Exhibit 10.117
FIRST AMENDMENT
FIRST AMENDMENT (this "Amendment") dated as of September 30, 1998, by
and among SpecTran Corporation, a Delaware corporation (the "Company"), and EACH
OF THE INSTITUTIONS IDENTIFIED AS A HOLDER OF NOTES ON THE SIGNATURE PAGES
HEREOF (collectively, the "Noteholders").
1. Preliminary Statement
0.1 The Company entered into those separate Note Purchase Agreements,
dated as of December 1, 1996 (as in effect immediately prior to the Effective
Date, collectively, the "Existing Note Purchase Agreement" and as amended
hereby, the "Note Purchase Agreement"), with, respectively, the purchasers of
the Notes signatory thereto, pursuant to which the Company issued and sold to
such purchasers $16,000,000 in principal amount of the Company's 9.24% Senior
Notes due December 26, 2003 and $8,000,000 in principal amount of the Company's
9.39% Senior Notes due December 26, 2004 (collectively the "Notes").
0.2 The Company and the Noteholders agree to amend the Existing Note
Purchase Agreement as more particularly set forth in this Amendment.
1. Defined Terms
The terms used herein have the meanings specified in the Existing Note
Purchase Agreement unless otherwise defined herein.
2. Amendments to Terms of Existing Note Purchase Agreement
0.1 The terms of the Existing Note Purchase Agreement are hereby
amended as set forth on Attachment A hereto.
3.2 The provisions of Section 9.8 of the Existing Note Purchase
Agreement are waived with respect to the amendment to the Bank Agreement
attached hereto as Attachment D, provided that such amendment becomes effective
as of the Effective Date.
3. Warranties and Representations of the Company
The Company represents and warrants to the holders of the Notes as of
the Effective Date:
(a) the Company is duly organized, validly existing and in
good standing in its jurisdiction of incorporation;
(b) the Company has the power to enter into this Amendment and
to perform its obligations hereunder;
(c) this Amendment has been duly authorized by all necessary
action on the part of the Company , and this Amendment constitutes a
legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such enforceability
may be limited by
SPECTRAN CORPORATION FIRST AMENDMENT
(i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and
(ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law);
(d) neither the execution or delivery by the Company of this
Amendment nor the performance by the Company of its
obligations hereunder or under the Financing Documents:
(i) will adversely affect the enforceability against
the Company of the Financing Documents;
(ii) will require the taking of any action or the
giving of any consent or approval by, or the making or any
registration or filing with, any Governmental Authority or
other person other than such actions, consents, approvals,
registrations and filings as have heretofore been taken, given
or made (as the case may be);
(iii) will violate any provision of any
organizational document of the Company, or any provision of
any law, rule, regulation, order or decree of any Governmental
Authority applicable to the Company; or
(iv) will violate or constitute a default under any
material agreement to which the Company is a party or by which
any of its Properties or assets is or may be bound, or will
result in the creation or imposition of any Lien on the
Properties or assets of the Company;
(e) (i) neither this Amendment nor any certificate furnished
in connection herewith nor any other document or statement
furnished to the holders of the Notes in connection with the
amendments contemplated hereby contains any untrue statement
of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein
not misleading;
(ii) there is no fact known to the Company that has
had or, so far as the Company can now reasonably foresee,
could reasonably be expected to have, a Material Adverse
Effect that has not been publicly disclosed; and
(f) immediately after the effectiveness hereof and after
giving effect hereto, there exists no Default or Event of Default.
4. Scope and Effect of Amendment
The terms of this Amendment shall not operate as or constitute a waiver
by any holder of Notes of, or otherwise prejudice any holder of Notes' rights,
remedies or powers under, the Existing Note Purchase Agreement, any other
Financing Document or under applicable law. Except as expressly provided herein,
(a) no terms or provisions of the Existing Note Purchase
Agreement are modified or changed by this Amendment, and
(b) the terms and provisions of the Existing Note Purchase
Agreement continue in full force and effect.
The Company hereby acknowledges, confirms, reaffirms and ratifies all of its
obligations and duties under the Financing Documents and all agreements related
thereto. This Amendment does not constitute an agreement or obligation of any
holder of Notes to give its consent to any future amendment of any Financing
Document or to any future transaction that would, absent consent of the holders
of the Notes, constitute a Default or Event of Default under the Note Purchase
Agreement. This Amendment may not be contradicted by evidence of any actual or
alleged prior, contemporaneous or subsequent understandings or agreements of the
parties, written or oral, express or implied, other than a writing which
expressly amends or supersedes this Amendment or Financing Documents. Upon the
effectiveness of this Amendment, each reference in any Financing Document to any
Note Purchase Agreement shall mean and be a reference to the Note Purchase
Agreement as amended hereby.
5. Miscellaneous
0.1 Governing Law
This Amendment is governed by the internal laws of the Commonwealth of
Massachusetts and shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of such State.
5.1 Successors and Assigns
This Amendment shall bind and inure to the benefit of the respective
successors and assigns of the Company and the holders of the Notes.
5.2 Expenses
The Company will pay, or cause to be paid, the reasonable out-of-pocket
costs and expenses of each holder of Notes in connection with entering into this
Amendment and the consummation of all transactions contemplated hereby. The
obligations of the Company under this Section 6.3 shall survive payment of any
Note issued under the Note Purchase Agreement.
5.3 Effectiveness
This Amendment may be executed in one or more counterparts and shall be
effective, as of the date hereof (the "Effective Date"), when
(a) at least one counterpart shall have been executed by the
Company and holders of Notes constituting the Required Holders, and
(b) the Company shall have complied with each of the
conditions precedent set forth on Attachment B hereto to the reasonable
satisfaction of the Required Holders.
[Remainder of page intentionally blank. Next page is signature page.]
SPECTRAN CORPORATION FIRST AMENDMENT IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be executed on their behalf by a duly authorized
officer or agent thereof, as the case may be, as of the date first above
written.
Very truly yours,
SPECTRAN CORPORATION
By: ---------------------------
Name:
Title:
Holder of Notes:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: ----------------------------------
Name:
Title:
CM LIFE INSURANCE COMPANY
By: -----------------------------------
Name:
Title:
J ROMEO & CO.
By: ----------------------------------
Name:
Title:
PACIFIC LIFE INSURANCE COMPANY
By: -----------------------------------
Name:
Title:
By: -----------------------------------
Name:
Title:
Attachment A-7
SPECTRAN CORPORATION FIRST AMENDMENT
ATTACHMENT A
AMENDMENT
1. A new Section 8.10 is hereby added to the Existing Note Purchase
Agreement as set forth below:
8.10 Offer to Pay upon Receipt of Proceeds
(a) Offer. If the Company is required to make an offer to
prepay the Notes in accordance with Section 10.8 such offer will be in
writing and will
(i) refer to this Section 8.10 and Section 10.8,
(ii) include the information required in the notices
delivered pursuant to Section 10.8 in connection with the
transactions giving rise to the offer to prepay,
(iii) specify the prepayment date (the "Proceeds
Prepayment Date"), which shall not be less than 5 Business
Days after, nor more than 10 Business Days after, the date of
such offer, and which shall on or before the repayment of Debt
giving rise to the requirement to make an offer under this
Section 8.10,
(iv) specify the last date upon which the offer can
be accepted or rejected, and state the consequences of failing
to provide an acceptance or rejection, as provided in Section
8.10(b),
(v) specify the amount of such offer (as determined
in accordance with Section 10.8, the "Proceeds Payment
Amount"), the minimum ratable share of such Proceeds Payment
Amount payable in respect of each Note (such minimum ratable
share to be determined on the basis of the aggregate principal
amount of all Notes outstanding immediately prior to the
making of such offer) and the principal amount of each Note
offered to be prepaid on such Proceeds Prepayment Date,
(vi) specify the amount of interest that would be due
on each Note offered to be prepaid, accrued to such Proceeds
Prepayment Date, and
(vii) be executed by a Senior Financial Officer of
the Company.
(b) Acceptance, Rejection. To accept or reject such offered
payment, a holder of Notes shall cause a notice of such acceptance or
rejection to be delivered to the Company at no later than 5 p.m. on the
second preceding Business Day prior to the Proceeds Prepayment Date. A
failure to respond to any such offer of payment as provided in this
Section 8.5(b) shall be deemed to constitute an acceptance of such
offer.
(c) Payment. The Company shall pay to each holder which shall
have accepted such offer a principal amount equal to such holder's
ratable share of the Proceeds Payment Amount (such ratable share to be
determined on the basis only of the aggregate principal amount of the
Notes outstanding immediately prior to the making of such offer which
shall have accepted such offer) at 100% of such principal amount and
interest thereon accrued to such Proceeds Prepayment Date, shall become
due and payable on such Proceeds Prepayment Date. The Company shall,
promptly after making such payment, notify in writing all holders of
Notes of the payment amount, and the name of each holder, of any Notes
prepaid under this Section 8.10.
(d) Effect on Required Payments. The amount of each payment of
the principal of the Notes made pursuant to this Section 8.5 shall be
applied against and reduce each of the then remaining principal
payments due pursuant to Section 8.1 by a percentage equal to the
aggregate principal amount of the Notes so paid divided by the
aggregate principal amount of the Notes outstanding immediately prior
to such payment.
(e) Payment of Make-Whole Amounts. If a prepayment of the
principal of the Notes is made under this Section 8.10 from the
proceeds of Asset Dispositions, then, notwithstanding anything to the
contrary in this Section 8.10, no Make-Whole Amount will be due in
connection therewith and no calculation of any Make-Whole Amounts shall
be required.
2. Section 10.4 of the Existing Note Purchase Agreement is amended to read
in full as follows:
10.4 Maintenance of Consolidated Net Worth.
On and after April 1, 2000, the Company will not, at any time, permit
Consolidated Net Worth to be less than the sum of
(a) Consolidated Net Worth as of December 31, 1999, plus
(b) an aggregate amount equal to 50% of its Consolidated Net
Income (but, in each case, only if a positive number) for each
completed fiscal year beginning with the fiscal year ended December 31,
2000 plus
(c) the net proceeds of all sales of equity securities (or
convertible securities upon conversion) by and of the Company and the
Subsidiaries (other than sales to the Company or a Subsidiary) received
by the Company and the Subsidiaries after December 31, 1999.
3. Section 10.5 of the Existing Note Purchase Agreement is amended to read
in full as follows:
10.5 Limitation on Debt.
(a) Funded Debt. On and after April 1, 2000, the Company will
not, and will not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Funded Debt, except
(i)the Notes and Debt incurred under the Bank
Agreement,
(ii) Funded Debt outstanding on the Closing Date and
identified on Schedule 5.15, and renewals and extensions
thereof, provided that the amount of any such Funded Debt
outstanding is not increased in connection with such renewal
or extension, and
(iii) other Funded Debt, so long as on the date the
Company or such Subsidiary becomes liable with respect to any
such Funded Debt and immediately after giving effect thereto
and the concurrent retirement of any other Funded Debt,
(A) no Default or Event of Default exists, and
(B) Consolidated Funded Debt does not exceed
325% of Consolidated Cash Flow determined in respect
of the period of 12 consecutive months then most
recently ended.
(b) Net Debt. On and after April 1, 2000, the Company will not
at any time permit Consolidated Net Debt to exceed 55% of Consolidated
Total Adjusted Capitalization.
(c) Subsidiaries. For the purposes of this Section 10.5, any
Person becoming a Subsidiary after the date hereof shall be deemed, at
the time it becomes a Subsidiary, to have incurred all of its then
outstanding Debt, and any Person extending, renewing or refunding any
Debt shall be deemed to have incurred such Debt at the time of such
extension, renewal or refunding.
4. Section 10.6 of the Existing Note Purchase Agreement is amended to read
in full as follows:
10.6 Fixed Charge Coverage.
On and after April 1, 2000, the Company will not, at any time, permit
Consolidated Earnings Available for Fixed Charges to be less than 300% of
Consolidated Fixed Charges, in each case determined in respect of the period of
12 consecutive months then most recently ended.
5. Section 10.7 of the Existing Note Purchase Agreement is amended to read
in full as follows:
10.7 Sale of Assets.
On and after April 1, 2000, and except as permitted under Section 10.2,
the Company will not, and will not permit any of its Subsidiaries to, make any
Asset Disposition unless:
(a) such Asset Disposition is the JV Transfer; or
(b) (i) in the good faith opinion of the Company, the Asset
Disposition is in exchange for consideration having a Fair
Market Value at least equal to that of the property exchanged
and is in the best interest of the Company or such Subsidiary;
(ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would
exist; and
(iii) (A) the Disposition Value of all property that
was the subject of any Asset Disposition (other than
the JV Transfer) occurring in the then current fiscal
year of the Company would not exceed 10% of
Consolidated Assets as of the end of the then most
recently ended fiscal year of the Company, and
(B) the Disposition Value of all property
that was the subject of any Asset Disposition (other
than the JV Transfer) occurring on or after the
Closing Date would not exceed 25% of Consolidated
Assets as of the end of the then most recently ended
fiscal quarter of the Company.
If, and solely to the extent that, the Net Proceeds Amount for any Asset
Disposition is applied to a Debt Prepayment Application or a Property
Reinvestment Application within 365 days after such Asset Disposition, then such
Asset Disposition, only for the purpose of determining compliance with Section
10.7(b)(iii) as of any date, shall to the extent of such application be deemed
not to be an Asset Disposition.
6. A new Section 10.8 is hereby added to the Existing Note Purchase
Agreement as set forth below:
10.8 Application of Proceeds of Certain Transactions
(a) Notice. The Company shall notify the holders of the Notes
of the receipt of moneys or property by the Company or any Subsidiary
as a result of an Asset Disposition, the incurrence of Debt owing to
any Person other than the Bank or a holder of Notes, or the issuance of
equity interests in the Company or any Subsidiary, within two Business
Days after such receipt. Such notice shall
(i) set forth the amount of the gross proceeds of
such transaction, and the net proceeds (net of transaction
costs and together with any investment earnings thereon, the
AProceeds@), which, in the case of property received, shall be
the Fair Market Value of such property,
(ii) set forth in detail the use of the proceeds, which
shall be one or more of
(A) investment in long-term assets to be used in the
business of the Company and the Subsidiaries, and
(B) the repayment of Debt of the Company and the
Subsidiaries, and
(C) investment in Short-Term Investments pending the
acquisition of such long-term assets or the repayment of
such Debt, and
(iii) be certified as true and correct by an authorized
officer of the Company.
If, after the delivery of such notice, the Company becomes aware that
such notice no longer sets forth the gross proceeds, Proceeds or use of
the proceeds of such transaction accurately in any material respect,
then the Company shall, within three Business Days of becoming so
aware, deliver a revised notice to the holders of the Notes.
(b) Use of Proceeds. If the Company applies Proceeds for the
repayment of Debt other than the Notes or the payment during the period
beginning on April 1, 2000 and ending on April 30, 2000, inclusive, of
Debt outstanding under the Bank Agreement, then the Company shall make
an offer of prepayment of the Notes in accordance with Section 8.10 in
respect of such application in an amount not less than
(i) the amount of such Proceeds so applied multiplied
by
(ii) the principal amount of the Notes outstanding on
the date of such application divided by the principal amount
of such Debt outstanding immediately prior to such
application.
Payments made to the holders of the Notes pursuant to this Section
10.8(b) shall be in immediately available funds by wire transfer,
regardless of the form or nature of the Proceeds.
(c) Security Interest. At all times when Proceeds are
being held in the form of Short-Term Investments,
(i) such Proceeds shall be deposited by the Company
with the Security Trustee (immediately upon receipt by the
Company), as security for the payment of the Secured
Obligations (as defined in the Trust Indenture),
(ii) the Security Trustee shall maintain a deposit
account and investment account solely for the Proceeds of
Asset Dispositions and a separate deposit account and
investment account for Proceeds derived from other types of
transactions;
(iii) the Company shall take such action (at its
expense) and execute and deliver such documents and agreements
as reasonably requested by the Security Trustee, the Required
Holders or the Bank to perfect the Security Trustee's security
interest in such Proceeds,
(iv) the Security Trustee shall invest such Proceeds
as directed by the Company in Short-Term Investments, so long
as the Security Trustee retains a perfected security interest
in such investments, and
(v) the Company will notify the holders of the Notes
and the Bank not less than five Business Days prior to
delivering any direction to the Security Trustee to disburse
such Proceeds for the purpose of purchasing such long-term
assets or paying Debt of the Company or the Subsidiaries.
(d) Subject to Security Documents. This Section 10.8 is
subject to the Security Documents, and to the extent that this Section
10.8 shall conflict therewith, the terms of the Security Documents
shall control.
(e) Debt Prepayment Applications. Debt Prepayment Applications
shall be, for purposes of determining compliance with this Section
10.8, deemed to be payments of the Notes under Section 8.10.
7. A new Section 10.9 is hereby added to the Existing Note Purchase
Agreement as set forth below:
10.9 Incorporation of Bank Covenants
From September 30, 1998 to March 31, 2000, inclusive, the Company and
the Subsidiaries will comply with Section 6 (exclusive of Section 6.2(r),
Section 6.2(s) and Section 6.2(t) thereof) of the form of the Bank Agreement
(including, in determining such compliance, all defined terms and all
cross-referenced sections set forth therein) attached to that certain First
Amendment to the Note Purchase Agreement, dated as of September 30, 1998, as
Attachment D (as amended by the First Amendment to the Bank Agreement included
in such Attachment D), and such Section 6 shall be deemed to have been
incorporated herein by reference. For the avoidance of doubt, it is understood
that
(i) amendments by the parties to the Bank Agreement of the
Bank Agreement made after the effectiveness of the First Amendment
shall have no effect on the form of the Bank Agreement as so
incorporated hereby, and
(ii) if a Default or an Event of Default exists on March 31,
2000 under any of such incorporated Sections, such Default or Event of
Default will continue after March 31, 2000 if and for so long
thereafter as the Company or any Subsidiary is obligated in any respect
under the Bank Agreement.
8. A new Section 10.10 is hereby added to the Existing Note Purchase
Agreement as set forth below:
10.10 Other Covenants
The Company shall not, nor shall it permit any Subsidiary to,
(a) enter into any amendment of any term of payment of
any Debt (other than the Notes) of the Company or any
Subsidiary, or
(b) pay any Debt (other than the Notes in accordance
with the provisions hereof) during the continuation of an
Event of Default.
9. A new Section 10.11 is hereby added to the Existing Note Purchase
Agreement as set forth below:
10.11 Further Assurances Regarding Collateral, Etc.
The Company shall satisfy at the Company's expense, on or prior to
January 15, 1999, each of the conditions set forth on Attachment C to that
certain First Amendment to the Note Purchase Agreement, dated as of September
30, 1998, in the reasonable opinion of the Required Holders, which reasonable
opinion shall be evidenced solely by a written affirmation of such satisfaction
delivered by the Required Holders on or prior to January 15, 1999.
10. The following defined terms are hereby added to Schedule B to the Existing
Note Purchase Agreement in the appropriately alphabetical locations:
Proceeds B is defined in Section 10.9.
Proceeds Payment Amount B is defined in Section 8.10.
Proceeds Prepayment Date B is defined in Section 8.10.
Short-Term Investments B means investments that maximize total return
within the confines of a short to average overall maturity framework.
AShort-Term Investments will be US Governments, domestic corporates,
asset-backed paper (AAA rated), Govt Agency mortgage-backed paper including
short term CMO's and Govt Agency backed short-term floating rate paper.
Positions required for liquidity needs will be held in high grade short-term or
money market balances. The horizon on these investments will be approximately a
for immediate liquidity needs (if necessary), approximately a to be used for
intermediate term purposes, and the remaining approximately a for long term
expansion purposes. The Company will have full authority and discretion on all
investment changes.
Attachment B-1
SPECTRAN CORPORATION FIRST AMENDMENT
ATTACHMENT B
CONDITIONS PRECEDENT
1. The Company shall pay all legal fees and expenses of the Noteholders'
counsel incurred in connection herewith
2. The Company shall pay an amendment fee in the aggregate amount of $150,000 to
the Noteholders, to be allocated among the Noteholders in proportion to the
aggregate principal value of their Notes, in immediately available federal
funds.
3. The Company shall have entered into an amendment to the Bank Agreement in
form attached hereto as Attachment D. The Company shall have provided to the
holders of the Notes a copy of the Bank Agreement and all related documentation,
as in effect on the Effective Date (including such amendment), certified as true
and correct by an authorized officer of the Company.
4. The Company shall provide the Noteholders' with evidence reasonably
satisfactory to the Noteholders' of the consent of the Bank to this Amendment.
Attachment C-2
SPECTRAN CORPORATION FIRST AMENDMENT
ATTACHMENT C
CONDITIONS SUBSEQUENT
The Company will provide to counsel for the Noteholders and the Bank the
following:
1. Recent Federal and State Tax Lien Searches against the Company.
2. Composite Certificate of Secretary of SpecTran with attached:
2.1 Certificate of Incorporation with all amendments (certified to
by the Delaware Secretary of State)
2.2 By-Laws
2.3 Votes
3. Certificate of Legal Existence and Good Standing for SpecTran issued by the
Delaware Secretary of State
4. Certificate of Qualification To Do Business in Massachusetts for SpecTran
issued by the Massachusetts Secretary of State
5. Opinion of Counsel to the Company and the Subsidiaries, reasonably
satisfactory to the Required Holders, opining as to
(i) due authorization , execution, and delivery of documents
by the Company and the Subsidiaries, and the enforceability
thereof,
(ii) absence of government approvals or filings in connection
therewith, other than with respect to security interests and
liens, and
(iii) proper form and recording of security interests,
mortgages and the like in the Massachusetts, Connecticut and
the U.S. Patent and Trademark Office.
6. Copies of Amendment executed with the Bank.
70 Amendments to the following to reflect changes to secured obligations:
7.1 Mortgage, Assignment of Rents and Security Agreement
7.2 Open-End Mortgage, Assignment of Rents and Security Agreement
7.3 Guaranty Agreement
7.4 UCC-1's
7.5 Trademark and Patent Filings
80 Landlord waivers and consents on all leased real estate.
90 Title Insurance Policies and/or Endorsements to existing Title
Insurance Policies to reflect changes to secured obligations.
100 UCC Searches against the Company and each Subsidiary from:
10.1 Massachusetts Secretary of State
10.2 Sturbridge Town Clerk
10.3 Connecticut Secretary of State
10.4 Additional filing locations as may be reasonably specified by
counsel to the Noteholders.
110 Confirmation of secured position of Bank and Noteholders
120 Covenant Compliance Certificate as of September 30, 1998
130 Duly authorized, executed and delivered documents amending the Security
Documents to the extent deemed reasonably necessary by the Required
Holders or the Security Trustee.
140 Payment of all legal fees and expenses of counsel to the
Noteholders (promptly upon receipt of a bill therefor)
ATTACHMENT D
BANK AGREEMENT (WITH AMENDMENT)