1
EXHIBIT 10.88
2
[COMPOSITE NOTE PURCHASE AGREEMENT OF
EACH OF THE SEPARATELY EXECUTED NOTE
PURCHASE AGREEMENTS]
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NOTE PURCHASE AGREEMENT
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SPECTRAN CORPORATION
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE 2004
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TABLE OF CONTENTS PAGE
1. AUTHORIZATION OF NOTES........................................................................ 1
2. SALE AND PURCHASE OF NOTES.................................................................... 1
3. CLOSING....................................................................................... 2
4. CONDITIONS TO CLOSING......................................................................... 2
4.1 Representations and Warranties....................................................... 2
4.2 Performance; No Default.............................................................. 2
4.3 Compliance Certificates.............................................................. 2
4.4 Opinions of Counsel.................................................................. 3
4.5 Purchase Permitted By Applicable Law, etc............................................ 3
4.6 Sale of Other Notes.................................................................. 3
4.7 Payment of Special Counsel Fees...................................................... 4
4.8 Private Placement Numbers............................................................ 4
4.9 Changes in Corporate Structure....................................................... 4
4.10 Collateral........................................................................... 4
4.11 Subsidiary Guaranty.................................................................. 6
4.12 Proceedings and Documents............................................................ 6
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................. 6
5.1 Organization; Power and Authority.................................................... 6
5.2 Authorization, etc................................................................... 6
5.3 Disclosure........................................................................... 7
5.4 Organization and Ownership of Shares of
Subsidiaries; Affiliates............................................................. 7
5.5 Financial Statements................................................................. 8
5.6 Compliance with Laws, Other Instruments, etc......................................... 8
5.7 Governmental Authorizations, etc..................................................... 8
5.8 Litigation; Observance of Agreements, Statutes and
Orders............................................................................... 8
5.9 Taxes................................................................................ 9
5.10 Title to Property; Leases............................................................ 9
5.11 Licenses, Permits, etc............................................................... 9
5.12 Compliance with ERISA................................................................ 10
5.13 Private Offering by the Company...................................................... 11
5.14 Use of Proceeds; Margin Regulations.................................................. 11
5.15 Existing Indebtedness; Future Liens.................................................. 11
5.16 Foreign Assets Control Regulations, etc.............................................. 12
5.17 Status under Certain Statutes........................................................ 12
5.18 Environmental Matters................................................................ 12
5.19 Collateral........................................................................... 13
6. REPRESENTATIONS OF THE PURCHASER.............................................................. 15
6.1 Purchase for Investment.............................................................. 15
6.2 Source of Funds...................................................................... 16
7. INFORMATION AS TO COMPANY..................................................................... 17
7.1 Financial and Business Information................................................... 17
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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TABLE OF CONTENTS (CONT.) PAGE
7.2 Officer's Certificate................................................................ 20
7.3 Inspection........................................................................... 20
8. PREPAYMENT OF THE NOTES....................................................................... 21
8.1 Required Prepayments................................................................. 21
8.2 Optional Prepayments with Make-Whole Amount.......................................... 21
8.3 Optional Prepayment of Notes without Make-Whole
Amount............................................................................... 22
8.4 Change in Control.................................................................... 22
8.5 Offer to Pay upon Transfer of Property............................................... 24
8.6 Allocation of Partial Prepayments.................................................... 26
8.7 Maturity; Surrender, etc............................................................. 26
8.8 Purchase of Notes.................................................................... 26
8.9 Make-Whole Amount.................................................................... 26
9. AFFIRMATIVE COVENANTS......................................................................... 28
9.1 Compliance with Law.................................................................. 28
9.2 Insurance............................................................................ 28
9.3 Maintenance of Properties............................................................ 28
9.4 Payment of Taxes and Claims.......................................................... 29
9.5 Corporate Existence, etc............................................................. 29
9.6 Line of Business..................................................................... 29
9.7 Subsidiary Security Documents........................................................ 29
9.8 Amendment to Bank Agreement.......................................................... 30
9.9 Further Assurances................................................................... 30
10. NEGATIVE COVENANTS............................................................................ 30
10.1 Transactions with Affiliates......................................................... 30
10.2 Merger, Consolidation, etc........................................................... 31
10.3 Liens................................................................................ 31
10.4 Maintenance of Consolidated Net Worth................................................ 34
10.5 Limitation on Debt................................................................... 34
10.6 Fixed Charge Coverage................................................................ 35
10.7 Sale of Assets....................................................................... 35
11. EVENTS OF DEFAULT............................................................................. 35
12. REMEDIES ON DEFAULT, ETC...................................................................... 39
12.1 Acceleration......................................................................... 39
12.2 Other Remedies....................................................................... 40
12.3 Rescission........................................................................... 40
12.4 No Waivers or Election of Remedies, Expenses, etc.................................... 40
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES................................................. 41
13.1 Registration of Notes................................................................ 41
13.2 Transfer and Exchange of Notes....................................................... 41
13.3 Replacement of Notes................................................................. 41
14. PAYMENTS ON NOTES............................................................................. 42
14.1 Place of Payment..................................................................... 42
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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TABLE OF CONTENTS (CONT.) PAGE
14.2 Home Office Payment.................................................................. 42
15. EXPENSES, ETC................................................................................. 42
15.1 Transaction Expenses................................................................. 42
15.2 Survival............................................................................. 43
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT..................................................................................... 43
17. AMENDMENT AND WAIVER.......................................................................... 43
17.1 Requirements......................................................................... 43
17.2 Solicitation of Holders of Notes..................................................... 44
17.3 Binding Effect, etc.................................................................. 44
17.4 Notes held by Company, etc........................................................... 44
18. NOTICES....................................................................................... 45
19. REPRODUCTION OF DOCUMENTS..................................................................... 45
20. CONFIDENTIAL INFORMATION...................................................................... 46
21. SUBSTITUTION OF PURCHASER..................................................................... 47
22. MISCELLANEOUS................................................................................. 48
22.1 Successors and Assigns............................................................... 48
22.2 Payments Due on Non-Business Days.................................................... 48
22.3 Severability......................................................................... 48
22.4 Construction......................................................................... 48
22.5 Counterparts......................................................................... 48
22.6 Governing Law........................................................................ 48
Schedule A -- Information Relating to Purchasers
Schedule B -- Defined Terms
Schedule 4.9 -- Changes in Corporate Structure
Schedule 5.3 -- Disclosure Materials
Schedule 5.4 -- Subsidiaries of the Company and Ownership
of Subsidiary Stock
Schedule 5.5 -- Financial Statements
Schedule 5.8 -- Certain Litigation
Schedule 5.11 -- Patents, etc.
Schedule 5.14 -- Use of Proceeds
Schedule 5.15 -- Existing Indebtedness and Liens
Schedule 5.19 -- Collateral
Exhibit A1 -- Form of 9.24% Series A Senior Secured Note due
2003
Exhibit A2 -- Form of 9.39% Series B Senior Secured Note due
2004
Exhibit B1 -- Form of Opinion of Special Counsel for the
Company and its Subsidiaries
Exhibit B2 -- Form of Opinion of Counsel for the Security
Trustee
Exhibit B3 -- Form of Opinion of Special Counsel for the
Purchasers
Exhibit C -- Form of Trust Indenture
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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TABLE OF CONTENTS (CONT.) PAGE
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Patent Collateral Assignment
Exhibit F -- Form of Trademark Security Agreement
Exhibit G -- Form of Pledge Agreement
Exhibit H -- Forms of Mortgages
Exhibit I -- Form of Subsidiary Guaranty
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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SPECTRAN CORPORATION
50 HALL ROAD
STURBRIDGE, MASSACHUSETTS 01566
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE 2004
Dated as of December 1, 1996
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Ladies and Gentlemen:
SpecTran Corporation, a Delaware corporation (the "COMPANY"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES
The Company will authorize
(a) the issue and sale of $16,000,000 aggregate principal
amount of its 9.24% Series A Senior Secured Notes due 2003 (together
with all notes issued pursuant hereto in exchange or substitution
thereof, the "SERIES A NOTES"), and
(b) the issue and sale of $8,000,000 aggregate principal amount
of its 9.39% Series B Senior Secured Notes due 2004 (together with all
notes issued pursuant hereto in exchange or substitution thereof, the
"SERIES B NOTES");
(the Series A Notes and the Series B Notes referred to, collectively, as the
"NOTES"). The Series A Notes and the Series B Notes shall be substantially in
the forms set out in Exhibit A1 and Exhibit A2, respectively, with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in SCHEDULE B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and the series
specified opposite your name in SCHEDULE A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in SCHEDULE A (the "OTHER PURCHASERS", you and the Other Purchasers
collectively referred to as the "PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and the
series specified opposite its name in SCHEDULE A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or non-performance
by any Other Purchaser thereunder.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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SPECTRAN CORPORATION
50 HALL ROAD
STURBRIDGE, MASSACHUSETTS 01566
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE 2004
Dated as of December 1, 1996
CM Life Insurance Company
c/o Massachusetts Mutual Life Insurance Company
1295 State Street
Springffield, MA 01111
Ladies and Gentlemen:
SpecTran Corporation, a Delaware corporation (the "COMPANY"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES
The Company will authorize
(a) the issue and sale of $16,000,000 aggregate principal
amount of its 9.24% Series A Senior Secured Notes due 2003 (together
with all notes issued pursuant hereto in exchange or substitution
thereof, the "SERIES A NOTES"), and
(b) the issue and sale of $8,000,000 aggregate principal amount
of its 9.39% Series B Senior Secured Notes due 2004 (together with all
notes issued pursuant hereto in exchange or substitution thereof, the
"SERIES B NOTES");
(the Series A Notes and the Series B Notes referred to, collectively, as the
"NOTES"). The Series A Notes and the Series B Notes shall be substantially in
the forms set out in Exhibit A1 and Exhibit A2, respectively, with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in SCHEDULE B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and the series
specified opposite your name in SCHEDULE A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in SCHEDULE A (the "OTHER PURCHASERS", you and the Other Purchasers
collectively referred to as the "PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and the
series specified opposite its name in SCHEDULE A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or non-performance
by any Other Purchaser thereunder.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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SPECTRAN CORPORATION
50 HALL ROAD
STURBRIDGE, MASSACHUSETTS 01566
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE 2004
Dated as of December 1, 1996
The Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019
Ladies and Gentlemen:
SpecTran Corporation, a Delaware corporation (the "COMPANY"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES
The Company will authorize
(a) the issue and sale of $16,000,000 aggregate principal
amount of its 9.24% Series A Senior Secured Notes due 2003 (together
with all notes issued pursuant hereto in exchange or substitution
thereof, the "SERIES A NOTES"), and
(b) the issue and sale of $8,000,000 aggregate principal amount
of its 9.39% Series B Senior Secured Notes due 2004 (together with all
notes issued pursuant hereto in exchange or substitution thereof, the
"SERIES B NOTES");
(the Series A Notes and the Series B Notes referred to, collectively, as the
"NOTES"). The Series A Notes and the Series B Notes shall be substantially in
the forms set out in Exhibit A1 and Exhibit A2, respectively, with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in SCHEDULE B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and the series
specified opposite your name in SCHEDULE A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in SCHEDULE A (the "OTHER PURCHASERS", you and the Other Purchasers
collectively referred to as the "PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and the
series specified opposite its name in SCHEDULE A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or non-performance
by any Other Purchaser thereunder.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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SPECTRAN CORPORATION
50 HALL ROAD
STURBRIDGE, MASSACHUSETTS 01566
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE 2004
Dated as of December 1, 1996
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
Ladies and Gentlemen:
SpecTran Corporation, a Delaware corporation (the "COMPANY"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES
The Company will authorize
(a) the issue and sale of $16,000,000 aggregate principal
amount of its 9.24% Series A Senior Secured Notes due 2003 (together
with all notes issued pursuant hereto in exchange or substitution
thereof, the "SERIES A NOTES"), and
(b) the issue and sale of $8,000,000 aggregate principal amount
of its 9.39% Series B Senior Secured Notes due 2004 (together with all
notes issued pursuant hereto in exchange or substitution thereof, the
"SERIES B NOTES");
(the Series A Notes and the Series B Notes referred to, collectively, as the
"NOTES"). The Series A Notes and the Series B Notes shall be substantially in
the forms set out in Exhibit A1 and Exhibit A2, respectively, with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in SCHEDULE B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and the series
specified opposite your name in SCHEDULE A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in SCHEDULE A (the "OTHER PURCHASERS", you and the Other Purchasers
collectively referred to as the "PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and the
series specified opposite its name in SCHEDULE A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or non-performance
by any Other Purchaser thereunder.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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3. CLOSING
3. CLOSING
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Hebb & Gitlin at 10:00 a.m., local
time, at a closing (the "CLOSING") on December 26, 1996 (the "CLOSING DATE") or
on such other Business Day thereafter on or prior to January 15, 1997, as may be
agreed upon by the Company and you and the Other Purchasers. At the Closing the
Company will deliver to you the Notes of the series to be purchased by you in
the form of a single Note (or such greater number of Notes in denominations of
at least $100,000 as you may request) dated the date of the Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds for
the account of the Company, as directed in writing by the Company. If at the
Closing the Company shall fail to tender such Notes to you as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to your satisfaction, you shall, at your election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
you may have by reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in the Financing
Documents shall be correct when made and at the time of the Closing.
4.2 PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in the Financing Documents required to be performed or
complied with by it prior to or at the Closing and after giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by SCHEDULE 5.14) no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since September 30, 1996 that would have been
prohibited by Section 10.1, Section 10.5 or Section 10.7 had such Sections
applied since such date.
4.3 COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Section 4.1, Section 4.2 and Section
4.9 have been fulfilled.
(b) COMPANY SECRETARY'S CERTIFICATE. The Company shall have
delivered to you a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, this Agreement and
the Security Documents to which the Company is a party.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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4. CONDITIONS TO CLOSING
(c) SUBSIDIARY SECRETARY'S CERTIFICATES. Each Subsidiary shall
have delivered to you a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Security Documents to
which such Subsidiary is a party.
4.4 OPINIONS OF COUNSEL.
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing
(a) from Hackmyer & Nordlicht, counsel for the Company,
covering the matters set forth in Exhibit B1,
(b) from Orr & Reno, counsel for the Security Trustee,
covering the matters set forth in Exhibit B2, and
(c) from Hebb & Gitlin, your special counsel in connection
with such transactions, substantially in the form set forth in Exhibit
B3.
4.5 PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall
(a) be permitted by the laws and regulations of each
jurisdiction to which you are subject, without recourse to provisions
(such as section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to
the character of the particular investment,
(b) not violate any applicable law or regulation (including,
without limitation, Regulation G, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System) and
(c) not subject you to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation
was not in effect on the date hereof.
If requested by you, you shall have received an Officer's Certificate certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is so permitted.
4.6 SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes of the series to be
purchased by them at the Closing as specified in SCHEDULE A.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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4 CONDITIONS TO CLOSING
4.7 PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.8 PRIVATE PLACEMENT NUMBERS.
A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each series
of Notes.
4.9 CHANGES IN CORPORATE STRUCTURE.
Except as specified in SCHEDULE 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in SCHEDULE 5.5.
4.10 COLLATERAL.
(a) TRUST INDENTURE. The Trust Indenture substantially in the
form of Exhibit C (as amended from time to time, the "TRUST INDENTURE")
shall be duly executed and delivered by the parties thereto, and a copy
thereof evidencing such due execution and delivery shall be delivered
to you, certified as true and correct by the Company.
(b) SECURITY AGREEMENT. A Security Agreement substantially in
the form of Exhibit D (as amended from time to time, the "SECURITY
AGREEMENT") shall be duly executed and delivered by each of the Company
and its Subsidiaries, and the other parties thereto, and copies thereof
evidencing such due execution and delivery shall be delivered to you,
certified as true and correct by the Company.
(c) PATENT COLLATERAL ASSIGNMENT. A Patent Collateral
Assignment substantially in the form of Exhibit E (as amended from time
to time, the "PATENT COLLATERAL ASSIGNMENT") shall be duly executed and
delivered by each of the Company and its Subsidiaries, and the other
parties thereto, and a copy thereof evidencing such due execution and
delivery shall be delivered to you, certified as true and correct by
the Company.
(d) TRADEMARK SECURITY AGREEMENT. A Trademark Security
Agreement substantially in the form of Exhibit F (as amended from time
to time, the "TRADEMARK SECURITY AGREEMENT") shall be duly executed and
delivered by each of the Company and its Subsidiaries, and the other
parties thereto, and a copy thereof evidencing such due execution and
delivery shall be delivered to you, certified as true and correct by
the Company. A trademark assignment substantially in the form of
Exhibit 1 to the Trademark Security Agreement shall be duly executed
and delivered by each of the Company and its Subsidiaries, and a copy
of each thereof evidencing such due execution and delivery shall be
delivered to you, certified as true and correct by the Company.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
14
4 CONDITIONS TO CLOSING
(e) PLEDGE AGREEMENT. The Pledge Agreement substantially in
the form of Exhibit G (as amended from time to time, the "PLEDGE
AGREEMENT") shall be duly executed and delivered by the parties
thereto, and a copy thereof evidencing such due execution and delivery
shall be delivered to you, certified as true and correct by the
Company. All stock certificates and undated stock powers executed in
blank required to be executed and delivered by the Company to the
Security Trustee by the terms of the Pledge Agreement shall have been
so delivered, and the Company shall provide you with copies thereof,
certified as true and correct by the Company.
(f) PERFECTION OF LIENS. All actions necessary to perfect the
Liens of the Security Trustee in the Collateral to be granted on or
prior to the Closing Date (including, without limitation, the filing of
all appropriate Uniform Commercial Code financing statements, the
recording of all appropriate documents with public officials
(including, without limitation, the United States Patent and Trademark
Office), the payment of all fees and taxes and the delivery of all
appropriate stock certificates together with undated stock powers
executed in blank to the Security Trustee) shall have been taken in
accordance with the provisions of the Security Documents.
(g) TERMINATION OR ASSIGNMENT OF EXISTING LIENS. All actions
necessary to terminate, release or assign to the Security Trustee any
and all Liens (including all mortgages) on all properties of the
Company and its Subsidiaries, other than Liens permitted under Section
10.3, shall have been taken in accordance with the provisions of the
Security Documents, including, without limitation, the filing of all
appropriate Uniform Commercial Code termination statements, the
recording of all appropriate mortgage releases, the recording of all
other appropriate documents with public officials (including, without
limitation, the United States Patent and Trademark Office) and the
return of all appropriate stock certificates together with undated
stock powers executed in blank to the Company for delivery to the
Security Trustee.
(h) REAL PROPERTY.
(i) MORTGAGE. You shall have received a copy of each
Mortgage substantially in the applicable form set forth in
Exhibit H (as amended from time to time, collectively, the
"MORTGAGES"), certified as true and correct by the Company.
Each Mortgage shall have been
(A) duly executed and delivered by the
parties thereto, and the copy delivered to you shall
evidence such duly authorized execution and delivery,
and
(B) filed in the appropriate public
recording offices, have had all necessary fees paid,
and the copy delivered to you shall evidence on its
face proper recording in the appropriate public
recording offices and the payment of all necessary
fees.
(ii) LEASEHOLDS. The Company shall have delivered a
copy of each
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
15
4 CONDITIONS TO CLOSING
lease in respect of any leasehold interest of the Company or
any Subsidiary in any real property, certified as true and
correct by the Company.
4.11 SUBSIDIARY GUARANTY.
A Subsidiary Guaranty substantially in the form of Exhibit I (as
amended from time to time, the "SUBSIDIARY GUARANTY") shall have been duly
executed and delivered to you by authorized officers of each Subsidiary on its
behalf.
4.12 PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by the Financing Documents and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you that:
5.1 ORGANIZATION; POWER AND AUTHORITY.
Each of the Company and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each of the Company
and its Subsidiaries has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver the
Financing Documents to which it is a party and to perform the provisions
thereof.
5.2 AUTHORIZATION, ETC.
(a) THE COMPANY. The Financing Documents to which the Company
is a party have been duly authorized by all necessary corporate action
on the part of the Company, and such Financing Documents constitute,
legal, valid and binding obligations of the Company enforceable against
the Company in accordance with their respective terms, except as such
enforceability may be limited by
(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).
(b) THE SUBSIDIARIES. The Security Documents to which each
Subsidiary is a party have been duly authorized by all necessary
corporate action on the part of each
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
such Subsidiary, and such Security Documents constitute legal, valid
and binding obligations of each such Subsidiary enforceable against
each such Subsidiary in accordance with their respective terms, except
as such enforceability may be limited by
(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).
5.3 DISCLOSURE.
The Company, through its agent, Fleet Corporate Finance, has delivered
to you and each Other Purchaser copies of the reports it has filed with the
Securities and Exchange Commission for the past three years and such other
documents listed on SCHEDULE 5.3 hereto (the "DISCLOSURE MATERIALS"). Except as
disclosed in SCHEDULE 5.3, the Disclosure Materials and the Financing Documents,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Disclosure Materials or as expressly described in SCHEDULE 5.3,
or in the financial statements listed in SCHEDULE 5.5, since December 31, 1995,
there has been no change in the financial condition, operations, business or
properties of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Disclosure Materials.
5.4 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES.
(a) SCHEDULE 5.4 contains (except as noted therein)
complete and correct lists
(i) of the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of
its organization, and the percentage of shares of each class
of its capital stock or similar equity interests outstanding
owned by the Company and each other Subsidiary,
(ii) of the Company's Affiliates, other than
Subsidiaries (relying on copies of Schedule 13D submitted to
the Company), and
(iii) of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in SCHEDULE 5.4 as being
owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
SCHEDULE 5.4).
(c) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed on SCHEDULE 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
17
5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of capital stock or similar equity interests of
such Subsidiary.
5.5 FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the financial
statements of the Company and its Subsidiaries listed on SCHEDULE 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company and its
Subsidiaries of the Financing Documents to which each such Person is a party,
will not
(a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to
which the Company or any Subsidiary is bound or by which the Company or
any Subsidiary or any of their respective properties may be bound or
affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary, which violations in the aggregate could reasonably be
expected to have a Material Adverse Effect.
5.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company or any Subsidiary of the
Financing Documents.
5.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in SCHEDULE 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including without
limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.9 TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments
(a) the amount of which is not individually or in the
aggregate Material or
(b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been paid for
all fiscal years up to and including the fiscal year ended December 31, 1995.
5.10 TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good title to their respective
properties that individually or in the aggregate are Material, including all
such properties reflected in the most recent audited balance sheet referred to
in Section 5.5 or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11 LICENSES, PERMITS, ETC.
Except as disclosed in SCHEDULE 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, pending
patents, copyright, service marks, trademarks, trade names or rights
thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others;
(b) to the reasonable knowledge of the Company, no product of
the Company or any of its Subsidiaries infringes in any material
respect any license, permit, franchise,
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
19
5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
authorization, patent, pending patent, copyright, service mark,
trademark, trade name or other right owned by any other Person;
(c) to the reasonable knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any of
its Subsidiaries with respect to any patent, pending patent, copyright,
service mark, trademark, trade name or other right owned or used by the
Company or any of its Subsidiaries; and
(d) all filings in federal and state offices (including,
without limitation, the United States Patent and Trademark Office) in
respect of all such patents, pending patents, copyrights, service
marks, trademarks and tradenames, and licenses with respect thereto,
necessary to protect the rights therein of the Company and its
Subsidiaries against third parties, have been made.
5.12 COMPLIANCE WITH ERISA.
(a) COMPLIANCE WITH LAW. The Company and each ERISA Affiliate
have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or Title IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee
benefit plans (as defined in section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably
be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or Title IV of ERISA or
to such penalty or excise tax provisions or to section 401(a)(29) or
section 412 of the Code, other than such liabilities or Liens as would
not be individually or in the aggregate Material.
(b) BENEFIT LIABILITIES. The present value of the aggregate
benefit liabilities under each of the Plans (other than Multiemployer
Plans), determined as of the end of such Plan's most recently ended
plan year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation report,
did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $600,000 in the
aggregate for all Plans. The term "BENEFIT LIABILITIES" has the meaning
specified in section 4001 of ERISA and the terms "CURRENT VALUE" and
"PRESENT VALUE" have the meaning specified in section 3 of ERISA.
(c) WITHDRAWAL LIABILITIES. The Company and its ERISA
Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or
4204 of ERISA in respect of Multiemployer Plans that individually or in
the aggregate are Material.
(d) POSTRETIREMENT BENEFITS. The expected postretirement
benefit obligation (determined as of the last day of the Company's most
recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the
Code) of the Company and its Subsidiaries is not Material.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(e) PROHIBITED TRANSACTIONS. The execution and delivery of the
Financing Documents and the issuance and sale of the Notes hereunder
will not involve any transaction that is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could be imposed
pursuant to section 4975(c)(1)(A) through section 4975(c)(1)(D),
inclusive, of the Code. The representation by the Company in the first
sentence of this Section 5.12(e) is made in reliance upon and subject
to
(i) the accuracy of your representation in Section
6.2 as to the sources of the funds used to pay the purchase
price of the Notes to be purchased by you and
(ii) the assumption, made solely for the purpose of
making such representation, that Department of Labor Prohibited
Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) with
respect to prohibited transactions remains valid in the
circumstances of the transactions contemplated herein.
5.13 PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any Person other than you, the Other Purchasers and not more than 20 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of section 5 of the Securities Act.
5.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in SCHEDULE 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 5% of the
value of such consolidated assets. As used in this Section, the terms "MARGIN
STOCK" and "PURPOSE OF BUYING OR CARRYING" shall have the meanings assigned to
them in said Regulation G.
5.15 EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, SCHEDULE 5.15 sets forth a
complete and correct list of all outstanding Indebtedness of the
Company and its Subsidiaries as of the Closing Date (indicating as to
each such Indebtedness the collateral, if any, securing such
Indebtedness), since which date there has been no Material change in
the amounts, interest rates, sinking funds, instalment payments or
maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default and
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
21
5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Subsidiary that would permit (or
that with notice or the lapse of time, or both, would permit) one or
more Persons to cause such Indebtedness to become due and payable
before its stated maturity or before its regularly scheduled dates of
payment.
(b) Except as disclosed in SCHEDULE 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.3.
5.16 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
The Company's use of the proceeds of the sale of the Notes will not
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
5.17 STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
5.18 ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them or disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws, in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
5.19 COLLATERAL.
(a) REPRESENTATIONS REGARDING COLLATERAL.
(i) UNIFORM COMMERCIAL CODE MATTERS.
(A) SCHEDULE 5.19(a)(i) sets forth
(I) the legal name of each of the
Company and its Subsidiaries,
(II) the address of the principal
executive office of each of the Company and
its Subsidiaries,
(III) each county and state where
personal property of the Company and its
Subsidiaries is located, and
(IV) each security interest in
personal property of the Company and its
Subsidiaries.
(B) Neither the Company nor any of its
Subsidiaries has
(I) changed its legal name, or
operated all or a portion of its business
under any name other than such name,
(II) moved its principal executive
office from the location listed on SCHEDULE
5.19(a)(i) since July 1, 1996, or
(III) moved any item of personal
property in which it has an interest and that
has a Fair Market Value in excess of $10,000
from the county where such personal property
was located on July 1, 1996, other than
inventory sold in the ordinary course of
business.
(ii) INTELLECTUAL PROPERTY. SCHEDULE 5.19(a)(ii)
contains a complete list and brief description of all patents,
trademarks, trade names, service marks, trade secrets and
copyrights, and license agreements relating to patent rights,
trademark rights, trade name rights, service mark rights, trade
secrets, and copyrights owned or licensed by the Company or any
of its Subsidiaries, and indicates the date of expiration
thereof. The Company has provided you with true and correct
copies of each of the items listed on SCHEDULE 5.19(a)(ii).
(iii) REAL PROPERTY. SCHEDULE 5.19(a)(iii) sets forth
the address of, nature and use of, and each interest in, real
property held by the Company and
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
its Subsidiaries and, together with the Mortgages, set forth
the names of the holders of, and describes, each other
interest in, such real property (whether as lessor, lessee,
mortgagee, mortgagor, fee holder, or otherwise). The property
descriptions attached to the Mortgages are complete and
correct.
(iv) EQUITY IN SUBSIDIARIES. SCHEDULE 5.19(a)(iv)
contains a complete list of all equity securities and
evidences of indebtedness issued by each of the Company's
Subsidiaries and owned by the Company.
(b) SECURITY DOCUMENTS.
(i) MORTGAGES. The Mortgages
(A) have been recorded as indicated on
SCHEDULE 5.19(b)(i) in the land records listed on
SCHEDULE 5.19(b)(i), and all taxes, recording fees and
other fees and charges required by applicable law to
be paid in connection therewith have been duly paid in
full, and
(B) create a valid first priority Lien in and
to the property described therein in favor of the
Security Trustee subject to no other Liens except to
the extent permitted by Section 10.3.
(ii) SECURITY AGREEMENT. The Security Agreement
creates (after filing UCC-1 financing statements as therein
provided) a valid and perfected first priority Lien in and to
the Collateral (as defined in the Security Agreement) in favor
of the Security Trustee subject to no Liens except to the
extent permitted by Section 10.3. All UCC-1 financing
statements required by the Security Agreement to be filed with
public recording offices have been so filed, and all taxes,
recording fees and other fees and charges required by
applicable law to be paid in connection therewith have been
duly paid in full.
(iii) PATENT COLLATERAL ASSIGNMENT. The Patent
Collateral Assignment
(A) creates (upon the filing thereof with the
United States Patent and Trademark Office and the
filing of UCC-1 financing statements as therein
provided) a valid and perfected first priority Lien in
and to the Collateral (as defined in the Patent
Collateral Assignment) in favor of the Security
Trustee subject to no Liens except to the extent
permitted by Section 10.3, and
(B) has been duly filed with the United States
Patent and Trademark Office and all taxes, recording
fees and other fees due in connection therewith have
been paid. All UCC-1 financing statements required by
the Patent Collateral Assignment to be filed with
public recording offices have been so filed, and all
taxes, recording fees and other fees and charges
required by applicable law to be paid in connection
therewith have been duly paid in full.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(iv) TRADEMARK SECURITY AGREEMENT. The Trademark
Security Agreement
(A) creates (upon the filing thereof with the
United States Patent and Trademark Office and the
filing of UCC-1 financing statements as therein
provided) a valid and perfected first priority Lien in
and to the Collateral (as defined in the Trademark
Security Agreement) in favor of the Security Trustee
subject to no Liens except to the extent permitted by
Section 10.3.
(B) has been duly filed with the United States
Patent and Trademark Office and all taxes, recording
fees and other fees due in connection therewith have
been paid. All UCC-1 financing statements required by
the Trademark Security Agreement to be filed with
public recording offices have been so filed, and all
taxes, recording fees and other fees and charges
required by applicable law to be paid in connection
therewith have been duly paid in full.
(v) PLEDGE AGREEMENT. The Pledge Agreement creates
(upon delivery of the Collateral (as defined in the Pledge
Agreement) to the Security Trustee) a valid and perfected first
priority Lien in and to the Collateral (as defined in the
Pledge Agreement) in favor of the Security Trustee subject to
no Liens, except to the extent permitted by Section 10.3. All
certificates and documents constituting Collateral (as defined
in the Pledge Agreement) have been delivered to the Security
Trustee, together with all related blank bond powers and stock
powers.
(c) WARRANTIES AND REPRESENTATIONS TRUE. All warranties and
representations made in each of the Security Documents are true and
correct as of the Closing Date.
6. REPRESENTATIONS OF THE PURCHASER
6.1 PURCHASE FOR INVESTMENT.
You represent that you are an Accredited Investor as defined in
Regulation D promulgated under the Securities Act and are purchasing the Notes
for your own account or for one or more separate accounts maintained by you or
for the account of one or more pension or trust funds and not with a view to the
distribution thereof, nor will you act in any way that would constitute you as
an underwriter within the meaning of the Securities Act, with respect to the
Notes, provided that the disposition of your or their property shall at all
times be within your or their control, subject to applicable laws. You
understand that the Notes have not been registered under the Securities Act or
any state securities laws and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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6 REPRESENTATIONS OF THE PURCHASER
6.2 SOURCE OF FUNDS.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in Department of Labor Prohibited Transaction Exemption 95-60
(60 FR 35925, July 12, 1995) and in respect thereof you represent that
there is no "employee benefit plan" (as defined in section 3(3) of
ERISA and section 4975(e)(1) of the IRC, treating as a single plan all
plans maintained by the same employer or employee organization or
affiliate thereof) with respect to which the amount of the general
account reserves and liabilities of all contracts held by or on behalf
of such plan exceed 10% of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statement filed with your
state of domicile, and that such acquisition is eligible for and
satisfies the other requirements of such exemption; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either
(i) an insurance company pooled separate account,
within the meaning of Prohibited Transaction Exemption ("PTE")
90-1 (issued January 29, 1990), or
(ii) a bank collective investment fund, within the
meaning of the PTE 91-38 (issued July 12, 1991) and, except as
you have disclosed to the Company in writing pursuant to this
paragraph (c), no employee benefit plan or group of plans
maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and
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SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
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6 REPRESENTATIONS OF THE PURCHASER
(i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed
to the Company in writing pursuant to this paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in section 3 of ERISA.
7. INFORMATION AS TO COMPANY
7.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) QUARTERLY STATEMENTS - within 45 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated and consolidating balance sheet
of the Company and its Subsidiaries as at the end of such
quarter, and
(ii) consolidated and consolidating statements of
operations, stockholders' equity and cash flows of the Company
and its Subsidiaries, for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year
ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) ANNUAL STATEMENTS -- within 90 days after the end of each
fiscal year of the Company, duplicate copies of,
17
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
27
7 INFORMATION AS TO COMPANY
(i) a consolidated and consolidating balance sheet of
the Company and its Subsidiaries, as at the end of such year,
and
(ii) consolidated and consolidating statements of
operations, stockholders' equity and cash flows of the Company
and its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion
shall state that such financial statements present fairly, in
all material respects, the financial position of the companies
being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that
the examination of such accountants in connection with such
financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that
they have reviewed the this Agreement and stating further
whether, in making their audit, they have become aware of any
condition or event that then constitutes a Default or an Event
of Default, and, if they are aware that any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure to
obtain knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an
audit in accordance with generally accepted auditing standards
or did not make such an audit),
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together
with the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's certificate
described in clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of
(i) each financial statement, report, notice or proxy
statement sent by the Company or any Subsidiary to public
securities holders generally, and
(ii) each regular or periodic report, each
registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with
the Securities and Exchange Commission and of all press
releases and other statements made available generally by the
Company or any Subsidiary to the public concerning
developments that are Material;
SPECTRAN CORPORATION 18 NOTE PURCHASE AGREEMENT
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7 INFORMATION AS TO COMPANY
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(e) ERISA MATTERS -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(c) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien, taken
together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(g) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
SPECTRAN CORPORATION 19 NOTE PURCHASE AGREEMENT
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7 INFORMATION AS TO COMPANY
7.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.4 through Section 10.7,
inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section , where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections , and the calculation of the amount, ratio or
percentage then in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
7.3 INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(b) DEFAULT -- if a Default or Event of Default then exists, at
the expense of the Company to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
SPECTRAN CORPORATION 20 NOTE PURCHASE AGREEMENT
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8 PREPAYMENT OF THE NOTES
8. PREPAYMENT OF THE NOTES
8.1 REQUIRED PREPAYMENTS.
(a) SERIES A NOTES. On December 26, 1999 and on each December
26 thereafter to and including December 26, 2002, the Company will
prepay $3,200,000 principal amount (or such lesser principal amount as
shall then be outstanding) of the Series A Notes at par and without
payment of the Make-Whole Amount provided that the principal amount of
the Series A Notes prepaid or purchased in connection with any partial
prepayment of the Series A Notes pursuant to Section 8.2 or Section 8.3
shall be applied against and reduce the principal amount of each
required prepayment of the Series A Notes becoming due under this
Section 8.1(a) on and after the date of such prepayment or purchase in
inverse order of maturity.
(b) SERIES B NOTES. On December 26, 2000 and on each December
26 thereafter to and including December 26, 2003, the Company will
prepay $1,600,000 principal amount (or such lesser principal amount as
shall then be outstanding) of the Series B Notes at par and without
payment of the Make-Whole Amount provided that the principal amount of
the Series B Notes prepaid or purchased in connection with any partial
prepayment of the Series B Notes pursuant to Section 8.2 or Section 8.3
shall be applied against and reduce the principal amount of each
required prepayment of the Series B Notes becoming due under this
Section 8.1(b) on and after the date of such prepayment or purchase in
inverse order of maturity.
8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in an amount not
less than 10% of the aggregate principal amount of the Notes then outstanding in
the case of a partial prepayment, at 100% of the principal amount so prepaid,
plus the Make-Whole Amount determined for the prepayment date with respect to
such principal amount. The Company will give each holder of Notes written notice
of each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall
(a) specify such date,
(b) refer to this Section 8.2,
(c) specify the aggregate principal amount of the Notes to be
prepaid on such date,
(d) specify the principal amount of each Note held by such
holder to be prepaid (determined in accordance with Section 8.6), and
(e) specify the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice
SPECTRAN CORPORATION 21 NOTE PURCHASE AGREEMENT
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8 PREPAYMENT OF THE NOTES
were the date of the prepayment), setting forth the details of such computation.
Two Business Days prior to such prepayment, the Company shall deliver to each
holder of Notes a certificate of a Senior Financial Officer specifying the
calculation of such Make-Whole Amount as of the specified prepayment date.
8.3 OPTIONAL PREPAYMENT OF NOTES WITHOUT MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below, on
December 26, 2001 and on any December 26 thereafter prepay up to $3,000,000
principal amount of the Notes (without distinction between series) at par and
without payment of the Make-Whole Amount provided that a prepayment under this
Section 8.3 may be made only once, regardless of the amount of the prepayment.
The Company will give each holder of Notes written notice of an optional
prepayment under this Section 8.3 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Such notice shall
(a) specify such date,
(b) refer to this Section 8.3,
(c) specify the aggregate principal amount of the Notes to be
prepaid on such date, and the principal amount of each Note held by
such holder to be prepaid (determined in accordance with Section 8.6),
and
(d) specify the interest to be paid on the prepayment date with
respect to such principal amount being prepaid.
8.4 CHANGE IN CONTROL.
(a) NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT. The Company
will, within 5 Business Days after any Responsible Officer has
knowledge of the occurrence of any Change in Control or Control Event,
give written notice of such Change in Control or Control Event to each
holder of Notes unless notice in respect of such Change in Control (or
the Change in Control contemplated by such Control Event) shall have
been given pursuant to Section 8.4(b). If a Change in Control has
occurred, such notice shall contain and constitute an offer to prepay
Notes as described in Section 8.4(c) and shall be accompanied by the
certificate described in Section 8.4(g).
(b) CONDITION TO COMPANY ACTION. The Company will not take any
action that consummates or finalizes a Change in Control unless
(i) at least 15 Business Days prior to such action it
shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as
described in Section 8.4(c), accompanied by the certificate
described in Section 8.4(g), and
(ii) contemporaneously with such action, it prepays
all Notes required to be prepaid in accordance with this
Section 8.4.
SPECTRAN CORPORATION 22 NOTE PURCHASE AGREEMENT
32
8 PREPAYMENT OF THE NOTES
(c) OFFER TO PREPAY NOTES. The offer to prepay Notes
contemplated by Section 8.4(a) and Section 8.4(b) shall be an offer to
prepay, in accordance with and subject to this Section 8.4, all, but
not less than all, the Notes held by each holder (in this case only,
"holder" in respect of any Note registered in the name of a nominee for
a disclosed beneficial owner shall mean such beneficial owner)
on a date specified in such offer (the "PROPOSED PREPAYMENT DATE"),
without distinction between series. If such Proposed Prepayment Date is
in connection with an offer contemplated by Section 8.4(a), such date
shall be not less than 15 Business Days and not more than 20 Business
Days after the date of such offer (if the Proposed Prepayment Date
shall not be specified in such offer, the Proposed Prepayment Date
shall be the 20th Business Day after the date of such offer).
(d) ACCEPTANCE; REJECTION. A holder of Notes may accept the
offer to prepay made pursuant to this Section 8.4 by causing a notice
of such acceptance to be delivered to the Company at least 2 days prior
to the Proposed Prepayment Date. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 8.4 shall
be deemed to constitute an acceptance of such offer by such holder.
(e) PREPAYMENT. Prepayment of the Notes to be prepaid pursuant
to this Section 8.4 shall be at 100% of the principal amount of such
Notes, plus, subject to Section 8.4(h), the Make-Whole Amount
determined for the date of prepayment with respect to such principal
amount, together with interest on such Notes accrued to the date of
prepayment. On the Business Day preceding the date of prepayment, the
Company shall deliver to each holder of Notes being prepaid a statement
showing the Make-Whole Amount, if any, due in connection with such
prepayment and setting forth the details of the computation of such
amount. The prepayment shall be made on the Proposed Prepayment Date
except as provided in Section 8.4(f).
(f) DEFERRAL PENDING CHANGE IN CONTROL. The obligation of the
Company to prepay Notes pursuant to the offers accepted in accordance
with Section 8.4(d) is subject to the occurrence of the Change in
Control in respect of which such offers and acceptances shall have been
made. In the event that such Change in Control does not occur on the
Proposed Prepayment Date in respect thereof, the prepayment shall be
deferred until and shall be made on the date on which such Change in
Control occurs. The Company shall keep each holder of Notes reasonably
and timely informed of
(i) any such deferral of the date of prepayment,
(ii) the date on which such Change in Control and the
prepayment are expected to occur, and
(iii) any determination by the Company that efforts
to effect such Change in Control have ceased or been abandoned
(in which case the offers and acceptances made pursuant to
this Section 8.4 in respect of such Change in Control shall be
deemed rescinded).
(g) OFFICER'S CERTIFICATE. Each offer to prepay the Notes
pursuant to this Section 8.4 shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated the
date of such offer, specifying:
SPECTRAN CORPORATION 23 NOTE PURCHASE AGREEMENT
33
8 PREPAYMENT OF THE NOTES
(i) that such offer is made pursuant to this Section
8.4;
(ii) the Proposed Prepayment Date;
(iii) the last date upon which the offer can be
accepted or rejected, and setting forth the consequences of
failing to provide an acceptance or rejection, as provided in
Section 8.4(d);
(iv) the principal amount of each Note offered to be
prepaid;
(v) the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of
such computation, or that no Make-Whole Amount is due
pursuant to Section 8.4(h), with supporting detail;
(vi) the interest that would be due on each Note
offered to be prepaid, accrued to the Proposed Prepayment
Date;
(vii) that the conditions of this Section 8.4 have
been fulfilled; and
(viii) in reasonable detail, the nature and date or
proposed date of the Change in Control.
(h) MAKE-WHOLE AMOUNT. Notwithstanding any other provision of
this Section 8.4, if the percentage of Voting Stock of every class
acquired by the Person or group that has precipitated the Change in
Control is not more than 50%, then no Make-Whole Amount will be due in
connection therewith.
(i) EFFECT ON REQUIRED PAYMENTS. The amount of each payment of
the principal of the Notes made pursuant to this Section 8.4 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.
8.5 OFFER TO PAY UPON TRANSFER OF PROPERTY.
(a) OFFER. The Company may, in connection with a Transfer made
in accordance with Section 10.7, make one or more irrevocable offers to
the holders of the Notes (without distinction between series) to pay
the principal of the Notes (together with the Make-Whole Amount due
with respect thereto and any interest accrued and unpaid thereon) in
connection with each such Transfer, in an amount, in the aggregate for
all such offers, not in excess of the Net Proceeds Amount in respect of
such Transfer. Each offer shall satisfy the requirements of Section
10.7 applicable to such Transfer. Such offer will be in writing and
will
(i) refer to this Section 8.5,
(ii) briefly describe the nature of the Transfer and
the Net Proceeds Amount received in connection therewith,
SPECTRAN CORPORATION 24 NOTE PURCHASE AGREEMENT
34
8 PREPAYMENT OF THE NOTES
(iii) specify the prepayment date (the "PREPAYMENT
DATE"), which shall not be less than 30 days after, nor more
than 40 days after, the date of such offer,
(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
8.5(b),
(v) specify the amount of such offer (the "DISPOSITION
PAYMENT AMOUNT"), the minimum ratable share of such Disposition
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 Prepayment Date,
(vi) specify the amount of interest that would be due
on each Note offered to be prepaid, accrued to such Prepayment
Date,
(vii) provide the calculation (with details) of an
estimated Make-Whole Amount (calculated as if the date of such
offer was the date of payment) due in connection with such
payment, and
(viii) 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 least 5 days prior to the
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 Disposition 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,
together with the Make-Whole Amount determined as of such Prepayment
Date, if any, and interest thereon accrued to such Prepayment Date,
shall become due and payable on such Prepayment Date. Two Business Days
prior to such Prepayment Date, the Company shall deliver to each holder
of Notes by facsimile transmission (confirmed by overnight courier) a
certificate of a Senior Financial Officer of the Company specifying the
amount of principal of such holder's Notes to be paid and specifying
the details of the calculation of such Make-Whole Amount as of the
Prepayment Date, and including a copy of the source of interest rate
information used in the calculation thereof. 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 8.5.
(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
SPECTRAN CORPORATION 25 NOTE PURCHASE AGREEMENT
35
8 PREPAYMENT OF THE NOTES
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.
8.6 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes pursuant to Section
8.1, Section 8.2 and Section 8.3, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes (without regard to series) at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
8.7 MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.8 PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.9 MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to the terms
hereof or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
SPECTRAN CORPORATION 26 NOTE PURCHASE AGREEMENT
36
8 PREPAYMENT OF THE NOTES
"MARGIN" means, the case of a prepayment made in connection
with Section 8.4, 1% per annum, and in all other cases, 0.60% per
annum.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, the Margin plus the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the display
designated as "Page USD" on the Bloomberg Financial Markets
System (or such other display as may replace Page USD on the
Bloomberg Financial Markets System) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement
Date, or
(ii) if such yields are not reported as of such time
or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date.
Such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial
practice and
(b) interpolating linearly between
(1) the actively traded U.S. Treasury
security with the duration closest to and greater
than the Remaining Average Life and
(2) the actively traded U.S. Treasury
security with the duration closest to and less than
the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing
(i) such Called Principal into
(ii) the sum of the products obtained by multiplying
(a) the principal component of each
Remaining Scheduled Payment with respect to such
Called Principal by
(b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between
the Settlement Date with respect to such
SPECTRAN CORPORATION 27 NOTE PURCHASE AGREEMENT
37
8. PREPAYMENT OF THE NOTES
Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to the terms hereof or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context
requires.
9. AFFIRMATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
9.1 COMPLIANCE WITH LAW.
The Company will, and will cause each of its Subsidiaries to, comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2 INSURANCE.
The Company will, and will cause each of its Subsidiaries to, maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.
9.3 MAINTENANCE OF PROPERTIES.
The Company will, and will cause each of its Subsidiaries to, maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
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9. AFFIRMATIVE COVENANTS
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
9.4 PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each of its Subsidiaries to, file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if
(a) the amount, applicability or validity thereof is contested
by the Company or such Subsidiary on a timely basis in good faith and
in appropriate proceedings, and the Company or such Subsidiary has
established adequate reserves therefor in accordance with GAAP on the
books of the Company or such Subsidiary or
(b) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse
Effect.
9.5 CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Section 10.2, the Company will at all
times preserve and keep in full force and effect the corporate existence of each
of its Subsidiaries (unless merged into the Company or a Subsidiary) and all
rights and franchises of the Company and its Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
9.6 LINE OF BUSINESS.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business if, as a result, the general nature of the business in
which the Company and its Subsidiaries, taken as a whole, would then be engaged
would be substantially changed from the general nature of the business in which
the Company and its Subsidiaries, taken as a whole, are engaged on the date of
this Agreement as described in the Disclosure Materials.
9.7 SUBSIDIARY SECURITY DOCUMENTS.
The Company will cause each Person which becomes a direct or indirect
Subsidiary of the Company to duly authorize, execute and deliver to each holder
of Notes all Security Documents that in the opinion of the Required Holders or
the Security Trustee are necessary to create and preserve the Liens provided in
the Security Documents on the properties of the Subsidiary, and a Subsidiary
Guaranty binding such Subsidiary, within 30 days of so becoming a Subsidiary of
the Company.
SPECTRAN CORPORATION 29 NOTE PURCHASE AGREEMENT
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9. AFFIRMATIVE COVENANTS
9.8 AMENDMENT TO BANK AGREEMENT.
The Company will not agree to any amendment or modification of, or
supplement to, the Bank Agreement, as in effect on the date hereof, the effect
of which is to
(a) materially increase the rate of interest on or fees payable
in respect of any of the extensions of credit made thereunder,
(b) shorten the maturity date of any of the credit available
thereunder,
(c) accelerate the terms under which extensions of credit
thereunder are payable or
(d) make the covenants or events of default contained therein,
taken as a whole, materially more restrictive than the covenants and
events of default set forth therein on the Closing Date.
9.9 FURTHER ASSURANCES.
(a) GENERALLY. The Company will, and will cause each Subsidiary
to, execute and deliver, within 30 days after any request therefor by
the Required Holders, all further instruments and documents and take
all further action that may be necessary, in order to give effect to,
and to aid in the exercise and enforcement of the Liens, rights and
remedies of the holders of Notes under, the Financing Documents
(excluding therefrom the JV Excluded Property).
(b) LIENS. The Company will, and will cause each Subsidiary to,
execute and deliver, within 30 days after any request therefor by the
Required Holders, all further instruments and documents and take all
further action that may be necessary, in order to create and perfect
Liens in favor of the Security Trustee in any property of the Company
or the Subsidiaries that is not then subject to a Lien or to a
perfected Lien (excluding therefrom the JV Excluded Property).
10. NEGATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
10.1 TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter into,
directly or indirectly, any Material transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.
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10. NEGATIVE COVENANTS
10.2 MERGER, CONSOLIDATION, ETC.
The Company will not, and will not permit any of its Subsidiaries to,
consolidate with or merge with any other Person or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to any Person, provided that such prohibition shall not apply to
the Company if:
(a) the successor formed by such consolidation or the survivor
of such merger or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety
(the "SURVIVOR"), as the case may be, shall be a solvent corporation
organized and existing under the laws of the United States or any State
thereof (including the District of Columbia), and
(b) if the Company is not such corporation, the Survivor and
each of its Subsidiaries shall have
(i) executed and delivered to each holder of any
Notes its assumption of the due and punctual performance and
observance of each covenant and condition of the Financing
Documents to which it is a party, and
(ii) caused to be delivered to each holder of any
Notes an opinion of independent counsel reasonably
satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the
terms hereof (subject to customary exceptions and
limitations), and
(c) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing and
the Survivor would be permitted under Section 10.5(a)(iii) to incur $1
of Funded Debt not owing to one of its Subsidiaries;
and provided further that any of the Company's Subsidiaries may merge with the
Company so long as the Company is the survivor of such merger, and any of the
Company's Subsidiaries may merge with another of the Company's Subsidiaries. No
such conveyance, transfer or lease of substantially all of the assets of the
Company or any Subsidiary shall have the effect of releasing the Company, any
such Subsidiary or any successor corporation that shall theretofore have become
such in the manner prescribed in this Section 10.2 from its liability under the
Financing Documents.
10.3 LIENS.
(a) GENERAL. The Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any
Lien on or with respect to any property or asset (including, without
limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Subsidiary, whether now owned or
held or hereafter acquired, or any income or profits therefrom (whether
or not provision is made for the equal and ratable securing of the
Notes in accordance with Section 10.3(c)), or assign or otherwise
convey any right to receive income or profits, except:
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10. NEGATIVE COVENANTS
(i) EXISTING LIENS -- Liens existing on the Closing
Date and securing the Debt of the Company and its Subsidiaries
referred to in SCHEDULE 5.15;
(ii) SECURITY DOCUMENTS -- Liens created by the
Security Documents;
(iii) INTRA-GROUP LIENS -- Liens on property or
assets of the Company or any of its Subsidiaries securing Debt
owing to the Company or to any of its Wholly-Owned
Subsidiaries;
(iv) TAXES, ETC. -- Liens for taxes, assessments or
other governmental charges which are not yet due and payable
or the payment of which is not at the time required by Section
9.4;
(v) ORDINARY COURSE LIENS -- Liens (other than any
Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business
(A) in connection with workers'
compensation, unemployment insurance and other types
of social security or retirement benefits, or
(B) to secure (or to obtain letters of
credit that secure) the performance of tenders,
statutory obligations, surety bonds, appeal bonds
(not in excess of $100,000), bids, leases (other than
Capital Leases), performance bonds, purchase,
construction or sales contracts and other similar
obligations, in each case not incurred or made in
connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred
purchase price of property;
(vi) MECHANICS LIENS -- statutory Liens of landlords
and Liens of carriers, warehousemen, mechanics, materialmen and
other similar Liens, in each case, incurred in the ordinary
course of business for sums not yet due and payable or the
payment of which is not at the time required by Section 9.4;
(vii) REAL ESTATE LIENS -- leases or subleases
granted to others, easements, rights-of-way, restrictions and
other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the
business of the Company or any of its Subsidiaries, provided
that such Liens do not, in the aggregate, materially detract
from the value of such property;
(viii) PURCHASE MONEY LIENS -- any Lien created to
secure all or any part of the purchase price, or to secure Debt
incurred or assumed to pay all or any part of the purchase
price or cost of construction, of property (or any improvement
thereon) acquired or constructed by the Company or a Subsidiary
after the date of the Closing, provided that
(A) any such Lien shall extend solely to the
item or items of such property (or improvement
thereon) so acquired or constructed and, if required
by the terms of the instrument originally creating
such Lien, other property (or improvement thereon)
which is an improvement to or is
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10 NEGATIVE COVENANTS
acquired for specific use in connection with such
acquired or constructed property (or improvement
thereon) or which is real property being improved by
such acquired or constructed property (or improvement
thereon),
(B) the principal amount of the Debt secured
by any such Lien shall at no time exceed an amount
equal to 100% the lesser of
(I) the cost to the Company or such
Subsidiary of the property (or improvement
thereon) so acquired or constructed and
(II) the Fair Market Value (as
determined in good faith by the board of
directors of the Company) of such property
(or improvement thereon) at the time of such
acquisition or construction, and
(C) any such Lien shall be created
contemporaneously with, or within 30 days after, the
acquisition or construction of such property; and
(ix) ACQUISITION LIENS -- any Lien existing on
property of a Person immediately prior to its being
consolidated with or merged into the Company or a Subsidiary or
its becoming a Subsidiary, or any Lien existing on any property
acquired by the Company or any Subsidiary at the time such
property is so acquired (whether or not the Debt secured
thereby shall have been assumed), provided that
(A) no such Lien shall have been created or
assumed in contemplation of such consolidation or
merger or such Person's becoming a Subsidiary or such
acquisition of property, and
(B) each such Lien shall extend solely to the
item or items of property so acquired and, if required
by the terms of the instrument originally creating
such Lien, other property which is an improvement to
or is acquired for specific use in connection with
such acquired property.
(b) INCURRENCE OF LIENS BY SUBSIDIARIES. For the purposes of
Section 10.3(a), any Person becoming a direct or indirect Subsidiary of
the Company after the Closing Date shall be deemed to have incurred all
of its then outstanding Liens at the time it becomes such a Subsidiary,
and any Person extending, renewing or refunding any Debt secured by any
Lien shall be deemed to have incurred such Lien at the time of such
extension, renewal or refunding.
(c) EQUAL AND RATABLE LIEN. If, notwithstanding the prohibition
contained herein, the Company shall, or shall permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit
to exist any Lien, other than those Liens permitted by Section 10.3(a),
it will make or cause to be made effective provision whereby the
Security Trustee will be granted Liens securing the Secured Obligations
(as defined in the Trust
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43
10 NEGATIVE COVENANTS
Indenture) equally and ratably with any and all other obligations
thereby secured, to the extent that such Secured Obligations are not
already secured thereby, such security to be pursuant to agreements
reasonably satisfactory to the Required Holders and, in any such case,
such Secured Obligations shall have the benefit, to the fullest extent
that, and with such priority as, the Secured Obligations may be
entitled under applicable law, of an equitable Lien on such property.
Such violation of Section 10.3(a) will constitute an Event of Default,
whether or not provision is made for an equal and ratable Lien pursuant
to this Section 10.3(c).
10.4 MAINTENANCE OF CONSOLIDATED NET WORTH.
The Company will not, at any time, permit Consolidated Net Worth to be
less than the sum of
(a) $23,000,000 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,
1997.
10.5 LIMITATION ON DEBT.
(a) FUNDED DEBT. 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. 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
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44
10 NEGATIVE COVENANTS
refunding any Debt shall be deemed to have incurred such Debt at the
time of such extension, renewal or refunding.
10.6 FIXED CHARGE COVERAGE.
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.
10.7 SALE OF ASSETS.
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.
11. EVENTS OF DEFAULT
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) PRINCIPAL OR MAKE-WHOLE AMOUNT PAYMENT -- the Company
defaults in the payment of any principal or Make-Whole Amount, if any,
on any Note when the same
SPECTRAN CORPORATION 35 NOTE PURCHASE AGREEMENT
45
11 EVENTS OF DEFAULT
becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or
(b) INTEREST PAYMENT -- the Company defaults in the payment of
any interest on any Note for more than 5 Business Days after the same
becomes due and payable; or
(c) NEGATIVE COVENANTS -- the Company defaults in the
performance of or compliance with any term contained in Section 10; or
(d) OTHER COVENANTS -- the Company or any Subsidiary defaults
in the performance of or compliance with any term contained herein
(other than those referred to in Section 11(a), Section 11(b) and
Section 11(c)) or in any other Financing Document and such default is
not remedied within 30 days after the earlier of
(i) a Responsible Officer obtaining actual knowledge
of such default and
(ii) the Company receiving written notice of such
default from any holder of a Note (any such written notice to
be identified as a "notice of default" and to refer
specifically to this Section 11(d)); or
(e) WARRANTIES AND REPRESENTATIONS -- any representation or
warranty made in writing by or on behalf of the Company or any
Subsidiary or by any officer of the Company or any Subsidiary in any
Financing Document, or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) CROSS-DEFAULT --
(i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of
any principal of or premium or make-whole amount or interest
on any Indebtedness that is outstanding in an aggregate
principal amount of at least $250,000 (without giving effect
to any period of grace provided with respect thereto), or
(ii) the Company or any Subsidiary is in default in
the performance of or compliance with any term of any evidence
of any Indebtedness in an aggregate outstanding principal
amount of at least $250,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared due and payable
before its stated maturity or before its regularly scheduled
dates of payment, or
(iii) the Company or any Subsidiary is in default in
the performance of or compliance with any term of any evidence
of any Indebtedness in an aggregate outstanding principal
amount of at least $250,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition one
or more Persons are entitled to
SPECTRAN CORPORATION 36 NOTE PURCHASE AGREEMENT
46
11 EVENTS OF DEFAULT
declare such Indebtedness to be, due and payable before its
stated maturity or before its regularly scheduled dates of
payment, provided that if such default or condition is
thereafter remedied, or such default or condition is waived or
the defaulted term is amended so as to eliminate such default,
pursuant in the case of such waiver or amendment to a written
agreement between such Persons and the Company and the
Subsidiaries, which written agreement is reasonably expected
by the Company to avoid a similar default for at least the
following 180 day period, then the Event of Default under this
Section 11(f)(iii) shall be terminated so long as the maturity
of the Notes have not then been accelerated under Section
12.1; or
(iv) as a consequence of the occurrence or
continuation of any event or condition (other than the passage
of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests),
(A) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment in an aggregate
outstanding principal amount of at least $250,000, or
(B) one or more Persons have the right to
require the Company or any Subsidiary so to purchase
or repay such Indebtedness; or
(g) INSOLVENCY -- the Company or any Material Subsidiary
(i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of
any jurisdiction,
(iii) makes an assignment for the benefit of its
creditors,
(iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its
property,
(v) is adjudicated as insolvent or to be liquidated,
or
(vi) takes corporate action for the purpose of any of
the foregoing; or
(h) APPOINTMENT OF A RECEIVER -- a court or governmental
authority of competent jurisdiction enters an order appointing, without
consent by the Company or any of its Subsidiaries, a custodian,
receiver, trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law
SPECTRAN CORPORATION 37 NOTE PURCHASE AGREEMENT
47
11. EVENTS OF DEFAULT
of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Subsidiaries, or any such
petition shall be filed against the Company or any of its Subsidiaries
and such petition shall not be dismissed within 60 days; or
(i) FINAL JUDGMENT -- a final judgment or judgments for the
payment of money aggregating in excess of $3,000,000 are rendered
against one or more of the Company and its Subsidiaries and which
judgments are not, within 45 days after entry thereof, bonded, insured,
discharged or stayed pending appeal, or are not discharged within 45
days after the expiration of such stay; or
(j) ERISA -- if
(i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of
the Code,
(ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC
or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $600,000,
(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan, or
(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary
thereunder;
and any such event or events described in clause (i) through clause
(vi) above, either individually or together with any other such event
or events, could reasonably be expected to have a Material Adverse
Effect (the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE WELFARE BENEFIT
PLAN" shall have the respective meanings assigned to such terms in
section 3 of ERISA); or
(k) SUBSIDIARY GUARANTY --
(i) any Subsidiary Guaranty shall cease to be in full
force and effect or shall be declared by a court or
Governmental Authority of competent
SPECTRAN CORPORATION 38 NOTE PURCHASE AGREEMENT
48
11. EVENTS OF DEFAULT
jurisdiction to be void, voidable or unenforceable against any
Subsidiary unless such Subsidiary immediately enters into a
Subsidiary Guaranty (substantially in the form of Exhibit I or
otherwise reasonably acceptable to the Required Holders) in
lieu of the Subsidiary Guaranty which was the subject of the
court's declaration, which new Subsidiary Guaranty is valid
and enforceable against the Subsidiary;
(ii) the validity or enforceability of any Subsidiary
Guaranty shall be contested by the Company, or any Subsidiary
or Affiliate thereof; or
(iii) the Company, or any Subsidiary or Affiliate
thereof, shall deny that any Subsidiary has any further
liability or obligation under any Subsidiary Guaranty.
12. REMEDIES ON DEFAULT, ETC.
12.1 ACCELERATION.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or paragraph (h) of Section 11 (other than
an Event of Default described in clause (i) of paragraph (g) or
described in clause (vi) of paragraph (g) by virtue of the fact that
such clause encompasses clause (i) of paragraph (g)) has occurred, all
the Notes then outstanding shall automatically become immediately due
and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 50% in principal amount
of the Notes at the time outstanding may at any time at its or their
option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or
paragraph (b) of Section 11 has occurred and is continuing, any holder
or holders of Notes at the time outstanding affected by such Event of
Default may at any time, at its or their option, by notice or notices
to the Company, declare all the Notes held by it or them to be
immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus
(i) all accrued and unpaid interest thereon and
(ii) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law),
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Company acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Company in the event that
the Notes
SPECTRAN CORPORATION 39 NOTE PURCHASE AGREEMENT
49
12. REMEDIES ON DEFAULT ETC.
are prepaid or are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under such
circumstances.
12.2 OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3 RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or clause (c) of Section 12.1, the holders of more than 50% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due
and payable and are unpaid other than by reason of such declaration,
and all interest on such overdue principal and Make-Whole Amount, if
any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate,
(b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration,
have been cured or have been waived pursuant to Section 17, and
(c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes.
No rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by any Financing Document upon any holder of any Note shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 15, the Company will pay
to the holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
SPECTRAN CORPORATION 40 NOTE PURCHASE AGREEMENT
50
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
13.1 REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2 TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in the
same series and aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note shall be payable to such Person as
such holder may request and shall be substantially in the form of Exhibit A1 or
Exhibit A2, as the case may be. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Note or dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less than $100,000,
provided that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representations set
forth in Section 6.2.
13.3 REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
an authorized officer of such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $50,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
SPECTRAN CORPORATION 41 NOTE PURCHASE AGREEMENT
51
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. PAYMENTS ON NOTES
14.1 PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest due and payable on the Notes shall be made in New York City,
New York or Boston, Massachusetts at the office of the Company or the Company's
bank in such jurisdiction. The Company may at any time, by notice to each holder
of a Note, change the place of payment of the Notes so long as such place of
payment shall be either the principal office of the Company in such jurisdiction
or the principal office of a bank or trust company in such jurisdiction.
14.2 HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in SCHEDULE A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.
15. EXPENSES, ETC.
15.1 TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by you and each Other Purchaser or holder of a Note in connection with
such transactions and in connection with any amendments, waivers or consents
under or in respect of the Financing Documents (whether or not such amendment,
waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending
(or determining whether or how to enforce or defend) any rights under
the Financing Documents or in
SPECTRAN CORPORATION 42 NOTE PURCHASE AGREEMENT
52
15. EXPENSES, ETC.
responding to any subpoena or other legal process or informal
investigative demand issued in connection with the Financing Documents
or by reason of being a holder of any Note, and
(b) the costs and expenses, including financial advisors'
fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes.
The Company will pay, and will save you and each other holder of a Note harmless
from, all claims in respect of any fees, costs or expenses if any, of brokers
and finders (other than those retained by you).
15.2 SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of any Financing Document, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained in any Financing Document
shall survive the execution and delivery of this Agreement and the Notes, the
purchase or transfer by you of any Note or portion thereof or interest therein
and the payment of any Note, and may be relied upon by any subsequent holder of
a Note, regardless of any investigation made at any time by or on behalf of you
or any other holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant to any
Financing Document shall be deemed representations and warranties of the Company
under this Agreement. Subject to the preceding sentence, the Financing Documents
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
17. AMENDMENT AND WAIVER.
17.1 REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that
(a) no amendment or waiver of any of the provisions of Section
1 through Section 6, inclusive, or Section 21, or any defined term (as
it is used therein), will be effective as to you unless consented to by
you in writing, and
(b) no such amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected
thereby,
(i) subject to the provisions of Section 12 relating
to acceleration or rescission, change the amount or time of
any prepayment or payment of principal
SPECTRAN CORPORATION 43 NOTE PURCHASE AGREEMENT
53
17. AMENDMENT AND WAIVER
of, or reduce the rate or change the time of payment or method
of computation of interest or of the Make-Whole Amount on, the
Notes,
(ii) change the percentage of the principal amount of
the Notes the holders of which are required to consent to any
such amendment or waiver, or
(iii) amend any of Section 8, Section 11(a), Section
11(b), Section 12, Section 17 or Section 20.
17.2 SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, at least 30 days in advance of the date a
decision is required, in order to enable such holder to make an
informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions hereof
or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding Notes
promptly following the date on which it is executed and delivered by,
or receives the consent or approval of, the requisite holders of Notes.
(b) PAYMENT. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
17.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4 NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under any
Financing Document, or have directed the taking of any action provided herein or
in the Notes to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then outstanding, Notes
SPECTRAN CORPORATION 44 NOTE PURCHASE AGREEMENT
54
17. AMENDMENT AND WAIVER
directly or indirectly owned by the Company or any of its Affiliates shall be
deemed not to be outstanding.
18. NOTICES
All notices and communications provided for hereunder shall be in
writing and sent
(a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or
(b) by registered or certified mail with return receipt
requested (postage prepaid), or
(c) by a recognized overnight delivery service (with charges
prepaid).
Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in SCHEDULE A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Bruce Cannon, C.F.O.,
or at such other address as the Company shall have specified to the
holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS
This Agreement and all documents relating thereto, including, without
limitation,
(a) consents, waivers and modifications that may hereafter be
executed,
(b) documents received by you at the Closing (except the Notes
themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you,
may be reproduced by you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This
SPECTRAN CORPORATION 45 NOTE PURCHASE AGREEMENT
55
19. REPRODUCTION OF DOCUMENTS
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
20. CONFIDENTIAL INFORMATION
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the
time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary, or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or
disclose Confidential Information to
(i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes),
(ii) your financial advisors and other professional advisors
who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section
20),
(v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions
of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
SPECTRAN CORPORATION 46 NOTE PURCHASE AGREEMENT
56
20. CONFIDENTIAL INFORMATION
(vii) the National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating agency
that requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure
may be necessary or appropriate
(A) to effect compliance with any law, rule,
regulation or order applicable to you,
(B) in response to any subpoena or other legal
process,
(C) in connection with any litigation to which you
are a party or
(D) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies
under your Notes and this Agreement,
provided that you will use reasonable efforts to give the Company prior
notice of such disclosure and will not object to the Company's efforts
to obtain confidential treatment of the disclosed information in any
such proceeding.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
21. SUBSTITUTION OF PURCHASER
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
SPECTRAN CORPORATION 47 NOTE PURCHASE AGREEMENT
57
22. MISCELLANEOUS
22. MISCELLANEOUS
22.1 SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in any Financing Document
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
22.2 PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
22.3 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4 CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
22.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS EXCLUDING CHOICE-OF-LAW PRINCIPLES OF
SPECTRAN CORPORATION 48 NOTE PURCHASE AGREEMENT
58
22. MISCELLANEOUS
THE LAW OF SUCH JURISDICTION THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH JURISDICTION.
[Remainder of page intentionally blank. Next page is signature page.]
SPECTRAN CORPORATION 49 NOTE PURCHASE AGREEMENT
59
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
SPECTRAN CORPORATION
By /s/ Bruce A. Cannon
------------------------------------
Name: Bruce A. Cannon
Title: Secretary
The foregoing is hereby
agreed to as of the
date thereof.
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK
By /s/ Peter W. Oliver
---------------------------------
Name: Peter W. Oliver
Title: Managing Director
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
60
SCHEDULE A
================================================================================
PURCHASER NAME MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; Series; RA-1; Series A
Principal Amount $5,500,000
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Citibank, N.A.
111 Wall Street
New York, NY 10043
ABA No.: 021000089
For MassMutual Long Term Pool
Account No.: 4067-3488
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: SPECTRAN CORPORATION
Description of
Security: 9.24% Series A Senior
Secured Notes due 2003
Security Number: 847598 A* 0
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Address for Notices Related to Massachusetts Mutual Life Insurance Company
Payments --1295 State Street
Springfield, MA 01111
Attn: Securities Custody and Collection
Department, F381
with telephonic advice of payment to:
Massachusetts Mutual Life Insurance
Company Securities Custody and
Collection Department at (413) 744-3878
- --------------------------------------------------------------------------------
Address for All other Notices Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attn: Securities Investment Division
- --------------------------------------------------------------------------------
Other Instructions MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By_______________________
Name:
Title:
- --------------------------------------------------------------------------------
Instructions re Delivery of Notes Mary Carey, Esq.
Massachusetts Mutual Life Insurance Company
1295 State Street, Mail Code B233
Springfield, MA 01111-0001
Tel: 413-744-6189
- --------------------------------------------------------------------------------
Tax Identification Number 04-1590850
================================================================================
SPECTRAN CORPORATION Schedule A-1 NOTE PURCHASE AGREEMENT
61
================================================================================
PURCHASER NAME MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; Series; RA-2; Series A
Principal Amount $1,500,000
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
New York, NY 10081
ABA No.: 021000021
For MassMutual IFM Non-Traditional
Account No.: 910-2509073
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: SPECTRAN CORPORATION
Description of
Security: 9.24% Series A Senior
Secured Notes due 2003
Security Number: 847598 A* 0
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Address for Notices Related to Massachusetts Mutual Life Insurance Company
Payments 1295 State Street
Springfield, MA 01111
Attention: Securities Custody and
Collection Department, F381
with telephonic advice of payment to:
Massachusetts Mutual Life Insurance
Company Securities Custody and
Collection Department at (413) 744-3878
- --------------------------------------------------------------------------------
Address for All other Notices Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attention: Securities Investment Division
- --------------------------------------------------------------------------------
Other Instructions MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By_______________________
Name:
Title:
- --------------------------------------------------------------------------------
Instructions re Delivery of Notes Mary Carey, Esq.
Massachusetts Mutual Life Insurance Company
1295 State Street, Mail Code B233
Springfield, MA 01111-0001
Tel: 413-744-6189
- --------------------------------------------------------------------------------
Tax Identification Number 04-1590850
================================================================================
SPECTRAN CORPORATION Schedule A-2 NOTE PURCHASE AGREEMENT
62
================================================================================
PURCHASER NAME CM LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered CM LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Note Registration Number; Series; RA-3; Series A
Principal Amount $1,000,000
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Citibank, N.A.
111 Wall Street
New York, NY 10043
ABA No.: 021000089
For Segment 43 - Universal Life
Account No.: 4068-6561
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: SPECTRAN CORPORATION
Description of
Security: 9.24% Series A Senior
Secured Notes due 2003
Security Number: 847598 A* 0
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Address for Notices Related to CM Life Insurance Company
Payments c/o Massachusetts Mutual Life Insurance
Company
1295 State Street
Springfield, MA 01111
Attention: Securities Custody and
Collection Department, F381
with telephonic advice of payment to:
Massachusetts Mutual Life Insurance
Company Securities Custody and
Collection Department at (413) 744-3878
- --------------------------------------------------------------------------------
Address for All other Notices CM Life Insurance Company
c/o Massachusetts Mutual Life Insurance
Company
1295 State Street
Springfield, MA 01111
Attention: Securities Investment Division
- --------------------------------------------------------------------------------
Other Instructions CM LIFE INSURANCE COMPANY
By_______________________
Name:
Title:
- --------------------------------------------------------------------------------
Instructions re Delivery of Notes Mary Carey, Esq.
Massachusetts Mutual Life Insurance Company
1295 State Street, Mail Code B233
Springfield, MA 01111-0001
Tel: 413-744-6189
- --------------------------------------------------------------------------------
Tax Identification Number 06-1041383
================================================================================
SPECTRAN CORPORATION Schedule A-3 NOTE PURCHASE AGREEMENT
63
================================================================================
PURCHASER NAME THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK
- --------------------------------------------------------------------------------
Name in Which Note is Registered THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK
- --------------------------------------------------------------------------------
Note Registration Number; Series; RA-4; Series A
Principal Amount $8,000,000
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information Chase Manhattan Bank
ABA No.: 021000021
For the Account of: The Mutual Life
Insurance Company of New York's
Security Remittance Account
Account No.: 321-023803
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: SPECTRAN CORPORATION
Description of
Security: 9.24% Series A Senior
Secured Notes due 2003
Security Number: 847598 A* 0
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Address for Notices Related to Glenpointe Marketing & Operations Center -
Payments MONY
Glenpointe Center West
500 Frank W. Burr Blvd.
Teaneck, NJ 07666-6888
Attention: Securities Custody
- --------------------------------------------------------------------------------
Address for All other Notices The Mutual Life Insurance Company of New
York
1740 Broadway
New York, NY 10019
Attention: MONY Capital Management Unit
- --------------------------------------------------------------------------------
Other Instructions THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK
By_______________________
Name:
Title:
- --------------------------------------------------------------------------------
Instructions re Delivery of Notes Law Department of Purchaser
- --------------------------------------------------------------------------------
Tax Identification Number 13-1632487
================================================================================
SPECTRAN CORPORATION Schedule A-4 NOTE PURCHASE AGREEMENT
64
================================================================================
PURCHASER NAME PACIFIC MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Name in Which Note is Registered ATWELL & CO
- --------------------------------------------------------------------------------
Note Registration Number; Series; RB-1; Series B
Principal Amount $5,000,000
RB-2; Series B
$2,000,000
RB-3; Series B
$1,000,000
- --------------------------------------------------------------------------------
Payment on Account of Note
Method Federal Funds Wire Transfer
Account Information The Chase Manhattan Bank, N.A.
ABA No.: 021-000-021
A/C = 9009-002206
For the Account of:
BBK = Chase Manhattan Bank / SSTO
A/C Name: Pacific Mutual Gen Acct
Sub A/C Number: 47363300
Regarding: Security Description and PPN
- --------------------------------------------------------------------------------
Accompanying Information Name of Company: SPECTRAN CORPORATION
Description of
Security: 9.39% Series B Senior
Secured Notes due 2004
Security Number: 847598 A@ 8
Due Date and Application (as among
principal, premium and interest) of the
payment being made:
- --------------------------------------------------------------------------------
Address for Notices Related to The Chase Manhattan Bank, N.A.
Payments P.O. Box 456
Wall Street Station
New York, NY 10005
WITH COPIES TO:
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
Attention: Securities Processing
- --------------------------------------------------------------------------------
Address for All other Notices Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
Attention: Fixed Income Securities
Department
- --------------------------------------------------------------------------------
Other Instructions PACIFIC MUTUAL LIFE INSURANCE COMPANY
By_______________________
Name:
Title:
By_______________________
Name:
Title:
- --------------------------------------------------------------------------------
Instructions re Delivery of Notes Law Department of Purchaser
- --------------------------------------------------------------------------------
Tax Identification Number 13-6065575
================================================================================
SPECTRAN CORPORATION Schedule A-5 NOTE PURCHASE AGREEMENT
65
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
AFFILIATE - Means at any time, and with respect to any person,
(a) any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests.
As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
AGREEMENT, THIS -- is defined in Section 17.3.
ASSET DISPOSITION -- means any Transfer except :
(a) any
(i) Transfer from a Subsidiary to the Company or a
Wholly-Owned Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned
Subsidiary; and
(iii) Transfer from the Company to a Subsidiary (other
than a Wholly-Owned Subsidiary) or from a Subsidiary to another
Subsidiary, which in either case is for Fair Market Value,
so long as immediately before and immediately after the consummation
of any such Transfer and after giving effect thereto, no Default or
Event of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either inventory held for sale or
equipment, fixtures, supplies or materials no longer required in the
operation of the business of the Company or any of its Subsidiaries or
that is obsolete.
BANK -- means, collectively, Fleet National Bank and its successors and
assigns under the Bank Agreement.
SPECTRAN CORPORATION Schedule B-1 NOTE PURCHASE AGREEMENT
66
BANK AGREEMENT -- means that certain Loan Agreement, dated as of
December 1, 1996, among the Company, SpecTran Specialty Optics Company, Applied
Photonic Devices, Inc., SpecTran Communication Fiber Technologies, Inc., and
Fleet National Bank, as amended from time to time.
BUSINESS DAY -- means
(a) for the purposes of Section 8.9 only, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York City
are required or authorized to be closed, and
(b) for the purposes of any other provision of this Agreement,
any day other than a Saturday, a Sunday or a day on which commercial
banks in Springfield, Massachusetts, New York City, New York, or Los
Angeles, California are required or authorized to be closed.
CAPITAL LEASE -- means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
CHANGE IN CONTROL -- has occurred if at any time any person (as such
term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in
effect on the Closing Date) or related persons constituting a group (as such
term is used in Rule 13d-5 under the Exchange Act), other than a person who then
qualifies as a member of Current Management, or a group of which all persons
constituting Current Management at such time are a part, become the "beneficial
owners" (as such term is used in Rule 13d-3 under the Exchange Act as in effect
on the Closing Date), directly or indirectly, of more than the Control
Percentage in effect at such time of the total voting power of all classes then
outstanding of the Company's voting stock. As used in this definition,
Control Percentage -- means, prior to January 1, 2000, 30%, and
on and after January 1, 2000, 50%.
Current Management -- means, at any time,
(a) Raymond E. Jaeger, Glenn E. Moore, Bruce A.
Cannon, John E. Chapman, William B. Beck and Crawford L. Cutts
and
(b) individuals who were, at such time, officers or
directors of the Company during the preceding period of 24
consecutive months.
CLOSING -- is defined in Section 3.
CLOSING DATE -- is defined in Section 3.
CODE -- means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
COMPANY -- is defined in the introductory sentence hereto.
CONFIDENTIAL INFORMATION -- is defined in Section 20.
SPECTRAN CORPORATION Schedule B-2 NOTE PURCHASE AGREEMENT
67
CONSOLIDATED ASSETS -- means, at any time, the total assets of the
Company and its Subsidiaries which would be shown as assets on a consolidated
balance sheet of the Company and its Subsidiaries as of such time prepared in
accordance with GAAP, after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Subsidiaries.
CONSOLIDATED CASH FLOW -- means, for any period, Cash Flow of the
Company and its Subsidiaries determined on a consolidated basis for such period
provided that Consolidated Cash Flow for any period shall be adjusted to reflect
the effect of all acquisitions and dispositions of Subsidiaries and the
incurrence and disposition of Debt in connection therewith, assuming for
purposes of calculation that all such acquisitions and dispositions that
occurred during such period occurred on the first day of such period. As used in
this definition,
Cash Flow -- means, for any period,
(a) Consolidated Net Income for such period, plus
(b) depreciation expense, amortization expense,
Interest Expense, and income tax expense, to the extent
deducted in the determination of such Consolidated Net Income.
CONSOLIDATED EARNINGS AVAILABLE FOR FIXED CHARGES -- means, for any
period, Earnings Available for Fixed Charges of the Company and its
Subsidiaries, determined on a consolidated basis at such time, provided that
Consolidated Earnings Available for Fixed Charges for any period shall be
adjusted to reflect the effect of all acquisitions and dispositions of
Subsidiaries and the incurrence and disposition of Debt in connection therewith,
assuming for purposes of calculation that all such acquisitions and dispositions
that occurred during such period occurred on the first day of such period. As
used in this definition,
Earnings Available for Fixed Charges -- means, for any period,
(a) Consolidated Net Income for such period, plus
(b) (i) Interest Expense and income tax
expense, plus
(ii) Consolidated Minimum Operating Lease
Rentals,
to the extent deducted in the determination of such
Consolidated Net Income for such period.
CONSOLIDATED FIXED CHARGES -- means, for any period, the sum of
Consolidated Minimum Operating Lease Rentals for such period plus Interest
Expense of the Company and its Subsidiaries to the extent included in the
determination of Consolidated Net Income for such period, provided that
Consolidated Fixed Charges for any period shall be adjusted to reflect the
effect of all acquisitions and dispositions of Subsidiaries and the incurrence
and disposition of Debt in connection therewith, assuming for purposes of
calculation that all such acquisitions and dispositions that occurred during
such period occurred on the first day of such period.
CONSOLIDATED FUNDED DEBT -- means, at any time, the amount of Funded
Debt of the Company and its Subsidiaries, determined on a consolidated basis at
such time.
SPECTRAN CORPORATION Schedule B-3 NOTE PURCHASE AGREEMENT
68
CONSOLIDATED MINIMUM OPERATING LEASE RENTALS -- means, for any period,
Net Rentals of the Company and its Subsidiaries determined on a consolidated
basis for such period. As used in this definition,
Net Rentals -- means, for any period, and any Person,
(a) all payments made by such Person during such
period in respect of leases of real and personal property other
than Capital Leases, minus
(b) the amount of rental payments made to such Person
by others in respect of fixed rental payments under
non-cancelable sub-leases with a term of at least 1 year on
properties of such Person subject to leases described in the
immediately preceding clause (a).
CONSOLIDATED NET DEBT -- means, at any time, the amount equal to
(a) Debt of the Company and its Subsidiaries, determined
on a consolidated basis at such time, minus
(b) the lesser of
(i) $5,000,000, or
(ii) the current book value of all cash and marketable
securities owned by the Company and its Subsidiaries,
determined on a consolidated basis at such time.
CONSOLIDATED NET INCOME -- means, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries for such period (taken as a
cumulative whole), as determined in accordance with GAAP, after eliminating all
offsetting debits and credits between the Company and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its Subsidiaries in
accordance with GAAP, provided that there shall be excluded:
(a) the income (or loss) of any Person (other than a
Subsidiary) in which the Company or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by the Company or such Subsidiary in the form of cash
dividends or similar cash distributions, and
(b) gains and losses classified as extraordinary in accordance
with GAAP.
CONSOLIDATED NET WORTH -- means, at any time,
(a) the total assets of the Company and its Subsidiaries which
would be shown as assets on a consolidated balance sheet of the Company
and its Subsidiaries as of such time prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries, minus
(b) the total liabilities of the Company and its Subsidiaries
(exclusive of liabilities in respect of deferred income taxes) which
would be shown as liabilities on a
SPECTRAN CORPORATION Schedule B-4 NOTE PURCHASE AGREEMENT
69
consolidated balance sheet of the Company and its Subsidiaries as of
such time prepared in accordance with GAAP.
CONSOLIDATED TOTAL ADJUSTED CAPITALIZATION -- means, at any time, the
sum of Consolidated Net Debt plus Consolidated Tangible Net Worth, determined at
such time. As used in this definition,
Consolidated Tangible Net Worth -- means, at any time, Tangible
Net Worth of the Company and its Subsidiaries, determined on a
consolidated basis at such time.
Tangible Net Worth -- means, at any time, in respect of any
Person,
(a) net worth, minus
(b) goodwill, minus
(c) all Intangible Assets,
of such Person determined at such time.
Intangible Assets -- means, with respect to any Person,
goodwill, trade names, trademarks, copyrights, patents, licenses,
contract rights, capitalized cost of acquired contracts, employment
contracts, customer lists, trained work force, organization expense,
unamortized debt discount and expense and all other intangible assets
of such Person properly classified as such in accordance with GAAP. For
the avoidance of doubt, deferred tax assets shall not be considered
"Intangible Assets" for any purpose hereunder.
CONTROL EVENT -- means:
(a) the execution by the Company or any of its Subsidiaries or
Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events
which, individually or in the aggregate, may reasonably be expected to
result in a Change in Control,
(b) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control,
or
(c) the making of any written offer by any person (as such term
is used in section 13(d) and section 14(d)(2) of the Exchange Act as in
effect on the date of the Closing) or related persons constituting a
group (as such term is used in Rule 13d-5 under the Exchange Act as in
effect on the date of the Closing) to the holders of the common stock
of the Company, which offer, if accepted by the requisite number of
holders, would result in a Change in Control.
DEBT -- with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(b) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
SPECTRAN CORPORATION Schedule B-5 NOTE PURCHASE AGREEMENT
70
(c) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(d) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(e) Swaps of such Person provided that Swaps entered into by
the Company and the Bank in connection with the Notes shall be excluded
from "Debt"; and
(f) any Guaranty of such Person with respect to liabilities of
a type described in any of clause (a) through clause (d) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through clause (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP. Debt shall not in any event include
unfunded pension liabilities.
DEBT PREPAYMENT APPLICATION -- means, with respect to any Transfer of
property, the application by the Company or its Subsidiaries of cash in an
amount equal to the Net Proceeds Amount with respect to such Transfer to pay
Senior Funded Debt of the Company (other than Senior Funded Debt owing to the
Company, any of its Subsidiaries or any Affiliate and Senior Funded Debt in
respect of any revolving credit or similar credit facility providing the Company
or any of its Subsidiaries with the right to obtain loans or other extensions of
credit from time to time, except to the extent that in connection with such
payment of Senior Funded Debt the availability of credit under such credit
facility is permanently reduced by an amount not less than the amount of such
proceeds applied to the payment of such Senior Funded Debt, provided that in the
course of making such application the Company shall offer to prepay each
outstanding Note in accordance with Section 8.5 in a principal amount which,
when added to the Make-Whole Amount applicable thereto, equals the Ratable
Portion for such Note. If any holder of a Note fails to accept such offer of
prepayment, then, for purposes of the preceding sentence only, the Company
nevertheless will be deemed to have applied the amount of such offer to the
payment of Senior Funded Debt. As used in this definition,
Ratable Portion -- means for any Note an amount equal to the
product of
(a) the Net Proceeds Amount being so offered to the
payment of Senior Funded Debt multiplied by
(b) a fraction the numerator of which is the
outstanding principal amount of such Note and the denominator
of which is the aggregate principal amount of Senior Funded
Debt of the Company and its Subsidiaries.
Senior Funded Debt -- means the Notes and any Funded Debt of
the Company or its Subsidiaries that by its terms is not subordinated
in right of payment to the Notes.
DEFAULT -- means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
DEFAULT RATE -- means that rate of interest that is the greater of
SPECTRAN CORPORATION Schedule B-6 NOTE PURCHASE AGREEMENT
71
(a) in the case of Series A Notes,
(i) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of the Series A Notes or
(ii) 2% over the rate of interest publicly announced
by Morgan Guaranty Trust Company in New York City as its "base"
or "prime" rate, and
(a) in the case of Series B Notes,
(i) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of the Series B Notes or
(ii) 2% over the rate of interest publicly announced
by Morgan Guaranty Trust Company in New York City as its "base"
or "prime" rate.
DISCLOSURE MATERIALS -- is defined in Section 5.3.
DISPOSITION PAYMENT AMOUNT -- is defined in Section 8.5(a)(v).
DISPOSITION VALUE -- means, at any time, with respect to any property
(a) in the case of property that does not constitute Subsidiary
Stock, the book value thereof, valued at the time of such disposition
in good faith by the Company, and
(b) in the case of property that constitutes Subsidiary Stock,
an amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that
the book value of such Subsidiary Stock represents of the book value of
all of the outstanding capital stock of such Subsidiary (assuming, in
making such calculations, that all securities convertible into such
capital stock are so converted and giving full effect to all
transactions that would occur or be required in connection with such
conversion) determined at the time of the disposition thereof, in good
faith by the Company.
ENVIRONMENTAL LAWS -- means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
ERISA AFFILIATE -- means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
EVENT OF DEFAULT -- is defined in Section 11.
EXCHANGE ACT -- means the Securities Exchange Act of 1934, as amended.
SPECTRAN CORPORATION Schedule B-7 NOTE PURCHASE AGREEMENT
72
FAIR MARKET VALUE -- means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
FINANCING DOCUMENTS -- means this Agreement, the Other Agreements, the
Notes and the Security Documents and each other agreement document and
certificate executed from time to time in connection therewith, all as amended
from time to time.
FUNDED DEBT -- means at any time with respect to any Person, all Debt
of that Person that would, in accordance with GAAP, constitute long term debt
including:
(a) any Debt with a maturity of more than one year after the
creation of such Debt,
(b) any Debt outstanding under a revolving credit or similar
agreement providing for borrowings (and renewals and extensions
thereof) which pursuant to its terms would constitute long term Debt in
accordance with GAAP,
(c) any Capital Lease obligations, and
(d) any Guaranty of that Person with respect to Funded Debt of
another Person,
provided that the current maturities of Funded Debt shall also be Funded Debt.
Notwithstanding anything to the contrary contained in this definition, any Debt
outstanding under a revolving credit or similar agreement providing for
borrowings which is paid down to $0 for a period of 30 consecutive days during
the then most recently ended 12 month period (and not merely refinanced with a
short term credit facility) will not be deemed to constitute Funded Debt.
GAAP -- means generally accepted accounting principles as in effect
from time to time in the United States of America.
GOVERNMENTAL AUTHORITY -- means
(a) the government of
(i) the United States of America or any state or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
GUARANTY -- means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of
SPECTRAN CORPORATION Schedule B-8 NOTE PURCHASE AGREEMENT
73
any other Person in any manner, whether directly or indirectly, including
(without limitation) obligations incurred through an agreement, contingent or
otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
HAZARDOUS MATERIAL -- means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
HOLDER -- means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
INDEBTEDNESS -- with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
SPECTRAN CORPORATION Schedule B-9 NOTE PURCHASE AGREEMENT
74
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
INSTITUTIONAL INVESTOR -- means
(a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate
principal amount of the Notes then outstanding, and
(c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment company,
any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
INTEREST EXPENSE -- means, for any period, and in respect of any
Person, all amounts that would, in accordance with GAAP, be deducted in
computing net income on account of interest on Debt of such Person for such
period, including, without limitation, imputed interest in respect of Capital
Lease obligations, amortization of Debt discounts and expenses, fees and
commissions for letters of credit and bankers' acceptance financing and the net
interest costs of interest rate swaps and hedges.
JV EXCLUDED PROPERTY -- has the meaning specified in the Security
Agreement.
JV SUBSIDIARY -- has the meaning specified in the Security Agreement.
JV TRANSFER -- has the meaning specified in the Security Agreement.
LIEN -- means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
MAKE-WHOLE AMOUNT -- is defined in Section 8.9.
MATERIAL -- means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
MATERIAL ADVERSE EFFECT -- means a material adverse effect on
SPECTRAN CORPORATION Schedule B-10 NOTE PURCHASE AGREEMENT
75
(a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Subsidiaries taken as a
whole, or
(b) the ability of the Company to perform its obligations under
any of the Financing Documents to which it is a party, or
(c) the ability of any Subsidiary to perform its obligations
under any of the Financing to which it is a party, or
(d) the validity or enforceability of any of the Financing
Documents.
MATERIAL SUBSIDIARY -- means, at any date, a Subsidiary of the Company
to which is attributable more than
(a) 5% percent of Consolidated Assets or Consolidated Net Worth
as of the end of the then most recently ended fiscal quarter of the
Company, or
(b) 5% percent of Consolidated Net Income for the period of 4
consecutive fiscal quarters then most recently ended.
MORTGAGES -- is defined in Section 4.10(h)(i).
MULTIEMPLOYER PLAN -- means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
NET PROCEEDS AMOUNT -- means, with respect to any Transfer of any
property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer.
NOTES -- is defined in Section 1.
OFFICER'S CERTIFICATE -- means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
OTHER AGREEMENTS -- is defined in Section 2.
OTHER PURCHASERS -- is defined in Section 2.
PATENT COLLATERAL ASSIGNMENT -- is defined in Section 4.10(c).
PBGC -- means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
SPECTRAN CORPORATION Schedule B-11 NOTE PURCHASE AGREEMENT
76
PERSON -- means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
PLAN -- means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
PLEDGE AGREEMENT -- is defined in Section 4.10(e).
PREFERRED STOCK -- means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
PREPAYMENT DATE -- is defined in Section 8.5(a)(iii).
PROPERTY OR PROPERTIES -- means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
PROPERTY REINVESTMENT APPLICATION -- means, with respect to any
Transfer of property, the application of an amount equal to the Net Proceeds
Amount with respect to such Transfer to the acquisition by the Company or any
Subsidiary of operating assets of the Company or any Subsidiary of a nature
similar, and a value at least equivalent, to the property subject to such
Transfer.
PROPOSED PREPAYMENT DATE -- is defined in Section 8.4(c).
PURCHASERS -- is defined in Section 2.
QPAM EXEMPTION -- means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
REQUIRED HOLDERS -- means, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
RESPONSIBLE OFFICER -- means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
SECURITIES ACT -- means the Securities Act of 1933, as amended from
time to time.
SECURITY AGREEMENT -- is defined in Section 4.10(b).
SECURITY DOCUMENTS -- means the Trust Indenture, the Security
Agreement, the Patent Collateral Assignment, the Trademark Security Agreement,
the Mortgages, the Pledge Agreement, the Subsidiary Guaranty and each other
agreement, document and certificate executed from time to time in connection
therewith, all as amended from time to time.
SECURITY TRUSTEE -- means the Trustee as defined in the Trust
Indenture.
SPECTRAN CORPORATION Schedule B-12 NOTE PURCHASE AGREEMENT
77
SENIOR FINANCIAL OFFICER -- means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
SERIES A NOTES -- is defined in Section 1(a).
SERIES B NOTES -- is defined in Section 1(b).
SOURCE -- is defined in Section 6.2.
SUBSIDIARY -- means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company. Notwithstanding the
preceding sentence, the JV Subsidiary shall not be a Subsidiary of the Company
for any purpose under this Agreement for so long as the Company shall not be
required to include, and shall not include, the JV Subsidiary as a consolidated
subsidiary in its GAAP financial statements.
SUBSIDIARY GUARANTY -- is defined in Section 4.11.
SUBSIDIARY STOCK -- means, with respect to any Person, the stock (or
any options or warrants to purchase stock or other securities exchangeable for
or convertible into stock) of any Subsidiary of such Person.
SURVIVOR -- is defined in Section 10.2(a).
SWAPS -- means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
TRADEMARK SECURITY AGREEMENT -- is defined in Section 4.10(d).
TRANSFER -- means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Subsidiary Stock. For purposes of determining the
application of the Net Proceeds Amount in respect of any Transfer, the Company
may designate any Transfer as one or more separate Transfers each yielding a
separate Net Proceeds Amount. In any such case, the Disposition Value of any
property subject to each such separate Transfer shall be determined by ratably
SPECTRAN CORPORATION Schedule B-13 NOTE PURCHASE AGREEMENT
78
allocating the aggregate Disposition Value of all property subject to all such
separate Transfers to each such separate Transfer on a proportionate basis.
TRUST INDENTURE -- is defined in Section 4.10(a).
VOTING STOCK -- means capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors or
Persons performing similar functions (irrespective of whether or not at the time
stock of any of the class or classes have or might have special voting power or
rights by reason of the happening of any contingency).
WHOLLY-OWNED SUBSIDIARY -- means, at any time, any Subsidiary 100% of
all of the equity interests (except directors' qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company's
other Wholly-Owned Subsidiaries at such time.
SPECTRAN CORPORATION Schedule B-14 NOTE PURCHASE AGREEMENT
79
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 4.9 Changes in Corporate Structure: None.
80
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.3 Disclosure Materials: The following materials were distributed to
all Purchasers:
1. History of the Company, jointly prepared by the Company and Fleet
National Bank.
2. Annual Report to Shareholders for the year ended December 31,
1994.
3. Annual Report to Shareholders for the year ended December 31,
1993.
4. Annual Report to Shareholders for the year ended December 31,
1992.
5. Annual Report to Shareholders for the year ended December 31,
1991.
6. Article from the November 4, 1996 edition of the New York Times.
7. Summary of Financial Projections dated September 1996.
8. Summary of Financial Projections prepared by Fleet National Bank
dated September 1996.
9. Quarterly Report on Form 10-Q for the period ended September 30,
1996.
Exceptions to Disclosure Materials: None
81
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.4 Subsidiaries of the Company and Ownership of Subsidiary Stock:
(a)(i) The Company has the following wholly-owned Delaware subsidiaries,
with the following outstanding capitalization:
1. SpecTran Communication Fiber Technologies, Inc.:
10 shares of Common Stock, par value $.01 per share.
2. SpecTran Specialty Optics Company:
10 shares of Common Stock, par value $.01 per share.
3. Applied Photonic Devices, Inc.:
10 shares of Common Stock, par value $.01 per share.
(a)(ii) The Company's affiliates are as follows:
Name: Title:
----- ------
Raymond E. Jaeger Chairman of the Board
Glenn E. Moore Chief Executive Officer,
President and Director
Bruce A. Cannon Chief Financial Officer,
Senior Vice President,
Treasurer, Secretary and
Director
82
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
------------------------------------
John E. Chapman Senior Vice President,
Technology and Director
President, SpecTran
Communication Fiber
Technologies, Inc.
Ira S. Nordlicht Director
Richard M. Donofrio Director
Paul D. Lazay Director
Lily K. Lai Director
(a)(3) Officers and Directors. For a list of officers and directors, see
(a)(ii) above.
83
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.5 Financial Statements:
The following financial statements of the Company have been delivered to
each Purchaser:
1. Audited Consolidated Financial Statements, dated February 2,
1996, for the year ended December 31, 1995.
2. Audited Consolidated Financial Statements for the year ended
December 31, 1994.
3. Audited Consolidated Financial Statements for the year ended
December 31, 1993.
4. Audited Consolidated Financial Statements for the year ended
December 31, 1992.
5. Audited Consolidated Financial Statements for the year ended
December 31, 1991.
6. Interim Balance Sheet incorporated in Quarterly Report on Form
10-Q for the period ended September 30, 1996.
84
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.8 Certain Litigation: None.
85
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.11 Patents, etc:
(a) None.
(b) None.
(c) None.
(d) None.
86
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.14 Use of Proceeds: Proceeds from sale of the Notes will be used to
refinance existing indebtedness of the Company, increase manufacturing capacity
and for general corporate purposes.
87
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.15 Existing Indebtedness and Liens:
(a) Loan Agreement (the"Bank Agreement"), dated as of December 1, 1996,
by and among the Company, SpecTran Specialty Optics Company ("SSOC"), Applied
Photonic Devices, Inc. ("APD"), SpecTran Communication Fiber Technologies, Inc.
("SCFT" and together with the Company, SSOC and APD, the "Debtors") and Fleet
National Bank, under which the following is currently outstanding:
Revolving Note of the Debtors (the "Revolving Note"), dated as of
December 1, 1996, in the original principal amount of $ 20,000,000 due
December 1, 1999.
For a description of liens, assets and collateral securing such
indebtedness, see the Security Documents and the UCC-1 Financing Statements
prepared by counsel to the Purchasers.
(b) None.
88
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedule 5.19 Collateral:
(a)(i)(A)(i) and (ii). The legal name and address of the principal executive
office of each of the Company and its subsidiaries is as follows:
Name: Address:
- ----- --------
Spectran Corporation 50 Hall Road
Sturbridge, MA 01566
SpecTran Communication Fiber 50 Hall Road
Technologies, Inc. Sturbridge, MA 01566
SpecTran Specialty Optics Company 150 Fisher Drive
Avon, CT 06001(1)
Applied Photonic Devices, Inc. 300 Lake Road
Dayville, CT 06241(2)
- --------
(1) SpecTran Specialty Optics Company intends to move its principal executive
offices to 55 Darling Drive, Avon, Connecticut 06001 during 1997.
(2) Applied Photonic Devices, Inc. intends to move its principal executive
offices to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
89
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
(a)(i)(A)(iii) Locations of Inventory and Equipment:
Spectran Corporation 50 Hall Road Worcester County
Sturbridge, MA 01566
69 Hall Road Worcester County
Sturbridge, MA 01566
46 Hall Road Worcester County
Sturbridge, MA 01566
SpecTran Communication Fiber 50 Hall Road Worcester County
Technologies, Inc. Sturbridge, MA 01566
69 Hall Road Worcester County
Sturbridge, MA 01566
46 Hall Road Worcester County
Sturbridge, MA 01566
Optical Cable Corporation(3)
5290 Concourse Drive
PO Box 11967
Roanoke, VA 24022
- --------
(3) As of November 30, 1996, approximately $282,162 of Inventory was on
consignment with Optical Cable Corporation.
90
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Jaso & Associates(4)
10161 49th Street North
Unit W
Pinellas Park, FL 34666
SpecTran Specialty Optics Company 150 Fisher Drive Hartford County
Avon, CT 06001
18 Parkside Lane and Hartford County
adjacent Barn
Avon, CT 06001
55 Darling Drive Hartford County
Avon, CT 06001
(a)(i)(A)(iv). See attached reports of Data Reporting Corp. and copies of UCC
filings.
(a)(ii). For a list of all intellectual property owned by the Company and its
subsidiaries, see attached Patent and Trademark Reports. In addition, the
Company holds the following material licenses:
1. License Agreement, dated January 1, 1991, by and between the
Company and Corning, Inc. The license expires upon expiration
of all subject patents.
2. License Agreement, dated February 1, 1983, by and between the
- --------
(4) As of November 30, 1996, approximately $5,751 of Inventory was on
consignment with Jaso & Associates.
91
SPECTRAN CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF DECEMBER 1, 1996
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES
SCHEDULES TO NOTE PURCHASE AGREEMENT
Company and Corning Glass Works. The license expires upon
expiration of all subject patents.
3. Patent License Agreement, dated August 15, 1981, by and
between the Company and Western Electric Company,
Incorporated. The license with respect to each subject patent
expires upon expiration of such patent.
4. Agreement, dated January 21, 1985, by and between the Company
and Aetna Communications Laboratories. The license expires
upon the transfer of the subject patents and related
technology to the Company.
5. License Agreement, dated October 31, 1983, by and between the
Company and Gulf & Western Manufacturing Company. The license
expires upon expiration of all subject patents.
6. License Agreement between Sumitomo Electric Industries,
Ltd.("Sumitomo") and Ensign-Bickford Optics Company ("EBOC")
dated November 1, 1990 (assigned to SpecTran Specialty Optics
Company), Supplemental Agreement between Sumitomo and EBOC
dated November 1, 1990 and Amendment to License Agreement
between SpecTran Specialty Optics Company ("SSOC") and
Sumitomo dated November 1, 1995. The license expires on April
12, 2005.
7. License Agreement between EBOC and Toray Industries, Inc.
dated September 1, 1986 (assigned to SSOC) and Amendment to
License Agreement between Toray Industries and SSOC dated
August 30, 1996. The license has a term of eight years.
8. License Agreement between EBOC and Asahi Glass Co., Ltd. dated
March 15, 1993 (assigned to SSOC). The license expires upon
expiration of all subject patents.
9. License Agreement between Lightwave Technologies, Inc. and
Sumitomo dated July 7, 1987.* The license terminates upon
expiration of all subject patents.
92
10. License Agreement between Lightwave Technologies, Inc. and
Polaroid Corporation dated March 31 1984 (assigned to
Ensign-Bickford Optical Technologies, Inc.).* The license has
no specified expiration date; however, royalty payments
thereunder ceased in 1992.
* These agreements were assigned by Lightwave Technologies, Inc. to
Ensign-Bickford Optical Technologies, Inc. ("EBOT") as part of EBOT's
acquisition of Lightwave and were subsequently transferred by EBOT to Cal
Optics, Inc., a company which was formed to facilitate the transaction under
which the specialty fiber operations of EBOC was acquired by the Company. A
wholly-owned subsidiary of the Company, EBOT Acquisition Corp., purchased the
stock of Cal Optics, Inc. EBOT Acquisition Corp and Cal Optics, Inc. were
subsequently merged into the Company. The agreements were subsequently assigned
by the Company to SSOC as part of the Company's restructuring.
(a)(iii). The Company owns its facilities located at 46 Hall Road, Sturbridge,
MA 01566, 50 Hall Road, Sturbridge, MA 01566 and 55 Darling Drive, Avon, CT
06001. The remainder of the Company's and its subsidiaries' facilities are
leased.
(a)(iv). The Company owns 10 shares of Common Stock, par value $.01 per share,
of Applied Photonic Devices, Inc., 10 shares of Common Stock, par value $.01 per
share, of SpecTran Specialty Optics Company and 10 shares of Common Stock, par
value $.01 per share, of SpecTran Communication Fiber Technologies, Inc.
93
Data Reporting Corp. Reports and Copies of UCC Filings
-Intentionally Omitted (See Closing Files for Copies)
Patent and Trademark Reports
- Intentionally Omitted (See Closing for Copies)