such loans and notes shall constitute Collateral and
be pledged to the Collateral Agent on behalf of the Secured Creditors;
(l) the Company may contribute cash to one or more of its
Subsidiaries that are or become Guarantors formed after the Initial
Borrowing Date in accordance with Section 8.14 OF THIS EXHIBIT E (including
in connection with a Permitted Acquisition) so long as such Subsidiary
remains a Guarantor;
(m) the Company may purchase shares of the Company common stock to
the extent permitted by Sections 8.06(ii) OF THIS EXHIBIT E;
(n) the Company and its Subsidiaries may make cash Investments in or
to Persons that are not Affiliates (other than joint ventures in which an
Affiliate of the Company has an ownership interest other than through the
Company or a Subsidiary of the Company) in an amount not to exceed
$25,000,000 outstanding at any one time (giving effect to any repayments in
cash, but without giving effect to any distributions or profits thereon,
write-downs or non-cash payments) PROVIDED, before and after giving effect
to each such Investment, (x) no Default or Event of Default shall have
occurred or result therefrom and (y) the Unutilized Revolving Loan
Commitment would be at least $15,000,000; and
(o) The Company and its Subsidiaries may make cash Investments in or
to Persons that are not Affiliates of the Company in an amount not to
exceed $5,000,000 outstanding at any one time, giving effect to any
repayments in cash, but without giving effect to any distributions thereon,
write-downs or non-cash payments (provided, that before and after giving
effect to each such Investment, no Default or Event of Default shall have
occurred or result therefrom).
8.06 DIVIDENDS, ETC. The Company will not, and will not permit any
of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock of the Company or any such Subsidiary, as the
case may be) or return any capital to, its stockholders or authorize or make any
other distribution, payment or delivery of property or cash to its stockholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for any consideration, any shares of any class of its capital stock,
now or hereafter outstanding (or any warrants for or options or stock
appreciation rights (other than such rights as are granted only to employees as
compensation for their employment) in respect of any of such shares), or set
aside any funds for any of the foregoing purposes, and the Company will not
permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of the Company or any
Subsidiary of the Company now or hereafter outstanding (or any options or
warrants or such stock appreciation rights issued by such Person with respect to
its capital stock) (all of the foregoing "Dividends", it being understood that
the payments made in accordance with the clauses contained in the proviso of
Section 8.07 OF THIS EXHIBIT E shall not be deemed to be Dividends), except
that:
E-36
(i) any Subsidiary of the Company may pay Dividends to the Company or
any Wholly-Owned Subsidiary of the Company;
(ii) prior to consummation of an initial public offering (including
the Initial Public Offering), the Company may redeem or purchase shares of
the Company Common Stock or options to purchase the Company Common Stock,
as the case may be, held by former employees (or their heirs) of the
Company or any of its Subsidiaries following the termination of their
employment; provided that (x) the only consideration paid by the Company in
respect of such redemptions and/or purchases shall be cash and/or
subordinated notes of the Company in form and substance satisfactory to the
LANDLORD and (y) the sum of (I) the aggregate amount paid by the Company in
cash in respect of all such redemptions and/or purchases plus (II) the
aggregate amount of all principal and interest payments made on such
subordinated notes shall not exceed $1,000,000 in any consecutive twelve
months of the Company;
(iii) as long as no Default or Event of Default shall then exist or
result therefrom, regular quarterly cash dividends on the Superior
Preferred Stock may be paid in an aggregate amount per fiscal quarter of
the Company not to exceed $300,000, PROVIDED that such dividend is not
declared earlier than ten days after the delivery to the LANDLORD of the
required financial statements and related Officer's Certificate for such
period contemplated by Section 7.01 OF THE AGREEMENT;
(iv) as long as no Default or Event of Default shall then exist or
result therefrom, with respect to each Special Dividend Period, the Company
may declare and pay a dividend on the Company's Common Stock in an amount
not to exceed $5,000,000; PROVIDED that the ratio of Consolidated EBITDA of
the Company to Consolidated Fixed Charges of the Company for such Special
Dividend Period (determined on a PRO FORMA basis after giving effect to
such dividend) exceeds 1.0 to 1.0, except that with respect to the second
Special Dividend Period and each Special Dividend Period thereafter, the
amount of such dividend may exceed $5,000,000 (but may not exceed
$7,500,000) but only if such ratio for such Special Dividend Period exceeds
1.10 to 1, it being understood that for each such Special Dividend Period
any dividend under this Section 8.06(iv) may not be declared earlier than
ten days after the delivery to the LANDLORD of the financial statements and
related Officer's Certificate for the last fiscal period of such Special
Dividend Period required by Section 7.01 OF THE AGREEMENT and an Officer's
Certificate showing, in reasonable detail, compliance with the applicable
ratio set forth in this Section 8.06;
(v) so long as no Default or Event of Default shall then exist or
result therefrom, the Company may declare and pay a Dividend from, and in
an amount not to exceed, the net cash proceeds of the Initial Public
Offering but only after giving effect to all repayments and commitment
reductions resulting from the Initial Public Offering as contemplated by
THE Agreement, including without limitation, Section 3 OF THE AGREEMENT;
PROVIDED that such dividend may not exceed the sum of (x) $53,300,000 and
(y) the net cash proceeds (net of all underwriting discounts, fees and
E-37
commissions and other costs and expenses associated therewith) from the
sale of Company Common Stock in the Initial Public Offering upon exercise
of the underwriters' over-allotment option; and
(vi) shares of the Superior Preferred Stock may be repurchased,
PROVIDED that the only consideration to be paid in connection therewith
shall be shares of (x) Company Common Stock and/or (y) Company preferred
stock having terms identical, in all material respects, to the Superior
Preferred Stock (including as to dividend rate and liquidation preferences)
except that the issuer thereof shall be the Company.
8.07 TRANSACTIONS WITH AFFILIATES. The Company will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to the Company or such
Subsidiary as would be reasonably expected to be obtainable by the Company or
such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate; PROVIDED that the following shall in any event
be permitted: (i) the Transaction; (ii) the performance of the Services
Agreement PROVIDED that (x) such payments may not exceed $2,000,000 in any four
fiscal quarter period and (y) the portion of such payment for services described
in Section 3(b) thereof shall be subject to the "arm's-length" standard
described in this Section 8.07; (iii) the Company and its Domestic Subsidiaries
may enter into the Company Tax Allocation Agreement and may make payments
thereunder and the Alpine Tax Allocation Agreement; (iv) transactions between or
among the Company and its Subsidiaries to the extent that such transactions are
otherwise specifically permitted under this Agreement and (v) the employment
agreement with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in terms and not more adverse to the Company
that those described in the Registration Statement.
8.08 CAPITAL EXPENDITURES. (a) The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(x) during the period (taken as one accounting period) commencing on the Initial
Borrowing Date and ending on April 27, 1997, the Company and its Subsidiaries
may make Capital Expenditures so long as the aggregate amount does not exceed
$7,100,000 during such period and (y) during any fiscal year thereafter, the
Company and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of such Capital Expenditures does not exceed $11,000,000.
(b) In the event that the amount of Capital Expenditures permitted to
be made by the Company and its Subsidiaries pursuant to clause (a) above in any
fiscal year (before giving effect to any increase in such permitted expenditure
amount pursuant to this clause (b)) is greater than the amount of such Capital
Expenditures actually made by the Company and its Subsidiaries during such
fiscal year, such excess (the "Rollover Amount") may be carried forward and
utilized to make Capital Expenditures in succeeding fiscal years; PROVIDED that
in no event shall the aggregate amount of Capital Expenditures made by the
Company and its Subsidiaries during any fiscal year pursuant to Section 8.08(a)
OF THIS EXHIBIT E exceed 125% of the direct amount set forth for such fiscal
year in such Section 8.08(a).
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(c) Notwithstanding the proviso in Section 8.08(b) OF THIS EXHIBIT E,
the Company and its Subsidiaries may make additional Capital Expenditures with
the Net Cash Proceeds of Asset Sales to the extent such proceeds are not
required to be applied to reduce the Total Revolving Loan Commitment pursuant to
Section 3.03(c) OF THE AGREEMENT and such proceeds are reinvested as required by
Section 3.03(c) OF THE AGREEMENT.
(d) The Company and its Subsidiaries may make additional Capital
Expenditures with the insurance proceeds received by the Company or any of its
Subsidiaries from any Taking or Destruction so long as such Capital Expenditures
are to replace or restore any properties or assets in respect of which such
proceeds were paid within one year following the date of the receipt of such
insurance proceeds to the extent such insurance proceeds are not required to be
applied to reduce the Total Revolving Loan Commitment pursuant to Section
3.03(f) OF THE AGREEMENT.
(e) The Company and its Wholly-Owned Subsidiaries may make Permitted
Acquisitions.
8.09 MINIMUM CONSOLIDATED EBITDA. The Company will not permit
Consolidated EBITDA during any Test Period set forth below to be less than the
amount set forth below with respect to such Test Period:
($ in millions)
Test Period Ending: Amount:
------------------ -----
10/31/96 $46.3
01/31/97 46.5
04/30/97 46.7
07/28/97 45.3
10/31/97 46.4
01/31/98 47.4
04/30/98 48.0
07/28/98 48.3
10/31/98 48.5
01/31/99 48.8
04/30/99 49.0
and the last day
of each Fiscal Quarter
thereafter
8.10 INTEREST COVERAGE RATIO. The Company will not permit the
Interest Coverage Ratio for any Test Period set forth below to be equal to or
less than the ratio set forth below with respect to such Test Period:
Test Period Ending: Ratio:
------------------ ------
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10/31/96 3.1x
01/31/97 3.1x
04/30/97 3.2x
07/28/97 3.2x
10/31/97 3.3x
01/31/98 3.5x
04/30/98 3.7x
07/28/98 3.8x
10/31/98 3.9x
01/31/99 3.9x
04/30/99 4.0x
and the last day
of each Fiscal Quarter
thereafter
8.11 LEVERAGE RATIO. The Company will not permit the Pro Forma
Leverage Ratio at any time during the Test Period set forth below to be equal to
or more than the ratio set forth below with respect to such Test Period:
Test Period Ending: Ratio:
------------------ ------
10/31/96 4.167x
01/31/97 4.083x
04/30/97 4.000x
07/28/97 3.875x
10/31/97 3.750x
01/31/98 3.625x
04/30/98 3.500x
07/28/98 3.375x
10/31/98 3.250x
01/31/99 3.150x
04/30/99 3.100x
and the last day
of each Fiscal Quarter
thereafter
8.12 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN
OTHER AGREEMENTS; ISSUANCES OF CAPITAL STOCK; ETC. The Company will not, and
will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Superior Preferred Stock (except
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as permitted by clause (vi) of Section 8.06 OF THIS EXHIBIT E) or any
Existing Indebtedness.
(ii) amend or modify in any material respect or in any manner adverse
to the Company or the Banks, or permit such an amendment or modification
of, any provision of the Superior Preferred Stock or Existing Indebtedness;
(iii) amend, modify or change in any way adverse to the interests of
the Banks, any Tax Allocation Agreement, its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or By-Laws; and
(iv) issue any class of capital stock other than common stock.
8.13 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The Company
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or any Subsidiary
of the Company, or pay any Indebtedness owed to the Company or a Subsidiary of
the Company, (b) make loans or advances to the Company or any of the Company's
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) the Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Company or a Subsidiary of the Company, (iv)
customary provisions restricting assignment of any licensing agreement entered
into by the Company or a Subsidiary of the Company in the ordinary course of
business, (vi) in the case of DNE and its Subsidiaries, the Existing
Indebtedness Agreements as modified by the consent contemplated under Section
5.19 OF THE AGREEMENT, and in the case of Superior and the Company, the
Brownwood, Texas lease (but only with respect to the property and assets subject
to such lease), (vii) customary provisions restricting the transfer of or by
those assets pursuant to, and subject to other Liens permitted under Section
8.03(h), (i), (j), (k) or (l) and (viii) OF THIS EXHIBIT E restrictions or
encumbrances pursuant to Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a Permitted
Acquisition) or an asset securing such Indebtedness, PROVIDED that such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, PROVIDED, FURTHER, such
restrictions or encumbrances apply solely to such Subsidiary or asset so
acquired.
8.14 LIMITATION ON THE CREATION OF SUBSIDIARIES. Notwithstanding
anything to the contrary contained in this Agreement, the Company will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Initial Borrowing Date any Subsidiary; PROVIDED that the Company and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Subsidiaries
as a result of investments made pursuant to Section 8.05(l) or Section 8.05(n)
OF THIS EXHIBIT E so long as, in each case, (i) at least 15 days' prior written
E-41
notice thereof is given to the LANDLORD (or such shorter period of time as is
acceptable to the LANDLORD), (ii) unless otherwise consented to by the LANDLORD
because such Subsidiary is a Foreign Subsidiary, the capital stock of such new
Subsidiary is promptly pledged pursuant to, and to the extent required by, this
Agreement and the Pledge Agreement and the certificates, if any, representing
such stock, together with stock powers duly executed in blank, are delivered to
the Collateral Agent, (iii) unless otherwise consented to by the LANDLORD
because such Subsidiary is a Foreign Subsidiary, such new Subsidiary promptly
executes a counterpart of the Guaranty, the Pledge Agreement and the Security
Agreement, and (iv) to the extent requested by the LANDLORD, takes all actions
required pursuant to Section 7.11 OF THE AGREEMENT, PROVIDED that no such action
will be required by any new Subsidiary (that is not a Wholly-Owned Subsidiary)
to the extent such new Subsidiary is a party to a preexisting agreement which
prohibits such new Subsidiary from executing a Guaranty; PROVIDED, FURTHER, such
preexisting agreement was not entered into for the purpose of avoiding the
requirements of Section 8.14 OF THIS EXHIBIT E and the restrictions contained
therein are no more adverse to the Company and its Subsidiaries than to the
other equity owners in such new Subsidiary. In addition, each new Subsidiary
that is required to execute any Credit Document shall execute and deliver, or
cause to be executed and delivered, all other relevant documentation of the type
described in Section 5 OF THE AGREEMENT as such new Subsidiary would have had to
deliver if such new Subsidiary were a Credit Party on the Initial Borrowing
Date.
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