Exhibit 10.51
FIRST AMENDMENT AGREEMENT
FIRST AMENDMENT AGREEMENT (this "AMENDMENT"), dated as of
August 7, 2002, by and among X. X. XXXXXXX MEZZANINE FUND, L.P. ("WMF"), a
Delaware limited partnership, ALBION ALLIANCE MEZZANINE FUND I, L.P. ("ALBION
I"), a Delaware limited partnership, ALBION ALLIANCE MEZZANINE FUND II, L.P.
("ALBION II"), a Delaware limited partnership, THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES ("EQUITABLE"), a New York corporation, FLEET
CORPORATE FINANCE, INC. ("FLEET"), a Massachusetts corporation, and CITIZENS
CAPITAL, INC. ("CITIZENS"; and together with WMF, Albion I, Albion II, Equitable
and Fleet, the "PURCHASERS" and, individually, a "PURCHASER"), a Massachusetts
corporation, and TRANSTECHNOLOGY CORPORATION (the "COMPANY"), a Delaware
corporation, to the Securities Purchase Agreement, dated as of August 29, 2000,
by and among the Purchasers and the Company (the "ORIGINAL AGREEMENT").
W I T N E S S E T H:
WHEREAS, the Purchasers and the Company entered into the
Original Agreement pursuant to which, among other things, the Purchasers
purchased from the Company subordinated promissory notes, due August 29, 2005,
in the aggregate principal amount of $75,000,000 and warrants to purchase
427,602 shares of common stock, par value $.01 per share, of the Company; and
WHEREAS, the Company proposes to refinance its existing senior
indebtedness (such existing senior indebtedness being referred to as the "OLD
SENIOR DEBT", and such new indebtedness being referred to as the "NEW SENIOR
DEBT") and in connection therewith the Company has requested that the Purchasers
agree to amend certain provisions of the Original Agreement as hereinafter set
forth; and
WHEREAS, the Purchasers are willing to consent to the
requested amendments, subject to the terms and conditions set forth in this
Amendment (the Original Agreement as amended by this Amendment is hereinafter
referred to as the "AGREEMENT").
NOW THEREFORE, in consideration of the premises set forth
herein and for other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the Purchasers and the Company agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 ORIGINAL AGREEMENT DEFINITIONS.
(a) All capitalized terms used in this Amendment but not
defined shall have the meanings given to them in the Original Agreement. In the
event of a conflict between the definitions contained in this Amendment and
those contained in the Original Agreement, the definitions contained herein
shall prevail.
(b) The definition of "ALBION/EQUITABLE NOTES" shall be
amended to read in its entirety as follows:
"ALBION/EQUITABLE NOTES" shall mean the Notes issued
to Albion I, Albion II and Equitable.
(c) The definition of "NOTES" shall be amended to read in its
entirety as follows:
"NOTES" shall mean the Amended and Restated Senior
Subordinated Promissory Notes of the Company dated August 7,
2002 issued to the Purchasers in exchange for the Notes in the
aggregate principal amount of $80,283,757.59 and shall include
all payment-in-kind promissory notes issued by the Company as
contemplated therein or in payment of fees to any Purchaser.
(d) The definition of "SENIOR CREDIT AGREEMENT" shall be
amended to read in its entirety as follows:
"SENIOR CREDIT AGREEMENT" shall mean individually and
collectively (i) the Financing Agreement dated as of August 7,
2002 by and among The CIT Group/Business Credit, Inc. and the
Company, Norco, Inc. and TCR Corporation (the "CIT FINANCING
AGREEMENT"), and (ii) the Financing Agreement dated as of
August 7, 2002 by and among the Company, Norco, Inc. TCR
Corporation, the lenders from time to time party thereto, and
Ableco Finance LLC, as Agent, as such agreements may be
amended, restated, supplemented or otherwise modified from
time to time.
(e) The definition of "SUBORDINATION AGREEMENT" shall be
amended to read in its entirety as follows:
"SUBORDINATION AGREEMENT" shall mean the
Intercreditor and Subordination Agreement dated as of August
7, 2002, by and among The CIT Group/Business Credit, Inc.,
Ableco Finance LLC (for itself and as
agent), the Company and certain of the Company's Subsidiaries
and the Purchasers.
(f) The following definition shall be inserted in alphabetical
order:
"TTGB RESTRUCTURING" shall mean the restructuring of
the business of the Company and its Subsidiaries effective
July 17, 2002, which resulted in the complete separation of
the operations of TransTechnology (GB) Limited and its
Subsidiaries (the "TTGB ENTITIES") from the operations and
financial results of the Company and its other Subsidiaries
(the "TTGB RESTRUCTURING").
(g) The definition of "WARRANTS" shall be amended to read in
its entirety as follows:
"WARRANTS" shall mean the amended and restated
warrants issued to the Purchasers in exchange for the warrants
referred to in the Whereas clause hereof.
(h) The definition of "WMF NOTE" shall be amended to read in
its entirety as follows:
"WMF NOTE" shall mean the Note issued to WMF.
ARTICLE 2
LIMITED WAIVER
--------------
Subject to the conditions set forth herein, the Purchasers
hereby waive the existing Events of Default under Sections 9.1, 9.6 and 9.8 of
the Original Agreement solely to the extent occurring as of or prior to the date
hereof; provided that such waivers shall be limited precisely as written and
shall not be deemed or otherwise construed to constitute a waiver of any other
default or Event of Default or to prejudice any right, power or remedy which the
Purchasers, may now have or may have in the future under or in connection with
the Original Agreement (after giving effect to this Amendment) or the Notes all
of which rights, powers and remedies are hereby expressly reserved by the
Purchasers.
ARTICLE 3
AMENDMENTS TO ORIGINAL AGREEMENT
3.1 AMENDMENT TO THE NOTES. Each Note shall be amended to increase the
Interest Rate (as defined in the Notes) commencing December 31, 2002, from
16.00% to 18.00%, and in connection therewith to increase the PIK Interest Rate
(as defined in the Notes) from 3.00% per annum to 5.00% per annum. In addition,
the PIK Interest Rate will increase by .25% effective each Interest Payment Date
commencing on March 31, 2003. There shall be no change in the calculation or
payment of Basic Interest (as defined in the Notes). In order to accomplish the
foregoing, each Purchaser will surrender the Note and any PIK Notes issued in
respect thereof now held by such Purchaser for cancellation in exchange for the
issuance by the Company to
such Purchaser of an Amended and Restated Senior Subordinated Promissory Note
(each an "AMENDED AND RESTATED NOTE"), in the form attached hereto as EXHIBIT I,
in the principal amount equal to the aggregate principal amount of the Note and
PIK Interest accrued through the date hereof on the Note now held by such
Purchaser.
3.2 AMENDMENT TO THE WARRANTS. Each Warrant shall be amended to (i) fix
the Purchase Price (as defined in the Warrant) in the event of a reorganization,
redistribution, merger or sale of assets occurring prior to December 31, 2002,
and to reduce the Purchase Price on December 31, 2002, and (ii) add a put right
in favor of the Holder thereunder in certain circumstances. In order to
accomplish the foregoing, each Purchaser will surrender the Warrants now held by
such Purchaser for cancellation in exchange for the issuance by the Company to
such Purchaser of an Amended and Restated Warrant (the "AMENDED AND RESTATED
WARRANT") in the form attached hereto as EXHIBIT II entitling the Purchaser to
purchase upon exercise thereof, the same number of shares of Common Stock as
provided for in the Warrant now held by such Purchaser.
3.3 AMENDMENT TO SECTION 8.1. Section 8.1 of the Original Agreement is
hereby amended to add a new subsection (o) to read in its entirety as follows:
(o) REPORTS PURSUANT TO SENIOR CREDIT DOCUMENTS. The
Company shall deliver to Purchasers a copy of each financial
statement, report or certificate, delivered to the CIT
Group/Business Credit, Inc. ("CIT") under Section 7.10 of the
Financing Agreement between CIT, the Company and certain of
its subsidiaries, contemporaneously with the delivery thereof
to CIT.
3.4 AMENDMENT TO SECTION 9.1(B). Section 9.1(b) of the Original
Agreement is hereby amended to add a new subsection (iv) to read in its entirety
as follows:
(iv) the TTGB Restructuring;
3.5 AMENDMENT TO SECTION 9.2. Section 9.2 of the Original Agreement is
hereby amended to add the following sentence to the end of clause (a):
"Notwithstanding any provision in this Agreement to the
contrary, neither the Company nor any of its Subsidiaries
after July 17, 2002 may in any way transfer, including by way
of capital contribution, purchase of any securities, or
otherwise, any funds to the TTGB Entities.
3.6 AMENDMENT TO SECTION 9.3. Section 9.3 of the Original Agreement is
hereby amended and restated in is entirety to read as follows:
9.3. NO INCONSISTENT AGREEMENTS. Except for the
Senior Credit Documents (to the extent not inconsistent with
the provisions of the Subordination Agreement), none of the
Company nor any of its Subsidiaries shall enter into any
Contractual Obligation or enter into any amendment or other
modification to any currently existing Contractual
Obligation of the Company, or any of their Subsidiaries, which
by its terms restricts or prohibits the ability of the Company
to pay the principal of or interest on the Notes or to fully
satisfy all of the obligations under the Transaction Documents
of the Company or any of its Subsidiaries.
3.7 AMENDMENT TO SECTION 9.4(B). Section 9.4(b) of the Original
Agreement is hereby amended and restated in its entirety to read as follows:
(b) (i) Senior Indebtedness, up to an aggregate
outstanding principal amount of $39,000,000, inclusive of
Senior Indebtedness listed in Section 1(a) of Schedule 5.5
(the "INDEBTEDNESS SCHEDULE") attached to the First Amendment
Agreement, dated as of August 7, 2002, by and among WMF,
Albion I, Albion II, Equitable, Fleet, Citizens and the
Company, or (ii) other Indebtedness other than Capital Lease
Obligations, up to an aggregate outstanding principal amount
of $500,000, inclusive of Indebtedness listed on Section 1(b)
of the Indebtedness Schedule.
3.8 AMENDMENT TO SECTION 9.4(H). Section 9.4(h) of the Original
Agreement is hereby amended and restated in its entirety to read as follows:
(h) Refinancings, refundings or extensions of Senior
Indebtedness as contemplated in clauses (i) through (v) of the
definition of Senior Debt in the Subordination Agreement,
PROVIDED, that any such refinancings, refundings or extensions
shall not be incurred from any Person other than any Lender
(as defined in the Senior Credit Agreement), any Affiliate of
a Lender, any fund or account managed by a Lender or Affiliate
of a Lender, or a bank, savings and loan association,
insurance company, pension fund, mutual fund, commercial
finance company or institutional lender having total assets
(together with its Affiliates) in excess of $500,000,000.
3.9 AMENDMENT TO SECTION 9.5(I). Section 9.5(i) is hereby amended and
restated in its entirety to read as follows:
(i) Liens granted in favor of the Lenders (as defined
in the Subordination Agreement) under the Senior Credit
Documents.
3.10 AMENDMENT TO SECTION 9.6. Section 9.6 of the Original Agreement is
hereby amended to add a new subsection (c) to read in its entirety as follows:
(c) the sale of TCR Corporation (the "TCR
DISPOSITION"), provided that the Purchasers shall have
received the following at least five (5) business days prior
to the consummation of the TCR Disposition:
(i) written certification by the Chief Executive
Officer and Chief Financial Officer of the Company that the
Company's management has
recommended the proposed TCR Disposition to the Board of
Directors of the Company;
(ii) written certification by Secretary of the
Company that the Board of Directors of the Company has
approved the terms and conditions of the proposed TCR
Disposition; and
(iii) a copy of a fairness opinion delivered to the
Board of Directors of the Company from an independent,
nationally recognized investment banker whose compensation is
not dependent upon the conclusion of the TCR Disposition to
the effect that the consideration to be received by the
Company from the proposed TCR Disposition is fair from a
financial point of view.
3.11 AMENDMENT TO SECTION 9.8. Section 9.8 of the Original Agreement is
hereby amended and restated in its entirety to read as follows:
9.8 FINANCIAL COVENANTS. The Company covenants and
agrees that until payment in full of all Indebtedness
hereunder and under the Notes, the Company shall comply with
and shall cause each of its Subsidiaries to comply with all
covenants in this Section 9.8 applicable to such Person.
Compliance with the covenants in this Section 9.8 shall be
determined on a consolidated basis in accordance with GAAP
consistently applied, unless explicitly stated otherwise.
(a) CONTINUING EBITDA. The Company shall not
permit the Consolidated EBITDA for the Company and
its Subsidiaries attributable to the continuing
operations of the Company and its Subsidiaries, on a
consolidated basis, for any twelve (12) month period
ending on each date set forth below to be less than
the applicable amount set forth below for such
period:
Continuing Operations
12 MONTH PERIOD ENDING EBITDA
---------------------- ------
September 30, 2002 $14,174,000
October 31, 2002 $14,551,000
November 30, 2002 $15,080,000
December 31, 2002 $13,658,000
January 31, 2003 $13,838,000
February 28, 2003 $13,941,000
March 31, 2003 $12,855,000
April 30, 2003 $13,574,000
May 31, 2003 $13,523,000
June 30, 2003 $13,531,000
July 31, 2003 $13,507,000
August 31, 2003 $13,518,000
September 30, 2003 $13,300,000
October 31, 2003 $13,433,000
November 30, 2003 $13,552,000
December 31, 2003 $13,680,000
January 31, 2004 $14,325,000
February 29, 2004 $14,033,000
March 31, 2004 (and each month $14,702,000
thereafter)
(b) FIXED CHARGE COVERAGE. The Company shall
not permit the ratio of (i) Consolidated EBITDA for
the periods set forth below, less Capital
Expenditures for such period other than Capital
Expenditures that are financed, to (ii) the sum of
Consolidated Total Interest Expense for such period
and the aggregate amount of payments of principal of
any Funded Indebtedness actually made or required to
be made during such period plus all payments,
dividends, distributions and repurchases made by the
Company in respect of its Capital Stock during such
period, to be less than the ratio set forth below for
such period:
PERIOD RATIO
------ -----
Six Month Period ending September 30, 2002 .90:1.00
Seven Month Period ending October 31, 2002 .90:1.00
Eight Month Period ending November 30, 2002 .90:1.00
Nine Month Period ending December 31, 2002 .90:1.00
Ten Month Period ending January 31, 2003 .90:1.00
Eleven Month Period ending February 28, 2003 .90:1.00
Twelve Month Period ending March 31, 2003 (and each twelve month .90:1.00
period ending on each succeeding month thereafter)
(c) TOTAL LEVERAGE TEST. At such date as
there shall be no Senior Debt outstanding and on the
last day of each month thereafter, the Company shall
not permit the ratio of Funded Indebtedness as of
such date to Consolidated Adjusted EBITDA for the
twelve (12) month period ending on such date, with
respect to the Company and its Subsidiaries, on a
consolidated basis, to be greater than 4.75:1.00,
which ratio shall be stepped down in accordance with
a schedule based on the Company's then projections,
which shall be negotiated in good faith by the
Company and the Purchasers.
(d) CAPITAL EXPENDITURES. The Company shall
not permit (i) for the eight (8) month period ending
March 31, 2003, (x) aggregate Capital Expenditures
for the Company and its Subsidiaries other than TCR
Corporation to exceed $1,100,000 or (y) aggregate
Capital Expenditures for TCR Corporation to exceed
$660,000, and (ii) for any Fiscal Year thereafter
aggregate Capital
Expenditures for the Company and its Subsidiaries to
exceed $1,265,000.
(e) SENIOR LEVERAGE TEST. The Company shall
not permit the ratio of Senior Indebtedness on each
date set forth below to Consolidated EBITDA for the
twelve (12) month period ending on each such date
with respect to the Company and its Subsidiaries, on
a consolidated basis, to be greater than the ratio
set forth below for such period:
12 Month Period Ending Ratio
---------------------- -----
If TCR If TCR Disposition
Disposition Has Has NOT BEEN
Been Effected Effected
------------- --------
September 30, 2002 2.00:1.00 2.50:1.00
October 31, 2002 2.00:1.00 2.50:1.00
November 30, 2002 2.00:1.00 2.50:1.00
December 31, 2002 1.75:1.00 2.25:1.00
January 31, 2003 1.75:1.00 2.25:1.00
February 28, 2003 1.75:1.00 2.25:1.00
March 31, 2003 (and each succeeding month thereafter) 1.50:1.00 2.00:1.00
ARTICLE 4
GUARANTY
--------
Each Wholly-Owned Subsidiary Guarantor, by its signature below, hereby
consents and agrees to the entering into of this Amendment and acknowledges and
confirms that the Subsidiary Guaranty remains in full force and effect in
accordance with its terms on the date hereof and after giving effect to this
Amendment and the issuance of the Notes and Warrants to be issued pursuant
hereto.
ARTICLE 5
FEES
----
The Company shall pay to each Purchaser on the execution and delivery
of this Agreement an amendment fee equal to 1% of the principal of the Amended
and Restated Note being issued to such Purchaser pursuant to Section 3.1 of this
Agreement such fee to be paid by the issuance to such Purchaser of a PIK Note in
the amount of such fee.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Purchaser as
follows:
5.1 AUTHORITY, ETC. The execution and delivery by the Company of this
Amendment and the performance by the Company of all of its agreements and
obligations under this Amendment and the Agreement (i) are within the corporate
authority of the Company, (ii) have been duly authorized by all necessary
corporate proceedings by the Company, (iii) do not conflict with or result in
any breach or contravention of any provision of law, statute, rule or regulation
to which the Company is subject or any judgment, order, writ, injunction,
license or permit applicable to the Company, except in each case for the
conflicts, breaches or contraventions that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
Condition of the Company (as defined in the Original Agreement) and (iv) do not
conflict with any provision of the corporate charter or by-laws of, or any
agreement or other instrument binding upon, the Company.
5.2 ENFORCEABILITY OF OBLIGATIONS. This Amendment and the Agreement
constitute the legal, valid and binding obligations of the Company, enforceable
against it in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
5.3 NO DEFAULT. After giving effect to this Amendment and the execution
and delivery of the New Senior Debt Documents (as defined below) contemplated
hereby, no default or Event of Default exists under the Notes and no event has
occurred and no condition exists which with the giving of notice, or the passage
of time or both would create or become a default or an Event of Default.
5.4 TTGB RESTRUCTURING. The TTGB Restructuring was consummated in the
manner and on the terms previously disclosed to the Purchasers. As a result of
the TTGB Restructuring, none of the TTGB Entities is a Subsidiary of the
Company.
5.5 OUTSTANDING BORROWINGS. SCHEDULE 5.5 attached hereto lists (i) the
amount of all Outstanding Borrowings of the Company and its Subsidiaries (other
than Indebtedness under the Agreement) as of the date hereof, (ii) the Liens
that relate to such Outstanding Borrowings and that encumber the assets of the
Company and its Subsidiaries, (iii) the name of each lender thereof, and (iv)
the amount of any unfunded commitments available to the Company or any
Subsidiary in connection with any Outstanding Borrowings.
5.6 TCR AND NORCO. The representations and warranties set forth in
Sections 7.21 and 7.22 of the CIT Financing Agreement are true and correct.
ARTICLE 7
CONDITIONS TO EFFECTIVENESS
The effectiveness of this Amendment is conditioned upon the
following:
(a) Receipt by the Purchasers of (i) an original counterpart
signature to this Amendment, duly executed and delivered by the Company, (ii)
the Amended and Restated Notes as contemplated in Section 3.1, (iii) the Amended
and Restated Warrants as contemplated in Section 3.2, and (iv) the Notes in
payment of the Amendment Fee as contemplated in Article 5.
(b) Receipt by the Purchasers of a copy of the fully executed
New Senior Debt Documents, in form and substance reasonably satisfactory to the
Purchasers (the "NEW SENIOR DEBT DOCUMENTS").
(c) Receipt by the Purchasers, in form and substance
reasonably satisfactory to the Purchasers, of the evidence of all corporate
approval necessary in connection with this Amendment.
(d) Receipt by the Purchaser of an opinion of Xxxx Xxxxxx &
Parks, LLC with regard to the transaction contemplated in this Amendment, in
form and substance reasonably satisfactory to Purchaser.
(e) The Purchasers shall be satisfied that, after giving
effect to this Amendment and the execution and delivery of the New Senior Debt
Documents and repayment of the Old Senior Debt, no default or Event of Default
shall then exist.
ARTICLE 8
MISCELLANEOUS
-------------
7.1 CONTINUED EFFECTIVENESS. Notwithstanding anything contained herein
to the contrary, the terms of this Amendment are not intended to and do not
serve to effect a novation as to the Original Agreement. The parties hereto
expressly do not intend to extinguish the Original Agreement. Instead, it is the
express intention of the parties hereto to reaffirm the indebtedness created
under the Original Agreement (including, without limitation, the Notes) and the
other documents contemplated thereby and to reaffirm the rights and obligations
contained therein. The Original Agreement as amended hereby and each of the
other documents contemplated thereby shall remain in full force and effect
except the Notes, which shall be amended and restated in their entirety as set
forth in the Amended and Restated Notes, and the Warrants, which shall be
amended and restated in their entirety as set forth in the Amended and Restated
Warrants. Except as herein amended, the Original Agreement shall remain
unchanged and in full force and effect, and is hereby ratified in all respects.
All of the representations, warranties and covenants contained in the Original
Agreement and this Amendment shall survive the execution and delivery of this
Amendment.
7.2 NOTICES. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery at the address specified in Section 11.2 of the
Original Agreement, or to such other address or addresses for a party as shall
have been furnished in writing by such party to the other parties hereto.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; if mailed, five
Business Days after being deposited in the mail, postage prepaid; and if
telecopied, when receipt is acknowledged.
7.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This Amendment
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto.
7.4 REFERENCES. Any reference to the Original Agreement contained in
any notice, requisite, certificate, or other document executed concurrently with
or after the execution and delivery of this Amendment shall be deemed to include
the amendments contained in this Amendment unless the context shall otherwise
require.
7.5 SIGNATURES; COUNTERPARTS. Telefacsimile transmissions of any
executed original document and/or retransmission of any executed telefacsimile
transmission shall be deemed to be the same as the delivery of an executed
original. At the request of any party hereto, the other parties hereto shall
confirm telefacsimile transmissions by executing duplicate original documents
and delivering the same to the requesting party or parties. This Amendment may
be executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
7.6 HEADINGS. The headings in this Amendment are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN
ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH
STATE.
7.8 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
7.9 CERTAIN EXPENSES. The Company will pay all reasonable out-of-pocket
expenses of the Purchasers (including without limitation reasonable fees,
charges and disbursements of counsel) in connection with this Amendment, any
other amendment, supplement, modification or waiver of or to any provision of
the Agreement, the Notes, the Warrants, or any consent to any departure by the
Company from the terms of any provision of the Agreement, the Notes, or the
Warrants.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their respective officers hereunto
duly authorized as of the date first above written.
TRANSTECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, Secretary and
General Counsel
X. X. XXXXXXX MEZZANINE FUND, L.P.
By: Xxxxxxx XX, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.,
Partner
A Managing Member
ALBION ALLIANCE MEZZANINE FUND I, L.P.
By: Albion Alliance, LLC
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
ALBION ALLIANCE MEZZANINE FUND II, L.P.
By: AA MEZZ II GP,
Its General Partner
By: Albion Alliance, LLC
Its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
[FIRST SIGNATURE PAGE TO FIRST AMENDMENT AGREEMENT]
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Investment Officer
FLEET CORPORATE FINANCE, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
CITIZENS CAPITAL, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------
Name: Xxxxx Xxxxxx
Title: Principal
[SECOND SIGNATURE PAGE TO FIRST AMENDMENT AGREEMENT]
Each of the undersigned Wholly Owned Subsidiary Guarantors agrees to
the provisions of Article 4.
NORCO, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
RANCHO TRANSTECHNOLOGY
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
RETAINERS, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
SSP INDUSTRIES
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
SSP INTERNATIONAL SALES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
TCR CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
THIRD SIGNATURE PAGE TO FIRST AMENDMENT AGREEMENT
TTER USA, INC. (FORMERLY TRANSTECHNOLOGY ENGINEERED
RINGS USA, INC.)
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
TRANSTECHNOLOGY INTERNATIONAL
CORPORATION (FORMERLY
KNOWN AS TRANSTECHNOLOGY XXXXXX, INC.)
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
[FOURTH SIGNATURE PAGE TO FIRST AMENDMENT AGREEMENT]
EXHIBIT I
FORM OF AMENDED AND RESTATED NOTE
16% AMENDED AND RESTATED SENIOR SUBORDINATED PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS.
THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE
SUBORDINATE TO THE SENIOR DEBT AS DEFINED IN, AND IN THE
MANNER TO THE EXTENT SET FORTH IN, THE INTERCREDITOR AND
SUBORDINATION AGREEMENT DATED AS OF AUGUST 7, 2002 AMONG THE
BORROWER, CERTAIN OF THE BORROWER'S SUBSIDIARIES, THE
PURCHASERS, THE CIT GROUP/BUSINESS CREDIT, INC., AND ABLECO
FINANCE LLC (FOR ITSELF AND AS AGENT), AND EACH HOLDER OF THIS
NOTE BY ITS ACCEPTANCE HEREOF SHALL BE BOUND BY THE PROVISIONS
OF SUCH INTERCREDITOR AND SUBORDINATION AGREEMENT.
THE SUBORDINATED INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT
RANKS PARI PASSU WITH CERTAIN OTHER SUBORDINATED INDEBTEDNESS
OF THE MAKER AND IS OTHERWISE SUBJECT TO CERTAIN OTHER
RESTRICTIONS SET FORTH IN THAT CERTAIN SUBORDINATED
INDEBTEDNESS INTERCREDITOR AGREEMENT, DATED AS OF AUGUST 29,
2000, BY AND AMONG THE MAKER HEREOF, THE PAYEE NAMED HEREIN,
CERTAIN OTHER HOLDER(S) OF INDEBTEDNESS OF THE MAKER AND THE
GUARANTORS OF SUCH INDEBTEDNESS, AS SUCH AGREEMENT MAY BE
AMENDED FROM TIME TO TIME.
TRANSTECHNOLOGY CORPORATION
16% AMENDED AND RESTATED SENIOR SUBORDINATED PROMISSORY NOTE
DUE AUGUST 29, 2005
(Amending and Restating the 16% Senior Subordinated Promissory Note
Due August 29, 2005 Issued on August 29, 2000)
$[AMOUNT] New York, New York
August 7, 2002
FOR VALUE RECEIVED, the undersigned, TransTechnology Corporation, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
[____________________("___")], a Delaware limited partnership, or its registered
assigns (the "HOLDER"), the principal sum of [___________________]
($[_______________]) on August 29, 2005, (the "MATURITY DATE"), with interest
thereon from time to time as provided herein. This 16% Amended and Restated
Senior Subordinated Promissory Note Due August 29, 2005 amends and restates in
its entirety the 16% Senior Subordinated Promissory Note Due August 29, 2005
(the "ORIGINAL NOTE") and upon delivery hereof the Original Note shall be of no
further force and effect and shall be delivered to the Company for cancellation.
1. PURCHASE AGREEMENT. This 16% Amended and Restated Senior
Subordinated Promissory Note (the "NOTE") is issued by the Borrower on August 7,
2002, pursuant to the Securities Purchase Agreement, dated as of August 29,
2000, as amended by that certain First Amendment Agreement, dated as of the date
hereof (as so amended and as further amended from time to time, the "PURCHASE
AGREEMENT"), by and among the Borrower, X.X. Xxxxxxx Mezzanine Fund L.P., Albion
Alliance Mezzanine Fund I, L.P., Albion Alliance Mezzanine Fund II, L.P., The
Equitable Life Assurance Society of the United States, Fleet Corporate Finance,
Inc., and Citizens Capital Inc. (collectively, the "PURCHASERS"), and is subject
to the terms thereof. The principal amount of this Note equals the principal
amount of the Original Note issued on August 29, 2000 plus all accrued and
unpaid interest thereon from August 29, 2000 through [_______], 2002, including
PIK Interest represented by PIK Notes, at the PIK Interest Rate of 3% per annum
(for purposes of this sentence, as such terms are defined in the Original Note).
This Note, together with all other promissory notes issued under the Purchase
Agreement from and after the date hereof, and all promissory notes issued
pursuant to paragraph 2(b) and paragraph 12 hereof or thereof are hereinafter
referred to as the "NOTES." The Holder is entitled to the benefits of this Note
and the Purchase Agreement, as it relates to the Note, and may enforce the
agreements of the Borrower contained herein and therein and exercise the
remedies provided for hereby and thereby or otherwise available in respect
hereto and thereto. Capitalized terms used herein without definition are used
herein with the meanings ascribed to such terms in the Purchase Agreement.
2. INTEREST. The Borrower promises to pay interest ("INTEREST") on the
principal amount of this Note from the date hereof through December 31, 2002 at
the rate of 16% per annum and thereafter at the rate of 18% per annum which rate
shall be increased on each successive January 1, April 1, July 1, and October 1,
commencing with April 1, 2003, by an additional 0.25% on a cumulative basis
(e.g., on April 1, 2003 the Interest Rate will be increased to 18.25%, on July
1, 2003 the Interest Rate will be increased to 18.50%, on October 1, 2003 the
Interest Rate will be increased to 18.75%, etc.) (the "INTEREST RATE"). Interest
on this Note shall accrue from and including the date of issuance through and
until repayment of the principal
amount of this Note and payment of all Interest in full, and shall be computed
on the basis of a 360-day year of twelve 30-day months. Interest shall be paid
as follows:
(a) BASIC INTEREST. The Borrower shall pay interest (the "BASIC
INTEREST") on the principal amount of this Note at the rate of 13% per annum
(the "BASIC INTEREST RATE"), quarterly on each March 31, June 30, September 30
and December 31 of each year or, if any such date shall not be a Business Day,
on the next succeeding Business Day to occur after such date (each date upon
which interest shall be so payable, an "INTEREST PAYMENT DATE"), beginning on
September 30, 2000, by wire transfer of immediately available funds to an
account at a bank designated in writing by the Holder. In the absence of any
such written designation, any such Interest payment shall be deemed made on the
date a check in the applicable amount payable to the order of Holder is received
by the Holder at its last address as reflected in Borrower's note registers; if
no such address appears, then to such Holder in care of the last address in such
note register of any predecessor holder of this Note (or its predecessor).
(b) PIK INTEREST. The Borrower shall pay interest ("PIK INTEREST") on
the principal amount of this Note from the date hereof through December 31, 2002
at the rate of 3% per annum and thereafter at the rate of 5% per annum which
rate shall be increased on each successive January 1, April 1, July 1 and
October 1, 2003, commencing with April 1, 2003, by an additional 0.25% on a
cumulative basis (e.g., on April 1, 2003 the Interest Rate will be increased to
5.25%, on July 1, 2003 the Interest Rate will be increased to 5.50%, on October
1, 2003 the Interest Rate will be increased to 5.75%, etc.) (the "PIK INTEREST
RATE"), by delivery to the Holder, by a date no later than each Interest Payment
Date, of an additional promissory note (each, a "PIK NOTE") having an aggregate
principal amount equal to the accrued but unpaid PIK Interest on this Note (and
the amount of accrued but unpaid PIK Interest on any previously delivered PIK
Notes) and otherwise having substantially identical terms to this Note
(including, without limitation, with respect to the Interest Rate). Interest on
each PIK Note shall accrue at the Interest Rate from the Interest Payment Date
in respect of which such additional PIK Note was issued until repayment of the
principal and payment of all accrued interest in full. If for any reason one or
more PIK Notes shall not be delivered in accordance herewith, Interest shall
accrue on this Note such that the aggregate Interest due and payable on the
Maturity Date and on each Interest Payment Date would be the same as if all PIK
Notes not issued had been issued, and the principal payable on the Maturity Date
with respect to this Note shall be an amount equal to the sum of the principal
outstanding hereunder and the aggregate principal which would be outstanding if
the PIK Notes not issued had been issued. Notwithstanding the foregoing, at the
option of the Borrower, Interest payable under this Section 2(b) shall be
payable in cash on any one or more Interest Payment Dates. For purposes of this
Note, the term "PIK Interest" shall be deemed to include payments of Interest in
cash at the PIK Interest Rate with respect to such times, if any, that the
Borrower shall choose such cash option.
(c) DEFAULT RATE OF INTEREST. Notwithstanding the foregoing provisions
of this Section 2, but subject to applicable law, any overdue principal of and
overdue Interest on this Note shall bear interest, payable on demand in
immediately available funds, for each day from the date payment thereof was due
to the date of actual payment, at a rate equal to the sum of (i) the Interest
Rate and (ii) an additional 2% per annum, and, upon and during the occurrence of
an Event of Default (as hereinafter defined), this Note shall bear interest,
from the date of the occurrence of such Event of Default until such Event of
Default is cured or waived, payable on demand in immediately available funds, at
a rate equal to the sum of (i) the Interest Rate and (ii) an additional 2% per
annum. Subject to applicable law, any interest that shall accrue on overdue
Interest on this Note as provided in the preceding sentence and shall not have
been paid in full on or before the next Interest Payment Date to occur after the
date on which the overdue interest became due and payable shall itself be deemed
to be overdue Interest on this Note to which the preceding sentence shall apply.
The term "Interest" shall mean and include all additional interest payable
pursuant to this Section 2(c).
(d) CALCULATION OF INTEREST. Basic Interest shall be computed at all
times without regard to PIK Interest or the PIK Interest Rate. PIK Interest
shall be computed at all times without regard to Basic Interest or the Basic
Interest Rate.
(e) NO USURIOUS INTEREST. In the event that any interest rate(s)
provided for in this Section 2 shall be determined to be unlawful, such interest
rate(s) shall be computed at the highest rate permitted by applicable law. Any
payment by the Borrower of any Interest amount in excess of that permitted by
law shall be considered a mistake, with the excess being applied to the
principal amount of this Note without prepayment premium or penalty; if no such
principal amount is outstanding, such excess shall be returned to Borrower.
3. MANDATORY PREPAYMENT/REDEMPTION.
(a) PUBLIC OFFERINGS. Subject to the subordination provisions of
Section 7 hereof and the right of the Senior Creditors to receive payment, upon
the consummation of a Public Offering (as hereinafter defined), the Borrower
shall, at the election of the Holder, prepay the outstanding principal amount of
this Note in accordance with the redemption prices (the "MANDATORY REDEMPTION
PRICES") set forth below (expressed as a percentage of the outstanding principal
amount of this Note), together with Interest accrued thereon through the date of
such prepayment to the extent of the net cash proceeds of such Public Offering
after payment of the Senior Creditors, or, if the Senior Creditors have waived
prepayment, to the extent of the net cash proceeds of such Public Offering. If
the consummation of a Public Offering shall occur during the consecutive
12-month period immediately preceding August 29 of the calendar year set forth
below, the Mandatory Redemption Price shall be determined based upon the
percentage of the outstanding principal amount of this Note which corresponds to
the period in question, as provided below.
PERIOD MANDATORY REDEMPTION PRICE
------ --------------------------
2001 109%
2002 109%
2003 109%
2004 105%
2005 103%
2006 101%
Borrower shall pay the Mandatory Redemption Price, together with Interest
accrued thereon, within 5 Business Days after receipt by any of the Borrower or
any of its Subsidiaries of the proceeds of such Public Offering. For the
purposes hereof, "PUBLIC OFFERING" means the sale by any of the Borrower, or any
of its Subsidiaries of its capital stock pursuant to a registration statement on
Form S-1 or otherwise under the Securities Act in which the issuer receives any
Net Cash Proceeds. For the purposes hereof, "NET CASH PROCEEDS" means (x) the
cash proceeds in respect of a Public Offering minus (y) reasonable brokerage
commissions or underwriting fees and other reasonable fees and expenses
(including, without limitation, reasonable fees, charges and disbursements of
counsel and reasonable fees and expenses of investment bankers) relating to such
Public Offering.
(b) LIQUIDITY EVENT. Subject to the subordination provisions of Section
7 hereof, upon the occurrence of a Liquidity Event (as hereinafter defined), the
Borrower shall, at the election of the Holder, prepay the outstanding principal
amount of this Note in accordance with the Mandatory Redemption Prices set forth
above in Section 3(a), together with interest accrued thereon through the date
of such prepayment If the occurrence of a Liquidity Event shall occur during the
consecutive 12-month period immediately preceding August 29 of the calendar year
set forth above in Section 3(a), the Mandatory Redemption Price shall be
determined based upon the percentage of the outstanding principal amount of this
Note which corresponds to the period in question.
(c) Borrower shall pay the Mandatory Redemption Price, together with
interest accrued thereon, within 5 Business Days after the occurrence of a
Liquidity Event. For the purposes hereof, "Liquidity Event" means (i) any
transaction or related series of transactions pursuant to a single plan of
action, in which any Person or group, other than the Purchaser or any of its
affiliates becomes the beneficial owner of 50% or more of the then outstanding
capital stock of any of the Borrower or of any of its Subsidiaries, the EBITDA
of which, individually or in the aggregate, are equal to or in excess of 25% of
the Consolidated EBITDA of the Borrower and its Subsidiaries, taken as a whole,
(ii) the sale or other disposition of all or substantially all of the assets of
any of the Borrower or of one or more of its Subsidiaries the EBITDA of which,
individually or in the aggregate, are equal to or in excess of 25% of the
Consolidated EBITDA of the Borrower and its Subsidiaries, taken as a whole,
(iii) the liquidation, dissolution or winding up of any of the Borrower or of
one or more of its Subsidiaries the EBITDA of which, individually or in the
aggregate, are equal to or in excess of 25% of the Consolidated EBITDA of the
Borrower and its Subsidiaries, taken as a whole, or (iv) the combination of the
Borrower or of any of its Subsidiaries, the EBITDA of which, individually or in
the aggregate, are equal to or in excess of 25% of the Consolidated EBITDA of
the Borrower and its Subsidiaries, taken as a whole, with another entity, as a
result of which (A) any Person or group, other than the Purchaser or any of its
affiliates becomes the beneficial owner of 50% or more of the then outstanding
capital stock of the combined entity or (B) the directors of such Borrower
constitute less than a majority of the Board of Directors of the combined
equity.
(d) NOTICE. The Borrower shall give written notice to the Holder of any
mandatory prepayment pursuant to this Section 3 at least five (5) Business Days
prior to the date of such prepayment. Such notice shall be given in the manner
specified in Section 11.02 of the Purchase Agreement.
(e) PIK NOTES NOT DELIVERED. If for any reason one or more PIK Notes
shall not be delivered in accordance with Section 2(b) of this Note, the
principal amount of this Note for purposes of calculating the Mandatory
Redemption Price shall be deemed to be the principal of this Note plus the
principal of all PIK Notes not so delivered, provided, however, that the
Mandatory Redemption Price payable with respect to this Note and all PIK Notes
actually delivered pursuant hereto in the aggregate shall not exceed the
Mandatory Redemption Price which would have been payable if all PIK Notes
required to be delivered in accordance with Section 2(b) of this Note had
actually been delivered.
4. OPTIONAL PREPAYMENT/REDEMPTION.
(a) Subject to the Subordination provisions of Section 7 hereof, upon
notice given to the Holder as provided in Section 4(b), the Borrower, at its
option, may prepay all or any portion of the principal amount of this Note at
any time after August 29, 2001, by paying to the Holder an amount equal to the
redemption prices (the "OPTIONAL REDEMPTION PRICES") set forth below (expressed
as a percentage of the outstanding principal amount being prepaid, from time to
time) together with Interest accrued and unpaid thereon to the date fixed for
such prepayment, and reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable fees, charges and disbursements of counsel), if
any, associated with such prepayment; provided, however, each prepayment of less
than the full outstanding balance of the principal amount of this Note shall be
in an aggregate principal amount of this Note of $5,000,000 or integral
multiples of $1,000,000 in excess thereof, and provided, further, that unless
this Note and all Notes shall be paid in full, the aggregate principal balance
of the Notes outstanding at any time shall be at least $4,000,000. If such
prepayment is to be made by the Borrower to the Holder during the consecutive
12-month period immediately preceding August 29, of the calendar year set forth
below, the Optional Redemption Price shall be determined based upon the
percentage of the outstanding principal amount of this Note and which
corresponds to period in question:
PERIOD OPTIONAL REDEMPTION PRICE
2002 109%
2003 105%
2004 103%
2005 101%
(b) The Borrower shall give written notice of prepayment of this Note,
or any portion thereof, pursuant to this Section 4 not less than 5 nor more than
60 days prior to the date fixed for such prepayment. Such notice of prepayment
pursuant to this Section 4 shall be given in the manner specified in Section
11.2 of the Purchase Agreement. Upon notice of prepayment pursuant to this
Section 4 being given by the Borrower, the Borrower covenants and agrees that it
will prepay, on the date therein fixed for prepayment, this Note or the portion
hereof so called for prepayment, at the applicable Optional Redemption Price set
forth above with respect to the outstanding principal amount of this Note or the
portion thereof so called for prepayment, together with Interest accrued and
unpaid thereon to the date fixed for such prepayment, and the costs and expenses
referred to in Section 4(a).
(c) All optional prepayments under this Section 4 shall include payment
of accrued Interest on the principal amount of this Note so prepaid and shall be
applied first to all costs, expenses and indemnities payable under the Purchase
Agreement, then to payment of default interest, if any, then to payment of the
Basic Interest, then to payment of the PIK Interest, and thereafter to
principal.
(d) If for any reason one or more PIK Notes shall not be delivered in
accordance with Section 2(b) of this Note, the principal amount of this Note for
purposes of calculating the Optional Redemption Price shall be deemed to be the
principal of this Note plus the principal of all PIK Notes not so delivered,
provided, however, that the Optional Redemption Price payable with respect to
this Note and all PIK Notes actually delivered pursuant hereto in the aggregate
shall not exceed the Optional Redemption Price which would have been payable if
all PIK Notes required to be delivered in accordance with Section 2(b) of this
Note had actually been delivered.
5. AMENDMENT. Amendments and modifications of this Note may be made
only in the manner provided in Section 11.4 of the Purchase Agreement.
6. DEFAULTS AND REMEDIES.
(a) EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall occur if:
(i) the Borrower shall default in the payment of the principal of
this Note, when and as the same shall become due and payable, whether at
maturity or at a date fixed for prepayment or by acceleration or otherwise; or
(ii) the Borrower shall default in the payment of any installment of
Basic Interest according to its terms, when and as the same shall become due and
payable and such default shall continue for a period of 5 days or Borrower shall
fail to deliver any PIK Note, or an appropriate amount of cash in lieu thereof
pursuant to Section 2(b), when and as the same shall become deliverable or
payable, as the case may be, and such failure shall continue for a period of 5
days after request for the delivery or payment thereof, as the case may be, by
the Holder; or
(iii) the Borrower shall default in the due observance or
performance of any covenant to be observed or performed pursuant to Sections
8.1, 8.2(a), 8.3, 8.8, 8.10, 8.11, 8.12 or Article 9 of the Purchase Agreement;
provided, however, that a default under Article 9 (other than a default under
the provisos of Section 9.2 (a)) which does not or is not likely to have a
material adverse effect on the Borrower, and all of its Subsidiaries, taken as a
whole shall become an Event of Default only if such default shall continue for a
period of 20 days; or
(iv) the Borrower, or any of its Subsidiaries shall default in the
due observance or performance of any other covenant, condition or agreement on
the part of the Borrower any of its Subsidiaries to be observed or performed
pursuant to the terms hereof or pursuant to the terms of the Purchase Agreement
or any of the Transaction Documents (other than those referred to in clauses
(i), (ii) or (iii) of this Section 6(a)), and such default shall continue for 15
days after the earliest of (A) the date the Borrower is required pursuant to the
Transaction Documents or otherwise to give notice thereof to the Holder (whether
or not such notice is actually given) or (B) the date of written notice thereof,
specifying such default and, if such default is capable of being remedied,
requesting that the same be remedied, shall have been given to the Borrower by
the Holder; or
(v) any representation, warranty or certification made by or on
behalf of the Borrower or any of its Subsidiaries in the Purchase Agreement,
this Note, the Transaction Documents or in any certificate or other document
delivered pursuant hereto or thereto shall have been incorrect when made or
deemed to be made or repeated; or
(vi) any event or condition shall occur that results in (A) the
acceleration of the maturity of any Indebtedness of any of the Borrower or any
of its Subsidiaries, or (B) a default of any Indebtedness of the Borrower or any
of its Subsidiaries, which continues beyond any applicable period of cure and
which would permit the holder to accelerate (automatically or upon notice and
declaration) such Indebtedness, in either case in a principal amount aggregating
$250,000 or more (except for capital leases, for which the threshold shall be
$1,000,000); or
(vii) any uninsured damage to or property casualty loss, theft or
destruction of any assets of the Borrower or any of its Subsidiaries shall occur
that is in excess of $5,000,000; or
(viii) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(a) relief in respect of the Borrower, or any of its Subsidiaries, or of a
substantial part of its property or assets, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (b) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any of its Subsidiaries, or for a substantial part of its
property or assets, or (c) the winding up or liquidation of the Borrower or any
of its Subsidiaries, and such proceeding or petition shall continue undismissed
for 60 days, or an order or decree approving or ordering any of the foregoing
shall be entered; or
(ix) any of the Borrower or any of its Subsidiaries shall (a)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law,
(b) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
paragraph (viii) of this Section 6(a), (c) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any of the Borrower or any of its Subsidiaries, or for a
substantial part of its property or assets, (d) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (e)
make a general assignment for the benefit of creditors, (f) become unable, admit
in writing its inability or fail generally to pay its debts as they become due
or (g) take any action for the purpose of effecting any of the foregoing; or
(x) one or more judgments for the payment of money in an aggregate
amount in excess of $2,000,000 (to the extent not covered by insurance) shall be
rendered against the Borrower, or any of its Subsidiaries and the same shall
remain undischarged for a period of 30 days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of any of the Borrower, or any of its
Subsidiaries to enforce any such judgment.
(b) ACCELERATION. If an Event of Default occurs under Section
6(a)(viii) or (ix), then the outstanding principal of and all accrued Interest
on this Note shall automatically become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived. If any other Event of Default occurs and is continuing the
Holder, by written notice to the Borrower, may declare the principal of and
accrued Interest on this Note to be immediately due and payable. Upon such
declaration, such principal and Interest shall become immediately due and
payable. The Holder may rescind an acceleration and its consequences if all
existing Events of Default have been cured or waived, except nonpayment of
principal or Interest that has become due solely because of the acceleration,
and if the rescission would not conflict with any judgment or decree. Any notice
or rescission shall be given in the manner specified in Section 11.2 of the
Purchase Agreement.
7. SUBORDINATION. This Note is subject to and subordinated by the terms
of an Intercreditor and Subordination Agreement dated as of August [__], 2002 by
and among The CIT Group/Business Credit, Inc., Ableco Finance LLC (for itself
and as agent), the Borrower, certain of the Borrower's Subsidiaries and the
Purchasers, which is incorporated herein by reference. This Note is subject to
the terms of a Subordinated Indebtedness Intercreditor Agreement, dated August
29, 2000, among the Company and the Purchasers.
8. USE OF PROCEEDS. The Borrower shall use the principal amount of this
Note in accordance with the permitted uses described in Section 8.10 of the
Purchase Agreement.
9. SUITS FOR ENFORCEMENT.
(a) Subject to Section 7, upon the occurrence of any one or more
Events of Default, the Holder of this Note may proceed to protect and enforce
its rights hereunder by suit in equity, action at law or by other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in the Purchase Agreement or this Note or in aid of the exercise of
any power granted in the Purchase Agreement or this Note, or may proceed to
enforce the payment of this Note, or to enforce any other legal or equitable
right of the Holders of this Note.
(b) In case of any default under this Note, the Borrower will pay to
the Holder such amounts as shall be sufficient to cover the costs and expenses
of such Holder due to such default, as provided in Article 7 of the Purchase
Agreement.
10. REMEDIES CUMULATIVE. No remedy herein conferred upon the Holder is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
11. REMEDIES NOT WAIVED. No course of dealing between the Borrower and
the Holder or any delay on the part of the Holder in exercising any rights
hereunder shall operate as a waiver of any right.
12. TRANSFER.
(a) The term "HOLDER" as used herein shall also include any
transferee of this Note whose name has been recorded by the Borrower in the Note
Register. Each transferee of this Note acknowledges that this Note has not been
registered under the Securities Act, and may be transferred only pursuant to an
effective registration under the Securities Act or pursuant to an applicable
exemption from the registration requirements of the Securities Act.
(b) The Borrower shall maintain a register (the "NOTE REGISTER") in its
principal offices for the purpose of registering the Note and any transfer or
partial transfer thereof, which register shall reflect and identify, at all
times, the ownership of record of any interest in the Note. Upon the issuance of
this Note, the Borrower shall record the name and address of the initial
purchaser of this Note in the Note Register as the first Holder. Upon surrender
for registration of transfer or exchange of this Note at the principal offices
of the Borrower, the Borrower shall, at its expense, execute and deliver one or
more new Notes of like tenor and of denominations of at least $500,000 (except
as may be necessary to reflect any principal amount not evenly divisible by
$500,000) of a like aggregate principal amount, registered in the name of the
Holder or a transferee or transferees. Every Note surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by written
instrument of transfer duly executed by the Holder of such Note or such holder's
attorney duly authorized in writing.
(c) This Note may be transferred or assigned, in whole or in part, by
the Holder at any time, subject to the provisions of Section 11.3 of the
Purchase Agreement.
13. REPLACEMENT OF NOTE. On receipt by the Borrower of an affidavit of
an authorized representative of the Holder stating the circumstances of the
loss, theft, destruction or mutilation of this Note (and in the case of any such
mutilation, on surrender and cancellation of such Note), the Borrower, at its
expense, will promptly execute and deliver, in lieu thereof, a new Note of like
tenor. If required by the Borrower, such Holder must provide indemnity
sufficient in the reasonable judgment of the Borrower to protect the Borrower
from any loss which they may suffer if a lost, stolen or destroyed Note is
replaced.
14. COVENANTS BIND SUCCESSORS AND ASSIGNS. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Borrower shall bind its successors and assigns, whether so expressed or not.
15. NOTICES. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier (with receipt
confirmed), courier service or personal delivery at the addresses specified in
Section 11.2 of the Purchase Agreement. All such notices and communications
shall be deemed to have been duly given when: delivered by hand, if personally
delivered; when delivered by courier, if delivered by commercial overnight
courier service; if mailed, five Business Days after being deposited in the
mail, postage prepaid; or if telecopied, when receipt is acknowledged.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN
ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH
STATE.
17. SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
18. REVIVAL AND REINSTATEMENT OF OBLIGATION. To the extent that any
payment made hereunder to a Holder is subsequently required to be, and is, paid
to The CIT Group/Business, Credit, Inc. or Ableco Finance LLC under and pursuant
to the Intercreditor and Subordination Agreement, or is subsequently required to
be, and is, returned to the Borrower for any reason, including, without
limitation, that such payment is invalidated, declared fraudulent, or
preferential or set aside or is required to be, and is, repaid to a trustee,
receiver or any other party under any bankruptcy, insolvency or reorganization
act, state or federal law, common law or equitable cause, then that portion of
this Note previously satisfied by such payment shall be revived and continue in
full force and effect as if such payment had never been made.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19. Headings. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
TRANSTECHNOLOGY CORPORATION
By: ___________________________________
Name:
Title:
[SIGNATURE PAGE TO PROMISSORY NOTE]
EXHIBIT II
FORM OF FIRST AMENDED AND RESTATED WARRANT
AMENDED AND RESTATED WARRANT
AUGUST 7, 2002
(Originally issued August 29, 2000)
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
Warrant to Purchase [________]
Shares of Common Stock
TRANSTECHNOLOGY CORPORATION
COMMON STOCK PURCHASE WARRANT
Void after August 29, 2010
TransTechnology Corporation (the "COMPANY"), a Delaware
corporation, hereby certifies that for value received [_____________], a
Delaware limited partnership, or its successors or assigns (the "Holder"), is
entitled to purchase, subject to the terms and conditions hereinafter set forth,
an aggregate of [__________] fully paid and nonassessable shares of Common
Stock, as defined herein, of the Company, at an exercise price equal to the
Purchase Price, as defined herein, subject to adjustment as provided herein, at
any time or from time to time beginning on August 29, 2000 and prior to 5:00
P.M., New York City time, on August 29, 2010 (the "Expiration Date").
This Amended and Restated Warrant amends and restates the Warrant issued
pursuant to the Securities Purchase Agreement (the "PURCHASE AGREEMENT"), dated
as of August 29, 2000, among the Company, X.X. Xxxxxxx Mezzanine Fund, L.P.
("WMF"), Albion Alliance Mezzanine Fund I, L.P. ("ALBION I"), Albion Alliance
Mezzanine Fund II, L.P. ("ALBION II", and together with Albion I, the "ALBION
FUNDS"), The Equitable Life Assurance Society of the United States
("EQUITABLE"), Fleet Corporate Finance, Inc. ("FLEET") and Citizens Capital
Incorporated ("CITIZENS", and together with WMF, the Albion Funds, Equitable and
Fleet, the "PURCHASERS"), as amended, and is subject to the terms thereof.
Capitalized terms used herein
and not otherwise defined shall have the respective meanings assigned to such
terms in the Purchase Agreement. The Holder is entitled to the rights and
subject to the obligations contained in the Purchase Agreement and the
Registration Rights Agreement relating to this Warrant and the shares of Common
Stock issuable upon exercise of this Warrant.
ARTICLE 1 DEFINITIONS. For the purposes of this Warrant, the following terms
shall have the meanings indicated:
"APPLICABLE PRICE" shall mean the higher of (a) the Current
Market Price per share of Common Stock on the applicable record or other
relevant date and (b) the Dilution Price.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in the City of New York are
authorized or required by law or executive order to close.
"CLOSING PRICE" shall mean, with respect to each share of
Common Stock for any day, (a) the last reported sale price or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
in either case as reported on the principal national securities exchange on
which the Common Stock is listed or admitted for trading or (b) if the Common
Stock is not listed or admitted for trading on any national securities exchange,
the last reported sale price or, in case no such sale takes place on such day,
the average of the highest reported bid and the lowest reported asked quotation
for the Common Stock, in either case as reported on the NASDAQ or a similar
service if NASDAQ is no longer reporting such information.
"CO-INVESTOR WARRANTS" shall mean all warrants, other than the
Warrant, to purchase Common Stock issued pursuant to the Purchase Agreement and
any subsequent warrants issued pursuant to the terms of such warrants.
"COMMON STOCK" means the common stock, par value $.01 per
share, of the Company, and any class of stock resulting from successive changes
or reclassification of such Common Stock.
"COMPANY" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"CURRENT MARKET PRICE" shall be determined in accordance with
Subsection 3(e).
"DILUTION PRICE" shall mean, with respect to each share of
Common Stock, the Purchase Price, subject to appropriate adjustment for events
described in Subsection 3(a).
"EQUITY EQUIVALENTS" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of the
Company and any rights to acquire the foregoing, including, without limitation,
any rights to acquire securities exercisable for, convertible into or
exchangeable for the foregoing.
"EXERCISE DATE" has the meaning ascribed to such term in
Subsection 2(d).
"EXPIRATION DATE" has the meaning ascribed to such term in the
first paragraph of this Warrant.
"HOLDER" has the meaning ascribed to such term in the first
paragraph and Section 9 of this Warrant.
"ISSUABLE WARRANT SHARES" means the shares of Common Stock
issuable at any time upon exercise of the Warrant.
"ISSUED WARRANT SHARES" means any shares of Common Stock
issued upon exercise of the Warrant.
"LIQUIDATION AMOUNT" shall mean the amount that would be
received by a stockholder of the Company with respect to one share of Common
Stock if immediately prior to the occurrence of a Liquidity Event all the
Warrants, as amended and restated, and all other Equity Equivalents to the
extent convertible, exchangeable or exercisable at the time of the Liquidity
Event (including by reason of such Liquidity Event) were converted, exchanged or
exercised in full, the Company were liquidated, and all assets of the Company,
after payment of all liabilities, were distributed to the stockholders.
"LIQUIDITY EVENT" has the meaning ascribed to such term in the
Notes, as amended from time to time.
"NASDAQ" shall mean the Automatic Quotation System of the
National Association of Securities Dealers, Inc.
"PERSON" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
"PURCHASE AGREEMENT" has the meaning ascribed to such term in
the second paragraph of this Warrant.
"PURCHASE PRICE" shall mean, (a) if the Exercise Date is prior
to December 31, 2002, the lesser of (i) $9.93, or (ii) in the event any
Liquidity Event occurs prior to December 31, 2002, the Liquidation Amount less
$5.00, but in no event less than $.01, and (b) if the Exercise Date is
subsequent to December 31, 2002, $.01.
"WARRANT" shall mean this Warrant and any subsequent Warrant
issued pursuant to the terms of this Warrant.
"WARRANT REGISTER" has the meaning ascribed to such term in
Subsection 9(c).
"WMF PLEDGE" shall mean any pledge of the WMF Note, the WMF
Warrant or the shares of stock issued upon exercise of the WMF Warrant pursuant
to the terms of the partnership agreement or other agreement of WMF, pursuant to
which WMF issued any bonds, promissory notes or other evidence of indebtedness.
ARTICLE 2 EXERCISE OF WARRANT.
EXERCISE. This Warrant may be exercised, in whole or in part, at any
time or from time to time during the period beginning on the date hereof and
ending on the Expiration Date, by surrendering to the Company at its principal
office this Warrant, with the form of Election to Purchase Shares (the "Election
to Purchase Shares") attached hereto as EXHIBIT A duly executed by the Holder
and accompanied by payment of the Purchase Price for the number of shares of
Common Stock specified in such form.
DELIVERY OF SHARES; PAYMENT OF PURCHASE PRICE. As soon as practicable
after surrender of this Warrant and receipt of payment, the Company shall
promptly issue and deliver to the Holder a certificate or certificates for the
number of shares of Common Stock set forth in the Election to Purchase Shares,
in such name or names as may be designated by such Holder, along with a check
for the amount of cash to be paid in lieu of issuance of fractional shares, if
any. Payment of the Purchase Price may be made as follows (or by any combination
of the following): (i) in United States currency by cash or delivery of a
certified check, bank draft or postal or express money order payable to the
order of the Company, (ii) by assigning to the Company all or any part of the
unpaid principal amount of the Note, as amended from time to time, held by the
Holder in a principal amount equal to the Purchase Price, (iii) by surrender of
a number of shares of Common Stock held by the Holder equal to the quotient
obtained by dividing (A) the Purchase Price payable with respect to the portion
of this Warrant then being exercised by (B) the Current Market Price per share
of Common Stock on the Exercise Date, or (iv) by cancellation of any portion of
this Warrant with respect to the number of shares of Common Stock equal to the
quotient obtained by dividing (A) the aggregate Purchase Price payable with
respect to the portion of this Warrant then being exercised by (B) the
difference between (1) Current Market Price per share of Common Stock on the
Exercise Date, and (2) the Purchase Price per share of Common Stock.
PARTIAL EXERCISE. If this Warrant is exercised for less than all of the
shares of Common Stock purchasable under this Warrant, the Company shall cancel
this Warrant upon surrender hereof and shall execute and deliver to the Holder a
new Warrant of like tenor for the balance of the shares of Common Stock
purchasable hereunder.
WHEN EXERCISE EFFECTIVE. The exercise of this Warrant shall be deemed
to have been effective immediately prior to the close of business on the
Business Day on which this Warrant is surrendered to and the Purchase Price is
received by the Company as provided in this Section 2 (the "Exercise Date") and
the Person in whose name any certificate for shares of Common Stock shall be
issuable upon such exercise, as provided in Subsection 2(b), shall be deemed to
be the record holder of such shares of Common Stock for all purposes on the
Exercise Date.
ISSUED WARRANT SHARES FULLY PAID, NONASSESSABLE. The Company shall take
all actions necessary to ensure that following exercise of this Warrant in
accordance with the provisions of this Section 2, the Issued Warrant Shares
issued hereunder shall, without further action by the Holder, be fully paid and
nonassessable.
CONTINUED VALIDITY. A Holder of shares of Common Stock issued upon the
exercise of this Warrant, in whole or in part, shall continue to be entitled to
all of the rights and subject to all of the obligations set forth in Section 9.
ARTICLE 3 ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted from time to time upon the occurrence of the following events:
DIVIDEND, SUBDIVISION, COMBINATION OR RECLASSIFICATION OF COMMON STOCK.
If the Company shall, at any time or from time to time, (i) declare a dividend
on the Common Stock payable in shares of its capital stock (including Common
Stock), (ii) subdivide the outstanding Common Stock into a larger number of
shares of Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares of its Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each such case, the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date shall be
proportionately adjusted so that the Holder of any Warrant exercised after such
date shall be entitled to receive, upon payment of the same aggregate amount as
would have been payable before such date, the aggregate number and kind of
shares of capital stock which, if such Warrant had been exercised immediately
prior to such date, such Holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. Any such adjustment shall become effective immediately after
the record date of such dividend or the effective date of such subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur. If a dividend is declared and such
dividend is not paid, the Purchase Price shall again be adjusted to be the
Purchase Price in effect immediately prior to such record date (giving effect to
all adjustments that otherwise would be required to be made pursuant to this
Section 3 from and after such record date).
ISSUANCE OF RIGHTS TO PURCHASE COMMON STOCK BELOW CURRENT MARKET PRICE
OR DILUTION PRICE. If the Company shall, at any time or from time to time, fix a
record date for the issuance of rights, options or warrants to all holders of
Common Stock (other than pursuant to Plans) entitling them to subscribe for or
purchase Common Stock, or securities convertible into Common Stock at a price
per share of Common Stock or having a conversion price per share of Common Stock
if a security is convertible into Common Stock (determined in either such case
by dividing (x) the total consideration payable to the Company upon exercise,
conversion or exchange of such rights, options, warrants or other securities
convertible into Common Stock by (y) the total number of shares of Common Stock
covered by such rights, options, warrants or other securities convertible into
Common Stock) which is lower than either the Current Market Price per share of
Common Stock on such record date (or, if an ex-dividend date has been
established for such record date, on the day next preceding such ex-dividend
date) or the Dilution Price, then, the Purchase Price shall be reduced to the
price determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so to be offered (or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at the Applicable Price and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible). In case such price for subscription or purchase may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined in good faith by the Board of
Directors of the Company. Any such adjustment shall become effective immediately
after the record date for such rights or warrants. Such adjustment shall be made
successively whenever such a record date is fixed. If such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to the Purchase
Price that otherwise would be in effect but for the fact such record date was
fixed (giving effect to all adjustments that otherwise would be required to be
made pursuant to this Section 3 from and after such record date).
CERTAIN DISTRIBUTIONS. If the Company shall, at any time or from time
to time, fix a record date for the distribution to all holders of Common Stock
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of evidences of
indebtedness, assets or other property (other than regularly scheduled cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends payable in capital stock for which adjustment is made under
Subsection 3(a)) or subscription rights, options or warrants (excluding those
referred to in Subsection 3(b)), THEN the Purchase Price shall be reduced to the
price determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction (which shall in no event be less than zero),
the numerator of which shall be the Current Market Price per share of Common
Stock on such record date (or, if an ex-dividend date has been established for
such record date, on the next day preceding such ex-dividend date), less the
fair market value (as determined in good faith by the Board of Directors of the
Company) of the portion of the assets, evidences of indebtedness, other
property, subscription rights or warrants so to be distributed applicable to one
share of Common Stock and the denominator of which shall be such Current Market
Price per share of Common Stock. Any such adjustment shall become effective
immediately after the record date for such distribution. Such adjustments shall
be made successively whenever such a record date is fixed. In the event that
such distribution is not so made, the Purchase Price shall be adjusted to the
Purchase Price in effect immediately prior to such record date (giving effect to
all adjustments that otherwise would be required to be made pursuant to this
Section 3 from and after such record date).
ISSUANCE OF COMMON STOCK BELOW CURRENT MARKET PRICE OR DILUTION PRICE.
If the Company shall, at any time and from time to time, after
the date hereof, directly or indirectly, sell or issue shares of Common Stock
(regardless of whether originally issued or from the Company's treasury), or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock) at a price per
share of Common Stock (determined, in the case of rights, options, warrants or
convertible or exchangeable securities, by dividing (x) the total consideration
received or receivable by the Company in consideration of the sale or issuance
of such rights, options, warrants or convertible or exchangeable securities,
plus the total consideration payable to the Company upon exercise or conversion
or exchange thereof, by (y) the total number of shares of Common Stock covered
by such rights, options, warrants or convertible or exchangeable securities)
which is lower than either the Current Market Price per share of Common Stock or
the Dilution Price immediately prior to such sale or issuance, THEN, subject to
clause 3(d)(ii), the Purchase Price shall be reduced to a price determined by
multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale or issuance would purchase at the
Applicable Price and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such sale or issuance. Such
adjustment shall be made successively whenever
such sale or issuance is made. For the purposes of such adjustments, the shares
of Common Stock which the holder of any such rights, options, warrants, or
convertible or exchangeable securities shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the date of such
sale or issuance and the consideration "received" by the Company therefor shall
be deemed to be the consideration actually received or receivable by the Company
(plus any underwriting discounts or commissions in connection therewith) for
such rights, options, warrants or convertible or exchangeable securities, plus
the consideration stated in such rights, options, warrants or convertible or
exchangeable securities to be payable to the Company for the shares of Common
Stock covered thereby. If the Company shall sell or issue shares of Common Stock
for a consideration consisting, in whole or in part, of property other than cash
or its equivalent, then in determining the "price per share of Common Stock" and
the "consideration" received or receivable by or payable to the Company for
purposes of the first sentence and the immediately preceding sentence of this
Subsection 3(d), the fair value of such property shall be determined in good
faith by the Board of Directors of the Company. The determination of whether any
adjustment is required under this Subsection 3(d) by reason of the sale and
issuance of rights, options, warrants or convertible or exchangeable securities
and the amount of such adjustment, if any, shall be made only at the time of
such issuance or sale and not at the subsequent time of issuance of shares of
Common Stock upon the exercise of such rights to subscribe or purchase.
No adjustment shall be made to the Purchase Price pursuant to
clause 3(d)(i) in connection with the issuance of (A) shares issued in any of
the transactions described in Subsections 3(a), (b) and (c) hereof; (B) shares
issued upon exercise of this Warrant or the Co-Investor Warrants; (C) additional
issuances of options to purchase shares of Common Stock pursuant to the
Company's existing stock option plans, under which the Company is authorized to
issue an aggregate of 1,250,000 shares of Common Stock, granted at an exercise
price of not less than the Current Market Price of Common Stock at the time of
grant and issued consistent with previous grants under the Company's stock
option plans; and (D) in any arm's length institutional financing of debt in
which shares of Common Stock or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock are issued as part of a unit, if such shares would otherwise be
included in clause 3(d)(i).
Notwithstanding any provision in Section 3 to the contrary and
without limitation to any other provision contained in Section 3, in the event
any securities of the Company (other than this Warrant or the Co-Investor
Warrants), including, without limitation, those securities set forth as
exceptions in Subsection 3(d)(ii) (for purposes of this Subsection,
collectively, the "SUBJECT SECURITIES"), are amended or otherwise modified by
operation of its terms or otherwise (including, without limitation, by operation
of such Subject Securities' anti-dilution provisions other than antidilution
provisions substantially similar to those contained in Section 3(a) hereof) in
any manner whatsoever that results in (i) the reduction of the exercise,
conversion or exchange price of such Subject Securities payable upon the
exercise for, or conversion or exchange into, Common Stock or other securities
exercisable for, or convertible or
exchangeable into, Common Stock and/or (ii) such Subject Securities becoming
exercisable for, or convertible or exchangeable into (A) more shares or dollar
amount of such Subject Securities which are, in turn exercisable for, or
convertible or exchangeable into, Common Stock, or (B) more shares of Common
Stock, THEN such amendment or modification shall be treated for purposes of
Section 3 as if the Subject Securities which have been amended or modified have
been terminated and new securities have been issued with the amended or modified
terms. The Company shall make all necessary adjustments (including successive
adjustments if required) to the Purchase Price in accordance with Section 3, but
in no event shall the Purchase Price be greater than it was immediately prior to
the application of this Subsection to the transaction in question. On the
expiration or termination of any such amended or modified Subject Securities for
which adjustment has been made pursuant to the operation of the provisions of
this Subsection under Section 3(b) or 3(d), as the case may be, without such
Subject Securities having been exercised, converted or exchanged in full
pursuant to their terms, the adjusted Purchase Price shall be appropriately
readjusted in the manner specified in such Section.
DETERMINATION OF CURRENT MARKET PRICE. For the purpose of any
computation under Subsections (b), (c) or (d) of this Section 3 or any other
provision of this Warrant, the Current Market Price per share of Common Stock on
any date shall be deemed to be the average of the daily Closing Prices per share
of Common Stock for the 10 consecutive trading days commencing 15 trading days
before such date. If on any such date the shares of Common Stock are not listed
or admitted for trading on any national securities exchange or quoted by NASDAQ
or a similar service, then the Company, on the one hand, and Holder on the other
hand, shall each promptly appoint as an appraiser an individual who shall be a
member of a nationally recognized investment banking firm. Each appraiser shall
be instructed to, within 30 days of appointment, determine the Current Market
Price per share of Common Stock which shall be deemed to be equal to the fair
market value per share of Common Stock as of such date. If the two appraisers
are unable to agree on the Current Market Price per share of Common Stock within
such 30 day period, then the two appraisers, within 10 days after the end of
such 30 day period shall jointly select a third appraiser. The third appraiser
shall, within 30 days of its appointment, determine, in good faith, the Current
Market Price per share of Common Stock and such determination shall be
controlling. If any party fails to appoint an appraiser or if one of the two
initial appraisers fails after appointment to submit its appraisal within the
required period, the appraisal submitted by the remaining appraiser shall be
controlling. The cost of the foregoing appraisals shall be shared one-half by
the Company and one-half by WMF, PROVIDED, HOWEVER, in the event a third
appraiser is utilized and one of the two initial appraisals (but not the other
initial appraisal) is greater than or less than the appraisal by such third
appraiser by 10% or more, then the cost of all of the foregoing appraisals shall
be borne by the party who appointed the appraiser who made such initial
appraisal.
DE MINIMIS ADJUSTMENTS. No adjustment in the Purchase Price shall be
made if the amount of such adjustment would result in a change in the Purchase
Price per share of less than $0.05, but in such case any adjustment that would
otherwise be required to be made shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment, which together
with any adjustment so carried forward, would result in a change in the Purchase
Price of $0.05 per share or more. If the Company shall, at any time or from time
to time, issue Common Stock by way of dividends on any stock of the Company or
subdivide or combine the outstanding shares of the Common Stock, such amount of
$0.05 (as theretofore increased or decreased, if such amounts shall have been
adjusted in accordance with the provisions of this clause) shall forthwith be
proportionately increased in the case of a combination or decreased in the case
of a subdivision or stock dividend so as appropriately to reflect the same.
Notwithstanding the provisions of the first sentence of this Subsection 3(f),
any adjustment postponed pursuant to this Subsection 3(f) shall be made no later
than the earlier of (i) three years from the date of the transaction that would,
but for the provisions of the first sentence of this Section 3(f), have required
such adjustment, (ii) an Exercise Date or (iii) the Expiration Date.
ADJUSTMENTS TO OTHER SHARES. In the event that at any time, as a result
of an adjustment made pursuant to Subsection 3(a), the Holder shall become
entitled to receive, upon exercise of this Warrant, any shares of capital stock
of the Company other than shares of Common Stock, the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in Subsections 3(a), (b), (c) and (d), inclusive, and the provisions
of Sections 2, 5, 6 and 7 with respect to the shares of Common Stock shall apply
on like terms to any such other shares.
ADJUSTMENT OF NUMBER OF SHARES ISSUABLE UPON EXERCISE. Upon each
adjustment of the Purchase Price as a result of the calculations made in
Subsections 3(a), (b), (c) or (d), this Warrant shall thereafter evidence the
right to receive, at the adjusted Purchase Price, that number of shares of
Common Stock (calculated to the nearest one-hundredth) obtained by dividing (x)
the product of the aggregate number of shares of Common Stock covered by this
Warrant immediately prior to such adjustment and the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price by (y) the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
REORGANIZATION, RECLASSIFICATION, MERGER AND SALE OF ASSETS. If there
occurs any capital reorganization or any reclassification of the Common Stock of
the Company, the consolidation or merger of the Company with or into another
Person (other than a merger or consolidation of the Company in which the Company
is the continuing corporation and which does not result in any reclassification
or change of outstanding shares of its Common Stock) or the sale or conveyance
of all or substantially all of the assets of the Company to another Person, THEN
the Holder will thereafter be entitled to receive, upon the exercise of this
Warrant in accordance with the terms hereof, the same kind and amounts of
securities (including shares of stock) or other assets, or both, which were
issuable or distributable to the holders of outstanding Common Stock of the
Company upon such reorganization, reclassification, consolidation, merger, sale
or conveyance, in respect of that number of shares of Common Stock then
deliverable upon the exercise of this Warrant if this Warrant had been exercised
immediately prior to such reorganization, reclassification, consolidation,
merger, sale or conveyance; and, in any such case, appropriate adjustments (as
determined in good faith by the Board of Directors of the Company) shall be made
to assure that the provisions hereof (including provisions with respect to
changes in, and other adjustments of, the Purchase Price) shall thereafter be
applicable, as nearly as reasonably may be practicable, in relation to any
securities or other assets thereafter deliverable upon exercise of this Warrant.
ARTICLE 4 CERTIFICATE AS TO ADJUSTMENTS. Whenever the Purchase Price and the
number of shares of Common Stock issuable, or the securities or other property
deliverable, upon the exercise of this Warrant shall be adjusted pursuant to the
provisions hereof, the Company shall promptly give written notice thereof to the
Holder, in accordance with Section 14, in the form of a certificate signed by
the Chairman of the Board, President or one of the Vice Presidents of the
Company, and by the Chief Financial Officer, Treasurer or one of the Assistant
Treasurers of the Company, stating the adjusted Purchase Price, the number of
shares of Common Stock issuable, or the securities or other property
deliverable, upon exercise of the Warrant and setting forth in reasonable detail
the method of calculation and the facts requiring such adjustment and upon which
such calculation is based. Each adjustment shall remain in effect until a
subsequent adjustment is required.
ARTICLE 5 FRACTIONAL SHARES. Notwithstanding an adjustment pursuant to Section
3(h) in the number of shares of Common Stock covered by this Warrant or any
other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company may
make payment to the Holder, at the time of exercise of this Warrant as herein
provided, of an amount in cash equal to such fraction multiplied by the
Applicable Price.
ARTICLE 6 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose at any
time or from time to time (a) to declare or pay any dividend payable in stock of
any class to the holders of Common Stock or to make any other distribution to
the holders of Common Stock (other than a regularly scheduled cash dividend),
(b) to offer to the holders of Common Stock rights or warrants to subscribe for
or to purchase any additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options, (c) to effect any
reclassification of its
Common Stock, (d) to effect any consolidation, merger or sale, transfer or other
disposition of all or substantially all of the property, assets or business of
the Company which would, if consummated, adjust the Purchase Price or the
securities issuable upon exercise of the Warrants, (e) to effect the
liquidation, dissolution or winding up of the Company, or (f) to take any other
action that would require a vote of the Company's stockholders, then, in each
such case, the Company shall give to the Holder, in accordance with Section 14,
a written notice of such proposed action, which shall specify (i) the record
date for the purposes of such stock dividend, distribution of rights or warrants
or vote of the stockholders of the Company, or if a record is not to be taken,
the date as of which the holders of shares of Common Stock of record to be
entitled to such dividend, distribution of rights or warrants, or vote is to be
determined, or (ii) the date on which such reclassification, consolidation,
merger, sale, transfer, disposition, liquidation, dissolution or winding up is
expected to become effective, and such notice shall be so given as promptly as
possible but in any event at least five (5) Business Days prior to the
applicable record, determination or effective date specified in such notice.
ARTICLE 7 NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (b) will at all times reserve and keep available the maximum
number of its authorized shares of Common Stock, free from all preemptive rights
therein, which will be sufficient to permit the full exercise of this Warrant,
and (c) will take all such action as may be necessary or appropriate in order
that all shares of Common Stock as may be issued pursuant to the exercise of
this Warrant will, upon issuance, be duly and validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof.
ARTICLE 8 REPLACEMENT OF WARRANTS. On receipt by the Company of an affidavit of
an authorized representative of the Holder stating the circumstances of the
loss, theft, destruction or mutilation of this Warrant (and in the case of any
such mutilation, on surrender and cancellation of such Warrant), the Company at
its expense will promptly execute and deliver, in lieu thereof, a new Warrant of
like tenor which shall be exercisable for a like number of shares of Common
Stock. If required by the Company, such Holder must provide an indemnity bond or
other indemnity sufficient in the judgment of the Company to protect the Company
from any loss which it may suffer if a lost, stolen or destroyed Warrant is
replaced.
ARTICLE 9 RESTRICTIONS ON TRANSFER.
Subject to the provisions of this Section 9 and Section 11.3 of the
Purchase Agreement, this Warrant may be transferred or assigned, in whole or in
part, by the Holder at any time, and from time to time. The term "Holder" as
used herein shall also include any transferee of this Warrant whose name has
been recorded by the Company in the Warrant Register (as hereinafter defined).
Each transferee of the Warrant or the Common Stock issuable upon the exercise of
the Warrant acknowledges that the Warrant or the Common Stock issuable upon the
exercise of the Warrant has not been registered under the Securities Act and may
be transferred only pursuant to an effective registration under the Securities
Act or pursuant to an applicable exemption from the registration requirements of
the Securities Act.
With respect to a transfer (other than in connection with the WMF
Pledge) that should occur prior to the time that the Warrant or the Common Stock
issuable upon the exercise thereof is registered under the Securities Act, such
Holder shall request an opinion of counsel (which shall be rendered by counsel
reasonably acceptable to the Company) that the proposed transfer may be effected
without registration or qualification under any Federal or state securities or
blue sky law. Counsel shall, as promptly as practicable, notify the Company and
the Holder of such opinion and of the terms and conditions, if any, to be
observed in such transfer, whereupon the Holder shall be entitled to transfer
this Warrant or such shares of Common Stock (or portion thereof), subject to any
other provisions and limitations of this Warrant. In the event this Warrant
shall be exercised as an incident to such transfer, such exercise shall relate
back and for all purposes of this Warrant be deemed to have occurred as of the
date of such notice regardless of delays incurred by reason of the provisions of
this Section 9 which may result in the actual exercise on any later date.
The Company shall maintain a register (the "Warrant Register") in its
principal office for the purpose of registering the Warrant and any transfer
thereof, which register shall reflect and identify, at all times, the ownership
of any interest in the Warrant. Upon the issuance of this Warrant, the Company
shall record the name of the initial purchaser of this Warrant in the Warrant
Register as the first Holder. Upon surrender for registration of transfer or
exchange of this Warrant together with a properly executed Form of Assignment
attached hereto as EXHIBIT B at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new Warrants of like
tenor which shall be exercisable for a like aggregate number of shares of Common
Stock, registered in the name of the Holder or a transferee or transferees.
Notwithstanding any provision in this Warrant to the contrary, the
Holder shall not sell, assign, or otherwise transfer to any Person (a
"Transferee") any Issued Warrant Shares prior to the Expiration Date (other than
pursuant to the WMF Pledge) unless such Transferee agrees in writing to be bound
in the same manner as the Holder by the provisions of this Section 9 (to the
extent such provisions have not terminated or expired) as they relate to the
Issued Warrant Shares. The Company acknowledges that each Transferee is an
intended third party beneficiary of, and shall be entitled to, all rights of the
Holder under Sections 10, 13, 14, 15 and 16 hereof with respect to any Issued
Warrant Shares purchased by such Transferee.
Notwithstanding any other provisions of this Warrant, in the event that
the Holder is subject to regulation under the Bank Holding Company Act of 1956
(BHC Act), the Holder may only transfer the Warrant in compliance with the terms
of the Warrant and any applicable related agreements or contracts in the
following circumstances:
to any person who intends to sell the shares issuable upon
exercise of the Warrant in connection with a public offering, reasonably
determined by the Holder to be widely distributed, of the shares; or
in a transaction with any person who acquires at least a
majority of the voting securities of the Company (excluding the shares issuable
upon exercise of the Warrants); or
in a transaction with any person who, as a result of the
transaction, would hold Warrants exercisable into shares which (altogether with
all other voting stock or rights thereto of the Company held by such person)
would equal no more than 2% of the Company's voting stock; or
in a sale conducted in accordance with Securities and Exchange
Commission Rule 144.
Notwithstanding the foregoing, the above restrictions on the
transfer of the Warrant shall cease to apply to the extent expressly granted, in
writing, by the Board of Governors of the Federal Reserve System or as otherwise
permitted by under the BHC Act or the regulations promulgated under the BHC Act.
Notwithstanding any other provision of this Warrant, in the
event that the holder is subject to regulation under the BHC Act, the Holder may
only exercise the Warrant to the extent that, after such exercise, the Holder
will not hold more than 4.99% of any "Class" of "Voting Securities" (each as
defined in the BHC Act) of the Company or such exercise is otherwise is
expressly granted, in writing, by the Board of Governors of the Federal Reserve
System or as otherwise permitted under the BHC Act or the regulation promulgated
under the BHC Act.
ARTICLE 10 HOLDER PUT RIGHT.
Upon the occurrence of a Liquidity Event, the Holder shall have the
right (the "Put Right") exercisable concurrently therewith, and at any time
during the 120-day period following such Liquidity Event, to cause the Company,
subject to the terms and conditions hereof, to purchase from the Holder all, or
any portion, of this Warrant and the Issued Warrant Shares, if any, at a
purchase price per Issuable Warrant Share or Issued Warrant Share, as the case
may be, equal to (i) if the Liquidation Amount is greater than $5.00, the
greater of (A) $5.00 and (B) the Liquidation Amount less $9.93; and (ii) if the
Liquidation Amount is equal to or less than $5.00, the Liquidation Amount. Such
right shall be exercisable by the Holder upon the closing of the Liquidity Event
or thereafter by delivery of written notice (the "PUT NOTICE") to the Company,
specifying the date on which such repurchase shall occur. Upon the date
designated for such repurchase pursuant to the Put Notice, the Holder shall
deliver to the Company, as applicable, this Warrant and one or more certificates
representing Issued Warrant Shares, if any, being repurchased duly endorsed for
transfer to the Company against (i) payment therefor by (at the option of the
Holder) (x) wire transfer to an account in a bank located in the United States
designated by the Holder for such purposes or (y) delivery of a certified or
official bank check drawn on a member of the New York Federal Reserve Clearing
House, and (ii) if the Holder has elected to have only a portion of this Warrant
repurchased, delivery of a new warrant duly executed by the Company, on the same
terms and conditions as this Warrant, except that such warrant shall be
exercisable for the remaining number of Issuable Warrant Shares.
If, for any reason, the Company is prohibited or otherwise unable to
pay to the Holder any portion of the aggregate purchase price for any portion of
this Warrant or the Issued Warrant Shares in connection with the exercise by the
Holder of its rights under Section 10(a), then, in addition to and not in
limitation of any other rights or remedies that may be available to the Holder,
such unpaid portion of the purchase price shall bear interest, payable on demand
in immediately available funds, for each day from the date such portion of the
aggregate purchase price was due to the date of actual payment, at a rate equal
to the Interest Rate under the Notes, as amended from time to time, compounding
quarterly until paid in full.
The right to receive payment from the Company upon exercise of the Put
Right set forth in this Section 10 is subject to and subordinated by the terms
of an Intercreditor and Subordination Agreement (the "Senior Subordination
Agreement") dated as of August 7, 2002 by and among The CIT Group/Business
Credit, Inc., Ableco Finance LLC (for itself and as agent), the Company, certain
of the Company's subsidiaries, and the Purchasers, and is also subject to the
terms of a Subordinated Indebtedness Intercreditor Agreement, dated August 29,
2000, among the Company and the Purchasers (the "SubDebt Intercreditor
Agreement"), each of which is incorporated herein by reference. In the event the
Company is unable to make a payment to the Holder by reason of the subordination
provided in such agreements, the Company shall issue to the Holder a note dated
the date such payment was otherwise required to be made, in form and substance
identical to the Notes, in the principal amount of the payment required to be
made on account of the Put Right, which Note shall thereafter be deemed a Note
for all purposes under the Purchase Agreement, the Senior Subordination
Agreement and the SubDebt Intercreditor Agreement.
ARTICLE 11 NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder hereof to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability of such
Holder as a stockholder of the Company.
ARTICLE 12 CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder hereof for any issue or transfer tax, or other incidental expense, in
respect of the issuance or delivery of such certificates or the securities
represented thereby, all of which taxes and expenses shall be paid by the
Company.
ARTICLE 13 AMENDMENT OR WAIVER. Subject to the terms of the Section 11.4 of the
Purchase Agreement, this Warrant and any term hereof may be amended, waived,
discharged or terminated only by and with the written consent of the Company and
the Holder.
ARTICLE 14 NOTICES. Any notice or other communication (or delivery) required or
permitted hereunder shall be made in writing and shall be by registered mail,
return receipt requested, telecopier, courier service or personal delivery to
the Company at its principal office as specified in Section 11.2 of the Purchase
Agreement and to the Holder at its address as it appears in the Warrant
Register. All such notices and communications (and deliveries) shall be deemed
to have been duly given: when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial overnight courier service; five
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is acknowledged, if telecopied.
ARTICLE 15 CERTAIN REMEDIES. The Holder shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Warrant and to enforce
specifically the terms and provisions of this Warrant in any court of the United
States or any state thereof having
jurisdiction, this being in addition to any other remedy to which such Holder
may be entitled at law or in equity.
ARTICLE 16 SURVIVAL. The provisions of Section 10 hereof shall survive the
complete exercise of this Warrant and the issuance of all Issuable Warrant
Shares.
ARTICLE 17 GOVERNING LAW. This Agreement shall be governed by, construed in
accordance with, and enforced under, the Law of the State of New York applicable
to agreements or instruments entered into and performed entirely within such
State.
ARTICLE 18 HEADINGS. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
TRANSTECHNOLOGY CORPORATION
By:
-----------------------------------
Name:
Title:
Exhibit A to Common
Stock Purchase Warrant
----------------------
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the
Warrant to purchase _____ shares of Common Stock, par value $.01 per share
("Common Stock"), of [Name of Issuer] (the "Company") and hereby [makes payment
of $_______ therefor] [or] [makes payment therefor by assignment to the Company
pursuant to Section 2(b)(ii) of the Warrant of $_____________ aggregate
principal amount of the Note (as defined in the Warrant)] [or] [makes payment
therefore by surrendering pursuant to Section 2(b)(iii) _____ shares of Common
Stock of the Company] [or] [makes payment therefor by cancellation pursuant to
Section 2(b)(iv) of a portion of the Warrant with respect to _________ shares of
Common Stock]. The undersigned hereby requests that certificates for such shares
be issued and delivered as follows:
ISSUE TO:
----------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
--------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:
--------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased hereby is
less than the number of shares of Common Stock covered by the Warrant, the
undersigned requests that a new Warrant representing the number of shares of
Common Stock not purchased be issued and delivered as follows:
ISSUE TO:
---------------------------------------------------------------------
(NAME OF HOLDER)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO:
--------------------------------------------------------------------
(NAME OF HOLDER)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
Dated: [NAME OF HOLDER]
-----------------------------------
By:
-----------------------------
Name:
Title:
-----------------------------
(1) Name of Holder must conform in all respects to name of Holder as
specified on the face of the Warrant.
31
Exhibit B to Common
Stock Purchase Warrant
----------------------
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $.01 per share ("Common Stock"), of
TRANSTECHNOLOGY CORPORATION represented by the Warrant, with respect to the
number of shares of Common Stock set forth below:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
and does hereby irrevocably constitute and appoint ____________________________
Attorney to make such transfer on the books of TRANSTECHNOLOGY CORPORATION
maintained for that purpose, with full power of substitution in the premises.
Dated: [NAME OF HOLDER(1)]
---------------------------
By:
-----------------------------------
Name:
Title:
-----------------------------
(1) Name of Holder must conform in all respects to name of Holder as
specified on the face of the Warrant.
