EXHIBIT 99.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
April 15, 2002, by and between CTS CORPORATION, an Indiana corporation (the
"Company"), and each of the entities whose names appear on the signature pages
hereof. Such entities are each referred to herein as a "Purchaser" and,
collectively, as the "Purchasers".
The Company wishes to sell to each Purchaser, and each
Purchaser wishes to purchase, on the terms and subject to the conditions set
forth in this Agreement, a 6 1/2% Convertible Subordinated Debenture in the form
attached hereto as Exhibit A (a "Closing Debenture" and, together with each
other Closing Debenture issued hereunder, the "Closing Debentures"). In
connection with such purchase and sale, the Company has granted to each
Purchaser an option to purchase an additional debenture with a conversion price
the same as that applicable to, and otherwise with terms substantially identical
to those contained in, the Closing Debentures (an "Option Debenture" and,
together with each other Option Debenture issued hereunder, the "Option
Debentures"). The Closing Debentures and the Option Debentures are collectively
referred to herein as the "Debentures".
The Debentures are convertible into shares (the "Conversion
Shares") of the Company's common stock, without par value (the "Common Stock").
The Debentures and the Conversion Shares are collectively referred to herein as
the "Securities".
The Company has agreed to effect the registration of the
Conversion Shares under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Rights Agreement of even date herewith by and
between the Company and each Purchaser (the "Registration Rights Agreement").
The sale of the Debentures by the Company to the Purchasers will be effected in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D ("Regulation D"), as promulgated by the Securities
and Exchange Commission (the "Commission") under the Securities Act.
The Company and each Purchaser hereby agree as follows:
1. PURCHASE AND SALE OF DEBENTURES.
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1.1 Purchase of Closing Debentures. Upon the terms and
subject to the satisfaction or waiver of the conditions set forth herein, the
Company agrees to sell and each Purchaser agrees to purchase a Closing Debenture
with a principal amount equal to the amount set forth below such Purchaser's
name on the signature pages hereof. The purchase price for the Closing Debenture
being purchased by a Purchaser (the "Purchase Price") shall be equal to the
principal amount of such Closing Debenture. The aggregate Purchase Price to be
paid by all of the Purchasers for the Closing Debentures shall be equal to
twenty five million dollars ($25,000,000). The date on which the closing of the
purchase and sale of the Closing Debentures occurs (the "Initial Closing") is
hereinafter referred to as the "Initial Closing Date". Subject to the
satisfaction or waiver of the conditions set forth herein, the Initial Closing
will be deemed to occur when (A) this Agreement and the other Transaction
Documents (as defined below) have been executed and delivered by the Company and
each Purchaser (which delivery may be effected by facsimile transmission), and
(B) full payment of each Purchaser's Purchase Price has been made by such
Purchaser by wire transfer of immediately available funds against physical
delivery by the Company of the duly executed Closing Debenture purchased by such
Purchaser at the Initial Closing.
1.2 Purchase of Option Debentures.
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(a) Each Purchaser shall have the right to purchase
from the Company (the "Purchase Option"), at any time during the period
beginning on the Initial Closing Date and ending on the ninetieth (90th) day
thereafter (the "Option Period"), an Option Debenture with a principal amount of
up to (A) five million dollars ($5,000,000) multiplied by (B) a fraction, the
numerator of which is the principal amount of the Closing Debenture purchased by
such Purchaser and the denominator of which is the aggregate principal amount of
the Closing Debentures purchased by all of the Purchasers.
(b) If a Purchaser wishes to exercise the Purchase
Option, such Purchaser must deliver a written notice (an "Option Notice") to the
Company during the Option Period specifying the principal amount of the Option
Debenture that such Purchaser wishes to purchase. In the event that, upon the
expiration of the Option Period (or such earlier date on which each of the
Purchasers has notified the Company of its intentions regarding the purchase of
the Option Debentures), less than all of the Purchasers have exercised the
Purchase Option, the Company shall, within two (2) Business Days thereafter
provide to each Purchaser which exercised the Purchase Option (the "Remaining
Purchasers") a written notice (a "Remaining Debenture Notice") specifying the
principal amount of the Option Debentures that remain unpurchased (the
"Remaining Debentures"). The Remaining Purchasers may purchase the Remaining
Debentures at the Option Closing on a pro rata basis (based on the principal
amount of the Option Debenture purchased by each Remaining Purchaser relative to
the aggregate principal amount of the Option Debentures purchased by all of the
Remaining Purchasers) or in any other manner on which the Remaining Purchasers
agree. In order to purchase a Remaining Debenture, a Remaining Purchaser must
notify the Company in writing of the number of Remaining Debentures that such
Remaining Purchaser wishes to purchase (not to exceed such Remaining Purchaser's
pro rata share of the Remaining Debentures) within two (2) Business Days
following delivery of the Remaining Debenture Notice. Upon the purchase of a
Remaining Debenture by a Remaining Purchaser, the principal amount of such
Remaining Debenture will be added to the principal amount of the Option
Debenture being purchased by such Remaining Purchaser, and the Company shall not
be obligated to issue a separate Remaining Debenture.
(c) The date on which the closing (the "Option
Closing") of the purchase and sale of the Option Debentures occurs (the "Option
Closing Date") shall be the fifth (5th) Business Day following the end of the
Option Period, or such other date to which the Company and the Remaining
Purchasers agree. A Purchaser may rescind its Option Notice and terminate its
purchase of the Option Debenture at any time prior to the Option Closing, for
any reason in its sole discretion, without any further obligation or liability
on its part with respect to such purchase. The Initial Closing and the Option
Closing are together referred to herein as the "Closings" and the Initial
Closing Date and the Option Closing Date are together referred to herein as the
"Closing Dates".
(d) At the Option Closing, (A) each Purchaser shall
deliver to the Company, in immediately available funds, the purchase price for
the Option Debenture being purchased by such Purchaser, which purchase price
shall be equal to the principal amount of such Option Debenture, and (B) the
Company shall deliver to such Purchaser (x) such Option Debenture, duly executed
by an authorized officer of the Company, (y) an opinion of counsel, dated as of
the Option Closing Date, substantially in the form of Exhibit 5.1.5 hereto, and
(z) a certificate, signed by the Chief Executive Officer and Chief Financial
Officer of the Company, certifying that the representations and warranties of
the Company set forth in this Agreement are true and correct in all material
respects as of the Option Closing Date as if made on such date and that the
Company has complied with or performed in all material respects all of the
agreements, obligations and conditions set forth in this Agreement that are
required to be complied with or performed by the Company at or prior to the
Option Closing, and acknowledging that such Purchaser may rely on such
certificate as though it were a representation and warranty of the Company made
herein.
1.3 Certain Definitions. When used herein, the following
terms shall have the respective meanings indicated:
"Affiliate" means, as to any Person (the "subject Person"), any other
Person (a) that directly or indirectly through one or more intermediaries
controls or is controlled by, or is under direct or indirect common control
with, the subject Person, (b) that directly or indirectly beneficially owns or
holds ten percent (10%) or more of any class of voting equity of the subject
Person, or (c) ten percent (10%) or more of the voting equity of which is
directly or indirectly beneficially owned or held by the subject Person. For the
purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, through
representation on such Person's Board of Directors or other management committee
or group, by contract or otherwise.
"Agreement" means this Agreement and any and all amendments, modifications,
supplements, renewals, extensions or restatements hereof, and all attachments
hereto.
"Bankruptcy Events" has the meaning specified in Section 6.2(a).
"Blockage Notice" has the meaning specified in Section 6.3(a).
"Blockage Period" has the meaning specified in Section 6.3(a).
"Business Day" means any day on which the New York Stock Exchange and
commercial banks in the city of New York are open for business.
"Conversion Price" has the meaning specified in the Debentures.
"Debt" means as to any Person at any time (without duplication): (a) all
indebtedness, liabilities and obligations of such Person for borrowed money; (b)
all indebtedness, liabilities and obligations (contingent or otherwise) of such
Person to pay the deferred purchase price of Property or services, except trade
accounts payable of such Person arising in the ordinary course of business that
are not past due by more than ninety (90) days; (c) all capital lease
obligations of such Person; (d) all Debt of others guaranteed by such Person;
(e) all indebtedness, liabilities and obligations secured by a Lien existing on
Property owned by such Person, whether or not the indebtedness, liabilities or
obligations secured thereby have been assumed by such Person or are non-recourse
to such Person; and (f) all reimbursement obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, bankers' acceptances,
bankers guarantees, surety or other bonds and similar instruments.
"DSSP Plan" means the Company's direct stock purchase plan, as amended
from time to time.
"Environmental Law" means any federal, state, provincial, local or foreign
law, statute, code or ordinance, principle of common law, rule or regulation, as
well as any permit, order, decree, judgment or injunction issued, promulgated,
approved or entered thereunder, relating to pollution or the protection, cleanup
or restoration of the environment or natural resources, or to the public health
or safety, or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, discharge or disposal
of hazardous materials.
"Exchange Act" means the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"GAAP" means generally accepted accounting principles used in the United
States, applied on a consistent basis, as set forth in opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards Board
and/or their respective successors and which are applicable in the circumstances
as of the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles applied in a current period are comparable
in all material respects to those accounting principles applied in a preceding
period.
"Governmental Authority" means any nation or government, any state,
provincial or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including without limitation any stock exchange, securities
market or self-regulatory organization.
"Governmental Requirement" means any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, injunction, franchise, license or other
directive or requirement of any federal, state, county, municipal, parish,
provincial or other Governmental Authority or any department, commission, board,
court, agency or any other instrumentality of any of them.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service xxxx registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information, engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.
"Lien" means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest, tax
lien, financing statement, pledge, charge, or other lien, charge, easement
(other than any easement not materially impairing usefulness), encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" means an effect that has a material and adverse
consequence on (i) the consolidated business, operations, properties, financial
condition, prospects or results of operations of the Company and its
Subsidiaries taken as a whole or (ii) the ability of the Company to perform its
obligations under this Agreement or the other Transaction Documents (as defined
below).
"Material Contracts" means, as to the Company or any of its Subsidiaries,
any supply, purchase, service, employment, tax, indemnity, stockholder or other
agreement or contract for which the aggregate amount or value of services
performed or to be performed for or by, or funds or other Property transferred
or to be transferred to or by, the Company or any such Subsidiary, or by which
the Company or any such Subsidiary or any of their respective Properties is
otherwise bound and any and all amendments, modifications, supplements, renewals
or restatements thereof.
"Maturity Date" with respect to a Debenture shall mean the five-year
anniversary of the issue date for such Debenture, or such earlier date to which
the Maturity Date may be accelerated pursuant to the terms of such Debenture.
"NYSE" means the New York Stock Exchange, Inc.
"Obligations" means any and all indebtedness, liabilities and obligations
of the Company to the Purchaser evidenced by and/or arising pursuant to any of
the Transaction Documents (including, without limitation, this Agreement and the
Debentures), now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several
or joint and several, including, without limitation, the obligations of the
Company to repay principal of the Debentures, to pay interest on the Debentures
(including, without limitation, interest accruing after any, if any, bankruptcy,
insolvency, reorganization or other similar filing) and to pay all fees,
indemnities, costs and expenses (including attorneys' fees) provided for in the
Transaction Documents.
"Permitted Liens" means the following:
(a) encumbrances consisting of easements,
rights-of-way, zoning restrictions or other restrictions on the use of
real Property or imperfections to title that do not (individually or in
the aggregate) materially impair the ability of the Company or any of
its Subsidiaries to use such Property in its businesses, and none of
which is violated in any material respect by existing or proposed
structures or land use;
(b) Liens for taxes, assessments or other
governmental charges that are not delinquent or which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the Property
subject to such Liens, and for which adequate reserves (as determined
in accordance with GAAP) have been established;
(c) Liens of mechanics, materialmen,
warehousemen, carriers, landlords or other similar statutory Liens
securing obligations that are not yet due and are incurred in the
ordinary course of business or which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject to such
Liens, and for which adequate reserves (as determined in accordance
with GAAP) have been established;
(d) Liens now existing or hereafter established
pursuant to the terms of the Senior Credit Agreement ; and
(e) other Liens permitted by the terms of the Senior
Credit Agreement.
"Person" means any individual, corporation, trust, association, company,
partnership, joint venture, limited liability company, joint stock company,
Governmental Authority or other entity.
"Property" means property and/or assets of all kinds, whether real,
personal or mixed, tangible or intangible (including, without limitation, all
rights relating thereto).
"Registration Statement" has the meaning set forth in the Registration
Rights Agreement.
"Restricted Payment" means (a) any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of capital stock of the
Company or any of its Subsidiaries now or hereafter outstanding; provided,
however, that the Company may (i) contribute capital in the form of cash or
other assets to any Subsidiary, the voting equity of which (other than
qualifying shares) is owned entirely by the Company; (ii) permit any Subsidiary
described in the immediately preceding clause (i) to transfer assets to any
other such Subsidiary; and (iii) purchase up to an aggregate of two million
(2,000,000) shares of Common Stock from its shareholders (such number being
subject to adjustment for stock splits, stock dividends and similar events) as
long as such purchase is made in compliance with all of the provisions of Rule
10b-18 under the Exchange Act, including without limitation the conditions set
forth in paragraph (b) of such Rule, regardless of whether an exemption
therefrom may be available to the Company at the time of such purchase; and (b)
any payment or prepayment of principal of, premium, if any, or interest on, or
any redemption, conversion, exchange, purchase, retirement or defeasance of, or
payment with respect to, any Debt other than with respect to the Debentures or
the Senior Debt. Notwithstanding the foregoing, "Restricted Payment" shall not
include the issuance of securities upon exercise or conversion of the Company's
options, warrants or other convertible securities outstanding as of the date
hereof and set forth on Schedule 3.5 or the grant of additional options or
warrants or the issuance of additional securities, in each such case under any
Company stock option or restricted stock plan approved by the Board of Directors
of the Company.
"Senior Credit Agreement" means that certain Third Amended and Restated
Senior Credit Agreement dated as of December 20, 2001 among the Company, the
institutions from time to time parties thereto as lenders (the "Senior Lenders")
and Bank One, NA, in its capacity as agent for itself and the Senior Lenders,
together with its successors and assigns (the "Senior Agent"), including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, or any other "Loan Documents" under and as
defined therein, and in each case, as amended, restated, modified, renewed,
refunded, replaced, increased or refinanced from time to time by one or more
facilities. With respect to replaced or refinanced agreements, the terms used
herein shall have the nearest equivalent term, if any, as the definition
contained in the Senior Credit Agreement.
"Senior Debt" means (a)(i) the outstanding principal balance of all
"Obligations" under and pursuant to the Senior Credit Agreement including,
without limitation, reimbursement obligations under letters of credit issued
pursuant to the Senior Credit Agreement and (ii) all obligations under interest
rate or foreign currency hedging or commodity price hedging, swap, cap, collar
or similar agreements of the Company to the Senior Agent, any Senior Lender or
any of their respective affiliates, whether now existing or hereafter arising
(and whether such indebtedness arises or accrues before or after the
commencement of any bankruptcy, insolvency or receivership proceedings),
including, without limitation, interest and fees accruing pre-petition or
post-petition at the rate or rates prescribed in the Senior Credit Agreement and
costs, expenses, and legal fees, whenever incurred (and whether or not such
claims, interest, costs, expenses or fees are allowed or allowable in any such
proceeding); (b) amounts disbursed or advanced (including, without limitation in
connection with the provision of any financing or other financial accommodations
pursuant to Section 364 of the Bankruptcy Code) by the Senior Lenders which the
Senior Lenders, in their discretion, deem necessary or desirable to preserve or
protect any "Collateral" (as defined in the Senior Credit Agreement) or to
enhance the likelihood or maximize the amount of repayment of the Senior Debt,
including, but not limited to, all protective advances, costs, expenses, and
attorneys' and paralegals' fees, whensoever made, advanced or incurred by the
Senior Lenders in connection with the Senior Debt or the collateral therefor;
and (c) any Debt of the Company which by the express terms thereof does not rank
junior to the Debentures.
"Subordinated Debt" means Debt of the Company which meets each of the
following requirements: (a) such Debt is wholly unsecured; and (b) such Debt is
contractually subordinated, as to payment, whether upon a Liquidation Event or
an Event of Default (as each such term is defined in the Debentures), to the
payment in full of the Debentures and the Obligations pursuant to written
agreements that are enforceable by any Purchaser against the holder of any such
Debt .
"Subordinated Debt Documents" means any and all agreements, documents and
instruments now or hereafter evidencing or governing the subordination of any
Subordinated Debt to the Obligations.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or Persons performing similar functions) of
such corporation or entity (irrespective of whether or not at the time, in the
case of a corporation, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more of its Subsidiaries or by such Person and one or more of
its Subsidiaries.
"Trading Day" shall mean any day on which the Common Stock is purchased and
sold on the principal market on which the Common Stock is then listed or traded.
"Transaction Documents" means (i) this Agreement, (ii) the Debentures,
(iii) the Registration Rights Agreement and (iii) all other agreements,
documents and other instruments executed and delivered by or on behalf of the
Company or any of its officers at any Closing.
"VWAP" on a Trading Day means the volume weighted average price of the
Common Stock for such Trading Day as reported by Bloomberg Financial Markets or,
if Bloomberg Financial Markets is not then reporting such prices, by a
comparable reporting service of national reputation selected by the holders of a
majority of the unpaid principal amount of the Debentures and reasonably
satisfactory to the Company.
1.4 Other Definitional Provisions. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms
defined. The words "hereof", "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER.
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Each Purchaser hereby makes the following representations and
warranties to the Company and agrees with the Company that, as of the date of
this Agreement and as of the date of each Closing:
2.1 Authorization; Enforceability. Such Purchaser is duly and
validly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization with full power and authority
to purchase the Debentures and to execute and deliver this Agreement. This
Agreement has been duly authorized, executed and delivered by such Purchaser and
constitutes, and the Registration Rights Agreement has been duly authorized and
when executed and delivered by such Purchaser will constitute, such Purchaser's
valid and legally binding obligation, enforceable in accordance with its terms,
except as such enforcement may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity.
2.2 No Conflicts. The execution, delivery and performance by
such Purchaser of the Transaction Documents, and the consummation by such
Purchaser of the transactions contemplated hereby and thereby do not and will
not (i) result in a violation of such Purchaser's organizational documents, (ii)
materially conflict with any agreement, indenture or instrument to which such
Purchaser is a party, or (iii) result in a material violation of any law, rule,
or regulation, or any order, judgment or decree of any court or governmental
agency applicable to such Purchaser. Such Purchaser is not required to obtain
any consent or authorization of any governmental agency in order for it to
perform its obligations under any of the Transaction Documents.
2.3 Accredited Investor. Such Purchaser is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D, and is
acquiring the Debentures solely for its own account as a principal and not with
a present view to, and has no arrangement with any Person with respect to, the
public resale or distribution of all or any part thereof, except pursuant to
sales that are exempt from the registration requirements of the Securities Act
and/or sales registered under the Securities Act; provided, however that in
making such representation, such Purchaser does not agree to hold the Securities
for any minimum or specific term and reserves the right to sell, transfer or
otherwise dispose of the Securities at any time in accordance with the
provisions of this Agreement and with Federal and state securities laws
applicable to such sale, transfer or disposition.
2.4 Information. Such Purchaser has such knowledge and
experience in financial and business matters in general and investments in
particular that it is able to evaluate the merits and risks of an investment in
the Debentures and to protect its own interests in connection with such
investments. The Company has provided such Purchaser with information that such
Purchaser considers necessary or appropriate regarding the business, operations
and financial condition of the Company, and has granted to such Purchaser the
opportunity to ask questions of and receive answers from representatives of the
Company, its officers, directors, employees and agents concerning the Company
and materials relating to the terms and conditions of the purchase and sale of
the Debentures hereunder. Neither such information nor any other investigation
conducted by such Purchaser or any of its representatives shall modify, amend or
otherwise affect such Purchaser's right to rely on the Company's representations
and warranties contained in this Agreement.
2.5 Not an Affiliate or Related Person. Such Purchaser is not
(i) an officer, director of "affiliate" (as that term is defined in Rule 405 of
the Act) of the Company or (ii) a "Related Party" of the Company, or any
subsidiary, affiliate or other closely-related person of a "Related Party" of
the Company, or a company or entity in which a "Related Party" of the Company
has a substantial direct or indirect interest within the meaning of the rules of
the NYSE.
2.6 Limitations on Disposition. Such Purchaser understands that
there is no public trading market for the Debentures, that none is expected to
develop, and that the Debentures must be held indefinitely unless such
Debentures are converted or the obligations thereunder are paid in full. Such
Purchaser acknowledges that, except as provided in the Registration Rights
Agreement, the Securities have not been and are not being registered under the
Securities Act and may not be transferred or resold without registration under
the Securities Act or unless pursuant to an exemption therefrom.
2.7 Sales of Common Stock. (a) During the period sixty (60) days
prior to the date of this Agreement, such Purchaser has not engaged in any short
sales or hedging of any kind in anticipation of the transactions contemplated by
this Agreement, and (b) during the term of this Agreement, such Purchaser will
make all sales and other dispositions, including short sales, of the Common
Stock in compliance with all applicable Federal and state securities laws.
2.8 Legend. Such Purchaser understands that the certificates
representing the Securities may bear at issuance a restrictive legend in
substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state, and
may not be offered or sold unless a registration statement
under the Securities Act and applicable state securities laws
shall have become effective with regard thereto, or an
exemption from registration under the Securities Act and
applicable state securities laws is available in connection
with such offer or sale."
Notwithstanding the foregoing, it is agreed that, as long as (A) the resale
or transfer (including without limitation a pledge) of any of the Securities is
registered pursuant to an effective registration statement, (B) such Securities
have been sold pursuant to Rule 144 under the Securities Act or any successor
provision ("Rule 144"), and such Purchaser provides the Company with customary
seller's and broker's representation letters, or (C) such Securities are
eligible for resale under Rule 144(k) or any successor provision, such
Securities shall be issued without any legend or other restrictive language and,
with respect to Securities upon which such legend is stamped, the Company shall
issue new certificates without such legend to the holder upon request.
2.9 Reliance on Exemptions. Such Purchaser understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of the
representations and warranties of such Purchaser set forth in this Section 2 in
order to determine the availability of such exemptions and the eligibility of
such Purchaser to acquire the Securities.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to each Purchaser
and agrees with each Purchaser that, as of the date of this Agreement and as of
the date of each Closing:
3.1 Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite power and authority to carry on its business as now
conducted. Each of the Company and its Subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify has had or would reasonably be expected to have a Material
Adverse Effect.
3.2 Authorization; Consents. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
the Transaction Documents, to issue and sell the Debentures to the Purchasers in
accordance with the terms hereof and to issue the Conversion Shares upon
conversion of the Debentures. Except as described on Schedule 3.2, all corporate
action on the part of the Company by its officers, directors and stockholders
necessary for the authorization, execution and delivery of, and the performance
by the Company of its obligations under, the Transaction Documents has been
obtained, and, based in part upon the representations of each Purchaser in this
Agreement, no further consent or authorization of the Company, its Board of
Directors, its stockholders, any governmental agency or organization (other than
such approval as may be required under the Securities Act and applicable state
securities laws in respect of the Registration Rights Agreement), or any other
person or entity is required (pursuant to any rule of the NYSE or otherwise).
The Company's Board of Directors has determined, at a duly convened meeting,
that the issuance and sale of the Securities, and the consummation of the
transactions contemplated hereby and by the other Transaction Documents
(including without limitation the issuance of Conversion Shares in accordance
with the terms of the Debentures), are in the best interests of the Company.
3.3 Enforcement. This Agreement constitutes, and the
Registration Rights Agreement, when executed and delivered by the Company will
constitute, the valid and legally binding obligation of the Company, enforceable
in accordance with its terms, except as such enforcement may be limited by (i)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) general principles of equity.
3.4 Disclosure Documents; Agreements; Financial Statements;
Other Information. The Company has filed with the Commission: (i) the Company's
Annual Report on Form 10-K for the year ended December 31, 2001, (ii) all
Current Reports on Form 8-K required to be filed with the Commission since
December 31, 2001 and (iii) the Company's definitive Proxy Statement for its
2001 Annual Meeting of Stockholders (collectively, the "Disclosure Documents").
The Company is not aware of any event occurring on or prior to the date of such
Closing (other than the transactions effected hereby) that would require the
filing of, or with respect to which the Company intends to file, a Form 8-K
after such Closing. Each Disclosure Document, as of the date of the filing
thereof with the Commission, conformed in all material respects to the
requirements of the Exchange Act, and the rules and regulations thereunder and,
as of the date of such filing, such Disclosure Document did not contain an
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All material
agreements required to be filed as exhibits to the Disclosure Documents have
been filed as required. Except as set forth in the Disclosure Documents or any
schedule or exhibit attached hereto, the Company has no liabilities, contingent
or otherwise, other than liabilities incurred in the ordinary course of business
which, under generally accepted accounting principles, are not required to be
reflected in such financial statements and which, individually or in the
aggregate, are not material to the consolidated business or financial condition
of the Company and its Subsidiaries taken as a whole. As of their respective
dates, the financial statements of the Company included in the Disclosure
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied at
the times and during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end adjustments).
3.5 Capitalization; Debt Schedule. The capitalization of the
Company as of the date hereof, including its authorized capital stock, the
number of shares issued and outstanding, the number of shares issuable and
reserved for issuance pursuant to the Company's stock option plans, the number
of shares issuable and reserved for issuance pursuant to securities (other than
the Debentures) exercisable for, or convertible into or exchangeable for any
shares of Common Stock and the number of shares initially to be reserved for
issuance upon conversion of the Debentures is set forth on Schedule 3.5 hereto.
All of such outstanding shares of capital stock have been, or upon issuance will
be, validly issued, fully paid and non-assessable. No shares of the capital
stock of the Company are subject to preemptive rights or any other similar
rights of the stockholders of the Company or any liens or encumbrances created
by or through the Company. Except as disclosed on Schedule 3.5, or as
contemplated herein, there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exercisable or exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries, or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries. Schedule 3.5 sets forth a description of all outstanding Debt of
the Company.
3.6 Due Authorization; Valid Issuance. The Debentures are duly
authorized and, when issued, sold and delivered in accordance with the terms
hereof, (a) will constitute the valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except as such enforcement
may be limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally, and (ii) general principles of equity and (b) based
in part upon the representations of each Purchaser in this Agreement, will be
issued, sold and delivered in compliance with all applicable Federal and state
securities laws. The Conversion Shares are duly authorized and reserved for
issuance and, when issued in accordance with the terms of the Debentures, will
be duly and validly issued, fully paid and nonassessable, free and clear of any
Liens imposed by or through the Company.
3.7 No Conflict with Other Instruments. Neither the Company nor
any of its Subsidiaries is in violation of any provisions of its charter, Bylaws
or any other governing document or in default (and no event has occurred which,
with notice or lapse of time or both, would constitute a default) under any
provision of any instrument or contract to which it is a party or by which it is
bound, or of any provision of any Governmental Requirement applicable to the
Company, which has had or would reasonably be expected to have a Material
Adverse Effect. The (i) execution, delivery and performance of this Agreement
and the other Transaction Documents and (ii) consummation of the transactions
contemplated hereby and thereby (including without limitation the issuance of
the Debentures, the payment of any amounts due thereunder (subject to the
provisions of Section 6 hereof) and the reservation for issuance and issuance of
the Conversion Shares) will not result in any such violation or be in conflict
with or constitute, with or without the passage of time and giving of notice,
either a default under any such provision, instrument or contract (including
without limitation the Senior Credit Agreement) or an event which results in the
creation of any Lien upon any assets of the Company or of any of its
Subsidiaries or the triggering of any preemptive or anti-dilution rights
(including without limitation pursuant to any "reset" or similar provisions) or
rights of first refusal or first offer, or any other rights that would allow or
permit the holders of the Company's securities to purchase shares of Common
Stock or other securities of the Company (whether pursuant to a "poison pill"
provision or otherwise), on the part of holders of the Company's securities.
3.8 Financial Condition; Taxes; Litigation.
3.8.1 The Company's financial condition is, in all material
respects, as described in the Disclosure Documents, except for changes in the
ordinary course of business and normal year-end adjustments that are not, in the
aggregate, materially adverse to the consolidated business or financial
condition of the Company and its Subsidiaries taken as a whole. Except as
otherwise described in the Disclosure Documents, there has been no material
adverse change to the Company's business, operations, properties, financial
condition, prospects or results of operations since the date of the Company's
most recent audited financial statements contained in the Disclosure Documents.
3.8.2 The Company and each of its Subsidiaries has filed all
tax returns required to be filed by it and paid all taxes which are due, except
for taxes which it reasonably disputes or which has not had or would not
reasonably be expected to have a Material Adverse Effect.
3.8.3 Neither the Company nor any of its Subsidiaries is the
subject of any pending or, to the Company's knowledge, threatened inquiry,
investigation or administrative or legal proceeding by the Internal Revenue
Service, the taxing authorities of any state or local jurisdiction, the
Commission or any state securities commission or other governmental or
regulatory entity which has had or would reasonably be expected to have a
Material Adverse Effect.
3.8.4 Except as described in the Disclosure Documents, there
is no claim, litigation or administrative proceeding pending, or, to the
Company's knowledge, threatened or contemplated, against the Company or any of
its Subsidiaries, or against any officer, director or employee of the Company or
any such Subsidiary in connection with such person's employment therewith which
has had or would reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is a party to or subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which has had or would reasonably be
expected to have a Material Adverse Effect.
3.9 Reporting Company; Form S-3. The Company is subject to the
reporting requirements of the Exchange Act, has a class of securities registered
under Section 12 of the Exchange Act, and has filed all reports required to be
filed thereby since December 31, 2000. The Company is eligible to register the
Conversion Shares for resale by each Purchaser on a registration statement on
Form S-3 under the Securities Act. There exist no facts or circumstances known
to the Company (including without limitation any required approvals or waivers
of any circumstances that may delay or prevent the obtaining of accountant's
consents) that could reasonably be expected to prohibit or delay the preparation
and filing of a registration statement on Form S-3 that will be available for
the resale of all Conversion Shares by each Purchaser.
3.10 Listing on the NYSE. The Common Stock is listed on the NYSE
and no suspension or restriction on the trading of the Common Stock on the NYSE
exists or, to the Company's knowledge, is threatened or contemplated. The
Company meets the continuing eligibility requirements for listing on the NYSE
and has not received any notice from the NYSE that it may not currently satisfy
such requirements or that such continued listing is in any way threatened.
3.11 Acknowledgement of Dilution. The Company acknowledges that
the issuance of the Conversion Shares upon conversion of the Debentures may
result in dilution of the outstanding shares of Common Stock. The Company
further acknowledges that its obligation to issue Conversion Shares upon
conversion of the Debentures is unconditional and absolute regardless of the
effect of any such dilution.
3.12 Intellectual Property. The Company and its Subsidiaries each
owns or possesses all Intellectual Property that is necessary or appropriate for
the operation of its businesses as presently conducted and as proposed to be
conducted, without any known conflict with the rights of others except where
such failure to own or possess or conflict has not had and would not reasonably
be expected to have a Material Adverse Effect. The consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
will not alter or impair, individually or in the aggregate, any of such rights
of the Company other than any alteration or impairment which would not
reasonably be expected to have a Material Adverse Effect. To the Company's
knowledge, none of its planned or current products or services infringes upon
any Intellectual Property of any other Person, and no claim or litigation is
pending or, to the knowledge of the Company, threatened against the Company
contesting its right to sell or otherwise use any product or material or service
which has had or would reasonably be expected to have a Material Adverse Effect.
There is no violation by the Company of any right of the Company with respect to
any material Intellectual Property owned or used by the Company except any
violation which has not had and would not reasonably be expected to have a
Material Adverse Effect. The Company's rights to such Intellectual Property are
valid and enforceable and no registration relating thereto has lapsed, expired
or terminated or is the subject of any claim or proceeding that could result in
any such lapse, expiration or termination which has had or would reasonably be
expected to have a Material Adverse Effect. The Company and its Subsidiaries
each has complied in all material respects with its obligations pursuant to any
agreement relating to the Intellectual Property Rights that are the subject of
licenses granted by third parties except for any non-compliance which has not
had and would not reasonably be expected to have a Material Adverse Effect.
3.13 Registration Rights; Rights of Participation. (A) the
Company has not granted or agreed to grant to any person or entity any rights
(including "piggy-back" registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority which
has not been satisfied and (B) no person or entity, including, but not limited
to, current or former stockholders of the Company, underwriters, brokers, agents
or other third parties, has any right of first refusal, preemptive right, right
of participation, anti-dilutive right or any similar right to participate in, or
to receive securities of the Company or other consideration as a result of, the
transactions contemplated by this Agreement or the other Transaction Documents.
3.14 Solicitation; Other Issuances of Securities. Neither the
Company nor any of its Subsidiaries or Affiliates, nor any person acting on its
or their behalf, (i) has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities, (ii) has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under any
circumstances that would require registration of the Securities under the
Securities Act or (iii) based in part on the representations of each Purchaser
in this Agreement, has issued any shares of Common Stock or shares of any series
of preferred stock or other securities or instruments convertible into,
exchangeable for or otherwise entitling the holder thereof to acquire shares of
Common Stock which would be integrated with the sale of the Securities to the
Purchaser or the issuance of the Conversion Shares for purposes of the
Securities Act or of any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the NYSE, nor will the
Company or any of its Subsidiaries or Affiliates take any action or steps (other
than as required by the terms of the Registration Rights Agreement) that would
require registration of any of the Securities under the Securities Act or cause
the offering of the Securities to be so integrated with other offerings.
3.15 Fees. Except for the fees owed by the Company to Granite
Financial, the Company is not obligated to pay any compensation or other fee,
cost or related expenditure to any underwriter, broker, agent or other
representative in connection with the transactions contemplated hereby. The
Company will indemnify and hold harmless the Purchaser from and against any
claim by any person or entity alleging that the Purchaser is obligated to pay
any such compensation, fee, cost or related expenditure in connection with the
transactions contemplated hereby.
3.16 Foreign Corrupt Practices. To the knowledge of the Company,
neither the Company, nor any of its Subsidiaries nor any director, officer,
agent, employee or other person acting on behalf of the Company or any
Subsidiary, has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity,
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee, or (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
3.17 Environment. Except as disclosed in the Disclosure Documents
(i) there is no environmental liability, nor factors likely to give rise to any
environmental liability, affecting any of the properties of the Company or any
of its Subsidiaries that, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect and (ii) neither the
Company nor any of the Subsidiaries has violated any Environmental Law
applicable to it now or previously in effect, other than such violations or
infringements that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect.
3.18 Disclosure. No written statement, information, report,
representation or warranty made by the Company in any Transaction Document or
furnished to such Purchaser by or on behalf of the Company in connection with
(i) the Transaction Documents, (ii) any transaction contemplated hereby or
thereby, or (iii) such Purchaser's due diligence investigation of the Company
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of the
circumstances in which made, not misleading. There is no fact known to the
Company which has had a Material Adverse Effect, and there is no fact known to
the Company which could reasonably be expected to have a Material Adverse Effect
except as may have been disclosed in writing to such Purchaser. The Company has
not disclosed to such Purchaser any event, circumstance or fact that would
constitute material non-public information as of the date of this Agreement.
3.19 Property. The Company and its Subsidiaries have good and
marketable title to all real Property and good and marketable title to all
personal Property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all Liens, except for
Permitted Liens. Any Property held under lease by the Company and its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
or proposed to be made of such Property by the Company and its Subsidiaries.
3.20 Regulatory Permits. The Company and its Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses except where the failure to possess such certificates, authorizations
and permits has not had and would not reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit that, if determined adversely to the
Company, would reasonably be expected to have a Material Adverse Effect.
4. COVENANTS OF THE COMPANY AND THE PURCHASERS.
-------------------------------------------
4.1 The Company agrees with each Purchaser that it will, following each
Closing:
(a) file a Form D with respect to the Securities issued at such Closing as
required under Regulation D and to provide a copy thereof to such Purchaser
promptly after such filing;
(b) take such action as the Company reasonably determines upon the advice
of counsel is necessary to qualify the Debentures issued at such Closing for
sale under applicable state or "blue-sky" laws or obtain an exemption therefrom,
and shall provide evidence of any such action to such Purchaser at such
Purchaser's request; and
(c) (A) with respect to the Initial Closing, (i) issue a press release
describing the transactions contemplated by this Agreement and the other
Transaction Documents on or before the Business Day following the Initial
Closing Date and (ii) file with the Commission a Form 8-K describing the terms
of the transactions contemplated by this Agreement and the other Transaction
Documents, with this Agreement and all exhibits attached to such Form 8-K as an
exhibit thereto, on or before the third (3rd) Business Day following the Initial
Closing Date in the form required by the Exchange Act and B) with respect to the
Option Closing, issue a press release announcing the issuance of the Option
Debentures on or before the Business Day following the Option Closing Date.
4.2 The Company agrees that it will, as long as the Purchaser or
any Affiliate of the Purchaser beneficially owns any Securities:
(a) maintain its corporate existence in good standing;
(b) maintain, keep and preserve all of its Properties necessary in the
proper conduct of its businesses in good repair, working order and condition
(ordinary wear and tear excepted) and make all necessary repairs, renewals and
replacements and improvements thereto, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect;
(c) pay or discharge before becoming delinquent (a) all taxes, levies,
assessments and governmental charges imposed on it or its income or profits or
any of its Property and (b) all lawful claims for labor, material and supplies,
which, if unpaid, might become a Lien upon any of its Property, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect; provided, however, that the Company shall not be required to pay or
discharge any tax, levy, assessment or governmental charge, or claim for labor,
material or supplies, whose amount, applicability or validity is being contested
in good faith by appropriate proceedings being diligently pursued and for which
adequate reserves have
been established under GAAP;
(d) comply with all Governmental Requirements applicable to the operation
of its business, except for instances of noncompliance that would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect;
(e) comply with all agreements, documents and instruments binding on it or
affecting its Properties or business, including, without limitation, all
Material Contracts, except for instances of noncompliance that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; and
(f) timely file with the Commission all reports required to be filed
pursuant to the Exchange Act and, during the two year period beginning on the
date of this Agreement, refrain from terminating its status as an issuer
required by the Exchange Act to file reports thereunder even if the Exchange Act
or the rules or regulations thereunder would permit such termination.
4.3 Reservation of Common Stock. The Company shall, at all times
that the Debentures are outstanding, have authorized and reserved for issuance,
free from any preemptive rights, a number of shares of Common Stock equal to one
hundred percent (100%) of the maximum number of shares of Common Stock issuable
upon conversion of the outstanding Debentures in full at the Conversion Price
then in effect (the "Reserved Amount"). The Company shall not reduce the number
of shares reserved for issuance hereunder without the written consent of the
holders of two-thirds of the aggregate principal amount of the Debentures then
outstanding, unless, immediately following such reduction, the Reserved Amount
shall represent at least one hundred percent (100%) of the maximum number of
shares of Common Stock issuable upon conversion of the outstanding Debentures in
full at the Conversion Price then in effect. The initial Reserved Amount shall
be allocated pro rata among the Purchasers based on the principal amount of the
Debentures issued to each Purchaser at the Initial Closing. Any increase in the
Reserved Amount shall be allocated pro rata among the Holders based on the
principal amount of the Debentures held by such Holder at the time of such
increase. In the event that a Holder shall sell or otherwise transfer any of
such Holder's Debentures, each transferee shall be allocated a pro rata portion
of such transferor's Reserved Amount. Any portion of the Reserved Amount which
remains allocated to any person or entity which does not hold any Debentures
shall be reallocated to the remaining Holders pro rata based on the principal
amount of the Debentures then held by such Holders.
4.4 Use of Proceeds. The Company shall use the proceeds from the
sale of the Debentures to prepay Senior Debt arising under the Senior Credit
Agreement, solely net of amounts permitted to be deducted from such proceeds
pursuant to the Senior Credit Agreement for the purposes specified therein.
4.5 Restricted Payments. As long as any Obligations are outstanding,
the Company will not, nor will it permit any Subsidiary of the Company to,
make any Restricted Payments, except that:
(a) the Company may make regularly scheduled payments
of principal and interest accrued on any Subordinated Debt if and to the extent
(but only if and to the extent) (i) permitted by the express terms of the
Subordinated Debt Documents governing such Subordinated Debt, (ii) an Event of
Default (as defined in the Debentures), or an event which with the lapse of time
or giving of notice or both would constitute an Event of Default, has not
occurred and is continuing, and (iii) such payment would not result in, or
reasonably be expected to result in, an Event of Default; and
(b) Subsidiaries of the Company may make Restricted
Payments to the Company.
4.6 Transactions with Affiliates. The Company agrees that
neither it nor any of its Subsidiaries will enter into, become a party to, or
become liable in respect of, any contract or undertaking with any Affiliate
except in the ordinary course of business and on terms not less favorable to the
Company or such Subsidiary, as the case may be, than those which could be
obtained if such contract or undertaking were an arms' length transaction with a
person or entity other than an Affiliate.
4.7 Listing on NYSE. The Company shall (i) on or before the
Initial Closing Date, submit such listing applications and take such action as
may be necessary to list all of the Conversion Shares that may be issued by the
Company (or such surviving entity) under the Debentures on the NYSE, and provide
each Purchaser with reasonable evidence thereof and (ii) use its commercially
reasonable efforts to maintain the listing of the Common Stock on the NYSE until
the earlier to occur of (x) the date on which no Purchaser holds any Debentures
or Registrable Securities (as defined in the Registration Rights Agreement) and
(y) the fifth (5th anniversary of the Initial Closing Date.
4.8 Management Restrictions. During the period beginning on the
date of this Agreement and ending on the ninetieth (90th) day following such
date, no executive officer of the Company may, directly or indirectly, sell,
transfer or otherwise dispose of (whether through the writing or purchase of
options, futures or derivative instruments), or publicly announce (whether
through the filing of a notice or otherwise) such individual's intention to
dispose of, any Common Stock held or beneficially owned by such individual.
4.9 Use of Purchaser Name. Except as may be required by
applicable law, the Company shall not use, directly or indirectly, any
Purchaser's name or the name of any of its affiliates in any advertisement,
announcement, press release or other similar communication unless it has
received the prior written consent of any Purchaser for the specific use
contemplated or as otherwise required by applicable law or regulation.
4.10 Company's Instructions to Transfer Agent. On or prior to the
Initial Closing Date, the Company shall execute and deliver irrevocable written
instructions to the transfer agent for its Common Stock (the "Transfer Agent"),
and provide each Purchaser with a copy thereof, directing the Transfer Agent to
issue certificates representing Conversion Shares upon conversion of the
Debentures and receipt of a valid Conversion Notice (as defined in the
Debentures) from a Purchaser, in the amount specified in such Conversion Notice,
in the name of such Purchaser or its nominee, and to deliver such certificates
to such Purchaser no later than the close of business on the third (3rd)
business day following the related Conversion Date (as defined in the
Debentures). Such certificates shall bear a restrictive legend to the extent and
in the form required by the terms of this Agreement. As long as the Company
shall instruct the transfer agent that, in lieu of delivering physical
certificates representing shares of Common Stock to a Purchaser upon conversion
of the Debentures, and as long as the Transfer Agent is a participant in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer program, and
such Purchaser has not informed the Company that it wishes to receive physical
certificates therefor, and as long as this Agreement does not then require a
restrictive legend to be placed on such shares, the transfer agent may effect
delivery of Conversion Shares by crediting the account of such Purchaser or its
nominee at DTC for the number of shares for which delivery is required hereunder
within the time frame specified above for delivery of certificates. The Company
represents to and agrees with each Purchaser that it will not give any
instruction to the Transfer Agent that will conflict with the foregoing
instruction or otherwise restrict such Purchaser's right to convert the
Debentures or to receive Conversion Shares in accordance with the terms of the
Debentures. In the event that the Company's relationship with the Transfer Agent
should be terminated for any reason, the Company shall use its best efforts to
cause the Transfer Agent to continue acting as transfer agent pursuant to the
terms hereof until such time that a successor transfer agent is appointed by the
Company and receives the instructions described above.
4.11 Consent under Senior Credit Agreement; Amendments, etc. The
Company shall use its reasonable best efforts to obtain the consent of the
Senior Agent and the "Required Lenders" (as defined in the Senior Credit
Agreement) to the Transaction Documents and the transactions contemplated
thereby, such consent to be subject to no conditions other than those which are
satisfied prior to the Initial Closing Date.
5. CONDITIONS TO CLOSING.
---------------------
5.1 Conditions to Purchasers' Obligations at the Initial
Closing. Each Purchaser's obligations at the Initial Closing, including without
limitation its obligation to purchase a Closing Debenture, are conditioned upon
the fulfillment (or waiver by such Purchaser) of each of the following events as
of the Initial Closing Date:
5.1.1 the representations and warranties of the
Company set forth in this Agreement shall be true and
correct in all material respects as of such date as
if made on such date;
5.1.2 the Company shall have complied with or
performed in all material respects all of the
agreements, obligations and conditions set forth in
this Agreement that are required to be complied with
or performed by the Company on or before such
Closing;
5.1.3 the Initial Closing Date shall occur on a date that
is not later than April 16, 2002;
5.1.4 the Company shall have delivered to the
Purchaser a certificate, signed by the Chief
Executive Officer and Chief Financial Officer of the
Company, certifying that the conditions specified in
this paragraph 5.1 have been fulfilled as of the
Initial Closing, it being understood that the
Purchaser may rely on such certificate as though it
were a representation and warranty of the Company
made herein;
5.1.5 the Company shall have delivered to such
Purchaser an opinion of counsel for the Company,
dated as of such date, in such form and covering such
matters as shall be acceptable to such Purchaser;
5.1.6 the Company shall have delivered duly executed
certificates representing the Debenture being
purchased by such Purchaser;
5.1.7 the Company shall have executed and delivered the
Registration Rights Agreement;
5.1.8 the Common Stock shall be listed and actively traded
on the NYSE;
5.1.9 each of the Company's executive officers shall
have executed and delivered a letter agreement
addressed to such Purchaser regarding such person's
agreement to refrain from selling such person's
holdings of Common Stock for ninety (90) days from
the Initial Closing Date; and
5.1.10 the Company shall have received the consent of
the Senior Agent and the "Required Lenders" (as
defined in the Senior Credit Agreement) to the
Transaction Documents and the transactions
contemplated thereby, such consent to be subject to
no conditions other than those which are satisfied
prior to the Initial Closing Date.
5.2 Conditions to Company's Obligations at the Initial Closing.
The Company's obligations at the Initial Closing are
conditioned upon the fulfillment of each of the following
events as of the date of such Closing:
5.2.1 the representations and warranties of each
Purchaser set forth in this Agreement shall be true
and correct in all material respects as of such date
as if made on such date;
5.2.2 each Purchaser shall have complied with or
performed all of the agreements, obligations and
conditions set forth in this Agreement that are
required to be complied with or performed by each
Purchaser on or before such Closing;
5.2.3 each Purchaser shall have executed and delivered the
Registration Rights Agreement; and
5.2.4 the Company shall have received the consent of
the Senior Agent and the "Required Lenders" (as
defined in the Senior Credit Agreement) to the
Transaction Documents and the transactions
contemplated thereby.
6. SUBORDINATION.
-------------
6.1 Obligations Subordinated to Senior Debt. The Company
covenants and agrees, and each Purchaser likewise covenants and agrees, that, to
the extent and in the manner hereinafter set forth in this Section 6, the
payment of the principal of and interest on the Debentures and all other payment
Obligations of the Company to any Purchaser hereunder or under any of the
Transaction Documents, including pursuant to any guaranty made by or on behalf
of, or indemnification obligations of, the Company or any right of set-off in
favor of any Purchaser, are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all Senior Debt in cash,
property or securities acceptable to the holders of Senior Debt.
6.2 Payment Over of Proceeds Upon Dissolution.
-----------------------------------------
(a) In the event of (i) any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization,
adjustment, composition or other similar case or proceeding in connection
therewith, relative to the Company or to its creditors, as such, or to its
assets, or (ii) any liquidation, dissolution or other winding up of the Company
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (iii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company (collectively, "Bankruptcy
Events"), then and in any such event:
(A) the holders of Senior Debt
(including the Senior Agent, on behalf of the Senior Lenders),
shall be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Debt in
cash, property or securities acceptable to the holders of
Senior Debt, before any Purchaser is entitled to receive any
payment from or on behalf of the Company on account of the
Obligations;
(B) any payment or distribution of
assets by the Company of any kind or character, whether in
cash, property or securities, by set-off or otherwise, to
which any Purchaser would be entitled but for the provisions
of this Section 6, including any such payment or distribution
which may be payable or deliverable by reason of the payment
of any other Subordinated Debt of the Company (except for any
such payment or distribution (1) authorized by an unstayed,
final, non-appealable order or decree stating that effect is
being given to the subordination of such Obligations to the
Senior Debt, and made by a court of competent jurisdiction in
a reorganization proceeding under any applicable bankruptcy
law or (2) constituting securities which, if debt securities,
are subordinated to at least the same extent as such
Obligations to the payment of all Senior Debt then outstanding
and which, in any case, do not mature or become subject to a
mandatory redemption obligation prior to the one-year
anniversary of the maturity of such Senior Debt (the
"Permitted Junior Securities")) shall be paid by the
liquidating trustee or agent or other Person making such
payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the
holders of all Senior Debt or their representative or
representatives, ratably according to the aggregate amounts
remaining unpaid on account of the principal of, and interest
on, such Senior Debt held or represented by each, to the
extent necessary to make payment in full of all such Senior
Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt;
and
(C) in the event that, notwithstanding
the foregoing provisions of this Section 6, any Purchaser
shall have received from or on behalf of the Company any
payment or distribution of assets of any kind or character in
violation of the foregoing subclauses (A) or (B), whether in
cash, property or securities acceptable to the holders of
Senior Debt, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any
other Subordinated Obligations of the Company (but excluding
any Permitted Junior Securities) before all such Senior Debt
is paid in full in cash, property or securities acceptable to
the holders of Senior Debt, then and in such event such
payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for
application to the payment of all such Senior Debt remaining
unpaid, to the extent necessary to pay all such Senior Debt in
full in cash, property or securities, after giving effect to
any concurrent payment or distribution to or for the holders
of such Senior Debt.
(b) If there shall occur any consolidation of the
Company with, or any merger of the Company into, another corporation or the
liquidation or dissolution of the Company following any conveyance, transfer or
lease of its properties and assets substantially as an entirety to another
corporation, such consolidation, merger or liquidation shall not be deemed a
Bankruptcy Event; provided, that no other Bankruptcy Event shall have occurred
and be continuing at the time of such consolidation, merger or liquidation.
6.3 No Payment in Certain Circumstances.
-----------------------------------
(a) In the event that (i) the Company shall fail to pay
when due (after giving effect to any applicable grace periods), upon
acceleration or otherwise, any amount or obligation with respect to Senior Debt
(a "Payment Default") which Payment Default shall not have been cured or waived,
and each Purchaser that is either an original party hereto or that is an
assignee thereof as to which the Senior Agent has received actual notice
receives written notice of such Payment Default from the Company or any holder
of Senior Debt, or (ii) the Company shall fail to comply with the covenants
contained in the Senior Credit Agreement, or any event of default under the
Senior Credit Agreement (other than a Payment Default) shall occur and be
continuing, which shall not have been cured or waived (a "Non-Payment Default"),
and the Company and each Purchaser that is either an original party hereto or
that is an assignee thereof as to which the Senior Agent has received actual
notice receives written notice of such Non-Payment Default from the "Required
Lenders" under and as defined in the Senior Credit Agreement (or the Senior
Agent acting on their behalf) (a "Blockage Notice"); then no payment on account
of the Obligations shall be made by the Company (x) in the case of any Payment
Default, unless and until such Senior Debt shall have been paid in full in cash
or until such Payment Default shall have been cured or waived, or (y) in the
case of any Non-Payment Default, from the earlier of the date on which the
Company or the Purchasers receives such Blockage Notice until the earlier of (1)
179 days after such date and (2) the date, if any, on which such Senior Debt to
which such Non-Payment Default relates is paid in full in cash or such
Non-Payment Default is waived by the holders of such Senior Debt or otherwise
cured (a "Blockage Period"); provided, that only one Blockage Notice with
respect to any Non-Payment Default may be given in any 360-day period.
(b) In the event that, notwithstanding the foregoing,
the Company shall make any payment to a Purchaser prohibited by the foregoing
provisions of this Section 6.3, then and in such event such payment shall be
paid over and delivered forthwith to the Company. The provisions of this Section
6.3 shall not apply to any payment with respect to which Section 6.2 would
apply.
6.4 Acceleration Rights; Remedies. If an Event of Default under
the Debentures shall exist at any time that any Senior Debt shall be outstanding
or any commitment with respect thereto has not been terminated, neither the
Purchasers nor any other holder of the Debentures shall take any action,
judicial or otherwise, to accelerate or to collect payment on or redeem, retire,
repurchase or otherwise acquire, the Obligations or to pursue any other remedy
arising out of such Event of Default prior to the earliest to occur of:
(a) the payment in full of all Senior Debt in cash, property
or securities acceptable to the holders of Senior
Debt;
(b) the occurrence or commencement of a Bankruptcy Event
(with respect to which the provisions of Section 6.2
shall govern);
(c) the expiration of ten (10) days immediately following the
receipt by the Senior Agent of notice of the occurrence of such Event of Default
from the holder or holders entitled to accelerate payments on the Obligations,
and such holder's or holders' good faith intention to declare the unpaid amount
of all Obligations to be immediately due and payable in accordance with the
Transaction Documents, unless, during such period such Event of Default has been
waived or cured; and
(d) the acceleration of the maturity of any Senior Debt;
provided, that any amount received by a Purchaser as a result of any
acceleration permitted above, prior to payment in full of all Senior Debt in
cash, property or securities acceptable to the holders of the Senior Debt, shall
be paid to the Senior Agent if otherwise required by and then in accordance with
the provisions of this Section 6.
6.5 Payments Otherwise Permitted. Nothing contained in this
Section 6 or elsewhere in this Agreement or any of the Transaction Documents is
intended to or shall impair, as between the Company, its creditors other than
the holders of Senior Debt, and the Purchasers, the obligation of the Company,
which is absolute and unconditional, to pay to each Purchaser the principal of
and interest on the Debenture held by such Purchaser and fulfill all of its
other Obligations to such Purchaser as and when the same shall become due and
payable in accordance with the terms of this Agreement or such other Transaction
Documents, or is intended to or shall affect the relative rights of the
Purchasers and creditors of the Company other than the holders of the Senior
Debt, nor shall anything herein prevent any Purchaser from exercising all
remedies otherwise permitted by applicable law upon default, subject to the
rights, if any, under this Section 6 of the holders of Senior Debt. If the
Company fails because of this Section 6 to pay principal of or interest on any
Debenture as and when due, or fails to fulfill any of its other Obligations
under this Agreement or any other Transaction Document, such failure shall still
be deemed an Event of Default (as defined in the Debentures).
6.6 No Waiver; Amendment. Except as expressly provided herein,
no right of any present or future Senior Agent or other holder of Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such Senior Agent or
holder of Senior Debt, or by any noncompliance by the Company with the terms,
provisions and covenants of this Agreement, the Debentures or any other
Transaction Document, regardless of any knowledge thereof any such holder may
have or be otherwise charged with. Without in any way limiting the generality of
the foregoing, the Senior Agent and other holders of Senior Debt may at any time
and from time to time, without the consent of or notice to any Purchaser,
without incurring responsibility to the Purchasers and without impairing or
releasing the subordination provided in this Section 6 or the obligations
hereunder of the Purchasers to the Senior Agent or other holders of Senior Debt,
do any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; (iv) take additional
collateral; (v) exercise or refrain from exercising or waiving any rights,
powers or remedies against the Company and any other Person; or (vi) otherwise
alter the terms of the Senior Debt.
6.7 Reliance. Upon any payment or distribution of assets of the
Company referred to in this Section 6, each Purchaser shall be entitled to rely
upon any unstayed, final, nonappealable order or decree entered by any court of
competent jurisdiction for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Debt and
other Debt of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Section 6.
6.8 Invalidated Payments. To the extent that the holders of the
Senior Debt receive payments on, or proceeds of collateral for, the Senior Debt
which are subsequently invalidated, declared to be fraudulent or preferential,
set aside, avoided and/or required to be repaid by the holders of Senior Debt to
a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law, or equitable cause, then, to the extent of such payment
or proceeds received, the Senior Debt, or part thereof, intended to be satisfied
shall be revived and continue in full force and effect as if such payments or
proceeds had not been received by the holders of Senior Debt.
6.9 Amendment. Any material amendment to the provisions
of this Section 6, or any other provision of this Agreement, the Debentures or
any other Transaction Document that embodies the terms of this Section 6, shall
not be effective against any holder of Senior Debt without the consent of the
"Required Lenders" under and as defined in the Senior Credit Agreement (or the
equivalent definition in any successor agreement).
6.10 Remedies. The holders of Senior Debt shall be entitled to
enforce their rights under this Section 6 specifically, to recover damages by
reason of any breach of any provision of this Section 6 and to exercise all
other rights existing in their favor. Each Purchaser acknowledges and agrees
that money damages may not be an adequate remedy for any breach of the
provisions of this Section 6 and that holders of Senior Debt may apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting bond or other security) in order to enforce
or prevent any violation of the provisions of this Section 6.
6.11 Notices. The Company agrees to notify the Senior Agent upon
the acceleration of any Obligations and the transfer of any Obligations
specifying the name and address of the transferee.
6.12 Legend. In addition to any other legend required by this
Agreement, the Company and each Purchaser, for themselves and their successors
and assigns, covenant to cause each instrument representing or evidencing any of
the Obligations to have affixed upon it a legend which reads substantially as
follows:
THIS DEBENTURE IS SUBORDINATED TO OTHER DEBT PURSUANT TO, AND
TO THE EXTENT PROVIDED IN, THE SECURITIES PURCHASE AGREEMENT,
DATED AS OF APRIL 15, 2002, AS THE SAME MAY BE AMENDED,
RESTATED, MODIFIED OR SUPPLEMENTED AND IN EFFECT FROM TIME TO
TIME, WHICH, AMONG OTHER THINGS, SUBORDINATES THE ISSUER'S
OBLIGATIONS HEREUNDER TO THE ISSUER'S OBLIGATIONS TO THE
HOLDERS OF "SENIOR DEBT" AS DEFINED IN SAID SECURITIES
PURCHASE AGREEMENT.
6.13 Purchasers' Relation to Senior Debt. With respect to the
holders of Senior Debt, each Purchaser undertakes to perform or to observe only
such of its covenants and obligations as are specifically set forth in this
Section 6 (or, with respect to any Transaction Document, as such covenants and
obligations are incorporated by reference in such Transaction Document, taking
into account any related terms defined therein), and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Agreement or any other Transaction Documents against the Purchasers. No
Purchaser shall be deemed to owe any fiduciary duty to the holders of Senior
Debt.
7. MISCELLANEOUS.
-------------
7.1 Survival; Severability. The representations,
warranties, covenants and indemnities made by the parties herein shall survive
each Closing notwithstanding any due diligence investigation made by or on
behalf of the party seeking to rely thereon. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that in such case the parties shall
negotiate in good faith to replace such provision with a new provision which is
not illegal, unenforceable or void, as long as such new provision does not
materially change the economic benefits of this Agreement to the parties.
7.2 Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Purchaser may assign its
rights and obligations hereunder, other than those contained in paragraph 1.2
hereof, in connection with any private sale or transfer of the Debentures in
accordance with the terms hereof and the terms of the Debentures, as long as, as
a condition precedent to such transfer, the transferee executes an
acknowledgment agreeing to be bound by the applicable provisions of this
Agreement, in which case the term "Purchaser" shall be deemed to refer to such
transferee as though such transferee were an original signatory hereto. The
Company may not assign it rights or obligations under this Agreement.
7.3 No Reliance. Each party acknowledges that (i) it
has such knowledge in business and financial matters as to be fully capable of
evaluating this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) it is not relying on any advice or
representation of any other party in connection with entering into this
Agreement, the other Transaction Documents or such transactions (other than the
representations made in this Agreement or the other Transaction Documents),
(iii) it has not received from such party any assurance or guarantee as to the
merits (whether legal, regulatory, tax, financial or otherwise) of entering into
this Agreement or the other Transaction Documents or the performance of its
obligations hereunder and thereunder, and (iv) it has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting advisors
to the extent that it has deemed necessary, and has entered into this Agreement
and the other Transaction Documents based on its own independent judgment and on
the advice of its advisors as it has deemed necessary, and not on any view
(whether written or oral) expressed by such other party.
7.4 Independent Nature of Purchasers' Obligations and
Rights. The obligations of each Purchaser hereunder are several and not joint
with the obligations of the other Purchasers hereunder, and no Purchaser shall
be responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at the Closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
7.5 Injunctive Relief. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to each
Purchaser and that the remedy or remedies at law for any such breach will be
inadequate and agrees, in the event of any such breach, in addition to all other
available remedies, such Purchaser shall be entitled to an injunction
restraining any breach and requiring immediate and specific performance of such
obligations without the necessity of showing economic loss.
7.6 Governing Law; Jurisdiction. This Agreement shall
be governed by and construed under the laws of the State of New York without
regard to the conflict of laws provisions thereof. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
sitting in the City of New York, borough of Manhattan, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
7.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
7.8 Headings. The headings used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
7.9 Notices. Any notice, demand or request required or
permitted to be given by the Company or a Purchaser pursuant to the terms of
this Agreement shall be in writing and shall be deemed delivered (i) when
delivered personally or by verifiable facsimile transmission, unless such
delivery is made on a day that is not a Business Day, in which case such
delivery will be deemed to be made on the next succeeding Business Day, (ii) on
the next Business Day after timely delivery to an overnight courier and (iii) on
the Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), addressed as
follows:
If to the Company:
CTS Corporation
000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer/ General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to any Purchaser, to such address for such Purchaser as shall appear on
the signature page hereof executed by such Purchaser. Any party hereto may
change its address for notices by designating a new address by notice given to
the other parties in accordance with this Section 7.9.
7.10 Expenses. The Company and each Purchaser each shall
pay all costs and expenses that it incurs in connection with the negotiation,
execution, delivery and performance of this Agreement, provided, however, that
the Company shall reimburse Halifax Fund, L.P. for all out-of-pocket expenses
(including without limitation legal fees and expenses) incurred by it in
connection its due diligence investigation of the Company and the negotiation,
preparation, execution, delivery and performance of this Agreement and the other
Transaction Documents in an amount not to exceed thirty five thousand dollars
($35,000).
7.11 Entire Agreement; Amendments. This Agreement and
the other Transaction Documents constitute the entire agreement between the
parties with regard to the subject matter hereof and thereof, superseding all
prior agreements or understandings, whether written or oral, between or among
the parties. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument executed by
the Company and the holders of at least a majority of the unpaid principal
amount of the Debentures then outstanding, and no provision hereof may be waived
other than by a written instrument signed by the party against whom enforcement
of any such waiver is sought.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
---------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
Halifax Fund, L.P.
By: /s/ XXXXXXX XXXXXXX
----------------------------------------------------
Xxxxxxx Xxxxxxx
Address: c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000)-000-0000
Principal Amount of Debentures Purchased: $7,000,000
The above-described purchaser represents by its execution hereof that it is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
XxXX Convertible Arbitrage Fund, Ltd.
By: /s/ XXXXXXX XXXXXXX
------------------------------------------------
Xxxxxxx Xxxxxxx
Address: c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000)-000-0000
Principal Amount of Debentures Purchased: $5,000,000
The above-described purchaser represents by its execution hereof that it is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
Palladin Overseas Fund, Ltd.
By: /s/ XXXXXXX XXXXXXX
------------------------------------------------
Xxxxxxx Xxxxxxx
Address: c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000)-000-0000
Principal Amount of Debentures Purchased: $1,000,000
The above-described purchaser represents by its execution hereof that it is an
"accredited investor" as that term is defined in Rule 501 under the Securities
Act of 1933, as amended, with assets of at least $30 million.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
Lancer Securities (Cayman) Ltd.
By: /s/ XXXXXXX XXXXXXX
---------------------------------------------
Xxxxxxx Xxxxxxx
Address: c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
(Fax): (000)-000-0000
Principal Amount of Debentures Purchased: $500,000
The above-described purchaser represents by its execution hereof that it is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
Palladin Partners I, L.P.
By: /s/ XXXXXXX XXXXXXX
-----------------------------------------------
Xxxxxxx Xxxxxxx
Address: c/o The Palladin Group, L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000)-000-0000
Principal Amount of Debentures Purchased: $500,000
The above-described purchaser represents by its execution hereof that it is an
"accredited investor" as that term is defined in Rule 501 under the Securities
Act of 1933, as amended, with assets of at least $30 million.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
Steelhead Investments, Ltd.
By: /s/ XXXXXXX X. XXXX
-----------------------------------------------
Xxxxxxx X. Xxxx
Address: c/o HBK Investments
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000)-000-0000
Principal Amount of Debentures Purchased: $6,000,000
The above-described purchaser represents by its execution hereof that it is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
CTS CORPORATION
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief Financial Officer
Ram Trading, Ltd.
By: /s/ XXXXX X. XXXX
----------------------------------------------
Xxxxx X. Xxxx
Address: c/o Ritchie Capital Management
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000)-000-0000
Principal Amount of Debentures Purchased: $5,000,000
The above-described purchaser represents by its execution hereof that it is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended.
