1
SENIOR SUBORDINATED
NOTE PURCHASE AGREEMENT
dated as of August 31, 1999
among
TRANSTECHNOLOGY CORPORATION
THE LENDERS AND HOLDERS REFERRED TO HEREIN
and
BANKBOSTON, N.A.
as Administrative Agent
Arranged by:
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
2
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.......................................................1
1.1. Definitions......................................................................1
1.2. Rules of Interpretation..........................................................17
2. SALE, PURCHASE AND CONVERSION OF BRIDGE NOTES.................................................18
2.1. Bridge Loan Commitment...........................................................18
2.2. The Bridge Notes.................................................................18
2.3. Scheduled Maturity of Bridge Notes...............................................19
2.4. Term Loan Commitment.............................................................19
2.5. The Term Notes...................................................................19
2.6. Scheduled Maturity of Term Notes.................................................20
2.7. Use of Proceeds..................................................................20
3. PURCHASE AND SALE OF WARRANTS.................................................................20
4. OTHER TERMS OF THE NOTES......................................................................20
4.1. Payment of Interest on Bridge and Term Notes.....................................20
4.2. Optional Redemption..............................................................22
4.3. Mandatory Prepayments from Asset Sales...........................................24
4.4. Mandatory Prepayment from Permanent Financing....................................24
4.5. Mandatory Prepayments from New Debt or Equity ...................................24
4.6. Mandatory Prepayment upon Change of Control......................................25
4.7. Terms of Redemption Offers.......................................................25
5. THE EXCHANGE NOTES............................................................................27
6. CERTAIN GENERAL PROVISIONS....................................................................29
6.1. Fees.............................................................................29
6.2. Payment Provisions...............................................................29
6.2.1. Currency of Account.....................................................29
6.2.2. Application of Interest Payments........................................29
6.2.3. Judgment Currency.......................................................29
6.2.4. Time of Payment.........................................................29
6.2.5. Payments by Administrative Agent........................................29
6.2.6. No Offset, etc..........................................................30
6.3. Computations.....................................................................30
6.4. Illegality; Inability to Determine LIBOR Rate....................................30
6.5. Additional Costs, etc............................................................31
6.6. Capital Adequacy.................................................................32
6.7. Certificate......................................................................33
6.8. Indemnity........................................................................33
6.9. Interest After Default...........................................................33
6.9.1. Overdue Amounts.........................................................33
6.9.2. Amounts Not Overdue.....................................................33
7. GUARANTY......................................................................................33
7.1. Subsidiary Guaranty..............................................................33
7.2. Subordination....................................................................33
8. REPRESENTATIONS AND WARRANTIES................................................................34
8.1. Corporate Authority..............................................................34
3
-ii-
8.1.1. Incorporation; Good Standing............................................34
8.1.2. Authorization...........................................................34
8.1.3. Enforceability..........................................................34
8.2. Governmental Approvals...........................................................35
8.3. Title to Properties; Leases......................................................35
8.4. Financial Statements and Projections.............................................35
8.4.1. Financial Statements....................................................35
8.4.2. Projections.............................................................35
8.5. No Material Changes, etc.........................................................35
8.6. Franchises, Patents, Copyrights, etc.............................................36
8.7. Litigation.......................................................................36
8.8. No Materially Adverse Contracts, etc.............................................36
8.9. Compliance with Other Instruments, Laws, etc.....................................37
8.10. Tax Status.......................................................................37
8.11. No Event of Default..............................................................37
8.12. Holding Company and Investment Company Acts......................................37
8.13. Absence of Financing Statements, etc.............................................37
8.14. Disclosure.......................................................................37
8.15. Certain Transactions.............................................................38
8.16. Employee Benefit Plans...........................................................38
8.16.1. In General..............................................................38
8.16.2. Terminability of Welfare Plans..........................................38
8.16.3. Guaranteed Pension Plans................................................38
8.16.4. Multiemployer Plans.....................................................39
8.16.5. Compliance with Employment Benefit Laws.................................39
8.17. Use of Proceeds..................................................................39
8.18. Environmental Compliance.........................................................40
8.19. Subsidiaries, etc................................................................41
8.20. Bank Accounts....................................................................41
8.21. Year 2000 Compliance.............................................................41
9. AFFIRMATIVE COVENANTS OF THE COMPANY..........................................................41
9.1. Punctual Payment.................................................................41
9.2. Maintenance of Offices...........................................................41
9.3. Records and Accounts.............................................................41
9.4. Financial Statements, Certificates and Information...............................42
9.5. Notices..........................................................................43
9.5.1. Defaults................................................................43
9.5.2. Environmental Events....................................................43
9.5.3. Notice of Litigation and Judgments......................................43
9.6. Corporate Existence; Maintenance of Properties...................................44
9.7. Insurance........................................................................44
9.8. Taxes............................................................................44
9.9. Inspection of Properties and Books, etc..........................................45
9.9.1. General.................................................................45
9.9.2. Environmental Assessments...............................................45
9.9.3. Communications with Accountants.........................................46
9.10. Compliance with Laws, Contracts, Licenses, and Permits...........................46
9.11. Employee Benefit Plans...........................................................46
4
-iii-
9.12. Use of Proceeds..................................................................47
9.13. Additional Guarantors............................................................47
9.14. Permanent Financing..............................................................47
9.15. Further Assurances...............................................................47
10. CERTAIN NEGATIVE COVENANTS OF THE COMPANY.....................................................48
10.1. Restrictions on Indebtedness and Preferred Stock.................................48
10.2. Restrictions on Liens............................................................49
10.3. Restrictions on Investments......................................................50
10.4. Restricted Payments..............................................................50
10.5. Merger, Consolidation and Disposition of Assets..................................53
10.5.1. Mergers and Acquisitions................................................53
10.5.2. Disposition of Assets...................................................53
10.6. Sale and Leaseback...............................................................54
10.7. Compliance with Environmental Laws...............................................54
10.8. Employee Benefit Plans...........................................................54
10.9. Maintenance of Business..........................................................55
11. SUBORDINATION.................................................................................55
11.1 Agreement to Subordinate.........................................................55
11.2. Liquidation; Dissolution; Bankruptcy.............................................55
11.3. Default on Designated Senior Debt................................................56
11.4. Acceleration.....................................................................56
11.5. When Distribution Must Be Paid Over..............................................56
11.6. Notice by Company................................................................57
11.7. Subrogation......................................................................57
11.8. Relative Rights..................................................................57
11.9. No Impairment by Company.........................................................58
11.10. Distribution or Notice to Representative.........................................58
11.11. Rights of Administrative Agent...................................................59
11.12. Authorization to Effect Subordination............................................59
11.13. Amendments.......................................................................59
12. CLOSING CONDITIONS............................................................................59
12.1. Loan Documents...................................................................60
12.2. Certified Copies of Charter Documents............................................60
12.3. Corporate Action.................................................................60
12.4. Incumbency Certificate...........................................................60
12.5. Senior Loan Documents; Availability..............................................60
12.6. Tinnerman Acquisition............................................................60
12.7. Solvency Certificate.............................................................61
12.8. Opinions of Counsel..............................................................61
12.9. Payment of Fees..................................................................61
12.10. Disbursement Instructions........................................................61
13. CONDITIONS TO CLOSING AND CONVERSION..........................................................61
13.1. Representations True; No Event of Default........................................61
13.2. No Legal Impediment..............................................................62
13.3. Governmental Regulation..........................................................62
13.4. Proceedings and Documents........................................................62
14. EVENTS OF DEFAULT; ACCELERATION; ETC..........................................................62
14.1. Events of Default and Acceleration...............................................62
5
-iv-
14.2. Remedies.........................................................................65
14.3. Distribution of Proceeds.........................................................65
15. SETOFF........................................................................................66
16. THE ADMINISTRATIVE AGENT......................................................................67
16.1. Authorization....................................................................67
16.2. Employees and Agents.............................................................68
16.3. No Liability.....................................................................68
16.4. No Representations...............................................................68
16.5. Payments.........................................................................68
16.5.1. Payments to Administrative Agent........................................68
16.5.2. Distribution by Administrative Agent....................................69
16.5.3. Delinquent Lenders......................................................69
16.6. Holders of Notes.................................................................69
16.7. Indemnity........................................................................70
16.8. Administrative Agent as Lender and Holder........................................70
16.9. Resignation of Administrative Agent..............................................70
17. EXPENSES......................................................................................70
18. INDEMNIFICATION...............................................................................71
19. SURVIVAL OF COVENANTS, ETC....................................................................72
20. ASSIGNMENT AND PARTICIPATION..................................................................72
20.1. Conditions to Assignment.........................................................72
20.2. Certain Representations and Warranties; Limitations;
Covenants......................................................................73
20.3. Register.........................................................................74
20.4. New Notes........................................................................74
20.5. Participations...................................................................75
20.6. Disclosure.......................................................................75
20.7. Assignee or Participant Affiliated with the Company..............................75
20.8. Miscellaneous Assignment Provisions..............................................76
20.9. Assignment by the Company........................................................76
21. NOTICES, ETC..................................................................................76
22. GOVERNING LAW.................................................................................77
23. HEADINGS......................................................................................77
24. COUNTERPARTS .................................................................................78
25. ENTIRE AGREEMENT, ETC.........................................................................78
26. WAIVER OF JURY TRIAL..........................................................................78
27. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................................78
27.1. Voting Procedures................................................................78
27.2. Company's Consent Not Required for Certain Amendments............................79
27.3. Course of Dealing................................................................79
28. SEVERABILITY..................................................................................79
29. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.................................................80
29.1. Sharing of Information with Section 20 Subsidiary................................80
29.2. Confidentiality..................................................................80
29.3. Prior Notification...............................................................81
29.4. Other............................................................................81
6
List of Schedules and Exhibits
------------------------------
Exhibits
--------
Exhibit A - Form of Bridge Note
Exhibit B - Form of Term Note
Exhibit C - Form of Exchange Note
Exhibit D - Indenture
Exhibit E - Registration Rights Agreement
Exhibit F - Compliance Certificate
Exhibit G - Subsidiary Guaranty
Exhibit H - Assignment and Acceptance
Schedules
---------
Schedule 1 The Lenders
Schedule 8.3 Title to Properties
Schedule 8.7 Litigation
Schedule 8.10 Tax Compliance
Schedule 8.16.5 Compliance with Employee Benefit Laws
Schedule 8.18 Environmental Compliance
Schedule 8.19 Subsidiaries
Schedule 8.20 Bank Accounts
Schedule 10.1 Existing Indebtedness
Schedule 10.2 Existing Liens
Schedule 10.3 Existing Investments
7
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
-------------------------------------------
This SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT is made as of August
31, 1999, by and among TRANSTECHNOLOGY CORPORATION, a Delaware corporation
having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ (the "COMPANY" or "TRANSTECHNOLOGY"), BANKBOSTON, N.A., a
United States national banking association ("BANKBOSTON") and the other lending
institutions listed on SCHEDULE 1 (BankBoston and such other institutions,
collectively, the "Lenders"), and BANKBOSTON, N.A., as Administrative Agent for
the Lenders (in such capacity, the "ADMINISTRATIVE AGENT").
WHEREAS, pursuant to an Asset Purchase Agreement dated as of July 9,
1999, by and between the Company and ▇▇▇▇▇ Corporation (the "TINNERMAN
ACQUISITION AGREEMENT"), the Company has agreed to acquire the assets of ▇▇▇▇▇
Corporation's Engineered Fasteners Division (referred to herein as "TINNERMAN");
and
WHEREAS, the Company has requested that the Lenders extend a credit
facility on the terms and conditions set forth herein in order to provide
financing for the completion of the transactions contemplated by the Tinnerman
Acquisition Agreement;
NOW, THEREFORE, in consideration for the foregoing premises and the
promises and covenants set forth herein, the parties hereto hereby agree as
follows.
1. DEFINITIONS AND RULES OF INTERPRETATION.
----------------------------------------
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Agreement referred to
below:
ACQUIRED DEBT. With respect to any specified Person, (i) Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, including, without
limitation Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming Subsidiary of such specified
Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
ACQUISITION CLOSING DATE. The date of completion of the Tinnerman
Acquisition.
AFFILIATE. With respect to any Person, any other Person that would be
considered to be an affiliate of such Person under Rule 144(a) of the Rules and
Regulations of the Securities and Exchange Commission, as in effect on the date
hereof, if such Person were issuing securities.
ADMINISTRATIVE AGENT'S HEAD OFFICE. The Administrative Agent's head
office located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other location as the Administrative Agent may designate from time to time.
8
-2-
ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, or such other
counsel as may be approved by the Administrative Agent.
AGREEMENT. This Senior Subordinated Note Purchase Agreement, including
the Schedules and Exhibits hereto.
APPLICABLE MARGIN. For each period set forth in the chart below, the
Applicable Margin shall be the applicable percentage set forth in the chart
below opposite such period:
------------------------------------ ----------------------------------
PERIOD APPLICABLE MARGIN
------------------------------------ ----------------------------------
Closing Date - 8.00%
November 30, 1999
------------------------------------ ----------------------------------
December 1, 1999 - 8.50%
February 29, 2000
------------------------------------ ----------------------------------
March 1, 2000 - 9.50%
May 31, 2000
------------------------------------ ----------------------------------
June 1, 2000 10.00%
August 31, 2000
------------------------------------ ----------------------------------
PROVIDED that, in the event that at any time during any of the periods set forth
in the table above, the Company shall have defaulted on any of its obligations
under Section 9.14 with respect to the Permanent Financing, such period shall be
deemed to have terminated and the Applicable Margin for the next succeeding
period shall immediately become effective.
ARRANGER. BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
ASSIGNMENT AND ACCEPTANCE. See Sections 20.1.1 and 20.1.2.
BALANCE SHEET DATE. March 31, 1999.
BANKBOSTON. See the preamble to this Agreement.
BASE RATE. The higher of (i) the annual rate of interest announced from
time to time by the Administrative Agent at its Head Office in Boston,
Massachusetts, as its "base rate" for loans denominated in Dollars, and (ii)
one-half of one percent (1/2%) above the Federal Funds Effective Rate. For the
purposes of this definition, "FEDERAL FUNDS EFFECTIVE RATE"shall mean for any
day, the rate per annum equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three funds brokers of recognized standing
selected by the Administrative Agent.
9
-3-
COMPANY. See preamble.
BRIDGE LOAN. See Section 2.1.
BRIDGE LOAN COMMITMENT. See Section 2.1.
BRIDGE NOTES. The promissory notes of the Company in the form of
EXHIBIT A attached hereto issued to each of the Lenders pursuant to Section 2.1
hereof, together with any Secondary Bridge Notes issued pursuant to
Section 4.l(c) hereof, and any Bridge Notes issued upon transfer or exchange
thereof.
BUSINESS. The businesses engaged in by the Company and its Subsidiaries
at the Closing Date, and businesses reasonably related or incidental thereto.
BUSINESS DAY. Any day (other than a Saturday or Sunday) on which
commercial banks are open for business in Boston, Massachusetts.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by the
Company or any of its Subsidiaries in connection with the purchase or lease by
the Company or any of its Subsidiaries of Capital Assets that would be required
to be capitalized and shown on the balance sheet of such Person in accordance
with generally accepted accounting principles.
CAPITALIZED LEASES. Leases (unless otherwise stated, under which the
Company or any of its Subsidiaries is the lessee or obligor), the discounted
future rental payment obligations under which are required to be capitalized on
the balance sheet of the lessee or obligor in accordance with generally accepted
accounting principles.
CERCLA. See Section 8.18.
CHANGE OF CONTROL. The occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act), (ii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule l3d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 35% of the Voting Stock of the
10
-4-
Company (measured by voting power rather than number of shares), or (iii) during
any period of twelve consecutive calendar months, individuals who were directors
of the Company on the first day of such period shall cease to constitute a
majority of the board of directors of the Company.
CLOSING DATE. The first date on which the conditions set forth in
Section 12 and Section 13 have been satisfied and the Bridge Loan is to be made
hereunder.
CODE. The Internal Revenue Code of 1986.
COMMITMENT. As to any Lender, such Lender's Bridge Loan Commitment or
Term Loan Commitment, as the case may be, and collectively, the Bridge Loan
Commitments and the Term Loan Commitments.
COMMITMENT PERCENTAGE. With respect to each Lender, the percentage set
forth on SCHEDULE 1 hereto as such Lender's percentage of the aggregate Bridge
Loan Commitments and Term Loan Commitments of all of the Lenders.
COMMISSION. The Securities and Exchange Commission.
CONSOLIDATED or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Company and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED EBITDA. With respect to any Reference Period, Earnings
Before Interest and Taxes for such Reference Period, before provision for any
depreciation and amortization, as determined in accordance with generally
accepted accounting principles.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Company and its Restricted Subsidiaries, after deduction of all
expenses, taxes and other proper charges, determined in accordance with
generally accepted accounting principles.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any Reference Period, the
aggregate amount of interest required to be paid or accrued by the Company and
its Subsidiaries during such Reference Period on all Indebtedness of the Company
and its Subsidiaries outstanding during all or any part of such Reference
Period, whether such interest was or is required to be reflected as an item of
expense or capitalized, including payments consisting of interest in respect of
the Senior Debt or Capitalized Leases and including commitment fees, agency
fees, facility fees and similar fees or expenses in connection with the
borrowing of money.
CONVERSION DATE. The Initial Maturity Date.
CONVERSION MARGIN. With respect to the first Interest Period commencing
on or after the Conversion Date, zero, and for each Interest Period thereafter,
an
11
-5-
increase of 0.50% over the Conversion Margin in effect in the preceding Interest
Period.
CONVERSION RATE. With respect to any Interest Period commencing on or
after the Conversion Date, the rate per annum equal to the highest of the
following as determined as of the commencement of such Interest Period:
(a) the Final Bridge Loan Rate PLUS 0.50%;
(b) the LIBOR Rate for such Interest Period PLUS 8.00%; or
(c) the Treasury Rate PLUS 8.00%.
DEFAULT. See Section 14.1.
DESIGNATED SENIOR DEBT. Any Indebtedness outstanding under the Senior
Credit Agreement, and any other Senior Debt permitted hereunder, the principal
amount of which is $25,000,000 or more and that has been designated by the
Company as "Designated Senior Debt" by written notice to the Administrative
Agent and each of the Lenders; PROVIDED, HOWEVER, that so long as the Senior
Credit Agreement remains in effect, the Majority Lenders (as defined therein)
shall have consented, in writing, to such designation of additional Indebtedness
as Designated Senior Debt.
DISQUALIFIED STOCK. Any equity security that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), requires the issuer thereof
to pay current Distributions thereon in cash, or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or at any time prior to the date that is 91 days after
the date on which the Term Notes mature; PROVIDED, HOWEVER, that any equity
security that would constitute Disqualified Stock solely because the holders
thereof have the right to require the Company to repurchase such securities upon
the occurrence of a Change of Control or a sale of all or substantially all of
the assets of the TransTechnology Group shall not constitute Disqualified Stock
if the terms of such securities provide that the Company may not repurchase any
such securities pursuant to such provisions unless such repurchase complies with
Section 4 hereof.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Company, other than
dividends payable solely in shares of common stock of the Company; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
the Company, directly or indirectly through a Subsidiary of the Company or
otherwise; the return of capital by the Company to its shareholders as such; or
any other distribution on or in respect of any shares of any class of capital
stock of the Company.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
12
-6-
DOMESTIC SUBSIDIARIES. Those Subsidiaries of the Company which are
incorporated in or organized under the laws of any state, district or territory
of the United States, Canada or the Commonwealth of Puerto Rico.
EARNINGS BEFORE INTEREST AND TAXES. The consolidated earnings (or loss)
from the operations of the Company and its Subsidiaries for any period, after
all expenses and other proper charges but before payment or provision for any
income taxes or interest expense for such period, determined in accordance with
generally accepted accounting principles, after eliminating therefrom all
non-recurring items of income (or loss) resulting from the discontinuation of
operations.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Company or any ERISA
Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. See Section 8.18(a).
EQUITY INTERESTS. Any shares of capital stock, partnership interests or
membership interests in any Person, or any other equity interest that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, and all warrants, options or
other rights to acquire any such shares or interests (but excluding any debt
security that is convertible into, or exchangeable for, any such shares or
interests).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Company under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
ESCROW AGENT. State Street Bank and Trust Company, in its capacity as
the Escrow Agent under the Exchange Escrow Agreement and the Warrant Escrow
Agreement.
EUROCURRENCY BUSINESS DAY. Any day (other than a Saturday or Sunday) on
which commercial banks are open for international business (including dealings
in Dollar deposits) in London, England.
EUROCURRENCY RESERVE RATE. For any day, the maximum rate (expressed as
a decimal) at which any lender subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor or similar regulations relating to such reserve
requirements) against "Eurocurrency Liabilities" (as that term is used in
Regulation D), if such liabilities were outstanding. The Eurocurrency Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in the Eurocurrency Reserve Rate.
13
-7-
EVENT OF DEFAULT. See Section 14.1.
EXCHANGE ACT. The Securities Exchange Act of 1934.
EXCHANGE DATE. See Section 5(a).
EXCHANGE ESCROW AGREEMENT. The Escrow Agreement among the Company, the
Administrative Agent and the Escrow Agent, pursuant to which the Indenture and
the Exchange Notes shall be held in escrow.
EXCHANGE NOTES. The promissory notes of the Company in the form of
EXHIBIT C attached hereto issued in favor of each of the Lenders pursuant to
Section 5(a) hereof, together with any Secondary Exchange Notes issued in
connection therewith, and any Exchange Notes issued upon transfer or exchange
thereof pursuant to the Indenture.
FEE LETTER. The letter agreement or agreements between BankBoston, the
Arranger and the Company dated or to be dated on or prior to the Closing Date
with respect to the amount of certain fees payable or to be paid by the Company
under or in respect of this Agreement.
FINAL BRIDGE LOAN RATE. The interest rate applicable to the Bridge Loan
on the Conversion Date.
FIXED CHARGE COVERAGE RATIO. As of any date of testing, the ratio of
(a) Consolidated EBITDA for the Reference Period most recently ended prior
thereto from which internal financial statements are available, to (b) the
aggregate amount of (i) Consolidated Total Interest Expense for such Reference
Period, PLUS (ii) the aggregate amount of payments of principal of any Funded
Indebtedness of the Company and its Subsidiaries actually made or required to be
made during such Reference Period (including, for the avoidance of doubt, any
such payments made or required to be made hereunder or with respect to the Term
Loan under and as defined in the Senior Credit Agreement), but excluding any
such amounts required to be repaid pursuant to Section 4 of the Senior Credit
Agreement or Section 4 hereof.
FIXED RATE. See Section 4.1(b).
FIXED RATE NOTE. Any Note bearing interest at the Fixed Rate.
FOREIGN SUBSIDIARIES. Those Subsidiaries of the Company other than the
Domestic Subsidiaries.
FUNDED INDEBTEDNESS. At any time of determination, the aggregate
principal amount of all funded Indebtedness for borrowed money (including, for
the avoidance of doubt, all Subordinated Debt of the Company and any of its
Subsidiaries), PLUS all obligations, contingent and otherwise, to reimburse the
issuer in respect of any letters of credit, performance bonds, bankers'
acceptances, guarantees or other similar instruments, PLUS Capitalized Leases,
of the Company and its Subsidiaries.
14
-8-
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time,
and (b) consistently applied with past financial statements of the Company
adopting the same principles, PROVIDED that a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Company or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTOR. Each Subsidiary of the Company which is a party to the
Subsidiary Guaranty.
HAZARDOUS SUBSTANCES. See Section 8.18(b).
HEDGING OBLIGATIONS. With respect to any Person, the obligations of
such Person under interest rate swap agreements, interest rate cap agreements,
interest rate cap obligations and any other agreements or arrangements designed
or intended to protect such Person against fluctuations in interest rate or
currency changes.
HOLDER. Any Person in whose name a Note is registered on the Note
Register at any given time.
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any Lien existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit, performance bonds,
bankers' acceptances, guarantees or other similar instruments; but EXCLUDING all
liabilities in respect of Operating Leases.
INDENTURE. An Indenture among the Company and the Trustee substantially
in the form attached hereto as EXHIBIT D, with such changes therein (a) as the
15
-9-
Administrative Agent and TransTechnology shall approve, or (b) as may be
required by applicable law or as may be reasonably deemed necessary by the
Administrative Agent, or (c) at such time as any Exchange Notes issued
thereunder are sold in an public offering, to reflect such public offering, as
such Indenture may be amended and in effect from time to time.
INELIGIBLE SECURITIES. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. Section 24, Seventh).
INITIAL MATURITY DATE. The first anniversary of the Closing Date.
INTEREST PAYMENT DATE. The date that is 3 months from the Closing Date
and each date 3 months thereafter.
INTEREST PERIOD. Prior to the Conversion Date, a period of one month
commencing with the Closing Date, and after the Conversion Date, a period of
three months commencing with the Conversion Date, subject in each case to the
following:
(a) if any Interest Period would otherwise end on a day that
is not a Eurocurrency Business Day, that Interest Period shall be
extended to the next succeeding Eurocurrency Business Day, unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end
on the immediately preceding Eurocurrency Business Day;
(b) any Interest Period shall end on the numerically
corresponding day in the calendar month at the end of such Interest
Period, PROVIDED that if any Interest Period begins on the last
Eurocurrency Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Eurocurrency
Business Day of a calendar month; and
(c) any Interest Period that would otherwise extend beyond the
Conversion Date or the Term Loan Maturity Date, as the case may be,
shall end on the Conversion Date or the Term Loan Maturity Date, as
applicable.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
16
-10-
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LENDERS. The Lenders referred to on SCHEDULE 1 hereto, collectively,
and each individually being referred to as a "Lender".
LIBOR RATE. For any Interest Period, the rate of interest equal to (i)
the rate determined by the Administrative Agent at which Dollar deposits for
such Interest Period are offered based on information presented on Telerate Page
3750 as of 11:00 a.m. London time on the second Eurocurrency Business Day prior
to the first day of such Interest Period, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Loan or portion thereof to which such Interest
Period applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable. If for any reason the rate referred to in clause
(i) is unavailable, then there shall be substituted therefor the rate per annum
(rounded upwards to the nearest 1/16 of one percent) for the Reference Bank at
which the Reference Bank's London office is offered Dollar deposits two
Eurocurrency Business Days prior to the beginning of the applicable Interest
Period in the London interbank eurodollar market, for delivery on the first day
of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Loan or portion thereof to which such
Interest Period applies.
LIEN. With respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
LOAN DOCUMENTS. This Agreement, the Notes, the Subsidiary Guarantee,
the Fee Letter, the Indenture, the Warrant Agreement, the Warrants, the Warrant
Holders' Agreement, the Warrant Escrow Agreement, the Registration Rights
Agreement, the Exchange Escrow Agreement, together with any other documents from
time to time entered into and identified therein as a "Loan Document" hereunder.
LOANS. The Bridge Loan and the Term Loan.
MAJORITY HOLDERS. As of any time, so long as there is only one Holder,
such Holder, and so long as there are at least two Holders, two or more Holders
holding at least fifty-one percent (51%) of the outstanding principal amount of
the Notes, and if no such amounts are then outstanding, two or more Holders who
held at least
17
-11-
fifty-one percent (51%) of the outstanding principal amount of the Notes
immediately prior to no such amounts being outstanding.
MAXIMUM RATE. See Section 4.1(d).
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Company or any ERISA
Affiliate.
NET CASH PROCEEDS. If from a sale of assets or of equity, the cash
proceeds received from such sale, net of all costs of sale, underwriting or
brokerage costs, and taxes paid or payable as a result thereof by the Company
and its Subsidiaries, and if from the incurring of Indebtedness, the cash
proceeds received from such incurring of Indebtedness, net of all costs thereof
incurred and fees and all expenses payable in connection therewith, and taxes
paid or payable as a result thereof, by the Company and its Subsidiaries.
NON-RECOURSE DEBT. Indebtedness: (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise) or (c) constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness (other than the Notes) of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
NOTES. The Bridge Notes, the Term Notes and the Exchange Notes.
NOTIFIED VARIABLE RATE Holder. Any Holder who is designated by written
notice given to it and to the Company in connection with, and no later than one
(1) Business Day prior to, the assignment to such Holder of any Term Notes or
Exchange Notes by a Variable Rate Holder that such Holder is a Variable Rate
Holder.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Company and its Subsidiaries to any of the Lenders and the Administrative
Agent, individually or collectively, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any of the other Loan Documents or in respect
of any of the Loans made or any of the Notes or other instruments at any time
evidencing any thereof.
18
-12-
OPERATING LEASES. Leases (unless otherwise stated, under which the
Company or any of its Subsidiaries is the lessee or obligor) of any property,
whether real, personal or mixed, which are not Capitalized Leases.
OUTSTANDING. With respect to any Loan or Note, the aggregate unpaid
principal thereof as of any date of determination.
PAYMENT BLOCKAGE NOTICE. See Section 11.3.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
PERMANENT FINANCING. The refinancing of the Notes through the Company's
issuance of high-yield bonds or other securities, to the extent permitted
hereunder and under the Senior Credit Agreement.
PERMANENT FINANCING OFFERING DOCUMENTS. See Section 9.14(b).
PERMITTED INVESTMENTS. See Section 10.3.
PERMITTED JUNIOR SECURITIES. Equity Interests in the Company or any
Guarantor or debt securities that are unsecured and subordinated to all Senior
Debt (and any debt securities issued in exchange for Senior Debt) to at least
the same extent as, or to a greater extent than, the Notes are subordinated to
Senior Debt pursuant hereto (without limiting the forgoing, such Permitted
Junior Securities shall have no required principal payments or equity redemption
requirements until at least 91 days after the final maturity of all Senior
Debt).
PERMITTED LIENS. Liens permitted by Section 10.2 of the Senior Credit
Agreement as in effect on the date hereof.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PROJECTIONS. See Section 8.4.3.
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Company or any of its Subsidiaries.
RECORD. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan referred to in such Note.
REFERENCE BANK. BankBoston.
REFERENCE PERIOD. A period of four (4) consecutive fiscal quarters.
19
-13-
REGISTRATION RIGHTS AGREEMENT. The Registration Rights Agreement in
substantially the form of EXHIBIT E attached hereto, by and among the Company,
the Guarantors referred to therein, and the Administrative Agent for and on
behalf of the Holders, as such agreement may be amended, modified and
supplemented and in effect from time to time.
RELATED FUND. With respect to any Lender that is an investment fund
that invests in commercial loans, any other such fund that is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
RESTRICTED INVESTMENTS. See Section 10.3.
RESTRICTED PAYMENT. See Section 10.4.
RESTRICTED SUBSIDIARY. With respect to any Person, each Subsidiary of
such Person that is not an Unrestricted Subsidiary.
SECONDARY BRIDGE NOTE. See Section 4.1(c).
SECONDARY TERM NOTE. See Section 4.1(c).
SECONDARY NOTES. Collectively, the Secondary Bridge Notes and the
Secondary Term Notes, and each individually, a "SECONDARY NOTE".
SECTION 20 SUBSIDIARY. A Subsidiary of the bank holding company
controlling any Lender, which Subsidiary has been granted authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
SENIOR CREDIT AGREEMENT. The Second Amended and Restated Credit
Agreement, dated of even date herewith, by and between the Company,
TransTechnology ▇▇▇▇▇▇ Orbis GmbH, TransTechnology (GB) Limited, BankBoston and
the other Senior Lenders referred to therein, BHF-BANK Aktiengesellschaft, as DM
Fronting Bank, BankBoston, acting through its London branch, as Sterling
Fronting Bank, BankBoston as Issuing Bank, ABN AMRO Bank N.V., as Syndication
Agent, The First National Bank of Chicago, as Documentation Agent, and
BankBoston as Administrative Agent, as amended, modified, restated, re-funded,
replaced or refinanced from time to time.
SENIOR DEBT. (a) All principal, premium, interest, fees, expenses and
other obligations or liabilities of any kind together with available undrawn
amounts under letters of credit issued or guaranteed under the Senior Credit
Agreement (including, without limitation, post-petition interest whether or not
allowed as a claim in any bankruptcy, reorganization, insolvency, receivership
or similar proceeding) with respect to Indebtedness outstanding under the Senior
Credit Agreement and all Hedging Obligations with respect thereto, (b) any other
Indebtedness permitted to be incurred by the Company under the terms of this
Agreement, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes, and (c) all
20
-14-
obligations with respect to the foregoing. Senior Debt, as used herein, will not
include (i) any liability for federal, state, local or other taxes owed or owing
by the Company or any of its Subsidiaries, (ii) any Indebtedness of the Company
to any of its Subsidiaries or other Affiliates, excluding any Indebtedness owed
to any Affiliate that was incurred prior to such Person becoming an Affiliate in
connection with the acquisition by the Company or any Subsidiary of a business
or Person from such Affiliate, (iii) any trade payables, or (iv) any
Indebtedness that is incurred in violation of this Agreement.
SENIOR LENDERS. The "Lenders" under and as defined in the Senior Credit
Agreement, together with any other holders from time to time of any Senior Debt.
SENIOR LENDER REPRESENTATIVE. The "Administrative Agent" under and as
defined in the Senior Credit Agreement, together with any other representative
or agent from time to time of any Senior Lender.
SENIOR LOAN DOCUMENTS. The "Loan Documents" under and as defined in the
Senior Credit Agreement.
SUBORDINATED DEBT. Unsecured Indebtedness of the Company or any of its
Subsidiaries in an amount, containing other terms and conditions, and expressly
subordinated and made junior to the payment and performance in full of the
Senior Debt pursuant to a written instrument containing subordination provisions
in each respect satisfactory to and approved by the Majority Holders and the
Administrative Agent in writing.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
SUBSIDIARY GUARANTY. The Guaranty dated of even date herewith and in
substantially the form of EXHIBIT G hereto, entered into by the Company's
Domestic Subsidiaries in favor of the Administrative Agent and the Lenders.
TERM LOAN. See Section 2.4.
TERM LOAN COMMITMENT. See Section 2.4.
TERM LOAN MATURITY DATE. The tenth anniversary of the Closing Date.
TERM NOTES. The promissory notes of the Company in the form of EXHIBIT
B attached hereto issued to each of the Lenders pursuant to Section 2.4 hereof,
together with any Secondary Term Notes issued pursuant to Section 4.1(c) hereof,
and any Term Notes issued upon transfer or exchange thereof.
TERM. NOTE RECORD. A Record with respect to a Term Note.
TINNERMAN. See preamble.
21
-15-
TINNERMAN ACQUISITION. The acquisition by the Company or certain
Subsidiaries of the Company of substantially all of ▇▇▇▇▇ Corporation's
Engineered Fastener Division pursuant to in accordance with the Tinnerman
Acquisition Agreement dated as of July 9, 1999 by and between the Company and
▇▇▇▇▇ Corporation.
TINNERMAN ACQUISITION AGREEMENT. See preamble.
TINNERMAN ACQUISITION DOCUMENTS. The Tinnerman Acquisition Agreement
and each of the other documents entered into by the Company or any of its
Subsidiaries pursuant thereto.
TRANSTECHNOLOGY GROUP. The Company and all of its Subsidiaries on a
consolidated basis.
TREASURY RATE. At any time, the highest rate per annum payable at such
time on any of the direct obligations of the United States of America having a
maturity of ten (10) years or less.
TRUSTEE. State Street Bank and Trust Company, or any other bank or
trust company which the Company may nominate prior to the Conversion Date to act
as Trustee under the Indenture, so long as at the time of such nomination and
for so long as such Trustee shall serve in such capacity, such bank or trust
company is (a) organized and does business in and under the laws of the United
States of America or any of the states thereof, (b) is authorized under
applicable federal and/or state laws to exercise corporate trust powers, (c) is
subject to supervision, examination and regulation by federal and/or state
authority, (d) is in good standing under applicable federal and/or state
authorities, and (e) has a combined capital and surplus of at least $50,000,000,
and is otherwise reasonably acceptable to the Majority Holders.
UNRESTRICTED SUBSIDIARY. Any Subsidiary that is designated by the Board
of Directors of the Company as an Unrestricted Subsidiary, but only to the
extent that such Subsidiary: (i) has no Indebtedness other than Non-Recourse
Debt; (ii) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company; (iii) is a
Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (A) to subscribe for
additional Equity Interests or (B) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; (iv) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries; and (v) has at least one director on its board of
directors that is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries. Any such
22
-16-
designation by the Board of Directors of the Company shall be evidenced by the
Company's delivering to the Administrative Agent a certified copy of the board
resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 10.4 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Agreement and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 10.1
hereof, the Company shall be in default of such covenant). The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; PROVIDED that such designation shall be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
Section 10.1 hereof calculated on a pro forma basis as if such designation had
occurred at the beginning of the applicable Reference Period, and (ii) no
Default or Event of Default would be in existence following such designation.
VARIABLE RATE HOLDER. The original Lenders, any Affiliate or Related
Fund of an original Lender, and any Notified Variable Rate Holder.
VARIABLE RATE NOTE. Any Note which is, at the relevant time of
determination, held by a Variable Rate Holder.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
WARRANTS. The Common Stock Purchase Warrants of the Company issued from
time to time under and in accordance with the Warrant Agreement.
WARRANT AGENT. State Street Bank and Trust Company, in its capacity as
Warrant Agent under the Warrant Agreement.
WARRANT AGREEMENT. The Warrant Agreement between the Company and the
Warrant Agent, pursuant to which the Company agrees to issue to the Lenders on
the date hereof the Warrants, as such agreement may be amended, modified and
supplemented and in effect from time to time.
WARRANT ESCROW AGREEMENT. The Warrant Escrow Agreement among the
Company, the Administrative Agent for and on behalf of the Lenders, and the
Escrow Agent, pursuant to which the Company agrees to deliver the Warrants to
the Escrow Agent to be retained until the Initial Maturity Date, as such
agreement may be amended, modified and supplemented and in effect from time to
time.
23
-17-
WARRANT HOLDERS' AGREEMENT. The Warrant Holders' Agreement between the
Company, the Lenders and the Administrative Agent for and on behalf of the
Lenders.
YEAR 2000 PROBLEM. See Section 8.20.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the Commonwealth of Massachusetts, have the meanings assigned to
them therein, with the term "instrument" being that defined under Article 9 of
the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
2. SALE, PURCHASE AND CONVERSION OF BRIDGE NOTES
---------------------------------------------
2.1. BRIDGE LOAN COMMITMENT. Subject to the terms and conditions set
forth herein and in reliance on the Company's covenants, representations and
warranties set forth herein, each of the Lenders hereby agrees to purchase from
the Company, and the Company agrees to issue and sell to each of the Lenders, on
the Closing Date, Bridge Notes in the aggregate principal amount of seventy-five
million dollars ($75,000,000) (such aggregate amount, the "BRIDGE LOAN"), with
each Lender committing to purchase its Commitment Percentage of such aggregate
principal amount of Bridge Notes. The Lenders' commitment to purchase the Bridge
Notes
24
-18-
hereunder is called individually such Lender's "BRIDGE LOAN COMMITMENT", and
collectively the "BRIDGE LOAN COMMITMENTS".
2.2. THE BRIDGE NOTES. The Bridge Loan shall be evidenced by separate
Bridge Notes dated the Closing Date, which the Company shall execute and deliver
to each Lender completed with appropriate insertions. One Bridge Note shall be
payable to the order of each Lender in a principal amount equal to such Lender's
Bridge Loan Commitment, representing the obligation of the Company to pay to
such Lender such principal amount or, if less, the outstanding amount of such
Lender's Bridge Loan, plus interest accrued thereon. The Company irrevocably
authorizes each Lender to make or cause to be made a notation on such Lender's
Bridge Note Record reflecting the original principal amount of such Lender's
Bridge Loan Commitment and, at or about the time of such Lender's receipt of any
principal payment on such Lender's Bridge Note, an appropriate notation on such
Lender's Bridge Note Record reflecting such payment. The aggregate unpaid amount
set forth on such Lender's Bridge Note Record shall be PRIMA FACIE evidence of
the principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Lender's Bridge
Note Record shall not affect the obligations of the Company hereunder or under
any Bridge Note to make payments of principal of and interest on any Bridge Note
when due. The Bridge Notes (i) will be subordinated to the Senior Debt in
accordance with Section 11, (ii) will bear interest as set forth in Section 4
hereof (including the payment of certain interest in the form of Secondary
Bridge Notes), (iii) will be subject to optional or mandatory redemption under
certain circumstances as described in Section 4, and (iv) will be subject to
conversion into the Term Loan as provided in Section 2.4.
2.3. SCHEDULED MATURITY OF BRIDGE NOTES. The Company shall pay in full,
or convert to the Term Loan pursuant to Section 2.4, the outstanding amount of
the Bridge Notes and all interest thereon then outstanding and unpaid no later
than the Initial Maturity Date.
2.4. TERM LOAN COMMITMENT. Subject to the terms and conditions set
forth herein and in reliance on the Company's covenants, representations and
warranties set forth herein, each of the Lenders hereby agree, if the Bridge
Notes have not been repaid in full before the Initial Maturity Date and no
Default or Event of Default has occurred and is then continuing, to convert on
the Initial Maturity Date the then outstanding principal amount of the Bridge
Notes, together with all accrued and unpaid interest thereon then outstanding,
into Term Notes, the aggregate principal amount of which (such aggregate amount,
the "TERM LOAN") shall equal the outstanding principal amount of the Bridge
Notes on the Initial Maturity Date, PLUS the amount of all interest on the
Bridge Notes outstanding and unpaid on the Initial Maturity Date, with each
Lender committing to convert its Commitment Percentage of such aggregate
principal amount. The Lenders' commitment to convert the Bridge Notes into the
Term Notes hereunder is called individually such Lender's "TERM LOAN
COMMITMENT", and collectively the "TERM LOAN COMMITMENTS". If the Bridge Notes
have not been repaid in full before the Initial Maturity Date and no Default or
Event of Default has occurred and is then continuing, then the Bridge Notes
shall be converted into Term Notes in the
25
-19-
aggregate principal amount of the Term Loan automatically on the Initial
Maturity Date without further request or notice.
2.5. THE TERM NOTES. On making the Term Loan pursuant to Section 2.4,
each Lender shall cancel on its records the Bridge Note held by it and all
amounts outstanding thereunder, which corresponding amount shall be satisfied by
the conversion to the Term Loan and the issuance by the Company of Term Notes
with respect thereto. The Term Loan shall be evidenced by separate Term Notes
dated the Initial Maturity Date, which the Company shall execute and deliver to
each Lender completed with appropriate insertions. One Bridge Note shall be
payable to the order of each Lender in a principal amount equal to such Lender's
Term Loan Commitment, representing the obligation of the Company to pay to such
Lender such principal amount or, if less, the outstanding amount of such
Lender's Term Loan, plus interest accrued thereon. The Company irrevocably
authorizes each Lender to make or cause to be made a notation on such Lender's
Term Note Record reflecting the original principal amount of such Lender's Term
Loan Commitment and, at or about the time of such Lender's receipt of any
principal payment on such Lender's Term Note, an appropriate notation on such
Lender's Term Note Record reflecting such payment. The aggregate unpaid amount
set forth on such Lender's Term Note Record shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Lender's Term Note
Record shall not affect the obligations of the Company hereunder or under any
Term Note to make payments of principal of and interest on any Term Note when
due. The Term Notes (i) will be subordinated to the Senior Debt in accordance
with Section 11, (ii) will bear interest as set forth in Section 4 hereof
(including the payment of certain interest in the form of Secondary Term Notes),
(iii) will be subject to optional or mandatory redemption under certain
circumstances as described in Section 4, and (iv) will be subject to conversion
into Exchange Notes as provided in Section 5.
2.6. SCHEDULED MATURITY OF TERM NOTES. Subject to Section 5, the Term
Notes shall mature and the Company shall pay in full the outstanding amount of
the Term Notes and all accrued and unpaid interest thereon on the Term Loan
Maturity Date.
2.7. USE OF PROCEEDS. The Company agrees that it will use the proceeds
from the issuance and sale of Bridge Notes for the purpose of financing the
transactions contemplated by the Tinnerman Acquisition Agreement and paying
expense incurred in connection with the Tinnerman Acquisition. The proceeds from
the Term Loan hereunder shall be used to cancel the outstanding amount of the
Bridge Notes and all accrued and unpaid interest thereon on the Initial Maturity
Date.
3. PURCHASE AND SALE OF WARRANTS
-----------------------------
Subject to the terms and conditions set forth herein, and in the
Warrant Agreement and the Warrant Escrow Agreement, the Company agrees that it
shall issue to each of the Lenders, and the Lenders agree to acquire from the
Company, on the Closing Date, simultaneously with the purchase by the Lenders of
the Bridge
26
-20-
Notes, Warrants to purchase 731,197 shares of the Company's common stock,
representing 10.0% of the fully-diluted common stock of the Company then
outstanding (assuming exercise of the Warrants and all other warrants, options,
or other convertible securities exercisable for or convertible into shares of
the Company's common stock). The Warrants shall be delivered to the Escrow Agent
under and as defined in the Warrant Escrow Agreement on the Closing Date, duly
executed by the Company, to be held by such Escrow Agent pursuant to and subject
to the terms of the Escrow Agreement.
4. OTHER TERMS OF THE NOTES
4.1. PAYMENT OF INTEREST ON BRIDGE AND TERM NOTES.
(a) Subject to all other provisions of this Section 4 and Section
14.10, from the Closing Date until the Initial Maturity Date, the Bridge Notes
(including, for the avoidance of doubt, any Secondary Bridge Notes issued
pursuant to clause (c) below) outstanding from time to time shall bear interest,
payable in cash to the Holders of record on each Interest Payment Date, in
arrears, at an annual rate equal to the LIBOR Rate PLUS the Applicable Margin
then in effect.
(b) Subject to all other provisions of this Section 4, Section 5 and
Section 14.10, from the Initial Maturity Date until the Term Loan Maturity Date,
the Notes (including, for the avoidance of doubt, any Secondary Notes issued
pursuant to clause (c) below) outstanding from time to time shall bear interest,
payable in cash to the Holders of record on each Interest Payment Date, in
arrears, at an annual rate equal to the Conversion Rate then in effect PLUS the
Conversion Margin then in effect, PROVIDED however, that in the event of any
assignment of a Note or portion thereof to any Holder which is not at the time
of such assignment a Variable Rate Holder, the Note issuable to such assignee
Holder shall thereafter bear interest at the rate (the "FIXED RATE") in effect
on the date of such assignment (subject in any event to the provisions of
Section 14.10).
(c) The interest rates set forth above in clauses (a) and (b) shall be
subject to a maximum effective annual rate of 18% of the principal amount of
such Notes then outstanding and, to the extent that the then-applicable
effective annual rate of interest exceeds 14% for any Interest Period, the
Company shall issue Secondary Notes as described in this clause (c) in lieu of
the payment in cash of such excess portion. If the Company issues Secondary
Notes in lieu of the payment of cash interest on any Interest Payment Date, the
Company shall give notice to the Holders (which notice shall include the amount
of interest to be paid by issuance of Secondary Notes, the reason therefor and
the calculation of the amount of interest to be paid through the issuance of
Secondary Notes) at least five (5) Business Days prior to the applicable
Interest Payment Date (although failure to provide a timely notice shall not
affect the Company's ability or competence to issue Secondary Notes), and shall
execute and deliver to the Holder at the close of business on the Interest
Payment Date, (i) in the event that such excess portion of interest is due with
respect to a Bridge Note, an additional Bridge Note in the form of Exhibit A
hereto, dated such Interest Payment Date, in a principal amount equal to such
27
-21-
excess portion of interest (such additional Bridge Note being referred to herein
as a "SECONDARY BRIDGE Note"), and (ii) in the event that such excess portion of
interest is due with respect to a Term Note, an additional Term Note in the form
of Exhibit B hereto, dated such Interest Payment Date, in a principal amount
equal to such excess portion of interest (such additional Term Note being
referred to herein as a "SECONDARY TERM NOTE"). The due issuance and delivery of
such Secondary Notes shall constitute full payment of such excess portion of
interest; PROVIDED, however, that the Company shall increase the cash component
of any interest payment as required in order to avoid issuing any Secondary Note
in an amount that is not $1,000 or an integral multiple of $1,000. Each issuance
of Secondary Notes in lieu of the payment of cash interest on the Notes shall be
made pro rata with respect to all outstanding Notes. In the event that, on any
Interest Payment Date, the Company is unable to pay to the Holders an amount of
interest (in the appropriate form) which is sufficient to satisfy the Company's
current interest obligation under the Notes, then the Company shall pay such
interest ratably among the Holders based on their respective ownership of
principal amount of Notes, PROVIDED that the foregoing shall not constitute a
waiver of the Default or Event of Default occasioned by the failure to pay such
interest in full.
(d) It is not intended by the Holders of the Notes, and nothing
contained in this Agreement, the Notes or any other Loan Document shall be
deemed, to establish or require the payment of a rate of interest in excess of
the maximum interest rate permitted by applicable federal, state or other law
(the "MAXIMUM RATE"), and to prevent such an occurrence, any agreement which may
now or hereafter be in effect between the Company and the Holders of the Notes
regarding the payment of fees or interest to such Holders is hereby limited by
the provisions of this Section 4.1(d). If, during any period, the effective
interest rate applicable to the principal outstanding under the Notes, absent
the Maximum Rate limitation contained herein, would have exceeded the Maximum
Rate, then the effective interest rate applicable to the Notes for that period
shall be the Maximum Rate, and, if in any subsequent period, the effective
interest rate would otherwise be less than the Maximum Rate, then the effective
interest rate applicable to the Notes for such period shall be increased to the
Maximum Rate until such time as the amount of interest paid hereunder equals the
amount of interest which would have been paid in respect of the Notes if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the principal outstanding under the Notes, redemption of all of the
outstanding Notes or conversion of such Notes, the total amount of interest paid
or accrued in respect of the Notes under the terms of this Agreement is less
than the total amount of interest which would have been paid or accrued in
respect of the Notes had the interest not been limited hereby to the Maximum
Rate, then the Company shall, to the extent permitted by such applicable
federal, state or other law, pay to each of the Holders an amount equal to the
excess, if any, of (i) the lesser of (A) the amount of interest which would have
been charged in respect of the Notes held by such Holder or its transferor or
assignor (whether direct or indirect) if the Maximum Rate had, at all times,
been in effect with respect to the Notes and (B) the amount of interest which
would have accrued in respect of the Notes held by such Holder or its transferor
or assignor (whether direct or indirect) had the effective interest rate
applicable with respect to the Notes at all
28
-22-
times not been limited hereunder by the Maximum Rate over (ii) the amount of
interest actually paid or accrued in respect of the Notes held by such Holder or
its transferor or assignor (whether direct or indirect) under this Agreement. In
the event that the Holders of the Notes receive, collect or apply as interest
any sum in excess of the Maximum Rate, such excess amount shall be applied to
the reduction of principal outstanding under the Notes until payment in full
thereof, and if no such principal is then outstanding, such excess, or part
thereof remaining, shall be paid to the Company.
4.2. OPTIONAL REDEMPTION. Subject to the provisions hereof and of the
Senior Credit Agreement, the Company shall have the right to redeem, at any time
and without premium or penalty, all or any part of the outstanding principal of
the Notes at the amount of such principal PLUS any accrued but unpaid interest
thereon; PROVIDED, HOWEVER, that any such redemptions shall be made pro rata to
the Holders of the Notes in accordance with the amount of principal and interest
outstanding thereunder, and PROVIDED, further, that any such redemption shall be
made only at the end of an Interest Period, unless the Majority Holders
otherwise agree. If the Company intends to redeem all or any part of the Notes,
the Company shall, at least twenty (20) Business Days prior to the intended date
of redemption, deliver to each of the Holders of record of Notes a notice (the
"REDEMPTION NOTICE") stating such intent to redeem the Notes, the date proposed
therefor, and the amounts of principal and interest on the Notes to be paid to
such Holder, each partial prepayment to be in the principal amount of $100,000
or an integral multiple thereof. To the extent not inconsistent with this
Section 4.2, the provisions of Section 4.7 below shall apply to the conduct of
such redemption. Notwithstanding the foregoing, Notes other than the Variable
Rate Notes may not be redeemed at the Company's option until the fifth
anniversary of the Conversion Date, and from and after the fifth anniversary of
the Conversion Date the amount required to be paid in redemption of any such
Note shall be equal to the outstanding principal amount thereof, PLUS any
accrued but unpaid interest thereon, plus a premium equal to the product of (a)
the principal amount of such Note multiplied by the percentage calculated by
multiplying (i) the Fixed Rate applicable to such Note by (ii) the percentage
set forth in the table below opposite the period in which such redemption
occurs:
29
-23-
@@
Period Percentage
------ ----------
From and including the fifth anniversary of the 50%
Conversion Date through the day preceding the sixth
anniversary of the Conversion Date
From and including the sixth anniversary of the 33.33%
Conversion Date through the day preceding the seventh
anniversary of the Conversion Date
From and including the seventh anniversary of the 16.66%
Conversion Date through the day preceding the eighth
anniversary of the Conversion Date
From and including the eighth anniversary of the 0%
Conversion Date through the Term Loan Maturity Date
@@
4.3. MANDATORY PREPAYMENTS FROM ASSET SALES. in the event that any
member of the TransTechnology Group shall sell any of its assets (other than
inventory sold in the ordinary course of business) or group of related assets,
whether by sale of such assets or sale of the stock of any member of the
TransTechnology Group, where such asset sale would either be permitted pursuant
to Section 10.5.2 upon compliance with this Section 4.3 or is previously
consented to in writing by the Majority Holders, then, within 180 days after the
receipt of any Net Cash Proceeds from any such asset sale, the Company may apply
such Net Cash Proceeds, at its option (subject to the provisions of the Senior
Credit Agreement), (a) to repay Senior Debt, or (b) to the completion of any
Approved Acquisition under and as defined in the Senior Credit Agreement.
Pending the final application of any such Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings, or otherwise invest such Net
Cash Proceeds in any manner permitted under Section 10.3. Any Net Cash Proceeds
from asset sales that are not applied or invested as provided in the first
sentence of this paragraph within 180 days after the receipt thereof will be
deemed to constitute "EXCESS PROCEEDS." When the aggregate amount of Excess
Proceeds exceeds $5,000,000, the Company will be required to make an offer to
all Holders of Notes (an "ASSET SALE OFFER") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash equal to 100% of the principal amount thereof PLUS accrued and
unpaid interest thereon, if any, to the date of purchase, in accordance with the
procedures set forth in Section 4.7. To the extent that any Excess Proceeds
remain after consummation of an Asset Sale Offer, the Company may use such
Excess Proceeds for any purpose not
30
-24-
otherwise prohibited by this Agreement. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
4.4. MANDATORY PREPAYMENT FROM PERMANENT FINANCING. In the event that
the Company issues any Subordinated Debt pursuant to the Permanent Financing,
the Company will be required to make an offer to all Holders of Notes to
purchase the maximum principal amount of Notes that may be purchased with all of
the Net Cash Proceeds of such Permanent Financing at an offer price in cash
equal to 100% of the principal amount thereof, PLUS accrued and unpaid interest
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in Section 4.7, and the Holders of all of the Variable Rate Notes then
outstanding shall be required to sell such Notes to the Company pursuant to such
offer. To the extent any Net Cash Proceeds of such Permanent Financing remain
after consummation of such offer, the Company shall apply such excess Net Cash
Proceeds in accordance with the provisions of the Senior Credit Agreement.
4.5. MANDATORY PREPAYMENTS FROM NEW DEBT OR EQUITY. In the event that
the Company or any of its Restricted Subsidiaries shall after the Closing Date
either (a) incur any Indebtedness other than Subordinated Debt and which is
permitted under the Senior Credit Agreement, or (b) sell or issue any shares of
its stock, options (other than stock options awarded to employees and directors
pursuant to incentive compensation plans operated by members of the
TransTechnology Group) or warrants for the purchase of its stock or other equity
or equity instruments, then, and to the extent that (i) the Net Cash Proceeds of
such incurrence, sale or issuance are not required to be applied in prepayment
of amounts outstanding under the Senior Credit Agreement pursuant to Section 4
thereof and (ii) no Default or Event of Default is then continuing or would
arise as a result of such prepayment, the Company will be required to make an
offer to purchase the maximum principal amount of Notes that may be purchased at
an offer price in cash equal to 100% of the principal amount thereof, PLUS
accured and unpaid interest thereon, if any, out of the Net Cash Proceeds to the
TransTechnology Group from such incurrence of Indebtedness or sale or issuance
of new equity, in accordance with the procedures set forth in Section 4.7. To
the extent any Net Cash Proceeds of such incurrence, sale or issuance remain
after consummation of such offer, the Company may use such excess Net Cash
Proceeds for any purpose not otherwise prohibited by this Agreement.
4.6. MANDATORY PREPAYMENT UPON CHANGE OF CONTROL. Upon the occurrence
of a Change of Control, each Holder of Notes will have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
aggregate principal amount then outstanding, PLUS accrued and unpaid interest
thereon to the date of completion of such repurchase. Within ten (10) Business
Days following the completion of a Change of Control, the Company shall send, by
first class mail, a notice to each of the Holders and to the Administrative
Agent describing the Change of Control and offering to purchase the Notes then
outstanding on a date specified in such notice, which shall be not earlier than
ten (10) Business Days and not later than thirty (60) days from the date such
notice is
31
-25-
mailed. The Holders wishing to sell in such repurchase shall tender their
respective Notes to the Administrative Agent prior to the date so specified
together with instructions on the amount thereof to be sold, and upon payment of
the repurchase price for such amount, new Notes in the principal amount
remaining outstanding (if any) to each such Holder shall be executed and
delivered by the Company to each such Holder. Prior to complying with this
Section 4.6, the Company shall first have repaid in full all Senior Debt then
outstanding, or obtained the consent of the holders of such Senior Debt for such
repurchase.
4.7. TERMS OF REDEMPTION OFFERS. In the event that, pursuant to
Sections 4.3. 4.4 or 4.5 hereof, the Company shall be required to commence an
offer to all Holders to purchase Notes (an "Offer"), it shall follow the
procedures specified in this Section 4.7. The Offer shall remain open for a
period of 20 Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the "OFFER
PERIOD"). No later than five Business Days after the termination of the Offer
Period (the "PURCHASE DATE"), the Company shall purchase the principal amount of
Notes required to be purchased pursuant to Sections 4.3. 4.4 or 4.5 hereof, as
applicable (the "OFFER AMOUNT"), or, if a principal amount of Notes less than
the Offer Amount has been tendered, all Notes tendered in response to the Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made. Upon the commencement of an Offer, the Company shall send, by
first class mail, a notice to each of the Holders and the Administrative Agent.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Offer. The Offer shall be made to all
Holders. The notice, which shall govern the terms of the Offer, shall state:
(a) the Section of this Agreement pursuant to which the Offer is being
made and the length of time the Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Offer shall cease to accrete or accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Offer
may only elect to have all of such Note purchased and may not elect to have only
a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Offer shall be required to surrender the Note to Company or a depositary, if
appointed by the Company, at the address specified in the notice at least three
days before the Purchase Date;
32
-26-
(g) that Holders shall be entitled to withdraw their election if the
Company, or the depositary, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
such Holder delivered for purchase and a statement that such Holder is
withdrawing its election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Offer, or if
less than the Offer Amount has been tendered, all Notes tendered. In the case of
an Offer pursuant to Section 4.4, all Variable Rate Notes shall be tendered by
the Holders thereof. No Holder of a Fixed Rate Note shall be required to tender
any such Notes pursuant to any Offer under this Section 4.7. The Company shall
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Note, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof.
5. THE EXCHANGE NOTES.
(a) Subject to the terms and conditions set forth herein and in
reliance on the Company's covenants, representations and warranties set forth
herein, on the tenth (10th) Business Day following the written request to the
Company and the Administrative Agent of any Holder of a Term Note (as to any
such request, the "EXCHANGE DATE"), and so long as no Default or Event of
Default has occurred and is continuing, such Holder's Term Note(s) shall be
converted automatically into the right to receive (i) an Exchange Note due 2009
of the Company in the equivalent principal amount to such Term Note(s) and (ii)
the accrued and unpaid amount of interest then outstanding on such Term Note.
Upon the Exchange Date in accordance with the Exchange Escrow Agreement, the
Administrative Agent shall direct the Escrow Agent to release (A) to the
Trustee, in its capacity as Custodian under the Indenture, a global Exchange
Note, to be completed in the appropriate principal amount in accordance with the
Indenture and the Exchange Escrow Agreement, and (B) to the Trustee and to the
Company the original Indenture, each as fully executed by the Company and the
Guarantors on the Closing Date and
33
-27-
retained in escrow by the Escrow Agent pursuant to the Exchange Escrow
Agreement.
(b) Subject to the conditions contained herein and in the Indenture,
the Company shall, on each Exchange Date, issue Exchange Notes under the
Indenture against delivery to the Company of the Term Notes, registered in the
names of the Holders surrendering such Term Notes. The Company shall issue
$1,000 principal amount of Exchange Notes for each $1,000 of principal
outstanding on the Exchange Date under the Term Notes then being exchanged, and
shall pay in full to the Holders of such Term Notes the aggregate amount of
interest accrued and outstanding thereon. To the extent that any Term Notes so
converted have, with respect to a single Holder and all of its Affiliates, a
principal amount plus interest that is not evenly divisible by $1,000, the
Company shall pay cash in the amount that is less than $1,000 in lieu of issuing
an Exchange Note.
(c) If a Default or an Event of Default under this Agreement has
occurred and is continuing at the time that the Term Notes are converted into
Exchange Notes and the facts, circumstances or events constituting such Default
or Event of Default would also constitute a default or event of default under
the Exchange Notes, (i) such Default or Event of Default shall continue to
constitute a default or an event of default under the Exchange Notes and (ii)
any grace or notice periods applicable to such default or event of default under
the Exchange Notes shall be reduced by any time elapsed under any such grace or
notice period prior to such exchange and any notice actually given under the
Term Notes shall be deemed to have been given with respect to the Exchange
Notes.
(d) In addition to the foregoing provisions in this Section 5 and the
conditions set forth in Section 13, the right of any Holder to convert Term
Notes is subject to the satisfaction of the following additional conditions
precedent:
(i) such conversion would not violate any law or regulation or
any order or decree of any Governmental Authority applicable to the
Company or such Holder; PROVIDED, HOWEVER, that the Holders agree to
cooperate with the Company, to the extent practicable, to attempt to
make such violation inapplicable to such conversion, but no such
cooperation shall entail making the terms of the Exchange Notes, the
Indenture or the Registration Rights Agreement any less favorable to
the Holders, in the reasonable judgment of such Holders;
(ii) the Indenture shall have been duly authorized, executed
and delivered by the Company, and the Exchange Notes to be issued
thereunder shall, upon any exchange, have been duly authorized,
executed, authenticated and issued, and the Indenture and the Exchange
Notes shall constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, and each Holder
converting Term Notes shall have received
34
-28-
evidence satisfactory to such Holder of the foregoing, including
officers' certificates, trustee's certificates and opinions of counsel
to the Company to the foregoing effect;
(iii) the Registration Rights Agreement shall have been duly
authorized, executed and delivered by the Company and shall constitute
a valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, and other laws of general applicability
relating to or affecting creditors' rights and to general principles of
equity;
(iv) the Trustee shall have executed and delivered to the
Escrow Agent signature pages for the Indenture; and
(v) all fees and other amounts owing to the Holder and/or to
the Administrative Agent hereunder shall have been paid in full.
(e) From and after the Exchange Date with respect to any Term Note, the
terms and provisions of the Indenture shall apply to and govern such Note as an
Exchange Note, and to the extent that there may be any inconsistencies between
the requirements of the Indenture and any requirement purporting to be
applicable to such Exchange Notes hereunder, the terms and provisions of the
Indenture shall control.
6. CERTAIN GENERAL PROVISIONS.
6.1. FEES. The Company agrees to pay on the Closing Date the fees in
the amounts agreed in the Fee Letter.
6.2. PAYMENT PROVISIONS.
6.2.1. CURRENCY OF ACCOUNT. Dollars are the currency of
account and payment for each and every sum at any time due from the
Company hereunder, under the Notes or under any other Loan Document.
6.2.2. APPLICATION OF INTEREST PAYMENTS. Interest payable by
the Company on the Notes shall be paid to the Administrative Agent for
the account of the Holders in the proportion of the respective
principal amount of each Holder's Note or Notes.
6.2.3. JUDGMENT CURRENCY. If any sum due from the Company
under this Agreement, the Notes, any other Loan Document or any order
or judgment given or made in relation hereto or thereto has to be
converted from the currency (the "FIRST CURRENCY") in which the same is
payable hereunder or under such order or judgment into another currency
(the "SECOND CURRENCY") for the purpose of (i) making or filing a claim
or proof against the Company, (ii) obtaining an order or judgment in
any court or other tribunal or (iii) enforcing any order or judgment
given or made in relation hereto, the Company shall indemnify and hold
harmless each of the Persons to whom
35
-29-
such sum is due from and against any loss suffered as a result of any
discrepancy between (A) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (B) the rate or rates of exchange at which such Person may
in the ordinary course of business purchase the first currency with the
second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof.
6.2.4. TIME OF PAYMENT. On each date on which this Agreement,
the Notes or any other Loan Document requires an amount to be paid by
the Company or any of the Lenders hereunder, the Company or such Lender
shall make the same available to the Administrative Agent to such
account as the Administrative Agent shall have notified to the Company
or to such Lender, as the case may be. Each such payment which is made
for the account of a Person other than the Administrative Agent shall
be made in time to enable the Administrative Agent to make available
such other Person's portion thereof for value the same day.
6.2.5. PAYMENTS BY ADMINISTRATIVE AGENT. Where a sum is to be
paid hereunder to the Administrative Agent for the account of another
Person, the Administrative Agent shall not be obliged to make the same
available to that other Person until the Administrative Agent has been
able to establish to its satisfaction that it has actually received
such sum, but if the Administrative Agent does so and it proves to be
the case that the Administrative Agent has not actually received the
sum it paid out, then the Person to whom such sum was so made available
shall on request refund the same to the Administrative Agent, together
with an amount sufficient to reimburse the Administrative Agent for any
amount it may have been required to pay out by way of interest on
moneys borrowed to fund the sum in question during the period beginning
on the due date for payment thereof and ending on the date on which it
receives the same.
6.2.6. NO OFFSET, ETC. All payments by the Company hereunder,
under the Notes or under any other Loan Document shall be made without
setoff or counterclaim and free and clear of and without deduction for
any taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Company is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Company with
respect to any amount payable by it hereunder, under the Notes or under
any other Loan Document, the Company will make such deduction or
withholding, will pay the full amount deducted or withheld to the
applicable authority, and will also pay to the Administrative Agent,
for its own account or for the account of the Holders, on the date on
which such amount is due and payable hereunder, under the Notes or
under such other Loan Document, such additional amount as shall be
necessary to enable the Holders or the Administrative Agent (as the
case may be) to receive the same
36
-30-
net amount in the same currency which the Holders or the Administrative
Agent would have received on such due date had no such obligation been
imposed upon the Company. The Company will deliver, within thirty (30)
days of any such deduction or payment, to the Administrative Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Company
hereunder, under the Notes or under such other Loan Document.
6.3. COMPUTATIONS. All computations of interest on the Notes shall,
unless otherwise expressly provided herein, be based on a 360-day year and paid
for the actual number of days elapsed. Whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension. The outstanding amount of the
Loans as reflected on the applicable Note Records from time to time shall be
considered correct and binding on the Company unless within five (5) Business
Days after receipt of any notice by the Administrative Agent or any of the
Holders of such outstanding amount, the Administrative Agent or such Holder
shall notify the Company to the contrary.
6.4. ILLEGALITY; INABILITY TO DETERMINE LIBOR RATE. In the event that
any present or future law, regulation, treaty or directive or the interpretation
or application thereof shall make it unlawful for any of the Lenders or Holders
to make Loans or hold promissory notes bearing interest at rates based on the
LIBOR Rate, or if prior to the commencement of any Interest Period, the
Administrative Agent shall determine that adequate and reasonable methods do not
exist for ascertaining the LIBOR Rate, then the applicable Lender(s) or
Holder(s) or the Administrative Agent, as the case may be, shall forthwith give
notice of such determination (which shall be conclusive and binding on the
Company and the other Holders) to the Company and the other Holders. In such
event the Treasury Rate shall be substituted for the LIBOR Rate in any
calculation of interest payable for such Interest Period.
6.5. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or Holder or the Administrative Agent by any
central bank or other fiscal, monetary or other authority (whether or not having
the force of law), shall:
(a) subject any Lender or Holder or the Administrative Agent
to any tax, levy, impost, duty, charge, fee, deduction or withholding
of any nature with respect to this Agreement, the Notes, the other Loan
Documents, such Lender's Commitment, the Loans or any payment of
interest or fees payable with respect to the Loans or any Notes (other
than taxes based upon
37
-31-
or measured by the income or profits of such Lender, Holder or
Administrative Agent, or bank franchise taxes), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits or bank franchise taxes) of
payments to any Lender or Holder of the principal of or the interest on
any Loans or any other amounts payable to any Lender or Holder or the
Administrative Agent under this Agreement, the Notes or any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of any office of any
Lender or Holder, or
(d) impose on any Lender or Holder or the Administrative Agent
any other conditions or requirements with respect to this Agreement,
the Notes, the other Loan Documents, the Loans, such Lender's
Commitment, or any class of loans or commitments of which any of the
Loans, the Notes or such Lender's Commitment forms a part, and the
result of any of the foregoing is:
(i) to increase the cost to any such Lender or Holder
of making, funding, issuing, renewing, extending or
maintaining any of the Loans or such Lender's Commitment or
any Note, or
(ii) to reduce the amount of principal, interest, or
other amount payable to such Lender or Holder or the
Administrative Agent hereunder on account of such Lender's
Commitment, any Note or any of the Loans, or
(iii) to require such Lender or Holder or the
Administrative Agent to make any payment or to forego any
interest or other sum payable hereunder or under any of the
Notes, the amount of which payment or foregone interest or
other sum is calculated by reference to the gross amount of
any sum receivable or deemed received by such Lender or Holder
or the Administrative Agent from the Company hereunder,
then, and in each such case, within fifteen (15) days after demand made by such
Lender or Holder or the Administrative Agent at any time and from time to time
and as often as the occasion therefor may arise, the Company will pay to such
Lender, Holder or Administrative Agent such additional amounts as will be
sufficient to compensate such Lender, Holder or Administrative Agent, as the
case may be, for such additional cost, reduction, payment or foregone interest
or other sum.
38
-32-
6.6. CAPITAL ADEQUACY. If after the date hereof any Lender or Holder
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Lender or
Holder or any corporation controlling such Lender or Holder with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Lender's Commitment or such Holder's Notes
to a level below that which such Lender or Holder could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
Holder's then existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed by such Lender
or Holder to be material, then such Lender or Holder may notify the Company of
such fact. To the extent that the amount of such reduction in the return on
capital is not reflected in the applicable interest rate hereunder, the Company
agrees to pay such Lender or Holder for the amount of such reduction in the
return on capital as and when such reduction is determined upon presentation by
such Lender or Holder of a certificate in accordance with Section 6.8 hereof.
Each Lender and Holder shall allocate such cost increases among its customers in
good faith and on an equitable basis.
6.7. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 6.6 or 6.7 and a brief explanation of such amounts
which are due, submitted by any Lender, Holder or the Administrative Agent to
the Company, shall be conclusive, absent manifest error, that such amounts are
due and owing.
6.8. INDEMNITY. The Company agrees to indemnify each Lender and Holder
and to hold each Lender and Holder harmless from and against any loss, cost or
expense (including loss of anticipated profits) that such Lender or Holder may
sustain or incur as a consequence of (i) default by a the Company in payment of
the principal amount of or any interest on any Notes as and when due and
payable, including any such loss or expense arising from interest or fees
payable by any such Lender to lenders of funds obtained by it in order to make
or maintain its Loans, (ii) default by the Company in making a borrowing or
conversion after such Company has given (or is deemed to have given) a request
therefor, or (iii) the making of any payment on a day that is not the last day
of the applicable Interest Period with respect thereto, including interest or
fees payable by any such Lender to lenders of funds obtained by it in order to
maintain any such Loans.
6.9. INTEREST AFTER DEFAULT.
6.9.1. OVERDUE AMOUNTS. Subject in any event to the provisions
of Sections 4.1(c) and (d), overdue principal and (to the extent
permitted by applicable law) interest on the Notes and all other
overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand
at a rate per annum. equal to the sum of two
39
-33-
percent (2%) per annum, PLUS the interest rate otherwise applicable
thereto, until such amount shall be paid in full (after as well as
before judgment).
6.9.2. AMOUNTS NOT OVERDUE. Subject in any event to the
provisions of Sections 4.1(c) and (d), during the continuance of a
Default or an Event of Default, the principal of the Notes not overdue
shall, until such Default or Event of Default has been cured or
remedied or such Default or Event of Default has been waived by the
Majority Holders pursuant to Section 27, bear interest at a rate per
annum equal to the sum of two percent (2%) PLUS the interest rate
otherwise applicable thereto.
7. GUARANTY.
7.1. SUBSIDIARY GUARANTY. The Obligations shall be guaranteed by each
of the Company's Domestic Subsidiaries pursuant to the terms of the Subsidiary
Guaranty. In the event that any Subsidiary of the Company (including any Foreign
Subsidiary) enters into any guaranty of any Senior Debt, the Company shall
procure that such Subsidiary promptly thereafter joins as a Guarantor under the
Subsidiary Guarantee.
7.2. SUBORDINATION. The obligations of the Guarantors under the
Subsidiary Guaranty shall be subordinate to the obligations of such Guarantors
under their respective guaranties of the Senior Debt on the same terms and
subject to the same provisions as are set forth in Section 11.
8. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Lenders, the Holders and the
Administrative Agent, at the Closing Date and the Conversion Date, as follows:
8.1. CORPORATE AUTHORITY.
8.1.1. INCORPORATION; GOOD STANDING. The Company and each of
its Subsidiaries (i) is a corporation duly organized, validly existing
and in good standing under the laws of its place of incorporation, (ii)
has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (iii) is
in good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a materially
adverse effect on the business, assets or financial condition of the
Company or such Subsidiary.
8.1.2. AUTHORIZATION. The execution, delivery and performance
of this Agreement, the Notes and the other Loan Documents to which the
Company or any of its Subsidiaries are or are to become a party and the
transactions contemplated hereby and thereby (i) are within the
corporate authority of such Person, (ii) have been duly authorized by
all necessary corporate proceedings, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute,
rule or regulation to which the
40
-34-
Company or any of its Subsidiaries, or any of the assets of the Company
or any of its Subsidiaries, are subject or any judgment, order, writ,
injunction, license or permit applicable to the Company or any of its
Subsidiaries and (iv) do not conflict with any provision of the
corporate charter, bylaws or memorandum and articles of association of,
or any agreement or other instrument binding upon, the Company or any
of its Subsidiaries.
8.1.3. ENFORCEABILITY. The execution and delivery of this
Agreement, the Notes and the other Loan Documents to which the Company
or any of its Subsidiaries are or are to become a party will result in
valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to
the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.
8.2. GOVERNMENTAL APPROVALS. Except as set forth on SCHEDULE 8.2
hereto, the execution, delivery and performance by the Company and its
Subsidiaries of this Agreement, the other Loan Documents and the Tinnerman
Acquisition Documents to which the Company or any of its Subsidiaries are or are
to become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
8.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 8.3
hereto, (a) the Company and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Company and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date)
subject to no Liens or rights of others, except Permitted Liens, and (b) all of
the Company's and its Subsidiaries' assets are reflected in the consolidated
balance sheet as at the Balance Sheet Date described in Section 8.4.1.
8.4. FINANCIAL STATEMENTS AND PROJECTIONS.
8.4.1. FINANCIAL STATEMENTS. There has been furnished to each
of the Lenders a consolidated balance sheet of the Company and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement
of income of the Company and its Subsidiaries for the fiscal year then
ended, certified by Deloitte & Touche LLP. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Company as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
There are no liabilities of the Company or any of its Subsidiaries,
contingent or otherwise, as of such date involving material amounts,
known
41
-35-
to the officers of the Company, which were not disclosed in such
balance sheet and the notes related thereto.
8.4.2. PROJECTIONS. There has been furnished to each of the
Lenders projections (dated July 23, 1999) of the annual operating
budgets of the Company and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 2000 to 2004 fiscal
years (the "PROJECTIONS"), which fairly disclose all assumptions made
with respect to general economic, financial and market conditions used
in their formulation. To the knowledge of the Company, no facts exist
that (individually or in the aggregate) would result in any material
change in any of the Projections. The Projections are based upon
reasonable estimates and assumptions, have been prepared on the basis
of the assumptions stated therein and reflect the reasonable estimates
of the Company of the results of operations and other information
projected therein.
8.5. NO MATERIAL CHANGES, ETC.
(a) Since the Balance Sheet Date there has occurred no materially
adverse change in the financial condition or business of the Company or any of
its Subsidiaries or any material assets of the Company or any of its
Subsidiaries as shown on or reflected in the consolidated balance sheet of the
Company and its Subsidiaries as at the Balance Sheet Date, or the consolidated
statement of income for the fiscal year then ended, other than changes in the
ordinary course of business that have not had any materially adverse effect
either individually or in the aggregate on the business or financial condition
of the Company or any of its Subsidiaries or any material assets of the Company
or any of its Subsidiaries.
(b) The Company and each of its Subsidiaries (before and after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents) (i) is solvent, (ii) has assets having a fair value in excess of its
liabilities, (iii) has assets having a fair value in excess of the amount
required to pay its liabilities on existing debts as such debts become absolute
and matured, and (iv) has, and expects to continue to have, access to adequate
capital for the conduct of its business and the ability to pay its debts from
time to time incurred in connection with the operation of its business as such
debts mature.
8.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC . The Company and each of its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
8.7. LITIGATION. Except as set forth in SCHEDULE 8.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against the Company or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial
42
-36-
condition or business of the Company or any of its Subsidiaries or materially
impair the right of the Company or any of its Subsidiaries to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Company and its
Subsidiaries, or which question the validity of this Agreement or any of the
other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Company nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Company or any of its Subsidiaries. Neither
the Company nor any of its Subsidiaries is a party to any contract or agreement
that is in default or has or is expected, in the judgment of the Company's
officers, to have any materially adverse effect on the business of the Company
or any of its Subsidiaries.
8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Company
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, act, statute, license, rule, regulation or other law, in any of the
foregoing cases in a manner that could result in the imposition of substantial
penalties or materially and adversely affect the financial condition, properties
or business of the Company or any of its Subsidiaries.
8.10. TAX STATUS. Except as disclosed on SCHEDULE 8.10 hereto, the
Company and each of its Subsidiaries (i) has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, (ii) has paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (iii) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.
8.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Company
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor are the Company
or any of its Subsidiaries an "investment company", or an "affiliated company"
or a "principal underwriter" of an "investment company", as such terms are
defined in the Investment Company Act of 1940.
43
-37-
8.13. ABSENCE OF FINANCING STATEMENTS, ETC. There is no financing
statement, security agreement, chattel mortgage, real estate mortgage, lease or
other document filed or recorded with any filing records, registry or other
public office, or otherwise, that purports to cover, affect or give notice of
any present or possible future Lien on any assets or property of the Company or
any of its Subsidiaries or any rights relating thereto, except with respect to
Permitted Liens.
8.14. DISCLOSURE. The written information, reports, financial
statements, exhibits and schedules furnished by the Company or any of its
Subsidiaries to the Administrative Agent or the Lenders in connection with the
preparation and negotiation of the Loan Documents and the Senior Loan Documents,
or included therein or delivered pursuant thereto (but excluding the
Projections), do not contain any material misstatement of fact and do not omit
to state any material fact necessary to make the statements made therein, in the
light of the circumstances in which made, not materially misleading.
8.15. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Company or any of its Subsidiaries or any officer,
director or employee of the Company or such Subsidiary makes payments in the
ordinary course of business upon terms no less favorable than the Company, such
Subsidiary, officer, director or employees could obtain from third parties, none
of the officers, directors, or employees of the Company or any of its
Subsidiaries is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
8.16. EMPLOYEE BENEFIT PLANS.
8.16.1. IN GENERAL. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including
but not limited to the provisions thereunder respecting prohibited
transactions. The Company has heretofore delivered to the
Administrative Agent the most recently completed annual report, Form
5500, with all required attachments, and actuarial statement required
to be submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
8.16.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the
meaning of Section 3(l) or Section 3(2)(B) of ERISA, no benefits are
due unless the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title I, Part 6 of
ERISA or as provided in the Tinnerman Acquisition Agreement). Except as
provided in the Tinnerman Acquisition Agreement, the Company or an
ERISA Affiliate, as appropriate, may terminate each such
44
-38-
Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of the Company or
such ERISA Affiliate without liability to any Person.
8.16.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of Section 302(f) of ERISA, or otherwise, has been
timely made. No waiver of an accumulated funding deficiency or
extension of amortization periods has been received with respect to any
Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by
the Company or any ERISA Affiliate with respect to any Guaranteed
Pension Plan and there has not been any ERISA Reportable Event, or any
other event or condition which presents a material risk of termination
of any Guaranteed Pension Plan by the PBGC. Except with respect to the
Guaranteed Pension Plan to be established by TransTechnology as
described in, and to the extent provided in, the Tinnerman Acquisition
Agreement, based on the latest valuation of each Guaranteed Pension
Plan (which in each case occurred within twelve months of the date of
this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all
such Guaranteed Pension Plans within the meaning of Section 4001 of
ERISA did not exceed the aggregate value of the assets of all such
Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in
excess of benefit liabilities.
8.16.4. MULTIEMPLOYER PLANS. Other than (a) the Electronics
Local 431 Pension Fund relating to employees of ▇▇▇▇▇▇ Inc., a
Subsidiary of the Company, and (b) the Western Pennsylvania Teamster
and Employers Pension Fund relating to employees of the Company's
Breeze-Industrial division, neither the Company nor any ERISA Affiliate
is a member of any Multiemployer Plan. Neither the Company nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
Section 4201 of ERISA or as a result of a sale of assets described in
Section 4204 of ERISA. Neither the Company nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA.
8.16.5. COMPLIANCE WITH EMPLOYMENT BENEFIT LAWS. Except as set
forth in SCHEDULE 8.16.5 hereto, neither the Company nor any of its
Subsidiaries is in violation of any material provision of any
applicable pension, retirement funding or employee benefit legislation
in any jurisdiction.
45
-39-
8.17. USE OF PROCEEDS. No portion of any Loan is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224. No portion of the proceeds of any Loans is to be used,
and no portion of any Letter of Credit is to be obtained, for the purpose of (a)
knowingly purchasing, or providing credit support for the purchase of,
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of, during
the underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c) making, or
providing credit support for the making of, payments of principal or interest on
Ineligible Securities underwritten or privately placed by a Section 20
Subsidiary and issued by or for the benefit of the Company or any Subsidiary or
other Affiliate of the Company.
8.18. ENVIRONMENTAL COMPLIANCE Each of the Company and its Subsidiaries
has taken all necessary steps to investigate the past and present condition and
usage of the Real Estate and the operations conducted thereon and, based upon
such diligent investigation, has determined that, except as set forth on
SCHEDULE 8.18 attached hereto:
(a) none of the Company, its Subsidiaries or any operator of
the Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
or any European Union, national, federal, state or local statute,
regulation, ordinance, order or decree relating to health, safety or
the environment (hereinafter "ENVIRONMENTAL LAWS"), which violation
would have a material adverse effect or the business, assets or
financial condition of any of the Company or its Subsidiaries or the
consummation of the transactions referred to in this Agreement;
(b) the Company and its Subsidiaries have conducted all
business operations on the Real Estate and continue to operate and
maintain their businesses in compliance in all material respects with
all applicable Environmental Laws and any other European Union,
national, federal, state and local laws, rules and regulation relating
to air emissions, water discharge, noise emissions, solid, or liquid
waste disposal, hazardous waste, or materials, or other environmental,
health or safety matters and there are no outstanding citations,
notices, or order of non-compliance issued to the Company or any of its
Subsidiaries, or relating to the respective businesses, assets, Real
Estate, other property, leaseholds, or equipment of the Company or any
of its Subsidiaries under any such laws, rules or regulations; and
46
-40-
(c) None of the Company or its Subsidiaries or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby.
8.19. SUBSIDIARIES, ETC. A complete and correct list of the
Subsidiaries of the Company and the jurisdictions of their incorporation as of
the Closing Date is set forth on Schedule 8.19 hereto. Except as set forth on
SCHEDULE 8.19 hereto, neither the Company nor any of its Subsidiaries is engaged
in any joint venture or partnership with any other Person.
8.20. BANK ACCOUNTS. SCHEDULE 8.20 sets forth the account numbers and
location of all bank accounts of the Company and its Subsidiaries.
8.21. YEAR 2000 COMPLIANCE. The Company and its Subsidiaries have
undertaken a review, the extent of which the Company believe to be commercially
reasonable, of their critical business and operational systems which could be
adversely affected by, and have developed a program to address on a timely
basis, the "Year 2000 Problem" (i.e., the risk that computer applications used
by the Company or any of its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999). Based upon such review and the implementation of such
program, the Company reasonably believe that the "Year 2000 Problem" will not
have any materially adverse effect on the business or financial condition of the
Company or any of its Subsidiaries.
9. AFFIRMATIVE COVENANTS OF THE COMPANY.
The Company covenants and agrees that, so long as any Loan or Note is
outstanding or any Lender has any obligation to make or convert any Loans:
9.1. PUNCTUAL PAYMENT. The Company will duly and punctually pay or
cause to be paid the principal and interest on the Notes, the fees and all other
amounts provided for in this Agreement, the Notes and the other Loan Documents
to which the Company or any of its Subsidiaries is a party, all in accordance
with the terms of this Agreement, the Notes and such other Loan Documents.
9.2. MAINTENANCE OF OFFICES. The Company will maintain its chief
executive office in Liberty Corner, New Jersey, or at such other place in the
United States of America as the Company shall designate upon written notice to
the Administrative Agent, where notices, presentations and demands to or upon
the Company in respect of the Notes and the other Loan Documents to which the
Company is a party may be given or made.
47
-41-
9.3. RECORDS AND ACCOUNTS. The Company will, and will cause each of its
Subsidiaries to, (a) with respect to the Company and any such Subsidiary located
in the United States, keep true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) with respect to any such Subsidiary
located outside the United States, keep true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
generally accepted accounting principles in the country in which such Subsidiary
is located. The Company will maintain adequate accounts and reserves for all
taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves.
9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Company
will deliver to each of the Holders:
(a) as soon as practicable, but in any event not later than
one hundred (100) days after the end of each fiscal year of the
Company, the consolidated balance sheet of the Company and its
Subsidiaries and the consolidating balance sheet of the Company and its
Subsidiaries, each as at the end of such year, and the related
consolidated and consolidating statements of income and consolidated
statement of cash flow for such year, each setting forth in comparative
form the figures for the previous fiscal year and all such consolidated
and consolidating statements to be in reasonable detail, prepared in
accordance with generally accepted accounting principles, and certified
(as to the consolidated statements) without qualification by Deloitte &
Touche LLP or by other independent certified public accountants
satisfactory to the Administrative Agent, together with a written
statement from such accountants to the effect that they have read a
copy of this Agreement, and that, in making the examination necessary
to said certification, they have obtained no knowledge of any Default
or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default;
PROVIDED that such accountants shall not be liable to the Holders for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Company, copies of the unaudited consolidated balance sheet of the
Company and its Subsidiaries and the unaudited consolidating balance
sheet of the Company and its Subsidiaries, each as at the end of such
quarter, and the related consolidated and consolidating statements of
income and consolidated statement of cash flow for the portion of the
Company's fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Company that the information contained in such financial
statements fairly presents the financial position of the
48
-42-
Company and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Company in substantially the form of EXHIBIT F hereto and setting forth
in reasonable detail computations evidencing compliance with the
covenants contained in Section 11 and (if applicable) reconciliations
to reflect changes in generally accepted accounting principles since
the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material filed with the Securities and Exchange
Commission or sent to the stockholders of the Company which is either
of a financial nature or addresses the Year 2000 Problem;
(e) by April 30 of each year, the annual budget of the Company
and its Subsidiaries for the next fiscal year; and
(f) from time to time such other financial data and
information (including accountants' management letters) as the
Administrative Agent or any Holder may reasonably request.
9.5. NOTICES.
9.5.1. DEFAULTS. The Company will promptly notify the
Administrative Agent and each of the Holders in writing of the
occurrence of any Default or Event of Default. If any Person shall give
any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement
or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which any of the Company or its
Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, The Company shall forthwith give written notice
thereof to the Administrative Agent and each of the Holders of record,
describing the notice or action and the nature of the claimed default.
9.5.2. ENVIRONMENTAL EVENTS. The Company will promptly give
notice to the Administrative Agent and each of the Holders of record
(i) of any violation of any Environmental Law that any of the Company
or its Subsidiaries reports in writing or is reportable by such Person
in writing (or for which any written report supplemental to any oral
report is made) to any federal, state or local environmental agency and
(ii) upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency of
potential environmental liability, or any federal, state or local
environmental agency or board, that has the potential to materially
affect the assets, liabilities, financial conditions or operations of
any of the Company or its Subsidiaries, or the Administrative Agent's
49
-43-
mortgages, deeds of trust or security interests pursuant to the
Security Documents.
9.5.3. NOTICE OF LITIGATION AND JUDGMENTS. The Company will,
and will cause each of its Subsidiaries to, give notice to the
Administrative Agent and each of the Holders of record in writing
within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting the Company or any of its Subsidiaries or to
which the Company or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Company or any of its
Subsidiaries that could reasonably be expected to have a materially
adverse effect on the Company or any of its Subsidiaries and stating
the nature and status of such litigation or proceedings. The Company
will, and will cause each of its, Subsidiaries to, give notice to the
Administrative Agent and each of the Holders of record, in writing, in
form and detail satisfactory to the Administrative Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise,
against the Company or any of its Subsidiaries in an amount in excess
of $1,000,000.
9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries. The Company (i) will cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, and (iii) will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by them and in
related businesses; PROVIDED that nothing in this Section 9.6 shall prevent the
Company from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its or their business and
that do not in the aggregate materially adversely affect the business of any of
the Company and its Subsidiaries on a consolidated basis.
9.7. INSURANCE. The Company will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent. Upon reasonable request from the Administrative Agent,
the Company shall furnish the Administrative Agent from time to time with
information concerning the Company's and its Subsidiaries' insurance, including
(when requested) copies of the certificates of insurance evidencing such
insurance.
50
-44-
9.8. TAXES. The Company will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a Lien on any
of its property; PROVIDED that any such tax, assessment, charge, levy or claim
need not be paid if the validity or amount thereof shall currently be contested
in good faith by appropriate proceedings and if the Company or such Subsidiary
shall have set aside on its books adequate reserves with respect thereto; and
PROVIDED further that the Company and its Subsidiaries will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any Lien that may have attached as security therefor.
9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
9.9.1. GENERAL. The Company shall permit the Holders, through
the Administrative Agent or any of the Holders' other designated
representatives, to visit and inspect any of the properties of the
Company and any of its Subsidiaries, to examine the books of account of
the Company and its Subsidiaries (and to make copies thereof and
extracts therefrom), and to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with, and to be advised as to the
same by, its and their officers, all at such reasonable times and
intervals as the Administrative Agent or any Holder may reasonably
request. If an Event of Default shall have occurred and be continuing,
the Company upon the request of the Administrative Agent will obtain
and deliver to the Administrative Agent appraisal reports in form and
substance and from appraisers satisfactory to the Administrative Agent,
stating (i) the then current fair market, orderly liquidation and
forced liquidation values of all or any portion of the equipment or
real estate owned by the Company or any of its Subsidiaries and (ii)
the then current business value of the Company and its Subsidiaries.
All such appraisals shall be conducted and made at the expense of the
Company obtaining and delivering such appraisal reports.
9.9.2. ENVIRONMENTAL ASSESSMENTS. Whether or not an Event of
Default shall have occurred, the Administrative Agent may, from time to
time, in its discretion for the purpose of assessing and ensuring the
value of any Real Estate, obtain one or more environmental assessments
or audits of such Real Estate prepared by a hydrogeologist, an
independent engineer or other qualified consultant or expert approved
by the Administrative Agent to evaluate or confirm (i) whether any
Hazardous Materials are present in the soil or water at such Real
Estate and (ii) whether the use and operation of such Real Estate
complies with all Environmental Laws. Environmental assessments may
include without limitation detailed visual inspections of such Real
Estate including any and all storage areas, storage tanks, drains, dry
▇▇▇▇▇ and leaching areas, and the taking of soil samples, surface water
samples and ground water samples, as well as such other investigations
or
51
-45-
analyses as the Administrative Agent deems appropriate. All such
environmental assessments shall be conducted at the expense of the
Company.
9.9.3. COMMUNICATIONS WITH ACCOUNTANTS. The Company authorizes
the Administrative Agent and, if accompanied by the Administrative
Agent, any of the Holders to communicate directly with the Company's
independent certified public accountants, PROVIDED that the Company
shall have received advance notice of any such communications, and
authorizes such accountants to disclose to the Administrative Agent and
the Holders any and all financial statements and other supporting
financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other
affairs of the Company or any of its Subsidiaries. At the request of
the Administrative Agent, the Company shall deliver a letter addressed
to such accountants instructing them to comply with the provisions of
this Section 9.9.3.
9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Company will, and will cause each of its Subsidiaries to, comply in all material
respects with (i) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws, (ii) the provisions of its charter
documents and, in the event such by-laws exist, its by-laws, (iii) all
agreements and instruments by which it or any of its properties may be bound and
(iv) all applicable decrees, orders, and judgments. If any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that the Company
or any of its Subsidiaries may fulfill any of its obligations hereunder or any
of the other Loan Documents to which the Company or such Subsidiary is a party,
the Company will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
the Company or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Administrative Agent and the Holders with
evidence thereof.
9.11. EMPLOYEE BENEFIT PLANS. The Company will (i) promptly upon filing
the same with the United States Department of Labor or Internal Revenue Service,
upon request of the Administrative Agent, furnish to the Administrative Agent a
copy of the most recent actuarial statement required to be submitted under
Section 103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Administrative Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under Sections
302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
The Company and each of its Subsidiaries shall comply with all applicable
pension, retirement funding or employee benefit legislation in any jurisdiction.
52
-46-
9.12. USE OF PROCEEDS. The proceeds of the issuance of the Bridge Notes
shall be used to finance the Tinnerman Acquisition and to pay certain expenses
incurred in connection therewith.
9.13. ADDITIONAL GUARANTORS. If, after the Closing Date, the Company or
any of its Subsidiaries acquires or creates any Subsidiary, such newly acquired
or created Subsidiary shall promptly join the Subsidiary Guaranty as Guarantor
thereunder, PROVIDED that any Subsidiary which is (a) both a Foreign Subsidiary
and not a guarantor of more than $30,000,000 in aggregate principal amount of
Designated Senior Debt, or (b) an Unrestricted Subsidiary, shall not be required
to so join the Subsidiary Guaranty, and, PROVIDED FURTHER at the time any
Subsidiary becomes an Unrestricted Subsidiary, such Subsidiary may be released
from its obligations under the Subsidiary Guaranty.
9.14. PERMANENT FINANCING. The Company hereby agrees, for the benefit
of the Administrative Agent and the Holders, that it shall comply with the
following provisions regarding the Permanent Financing:
(a) within sixty (60) days after the Closing Date, supply to the
Arranger, in a form reasonably acceptable for inclusion in a registration
statement to be filed under the Securities Act audited financial statements for
Tinnerman for the three years immediately preceding the completion of the
Tinnerman Acquisition;
(b) within sixty (60) days after the Closing Date, supply to the
Arranger, in form reasonably satisfactory to the Arranger, either an offering
memorandum for a private placement of debt securities pursuant to Rule 144A
under the Securities Act, or a registration statement under the Securities act
with respect to a public offering of such securities, together with such other
documentation in customary form for transactions of this type, including an
indenture and registration rights agreement, as the Arranger may in its sole
discretion require in connection with the Permanent Financing (collectively, the
documentation referred to in this clause (b) being referred to as the "PERMANENT
FINANCING OFFERING DOCUMENTS"); and
(c) within thirty (30) days after the delivery to the Arranger of the
Permanent Financing Offering Documents, the Company shall have made available to
the Arranger such officers and executive personnel of the Company and its
Subsidiaries as the arranger shall have requested for the purpose of (i)
meetings with rating agencies, (ii) meetings with prospective purchasers of the
securities to be issued in the Permanent Financing, and (iii) preparing and
presenting to such potential investors "road show" materials in a manner
consistent with and customary in the issuance and sale of high-yield debt
securities.
9.15. FURTHER ASSURANCES. The Company will, and will cause each of its
Subsidiaries to, cooperate with the Lenders and Holders and the Administrative
Agent and execute such further instruments and documents as the Lenders or
Holders or the Administrative Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.
53
-47-
10. CERTAIN NEGATIVE COVENANTS OF THE COMPANY.
The Company covenants and agrees that, so long as any Loan or Note is
outstanding or any Lender has any obligation to make or convert any Loans:
10.1. RESTRICTIONS ON INDEBTEDNESS AND PREFERRED STOCK. The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), or issue any
Disqualified Stock (other than any such issuance to the Company or another
Restricted Subsidiary); PROVIDED, HOWEVER, that the Company may incur
Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if
the Fixed Charge Coverage Ratio for the Company's most recently ended Reference
Period for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least 2.0:1, determined on a pro
forma basis (including a PRO FORMA application of the net proceeds therefrom),
as if the additional Indebtedness had been incurred, or the Disqualified Stock
had been issued, as the case may be, at the beginning of such Reference Period;
PROVIDED that if such additional Indebtedness was incurred or such Disqualified
Stock issued in the financing of any Approved Acquisition (as defined in the
Senior Credit Agreement), the Earnings Before Interest and Taxes of the acquired
Target (as defined in the Senior Credit Agreement) shall also be included in
calculating such PRO FORMA Fixed Charge Coverage Ratio as though the applicable
Acquisition Closing Date had occurred at the beginning of such Reference Period.
The provisions of the first paragraph of this Section 10.1 shall not
apply to the incurrences of any of the following (collectively, "PERMITTED
INDEBTEDNESS").
(a) the Designated Senior Debt;
(b) Indebtedness to the Holders and the Administrative Agent
arising under any of the Loan Documents;
(c) current liabilities of any of the Company or its
Subsidiaries incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit
except for credit on an open account basis customarily extended and in
fact extended in connection with normal purchases of goods and
services;
(d) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 9.8;
(e) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal
so long as
54
-48-
execution is not levied thereunder or in respect of which any of the
Company or Subsidiary shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(f) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(g) obligations under Capitalized Leases not exceeding
$8,000,000 in aggregate amount at any time outstanding;
(h) Indebtedness incurred in connection with (i) the
acquisition after the Closing Date of any real or personal property by
any of the Company or its Subsidiaries, and (ii) the issuance by any of
the Company or its Subsidiaries of any industrial revenue bonds,
industrial development bonds or similar instruments, PROVIDED that the
aggregate principal amount of Permitted Indebtedness of the Company and
its Subsidiaries incurred pursuant to this clause (h) shall not exceed
the aggregate amount of $10,000,000 at any one time;
(i) Indebtedness existing on the date hereof and listed and
described on SCHEDULE 10.1 hereto;
(j) Indebtedness of any Restricted Subsidiary of the Company
to the Company; PROVIDED that such Indebtedness shall be evidenced by
promissory notes duly executed by the obligor and in form and substance
satisfactory to the Administrative Agent; and
(k) Indebtedness incurred in the Permanent Financing, so long
as the Net Cash Proceeds thereof are applied immediately in prepayment
of the Notes pursuant to and in accordance with Section 4.
Without limiting the foregoing restrictions, the Company will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee, or be or
remain liable, contingently or otherwise, with respect to, any Indebtedness that
is subordinate to or junior in right of payment to any Designated Senior Debt
and senior in right of payment to the Notes.
10.2. RESTRICTIONS ON LIENS. The Company will not, and will not permit
any of its Subsidiaries to, create or incur or suffer to be created or incurred
or to exist any Lien of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom except for Permitted Liens.
10.3. RESTRICTIONS ON INVESTMENTS. Except as set forth in Section 10.4
below, the Company will not, and will not permit any of its Subsidiaries to,
make or permit to exist or to remain outstanding any Investment, other than the
following
55
-49-
(collectively, "PERMITTED INVESTMENTS"; and all Investments other than Permitted
Investments being referred to herein as "RESTRICTED INVESTMENTS"):
(a) marketable direct or guaranteed obligations of the United
States of America, the Federal Republic of Germany or the United
Kingdom that mature within one (1) year from the date of purchase;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States or Canadian banks having
total assets in excess of $1,000,000,000 or, with respect to
Subsidiaries of the Company located outside the United States, deposit
accounts with local banks having total assets in excess of
$1,000,000,000 or the local currency equivalent thereof;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by ▇▇▇▇▇'▇ Investors Services, Inc., and not less than "A 1" if
rated by Standard and Poor's;
(d) Investments existing on the date hereof and listed on
SCHEDULE 10.3
(e) Investments with respect to Permitted Indebtedness under
Section 10.1(j) so long as such entities remain Restricted Subsidiaries
of the Company;
(f) Investments consisting of the Guaranties or Investments by
the Company in Restricted Subsidiaries of the Company;
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted hereunder;
(h) Investments consisting of loans and advances to employees
for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $250,000 in the aggregate at
any time outstanding; and
(i) other Investments in an aggregate amount not in excess of
$100,000.
10.4. RESTRICTED PAYMENTS. The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly: (i) make any
Distribution, (ii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes; or (iii) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iii) above being
collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of and
after giving effect to such Restricted Payment:
56
-50-
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment
and after giving PRO forma effect thereto as if such Restricted Payment
had been made at the beginning of the most recently completed Reference
Period for which internal financial statements are available, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 10.1 above; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Closing Date (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv) and (v) of the next
succeeding paragraph), is less than the sum, without duplication, of
(i) 50% of Consolidated Net Income for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the Closing Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if there is a
Consolidated Net Deficit for such period, less 100% of such Deficit),
PLUS (ii) 100% of the aggregate Net Cash Proceeds received by the
Company since the Closing Date as a contribution to its common equity
capital or from the issue or sale of Equity Interests of the Company
(other than Disqualified Stock) or from the issue or sale of
Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary
of the Company), PLUS (iii) to the extent that any Restricted
Investment that was made after the Closing Date is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (B) the initial amount of such
Restricted Investment.
The foregoing provisions shall not prohibit (i) the payment of any
Distribution within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions hereof;
(ii) the redemption, repurchase, retirement, defeasance or other acquisition of
any Indebtedness that is subordinated to the Notes or Equity Interests of the
Company in exchange for, or out of the Net Cash Proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of, other
Equity Interests of the Company (other than any Disqualified Stock); provided
that the amount of any such Net Cash Proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (c) (ii) of the preceding paragraph; (iii) the payment of
any dividend (in cash or otherwise) by a Restricted Subsidiary of the Company to
the holders of its common Equity Interests on a pro rata basis; (iv) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Subsidiary of the Company, PROVIDED that
the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests of the Company or any Subsidiary
57
-51-
shall not exceed $2,000,000 in any twelve-month period and no Default or Event
of Default shall have occurred and be continuing immediately after such
transaction; or (v) so long as no Default or Event of Default has occurred and
is continuing or would result therefrom, the Company may declare and pay
dividends in cash on or in respect of any of its Equity Interests in an
aggregate amount not to exceed $2,000,000 paid in any period of twelve (12)
consecutive months.
The Board of Directors of the Company may designate any Restricted
Subsidiary (other than TransTechnology Engineered Components, LLC, a Delaware
limited liability company, or TransTechnology Canada Corporation, an Ontario
corporation) to be an Unrestricted Subsidiary if such designation would not
cause a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under clause (c) of this Section 10.4. All such
outstanding Investments will be deemed to constitute investments in an amount
equal to the greatest of (x) the net book value of such Investments at the time
of such designation, (y) the fair market value of such Investments at the time
of such designation and (z) the original fair market value of such investments
at the time they were made. Such designation will only be permitted if such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined by the Board
of Directors of the Company, whose resolution with respect thereto shall be
delivered to the Administrative Agent, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if such fair market value exceeds $5,000,000. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Administrative Agent an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 10.4 were computed, together with a copy
of any opinion or appraisal required by this Section 10.4.
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
10.5.1. MERGERS AND ACQUISITIONS. The Company will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, to convert the Company or any of its
Subsidiaries from one form of corporate organization or partnership to
another, or agree to or effect any asset acquisition or stock
acquisition, other than:
(a) the acquisition of assets (other than assets which
constitutes all or a substantial part of a business or division) in the
ordinary course of business consistent with the past practices of the
TransTechnology Group;
58
-52-
(b) Approved Acquisitions under and as defined in the Senior
Credit Agreement, subject to fulfillment of the conditions set forth in
the definition thereof in the Senior Credit Agreement;
(c) the merger or consolidation of one or more of the
Subsidiaries of the Company with and into the Company; or
(d) the merger, conversion or consolidation of two or more
Subsidiaries of the Company, provided that no such Subsidiary which
prior to such merger or consolidation was a Guarantor shall, as a
result of such merger, conversion or consolidation, cease to be a
Guarantor.
10.5.2. DISPOSITION OF ASSETS. The Company will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect any
disposition of assets, other than:
(a) the disposition of assets (other than assets which
constitutes all or a substantial part of a business or division) in the
ordinary course of business, consistent with the past practices of the
TransTechnology Group;
(b) the disposition of assets permitted under the Senior
Credit Agreement; or
(c) any other disposition of assets, PROVIDED that: (i) no
Default or Event of Default has occurred and is continuing or would
result therefrom, (ii) upon completion of such disposition and after
giving PRO FORMA effect thereto as if such disposition had been made at
the beginning of the most recently completed Reference Period for which
internal financial statements are available, the Company would have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 10.1 hereby, and (iii) the proceeds of such
disposition are applied in compliance with Section 4.3 hereof.
10.6. SALE AND LEASEBACK. The Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby the Company or Restricted Subsidiary shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that any member of the TransTechnology Group intends to use
for substantially the same purpose as the property being sold or transferred
unless (i) the Company or such Restricted Subsidiary could have incurred
Indebtedness in an amount equal to the Indebtedness relating to such sale and
leaseback transaction pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 10.1 above, (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Administrative Agent) of the property that is the subject of
such sale and leaseback transaction, and (iii) the transfer of assets in such
sale and leaseback transaction is permitted by, and the Company or such
59
-53-
Restricted Subsidiary applies the proceeds of such transaction in compliance
with, Section 4.3 above.
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company will not, and
will not permit any of its Subsidiaries to, (i) construct or install on any of
the Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (ii) conduct any activity at any Real Estate or use any
Real Estate in any manner so as to cause any material release (i.e., releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping) of Hazardous Substances on, upon or
into the Real Estate, or (iii) otherwise conduct any activity at any Real Estate
or use any Real Estate in any manner that would be in material violation of any
Environmental Law or bring such Real Estate in material violation of any
Environmental Law.
10.8. EMPLOYEE BENEFIT PLANS. Neither the Company nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for the Company or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a Lien on the assets of the Company or any of its
Subsidiaries pursuant to Section 302(f) or Section 4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities.
10.9. MAINTENANCE OF BUSINESS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, materially change the business of
the Company or such Restricted Subsidiary from the Business.
11. SUBORDINATION
11.1. AGREEMENT TO SUBORDINATE. The Company agrees, and each Holder by
accepting a Note agrees, that the Indebtedness, interest and other Obligations
of any kind evidenced by the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Section 11, to the prior payment in
full in cash of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
60
-54-
11.2. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution to
creditors of the Company or any Guarantor whether in cash, properties,
securities or otherwise, in a liquidation or dissolution of the Company or any
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company, any Guarantor, or their property, an
assignment for the benefit of creditors or any marshaling of the Company's or
any Guarantor's assets and liabilities, the holders of Senior Debt shall be
entitled to receive payment in full in cash of all Obligations due in respect of
such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt whether or not
allowed as a claim in any such proceeding) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes or under the
Subsidiary Guarantee, and until all obligations with respect to Senior Debt are
paid in full in cash, any distribution to which the Holders of Notes would be
entitled shall be made to the holders of Senior Debt (except that Holders of
Notes may receive and retain Permitted Junior Securities).
To the extent any payment of Senior Debt (whether by or on behalf of
the Company or any Subsidiary, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Debt or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation to
repay any Senior Debt is declared to be fraudulent, invalid, or otherwise set
aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then the obligations so declared fraudulent, invalid or otherwise
set aside (and all other amounts that would come due with respect thereto had
such obligation not been affected) shall be deemed to be reinstated and
outstanding as Senior Debt for all purposes hereof as if such declaration,
invalidity or setting aside had not occurred.
11.3. DEFAULT ON DESIGNATED SENIOR DEBT. The Company and the Guarantors
shall not make any payment upon or in respect of the Notes or the Subsidiary
Guarantees (except in Permitted Junior Securities) if (a) a default in the
payment of the principal of, or premium, if any, or interest on, Senior Debt
occurs and is continuing, or (b) any other default occurs and is continuing with
respect to Designated Senior Debt that currently, or with the passage of time or
giving of notice, permits holders of the Designated Senior Debt as to which such
default relates to accelerate its maturity and, in the case of any such default
described in this clause (b), the Administrative Agent receives a notice of such
default of the type referred to in this clause (b) (a "PAYMENT BLOCKAGE NOTICE")
from the Company, the Senior Lender Representative, or the holders of any
Designated Senior Debt. Payments on the Notes may and shall be resumed (i) in
the case of a payment default, upon the date on which such default is cured or
waived in writing by the holders of the applicable Senior Debt, and (ii) in case
of a nonpayment default, the earlier of the date on which such nonpayment
default is cured or waived in writing
61
-55-
by the holders of Designated Senior Debt or 179 days after the date on which the
applicable Payment Blockage Notice is received by the Administrative Agent,
unless the maturity of any Designated Senior Debt has been accelerated. No new
period of payment blockage may be commenced under clause (ii) above unless and
until (A) 360 days have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice and (B) all scheduled payments of
principal of, and premium, if any, and interest on, the Notes that have come due
have been paid in full in cash. No nonpayment default that existed and was
continuing on the date of delivery of any Payment Blockage Notice to the
Administrative Agent shall be, or be made, the basis for a subsequent Payment
Blockage Notice unless such default shall have been waived in writing or cured
for a period of not less than 90 days. In the event that the Company or any
Guarantor makes any payment to any Holder of any Note prohibited by the
foregoing, such payment will be required to be held in trust for and paid over
to the holders of Senior Debt (or the Senior Lender Representative on behalf
thereof).
11.4. ACCELERATION. If payment of the Notes is accelerated because of
an Event of Default, the Company shall promptly notify the holders of Senior
Debt and the Senior Lender Representative of the acceleration.
11.5. WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the
Administrative Agent or any Holder receives any payment of any Obligations with
respect to the Notes at a time when the Administrative Agent or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section 11.2
or Section 11.3 hereof, such payment shall be held by the Administrative Agent
or such Holder, as the case may be, in trust for -the benefit of and shall be
paid forthwith over and delivered, upon written request, to, the holders of
Senior Debt as their interests may appear or the Senior Lender Representative on
their behalf, for application to the payment of all obligations with respect to
Senior Debt remaining unpaid, to the extent necessary to pay such obligations in
full in cash in accordance with their terms after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt. With
respect to the holders of Senior Debt and the Senior Lender Representative, the
Administrative Agent undertakes to perform only such obligations on the part of
the Administrative Agent as are specifically set forth in this Section 11, and
no implied covenants or obligations with respect to the holders of Senior Debt
shall be read into this Agreement against the Administrative Agent. The
Administrative Agent shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Administrative Agent shall pay over or distribute to or on behalf of the Holders
or the Company or any other Person money or assets to which any holders of
Senior Debt shall be entitled by virtue of this Section 11.
11.6. NOTICE BY COMPANY. The Company shall promptly notify the
Administrative Agent of any facts known to the Company that would cause a
payment of any Obligations with respect to the Notes to violate this Section 11,
but failure to give such notice shall not affect the subordination of the Notes
to the Senior Debt as provided in this Section 11.
62
-56-
11.7. SUBROGATION. After all Senior Debt is paid in full in cash and
until the Notes are paid in full, Holders of Notes shall be subrogated (equally
and ratably with all other Indebtedness pari passu with the Notes) to the rights
of holders of Senior Debt to receive distributions applicable to Senior Debt to
the extent that distributions otherwise payable to the Holders of Notes have
been applied to the payment of Senior Debt. A distribution made under this
Section 11 to holders of Senior Debt that otherwise would have been made to
Holders of Notes is not, as between the Company and the Holders, a payment by
the Company on the Notes.
11.8. RELATIVE RIGHTS. This Section 11 defines the relative rights of
Holders of Notes and holders of Senior Debt. Nothing in this Agreement shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of
Senior Debt;
(3) prevent the Administrative Agent or any Holder of Notes
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes;
(4) prevent the Company from making any prepayment of the
Notes required to be made pursuant to Section 4.4; or
(5) limit or restrict the conversion of the Bridge Notes to
Term Notes pursuant to Section 2.4 or the conversion of Term Notes to Exchange
Notes pursuant to Section 5.
If the Company fails because of this Section 11 to pay principal of or
interest on a Note or to comply with any of the conversion provisions hereof on
the due date, the failure is still a Default or Event of Default hereunder.
11.9. NO IMPAIRMENT BY COMPANY. No right of any holder of Senior Debt
to enforce the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or any Holder or by the
failure of the Company or any Holder to comply with this Agreement. The
Administrative Agent and the Holders agree that they will not challenge the
validity, enforceability or perfection of any Senior Debt or the Liens,
guarantees and security interests securing the same and that as between the
holders of the Senior Debt on the one hand and the Administrative Agent and the
Holders on the other, the terms hereof shall govern even if all or part of the
Senior Debt or such Liens, guarantees and security interests are avoided,
disallowed, subordinated, set aside or otherwise invalidated in any judicial
proceeding or otherwise, regardless of the theory upon which such action is
premised.
63
-57-
Without in any way limiting the generality of this Section 11.9, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Administrative Agent or the Holders, without
incurring responsibility to the Administrative Agent or the Holders, and without
impairing or releasing the subordination provided in this Section 11 or the
obligations hereunder of the Holders to the holders of Senior Debt, do any one
or more of the following: (a) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Debt, the Senior Credit
Agreement or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding or secured; (b) sell, exchange, release, foreclose
against or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (c) release any Person liable in any manner for the
collection of Senior Debt; and/or (d) exercise or refrain from exercising any
rights against the Company, any Subsidiary thereof or any other Person.
11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of any Senior Debt, the
distribution may be made and the notice given to the Senior Lender
Representative. Upon any payment or distribution of assets of the Company
referred to in this Section 11.10, the Administrative Agent and the Holders of
Notes shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Senior Lender
Representative(s) or of the liquidating trustee or agent or other Person making
any distribution to the Administrative Agent or to the Holders of Notes for the
purpose of ascertaining the Persons entitled to participate in such
distribution, all holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Section
11.10.
11.11. RIGHTS OF ADMINISTRATIVE AGENT. Notwithstanding the provisions
of this Section 11 or any other provision of this Agreement, the Administrative
Agent shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Administrative
Agent, and the Administrative Agent may continue to distribute payments on the
Notes received by it, unless the Administrative Agent shall have received at its
Head Office at least two Business Days prior to the date of such payment written
notice of facts that would cause the payment of any Obligations with respect to
the Notes to violate this Section 11. Only the Company or the Senior Lender
Representative may give such notice. Nothing in this Section 11.12 shall impair
the claims of, or payments to, the Administrative Agent under or pursuant to
Section 16 hereof. The Administrative Agent hereunder in its individual or any
other capacity may hold Senior Debt with the same rights it would have if it
were not Administrative Agent. Any Agent may do the same with like rights.
11.12. AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of Notes, by
such Holder's acceptance thereof, authorizes and directs the Administrative
Agent on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Section 11 and
the subordination of the Subsidiary Guarantee as provided therein, and appoints
the Administrative Agent to act as such Holder's attorney-in-fact for any and
all such purposes, including, in
64
-58-
the event of any dissolution, winding up, liquidation or reorganization of the
Company or any Subsidiary (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise), the filing of a claim for the unpaid balance of its
Notes in the form required in those proceedings. If the Administrative Agent
does not file a proper proof of claim or proof of debt in the form required in
any bankruptcy, liquidation or other insolvency proceeding at least 30 days
before the expiration of the time to file such claim, the Senior Lender
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
11.13. AMENDMENTS. The provisions of this Section 11 (including,
without limitation, any definitions or other sections included by reference or
incorporation) or the terms and conditions of the Subsidiary Guarantee shall not
be amended or modified without the written consent of the holders of all Senior
Debt.
12. CLOSING CONDITIONS.
The obligations of the Lenders to make the Bridge Loan on the Closing
Date shall be subject to the satisfaction of the following conditions precedent
on or prior to the Closing Date:
12.1 LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto and shall be in form
and substance satisfactory to each of the Lenders. Each of the Loan Documents
(other than the Indenture and the Exchange Notes) shall be in full force and
effect, and the Indenture and the Exchange Notes shall have been delivered in
fully-executed form to the Escrow Agent. The Administrative Agent shall have
received a fully executed copy of each such document.
12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Lenders shall
have received from the Company and each of its Subsidiaries a copy, certified by
a duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (i) its charter or other incorporation documents as in effect
on such date of certification, and (ii) its by-laws as in effect on such date.
12.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Company and each of its Subsidiaries
of this Agreement and the other Loan Documents to which it is or is to become a
party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Lenders shall have been provided to each of the Lenders.
12.4. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received
from the Company and each of its Subsidiaries an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of the Company or
such Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (i) to sign, in the name and on behalf of
the Company and such Subsidiary, each of the Loan Documents and the Tinnerman
Acquisition Documents to which the Company or such Subsidiary is or is to become
a
65
-59-
party; and (ii) in the case of the Company, to give notices and to take other
action on behalf of the Company under the Loan Documents.
12.5. SENIOR LOAN DOCUMENTS; AVAILABILITY. The Senior Loan Documents
shall be in full force and effect, all of the conditions precedent to the
borrowing by the Company of a Term Loan in the principal amount of $50,000,000
and of Revolving Credit Loans of up to $200,000,00 (other than the effectiveness
of this Agreement) shall have been fulfilled, and the Company shall have
availability of at least $20,000,000 in Revolving Credit Loans under the Senior
Credit Agreement, after completion of the Tinnerman Acquisition and the
refinancing of the TransTechnology Group's existing credit facilities and all
related transactions, and the drawdown of all loans in connection therewith.
12.6. TINNERMAN ACQUISITION. All of the conditions precedent to the
completion of the Tinnerman Acquisition in accordance with the Tinnerman
Acquisition Agreement shall have been fulfilled.
12.7. SOLVENCY CERTIFICATE. Each of the Lenders shall have received an
officer's certificate of the Company dated as of the Closing Date as to the
solvency of the Company and its Subsidiaries following the consummation of the
transactions contemplated herein and in the Senior Loan Documents in form and
substance satisfactory to the Lenders and the Administrative Agent.
12.8. OPINIONS OF COUNSEL. Each of the Lenders and the Administrative
Agent shall have received a favorable legal opinion addressed to the Lenders and
the Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent, from:
(a) ▇▇▇▇ ▇▇▇▇▇▇ & Parks LLP, counsel to the Company and its
Subsidiaries in the United States; and
(b) if requested by the Administrative Agent, such other local counsel
to the Company in any jurisdiction where any of the Guarantors is organized.
12.9. PAYMENT OF FEES. The Company shall have paid to the
Administrative all fees payable pursuant under the Fee Letter, and shall have
paid the reasonable fees and expenses of the Administrative Agent's Special
Counsel incurred in connection with the preparation and negotiation of this
Agreement and the other Loan Documents.
12.10. DISBURSEMENT INSTRUCTIONS. The Administrative Agent shall have
received disbursement instructions from the Company indicating that
substantially all of the proceeds of the Bridge Loan are to be paid to ▇▇▇▇▇
Corporation in payment of the purchase price under the Tinnerman Acquisition
Agreement.
13. CONDITIONS TO CLOSING AND CONVERSION.
The obligations of the Lenders to make the Bridge Loan, to convert the
Bridge Loan into the Term Loan, and to convert the Term Loan or any part thereof
66
-60-
to Exchange Notes, shall also be subject to the satisfaction of the following
conditions precedent:
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Company and any of its Subsidiaries
contained in this Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Agreement shall be
true as of the date as of which they were made and shall also be true at and as
of the time of the making or conversion of such Loan, with the same effect as if
made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse, and to the extent that such
individual representations and warranties relate expressly to an earlier date)
and no Default or shall have occurred and be continuing. Upon the request of the
Administrative Agent, the Company shall have delivered to the Administrative
Agent a certificate of the Company signed by an authorized officer of the
Company to such effect.
13.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make or convert such Loan
pursuant to the provisions of this Agreement.
13.3. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System or any other applicable regulatory or supervisory body.
13.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents, the
Acquisition Documents and all other documents incident thereto shall be
satisfactory in substance and in form to the Lenders and to the Administrative
Agent and the Administrative Agent's Special Counsel, and the Lenders, the
Administrative Agent and such counsel shall have received all information and
such counterpart originals or certified or other copies of such documents as the
Administrative Agent may reasonably request.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Company shall fail to pay any principal of the Notes
when the same shall become due and payable, whether at the stated date
of maturity or any accelerated date of maturity or at any other date
fixed for payment;
67
-61-
(b) the Company or any of its Subsidiaries shall fail to pay
any interest on the Notes, any Liquidated Damages under and as defined
in the Registration Rights Agreement, or any fees or other sums due
hereunder or under any of the other Loan Documents, within three (3)
days after the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(c) any of the Company or its Subsidiaries shall fail to
comply with any of its covenants contained in Section 9 or 10 or any of
the covenants contained in any of the Loan Documents;
(d) the Company or any of its Subsidiaries shall fail to
perform any other term, covenant or agreement contained herein (other
than those specified elsewhere in this Section 14.1 or those which by
their terms expressly exclude any grace period for any non-compliance
therewith) for fifteen (15) days after written notice of such failure
has been given to the Company by the Administrative Agent;
(e) any representation or warranty the Company or any of its
Subsidiaries in this Agreement or any of the other Loan Documents or in
any other document or instrument delivered pursuant to or in connection
with this Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or
repeated;
(f) the Company or any of its Subsidiaries shall (i) fail to
pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases in an aggregate amount in excess of $5,000,000, or
(ii) fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing such borrowed money or credit received or in respect of
such Capitalized Leases and the holder or holders thereof or of any
obligations issued thereunder shall have accelerated the maturity
thereof;
(g) any of the Company or its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of such Company or
Subsidiary or of any substantial part of the assets of such Company or
Subsidiary or shall commence any case or other proceeding relating to
any of the Company or its Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against or any of the Company or its Subsidiaries and any
of the Company or its Subsidiaries shall indicate its approval thereof,
consent thereto or acquiescence therein or such
68
-62-
petition or application shall not have been dismissed within forty-five
(45) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Company or
its Subsidiaries bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is
entered in respect of any of the Company or its Subsidiaries in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive,
any final judgment against any of the Company or its Subsidiaries that,
with other outstanding final judgments, undischarged, against the
Company and its Subsidiaries exceeds in the aggregate $5,000,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded, in each case otherwise than in
accordance with the terms thereof or with the express prior written
agreement, consent or approval of the Holders (and, notwithstanding
anything herein to the contrary, if any Guaranty shall be cancelled,
terminated, revoked or rescinded without the consent of the Holders),
or any action at law, suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced
by or on behalf of the Company or any of its Subsidiaries party thereto
or any of their respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Holders shall
have determined in their reasonable discretion that such event
reasonably could be expected to result in liability of the Company or
any of its Subsidiaries to the PBGC or such Guaranteed Pension Plan in
an aggregate amount exceeding $250,000 and such event in the
circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan; or a trustee shall
have been appointed by the United States District Court to administer
such Plan; or the PBGC shall have instituted proceedings to terminate
such Guaranteed Pension Plan;
(l) the Company or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its
69
-63-
business and such order has a material adverse effect on the business
or financial condition of the Company or such Subsidiary;
(m) there shall occur any material damage to, or loss, theft
or destruction of, any property, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than
fifteen (15) consecutive days, the cessation or substantial curtailment
of revenue producing activities at any facility of any of the Company
or its Subsidiaries, if such event or circumstance is not also covered
by business interruption insurance and would have a material adverse
effect on the business or financial condition of the Company or such
Subsidiary;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Company or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Company or
such Subsidiary; or
(o) any of the Company or its Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought against any of the Company or its
Subsidiaries, a punishment for which in any such case could include the
forfeiture of any assets of such Company or Subsidiary having a fair
market value in excess of $5,000,000;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Holders shall, by
notice in writing to the Company declare all amounts owing with respect to this
Agreement, the Loans, the Notes and the other Loan Documents to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; provided that in the event of any Event
of Default specified in Section 14.1(g) or 14.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Administrative Agent or any Holder.
14.2. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Administrative Agent or
the Majority Holders shall have accelerated the maturity of the Notes pursuant
to Section 14.1, each Holder, if owed any amount with respect to the Notes, may,
with the consent of the Majority Holders but not otherwise, proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations to such Holder are evidenced, including as
permitted by applicable law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of such Holder. No remedy herein conferred upon any Holder or
70
-64-
the Administrative Agent is intended to be exclusive of any other remedy herein
or in any of the other Loan Documents and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
under any of the other Loan Documents or now or hereafter existing at law or in
equity or by statute or any other provision of law.
14.3. DISTRIBUTION OF PROCEEDS. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Administrative Agent or any Holder, as the case may be, receives any monies in
connection with the enforcement of any of the Loan Documents, such monies shall
be distributed for application as follows, subject to Section 11:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of all
reasonable costs, expenses, disbursements and losses which shall have
been incurred or sustained by the Administrative Agent in connection
with the collection of such monies by the Administrative Agent, for the
exercise, protection or enforcement by the Administrative Agent of all
or any of the rights, remedies, powers and privileges of the
Administrative Agent under this Agreement or any of the other Loan
Documents or in support of any provision of adequate indemnity to the
Administrative Agent against any taxes or Liens which by law shall
have, or may have, priority over the rights of the Administrative Agent
to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Holders may determine; provided, however,
that distributions in respect of such obligations shall be made
Obligations owing to the Holders with respect to each type of
Obligation such as interest, principal, fees and expenses, shall be
made among the Holders pro rata; and provided, further, that the
Administrative Agent may in its discretion make proper allowance to
take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Holders and the
Administrative Agent of all of the Obligations, to the payment of any
obligations required to be paid pursuant to Section 9-504(1)(c) of the
Uniform Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Company or to such other Persons as are entitled thereto.
15. SETOFF.
During the continuance of any Event of Default, any deposits or other
sums credited by or due from any of the Holders to the Company and any
securities or other property of the Company in the possession of such Holder may
be applied to or set off by such Holder against the payment of Obligations and
any and all other liabilities, direct, or indirect, absolute or contingent, due
or to become due, now
71
-65-
existing or hereafter arising, of the Company to such Holder. Each of the
Holders agrees with each other Holder that (i) if an amount to be set off is to
be applied to Indebtedness of the Company to such Holder, other than
Indebtedness evidenced by the Notes held by such Holder, such amount shall be
applied ratably to such other Indebtedness and to the Indebtedness evidenced by
all such Notes held by such Holder, and (ii) if such Holder shall receive from
the Company, whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes held
by such Holder by proceedings against the Company at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Holder any amount in excess of its ratable
portion of the payments received by all of the Holders with respect to the Notes
held by all of the Holders, such Holder will make such disposition and
arrangements with the other Holders with respect to such excess, either by way
of distribution, pro tanto assignment of claims, subrogation or otherwise as
shall result in each Holder receiving in respect of the Notes held by it, its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Holder, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
16. THE ADMINISTRATIVE AGENT.
16.1. AUTHORIZATION.
(a) The Administrative Agent is authorized to take such action
on behalf of each of the Lenders and Holders and to exercise all such
powers as are hereunder and under any of the other Loan Documents and
any related documents delegated to the Administrative Agent, together
with such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein
shall be implied to have been assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each
of the Lenders and Holders is that of an independent contractor. The
use of the term "Administrative Agent" is for convenience only and is
used to describe, as a form of convention, the independent contractual
relationship between the Administrative Agent and each of the Lenders
and Holders. Nothing contained in this Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Administrative Agent and any of the
Lenders and Holders.
(c) As an independent contractor empowered by the Lenders and
Holders to exercise certain rights and perform certain duties and
responsibilities hereunder and under the other Loan Documents, the
Administrative Agent is nevertheless a "representative" of the Lenders
and Holders, as that term is defined in Article 1 of the Uniform
Commercial Code, for purposes of actions for the benefit of the Lenders
and Holders and the
72
-66-
Administrative Agent with respect to all security and guaranties
contemplated by the Loan Documents. Such actions include the
designation of the Administrative Agent as "secured party", "mortgagee"
or the like on all financing statements and other documents and
instruments, whether recorded or otherwise, relating to the attachment,
perfection, priority or enforcement of any security interests,
mortgages or deeds of trust in collateral security intended to secure
the payment or performance of any of the Obligations, all for the
benefit of the Lenders and Holders and the Administrative Agent.
16.2. EMPLOYEES AND AGENTS. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement and the other Loan
Documents. The Administrative Agent may utilize the services of such Persons as
the Administrative Agent in its sole discretion may reasonably determine, and
all reasonable fees and expenses of any such Persons shall be paid by the
Company.
16.3. NO LIABILITY. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
16.4. NO REPRESENTATIONS. The Administrative Agent shall not be
responsible for the execution or validity or enforceability of this Agreement,
the Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security or for
the validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Company or any of its Subsidiaries, or be bound to ascertain or inquire as to
the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Notes or to inspect any of the
properties, books or records of the Company or any of its Subsidiaries. The
Administrative Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Company or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Administrative Agent has not made nor does it now make any representations
or warranties, express or implied, nor does it assume any liability to the
Lenders or the Holders, with respect to the credit worthiness or financial
conditions of the Company or any of its Subsidiaries. Each Lender acknowledges
that it has, independently and
73
-67-
without reliance upon the Administrative Agent or any other Lender or Holder,
and based upon such information and documents as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement.
16.5. PAYMENTS.
16.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by the
Company to the Administrative Agent hereunder, under the Notes or under
any of the other Loan Documents for the account of any Lender or Holder
shall constitute a payment to such Lender or Holder. The Administrative
Agent agrees promptly to distribute to each Holder such Holder's pro
rata share of payments received by the Administrative Agent for the
account of the Lenders or Holders, except as otherwise expressly
provided herein or in any of the other Loan Documents.
16.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the
opinion of the Administrative Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution
shall have been adjudicated by a court of competent jurisdiction. If a
court of competent jurisdiction shall adjudge that any amount received
and distributed by the Administrative Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either
repay to the Administrative Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.
16.5.3. DELINQUENT LENDERS. Notwithstanding anything to the
contrary contained in this Agreement or any of the other Loan
Documents, any Lender that fails (i) to make available to the
Administrative Agent its pro rata share of any Loan, or (iii) to comply
with the provisions of Section 15 with respect to making dispositions
and arrangements with the other Lenders, where such Lender's share of
any payment received, whether by setoff or otherwise, is in excess of
its pro rata share of such payments due and payable to all of the
Lenders, in each case as, when and to the full extent required by the
provisions of this Agreement, shall be deemed delinquent (a "Delinquent
Lender") and shall be deemed a Delinquent Lender until such time as
such delinquency is satisfied. A Delinquent Lender shall be deemed to
have assigned any and all payments due to it from the Company, whether
on account of outstanding Loans, interest, fees or otherwise, to the
remaining nondelinquent Lenders for application to, and reduction of,
their respective pro rata shares of all outstanding Loans. The
Delinquent Lender hereby authorizes the Administrative Agent to
distribute such payments to the nondelinquent Lenders in proportion to
their respective pro rata shares of all outstanding Loans. A Delinquent
Lender shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all
outstanding Loans of the nondelinquent Lenders, the Lenders' respective
pro rata shares of all outstanding Loans have returned to
74
-68-
those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
16.6. HOLDERS OF NOTES. The Administrative Agent may deem and treat the
payee of any Note as the absolute owner or purchaser thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.
16.7. INDEMNITY. The Holders ratably agree hereby to indemnify and hold
harmless the Administrative Agent from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Administrative Agent has not been
reimbursed by the Company as required by Section 17), and liabilities of every
nature and character arising out of or related to this Agreement, the Notes, or
any of the other Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or the Administrative Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Administrative Agent's willful misconduct or gross negligence.
16.8. ADMINISTRATIVE AGENT AS LENDER AND HOLDER. In its individual
capacity, BankBoston shall have the same obligations and the same rights, powers
and privileges in respect of its Commitments and the Loans made by it and as the
holder of any of the Notes, as it would have were it not also the Administrative
Agent.
16.9. RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent may
resign at any time by giving sixty (60) days prior written notice thereof to the
Holders and the Company. Upon any such resignation, the Majority Holders shall
have the right to appoint a successor Administrative Agent. Unless a Default or
Event of Default shall have occurred and be continuing, such successor
Administrative Agent shall be reasonably acceptable to the Company. If no
successor Administrative Agent shall have been so appointed by the Majority
Holders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Holders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by Standard & Poor's Corporation. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation, the provisions of this Agreement
and the other Loan Documents shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
17. EXPENSES.
75
-69-
The Company agrees to pay (i) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (ii) any taxes (including any interest and
penalties in respect thereto) payable by the Administrative Agent or any of the
Lenders or Holders (other than taxes based upon the Administrative Agent's or
any Lender's or Holder's net income) on or with respect to the transactions
contemplated by this Agreement (the Company hereby agreeing to indemnify the
Administrative Agent and each Lender and Holder with respect thereto), (iii) the
reasonable fees, expenses and disbursements of the Administrative Agent's
Special Counsel or any local counsel to the Administrative Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or hereunder,
(iv) the fees, expenses and disbursements of the Administrative Agent incurred
by the Administrative Agent in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums, asset and/or collateral examiners' and
commercial finance examiners' fees and surveyor, engineering and appraisal
charges, (v) any fees, costs, expenses and bank charges, including bank charges
for returned checks, incurred by the Administrative Agent in establishing,
maintaining or handling agency accounts, lock box accounts and other accounts
for the collection of any funds; and (vi) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Lender or Holder or the Administrative Agent,
and reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Lender or Holder or the
Administrative Agent in connection with (A) the enforcement of or preservation
of rights under any of the Loan Documents against the Company or any of its
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (B) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Lender's or Holder's or the
Administrative Agent's relationship with the Company or any of its Subsidiaries.
The covenants of this Section 17 shall survive payment or satisfaction of all
other Obligations.
18. INDEMNIFICATION.
The Company agrees to indemnify and hold harmless the Administrative
Agent, the Arranger and each of the Lenders and Holders, and their respective
shareholders, directors, agents, officers, Subsidiaries and Affiliates (each, an
"Indemnified Party") from and against any and all claims, actions, suits or
causes of action whether groundless or otherwise, and from and against any and
all liabilities, losses, damages, settlement payments, obligations, and
reasonable costs and expenses of every nature and character arising out of this
Agreement, the Notes or any of the other Loan Documents or the transactions
contemplated hereby or thereby, including, without limitation, (i) any actual or
proposed use by the Company or any of its Subsidiaries of the proceeds of any of
the Loans, (ii) the reversal or withdrawal of any provisional credits granted by
the Administrative Agent or any Lender or Holder upon the transfer of funds from
bank agency or lock
76
-70-
box accounts or in connection with the provisional honoring of checks or other
items, (iii) any actual or alleged infringement of any patent, copyright,
trademark, service ▇▇▇▇ or similar right of the Company or any of its
Subsidiaries, (iv) the Company or any of its Subsidiaries entering into or
performing this Agreement, the Notes or any of the other Loan Documents, or (v)
with respect to the Company and its Subsidiaries and their respective properties
and assets, the violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release or threatened
release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding, but excluding any such liabilities, losses, damages, settlement
payments, obligations, costs and expenses resulting from the gross negligence or
willful misconduct of the applicable Indemnified Party. In litigation, or the
preparation therefor, each of the Lenders or Holders, the Arranger and the
Administrative Agent shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Company agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Company under this Section 18 are unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 18 shall survive payment
or satisfaction in full of all other Obligations.
19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Company or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Lenders, the
Holders and the Administrative Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by any
of the Lenders of any of the Loans as herein contemplated, and shall continue in
full force and effect so long as any amount due under this Agreement or the
Notes or any of the other Loan Documents remains outstanding or any Lender has
any obligation to make any Loans, and for such further time as may be otherwise
expressly specified in this Agreement. All statements contained in any
certificate or other paper delivered to any Lender or Holder or the
Administrative Agent at any time by or on behalf of the Company or any of its
Subsidiaries pursuant hereto or in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Company or such
Subsidiary hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. CONDITIONS TO ASSIGNMENT. Except as provided herein, each Lender
and/or Holder may assign all or a portion of its interests, rights and
obligations as a Lender or Holder under this Agreement (including all or a
portion of any such
77
-71-
Lender's Commitment Percentage and Commitment, and the same portion of the Loans
at the time owing to any such Lender or Holder and the Notes held by any such
Lender or Holder); provided that (a) any such assignment of a Lender's
Commitment Percentage and Commitment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations as a Lender
under this Agreement, (b) each assignment shall be in an amount that is at least
$500,000 or a greater multiple of $100,000, PROVIDED, however, that assignments
that are made on the same day to two or more Related Funds may be treated as a
single assignment for purposes of the minimum amount, and (c) the parties to
such assignment shall execute and deliver to the Administrative Agent, for
recording in the Note Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of EXHIBIT H hereto (an "ASSIGNMENT AND
ACCEPTANCE"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in any such Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender and
Holder hereunder, and (ii) the assigning Lender or Holder shall, to the extent
provided in such assignment and upon payment to the Administrative Agent of the
registration fee referred to in Section 20.3, be released from its obligations
under this Agreement.
20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender or Holder makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the Notes, the other Loan Documents or any
other instrument or document furnished pursuant hereto,
(b) the assigning Lender or Holder makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Company and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations,
or the performance or observance by the Company and any of its
Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under
this Agreement, the Notes or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto;
78
-72-
(c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
referred to in Section 8.4 and Section 9.4 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Lender or Holder, the Administrative Agent or any
other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement;
(e) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;
(f) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender or Holder; and
(g) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
20.3. REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Note Register") for the recordation of (a) the names and addresses of the
Lenders and Holders, (b) the Commitment Percentages of each of the Lenders, and
(c) the Notes held by each of the Holders from time to time. The entries in the
Note Register shall be conclusive, in the absence of manifest error, and the
Company, the Administrative Agent and each of the Lenders and Holders may treat
each Person whose name is recorded in the Note Register as a Lender and Holder
hereunder for all purposes of this Agreement. The Note Register shall be
available for inspection by the Company and the Holders at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation,
other than the recordations of transfers from the original Lenders or from a
Lender to an Affiliate or a Related Fund of such Lender, the assigning Holder
agrees to pay to the Administrative Agent a registration fee in the sum of
$3,500.
20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (i) record the information
contained therein in the Note Register, and (ii) give prompt notice thereof to
the Company and the Holders (other than the assigning Holder). Within five (5)
Business Days after receipt of such notice, the Company, at its own expense,
shall execute and deliver to the Administrative Agent in exchange for each
surrendered Note, a new Note to the order of such assignee in an amount equal to
the amount assumed by such assignee
79
-73-
pursuant to such Assignment and Acceptance and, if the assigning Holder has
retained some portion of its obligations hereunder, a new Note or Notes to the
order of the assigning Holder in an amount equal to the amount of the Loans
retained by it. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such in Assignment and Acceptance and shall otherwise be
substantially the form of the assigned Notes. Upon the request of the recipient
of new Notes or the Administrative Agent, within five (5) days of issuance of
such new Notes pursuant to this Section 20.4, the Company shall deliver an
opinion of counsel, which may be the general counsel of the Company, addressed
to the recipients of the new Notes and the Administrative Agent, relating to the
due authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to the
recipients of the new Notes, the Administrative Agent and the Administrative
Agent's Special Counsel. The surrendered Notes shall be cancelled and returned
to the Company.
20.5. PARTICIPATIONS. Each Holder may sell participations to one or
more banks or other entities in all or a portion of such Holder's rights and
obligations under this Agreement and the other Loan Documents; provided that (i)
any such sale or participation shall not affect the rights and duties of the
selling Holder hereunder to the Company, and (iii) the only rights granted to
the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Notes or extend any regularly scheduled payment
date for principal or interest.
20.6. DISCLOSURE. The Company agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Lender or
Holder may disclose information obtained by such Lender or Holder pursuant to
this Agreement to assignees or participants and potential assignees or
participants hereunder; provided that such assignees or participants or
potential assignees or participants shall agree (i) to treat in confidence such
information unless such information otherwise becomes public knowledge, (ii) not
to disclose such information to a third party, except as required by law or
legal process and (iii) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
20.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE COMPANY. If any
assignee Holder is an Affiliate of the Company, then any such assignee Holder
shall have no right to vote as a Holder hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Administrative Agent pursuant to Section
14.1 or Section 14.2, and the determination of the Majority Holders shall for
all purposes of this Agreement and the other Loan Documents be made without
regard to such assignee Holder's interest in any of the Notes. If any Holder
sells a participating interest in any of the
80
-74-
Notes to a participant, and such participant is the Company or an Affiliate of
the Company, then such transferor Holder shall promptly notify the
Administrative Agent of the sale of such participation. A transferor Holder
shall have no right to vote as a Holder hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Administrative Agent pursuant to Section 14.1
or Section 14.2 to the extent that such participation is beneficially owned by
the Company or any Affiliate of the Company, and the determination of the
Majority Holders shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Holder in
the Notes to the extent of such participation.
20.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Holder shall
retain its rights to be indemnified pursuant to Section 17 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Holder is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder, under the Notes or under any of the other Loan Documents for
its account, deliver to the Company and the Administrative Agent certification
as to its exemption from deduction or withholding of any United States federal
income taxes. If the Reference Bank transfers all of its interest, rights and
obligations under this Agreement, the Administrative Agent shall, in
consultation with the Company and with the consent of the Company and the
Majority Holders, appoint another financial institution to act as the Reference
Bank hereunder, and in the absence of such consent the Administrative Agent
shall act as Reference Bank. Anything contained in this Section 20 to the
contrary notwithstanding, any Holder may at any time pledge all or any portion
of its interest and rights under this Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or the
enforcement thereof shall release the pledgor Holder from its obligations
hereunder or under any of the other Loan Documents.
20.9. ASSIGNMENT BY THE COMPANY. The Company shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Holders.
21. NOTICES, ETC.
Except as otherwise expressly provided in this Agreement, all notices
and other communications made or required to be given pursuant to this Agreement
or the Notes shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail or, if either the Person
giving the notice or the Person being notified is outside the United States, by
registered or recorded-delivery air mail, in each case postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
81
-75-
(a) if to the Company, at TransTechnology Corporation, ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, U.S.A., Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq., Vice President, Secretary and General Counsel, or at
such other address for notice as the Company shall last have furnished
in writing to the Person giving the notice;
(b) if to the Administrative Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice
President, or such other address for notice as the Administrative Agent
shall last have furnished in writing to the Person giving the notice;
(c) if to any Lender or Holder, at such Lender's or Holder's
address set forth on SCHEDULE 1 hereto, or such other address for
notice as such Lender or Holder shall have last furnished in writing to
the Person giving the notice; and
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile,
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof, and (iii) if sent by
registered or recorded-delivery air mail, on the fifth Business Day following
the mailing thereof.
22. GOVERNING LAW.
THIS AGREEMENT, THE NOTES AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE COMPANY
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT, OR THE NOTES OR ANY
OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND THE COMPANY CONSENTS TO
THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON IT BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 21. THE
COMPANY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
23. HEADINGS.
82
-76-
The captions in this Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated, except as provided
in Section 27.
26. WAIVER OF JURY TRIAL.
The Company and each of the Lenders hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Agreement, the Notes or any of the other Loan Documents,
any rights or obligations hereunder or thereunder or the performance of which
rights and obligations. Except as prohibited by law, the Company hereby waives
any right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Company (a)
certifies that no representative, agent or attorney of any Lender, Holder or the
Administrative Agent has represented, expressly or otherwise, that such Lender,
Holder or the Administrative Agent would not, in the event of litigation, seek
to enforce the foregoing waivers and (b) acknowledges that each of the
Administrative Agent and the Lenders and Holders has been induced to enter into
this Agreement, the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
27.1. VOTING PROCEDURES.
(a) Except as set forth in clauses (b) - (e) below, any term, covenant,
agreement or condition of this Agreement or any of the Loan Documents may be
amended or waived and any departure therefrom may be consented to by the
Majority Holders if, but only if, such amendment, waiver or consent is in
writing signed by the Majority Holders and, in the case of an amendment (other
than an amendment described in Section 27.2), by the Company and, in any such
event, the failure to observe, perform or discharge any such term, covenant,
agreement or condition (whether such amendment is executed or such waiver or
consent is given before or after such failure) shall not be construed as a
breach of such term, covenant,
83
-77-
agreement or condition or as a Default or an Event of Default. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given. Anything herein to the contrary notwithstanding, the Majority
Holders shall have the right to waive any Default or Event of Default and the
consequences hereunder of such Default or Event of Default and shall have the
right to enter into an agreement with the Company providing for the forbearance
from the exercise of any remedies provided hereunder or under the other Loan
Documents without waiving any Default or Event of Default.
(b) Except as otherwise set forth in this Agreement, without the prior
written consent of the Holders of such Note, no amendment, consent or waiver
shall extend the originally scheduled time or times of payment of the principal
of any Note or alter the time or times of payment of interest on such Note or
the amount of the principal thereof or the rate of interest thereon or permit
any subordination of the principal or interest on any such Note other than as
expressly provided in Section 11.
(c) Except as otherwise set forth in this Agreement, (i) without the
prior written consent of each Lender, no amendment, consent or waiver shall
affect the amounts or extend the time of any of the Lenders' Commitments and
(ii) without the prior written consent of the Administrative Agent, no
amendment, consent or waiver shall affect the right or duties of the
Administrative Agent, including without limitation the provisions of Section 16.
(d) No Restricted Subsidiary of the Company which is a "significant
subsidiary" (as defined in Regulation S-X under the Securities Exchange Act of
1934) shall be released from the Subsidiary Guaranty without the prior unanimous
written consent of each of the Holders pursuant to this Section 27.1(d).
(e) Neither the definition of "Majority Holders", nor the provisions of
this Section 27.1, may be amended without the prior unanimous written consent of
each of the Holders.
27.2. COMPANY'S CONSENT NOT REQUIRED FOR CERTAIN AMENDMENTS.
Notwithstanding any provision of this Agreement or the other Loan Documents to
the contrary, no consent, written or otherwise, of the Company shall be
necessary or required in connection with any amendment to Section 16, and any
such amendment shall be effected solely by and among Administrative Agent and
the Holders, provided that no such amendment shall impose any obligation on the
Company.
27.3. COURSE OF DEALING. No course of dealing or delay or omission on
the part of the Administrative Agent or any Lender or Holder in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon the Company shall entitle the Company to other or
further notice or demand in similar or other circumstances.
28. SEVERABILITY.
84
-78-
The provisions of this Agreement are severable and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
29. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
29.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Company
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Company or one or more of its
Subsidiaries, in connection with this Agreement or otherwise, by a Section 20
Subsidiary. The Company, for itself and each of its Subsidiaries, hereby
authorizes (a) such Section 20 Subsidiary to share with the Administrative
Agent, each Lender and each Holder any information delivered to such Section 20
Subsidiary by the Company or any of its Subsidiaries, and (b) the Administrative
Agent, each Lender and each Holder to share with such Section 20 Subsidiary any
information delivered to the Administrative Agent, such Lender or such Holder by
the Company or any of its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Lender to enter into this Agreement or of
such Holder to purchase any Note; it being understood, in each case, that any
such Section 20 Subsidiary receiving such information shall be bound by the
confidentiality provisions of this Agreement. Such authorization shall survive
the payment and satisfaction in full of all of Obligations.
29.2. CONFIDENTIALITY. Each of the Lenders, the Holders and the
Administrative Agent agrees, on behalf of itself and each of its affiliates,
directors, officers, employees and representatives, to use reasonable
precautions to keep confidential, in accordance with their customary procedures
for handling confidential information of the same nature and in accordance with
safe and sound banking practices, any non-public information supplied to it by
the Company or any of its Subsidiaries pursuant to this Agreement that is
identified by such Person as being confidential at the time the same is
delivered to any of the Lenders, the Holders or the Administrative Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this Section 29, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel, auditors or accounts for any of
the Lenders, the Holders or the Administrative Agent, (d) to bank examiners or
any other regulatory authority having jurisdiction over any of the Lenders, the
Holders or the Administrative Agent, (e) to the Administrative Agent, any
Lender, any Holder or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Lenders, the Administrative Agent or
any Section 20 Subsidiary is a party, or in connection with the enforcement of
rights or remedies hereunder or under any other Loan Document, (g) to a
Subsidiary or affiliate of such Lender or such Holder as provided in Section
29.1 or (h) to any assignee! or participant (or prospective assignee or
participant) so long as such assignee or participant agrees to be bound by the
provisions of Section 20.6.
85
-79-
29.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Lenders, the Holders and the Administrative
Agent shall, prior to disclosure thereof, notify the Company of any request for
disclosure of any such non-public information by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender, such Holder or the
Administrative Agent by such governmental agency) or pursuant to legal process,
and shall consult with the Company on the advisability of taking legally
available steps to resist or narrow any such request. In the event that such
steps are not available or effective, or are deemed inadvisable by counsel to
such Lender, such Holder or the Administrative Agent, as the case may be, or in
the event that the Company waives compliance with the provisions of this Section
29.3, such Lender, such Holder or the Administrative Agent, and/or its
respective representatives, as the case may be, may disclose to any tribunal
only that portion of such non-public information which it is advised by counsel
is legally required to be disclosed, and shall exercise reasonable efforts to
obtain assurances that confidential treatment will be accorded such non-public
information.
29.4. OTHER. In no event shall any Lender, Holder or the Administrative
Agent be obligated or required to return any materials furnished to it or any
Section 20 Subsidiary by the Company or any of its Subsidiaries which such
Lender, Holder Section 20 Subsidiary or Administrative Agent is required to
retain pursuant to any requirement of law or rule or regulation of any
governmental agency. The obligations of each Lender and each Holder under this
Section 29 shall supersede and replace the obligations of such Lender or such
Holder under any confidentiality letter in respect of this financing signed and
delivered by such Lender or such Holder to the Company prior to the date hereof
and shall be binding upon any assignee of, or purchaser of any participation in,
any interest in any of the Notes from any Lender or any Holder.
86
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
TRANSTECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President & CFO
BANKBOSTON, N.A., individually and as
Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇ Megeaski
--------------------------------------
Name: ▇▇▇▇ Megeaski
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
FIRST CHICAGO CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
87
EXHIBIT A
PAYMENT OF THIS BRIDGE NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE PRIOR
PAYMENT IN FULL IN CASH OR CASH EQUIVALENTS OF ALL SENIOR DEBT, AS DEFINED IN
THAT CERTAIN PURCHASE AGREEMENT REFERRED TO BELOW, A COPY OF WHICH WILL BE MADE
AVAILABLE TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE ADMINISTRATIVE AGENT.
FORM OF BRIDGE NOTE
$[___________] _____________ __, ____"
FOR VALUE RECEIVED, the undersigned TRANSTECHNOLOGY CORPORATION, a
Delaware corporation ("TransTechnology"), hereby promises to pay (without setoff
or counterclaim) to the order of [INSERT LENDER], a [insert entity] (the
"Lender"), at the Administrative Agent's Head Office (as defined in the Purchase
Agreement referred to below):
(a) prior to or on August __, 2004" \@ "MMMM d, yyyy" \*
charformat August __, 2000 the principal amount of [INSERT AMOUNT]
DOLLARS ($____), evidencing the portion of the Bridge Loan made by the
Lender to TransTechnology pursuant to the Senior Subordinated Note
Purchase Agreement dated as of August 31, 1999 (as amended, restated,
modified, varied and in effect from time to time, the "Purchase
Agreement"), by and among TransTechnology, the lending institutions
party thereto (the "Lenders"), and BankBoston, N.A., as administrative
agent for the Lenders (the "Administrative Agent");
(b) the principal outstanding hereunder from time to time at
the times provided in the Purchase Agreement; and
(c) interest from the date hereof on the principal amount from
time to time outstanding to and including the maturity hereof at the
rates and terms and in all cases in accordance with the terms of the
Purchase Agreement.
This Note evidences borrowings under and has been issued by
TransTechnology in accordance with the terms of the Purchase Agreement. The
Lender and any holder hereof is entitled to the benefits of the Purchase
Agreement and the other Loan Documents, and may enforce the agreements of
TransTechnology contained therein, and any holder hereof may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof. All capitalized
terms used in this Note and not otherwise defined herein shall have the same
meanings herein as in the Purchase Agreement.
TransTechnology irrevocably authorizes the Lender to make or cause to
be made, at the time of receipt of any payment of principal of this Note, an
appropriate notation on the grid attached to this Note, or the continuation of
such grid, or any other similar record,
88
-2-
including computer records, reflecting the receipt of such payment. The
outstanding amount of the Lender's portion of the Bridge Loan set forth on the
grid attached to this Note, or the continuation of such grid, or any other
similar record, including computer records, maintained by the Lender with
respect to its portion of the Bridge Loan shall be PRIMA FACIE evidence of the
principal amount of the Lender's portion of the Bridge Loan owing and unpaid to
the Lender, but the failure to record, or any error in so recording, any such
amount on any such grid, continuation or other record shall not limit or
otherwise affect the obligation of TransTechnology hereunder or under the
Purchase Agreement to make payments of principal of and interest on this Note
when due.
TransTechnology has the right in certain circumstances and the
obligation under certain other circumstances to prepay the whole or part of the
principal of this Note on the terms and conditions specified in the Purchase
Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Purchase Agreement.
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any future occasion.
TransTechnology and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
This Note is subject to conversion into a Term Note on the terms and
conditions specified in the Purchase Agreement.
THIS NOTE AND THE OBLIGATIONS OF TRANSTECHNOLOGY HEREUNDER SHALL FOR
ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). TRANSTECHNOLOGY AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON
TRANSTECHNOLOGY BY MAIL AT THE ADDRESS SPECIFIED IN SS.21 OF THE PURCHASE
AGREEMENT. TRANSTECHNOLOGY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
89
-3-
TRANSTECHNOLOGY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO
ANY PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS NOTE, ANY
RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF ANY SUCH RIGHTS OR
OBLIGATIONS.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the Commonwealth of Massachusetts.
90
-4-
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed
under seal in its corporate name by its duly authorized officer as of the day
and year first above written.
TRANSTECHNOLOGY CORPORATION
By: _____________________________________________
Name:
Title:
▇▇
-▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇ of Balance of
of Bridge Loan Principal Paid Principal Notation
Date or Prepaid Unpaid Made By:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
92
EXHIBIT B
PAYMENT OF THIS TERM NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE PRIOR
PAYMENT IN FULL IN CASH OR CASH EQUIVALENTS OF ALL SENIOR DEBT, AS DEFINED IN
THAT CERTAIN PURCHASE AGREEMENT REFERRED TO BELOW, A COPY OF WHICH WILL BE MADE
AVAILABLE TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE ADMINISTRATIVE AGENT.
FORM OF TERM NOTE
$[___________] _____________ __, ____
FOR VALUE RECEIVED, the undersigned TRANSTECHNOLOGY CORPORATION, a
Delaware corporation ("TransTechnology"), hereby promises to pay (without setoff
or counterclaim) to the order of [INSERT LENDER], a [insert entity] (the
"Lender"), at the Administrative Agent's Head Office (as defined in the Purchase
Agreement referred to below):
(a) prior to or on August __, 2004" \@ "MMMM d, yyyy" \*
charformat August __, 2009 the principal amount of [INSERT AMOUNT]
DOLLARS ($____), evidencing the portion of the Term Loan made by the
Lender to TransTechnology pursuant to the Senior Subordinated Note
Purchase Agreement dated as of August 31, 1999 (as amended, restated,
modified, varied and in effect from time to time, the "Purchase
Agreement"), by and among TransTechnology, the lending institutions
party thereto (the "Lenders"), and BankBoston, N.A., as administrative
agent for the Lenders (the "Administrative Agent");
(b) the principal outstanding hereunder from time to time at
the times provided in the Purchase Agreement; and
(c) interest from the date hereof on the principal amount from
time to time outstanding to and including the maturity hereof at the
rates and terms and in all cases in accordance with the terms of the
Purchase Agreement.
This Note evidences borrowings under and has been issued by
TransTechnology in accordance with the terms of the Purchase Agreement. The
Lender and any holder hereof is entitled to the benefits of the Purchase
Agreement and the other Loan Documents, and may enforce the agreements of
TransTechnology contained therein, and any holder hereof may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof. All capitalized
terms used in this Note and not otherwise defined herein shall have the same
meanings herein as in the Purchase Agreement.
TransTechnology irrevocably authorizes the Lender to make or cause to
be made, at the time of receipt of any payment of principal of this Note, an
appropriate notation on the grid attached to this Note, or the continuation of
such grid, or any other similar record, including computer records, reflecting
the receipt of such payment. The outstanding
93
-2-
amount of the Lender's portion of the Term Loan set forth on the grid attached
to this Note, or the continuation of such grid, or any other similar record,
including computer records, maintained by the Lender with respect to its portion
of the Term Loan shall be prima facie evidence of the principal amount of the
Lender's portion of the Term Loan owing and unpaid to the Lender, but the
failure to record, or any error in so recording, any such amount on any such
grid, continuation or other record shall not limit or otherwise affect the
obligation of TransTechnology hereunder or under the Purchase Agreement to make
payments of principal of and interest on this Note when due.
TransTechnology has the right in certain circumstances and the
obligation under certain other circumstances to prepay the whole or part of the
principal of this Note on the terms and conditions specified in the Purchase
Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Purchase Agreement.
No delay or omission on the part of the Lender or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Lender or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any future occasion.
TransTechnology and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF TRANSTECHNOLOGY HEREUNDER SHALL FOR
ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). TRANSTECHNOLOGY AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON
TRANSTECHNOLOGY BY MAIL AT THE ADDRESS SPECIFIED IN SS.21 OF THE PURCHASE
AGREEMENT. TRANSTECHNOLOGY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
TRANSTECHNOLOGY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO
ANY PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS NOTE, ANY
RIGHTS OR OBLIGATIONS
94
-3-
HEREUNDER, OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the Commonwealth of Massachusetts.
95
-4-
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed
under seal in its corporate name by its duly authorized officer as of the day
and year first above written.
TRANSTECHNOLOGY CORPORATION
By: __________________________________________
Name:
Title:
▇▇
-▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇ of Balance of
of Term Loan Principal Paid Principal Notation
Date or Prepaid Unpaid Made By:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
97
EXHIBIT C
[FORM OF EXCHANGE NOTE]
(Face of Note)
================================================================================
CUSIP #______
[Series A] [Series B] Senior Subordinated Notes due 2009
No.__ $_____
TransTechnology Corporation
promises to pay to______________________________________________
or registered assigns,
the principal sum of________________________________________
Dollars on ________, 2009.
Interest Payment Dates: August 31, November 30, February 28 and May 31
Record Dates: August 15, November 15, February 14 and May 15
DATED: ____________, 200_
TRANSTECHNOLOGY CORPORATION
BY:
------------------------------
Name:
Title:
(SEAL)
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:
---------------------------
Name:
Title:
================================================================================
98
-2-
(Back of Note)
[Series A] [Series B] Senior Subordinated Notes due 2009
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS OF THE
INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE INDENTURE]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. TransTechnology Corporation, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at [if subject to the Fixed Rate, insert Fixed Rate][the Variable Rate, as
defined in the Indenture to which this Note is subject]% per annum from
__________________ until maturity and shall pay the Liquidated Damages payable
pursuant to Section 5 of the Registration Rights Agreement referred to below.
The Company will pay interest and Liquidated Damages semi-annually on August 31,
November 31, February 28 and May 31 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand to the extent lawful at a rate that is 2% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the August 15, November
15, February 14, or May 15 next preceding the Interest Payment Date, even if
such Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. Principal, premium, if any, and interest and Liquidated
Damages on the Notes will be payable at the office or agency of the Company
maintained for such purpose or, at the option of the Company, payment of
interest and Liquidated Damages may be made by check mailed to the Holders of
the Notes at their respective addresses set forth in the register of Holders of
Notes; provided that all payments of principal, premium, interest and Liquidated
Damages with respect to Notes the Holders of which have given wire transfer
instructions to the Company prior to the Record Date will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof. Until otherwise designated by the Company, the Company's office
or agency in New York will be the office of the Trustee maintained for such
purpose. The Notes will be issued in denominations of $1,000 and integral
multiples thereof. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
99
-3-
4. INDENTURE AND SUBORDINATION. The Company issued the Notes
under an Indenture dated as of August 31, 2000 ("the Indenture") between the
Company and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are general unsecured
obligations of the Company limited to $75.0 million in aggregate principal
amount.
The payment of the Notes will, to the extent set forth in the
Indenture, be subordinated in right of payment to the prior payment in full in
cash or cash equivalents of all Senior Debt.
5. OPTIONAL REDEMPTION.
(a) The Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 10 nor more than
30 days' notice, at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon and Liquidated Damages under
and as defined in the Registration Right Agreement referred to below with
respect thereto, to the applicable redemption date.
(b) Notwithstanding the provisions of clause (a), any Notes held
by a Fixed Rate Holder (as defined in the Indenture) shall not be subject to
redemption at the Company's option until August 31, 2005, and from and after
August 31, 2005 the amount required to be paid in redemption of any such Note
shall be equal to the outstanding principal amount thereof, PLUS any accrued but
unpaid interest and Liquidated Damages thereon, to the applicable redemption
date, PLUS a premium equal to the product of (i) the principal amount of such
Note multiplied by (ii) the percentage calculated by multiplying (A) the fixed
interest rate applicable to such Note by (B) the percentage set forth in the
table below opposite the period in which such redemption occurs:
Period Percentage
------ ----------
From and including August 31, 2005 through 50%
August 30, 2006
From and including August 31, 2006 through 33.33%
August 30, 2007
From and including August 31, 2007 through 16.66%
August 30, 2008
From and including August 31, 2008 through 0%
August 30, 2009
6. MANDATORY REDEMPTION.
Except as set forth in Paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, each Holder of Notes will
have the right to require the Company to make an offer (a "Change of Control
Offer") to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages
100
-4-
thereon, if any, to the date of purchase (the "Change of
Control Payment"). Within 15 Business Days following any Change of Control, the
Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"), pursuant to the procedures required by the
Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, when the aggregate amount of Excess Proceeds exceeds $5.0 million
the Company will be required to make an offer to all Holders of Notes and all
holders of other pari passu Indebtedness containing provisions similar to those
set forth in the Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the date of purchase, in accordance
with the procedures set forth in the Indenture and such other Indebtedness. To
the extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and such
other Indebtedness tendered into such Asset Sale Offer surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and such other Indebtedness to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 10 days but not more than 30 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. Notes in denominations
larger than $1,000 may be redeemed in part. If any Note is to be redeemed in
part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company or the Registrar is not required to
transfer or exchange any Note selected for redemption. Also, the Company or the
Registrar is not required to transfer or exchange any Notes for a period of 15
days before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Notes or the Subsidiary Guarantees may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes) and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding
101
-5-
Notes (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes). Without the consent
of any Holder of Notes, the Company and the Trustee may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation, or sale of all or substantially
all of the Company's assets, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not prohibited by the subordination provisions
of the Indenture); (ii) default in payment when due of principal of or premium,
if any, on the Notes (whether or not prohibited by the subordination provisions
of the Indenture); (iii) failure by the Company or any of its Subsidiaries for
30 days after notice to comply with Section 4.07, 4.09, 4.10 or 4.15 of the
Indenture; (iv) failure by the Company or any of its Subsidiaries for 60 days
after notice to comply with any of its other agreements in the Indenture or the
Notes; (v) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created
after the date of the Indenture, which default results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness the maturity of which has been so accelerated, aggregates $5.0
million or more (other than Existing Indebtedness to the extent it is secured by
or paid by the drawing against a letter of credit permitted to be issued under
the Indenture); (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days; (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Significant Subsidiaries as set forth in the Indenture; and (viii) except as
permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid in any material respect or
shall cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least a majority in principal
amount of the then outstanding Notes may declare all the Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency as set forth in
the Indenture, with respect to the Company, any Significant Subsidiary or any
group of Subsidiaries, that taken together would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required, upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
102
-6-
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall not
have any liability for any obligations of the Company or any Guarantor under the
Notes, the Subsidiary Guarantees, the Indenture or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of August 31, 1999, between the Company and the parties named
on the signature pages thereof (the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
103
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:________________ Your Signature:_________________________
(Sign exactly as your name
appears on the Note)
SIGNATURE GUARANTEE:
-------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
104
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $_____
Date:______ Your Signature:______________________________
(Sign exactly as your name appears on
the Note)
Tax Identification No:________________________
SIGNATURE GUARANTEE
_____________________________
Participant in a Recognized Signature
Guarantee Medallion Program
105
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)
The following changes of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Amount of Amount of Principal Amount
decrease in increase in of this Signature of
Principal Principal Global Note authorized officer
Amount of Amount of following such of Trustee or
Date of Exchange this Global Note this Global Note decrease (or increase) Custodian
---------------- ---------------- ---------------- ---------------------- ------------------
(1) This should be included only if the Note is issued in global form.
106
EXHIBIT D
-------------------------------------------------------------------------------
TRANSTECHNOLOGY CORPORATION
SERIES A AND SERIES B
SENIOR SUBORDINATED NOTES DUE 2009
INDENTURE
---------------------------------------
Dated as of August 31, 2000
---------------------------------------
STATE STREET BANK AND TRUST COMPANY
Trustee
-------------------------------------------------------------------------------
107
CROSS-REFERENCE TABLE*
(a) TRUST INDENTURE
Act Section Indenture Section
310(a)(1)........................................................................................7.10
(a)(2)...........................................................................................7.10
(a)(3)...........................................................................................N.A.
(a)(4)...........................................................................................N.A.
(a)(5)...........................................................................................7.10
(i)(b)...........................................................................................7.10
(ii)(c)..........................................................................................N.A.
311(a)...........................................................................................7.11
(b)..............................................................................................7.11
(iii(c)..........................................................................................N.A.
312(a)...........................................................................................2.05
(b)..............................................................................................11.03
(iv)(c)..........................................................................................11.03
313(a)...........................................................................................7.06
(b)(2)...........................................................................................7.07
(v)(c)...........................................................................................7.06;
12.02
(vi)(d)..........................................................................................7.06
314(a)...........................................................................................4.03;
12.02
(c)(1)...........................................................................................12.04
(c)(2)...........................................................................................12.04
(c)(3)...........................................................................................N.A.
(vii)(e).........................................................................................11.05
(f)..............................................................................................NA
315 (a)..........................................................................................7.01
(b)..............................................................................................7.05,
12.02
(A)(c)...........................................................................................7.01
(d)..............................................................................................7.01
(e)..............................................................................................6.11
316 (a)(last sentence)...........................................................................2.09
(a)(1)(A)........................................................................................6.05
(a)(1)(B)........................................................................................6.04
(a)(2)...........................................................................................N.A.
(b)..............................................................................................6.07
(B)(c)...........................................................................................2.12
317(a)(1)........................................................................................6.08
(a)(2)...........................................................................................6.09
(b)..............................................................................................2.04
318 (a)..........................................................................................12.01
(b)..............................................................................................N.A.
(c)..............................................................................................12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
108
TABLE OF CONTENTS
-----------------
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY
REFERENCE...............................................................................................1
Section 1.01. Definitions..............................................................1
Section 1.02. Other Definitions........................................................19
Section 1.03. Terms of Tia.............................................................19
Section 1.04. Rules of Construction....................................................20
ARTICLE 2. THE NOTES....................................................................................20
Section 2.01. Form and Dating..........................................................20
Section 2.02. Execution and Authentication.............................................22
Section 2.03. Registrar and Paying Agent...............................................22
Section 2.04. Paying Agent to Hold Money in Trust......................................23
Section 2.05. Holder Lists.............................................................23
Section 2.06. Transfer and Exchange....................................................24
Section 2.07. Replacement Notes........................................................28
Section 2.08. Outstanding Notes........................................................28
Section 2.09. Treasury Notes...........................................................29
Section 2.10. Temporary Notes..........................................................29
Section 2.11. Cancellation.............................................................29
Section 2.12. Defaulted Interest.......................................................30
SECTION 2.13 Special Transfer Provisions..............................................30
ARTICLE 3. REDEMPTION AND PREPAYMENT....................................................................34
Section 3.01. Notices to Trustee.......................................................34
Section 3.02. Selection of Notes to Be Redeemed........................................34
Section 3.03. Notice of Redemption.....................................................35
Section 3.04. Effect of Notice of Redemption...........................................36
Section 3.05. Deposit of Redemption Price..............................................36
Section 3.06. Notes Redeemed in Part...................................................36
Section 3.07. Optional Redemption......................................................36
Section 3.08. Mandatory Redemption.....................................................37
Section 3.09. Offer to Purchase by Application of Excess Proceeds......................37
ARTICLE 4. COVENANTS....................................................................................39
Section 4.01. Payment of Notes.........................................................39
Section 4.02. Maintenance of Office or Agency..........................................40
Section 4.03. Reports..................................................................40
Section 4.04. Compliance Certificate...................................................41
Section 4.05. Taxes....................................................................42
Section 4.06. Stay, Extension and Usury Laws...........................................42
109
ii
Section 4.07. Restricted Payments......................................................43
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries...........45
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock...............46
Section 4.10. Asset Sales.............................................................49
Section 4.11. Transactions with Affiliates.............................................50
Section 4.12. Liens....................................................................51
Section 4.13. No Senior Subordinated Debt..............................................51
Section 4.14. Corporate Existence......................................................51
Section 4.15. Offer to Repurchase Upon Change of Control...............................52
Section 4.16. Payments for Consent.....................................................53
Section 4.17. Additional Subsidiary Guarantees.........................................53
ARTICLE 5. SUCCESSORS...................................................................................53
Section 5.01. Merger, Consolidation, or Sale of Assets.................................53
Section 5.02. Successor Corporation Substituted........................................54
ARTICLE 6. DEFAULTS AND REMEDIES........................................................................54
Section 6.01. Events of Default........................................................54
Section 6.02. Acceleration.............................................................56
Section 6.03. Other Remedies...........................................................57
Section 6.04. Waiver of Past Defaults..................................................57
Section 6.05. Control by Majority......................................................57
Section 6.06. Limitation on Suits......................................................58
Section 6.07. Rights of Holders of Notes to Receive Payment............................58
Section 6.08. Collection Suit by Trustee...............................................58
Section 6.09. Trustee May File Proofs of Claim.........................................59
Section 6.10. Priorities...............................................................59
Section 6.11. Undertaking for Costs....................................................60
ARTICLE 7. TRUSTEE......................................................................................60
Section 7.01. Duties of Trustee........................................................60
Section 7.02. Rights of Trustee........................................................61
Section 7.03. Individual Rights of Trustee.............................................62
Section 7.04. Trustee's Disclaimer.....................................................62
Section 7.05. Notice of Defaults.......................................................62
Section 7.06. Reports by Trustee to Holders of the Notes...............................63
Section 7.07. Compensation and Indemnity...............................................63
Section 7.08. Replacement of Trustee...................................................64
Section 7.09. Successor Trustee by Merger, etc.........................................65
Section 7.10. Eligibility; Disqualification............................................65
Section 7.11 Preferential Collection of Claims Against Company........................66
110
iii
ARTICLE 8. [intentionally omitted].....................................................................66
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.............................................................66
Section 9.01. Without Consent of Holders of Notes......................................66
Section 9.02. With Consent of Holders of Notes.........................................67
Section 9.03. Compliance with Trust Indenture Act......................................68
Section 9.04. Revocation and Effect of Consents........................................68
Section 9.05. Notation on or Exchange of Notes.........................................69
Section 9.06. Trustee to Sign Amendments, etc..........................................69
ARTICLE 10. SUBORDINATION...............................................................................69
Section 10.01. Agreement to Subordinate.................................................69
Section 10.02. Certain Definitions......................................................70
Section 10.03. Liquidation; Dissolution; Bankruptcy.....................................70
Section 10.04. Default on Designated Senior Debt........................................71
Section 10.05. Acceleration of Securities...............................................72
Section 10.06. When Distribution Must Be Paid over......................................72
Section 10.07. Notice by Company........................................................73
Section 10.08. Subrogation..............................................................73
Section 10.09. Relative Rights..........................................................73
Section 10.10. Subordination May Not Be Impaired by Company.............................74
Section 10.11. Distribution or Notice to Representative.................................74
Section 10.12. Rights of Trustee and Paying Agent.......................................75
Section 10.13. Authorization to Effect Subordination....................................75
Section 10.14. Amendments...............................................................75
ARTICLE 11. SUBSIDIARY GUARANTEES.......................................................................76
Section 11.01. Guarantee................................................................76
Section 11.02. Subordination of Subsidiary Guarantee....................................77
Section 11.03. Limitation on Guarantor Liability........................................77
Section 11.04. Execution and Delivery of Subsidiary Guarantee...........................78
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.......................78
Section 11.06. Releases Following Sale of Assets or capital stock.......................79
ARTICLE 12. MISCELLANEOUS...............................................................................79
Section 12.01. Trust Indenture Act Controls.............................................79
Section 12.02. Notices..................................................................79
Section 12.03. Communication by Holders of Notes with Other Holders of Notes............81
Section 12.04. Certificate and Opinion as to Conditions Precedent.......................81
Section 12.05. Statements Required in Certificate or Opinion............................81
Section 12.06. Rules by Trustee and Agents..............................................82
Section. 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.82
111
iv
Section 12.08. Governing Law............................................................82
Section 12.09. No Adverse Interpretation of Other Agreements............................82
Section 12.10. Successors...............................................................82
Section 12.11. Severability.............................................................83
Section 12.12. Counterpart Originals....................................................83
Section 12.13. Table of Contents, Headings, etc.........................................83
112
v
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF SUBORDINATED SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
113
INDENTURE dated as of August 31, 2000 between TransTechnology
Corporation, a Delaware corporation (the "Company"), the Guarantors named
herein, and State Street Bank and Trust Company, a Massachusetts trust company,
as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the Company's
Series A Senior Subordinated Notes due 2009 (the "Series A Notes") and the
Company's Series B Senior Subordinated Notes due 2009 (the "Series B Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit A-1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Administrative Agent" means BankBoston, N.A., in its capacity as
Administrative Agent under the Note Purchase Agreement, and any successor
Administrative Agent under the Note Purchase Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person but in any event excluding the agent and
lenders under the Senior Credit Facility. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person shall be deemed to be control.
114
2
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by Sections 4.15
or 5.01 and not by Section 4.10 hereof) and (ii) the issue or sale by the
Company or any of its Restricted Subsidiaries of Equity Interests of any of the
Company's Restricted Subsidiaries, in the case of either clause (i) or (ii),
whether in a single transaction or a series of related transactions (a) that
have a fair market value in excess of $1.0 million or (b) for net proceeds in
excess of $1.0 million. Notwithstanding the foregoing, the following items shall
not be deemed to be Asset Sales: (i) a transfer of assets by the Company to a
Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary, (ii) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary, and (iii) a
Restricted Payment that is permitted by Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or
115
3
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any lender party to the Senior Credit Facility or with any domestic
commercial bank having capital and surplus in excess of $500 million and a
▇▇▇▇▇▇▇▇ Bank Watch Rating of "B" or better, (iv) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper having the highest rating obtainable from ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Corporation and in each case maturing within
six months after the date of acquisition and (vi) money market funds at least
95% of the assets of which constitute Cash Equivalents of the kinds described in
clauses (i) - (v) of this definition.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act), (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above) becomes the "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 35% of the Voting Stock of the
Company (measured by voting power rather than number of shares); or (iv) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"Company" means TransTechnology Corporation, a Delaware corporation,
and any and all successors thereto.
116
4
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income, minus
(v) non-cash items increasing such Consolidated Net Income for such period, in
each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash expenses of, a
Restricted Subsidiary of the referent Person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow only to the extent that a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior governmental approval (that
has not been obtained), and without direct or indirect restriction pursuant to
the terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof that is a
117
5
Guarantor, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar distributions
by that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) and without direct or indirect restriction pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iv) the cumulative effect of a change in
accounting principles shall be excluded, and (v) the Net Income of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to the
Company or one of its Restricted Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred equity (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred equity, less (a) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) effected subsequent to the date of this
Indenture in the book value of any asset owned by such Person or a consolidated
Restricted Subsidiary of such Person, (y) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Restricted Subsidiaries
(except, in each case, Permitted Investments), and (z) all unamortized debt
discount and expense and unamortized deferred charges as of such date, all of
the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture, or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Conversion Date" means August 31, 2000.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
118
6
"Credit Facilities" means, with respect to the Company and its
Restricted Subsidiaries, one or more debt facilities (including, without
limitation, the Senior Credit Facility) or commercial paper facilities with
banks, insurance companies, commercial finance companies or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit or Hedging Obligations, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A-1 hereto except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature; provided, however, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
Change of Control or an Asset Sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof.
"Domestic Restricted Subsidiary" means, with respect to the Company,
any Restricted Subsidiary of the Company that was formed under the laws of the
United States of America or any state, possession or commonwealth thereof or the
District
119
7
of Columbia, or that guarantees or otherwise provides credit support for any
Indebtedness of the Company.
"Domestic Subsidiary" means each current and any future Subsidiary of
the Company that is organized under the laws of the United States or any state,
possession or commonwealth thereof or the District of Columbia.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Senior Credit
Facility) in existence on the date of this Indenture, until such Indebtedness is
repaid.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations) and (ii)
the consolidated interest of such Person and its Restricted Subsidiaries that
was capitalized during such period, and (iii) any interest expense on
Indebtedness of another Person that is guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries (whether or not such Guarantee or Lien is called
upon) and (iv) the product of (a) all dividend payments, whether or not in cash,
on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined
120
8
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person and its Restricted Subsidiaries for such
period. In the event that the referent Person or any of its Restricted
Subsidiaries incurs, assumes, guarantees or redeems or prepays any Indebtedness
(other than revolving credit borrowings) or issues or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, redemption or prepayment of
Indebtedness, or such issuance or redemption of preferred stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
without giving effect to clause (iii) of the proviso set forth in the definition
of Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"Fixed Rate" means, with respect to any Note, the Fixed Rate payable
thereon pursuant to and as defined in the Note Purchase Agreement.
"Fixed Rate Holder" means any Holder of a Note other than (i) an
original holder of a Bridge Note issued pursuant to the Note Purchase Agreement,
(ii) an Affiliate of such an original holder, (iii) in the case of any such
original holder or Affiliate which is an investment fund, any other such fund
that is managed or advised by the same advisor of such original holder or
Affiliate, or by an Affiliate of such investment advisor, or (iv) any transferee
of a Note from any Person described in the foregoing clauses (i) - (iii) who
shall have taken such Note as a "Variable Rate Holder" under and as defined in
the Note Purchase Agreement.
121
9
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Guarantors" means (i) each current and future Domestic Restricted
Subsidiary of the Company, and (ii) any other Subsidiary of the Company that
executes a Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency changes.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person
122
10
of any indebtedness of any other Person. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount, and (ii) the principal
amount thereof in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in
Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York are authorized by law, regulation or
executive order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
123
11
"Liquidated Damages" means, at any time, all liquidated damages then
owing pursuant to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received directly or
indirectly by the Company or any of its Restricted Subsidiaries in respect of
any Asset Sale (including, without limitation, any cash received upon the sale
or other disposition of any non-cash consideration received in any Asset Sale),
net of the direct costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of Indebtedness (other than Indebtedness under the
Senior Credit Facility) secured by a Lien on the asset or assets that were the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
124
12
"Notes" means the Series A Notes and the Series B Notes.
"Note Purchase Agreement" means that certain Senior Subordinated Note
Purchase Agreement, dated as of August 31, 1999, by and among the Companies,
BankBoston N.A., as administrative agent and purchaser and the other purchaser
named therein, providing for the purchase and sale of up to $75.0 million in
aggregate principal amount of Senior Subordinated Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company that is a Guarantor; (b) any Investment in
Cash Equivalents; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Company and a Guarantor or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company that is a Guarantor; (d) any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof;
(e) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company; (f) Investments
existing on the date of the Indenture; (g)
125
13
receivables owing to the Company or any Wholly Owned Restricted Subsidiary of
the Company if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided that
such trade terms may include concessionary terms as the Company or such
Restricted Subsidiary deems reasonable under the circumstances; (h) loans or
advances to employees permitted by Section 4.11 hereof; (i) stock obligations or
securities received in settlement of debts created in the ordinary course of
business and owning to the Company or any of its Restricted Subsidiaries or in
satisfaction of judgments; (j) any Investment by the Company or any Restricted
Subsidiary of the Company consisting of intercompany loans to a Restricted
Subsidiary of the Company that is not a Guarantor; (k) Hedging Obligations
incurred to protect the Company and/or its Subsidiaries against fluctuations in
interest rates or currency exchange rates and not for purposes of speculation;
and (l) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (l) that are at the time outstanding, not to exceed
$5.0 million.
"Permitted Liens" means (i) Liens on assets of the Company, any of its
Restricted Subsidiaries or any of the Guarantors securing Senior Debt that was
permitted by the terms of this Indenture to be incurred; (ii) Liens in favor of
the Company; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property or assets existing at the time of acquisition
thereof or the acquisition of a Person owning such property or assets by the
Company or any Restricted Subsidiary of the Company, provided that such Liens
were in existence prior to the contemplation of such acquisition; (v) Liens to
secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of Section 4.09 hereof covering only the
assets acquired or financed with such Indebtedness; (vii) Liens existing on the
date of this Indenture; (viii) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (ix) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed $5.0
million at any one time outstanding and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or
126
14
materially impair the use thereof in the operation of business by the Company or
such Restricted Subsidiary.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes on terms at least as favorable to the Holders of Notes as
those contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement
with respect to the Notes, dated as of August 31, 1999, by and among the Company
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
127
15
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note in
the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in
the form of Exhibit A-2 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Resale Restriction Termination Date" means, as to any Note, the date
which is two years after the later of the date of issuance thereof and the last
date on which the Company or any of its Affiliates held any beneficial interest
in such Note or a predecessor to such Note.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means, with respect to any person, each
Subsidiary of such Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
128
16
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means that certain Second Amended and Restated
Credit Agreement, dated as of July 30, 1995, amended and restated as of July 24,
1998, and further amended and restated as of August 31, 1999, by and among the
Company, certain of its Subsidiaries, the financial institutions named therein
as Lenders, BHF-BANK Aktiengesellschaft, as DM Fronting Bank, ABN AMRO Bank
N.V., as Syndication Agent, The First National Bank of Chicago, as Documentation
Agent, and BankBoston, N.A., as Sterling Fronting Bank, Issuing Bank, and
Administrative Agent, providing for up to $250.0 million of revolving credit and
term loan borrowings, and including any related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Senior Subordinated Notes" means the Bridge Notes issued pursuant to
the Note Purchase Agreement and the Term Notes.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Guaranty" means the Subordinated Guaranty by each
Guarantor of the Company's payment obligations under the Senior Subordinated
Notes, executed pursuant to the provisions of the Note Purchase Agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any
129
17
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination thereof)
and (ii) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"Subsidiary Guarantee" means a Guarantee of the Notes by any Guarantor.
"Term Notes" means the Term Notes issued pursuant to the Note Purchase
Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 ▇.▇.▇.▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note in the form of
Exhibit A-1 attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary: (i) has no Indebtedness
other than Non-Recourse Debt; (ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (iii) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (A) to subscribe for additional Equity Interests or (B) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (iv) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; and (v) has at least one director
on its board of directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least one executive
130
18
officer that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation compiled with the foregoing conditions and was
permitted by Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09
hereof the Company shall be in default of such covenant). The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under Section 4.09
hereof calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period, and (ii) no Default or Event
of Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Variable Rate" means, as to any Notes other than a Note bearing
interest at a Fixed Rate at any time, the variable rate of interest then
applicable to such Note under the terms of the Note Purchase Agreement, as shall
be certified by the Administrative Agent to the Trustee or any Holder upon three
(3) Business Days' prior written request.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned" means, when used with respect to any Subsidiary or
Restricted Subsidiary of a Person, a Subsidiary (or Restricted Subsidiary, as
131
19
appropriate) of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Subsidiaries (or
Wholly Owned Restricted Subsidiaries, as appropriate) of such Person and one or
more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as
appropriate) of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"......................................................4.11
"Asset Sale Offer"...........................................................3.09
"Authentication Order".......................................................2.02
"Change of Control Offer"....................................................4.15
"Change of Control Payment"..................................................4.15
"Change of Control Payment Date" ............................................4.15
"Commission".................................................................4.03
"Designated Senior Debt".....................................................10.02
"Event of Default"...........................................................6.01
"Excess Proceeds"............................................................4.10
"incur"......................................................................4.09
"Offer Amount"...............................................................3.09
"Offer Period"...............................................................3.09
"Paying Agent"...............................................................2.03
"Payment Blockage Notice"....................................................10.04
"Permitted Debt".............................................................4.09
"Permitted Junior Securities"................................................10.02
"Purchase Date"..............................................................3.09
"Registrar"..................................................................2.03
"Representative".............................................................10.02
"Restricted Payments"........................................................4.07
"Senior Debt"................................................................10.02
"Payment Blockage Notice"....................................................10.04
SECTION 1.03. TERMS OF TIA.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
132
20
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to
time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
133
21
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibits A-1 or A-2 attached hereto (including the Global Note
Legend thereon and the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Notes issued in definitive form shall be substantially in the
form of Exhibit A-1 attached hereto (but without the Global Note Legend thereon
and without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or by the
Custodian, at the direction of the Trustee, in accordance with instructions
given by or on behalf of the Holder thereof as required by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its Corporate Trust Office, as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Cedel, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Restricted Period shall be terminated
upon the receipt by the Trustee of (i) a written certificate from the
Depositary, together with copies of certificates from Euroclear and Cedel
certifying that they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who
acquired an interest therein during the Restricted Period pursuant to another
exemption from registration under the Securities Act and who will take delivery
of a beneficial ownership interest in a 144A Global Note bearing a Private
Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii)
an Officers' Certificate from the Company. Following the termination of the
Restricted Period, beneficial interests in the Regulation S Temporary Global
Note shall be exchanged for beneficial interests in Regulation S
134
22
Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note. The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel shall be applicable to transfers of beneficial
interests in the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes that are held by Participants through Euroclear or Cedel.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or
135
23
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
The Company shall, prior to the Record Date, notify the Paying Agent of
any wire transfer instructions for payments that it receives from Holders.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably
136
24
require of the names and addresses of the Holders of Notes and the Company shall
otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) The Global Notes. The Notes initially shall (i) be issued in the
form of Global Notes, (ii) be registered in the name of the Depositary or the
nominee of such Depositary, (iii) be delivered to the Trustee as custodian for
such Depositary and (iv) bear legends as set forth in subparagraph (g)(ii)
below.
Participants in, the Depositary shall have no rights under this
Indenture with respect to any Global Note held on their behalf by the
Depositary, or the Trustee as its Custodian, or under the Global Notes, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of each Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee, or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.
(b) Transfer of Global Notes. Transfers of Global Notes shall be
limited to transfers in whole, but not in part, to the Depositary, its
successors, or their respective nominees. Interests of beneficial owners in the
Global Notes may be transferred or exchanged for Definitive Notes in accordance
with the rules and procedures of the Depositary and this Indenture. In addition,
Definitive Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in Global Notes if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for any Global
Note, or that it will cease to be a "Clearing Agency" under the Exchange Act,
and in either case a successor Depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depositary
to issue Definitive Notes.
(c) Issuance of Definitive Notes. In connection with any transfer or
exchange of a portion of the beneficial interest in any Global Note to
beneficial owners pursuant to paragraph (b), the Registrar shall (if one or more
Definitive Notes are to be issued) reflect on its books and records the date and
a decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Definitive Note of like tenor and principal amount of
authorized denominations.
(d) Surrender of Global Notes. In connection with the transfer of
Global Notes as an entirety to beneficial owners pursuant to paragraph (b), the
Global
137
25
Notes shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the Global Notes, an equal aggregate principal amount at
maturity of Definitive Notes of like tenor of authorized denominations.
(e) Private Placement Legend. Any Definitive Note delivered in exchange
for an interest in a Global Note pursuant to subparagraph (b), (c) or (d) of
this Section 2.06 shall, except as otherwise provided by Section 2.13 hereof,
bear the Private Placement Legend.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends.
The following legends shall appear on the face of all Global Notes
and Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture:
(i) Private Placement Legend.
(A) Except as permitted by each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially
the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE
138
26
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS
OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3)
TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES
AND OTHER JURISDICTIONS."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to Section 2.06(f) or in
accordance with any of Section 2.13(d)(i) - (iii) (and all
Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note shall bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
CERTIFICATED
139
27
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN)."
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect
such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
140
28
(v) The Registrar shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (c) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
SECTION 2.07. REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance
141
29
with the provisions hereof, and those described in this Section as not
outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease
to be outstanding because the Company or an Affiliate of the Company holds the
Note; however, Notes held by the Company or a Subsidiary of the Company shall
not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of any thereof) holds, on a redemption date or maturity
date, money sufficient to pay Notes payable on that date, then on and after that
date such Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes
142
30
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following additional provisions shall apply with respect to the registration of
any proposed transfer of a Note to any Institutional Accredited Investor which
is not a QIB:
(i) the Registrar shall register the transfer of any Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the Resale Restriction Termination Date or
(y) the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit C hereto and any legal
opinions and certifications required thereby;
(ii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Note, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depositary's and
the Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, together with any
required legal opinions and certifications, the Registrar shall
register the transfer and reflect on its books and records the date and
a decrease in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to
143
31
the principal amount of the Notes to be transferred and the Company
shall execute and upon the order of the Company accompanied by an
Officers' Certificate, the Trustee shall authenticate Definitive Notes
in a principal amount equal to the principal amount of the Global Notes
to be transferred.
(b) Transfers to Non-U.S. Persons. The following additional provisions
shall apply with respect to the registration of any proposed transfer of an
Initial Note to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Initial
Note, whether or not such Note bears the Private Placement Legend, if
(x) the requested transfer is after the Resale Restriction Termination
Date or (y) the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto;
(ii) if the proposed transferee is a Participant and the Notes
to be transferred consist of Definitive Notes which after transfer are
to be evidenced by an interest in the Regulation S Global Note upon
receipt by the Registrar of (x) written instructions given in
accordance with the Depositary's and the Registrar's procedures and (y)
the appropriate certificate, if any, required by clause (y) of
paragraph (i) above, together with any required legal opinions and
certifications, the Registrar shall register the transfer and reflect
on its books and records the date and an increase in the principal
amount of the Regulation S Global Note in an amount equal to the
principal amount of Definitive Notes to be transferred, and the Trustee
shall cancel the Definitive Notes so transferred;
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Note, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depositary's and
the Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, together with any
required legal opinions and certifications, the Registrar shall
register the transfer and reflect on its books and records the date and
(A) a decrease in the principal amount of the Global Note from which
such interests are to be transferred in an amount equal to the
principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the Regulation S Global Note in an amount equal
to the principal amount of the Global Note to be transferred; and
(iv) until the first day after the end of the Restricted
Period, an owner of a beneficial interest in the Regulation S Temporary
Global Note may not transfer such interest to a transferee that is a
U.S. person or for the account or benefit of a U.S. person within the
meaning of Rule 902(o) of the Securities Act. During the Restricted
Period, all beneficial interests in the Regulation S Temporary Global
Note shall be transferred only through Cedel
144
32
or Euroclear, either directly if the transferor and transferee are
participants in such systems, or indirectly through organizations that
are participants, in accordance with (x) the written instructions given
in accordance with the Depositary's, Euroclear or Cedel's and the
Registrar's procedures and (y) if the proposed transferor has delivered
to the Registrar a certificate substantially in the form of Exhibit D
hereto; and
(v) upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Temporary Global Note may be
exchanged for interests in the Regulation S Permanent Global Note upon
certification to the Registrar that such interest are owned either by
Non-U.S. Persons or U.S. Persons who purchased such interests pursuant
to an exemption from, or transfer not subject to, the registration
requirements of the Securities Act.
Upon the expiration of the Restricted Period, the Company shall prepare
and execute the Regulation S Permanent Global Note in accordance with
the terms of this Indenture and deliver it to the Trustee for
authentication. The Trustee shall retain the Regulation S Permanent
Global Note as custodian for the Depositary. Any transfers of
beneficial ownership interests in the Regulation S Temporary Global
Note made in reliance on Regulation S shall thenceforth be recorded by
the Trustee by making an appropriate increase in the principal amount
of the Regulation S Permanent Global Note and a corresponding decrease
in the principal amount of the Regulation S Temporary Global Note. At
such time as the principal amount of the Regulation S Temporary Global
Note has been reduced to zero, the Trustee shall cancel the Regulation
S Temporary Global Note and deliver it to the Company.
(c) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note to a QIB
(excluding Non-U.S. Persons):
(i) the Registrar shall register the transfer of any Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the Resale Restriction Termination Date or
(y) such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that the
sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed a certification stating, or has otherwise
advised the Company and the Registrar in writing, that it is purchasing
the Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is
145
33
being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the Notes
to be transferred consist of Definitive Notes which after transfer are
to be evidenced by an interest in the 144A Global Note, upon receipt by
the Registrar of written instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall
register the transfer and reflect on its book and records the date and
an increase in the principal amount of the 144A Global Note in an
amount equal to the principal amount of Definitive Notes to be
transferred, and the Trustee shall cancel the Definitive Note so
transferred; and
(iii) if the proposed transferor is a Participant seeking to
transfer an interest in a Global Note, upon receipt by the Registrar of
written instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
principal amount of the Global Note from which interests are to be
transferred in an amount equal to the principal amount of the Notes to
be transferred and (B) an increase in the principal amount of the 144A
Global Note in an amount equal to the principal amount of the Global
Note to be transferred.
(d) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the registration of transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) the circumstances contemplated by paragraph
(a)(i)(x) of this Section 2.13 exist, (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act or (iii) such Note has been sold pursuant to an effective registration
statement under the Securities Act.
(e) Other Transfers. If a Holder proposes to transfer a Definitive
Restricted Note or any interest in a Global Restricted Note pursuant to any
exemption from the registration requirements of the Securities Act other than as
provided for by Section 2.13(a), (b) and (c) hereof, the Registrar shall only
register such transfer or exchange if such transferor delivers an Opinion of
Counsel satisfactory to the Company and the Registrar that such transfer is in
compliance
146
34
with the Securities Act and the terms of this Indenture; provided, however, that
the Company may, based upon the opinion of its counsel, instruct the Registrar
by order accompanied by an Officers' Certificate not to register such transfer
in any case where the proposed transferee is not a QIB, Non-U.S. Person or
Institutional Accredited Investor.
(f) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.06 hereof or this Section
2.13. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable prior written notice to the Registrar.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected
147
35
shall be in amounts of $1,000 or whole multiples of $1,000; except that if all
of the Notes of a Holder are to be redeemed, the entire outstanding amount of
Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 3.03. NOTICE OF REDEMPTION
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
148
36
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) The Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 10 nor more than 30
days' notice, at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon, to the
applicable redemption date.
149
37
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
any Notes held by a Fixed Rate Holder shall not be subject to redemption at the
Company's option until the fifth anniversary of the Conversion Date, and from
and after the fifth anniversary of the Conversion Date the amount required to be
paid in redemption of any such Note shall be equal to the outstanding principal
amount thereof, PLUS any accrued but unpaid interest and Liquidated Damages
thereon, to the applicable redemption date, PLUS a premium equal to the product
of (a) the principal amount of such Note multiplied by (b) the percentage
calculated by multiplying (i) the Fixed Rate applicable to such Note by (ii) the
percentage set forth in the table below opposite the period in which such
redemption occurs:
Period Percentage
------ ----------
From and including August 31, 2005 through August 30, 2006 50%
From and including August 31, 2006 through August 30, 2007 33.33%
From and including August 31, 2007 through August 30, 2008 16.66%
From and including August 31, 2008 through August 30, 2009 0%
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth in Sections 4.10 and 4.15 hereof, the Company shall
not be required to make mandatory redemption payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall
150
38
purchase the principal amount of Notes required to be purchased pursuant to
Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has
been tendered, all Notes tendered in response to the Asset Sale Offer. Payment
for any Notes so purchased shall be made in the same manner as interest payments
are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be
made to all Holders. The notice, which shall govern the terms of the Asset Sale
Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
151
39
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of
152
40
10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
2% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the
Securities and Exchange Commission (the "Commission"), so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes (i) all quarterly
and annual financial information that would be required to be contained in a
filing with
153
41
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports, in each case within the
time periods specified in the Commission's rules and regulations. In addition,
following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(b) In addition, for so long as any Notes remain outstanding, the
Company and the Guarantors shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Any
materials required to be furnished to Holders of Notes by this Section 4.03
shall discuss, in reasonable detail, either on the face of the financial
statements included therein or in the footnotes thereto and in any Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if
154
42
any, on the Notes is prohibited or if such event has occurred, a description of
the event and what action the Company is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
155
43
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the Company or a
Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value (including, without limitation, in connection with
any merger or consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company; (iii) make any payment
on or with respect to, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes, except a
payment of interest or principal at Stated Maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted by
clauses (ii), (iii), (iv), (v) and (vi) of the next succeeding paragraph), is
less than the sum, without duplication, of (i) 50% of the Consolidated Net
Income of the Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the date of this
Indenture to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus (ii) 100% of the aggregate net cash proceeds
received by the Company since the date of this Indenture as a contribution to
its common equity capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or from the issue or
156
44
sale of Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Subsidiary of the
Company), plus (iii) to the extent that any Restricted Investment that was made
after the date of this Indenture is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (A) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebtedness that is subordinated to the Notes or Equity
Interests of the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of the
Company) of, other Equity Interests of the Company (other than any Disqualified
Stock); provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (c) (ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of Indebtedness that is
subordinated to the Notes with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; (iv) the payment of any dividend (in cash or
otherwise) by a Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis; (v) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company or
any Restricted Subsidiary of the Company; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests of the
Company or any Subsidiary shall not exceed $2.0 million in any twelve-month
period and no Default or Event of Default shall have occurred and be continuing
immediately after such transaction; or (vi) so long as no Default or Event of
Default has occurred and is continuing or would result therefrom, the Company
may declare and pay dividends in cash on or in respect of any of its Equity
Interests in an aggregate amount not to exceed $2.0 million paid in any period
of twelve (12) consecutive months.
The Board of Directors of the Company may designate any Restricted
Subsidiary (other than TransTechnology Engineered Components, LLC, a Delaware
limited liability company, or TransTechnology Canada Corporation, an Ontario
corporation) to be an Unrestricted Subsidiary if such designation would not
cause a Default. For purposes of making such determination, all outstanding
investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under clause (c) of this Section 4.07. All such
outstanding investments will be deemed to constitute investments in an amount
equal to the greatest of (x)
157
45
the net book value of such investments at the time of such designation, (y) the
fair market value of such investments at the time of such designation and (z)
the original fair market value of such investments at the time they were made.
Such designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined by the Board
of Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any opinion or appraisal required by this
Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
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
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries. However, the foregoing
restrictions will not apply to encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date of this Indenture,
(b) the Senior Credit Facility as in effect as of the date of this Indenture,
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in the Senior Credit Facility as in effect on the date of
this Indenture as determined in good faith by the Company's Board of Directors,
(c) the Note Purchase Agreement, the Notes and the Subsidiary
158
46
Guarantees, (d) applicable law, (e) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (f) customary non-assignment provisions in leases and other
contracts, (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (h) any agreement for the sale of a
Restricted Subsidiary or a substantial portion of a Restricted Subsidiary's
assets that restricts distributions by that Restricted Subsidiary pending its
sale, (i) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are not materially more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced as determined in good
faith by the Company's Board of Directors, (j) Liens securing Indebtedness
otherwise permitted to be incurred pursuant to the provisions of Section 4.12
that limit the right of the debtor to dispose of the assets securing such
Indebtedness, (k) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business and (l) restrictions on cash or
other deposits or net worth imposed by customers under contracts entered into in
the ordinary course of business.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and that the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock (other than to a Company or
the Restricted Subsidiaries of the Company); provided, however, that the Company
and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt)
or issue shares of Disqualified Stock and the Company's Restricted Subsidiaries
may incur Indebtedness (including Acquired Debt) and issue any shares of
preferred stock (to the extent otherwise permitted by this Indenture) if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro
159
47
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been issued, as
the case may be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this Section 4.09 will not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company and the Guarantors of
Indebtedness and letters of credit (with letters of credit being deemed
to have a principal amount equal to the stated amount thereof) and
other obligations under Credit Facilities in an aggregate principal
amount that does not exceed at any one time $25.0 million less the
aggregate amount of all Net Proceeds of Asset Sales applied to repay
Indebtedness under a Credit Facility pursuant to Section 4.10 hereof
(other than temporary paydowns pending final application of such Net
Proceeds);
(ii) the incurrence by the Company and the Guarantors of the
Existing Indebtedness and letters of credit (including reimbursement
obligations with respect thereto) supporting Existing Indebtedness
whether such letters of credit are incurred under the Senior Credit
Facility or otherwise;
(iii) the incurrence by the Company of Indebtedness
represented by the Notes;
(iv) the incurrence by the Company or any of the Guarantors of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of the Company or such Subsidiary, in an aggregate principal
amount, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness incurred pursuant
to this clause (iv), not to exceed $8.0 million at any time
outstanding;
(v) the incurrence by the Company or any of the Guarantors of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that is permitted by this Indenture to
be incurred under the first paragraph hereof or clauses (ii) or (iii)
of this paragraph;
(vi) the incurrence by the Company or any of the Guarantors of
intercompany Indebtedness between or among the Company and any
160
48
Guarantor; provided, however, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes and (ii)(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Subsidiary thereof and (B) any sale or
other transfer of any such Indebtedness to a Person that is not either
the Company or a Guarantor thereof shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Guarantor, as the case may be, that was not permitted by this clause
(vi);
(vii) the incurrence by the Company or any of the Guarantors
of Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding;
(viii) the guarantee by the Company or any of its Subsidiaries
or any of the Guarantors of Indebtedness of the Company or another
Guarantor that was permitted to be incurred by another provision of
this Section 4.09;
(ix) the incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (ix), and the issuance of preferred stock by Unrestricted
Subsidiaries;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness pursuant to this clause
(x) not to exceed $5.0 million at any time outstanding); or
(xi) the incurrence by the Restricted Subsidiaries that are
not Guarantors of International Facility Loans under (and as defined
in) the Senior Credit Facility; provided that the aggregate principal
amount of all Indebtedness outstanding under such International
Facility Loans after giving effect to such incurrence does not exceed
an amount equal to $35.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (x) above or is
entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies
161
49
with this Section 4.09. Accrual of interest, accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this Section 4.09; provided, in
each such case, that the amount thereof is included in Fixed Charges of the
Company as accrued (to the extent not already included in Fixed Charges).
SECTION 4.10. ASSET SALES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents; provided that the amount of (x) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet) of the
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or the Subsidiary
Guarantees) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) in the case of any Asset Sale
constituting the transfer (by merger or otherwise) of all of the Capital Stock
of a Restricted Subsidiary, any liabilities (as shown on such Restricted
Subsidiary's most recent balance sheet) of such Restricted Subsidiary (other
than contingent liabilities and liabilities that are by their terms subordinated
to the Notes or the Subsidiary Guarantees) that will remain outstanding after
such transfer and will not be a liability of the Company or any other Restricted
Subsidiary of the Company following such transfer and (z) any securities, notes
or other obligations received by the Company or any such Restricted Subsidiary
from such transferee that are contemporaneously (subject to ordinary settlement
periods) converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash for purposes of
this provision.
Within 180 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to repay
Senior Debt, (b) to the acquisition of a majority of the assets of, or a
majority of the Voting Stock of, another business, (c) the making of a capital
expenditure, or (d) the acquisition of other long-term assets, in each case, in,
or used or useful in, the same or a similar line of business as the Company or
one of its Subsidiaries was engaged in on the date of this Indenture or any
reasonable extension or expansion thereof. Pending
162
50
the final application of any such Net Proceeds, the Company may temporarily
reduce revolving credit borrowings or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the first sentence of this
paragraph will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $5.0 million, the Company will be required to
make an offer to all Holders of Notes and all holders of other pari passu
Indebtedness containing provisions similar to those set forth in this Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets (an "Asset Sale Offer") to purchase the maximum principal amount of Notes
and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase, in accordance with the procedures set forth in
this Indenture and such other Indebtedness. To the extent that any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by this Indenture.
If the aggregate principal amount of Notes and such other Indebtedness tendered
into such Asset Sale Offer surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other Indebtedness
to be purchased on a pro rata basis. Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing. Notwithstanding the foregoing, the following
163
51
items shall not be deemed to be Affiliate Transactions: (i) any employment
agreement entered into by the Company or any of its Restricted Subsidiaries, or
loans or advances to any employees of the Company or any of its Restricted
Subsidiaries, in each case in the ordinary course of business and consistent
with reasonable commercial practices, (ii) transactions between or among the
Company and/or its Subsidiaries, (iii) payment of reasonable directors fees to
Persons who are not otherwise Affiliates of the Company, (iv) Restricted
Payments that are permitted by Section 4.07 hereof, and (v) Affiliate
Transactions existing on the date of this Indenture and permitted under the
terms of the Credit Facilities.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired, or any income or profits
therefrom or assign or convey any right to receive income therefrom, securing
Indebtedness or trade payables, except Permitted Liens.
SECTION 4.13. NO SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, (i) the Company
shall not incur, create, issue, assume, guarantee or otherwise become liable for
any Indebtedness that is subordinate or junior in right of payment to any Senior
Debt and senior in any respect in right of payment to the Notes, and (ii) no
Guarantor shall incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
Senior Debt of such Guarantor and senior in any respect in right of payment to
the Subsidiary Guarantees.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
164
52
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within fifteen Business Days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by this Indenture and described in such notice. The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being repurchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unrepurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this Section 4.15, but in any event within 90 days
following a Change of Control, the Company shall either repay all outstanding
Senior Debt or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Debt to permit the repurchase of Notes required by
this Section 4.15. The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section
165
53
4.15 and Section 3.09 hereof and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.16. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.17. ADDITIONAL SUBSIDIARY GUARANTEES
If the Company or any of its Restricted Subsidiaries shall acquire or
create another Subsidiary after the date of this Indenture, then such newly
acquired or created Subsidiary shall become a Guarantor and execute a
Supplemental Indenture and deliver an Opinion of Counsel, in accordance with the
terms of this Indenture; provided, that all Subsidiaries that have properly been
designated as Unrestricted Subsidiaries in accordance with this Indenture (i)
shall not be subject to the requirements of this Section 4.17 and (ii) shall be
released from all Obligations under any Subsidiary Guarantee, in each case for
so long as they continue to constitute Unrestricted Subsidiaries.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) except in the case of a merger or consolidation of the Company
with or into a Wholly Owned Restricted Subsidiary of the Company, the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Registration
166
54
Rights Agreement, the Notes and the Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (iii) immediately
after such transaction no Default or Event of Default exists; and (iv) except in
the case of a merger or consolidation of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) shall have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) shall, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes (whether or not
prohibited by the subordination provisions of this Indenture);
167
55
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes (whether or not prohibited by the subordination
provisions of this Indenture);
(c) failure by the Company or any of its Subsidiaries for 30 days after
notice to comply with any of the provisions of Sections 4.07, 4.09, 4.10, 4.15
or 5.01 hereof;
(d) the Company or any of its Subsidiaries fails to comply with any
other covenant, representation, warranty or other agreement in this Indenture or
the Notes for 60 days after notice;
(e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), whether such Indebtedness or
Guarantee now exists, or is created after the date of this Indenture, which
default results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness the maturity of which
has been so accelerated, aggregates $5.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments remain
undischarged for a period (during which execution shall not be effectively
stayed) of 60 days, provided that the aggregate of all such undischarged
judgments exceeds $5.0 million;
(g) the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
168
56
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary
case;
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(i) except as permitted by this Indenture, any Subsidiary Guarantee is
held in any judicial proceeding to be unenforceable or invalid in any material
respect or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least a majority in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g) or
(h) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable without further action or notice. Holders of the Notes may not
enforce this Indenture or the Notes except as provided in this Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
169
57
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may,
subject to Article 10, pursue any available remedy to collect the payment of
principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on the Notes (including any waiver obtained in connection with a purchase of,
tender offer or exchange offer for Notes)(provided, however, that the Holders of
a majority in aggregate principal amount of the then outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability.
170
58
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least a majority in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture and subject to
Article 10 and Section 11.02, the right of any Holder of a Note to receive
payment of principal, premium and Liquidated Damages, if any, and interest on
the Note, on or after the respective due dates expressed in the Note (including
in connection with an offer to purchase), or to bring suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection,
171
59
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall,
subject to Article 10, pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
172
60
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
173
61
(c) The Trustee may not be relieved from liabilities for its own bad
faith, negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
174
62
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or
175
63
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default, in good faith, relating to the payment of principal or
interest on any Note, the Trustee may withhold the notice if it determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its gross
negligence, willful misconduct or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
176
64
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
177
65
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
178
66
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
[INTENTIONALLY OMITTED]
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may (subject to Section 10.14) amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's (and Guarantors')
obligations to the Holders of the Notes in the case of a merger or consolidation
or sale of all or substantially all of the Company's (and Guarantors') assets
pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder of the Note; and
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to
179
67
enter into such amended or supplemental Indenture that affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02 and in Section 10.14, the
Company and the Trustee may amend or supplement this Indenture (including
Section 3.09, 4.10 and 4.15 hereof), or the Notes and any Subsidiary Guarantees
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class (including, without limitation, consents obtained in connection with a
purchase of, tender offer or exchange offer for, Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium,
if any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, tender offer or exchange offer for,
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder
180
68
affected, an amendment or waiver under this Section 9.02 may not (with respect
to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes except as
provided above with respect to Sections 3.09, 4.10 and 4.15 hereof;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, if any, or interest on the Notes; or
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 and 4.15 hereof or make any change in
Section 6.04 or 6.07 hereof or in the foregoing amendment and waiver provisions.
In addition, any amendment to the provisions of Article 10 of this
Indenture (which relate to subordination) will require the consent of the
Holders of at least 75% in aggregate principal amount of the Notes then
outstanding if such amendment would adversely affect the rights of Holders of
Notes.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may
181
69
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness, interest and other Obligations of any kind evidenced by the
Notes and this Indenture is subordinated in right of payment, to the extent and
in the manner provided in this Article 10, to the prior payment in full in cash
of all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
182
70
SECTION 10.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means (i) any Indebtedness outstanding under
the Senior Credit Facility and (ii) any other Senior Debt permitted under this
Indenture the principal amount of which is $25.0 million or more and that has
been designated by the Company as "Designated Senior Debt"; provided, however,
that so long as the Senior Credit Facility remains in effect, lenders holding a
majority in aggregate amount of the loan commitments thereunder shall have
consented, in writing, to such designation of additional Indebtedness as
Designated Senior Debt.
"Permitted Junior Securities" means Equity Interests in the Company or
any Guarantor or debt securities that are unsecured and subordinated to all
Senior Debt (and any debt securities issued in exchange for Senior Debt) to at
least the same extent as, or to a greater extent than, the Notes are
subordinated to Senior Debt pursuant to this Indenture (without limiting the
forgoing, such Permitted Junior Securities shall have no required principal
payments or equity redemption requirements until after the final maturity of all
Senior Debt).
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Senior Debt" means (i) all principal, premium, interest, fees,
expenses and other obligations or liabilities of any kind together with
available undrawn amounts under letters of credit issued or guaranteed under the
Senior Credit Facility (including, without limitation, post-petition interest
whether or not allowed as a claim in any bankruptcy, reorganization, insolvency,
receivership or similar proceeding) with respect to Indebtedness outstanding
under Credit Facilities and all Hedging Obligations with respect thereto, (ii)
any other Indebtedness permitted to be incurred by the Company under the terms
of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Notes and (iii) all Obligations with respect to the foregoing.
Senior Debt will not include (w) any liability for federal, state, local or
other taxes owed or owing by the Company, (x) any Indebtedness of the Company to
any of its Subsidiaries or other Affiliates, excluding any Indebtedness owed to
any Affiliate that was incurred prior to such Person becoming an Affiliate in
connection with the acquisition by the Company or any Subsidiary of a business
or Person from such Affiliate, (y) any trade payables or (z) any Indebtedness
that is incurred in violation of this Indenture.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company or any Guarantor
whether in cash, properties, securities or otherwise, in a liquidation or
dissolution of the Company or any Guarantor or in a bankruptcy, reorganization,
insolvency,
183
71
receivership or similar proceeding relating to the Company, any Guarantor, or
their property, an assignment for the benefit of creditors or any marshaling of
the Company's or any Guarantor's assets and liabilities, the holders of Senior
Debt shall be entitled to receive payment in full in cash of all Obligations due
in respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior Debt whether or
not allowed as a claim in any such proceeding) before the Holders of Notes will
be entitled to receive any payment with respect to the Notes or under the
Subsidiary Guarantee, and until all Obligations with respect to Senior Debt are
paid in full in cash, any distribution to which the Holders of Notes would be
entitled shall be made to the holders of Senior Debt (except that Holders of
Notes may receive and retain Permitted Junior Securities and payments made from
the trust created pursuant to Article 8 hereof).
To the extent any payment of Senior Debt (whether by or on behalf of
the Company or any Subsidiary, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Debt or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation to
repay any Senior Debt is declared to be fraudulent, invalid, or otherwise set
aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then the obligations so declared fraudulent, invalid or otherwise
set aside (and all other amounts that would come due with respect thereto had
such obligation not been affected) shall be deemed to be reinstated and
outstanding as Senior Debt for all purposes hereof as if such declaration,
invalidity or setting aside had not occurred.
SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company and the Guarantors also may not make any payment upon or in
respect of the Notes or the Subsidiary Guarantees (except in Permitted Junior
Securities or from the trust created pursuant to Article 8 hereof) if (i) a
default in the payment of the principal of, premium, if any, or interest on
Senior Debt occurs and is continuing or (ii) any other default occurs and is
continuing with respect to Designated Senior Debt that currently, or with the
passage of time or giving of notice, permits holders of the Designated Senior
Debt as to which such default relates to accelerate its maturity and, in the
case of any such default described in this clause (ii), the Trustee receives a
notice of such default of the type referred to in this clause (ii) (a "Payment
Blockage Notice") from the Company or the holders of any Designated Senior Debt.
Payments on the Notes may and shall be resumed (a)
184
72
in the case of a payment default, upon the date on which such default is cured
or waived in writing by the holders of the applicable Senior Debt and (b) in
case of a nonpayment default, the earlier of the date on which such nonpayment
default is cured or waived in writing by the holders of Designated Senior Debt
or 179 days after the date on which the applicable Payment Blockage Notice is
received by the Trustee, unless the maturity of any Designated Senior Debt has
been accelerated. No new period of payment blockage may be commenced under
clause (ii) above unless and until (i) 360 days have elapsed since the initial
effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal of, premium, if any, and interest on the Notes
that have come due have been paid in full in cash. No nonpayment default that
existed and was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice unless such default shall have been waived in writing or cured
for a period of not less than 90 days. In the event that the Company or any
Guarantor makes any payment to the Trustee or any Holder of any Note prohibited
by the foregoing, such payment will be required to be held in trust for and paid
over to the holders of Senior Debt (or the representative thereof). The Trustee
and the Holders of the Notes will not challenge or contest the enforceability or
validity of the Senior Credit Facility or any obligation, Lien or encumbrance
thereunder.
SECTION 10.05. ACCELERATION OF SECURITIES.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Debt of the acceleration.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when the Trustee or such Holder,
as applicable, has actual knowledge that such payment is prohibited by Sections
10.03 or 10.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt as their interests may
appear or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in cash in accordance with their terms, after giving effect
to any concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee
185
73
shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Company or any other Person money
or assets to which any holders of Senior Debt shall be entitled by virtue of
this Article 10, except if such payment is made as a result of the bad faith or
willful misconduct or gross negligence of the Trustee.
SECTION 10.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
SECTION 10.08. SUBROGATION.
After all Senior Debt is paid in full in cash and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.09. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the obligation
of the Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors of the
Company other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
186
74
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
Trustee and Holders agree that they will not challenge the validity,
enforceability or perfection of any Senior Debt or the liens, guarantees and
security interests securing the same and that as between the holders of the
Senior Debt on the one hand and the Trustee and Holders on the other, the terms
hereof shall govern even if all or part of the Senior Debt or such liens and
security interests are avoided, disallowed, subordinated, set aside or otherwise
invalidated in any judicial proceeding or otherwise, regardless of the theory
upon which such action is premised.
Without in any way limiting the generality of this section 10.10, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article 10 or the obligations hereunder of
the Holders to the holders of Senior Debt, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Debt, the Senior Credit Facility or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding or
secured: (b) sell, exchange, release, foreclose against or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Debt; (c) release
any Person liable in any manner for the collection of Senior Debt; and (d)
exercise or refrain from exercising any rights against the Company, any
Subsidiary thereof or any other Person.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
any Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative(s) or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, all holders of the Senior Debt and other Indebtedness of the
Company, the amount
187
75
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least two Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10 and the subordination of the Subsidiary Guarantees as provided in
Section 11.02, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Company or any Subsidiary
(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or otherwise),
the filing of a claim for the unpaid balance of its Notes in the form required
in those proceedings. If the Trustee does not file a proper proof of claim or
proof of debt in the form required in any proceeding referred to in Section 6.09
hereof at least 30 days before the expiration of the time to file such claim,
the Representatives are hereby authorized to file an appropriate claim for and
on behalf of the Holders of the Notes.
SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 or Section 11.02 or 11.06 (including,
without limitation, any definitions or other sections included by reference or
incorporation or the terms and conditions of the Subsidiary Guarantees) shall
not be amended or modified without the written consent of the holders of all
Senior Debt.
188
76
ARTICLE 11.
SUBSIDIARY GUARANTEES
SECTION 11.01. GUARANTEE.
Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of and interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
189
77
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE.
The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 shall be junior and subordinated to the prior
payment in full in cash of the Senior Debt of such Guarantor on the same basis
as the Notes are junior and subordinated to Senior Debt of the Company. For the
purposes of the foregoing sentence, the Trustee and the Holders shall have the
right to receive and/or retain payments by any of the Guarantors only at such
times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article 10 hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor under its Subsidiary Guarantee and this
Article 11 shall be limited to the maximum amount as will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Subsidiary Guarantee not constituting a fraudulent transfer or
conveyance.
190
78
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President, Treasurer or one of its Vice Presidents. Further, the Company shall
cause all future Guarantors to execute a Supplemental Indenture substantially in
the form of Exhibit F.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.17 hereof the
Company shall cause such Subsidiaries to execute supplemental indentures to this
Indenture and Subsidiary Guarantees in accordance with Section 4.17 hereof and
this Article 11, to the extent applicable; provided, that all Subsidiaries that
have properly been designated as Unrestricted Subsidiaries in accordance with
this Indenture (i) will not be subject to the requirements of Section 4.17
hereof and (ii) will be released from all Obligations under any Subsidiary
Guarantee, in each case for so long as they continue to constitute Unrestricted
Subsidiaries.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
No Guarantor may consolidate with or merge with or into (whether or not
such Guarantor is the surviving Person), another corporation, Person or other
entity whether or not affiliated with such Guarantor unless (i) subject to the
provisions of the following paragraph, the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture, in form and
substance reasonably satisfactory to the Trustee, under the Notes, the Indenture
and the Registration Rights Agreement; (ii) immediately after giving effect to
such transaction, no
191
79
Default or Event of Default exists; and (iii) except in the case of a merger of
a Guarantor with or into another Guarantor or a merger of a Guarantor with or
into the Company, the Company would be permitted by virtue of the Company's pro
forma Fixed Charge Coverage Ratio, immediately after giving effect to such
transaction, to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof.
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS OR CAPITAL STOCK.
In the event of a sale or other disposition of all or substantially all
of the assets of any Guarantor (other than to the Company or another Guarantor),
by way of merger, consolidation or otherwise, or a sale or other disposition of
all of the Capital Stock of any Guarantor (other than to the Company or another
Guarantor), then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the Capital Stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Subsidiary
Guarantee and any such acquiring corporation will not be required to assume any
obligations of such Guarantor under the applicable Subsidiary Guarantee;
provided that such sale or other disposition complies with all applicable
provisions of this Indenture including, without limitation, Section 4.10 or
Article 10 hereof. The Trustee will provide any written confirmation or evidence
of the termination of such Subsidiary Guarantee as reasonably required by the
Representative.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 11.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the other's address
192
80
If to the Company and/or any Guarantor:
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
▇▇▇▇ ▇▇▇▇▇▇ & Parks LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
If to the Trustee:
State Street Bank and Trust Company
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇)-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: TransTechnology Corporation
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice
193
81
or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
194
82
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION. 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or such Guarantor under the Notes, the
Subsidiary Guarantees, this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
195
83
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
196
Dated as of ______, _____ SIGNATURES:
THE COMPANY:
TRANSTECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE GUARANTORS:
TRANSTECHNOLOGY ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
PALNUT FASTENERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
INDUSTRIAL RETAINING RING COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
RETAINERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
197
RANCHO TRANSTECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY SYSTEMS & SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
ELECTRONIC CONNECTIONS AND
ASSEMBLIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
SSP INDUSTRIES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
SSP INTERNATIONAL SALES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
198
TRANSTECHNOLOGY ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TCR CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
NORCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
AEROSPACE RIVET MANUFACTURERS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
▇▇▇▇▇▇▇ RING & WASHER INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
199
TRANSTECHNOLOGY ENGINEERED
COMPONENTS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY CANADA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY INTERNATIONAL
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ AND TRUST COMPANY,
AS TRUSTEE
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
201
EXHIBIT A-1
(Face of Note)
=============================================================================
CUSIP:
[Series A] [Series B] Senior Subordinated Notes due 2009
No.: $_____________
TransTechnology Corporation
promises to pay to____________________________________________________________
or registered assigns,
the principal sum of__________________________________________________________
Dollars on __________, 2009.
Interest Payment Dates: August 31, November 30, February 28 and May 31
Record Dates: August 15, November 15, February 14 and May 15
DATED: ____________, 200_
TRANSTECHNOLOGY CORPORATION
BY:____________________________
Name:
Title:
(SEAL)
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:_____________________________
Name:
Title:
==============================================================================
202
(Back of Note)
[Series A] [Series B] Senior Subordinated Notes due 2009
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS OF THE
INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE INDENTURE]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. TransTechnology Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at [if
Fixed Rate, insert applicable Fixed Rate] [the Variable Rate, as such term is
defined in the Indenture to which this Note is subject] per annum from
_____________ until maturity and shall pay the Liquidated Damages payable
pursuant to Section 5 of the Registration Rights Agreement referred to below.
The Company will pay interest and Liquidated Damages semi-annually on August 31,
November 31, February 28 and May 31 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand to the extent lawful at a rate that is 2% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the August 15, November
15, February 14, or May 15 next preceding the Interest Payment Date, even if
such Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. Principal, premium, if any, and
203
interest and Liquidated Damages on the Notes will be payable at the office or
agency of the Company maintained for such purpose or, at the option of the
Company, payment of interest and Liquidated Damages may be made by check mailed
to the Holders of the Notes at their respective addresses set forth in the
register of Holders of Notes; provided that all payments of principal, premium,
interest and Liquidated Damages with respect to Notes the Holders of which have
given wire transfer instructions to the Company prior to the Record Date will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New York will be the office of the
Trustee maintained for such purpose. The Notes will be issued in denominations
of $1,000 and integral multiples thereof. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and
Trust Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE AND SUBORDINATION. The Company issued the Notes
under an Indenture dated as of August 31, 2000 ("the Indenture") between the
Company and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are general unsecured
obligations of the Company limited to $75.0 million in aggregate principal
amount.
The payment of the Notes will, to the extent set forth in the
Indenture, be subordinated in right of payment to the prior payment in full in
cash or cash equivalents of all Senior Debt.
5. OPTIONAL REDEMPTION.
(a) The Notes will be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 10 nor more than
30 days' notice, at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon and Liquidated
204
Damages under and as defined in the Registration Rights Agreement referred to
below with respect thereto, to the applicable redemption date.
(b) Notwithstanding the provisions of clause (a), any Notes held
by a Fixed Rate Holder (as defined in the Indenture) shall not be subject to
redemption at the Company's option until August 31, 2005, and from and after
August 31, 2005 the amount required to be paid in redemption of any such Note
shall be equal to the outstanding principal amount thereof, PLUS any accrued but
unpaid interest and Liquidated Damages thereon, to the applicable redemption
date, PLUS a premium equal to the product of (i) the principal amount of such
Note multiplied by (ii) the percentage calculated by multiplying (A) the fixed
interest rate applicable to such Note by (B) the percentage set forth in the
table below opposite the period in which such redemption occurs:
Period Percentage
------ ----------
From and including August 31, 2005 through August 30, 2006 50%
From and including August 31, 2006 through August 30, 2007 33.33%
From and including August 31, 2007 through August 30, 2008 16.66%
From and including August 31, 2008 through August 30, 2009 0%
6. MANDATORY REDEMPTION.
Except as set forth in Paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, each Holder of Notes will
have the right to require the Company to make an offer (a "Change of Control
Offer") to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase (the "Change of
Control Payment"). Within 15 Business Days following any Change of Control, the
Company will mail a notice to each Holder describing the
205
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, when the aggregate amount of Excess Proceeds exceeds $5.0 million
the Company will be required to make an offer to all Holders of Notes and all
holders of other pari passu Indebtedness containing provisions similar to those
set forth in the Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the date of purchase, in accordance
with the procedures set forth in the Indenture and such other Indebtedness. To
the extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and such
other Indebtedness tendered into such Asset Sale Offer surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and such other Indebtedness to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 10 days but not more than 30 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. Notes in denominations
larger than $1,000 may be redeemed in part. If any Note is to be redeemed in
part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.
206
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company or the Registrar is not required to
transfer or exchange any Note selected for redemption. Also, the Company or the
Registrar is not required to transfer or exchange any Notes for a period of 15
days before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Notes or the Subsidiary Guarantees may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes) and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes). Without the consent of any Holder of Notes, the
Company and the Trustee may amend or supplement the Indenture or the Notes to
cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the assumption
of the Company's obligations to Holders of the Notes in case of a merger or
consolidation, or sale of all or substantially all of the Company's assets, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not prohibited by the subordination provisions
of the Indenture); (ii) default in payment when due of principal of or premium,
if any, on the Notes (whether or not prohibited by the subordination provisions
of the Indenture); (iii) failure by the Company or any of its Subsidiaries for
30 days after notice to comply with Section 4.07,
207
4.09, 4.10 or 4.15 of the Indenture; (iv) failure by the Company or any of its
Subsidiaries for 60 days after notice to comply with any of its other agreements
in the Indenture or the Notes; (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date of the Indenture, which default results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness the maturity of which has been so
accelerated, aggregates $5.0 million or more (other than Existing Indebtedness
to the extent it is secured by or paid by the drawing against a letter of credit
permitted to be issued under the Indenture); (vi) failure by the Company or any
of its Restricted Subsidiaries to pay final judgments aggregating in excess of
$5.0 million, which judgments are not paid, discharged or stayed for a period of
60 days; (vii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries as set forth in the Indenture;
and (viii) except as permitted by the Indenture, any Subsidiary Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid in any
material respect or shall cease for any reason to be in full force and effect or
any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least a
majority in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency as set forth in the Indenture, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries, that taken together would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest. The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Notes. The Company is
required to deliver
208
to the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required, upon becoming aware of any Default or Event of Default,
to deliver to the Trustee a statement specifying such Default or Event of
Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall not
have any liability for any obligations of the Company or any Guarantor under the
Notes, the Subsidiary Guarantees, the Indenture or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of August 31, 1999, between the Company and the parties named
on the signature pages thereof (the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience
209
to Holders. No representation is made as to the accuracy of such numbers either
as printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
210
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
-------------------------------------------------------------------------------
Date: Your Signature:
------------- ---------------------------
(Sign exactly as your name
appears on the Note)
SIGNATURE GUARANTEE:
---------------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
211
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
----------------------- ---------------------
(Sign exactly as your
name appears on the Note)
Tax Identification No.:
-------------
SIGNATURE GUARANTEE:
--------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
212
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE(1)
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
Amount of Amount of Principal Amount
decrease in increase in of this Signature of
Principal Principal Global Note authorized
Amount of Amount of following such decrease officer of
Date of this Global this Global decrease(or Trustee or
Exchange Note Note increase) Custodian
-------- ---- ---- --------- ---------
-------------------------------------------
(1) This should be included only if the Note is issued in global form.
213
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
===============================================================================
CUSIP: _________
[Series A] [Series B] Senior Subordinated Notes due 2009
No. ______ $__________
TransTechnology Corporation
promises to pay to_____________________________________________________________
or registered assigns,
the principal sum of ________________________________________________________
Dollars on ________________, 2009.
Interest Payment Dates: August 31, November 30, February 28 and May 31
Record Dates: August 15, November 15, February 14 and May 15
DATED:__________________, 1999
TRANSTECHNOLOGY CORPORATION
By:
---------------------------
Name:
Title:
[(SEAL)]
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:__________________________
Name:
Title:
===============================================================================
214
A2-2
(Back of Regulation S Temporary Global Note)
[Series A] [Series B] Senior Subordinated Notes due 2009
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
215
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. TransTechnology Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at [if
Fixed Rate insert applicable Fixed Rate][the Variable Rate, as such term is
defined in the Indenture to which this Note is subject] per annum from
________________________ until maturity and shall pay the Liquidated Damages
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages quarterly on August
31, November 31, February 28 and May 31 of each year, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand to the extent lawful at a rate that is 2% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the August 15, November
15, February 14, or May 15 next preceding the Interest Payment Date, even if
such Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. Principal, premium, if any, and interest and Liquidated
Damages on the Notes will be payable at the office or
216
agency of the Company maintained for such purpose or, at the option of the
Company, payment of interest and Liquidated Damages may be made by check mailed
to the Holders of the Notes at their respective addresses set forth in the
register of Holders of Notes; provided that all payments of principal, premium,
interest and Liquidated Damages with respect to Notes the Holders of which have
given wire transfer instructions to the Company prior to the Record Date will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New York will be the office of the
Trustee maintained for such purpose. The Notes will be issued in denominations
of $1,000 and integral multiples thereof. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE AND SUBORDINATION. The Company issued the Notes under an
Indenture dated as of August 31, 2000 ("Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement
of such terms. To the extent any provision of this Note conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are general unsecured obligations of the
Company limited to $75.0 million in aggregate principal amount.
The payment of the Notes will, to the extent set forth in the
Indenture, be subordinated in right of payment to the prior payment in full in
cash or cash equivalents of all Senior Debt.
5. OPTIONAL REDEMPTION.
(a) The Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 10 nor more than 30
days' notice, at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon and Liquidated Damages under
and as defined in the Registration Rights Agreement referred to below with
respect thereto, to the applicable redemption date.
217
A2-5
(b) Notwithstanding the provisions of clause (a), any Notes held by a
Fixed Rate Holder (as defined in the Indenture) shall not be subject to
redemption at the Company's option until August 31, 2005, and from and after
August 31, 2005 the amount required to be paid in redemption of any such Note
shall be equal to the outstanding principal amount thereof, PLUS any accrued but
unpaid interest and Liquidated Damages thereon, to the applicable redemption
date, PLUS a premium equal to the product of (i) the principal amount of such
Note multiplied by (ii) the percentage calculated by multiplying (A) the fixed
interest rate applicable to such Note by (B) the percentage set forth in the
table below opposite the period in which such redemption occurs:
Period Percentage
------ ----------
From and including August 31, 2005 through August 30, 2006 50%
From and including August 31, 2006 through August 30, 2007 33.33%
From and including August 31, 2007 through August 30, 2008 16.66%
From and including August 31, 2008 through August 30, 2009 0%
6. MANDATORY REDEMPTION.
Except as set forth in Paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, each Holder of Notes will have the
right to require the Company to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase (the "Change of Control Payment").
Within 15 Business Days following any Change of Control, the Company will mail a
notice to each Holder describing the transaction or transactions that constitute
the Change of Control and offering to repurchase Notes on the date specified in
such notice, which date shall be
218
A2-6
no earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, when the aggregate amount of Excess Proceeds exceeds $5.0 million, the
Company will be required to make an offer to all Holders of Notes and all
holders of other pari passu Indebtedness containing provisions similar to those
set forth in the Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages thereon, if any, to the date of purchase, in accordance
with the procedures set forth in the Indenture and such other Indebtedness. To
the extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and such
other Indebtedness tendered into such Asset Sale Offer surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and such other Indebtedness to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first
class mail at least 10 days but not more than 30 days before the redemption date
to each Holder of Notes to be redeemed at its registered address. Notices of
redemption may not be conditional. Notes in denominations larger than $1,000 may
be redeemed in part. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date interest
ceases to accrue on Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may
219
A2-7
be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company or the Registrar
is not required to transfer or exchange any Note selected for redemption. Also,
the Company or the Registrar is not required to transfer or exchange any Notes
for a period of 15 days before a selection of Notes to be redeemed.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Notes or the Subsidiary Guarantees may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes) and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes). Without the consent of any Holder of Notes, the
Company and the Trustee may amend or supplement the Indenture or the Notes to
cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the assumption
of the Company's obligations to Holders of the Notes in case of a merger or
consolidation or sale of all or substantially all of the Company's assets, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on, or Liquidated Damages
220
A2-8
with respect to the Notes (whether or not prohibited by the subordination
provisions of the Indenture); (ii) default in payment when due of principal of
or premium, if any, on the Notes (whether or not permitted by the subordination
provisions of the Indenture); (iii) failure by the Company or any of its
Subsidiaries for 30 days after notice to comply with Section 4.07, 4.09, 4.10 or
4.15 of the Indenture; (iv) failure by the Company or any of its Subsidiaries
for 60 days after notice to comply with any of its other agreements in the
Indenture or the Notes or (v) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date of the Indenture, which default results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness the maturity of which has been so
accelerated, aggregates $5.0 million or more (other than Existing Indebtedness
to the extent it is secured by or paid by the drawing against a letter of credit
permitted to be issued under the Indenture); (vi) failure by the Company or any
of its Restricted Subsidiaries to pay final judgments aggregating in excess of
$5.0 million, which judgments are not paid, discharged or stayed for a period of
60 days; (vii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries as set forth in the Indenture;
and (viii) except as permitted by the Indenture, any Subsidiary Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid in any
material respect or shall cease for any reason to be in full force and effect or
any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least a
majority in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency as set forth in the Indenture, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries, that taken together would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest. The Holders of a
221
A2-9
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or any Guarantor, as such, shall not
have any liability for any obligations of the Company or any Guarantor under the
Notes, the Subsidiary Guarantees, the Indenture or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of August 31, 1999, between the Company and the parties named
on the signature pages thereof (the "Registration Rights Agreement").
222
A2-10
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
223
A2-11
(Assignment Form)
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
-------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
------------------------------------------------------------------------------
Date: _____________________ Your Signature: _______________________________
(Sign exactly as your name
appears on the Note)
SIGNATURE GUARANTEE:
-------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
224
A2-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $___________
-------------------------------------------------------------------------------
Date: Your Signature:
------------------------ -------------------------------
(Sign exactly as your name
appears on the Note)
Tax Identification No.:
-----------------
SIGNATURE GUARANTEE:
--------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
225
A2-13
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE(2)
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
Amount of Amount of Principal Amount
decrease in increase in of this Signature of
Principal Principal Global Note authorized
Amount of Amount of following such decrease officer of
Date of this Global this Global decrease(or Trustee or
Exchange Note Note increase) Custodian
-------- ---- ---- --------- ---------
-------------------------------------------
(2) This should be included only if the Note is issued in global form.
226
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
[Registrar address block]
Re: Series Senior Subordinated Notes due 2009
---------------------------------------------
Reference is hereby made to the Indenture, dated as of _____________
(the "INDENTURE"), between TransTechnology Corporation, as issuer (the
"COMPANY"), and State Street Bank and Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the "TRANSFEROR") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement
227
B-2
Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A DEFINITIVE
NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an initial purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF
THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
228
B-3
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Global Note and/or the Definitive Notes and in
the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend
229
printed on the Restricted Global Notes, on Restricted Definitive Notes and in
the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated: ______________________,
230
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP__________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ________), or
(ii) [ ] Regulation S Global Note
(CUSIP ________), or
(iii) [ ] Unrestricted Global Note
(CUSIP ________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
231
EXHIBIT C
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Ladies and Gentlemen:
In connection with our proposed purchase of $_________
aggregate principal amount of the Series ____ Senior Subordinated Notes due 2009
(the "Notes") of TransTechnology Corporation (the "Company"), we confirm that:
1. We understand that the Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Notes to offer, sell or otherwise transfer such Notes prior to (x)
the date which is two years (or such shorter period of time as permitted by Rule
144 under the Securities Act) after the later of the date of original issue of
the Notes being acquired or any predecessor to such Notes or the last date on
which the Company or any affiliate of the Company was the owner of the Notes
being acquired or any predecessor of such Notes or (y) such later date, if any,
as may be required by any subsequent change in applicable law (the "Resale
Restriction Termination Date") only (a) to the Company or a subsidiary thereof,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act, (c) so long as the Notes are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person we reasonably believe is a
"qualified institutional buyer" under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States to "foreign purchasers" (as defined
below) in offshore transactions meeting the requirements of Rule 904 of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act (an "Accredited Investor") that is purchasing for its
own account or for the account of such an institutional "accredited investor" in
each case in a minimum principal amount of the Notes of $250,000, for investment
purposes and not with a
232
C-2
view to or for offer or sale in connection with any distribution in violation of
the Securities Act or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, in each case in accordance with
applicable securities laws of any state of the United States or any other
applicable jurisdiction, subject, in each of the foregoing cases, to any
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control and to
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Notes is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Trustee, which shall provide, among other things, that the
transferee is an Accredited Investor within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company, the Trustee and
the Transfer Agent and Registrar reserve the right prior to any offer, sale or
other transfer prior to the Resale Restriction Termination Date of the Notes
pursuant to clause (d), (e) or (f) above to require the delivery of an opinion
of counsel, certification and/or other information satisfactory to the Company
and the Trustee.
2. We are an Accredited Investor purchasing Notes for our own account
or for the account of one or more QIBs or Accredited Investors, and we are
acquiring the Notes for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act
or the securities laws of any state of the United States and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment in the Notes for an indefinite period.
3. We are acquiring the Notes purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion and we and any such account are (a) a QIB, aware that the sale is
being made in reliance on Rule 144A under the Securities Act, (b) an Accredited
Investor, or (c) a person other than a U.S. person ("foreign purchasers"), which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust) in offshore transactions meeting the requirements of Rules
903 and 904 of Regulation S under the Securities Act.
233
C-3
4. We have received a copy of the Offering Memorandum and acknowledge
that we have had access to such financial and other information, and have been
afforded the opportunity to ask such questions of representatives of the Company
and receive answers thereto, as we deem necessary in order to verify the
information contained in the Offering Memorandum.
5. We are not purchasing the Notes for or on behalf of, and will not
transfer the Securities to, any pension or welfare plan (as defined in Section 3
of ERISA, except as may be permitted under ERISA and as described under "Notice
to Investors" in the Offering Memorandum.
6. In the event that we purchase any Notes, we will acquire Notes
having an outstanding principal amount of at least $250,000 for our own account
and $250,000 for each account for which we are acting.
We understand that the Trustee and the Transfer Agent will not
be required to accept for registration of transfer any Notes acquired by us,
except upon presentation of evidence satisfactory to the Company and the Trustee
that the foregoing restrictions on transfer have been complied with. We further
understand that the Notes purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of the first paragraph of this letter. We further agree to provide
to any person acquiring any of the Notes from us a notice advising such person
that transfers of such Notes are restricted as stated herein and that
certificates representing such Notes will bear a legend to that effect.
We represent that you, the Company, the Trustee and others are
entitled to rely upon the truth and accuracy of our acknowledgements,
representations and agreements set forth herein, and we agree to notify you
promptly in writing if any of our acknowledgements, representations or
agreements herein cease to be accurate and complete. You are also irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
We represent to you that we have full power to make the
foregoing acknowledgements, representations and agreements on our own behalf and
on behalf of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United
States" and "U.S. person" have the respective meanings given to them in
Regulation S under the Securities Act.
234
C-4
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
(Name of Purchaser)
By:____________________
Date:__________________
Upon transfer, the Securities would be registered in the name of the new
beneficial owner.
235
EXHIBIT D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
State Street Bank and Trust Company
Corporate Trust Department
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: TransTechnology Corporation (the "Company")
Series ___ Senior Subordinated Notes
due 2009 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $______ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person acting on our behalf
knows that the transaction has been pre-arranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes;
236
D-2
(6) if the circumstances set forth in Rule 904(c) under the Securities
Act are applicable, we have complied with the additional conditions therein,
including (if applicable) sending a confirmation or other notice stating that
the Notes may be offered and sold during the restricted period specified in Rule
903(c)(2) or (3), as applicable, in accordance with the provisions of Regulation
S; pursuant to registration of the Notes under the Securities Act; or pursuant
to an available exemption from the registration requirements under the
Securities Act; and
(7) if the sale is made during a restricted period and the provisions
of Rule 903(c)(3) are applicable thereto, we confirm that such sale has been
made in accordance with such provisions.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:________________________
Authorized Signature
237
EXHIBIT E
FORM OF SUBORDINATED SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture dated as of August 31, 2000
(the "Indenture") among TransTechnology Corporation, the Guarantors listed on
the signature page thereto, and State Street Bank and Trust Company, as trustee
(the "Trustee"), and subject to the provisions in the Indenture, (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Indenture), whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to this Subsidiary Guarantee and
the Indenture are expressly set forth in Article 11 of the Indenture and
reference is hereby made to the Indenture for the precise terms of this
Subsidiary Guarantee. Each Holder of a Note, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Subsidiary Guarantee shall
cease to be so subordinated and subject in right of payment upon any defeasance
of this Note in accordance with the provisions of the Indenture.
The terms of Articles 10 and 11 of the Indenture are incorporated
herein by reference.
[Name of Guarantor]
By:________________________
Name:
Title:
238
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of TransTechnology Corporation (or its permitted successor), a
Delaware corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and State Street Bank and Trust
Company, as trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of _______________ providing
for the issuance of an aggregate principal amount of up to $75.0 million of
Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its
239
F-2
successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations
of the Company hereunder or thereunder, that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on
the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the
terms hereof and thereof; and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other
obligations, that same will be promptly paid in full
when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity,
by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall
be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or
the Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
(c) The following is hereby waived: diligence, presentment, demand
of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require
a proceeding first against the Company, protest, notice and
all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes
and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any
Custodian, Trustee, liquidator or other similar official
acting in
240
relation to either the Company or the Guarantors, any amount
paid by either to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right
of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided
in Article 6 of the Indenture for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether or not
due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Guarantee.
(i) The obligations hereunder shall be subject to the
subordination provisions set forth in Article 10 of the
Indenture.
3. Execution and Delivery. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms.
(a) The Guaranteeing Subsidiary may not consolidate with or
merge with or into (whether or not such Guarantor is the surviving
Person) another corporation, Person or entity whether or not affiliated
with such Guarantor unless:
(i) subject to Section 11.05 and 11.06 of the Indenture,
the Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or
the Company)
241
F-4
unconditionally assumes all the obligations of such
Guarantor, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture and the
Subsidiary Guarantee on the terms set forth herein or
therein;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
(iii) except in the case of a merger of a Guarantor with or
into another Guarantor or a merger of a Guarantor
with or into the Company, the Company would be
permitted by virtue of the Company's pro forma Fixed
Charge Coverage Ratio, immediately after giving
effect to such transaction, to incur at least $1.00
of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09
of the Indenture.
(b) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the Subsidiary
Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the
Indenture to be performed by the Guarantor, such successor
corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor corporation thereupon may cause
to be signed any or all of the Subsidiary Guarantees to be
endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and
benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms
of the Indenture as though all of such Subsidiary Guarantees
had been issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained
in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or
242
F-5
substantially as an entirety to the Company or another
Guarantor.
5. Releases.
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all to the
Capital Stock of any Guarantor (other than to the Company or
another Guarantor), then such Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor
(other than to the Company or another Guarantor)) or the
corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of
such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee and any such
acquiring corporation will not be required to assume any
obligations of such Guarantor under the applicable Subsidiary
Guarantee; provided that such sale or other disposition
complies with all applicable provisions of the Indenture
including, without limitation, Section 4.10 hereof. Upon
delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including
without limitation Section 4.10 of the Indenture, the Trustee
shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount
of principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided
in Article 11 of the Indenture.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities
243
under the federal securities laws and it is the view of the SEC that such a
waiver is against public policy.
7. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____ [Guaranteeing Subsidiary]
By:___________________________
Name:
Title:
244
EXHIBIT E
------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of August 31, 1999
by and among
TransTechnology Corporation,
the Guarantors named herein,
and
BankBoston, N.A., as Administrative Agent
------------------------------------------------------------------------
245
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of August 31, 1999, by and among TransTechnology Corporation, a
Delaware corporation (the "Company"), the Guarantors listed on the signature
pages hereto as such (together with any future subsidiary of the Company that
executes a guarantee in accordance with the provisions of the Purchase Agreement
referred to below, the "Guarantors"), and BankBoston, N.A., in its capacity as
administrative agent for the initial purchasers (the "Initial Purchasers"), of
the Company's Bridge Notes in the original principal amount of $75,000,000 (the
"Bridge Notes") under and pursuant to that certain Senior Subordinated Note
Purchase Agreement, dated as of August 31, 1999 (the "Purchase Agreement"), by
and among the Company, the Administrative Agent, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Inc., as the arranger (in such capacity, the "Arranger") and the Initial
Purchasers.
This Agreement is made pursuant to the Purchase Agreement. In order to
induce the Initial Purchasers to purchase the Bridge Notes, the Company and the
Guarantors (collectively, the "Issuers") have agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in Section
2 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
ADMINISTRATIVE AGENT: As defined in the preamble hereto.
AFFILIATE: With respect to any specified Person, any Person directly or
indirectly controlling or controlled by such specified Person, or any Person
under direct or common control with such specified Person.
BRIDGE NOTES: As defined in the preamble hereto.
BUSINESS DAY: Any day other than a Saturday, a Sunday or a day on which
banking institutions in Boston, Massachusetts, or at any other place of payment
hereunder are authorized by law, regulation or executive order to remain closed.
BROKER-DEALER: Any broker or dealer registered as such under the
Exchange Act.
CLOSING DATE: The date of this Agreement.
COMMISSION: The Securities and Exchange Commission.
246
-2-
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Issuers
to the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Notes, each Interest Payment
Date.
EFFECTIVENESS TARGET DATE: As defined in Section 5 hereof.
EXCHANGE ESCROW AGREEMENT: As defined in the Purchase Agreement.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The registration by the issuers under the Act of the
Series B Notes pursuant to a Registration Statement pursuant to which the
Issuers offer the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Series B Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
GUARANTORS: As defined in the preamble hereto.
HOLDERS: As defined in Section 2(b) hereof.
INDEMNIFIED HOLDER: As defined in Section 8(a) hereof.
INDENTURE: The Indenture, dated as of the date hereof, among the
Issuers and State Street Bank and Trust Company, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
INITIAL MATURITY DATE: August 31, 2000.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Notes.
LIQUIDATED DAMAGES: As defined in Section 5 hereof.
247
-3-
NASD: National Association of Securities Dealers, Inc.
NOTES: The Series A Notes and the Series B Notes.
PERSON: An individual, partnership, corporation, limited liability
company, limited liability partnership, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
PURCHASE AGREEMENT: As defined in the preamble hereto.
RECORD HOLDER: With respect to any Damages Payment Date relating to the
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Issuers
relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
SERIES A NOTES: The Company's Series A Senior Subordinated Notes due
2009 to be issued under the Indenture in exchange for Term Notes pursuant to
Section 5 of the Purchase Agreement, together with the guarantee thereof by any
Guarantor.
SERIES B NOTES: The Company's Series B Senior Subordinated Notes due
2009 to be issued pursuant to the Indenture in the Exchange Offer, together with
the guarantee thereof by any Guarantor.
SHELF FILING DEADLINE: As defined in Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
TERM NOTE: As defined in the Purchase Agreement.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
248
-4-
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer and the
Note for which it is exchanged is entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Act, (b) the date on which such Note has been effectively registered under
the Act and disposed of in accordance with a Shelf Registration Statement or (c)
the date on which such Note is permitted to be distributed to the public
pursuant to Rule 144 under the Act or by a Broker-Dealer pursuant to the "Plan
of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein).
UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
WARRANT HOLDERS' AGREEMENT: As defined in the Purchase Agreement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to be
a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities. A Holder is deemed a "selling
Holder" whenever such Holder notifies the Company of such Holder's intent to
sell Transfer Restricted Securities pursuant to a Shelf Registration Statement.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Issuers shall (i) cause to be filed with the
Commission as soon as practicable after the Initial Maturity Date, but in no
event later than 60 days after the Initial Maturity Date, an Exchange Offer
Registration Statement, (ii) use commercially reasonable efforts to cause such
Registration Statement to become effective at the earliest possible time, but in
no event later than 120 days after the Initial Maturity Date, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Act, and (C) cause
all necessary filings in connection with the registration and qualification of
the Series B Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit the Exchange Offer to be Consummated, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
Series B Notes to be offered in exchange for the Transfer Restricted
249
-5-
Securities and to permit resales of Notes held by Broker-Dealers as contemplated
by Section 3(c) below.
(b) The Company shall use commercially reasonable efforts to cause the
Exchange Offer Registration Statement to be effective continuously and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 Business Days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Series B Notes shall be included in the Exchange Offer Registration Statement.
The Company shall use commercially reasonable efforts to cause the Exchange
Offer to be Consummated on the earliest practicable date after the Exchange
Offer Registration Statement has become effective, but in no event later than 30
Business Days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Broker-Dealer who holds Series A Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Series A Notes pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the Series B Notes received by such Broker-Dealer
in the Exchange Offer, which prospectus delivery requirement may be satisfied by
the delivery by such Broker-Dealer of the Prospectus contained in the Exchange
Offer Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by Broker-Dealers
that the Commission may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
Subject to Section 4(c), the Issuers shall use commercially reasonable
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
Notes acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 180 days from the date on which the Exchange Offer Registration
Statement is declared effective.
The Issuers shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
180 day period in order to facilitate such resales.
250
-6-
SECTION 4. SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Issuers are not required to file an
Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Company within 20 Days after the Exchange Offer shall have been Consummated (A)
that such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, or (B) that such Holder may not resell the
Series B Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, or (C) that such Holder is a Broker-Dealer and holds Series A Notes
acquired directly from the Company or one of its Affiliates, then the Issuers
shall:
(x) use commercially reasonable efforts to file a
shelf registration statement pursuant to Rule 415 under the Act, which
may be an amendment to the Exchange Offer Registration Statement (in
either event, the "Shelf Registration Statement") on or prior to the
earliest to occur of (1) the 60th day after the date on which the
Company determines that it is not required to file the Exchange Offer
Registration Statement or (2) the 60th day after the date on which the
Company receives notice from a Holder of Transfer Restricted Securities
as contemplated by clause (ii) above (such earliest date being the
"Shelf Filing Deadline"), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities the Holders
of which shall have provided the information required pursuant to
Section 4(b) hereof; and
(y) use commercially reasonable efforts to cause such
Shelf Registration Statement to be declared effective by the Commission
on or before the 120th day after the obligation to file the Shelf
Registration Statement arises.
Subject to Section 4(c), the Issuers shall use commercially reasonable efforts
to keep such Shelf Registration Statement continuously effective, supplemented
and amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years following the
Closing Date.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 15 Business Days after receipt of a request
therefor, such information as the Company may
251
-7-
reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages (as defined)
pursuant to Section 5 hereof unless and until such Holder shall have used its
best efforts to provide all such reasonably requested information. Each Holder
as to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.
(c) The Company shall be entitled to suspend the effectiveness of any
Shelf Registration Statement and the duration of such suspension shall be
excluded from the calculation of the two-year period referred to in Section
4(a). Such suspension shall be effected only if the Board of Directors of the
Company determines reasonably and in good faith that the effectiveness of the
Shelf Registration Statement would materially impede, delay or interfere with
any financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Company or any of
its Affiliates or require disclosure of material information which the Company
has a lawful and bona fide business purpose for preserving as confidential,
which financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction is under active consideration by
the Company at the time of such suspension described above; PROVIDED, HOWEVER,
that the Company shall not be entitled to more than one suspension, which
suspension shall be no longer than six weeks in duration. If the Company shall
so suspend the effectiveness of a Shelf Registration Statement it shall, as
promptly as possible, deliver a certificate signed by the President, Chief
Executive Officer or Chief Financial Officer of the Company to the Initial
Purchasers and Holders of Transfer Restricted Securities as to such
determination, and such Initial Purchasers and Holders shall receive an
extension of the applicable registration period equal to the number of days of
the suspension.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 Business Days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose (except pursuant to Section 4(c)) prior to the
expiration of the time period specified by this Agreement without being
succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself immediately declared
effective (each such event referred to in clauses (i) through (iv), a
"Registration Default", and each period during which a Registration Default has
occurred and is continuing, a "Registration Default Period"), the Issuers hereby
jointly and severally agree that liquidated damages ("Liquidated Damages"), in
252
-8-
addition to the base interest that would otherwise accrue on the Transfer
Restricted Securities, shall accrue at a per annum rate of 0.25% of the
aggregate principal amount of such Transfer Restricted Securities outstanding
for the first 90 days of the Registration Default Period, at a per annum rate of
0.50% of the aggregate principal amount of such Transfer Restricted Securities
for the second 90 days of the Registration Default Period, at a per annum rate
of 0.75% of the aggregate principal amount of such Transfer Restricted
Securities for the third 90 days of the Registration Default Period and at a per
annum rate of 1.0% of the aggregate principal amount of such Transfer Restricted
Securities outstanding thereafter for the remaining portion of the Registration
Default Period. All accrued liquidated damages shall be paid to Record Holders
by the Company by wire transfer of immediately available funds or by federal
funds check on each Damages Payment Date. Following the cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the accrual
of Liquidated Damages with respect to such Transfer Restricted Securities will
cease immediately.
All obligations of the Issuers set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Security shall have
been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Issuers shall comply with all of the provisions of Section
6(c) below, shall use commercially reasonable efforts to effect such exchange
and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company
there is a question as to whether the Exchange Offer is permitted by
applicable law, the Issuers hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Issuers to
Consummate an Exchange Offer for such Series A Notes. The Issuers
hereby agree to pursue the issuance of such a decision to the
Commission staff level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy. The
Issuers hereby agree, however, to (A) participate in telephonic
conferences with the Commission, (B) deliver to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that such an
Exchange Offer should be permitted, and (C) diligently pursue a
resolution (which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the time that it is Consummated, a written representation to
the Company (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration
253
-9-
Statement) to the effect that (A) it is not an affiliate of the
Issuers, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate
in, a distribution of the Series B Notes to be issued in the Exchange
Offer, (C) it is acquiring the Series B Notes in its ordinary course of
business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Issuers' preparations for
the Exchange Offer and (D) such other customary representations as the
Issuers may reasonably request. Each Holder hereby acknowledges and
agrees that any Broker-Dealer and any such Holder using the Exchange
Offer to participate in a distribution of the securities to be acquired
in the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the
Commission enunciated in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AND CO., INC. (available June
5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May 13,
1988), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters (including any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of
the Act in connection with a secondary resale transaction and that such
a secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Series B Notes obtained by such Holder in
exchange for Series A Notes acquired by such Holder directly from the
Company or an Affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Issuers shall provide a supplemental letter
to the Commission (A) stating that the Issuers are registering the
Exchange Offer in reliance on the position of the Commission enunciated
in EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ AND CO., INC. (available June 5, 1991) and, if applicable, any
no-action letter obtained pursuant to clause (i) above, and (B)
including a representation that neither the Company nor any Guarantor
has entered into any arrangement or understanding with any Person to
distribute the Series B Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Series B Notes in
its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Series B
Notes received in the Exchange Offer.
(b) SHELF REGISTRATION STATEMENT. In connection with any Shelf
Registration Statement, the Issuers shall comply with all the provisions of
Section 6(c) below and shall use their commercially reasonable efforts to effect
such registration to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and pursuant thereto the Issuers will as expeditiously as possible prepare and
file with the Commission a Registration Statement relating to the registration
on any appropriate form under the Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended and
lawful method or methods of distribution thereof.
254
-10-
(c) GENERAL PROVISIONS. Subject to Section 4(c), in connection with any
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required to
permit resales of Notes by Broker-Dealers), the Issuers shall:
(i) use commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Act or any
regulation thereunder, financial statements of the Guarantors) for the
period specified in Section 3 or 4 of this Agreement, as applicable;
upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by
this Agreement, the Issuers shall file promptly an appropriate
amendment to such Registration Statement, in the case of clause (A),
correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use its commercially reasonable efforts to
cause such amendment to be declared effective and such Registration
Statement and the related Prospectus to become usable for their
intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as applicable, or
such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been exchanged
or cease to be Transfer Restricted Securities; cause the Prospectus to
be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state
255
-11-
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Upon receipt
of written notice of any stop order described in the preceding clause
(C), selling Holders shall refrain from delivering any Prospectus or
Prospectus Supplement in the jurisdiction issuing such stop order until
notification by the Issuers that such stop order has been lifted or
withdrawn. Upon the receipt of written notice of any fact or event
described in the preceding clause (D), selling Holders shall refrain
from delivering any Prospectus or Prospectus Supplement requiring
amendment or supplement as described therein. If at any time the
Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Issuers shall use
commercially reasonable efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s), if any, for a
period of at least three Business Days, and the Issuers will not file
any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including
all such documents incorporated by reference) to which a selling Holder
of Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s), if any, shall reasonably object within
three Business Days after the receipt thereof;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Issuers representatives available for
discussion of such document and other customary due diligence matters,
and include such information in such document prior to the filing
thereof as such selling Holders or underwriter(s), if any, reasonably
may request, provided that the Company may require any such Person to
enter into a customary confidentiality agreement;
(vi) subject to the receipt of confidentiality agreements as
provided above, make available at reasonable times for inspection by
the selling Holders,
256
-12-
any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by such
selling Holders or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Issuers
and cause the Issuers' officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being
paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Issuers are notified of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Notes covered thereby or the underwriter(s), if
any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Issuers
hereby consent to the use of the Prospectus and any amendment or
supplement thereto in accordance with this Agreement by each of the
selling Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(xi) enter into such agreements (including an underwriting
agreement), and make such reasonable and customary representations and
warranties, and take all such other actions in connection therewith as
reasonably necessary in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement, all to
257
-13-
such extent as may be reasonably requested by any Initial Purchaser or
by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Registration
Statement contemplated by this Agreement; and whether or not an
underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Issuers shall:
(A) furnish to the selling Holders and each
underwriter, if any, in the event of a Shelf Registration
Statement, and furnish to any Holder tendering Notes in an
Exchange Offer, if any, in the event of an Exchange Offer, in
each case, in such substance and scope as they may reasonably
request and as are customarily made by issuers to underwriters
in primary underwritten offerings, upon the date of the
Consummation of the Exchange Offer and, if applicable, the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date the
Exchange Offer is Consummated or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, signed by (y) the President or any
Vice President and (z) a principal financial or
accounting officer of the Company confirming, as of
the date thereof, the matters set forth in Sections
8.1 - 8.5 of the Purchase Agreement and such other
matters as such parties may reasonably request;
(2) an opinion, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, of counsel for the Issuers, covering
the matters customarily opined to in connection with
the registration of securities as contemplated by
Sections 3 and 4 of this Agreement and such other
matter as such parties may reasonably request, and in
any event including a statement to the effect that
such counsel has participated in conferences with
officers and other representatives of the Company and
the Guarantors, representatives of the independent
public accountants for the Company and the
Guarantors, representatives of the Holders and their
counsel in connection with the preparation of the
Registration Statement and related Prospectus and
have considered the matters required to be stated
therein and the statements contained therein and,
although they have not independently verified and are
not passing upon and assume no responsibility for the
accuracy, completeness or fairness of such
statements, on the basis of the foregoing, they
hereby confirm that no facts came to their attention
that caused them to believe that the Registration
Statement and related Prospectus, as of their date,
contained or contains an untrue statement of a
material fact or omitted or omits to state a material
fact required to be stated therein or necessary to
make the statements therein, in the light of the
circumstances under which
258
-14-
they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such
counsel expresses no belief or opinion with respect
to, assumes no responsibility for, and has not
independently verified, the accuracy, completeness or
fairness of exhibits, the financial statements, notes
and schedules and other financial data included in
any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of
the date of Consummation of the Exchange Offer or the
date of effectiveness of the Shelf Registration
Statement, as the case may be, from the Issuers'
independent accountants, in the customary form and
covering matters of the type customarily covered in
comfort letters by underwriters in connection with
primary underwritten offerings;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to
all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Issuers pursuant to this clause
(xi), if any.
If at any time during which a Registration Statement is required to be
effective under this Agreement the Issuers become aware that the representations
and warranties of the Issuers contemplated in clause (A)(1) above cease to be
true and correct, the Issuers shall so advise the Initial Purchaser and the
underwriter(s), if any, and each selling Holder promptly and, if requested by
such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions (within the United
States, Canada or, with respect to sales to institutions, the United
Kingdom) as the selling Holders or underwriter(s) may reasonably
request and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that neither the Company nor any
Guarantor shall be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
259
-15-
(xiii) to the extent lawful, issue, upon the request of any
Holder of Series A Notes covered by the Shelf Registration Statement,
Series B Notes, having an aggregate principal amount equal to the
aggregate principal amount of Series A Notes surrendered to the Company
by such Holder in exchange therefor or being sold by such Holder; such
Series B Notes to be registered in the name of such Holder or in the
name of the purchaser(s) of such Notes, as the case may be; in return,
the Series A Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xiv) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two Business Days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xv) use commercially reasonable efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities within the United States, as may be reasonably necessary to
enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xii) above;
(xvi) subject to Section 6(c)(i), if any fact or event
contemplated by clause (c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material- fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; (xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities that are in a form
eligible for deposit with The Depository Trust Company;
(xviii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use commercially reasonable
efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities (within the
United States, Canada or the United Kingdom) as may be necessary to
enable the
260
-16-
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xix) otherwise commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(xx) if so required under the TIA, cause the Indenture to be
qualified under the TIA not later than the effective date of the first
Registration Statement required by this Agreement, and, in connection
therewith, cooperate with the Trustee and the Holders of Notes to
effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA;
and execute and use commercially reasonable efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely
manner;
(xxi) provide promptly to each Holder upon request each
document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Issuers' expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
261
-17-
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Issuers' performance of or compliance
with this Agreement will be borne by the Company or the respective Guarantor,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses (including
filings made by any Initial Purchaser or Holder with the NASD (and, if
applicable, the reasonable fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules and regulations
of the NASD)); (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Series B Notes to be issued in the Exchange Offer
and printing of Prospectuses), messenger and delivery services and telephone
incurred by the Company the Guarantors and their agents; (iv) all fees and
disbursements of counsel for the Company and, subject to Section 7(b) below, the
Holders of Transfer Restricted Securities, (v) all application and filing fees
in connection with listing Notes on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Issuers
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Issuers will bear their internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by any issuer.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuers will reimburse the
Initial Purchaser and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors will, jointly and severally,
indemnify and hold harmless each Holder against any losses, claims, damages or
liabilities, joint or several, to which such Holder may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, and will
262
-18-
reimburse each Holder for any legal or other expenses reasonably incurred by
such Holder in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company and the
Guarantors shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Registration Statement or Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Holder expressly for use therein.
(b) Each Holder will, severally and not jointly, indemnify and hold
harmless the Company and the Guarantors against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Registration Statement
or Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use therein; and will reimburse the Company and the Guarantors for
any legal or other expenses reasonably incurred by the Company and the
Guarantors in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or
263
-19-
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors on the one hand and
the Holders on the other from the sale by the Company of the Series A Notes. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Guarantors on the one hand and the
Holders on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantors on the one hand and the
Holders on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Notes (before deducting expenses) received
by the Company and the Guarantors bear to the total proceeds received by such
holder upon the sale of the Notes giving rise to such indemnification
obligations. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Guarantors on the one hand or the Holders on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Guarantors agree, and the Holders shall be deemed to have agreed, that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Holder shall be required to contribute any
amount in excess of the amount by which the total net proceeds received by such
Holder with respect to the Notes exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
264
-20-
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective principal amount of
Series A Notes held by each of the Holders hereunder and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Holder within the meaning
of the Act; and the obligations of the Holders under this Section 8 shall be in
addition to any liability which the respective Holders may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company and the Guarantors and to each person, if any, who controls the
Company within the meaning of the Act the amount by which the total net proceeds
received by such Holder with respect to the Notes exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of misrepresentation within the meaning of Section 11(a) of the Act shall
be entitled to contribution from any person who was not guilty of such
misrepresentation.
(f) Notwithstanding anything to the contrary in this Section 8, the
Company and the Guarantors shall not be required to indemnify and hold harmless
any party with respect to any loss, liability, claim, damage or expense to the
extent arising out of (x) the use of a Prospectus relating to a Shelf
Registration Statement during any period when its use has been suspended
pursuant to Section 4(c) after the Issuers have provided (and such party has
actually received) written notice of such suspension pursuant to Section 12(e);
PROVIDED that the Company shall have established beyond a reasonable doubt in a
court of competent jurisdiction that such Holder actually received such written
notice on a timely basis and that such loss, liability, claim, damage or expense
would have been completely avoided had such notice been complied with or (y) the
use of an outdated Prospectus relating to a Shelf Registration Statement
following the delivery of an updated Prospectus correcting the untrue statement
or omission giving rise to the loss, liability, claim, damage or expense to any
Holder; provided, that the Company shall have established beyond a reasonable
doubt in a court of competent jurisdiction that (i) any such untrue statement or
omission was fully corrected in such updated Prospectus, (ii) that the delivery
of such updated Prospectus by such Holder would not have given rise to such
loss, liability, claim, damage or expense and (iii) such Holder was provided
with sufficient quantities of such updated Prospectus and written notice of
suspension of the prior Prospectus, each on a timely basis. Any amounts paid by
the Issuers to a Holder pursuant to this Agreement as a result of such losses,
liabilities, claims, damages or expenses shall be returned to the Issuer, if it
shall be finally determined by a court of competent jurisdiction that such
Holder was not entitled to indemnification by the Issuers by virtue of this
Section 8(f).
SECTION 9. RULE 144A
The Issuers hereby agree with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available to any Holder or
beneficial owner of
265
-21-
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities from such Holder or
beneficial owner, the information required by Rule 144A(d)(4) under the Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration with respect
to any Notes hereunder unless such Holder (a) agrees to sell such Holder's
Transfer Restricted Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements, and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) REMEDIES. The Issuers agree that monetary damages (including the
Liquidated Damages contemplated hereby) would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Issuers will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Neither the Company nor any of
the Guarantors have previously entered into any agreement granting any
registration rights with respect to its securities to any Person, other than the
Warrant Holders' Agreement. The rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with the rights granted to any
of the holders of the Issuers' securities under any agreement in effect on the
date hereof.
(c) ADJUSTMENTS AFFECTING THE NOTES. The Issuers will not take any
action, or permit any change to occur, with respect to the terms of the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
266
-22-
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Issuers have obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to the Issuers:
TransTechnology Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to
F. ▇▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ & Parks LLP
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
267
-23-
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(I) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO
THE CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that anyone or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, the Indenture, the Notes and the Exchange Escrow Agreement, is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Issuers with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[Signature page follows]
268
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first set forth above.
THE COMPANY:
TRANSTECHNOLOGY CORPORATION
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President & CFO
THE GUARANTORS:
TRANSTECHNOLOGY ACQUISITION CORPORATION
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
PALNUT FASTENERS, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
INDUSTRIAL RETAINING RING COMPANY
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
RETAINERS, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
269
RANCHO TRANSTECHNOLOGY CORPORATION
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY SYSTEMS & SERVICES, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
ELECTRONIC CONNECTIONS AND ASSEMBLIES, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
SSP INDUSTRIES
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
SSP INTERNATIONAL SALES, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY ▇▇▇▇▇▇, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
270
▇▇▇▇▇▇ INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TCR CORPORATION
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
NORCO, INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
AEROSPACE RIVET MANUFACTURERS CORPORATION
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
▇▇▇▇▇▇▇ RING & WASHER INC.
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY ENGINEERED COMPONENTS, LLC
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
271
TRANSTECHNOLOGY CANADA CORPORATION
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
THE ADMINISTRATIVE AGENT:
BANKBOSTON, N.A., as Administrative Agent on
behalf of the Initial Purchasers and Holders
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
272
EXHIBIT F
FORM OF
COMPLIANCE CERTIFICATE
----------- --, ---
To each of the Lenders party to the
Purchase Agreement referred to below
c/o BankBoston, N.A., as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Senior Subordinated Note Purchase Agreement
dated as of August 31, 1999 (as amended, restated, modified, varied and in
effect from time to time, the "Purchase Agreement"), by and among
TransTechnology, the lending institutions party thereto (the "Lenders"), and
BankBoston, N.A., as administrative agent for the Lenders (the "Administrative
Agent"). Capitalized terms which are used herein without definition and which
are defined in the Purchase Agreement shall have the respective meanings
assigned to such terms in the Purchase Agreement.
Pursuant to Section 9.4(c) of the Purchase Agreement, the principal
financial or accounting officer of TransTechnology hereby certifies to each of
you as follows: (a) the information furnished in the calculations attached
hereto was true and correct as of the last day of the fiscal [year] [quarter]
next preceding the date of this certificate; (b) as of the date of this
certificate, there exists no Default or Event of Default or condition which
would, with either or both the giving of notice or the lapse of time, result in
a Default or an Event of Default; and (c) the financial statements delivered
herewith were prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods (except, in the case
of quarterly statements, for year-end adjustments and provisions for footnotes
and, in all cases, except as disclosed therein).
IN WITNESS WHEREOF, the undersigned officer has executed this Compliance
Certificate as of the date first written above.
TRANSTECHNOLOGY CORPORATION
By:_______________________________
Title:
[Worksheet to be attached]
273
EXHIBIT G
SUBORDINATED GUARANTY
SUBORDINATED GUARANTY (this "Guaranty"), dated as of August 31, 1999,
by TRANSTECHNOLOGY ACQUISITION CORPORATION, a Delaware corporation, PALNUT
FASTENERS, INC., a Delaware corporation, INDUSTRIAL RETAINING RING COMPANY, a
New Jersey corporation, RETAINERS, INC., a New Jersey corporation, RANCHO
TRANSTECHNOLOGY CORPORATION, a California corporation, TRANSTECHNOLOGY SYSTEMS &
SERVICES, INC., a Michigan corporation, ELECTRONIC CONNECTIONS AND ASSEMBLIES,
INC., a Delaware corporation, SSP INDUSTRIES, a California corporation, SSP
INTERNATIONAL SALES, INC., a California corporation, TRANSTECHNOLOGY ▇▇▇▇▇▇,
INC., a Delaware corporation, ▇▇▇▇▇▇, INC., a Delaware corporation, TCR
CORPORATION, a Minnesota corporation, NORCO, INC., a Connecticut corporation,
AEROSPACE RIVET MANUFACTURERS CORPORATION, a California corporation, ▇▇▇▇▇▇▇
RING & WASHER, INC., a Virginia corporation, TRANSTECHNOLOGY ENGINEERED
COMPONENTS, LLC, a Delaware limited liability company, TRANSTECHNOLOGY CANADA
CORPORATION, an Ontario corporation and TRANSTECHNOLOGY INTERNATIONAL
CORPORATION, a U.S. Virgin Islands corporation (each a "Guarantor" and
collectively, the "Guarantors"), in favor of (i) BankBoston, N.A., a national
banking association, as Administrative Agent (hereinafter, in such capacity, the
"Administrative Agent") for itself and the other lending institutions
(hereinafter, collectively, the "Lenders") which are or may become parties to a
Senior Subordinated Note Purchase Agreement dated as of August 31, 1999 (as
amended, restated, modified, varied and in effect from time to time, the
"Purchase Agreement"), by and among TransTechnology Corporation, a Delaware
corporation (the "Company"), the Lenders, and the Administrative Agent, (ii)
each of the Holders of the Notes (as such terms are defined in the Purchase
Agreement).
WHEREAS, the Guarantors are members of a group of related corporations,
the success of any one of which is dependent in part on the success of the other
members of such group;
WHEREAS, each of the Guarantors expects to receive substantial direct
and indirect benefits from the extensions of credit to the Company by the
Holders pursuant to the Purchase Agreement (which benefits are hereby
acknowledged);
WHEREAS, it is a condition precedent to the Lenders' purchasing the
Notes under the Purchase Agreement that each Guarantor execute and deliver to
the Administrative Agent, for the benefit of each of the Holders of the Notes, a
guarantee substantially in the form hereof; and
WHEREAS, each Guarantor wishes to guarantee the Company's Obligations
to the Holders under or in respect of the Purchase Agreement as provided herein.
274
-2-
NOW, THEREFORE, each Guarantor hereby agrees for the benefit of the
Holders as follows:
1. DEFINITIONS. All capitalized terms used herein without definition
that are defined in the Purchase Agreement shall have the respective meanings
provided therefor in the Purchase Agreement. References herein to the
Administrative Agent shall, if and for so long as any Exchange Notes are
outstanding under the Indenture, be deemed to include the Trustee under and as
defined in the Indenture.
2. GUARANTEE OF PAYMENT AND PERFORMANCE; SUBORDINATION.
(a) IN GENERAL. Each Guarantor hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note and to the Administrative
Agent, irrespective of the validity or enforceability of the Purchase Agreement,
the Indenture, the Notes or the obligations of the Company thereunder, that: (i)
the principal of and interest on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the Administrative Agent
under the Notes, the Purchase Agreement, the Indenture or any of the other Loan
Documents will be promptly paid in full or performed, all in accordance with the
terms hereof and thereof; (ii) without limiting the foregoing, the Liquidated
Damages payable under the Registration Rights Agreement will be promptly paid in
full when due; and (iii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, each Guarantor shall be jointly and severally obligated to
pay the same immediately. Each Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection. The obligations of the Guarantors
under this Section 2(a) are referred to herein as the "Obligations".
(b) SUBORDINATION. Notwithstanding any other provision of this
Guaranty, payment under this Guaranty shall be, in the manner and to the extent
set forth in Section 11 of the Purchase Agreement, junior and subordinated in
right of payment to the prior payment in full of all amounts due and owing upon
all Senior Debt (as defined in the Purchase Agreement) at any time outstanding
as if a payment under this Guaranty were a payment under the Notes (or any of
them); and in furtherance thereof, the Administrative Agent and the Holders
shall have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to the Purchase Agreement.
3. GUARANTOR'S AGREEMENT TO PAY ENFORCEMENT COSTS, ETC. Each Guarantor
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Holders and to the Administrative Agent, on demand, all reasonable costs
275
-3-
and expenses (including court costs and legal expenses) incurred or expended by
any Holder or the Administrative Agent in connection with the Obligations, this
Guaranty and the enforcement thereof, together with interest on amounts
recoverable under this Section 3 from the time when such amounts become due
until payment, whether before or after judgment, at the rate of interest for
overdue principal set forth in the Purchase Agreement, PROVIDED that if such
interest exceeds the maximum amount permitted to be paid under applicable law,
then such interest shall be reduced to such maximum permitted amount.
4. FOREIGN CURRENCY OBLIGATIONS.
The Guarantors shall make payment relative to each Obligation in the
currency (the "Original Currency") in which TransTechnology is required to pay
such Obligation. If any Guarantor makes payment relative to any Obligation to
the Lenders of the Administrative Agent in a currency (the "Other Currency")
other than the Original Currency (whether voluntary or pursuant to an order or
judgement of a court of tribunal of any jurisdiction), such payment shall
constitute a discharge of the liability of such Guarantor hereunder in respect
of such Obligation only to the extent of the amount of the Original Currency
which the Administrative Agent is able to purchase at Boston, Massachusetts with
the amount it receives on the date of receipt in accordance with its normal
practice. If the amount of the Original Currency which the Administrative Agent
is able to purchase is less than the amount of such currency originally due in
respect of the relevant Obligation, such Guarantor shall indemnify and save the
Administrative Agent harmless from and against any loss or damage arising as a
result of such deficiency. This indemnity shall constitute an obligation
separate and independent from the other obligations contained in this Guarantee,
shall give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by any Lender or the Administrative Agent
and shall continue in full force and effect notwithstanding any judgment or
order in respect of any amount due hereunder or under any judgement or order.
5. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
The Guarantors may not consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person), another corporation, Person or
other entity whether or not affiliated with such Guarantor unless (i) subject to
the provisions of the following paragraph, the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to an assumption agreement, in form and
substance reasonably satisfactory to the Administrative Agent, under the Notes
and the Purchase Agreement; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; and (iii) except in the case
of a merger of a Guarantor with or into another Guarantor or a merger of a
Guarantor with or into the Company, the Company would be permitted by virtue of
the Company's pro forma Fixed Charge Coverage Ratio, immediately after giving
effect to such transaction, to incur at least $1.00 of additional
▇▇▇
-▇-
▇▇▇▇▇▇▇▇▇▇▇▇ pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 10.1 of the Purchase Agreement.
6. RELEASES FOLLOWING SALE OF ASSETS OR CAPITAL STOCK.
In the event of a sale or other disposition of all or substantially all
of the assets of a Guarantor (other than to the Company or another Guarantor),
by way of merger, consolidation or otherwise, or a sale or other disposition of
all of the Capital Stock of any Guarantor (other than to the Company or another
Guarantor), then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the Capital Stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under this Guaranty
and any such acquiring corporation will not be required to assume any
obligations of such Guarantor under this Guaranty; provided that such sale or
other disposition complies with all applicable provisions of the Purchase
Agreement.
7. WAIVERS BY GUARANTORS; HOLDERS' FREEDOM TO ACT. Each Guarantor
agrees that the Obligations will be paid and performed strictly in accordance
with their respective terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Holder with respect thereto. The Guarantors hereby agree that
their Obligations hereunder shall be unconditional, irrespective of the absence
of any action to enforce the same, any waiver or consent by any Holder of the
Notes with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenant that this
Guaranty shall not be discharged except by complete performance of the
Obligations. Without limiting the generality of the foregoing, each Guarantor
agrees to the provisions of any instrument evidencing, securing or otherwise
executed in connection with any Obligation and agrees that the Obligations of
such Guarantor hereunder shall not be released or discharged, in whole or in
part, or otherwise affected by (a) the failure of any Holder to assert any claim
or demand or to enforce any right or remedy against the Company or any other
entity or other person primarily or secondarily liable with respect to any of
the Obligations; (b) any extensions, compromise, refinancing, consolidation or
renewals of any Obligation; (c) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers, compromise,
refinancing, consolidation or other amendments or modifications of any of the
terms or provisions of the Purchase Agreement, the Indenture, the Notes, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligations, (d) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligations; (e) the adequacy of any rights which any Holder may
have against any
277
-5-
collateral security or other means of obtaining repayment of any of the
Obligations; (f) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which any Holder might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (g) any other act or omission which might in any manner
or to any extent vary the risk of the Guarantors or otherwise operate as a
release or discharge of any Guarantor, all of which may be done without notice
to such Guarantor. To the fullest extent permitted by law, each Guarantor hereby
expressly waives any and all rights or defenses arising by reason of (i) any
"one action" or "anti-deficiency" law which would otherwise prevent any Holder
from bringing any action, including any claim for a deficiency, or exercising
any other right or remedy (including any right of set-off), against such
Guarantor before or after such Holder's commencement or completion of any
foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (ii) any other law which in any other way would otherwise require
any election of remedies by any Holder.
8. UNENFORCEABILITY OF OBLIGATIONS AGAINST COMPANY. If for any reason
the Company has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from the Company by reason of the Company's insolvency, bankruptcy or
reorganization or by other operation of law or for any other reason, this
Guaranty shall nevertheless be binding on the Guarantors to the same extent as
if the Guarantors at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of any of
the Obligations is stayed upon the insolvency, bankruptcy or reorganization of
the Company, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of the Purchase Agreement, the Indenture, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any Obligation shall be immediately due
and payable by the Guarantor.
9. SUBROGATION.
9.1. WAIVER OF RIGHTS. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in full of
all obligations guaranteed hereby. Each Guarantor further agrees that,
as between the Guarantors, on the one hand, and the Holders and the
Administrative Agent, on the other hand, (x) the maturity of the
obligations under the Notes guaranteed hereby may be accelerated as
provided in the Purchase Agreement for the purposes of this Guaranty,
notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such obligations
as provided in the Purchase Agreement, such obligations (whether or not
due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guaranty. The Guarantors shall have
the right to seek contribution from any non-paying
▇▇▇
-▇-
▇▇▇▇▇▇▇▇▇ so long as the exercise of such right does not impair the
rights of the Holders under this Guaranty.
9.2. PROVISIONS SUPPLEMENTAL. The provisions of this ss.8
shall be supplemental to and not in derogation of any rights and
remedies of the Holders or the Administrative Agent under any separate
subordination agreement which a Holder or the Administrative Agent may
at any time and from time to time enter into with the Guarantor.
10. TAXES AND SETOFF BY GUARANTOR.
All payments to be made by the Guarantors hereunder shall be made
without set-off or counterclaim and without deduction for any taxes, levies,
duties, fees, deductions, withholdings, restrictions or conditions of any nature
whatsoever. If at any time any applicable law, regulation or international
agreement requires any Guarantor to make any such deduction or withholding from
any such payment, the sum due from such Guarantor in respect to such payment
shall be increased to the extent necessary to ensure that, after the making of
such deduction or withholding, the Administrative Agent, for and on behalf of
the Lenders, receives a net sum equal tot he sum which it would have received
had no deduction or withholding been required.
11. FURTHER ASSURANCES. Each Guarantor agrees that it will from time to
time, at the request of the Majority Holders, do all such things and execute all
such documents as the Majority Holders may consider necessary or desirable to
give full effect to this Guaranty and to perfect and preserve the rights and
powers of the Holders and the Administrative Agent hereunder, including
endorsing a notation of this Guaranty substantially in the form included in
Exhibit E to the Indenture on each Exchange Note authenticated and delivered by
the Trustee pursuant to Section 5 of the Purchase Agreement and the provisions
of the Exchange Escrow Agreement. Each Guarantor hereby agrees that this
Guaranty shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of this Guaranty.
If an Officer whose signature is on this Guaranty no longer holds that
office at the time the Trustee authenticates any Exchange Note on which this
Guaranty is endorsed, this Guaranty shall be valid nevertheless. The delivery of
any Exchange Note by the Trustee, pursuant to and after the authentication
thereof under the Indenture, shall constitute due delivery of this Guaranty on
behalf of the Guarantors.
Each Guarantor acknowledges and confirms that it has established its
own adequate means of obtaining from the Company on a continuing basis all
information desired by such Guarantor concerning the financial condition of the
Company and that such Guarantor will look to the Company and not to any Holder
in order for such Guarantor to keep adequately informed of changes in the
Company's financial condition.
279
-7-
12. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full
force and effect until the indefeasible repayment in full, in cash, of all of
the Obligations. If any Holder or the Administrative Agent is required by any
court or otherwise to return to the Company, the Guarantors or any custodian,
trustee, liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by either to the Administrative Agent
or such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect.
13. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon each
Guarantor, such Guarantor's successors and assigns, and shall inure to the
benefit of the Holders and their successors, transferees and assigns. Without
limiting the generality of the foregoing sentence, each Holder may assign or
otherwise transfer the Notes, the other Loan Documents or any other agreement or
note held by it evidencing, securing or otherwise executed in connection with
the Obligations, or sell participations in any interest therein, to any other
entity or other person, and such other entity or other person shall thereupon
become vested, to the extent set forth in the agreement evidencing such
assignment, transfer or participation, with all the rights in respect thereof
granted to such Holder herein, all in accordance with the Purchase Agreement.
The Guarantors may not assign any of their obligations hereunder.
14. LIMITATION ON GUARANTORS' LIABILITY. Each Guarantor hereby confirms
that it is the intention of such party that this Guaranty not constitute a
fraudulent transfer or conveyance for purposes of the United States Bankruptcy
Code or another insolvency code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to this Guaranty. To effectuate the foregoing intention, the
Guarantors hereby irrevocably agree that the obligations of such Guarantor under
this Guaranty shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Guaranty, result in the obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance.
15. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantors therefrom shall be
effective unless the same shall be in writing and signed by the Majority
Holders. No failure on the part of any Holder to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
16. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be
280
-8-
deemed to have been duly made or given when delivered by hand or mailed first
class, postage prepaid, or, in the case of telegraphic or telexed notice, when
transmitted, answer back received, addressed as follows: if to a Guarantor, c/o
the Company at its address set forth in Section 21 of the Purchase Agreement, if
to the Administrative Agent, at its address set forth in Section 21 of the
Purchase Agreement, if to the Trustee, at its address set forth in the
Indenture, and if to a Holder, at the address for notices for such Holder set
forth in the register referred to in Section 20.3 of the Purchase Agreement, or
at such address as either party may designate in writing to the other.
17. GOVERNING LAW; CONSENT TO JURISDICTION. THIS GUARANTEE IS INTENDED
TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). Each Guarantor agrees that any
suit for the enforcement of this Guaranty may be brought in the courts of the
Commonwealth of Massachusetts or any federal court sitting therein and consents
to the nonexclusive jurisdiction of such court and to service of process in any
such suit being made upon the Guarantors by mail at the address specified by
reference in Section 14. Each Guarantor hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit was brought in an inconvenient court.
18. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT ON BEHALF OF THE
LENDERS AND EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT
TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
GUARANTEE, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH
RIGHTS OR OBLIGATIONS. Except as prohibited by law, each Guarantor hereby waives
any right which it may have to claim or recover in any litigation referred to in
the preceding sentence any special, exemplary, punitive or consequential damages
or any damages other than, or in addition to, actual damages. Each Guarantor (a)
certifies that no Holder nor any representative, agent or attorney of any Holder
has represented, expressly or otherwise, that any Holder would not, in the event
of litigation, seek to enforce the foregoing waivers and (b) acknowledges that,
in entering into the Purchase Agreement and the other Loan Documents to which
any Holder is a party, the Holders are relying upon, among other things, the
waivers and certifications contained in this Section 16.
19. MISCELLANEOUS. This Guaranty constitutes the entire agreement of
the Guarantors with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guarantee of or collateral security for any of the Obligations. The
invalidity or unenforceability of any one or more sections of this Guaranty
shall not affect the validity or enforceability of its remaining provisions.
Captions are for the ease of reference only and shall not affect the meaning of
the relevant provisions. The meanings of all
281
-9-
defined terms used in this Guaranty shall be equally applicable to the singular
and plural forms of the terms defined.
282
IN WITNESS WHEREOF, each of the Guarantors has caused this Subordinated
Guaranty to be executed and delivered as of the date first above written.
TRANSTECHNOLOGY ACQUISITION CORPORATION
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
PALNUT FASTENERS, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
INDUSTRIAL RETAINING RING COMPANY
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
RETAINERS, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
RANCHO TRANSTECHNOLOGY CORPORATION
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
283
TRANSTECHNOLOGY SYSTEMS & SERVICES, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
ELECTRONIC CONNECTIONS AND ASSEMBLIES, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
SSP INDUSTRIES
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
SSP INTERNATIONAL SALES, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY ▇▇▇▇▇▇, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
▇▇▇▇▇▇ INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
284
TCR CORPORATION
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
NORCO, INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
AEROSPACE RIVET MANUFACTURERS CORPORATION
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
▇▇▇▇▇▇▇ RING & WASHER INC.
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY ENGINEERED COMPONENTS, LLC
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
TRANSTECHNOLOGY CANADA CORPORATION
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
285
TRANSTECHNOLOGY INTERNATIONAL CORPORATION
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary
The Administrative Agent hereby executes this Guaranty on behalf of
itself and the other Lenders solely for the purpose of Section 18 hereof:
BANKBOSTON, N.A.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
286
EXHIBIT H
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated as of _____ __, ____
Reference is made to the Senior Subordinated Note Purchase Agreement
dated as of August 31, 1999 (as amended, restated, modified, varied and in
effect from time to time, the "Purchase Agreement"), by and among
TransTechnology Corporation, a Delaware corporation ("TransTechnology"), the
lending institutions party thereto (the "Lenders"), and BankBoston, N.A., as
administrative agent for the Lenders (the "Administrative Agent"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Purchase Agreement.
_______________ (the "ASSIGNOR") and _______________ (the "ASSIGNEE")
hereby agree as follows:
1. ASSIGNMENT. Subject to the terms and conditions of this Assignment
and Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$_______ interest in and to the rights, benefits, indemnities and obligations of
the Assignor under the Purchase Agreement equal to _______% in respect of the
Loans immediately prior to the Effective Date (as hereinafter defined).
2. ASSIGNOR'S REPRESENTATIONS. The Assignor (i) represents and warrants
that (A) it is legally authorized to enter into this Assignment and Acceptance,
(B) as of the Effective Date (as hereinafter defined), immediately after giving
effect to this Assignment and Acceptance, its Commitment is $_______, its
Commitment Percentage is _______%, and the aggregate outstanding principal
balance of its Loans equals $_______________, and (C) immediately after giving
effect to all assignments which have not yet become effective, the Assignor's
interest in the Loans will be sufficient to give effect to this Assignment and
Acceptance, (ii) makes no representation or warranty, express or implied, and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Purchase Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Purchase Agreement, the other Loan Documents or any
other instrument or document furnished pursuant thereto or the attachment,
perfection or priority of any security interest or mortgage, other than that it
is the legal and beneficial owner of the interest being assigned by it hereunder
free and clear of any claim or encumbrance; (iii) makes no representation or
warranty and assumes no
287
-2-
responsibility with respect to the financial condition of TransTechnology or any
of its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by
TransTechnology or any of its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of its
obligations under the Purchase Agreement or any of the other Loan Documents or
any other instrument or document delivered or executed pursuant thereto; and
(iv) attaches hereto the Bridge Note [, Term Note and Exchange Note] delivered
to it under the Purchase Agreement.
The Assignor requests that TransTechnology exchange the Assignor's
Bridge Note [and/or Term Note and/or Exchange Note] for new Bridge Notes [and/or
Term Notes and/or Exchange Notes] payable to the Assignor and Assignee as
follows:
Notes payable to Amount of Bridge Note: Amount of Amount of
---------------- --------------------- --------- ---------
the order of: Term Note: Exchange Note:
---------------- ----------- --------------
Assignor $__________ $__________ $__________
Assignee $__________ $__________ $__________
3. ASSIGNEE'S REPRESENTATIONS. The Assignee (i) represents and warrants that
(A) it is duly and legally authorized to enter into this Assignment and
Acceptance, (B) the execution, delivery and performance of this Assignment and
Acceptance do not conflict with any provision of law or of the charter or
by-laws of the Assignee, or of any agreement binding on the Assignee, (C) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Assignment
and Acceptance, and to render the same the legal, valid and binding obligation
of the Assignee, enforceable against it in accordance with its terms, have been
done and performed and have occurred in due and strict compliance with all
applicable laws; (ii) confirms that it has received a copy of the Purchase
Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 8.4 and 9.4 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon the Assignor, the Administrative
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Purchase Agreement; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Purchase Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (v) agrees
that it will perform in accordance with their terms all the obligations which
by
288
-3-
the terms of the Purchase Agreement are required to be performed by it as a
Lender.
4. EFFECTIVE DATE. The effective date for this Assignment and
Acceptance shall be _____ __, ____ (the "EFFECTIVE DATE"). Following the
execution of this Assignment and Acceptance, each party hereto shall deliver its
duly executed counterpart hereof to the Administrative Agent for acceptance by
the Administrative Agent and recording in the Register by the Administrative
Agent. SCHEDULE 1 to the Purchase Agreement shall thereupon be replaced as of
the Effective Date by SCHEDULE 1 annexed hereto.
5. RIGHTS UNDER PURCHASE AGREEMENT. Upon such acceptance and recording,
from and after the Effective Date, (i) the Assignee shall be a party to the
Purchase Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, with respect to that portion of its interest under the Purchase
Agreement assigned hereunder, relinquish its rights and be released from its
obligations under the Purchase Agreement; PROVIDED, HOWEVER, that the Assignor
shall retain its rights to be indemnified pursuant to Section 18 of the Purchase
Agreement with respect to any claims or actions arising prior to the Effective
Date.
6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by
the Administrative Agent and such recording, from and after the Effective Date,
the Administrative Agent shall make all payments in respect of the rights and
interests assigned hereby (including payments of principal, interest, fees and
other amounts) to the Assignee. The Assignor and the Assignee shall make any
appropriate adjustments in payments for periods prior to the Effective Date by
the Administrative Agent or with respect to the making of this assignment
directly between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.
289
-4-
IN WITNESS WHEREOF, intending to be legally bound, each of the
undersigned has caused this Assignment and Acceptance to be executed on its
behalf by its officer or officers thereunto duly authorized, as of the date
first above written.
ASSIGNOR:
By: ________________________________________
Name:
Title:
ASSIGNEE:
By: ________________________________________
Name:
Title:
290
-5-
SCHEDULE 1