[EXECUTION COPY]
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PIK DIVIDEND NOTE AGREEMENT
Dated as of January 3, 1994
among
KAYNAR HOLDINGS INC.,
as Issuer
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Initial Holder
and
THE OTHER PERSONS
FROM TIME TO TIME PARTY HERETO,
as Holders
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods. . . . . . . . . . . . . . . . . . . . 18
1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.04. Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
THE NOTES
2.01. Issuance of Notes. . . . . . . . . . . . . . . . . . . . . . . . . 18
2.02. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.03. Authorized Officers and Agents . . . . . . . . . . . . . . . . . . 22
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . . . . 22
3.02. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.03. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
CONDITIONS TO ISSUANCE OF NOTES
4.01. Conditions Precedent to Effectiveness of this Agreement . . . . . 24
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Closing Date Representations and Warranties. . . . . . . . . . . . 26
ARTICLE VI
REPORTING COVENANTS
6.01. Financial Statements and Reports . . . . . . . . . . . . . . . . . 29
6.02. Operations Reports . . . . . . . . . . . . . . . . . . . . . . . . 30
6.03. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 30
6.04. Lawsuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.05. Other Information. . . . . . . . . . . . . . . . . . . . . . . . . 31
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ARTICLE VII
AFFIRMATIVE COVENANTS
7.01. Corporate Existence, Etc.. . . . . . . . . . . . . . . . . . . . . 31
7.02. Corporate Powers; Conduct of Business. . . . . . . . . . . . . . . 31
7.03. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . 32
7.04. Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . 32
7.05. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.06. Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.07. ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.08. Foreign Employee Benefit Plan Compliance . . . . . . . . . . . . . 33
7.09. Government Contract Compliance . . . . . . . . . . . . . . . . . . 33
7.10. Environmental Compliance . . . . . . . . . . . . . . . . . . . . . 33
7.11. Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VIII
NEGATIVE COVENANTS
8.01. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.02. Sales of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.03. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.04. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.05. Accommodation Obligations. . . . . . . . . . . . . . . . . . . . . 37
8.06. Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . 37
8.07. Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 38
8.08. Transactions with Shareholders and Affiliates. . . . . . . . . . . 38
8.09. Restriction on Fundamental Changes . . . . . . . . . . . . . . . . 39
8.10. Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . 39
8.11. Issuance of Capital Stock. . . . . . . . . . . . . . . . . . . . . 39
8.12. Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . . 39
8.13. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IX
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 39
9.02. Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE X
MISCELLANEOUS
10.01. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.02. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.03. Change in Accounting Principles . . . . . . . . . . . . . . . . . 44
10.04. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.05. Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.06. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 46
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10.07. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.08. Survival of Warranties and Agreements . . . . . . . . . . . . . . 47
10.09. Failure or Indulgence Not Waiver; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.10. Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . 48
10.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.12. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.13. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.14. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . 48
10.15. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 49
10.16. Certain Consents and Waivers of the Issuer. . . . . . . . . . . . 49
10.17. Counterparts; Inconsistencies . . . . . . . . . . . . . . . . . . 50
10.18. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.19. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 51
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EXHIBITS
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Exhibit A -- Form of Note
Exhibit B -- List of Closing Documents
SCHEDULES
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Schedule 1.01.1 -- Permitted Existing Accommodation
Obligations
Schedule 5.01-C -- Consents
Schedule 5.01-D -- Authorized, Issued and Outstanding Capital
Stock; Subsidiaries
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PIK DIVIDEND NOTE AGREEMENT
This PIK Dividend Note Agreement dated as of January 3, 1994 (as
amended, supplemented or modified from time to time, the "Agreement") is entered
into by and among Kaynar Holdings Inc., a Delaware corporation (the "Issuer"),
General Electric Capital Corporation, a New York corporation (the "Initial
Holder") and the other Persons from time to time party hereto as "Holders" (as
defined below).
ARTICLE I
DEFINITIONS
1.01. CERTAIN DEFINED TERMS. The following terms used in this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:
"ACCOMMODATION OBLIGATION" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent thereof by
the Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness, obligation or liability of another that such
Indebtedness, obligation or liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders thereof
will be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes co-
made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or any security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level of income, or
other financial condition, and agreements to make payment other than for value
received. The amount of any Accommodation Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported; PROVIDED, that
(i) if the liability of the Person extending such guaranty or support is limited
with respect thereto to an amount less than the obligation guaranteed or
supported, or is limited to recourse against a particular asset or assets of
such Person, the amount of the corresponding Accommodation Obligation shall be
limited (in the case of a guaranty or other support limited by amount) to such
lesser amount or (in the case of a guaranty or other support limited by recourse
to a particular asset or assets) to the higher of the Fair Market Value of such
asset or assets at the date for determination of the amount of the Accommodation
Obligation or the value at which such asset or assets would, in conformity with
GAAP, be reflected on or valued for the purposes of preparing a consolidated
balance sheet of such Person as at such determination date; and (ii) if any
obligation is guaranteed or otherwise supported jointly and severally by a
Person and others, then the amount of the liability of such Person with respect
to
such guaranty or other support to be included in the amount of such Person's
Accommodation Obligation shall be the whole principal amount so guaranteed or
otherwise supported.
"AFFILIATE" means any Person (other than the Initial Holder) which
directly or indirectly owns or controls, on an aggregate basis, including all
beneficial ownership and ownership or control as a trustee, guardian or other
fiduciary, at least ten percent (10%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors
(irrespective of whether, at the time, stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) of the Issuer or any Subsidiary of which is
controlled by or is under common control with the Issuer or any stockholders of
the Issuer, or any Subsidiary. For the purpose of this definition, "control"
means the possession, directly or indirectly, of the power to direct or to cause
the direction of management and policies, whether through the ownership of
voting securities, by contract or otherwise.
"AFS" means the Aerospace Fastening Systems Group of Microdot.
"AFS PURCHASE AGREEMENT" means the Asset Purchase Agreement dated as
of November 3, 1993 by and between Opco and Microdot, pursuant to which Microdot
agrees to sell, and Opco agrees to purchase substantially all of the assets of
AFS.
"AGREEMENT" is defined in the preamble hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Sections 101 ET SEQ.), as amended from time to time, and any successor statute.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Central District of California, Santa Xxx Division.
"BENEFIT PLAN" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) subject to Title IV
of ERISA (i) in respect of which the Issuer or any ERISA Affiliate is, or within
the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA and (ii) which is not a Foreign Pension Plan or Foreign
Employee Benefit Plan.
"BOARD OF DIRECTORS" means the board of directors of the Issuer.
"BUSINESS ACTIVITY REPORT" means (i) an Indiana Business Activity
Report from the Indiana Department of Revenue, Compliance Division, or (ii) a
Notice of Business Activities Report from the State of New Jersey Division of
Taxation, or
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(iii) a Minnesota Business Activity Report from the Minnesota Department of
Revenue.
"BUSINESS DAY" means a day, in the applicable local time, which is not
a Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other governmental action to close in Los Angeles,
California or Chicago, Illinois.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK", with respect to any Person, means any capital stock
of such Person, regardless of class or designation, and all warrants, options,
purchase rights, conversion or exchange rights, voting rights, calls or claims
of any character with respect thereto.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; and (ii) domestic and
eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations), which, at the time of acquisition, are rated A-1 (or
better) by Standard & Poor's Corporation or Prime-1 (or better) by Xxxxx'x
Investors Services, Inc.; PROVIDED, that the maturities of such Cash Equivalents
shall not exceed one year.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. Sections 9601 ET SEQ., any amendments
thereto, any successor statutes, and any regulations or guidance promulgated
thereunder.
"CERTIFICATES OF DESIGNATION" means, collectively, the Certificate of
Designation of the Series A Preferred Stock and the Certificate of Designation
of the Series B Preferred Stock; and "CERTIFICATE OF DESIGNATION" means either
of them.
"CLAIM" means any claim or demand, by any Person, of whatsoever kind
or nature for any alleged Liabilities and Costs, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"CLOSING DATE" means the date the "Term Loan" under (and as defined
in) the Term Loan Agreement is made.
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"COGNIZANT SECURITY OFFICE" means the office of the Defense
Investigative Service Director of Industrial Security that has industrial
security jurisdiction over the geographical area in which a contractor is
located.
"COMMISSION" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the Issuer.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, extremely hazardous waste, special waste, petroleum
or petroleum-derived substance or waste, asbestos, PCBs, or any constituent of
any such substance or waste, and includes, but is not limited to, these terms as
defined in any Environmental Law, as well as any other substance which is
required by any Governmental Authority to be investigated, cleaned up, removed,
treated or otherwise abated or which is regulated by such Governmental
Authority.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.
"CORPORATE DOCUMENTS" means, with respect to any corporation, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation, (ii) the by-laws (or the equivalent governing
documents) of the corporation and (iii) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such corporation's Capital Stock.
"CUSTOMARY PERMITTED LIENS" means
(i) Liens (other than Environmental Liens and Liens in favor of
the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which
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adequate reserves or other appropriate provisions are being maintained
in accordance with GAAP;
(iii) Liens (other than Environmental Liens and Liens in favor
of the PBGC) incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for the
repayment of borrowed money), surety and performance bonds; PROVIDED,
that (A) all such Liens do not in the aggregate materially detract
from the value of the Issuer's or any of its Subsidiaries' respective
assets or Property or materially impair the use thereof in the
operation of their respective businesses, and (B) all such Liens in
connection with worker's compensation, unemployment insurance or other
types of social security benefits deposits shall secure obligations in
an aggregate principal amount not exceeding $50,000 at any time
outstanding; and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of Real Property which do not interfere with
the ordinary conduct of the business of the Issuer or any of its
Subsidiaries.
"DIVIDEND PAYMENT DATE" means, with respect to each series of
Preferred Stock, each "Dividend Payment Date" under (and as defined in) the
applicable Certificate of Designation with respect to which the Board of
Directors declares dividends on such series of Preferred Stock out of funds of
the Issuer legally available therefor.
"DOD" means the United States Department of Defense, all constituent
agencies thereof and any Person succeeding to the functions thereof.
"DOL" means the United States Department of Labor, all constituent
agencies thereof and any Person succeeding to the functions thereof.
"DOLLARS" and "$" mean the lawful money of the United States.
"ENVIRONMENTAL LAW" means any Requirement of Law derived from or
relating to federal, state and local laws or regulations relating to or
addressing the environment, health or safety, including but not limited to
CERCLA, OSHA and RCRA, and any state or local equivalent thereof.
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"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental Law, or (ii) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACTS" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the transfer, sale, lease or closure of
any Property or deed or title for any Property for environmental reasons,
including, but not limited to, any so-called "Environmental Cleanup
Responsibility Acts" or "Responsible Transfer Acts".
"EQUIPMENT" means all of the Issuer's and each of its Subsidiaries'
respective present and future (i) equipment, including, without limitation,
machinery, manufacturing, distribution, selling, data processing and office
equipment, assembly systems, tools, molds, dies, fixtures, appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft engines, and trade
fixtures, (ii) other tangible personal Property (other than the Issuer's and
each such Subsidiary's respective Inventory), and (iii) any and all accessions,
parts and appurtenances attached to any of the foregoing or used in connection
therewith, and any substitutions therefor and replacements, products and
proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.
"ERISA AFFILIATE" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Issuer; (ii) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Issuer; and
(iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Issuer, any corporation
described in CLAUSE (i) above or any partnership or trade or business described
in CLAUSE (ii) above.
"EVENT OF DEFAULT" means any of the occurrences set forth in
SECTION 9.01 after the expiration of any applicable grace period and the giving
of any applicable notice, in each case as expressly provided in SECTION 9.01.
"EXPORT LICENSE" means any and all licenses, authorizations, approvals
or applications therefor relating to exports, reexports, temporary exports,
temporary imports and imports, as the case may be, granted by or pending before
the United States Department of Commerce, the United States
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Department of State or any other United States Governmental Authority.
"FACILITY SECURITY CLEARANCE" means an administrative determination by
the applicable United States Government Authority that, from a security
viewpoint, a facility is eligible for access to classified information of a
certain category and all lower categories.
"FAIR MARKET VALUE" means, with respect to any asset, the value of the
consideration obtainable in a sale of such asset in the open market, assuming a
sale by a willing seller to a willing purchaser dealing at arm's length and
arranged in an orderly manner over a reasonable period of time, each having
reasonable knowledge of the nature and characteristics of such asset, neither
being under any compulsion to act, determined (a) in good faith by the board of
directors of the Issuer or (b) in an appraisal of such asset, PROVIDED, that
such appraisal was performed relatively contemporaneously with such sale by an
independent third party appraiser and the basic assumptions underlying such
appraisal have not materially changed since the date thereof.
"FISCAL YEAR" means the fiscal year of the Issuer, which shall be the
12-month period ending on December 31 of each calendar year.
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Issuer, any of its Subsidiaries or any of its
ERISA Affiliates and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"FOREIGN PENSION PLAN" means any employee benefit plan as defined in
Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit
of employees of the Issuer, any of its Subsidiaries or any of its ERISA
Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (iii) under applicable local law, is required to be funded through a trust
or other funding vehicle.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accounting Standards Board or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession as in effect on the date hereof (unless otherwise
specified herein as in effect on another date or dates).
"GENERAL INTANGIBLES" means all of the Issuer's and its Subsidiaries'
respective present and future (i) general intangibles, (ii) rights, interests,
choses in action, causes of action, claims and other intangible Property of
every kind and
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nature (other than accounts), (iii) corporate and other business records,
(iv) loans, royalties, and other obligations receivable, (v) trademarks,
registered trademarks, trademark applications, service marks, registered
service marks, service xxxx applications, patents, patent applications, trade
names, rights of use of any name, labels, fictitious names, inventions,
designs, trade secrets, computer programs, software, printouts and other
computer materials, goodwill, registrations, copyrights, copyright
applications, permits, licenses, franchises, customer lists, credit files,
correspondence, and advertising materials, (vi) customer and supplier
contracts, firm sale orders, rights under license and franchise agreements,
rights under tax sharing agreements, and other contracts and contract rights,
(vii) interests in partnerships and joint ventures, (viii) tax refunds and
tax refund claims, (ix) right, title and interest under leases, subleases,
licenses and concessions and other agreements relating to Property, (x)
deposit accounts (general or special) with any bank or other financial
institution, (xi) credits with and other claims against third parties
(including carriers and shippers), (xii) rights to indemnification and with
respect to support and keep-well agreements, (xiii) reversionary interests in
pension and profit sharing plans and reversionary, beneficial and residual
interests in trusts, (xiv) proceeds of insurance of which the Issuer or such
Subsidiary is beneficiary, (xv) letters of credit, guarantees, Liens,
security interests and other security held by or granted to the Issuer or
such Subsidiary, (xvi) uncertificated securities, and (xvii) governmental
certificates and certifications, including, without limitation, certificates
and certifications relating to Government Contracts and Export Licenses,
authorizations and approvals, issued to the Issuer or such Subsidiary.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GOVERNMENT CONTRACT" means any bid, quotation, proposal, contract,
agreement, work authorization, lease, commitment or sale or purchase order of
the Issuer or any of its Subsidiaries which is entered into with or submitted to
any United States Governmental Authority or any agency, agent or instrumentality
thereof, including, among other things, all contracts and work authorizations to
supply goods and services to the United States Government.
"HOLDERS" means the Stockholders and the Noteholders.
"INDEBTEDNESS", as applied to any Person, means, at any time, (i) all
indebtedness, obligations or other liabilities of such Person (A) for borrowed
money or evidenced by debt securities, debentures, acceptances, notes or other
similar instru-
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ments, and any accrued interest, fees and charges relating thereto, (B) under
profit payment agreements or in respect of obligations to redeem, repurchase
or exchange any Securities of such Person or to pay dividends in respect of
any stock, (C) with respect to letters of credit issued for such Person's
account, (D) to pay the deferred purchase price of property or services,
except accounts payable and accrued expenses arising in the ordinary course
of business, (E) in respect of Capital Leases, (F) which are Accommodation
Obligations or (G) under warranties and indemnities; (ii) all indebtedness,
obligations or other liabilities of such Person or others secured by a Lien
on any property of such Person, whether or not such indebtedness, obligations
or liabilities are assumed by such Person, all as of such time; (iii) all
preferred stock subject (upon the occurrence of any contingency or otherwise)
to mandatory redemption; and (iv) all contingent Contractual Obligations with
respect to any of the foregoing.
"INITIAL HOLDER" is defined in the preamble hereto.
"INTEREST PAYMENT DATE" means each March 31, June 30, September 30 and
December 31 during the term of this Agreement.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"INVENTORY" means all of the Issuer's and each of its Subsidiaries'
respective present and future (i) inventory, (ii) goods, merchandise and other
personal Property furnished or to be furnished under any contract of service or
intended for sale or lease, and all consigned goods and all other items which
have previously constituted Equipment but are then currently being held for sale
or lease in the ordinary course of the Issuer's or such Subsidiary's business,
(iii) raw materials, work-in-process and finished goods, (iv) materials and
supplies of any kind, nature or description used or consumed in the Issuer's or
such Subsidiary's business or in connection with the manufacture, production,
packing, shipping, advertising, finishing or sale of any of the Property
described in CLAUSES (i) through (iii) above, (v) goods in which the Issuer or
such Subsidiary has a joint or other interest or right of any kind (including,
without limitation, goods in which the Issuer or such Subsidiary has an interest
or right as consignee), and (vi) goods which are returned to or repossessed by
the Issuer or such Subsidiary; in each case whether in the possession of the
Issuer, such Subsidiary, a bailee, a consignee, or any other Person for sale,
storage, transit, processing, use or otherwise, and any and all documents for or
relating to any of the foregoing.
"INVESTMENT" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person,
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(ii) any purchase by that Person of all or substantially all of the assets of
a business conducted by another Person, and (iii) any loan, advance (other
than deposits with financial institutions available for withdrawal on demand,
prepaid expenses, accounts receivable, advances to employees and similar
items made or incurred in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Indebtedness
to such Person arising from a sale of property by such Person other than in
the ordinary course of its business. The amount of any Investment shall be
the original cost of such Investment, plus the cost of all additions thereto
less the amount of any return of capital or principal to the extent such
return is in cash with respect to such Investment without any adjustments for
increases or decreases in value or write-ups, write-downs or write-offs with
respect to such Investment.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"ISSUER" is defined in the preamble hereto.
"LIABILITIES AND COSTS" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation, attorney,
expert and consulting fees and costs of investigation, feasibility or Remedial
Action studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or imposed by
law, and includes the interest of a lessor under a Capital Lease or under any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor pursuant to Section 9-408 of
the Uniform Commercial Code), naming the owner of such property as debtor, under
the Uniform Commercial Code or other comparable law of any jurisdiction.
"LIQUIDATION PREFERENCE" means, with respect to each series of
Preferred Stock, the "Liquidation Preference" under (and as defined in) the
Certificate of Designation pursuant to which such Preferred Stock was issued.
"MAJORITY HOLDERS" means, as of any date of determination, (i)
Noteholders holding, in the aggregate, greater
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than fifty percent (50%) in principal amount of all Notes outstanding as of
such date, (ii) Stockholders holding, in the aggregate, greater than fifty
percent (50%) of the Shares of Series A Preferred Stock issued and
outstanding as of such date and (iii) Stockholders holding, in the aggregate,
greater than fifty percent (50%) of the Shares of Series B Preferred Stock
issued and outstanding as of such date.
"MAL" means Microdot Aerospace Limited, a company organized under the
laws of the United Kingdom, and a wholly-owned Subsidiary of Microdot.
"MAL PURCHASE AGREEMENT" means, to the extent the assets of MAL have
been made available in accordance with the AFS Purchase Agreement, the agreement
by and between MAL, Opco and the U.K. Subsidiary, pursuant to which Opco and the
U.K. Subsidiary agree to purchase substantially all of the assets of MAL, which
agreement shall be in form and substance satisfactory to the Initial Holder.
"MANAGEMENT INVESTORS" means Jordan A. Law, Xxxxx X. Xxxxxx, Xxxxx X.
Xxxx, Xxxxxx X. Xxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxxxxx and Xxxxxx X. Xxxxxxxx.
"MANAGEMENT SUBSCRIPTION AGREEMENTS" means the respective Subscription
Agreements between the Issuer and each of the Management Investors, pursuant to
which the Issuer agrees to sell and the Management Investors subscribe to
purchase an aggregate of 20,500 shares of Common Stock.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
financial condition, operations, assets or prospects of the Issuer, Opco or any
of their respective Subsidiaries, (ii) the ability of the Issuer, Opco or any of
their respective Subsidiaries to perform their respective obligations under the
Transaction Documents, or (iii) the ability of any Holder to enforce this
Agreement or the Notes held by such Holder.
"MICRODOT" means Microdot Inc., a Delaware corporation.
"MICRODOT LOAN AGREEMENT" means that certain Loan and Security
Agreement dated as of December 30, 1983 between the Initial Holder and Microdot,
as amended, as amended and restated by that certain Amended and Restated Loan
and Security Agreement dated as of April 1, 1989 between the Initial Holder and
Microdot, as further amended by Amendment No. 1 thereto dated as of December 8,
1992.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by either the Issuer or any ERISA Affiliate.
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"NOTE" is defined in SECTION 2.01(a).
"NOTEHOLDER" means each holder of record of Notes as it appears on
the books of the Issuer.
"OBLIGATIONS" means the Indebtedness evidenced by the Notes and all
advances, debts, liabilities, obligations, covenants and duties owing by the
Issuer to the Noteholders, or any Person entitled to indemnification pursuant
to SECTION 10.02 of this Agreement, of any kind or nature, present or future,
whether or not evidenced by any note, guaranty or other instrument, arising
under this Agreement or the Notes, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising and however acquired. The term includes,
without limitation, all interest (including, without limitation, interest,
whether or not allowed under Section 502 of the Bankruptcy Code or otherwise,
at the then applicable rate (including the rate in effect from time to time
under SECTION 2.02(c)) specified herein that accrues after the commencement
of any proceeding under the Bankruptcy Code or other applicable bankruptcy,
reorganization, insolvency, dissolution, liquidation or other debtor relief
Requirement of Law), charges, expenses, fees, attorneys' fees and
disbursements and any other sum chargeable to the Issuer under this Agreement
or any of the Notes.
"OFFICER'S CERTIFICATE" means a certificate executed on behalf of a
corporation by (i) the chairman or vice-chairman of its board of directors
(if an officer of such corporation) or (ii) its president, any of its
vice-presidents, its chief financial officer, or its treasurer.
"OPCO" means Kaynar Technologies Inc., a Delaware corporation.
"OPCO CREDIT AGREEMENT" means that certain Credit Agreement of even
date herewith by and between Opco and the Initial Holder, as the same may be
amended, supplemented or modified from time to time.
"OPCO LOAN DOCUMENTS" means the "Loan Documents" as defined in the
Opco Credit Agreement.
"OPERATING LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is
not a Capital Lease.
"OSHA" means the Occupational Safety and Health Act of 1970, any
amendments thereto, any successor statutes and any regulations or guidance
promulgated thereunder.
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"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"PCBS" means polychlorinated biphenyls.
"PERMITS" means any license, permit, variance, interim permit,
permit application, approval, consent, certification, qualification or other
authorization under any Requirement of Law applicable to the Issuer or any of
its Subsidiaries or otherwise required by any Governmental Authority in
connection with the business or operations of the Issuer or any of its
Subsidiaries, including, without limitation, any license, permit, consent,
certification, approval, authorization or qualification relating to any
Government Contract.
"PERMITTED EXISTING ACCOMMODATION OBLIGATIONS" means the Accommodation
Obligations of the Issuer and its Subsidiaries identified as such on
SCHEDULE 1.01.1.
"PERSON" means any natural person, corporation, limited partnership,
general partnership, joint stock company, joint venture, association, company,
trust, bank, trust company, land trust, business trust or other organization,
whether or not a legal entity, and any Governmental Authority.
"PERSONNEL SECURITY CLEARANCE" means an administrative determination
by the applicable United States Governmental Authority that an individual is
eligible, from a security point of view, for access to classified information of
the same or lower category as the level of the personnel clearance being
granted.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA
(i) in respect of which the Issuer or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA and (ii) which is not a Foreign Pension Plan or Foreign
Employee Benefit Plan.
"POTENTIAL EVENT OF DEFAULT" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"PREFERRED STOCK" means the Series A Preferred Stock and the Series B
Preferred Stock.
"PROCESS AGENT" is defined in SECTION 10.16.
"PROPERTY" means any Real Property or personal property, plant,
building, facility, structure, underground storage tank or unit, Equipment,
Inventory, General Intangible, account, or other asset owned, leased or operated
by the Issuer or its Subsidiaries, as applicable, (including any surface water
thereon or adjacent thereto, and soil and groundwater thereunder).
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"PRO RATA SHARE" means, with respect to any Noteholder, the
percentage obtained by dividing (i) the unpaid balance of the outstanding
Notes held by such Noteholder by (ii) the aggregate unpaid balance of all
outstanding Notes issued pursuant to this Agreement.
"PURCHASE" means, collectively, (i) the purchase by Opco from
Microdot of substantially all of the assets of AFS pursuant to the AFS
Purchase Agreement and (ii) to the extent the assets of MAL have been made
available in accordance with the AFS Purchase Agreement, the purchase by Opco
and the U.K. Subsidiary of substantially all of the assets of MAL pursuant to
the MAL Purchase Agreement.
"PURCHASE AGREEMENTS" means the AFS Purchase Agreement and, to the
extent the assets of MAL have been made available in accordance with the AFS
Purchase Agreement, the MAL Purchase Agreement, and "PURCHASE AGREEMENT"
means either of them.
"PURCHASE DOCUMENTS" means the Purchase Agreements and all of the
agreements, documents and instruments executed in connection with either of
them.
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Sections 6901 ET SEQ., any amendments thereto, any successor statutes,
and any regulations or guidance promulgated thereunder.
"REAL PROPERTY" means all of the Issuer's and each of its
Subsidiaries' respective present and future right, title and interest
(including, without limitation, any leasehold estate) in (i) any plots,
pieces or parcels of land, (ii) any improvements, buildings, structures and
fixtures now or hereafter located or erected thereon or attached thereto of
every nature whatsoever (the rights and interests described in CLAUSE (i) or
(ii) above being the "Premises"), (iii) all easements, rights of way, gores
of land or any lands occupied by streets, ways, alleys, passages, sewer
rights, water courses, water rights and powers, and public places adjoining
such land, and any other interests in property constituting appurtenances to
the Premises, or which hereafter shall in any way belong, relate or be
appurtenant thereto, (iv) all hereditaments, gas, oil, minerals (with the
right to extract, sever and remove such gas, oil and minerals), and
easements, of every nature whatsoever, located in or on the Premises and
(v) all other rights and privileges thereunto belonging or appertaining and all
extensions, additions, improvements, betterments, renewals, substitutions and
replacements to or of any of the rights and interests described in
CLAUSE (iii) or (iv) above.
"RELEASE" means release, presence, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any
Property or Third Party
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Property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater, Property or Third Party Property.
"REMEDIAL ACTION" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"REPORTABLE EVENT" means any of the events described in Section
4043 of ERISA and the regulations promulgated thereunder as in effect from
time to time, excluding any event with respect to which the 30-day notice
requirement is waived in the applicable regulations.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person, and
any law, rule or regulation, or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property
is subject including, without limitation, the Securities Act, the Securities
Exchange Act, ERISA, the Fair Labor Standards Act and any certificate of
occupancy, zoning ordinance, building, environmental or land use requirement
or Permit or environmental, labor, employment, occupational safety or health
law, ordinance, rule, regulation or common law.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Issuer or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of
stock or in any junior class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of the Issuer or any of its Subsidiaries now or hereafter
outstanding, and (iii) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of the Issuer or
any of its Subsidiaries now or hereafter outstanding.
"SCHEDULED MATURITY DATE" means the fifth (5th) anniversary of the
Closing Date.
"SECURITIES" means any stock, shares, voting trust certificates,
bonds, debentures, notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or any certificates of
interest, shares, or participations in temporary or interim certificates for
the purchase or
-15-
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"SERIES A PREFERRED STOCK" means the Series A Convertible Preferred
Stock, par value $0.01 per share, of the Issuer.
"SERIES B PREFERRED STOCK" means the Series B Preferred Stock, par
value $0.01 per share, of the Issuer.
"SHAREHOLDERS AGREEMENT" means that certain Shareholders Agreement
dated as of January 3, 1994 among the Issuer, the Initial Holder and the
Management Investors regarding transfers of, restrictions on and other rights
and conditions relating to the Common Stock and the Preferred Stock, as the
same may be amended, supplemented or modified from time to time.
"SOLVENT", when used with respect to any Person, means that at the
time of determination:
(i) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as
they mature; and
(iv) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
"STOCKHOLDER" means each holder of record of shares of Series A
Preferred Stock or Series B Preferred Stock as it appears on the share register
of the Issuer.
"SUBSIDIARY" of a Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned or controlled by such
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Person, one or more of the other subsidiaries of such Person or any
combination thereof.
"TAXES" is defined in SECTION 3.03(a).
"TERM LOAN AGREEMENT" means that certain Term Loan Agreement by and
between the Issuer and the Initial Holder, as the same may be amended,
supplemented or modified from time to time.
"TERM LOAN DOCUMENTS" means the "Loan Documents" as defined in the
Term Loan Agreement.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Issuer or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Issuer or such ERISA Affiliate was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations of a facility which results in the termination of
employment of 20% of Benefit Plan participants who are employees of the Issuer
or any ERISA Affiliate; (iii) the imposition of an obligation on the Issuer or
any ERISA Affiliate under Section 4041 of ERISA to provide affected parties
written notice of intent to terminate a Benefit Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the institution by the PBGC or any
similar foreign Governmental Authority of proceedings to terminate a Benefit
Plan or a Foreign Pension Plan; (v) any event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan;
(vi) a foreign Governmental Authority shall appoint or institute proceedings to
appoint a trustee to administer any Foreign Pension Plan; or (vii) the partial
or complete withdrawal of the Issuer or any ERISA Affiliate from a Multiemployer
Plan or a Foreign Pension Plan.
"THIRD PARTY PROPERTY" means any real or personal property, plant,
building, facility, structure, underground storage tank or unit or equipment
owned, leased or operated by any Person other than the Issuer or its
Subsidiaries (including, without limitation, any surface water thereon or
adjacent thereto and soil and ground water thereunder).
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Issuer, Opco and their respective Subsidiaries in connection with the execution,
delivery and performance of the Transaction Documents.
"TRANSACTION DOCUMENTS" means (i) this Agreement and the Notes, (ii)
the Term Loan Documents, (iii) the Opco Loan Documents and (iv) the Purchase
Documents.
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"U.K. SUBSIDIARY" means Kaynar Technologies Ltd., a wholly-owned
Subsidiary of Opco organized under the laws of England and Wales.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as enacted
in the State of California, as it may be amended from time to time.
1.02. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, PROVIDED, that if such period commences on the last
day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month during which such period is to end),
such period shall, unless otherwise expressly required by the other provisions
of this Agreement, end on the last day of the calendar month.
1.03. ACCOUNTING TERMS. Subject to SECTION 10.03, for purposes of
this Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.04. OTHER TERMS. All other terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings assigned to
such terms by the Uniform Commercial Code to the extent the same are defined
therein.
ARTICLE II
THE NOTES
2.01. ISSUANCE OF NOTES. (a) AMOUNTS AND SERIES OF NOTES. Subject
to the terms and conditions set forth in this Agreement, on each Dividend
Payment Date through and including the Scheduled Maturity Date, if the Issuer
has not paid all dividends declared to be payable on such Dividend Payment Date
in cash (or if the Issuer is then prohibited by law or contract from paying
dividends in cash on the Preferred Stock), the Issuer shall issue, in two
separate series, promissory notes in substantially the form of EXHIBIT A
attached hereto and made a part hereof (collectively, the "Notes") dated such
Dividend Payment Date to each Stockholder of record of shares of Series A
Preferred Stock and Series B Preferred Stock, respectively, appearing on the
share register of the Issuer on the tenth (10th) day preceding the relevant
Dividend Payment Date, PROVIDED that the Notes may have notations, legends or
endorsements required by
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law, stock exchange rule or usage (including any legend required by the
Internal Revenue Code if the Notes are considered to be issued with "original
issue discount"). Each issuance of Notes shall be issued in accordance with
a resolution of the Board of Directors, and shall be designated generally as
the "PIK Dividend Notes" of the Issuer, with such further particular
designations added or incorporated into such title for the Notes of any
particular series as the Board of Directors may determine. With respect to
any particular series of Notes, the Board Resolution relating thereto shall
specify, to the extent deemed appropriate by the Board of Directors, the
title of the Notes of that series (which shall distinguish the Notes of that
series from all other Notes); PROVIDED that, notwithstanding anything herein
to the contrary, Notes may be issued hereunder only (a) in payment of
dividends and in lieu of payment of dividends in cash and (b) in substitution
or replacement of other Notes as provided in SECTION 2.01(f). With respect
to the series of Notes from time to time issued to the Stockholders of Series
A Preferred Stock, the Issuer shall issue to each such Stockholder a Note in
a principal amount equal to the excess (if any) of (i) the amount of the
dividend declared to be payable to such Stockholder as of the relevant
Dividend Payment Date over (ii) the cash payment paid to such Stockholder in
respect of the dividends declared to be paid as of such Dividend Payment
Date. With respect to the series of Notes from time to time issued to the
Stockholders of Series B Preferred Stock, the Issuer shall issue to each such
Stockholder a Note in a principal amount equal to the excess (if any) of
(x) the amount of the dividend declared to be payable to such Stockholder as of
the relevant Dividend Payment Date over (y) the cash payment paid to such
Stockholder in respect of the dividends declared to be paid as of such
Dividend Payment Date.
(b) CONDITIONS TO ISSUANCE. In addition to the conditions set forth
in this Agreement, the Issuer shall not issue or pay any Notes under this
Agreement in violation of law or applicable directors' duties, and unless and
until all of the conditions for the declaration and payment of dividends set
forth in the applicable Certificate of Designation shall have been satisfied.
(c) REPAYMENT OF THE NOTES. (i) The outstanding principal balance
of the Notes (including, without limitation, the principal balance of the Notes
attributable to interest capitalized in accordance with the terms of SECTION
2.02(b)(i)) shall be payable in full on the earlier of (x) the Scheduled
Maturity Date (or, if not a Business Day, the immediately preceding Business
Day), and (y) the date of acceleration of the Obligations pursuant hereto.
(ii) In addition to the scheduled payment on the Notes, the Issuer
may make the voluntary prepayments described in SECTION 3.01 for credit against
such scheduled payments on the Notes pursuant to SECTION 3.01.
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(d) NOTEHOLDER LIST. The Issuer shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Noteholders.
(e) TRANSFER AND EXCHANGE. Where Notes are presented to the Issuer
with a request to register a transfer or to exchange them for an equal principal
amount of Notes of other permitted denominations of like series, the Issuer
shall register the transfer or make the exchange and, upon surrender of the
existing Notes, shall issue such new Notes as shall be necessary to evidence
such transfer or exchange. No service charge shall be made for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Issuer may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith. The Issuer shall
not be required (i) to issue, register the transfer of or exchange Notes during
a period beginning at the opening of business 15 days before the day of any
selection of Notes for prepayment of Notes under SECTION 3.01 and ending at the
close of business on the day of selection, or (ii) to register the transfer or
exchange of any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(f) REPLACEMENT NOTES. If a Noteholder claims that its Note has been
mutilated, lost, destroyed or wrongfully taken, the Issuer shall issue a
replacement Note, PROVIDED that, if required by the Issuer, an indemnity bond
must be provided by such Noteholder in an amount which is sufficient in the
judgment of the Issuer to protect the Issuer from any loss which any of them may
suffer if a Note is replaced. The Issuer may charge for their expenses in
replacing a Note. In case any such mutilated, lost, destroyed or wrongfully
taken Note has become or is about to become due and payable, the Issuer, in its
discretion, may, instead of issuing a new Note, pay such Note. Every
replacement Note is an additional Obligation of the Issuer.
(g) OUTSTANDING NOTES. The Notes outstanding at any time are all the
Notes issued by the Issuer except for those cancelled by it, those delivered to
it for cancellation, and those described in this SECTION 2.01(G) as not
outstanding. If a Note is replaced pursuant to SECTION 2.01(F), it ceases to be
outstanding unless the Issuer receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser. If Notes are fully paid in
cash, they cease to be outstanding and interest on them ceases to accrue. A
Note does not cease to be outstanding solely because the Issuer or an Affiliate
of the Issuer holds the Note.
(h) TREASURY NOTES. In determining whether the Noteholders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Issuer or an Affiliate of the Issuer shall be
considered as though they are not outstanding.
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2.02. INTEREST. (a) RATE OF INTEREST. The Indebtedness evidenced
by each Note and the outstanding principal balance of all other Obligations
shall bear interest on the unpaid principal amount thereof from the date such
Note is issued and such other Obligations are due and payable until paid in
full, except as otherwise provided in SECTION 2.02(c), at a per annum rate equal
to (i) for the period commencing on the Closing Date and ending on December 31,
1995, nine and one-half percent (9.50%) and (ii) for the period commencing on
January 1, 1996 and ending on the date the Obligations are paid in full, eleven
and one-half percent (11.50%).
(b) INTEREST PAYMENTS. (i) Interest accrued on the Notes shall be
payable in arrears (A) with respect to interest accrued and unpaid as of any
Interest Payment Date, on the day immediately following such Interest Payment
Date, commencing on the first such day immediately following Xxxxx 00, 0000, (X)
upon the payment or prepayment of the Notes in full, and (C) if not theretofore
paid in full, at maturity (whether by acceleration or otherwise) of the Notes.
Accrued and unpaid interest on the outstanding principal balance of the Notes
may, at the option of the Issuer, be paid in immediately available funds in
accordance with the immediately preceding sentence and SECTION 3.02(a). If not
so paid, such interest shall be capitalized on the day immediately following the
applicable Interest Payment Date, and the outstanding principal balance of the
Notes shall automatically and without notice of any kind whatsoever be increased
by an amount equal to such interest.
(ii) Interest accrued on the principal balance of all other
Obligations shall be payable in immediately available funds in arrears (A) on
the last day of each calendar month, commencing on the first such day following
the incurrence of such Obligation, (B) upon repayment thereof in full or in
part, and (C) if not theretofore paid in full, at the time such other Obligation
becomes due and payable (whether by acceleration or otherwise).
(c) DEFAULT INTEREST. Notwithstanding the rates of interest
specified in SECTION 2.02(a) or elsewhere in this Agreement, effective
immediately upon (i) the occurrence of an Event of Default described in
SECTION 9.01(a) or (ii) the occurrence of any other Event of Default and notice
from the Majority Holders of the effectiveness of this SECTION 2.02(c), and for
as long thereafter as such Event of Default shall be continuing, the principal
balance of the Notes, and the principal balance of all other Obligations, shall
bear interest at a per annum rate which is two percent (2.0%) per annum in
excess of the interest rate otherwise applicable under SECTION 2.02(a).
(d) COMPUTATION OF INTEREST. Interest on all Obligations shall be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of 360 days. In computing interest on each
Note, the date of
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issuance of such Note shall be included and the date of payment shall be
excluded.
2.03. AUTHORIZED OFFICERS AND AGENTS. On the Closing Date and from
time to time thereafter when necessary, the Issuer shall deliver to the Holders
an Officer's Certificate setting forth the names of the officers, employees and
agents authorized to act for the Issuer in respect of all matters relating to
the this Agreement and the Notes and containing a specimen signature of each
such officer, employee or agent. The Holders shall be entitled to rely
conclusively on such officer's or employee's authority to act hereunder until
the Holders receive written notice to the contrary. The Holders shall have no
duty to verify the authenticity of the signature appearing on any written
document.
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. VOLUNTARY PREPAYMENTS. The Issuer may, upon at least one (1)
Business Day's prior written notice to the Noteholders, at any time and from
time to time, prepay the Notes, in whole or in part. Unless the aggregate
outstanding principal balance of the Notes is to be prepaid in full, voluntary
prepayments of the Notes shall be in an aggregate minimum amount of $100,000 and
integral multiples of $100,000 in excess of that amount. Any notice of
prepayment given to the Noteholders under this SECTION 3.01 shall specify the
date (which shall be a Business Day) of prepayment and the aggregate principal
amount of the prepayment. When notice of prepayment is delivered as provided
herein, the principal amount of the Notes specified in the notice shall become
due and payable on the prepayment date specified in such notice. The
prepayments described in this SECTION 3.01 may be made without premium or
penalty.
3.02. PAYMENTS. (a) MANNER AND TIME OF PAYMENT. All payments and
prepayments of principal of and interest on the Notes and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Noteholders shall be made without condition or reservation of right, in
immediately available funds (except to the extent otherwise permitted by SECTION
2.02(b)(i)), delivered to the Noteholders not later than 1:00 p.m. (Chicago
time) on the date and at the place due, to such account of each Noteholder as
such Noteholder may designate; and funds received by each Noteholder not later
than 1:00 p.m. (Chicago time) on any given Business Day shall be credited
against payment to be made that day and funds received by the Holders after that
time shall be deemed to have been paid on the immediately following Business
Day.
(b) APPLICATION OF PAYMENTS. (i) Subject to the provisions of
SECTION 3.01, all payments of principal and interest in respect of the Notes,
all payments of fees and all
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other payments in respect of any other Obligations, shall be allocated among
such of the Noteholders as are entitled thereto, in proportion to their
respective Pro Rata Shares and shall be applied FIRST, to pay all Obligations
then due and payable and SECOND, as the Issuer so designates.
(ii) After the occurrence of an Event of Default and while the same is
continuing, the Noteholders shall apply all payments in respect of any
Obligations in the following order:
(A) FIRST, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Noteholders;
(B) SECOND, to pay interest due in respect of the Notes;
(C) THIRD, to the payment or prepayment of principal outstanding
on the Notes; and
(D) FOURTH, to the payment of all other Obligations.
(c) PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
by the Issuer hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the immediately
following Business Day, and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
3.03. TAXES. (a) PAYMENT OF TAXES. Any and all payments by the
Issuer hereunder or under the Notes or other document evidencing any Obligations
shall be made, in accordance with SECTION 3.02, free and clear of and without
reduction for any and all present or future taxes, levies, imposts, deductions,
charges, withholdings, and all stamp or documentary taxes, excise taxes, ad
valorem taxes and other taxes imposed on the value of the Property, charges or
levies which arise from the execution, delivery or registration, or from payment
or performance under, or otherwise with respect to, this Agreement or any of the
Notes and all other liabilities with respect thereto, excluding taxes imposed on
or measured by net income or overall gross receipts and capital and franchise
taxes imposed on the Noteholders by (i) the United States, (ii) the Governmental
Authority of any jurisdiction in which any Noteholders has an office or any
political subdivision thereof or (iii) the Governmental Authority in which a
Noteholders is organized, managed and controlled or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges and
withholdings being hereinafter referred to as "Taxes"). If the Issuer shall be
required by law to withhold or deduct any Taxes from or in respect of any sum
payable hereunder or under the Notes or document to any Noteholder (x) the sum
payable to such Noteholder shall be increased as may be necessary so that after
making all
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required withholding or deductions (including withholding or deductions
applicable to additional sums payable under this SECTION 3.03) such
Noteholder receives an amount equal to the sum it would have received had no
such withholding or deductions been made, (y) the Issuer shall make such
withholding or deductions, and (z) the Issuer shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) INDEMNIFICATION. The Issuer will indemnify the Noteholders
against, and reimburse each Noteholder on demand for, the full amount of all
Taxes (including, without limitation, any Taxes imposed by any Governmental
Authority on amounts payable under this SECTION 3.03 and any additional income
or franchise taxes resulting therefrom) incurred or paid by such Noteholder or
any of its Affiliate and any liability (including penalties, additions to tax,
interest, and out-of-pocket expenses paid to third parties) arising therefrom or
with respect thereto, whether or not such Taxes were lawfully payable. A
certificate as to any additional amount payable to any Person under this SECTION
3.03 submitted by it to the Issuer shall, absent manifest error, be final,
conclusive and binding upon all parties hereto. Each Noteholder agrees, within
a reasonable time after receiving a written request from the Issuer, to provide
the Issuer with such certificates as are reasonably required, and take such
other actions as are reasonably necessary to claim such exemptions as such
Noteholder may be entitled to claim in respect of all or a portion of any Taxes
which are otherwise required to be paid or deducted or withheld pursuant to this
SECTION 3.03 in respect of any payments under this Agreement or under the Notes.
(c) RECEIPTS. Within thirty (30) days after the date of any payment
of Taxes by the Issuer, it will furnish to the applicable Noteholders, at its
address referred to in SECTION 10.07, the original or a certified copy of a
receipt evidencing payment thereof.
ARTICLE IV
CONDITIONS TO ISSUANCE OF NOTES
4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT. This
Agreement shall become effective against the Issuer and the Initial Holder upon
the satisfaction of all of the following conditions precedent:
(a) DOCUMENTS. The Initial Holder shall have received on or before
the Closing Date all of the following:
(i) this Agreement and all other agreements, documents and
instruments described in the List of Closing Documents attached hereto
as EXHIBIT B attached hereto and made a part hereof, each duly
executed where
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appropriate and in form and substance satisfactory to the Initial Holder;
(ii) the PRO FORMA financials referred to in SECTION 5.01(g);
(iii) documentation deemed adequate by the Initial Holder
showing the Issuer's and its Subsidiaries' compliance with any
financial responsibility requirements of applicable Requirements of
Law, including, without limitation, those contained in 40 C.F.R. Parts
264 and 265, Subps. H, and state law equivalents, and those
promulgated pursuant to 42 U.S.C. Section 6991b(c)(6), and state
equivalents; and
(iv) such additional documentation as the Initial Holder may
reasonably request.
(b) NO LEGAL IMPEDIMENTS. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Issuer shall not have
received any notice that litigation is pending or threatened which is likely to
(i) enjoin, prohibit or restrain (A) the effectiveness of this Agreement or the
issuance of the Notes pursuant hereto or (B) the consummation of the Purchase or
(ii) impose or result in the imposition of a Material Adverse Effect.
(c) NO DEFAULT. No Event of Default or Potential Event of Default
shall have occurred and be continuing or would result from the effectiveness of
this Agreement or the issuance of Notes pursuant hereto.
(d) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties contained in SECTION 5.01 shall be true and correct in all material
respects on and as of the Closing Date.
(e) PURCHASE OF CAPITAL STOCK OF THE ISSUER. The Management
Investors shall have purchased all of the issued and outstanding Common Stock
pursuant to the respective Management Subscription Agreements for an aggregate
purchase price of not less than $300,000 (less out-of-pocket transaction costs
for which the Management Investors are entitled to credit for this purpose in
accordance with the letter agreement on such subject, together with any
amendments or supplements thereto (if any), between the Management Investors and
the Initial Holder).
(f) THE PURCHASE. (i) All conditions precedent to, and all consents
necessary to permit, the Purchase pursuant to the Purchase Documents shall have
been satisfied or delivered, or waived with the prior written consent of the
Initial Holder, and the Purchase Documents shall not have been amended or
modified without the prior written consent of the Initial Holder and shall be in
full force and effect.
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(ii) Substantially simultaneously with the effectiveness of this
Agreement, the Term Loan Agreement and the Opco Credit Agreement, Opco shall
have acquired substantially all of the assets of AFS pursuant to the AFS
Purchase Agreement, and, to the extent the assets of MAL shall have been made
available for purchase on the Closing Date pursuant to the AFS Purchase
Agreement, Opco and the U.K. Subsidiary shall have acquired substantially all of
the assets of MAL pursuant to the MAL Purchase Agreement, in each case in
compliance with all applicable laws.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. CLOSING DATE REPRESENTATIONS AND WARRANTIES. In order to
induce the Initial Holder to enter into this Agreement on the Closing Date, the
Issuer hereby represents and warrants to the Initial Holder that the following
statements are true, correct and complete as of the Closing Date:
(a) ORGANIZATION; CORPORATE POWERS. The Issuer and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing will have or is reasonably likely to have a Material Adverse Effect,
(iii) to the extent required, has filed and maintained effective (unless exempt
from the requirements for filing) a current Business Activity Report with the
appropriate Governmental Authority in the states of Minnesota, New Jersey and
Indiana, and (iv) has all requisite corporate power and authority to own,
operate and encumber its Property and to conduct its business as proposed to be
conducted in connection with and following the consummation of the transactions
contemplated by the Transaction Documents.
(b) AUTHORITY. (i) The Issuer and each of its Subsidiaries have the
requisite corporate power and authority (A) to execute, deliver and perform each
of the Transaction Documents which are to be executed by it in connection with
the Purchase or which have been executed by it as required by this Agreement on
or prior to the Closing Date and (B) to file the Transaction Documents which
must be filed by it in connection with the Purchase or which have been filed by
it as required by this Agreement on or prior to the Closing Date, with any
Governmental Authority.
(ii) The execution, delivery, performance and filing, as the case may
be, of each of the Transaction Documents which must be executed or filed by the
Issuer in connection with the Purchase or which have been executed or filed as
required by this Agreement on or prior to the Closing Date and to which the
Issuer
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or any of its Subsidiaries is party and the consummation of the transactions
contemplated thereby, have been duly approved by the respective boards of
directors and, if necessary, the shareholders of the Issuer and its
Subsidiaries and such approvals have not been rescinded. No other corporate
action or proceedings on the part of the Issuer or its Subsidiaries are
necessary to consummate such transactions.
(iii) Each of the Transaction Documents to which the Issuer or any of
its Subsidiaries is a party has been duly executed, delivered or filed, as the
case may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, is in full force and effect
and no material term or condition thereof has been amended, modified or waived
from the terms and conditions contained in the Transaction Documents delivered
to the Initial Holder pursuant to SECTION 4.01(a) without the prior written
consent of the Initial Holder, and all parties thereto have performed and
complied with all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such parties on or
before the Closing Date, and no Potential Event of Default, Event of Default or
breach of any covenant by any such party exists thereunder.
(c) CONSENTS. Except as set forth in SCHEDULE 5.01-C and for
approval of the Bankruptcy Court, no consents or approvals of, or filings or
registrations (other than filings or registrations contemplated by SECTION
5.01(f)(i) with respect to Government Contracts) by the Issuer or its
Subsidiaries with any Governmental Authority or any other Person not a party to
this Agreement are necessary in connection with the execution and delivery of
the Transaction Documents by the Issuer and its Subsidiaries and the
consummation by the Issuer and its Subsidiaries of the transactions contemplated
by the Transaction Documents, except where the failure to obtain such consents
or approvals would not result in a Material Adverse Effect.
(d) SUBSIDIARIES; OWNERSHIP OF CAPITAL STOCK. SCHEDULE 5.01-D
accurately sets forth (i) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which qualified to transact business as a
foreign corporation of each of the direct and indirect Subsidiaries of the
Issuer, (ii) the authorized, issued and outstanding shares of each class of
Capital Stock of the Issuer and each of its Subsidiaries and the owners of such
shares, and (iii) a summary of the direct and indirect partnership, joint
venture, or other equity interests, if any, of the Issuer and each of its
Subsidiaries in any Person that is not a corporation. None of such issued and
outstanding Capital Stock is subject to any vesting or redemption agreement, or,
except as provided in the Shareholders Agreement, repurchase agreement, and
there are no warrants or options outstanding with respect to such Capital Stock.
The outstanding Capital Stock of the Issuer and each of its Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable.
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(e) NO CONFLICT. The execution, delivery and performance of each of
the Transaction Documents to which the Issuer or any of its Subsidiaries is a
party do not and will not (i) conflict with the Corporate Documents of the
Issuer or any such Subsidiary, (ii) constitute a tortious interference with any
Contractual Obligation of any Person or conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law or Contractual Obligation of the Issuer or any such
Subsidiary, or require termination of any Contractual Obligation, the
consequences of which violation, breach, default or termination, singly or in
the aggregate, will have or is reasonably likely to have a Material Adverse
Effect or is reasonably likely to subject the Initial Holder to any liability,
or (iii) result in or require the creation or imposition of any Lien whatsoever
upon any of the Property or assets of the Issuer or any such Subsidiary, other
than Liens contemplated by the Term Loan Documents or the Opco Loan Documents.
(f) PATENTS, TRADEMARKS, PERMITS, ETC.; GOVERNMENT APPROVALS. (i)
After giving effect to the Purchase, the Issuer and each of its Subsidiaries
own, are licensed or otherwise have the lawful right to use, or have all permits
and other governmental approvals (except with respect to Government Contracts),
patents, trademarks, trade names, copyrights, technology, know-how and processes
used in or necessary for the conduct of their businesses as proposed to be
conducted which are material to their condition (financial or otherwise),
operations, performance and prospects, taken as a whole, including, without
limitation, the names "Microdot", "Kaynar" and "Microdot Inserts". With respect
to each Government Contract acquired by Opco in connection with the Purchase,
such Government Contract has been transferred to Opco (and all necessary
approvals therefor have been obtained) or Opco is operating under a subcontract
contemplated by the AFS Purchase Agreement.
(ii) The consummation of the Purchase and the transactions
contemplated by the Transaction Documents will not impair the ownership of or
rights under (or the license or other right to use, as the case may be) any
permits and governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how or processes by the Issuer or any of its
Subsidiaries in any manner which has or is reasonably likely to have a Material
Adverse Effect.
(g) PRO FORMA FINANCIALS. The PRO FORMA consolidated and
consolidating balance sheets of the Issuer and its Subsidiaries prepared as of
October 31, 1993 (and giving effect to the Purchase) and in accordance with GAAP
consistently applied, copies of which have been furnished to the Initial Holder
on or before the Closing Date, fairly present on a PRO FORMA basis the financial
condition of the Issuer and such Subsidiaries as of October 31, 1993, and
reflect on a PRO FORMA basis those liabilities reflected in the notes thereto
and resulting from
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consummation of the transactions contemplated by the Transaction Documents,
and the payment or accrual of all Transaction Costs payable on the Closing
Date with respect to any of the foregoing. The projections and assumptions
expressed in the PRO FORMA financials furnished pursuant to this
SECTION 5.01(g) are reasonable based on the information available to the
Issuer as of the date hereof.
(h) SOLVENCY. After giving effect to the making of the "Term Loan"
under (and as defined) in the Term Loan Agreement on the Closing Date, the
Issuer and each of its Subsidiaries are Solvent.
(i) THE PURCHASE. (i) All conditions precedent to, and all consents
necessary to permit, the Purchase pursuant to the Purchase Documents have been
satisfied or delivered, or waived with the prior written consent of the Initial
Holder, and no material breach of any term or provision of any Purchase Document
has occurred and no action has been taken by any competent authority which
restrains, prevents or imposes material adverse conditions upon, or seeks to
restrain, prevent or impose material adverse conditions upon, the Purchase or
the effectiveness of this Agreement.
(ii) After giving effect to the Purchase, Opco has acquired
substantially all of the assets of AFS pursuant to the AFS Purchase Agreement,
and, to the extent the assets of MAL have been made available in accordance with
the AFS Purchase Agreement, Opco and the U.K. Subsidiary have acquired
substantially all of the assets of MAL pursuant to the MAL Purchase Agreement,
in each case in compliance with all applicable laws.
ARTICLE VI
REPORTING COVENANTS
The Issuer covenants and agrees that so long as any Obligations are
outstanding (other than indemnities not yet due), unless the Majority Holders
shall otherwise give prior written consent thereto:
6.01. FINANCIAL STATEMENTS AND REPORTS. The Issuer shall maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of consolidated and consolidating financial statements in
conformity with GAAP, and each of the financial statements submitted to the
Holders shall be prepared from such system and records. The Issuer shall
deliver or cause to be delivered to each Holder a copy of all financial
statements, notices, reports and other documents and certificates delivered to
any other holder of Indebtedness of the Issuer (or any agent or representative
thereof), other than Indebtedness held solely by an Affiliate of
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the Issuer and Indebtedness whose aggregate outstanding principal amount is
less than $1,000,000.
6.02. OPERATIONS REPORTS. Within seven (7) days after the Majority
Holders' request therefor, the Issuer shall deliver to the Holders a report
detailing the operations of the Issuer and its Subsidiaries which report shall
include a management commentary with respect to the Issuer's and its
Subsidiaries' financial performance during such period as may be requested by
the Majority Holders, together with an explanation of any material changes in
the consolidated and consolidating statements of income, stockholders' equity
and cash flow of the Issuer and its Subsidiaries for such period from such
statements for the corresponding period of the previous Fiscal Year and the
corresponding figures from the consolidated financial forecast for the current
Fiscal Year delivered pursuant to SECTION 6.01(f) of the Term Loan Agreement.
6.03. EVENTS OF DEFAULT. Promptly upon any of the chief executive
officer, chief operating officer, chief financial officer, treasurer or
controller of the Issuer obtaining knowledge (a) of any condition or event which
constitutes an Event of Default or Potential Event of Default, or becoming aware
that any Holder has given any notice with respect to a claimed Event of Default
or Potential Event of Default under this Agreement, (b) that any Person has
given any notice to the Issuer or any Subsidiary of the Issuer or taken any
other action with respect to a claimed default or event or condition of the type
referred to in SECTION 9.01(e), or (c) of any condition or event which has or is
reasonably likely to have a Material Adverse Effect, the Issuer shall deliver to
the Holders an Officer's Certificate specifying (A) the nature and period of
existence of any such claimed default, Event of Default, Potential Event of
Default, condition or event, (B) the notice given or action taken by such Person
in connection therewith, and (C) what action the Issuer has taken, is taking and
proposes to take with respect thereto.
6.04. LAWSUITS. (a) Promptly upon the Issuer obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Issuer or any
of its Subsidiaries or any Property of the Issuer or any of its Subsidiaries,
which action, suit, proceeding, governmental investigation or arbitration
exposes, or in the case of multiple actions, suits, proceedings, governmental
investigations or arbitrations arising out of the same general allegations or
circumstances which expose, in the Issuer's reasonable judgment, the Issuer or
any of its Subsidiaries to liability in an amount aggregating $100,000 or more
(exclusive of claims covered by insurance policies of the Issuer or any of its
Subsidiaries unless the insurers of such claims have disclaimed coverage or
reserved the right to disclaim coverage on such claims), the Issuer shall give
written notice thereof to the Holders and provide such other information as may
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be reasonably available to enable the Holders and their respective counsel to
evaluate such matters; (b) as soon as practicable and in any event within forty-
five (45) days after the end of each fiscal quarter of the Issuer, the Issuer
shall provide a written quarterly report to the Holders covering the institution
of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration (not previously reported) against or affecting the
Issuer or any of its Subsidiaries or any Property of the Issuer or any of its
Subsidiaries not previously disclosed by the Issuer to the Holders, and shall
provide such other information at such time as may be reasonably available to
enable the Holders and its counsel to evaluate such matters (but excluding such
information at to which the Issuer in good faith has asserted or will assert a
legal privilege in objection to disclosure of the information by the Issuer in
the action, suit, proceeding, investigation or arbitration); and (c) in addition
to the requirements set forth in CLAUSES (a) and (b) of this SECTION 6.04, the
Issuer upon request of the Majority Holders shall promptly give written notice
of the status of any action, suit, proceeding, governmental investigation or
arbitration covered by a report delivered pursuant to CLAUSE (a) or (b) above
and provide such other information as may be reasonably available to it to
enable the Holders and their respective counsel to evaluate such matters.
6.05. OTHER INFORMATION. Promptly upon receiving a request therefor
from the Majority Holders, the Issuer shall prepare and deliver to the Holders
such other information with respect to the Issuer, any of its Subsidiaries, as
from time to time may be reasonably requested by the Majority Holders.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Issuer covenants and agrees that so long as any Obligations are
outstanding (other than indemnities not yet due), unless the Majority Holders
shall otherwise give prior written consent:
7.01. CORPORATE EXISTENCE, ETC. The Issuer shall, and shall cause
each of its Subsidiaries to, at all times maintain its corporate existence and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its businesses, except where the loss or
termination of such rights and franchises is not likely to have a Material
Adverse Effect.
7.02. CORPORATE POWERS; CONDUCT OF BUSINESS. The Issuer shall, and
shall cause each of its Subsidiaries to qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified.
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7.03. COMPLIANCE WITH LAWS, ETC. The Issuer shall, and shall cause
its Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, Property, assets or operations
of such Person, and (b) obtain as needed all Permits necessary for its
operations and maintain such Permits in good standing, except in the case where
noncompliance with either CLAUSE (a) or (b) above is not reasonably likely to
have a Material Adverse Effect.
7.04. PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Issuer
shall pay, and cause each of its Subsidiaries to pay, (a) all taxes, assessments
and other governmental charges imposed upon it or on any of its Property or
assets or in respect of any of its franchises, business, income or Property
before any penalty, addition to tax or interest accrues thereon, and (b) all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by SECTION 8.03) upon any of the
Issuer's or such Subsidiary's Property or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; PROVIDED, HOWEVER, that
no such taxes, assessments and governmental charges referred to in CLAUSE (a)
above or claims referred to in CLAUSE (b) above need be paid if being contested
in good faith by appropriate proceedings diligently instituted and conducted and
if such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor. The Issuer will not, nor
will it permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than with the Issuer, Opco
or any of their respective Subsidiaries).
7.05. INSURANCE. The Issuer shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect the insurance policies and programs listed on SCHEDULE 5.02-M of the
Opco Credit Agreement or substantially similar policies and programs or other
policies and programs as are acceptable to the Majority Holders. All such
policies and programs shall be maintained with insurers acceptable to the
Majority Holders.
7.06. INSPECTION OF PROPERTY; BOOKS AND RECORDS; Discussions. The
Issuer shall permit, and cause each of its Subsidiaries to permit, any
authorized representative(s) designated by any Holder to visit and inspect any
of the Properties of the Issuer or any of its Subsidiaries, to examine, audit,
check and make copies of their respective financial and accounting records,
books, journals, orders, receipts and any correspondence and other data relating
to their respective businesses or the transactions contemplated hereby or by the
Purchase Documents (including, without limitation, in connection with
environmental compliance, hazard or liability or any Government Contract), and
to discuss their affairs, finances and accounts with their officers and
independent certified public accountants, all upon
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reasonable notice and at such reasonable times during normal business hours,
as often as may be reasonably requested. At the request of any Holder and
upon delivery to the Issuer of invoices therefor, each such visitation and
inspection shall be at the Issuer's expense. The Issuer shall keep and
maintain, and cause its Subsidiaries to keep and maintain, in all material
respects proper books of record and account in which entries in conformity
with GAAP shall be made of all dealings and transactions in relation to their
respective businesses and activities. If an Event of Default has occurred
and is continuing, the Issuer, upon the Majority Holders' request, shall turn
over copies of any such records to a representative designated by the
Majority Holders.
7.07. ERISA COMPLIANCE. The Issuer shall, and shall cause each of
its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all
Plans to comply in all material respects with the provisions of ERISA, the
Internal Revenue Code, all other applicable laws, and the regulations thereunder
and the respective requirements of the governing documents for such Plans.
7.08. FOREIGN EMPLOYEE BENEFIT PLAN COMPLIANCE. The Issuer shall,
and shall cause each of its Subsidiaries and ERISA Affiliates to, establish,
maintain and operate all Foreign Employee Benefit Plans to comply in all
material respects with all laws and regulations applicable thereto and the
respective requirements of the governing documents for such Plans.
7.09. GOVERNMENT CONTRACT COMPLIANCE. The Issuer shall, and shall
cause each of its Subsidiaries to (a) maintain all Permits pertaining to
Government Contracts required to operate the Issuer's business as it is
currently conducted, including, without limitation, (i) all Facility Security
Clearance(s) and Personnel Security Clearance(s), (ii) all certifications of
products manufactured by the Issuer which are on the "Qualified Products List"
of any United States Governmental Authority, and (iii) all Export Licenses and
other similar Permits; and (b) comply in all material respects with all
Requirements of Law and Contractual Obligations pertaining to each Government
Contract.
7.10. ENVIRONMENTAL COMPLIANCE. The Issuer shall, and shall cause
each of its Subsidiaries to (a) obtain and maintain in effect all Permits
required by Environmental Law and comply with all conditions of such Permits;
(b) comply with all Environmental Law applicable to the Issuer and its
Subsidiaries; and (c) conduct its and their operations in an environmentally
responsible manner so as to minimize Releases of Contaminants and the likelihood
of violating Environmental Law, except in the case where non-compliance with any
of clause (a) or (b) or (c) above will not have or result in a Material Adverse
Effect.
7.11. MAINTENANCE OF PROPERTY. The Issuer shall, and shall cause
each of its Subsidiaries to, maintain in all material
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respects all of their respective owned and leased Property in good, safe and
insurable condition and repair, and not permit, commit or suffer any waste or
abandonment of any such Property and from time to time shall make or cause to
be made all material repairs, renewal and replacements thereof, including,
without limitation, any capital improvements which may be required; PROVIDED,
HOWEVER, that such Property may be altered or renovated in the ordinary
course of business.
ARTICLE VIII
NEGATIVE COVENANTS
The Issuer covenants and agrees that so long as any Obligations are
outstanding (other than indemnities not yet due), unless the Majority Holders
shall otherwise give prior written consent:
8.01. INDEBTEDNESS. Neither the Issuer nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Indebtedness under the Term Loan Agreement and the Opco
Credit Agreement and any refinancing thereof, provided that the
aggregate outstanding amount of Indebtedness described in this clause
(ii) is not increased by the applicable refinancing;
(iii) trade payables, wages and other accrued expenses incurred
in the ordinary course of business;
(iv) the Transaction Costs;
(v) in an aggregate amount not to exceed $1,000,000 at any time,
Capital Leases and purchase money Indebtedness incurred to finance the
acquisition of fixed assets, and Indebtedness incurred to refinance
such Capital Leases and purchase money Indebtedness;
(vi) Indebtedness in respect of taxes, assessments, governmental
charges and claims for labor, materials or supplies, to the extent
that payment thereof is not required pursuant to SECTION 7.04;
(vii) Indebtedness constituting Accommodation Obligations
permitted by SECTION 8.05;
(viii) Indebtedness arising from intercompany loans from Opco to
the Issuer which, together with the amount of dividends or
distributions to the Issuer on the Capital Stock of Opco permitted
under SECTION
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8.06(ii), shall not exceed an aggregate amount of $600,000 in any Fiscal
Year, PROVIDED, that the proceeds of such intercompany loans, dividends
or distributions shall be used by the Issuer solely to pay (A) operating
expenses of the Issuer in an amount not to exceed $50,000 in any Fiscal
Year, (B) accrued interest on the "Term Loan" under (and as defined in)
the Term Loan Agreement or the Notes (including, without limitation, that
portion of the principal amount of such Term Loan or the Notes
attributable to interest which has been capitalized in accordance with
the Term Loan Agreement or this Agreement, as applicable) and (C) if and
only if all accrued interest on such Term Loan and the Notes (including,
without limitation, that portion of the principal amount of such Term
Loan or the Notes attributable to interest which has been capitalized in
accordance with the Term Loan Agreement or this Agreement, as
applicable) as of the then most recent Interest Payment Date has been
(or will be concurrently therewith) paid in full in cash, dividends or
distributions on the Preferred Stock of the Issuer;
(ix) In addition to the intercompany loans from Opco to the
Borrower permitted under SECTION 8.01(viii), Indebtedness arising from
intercompany loans from Opco to the Borrower, the proceeds of which,
together with the proceeds of dividends or distributions to the
Borrower on the Capital Stock of Opco permitted under SECTION
8.06(iv), are used to pay the outstanding Indebtedness under (A) the
Term Loan Agreement and the "Term Note" on the "Scheduled Maturity
Date" (each as defined in the Term Loan Agreement) and (B) this
Agreement and the Notes on the Scheduled Maturity Date;
(x) Indebtedness arising from intercompany loans from the Issuer
to Opco or from any of Opco's wholly-owned Subsidiaries to Opco; and
(xi) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted under
SECTION 8.02.
8.02. SALES OF ASSETS. Neither the Issuer nor any of its
Subsidiaries shall sell, assign, transfer, lease, convey or otherwise dispose of
any Property, whether now owned or hereafter acquired, or any income or profits
therefrom, or enter into any agreement to do so, except:
(i) the sale of Property having an aggregate Fair Market Value
of not more than $1,000,000 in any Fiscal Year for cash consideration
not less than the Fair Market Value thereof;
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(ii) the transfer of Property from a Subsidiary of Opco to Opco;
(iii) sales of Inventory, dispositions of Equipment and
licensing of General Intangibles, in each case in the ordinary course
of business; and
(iv) any Investment permitted under SECTION 8.04.
8.03. LIENS. Neither the Issuer nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective Property or assets except:
(i) Liens created by the Term Loan Documents or the Opco Loan
Documents or any refinancing or replacement thereof (provided that the
aggregate Indebtedness of the Issuer and its Subsidiaries is not
increased by the refinancing or replacement);
(ii) Customary Permitted Liens; and
(iii) purchase money Liens (including the interest of a lessor
under a Capital Lease or an Operating Lease having substantially the
same economic effect and Liens to which any Property is subject at the
time of the Issuer's or such Subsidiary's purchase thereof) securing
an amount not to exceed $1,000,000 in the aggregate at any time or
from time to time, PROVIDED, that such Liens shall not apply to any
Property of the Issuer or its Subsidiaries other than that purchased
or subject to such Capital Lease.
8.04. INVESTMENTS. Neither the Issuer nor any of its Subsidiaries
shall directly or indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(iii) contributions to and payments of benefits under any Plan
(in accordance with the terms of the Plan) permitted by this
Agreement;
(iv) Investments (in an aggregate unrecovered amount not to exceed
$1,600,000) by Opco in the U.K. Subsidiary, including, without limitation,
Opco's ownership of the Capital Stock of the U.K. Subsidiary; and
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(v) Investments arising from intercompany loans which are
permitted under SECTION 8.01(viii), 8.01(ix) or 8.01(x).
8.05. ACCOMMODATION OBLIGATIONS. Neither the Issuer nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Accommodation Obligation, except:
(i) recourse obligations resulting from endorsement of
negotiable instruments for collection in the ordinary course of
business;
(ii) Permitted Existing Accommodation Obligations; and
(iii) Accommodation Obligations arising under the Term Loan
Documents or the Opco Loan Documents.
8.06. RESTRICTED JUNIOR PAYMENTS. Neither the Issuer nor any of its
Subsidiaries shall declare or make any Restricted Junior Payment on account of
any shares of Capital Stock which is junior in right of payment or liquidation
preference to the Preferred Stock, except for:
(i) dividends or distributions to Opco on the Capital Stock of
any of Opco's wholly-owned Subsidiaries;
(ii) for so long as no Event of Default has occurred and is
continuing, dividends or distributions to the Issuer on the Capital
Stock of Opco which, together with the amount of intercompany loans
from Opco to the Issuer permitted under SECTION 8.01(viii), shall not
exceed an aggregate amount of $600,000 in any Fiscal Year, PROVIDED,
that the proceeds of such intercompany loans, dividends or
distributions shall be used by the Issuer solely to pay (A) operating
expenses of the Issuer in an amount not to exceed $50,000 in any
Fiscal Year, (B) accrued interest on the "Term Loan" under (and as
defined in) the Term Loan Agreement or the Notes (including, without
limitation, that portion of the principal amount of such Term Loan or
the Notes attributable to interest which has been capitalized in
accordance with the Term Loan Agreement or this Agreement, as
applicable) and (C) if and only if all accrued interest on such Term
Loan and the Notes (including, without limitation, that portion of the
principal amount of such Term Loan or the Notes attributable to
interest which has been capitalized in accordance with the Term Loan
Agreement or this Agreement, as applicable) as of the then most recent
Interest Payment Date has been (or will be concurrently
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therewith) paid in full in cash, dividends or distributions on the
Preferred Stock of the Issuer;
(iii) dividends or distributions on the Preferred Stock of the
Issuer in Notes to the extent permitted by this Agreement or in cash
to the extent permitted by SECTION 8.06(ii)(C); and
(iv) in addition to the dividends and distributions to the
Borrower on the Capital Stock of Opco permitted under SECTION
8.06(ii), dividends and distributions to the Borrower on the Capital
Stock of Opco, the proceeds of which, together with the proceeds of
intercompany loans from Opco to the Borrower permitted under SECTION
8.01(ix), are used to pay the outstanding Indebtedness under (A) the
Term Loan Agreement and the "Term Note" on the "Scheduled Maturity
Date" (each as defined in the Term Loan Agreement) and (B) this
Agreement and the Notes on the Scheduled Maturity Date.
8.07. CONDUCT OF BUSINESS. Neither the Issuer nor any of its
Subsidiaries shall engage in any business other than (i) the businesses engaged
in by AFS on the date hereof and (ii) any business or activities which are
substantially similar, related or incidental thereto.
8.08. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the
Issuer nor any of its Subsidiaries shall directly or indirectly enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any holder or holders of more than five percent (5%) of any class of equity
Securities of the Issuer or Opco, or with any Affiliate of the Issuer which is
not its Subsidiary, on terms that are less favorable to the Issuer or any of its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a holder or
Affiliate. Nothing contained in this SECTION 8.08 shall prohibit (i) any
transaction expressly permitted by SECTIONS 8.01, 8.05 or 8.06; (ii) increases
in compensation and benefits for officers and employees of the Issuer or any of
its Subsidiaries which are customary in the industry or consistent with the past
business practice of the Issuer or such Subsidiary, PROVIDED, that no Event of
Default or Potential Event of Default has occurred and is continuing; (iii)
payment of customary directors' fees and indemnities; (iv) performance of any
obligations arising under the Transaction Documents or the Shareholders
Agreement; or (v) transactions between the Issuer and Opco or Opco and any of
its Subsidiaries, PROVIDED, that no Event of Default or Potential Event of
Default results therefrom.
8.09. RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Issuer nor any
of its Subsidiaries shall enter into any merger or
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consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation
or dissolution), or convey, lease, sell, transfer or otherwise dispose of, in
one transaction or series of transactions, all or substantially all of the
Issuer's or any such Subsidiary's business or Property, whether now or
hereafter acquired, except transactions permitted under SECTION 8.02.
8.10. SALES AND LEASEBACKS. Neither the Issuer nor any of its
Subsidiaries shall become liable, directly, by assumption or by Accommodation
Obligation, with respect to any lease, whether an Operating Lease or a Capital
Lease, of any Property (whether real or personal or mixed) (i) which it or one
of its Subsidiaries sold or transferred or is to sell or transfer to any other
Person, or (ii) which it or one of its Subsidiaries intends to use for
substantially the same purposes as any other Property which has been or is to be
sold or transferred by it or one of its Subsidiaries to any other Person in
connection with such lease.
8.11. ISSUANCE OF CAPITAL STOCK. Neither the Issuer nor any of its
Subsidiaries shall issue any Capital Stock to any Person except for (i) the
Capital Stock issued by such Persons as of the date of this Agreement and
(ii) Common Stock issued by the Issuer upon conversion of shares of Preferred
Stock in accordance with the respective certificate of designation for the
Series A Preferred Stock and the Series B Preferred Stock.
8.12. CORPORATE DOCUMENTS. Neither the Issuer nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective Corporate Documents as in effect on the
date hereof.
8.13. FISCAL YEAR. Neither the Issuer nor any of its consolidated
Subsidiaries shall change its Fiscal Year for accounting or tax purposes from a
period consisting of the 12-month period ending on December 31 of each calendar
year.
ARTICLE IX
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.01. EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Issuer shall fail to pay
when due any of the Obligations.
(b) BREACH OF CERTAIN COVENANTS. The Issuer shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on such Person under SECTIONS 7.01 and 7.06 or ARTICLE VIII.
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(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made or deemed made by the Issuer to the Initial Holder herein or in
any statement or certificate at any time given by the Issuer pursuant to this
Agreement shall be false or misleading in any material respect on the date as of
which made (or deemed made).
(d) OTHER DEFAULTS. The Issuer shall default in the performance of
or compliance with any term contained in this Agreement (other than as covered
by PARAGRAPHS (a), (b) or (c) of this SECTION 9.01), and such default or event
of default shall continue for fifteen (15) days after the Issuer has knowledge
of the default or, if earlier, receipt by the Issuer of a notice of the default
from the Majority Holders.
(e) DEFAULT AS TO OTHER INDEBTEDNESS; OPERATING LEASES; OTHER
AGREEMENTS. The Issuer or any of its Subsidiaries shall fail to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to any Indebtedness (other than
an Obligation) having a principal amount in excess of $25,000; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to any such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by the Issuer or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
or any "Event of Default" under (and as defined in) the Opco Credit Agreement or
the Term Loan Agreement has occurred and is continuing.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Issuer or any
of its Subsidiaries and the petition shall not be dismissed, stayed, bonded or
discharged within sixty (60) days after commencement of the case; or a court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of the Issuer or any of its Subsidiaries in an involuntary case, under
any applicable bankruptcy, insolvency or other similar law now or hereinafter in
effect; or any other similar relief shall be granted under any applicable
federal, state, local or foreign law; or the board of directors of the Issuer or
any of its Subsidiaries (or any committee thereof) adopts any resolution or
otherwise authorizes any action to approve any of the foregoing.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over the Issuer or any of its
Subsidiaries or over all or a substantial part of the Property of the Issuer or
any of its Subsidiaries shall be entered; or an interim receiver, trustee or
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other custodian of the Issuer or any of its Subsidiaries or of all or a
substantial part of the Property of the Issuer or any of its Subsidiaries shall
be appointed or a warrant of attachment, execution or similar process against
any substantial part of the Property of the Issuer or any of its Subsidiaries
shall be issued and any such event shall not be stayed, dismissed, bonded or
discharged within sixty (60) days after entry, appointment or issuance; or the
board of directors of the Issuer or any of its Subsidiaries (or any committee
thereof) adopts any resolution or otherwise authorizes any action to approve any
of the foregoing.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Issuer
or any of its Subsidiaries of the Issuer shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
Property; or the Issuer or any of its Subsidiaries of the Issuer shall make any
assignment for the benefit of creditors or shall be unable or fail, or admit in
writing its inability, to pay its debts as such debts become due.
(h) JUDGMENTS AND ATTACHMENTS. Any money judgment (other than a
money judgment covered by insurance as to which the insurance company has
acknowledged coverage), writ or warrant of attachment, or similar process
against the Issuer or any of its Subsidiaries of the Issuer or any of their
respective assets involving in any case an amount in excess of $500,000 is
entered and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty (60) days or in any event later than five (5) days prior to the
date of any proposed sale thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered
against the Issuer or any of its Subsidiaries decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of sixty (60) days; or the Issuer or any of its
Subsidiaries shall otherwise dissolve or cease to exist except as specifically
permitted by this Agreement.
(j) EFFECTIVENESS OF AGREEMENT AND NOTES. At any time, for any
reason, this Agreement or any of the Notes ceases to be in full force and effect
or the Issuer seeks to repudiate its obligations thereunder.
(k) TERMINATION EVENT. Any Termination Event occurs which the
Majority Holders believe could reasonably be expected to subject either the
Issuer or any ERISA Affiliate to liability in excess of $250,000.
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(l) WAIVER APPLICATION. The plan administrator of any Benefit Plan
applies under Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and the Majority
Holders believe that the substantial business hardship upon which the
application for the waiver is based could subject either the Issuer or any ERISA
Affiliate to liability in excess of $250,000.
(m) SUSPENSIONS, DEBARMENT. Any suspension or debarment with respect
to Government Contracts is imposed on the Issuer, any of its Subsidiaries or any
of their respective directors, officers, employees, consultants or agents.
(n) MATERIAL ADVERSE CHANGE. An event shall exist which has a
Material Adverse Effect.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with SECTION 10.06.
9.02. RIGHTS AND REMEDIES.
(a) ACCELERATION AND TERMINATION. Upon the occurrence of any Event
of Default described in SECTIONS 9.01(f) or 9.01(g), the unpaid principal amount
of, and any and all accrued interest on, the Obligations and all accrued fees
shall automatically become immediately due and payable, without presentment,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and of acceleration), all of which are hereby expressly
waived by the Issuer; and upon the occurrence and during the continuance of any
other Event of Default, the Majority Holders may, by written notice to the
Issuer, declare the unpaid principal amount of and any and all accrued and
unpaid interest on the Obligations to be, and the same shall thereupon be,
immediately due and payable, without presentment, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the Issuer.
(b) DEFAULT RATE OF INTEREST. In addition to any other remedies
available to the Holders after the occurrence of an Event of Default, the
Noteholders shall be entitled to receive interest on the Obligations at the
default rate in accordance with SECTION 2.02(c).
(c) ENFORCEMENT. The Issuer acknowledges that in the event the
Issuer fails to perform, observe or discharge any of its respective obligations
or liabilities under this Agreement or the Notes, any remedy of law may prove to
be inadequate relief to the Holders; therefore, the Issuer agrees that the
Holders shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
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ARTICLE X
MISCELLANEOUS
10.01. EXPENSES. The Issuer agrees upon demand to pay, or reimburse
each Holder for, all of such Holder's reasonable internal and external audit,
legal, appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other out-of-pocket costs and expenses of
every type and nature (including, without limitation, the reasonable fees,
expenses and disbursements of Sidley & Austin, counsel to the Initial Holder,
local and foreign legal counsel, auditors, accountants, appraisers, printers,
insurance and environmental advisers, and other consultants and agents) incurred
by such Holder in connection with (a) such Holder's periodic audits of the
Issuer and its Subsidiaries after the date hereof; (b) the ongoing
administration of this Agreement and the Notes, including consultation with
attorneys in connection therewith and with respect to such Holder's rights and
responsibilities under this Agreement and the Notes; (c) the protection,
collection or enforcement of any of the Obligations or any security therefor or
exercising or enforcing any other right or remedy available to such Holder under
this Agreement or the Notes; (d) the commencement, defense or intervention in
any court proceeding relating in any way to the Obligations, the Property, the
Issuer, any of its Subsidiaries, this Agreement or any of the other Transaction
Documents; (e) the response to, and preparation for, any subpoena or request for
document production with which such Holder is served or deposition or other
proceeding in which such Holder is called to testify, in each case, relating in
any way to the Obligations, the Property, the Issuer, any of its Subsidiaries,
this Agreement or any of the other Transaction Documents; (f) in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (g) in taking any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) described in CLAUSES (c) through (g) above;
and (h) any amendments, consents, waivers, assignments, restatements, or
supplements to this Agreement or any of the Notes and the preparation,
negotiation, and execution of the same. Each Holder hereby acknowledges that
such Holder shall pay its own expenses incurred in connection with the
preparation, negotiation and execution of this Agreement.
10.02. INDEMNITY. The Issuer further agrees to defend, protect,
indemnify, and hold harmless the Holders and each of its officers, directors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in ARTICLE IV) (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses (other than loss of
profits), damages, penalties, actions, judgments, suits, claims, costs, expenses
and
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disbursements of any kind or nature whatsoever (excluding any taxes and
including, without limitation, the fees and disbursements of counsel or
consulting firms for such Indemnitees in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitees shall be
designated a party thereto), imposed on, incurred by, or asserted against such
Indemnitees in any manner relating to or arising out of (a) this Agreement or
the Notes, or any act, event or transaction related or attendant thereto or to
the Purchase, the issuance of the Notes, the management of the Notes, or any of
the other transactions contemplated by the Transaction Documents, or (b) any
Liabilities and Costs under Environmental Laws arising from or in connection
with the past, present or future operations of the Issuer, its Subsidiaries or
any of their respective predecessors in interest, or, the past, present or
future environmental condition of any Property, the presence of
asbestos-containing materials at any Property or the Release or threatened
Release of any Contaminant (collectively, the "Indemnified Matters"); PROVIDED,
HOWEVER, that the Issuer shall have no obligation to an Indemnitee hereunder
with respect to Indemnified Matters to the extent caused by or resulting from
the willful misconduct or gross negligence of the Indemnitee (or any other
Indemnitee whose willful misconduct or grossly negligent acts were authorized by
the Indemnitee claiming indemnification hereunder), as determined by a court of
competent jurisdiction. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Issuer shall contribute
the maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
10.03. CHANGE IN ACCOUNTING PRINCIPLES. If any change in the
accounting principles used in the preparation of the most recent financial
statements referred to in SECTION 6.01 are hereafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Issuer with the agreement of its independent certified public accountants and
such changes result in a change in the method of calculation of any of the
covenants, standards or terms found in ARTICLE VIII, the parties hereto agree to
enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
compliance with such covenants, standards and terms by the Issuer shall be the
same after such changes as if such changes had not been made; PROVIDED, HOWEVER,
that no change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to the Majority Holders
and the Issuer, to so reflect such change in accounting principles.
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10.04. SETOFF. In addition to any rights now or hereafter granted
under applicable law, upon the occurrence and during the continuance of any
Event of Default, each Holder is hereby authorized by the Issuer at any time or
from time to time, without notice to any Person (any such notice being hereby
expressly waived) to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured (but not
including trust accounts)) and any other Indebtedness at any time held or owing
by such Holder to or for the credit or the account of the Issuer against and on
account of the Obligations of the Issuer to such Holder Holders, including, but
not limited to, the Notes and all claims of any nature or description arising
out of or in connection with this Agreement, irrespective of whether or not (a)
such Holder shall have made any demand hereunder or (b) the Majority Holders
shall have declared the principal of and interest on the Notes and other amounts
due hereunder to be due and payable as permitted by ARTICLE IX and even though
such Obligations may be contingent or unmatured.
10.05. RATABLE SHARING. The Noteholders agree among themselves that
(i) with respect to all amounts received by them which are applicable to the
payment of the Obligations, equitable adjustment will be made so that, in
effect, all such amounts will be shared among them ratably in accordance with
their Pro Rata Shares, whether received by voluntary payment, by the exercise of
the right of setoff, by counterclaim or cross-action or by the enforcement of
any or all of the Obligations, (ii) if any of them shall by voluntary payment or
by the exercise of any right of counterclaim, setoff or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it,
which is greater than the amount which such Noteholder is entitled to receive
hereunder, the Noteholder receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
PROVIDED, HOWEVER, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such party to the extent necessary to adjust for such recovery, but without
interest except to the extent the purchasing party is required to pay interest
in connection with such recovery. The Issuer agrees that any Noteholder so
purchasing a participation from another Noteholder pursuant to this
SECTION 10.05 may, to the fullest extent permitted by law, exercise all its
rights of payment (including, subject to SECTION 10.04, the right of setoff)
with respect to such participation as fully as if such Noteholder were the
direct creditor of the Issuer in the amount of such participation.
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10.06. AMENDMENTS AND WAIVERS. Unless otherwise provided in this
Agreement, no amendment or modification of any provision of this Agreement shall
be effective without the written agreement of the Majority Holders and the
Issuer, and no termination or waiver of any provision of this Agreement, or
consent to any departure by the Issuer therefrom, shall be effective without the
written concurrence of the Majority Holders, which the Majority Holders shall
have the right to grant or withhold in their sole discretion. Notwithstanding
the foregoing, any amendment, modification, termination, waiver or consent with
respect to any of the following provisions of this Agreement shall be effective
only by a written agreement, signed by each Holder affected thereby: (a)
reduction of the principal of, rate or amount of interest on the Notes or any
fees or other amounts payable to such Holder (other than by the payment or
prepayment thereof), (b) postponement of the Scheduled Maturity Date or any
other date fixed for any payment of principal of, or interest on, the Notes or
any fees or other amounts payable to such Holder, (c) change in the definition
of Majority Holders or (d) amendment of SECTION 10.05 or this SECTION 10.06.
Any waiver or consent shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice to or demand on the
Issuer in any case shall entitle the Issuer to any other or further notice or
demand in similar or other circumstances.
10.07. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telecopied, telexed or sent by courier
service or United States certified mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy or
telex or four (4) Business Days after deposit in the United States mail with
postage prepaid and properly addressed. For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this SECTION 10.07) shall be as follows:
(a) If to the Initial Holder, at:
General Electric Capital Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No. (000) 000-0000
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with copies to:
General Electric Capital Corporation
000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Corporate Finance Group
Department Counsel
Telecopier No. (000) 000-0000
and
Sidley & Austin
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, III, Esq.
Telecopier No. (000) 000-0000
(b) If to any other Holder, at such notice as such Holder shall
deliver to the Issuer upon becoming a Holder under this Agreement.
(c) If to the Issuer, at:
Kaynar Holdings Inc.
000 Xxxxx Xxxxx Xxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
with a copy to:
O'Melveny & Xxxxx
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: C. Xxxxx Xxxxx, Esq.
Telecopier No. (000) 000-0000
PROVIDED, that each Holder and the Issuer shall have the right to change any of
the above-listed addresses by properly addressed and delivered notice to the
other party.
10.08. SURVIVAL OF WARRANTIES AND AGREEMENTS. All representations
and warranties made herein and all obligations of the Issuer in respect of
taxes, indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the Notes, the issuance and repayment of the
Notes and the termination of this Agreement and shall not be limited in any way
by the passage of time or occurrence of any event and shall expressly cover time
periods when the Holders may have come into possession or control of any of the
Issuer's or its Subsidiaries' Property.
10.09. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any Holder
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Holders in the exercise of any power, right or privilege under this Agreement
or any of the Notes shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.
All rights and remedies existing under this Agreement and the Notes are
cumulative to and not exclusive of any rights or remedies otherwise available.
10.10. MARSHALLING; PAYMENTS SET ASIDE. The Holders shall be under
no obligation to xxxxxxxx any assets in favor of the Issuer or any other party
or against or in payment of any or all of the Obligations. To the extent that
the Issuer makes a payment or payments to any Holder or any Holder exercises its
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all right
and remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.
10.11. SEVERABILITY. In case any provision in or obligation under
this Agreement or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
10.12. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
10.13. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
10.14. LIMITATION OF LIABILITY. No claim may be made by the Issuer
or any Holders or any other Person against the Issuer, any Holder or the
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Issuer and the Holders hereby waive,
release and agree not to xxx upon any such claim for any such damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
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10.15. SUCCESSORS AND ASSIGNS. This Agreement and the Notes shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and
permitted assigns of the Holders. The Holders may assign all or any part of its
rights and obligations under this Agreement and the Notes to any Person upon
thirty (30) days' prior written notice to (but without the consent of) the
Issuer, it being agreed and understood that each Holder's right to assign its
interests under this Agreement and the other Notes shall be independent of any
right of assignment in favor of any Holder with respect to any other agreement,
document or instrument to which it is a party. The rights hereunder of the
Issuer, or any interest therein, may not be assigned without the written consent
of all of the Holders.
10.16. CERTAIN CONSENTS AND WAIVERS OF THE ISSUER.
(a) PERSONAL JURISDICTION. THE HOLDERS AND THE ISSUER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY CALIFORNIA STATE COURT OR FEDERAL COURT SITTING IN LOS
ANGELES, CALIFORNIA, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS
HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED
WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE ISSUER
IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION AS ITS AGENT (THE "PROCESS
AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. THE HOLDERS AND THE ISSUER AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE ISSUER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT CONSIDERING THE DISPUTE.
(b) SERVICE OF PROCESS. THE ISSUER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE ISSUER'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE
ISSUER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY NOTE IN ANY
JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
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PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE
MAJORITY HOLDERS TO BRING PROCEEDINGS AGAINST THE ISSUER IN THE COURTS OF ANY
OTHER JURISDICTION.
(c) WAIVER OF JURY TRIAL. EACH HOLDER AND THE ISSUER IRREVOCABLY
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY NOTE.
10.17. COUNTERPARTS; INCONSISTENCIES. This Agreement and any
amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement and each of the Notes shall be construed to the
extent reasonable to be consistent one with the other, but to the extent that
the terms and conditions of this Agreement are actually inconsistent with the
terms and conditions of any Note, this Agreement shall govern.
10.18. CONFIDENTIALITY. Each Holder shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement and
identified as such by the Issuer in accordance with such Holder's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a bona fide offeree, transferee or participant
in connection with the contemplated transfer or participation or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such offeree, transferee or participant to
agree (and require any of its offerees, transferees or participants to agree) to
comply with this SECTION 10.18. In no event shall any Holder be obligated or
required to return any materials furnished by the Issuer; PROVIDED, HOWEVER,
that each offeree shall be required to agree that if it does not become a
transferee or participant it shall return all materials furnished to it by the
Issuer in connection with this Agreement. Any and all confidentiality
agreements entered into between any Holder and the Issuer shall survive the
execution of this Agreement.
[THE FOLLOWING PAGE IS THE SIGNATURE PAGE]
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10.19. ENTIRE AGREEMENT. This Agreement, taken together with all of
the Notes, embodies the entire agreement and understanding among the parties
hereto and all prior agreements and understandings, written and oral, relating
to the subject matter hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
ISSUER: KAYNAR HOLDINGS INC.
By /s/ X.X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
INITIAL HOLDER: GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Region Operation Manager
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