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WARRANT HOLDERS' AGREEMENT
By and Among
TRANSTECHNOLOGY CORPORATION
THE PURCHASERS NAMED HEREIN
and
BANKBOSTON, N.A.
as Administrative Agent
Dated as of August 31, 1999
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WARRANT HOLDERS' AGREEMENT
This WARRANT HOLDERS' AGREEMENT (the "AGREEMENT") is made and
entered into as of August 31, 1999, by and among TRANSTECHNOLOGY CORPORATION, a
Delaware corporation (hereinafter, together with its successors in title and
assigns, the "COMPANY"), each of the Purchasers named on SCHEDULE 1 hereto (the
"PURCHASERS") and each other person who becomes a party to this Agreement by
executing an Instrument of Accession (an "INSTRUMENT OF ACCESSION") in the form
of EXHIBIT A hereto, and BANKBOSTON, N.A., as Administrative Agent under the
Subordinated Loan Agreement (as defined below) and as Agent for the Purchasers
hereunder (the "ADMINISTRATIVE AGENT").
WHEREAS, the Company has issued Warrants (as defined below) for the
purchase of 731,197 shares of its Common Stock (as defined below), pursuant to
the Subordinated Loan Agreement, and subject to each of (a) a Warrant Agreement,
dated as of the date hereof (the "WARRANT AGREEMENT"), by and among the Company
and each of the Purchasers and (b) a Warrant Escrow Agreement, dated as of the
date hereof (the "WARRANT ESCROW AGREEMENT"), by and among the Company, each of
the Purchasers and State Street Bank and Trust Company as the Escrow Agent;
WHEREAS, this Agreement sets forth certain rights of the holders of
such Warrants;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
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CERTAIN DEFINED TERMS
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As used herein, the following terms shall have the respective meanings
assigned to them in this Article I:
"ADJUSTED NET WORTH" shall mean, in connection with any liquidation or
sale of assets by the Company, the consolidated net worth of the Company,
determined in accordance with generally accepted accounting principles (as
defined below), taking into account (i) the total consideration received by the
Company for such transactions, (ii) the transaction costs and (iii) any
liabilities of the Company to be discharged in connection with such transaction.
"AFFILIATE" shall mean, with respect to any Stockholder, any Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Stockholder and shall include (a) any Person who is a
director or beneficial holder of at least 10% of the then outstanding capital
stock (or partnership interests or other shares of beneficial interest) of such
Stockholder and Family Members of any such Person, (b) any Person of which such
Stockholder or an Affiliate (as defined
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in clause (a) above) of such Stockholder directly or indirectly, either
beneficially owns at least 10% of the then outstanding capital stock (or
partnership interests or other shares of beneficial interest) or constitutes at
least a 10% equity participant, (c) any Person of which an Affiliate (as defined
in clause (a) above) of such Stockholder is a partner, director, officer or
executive employee, and (d) in the case of a specified Person who is an
individual, Family Members of such Person.
"BUSINESS DAY" means any day (other than a Saturday or Sunday) on which
banking institutions in Boston, Massachusetts are open for the transaction of
banking business.
"CAPITAL TRANSACTION" means the occurrence of any of the following: any
merger, consolidation, liquidation, sale or other transfer of more than fifty
percent (50%) of the assets of the Company or other similar corporate actions
pursuant to which the Company or the holders of common stock or preferred stock
of the Company receive cash, securities, or other property.
"CERTIFICATE OF INCORPORATION" shall mean the Company's Certificate of
Incorporation, as amended and in effect on the date of this Agreement.
"CHANGE IN CONTROL" shall have the meaning ascribed to that term in the
Subordinated Loan Agreement.
"CLOSING DATE" shall have the meaning ascribed to that term in the
Subordinated Loan Agreement.
"CLOSING PRICE" with respect to any security on any day means (a) if
such security is listed or admitted for trading on a national securities
exchange, the reported last sales price regular way or, if no such reported sale
occurs on such day, the average of the closing bid and asked prices regular way
on such day, in each case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such class of security is listed or admitted to
trading, or (b) if such security is not listed or admitted to trading on any
national securities exchange, the last quoted sales price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market
on such day as reported by NASDAQ or any comparable system then in use or, if
not so reported, as reported by any New York Stock Exchange member firm
reasonably selected by the Company for such purpose.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" shall mean the Company's Common Stock, $0.01 par value
per share.
"COMPANY" shall have the meaning ascribed to that term in the preamble
hereto.
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"COMPANY APPRAISAL" shall have the meaning ascribed to that term in
Section 7.4(b) hereof.
"COMPANY APPRAISER" shall have the meaning ascribed to that term in
Section 7.4(b) hereof.
"CONSENSUS APPRAISER" shall have the meaning ascribed to that term in
Section 7.4(b) hereof.
"CONSOLIDATED EBITDA" shall have the meaning ascribed to that term in
the Subordinated Loan Agreement as in effect on the date hereof.
"CREDIT AGREEMENT" shall mean the Second Amended and Restated Credit
Agreement, dated as of August 31, 1999, by and among the Company, BankBoston,
N.A., as Administrative Agent, and the other parties referred to therein.
"DEMAND REGISTRATION" has the meaning ascribed to such term in
Section 6.1(a) hereof.
"EVENT OF DEFAULT" shall have the meaning specified in the Subordinated
Loan Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any federal statute or code which is a successor thereto.
"FAIR MARKET VALUE" shall have the meaning ascribed to that term in
Section 7.4(b) hereof.
"FAMILY MEMBERS" shall mean, with respect to any individual, any
Related Person or Family Trust of such individual.
"FAMILY TRUST" shall mean, with respect to any individual, any trust
created for the benefit of one or more of such individual's Related Persons and
controlled by such individual.
"FORM S-1", "FORM S-3" and "FORM S-8" means the forms so designated,
promulgated by the Commission for registration of securities under the
Securities Act, and any forms succeeding to the functions of such forms, whether
or not bearing the same designation.
"FORMULA VALUE" shall have the meaning ascribed to that term in
Section 10.4(c) hereof.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean 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 in each case referred to in this
definition of "generally
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accepted accounting principles" 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.
"HOLDER APPRAISER" shall have the meaning ascribed to that term in
Section 7.4(b) hereof.
"HOLDER CONSENT" means, at any particular date, the consent, approval
or vote of the Majority Holders.
"HOLDER SHARES" means, in relation to any Holder at any particular
date, (i) all shares of Common Stock held of record by such Holder on such date,
and (ii) all shares of Common Stock issuable by the Company to such Holder upon
conversion of or in exchange for or upon exercise of rights under all other
capital stock or other securities (including the Warrants and any other warrants
and options) of the Company held of record by such Holder on such date. In this
Agreement, in any calculation of the number of Holder Shares held by any Holder,
in addition to any shares of Common Stock held of record by such Holder, such
Holder shall be deemed to hold of record on any particular date the total number
of shares of Common Stock issuable by the Company upon conversion of or in
exchange for or upon exercise of rights under all capital stock or other
securities (including the Warrants and any other warrants or options) of the
Company then held of record by such Holder.
"HOLDERS" means, collectively, (i) the Purchasers so long as any of the
Purchasers shall continue to own and hold of record any of the Securities and
(ii) each Permitted Transferee of a Purchaser so long as such Permitted
Transferee shall continue to own and hold of record any of the Securities, and
provided such Permitted Transferee has executed an Instrument of Accession.
"INDEMNIFIED PARTY" shall have the meaning ascribed to that term in
Section 6.7(c) hereof.
"INDEMNIFYING PARTY" shall have the meaning ascribed to that term in
Section 6.7(c) hereof.
"INSTRUMENT OF ACCESSION" shall have the meaning ascribed thereto in
the preamble hereto.
"MAJORITY HOLDERS" means, in relation to the Holders at any particular
date, Holders holding of record or deemed to be holding of record, at such date,
at least fifty-one percent (51%) of the total number of all Holder Shares then
held or deemed held of record by all Holders on such date.
"MARKET PRICE" with respect to any security on any day means the
average of the daily Closing Prices of a share or unit of such security for the
20 consecutive Business Days ending on the most recent Business Day for which a
Closing Price is
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available; provided, however, that in the event that, in the case of Common
Stock, the Market Price is determined during a period following the announcement
by the Company of (A) a dividend or distribution of Common Stock, or (B) any
subdivision, combination or reclassification of Common Stock and prior to the
expiration of 20 Business Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Market Price shall be
appropriately adjusted to reflect the current Market Price per share equivalent
of Common Stock.
"NASDAQ" means the National Association of Securities Dealers automated
quotation system.
"NEGOTIATION PERIOD" shall have the meaning ascribed to that term in
Section 10.4(b) hereof.
"PERMITTED TRANSFEREE" means, in relation to any particular Holder, a
transferee of such Holder's interest in any Warrants pursuant to the Warrant
Agreement, and any Person who shall acquire any other Securities from such
Holder or from any Permitted Transferee thereof in a transaction not in
violation or in contravention of any applicable law or regulation.
"PERSON" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
"PERSONAL REPRESENTATIVE" shall mean the successor or legal
representative (including, without limitation, a guardian, executor,
administrator or conservator) of a dead or incompetent Stockholder.
"PIGGYBACK REGISTRATION" shall have the meaning ascribed to that term
in Section 6.2(a) hereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by any Prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the prospectus, including post-effective amendments, and all material
incorporated by reference in such prospectus.
"PUBLIC SALE" shall mean any sale of Common Stock to the public
pursuant to a public offering registered under the Securities Act of 1933, as
amended, or to the public through a broker or market-maker pursuant to the
provisions of Rule 144 (or any successor rule) adopted under the Securities Act
of 1933, as amended.
"PURCHASERS" shall have the meaning ascribed to that term in the
preamble hereto.
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"PUT CLOSING DATE" shall have the meaning ascribed to that term in
Section 7.2 hereof.
"PUT NOTICE" shall have the meaning ascribed to that term in Section
7.1 hereof.
"REGISTER", "REGISTERED" and "REGISTRATION" refers to a registration
effected by preparing and filing a Registration Statement in compliance with the
Securities Act and the declaration or ordering by the Commission of
effectiveness of such Registration Statement.
"REGISTRABLE SECURITIES" shall mean (a) the Warrants and the shares of
Common Stock issued or issuable upon exercise of the Warrants in accordance with
their terms, (b) all shares of Common Stock issued or issuable upon conversion
of such shares of Common Stock, and (c) all shares of the Company's capital
stock issued with respect to such shares by way of stock dividend or stock split
or in connection with any merger, consolidation, recapitalization or other
reorganization affecting the Company's capital stock. Registrable Securities
will continue to be Registrable Securities in the hands of any holder and each
transferee thereof will succeed to the rights and obligations of a holder of
Registrable Securities hereunder, provided that shares of Purchaser Securities
will cease to be Registrable Securities when transferred (i) to the Company or
(ii) pursuant to a Public Sale.
"REGISTRATION EXPENSES" shall have the meaning ascribed to that term in
Section 6.6(a) hereof.
"REGISTRATION STATEMENT" means any Registration Statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.
"RELATED PERSONS" shall mean, with respect to any individual, such
individual's parents, spouse, children and grandchildren.
"REPURCHASE PRICE" shall have the meaning ascribed to that term in
Section 7.4(a) hereof.
"RULE 144" means Rule 144 issued by the Commission under the Securities
Act, or any subsequent rule pertaining to the disposition of securities without
registration.
"SECURITIES" means, collectively, the Warrants and the Warrant Shares.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
federal statute or code which is a successor thereto.
"STOCK OPTION PLAN" means, collectively, the Company's Amended and
Restated 1992 Long Term Incentive Plan and 1998 Non-Employee Directors' Stock
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Option Plan or plans created after the date hereof pursuant to which capital
stock, options and warrants may be issued to employees and directors of the
Company.
"SUBORDINATED LOAN AGREEMENT" shall have the meaning ascribed to that
term in Section 2.4 hereof.
"SUBSIDIARY" shall mean any corporation, association, trust, or other
business entity, of which the designated parent shall at any time own or control
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding shares of capital stock (or other shares
of beneficial interest) entitled ordinarily to vote for the election of such
business entity's directors (or in the case of a business entity that is not a
corporation, for those Persons exercising functions similar to directors of a
corporation).
"TENDERING HOLDER" shall have the meaning ascribed to that term in
Section 7.1 hereof.
"THIRD APPRAISER" shall have the meaning ascribed to that term in
Section 7.4(b) hereof.
"UNDERWRITERS' MAXIMUM NUMBER" shall have the meaning ascribed to that
term in Section 6.1(e) hereof.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" refers to any
registration in which securities of the Company are sold or to be sold pursuant
to a firm commitment underwriting.
"UNREPURCHASED SECURITIES" shall have the meaning ascribed to that term
in Section 10.3 hereof.
"VOTING SECURITIES" shall mean the Common Stock.
"WARRANT AGREEMENT" shall have the meaning ascribed to that term in the
preamble hereof.
"WARRANT ESCROW AGREEMENT" shall have the meaning ascribed to that term
in the preamble hereof.
"WARRANT SHARES" means the shares of Common Stock issued pursuant to or
issuable upon exercise of the Warrants.
"WARRANTS" shall have the meaning ascribed to that term in the Warrant
Agreement.
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ARTICLE II
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REPRESENTATIONS
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The Company represents and warrants to the Holders as follows:
Section 2.1. CAPITALIZATION OF COMPANY.
(a) SCHEDULE 2 lists and describes the authorized capital stock of the
Company on and as of the Closing Date, the issued and outstanding capital stock
of the Company on and as of the Closing Date, and all issued and outstanding
options, warrants, convertible securities or other rights to acquire any capital
stock of the Company on and as of the Closing Date.
(b) As of the Closing Date, the Company has not granted or issued any
options, warrants, convertible securities or other rights to acquire any shares
of capital stock of the Company, except as described on SCHEDULE 2.
(c) If the Warrants were exercisable as of the Closing Date, the
Warrants would be exercisable in full for 10.0% of the issued and outstanding
Common Stock of the Company on a fully-diluted basis, after giving effect to the
issuance of such Warrants and all other warrants, options, or other convertible
securities exercisable for or convertible into shares of Common Stock of the
Company outstanding as of the Closing Date.
Section 2.2. AUTHORIZATION OF WARRANTS.
(a) The Company has duly and properly authorized (i) the issuance to
the Purchasers of the Warrants and (ii) the issuance by the Company of shares of
Common Stock upon exercise of the Warrants in accordance with the terms thereof.
(b) The Warrants shall become exercisable as provided in the Warrants
and the Warrant Escrow Agreement.
Section 2.3. BINDING EFFECT OF DOCUMENTS, ETC. Each of this Agreement,
the Warrants, the Warrant Escrow Agreement and the Warrant Agreement
(collectively, the "WARRANT DOCUMENTS"), upon the execution and delivery thereof
by the Company, has been duly and validly executed and delivered by the Company.
The execution, delivery and performance by the Company of each Warrant Document
on the Closing Date has been duly authorized by proper corporate proceedings by
the Company, and each Warrant Document constitutes, on and as of the Closing
Date, the legal valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and (ii) general principles
of equity including without limitation concepts of materiality, reasonableness,
good faith and fair dealing, and the possible unavailability of specific
performance or injunctive relief (regardless of whether considered in a
proceeding in equity or at law); and the execution, delivery
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and performance of this Agreement by the Company does not and will not violate
any applicable law or regulation.
Section 2.4. SENIOR SUBORDINATED LOAN AGREEMENT. The Company hereby
further represents and warrants to the Purchasers that all of the
representations and warranties set forth in the Senior Subordinated Loan
Agreement, dated as of August 31, 1999, by and among the Company, the Purchasers
and the other parties thereto (as modified, amended or amended and restated from
time to time, the "SUBORDINATED LOAN AGREEMENT"), are true and correct on and as
of the Closing Date.
ARTICLE III
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WARRANT DOCUMENTS
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By its acceptance of a Warrant, the Holder of such Warrant acknowledges
and agrees that (a) each of the Warrants is subject to the terms and provisions
of each of the Warrant Agreement and the Warrant Escrow Agreement, and (b) each
of the Warrants is entitled to all of the benefits set forth in this Agreement
on the terms and subject to the conditions hereof, of the Warrant Agreement, and
of the Warrant Escrow Agreement.
ARTICLE IV
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REPRESENTATIONS OF THE HOLDERS
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Each of the Holders represents and warrants to the Company that:
(a) Such Holder is purchasing or acquiring its interest in the
Securities from the Company or another Holder, as the case may be, in accordance
with the terms hereof for such Holder's own account without a view to any
distribution thereof in violation of the Securities Act, but, SUBJECT,
NEVERTHELESS, to any requirement of law that the disposition of such Holder's
property shall at all times be within such Holder's control. Such Holder has
been informed and understands that the Securities have not been registered
pursuant to the provisions of Section 5 of the Securities Act and must be held
indefinitely unless such Securities are subsequently registered under the
provisions of the Securities Act or an exemption from such registration is
available.
(b) Such Holder represents that it is an "accredited investor" within
the meaning of Rule 501(a) promulgated under the Securities Act.
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ARTICLE V
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COVENANTS OF COMPANY
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The Company hereby covenants with each of the Holders that, except as
otherwise expressly permitted or provided, in any particular instance, by a
written Holder Consent:
Section 5.1. RECORDS AND ACCOUNTS. The Company will (i) keep, and cause
each of its Subsidiaries to 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 (ii) 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.
Section 5.2. FINANCIAL INFORMATION. The Company will deliver to each of
the Holders contemporaneously with the filing or mailing thereof, copies of all
periodic or special reports filed with the Securities and Exchange Commission,
and copies of all materials sent to the stockholders of the Company. So long as
the Subordinated Loan Agreement remain in effect, the Company may satisfy its
obligations under this Section 5.2 by delivering to each Holder the information
which it is required to deliver to the Holders under the corresponding covenants
contained in the Subordinated Loan Agreement at the times required by the
Subordinated Loan Agreement.
ARTICLE VI
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REGISTRATION RIGHTS
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The Company hereby grants to the Holders certain rights to require the
Company to register Common Stock of the Company in compliance with the
Securities Act and certain rights to participate with the Company in any
registration by the Company of Common Stock under the Securities Act. The
provisions governing such registration rights are set out in this Article VI.
The Company and the Holders hereby absolutely and unconditionally agree to be
bound and governed by, and specifically make and adopt, all of the terms and
provisions contained in this Article VI. A Holder shall, for all purposes of
this Article VI, unless the context shall otherwise require, be deemed to hold,
at any particular time, all shares of Common Stock issuable upon conversion of
or in exchange for or upon exercise of rights under all capital stock or other
securities (including, without limitation, options and warrants) of the Company
held of record by such Holder at such time.
Section 6.1. DEMAND REGISTRATIONS.
(a) REQUESTS FOR DEMAND REGISTRATION.
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(i) Subject to the limitations contained in the following
paragraphs of this Section 6.1, the Holders of not less than
twenty-five percent (25%) of the Registrable Securities may at any time
and from time to time after the first anniversary of the Closing Date
give to the Company, pursuant to this clause (i), a written request for
the registration by the Company under the Securities Act of all or any
part of the Registrable Securities of such Holders having an aggregate
offering price of at least $250,000 (such registration being herein
called a "DEMAND REGISTRATION") on Form S-3 or any successor form
adopted by the Commission, PROVIDED, HOWEVER, that if in accordance
with applicable law, including applicable rules and regulations
promulgated by the Commission, the Company is not eligible to register
securities on Form S-3 (or any comparable short-form registration
adopted by the Commission), then the Holders shall have the right to
require completion of one Demand Registration pursuant to this
subparagraph (i) on Form S-1 or any successor form adopted by the
Commission. Within ten (10) days after the receipt by the Company of
any such written request, the Company will give written notice of such
registration request to all Holders of Registrable Securities.
(ii) Subject to the limitations contained in the following
paragraphs of this Section 6.1, after the receipt of each such written
request for a Demand Registration, (A) the Company will be obligated
and required to include in such Demand Registration all Registrable
Securities with respect to which the Company shall receive from Holders
of Registrable Securities, within thirty (30) days after the date on
which the Company shall have given to all Holders a written notice of
registration request pursuant to Section 6.1(a)(i) hereof, the written
requests of such Holders for inclusion in such Demand Registration, and
(B) the Company will use its best efforts in good faith to effect
promptly the registration of all such Registrable Securities. The
Holders of Registrable Securities shall be permitted to withdraw all or
any part of the Registrable Securities of such Holders from any Demand
Registration at any time prior to the effective date of such Demand
Registration PROVIDED, that if such Demand Registration is on Form S-1
or any successor form adopted by the Commission and such withdrawal
would reduce the amount of Registrable Securities to be registered in
such Demand Registration to less than the amount required to initiate a
Demand Registration pursuant to clause (i) above, then the Company may
elect not to proceed with such Demand Registration. All written
requests made by Holders of Registrable Securities pursuant to this
clause (ii) will specify the number of shares of Registrable Securities
to be registered and will also specify the intended method of
disposition thereof. Such method of disposition shall, in any case, be
an underwritten offering if an underwritten offering is requested by
Holders of a majority of Registrable Securities to be included in such
Demand Registration.
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(b) LIMITATIONS ON DEMAND REGISTRATION.
(i) Except in the circumstances contemplated in paragraph
(a)(i) above, the Holders of Registrable Securities will not be
entitled to require the Company to effect any registrations on Form S-1
(or other comparable form adopted by the Commission). At such time as
all of any Holder's Registrable Securities shall be freely tradable
under paragraph (k) of Rule 144, such Holder shall not be entitled to
require the Company to effect, and shall not be entitled to participate
pursuant to this Section 6.1 in, any further Demand Registrations.
(ii) The Company shall not be obligated or required to effect
any Demand Registration of any Registrable Securities pursuant to
Section 6.1(a) hereof during the period commencing on the date falling
sixty (60) days prior to the Company's estimated date of filing of, and
ending on the date ninety (90) days following the effective date of,
any Registration Statement pertaining to any underwritten registration
initiated by the Company, for the account of the Company. The foregoing
limitation on the Company's obligation to effect a Demand Registration
shall only be applicable if the written request of Holders for such
Demand Registration shall have been received by the Company both (A)
after the first anniversary of the Closing Date and (B) after the
Company shall have given to all Holders of Registrable Securities a
written notice stating that the Company is commencing an underwritten
registration initiated by the Company. Notwithstanding any limitation
on the Company's obligations described in this paragraph (b)(ii), the
Company will use its best efforts in good faith to cause any such
Registration Statement for a Demand Registration requested by the
Holders to be filed and to become effective as expeditiously as shall
be reasonably possible.
(c) EFFECTIVE REGISTRATION - EXPENSES. In any registration initiated by
the Holders as a Demand Registration pursuant to Section 6.1(a) hereof, the
Company will pay all Registration Expenses of each such registration regardless
of whether such registration constitutes a Demand Registration for purposes of
this Section 6.1.
(d) LIMITATION ON RIGHTS TO PIGGYBACK ON DEMAND REGISTRATIONS.
(i) Neither the Company nor any of its securityholders (other
than Holders of Registrable Securities in their capacity as Holders)
shall have the right or otherwise be entitled to include any of the
Company's securities in any registration initiated by Holders of
Registrable Securities as a Demand Registration pursuant to Section
6.1(a) hereof, unless (A) such securities are of the same class as the
Registrable Securities to be included in such Demand Registration, and
(B) if such Demand Registration is an underwritten offering, the
Company or (as the case may be) such securityholders shall have duly
and properly agreed in writing to sell their securities on the same
terms and conditions as shall apply to the Registrable Securities to be
included in such Demand Registration.
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(ii) The Company will not grant or agree to grant to any
Persons any registration rights which will conflict or be inconsistent
in any respect with any of the provisions of clause (i) of this
Section 6.1(d). In the event of any such conflict or inconsistency, the
provisions of such clause (i) shall in any case prevail and be
controlling.
(e) PRIORITY ON DEMAND REGISTRATIONS. If any Demand Registration is an
underwritten offering, and the managing underwriters shall give written advice
to the Company and the Holders of Registrable Securities to be included in such
registration that, in the reasonable opinion of such managing underwriters,
marketing factors require a limitation on the total number of securities to be
underwritten (the "UNDERWRITERS' MAXIMUM NUMBER"), then: (i) the Company will be
obligated and required to include in such registration that number of
Registrable Securities requested by the Holders thereof to be included in such
registration which does not exceed the Underwriters' Maximum Number, and such
number of Registrable Securities shall be allocated PRO RATA among the Holders
of such Registrable Securities on the basis of the number of Registrable
Securities requested to be included therein by each such Holder; (ii) if the
Underwriters' Maximum Number exceeds the number of Registrable Securities
requested by the Holders thereof to be included in such registration, then the
Company will be entitled to include in such registration that number of
securities which shall have been requested by the Company to be included in such
registration for the account of the Company and which shall not be greater than
such excess; and (iii) if the Underwriters' Maximum Number exceeds the sum of
the number of Registrable Securities which the Company shall be required to
include in such Demand Registration and the number of securities which the
Company proposes to offer and sell for its own account in such registration,
then the Company may include in such registration that number of other
securities which Persons (other than the Holders as such) shall have requested
be included in such registration and which shall not be greater than such
excess.
(f) SELECTION OF UNDERWRITERS. If any Demand Registration is an
underwritten offering, or a best efforts underwritten offering, the investment
bankers and managing underwriters in such registration will be selected by the
Company subject to the approval of the Holders of a majority of Registrable
Securities to be included in such registration.
Section 6.2. PIGGYBACK REGISTRATIONS.
(a) RIGHTS TO PIGGYBACK.
(i) If (and on each occasion that) the Company proposes to
register any of its securities under the Securities Act (other than
pursuant to a Demand Registration), either for the Company's own
account or for the account of any of its securityholders (other than
the Holders of Registrable Securities in their capacity as Holders)
(each such registration being herein called a "PIGGYBACK
REGISTRATION"), the Company will give written notice to all Holders of
Registrable Securities of the Company's intention to effect such
15
Piggyback Registration not later than the earlier to occur of (A) the
tenth day following the receipt by the Company of notice of exercise of
any registration rights by any Persons (other than the Holders of
Registrable Securities in their capacities as Holders), and (B) thirty
(30) days prior to the anticipated filing date of such Piggyback
Registration.
(ii) Subject to the provisions contained in paragraphs (c) and
(d) of this Section 6.2 and in the last sentence of this clause (ii),
(A) the Company will be obligated and required to include in each
Piggyback Registration all Registrable Securities with respect to which
the Company shall receive from Holders of Registrable Securities,
within thirty (30) days after the date on which the Company shall have
given written notice of such Piggyback Registration to all Holders of
Registrable Securities pursuant to Section 6.2(a)(i) hereof, the
written requests of such Holders for inclusion in such Piggyback
Registration, and (B) the Company will use its best efforts in good
faith to effect promptly the registration of all such Registrable
Securities. The Holders of Registrable Securities shall be permitted to
withdraw all or any part of the Registrable Securities of such Holders
from any Piggyback Registration at any time prior to the effective date
of such Piggyback Registration. Any registration of Registrable
Securities pursuant to this Section 6.2 shall not be counted as a
Demand Registration pursuant to Section 6.1 hereof. The Company will
not be obligated or required to include any Registrable Securities in
any registration effected solely to implement an employee benefit plan
or a transaction to which Rule 145 of the Commission is applicable.
(b) PIGGYBACK REGISTRATION EXPENSES. The Company will pay all
Registration Expenses of each Piggyback Registration attributable to Registrable
Securities or otherwise incurred or sustained in connection with or arising out
of the inclusion in each such Piggyback Registration of Registrable Securities.
(c) PRIORITY ON PIGGYBACK REGISTRATIONS. If a Piggyback Registration is
an underwritten registration, and the managing underwriters shall give written
advice to the Company of an Underwriters' Maximum Number, then: (i) the Company
shall be entitled to include in such registration that number of securities
which the Company proposes to offer and sell for its own account in such
registration and which does not exceed the Underwriters' Maximum Number; (ii) if
the Underwriters' Maximum Number exceeds the number of securities which the
Company proposes to offer and sell for its own account in such registration,
then the Company will be obligated and required to include in such registration
that number of Registrable Securities requested by the Holders thereof to be
included in such registration and which does not exceed such excess and such
Registrable Securities shall be allocated PRO RATA among the Holders thereof on
the basis of the number of Registrable Securities requested to be included
therein by each such Holder; and (iii) if the Underwriters' Maximum Number
exceeds the sum of the number of Registrable Securities which the Company shall
be required to include in such registration pursuant to clause (ii) and the
number of securities which the Company proposes to offer and sell for its own
account in such registration, then the Company
16
may include in such registration that number of other securities which persons
shall have requested be included in such registration and which shall not be
greater than such excess.
(d) SELECTION OF UNDERWRITERS. If any Piggyback Registration is an
underwritten offering, or a best-efforts underwritten offering, the investment
bankers and managing underwriters in such registration will be selected by the
Company subject to the approval of the Holders of a majority of the Registrable
Securities to be included in such registration, which approval will not be
unreasonably withheld or delayed.
Section 6.3. LOCKUP AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES.
Each Holder of Registrable Securities, any of whose Registrable Securities are
included in any underwritten registration of the Company's securities, if the
Company or the managing underwriters so request in connection with such
registration, will not, without the prior written consent of the Company or such
underwriters, effect any public sale or other distribution of any equity
securities of the Company, including any sale pursuant to Rule 144, during the
seven (7) days prior to, and during the one hundred twenty (120) day period
commencing on, the effective date of such underwritten registration, except in
connection with such underwritten registration, except, in each case, to the
extent such Holder is prohibited by applicable law or exercise of fiduciary
duties from agreeing to withhold Registrable Securities from sale or is acting
in its capacity as a fiduciary or investment adviser; provided that each officer
and director of the Company and each holder of more than two percent (2%) of the
issued and outstanding shares of Common Stock shall enter into similar
agreements of at least equal duration. Without limiting the scope of the term
"fiduciary", a Holder shall be deemed to be acting as a fiduciary or an
investment adviser if its actions or the Registrable Securities to be sold are
subject to the Employee Retirement Income Security Act of 1974, as amended, or
the Investment Company Act of 1940, as amended, or if such Registrable
Securities are held in a separate account under applicable insurance law or
regulation.
(b) RESTRICTIONS ON PUBLIC SALE BY COMPANY. If the managing
underwriters request, the Company agrees not to effect any public sale or other
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such equity securities, during the period
commencing on the seventh (7th) day prior to, and ending on the one hundred and
twentieth (120th) day following, the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration, except in connection
with any such underwritten registration and except for any offering or
distribution pursuant to an employee benefit plan and registered on Form S-8.
Section 6.4. REGISTRATION PROCEDURES. Whenever the Holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of
17
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities and use its best efforts to cause such
Registration Statement to become effective (PROVIDED, that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company will furnish to counsel selected by the Holders of Registrable
Securities covered by such Registration Statement, copies of all such documents
proposed to be filed, which documents will be subject to the timely review of
such counsel and the Company will not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto, including
documents incorporated by reference, to which the Holders of a majority of the
Registrable Securities covered by such Registration Statement shall reasonably
object);
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
not more than one (1) year and, comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during such effective period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
and cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act;
(c) upon request, furnish to each seller of Registrable Securities such
number of copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus and each Prospectus filed under Rule 424 of the
Securities Act) and such other documents as each such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by each such seller (it being understood that the Company consents to the
use of the Prospectus and any amendment or supplement thereto by such seller in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto);
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or Blue Sky laws of such jurisdictions as
any seller reasonably requests, use its best efforts to keep each such
registration or qualification effective, including through new filings,
amendments or renewals, during the period such Registration Statement is
required to be kept effective, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; PROVIDED that the Company will not be required (i) to qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph (d), (ii) to subject itself to taxation in any
such jurisdiction or (iii) to consent to general service of process in any such
jurisdiction;
18
(e) notify each seller of such Registrable Securities, at any time when
a Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included
in such Registration Statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Company will promptly prepare (and, when
completed, give notice to each seller of Registrable Securities) a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such Prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading; provided that upon such notification by the
Company, each seller of such Registrable Securities will not offer or sell such
Registrable Securities until the Company has notified such seller that it has
prepared a supplement or amendment to such Prospectus and delivered copies of
such supplement or amendment to such seller;
(f) cause all such Registrable Securities to be listed, prior to the
date of the first sale of such Registrable Securities pursuant to such
registration, on each securities exchange on which similar securities issued by
the Company are then listed and, if not so listed, to be listed with NASDAQ;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration Statement;
(h) enter into all such customary agreements (including underwriting
agreements in customary form) as the Holders of a majority of Registrable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities;
(i) make available for inspection on a confidential basis by any
seller, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter (in each case after reasonable prior notice), all
reasonably requested financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply on a confidential basis all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement;
(j) permit any Holder of Registrable Securities which Holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company within the meaning of Section 15 of the
Securities Act, to participate in the preparation of such registration or
comparable statement and to permit the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such Holder and
its counsel should be included, provided that such material shall be furnished
under such circumstances as shall cause it to be subject to the indemnification
provisions provided pursuant to Section 6.7(b) hereof;
19
(k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order;
(l) if requested by the managing underwriter or underwriters or any
holder of Registrable Securities in connection with any sale pursuant to a
Registration Statement, promptly incorporate in a Prospectus supplement or
post-effective amendment such information relating to such underwriting as the
managing underwriter or underwriters or such Holder reasonably requests to be
included therein, and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after being notified of the
matters incorporated in such Prospectus supplement or post-effective amendment;
(m) cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be sold under such registration, and
enable such Registrable Securities to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or such Holders
may request;
(n) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
within the United States and having jurisdiction over the Company as may
reasonably be necessary to enable the seller or sellers thereof or the
underwriter or underwriters, if any, to consummate the disposition of such
Registrable Securities;
(o) use its best efforts to obtain, at the time of effectiveness of
each Piggyback Registration and at the time of any sale pursuant to each Demand
Registration, an opinion or opinions, favorable in form and scope to the Holders
of a Majority of Registrable Securities covered by such registration, from
counsel to the Company in customary form; and
(p) otherwise comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders (as contemplated
by Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve month period beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement, which statement shall cover said twelve month period.
Section 6.5. COOPERATION BY PROSPECTIVE SELLERS, ETC.
(a) INFORMATION REQUESTS. Each prospective seller of Registrable
Securities will furnish to the Company in writing such information as the
Company
20
may reasonably require from such seller in connection with any Registration
Statement with respect to such Registrable Securities.
(b) FAILURE TO COOPERATE. The failure of any prospective seller of
Registrable Securities to furnish any information or documents in accordance
with any provision contained in this Article VI shall not affect the obligations
of the Company under this Article VI to any remaining sellers who furnish such
information and documents unless, in the reasonable opinion of counsel to the
Company or the underwriters, such failure impairs or may impair the viability of
the offering or the legality of the Registration Statement or the underlying
offering.
(c) SUSPENSION OF SALES. The Holders of Registrable Securities included
in any Registration Statement will not (until further notice) effect sales
thereof after receipt of telegraphic or written notice from the Company to
suspend sales to permit the Company to correct or update such Registration
Statement or Prospectus; but the obligations of the Company with respect to
maintaining any Registration Statement current and effective shall be extended
by a period of days equal to the period such suspension is in effect.
(d) REMOVAL OF SHARES FROM REGISTRATION. At the end of any period
during which the Company is obligated to keep any Registration Statement current
and effective as provided by Section 6.4 hereof (and any extensions thereof
required by the preceding paragraph (c) of this Section 6.5), the Holders of
Registrable Securities included in such Registration Statement shall discontinue
sales of shares pursuant to such Registration Statement upon receipt of notice
from the Company of its intention to remove from registration the shares covered
by such Registration Statement which remain unsold, and such Holders shall
notify the Company of the number of shares registered which remain unsold
promptly after receipt of such notice from the Company.
(e) WARRANTS OR OPTIONS. Notwithstanding any other provision herein to
the contrary, no Holder of Registrable Securities which constitute warrants or
options shall be required to exercise such warrants or options in connection
with any registration until the actual sale of the shares of Common Stock
issuable upon exercise of such warrants or options. The Company shall enter into
such agreements and shall otherwise cooperate with the Holders of Registrable
Securities in order to ensure that such Holders are not required to exercise any
warrants or options prior to the date of the actual sale of the shares of Common
Stock issuable upon exercise of such warrants or options, but the Company shall
not be required to extend the exercise date thereof for such purposes.
Section 6.6. REGISTRATION EXPENSES.
(a) EXPENSES BORNE BY THE COMPANY. All costs and expenses incurred or
sustained in connection with or arising out of each registration pursuant to
Section 6.1 or Section 6.2 hereof, including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or
Blue Sky laws (including reasonable fees and disbursements of counsel for the
underwriters in connection with the Blue Sky
21
qualification of Registrable Securities), printing expenses, messenger,
telephone and delivery expenses, fees and disbursements of counsel for the
Company and of counsel for the sellers of Registrable Securities (subject to the
limitations contained in paragraph (b) of this Section 6.6), fees and
disbursements of all independent certified public accountants (including the
expenses relating to the preparation and delivery of any special audit or "cold
comfort" letters required by or incident to such registration), and fees and
disbursements of underwriters (excluding discounts and commissions), the
reasonable fees and expenses of any special experts retained by the Company of
its own initiative or at the reasonable request of the managing underwriters in
connection with such registration, and fees and expenses of all (if any) other
Persons retained by the Company (all such costs and expenses being herein
called, collectively, the "REGISTRATION EXPENSES"), will be borne and paid by
the Company. The Company will, in any case, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the expense of liability insurance referred to above, and the fees and
expenses incurred in connection with the listing of the securities to be
registered on each securities exchange on which similar securities of the
Company are then listed.
(b) ATTORNEYS' FEES; TAXES. In connection with each registration of
Registrable Securities pursuant to this Article VI, the Company will reimburse
the Holders of Registrable Securities being registered in such registration for
the reasonable fees and disbursements of one law firm which acts as counsel
chosen by the Holders of a majority of Registrable Securities being registered
in such registration. The Company will not bear the cost of nor pay for any
stock transfer taxes imposed in respect of the transfer of any Registrable
Securities to any purchaser thereof by any Holder of Registrable Securities in
connection with any registration of Registrable Securities pursuant to this
Article VI.
(c) PAYMENT BY HOLDER. To the extent that Registration Expenses
incident to any registration are, under the terms of this Article VI, not
required to be paid by the Company, each Holder of Registrable Securities
included in such registration will pay all Registration Expenses which are
clearly solely attributable to the registration of such Holder's Registrable
Securities so included in such registration, and all other Registration Expenses
not so attributable to one Holder will be borne and paid by all sellers of
securities included in such registration in proportion to the number of
securities so included by each such seller.
Section 6.7. INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. The Company will indemnify each Holder
requesting or joining in a registration and each underwriter of the securities
so registered, the officers, directors and partners of each such Person and each
Person who controls any thereof (within the meaning of the Securities Act),
against any and all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of any material fact contained in any Prospectus, offering
circular or other document incident to any registration, qualification or
compliance (or in any related
22
Registration Statement, notification or the like) or any omission (or alleged
omission) to state therein any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of any rule or regulation promulgated under the Securities Act
applicable to the Company and relating to any action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, officer, director, partner,
controlling Person, and underwriter for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action; PROVIDED, HOWEVER, that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company in an
instrument duly executed by any Holder, officer, director, partner, controlling
Person, or underwriter and stated to be exclusively and specifically for use
therein.
(b) INDEMNIFICATION BY EACH HOLDER. Subject to the limitations set
forth below, each Holder requesting or joining in a registration will indemnify
each underwriter of the securities so registered, the Company and its officers
and directors and each Person, if any, who controls any thereof (within the
meaning of the Securities Act) and their respective successors in title and
assigns against any and all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of any material fact contained in any Prospectus, offering
circular or other document incident to any registration, qualification or
compliance, or any omission (or alleged omission) to state therein any material
fact required to be stated therein or necessary to make the statement therein
not misleading, and such Holder will reimburse each underwriter, the Company and
each other Person indemnified pursuant to this paragraph (b) for any legal and
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action; PROVIDED, HOWEVER,
that this paragraph (b) shall apply only if (and only to the extent that) such
statement or omission was made in reliance upon information furnished to the
Company in an instrument duly executed by such Holder and stated to be
specifically for use in such Prospectus, offering circular or other document or
any amendment or supplement thereto. The maximum liability under this paragraph
(b) of each Holder joining in any registration shall be limited to the aggregate
amount of all sales proceeds actually received by such Holder upon the sale of
such Holder's Registrable Securities in connection with such registration.
(c) INDEMNIFICATION PROCEEDINGS. Each party entitled to indemnification
pursuant to this Section 6.7 (the "INDEMNIFIED PARTY") shall give notice to the
party required to provide indemnification pursuant to this Section 6.7 (the
"INDEMNIFYING PARTY") promptly after such Indemnified Party acquires actual
knowledge of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party (at its expense) to assume the defense of any claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
acceptable to the Indemnified Party, and the Indemnified Party may participate
in such defense at such party's expense; and
23
PROVIDED, FURTHER, that if any Indemnified Party shall have reasonably
concluded that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to and are inconsistent
with those available to the Indemnifying Party, or that such claim or litigation
involves or could have a material adverse effect upon matters beyond the scope
of the indemnity agreement provided in this Section 6.7, the Indemnifying Party
shall not have the right to assume the defense of such action on behalf such
Indemnified Party and such Indemnifying Party shall reimburse such Indemnified
Party and any Person controlling such Indemnified Party for that portion of the
fees and expenses of any counsel retained by the Indemnified Party which are
reasonably related to the matters covered by the indemnity agreement provided in
this Section 6.7; and PROVIDED, FURTHER, that the failure by any Indemnified
Party to give notice as provided in this paragraph (c) shall not relieve the
Indemnifying Party of its obligations under this Section 6.7 except to the
extent that the failure results in a failure of actual notice to the
Indemnifying Party and such Indemnifying Party is damaged (or the
indemnification liability of such Indemnifying Party hereunder would be
increased) solely as a result of the failure to give notice. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. The reimbursement required
by this Section 6.7 shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
(d) CONTRIBUTION IN LIEU OF INDEMNIFICATION. If the indemnification
provided for in this Section 6.7 from the Indemnifying Party is unavailable to
an Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expense (or actions in respect thereof) referred to therein, then
the Indemnifying Party in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying and indemnified parties
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact,
has been made by, or relates to information supplied by, such Indemnifying Party
or indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action; PROVIDED,
HOWEVER, that in no event shall the liability of any Holder hereunder be greater
in amount than the difference between the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such
contribution obligation and all amounts previously contributed by such Holder
with respect to such losses, claims, damages, liabilities and expenses referred
to above shall be deemed to include, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
24
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.7(d) were determined by PRO RATA
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.
Section 6.8. RULE 144 REQUIREMENTS; FORM S-3. The Company will make
every effort in good faith to take all steps necessary to ensure that the
Company will be eligible to register securities on Form S-3 (or any comparable
form adopted by the Commission) at all times, and to make publicly available
and available to the Holders of Registrable Securities, pursuant to Rule 144 or
Rule 144A of the Commission under the Securities Act, such information
as shall be necessary to enable the Holders of Registrable Securities to make
sales of Registrable Securities pursuant to such Rules. The Company will
furnish to any Holder of Registrable Securities, upon request made by such
Holder at any time after the undertaking of the Company in the preceding
sentence shall have first become effective, a written statement signed by the
Company, addressed to such Holder, describing briefly the action the Company
has taken or proposes to take to comply with the current public information
requirements of Rule 144 or Rule 144A. The Company will, at the request of any
Holder of Registrable Securities, upon receipt from such Holder of a
certificate certifying (i) that such Holder has held such Registrable
Securities for a period of not less than two (2) consecutive years, and (ii)
that such Holder has not been an affiliate (as defined in Rule 144) of the
Company for more than the ninety (90) preceding days, remove from the stock
certificates representing such Registrable Securities that portion of any
restrictive legend which relates to the registration provisions of the
Securities Act.
Section 6.9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration pursuant to this Article VI unless
such Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Persons entitled, under the
provisions contained in this Article VI, to approve such arrangements, and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required by the terms of
such underwriting arrangements, PROVIDED, HOWEVER, that no such indemnities or
underwriting agreements shall provide for indemnification or contribution
obligations of any Holder to a greater extent than the obligations of such
Holder set forth in Section 6.7(b) hereof. Subject to the provisions of this
Agreement, any Holder of Registrable Securities to be included in any
underwritten registration shall be entitled at any time to withdraw such
Registrable Securities from such registration in the event that such Holder
shall disapprove of any of the terms of the related underwriting agreement.
Section 6.10. NO INCONSISTENT AGREEMENTS. The Company will not, at
any time after the effective date of this Agreement, enter into any agreement
or contract (whether written or oral) with respect to any of its securities
which is inconsistent in
25
any respect with the registration rights granted by the Company to Holders
pursuant to Article VI of this Agreement or otherwise conflicts with the
provisions hereof.
Section 6.11. REGISTRABLE SECURITIES HELD BY THE COMPANY. Whenever the
consent or approval of Holders of Registrable Securities is required pursuant to
this Article VI, Registrable Securities held by the Company shall not be counted
in determining whether such consent or approval was duly and properly given by
such Holders pursuant to and in compliance with any of the terms of Article VI
of this Agreement.
Section 6.12. TERM. The agreements of the Company contained in this
Article VI shall continue in full force and effect so long as any Holder holds
any Registrable Securities.
ARTICLE VII
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PUT OPTION
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Section 7.1. RIGHT TO PUT SECURITIES. At any time (a) after the
occurrence and during the continuance of an Event of Default under and as
defined in the Subordinated Loan Agreement, and (b) after the seventh (7th)
anniversary of the Closing Date, each Holder (a "TENDERING HOLDER") may, by
notice to the Company (a "PUT NOTICE"), require the Company to repurchase from
such Tendering Holder, at the Repurchase Price specified in Section 7.4 hereof,
such number of Securities held by such Tendering Holder as are specified
in the Put Notice. Promptly upon its receipt of a Put Notice, the Company shall
give written notice of the particulars thereof to each other Holder (other than
to the Tendering Holder) and, if any of such Holders delivers a Put Notice to
the Company within ten (10) days after its receipt of such notice from the
Company, the holders of all of such Securities shall be entitled to close their
put of such Securities on but not before the date scheduled pursuant to Section
7.2 for the closing of the put referred to in the Company's notice to them
pursuant to this Section 7.1. Except to the extent prohibited by applicable law,
and in any event subject to customary confidentiality and non-transfer
agreement, within five (5) business days of its receipt of any Put Notice, the
Company shall deliver to each of the Tendering Holders a certificate signed by
an authorized officer of the Company outlining in reasonable detail the
particulars of any potential transactions which the Company is considering at
such time and that may be material to the exercise of such Tendering Holder's
rights under this Section 7, including any plans or proposals for any mergers,
sales of assets, acquisitions and substantial sales of stock by its
stockholders and each such Tendering Holder shall have five (5) business days
after its receipt of such certificate to rescind its Put Notice. The Company
acknowledges that the disclosure contained in any certificate delivered to such
Tendering Holder pursuant to the immediately preceding sentence shall be relied
on by such Tendering Holder in its determination of whether to put at such
time.
26
Section 7.2. PUT CLOSING. The closing, except as otherwise provided in
Section 7.6, shall take place at the offices of the Company at 10:00 a.m. local
time on a date (a) not more than ninety (90) days after the date a Put Notice
is received by the Company as the Company shall specify by notice to the
Tendering Holders, or at such later time as Fair Market Value shall have been
determined under Section 7.4(b) hereof, or (b) at such other time and place as
the Tendering Holders and the Company may agree upon (a "PUT CLOSING DATE"). At
the closing such holders will deliver to the Company a certificate or
certificates evidencing all of the Warrant Shares and Warrants being put which
are held by the Tendering Holders (properly endorsed or accompanied by stock
powers or, in the case of any Warrants, assignments, with signature(s)
guaranteed or similar appropriate documentation of authority to transfer)
against payment of the Repurchase Price to such Tendering Holder in the manner
specified in Section 7.3 hereof. Except to the extent prohibited by applicable
law and in any event subject to customary confidentiality and non-transfer
agreements, prior to the Put Closing Date, the Company will provide such
Tendering Holder with all available information that may be material to the
exercise of such Tendering Holder's rights under this Section 7, including any
plans or proposals for any mergers, sales of assets, acquisitions and
substantial sales of stock by its stockholders.
Section 7.3. PAYMENT. The Company shall pay the Repurchase Price at any
closing under Section 7.2 hereof out of funds legally available therefor in
cash or immediately available funds. In the event that any portion of the
aggregate Repurchase Price is not paid as a result of any insufficiency of
legally available funds or as a result of any limitations on the repurchase of
shares of the Company's Common Stock under the Subordinated Loan Agreement or
the Credit Agreement or otherwise, either (A) the Tendering Holders may rescind
their Put Notice or (B) the Company shall pay to the Tendering Holders that
portion of the aggregate Repurchase Price which the Company is able to pay PRO
RATA to each such Tendering Holder based on the ratio of the Repurchase
Price payable to such Tendering Holder to the aggregate Repurchase Price
payable to all such Tendering Holders and such Tendering Holders shall retain a
contract claim for the unpaid balance of the Repurchase Price and shall retain
all their respective rights hereunder and under and in connection with such
Securities, as to that number of such Warrant Shares or portion of such
Warrants exercisable for that number of shares as such unpaid portion
represents (the "UNREPURCHASED SECURITIES"), until such time as the unpaid
portion of the Repurchase Price shall be paid to such Tendering Holders in
full. In the event of any failure of the Company to pay in full the Repurchase
Price of any Warrants and Warrant Shares which are put to the Company on the
scheduled Put Closing Date, all references in this ss.7 to such Put Closing
Date (including without limitation any such references used in determining the
Repurchase Price for such Securities to the extent they constitute
Unrepurchased Securities) shall, but only with respect to such Unrepurchased
Securities, be deemed to refer to the date on which payment in full therefor is
actually made. The unpaid portion of the Repurchase Price allocable to the
Unrepurchased Securities shall remain an obligation of the Company, shall bear
interest at the rate of eighteen percent (18%) PER ANNUM, and shall become due
and payable (including interest accrued in respect thereof), in cash or
immediately available funds, as soon as there are funds legally available
therefor.
27
Section 7.4. REPURCHASE PRICE FOR SECURITIES.
(a) REPURCHASE PRICE. The repurchase price (the "REPURCHASE PRICE")
shall, except as otherwise provided in ss.7.6, be an amount equal to (i) in the
case of each portion of any Warrants exercisable for one Warrant Share, the
difference between the repurchase price per share of the Warrant Shares as
determined under clause (ii) below of this ss.7.4 and the exercise price per
share specified therein, and (ii) in the case of each Warrant Share, the
quotient obtained by dividing (A) the SUM of the GREATER of either the Fair
Market Value of the Company's common stock equity (as determined pursuant to
Section 7.4(b) hereof) or the Formula Value of the Company's common stock
equity (as determined pursuant to Section 7.4(c) hereof) PLUS the aggregate
consideration to be paid to the Company upon the exercise of all then
outstanding Warrants, by (B) the sum of the number of shares of Common Stock
then outstanding on a fully diluted basis, including the number of shares of
Common Stock then issuable upon exercise of the Warrants.
(b) FAIR MARKET VALUE. The fair market value of the Company's common
stock equity (the "FAIR MARKET VALUE") shall be determined as follows:
(i) if at any date of determination of the Repurchase Price
the Common Stock of any class shall then be publicly traded, the Fair
Market Value of the Company on such date shall be the Market Price on
such date multiplied by the number of shares of Common Stock then
outstanding on a fully diluted basis; and
(ii) if at any date of determination of the Repurchase Price
the Common Stock of any class shall not then be publicly traded, for a
period of ten (10) days after the date of any Put Notice (the
"NEGOTIATION PERIOD"), each party hereto agrees to negotiate in good
faith to reach agreement upon the Fair Market Value. In the event that
the Company and the Holders are unable to agree upon the Fair Market
Value by the end of the Negotiation Period, for a period of ten (10)
days after the end of the Negotiation Period, the Company and the
Holders shall endeavor to agree on an independent appraiser (the
"CONSENSUS APPRAISER") who shall be jointly appointed by the Company
and the Holders to make a binding determination of the Fair Market
Value of the Company's common stock equity. In the event that the
Company and the Holders are unable to agree on a Consensus Appraiser by
the end of such period, the Fair Market Value of the Company's common
stock equity shall be determined for purposes of this Section 7.5(b)
initially by an independent appraiser selected by the Company (the
"COMPANY APPRAISER") and whose appraisal (the "COMPANY APPRAISAL")
shall be furnished to each of the Holders to which such put relates
within thirty (30) days after the end of the Negotiation Period. If the
Holders do not object to such determination within fifteen (15) days
after receipt of such Appraisal, the fair market value determined by
Company Appraiser shall be the Fair Market Value. If any of the Holders
object to the Fair Market Value determined by the Company Appraiser,
such objecting Holders may select an appraiser (the "HOLDER APPRAISER")
who shall review the determination of the Company Appraiser
28
and issue a report thereon (the "HOLDER APPRAISAL"), within thirty (30)
days after delivery to each of the Holders to which such put relates of
the Company Appraisal. Within ten (10) days after delivery to the
Holders of the Holder Appraisal, the Holders will either accept the
Company Appraisal or deliver the Holder Appraisal to the Company. If
the Holders decide to deliver the Holder Appraisal to the Company, the
Company Appraiser and the Holder Appraiser shall meet within ten (10)
days after such delivery in order to resolve any questions or
differences with respect to the Fair Market Value. If the Company
Appraiser and the Holder Appraiser agree on a Fair Market Value of the
Company's common stock equity, such Fair Market Value shall be the Fair
Market Value. If no agreement is reached, the Company Appraiser and the
Holder Appraiser shall jointly select an appraiser (the "THIRD
APPRAISER") within five (5) days after such meeting. Fair Market Value
shall then be determined by the Third Appraiser within thirty (30) days
after delivery to the Company of the Holder Appraisal, and the
determination of the Third Appraiser (which determination shall not be
less than the determination of the Company Appraiser or greater than
the determination of the Holder Appraiser) shall be conclusive and
binding upon the Company and each of the Holders to which such put
relates. Fair Market Value shall in all cases be calculated by
determining the Fair Market Value of the entire common stock equity
interest of the Company taken as a whole, without premium for control
or discounts for minority interests or restrictions on transfer but
taking into consideration any plans or proposals (to the extent they
are reasonably likely to occur) for any mergers, sales of assets,
acquisitions or substantial sales of stock by the Company or its
stockholders relating to the Company. All expenses of the Consensus
Appraiser and of the Company Appraiser shall be borne by the Company;
all expenses of the Holder Appraiser shall be borne by the Holder or
Holders to which such put relates on a PRO RATA basis based on the
number of shares for which such Warrants held by each of such Holders
are exercisable and the number of such Warrant Shares held by each of
such Holders; and all expenses of the Third Appraiser shall be borne
50% by the Company and 50% by the Holders to which such put relates in
the same proportions as in the case of the Holder Appraisal.
(c) FORMULA VALUE. The "FORMULA VALUE" of the Company's common stock
equity at any particular date of determination shall be an amount calculated by
multiplying Consolidated EBITDA for the period of 4 full fiscal quarters most
recently ended prior to such date by the number 6.25.
Section 7.5. ADDITIONAL PAYMENTS UPON MERGER, ETC. If at any time
within twelve months after any Put Closing Date with respect to the repurchase
or exchange of any Warrants and/or Warrant Shares, the Company shall have
entered into any agreement or letter of intent with respect to any Capital
Transaction, the Company shall, simultaneously with the consummation of such
Capital Transaction or at such later time as any payment is received by the
Company or any of their stockholders in respect of such Capital Transaction,
make an additional payment to each former holder of such Warrant or Warrant
Shares in an amount equal to the
29
excess of the amount such Holder would have received (or the Company would have
received and in which such holder would have had a beneficial interest as a
stockholder) in respect of such Warrant and/or Warrant Shares had such Warrants
and/or Warrant Shares not been previously repurchased pursuant to Sections 7.2
or 7.3 hereof, but instead had been purchased pursuant to Section 7.6 hereof
over the payment received by such holder pursuant to Sections 7.2 or 7.3
hereof. Each payment to such Holder pursuant to this Section 7.5 shall be
made either in cash or in the form of the securities and other property
received by the holders of common equity of the Company.
Section 7.6. REPURCHASE UPON CHANGE OF CONTROL. The Company will give
each Holder of Securities at least thirty (30) days' prior written notice of
any Change of control following the first anniversary of the Closing Date. At
the time of the consummation of such Change of control following the first
anniversary of the Closing Date, the Holders of Securities may, at their
option, sell and the Company shall be required to repurchase all of the
Securities then outstanding and the Repurchase Price, for purposes of this
Section 7.6, shall be equal to (a) in the case of each portion of any Warrant
exercisable for one Warrant Share, the Repurchase Price per Warrant Share as
determined pursuant to clause (b) below LESS the exercise price for such share
and (b) in the case of each Warrant Share, (i) in the case of a merger, public
offering, dissolution or liquidation the Company or of the Parent, or any other
stock transaction, the highest price per share received by any holder of Common
Stock in connection with such transaction and (ii) in the case of any
liquidation or sale of assets, the quotient of (A) the Adjusted Net Worth of
the Company immediately prior to such liquidation or immediately after such
sale, DIVIDED BY (B) the sum of the number of shares of Common Stock then
outstanding PLUS the number of shares of Common Stock then issuable upon the
exercise of then outstanding warrants, options or convertible securities, in
each case to the extent then exercisable.
ARTICLE VIII
------------
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION, ETC.
--------------------------------------------------
Section 8.1. SURVIVAL OF REPRESENTATIONS. The representations and
warranties of the Company and of the Purchasers and the Holders contained in
this Agreement or any agreement, instrument or document delivered pursuant to
any of the provisions of this Agreement shall survive the execution and delivery
of this Agreement, any examination or investigation conducted by or on behalf of
the Company or the Holders, and the Closing hereunder.
Section 8.2. INDEMNIFICATION FOR MISREPRESENTATIONS. The Company
agrees to indemnify and hold the Holders harmless from and against, and to pay
to the Holders, on demand by the Holders from time to time, the full amount of
any loss, claim, damage, liability, cost or expense (including reasonable
attorneys' fees) resulting to the Holders from any false, incorrect or
misleading representation or warrants of the Company contained in this
Agreement or any agreement,
30
instrument or document delivered by the Company to the Holders pursuant to any
of the provisions hereof or thereof.
Section 8.3. EXPENSES. Whether or not all or any of the arrangements or
transactions contemplated by this Agreement or by any of the Warrants shall be
consummated, the Company agrees to pay to the Holders, on demand by the Holders
at any time and as often as the occasion therefor may require: (a) all of the
reasonable legal fees, PLUS all reasonable out-of-pocket expenses and
disbursements, of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Holders, which have
been or shall be incurred or sustained at any time in connection with the
preparation, negotiation, execution or delivery of this Agreement, any of the
Warrants or any other agreements, instruments or documents relating thereto; and
(b) all reasonable out-of-pocket costs and expenses which shall be incurred or
sustained by any Holder at any time in connection with any modifications or
amendments to or consents, approvals or waivers under this Agreement or any of
the Warrants, or in connection with any action or proceeding taken by any Holder
to protect or preserve all or any of the rights, remedies, powers or privileges
of such Holder under any of such documents or to enforce any of the covenants,
agreements or obligations of the Company under any of such documents (including,
without limitation, all of the reasonable fees and disbursements of legal
counsel for each Holder).
ARTICLE IX
----------
MISCELLANEOUS
-------------
Section 9.1. NOTICES.
(a) All notices and other communications pursuant to this Agreement
shall be in writing, either delivered in hand, mailed by United States
registered or certified first-class mail, 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:
(i) if to the Company, at TransTechnology Corporation, ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel, or at such other address as shall have been furnished to each
of the Holders in writing by the Company, and a copy thereof shall in
any event be simultaneously transmitted to ▇▇▇▇ ▇▇▇▇▇▇ & Parks LLP,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇,
Attention: F. ▇▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.; or
(ii) if to any Holder, at such addresses (in each case) as
shall have been furnished to the Company and to the other Holders by
such Holder in writing, and copies thereof shall in any event be
simultaneously transmitted to (A) the Administrative Agent at
BankBoston, N.A., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and (B) ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Esq.
31
(b) Any notice or other communication pursuant to this Agreement 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 receipt thereof by such
officer or the sending of such facsimile or (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third business day following
the mailing thereof.
Section 9.2. GOVERNING LAW. THIS AGREEMENT IS INTENDED TO TAKE EFFECT
AS A SEALED INSTRUMENT. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
Section 9.3. AMENDMENTS AND WAIVERS.
(a) Except as otherwise provided by paragraph (b) of this Section 9.3,
and except as otherwise expresslY required by any other provisions of this
Agreement, none of the terms or provisions contained in this Agreement, and
none of the agreements, obligations or covenants of the Company contained in
this Agreement, may be amended, modified, supplemented, waived or terminated
unless (i) the Company shall execute an instrument in writing agreeing or
consenting to such amendment, modification, supplement, waiver or termination,
and (ii) the Company shall receive a prior written Holder Consent therefor.
(b) Each of the terms and provisions contained in this Section 9.3
or in the definitions of PERMITTED TRANSFEREE, HOLDER CONSENT or MAJORITY
HOLDERS contained in Article I hereof may be amended, modified, supplemented,
waived or terminated only by a written instrument or consent signed by the
Company and by each of the Holders holding of record any Securities at the
effective date thereof.
(c) In connection with any action taken or to be taken pursuant to
paragraph (a) of this Section 9.3, there shall be no obligation or requirement
on the part of the Company, any of the Holders or any other Persons (i) to
solicit or to attempt to solicit from all of the Holders the consent or
approval of all of the Holders for such action, or (ii) to submit any notices
of any kind to all of the Holders in advance of any action proposed to be taken
pursuant to paragraph (a) of this Section 9.3. However, copies of all written
consents or approvals given by Holders in connection with any action taken or
to be taken pursuant to and in compliance with paragraph (a) of this Section
9.3 shall be sent by the Company, promptly after the receipt thereof by the
Company, to each Holder who shall have failed or refused to give a written
consent or approval for such action.
(d) Any action taken pursuant to and in compliance with paragraph (a)
of this Section 9.3 shall be binding upon the Company and upon all of the
Holders, including all of the Holders who shall have failed or refused to give
a written consent or approval for such action.
32
Section 9.4. PROPORTIONAL ADJUSTMENTS. There are references in this
Agreement to a specific price per share of the Company's Common Stock or to a
specific number of shares in the capital of the Company. The specific price per
share and the specific number of shares so stated are effective as of the
Closing Date. The specific price per share and the specific number of shares so
stated shall (in each case) be proportionally adjusted from time to time if (and
on each occasion that) there shall be effected by the Company any stock
dividend, stock split, subdivision of shares, combination of shares,
reclassification, recapitalization or other similar corporate reorganization
affecting the capital structure of the Company. The exact amount and the
effective date of each adjustment effected pursuant to this ss.9.4 shall be
determined in good faith and on a reasonable basis by the Board of Directors of
the Company. The Company shall promptly notify each Holder in writing of each
such adjustment.
Section 9.5. INTEGRATION. Annexed to this Agreement are SCHEDULE 1,
SCHEDULE 2 and EXHIBIT A. Such SCHEDULES and EXHIBIT are an integral part of
this Agreement and are hereby incorporated by reference.
Section 9.6. RIGHTS AND OBLIGATIONS SEVERAL. The rights and
obligations of each of the parties hereto shall be several (and not joint),
except as otherwise expressly provided by this Agreement.
Section 9.7. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on
the part of any party hereto in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 9.8. ENTIRE AGREEMENT. This Agreement, including the
SCHEDULES and EXHIBITS hereto, the Warrants, the Warrant Agreement, the Warrant
Escrow Agreement, the Subordinated Loan Agreement constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
and supersedes any prior understandings or agreements concerning the subject
matter hereof.
Section 9.9. SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
Section 9.10. BINDING EFFECT. All of the covenants and agreements of
the Company contained in, and all of the rights granted by the Company pursuant
to, this Agreement, shall inure to the benefit of each Holder, including each
of the Permitted Transferees of such Holder. None of such covenants, agreements
or rights shall be assignable or transferable by any Holder to any Person
except to a Person who is a Permitted Transferee of such Holder.
Section 9.11. COUNTERPARTS. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
agreement. In making proof of this
33
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by each of the parties hereto.
34
IN WITNESS WHEREOF, the parties have caused this Warrant Holders'
Agreement to be duly executed as of the date first written above.
THE COMPANY:
TRANSTECHNOLOGY
CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President & CFO
THE PURCHASERS:
--- -----------
BANKBOSTON, N.A.
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
35
THE ADMINISTRATIVE AGENT:
-------------------------
BANKBOSTON, N.A., as
Administrative Agent
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
36
EXHIBIT A
---------
TO WARRANT
HOLDERS' AGREEMENT
Instrument of Accession
-----------------------
The undersigned, ____________________, in order to become the owner or
holder of ________ shares of Common Stock, $0.01 par value per share (the
"SHARES"), of TRANSTECHNOLOGY CORPORATION, a Delaware corporation, hereby agrees
to become a Holder party to that certain Warrant Holders' Agreement, dated as of
August 31, 1999 (the "WARRANT HOLDERS' AGREEMENT"), a copy of which is attached
hereto. This Instrument of Accession shall become a part of such Warrant
Holders' Agreement.
Executed as of the date set forth below under the laws of the State of
Delaware.
Signature: ___________________________
Address: ___________________________
___________________________
___________________________
Date: ___________________________
Accepted:
TRANSTECHNOLOGY CORPORATION
By:__________________________________
Title:_______________________________
Date:________________________________