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Exhibit 10.42
INTERCREDITOR AND SUBORDINATION AGREEMENT
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This INTERCREDITOR AND SUBORDINATION AGREEMENT (this "Agreement"), dated as
of August ___, 2000, among (i) FLEET NATIONAL BANK, a national banking
association, as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders (as hereinafter defined), (ii) TRANSTECHNOLOGY
CORPORATION, a Delaware corporation (the "Company"), and (iii) each of X.X.
XXXXXXX MEZZANINE FUND, L.P., a Delaware limited partnership ("WMF"), ALBION
ALLIANCE MEZZANINE FUND I, L.P., a Delaware limited partnership ("Albion I"),
ALBION ALLIANCE MEZZANINE FUND II, L.P., a Delaware limited partnership ("Albion
II"), THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New York
corporation ("Equitable"), FLEET CORPORATE FINANCE, INC., a Massachusetts
corporation ("FCFI"), and CITIZENS CAPITAL, INC. ("Citizens"; and together with
WMF, Albion I, Albion II, Equitable and FCFI, the "Purchasers" and,
individually, a "Purchaser").
WHEREAS, pursuant to a Second Amended and Restated Credit Agreement, dated
as of June 30, 1995, as amended and restated as of July 24, 1998 and as further
amended and restated as of August 31, 1999 (as amended and in effect from time
to time, including any replacement agreement therefor, the "Credit Agreement"),
among the lending institutions party thereto (the "Lenders" and, individually, a
"Lender"), the Agents thereunder, the Company and certain Subsidiaries of the
Company (together, the "Borrowers"), the Lenders have agreed, upon the terms and
subject to the conditions contained therein, to make loans and otherwise to
extend credit to the Borrowers; and
WHEREAS, the Purchasers have agreed to extend credit to the Company
pursuant to a Securities Purchase Agreement, dated as of August 29, 2000 (as
amended as permitted herein and in effect from time to time, the "Subordinated
Agreement"), between the Purchasers and the Company; and
WHEREAS, it is a condition precedent to the effectiveness of the Lenders'
consent to the Company's entering into the Subordinated Agreement and incurring
the indebtedness thereunder that the Company and the Purchasers enter into this
Agreement with the Administrative Agent;
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Administrative Agent, each of the
Purchasers severally (and not jointly), and to the extent set forth herein the
Company, hereby agree, intending to be legally bound, as follows:
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1. DEFINITIONS. Terms not otherwise defined herein have the same
respective meanings given to them in the Credit Agreement as in effect on the
date hereof. In addition, the following terms shall have the following meanings:
ADMINISTRATIVE AGENT. As defined in the preamble hereto and shall include
any replacement or successor Administrative Agent under the Credit Agreement.
AGREEMENT. This Intercreditor and Subordination Agreement.
COMPANY. As defined in the preamble hereto; PROVIDED that "Company" as used
herein includes the Company as debtor, and the estate of the Company as debtor,
under the federal Bankruptcy Code as well as any permitted post-confirmation
successor to such debtor under Chapter 11 of the federal Bankruptcy Code.
CREDIT DOCUMENTS. Collectively, the Credit Agreement and the Subordinated
Agreement.
INSOLVENCY PROCEEDING. A case or proceeding, voluntary or involuntary, for
the distribution, division or application of all or part of the assets of the
Company or any of its Subsidiaries or the proceeds thereof, whether such case or
proceeding be for the liquidation, dissolution or winding up of the Company or
any of its Subsidiaries or their business, a receivership, insolvency or
bankruptcy case or proceeding, an assignment for the benefit of creditors or a
proceeding by or against the Company or any of its Subsidiaries for relief under
the federal Bankruptcy Code or any other bankruptcy, reorganization or
insolvency law or any other law relating to the relief of debtors, readjustment
of indebtedness, reorganization, arrangement, composition or extension or
marshalling of assets or otherwise.
LENDERS. As defined in the preamble hereto, together with their respective
successors and assigns, and shall include any replacement or successive lenders
under the Credit Agreement.
SENIOR DEBT. All principal, interest, fees, costs, enforcement expenses
(including reasonable legal fees and disbursements), collateral protection
expenses and other reimbursement or indemnity obligations created or evidenced
by the Credit Agreement or any of the other Senior Loan Documents or any other
document, instrument or agreement executed in connection therewith or any prior,
concurrent or subsequent notes, instruments or agreements of indebtedness,
liabilities or obligations of any type or form whatsoever relating thereto in
favor of the Administrative Agent or any of the Lenders. It is expressly
acknowledged and agreed that the amount of Senior Debt may be increased, the
term thereof may be extended or shortened, and the provisions thereof may be
amended, modified, replaced or restated in any respect, including without
limitation, amendments, modifications, restatements or replacements after the
commencement of an Insolvency Proceeding PROVIDED, HOWEVER, that in no event
shall (i) the principal amount of the Senior Debt, as at any date of
determination, exceed $260,000,000 MINUS, as to any term loan, all payments of
principal on such term loan paid by the Borrowers between the date hereof and
such date of determination
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and, as to any revolving credit loan, the aggregate amount of all permanent
reductions of commitments to provide such revolving credit loan between the date
hereof and such date of determination, (ii) the highest Applicable Margin
included in calculating interest rates on the Senior Debt be increased by more
than 150 basis points above the highest such Applicable Margin as at the date
hereof (it being understood that the imposition of a default rate of interest in
the amount and under such circumstances as are contained in the Senior Loan
Documents as in effect on the date hereof shall not be restricted by this clause
(ii)), (iii) the final scheduled maturity of the Senior Debt be extended beyond
February 28, 2005, (iv) the weighted averaged maturity of regularly scheduled
payments of principal on the Senior Debt as at the date hereof be accelerated
(it being understood that the acceleration of the entire Senior Debt in
accordance with and under such circumstances as are contained in the Senior Loan
Documents shall not be restricted by this clause (iv)), or (v) any covenant or
event of default under the Credit Agreement be added or made more restrictive
other than pursuant to a modification or supplement substantially identical to a
modification or supplement then made in the Subordinated Documents. Senior Debt
shall expressly include any and all interest accruing and out-of-pocket costs or
expenses incurred after the date of any filing by or against the Company or any
of its Subsidiaries of any Insolvency Proceeding regardless of whether a claim
therefor is allowed or allowable in the case or proceeding relating thereto.
SENIOR LOAN DOCUMENTS. The "Loan Documents", as defined in the Credit
Agreement, or any like term of the same meaning contained in any other Credit
Agreement.
SUBORDINATED DEBT. All principal, interest, fees, costs, enforcement
expenses (including legal fees and disbursements), collateral protection
expenses and other reimbursement and indemnity obligations created or evidenced
by the Subordinated Agreement or any prior, concurrent or subsequent notes,
instruments or agreements of indebtedness, liabilities or obligations of any
type or form whatsoever relating thereto in favor of the Purchasers or any
subsequent assignee.
SUBORDINATED DEFAULT. An "Event of Default" as defined in the Subordinated
Agreement or the Subordinated Notes, or a default or event of default under any
of the other Subordinated Documents.
SUBORDINATED DEFAULT NOTICE. A written notice from the Purchasers to the
Administrative Agent pursuant to which the Administrative Agent is notified of
the occurrence of a Subordinated Default that is continuing, which notice
incorporates a reasonably detailed description of such Subordinated Default.
SUBORDINATED DOCUMENTS. Collectively, the Subordinated Agreement, the
Subordinated Notes and any and all guaranties and security agreements, mortgages
and other agreements or instruments creating liens directly or indirectly
guarantying or securing any of the Subordinated Debt, and any and all other
documents or instruments evidencing or further guarantying or securing directly
or indirectly any of the Subordinated Debt, whether now existing or hereafter
created.
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SUBORDINATED NOTES. The 16% Senior Subordinated Promissory Notes, due
August 29, 2005, made by the Company in favor of the Purchasers pursuant to the
Subordinated Agreement, and any Senior Subordinated Promissory Notes issued as
payment in kind pursuant to Section 2(b) of such Notes.
WMF PLEDGE. The pledge of the Subordinated Debt held by WMF pursuant to the
terms of the partnership agreement or other agreement of WMF pursuant to which
WMF issued any bonds, promissory notes or other evidences of indebtedness.
2. PAYMENT SUBORDINATION.
2.1. GENERALLY. It is the intent of the parties hereto that the Senior
Debt shall be paid in full in cash (or in a manner otherwise satisfactory to the
Administrative Agent in its sole and absolute discretion) and that the
commitments represented by the Credit Agreement shall have expired or been
reduced to zero or terminated before any of the Subordinated Debt is paid.
Notwithstanding the immediately preceding sentence, subject to the other
provisions contained herein, the Company shall be permitted to pay, and the
Purchasers shall be permitted to receive any regularly scheduled payments on
account of principal of and interest on the Subordinated Debt, payable on the
regular due date thereof as in effect on the date hereof or within any
applicable grace period (together with any amounts due pursuant to Sections 2.2
or 7 of the Subordinated Agreement as in effect on the date hereof); PROVIDED
that the interest rate on the Subordinated Debt payable in cash or cash
equivalents shall not exceed 13% per annum, other than pursuant to and to the
extent set forth in Section 2(c) of the Subordinated Notes as in effect on the
date hereof. Without limiting the generality of the foregoing, it is agreed by
the Administrative Agent, the Purchasers and the Company that, so long as any
Senior Debt remains outstanding, (a) notwithstanding the provisions of the last
sentence of Section 2(b) of any Subordinated Note, the Company shall not be
permitted to elect to pay PIK Interest (as defined therein) in cash or cash
equivalents, (b) notwithstanding the provisions of Section 3 of any Subordinated
Note, no prepayment of the Subordinated Debt shall be required or permitted to
be made by the Company upon the consummation by the Company of a public offering
of its capital stock or upon a "Liquidity Event" (as defined in such
Subordinated Note), and (c) notwithstanding the provisions of Section 4 of any
Subordinated Note, no optional prepayment or redemptions of the Subordinated
Debt by the Company shall be permitted.
2.2. PAYMENT DEFAULTS. No payment shall be made by the Company or any of
its Subsidiaries or accepted or retained by any of the Purchasers on account of
the Subordinated Debt in the event of default in the payment of any principal,
interest or other amounts due in respect of the Senior Debt when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration or otherwise (a "Senior Debt Payment Default"), unless and
until such Senior Debt Payment Default has been cured or waived in writing by
the Administrative Agent and the requisite Lenders or otherwise has ceased to
exist. Notwithstanding anything to the contrary set forth in this Section 2.2,
if following a Senior Debt Payment Default, but prior to receipt by a Purchaser
of written notice of such Senior Debt Payment Default from the Administrative
Agent or any of its representatives (a "Senior
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Debt Payment Default Notice"), which Senior Debt Payment Default Notice may be
given following any Senior Debt Payment Default and shall be given by the
Administrative Agent on the request of the Majority Lenders following any Senior
Debt Payment Default, such Purchaser receives a payment from the Company or any
of its Subsidiaries with respect to the Subordinated Debt which would otherwise
be permitted under Section 2.1, such Purchaser shall be entitled to retain such
payment and apply it to the Subordinated Debt unless (i) such Purchaser receives
a Senior Debt Payment Default Notice within five (5) Business Days after receipt
by such Purchaser of such payment, or (ii) such Purchaser has actual knowledge
that a Senior Debt Payment Default has occurred and is continuing at the time of
receipt of such payment.
2.3. PAYMENT BLOCKAGE PERIODS. Upon the occurrence of any event of default
with respect to any Senior Debt permitting the Lenders (or any requisite
percentage thereof) to accelerate the maturity or demand payment thereof (other
than a Senior Debt Payment Default), upon written notice of such event of
default given to the Company and the Purchasers by the Administrative Agent or
any of its representatives (a "Payment Blockage Notice"), which Payment Blockage
Notice may be given following any such event of default and shall be given by
the Administrative Agent on the request of the Majority Lenders following any
such event of default, then no payment shall be made by the Company or any of
its Subsidiaries or accepted or retained by any of the Purchasers on account of
any of the Subordinated Debt for a period (each, a "Payment Blockage Period")
commencing on the date of receipt by Purchasers holding a majority of the
Subordinated Debt of such Payment Blockage Notice and terminating on the
earliest to occur of the following dates: (a) 179 days after the date of receipt
by Purchasers holding a majority of the Subordinated Debt of such Payment
Blockage Notice (provided the Senior Debt shall not theretofore have been
accelerated and provided further, that upon the rescission (if any) of such
acceleration (so long as the provisions described in Section 2.2 are not then
applicable), payments in respect of the Subordinated Debt shall resume as and to
the extent set forth below), (b) the date on which such event of default shall
have been cured or waived in writing by the Administrative Agent and the
requisite Lenders, or shall have ceased to exist, (c) the date on which the
Senior Debt shall have been discharged or paid in full and the Lenders'
Commitments terminated, or (d) the date on which such Payment Blockage Period
shall have been terminated by written notice to the Company or the Purchasers
from the Administrative Agent and, after which, in the case of clauses (a)
through (d), the Company shall resume making any and all required payments in
respect of the Subordinated Debt, including any payments not made during the
Payment Blockage Period due to the foregoing prohibitions, unless the provisions
described in Section 2.2 above are then applicable. The right of the
Administrative Agent to issue Payment Blockage Notices and to commence a Payment
Blockage Period hereunder is subject to the following limitations: (i) no event
of default existing on the date of the commencement of a Payment Blockage Period
shall be used as the basis for the commencement of a second Payment Blockage
Period unless the same shall have been cured or waived for a period of at least
90 consecutive days, (ii) the Administrative Agent shall not issue to the
Purchasers more than two Payment Blockage Notices in any 360 day period, and
(iii) the aggregate duration of
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all Payment Blockage Periods during any period of 360 consecutive days shall not
exceed 180 days.
2.4. GENERAL. The failure to make a payment on the Subordinated Debt
pursuant to Sections 2.1, 2.2 or 2.3 shall not be construed as preventing the
occurrence of a default or event of default under the Subordinated Debt. Any
payment permitted hereunder by the Company after a Payment Blockage Period of
amounts owed to the Purchasers during the Payment Blockage Period shall be
deemed a cure of any default caused by such delayed payment.
3. ENFORCEMENT. During any Senior Debt Payment Default or any Payment
Blockage Period, any declaration that all or any portion of the unpaid principal
amount of the Subordinated Debt shall be due and payable prior to its stated
maturity shall not be effective unless, and the Purchasers shall not assert,
collect or enforce the Subordinated Debt or any part thereof or take any action
to realize upon the Subordinated Debt or any part thereof or enforce any of the
Subordinated Documents or initiate any judicial action, including initiating a
filing of a petition for relief under the Bankruptcy Code, until the first to
occur of: (i) acceleration of the Senior Debt, (ii) commencement of judicial
enforcement of any rights or remedies under the Senior Loan Documents or
applicable law with respect to the Senior Debt or the Senior Loan Documents, or
commencement of an Insolvency Proceeding, or (iii) the date that is 180 days
from the date the Administrative Agent receives a Subordinated Default Notice in
respect of any Subordinated Default, if such Subordinated Default shall not have
been cured or waived within such period, except to the extent (but only to such
extent) that the commencement of a legal action may be required to toll the
running of any applicable statute of limitation. Notwithstanding any provision
of any Subordinated Document or any other provisions contained in this Agreement
to the contrary, the Purchasers shall not have any right to accelerate or
declare a default under any Subordinated Debt, and no purported default or
acceleration of any Subordinated Debt shall have any effect, to the extent that
such default or acceleration is premised solely upon the existence of a default
or event of default under the Senior Debt if the outstanding principal amount of
the Senior Debt has not then been accelerated. The Purchasers will not take or
omit to take any action or assert any claim with respect to the Subordinated
Debt or otherwise which is inconsistent with the provisions of this Agreement.
Subject to the prior payment in full of all Senior Debt, the Purchasers shall be
subrogated to the rights of the Administrative Agent and the Lenders to receive
payments and distributions of cash or cash equivalents, property and securities
applicable to the Senior Debt to the extent that distributions otherwise payable
to the Purchasers have been applied to the Senior Debt, until all amounts
payable under the Subordinated Debt shall have been paid in full.
Notwithstanding anything to the contrary stated herein, the subrogation rights
of the Purchasers shall continue to apply notwithstanding any payment by any
Purchaser to a holder of Senior Debt pursuant to the last sentence of Section 5
or pursuant to Section 11. Until the payment in full of the Senior Debt, the
Purchasers shall not exercise any right of subrogation, reimbursement,
restitution, contribution or indemnity whatsoever from any assets of the Company
or any of its Subsidiaries or any other guarantor of or provider of collateral
security for the Senior Debt, except as otherwise expressly permitted by this
Agreement. The Purchasers further waive any and all rights with respect to
marshalling.
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4. PAYMENTS HELD IN TRUST. The Purchasers will hold in trust and
immediately pay over to the Administrative Agent, for the account of the Lenders
and the Administrative Agent, in the same form of payment received, with
appropriate endorsements, for application to, or, in the sole discretion of the
Administrative Agent, to be held as collateral for, the Senior Debt, any cash or
cash equivalents, securities, or other property received by the Purchasers with
respect to the Subordinated Debt, whether received in connection with or during
the continuance of an Insolvency Proceeding or at any other time, in each case
except with respect to payments on the Subordinated Debt expressly permitted
pursuant to Section 2 or Section 6.2.
5. DEFENSE TO ENFORCEMENT. If any of the Purchasers, in contravention of
the terms of this Agreement, shall commence, prosecute or participate in any
suit, action or proceeding against the Company or any of its Subsidiaries, then
the Company or such Subsidiary may interpose as a defense or plea the making of
this Agreement, and the Administrative Agent or any Lender may intervene and
interpose such defense or plea in its own name or in the name of the Company or
such Subsidiary. If any of the Purchasers, in contravention of the terms of this
Agreement, shall attempt to collect any of the Subordinated Debt or enforce any
of the Subordinated Documents, then the Administrative Agent, any Lender, the
Company, or any of its Subsidiaries may, by virtue of this Agreement, restrain
the enforcement thereof in the name of the Administrative Agent or such Lender
or in the name of the Company or such Subsidiary. If any of the Purchasers, in
contravention of the terms of this Agreement, obtains any cash or cash
equivalents or other assets of the Company or any of its Subsidiaries as a
result of any administrative, legal or equitable actions, or otherwise, such
Purchaser agrees to hold in trust and forthwith to pay, deliver and assign to
the Administrative Agent, for the account of the Lenders and the Administrative
Agent, with appropriate endorsements, any such cash or cash equivalents for
application to the Senior Debt and any such other assets as collateral for the
Senior Debt.
6. BANKRUPTCY, ETC.
6.1. PAYMENTS RELATING TO SUBORDINATED DEBT. At any meeting of creditors
of the Company or any of its Subsidiaries or in the event of any case or
proceeding, voluntary or involuntary, for the distribution, division or
application of all or part of the assets of the Company or any of its
Subsidiaries or the proceeds thereof, whether such case or proceeding be for the
liquidation, dissolution or winding up of the Company or any of its Subsidiaries
or its business, a receivership, insolvency or bankruptcy case or proceeding, an
assignment for the benefit of creditors or a proceeding by or against the
Company or such Subsidiary for relief under the federal Bankruptcy Code or any
other bankruptcy, reorganization or insolvency law or any other law relating to
the relief of debtors, readjustment of indebtedness, reorganization,
arrangement, composition or extension or marshalling of assets or otherwise, the
Administrative Agent is hereby irrevocably authorized at any such meeting or in
any such proceeding (a) to receive or collect for the benefit of the Lenders and
the Administrative Agent, and there shall be paid to the Administrative Agent,
any cash or cash equivalents or other assets of the Company or such Subsidiary
distributed, divided or applied by way of dividend or payment, or any securities
issued, on account of any Subordinated Debt, (b) to
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apply such cash or cash equivalents to or to hold such other assets or
securities as collateral for the Senior Debt, and (c) to apply to the Senior
Debt any cash or cash equivalents and the proceeds of any realization upon such
other assets or securities that the Administrative Agent in its discretion
elects to effect, until all of the Senior Debt shall have been paid in full,
rendering to the Purchasers any surplus to which the Purchasers are then
entitled.
6.2. SECURITIES BY PLAN OF REORGANIZATION OR READJUSTMENT. Notwithstanding
the foregoing provisions of Section 6.1, the Purchasers shall be entitled to
receive and retain any securities of the Company or any other corporation or
other entity provided for by a plan of reorganization or readjustment (a) the
payment of which securities is subordinate, at least to the extent provided in
this Agreement with respect to Subordinated Debt, to the payment of all Senior
Debt under any such plan of reorganization or readjustment and (b) all other
terms of which are reasonably acceptable to the Administrative Agent.
6.3. SUBORDINATED DEBT VOTING RIGHTS. At any such meeting of creditors or
in the event of any such case or proceeding referred to in Section 6.1, the
Purchasers shall retain the right to vote and otherwise act with respect to the
Subordinated Debt (including, without limitation, the right to vote to accept or
reject any plan of partial or complete liquidation, reorganization, arrangement,
composition or extension), PROVIDED that the Purchasers shall not vote with
respect to any such plan or take any other action in any way so as to contest
(a) the validity of any Senior Debt or any collateral therefor or guaranties
thereof, (b) the relative rights and duties of any holders of any Senior Debt
established in any instruments or agreements creating or evidencing any of the
Senior Debt with respect to any of such collateral or guaranties, or (c) the
Purchasers' obligations and agreements set forth in this Agreement.
7. LENDERS' FREEDOM OF DEALING. The Purchasers agree, with respect to the
Senior Debt and any and all collateral therefor or guaranties thereof, that the
Borrowers and the Lenders may agree to increase the amount of the Senior Debt,
and the Lenders may grant extensions of the time of payment or performance to
and make compromises, including releases of guaranties, and settlements with the
Company, its Subsidiaries and all other persons, in each case without the
consent of the Purchasers or the Company or any such Subsidiaries and without
affecting the agreements of the Purchasers or the Company contained in this
Agreement; PROVIDED, HOWEVER, that (a) nothing contained in this Section 7 shall
constitute a waiver of the right of the Company or any of its Subsidiaries
themselves to agree or consent to a settlement or compromise of a claim which
the Administrative Agent or any Lender may have against the Company or such
Subsidiary, and (b) the provisions of this Section 7 shall be subject to the
limitations set forth in the definition of Senior Debt.
8. MODIFICATION OR SALE OF THE SUBORDINATED DEBT. The Purchasers agree
that, except for modifications or supplements that are substantially identical
to modifications or supplements then made in the Senior Loan Documents, they
will not, at any time while this Agreement is in effect, modify or supplement
any of the terms of any of the Subordinated Debt or any of the Subordinated
Documents which (i) increases the maximum principal amount of the Subordinated
Debt or the rate of interest on any of the Subordinated Debt (it being
understood that the imposition of a default rate of interest in the amount and
under such
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circumstances as are contained in the Subordinated Documents as in effect on the
date hereof shall not be restricted by this clause (i)), (ii) accelerates the
dates (including maturity dates) upon which payments of principal or interest on
the Subordinated Debt are due, (iii) makes more restrictive or adds any event of
default or any covenant with respect to the Subordinated Debt, (iv) changes the
redemption or prepayment provisions of the Subordinated Debt, (v) alters the
subordination provisions with respect to the Subordinated Debt, including,
without limitation, purporting to subordinate the Subordinated Debt to any other
debt, (vi) grants any liens or security interests in any assets of the Company
or any of its Subsidiaries or any other assets securing the Senior Debt, (vii)
changes or amends the definitions of the terms "Event of Default" or "Liquidity
Event" in each case as defined in the Subordinated Documents, or (viii) changes
or amends any other term of the Subordinated Documents if such change or
amendment would materially increase the obligations of the Company or any of its
Subsidiaries or confer additional material rights on the Purchasers or any other
holder of the Subordinated Debt in a manner adverse to the Company, any such
Subsidiary, the Administrative Agent or the Lenders; nor will any of the
Purchasers sell, transfer, pledge, assign, hypothecate or otherwise dispose of
any or all of the Subordinated Debt (other than in connection with the WMF
Pledge) to any person other than a person who agrees in a writing, reasonably
satisfactory in form and substance to the Administrative Agent, to become a
party hereto and to succeed to the rights and to bound by all of the obligations
of such Purchaser hereunder. In the case of any such disposition by a Purchaser,
such Purchaser will notify the Administrative Agent at least five (5) Business
Days prior to the date of any of such intended disposition.
9. AMENDMENT OF THIS AGREEMENT.
(a) No modification or amendment of this Agreement shall be effective
unless the same shall be in writing and signed by the Administrative Agent,
Purchasers holding a majority of the Subordinated Debt, at least two of whom
shall not be Affiliates (as such term is defined in the Subordinated Agreement),
and, to the extent that any such modification or amendment would adversely
affect the rights of the Company or any of its Subsidiaries hereunder, the
Company.
(b) No waiver of any provision of this Agreement and no consent to any
departure by any party hereto from the provisions hereof shall be effective
unless such waiver or consent shall be set forth in a written instrument
executed by the party against which it is sought to be enforced, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on any party hereto in any case
shall entitle such party to any other or further notice or demand in the same,
similar or other circumstances.
10. COMPANY'S OBLIGATIONS ABSOLUTE. By countersigning this Agreement, the
Company acknowledges and consents to and agrees to perform and be bound by each
provision of this Agreement which expressly recites that the Company is agreeing
thereto by countersigning this Agreement. Nothing contained in this Agreement
shall impair, as between
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the Company and any of the Purchasers, the obligation of the Company to pay to
such Purchaser all amounts payable in respect of the Subordinated Debt as and
when the same shall become due and payable in accordance with the terms thereof,
or prevent such Purchaser (except as expressly otherwise provided in this
Agreement) from exercising all rights, powers and remedies otherwise permitted
by the Subordinated Documents and by applicable law upon a default in the
payment of the Subordinated Debt or under any Subordinated Document, all,
however, subject to the rights of the Administrative Agent and the Lenders as
set forth in this Agreement.
11. TERMINATION OF SUBORDINATION; REINSTATEMENT OF AGREEMENT. This
Agreement shall continue in full force and effect, and the obligations and
agreements of the Purchasers and the Company hereunder shall continue to be
fully operative, until the Lenders' Commitments have terminated and all of the
Senior Debt shall have been paid and satisfied in full and such full payment and
satisfaction shall be final and not avoidable. To the extent that the Borrowers
or any guarantor of or provider of collateral for the Senior Debt (each, an
"Applicable Obligor") makes any payment on the Senior Debt that is subsequently
invalidated, declared to be fraudulent or preferential or set aside or is
required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or reorganization act, state or federal law, common law
or equitable cause (such payment being hereinafter referred to as a "Voided
Payment"), then to the extent of such Voided Payment, that portion of the Senior
Debt that had been previously satisfied by such Voided Payment shall be revived
and continue in full force and effect as if such Voided Payment had never been
made. In the event that any Voided Payment is recovered from the Administrative
Agent or any Lender, an Event of Default shall be deemed to have existed and to
be continuing from the first date of a return by the Administrative Agent or a
Lender of a Voided Payment until the full amount of all Voided Payments is
restored to the Administrative Agent and/or the Lenders. During any continuance
of any such Event of Default, this Agreement shall be in full force and effect
with respect to the Subordinated Debt. To the extent that any of the Purchasers
(a) receives any payments with respect to the Subordinated Debt either (i) on or
at any time subsequent to the date it receives written notice from the
Administrative Agent of any recovery from the Administrative Agent or any Lender
of a Voided Payment, or (ii) following commencement of an Insolvency Proceeding,
or (b) has received any payments with respect to the principal amount of the
Subordinated Debt within 100 days following the Administrative Agent's or any
Lender's receipt of such Voided Payment, and such payments to such Purchaser
have not been invalidated, declared to be fraudulent or preferential or set
aside or required to be repaid to a trustee, receiver, or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, such
Purchaser shall be obligated and hereby agrees that any such payment so held or
received shall be deemed to be held or received in trust for the benefit of the
Administrative Agent or such Lender, and such Purchaser hereby agrees to pay to
the Administrative Agent for the benefit of the Administrative Agent or (as the
case may be) such Lender, upon demand (made, in the case of any payment
described in clause (b) above, within the 100-day period specified in such
clause (b)), the full amount so held or received by such Purchaser to the extent
necessary fully to restore to the Administrative Agent or such Lender the amount
of such Voided Payment, provided that if such Purchaser reasonably believes at
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the time any such payment is required to be made by it to the Administrative
Agent or any Lender pursuant to clause (b) above that (notwithstanding the
provisions of Section 3) such Purchaser would not have an effective right of
subrogation against the Applicable Obligor were such payment to be made to the
Administrative Agent or such Lender, such Purchaser may make such payment to the
Applicable Obligor. Upon the payment and satisfaction in full of all of the
Senior Debt and the termination of the Lenders' Commitments, which payment shall
be final and not avoidable, this Agreement will automatically terminate without
any additional action by any party hereto.
12. NOTICES.
(a) The Purchasers will provide the Administrative Agent, promptly and
in any event within five (5) Business Days of the occurrence of a
Subordinated Default as to which any Purchaser has actual knowledge, with a
Subordinated Default Notice of such Subordinated Default.
(b) All notices and other communications which are required and may be
given pursuant to the terms of this Agreement shall be in writing and shall
be sufficient and effective in all respects if given in writing or
telecopied, delivered or mailed by registered or certified mail, postage
prepaid, as follows:
If to the Administrative Agent:
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Director
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: T. Xxxxxxx Xxxxxxxxxx
If to any of the Purchasers, at the addresses (including the
address(es) for copies) therefor set forth in Section 11.2 of the
Subordinated Agreement.
If to the Company:
000 Xxxxx Xxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: General Counsel
with a copy to:
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Xxxx, Xxxxxx & Parks, LLP
0000 XX Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: F. Xxxxxx X'Xxxxx
or such other address or addresses as any party hereto shall have designated by
written notice to the other parties hereto. Notices shall be deemed given and
effective upon the earlier to occur of (i) the fifth Business Day following
deposit thereof in the U.S. mail, postage prepaid, or (ii) receipt by the party
to whom such notice is directed.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE A
SEALED INSTRUMENT UNDER SUCH LAWS.
14. JURISDICTION; WAIVER OF JURY TRIAL.
(a) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR OF THE UNITED STATES OF AMERICA FOR THE DISTRICT OF
MASSACHUSETTS AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND
VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF
IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH
PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS
SET FORTH IN SECTION 12, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH
MAILING.
(b) EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE COMPANY AND EACH PURCHASER (A) CERTIFIES THAT NO
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REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY LENDER
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(B) ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
HEREIN.
15. WAIVER OF RIGHTS. Neither any failure nor any delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, and a single or partial exercise thereof shall not preclude
any other or further exercise or the exercise of any other right, power or
privilege.
16. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provision.
17. FURTHER ASSURANCES, ETC. Each of the Administrative Agent, the
Purchasers and, by countersigning this Agreement, the Company agrees to execute
and deliver such other documents and instruments, in form and substance
reasonably satisfactory to the Administrative Agent, and shall take such other
action, in each case as the Administrative Agent may reasonably request (at the
sole cost and expense of the Company which, by countersigning this Agreement,
agrees to pay such reasonable costs and expenses), to effectuate and carry out
the provisions of this Agreement including, without limitation, by recording or
filing in such places as the Administrative Agent may deem desirable, this
Agreement or such other documents or instruments.
18. LEGENDS. Each Subordinated Note and any other instrument evidencing
the Subordinated Debt shall contain in a conspicuous manner the following
legend:
"THIS NOTE [OR OTHER INSTRUMENT] AND THE INDEBTEDNESS EVIDENCED HEREBY ARE
SUBORDINATE TO THE SENIOR DEBT AS DEFINED IN, AND IN THE MANNER AND TO THE
EXTENT SET FORTH IN, AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED AS
OF AUGUST __, 2000 AMONG THE BORROWER, THE PURCHASERS AND FLEET NATIONAL
BANK, AS ADMINISTRATIVE AGENT, AND EACH HOLDER OF THIS NOTE [OR OTHER
INSTRUMENT] BY ITS ACCEPTANCE HEREOF SHALL BE BOUND BY THE PROVISIONS OF
SUCH INTERCREDITOR AND SUBORDINATION AGREEMENT."
19. MISCELLANEOUS. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes all
prior representations, negotiations, writings, memoranda and agreements with
respect to such subject matters. To the extent any provision of this Agreement
conflicts with any of the
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Credit Documents, as between the parties hereto the provisions of this Agreement
shall be controlling. This Agreement may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against which
enforcement is sought. The section headings used herein are for convenience of
reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement. This Agreement shall be binding
upon the Company and shall be binding upon, and shall inure to the benefit of
the Purchasers, the Administrative Agent and the Lenders, their respective
successors and assigns, any lender or lenders refunding or refinancing any of
the Senior Debt or Subordinated Debt and their respective successors and
assigns, but shall not otherwise create any rights or benefits for any third
party. In the event that any lender or lenders refund or refinance any of the
Senior Debt, the terms "Credit Agreement", "Loan Documents", "Event of Default"
and the like shall refer MUTATIS MUTANDIS to the agreements and instruments in
favor of such lender or lenders and to the related definitions contained
therein. References herein to "Sections" are, unless expressly stated otherwise,
references to Sections of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor and
Subordination Agreement as of the date first above written.
FLEET NATIONAL BANK, in its capacity
as Administrative Agent
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxxx
Director
X. X. XXXXXXX MEZZANINE FUND, L.P.
By: Xxxxxxx XX, L.L.C.,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
A Managing Member
ALBION ALLIANCE MEZZANINE FUND I, L.P.
By: Albion Alliance LLC
Its General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
Title: Senior Vice President
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ALBION ALLIANCE MEZZANINE FUND II, L.P.
By: AA Mezz II G.P., LLC,
Its General Partner
By: Albion Alliance, LLC
Its Sole Member
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
Title: Senior Vice President
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
Title: Investment Officer
FLEET CORPORATE FINANCE, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx
Title: Managing Director
CITIZENS CAPITAL, INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director
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ACCEPTED AND AGREED TO:
TRANSTECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Chief Financial Officer
