EXHIBIT 2
AMENDMENT
TO
EXCHANGE AGREEMENT
BY AND AMONG
PACIFIC AEROSPACE & ELECTRONICS, INC.,
AEROMET AMERICA, INC.,
BALO PRECISION PARTS, INC.,
CASHMERE MANUFACTURING CO., INC.,
CERAMIC DEVICES, INC.,
ELECTRONIC SPECIALTY CORPORATION,
NORTHWEST TECHNICAL INDUSTRIES, INC.,
PACIFIC COAST TECHNOLOGIES, INC.,
PA&E INTERNATIONAL, INC.,
SEISMIC SAFETY PRODUCTS, INC.,
SKAGIT ENGINEERING & MANUFACTURING, INC.
AND
THE HOLDERS OF THE OUTSTANDING
11 1/4% SENIOR SUBORDINATED NOTES DUE 2005 OF
PACIFIC AEROSPACE & ELECTRONICS, INC.
NAMED IN EXHIBIT A HERETO
Dated as of March 19, 2002
THIS AMENDMENT TO EXCHANGE AGREEMENT (this "Amendment") dated as of
March 19, 2002 is by and among Pacific Aerospace & Electronics, Inc., a
corporation organized under the laws of the State of Washington (the "Company"),
Aeromet America, Inc., Balo Precision Parts, Inc., Cashmere Manufacturing Co.,
Inc., Ceramic Devices, Inc., Electronic Specialty Corporation, Northwest
Technical Industries, Inc., Pacific Coast Technologies, Inc., PA&E
International, Inc., Seismic Safety Products, Inc. and Skagit Engineering &
Manufacturing, Inc. (collectively, the "Subsidiary Guarantors") and the
noteholders named in Exhibit A (the "Holders") of the Company's 11 1/4% Senior
Subordinated Notes due 2005 (the "Old Notes") issued pursuant to that certain
indenture dated as of July 30, 1998 by and among the Company, the Guarantors (as
defined therein) and the Bank of New York (as successor to IBJ Xxxxxxxxx Bank &
Trust Company), as Trustee. Capitalized terms used herein but not defined herein
shall have the meanings set forth in the Exchange Agreement (as defined below).
WHEREAS, the Company, the Subsidiary Guarantors and the Holders have
entered into an Exchange Agreement (the "Exchange Agreement"), dated as of March
19, 2002, pursuant to which the Holders exchanged their Old Notes for certain
other securities of the Company, including common stock, convertible preferred
stock and pay-in-kind senior subordinated notes, as more particularly described
therein;
WHEREAS, pursuant to Section 9.10 of the Exchange Agreement, such
agreement may not be amended unless such amendment is consented to in writing by
all parties thereto; and
WHEREAS, the Company, the Subsidiary Guarantors and the Holders wish to
amend the Exchange Agreement to remove Alliance Capital Management L.P. and
Xxxxxxx X. Xxxxx & Sons Special Situation Partners II, L.P. from the voting
obligations of Sections 6.5, 6.6 and 6.7 of the Exchange Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and other
valuable consideration, and intending to be legally bound hereby, the parties
hereto agree as follows:
AGREEMENT
1. Amendment. Section 6.8 of the Exchange Agreement is hereby amended
and restated in its entirety to read as follows:
"6.8. No Voting Obligations - HBK Master Fund L.P., Alliance Capital
Management L.P. and Xxxxxxx X. Xxxxx & Sons Special Situation
Partners II, L.P.
Solely for purposes of Sections 6.5, 6.6 and 6.7 above, the term
"Holders" shall not include HBK Master Fund L.P., Alliance Capital
Management L.P. or Xxxxxxx X. Xxxxx & Sons Special Situation Partners
II, L.P. and, accordingly, HBK Master Fund L.P., Alliance Capital
Management L.P. and Xxxxxxx X. Xxxxx
1
& Sons Special Situation Partners II, L.P. shall not be entitled to any
of the rights or remedies, nor subject to any of the obligations or
restrictions, contemplated in Sections 6.5, 6.6 and 6.7.
2. Miscellaneous.
(a) Counterparts. Any number of counterparts of this Amendment may be
executed and each such counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute one instrument.
(b) Applicable Law. This Amendment shall be governed by the laws of the
State of New York applicable to contracts made and to be wholly performed in the
State of New York without giving effect to the principles of conflicts of laws
thereof.
[Signature Page Follows]
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed in their respective names by their respective duly authorized
representatives, all as of the day and year first above written.
PACIFIC AEROSPACE &
ELECTRONICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer and
President
XXXXXX X. XXXXXX
(solely for purposes of Sections 6.5, 6.6, 6.7
and 6.9 of the Exchange Agreement)
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------
XXXXXX XXXXXXXXXXX
(solely for purposes of Sections 6.5, 6.6 and
6.7 of the Exchange Agreement)
/s/ Xxxxxx Xxxxxxxxxxx
----------------------------------------------
AEROMET AMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
BALO PRECISION PARTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
CASHMERE MANUFACTURING CO.,
INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
CERAMIC DEVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
ELECTRONIC SPECIALTY
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
NORTHWEST TECHNICAL
INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
PACIFIC COAST TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
PA&E INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
SEISMIC SAFETY PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
SKAGIT ENGINEERING &
MANUFACTURING, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
HOLDERS:
GSCP RECOVERY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
ALLIANCE CAPITAL MANAGEMENT L.P.,
as investment advisor
By: Alliance Capital Management Corp.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
M.W. POST ADVISORY GROUP, L.L.C.,
as investment advisor
By: /s/ Xxxx Xxxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Director
XXXXXXX X. XXXXX & SONS SPECIAL SITUATION
PARTNERS II, L.P.
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Principal
HBK MASTER FUND L.P.
By: HBK Investments L.P., Investment
Manager
By: /s/ Xxxxx X'Xxxx
------------------------------------------
Name: Xxxxx X'Xxxx
Title: Authorized Signatory
GSC RECOVERY II, L.P.
By: GSC Recovery II GP, L.P.,
its general partner
By: GSC RII, LLC,
its general partner
By: GSCP (NJ) Holdings, L.P.,
its sole member
By: GSCP (NJ), Inc.,
its general partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Exhibit A
HOLDERS
GSCP Recovery, Inc.
GSC Recovery II, L.P.
Alliance Capital Management L.P.
M.W. Post Advisory Group, L.L.C.
Xxxxxxx X. Xxxxx & Sons Special Situation Partners II, L.P.
HBK Master Fund L.P.
