EXHIBIT 4.4
THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT
AND SENIOR DISCOUNT NOTES
This Third Amendment to Note Purchase Agreement and Senior Discount
Notes dated as of October 26, 2001 (this "Amendment") is by and among Ampex Data
Systems Corporation (the "Issuer"), Ampex Corporation (the "Guarantor"), the
entities identified as "Purchasers" on the signature pages hereto (the
"Purchasers"), and DDJ Capital Management, LLC as agent (the "Holders' Agent")
for the Purchasers and the other holders from time to time of the Senior
Discount Notes (defined below).
WHEREAS, the Issuer, the Guarantor, the Purchasers and the Holders'
Agent are parties to a certain Note Purchase Agreement dated as of November 6,
2000 (as amended, the "Note Purchase Agreement") with respect to $8,919,555.56
aggregate principal amount of Senior Discount Notes of the Issuer (the "Senior
Discount Notes"); and
WHEREAS, the parties have entered into (i) an Amendment to Note
Purchase Agreement and the Senior Discount Notes, dated as of May 30, 2001 (the
"First Amendment"), pursuant to which, among other things, the stated maturity
date of the Senior Discount Notes was extended from May 30, 2001 to August 31,
2001, and (ii) a Second Amendment to Note Purchase Agreement and the Senior
Discount Notes, dated as of August 13, 2001 (the "Second Amendment"), pursuant
to which, among other things, the stated maturity date of the Senior Discount
Notes was extended from August 31, 2001 to October 31, 2001; and
WHEREAS, the Issuer and Sherborne & Company Incorporated, a Delaware
corporation ("SCI"), propose to enter into a Loan Agreement (the "SCI Loan
Agreement") to be in substantially the form of Exhibit A to this Amendment,
which provides, among other things, for the making of working capital loans
("Loans") by SCI, at its discretion, to Issuer, from time to time in an
aggregate amount up to $2,500,000, such Loans to be (i) evidenced by a Secured
Promissory Note to be in substantially the form of Annex A to the SCI Loan
Agreement (the "SCI Note"), (ii) secured by a lien and security interest in
favor of SCI on certain "Collateral" of Issuer more fully described in the
Security Agreement to be in substantially the form of Annex B to the SCI Loan
Agreement (the "SCI Security Agreement"), and (iii) guaranteed by Guarantor
pursuant to a Guarantee Agreement to be in substantially the form of Annex C to
the SCI Loan Agreement (the "SCI Guarantee Agreement"); and
WHEREAS, the Issuer and the Guarantor have requested that the
Purchasers and the Holders' Agent agree to further amend the Note Purchase
Agreement and the Senior Discount Notes (i) to extend the stated maturity date
of the Senior Discount Notes from October 31, 2001 to March 31, 2002, and (ii)
to permit the Issuer and the Guarantor to enter into and perform their
respective obligations under the SCI Loan Agreement, the SCI Note, the SCI
Security Agreement and the SCI Guarantee Agreement without giving rise to any
default under the Note Purchase Agreement or the Senior Discount Notes; and
WHEREAS, the Purchasers and the Holders' Agent are willing to amend
the Note Purchase Agreement and the Senior Discount Notes as requested on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Capitalized terms used herein without definition shall have the
meanings set forth in the Note Purchase Agreement, the First Amendment or the
Second Amendment, as applicable.
2. Notwithstanding anything to the contrary set forth in the Note
Purchase Agreement, the Senior Discount Notes, the First Amendment, the Second
Amendment or the Letter Agreement (as defined in the First Amendment), the
parties hereto do hereby agree that:
(a) The Senior Discount Notes shall mature and be due and
payable in full on the earliest to occur of (i) March 31, 2002,
(ii) a Mandatory Redemption Date, or (iii) a Designated Voluntary
Redemption Date (the earliest to occur of any of the foregoing
being hereinafter referred to as the "Redemption Date");
(b) On June 1, 2001, the Senior Discount Notes shall be
deemed to have had an Accreted Value of $1,000 per $1,000
principal amount of Senior Discount Notes;
(c) The Senior Discount Notes shall cease to accrete in
value from and after June 1, 2001 and instead, from June 2, 2001
through the Redemption Date, interest shall accrue on the unpaid
Accreted Value of the Senior Discount Notes at a rate of twenty
percent (20%) per annum, compounding on April 30th and October
31st of each year, and based on an annual period of twelve 30-day
months, which interest shall be due and payable in full in cash
on the Redemption Date; provided that if for any reason the
interest or other amounts payable in respect of the Senior
Discount Notes or otherwise under the Note Purchase Agreement are
found by a court of competent jurisdiction, in a final
determination, to exceed the limit which may be lawfully charged,
then the obligation of the Issuer to pay interest and other
charges shall automatically be reduced to such limit and, if any
amount in excess of such limit shall have been paid, then such
amount shall be refunded to the Issuer; and
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(d) If the Issuer fails to pay to the Holders of the Senior
Discount Notes on or before the Redemption Date cash in an amount
equal to the sum of (A) the Accreted Value of the Senior Discount
Notes as of June 1, 2001, and (B) accrued and unpaid interest on
such Accreted Value as set forth above in Section 2(c) of this
Amendment, interest shall accrue on the unpaid portion of the
Accreted Value of the Senior Discount Notes (and on the unpaid
portion of accrued interest) at the Default Rate for each day
from and after the Redemption Date until the entire Accreted
Value of the Senior Discount Notes and all accrued interest
thereon, shall have been paid in full.
3. Section 1.1 of the Note Purchase Agreement is hereby amended by
adding the following terms:
"`Hillside' means Hillside Capital Incorporated."
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"`Hillside Agreement' means the Agreement dated as of December 1,
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1994 (effective November 22, 1994), as amended, by and among the
Issuer, the Guarantor, Hillside and certain other parties named
therein, which provides, among other things, that if Hillside shall
make requested contributions to certain employee benefit plans of the
Guarantor, the Guarantor shall issue certain Contribution Notes (as
defined in the Hillside Agreement) and the Issuer and other members of
the Ampex Group (as defined in the Hillside Agreement) shall guarantee
the payment of such Contribution Notes.
"`SCI' means Sherborne & Company Incorporated."
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"`SCI Guarantee Agreement' means the Guarantee Agreement to be
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entered into by the Guarantor and SCI on or about October 29,2001
pursuant to which the Guarantor shall guaranty the payment and
performance by the Issuer of all obligations of the Issuer under the
SCI Loan Agreement, the SCI Security Agreement and the SCI Note."
"`SCI Loan Agreement' means the Loan Agreement to be entered
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into by the Issuer and SCI on or about October 29, 2001 pursuant to
which SCI shall from time to time make working capital loans to the
Issuer in an aggregate amount up to $2,500,000."
"`SCI Note' means the Secured Promissory Note to be issued by
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the Issuer to SCI on or about October 29, 2001 in the maximum
principal amount of $2,500,000."
"`SCI Security Agreement' means the Security Agreement to be
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entered into by the Issuer and SCI on or about October 29, 2001
pursuant to which the Issuer shall grant in favor of SCI as security
for the obligations of the Issuer under
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the SCI Loan Agreement and the SCI Note, liens and security interests
on substantially all of the Issuer's properties and assets other than
the Colorado Facility and the related Property subject to the liens in
favor of the Holders' Agent under the Colorado Deed of Trust."
4. Section 8.1 of the Note Purchase Agreement is hereby amended by
deleting existing Section 8.1 in its entirety and replacing it with the
following new Section 8.1:
"8.1 Borrowing. Create, incur, assume or suffer to exist any
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liability for Indebtedness for Borrowed Money except: (a) the Senior
Discount Notes; (b) the 12% Senior Notes; (c) purchase money
Indebtedness and Capital Leases; (d) existing Indebtedness identified
on Schedule 8.1; (e) Indebtedness of any Restricted Subsidiary to the
Guarantor or to any other Restricted Subsidiary of the Guarantor and
Indebtedness of the Guarantor to any Restricted Subsidiary, in each
case, incurred in the ordinary course of business and consistent with
past practices; (f) Indebtedness of the Issuer and the Guarantor to
Ampex Finance Corporation incurred after the Closing Date under the
Inter-Company Loan Agreement described in Schedule 1.1; (g) unsecured
Indebtedness of the Guarantor or any Restricted Subsidiary to Hillside
arising pursuant to the terms of the Hillside Agreement in an
aggregate outstanding amount not to exceed $2,000,000 and evidenced by
Contribution Notes (as defined in the Hillside Agreement), including
any guarantees of the Contribution Notes executed by the Issuer or any
Restricted Subsidiary pursuant thereto; provided that none of the
Issuer, the Guarantor or any Restricted Subsidiary shall make any
payments to Hillside in respect of such Indebtedness, such
Contribution Notes or such guarantees prior to the repayment in full
of the entire Accreted Value of the Senior Discount Notes and all
accrued interest thereon, except that if no Default or Event of
Default shall have occurred and be continuing under this Agreement or
the Senior Discount Notes, the Guarantor and the Restricted
Subsidiaries shall be permitted to make monthly payments of interest
only in respect of such Contribution Notes at the rate and in
accordance with the terms thereof and of the Hillside Agreement; and
(h) Indebtedness of the Issuer to SCI under the SCI Loan Agreement and
the SCI Note in an aggregate outstanding amount not to exceed
$2,500,000, and Indebtedness of the Guarantor arising pursuant to the
SCI Guarantee Agreement."
5. Section 8.2 of the Note Purchase Agreement is hereby amended by
deleting existing Section 8.2 in its entirety and replacing it with the
following new Section 8.2:
"8.2 Liens. Create, incur, assume or suffer to exist any Lien
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upon any of its Property, whether now owned or hereafter acquired,
except (i) Permitted Liens and (ii) Liens on Property of the Issuer
securing the obligations of the Issuer
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under the SCI Loan Agreement and SCI Note pursuant to the terms of the
SCI Security Agreement, provided that such Liens pursuant to this
clause (ii) shall not extend to the Colorado Facility or any related
Property of the Issuer subject to the liens in favor of the Holders'
Agent under the Colorado Deed of Trust."
6. Section 8.6 of the Note Purchase Agreement is hereby amended by
deleting existing Section 8.6 in its entirety and replacing it with the
following new Section 8.6:
"8.6 Payments of Indebtedness for Borrowed Money. Make any
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payment or prepayment on account of any Indebtedness for Borrowed
Money other than on the Senior Discount Notes, except that (a) the
Issuer may make payments of principal and interest on account of the
obligations of the Issuer under the SCI Loan Agreement and the SCI
Note, (b) the Guarantor and its Subsidiaries may make regularly
scheduled payments of principal and interest (but no prepayments) on
account of the other Indebtedness permitted under Section 8.1 above,
and (c) the Guarantor and its Subsidiaries may make payments of
principal and interest on account of intercompany Indebtedness owing
from (i) the Guarantor to any of its Subsidiaries, (ii) any of the
Guarantor's Subsidiaries to the Guarantor, or (iii) any of the
Guarantor's Subsidiaries to any of the Guarantor's other
Subsidiaries."
7. The Guarantor hereby acknowledges, confirms, ratifies and agrees
that (i) pursuant to the provisions of Article XIV of the Note Purchase
Agreement, the Guarantor has guaranteed the obligations of the Issuer under
the Note Purchase Agreement and the Senior Discount Notes, (ii) as security
for the obligations of the Issuer and the Guarantor under the Note Purchase
Agreement, the Guarantor has granted to the Holders' Agent for the benefit
of the Holders, pursuant to the Guarantor Security Agreement, a security
interest in all of the right, title and interest now owned or hereafter
acquired by the Guarantor in various royalties, license fees, receivables
and other payments as set forth therein, and (iii) the Note Purchase
Agreement and the Guarantor Security Agreement are presently and, after
giving effect to this Amendment, will continue to be valid and binding
obligations of the Guarantor enforceable in accordance with their
respective terms.
8. This Amendment shall become effective on the date that each of
the following conditions has been fulfilled to the satisfaction of the
Holders' Agent, provided that any or all of the following conditions may be
waived, in whole or in part, by the Holders' Agent in its sole discretion:
(a) The Issuer, the Guarantor, the Purchasers and the
Holders' Agent shall have executed and delivered to the Holders'
Agent an original of this Amendment;
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(b) The Issuer and SCI shall have executed and delivered the SCI
Loan Agreement and all conditions precedent to the funding of loans by
SCI under the SCI Loan Agreement (other than the effectiveness of this
Amendment) shall have been satisfied or waived by SCI; and
(c) The Issuer and the Guarantor shall have executed and
delivered to the Holders' Agent such additional documents as the
Holders' Agent may reasonably request, including without limitation,
an amendment to the May 23, 2001 letter agreement from Hillside
Capital Corporation extending Hillside Capital Corporation's waiver of
its right to obtain a mortgage on the Colorado Facility until the
thirtieth (30th) day next following the extended maturity date of the
Senior Discount Notes, each of which additional documents shall be in
form and substance reasonably satisfactory to the Holders' Agent.
9. Each of the Issuer and the Guarantor acknowledges, represents and
warrants that neither the Issuer nor the Guarantor has any claim, cause of
action, defense, or right of set off against the Purchasers or the Holders'
Agent, and, to the extent that either the Issuer or the Guarantor has any such
rights, each of the Issuer and the Guarantor hereby releases, waives, and
forever discharges the Purchasers and the Holders' Agent (together with their
predecessors, successors and assigns) from each action, cause of action, suit,
debt, defense, right of set off, or other claim whatsoever, in law or in equity,
known or unknown against the Purchasers or the Holders' Agent.
10. This Amendment may be executed in counterparts, each of which shall be
an original and all of which shall constitute one and the same agreement.
11. This Amendment shall be governed and construed in accordance with the
laws of The Commonwealth of Massachusetts. If any provision of this Amendment is
in conflict with a statute or rule of the law of The Commonwealth of
Massachusetts, or is otherwise unenforceable for any reason whatsoever, such
provision shall be deemed null and void to the extent of such conflict or
unenforceability, but shall be deemed separable from and shall not invalidate
any other provisions of this Amendment.
This Amendment contains the final, complete, and exclusive expression
of the understandings between the parties regarding the transaction contemplated
by this Amendment.
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IN WITNESS WHEREOF, each of the undersigned parties through their
authorized representatives has executed and delivered this Amendment as an
instrument under seal as of the date set forth above.
"ISSUER"
AMPEX DATA SYSTEMS CORPORATION
By: /s/ Craig L. McKibben
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Name: Craig L. McKibben
Title: Vice President
"GUARANTOR"
AMPEX CORPORATION
By: /s/ Craig L. McKibben
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Name: Craig L. McKibben
Title: Vice President
"PURCHASERS"
B III CAPITAL PARTNERS, L.P.
By: DDJ Capital III, LLC, its General Partner
By: DDJ Capital Management, LLC, Manager
By: /s/ David J. Breazzano
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Name: David J. Breazzano
Title: Member
III-A CAPITAL PARTNERS, L.P.
By: GP III-A, LLC, its General Partner
By: DDJ Capital Management, LLC, Manager
By: /s/ David J. Breazzano
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Name: David J. Breazzano
Title: Member
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State Street Bank & Trust, solely in its capacity as
Custodian for General Motors Employees Global Group Pension
Trust as directed by DDJ Capital Management, LLC, and not in
its individual capacity
By: /s/ Joseph Gately
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Name: Joseph Gately
Title: Assistant Secretary, as Trustee for
General Motors Employees Global
Group Pension Trust
"HOLDERS' AGENT"
DDJ Capital Management, LLC, in its capacity as Agent for
the Purchasers and the other holders from time to time of
Senior Discount Notes
By: /s/ David J. Breazzano
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Name: David J. Breazzano
Title: Member
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