RESTRUCTURING

At one time or another many companies find themselves overburdened with debt. This may come about because of a decline in sales, very rapid growth or onerous terms and conditions on existing debt that affect the company's ability to survive. The professionals at Allegiance Capital have the experience, competency and capability that are required to negotiate with lending institutions, restructure debt and make effective settlements.

As financial intermediaries, we have saved many companies from bankruptcy. In the process, we have been highly successful in restructuring existing debt with substantial reductions. We also establish new financing options to provide the company with breathing room and opportunity to move forward and grow. Our fee structure is based on a percentage of the money that our clients save. We are reasonable, effective and move very rapidly.

The best indication of what Allegiance Capital can do for a client is our historical track record of closed transactions and the debt settlements that have been completed by our professionals. Examples are as follows:

Debt Settlement with Mexican Banks

A major pharmaceutical firm had $17 million in debt with nine loans to six banks and was also being sued by the banks. Our professionals settled the debt for $10 million and saved the client $7 million.

Release of Assets

We negotiated and arranged a release of assets held by a bank so that the newly released assets could be repledged for a new loan. This allowed the company to fill orders, increase sales and meet its obligation in the marketplace. Concurrently with negotiating a release of the assets, we negotiated an additional 17.5% ecrease in the principal amount of the loan by providing a new lender who would repay the bank loan in full within 60 days.

Equity Buyback

We assisted a major Mexican firm in negotiating the repurchase of the company's shares held by its bank. Our client's bank had taken equity from the company in exchange for debt. As the company's operations improved, our client desired to repurchase the equity held by the bank. The company attempted to negotiate a substantial reduction in the amount of money the bank was seeking. Allegiance Capital was engaged to further negotiate the transaction, resulting in an additional 50% reduction in the settlement amount.

Buy Out Shareholder

Our principals raised new capital for a firm so that the company could sell its bank debt at a 50% discount and buy out a shareholder who owned 25% of the company. The selling shareholder settled on an amount that was $3 million less than what the shareholder initially demanded.

Standstill Agreements with Banks

Our principals have negotiated many formal standstill agreements with major international lending institutions so further payments were not demanded and interest was frozen. This served to provide clients sufficient time to reorganize, restructure and work their way out of financial problems. In several cases these types of moratoriums on debt and accumulation of interest prevented bankruptcy and provided a better solution not only for the company but for the lending institutions as well.

Allegiance Capital has the knowledge and experience to negotiate effectively on behalf of its clients. As intermediaries we are able to negotiate objectively and bring transactions to closure thus avoiding conflict between client and lender. This permits our clients to maintain ongoing relationships with their lenders. Our professional presence provides rationality, reason and speed in bringing agreed-upon settlement programs to a successful conclusion.