<PAGE> 1
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 26, 1996
SpecTran Corporation
(Exact name of registrant as specified in its charter)
Delaware 0-12489 04-2729372
(State or other (Commission File No.) (IRS Employer
jurisdiction) Identification No.)
50 Hall Road, Sturbridge, MA 01566
(Address of principal executive offices)
Registrant's telephone number, including area code 508-347-2261
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
On December 26, 1996, SpecTran Corporation (the"Company") sold to four
institutions an aggregate principal amount of $24 million of senior secured
notes (the "Notes"), consisting of $16 million of 9.24% Series A Senior Secured
Notes due December 26, 2003 (the "Series A Notes") and $8 million of 9.39%
Series B Senior Secured Notes due December 26, 2004 (the "Series B Notes").
Interest on the Notes will be payable semi-annually beginning June 26, 1997,
with five equal annual principal repayments required beginning December 26, 1999
for the Series A Notes and December 26, 2000 for the Series B Notes. The Notes
constitute senior secured debt of the Company secured by substantially all of
the assets of the Company and all current and hereinafter created or acquired
subsidiaries, a pledge by the Company of the issued and outstanding stock of its
subsidiaries and mortgages on real estate owned by the Company's subsidiaries.
The Company's obligations are also guaranteed by the Company's subsidiaries and
rank equal to all other senior secured indebtedness of the Company. The Company
may repay the Notes at any time, subject to the payment of an amount to
compensate the Note holders for lost interest, except for a one-time prepayment
of up to $3 million which may be made by the Company on any annual anniversary
date of the Notes commencing December 26, 2001 without any such payment. In the
event that a person or group of related persons, 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 is a party, acquires more than 30%
of the voting stock of the Company prior to January 1, 2000 or 50% thereafter,
the Note holders have the right to demand repayment of the Notes. The Notes
require that the Company comply with certain financial and non-financial
covenants. $14 million of the proceeds of the sale of the Notes were used to
repay the Company's indebtedness under its then exiting term loan and revolving
credit facilities provided by Fleet National Bank ("Fleet Bank"), the Company's
principal lender.
On December 26, 1996, the Company and its subsidiaries restructured
their loan arrangements with Fleet Bank by replacing the then existing term loan
and revolving credit facilities with a new three-year revolving credit facility.
The maximum amount that can be borrowed under the Agreement is $20 million.
Interest on amounts outstanding under the new revolving credit facility is
payable quarterly at a rate to be selected by the Company from time to time,
which can be either Fleet Bank's prime rate, the LIBOR one month index rate plus
150 basis points, the LIBOR three month index rate plus 150 basis points or the
LIBOR six month index rate plus 150 basis points. The new revolving credit
facility expires December 31, 1999 and is secured by the same security granted
to the holders of the Notes on an equal basis.
2
<PAGE> 3
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
10.86 Note Purchase Agreement between SpecTran Corporation and
Massachusetts Mutual Life Insurance Company dated as of December 1, 1996.
10.87 Note Purchase Agreement between SpecTran Corporation and CM Life
Insurance Company dated as of December 1, 1996.
10.88 Note Purchase Agreement between SpecTran Corporation and The
Mutual Life Insurance Company of New York dated as of December 1, 1996.
10.89 Note Purchase Agreement between SpecTran Corporation and Atwell
& Co. dated as of December 1, 1996.
10.90 Security Agreement among SpecTran Corporation, SpecTran
Communication Fiber Technologies, Inc, SpecTran Specialty Optics Company,
Applied Photonic Devices, Inc. and Fleet National Bank, as Trustee, dated as of
December 1, 1996.
10.91 Trademark Security Agreement among SpecTran Corporation,
SpecTran Communication Fiber Technologies, Inc, SpecTran Specialty Optics
Company, Applied Photonic Devices, Inc. and Fleet National Bank, as Trustee,
dated as of December 1, 1996.
10.92 Patent Collateral Assignment among SpecTran Corporation,
SpecTran Communication Fiber Technologies, Inc, SpecTran Specialty Optics
Company, Applied Photonic Devices, Inc. and Fleet National Bank, as Trustee,
dated as of December 1, 1996.
10.93 Pledge Agreement among SpecTran Corporation, SpecTran
Communication Fiber Technologies, Inc, SpecTran Specialty Optics Company,
Applied Photonic Devices, Inc. and Fleet National Bank, as Trustee, dated as of
December 1, 1996.
10.94 Open-End Mortgage, Assignment of Rents and Security Agreement by
SpecTran Communication Fiber Technologies, Inc. to Fleet National Bank, as
Trustee, dated as of December 1, 1996.
10.95 Open-End Mortgage, Assignment of Rents and Security Agreement by
SpecTran Specialty Optics Company to Fleet National Bank, as Trustee, dated as
of December 1, 1996.
10.96 Guaranty Agreement dated as of December 1, 1996 by SpecTran
Communication Fiber Technologies, Inc., SpecTran Specialty Optics Company and
Applied Photonic Devices, Inc. in favor of Massachusetts Mutual Life Insurance
Company, CM Life Insurance Company, The New York Mutual Life Insurance Company
and Atwell & Co.
3
<PAGE> 4
10.97 Loan Agreement among SpecTran Corporation, SpecTran Communication
Fiber Technologies, Inc., SpecTran Specialty Optics Company, Applied Photonic
Devices, Inc. and Fleet National Bank dated as of December 1, 1996.
4
<PAGE> 5
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SpecTran Corporation
(Registrant)
Date: December 31, 1996 /s/ Bruce A. Cannon
--------------------------
Bruce A. Cannon, Secretary
5
<PAGE> 6
EXHIBIT INDEX
ITEM DESCRIPTION
- ---- -----------
10.86 Note Purchase Agreement between SpecTran Corporation and
Massachusetts Mutual Life Insurance Company dated as of
December 1, 1996.
10.87 Note Purchase Agreement between SpecTran Corporation and
CM Life Insurance Company dated as of December 1, 1996.
10.88 Note Purchase Agreement between SpecTran Corporation and
The Mutual Life Insurance Company of New York dated as
of December 1, 1996.
10.89 Note Purchase Agreement between SpecTran Corporation and
Atwell & Co. dated as of December 1, 1996.
10.90 Security Agreement among SpecTran Corporation, SpecTran
Communication Fiber Technologies, Inc, SpecTran Specialty
Optics Company, Applied Photonic Devices, Inc. and Fleet
National Bank, as Trustee, dated as of December 1, 1996.
10.91 Trademark Security Agreement among SpecTran Corporation,
SpecTran Communication Fiber Technologies, Inc, SpecTran
Specialty Optics Company, Applied Photonic Devices, Inc.
and Fleet National Bank, as Trustee, dated as of
December 1, 1996.
10.92 Patent Collateral Assignment among SpecTran Corporation,
SpecTran Communication Fiber Technologies, Inc, SpecTran
Specialty Optics Company, Applied Photonic Devices, Inc.
and Fleet National Bank, as Trustee, dated as of
December 1, 1996.
10.93 Pledge Agreement among SpecTran Corporation, SpecTran
Communication Fiber Technologies, Inc, SpecTran Specialty
Optics Company, Applied Photonic Devices, Inc. and Fleet
National Bank, as Trustee, dated as of December 1, 1996.
10.94 Open-End Mortgage, Assignment of Rents and Security Agreement
by SpecTran Communication Fiber Technologies, Inc. to
Fleet National Bank, as Trustee, dated as of December 1, 1996.
10.95 Open-End Mortgage, Assignment of Rents and Security Agreement
by SpecTran Specialty Optics Company to Fleet National Bank,
as Trustee, dated as of December 1, 1996.
10.96 Guaranty Agreement dated as of December 1, 1996 by SpecTran
Communication Fiber Technologies, Inc., SpecTran Specialty
Optics Company and Applied Photonic Devices, Inc. in favor
of Massachusetts Mutual Life Insurance Company, CM
Life Insurance Company, The New York Mutual Life Insurance
Company and Atwell & Co.
10.97 Loan Agreement among SpecTran Corporation, SpecTran
Communication Fiber Technologies, Inc., SpecTran Specialty
Optics Company, Applied Photonic Devices, Inc. and Fleet
National Bank dated as of December 1, 1996.
<PAGE> 1
EXHIBIT 10.86
<PAGE> 2
[COMPOSITE NOTE PURCHASE AGREEMENT OF
EACH OF THE SEPARATELY EXECUTED NOTE
PURCHASE AGREEMENTS]
---------------------
NOTE PURCHASE AGREEMENT
---------------------
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
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
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
</TABLE>
i
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
ii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
<CAPTION>
<S> <C>
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
</TABLE>
iii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 6
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
iv
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 7
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 8
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 9
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 10
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 11
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.
2
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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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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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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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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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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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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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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,
9
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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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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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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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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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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.
14
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 24
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.
15
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 25
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
16
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 26
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
<PAGE> 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
<PAGE> 28
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
<PAGE> 29
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
<PAGE> 30
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
<PAGE> 31
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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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
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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
SPECTRAN CORPORATION 28 NOTE PURCHASE AGREEMENT
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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
<PAGE> 39
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.
SPECTRAN CORPORATION 30 NOTE PURCHASE AGREEMENT
<PAGE> 40
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:
SPECTRAN CORPORATION 31 NOTE PURCHASE AGREEMENT
<PAGE> 41
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
SPECTRAN CORPORATION 32 NOTE PURCHASE AGREEMENT
<PAGE> 42
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
SPECTRAN CORPORATION 33 NOTE PURCHASE AGREEMENT
<PAGE> 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
SPECTRAN CORPORATION 34 NOTE PURCHASE AGREEMENT
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By /s/ Thomas Li
---------------------------------
Name: Thomas Li
Title: Managing Director
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 60
SCHEDULE A
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-1 NOTE PURCHASE AGREEMENT
<PAGE> 61
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-2 NOTE PURCHASE AGREEMENT
<PAGE> 62
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-3 NOTE PURCHASE AGREEMENT
<PAGE> 63
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-4 NOTE PURCHASE AGREEMENT
<PAGE> 64
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-5 NOTE PURCHASE AGREEMENT
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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)
<PAGE> 1
EXHIBIT 10.87
<PAGE> 2
[COMPOSITE NOTE PURCHASE AGREEMENT OF
EACH OF THE SEPARATELY EXECUTED NOTE
PURCHASE AGREEMENTS]
---------------------
NOTE PURCHASE AGREEMENT
---------------------
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
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
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
</TABLE>
i
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
ii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
<CAPTION>
<S> <C>
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
</TABLE>
iii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 6
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
iv
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 7
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 8
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 9
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 10
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 11
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.
2
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 12
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.
3
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 13
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.
4
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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
5
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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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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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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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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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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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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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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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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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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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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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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
16
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 26
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
<PAGE> 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
<PAGE> 28
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
<PAGE> 29
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
<PAGE> 30
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
<PAGE> 31
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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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
SPECTRAN CORPORATION 28 NOTE PURCHASE AGREEMENT
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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
<PAGE> 39
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.
SPECTRAN CORPORATION 30 NOTE PURCHASE AGREEMENT
<PAGE> 40
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:
SPECTRAN CORPORATION 31 NOTE PURCHASE AGREEMENT
<PAGE> 41
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
SPECTRAN CORPORATION 32 NOTE PURCHASE AGREEMENT
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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
SPECTRAN CORPORATION 33 NOTE PURCHASE AGREEMENT
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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
SPECTRAN CORPORATION 34 NOTE PURCHASE AGREEMENT
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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
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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
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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
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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
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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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
CM LIFE INSURANCE COMPANY
By /s/ Thomas Li
---------------------------------
Name: Thomas Li
Title: Investor Officer
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 60
SCHEDULE A
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-1 NOTE PURCHASE AGREEMENT
<PAGE> 61
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-2 NOTE PURCHASE AGREEMENT
<PAGE> 62
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-3 NOTE PURCHASE AGREEMENT
<PAGE> 63
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-4 NOTE PURCHASE AGREEMENT
<PAGE> 64
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-5 NOTE PURCHASE AGREEMENT
<PAGE> 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 immedately 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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)
<PAGE> 1
EXHIBIT 10.88
<PAGE> 2
[COMPOSITE NOTE PURCHASE AGREEMENT OF
EACH OF THE SEPARATELY EXECUTED NOTE
PURCHASE AGREEMENTS]
---------------------
NOTE PURCHASE AGREEMENT
---------------------
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
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
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
</TABLE>
i
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
ii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
<CAPTION>
<S> <C>
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
</TABLE>
iii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 6
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
iv
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 7
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 8
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 9
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 10
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 11
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.
2
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 12
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.
3
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 13
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.
4
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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
5
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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
6
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 16
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
7
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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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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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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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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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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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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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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.
15
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 25
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
16
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<PAGE> 26
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
<PAGE> 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
<PAGE> 28
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
<PAGE> 29
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
<PAGE> 30
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
<PAGE> 31
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
SPECTRAN CORPORATION 28 NOTE PURCHASE AGREEMENT
<PAGE> 38
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
<PAGE> 39
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.
SPECTRAN CORPORATION 30 NOTE PURCHASE AGREEMENT
<PAGE> 40
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:
SPECTRAN CORPORATION 31 NOTE PURCHASE AGREEMENT
<PAGE> 41
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
SPECTRAN CORPORATION 33 NOTE PURCHASE AGREEMENT
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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
SPECTRAN CORPORATION 34 NOTE PURCHASE AGREEMENT
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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
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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
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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
<PAGE> 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
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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
<PAGE> 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.
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<PAGE> 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,
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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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 60
SCHEDULE A
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-1 NOTE PURCHASE AGREEMENT
<PAGE> 61
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-2 NOTE PURCHASE AGREEMENT
<PAGE> 62
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-3 NOTE PURCHASE AGREEMENT
<PAGE> 63
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-4 NOTE PURCHASE AGREEMENT
<PAGE> 64
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-5 NOTE PURCHASE AGREEMENT
<PAGE> 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
<PAGE> 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.
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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.
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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
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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;
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(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
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(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
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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
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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
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(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
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(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.
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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.
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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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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)
<PAGE> 1
EXHIBIT 10.89
<PAGE> 2
[COMPOSITE NOTE PURCHASE AGREEMENT OF
EACH OF THE SEPARATELY EXECUTED NOTE
PURCHASE AGREEMENTS]
---------------------
NOTE PURCHASE AGREEMENT
---------------------
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
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
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
</TABLE>
i
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
ii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
<CAPTION>
<S> <C>
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
</TABLE>
iii
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 6
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C>
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
</TABLE>
iv
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 7
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 8
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 9
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.
1
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 10
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
<PAGE> 11
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
<PAGE> 12
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.
3
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 13
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.
4
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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
5
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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
6
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 16
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
7
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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.
8
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 18
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,
9
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 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.
10
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 20
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
11
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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
12
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
13
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.
14
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.
15
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 25
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
16
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 26
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
<PAGE> 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
<PAGE> 28
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
<PAGE> 29
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
<PAGE> 30
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
<PAGE> 31
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
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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
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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
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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
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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
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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
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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
SPECTRAN CORPORATION 28 NOTE PURCHASE AGREEMENT
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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.
SPECTRAN CORPORATION 30 NOTE PURCHASE AGREEMENT
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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:
SPECTRAN CORPORATION 31 NOTE PURCHASE AGREEMENT
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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
SPECTRAN CORPORATION 32 NOTE PURCHASE AGREEMENT
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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
SPECTRAN CORPORATION 33 NOTE PURCHASE AGREEMENT
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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
SPECTRAN CORPORATION 34 NOTE PURCHASE AGREEMENT
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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
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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
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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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By /s/ William R. Schmidt
---------------------------------
Name: William R. Schmidt
Title: Assistant Vice President
By /s/ Audrey L. Milfs
---------------------------------
Name: Audrey L. Milfs
Title: Corporate Secretary
SPECTRAN CORPORATION NOTE PURCHASE AGREEMENT
<PAGE> 60
SCHEDULE A
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-1 NOTE PURCHASE AGREEMENT
<PAGE> 61
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-2 NOTE PURCHASE AGREEMENT
<PAGE> 62
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-3 NOTE PURCHASE AGREEMENT
<PAGE> 63
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-4 NOTE PURCHASE AGREEMENT
<PAGE> 64
<TABLE>
<CAPTION>
================================================================================
<S> <C>
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
================================================================================
</TABLE>
SPECTRAN CORPORATION Schedule A-5 NOTE PURCHASE AGREEMENT
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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)
<PAGE> 1
EXHIBIT 10.90
<PAGE> 2
SPECTRAN CORPORATION
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
TO
FLEET NATIONAL BANK, AS TRUSTEE
--------------
SECURITY AGREEMENT
--------------
DATED AS OF DECEMBER 1, 1996
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
1. PRELIMINARY STATEMENTS........................................................................ 1
2. INTERPRETATION OF THIS AGREEMENT.............................................................. 1
2.1 Terms Defined........................................................................ 1
2.2 Section Headings and Table of Contents and Construction.............................. 7
2.3 Separate Agreements.................................................................. 7
2.4 Partial Invalidity................................................................... 7
2.5 Governing Law........................................................................ 7
3. COLLATERAL.................................................................................... 8
3.1 Grant of Security Interest........................................................... 8
3.2 Collateral-Related Rights and Undertakings........................................... 9
3.3 Covenant Regarding Ownership Interest in JV Subsidiary............................... 16
4. REPRESENTATIONS AND WARRANTIES................................................................ 17
4.1 Ownership of Collateral.............................................................. 17
4.2 Incorporation........................................................................ 17
4.3 Corporate Powers and Authorization................................................... 17
4.4 Governmental Filings; Registration................................................... 18
4.5 Enforceability....................................................................... 18
4.6 Location of Inventory and Equipment, etc............................................. 19
4.7 Patents, Trademarks.................................................................. 19
4.8 Accounts............................................................................. 19
4.9 Accuracy of Preliminary Statements................................................... 19
5. DEFAULTS -- REMEDIES.......................................................................... 20
5.1 Default Remedies..................................................................... 20
5.2 Other Enforcement Rights............................................................. 22
5.3 Power of Attorney.................................................................... 22
5.4 Effect of Sale, etc.................................................................. 23
5.5 Delay or Omission; No Waiver......................................................... 23
5.6 Restoration of Rights and Remedies................................................... 23
5.7 Application of Proceeds.............................................................. 24
5.8 Cumulative Remedies.................................................................. 24
5.9 Waivers by the Obligors.............................................................. 24
5.10 Consent.............................................................................. 24
6. MISCELLANEOUS................................................................................. 25
6.1 Communications....................................................................... 25
6.2 Waiver and Amendment................................................................. 25
6.3 Survival............................................................................. 25
6.4 Successors and Assigns............................................................... 25
6.5 Reproduction of Documents............................................................ 26
6.6 Additional Parties................................................................... 26
6.7 Subject to Trust Indenture........................................................... 26
6.8 Term of Agreement.................................................................... 26
6.9 Entire Agreement..................................................................... 27
</TABLE>
SPECTRAN CORPORATION i SECURITY AGREEMENT
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS (CONT.) PAGE
<S> <C> <C>
6.10 Execution in Counterpart............................................................. 27
</TABLE>
Annex 1 -- Principal Executive Offices; Location of Books and Records
Annex 2 -- Financing Statements
Annex 3 -- Locations of Inventory and Equipment
Annex 4 -- Trademarks, Trade Names and Patents
Exhibit A -- Form of Acknowledgment and Agreement
SPECTRAN CORPORATION ii SECURITY AGREEMENT
<PAGE> 5
SECURITY AGREEMENT
SECURITY AGREEMENT (as may be amended, restated, supplemented or
otherwise modified from time to time, this "AGREEMENT"), dated as of December 1,
1996, among each of SPECTRAN CORPORATION (together, with its successors and
assigns, the "COMPANY"), a Delaware corporation, SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC., a Delaware corporation, SPECTRAN SPECIALTY OPTICS COMPANY, a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC. (together, with its
successors and assigns,"APD"), a Delaware corporation (all of the foregoing
(other than the Company), together with their respective successors and assigns,
referred to herein, individually, as a "GUARANTOR," and, collectively, as the
"GUARANTORS;" the Company and the Guarantors being collectively referred to
herein as the "OBLIGORS"), and FLEET NATIONAL BANK, a national banking
association, as security trustee under a certain Trust Indenture (as may be
amended, restated or otherwise modified from time to time, the "TRUST
INDENTURE"), dated as of the date hereof, among the Obligors, Fleet National
Bank (in its capacity as such security trustee, and together with any successor
or co-security trustee that becomes such in accordance with the provisions of
the Trust Indenture, the "TRUSTEE") and the other parties signatory thereto.
1. PRELIMINARY STATEMENTS
1.1 The Liens granted herein to the Trustee by each of the Obligors are
for the ratable benefit of the Beneficiaries, as provided in the Trust
Indenture.
1.2 The Trustee is to act as trustee on behalf of the Beneficiaries, in
accordance with the terms of the Trust Indenture and the other Security
Documents.
1.3 All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of each of the Obligors necessary to
constitute this Agreement a valid and binding agreement for the uses and
purposes set forth herein, in accordance with its terms, have been done and
taken, and the execution and delivery hereof has been in all respects duly
authorized.
2. INTERPRETATION OF THIS AGREEMENT
2.1 TERMS DEFINED.
As used in this Agreement, the following terms have the respective
meanings set forth below or provided for in the section or other part of this
Agreement referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined)
or, if not defined herein, then as defined in the Trust Indenture.
ACCOUNT DEBTOR -- shall mean the Person obligated to any Obligor
pursuant to an Account.
ACCOUNTS -- means
(a) all of the present and future accounts, contract rights,
instruments, documents, chattel paper, general intangibles, and other
forms of obligations of, or owing to, each Obligor (whether from or
owed by the Company, any Subsidiary (as such term
SPECTRAN CORPORATION 1 SECURITY AGREEMENT
<PAGE> 6
2. INTERPRETATION OF THIS AGREEMENT
is defined in the Trust Indenture) or any other Person), which, in each
case, arise out of or in connection with the sale, lease or other
disposition of Inventory by such Obligor or in respect of the rendering
of services by such Obligor, as the case may be,
(b) all present and future guarantees, credit insurance and
other security for such accounts, contract rights, instruments,
documents, chattel paper, general intangibles, and other forms of
obligations and
(c) all other "accounts" (as such term is defined in the
Code).
AGREEMENT, THIS -- has the meaning set forth in the introductory
sentence hereof.
APD -- has the meaning specified in the introductory sentence hereof.
BANK AGREEMENT -- has the meaning specified in the Trust Indenture.
BENEFICIARIES -- has the meaning specified in the Trust Indenture.
BOOKS AND RECORDS -- Section 3.1(m).
BUSINESS DAY -- has the meaning specified in the Trust Indenture.
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.
CHATTEL PAPER -- means, with respect to any Obligor, all of such
Obligor's chattel paper, as such term is defined in the Code, including, without
limitation, all of such Obligor's writings which evidence both a monetary
obligation and a security interest in or a lease of specific goods.
CLOSING DATE -- has the meaning specified in the Trust Indenture.
CODE -- means the Uniform Commercial Code as in effect from time to
time in any specified or applicable jurisdiction.
COLLATERAL -- Section 3.1.
COMPANY -- has the meaning specified in the introductory sentence
hereof.
DEFAULT -- means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
ENVIRONMENTAL PROTECTION LAW -- 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.
SPECTRAN CORPORATION 2 SECURITY AGREEMENT
<PAGE> 7
2. INTERPRETATION OF THIS AGREEMENT
EQUIPMENT -- means, with respect to each Obligor, all of such Obligor's
equipment in all of its forms, wherever located, whether presently owned or
hereafter acquired, and all parts thereof and all accessions thereto, including,
without limitation, all machinery, furniture, furnishings, fixtures, motor
vehicles, tools, motors, parts, Spare Parts, accessories, supplies and all other
"equipment" (as such term is defined in the Code) of such Obligor.
EVENT OF DEFAULT -- has the meaning specified in the Trust Indenture.
GAAP -- means generally accepted accounting principles as in effect
from time to time in the United States of America.
GENERAL INTANGIBLES -- means, with respect to any Obligor, all of such
Obligor's general intangibles (as such term is defined in the Code), including,
but not limited to, any patents, patent applications, copyrights, franchises,
licenses, customer lists, telephone and similar communications listings, rights,
title and interest pursuant to any non-compete agreements or covenants with any
third parties, trade names and trademarks and the goodwill of the business
symbolized thereby, Federal, State and local tax refund claims of all kinds, any
equipment formulations, manufacturing procedures, quality control procedures,
product specifications, any other obligations of any kind, now or hereafter
existing, including, without limitation, any notes, drafts, stocks, securities
or other obligations received in settlement of or in connection with the payment
of any of the foregoing items, and any rights, remedies or benefits under any
contract, agreement, or instrument, or any other relationship.
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.
GUARANTOR -- has the meaning set forth in the introductory sentence
hereof.
INVENTORY -- means, with respect to each Obligor, all of such Obligor's
present and future inventory (including, without limitation, all present and
future goods, merchandise and other personal Property of such Obligor held for
sale, lease or other disposition), in all its forms, including, but not limited
to
(a) work-in-process, raw materials and other goods and
materials used and consumed in the production thereof,
SPECTRAN CORPORATION 3 SECURITY AGREEMENT
<PAGE> 8
2. INTERPRETATION OF THIS AGREEMENT
(b) goods in which any Obligor has an interest in mass or a
joint or other interest or right of any kind, including, without
limitation, goods in which any Obligor has an interest or right as
consignee,
(c) packaging materials, wherever located, and goods and
materials relating thereto of any kind, nature or description which are
or might be used or consumed in the business of such Obligor, or used
in selling of such inventory,
(d) any inventory which is returned to or repossessed by any
Obligor,
(e) all documents of title or other similar documents
representing the same and
(f) all other "inventory" (as such term is defined in the
Code); the aforesaid inventory and other Property shall be included in
this definition whether in the actual, constructive or exclusive
possession of such Obligor or in transit to such Obligor or in the
possession of carriers, forwarding agents, bailees, truckers,
warehousemen, vendors, selling agents, finishers, converters or any
other third parties.
JV EQUITY INTEREST -- means any equity interest (whether capital stock,
membership interest, partnership interest, beneficial interest or otherwise) in
the JV Subsidiary owned by any Subsidiary of the Company.
JV EXCLUDED PROPERTY -- Section 3.3(b).
JV OWNER -- Section 3.3(a)(i).
JV SUBSIDIARY -- means General Photonics, LLC, a Delaware limited
liability company, and its successors and assigns, for so long as the Company
shall not be required to include, and shall not include, such Person as a
consolidated subsidiary in its GAAP financial statements.
JV TRANSFERRED PROPERTY -- means any and all Property owned by, or to
be assigned by Applied Photonic Devices, Inc. on or before January 31, 1997 to,
the JV Subsidiary, pursuant to the JV Agreements. As used in this definition,
JV Agreements -- means, collectively,
(a) that certain Asset Purchase Agreement, dated as
of December 23, 1996, among Applied Photonic Devices, Inc.,
SpecTran Corporation, General Cable Industries, Inc. and
General Cable Corporation,
(b) that certain General Photonics, LLC Investors
Contribution Agreement, dated as of December 23, 1996, between
General Photonics, LLC and General Cable Industries, Inc.,
(c) that certain General Photonics, LLC Investors
Representations and Subscription Agreement, dated as of
December 23, 1996, between General Photonics, LLC and General
Cable Industries, Inc., and
SPECTRAN CORPORATION 4 SECURITY AGREEMENT
<PAGE> 9
2. INTERPRETATION OF THIS AGREEMENT
(d) that certain General Photonics, LLC Investor's Representations and
Contribution Agreement, and Subscription Agreement.
LENDING DOCUMENTS -- has the meaning specified in the Trust Indenture.
LIEN -- means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including, but not
limited to, the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale, sale with recourse or a trust receipt, or a lease,
consignment or bailment for security purposes. The term "Lien" includes, without
limitation, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting real Property and includes, without limitation, with
respect to stock, stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements. For the purposes hereof, each Obligor
shall be deemed to be the owner of any Property that it shall have acquired or
holds subject to a conditional sale agreement, Capital Lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such retention or vesting
is deemed a Lien. The term "Lien" does not include negative pledge clauses in
agreements relating to the borrowing of money.
MAJORITY BENEFICIARIES -- has the meaning specified in the Trust
Indenture.
MATERIAL ADVERSE EFFECT -- means a material adverse effect on
(a) the business, operations, affairs, financial condition,
assets or properties of the Obligors, taken as a whole, or
(b) the fair market value of the Collateral, taken as a whole,
or
(c) the ability of any Obligor to perform its obligations
under any of the Lending Documents to which it is a party, or
(d) the validity or enforceability of any of the Lending
Documents.
MORTGAGED PROPERTY -- means and includes all "Property" (as such term
is defined in each of the Mortgages) subject to the Lien in favor of the Trustee
granted pursuant to the Mortgages.
MORTGAGES -- means and includes each Mortgage, Assignment of Rents and
Security Agreement, dated as of the date hereof, by an Obligor in favor of the
Trustee, as the same may be amended, restated or otherwise modified from time to
time.
NOTE PURCHASE AGREEMENT -- has the meaning specified in the Trust
Indenture.
OBLIGORS -- has the meaning specified in the introductory sentence
hereof.
PATENT COLLATERAL ASSIGNMENT -- means the Patent Collateral Assignment,
of even date herewith, entered into by the Trustee with the Obligors.
SPECTRAN CORPORATION 5 SECURITY AGREEMENT
<PAGE> 10
2. INTERPRETATION OF THIS AGREEMENT
PATENTS -- means all right, title and interest in and to United States
and foreign patents and patent applications, including, without limitation, the
inventions and improvements described and claimed therein, and those patents
listed on Annex 4 and all patents, and the reissues, divisions, continuations,
continuations in part, extensions and renewals thereof and all income, license
royalties, damages and payments due and/or payable under and with respect to all
patents and patent applications, including, without limitation, damages and
payments for past, present and future infringements thereof against third
parties and the right to sue for past, present and future infringements thereof
and all rights corresponding thereto throughout the world.
PERMITS AND WARRANTIES -- means all permits, licenses, manufacturer's
warranties, performance guarantees, service contracts, maintenance contracts,
and other similar general intangibles which are necessary for, or used or useful
in connection with, the operation or use of any of the Collateral or any of the
Mortgaged Property.
PERMITTED LIENS -- means
(a) one or more Liens or security interests in favor of the
Trustee securing the Secured Obligations and
(b) other Liens that comply with the terms of all of the
Lending Documents.
PERSON -- means an individual, sole proprietorship, partnership,
corporation, trust, joint venture, unincorporated organization, limited
liability company or a government or agency or political subdivision thereof.
PLEDGE AGREEMENT -- means the Pledge Agreement, dated as of the date
hereof, among each of the Obligors and the Trustee, together with any
acknowledgements and agreements delivered in connection therewith, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
SECURED OBLIGATIONS -- has the meaning specified in the Trust
Indenture.
SPARE PARTS -- means and includes all parts and accessories, and
replacements and substitutions therefor, owned or held by each Obligor for
repair of machinery or other equipment owned by such Obligor.
SUBSIDIARY -- has the meaning specified in the Trust Indenture.
TRADEMARK SECURITY AGREEMENT -- means the Trademark Security Agreement,
of even date herewith, entered into by the Trustee with the Obligors.
TRADEMARKS -- means all right, title and interest in and to United
States and foreign trademarks, trade names, service marks, trademark
registrations and trademark applications (including, without limitation, those
of the foregoing listed on Annex 4 and made a part hereof), whether now owned or
hereafter existing or acquired, including, without limitation, all renewals
SPECTRAN CORPORATION 6 SECURITY AGREEMENT
<PAGE> 11
2. INTERPRETATION OF THIS AGREEMENT
thereof, and all income, royalties, damages and payments now and hereafter due
and/or payable under all trademarks and trademark applications, including,
without limitation, damages and payments for past, present and future
infringements thereof against third parties and the right to sue for past,
present and future infringements thereof and all rights corresponding thereto
throughout the world, and all goodwill relating to any of the foregoing.
TRUST INDENTURE -- has the meaning set forth in the introductory
sentence hereof.
TRUSTEE -- has the meaning set forth in the introductory sentence
hereof.
2.2 SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION.
(a) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The titles of
the Sections of this Agreement and the Table of Contents of this
Agreement appear as a matter of convenience only, do not constitute a
part hereof and shall not affect the construction hereof. The words
"herein," "hereof," "hereunder" and "hereto" refer to this Agreement as
a whole and not to any particular Section or other subdivision.
References to Sections are, unless otherwise specified, references to
Sections of this Agreement. References to Annexes, Schedules, Exhibits
and Attachments are, unless otherwise specified, references to Annexes,
Schedules, Exhibits and Attachments attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
2.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Obligors and
the Trustee, this Agreement shall be construed and interpreted as a separate
Agreement between each Obligor, respectively, and the Trustee, and any whole or
partial invalidity of this Agreement in respect of any Obligor shall not have
any effect on the validity or enforceability of this Agreement as among each
other Obligor, respectively, as the case may be, and the Trustee.
2.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
2.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT TO THE EXTENT
THAT THE PERFECTION OF THE LIENS IN AND TO THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS.
SPECTRAN CORPORATION 7 SECURITY AGREEMENT
<PAGE> 12
3. COLLATERAL
3. COLLATERAL
3.1 GRANT OF SECURITY INTEREST.
As security for the payment by each of the Obligors of the Secured
Obligations and the performance by each of the Obligors of its other respective
obligations and undertakings under this Agreement and under the other Lending
Documents, each of the Obligors does hereby grant, bargain, convey, assign,
transfer, mortgage, hypothecate, pledge, confirm and grant a continuing security
interest to the Trustee in and to all of its presently owned or hereafter
acquired tangible and intangible Property (such Property being referred to as
the "COLLATERAL"), including with respect to each such Obligor, without
limitation, the following:
(a) all Accounts;
(b) all Inventory;
(c) all Equipment;
(d) all General Intangibles;
(e) all Chattel Paper;
(f) all Patents;
(g) all Trademarks;
(h) all Permits and Warranties;
(i) all interests deposit and other bank accounts;
(j) all moneys, securities and other Property and the proceeds
thereof in respect of the Accounts, now or hereafter held or received
by, the Trustee, any of the Obligors, or in transit to the Trustee from
or for any of the Obligors, whether for safekeeping, pledging, custody,
transmission, collection or otherwise;
(k) all of the rights, remedies, security interests and Liens
of each of the Obligors, in, to and in respect of the Accounts
(including, without limitation, rights of stoppage in transit, rights
of replevin, rights of repossession and reclamation and other rights
and remedies of an unpaid vendor, lienor, consignor or secured party)
and all guaranties, insurance policies or other contracts of suretyship
with respect to the Accounts;
(l) all of the right, title and interest of each of the
Obligors in, to and in respect of, all goods (and any warranties in
respect thereof) relating to, or which by sale, lease or other
disposition have resulted in, Accounts, including, without limitation,
all goods described in invoices or other documents or instruments with
respect to, or otherwise representing or evidencing, any Account, and
all returned, reclaimed or repossessed goods, which returned, reclaimed
or repossessed goods would qualify as Inventory;
SPECTRAN CORPORATION 8 SECURITY AGREEMENT
<PAGE> 13
3. COLLATERAL
(m) all books, records, operator's manuals, ledger cards,
computer programs, computer disks and tapes and other similar Property
and general intangibles at any time evidencing or relating to the
Accounts, the Inventory or any of the other Collateral referred to in
clause (a) through clause (k), inclusive, above (the "BOOKS AND
RECORDS");
(n) to the extent not covered by any of the foregoing clauses
(a) through (m), inclusive, all "securities" (as defined in the Code or
in the Securities Act of 1933, as amended) owned or held by any
Obligor, all "instruments" (as such term is defined in the Code) owned
or held by any Obligor, all "documents" and "documents of title" (as
defined in the Code), all interests of any Obligor under any lease, all
"contract rights" (as now or formerly defined in the Code) and all
"goods" (as defined in the Code); and
(o) all proceeds and products of the Collateral referred to in
clause (a) through clause (n), inclusive, above in whatever form,
including, but not limited to: cash, deposit accounts (whether or not
comprised solely of proceeds), certificates of deposit, insurance
proceeds, negotiable instruments and other instruments for the payment
of money, chattel paper, security agreements or documents (including,
without limitation, any claims by any of the Obligors against third
parties for loss or compensation with respect to damage, destruction or
condemnation of any of the aforesaid Collateral or in respect of a
breach of warranty of any of the aforesaid Collateral).
provided, however, that the term "Collateral" will not include:
(i) JV Excluded Property; or
(ii) any Permits and Warranties in which the owner or holder
thereof is prohibited from granting a security interest under
applicable law.
3.2 COLLATERAL-RELATED RIGHTS AND UNDERTAKINGS.
(a) CHIEF EXECUTIVE OFFICE; NOTICE OF CHANGES OF ADDRESS OR
NAME. Each of the Obligors hereby represents, warrants and covenants to
the Trustee that,
(i) the chief executive office of each of the
Obligors (and the office where all of the Books and Records of
each of the Obligors are maintained) is located at the
applicable address set forth on Annex 1, and
(ii) the Inventory and Equipment currently owned by
such Obligor is physically located at the address or addresses
set forth on Annex 3.
None of the Obligors shall
(A) change the address of such chief executive office
to an address outside the State or county of such address, or
merge or consolidate with any Person or change its name, or
(B) change the specified locations of such Inventory
(other than pursuant to sales of such Inventory in the normal
course of business) and Equipment,
SPECTRAN CORPORATION 9 SECURITY AGREEMENT
<PAGE> 14
3. COLLATERAL
unless such Obligor shall have given thirty (30) days prior written
notice thereof to the Trustee.
(b) OWNERSHIP OF COLLATERAL; LIEN OF THE TRUSTEE. Each of the
Obligors hereby represents, warrants and covenants to the Trustee that
the Collateral granted by each Obligor hereunder is now, and at all
times shall be, solely owned by such Obligor free and clear of all
Liens, security interests, claims and encumbrances, except Permitted
Liens. Each of the Obligors hereby represents, warrants and covenants
to the Trustee that the security interests of the Trustee in the
Collateral are now, and shall at all times be, valid, perfected, first
priority security interests in the Collateral (subject only to
Permitted Liens and the Lien of the Trustee provided for in the Trust
Indenture). Each of the Obligors shall defend the Collateral from all
claims and demands of all other Persons, except the holders of
Permitted Liens. Each of the Obligors shall comply with the
requirements of all state and federal laws, rules and regulations in
order to grant the security interests herein granted in and to the
Collateral, to maintain the perfection and priority of such security
interests and to permit the Trustee to realize promptly and directly on
such Collateral, as provided herein.
(c) FINANCING STATEMENTS; FURTHER ASSURANCES.
(i) Each of the Obligors hereby agrees to execute
such financing statements
(A) as may be requested by the Noteholders
(as defined in the Trust Indenture) or the Bank
Lenders (as defined in the Trust Indenture) on or
prior to the Closing Date, and
(B) as the Trustee or the Majority
Beneficiaries may from time to time request, and take
such other action (including, without limitation, the
preparation and filing, at its own expense, of all
continuation statements) as may be required to
perfect and to keep continuously perfected the
Trustee's security interest and Lien in the
Collateral.
The Trustee is hereby authorized by each of the Obligors to
execute and file any such financing statements and
continuation statements on such Obligor's behalf, unless
prohibited by law, and, if such Obligor fails to make such
filings within five (5) days of any request therefor by the
Trustee, the Trustee shall make such filings subject to the
provisions hereof.
(ii) Each of the Obligors shall, at its sole cost and
expense, perform all acts and execute all documents reasonably
requested by the Trustee or the Majority Beneficiaries from
time to time to evidence, perfect, preserve the priority of,
maintain or enforce the Trustee's security interests granted
herein or otherwise in furtherance of the provisions of this
Agreement. At any time and from time to time, each of the
Obligors shall, at its sole cost and expense, execute and
deliver to the Trustee such financing statements pursuant to
the Uniform Commercial Code of any applicable jurisdiction,
and shall execute, acknowledge, deliver and record, or will
cause to be executed, acknowledged, delivered or recorded, all
such further instruments, deeds, conveyances, mortgages,
supplemental
SPECTRAN CORPORATION 10 SECURITY AGREEMENT
<PAGE> 15
3. COLLATERAL
indentures, transfers, continuation statements and assurances
as are necessary or reasonably appropriate to preserve,
protect, continue and maintain the perfection and priority of
the Lien of the Trustee in and to the Collateral or, as the
Trustee may reasonably require, for the better granting,
bargaining, selling, remising, releasing, confirming,
conveying, warranting, assigning, transferring, mortgaging,
pledging, delivering and setting over to the Trustee every
part of such security, or as may be required in order to
transfer to any successor trustee or trustees the estate,
powers, instruments and funds held in trust hereunder. Each of
the Obligors hereby authorizes the Trustee to execute and file
at any time and from time to time one or more financing
statements or copies thereof or of this Agreement (and any
continuation statements in respect thereof) with respect to
the Collateral signed only by Trustee.
(d) SALE OF COLLATERAL. No Obligor shall assign, sell,
transfer, or otherwise dispose of, nor shall any Obligor suffer or
permit any of the same to occur with respect to, any Collateral other
than
(i) in respect of the sale of Inventory in the
ordinary course of business on terms substantially similar to
the terms currently being extended by such Obligor to its
current customers (subject to adjustment for changes in
economic and/or industry conditions affecting such Obligor),
(ii) as otherwise permitted under each of the Lending
Documents,
(iii) in respect of the collection of checks, drafts,
money orders or other instruments in respect of the Accounts
as contemplated by Section 3.2(i)(ii), or
(iv) with the prior written consent of the Majority
Beneficiaries.
The foregoing notwithstanding and notwithstanding anything to the
contrary in the Lending Documents, the Majority Beneficiaries may, in
their sole discretion, withdraw the aforesaid permissions to assign,
sell, transfer or otherwise dispose of Inventory upon the occurrence
and continuance of any Event of Default.
(e) ACCESS TO COLLATERAL; MAINTENANCE OF BOOKS AND RECORDS.
The Trustee shall at all times have free access to and right of
inspection of the Collateral and any records pertaining thereto (and
the right to make extracts from and to receive from the Obligors
originals or true copies of such records and any papers and instruments
relating to any Collateral upon request therefor at reasonable times
and as reasonably requested). The Trustee hereby agrees with the
Obligors that the Trustee shall, in respect of Confidential Information
(as defined in the Note Purchase Agreement), be bound by and entitled
to the benefits of Section 20 of the Note Purchase Agreement, mutatis
mutandis, as if it were a holder of Notes party thereto. Each of the
Obligors shall maintain the Books and Records and such other records as
will enable it and the Trustee to accurately determine the status of
the Collateral in a prompt manner. All of the Books and Records and
such other records shall be maintained at the respective addresses set
forth on Annex 1 until such time as any Obligor shall be permitted to
change such location in accordance with Section 3.2(a).
SPECTRAN CORPORATION 11 SECURITY AGREEMENT
<PAGE> 16
3. COLLATERAL
(F) USE OF EQUIPMENT; NOTICES REGARDING CHANGES IN EQUIPMENT.
(i) Each of the Obligors hereby represents, warrants
and covenants to the Trustee that all of the Equipment is used
in the business of such Obligor (and not for personal, family,
household or farming use) for lawful purposes only and in
compliance in all material respects with all laws, rules and
governmental regulations relating thereto.
(ii) Each Obligor will, at such Obligor's sole
expense, keep each item of Equipment in functional condition
and repair, running and marketable condition.
(iii) The Obligors shall promptly (and in any event
within ten (10) Business Days) advise Beneficiaries in
sufficient detail of any substantial change relating to the
type, quantity or quality of the Equipment or any event which
would have a Material Adverse Effect on the value of the
Equipment.
(G) NOTICES REGARDING CHANGES IN INVENTORY. The Obligors shall
promptly (and in any event within ten (10) Business Days) advise the
Beneficiaries in sufficient detail of any substantial change relating
to the type, quantity or quality of the Inventory or any event which
would have a Material Adverse Effect on the value of the Inventory.
(H) INSURANCE.
(i) Anything contained in the other Lending Documents
notwithstanding, the Obligors agree to maintain insurance,
with financially sound and reputable insurers, with respect to
the Inventory and any returned, repossessed or reclaimed
tangible personal Property included in the Collateral against
casualties, contingencies, hazards and such other risks
(including, without limitation,
(A) fire, hurricane, tornado, wind damage,
and such other risks insured against by a standard
all-risk property and fire insurance policy and
endorsement for extended coverage and
(B) flood, earthquake and public disturbance
insurance)
and in such amounts (and with such reasonable deductibles) as
shall be customary in the case of corporations of established
reputations engaged in the same or a similar business and
similarly situated (it being understood that the deductibles
in respect of such insurance on the Closing Date shall be
deemed to be reasonable for the purposes hereof). The Obligors
shall deliver copies of the policies of such insurance to the
Trustee, with copies to each of the Beneficiaries, with
satisfactory lender's loss payable endorsements naming the
Trustee as loss payee to the extent of its interest and as
such interest may appear. Each such policy of insurance or
endorsement shall contain a clause requiring the insurer to
give not less than thirty (30) days prior written notice to
the Trustee in the event of cancellation of the policy for any
reason whatsoever and a clause that the interest of the
Trustee shall not be impaired or invalidated by any act or
neglect of any Obligor. If the Obligors shall fail to provide
and pay for such insurance, or
SPECTRAN CORPORATION 12 SECURITY AGREEMENT
<PAGE> 17
3. COLLATERAL
have the same provided and paid for, the Trustee, upon being
instructed by the Majority Beneficiaries, may, at the sole
expense of the Obligors, procure the same, but may not be
required by the Obligors to do so. Each of the Obligors agrees
to deliver to the Trustee, promptly as rendered, true copies
of all material reports made in any reporting form to
insurance companies.
(ii) Anything contained in the other Lending
Documents notwithstanding, each Obligor shall maintain or
caused to be maintained insurance, with financially sound and
reputable insurers, with respect to its Property (including,
without limitation, the Collateral) and business covering any
public and/or product liability of any Obligor, or its
officers, agents or employees, and in such amounts as shall be
customary in the case of corporations of established
reputations engaged in the same or a similar business and
similarly situated. The Trustee and each of the Beneficiaries
shall be named as a co-insured on such policies. The Obligors
shall deliver to the Trustee on the Closing Date evidence of
insurance of the type and in the amounts provided for in this
Section being in full force and effect and payment of all
premiums in respect thereof.
(I) COLLECTION OF ACCOUNTS, ETC. Anything herein to the
contrary notwithstanding:
(i) each of the Obligors shall remain responsible and
liable to perform all of its duties and obligations under or
in respect of each of the Accounts;
(ii) until such time as the Trustee shall have
informed any of the Obligors to the contrary, the Obligors
shall remain obligated to collect, and account for all
proceeds in respect of, the Accounts and shall do so
diligently and in accordance with reasonable commercial
procedures and practices for similarly situated corporations
and shall be entitled to retain and use such proceeds, and, if
an Event of Default shall exist and if so instructed by the
Trustee, each of the Obligors shall deliver all such proceeds
to the Trustee, or as directed by the Trustee, for application
to the Secured Obligations and the obligations secured by the
Permitted Liens; and
(iii) the execution and delivery of this Agreement,
and the granting of the security interests in and to the
Collateral, shall not subject the Trustee or any holder of the
Secured Obligations to, or transfer or pass to such Persons,
or in any way affect or modify, the liability of the Obligors
under any or all of their respective Accounts or any
obligations of the Obligors in connection therewith, it being
understood and agreed that notwithstanding this Agreement, and
the granting of the security interests in and to the
Collateral, all of the obligations of each of the Obligors to
each and every other party under each and every one of the
Accounts shall be and remain enforceable by such other party,
its successors and assigns, only against the Obligors, and the
Trustee and each holder of Secured Obligations have not
assumed any of the obligations or duties of any of the
Obligors thereunder or in connection therewith.
SPECTRAN CORPORATION 13 SECURITY AGREEMENT
<PAGE> 18
3. COLLATERAL
(J) INDEMNIFICATION. Each of the Obligors hereby agrees to
indemnify each of the Trustee and each holder of Secured Obligations,
and hold each such Person harmless, from any and all liability, loss or
damage which any such Person may or might incur by reason of any and
all claims and demands whatsoever which may be asserted against any
such Person arising out of, as a result of, or otherwise connected
with, the security interests hereby granted to the Trustee by the
Obligors under or in respect of any of the Collateral by reason of
(i) the failure by any of the Obligors to perform any
alleged obligations or undertakings required to be performed
by such Obligor, as the case may be, under or in connection
with the Collateral (including, without limitation, the
failure of any warranty or representation (express or implied)
in respect of the sale of any Inventory),
(ii) any failure by any of the Obligors, in
connection with any of the Collateral, to comply with any
applicable federal, state or local law and the rules and
regulations promulgated thereunder and
(iii) any bodily injury, death or property damage
occurring in connection with the sale, lease or use of the
Collateral.
No Obligor shall be liable to any Person pursuant to this paragraph in
respect of any liability, loss, damage, claim or demand that arises
from such Person's gross negligence or willful misconduct.
(K) CERTAIN RIGHTS OF TRUSTEE.
(i) Neither the Trustee nor any holder of Secured
Obligations shall be obligated to, or be responsible for, the
payment of any of the amounts or sums referred to in this
Section or the other performance of any of the undertakings of
the Obligors hereunder. Each of the Obligors hereby agrees and
acknowledges that neither the acceptance of this Agreement by
the Trustee nor the exercise of, or failure to exercise, any
right, power or remedy in this Agreement conferred upon the
Trustee shall be deemed or construed to obligate the Trustee
or any holder of Secured Obligations to pay any sum of money,
take any other action or incur any liability in connection
with, or collect or realize upon, any of the Collateral. It is
further agreed and understood by each of the Obligors that the
Trustee and the Beneficiaries shall not be liable in any way
for any cost, expense or liability connected with, or any
charge or liability arising from, any of the Collateral. All
insurance expenses, all expenses of protecting, storing, ware-
housing, insuring, handling, maintaining and shipping the
Collateral, and any and all excise, property, sales, use and
other taxes imposed by any state, federal or local authority
on any of the Collateral or in respect of the sale or other
disposal thereof shall be borne and paid by the Obligors.
(ii) If any of the Obligors shall fail to pay any of
the aforesaid expenses and taxes, the Trustee may, at the
instruction of the Majority Beneficiaries and at such
Obligor's expense, pay the same, and any such payment shall be
deemed an advance by the Trustee to such Obligor payable on
demand together with
SPECTRAN CORPORATION 14 SECURITY AGREEMENT
<PAGE> 19
3. COLLATERAL
interest at the highest rate then payable on any of the
Secured Obligations. If any of the Obligors shall fail to
perform any of its other undertakings or agreements or
obligations under this Agreement, the Trustee may (but shall
not be required to) itself perform, or cause performance of,
such undertaking, agreement or obligation, and the expenses of
the Trustee incurred in connection therewith shall be payable
by such Obligor on demand together with interest at the
highest rate then payable on any of the Secured Obligations
and shall otherwise be treated as a Secured Obligation
hereunder.
(iii) If, by reason of any suit or proceeding of any
kind, nature or description against any of the Obligors, or by
any Obligor or any other party against any other Person, which
in the Trustee's sole discretion makes it advisable for the
Trustee to seek counsel for the protection and preservation of
the Collateral, or to defend its own interest or the interests
of the Beneficiaries, such out-of-pocket expenses and
reasonable counsel fees shall be allowed to the Trustee and
borne and paid by such Obligor.
(L) NO LIABILITY FOR SAFEKEEPING. Except to the extent
specifically limited by applicable law, the Trustee shall not be liable
or responsible in any way for the safekeeping of the Collateral or for
any loss or damage thereto or for any diminution in the value thereof,
or any act or default of any warehouseman, carrier, forwarding agency
or other Person, but the same shall be at the sole risk of the Obligor
owning such Collateral.
(M) NO VIOLATION OF LAW. No Obligor shall
(i) violate any law, ordinance or governmental rule
or regulation (including, without limitation, any
Environmental Protection Laws) to which it or the Collateral
is subject, nor
(ii) fail to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of
the Collateral, the sale or lease of the Inventory, the
collection of the Accounts, or the operation of the Equipment,
which violation or failure to obtain might have a Material Adverse
Effect.
(N) FURTHER ASSIGNMENTS; MARKING OF COLLATERAL. Each of the
Obligors shall deliver to the Trustee, at such times and in such form
as may be reasonably designated by the Trustee or the Majority
Beneficiaries from time to time, assignments, reports and schedules
relating to the Collateral. Upon request by the Trustee or the Majority
Beneficiaries, each of the Obligors shall mark its books and records to
reflect the security interests of the Trustee in the Collateral.
(O) PERMITS AND WARRANTIES. To further protect the security
afforded by this Agreement with respect to the Permits and Warranties,
each Obligor agrees:
(i) to faithfully abide by, perform and discharge in
all material respects each and every obligation, covenant,
condition, duty and agreement which each
SPECTRAN CORPORATION 15 SECURITY AGREEMENT
<PAGE> 20
3. COLLATERAL
or any of the Permits and Warranties provides are to be
performed by such Obligor;
(ii) not to amend, assign, modify, cancel, surrender,
otherwise change or terminate any of the Permits and
Warranties, or waive any provision thereof in any manner that
would materially affect the security interest of the Trustee
in the Permits and Warranties, without the written consent of
the Trustee and the Majority Beneficiaries, except to the
extent that such actions would not, individually or in the
aggregate, have a Material Adverse Effect; and
(iii) to appear in and defend any action or
proceeding to the extent deemed necessary in its reasonable
business judgment arising under, growing out of or in any
manner connected with the obligations, covenants, conditions,
duties, agreements or liabilities of such Obligor under any of
the Permits and Warranties, at the sole cost and expense of
such Obligor.
3.3 COVENANT REGARDING OWNERSHIP INTEREST IN JV SUBSIDIARY.
(A) GENERALLY. So long as the Secured Obligations have not
been indefeasibly paid in full,
(i) one Subsidiary (the "JV OWNER") of the Company
will own 100% of the JV Equity Interest;
(ii) the JV Owner,
(I) will engage in no business other
than the ownership of the equity interest in
the JV Subsidiary,
(II) will not become obligated in
respect of any borrowed money or other
obligations other than guarantees of the
Secured Obligations; and
(III) will be liable jointly and
severally with the other Borrowing Parties
in respect of the Secured Obligations;
(iii) the JV Owner will own not less than 50% of the
outstanding equity interest
in the JV Subsidiary;
provided that the JV Owner will be permitted to cure any violation of
the foregoing requirements within 30 days of the violation thereof,
either by
(A) curing such violation or by transferring such
equity interest to another Subsidiary of the Company that
complies with each of such requirements, or
(B) granting to the Trustee a first priority
perfected security interest in such equity interest, pursuant
to such documents and instruments as are satisfactory to the
Majority Beneficiaries.
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<PAGE> 21
3. COLLATERAL
(B) JV PROPERTY EXCLUSION. So long as there is no violation of
Section that has not been cured as provided in Section (B), the JV
Equity Interest will be excluded from the security interest granted in
accordance with this Section and shall constitute, together with the JV
Transferred Property, "JV EXCLUDED PROPERTY". The JV Equity Interest
shall not constitute JV Excluded Property, and shall be subject to the
security interests granted in accordance with this Section if, and for
so long as, a violation of Section exists and has not been cured in
accordance with Section (B). JV Transferred Property shall at all times
constitute JV Excluded Property.
4. REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants, as of the Closing Date, as
follows:
4.1 OWNERSHIP OF COLLATERAL.
The Collateral being granted by such Obligor is owned solely by such
Obligor, and no other Person has any right, title, interest, claim or Lien
thereon, or thereto, except for Permitted Liens.
4.2 INCORPORATION.
Such Obligor:
(a) is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(b) has all corporate power and authority necessary to own and
operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as
presently proposed to be conducted, except where the failure to have
such licenses, certificates, permits, franchises and other governmental
authorizations, in the aggregate for all such failures, could not have
a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation, in each state in the United States of America and in each
other jurisdiction where the failure to be so qualified or licensed and
authorized and in good standing, in the aggregate for all such
failures, could have a Material Adverse Effect.
4.3 CORPORATE POWERS AND AUTHORIZATION.
The execution, delivery and performance by such Obligor of this
Agreement and all other instruments and documents to be delivered hereunder, and
the transactions contemplated hereby and thereby, are within the corporate
powers of such Obligor, have been duly authorized by all necessary corporate
action and
SPECTRAN CORPORATION 17 SECURITY AGREEMENT
<PAGE> 22
4. REPRESENTATIONS AND WARRANTIES
(a) do not contravene such Obligor's certificate or articles
of incorporation or bylaws or, to such Obligor's knowledge, any law,
rule, regulation, order, writ, judgment, injunction or decree presently
in effect having applicability to it,
(b) do not contravene any indenture, loan or credit agreement
or any other material agreement, lease or instrument
(i) to which such Obligor is a party or
(ii) by which such Obligor or its Property may be
bound or affected, and
(c) do not result in or require the creation of any Lien,
security interest or other charge or encumbrance upon or with respect
to any of its Properties (except as provided herein).
4.4 GOVERNMENTAL FILINGS; REGISTRATION.
(A) FILINGS AND REGISTRATIONS. No authorization or approval or
other action by, and no notice to or filing with, any Governmental
Authority is required for
(i) the grant by each Obligor of the security
interest granted hereby or the due execution, delivery and
performance by such Obligor of this Agreement or any other
document or instrument to be delivered hereunder, or
(ii) the perfection of such security interest or the
exercise by the Trustee of its rights and remedies hereunder
and under the other Lending Documents,
except for the filings of the Uniform Commercial Code financing
statements described on Annex 2, and filings with the United States
Patent and Trademark Office required by the Trademark Security
Agreement and the Patent Collateral Assignment, all of which shall be
duly made on or immediately after the Closing Date and will, upon the
filing thereof, be in full force and effect.
(B) NO OTHER FINANCING STATEMENTS. No effective financing
statement which names any Obligor as debtor is on file in any
jurisdiction except for the financing statements in respect of
Permitted Liens.
4.5 ENFORCEABILITY.
All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of such Obligor necessary to constitute
this Agreement a valid and binding agreement for the uses and purposes set forth
herein, in accordance with its terms, have been done and taken. Assuming the
corporate existence, power and authority of, and the due authorization,
execution and delivery hereof by, the Trustee, this Agreement is the legal,
valid and binding obligation of such Obligor, enforceable in accordance with its
terms, except as the enforceability hereof may be
SPECTRAN CORPORATION 18 SECURITY AGREEMENT
<PAGE> 23
4. REPRESENTATIONS AND WARRANTIES
(a) limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability
of creditors' rights generally and
(b) subject to the availability of equitable remedies and
judicial discretion in the enforcement thereof.
4.6 LOCATION OF INVENTORY AND EQUIPMENT, ETC.
(A) LOCATION OF INVENTORY AND EQUIPMENT. Such Obligor does not
currently hold, nor has such Obligor held at any time during the three
hundred sixty-five (365) days immediately preceding the date hereof,
any interest in tangible personal Property constituting a part of the
Collateral which is located in any location other than the locations
listed on Annex 3.
(B) CHANGES OF NAME AND ADDRESSES. Such Obligor has not, in
the last five (5) years,
(i) changed its name or operated all or a portion of
its business under any name other than its present legal name
and the trade names listed on Annex 4, or
(ii) changed the address of its chief executive
office other than as set forth on Annex 1.
4.7 PATENTS, TRADEMARKS.
Such Obligor owns or possesses all of the patents, trademarks, service
marks, trade names, copyrights, licenses, and rights with respect thereto,
necessary for the present and presently planned future conduct of its business,
without any known conflict with the rights of others. All patents owned by such
Obligor and all of the trademarks, service marks or trade names found on, or
used in connection with the sale, lease or other disposition of, Inventory are
set forth on Annex 4.
4.8 ACCOUNTS.
(a) None of the Accounts is evidenced by a promissory note or
other instrument.
(b) Each of the Accounts is a true and correct statement of
the actual amount owing by each Account Debtor with respect thereto.
4.9 ACCURACY OF PRELIMINARY STATEMENTS.
Each statement contained in Section of this Agreement is accurate.
SPECTRAN CORPORATION 19 SECURITY AGREEMENT
<PAGE> 24
5. DEFAULTS -- REMEDIES
5. DEFAULTS -- REMEDIES
5.1 DEFAULT REMEDIES.
(A) GENERAL. If an Event of Default exists, the Trustee may
(i) exercise all of the rights and remedies conferred
in this Agreement, in the Trust Indenture and in the other
Lending Documents, and
(ii) exercise all of the rights and remedies of a
secured party under the Code and all of the rights and
remedies in this Agreement or otherwise available at law or in
equity.
(B) RIGHTS AND REMEDIES.
(I) PAYMENTS TO LOCKBOX. If an Event of Default
exists, the Trustee may require the Obligors to instruct the
Account Debtors to make payment thereof directly to the
Trustee or to a Person or lockbox so designated by the
Trustee. If an Event of Default shall exist and any Obligor
receives any cash, checks, drafts, money orders or other
instruments in payment of any Accounts, it shall hold the same
in trust for the Trustee and shall segregate the same and
shall promptly deliver the same (in the identical form as
received) to the Trustee or to such Person or lockbox as the
Trustee may designate.
(II) NOTIFICATION OF DEBTORS. If an Event of Default
shall exist, each of the Obligors authorizes the Trustee (but
the Trustee shall not be obligated) to communicate with any
Account Debtor or any other Person primarily or secondarily
liable under an Account with regard to any delinquent payment
or other payment status of such Account or any matter relating
thereto or with regard to the verification that such Account
Debtor did incur the obligations thereunder and the terms and
provisions thereof. If an Event of Default exists, each of the
Obligors agrees, upon the request of the Trustee, to notify
each Account Debtor in writing of the assignment to the
Trustee of its respective Account, the Trustee's security
interest therein and any other matter relating thereto.
Notwithstanding the immediately preceding sentence, the
Trustee shall, during the existence of any Event of Default,
have the right, without first making a request of the Obligor
owning such Accounts, to notify each Account Debtor of the
assignment to the Trustee of its respective Account, the
Trustee's security interest therein and any other matter
relating thereto.
(C) COLLECTION. The Trustee may, at any time and from time to
time during the existence of any Event of Default, demand, sue for,
collect or receive any money or Property at any time payable or
receivable on account of or in exchange for, or make any compromise or
settlement reasonably deemed desirable by the Trustee with respect to,
any Account, and/or extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any Account
or any collateral, guaranty or insurance therefor or in respect
thereof, all without notice to or consent by the Obligors and without
otherwise discharging or affecting the Secured Obligations, the other
Collateral or the security interest granted herein. Without limiting
any of the foregoing,
SPECTRAN CORPORATION 20 SECURITY AGREEMENT
<PAGE> 25
5. DEFAULTS -- REMEDIES
each of the Obligors hereby authorizes the Trustee and any agent or
designee thereof during the existence of any Event of Default to take
any and all steps in the name of such Obligor, necessary or desirable,
in the determination of the Trustee or the Majority Beneficiaries, to
collect all amounts due under any and all Accounts, including, without
limitation, endorsing such Obligor's name on checks and other
instruments representing collections and/or proceeds of Accounts and
enforcing such Accounts.
(d) POSSESSION OF COLLATERAL; ENTRY OF PREMISES. If an Event
of Default exists, the Trustee shall have the right, at any time or
from time to time, to take immediate possession of any or all
Collateral that is tangible personal Property, and may require each of
the Obligors to assemble such Collateral, at the expense of each such
Obligor, and to make it available to the Trustee at a place to be
designated by the Trustee that is reasonably convenient to both
parties, and may enter any of the premises of each of the Obligors (or
wherever such Collateral shall be located) without force and with or
without process of law, and keep and store the same on such premises
until sold (and if such premises be the Property of any Obligor, such
Obligor agrees not to charge the Trustee for storage thereof for a
period of at least ninety (90) days after sale or disposition of such
Collateral).
(e) BOOKS AND RECORDS. At the request of the Trustee at any
time while an Event of Default exists, each of the Obligors shall
assemble all of the Books and Records which evidence the Collateral and
make the same available to the Trustee or its designee at a place
selected by the Trustee or its designee.
(f) SALE OF COLLATERAL; COMMERCIAL REASONABLENESS. Each of the
Obligors and the Trustee agree that ten (10) days notice to such
Obligor of any public or private sale or other disposition of the
Collateral shall be reasonable notice thereof, and such sale shall be
at such reasonable location as the Trustee shall designate in such
notice. Any other requirement of notice, demand or advertisement for
sale is, to the extent permitted by law, waived by each of the
Obligors. Sales for cash, or on credit to a wholesaler, retailer or
user of the Collateral, at any public or private sale are all hereby
deemed (without limitation) to be commercially reasonable (as defined
in the Uniform Commercial Code as in effect in any applicable
jurisdiction). The Collateral may be sold at any private or public sale
in one or more lots. The Trustee shall have, to the extent permitted by
applicable law, the right to bid at any such public sale on behalf of
any one or more Beneficiaries (who shall also have the right to bid
individually).
(g) CERTAIN OFFSET RIGHTS IN RESPECT OF COLLATERAL. If an
Event of Default exists, the Trustee may also, with or without
proceeding with sale or foreclosure or demanding payment of the Secured
Obligations, without notice, appropriate and apply to the payment of
the Secured Obligations and the other obligations secured under this
Agreement any and all Collateral in its possession (including, without
limitation, any and all balances, credits, deposits, accounts,
reserves, or other moneys due or owing to any of the Obligors held by
the Trustee hereunder or otherwise) in accordance with the provisions
of the Trust Indenture.
(h) UNDERTAKINGS CUMULATIVE. All covenants, conditions,
provisions, warranties, guaranties, indemnities and other undertakings
of the Obligors contained in this Agreement or any other Lending
Document, or in any document referred to in this
SPECTRAN CORPORATION 21 SECURITY AGREEMENT
<PAGE> 26
5. DEFAULTS -- REMEDIES
Agreement or any other Lending Document or contained in any agreement
supplementary to this Agreement or any other Lending Document, shall be
deemed cumulative to and not in derogation or substitution of any of
the terms, covenants, conditions or agreements of the Obligors
contained in this Agreement or any other Lending Document.
(i) PAYMENT OF EXPENSES AND CHARGES. Each of the Obligors
shall be obligated, jointly and severally, to pay to the Trustee all
out-of-pocket expenses (including court costs and reasonable attorneys'
fees and expenses) of, or incident to, the enforcement of any of the
provisions of this Agreement and all other charges due against the
Collateral, including, without limitation, taxes, assessments, security
interests, Liens or encumbrances upon the Collateral and any expenses,
including transfer or other taxes, arising in connection with any sale,
transfer or other disposition of Collateral.
5.2 OTHER ENFORCEMENT RIGHTS.
The Trustee may proceed to protect and enforce this Agreement by suit
or suits or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement in this Agreement contained or
in execution or aid of any power in this Agreement granted, or for foreclosure
under this Agreement, or for the appointment of a receiver or receivers for the
Collateral or any part thereof, for the recovery of judgment for the obligations
secured by this Agreement or for the enforcement of any other proper, legal or
equitable remedy available under applicable law.
5.3 POWER OF ATTORNEY.
Each Obligor hereby makes, constitutes and appoints the Trustee the
true and lawful agent and attorney in fact of such Obligor with full power of
substitution:
(a) if an Event of Default shall exist, to receive, open and
dispose of all mail addressed to such Obligor and remove therefrom any
notes, checks, drafts, money orders or other instruments included in
the Collateral, with full power to endorse the name of such Obligor
upon any such checks, drafts, money orders, or other instruments
relating to the Collateral and to effect the deposit and collection
thereof, and the further right and power to endorse the name of such
Obligor on any other document relating to the Collateral;
(b) if an Event of Default exists, to sign the name of such
Obligor to drafts against its debtors, to notices to such debtors, to
assignments and notices of assignments, financing statements,
continuation statements or other public records or notices and all
other instruments and documents; and
(c) to do any and all things necessary to take action in the
name and on behalf of such Obligor to carry out the provisions of this
Agreement.
Each of the Obligors agrees, in the absence of willful wrongdoing or gross
negligence, that neither the Trustee nor any of its agents, designees or
attorneys-in-fact will be liable for any acts of commission or omission, or for
any error of judgment or mistake of fact or law with respect to the exercise of
the power of attorney granted under this Section . The power of attorney
SPECTRAN CORPORATION 22 SECURITY AGREEMENT
<PAGE> 27
5. DEFAULTS -- REMEDIES
granted under this Section is coupled with an interest and shall be irrevocable
so long as any Secured Obligation remains outstanding.
5.4 EFFECT OF SALE, ETC.
(a) TITLE. Any sale or sales pursuant to the provisions of
this Agreement, whether under any right or power granted hereby or
pursuant to any legal proceedings, shall operate to divest each of the
Obligors of all of any such Obligor's right, title, interest, claim and
demand whatsoever, either at law or in equity, of, in and to the
Collateral, or any part thereof, so sold, and any Property so sold
shall be free and clear of any and all rights of redemption by, through
or under such Obligor. At any such sale any holder of Secured
Obligations may, to the extent permitted by applicable law, bid for and
purchase the Property sold and may make payment therefor as set forth
in Section , and any such Person so purchasing any such Property, upon
compliance with the terms of sale, may hold, retain and dispose of such
Property without further accountability.
(b) APPLICATION OF PROCEEDS. The receipt by the Trustee, or by
any Person authorized under any judicial proceedings to make any such
sale, of the proceeds of any such sale shall be a sufficient discharge
to any purchaser of the Collateral, or of any part thereof, sold as
aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the event
that, at any such sale, any holder of Secured Obligations is the
successful purchaser, it shall be entitled, for the purpose of making
settlement or payment, to use and apply such Collateral to its Secured
Obligations by crediting thereon the amount apportionable and
applicable thereto out of the net proceeds of such sale.
5.5 DELAY OR OMISSION; NO WAIVER.
No course of dealing on the part of the Trustee or any holder of
Secured Obligations nor any delay or failure on the part of the Trustee or such
holder to exercise any right shall impair such right or operate as a waiver of
such right or otherwise prejudice the Trustee's or such holder's rights, powers
and remedies. No waiver by the Trustee or any holder of Secured Obligations of
any Default or Event of Default, whether such waiver be full or partial, shall
extend to or be taken to affect any subsequent Default or Event of Default, or
to impair the rights resulting therefrom except as may be otherwise expressly
provided in this Agreement. Every right and remedy given by this Agreement, by
any other Lending Document or by law to the Trustee or any holder of Secured
Obligations may be exercised from time to time as often as may be deemed
expedient by such Person.
5.6 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee shall have instituted any proceeding to enforce any
right or remedy under this Agreement or under any other Lending Document and
such proceeding shall have been discontinued or abandoned for any reason, or
shall have been determined adversely to the Trustee, then and in every such case
the Trustee, the Obligors and the Beneficiaries shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions under this Agreement and under the other Lending
Documents, and thereafter
SPECTRAN CORPORATION 23 SECURITY AGREEMENT
<PAGE> 28
5. DEFAULTS -- REMEDIES
all rights and remedies of the Trustee and such Beneficiaries shall continue as
though no such proceeding had been instituted.
5.7 APPLICATION OF PROCEEDS.
The proceeds of any exercise of rights with respect to the Collateral,
or any part thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to the Trustee and applied by the Trustee in accordance
with the provisions of the Trust Indenture. If there is a deficiency, each of
the Obligors shall, subject always to the other provisions of this Agreement,
remain liable therefor and shall forthwith pay the amount of any such deficiency
to the Trustee.
5.8 CUMULATIVE REMEDIES.
No remedy under this Agreement or under any other Lending Document is
intended to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given under this
Agreement or under any other Lending Document or otherwise existing; nor shall
the giving, taking or enforcement of any other or additional security,
collateral or guaranty for the payment or performance of the Secured Obligations
operate to prejudice, waive or affect the security of this Agreement or any
rights, powers or remedies under this Agreement, nor shall the Trustee or the
holder of any Secured Obligation be required to look first to, enforce or
exhaust any such other or additional security, collateral or guaranties.
5.9 WAIVERS BY THE OBLIGORS.
(a) Each of the Obligors hereby waives notice of acceptance of
this Agreement. Each of the Obligors further waives presentment and
demand for payment of any of the Secured Obligations, protest and
notice of dishonor or default with respect to any of the Secured
Obligations, and all other notices to which such Obligor might
otherwise be entitled.
(b) Each of the Obligors (to the extent that it may lawfully
do so) covenants that it shall not at any time insist upon or plead, or
in any manner claim or take the benefit or advance of, any stay (except
in connection with a pending appeal), valuation, appraisal, redemption
or extension law now or at any time hereafter in force that, but for
this waiver, might be applicable to any sale made under any judgment,
order or decree based on this Agreement or any other Lending Document;
and each of the Obligors (to the extent that it may lawfully do so)
hereby expressly waives and relinquishes all benefit and advance of any
and all such laws and hereby covenants that it will not hinder, delay
or impede the execution of any power in this Agreement or therein
granted and delegated to the Trustee, but that it will suffer and
permit the execution of every such power as though no such law or laws
had been made or enacted.
5.10 CONSENT.
Each of the Obligors hereby consents that from time to time (before or
after the occurrence or existence of any Event of Default, with or without
notice to or assent from such Obligor)
SPECTRAN CORPORATION 24 SECURITY AGREEMENT
<PAGE> 29
5. DEFAULTS -- REMEDIES
(a) any Collateral or other security at any time held by or
available to the Trustee or any holder of Secured Obligations for any
of the Secured Obligations, or any other security at any time held by
or available to the Trustee or such holder for any obligation of any
other Person secondarily or otherwise liable for any of the Secured
Obligations, may be exchanged with the Person providing such Collateral
or other security, surrendered or released, and
(b) any of the Secured Obligations may be changed, altered,
renewed, extended, continued, surrendered, compromised, waived or
released, in whole or in part,
in each case as the Trustee or the holder thereof may see fit, and such Obligor
shall remain bound under this Agreement notwithstanding any such exchange,
surrender, release, change, alteration, renewal, extension, continuance,
compromise, waiver or release.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
All communications under this Agreement shall be in writing and shall
be made to the Persons and addresses, and in the manner, provided in the Trust
Indenture.
6.2 WAIVER AND AMENDMENT.
No provision of this Agreement shall be waived, amended, modified or
supplemented except by a written instrument executed by the Obligors and the
Trustee in accordance with the Trust Indenture.
6.3 SURVIVAL.
All warranties, representations, certifications and covenants made by
the Obligors in this Agreement and in the other Lending Documents or in any
certificate or other document or instrument delivered by it or on behalf of it
under this Agreement or any other Lending Document shall be considered to have
been relied upon by the Trustee and each holder of the Secured Obligations and
shall survive the delivery to each holder of Secured Obligations of any
instrument or other document evidencing the same regardless of any investigation
made by the Trustee, any of the Beneficiaries or on their behalf. All statements
in any such certificate or other instrument shall constitute warranties and
representations by the Obligors under this Agreement. This Agreement shall be
binding upon the Obligors and inure to the benefit of and be enforceable by the
Trustee and the Beneficiaries.
6.4 SUCCESSORS AND ASSIGNS.
Whenever any of the parties to this Agreement is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all the covenants, promises and agreements in this Agreement contained by or
on behalf of any of the Obligors, or by or on behalf of the Trustee, shall bind
and inure to the benefit of the respective successors and assigns of such
parties whether so expressed or not.
SPECTRAN CORPORATION 25 SECURITY AGREEMENT
<PAGE> 30
6. MISCELLANEOUS
6.5 REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto may be reproduced by
the Trustee by any photographic, photostatic, microfilm, micro-card, miniature
photographic, digital or other similar process and the Trustee may destroy any
original document so reproduced. Each of the Obligors agrees and stipulates that
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 the Trustee in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
6.6 ADDITIONAL PARTIES.
Any Person which becomes a Subsidiary after the Closing Date and which
is required, pursuant to the Trust Indenture or any other Lending Document, to
become a party to this Agreement shall execute and deliver an acknowledgement
and agreement in the form of Exhibit A and, upon acceptance thereof by the
Trustee, such Subsidiary shall become an "Obligor" under this Agreement for all
purposes and shall be deemed to have made the covenants and agreements of each
Obligor set forth herein as of the date of the execution and delivery of such
acknowledgment and agreement (including, without limitation, the grant of the
security interest contained in Section ) and shall comply with all other
obligations to be performed by an Obligor party hereto.
6.7 SUBJECT TO TRUST INDENTURE.
Any and all rights granted to the Trustee under this Agreement are to
be held and exercised by the Trustee as trustee for the benefit of the
Beneficiaries, pursuant to the provisions of the Trust Indenture. To the extent
set forth in the Lending Documents and any other document or instrument creating
or evidencing any Secured Obligation, each of the Beneficiaries shall be a
beneficiary of the terms of this Agreement. Any and all obligations under this
Agreement of the parties to this Agreement, and the rights and indemnities
granted to the Trustee under this Agreement, are created and granted subject to,
and in furtherance (and not in limitation) of, the terms of the Trust Indenture.
Nothing in this Agreement expressed or implied is intended or shall be construed
to give to any Person other than the Obligors, the Beneficiaries and the Trustee
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any covenant, condition or provision herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Obligors, the Beneficiaries and the Trustee.
6.8 TERM OF AGREEMENT.
This Agreement shall be and remain in full force and effect until
terminated in accordance with the Trust Indenture; provided, that all
indemnities of the Obligors contained in this Agreement shall survive, and
remain operative and in full force and effect regardless of, the termination of
this Agreement.
SPECTRAN CORPORATION 26 SECURITY AGREEMENT
<PAGE> 31
6. MISCELLANEOUS
6.9 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.10 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
to this Agreement, and each set of counterparts which, collectively, show
execution by each party to this Agreement shall constitute one duplicate
original.
[Remainder of page blank. Next page is signature page.]
SPECTRAN CORPORATION 27 SECURITY AGREEMENT
<PAGE> 32
IN WITNESS WHEREOF, EACH OF THE OBLIGORS has caused this Agreement to
be executed by an authorized officer, and FLEET NATIONAL BANK, as Trustee, has
caused this Agreement to be executed by an authorized officer, all as of the day
and year first above written.
SPECTRAN CORPORATION
By /s/ Bruce a. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN SPECIALTY OPTICS
COMPANY
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
APPLIED PHOTONIC DEVICES, INC.
By /s/ Bruce A. Cannon
---------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN CORPORATION SECURITY AGREEMENT
<PAGE> 33
FLEET NATIONAL BANK, as Trustee
By /s/ Michael T. Quaile
--------------------------------------
Name: Michael T. Quaile
Title: Corporate Trust Officer
SPECTRAN CORPORATION SECURITY AGREEMENT
<PAGE> 34
Annex 1 to Security Agreement
Chief Executive Office of Obligors
----------------------------------
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.
<PAGE> 35
Applied Photonic Devices, Inc. 300 Lake Road
Dayville, CT 06241
50 Tiffany Street
Brooklyn, CT 06259
<PAGE> 36
ANNEX 2
LIST OF OFFICES IN WHICH FINANCING STATEMENTS ARE FILED
SECURED PARTY: Fleet National Bank
One Federal Street
Boston, MA 02110
Attention: Corporate Trust Dept., Mail Stop MA/OF/D05M
Telephone No.: (617) 346-5500
Telecopier No.: (617) 346-5501
- ------------------------------------------------------------------------------
DEBTOR NAME FILING OFFICE
- ------------------------------------------------------------------------------
SpecTran Corporation Massachusetts Secretary of the
Commonwealth
Worcester County, MA
Town of Sturbridge, MA
Connecticut Secretary of the State
Town Clerk, Avon, CT
- ------------------------------------------------------------------------------
SpecTran Communication Fiber Massachusetts Secretary of the
Technologies, Inc. Commonwealth
Worcester County, MA
Town of Sturbridge, MA
Florida Secretary of State
Virginia Secretary of the Commonwealth
- ------------------------------------------------------------------------------
SpecTran Specialty Optics Company Connecticut Secretary of the State
Town Clerk, Avon, CT
Massachusetts Secretary of the
Commonwealth
Town of Sturbridge, MA
- ------------------------------------------------------------------------------
Applied Photonics Devices, Inc. Connecticut Secretary of the State
Town Clerk, Killingly, CT
Town Clerk, Brooklyn, CT
Massachusetts Secretary of the
Commonwealth
- ------------------------------------------------------------------------------
Spectran Corporation Annex 2-1 Security Agreement
<PAGE> 37
Annex 3 to Security Agreement
Locations of Inventory and Equipment
Spectran Corporation 50 Hall Road
Sturbridge, MA 01566
69 Hall Road
Sturbridge, MA 01566
46 Hall Road
Sturbridge, MA 01566
SpecTran Communication Fiber 50 Hall Road
Technologies, Inc. Sturbridge, MA 01566
69 Hall Road
Sturbridge, MA 01566
46 Hall Road
Sturbridge, MA 01566
Optical Cable Corporation(3)
5290 Concourse Drive
P.O. Box 11967
Roanoke, VA 24022
Jaso & Associates(4)
10161 49th Street North
Unit W
Pinellas Park, FL 34666
SpecTran Specialty Optics Company 150 Fisher Drive
Avon, CT 06001
18 Parkside Lane and adjacent Barn
Avon, CT 06001
55 Darling Drive
Avon, CT 06001
- ----------
(3) As of November 30, 1996, approximately $282,162 of Inventory was
on consignment with Optical Cable Corporation.
(4) As of November 30, 1996, approxiamtely $5,751 of Inventory was
on consignment with Jaso & Associates.
<PAGE> 38
Annex 4 to Security Agreement
Patents and Trademarks
See attached list.
<PAGE> 39
PATENT REPORT
- -----------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR UNITED KINGDOM
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 2186072 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App. No.: 8602464.3 JANUARY 31, 1986
Ref: 003585-0002-002
- -----------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR FRANCE
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 8601457 FEBRUARY 03, 1986 Expires: FEBRUARY 03, 2006 PATENTED
App. No.: 8601457 FEBRUARY 03, 1986
Ref: 003585-0002-004
- -----------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR SWEDEN
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 8600433-0 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App. No.: 8600433-0 JANUARY 31, 1986
Ref: 03585-0002-016
JAEGER, Raymond E., ASLAMI, Mohd
- ----------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR UNITED STATES
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 4,650,281 MARCH 17, 1987 PATENTED
App. No.: 08/624,355 JUNE 25, 1984
Ref: 003585-0002-999
- ---------------------------------------------------------------------------
-1-
<PAGE> 40
PATENT REPORT
- --------------------------------------------------------------------------------
HIGH TENSILE STRENGTH OPTICAL FIBER UNITED STATES
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 4,660,928 APRIL 28, 1987 PATENTED
App. No.: 05/653,113 SEPTEMBER 21, 1984
Ref: 003585-0004-999
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOP. UNITED KINGDOM
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 2188073 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App. No.: 8602465.0 JANUARY 31, 1986
Ref: 003585-0005-002
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR FRANCE
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 8601468 FEBRUARY 03, 1986 Expires: FEBRUARY 03, 2006 PATENTED
App. No.: 8601458 FEBRUARY 03, 1986
Ref: 003585-0005-004
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR SWEDEN
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 8600434-8 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App. No.: 8600434-8 JANUARY 31, 1986
Ref: 003585-0005-016
JAEGER, Raymond E.; ASLAMI, Mohd
- --------------------------------------------------------------------------------
-2-
<PAGE> 41
PATENT REPORT
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR UNITED STATES
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 4,701,614 OCTOBER 20, 1987 PATENTED
App. No.: 06/624,259 JUNE 25, 1984
Ref: 003585-0005-999
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS CANADA
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: 1,295,892 FEBRUARY 18,1992 Expires: FEBRUARY 18,2009 PATENTED
App. No.: 532,631 MARCH 20, 1987
Ref: 003585-0020-001
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS UNITED KINGDOM
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: G90301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App. No.: 57903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-002
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS GERMANY
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: DE0301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App. No.: 87903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-003
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS FRANCE
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: FR0301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App. No.: 87903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-004
- --------------------------------------------------------------------------------
-3-
<PAGE> 42
PATENT REPORT
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS BRAZIL
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: PENDING
App. No.: P18707655 MARCH 31, 1987
Basic App: PCT/US87/00733 Ref: 003585-0020-037
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS TAIWAN
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: NI-35477 DECEMBER 11, 1989 Expires: DECEMBER 11, 2004 PATENTED
App. No.: 76-101938 MARCH 31, 1987
Ref: 003585-0020-185
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS EUROPEAN PATENT CONV.
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: 0301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App. No.: 87903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-227
- --------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBER AND PRODUCT UNITED STATES
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat. No.: 4,735,856 APRIL 05, 1988 PATENTED
App. No.: 06/846.331 MARCH 31, 1986
Ref: 003585-0020-999
- --------------------------------------------------------------------------------
PRESSURE OR STRAIN SENSITIVE OPTICAL FIBER CANADA
Owner: SPECTRAN CORPORATION
Inventors - LEVIN, PHILIP S.; SVETAKA, PATRICE A.
Pat. No.: 1,304,243 JUNE 30, 1992 Expires: JUNE 30, 2009 PATENTED
App. No.: 551,402 NOVEMBER 09, 1987
Ref: 003585-0022-001
- --------------------------------------------------------------------------------
-4-
<PAGE> 43
PATENT REPORT
- --------------------------------------------------------------------------------
PRESSURE OR STRAIN SENSITIVE OPTICAL FIBER TAIWAN
Owner: SPECTRAN CORPORATION
Inventors - LEVIN, PHILIP S.; SVETAKA, PATRICE A.
Pat. No.: NI-34110 OCTOBER 01, 1989 Expires: OCTOBER 01, 2004 PATENTED
App. No.: 77-100108 JANUARY 08, 1988
Ref: 003585-0022-185
- --------------------------------------------------------------------------------
PRESSURE SENSITIVE OPTICAL FIBER UNITED STATES
Inventors - LEVIN, PHILIP S.; SVETAKA, PATRICE A.
Pat. No.: 4,770,492 SEPTEMBER 13, 1988 PATENTED
App. No.: 07/173,903 OCTOBER 28, 1986
Ref: 003585-0022-399
- --------------------------------------------------------------------------------
COMPOSITE CAPILLARY TUBE STRUCTURE AND METHOD OF FORMING UNITED STATES
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat. No.: 4,812,344 MARCH 14, 1989 PATENTED
App. No.: 07/173,952 MARCH 28, 1988
Ref: 003585-0024-001
- --------------------------------------------------------------------------------
OXIDE COATINGS FOR FLUORIDE GLASS CANADA
Owner: SPECTRAN CORPORATION
Inventors - VACHA, LUBOS J.B.; MOYNIHAN, CORNELIUS T.; SCHULTZ, PETER C.
Pat. No.: 1,323,222 OCTOBER 19, 1993 Expires: OCTOBER 19, 2010 PATENTED
App. No.: 572,088 JULY 14, 1988
Ref: 003585-0024-001
- --------------------------------------------------------------------------------
-5-
<PAGE> 44
PATENT REPORT
- -------------------------------------------------------------------------------
OXIDE COATINGS FOR FLOURIDE GLASS UNITED STATES
Inventors - VACHA, LOBOS J.B.; MOYNIHAN, CORNELIUS T.; SCHULTZ, PETER C.
Pat No :4,883,339 NOVEMBER 28, 1989 PATENTED
App No :07/074.646 JULY 17, 1987
Ref: 003585-0024-999
- -------------------------------------------------------------------------------
HERMETIC COATINGS FOR NON-SILCA BASED OPTICAL FIBERS UNITED STATES
Inventors - VACHA, LOBOS J.B.; SCHULTZ, PETER C.; MOYNIHAN, CORNELIUS
T.; RAYCHAUDHURI, SATYABRATA; CADIEN, KEN C.; MOSSADECH, REZA; HARBISON,
BARRY B.
Pat No :4,874,222 OCTOBER 17, 1989 PATENTED
App No:07/160.545 FEBRUARY 25, 1988
Ref: 003586-0025-999
- -------------------------------------------------------------------------------
CVD TORCH UNITED STATES
Inventors - LEVIN, PHILIP S.
Pat No :4,863,102 SEPTEMBER 05, 1989 PATENTED
App No:07/272.281 DECEMBER 19, 1988
Ref: 003685-0036-999
- -------------------------------------------------------------------------------
OXIDE COATINGS FOR FLOURIDE GLASS UNITED STATES
Inventors - VACHA, LOBOS J.B., MOYNIHAN, CORNELIUS T., SCHULTZ, PETER C.
Pat No :4,938,562 JULY 03, 1990 PATENTED
App No:07/379,847 JULY 14, 1989
Ref: 003585-0038-999
- -------------------------------------------------------------------------------
COMPOSITION HAVING IMPROVED OPTICAL QUALITIES CANADA
Owner: SPECTRAN SPECIALTY OPTICS QUALITIES
Inventor - SKUTNIK, BOLESH J.
Pat No :1,221,797 MAY 12, 1987 Expires: MAY 12, 2004 PATENTED
App No:472,370 JANUARY 18, 1985
Ref: 003585-0051-001
- -------------------------------------------------------------------------------
-6-
<PAGE> 45
PATENT REPORT
- -----------------------------------------------------------------------------
FLUOROACRYLATES HAVING IMPROVED OPTICAL QUALITIES AUSTRALIA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 563145 MARCH 08, 1985 Expires: MARCH 08, 2005 PATENTED
App No: 39659/85 MARCH 08, 1985
Ref: 003585-0051-007;
- -----------------------------------------------------------------------------
COMPOSITION HAVING IMPROVED OPTICAL QUALITIES UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 4,511,209 APRIL 16, 1985 Expires: APRIL 16, 2002 PATENTED
App No: 06/572,397 JANUARY 20, 1984
Ref: 003585-0051-999;
- -----------------------------------------------------------------------------
FIBER OPTIC COUPLER CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: 1,287,763 AUGUST 20, 1991 Expires: AUGUST 20, 2008 PATENTED
App No: 643,354 JULY 30, 1987
Ref: 003585-0052-001;
- -----------------------------------------------------------------------------
FIBER OPTIC COUPLER GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: DE3751674 JULY 31, 1987 Expires: JULY 31, 2007 PATENTED
App No: 87306838.1 JULY 31, 1987
Ref: 003565-0052-003
- -----------------------------------------------------------------------------
FIBER OPTIC COUPLER EUROPEAN PATENT CONV.
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: 0271177 JULY 31, 1987 Expires: JULY 31, 2007 PATENTED
App No: 87306838.1 JULY 31, 1987
Ref: 003585-0052-227;
-7-
<PAGE> 46
PATENT REPORT
- -------------------------------------------------------------------------------
OPTICAL FIBER COUPLER UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: 4,784,452 NOVEMBER 15, 1988 Expires: NOVEMBER 15, 2005 PATENTED
App No: 06/892,799 AUGUST 01, 1988
Ref: 003585-0062-999;
- -------------------------------------------------------------------------------
ANGLED INPUT FIBER FACE GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No: Expires: OCTOBER 10, 2010 FILED
App No: P4032184.3 OCTOBER 10, 1990 WAIT EXAM
Ref: 003585-0053-003;
- -------------------------------------------------------------------------------
ANGLED INPUT FIBER FACE FRANCE
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No: 9012701 OCTOBER 15, 1990 Expires: OCTOBER 15, 2010 PATENTED
App No: 9012701 OCTOBER 15, 1990
Ref: 003585-0053-004;
- -------------------------------------------------------------------------------
ANGLED INPUT FIBER FACE JAPAN
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No: Expires: OCTOBER 16, 2010 FILED
App No: 2-275471 OCTOBER 16, 1990 WAIT EXAM
Ref: 003585-0053-012;
- -------------------------------------------------------------------------------
ANGLED OPTICAL FIBER INPUT END FACE AND METHOD FOR UNITED STATES
DELIVERING ENERGY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No: 4,995,691 FEBRUARY 26, 1991 Expires: FEBRUARY 26, 2008 PATENTED
App No: 07/421,677 OCTOBER 16, 1989
Ref: 003585-0053-999;
- -------------------------------------------------------------------------------
- 8 -
<PAGE> 47
PATENT REPORT
- -------------------------------------------------------------------------------
CLEAVING TOOL FOR OPTICAL FIBERS UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - VINES, JOSEPH J.
Pat No: 5,108,021 APRIL 28, 1992 Expires: APRIL 28, 2009 PATENTED
App No: 07/575.979 AUGUST 31, 1990
Ref: 003595-0055-999;
- -------------------------------------------------------------------------------
FIBER OPTIC DIFFUSER TIP GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT
C.;
LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: Expires: NOVEMBER 30, 2014 PENDING
App No: P4442523.6 NOVEMBER 30, 1994
Ref: 003585-0055-003;
- -------------------------------------------------------------------------------
FIBER OPTIC DIFFUSER TIP JAPAN
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT
C.;
LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: Expires: DECEMBER 13, 2014 PENDING
App No: 6-309328 DECEMBER 13, 1994
Ref: 003585-0055-012;
- -------------------------------------------------------------------------------
FIBER OPTIC DIFFUSER TIP UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT
C.;
LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: 5,373,571 DECEMBER 13, 1994 Expires: DECEMBER 13, 2011 PATENTED
App No: 08/033,193 MARCH 16, 1993
Ref: 003585-0055-999;
- -------------------------------------------------------------------------------
OPTICAL FIBER CABLE CONNECTOR ASSEMBLY GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; LUTZEN, JON A.; MONTGELAS, RUDOLPH A.
Pat No: Expires: NOVEMBER 30, 2012 FILED
App No: P4442424.4 NOVEMBER 30, 1994 WAIT EXAM
Ref: 003585-0056-003;
- -------------------------------------------------------------------------------
- 9 -
<PAGE> 48
PATENT REPORT
- ------------------------------------------------------------------------------
OPTICAL FIBER CABLE CONNECTOR ASSEMBLY JAPAN
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; LUTZEN, JON A.; MONTGELAS, RUDOLPH A.
Pat No: Expires: NOVEMBER 30, 2014 FILE WAIT EXAM
App No:6-297560 NOVEMBER 30, 1994
Ref. 003585-0068-012:
- ------------------------------------------------------------------------------
OPTICAL FIBER CABLE CONNECTOR ASSEMBLY UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; LUTZEN, JON A.; MONTGELAS, RUDOLPH A.
Pat No:5,455,880 OCTOBER 03, 1995 Expires: December 01, 2013 PATENTED
App No: 08/159,832 DECEMBER 01, 1993
Ref: 003585-0056-999:
- -------------------------------------------------------------------------------
COATING COMPOSITIONS CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No:1,307,071 SEPTEMBER 01, 1992 Expires: SEPTEMBER 01, 2009 PATENTED
App No:545.139 AUGUST 24, 1987
Ref:003585-0059-001
- -------------------------------------------------------------------------------
COATING COMPOSITIONS UNITED KINGDOM
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No:2209034 AUGUST 25, 1987 Expires: AUGUST 25, 2007 PATENTED
App No:8719985.7 AUGUST 25, 1987
Ref: 003585-0059-002
- -------------------------------------------------------------------------------
COATING COMPOSITIONS FRANCE
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat. No:8712288 SEPTEMBER 04, 1987 Expires: SEPTEMBER 04, 2007 PATENTED
App. No.8712288 SEPTEMBER 04, 1987
Ref:003585-0059-004.
- --------------------------------------------------------------------------------
-10-
<PAGE> 49
PATENT REPORT
- --------------------------------------------------------------------------------
COATING COMPOSITIONS FOR OPTICAL FIBERS UNITED STATES
Owner SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J; BRIELMANN, HARRY L.
Pat No: 4,707,076 NOVEMBER 17, 1987 Expires: NOVEMBER 17, 2004 PATENTED
App No: 08/722,828 APRIL 12, 1985
Ref: 003585-0053-999
- --------------------------------------------------------------------------------
OPTICAL FIBER AND METHOD OF PRODUCING SAME JAPAN
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 2515728 AUGUST 08, 1985 Expires: AUGUST 06, 2005 PATENTED
App No: 60-171925 AUGUST 08, 1985
Ref: 003565-0080-012
- --------------------------------------------------------------------------------
OPTICAL FIBER AND METHOD OF PRODUCING SAME JAPAN
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 4,599,098 JULY 08, 1986 Expires: JULY 08, 2003 PATENTED
App No: 06/579,496 FEBRUARY 13, 1984
Ref: 003585-0060-999
- --------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES AND WAVEGUIDES MADE UNITED STATES
THEREBY
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: Expires: JANUARY 30, 2007 PENDING
App No: 62-018760 JANUARY 30, 1987
Ref: 003585-0061-012:
- --------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES UNITED STATES
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 5,028,246 JULY 02, 1991 Expires: JULY 02, 2008 PATENTED
App No: 07,308,986 FEBRUARY 08, 1989
Ref: 003585-0061-995:
- --------------------------------------------------------------------------------
-11-
<PAGE> 50
PATENT REPORT
- --------------------------------------------------------------------------------
OPTICAL WAVEGUIDES HAVING REDUCED BENDING LOSS AND METHOD OF UNITED STATES
MAKING THE SAME
Owner SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - DABBY, FRANKLIN W.
Pat No: 5,175,785 DECEMBER 29, 1992 Expires: DECEMBER 29, 2009 PATENTED
App No: 07/694,652 MAY 02, 1991
Ref: 003585-0062-999;
- --------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES AND WAVEGUIDES MADE UNITED STATES
THEREBY
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - MERRITT, TREVOR
Pat No: 5,318,511 JUNE 07, 1994 Expires: JUNE 07, 2011 PATENTED
App No: 07/851,489 MARCH 13, 1992
Ref: 003585-0063-999.
- --------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES UNITED STATES
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 5,364,430 NOVEMBER 15, 1994 Expires: NOVEMBER 15, 2011 PATENTED
App No: 08/002,077 JANUARY 08, 1993
Ref: 003585-0064-999;
Archive: 11,595
- --------------------------------------------------------------------------------
OPTICAL FIBER CLADDING CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 1,221,795 MAY 12, 1987 Expires: MAY 12, 2004 PATENTED
App No: 422,209 FEBRUARY 23, 1983
Ref: 003585-0065-001:
- --------------------------------------------------------------------------------
COATING COMPOSITION FRANCE
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No: Expires: SEPTEMBER 04, 2007
FILED WAIT EXAM
App No: 9215010 SEPTEMBER 04, 1987
Ref: 003585-0068-004;
- --------------------------------------------------------------------------------
-12-
<PAGE> 51
Pennie & Edmonds
October 28, 1996
Page 2
- -------------------------------------------------------------------------------
SPECTRAN CORPORATION
TRADEMARK REPORT
- -------------------------------------------------------------------------------
ULTRASIL Ref: 003686-0076-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY PENDING APP.
App No: 75/039666 JAN 03, 1996
Classes: 9
8 OPTICAL FIBER
- -------------------------------------------------------------------------------
V-SYSTEM Ref: 005686-0076-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY PENDING APP.
App No: 75/039657 JAN 03, 1996
Classes: 9
8 OPTICAL FIBER CABLING SYSTEM COMPRISED OF OPTIC FIBER, CONNECTORS
AND TERMINATION KIT, NAMELY CRIMP TOOL, CLEAVE TOOL BUFFER STRIPPING
TOOL AND JACKET STRIPPING TOOL
- -------------------------------------------------------------------------------
<PAGE> 52
Pennie & Edmonds
October 28, 1996
Page 1
- -------------------------------------------------------------------------------
SPECTRAN CORPORATION
TRADEMARK REPORT
- -------------------------------------------------------------------------------
AVIOPTICS Ref: 003585-0074-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY PENDING APP.
App No: 75/093106 APR 22, 1996
Classes: 9
8 FIBER OPTIC CABLE
- -------------------------------------------------------------------------------
FLIGHTGUIDE Ref: 003686-0073-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY PENDING APP.
App No: 75/039655 JAN 03, 1996
Classes: 9
8 FIBER OPTIC CABLE
- -------------------------------------------------------------------------------
SPECTRAGUIDE Ref: 003686-0007-999 UNITED STATES
SPECTRAN CORPORATION
Reg No: 1,324,144 MAR 12, 1985 REGISTERED
App No: 437,452 AUG 01, 1983
RENEWAL DUE: MAR 12, 2005
Classes: 9
8 FIBER LIGHT GUIDES FOR USE IN DATA COMMUNICATIONS
- -------------------------------------------------------------------------------
SPECTRAN AND DESIGN Ref: 003585-0047-999 UNITED STATES
SPECTRAN CORPORATION
Reg No: 1,753,738 FEB 23, 1993 REGISTERED
App No: 74/285779 JUN 17, 1992
[LOGO] RENEWAL DUE: FEB 23, 2003
SEC. 8 &/OR 15: FEB 23, 1999
Classes: 9
8 OPTICAL FIBERS
- -------------------------------------------------------------------------------
STC AND DESIGN Ref: 003585-0011-999 UNITED STATES
SPECTRAN CORPORATION
Reg No: 1,394,797 MAY 27, 1986 ABANDONED
App No: 584,850 OCT 24, 1985
[LOGO]
Classes: 9
8 FIBER OPTICS EQUIPMENT, NAMELY, GLASS CAPILLARY FIBERS AND GLASS
COATED WIRE
- -------------------------------------------------------------------------------
<PAGE> 53
EXHIBIT A
[FORM OF ACKNOWLEDGMENT AND AGREEMENT]
ACKNOWLEDGMENT AND AGREEMENT
SECURITY AGREEMENT, DATED AS OF DECEMBER 1, 1996, AMONG SPECTRAN CORPORATION,
THE GUARANTORS PARTY THERETO, AND FLEET NATIONAL BANK, AS TRUSTEE (AS MAY BE
AMENDED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
"SECURITY AGREEMENT")
[DATE]
Reference is made to Section of the Security Agreement as defined
above; capitalized terms used herein and not otherwise defined herein shall have
the meanings specified by the Security Agreement. The undersigned is a
Subsidiary and, in accordance with the terms of the Trust Indenture, is required
to become a party to the Security Agreement. By execution and delivery of this
Acknowledgment and Agreement and, upon acceptance hereof by the Trustee, the
undersigned hereby becomes a party to the Security Agreement for all purposes,
agrees to comply with all of the covenants and agreements of each Obligor set
forth in the Security Agreement as of the date hereof (including, without
limitation, the grant of the security interest contained in Section of the
Security Agreement) and agrees to comply with all other obligations to be
performed by an Obligor under the Security Agreement.
The correct legal name and address of the undersigned and its address
for all communications is set forth on Annex 1 hereto.
This Acknowledgment and Agreement hereby incorporates by reference the
provisions of the Security Agreement, which are deemed to be a part hereof, and
this Acknowledgment and
SPECTRAN CORPORATION SECURITY AGREEMENT
Exhibit A-1
<PAGE> 54
Agreement shall also be deemed to be a part of the Security Agreement.
[NAME OF OBLIGOR]
By:______________________
Name:
Title:
Accepted as of the date
first above written:
FLEET NATIONAL BANK, as Trustee
By:____________________________
Name:
Title:
SPECTRAN CORPORATION Exhibit A-2 SECURITY AGREEMENT
<PAGE> 55
Annex 1
[NAME AND ADDRESS OF OBLIGOR TO BE ADDED]
SPECTRAN CORPORATION Exhibit A-3 SECURITY AGREEMENT
<PAGE> 1
EXHIBIT 10.91
<PAGE> 2
SPECTRAN CORPORATION
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
TO
FLEET NATIONAL BANK, as Trustee
---------------------
TRADEMARK SECURITY AGREEMENT
---------------------
DATED AS OF DECEMBER 1, 1996
<PAGE> 3
TRADEMARK SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT (as may be amended, restated or otherwise
modified from time to time, this "AGREEMENT"), dated as of December 1, 1996,
among each of SPECTRAN CORPORATION (together, with its successors and assigns,
the "COMPANY"), a Delaware corporation, SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC., a Delaware corporation, SPECTRAN SPECIALTY OPTICS COMPANY, a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC., a Delaware corporation
(all of the foregoing (other than the Company), together with their respective
successors and assigns, referred to herein, individually, as a "GUARANTOR", and,
collectively, as the "GUARANTORS"; the Company and the Guarantors being
collectively referred to herein as the "OBLIGORS"), and FLEET NATIONAL BANK, a
national banking association, as security trustee under a certain Trust
Indenture (as may be amended, restated or otherwise modified from time to time,
the "TRUST INDENTURE"), dated as of the date hereof, among the Obligors, Fleet
National Bank (in its capacity as such security trustee, and together with any
successor or co-security trustee that becomes such in accordance with the
provisions of the Trust Indenture, the "TRUSTEE") and the other parties
signatory thereto.
1. PRELIMINARY STATEMENTS
1.1 The Liens granted herein to the Trustee by each of the Obligors are
for the ratable benefit of the Beneficiaries, as provided in the Trust
Indenture.
1.2 The Trustee is to act as trustee on behalf of the Beneficiaries in
accordance with the terms of the Trust Indenture and the other Security
Documents.
1.3 All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of each of the Obligors necessary to
constitute this Agreement a valid and binding agreement for the uses and
purposes set forth herein, in accordance with its terms, have been done and
taken, and the execution and delivery hereof has been in all respects duly
authorized.
2. INTERPRETATION OF THIS AGREEMENT
2.1 TERMS DEFINED.
As used in this Agreement, the following terms have the respective
meanings set forth below or provided for in the section or other part of this
Agreement referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined)
or, if not defined herein, then as defined in the Trust Indenture.
AGREEMENT, THIS -- introductory sentence.
BANK AGREEMENT -- has the meaning specified in the Trust Indenture.
BANK LENDER -- has the meaning specified in the Trust Indenture.
BENEFICIARY -- has the meaning specified in the Trust Indenture
1
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 4
2 . INTERPRETATION OF THIS AGREEMENT
CODE -- means the Uniform Commercial Code as in effect from time to
time in any specified or applicable jurisdiction.
COLLATERAL -- Section 3.
COMPANY -- introductory sentence.
DEFAULT ASSIGNMENT -- Section 3.
EVENT OF DEFAULT -- has the meaning specified in the Trust Indenture.
GUARANTORS -- introductory sentence.
LENDING DOCUMENTS -- has the meaning specified in the Trust Indenture.
LIEN -- has the meaning specified in the Security Agreement.
OBLIGORS -- introductory sentence.
PERSON -- means an individual, a partnership, a corporation, a trust, a
limited liability company, an unincorporated organization, or a government or
agency or political subdivision thereof.
SECURED OBLIGATIONS -- has the meaning specified in the Trust
Indenture.
SECURITY AGREEMENT -- means that certain Security Agreement, dated as
of the date hereof, among each of the Obligors and the Trustee, together with
any acknowledgments and agreements delivered in connection therewith, as the
same may be amended, restated, modified or supplemented from time to time.
SECURITY DOCUMENTS -- has the meaning specified in the Trust Indenture.
SUBSIDIARY -- has the meaning specified in the Trust Indenture.
TRADEMARKS -- means and includes
(a) all foreign and United States (including, without
limitation, each individual state thereof) trademarks, trademark
applications and registrations, trade names, trade styles, service
marks, prints and labels on which said trademarks, trade names, trade
styles and service marks appear or have appeared, designs and general
intangibles of like nature, and all improvements to each of the
foregoing, including, without limitation, those listed on Schedule A
and those further provided for in Section 4.3, and any and all rights
pertaining to any of the foregoing;
(b) all proceeds of the foregoing (including, without
limitation, license royalties and proceeds of infringement suits);
2
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 5
2. INTERPRETATION OF THIS AGREEMENT
(c) all general intangibles associated with the foregoing,
including, without limitation, all goodwill associated with the
foregoing and with the business of the Obligor to which the foregoing
relates;
(d) the right to sue for past, present and future
infringements; all rights corresponding thereto; and
(e) all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof.
TRUSTEE -- introductory sentence.
TRUST INDENTURE -- introductory sentence.
2.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections of this
Agreement appear as a matter of convenience only, do not constitute a
part hereof and shall not affect the construction hereof. The words
"herein," "hereof," "hereunder" and "hereto" refer to this Indenture as
a whole and not to any particular Section or other subdivision.
References to Sections are, unless otherwise specified, references to
Sections of this Agreement. References to Annexes, Schedules, Exhibits
and Attachments are, unless otherwise specified, references to Annexes,
Schedules, Exhibits and Attachments attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
2.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Obligors and
the Trustee, this Agreement shall be construed and interpreted as a separate
Agreement between each Obligor, respectively, and the Trustee, and any whole or
partial invalidity of this Agreement in respect of any Obligor shall not have
any effect on the validity or enforceability of this Agreement as among each
other Obligor, respectively, as the case may be, and the Trustee.
2.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
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SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 6
2. INTERPRETATION OF THIS AGREEMENT
2.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT TO THE EXTENT
THAT THE PERFECTION OF THE LIENS IN AND TO THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS.
3. GRANT OF SECURITY INTEREST
As security for the payment by each Obligor of the Secured Obligations
and the performance by such Obligor of its other obligations and undertakings
under this Agreement and under the other Lending Documents, each Obligor does
hereby grant, bargain, convey, assign, transfer, mortgage, hypothecate, pledge,
confirm and grant a continuing security interest to the Trustee in and to all
Trademarks in which such Obligor has any right title or interest, in each case,
whether presently existing or hereafter acquired (such Property being referred
to as the "COLLATERAL"). Simultaneously with the signing of this Agreement, each
Obligor shall execute and deliver the Trademark Assignments attached as Exhibit
1 (collectively, the "DEFAULT ASSIGNMENT"). The Trustee shall hold the Default
Assignment until an Event of Default occurs, at which time the Trustee may use
the Default Assignment as described in this Agreement.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING TRADEMARKS
4.1 TRADEMARKS; ETC.
Each Obligor represents, warrants and covenants that:
(a) Schedule A completely and accurately lists all Trademarks
in which such Obligor has any right, title or interest as of the date
of its execution and delivery of this Agreement;
(b) each of such Trademarks is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(c) each of such Trademarks is valid and enforceable;
(d) such Obligor is the sole and exclusive owner of the entire
right, title and interest in and to each of such Trademarks, free and
clear of any Liens, charges and encumbrances, including without
limitation, licenses, shop rights and covenants by such Obligor not to
sue third persons;
(e) such Obligor has the unqualified right to enter into this
Agreement and perform its obligations hereunder and has entered and
will enter into such written agreements with each of its present and
future employees, agents and consultants as will enable it to comply
with the covenants herein contained; and
4
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 7
4. REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING TRADEMARKS
(f) such Obligor has used, and will continue to use for the
duration of this Agreement, consistent standards of quality in its
manufacture of products and inventory sold under the Trademarks.
4.2 NO INCONSISTENT AGREEMENTS.
Until all of the Secured Obligations shall have been satisfied in full
and no Bank Lender is obligated to make a further advances under the Bank
Agreement, no Obligor will, without the prior written consent of the Majority
Beneficiaries, enter into any agreement (including, without limitation, a
license agreement) that is inconsistent with such Obligor's obligations under
this Agreement.
4.3 AFTER-ACQUIRED TRADEMARKS SUBJECT TO THIS AGREEMENT.
(a) If while any Secured Obligation is outstanding or any Bank
Lender is obligated to make advances under the Bank Agreement, any
Obligor shall obtain rights to any new Trademark, or become entitled to
the benefit of any Trademark, the same shall automatically (without any
action on the part of such Obligor) be deemed subject to this Agreement
and included within the term "TRADEMARK". Such Obligor shall give the
Trustee prompt written notice of any such after-acquired Trademark.
(b) Each Obligor grants the Trustee a power-of-attorney,
irrevocable so long as any Secured Obligation remains outstanding or
any Bank Lender is obligated to make any advances under the Bank
Agreement, to modify this Agreement from time to time by amending
Schedule A (without requirement of any consent or further action on the
part of any Obligor) to include any and all future Trademarks to which
any Obligor shall have any right, title or interest.
4.4 LICENSE.
Unless and until there shall have occurred and be continuing an Event
of Default, the Trustee hereby grants to each Obligor the exclusive,
nontransferable right and license to make, have made, use and sell its inventory
under its Trademarks for such Obligor's own benefit and account and for no other
purpose. Each Obligor agrees that it will not, without the prior written consent
of the Trustee, sell or assign its interest in, or grant any sublicense under,
the license granted to it in this Section 4.4, except as set forth in Schedule
4.4.
4.5 TRADEMARK APPLICATIONS; ENFORCEMENT RIGHTS.
Each Obligor shall have the duty to prosecute diligently any trademark
application pending as of the date of this Agreement or thereafter and to
preserve and maintain all rights in trademark applications and trademarks which
constitute the Trademarks, in each case, until the Secured Obligations shall
have been paid in full and no Bank Lender is obligated to make a further advance
under the Bank Agreement. Any expenses incurred in connection with such an
application shall be borne by such Obligor. No Obligor shall abandon any
Trademark without the consent of the Trustee. Each Obligor shall further enter
into such agreements with its
5
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 8
4. REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING TRADEMARKS
employees, and take such other reasonable measures, as are necessary to insure
that such Obligor shall have and enjoy all rights to apply for, register and
use, subject to Section 4.3, Trademarks designed or created by such employees in
the ordinary course of their employment; provided that such Obligor may fairly
compensate such employees for having created such Trademarks.
4.6 FURTHER ASSURANCES.
So long as any Secured Obligation is outstanding or any Bank Lender is
obligated to make an advance under the Bank Agreement, each Obligor, at its
expense, will timely execute, acknowledge, deliver, file and record, or will
cause to be executed, acknowledged, delivered, filed or recorded, all such
further instruments, agreements, assignments and assurances (including, without
limitation, registrations of assignments with the United States Patent and
Trademark Office) as may be necessary or appropriate (and, in any event, as may
be reasonably requested by the Trustee):
(a) to preserve and continue in force each of the Trademarks
and to pay any and all fees and out of pocket expenses in connection
therewith (including, without limitation, payment of such maintenance
fees, if any, as may be imposed by the United States Patent and
Trademark Office); and
(b) to subject to this Agreement, and to preserve, continue
and protect the Lien of this Agreement on, and the rights of the
Trustee in and to, the Trademarks, including, without limitation, any
Trademarks acquired after the date of this Agreement.
5. DEFAULT REMEDIES, ETC.
5.1 DEFAULT REMEDIES.
(a) GENERAL. If an Event of Default exists, the Trustee may
(i) exercise all of the rights and remedies conferred
in this Agreement, in the Trust Indenture and in the other
Lending Documents, and
(ii) exercise all of the rights and remedies of a
secured party under the Code and all of the rights and
remedies in this Agreement or otherwise available at law or in
equity.
(b) REMEDIES CUMULATIVE. All of the Trustee's rights and
remedies with respect to the Trademarks, whether established hereby or
by the Security Agreement, or by any other agreement or by law, shall
be cumulative and may be exercised singularly or concurrently. Without
limiting the foregoing, this Agreement is executed in furtherance of,
and supplementary to, the provisions of the Security Agreement, the
terms and conditions of which are incorporated hereby as if set forth
in full herein. In the event any provision of the Security Agreement
conflicts with any provision of this Agreement, the provisions of the
Security Agreement shall prevail and this Agreement shall be deemed
6
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 9
5. DEFAULT REMEDIES, ETC.
to have been modified to the extent necessary to conform to the
provisions of the Security Agreement.
(c) UCC AND OTHER REMEDIES. If an Event of Default exists, the
Trustee may exercise all of the rights and remedies of a secured party
under the Code and all of the rights and remedies conferred in this
Agreement, in the Security Agreement or in any other Lending Document,
it being expressly understood that no such remedy is intended to be
exclusive of any other remedy or remedies, but each and every remedy
shall be cumulative and shall be in addition to every other remedy
given in this Agreement, in the Security Agreement or in any other
Lending Document or now or hereafter existing at law or in equity or by
statute, and may be exercised from time to time as often as may be
deemed expedient by the Trustee. Without limiting the generality of the
foregoing, each Obligor does further authorize the Trustee and does
hereby irrevocably make, constitute and appoint the Trustee and any
officer or agent thereof, with full power of substitution, as such
Obligor's true and lawful attorney-in-fact with full power, in its own
name or in the name of the Beneficiaries, upon the occurrence and
continuance of an Event of Default, to:
(i) file the Default Assignment immediately, and to
take ownership of the Trademarks and exercise all rights
associated with the ownership of the Trademarks;
(ii) terminate immediately the license granted to any
or all of the Obligors pursuant to Section 4.4, and to use the
Trademarks exclusively;
(iii) pay or discharge any taxes, Liens, security
interests or other encumbrances in respect of the Trademarks;
(iv) receive payment of, receipt for, settle,
compromise or adjust and give discharges and releases for or
in respect of any and all moneys, claims and other amounts due
and to become due at any time under or in respect of the
Trademarks; and
(v) without demand of performance and without other
notice (except as set forth in 5.1(d)) or demand whatsoever
to the Obligor, all of which are hereby expressly waived, and
without advertisement, sell at public or private sale or
otherwise realize upon, in Massachusetts or elsewhere, the
whole or from time to time any part of the Trademarks, or any
interest that any or all of the Obligors may have therein.
(d) NOTICE OF SALE. Each Obligor and the Trustee agree that
ten (10) days' notice to the Obligors of any public or private sale or
other disposition of the Trademarks shall be reasonable notice thereof,
and such sale shall be at such reasonable locations as the Trustee
shall designate in such notice. Any other requirement of notice, demand
or advertisement for sale is, to the extent permitted by law, waived by
each Obligor. The Trustee shall have the right to bid at any such sale
on behalf of any one or more of the
7
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 10
5. DEFAULT REMEDIES, ETC.
Beneficiaries (who shall also have the right to bid individually).
Proceeds arising from any such sale shall be applied in the manner set
forth in the Trust Indenture.
(e) ACTION IN TRUSTEE'S NAME. If any Event of Default exists,
the Trustee shall have the right, but shall in no way be obligated to,
bring suit in its own name to enforce the Trademarks and any license
thereunder, in which event each Obligor shall at the request of the
Trustee do any and all lawful acts and execute any and all proper
documents reasonably required by the Trustee in aid of such
enforcement, and the Obligors shall jointly and severally, promptly
upon demand, reimburse and indemnify the Trustee for all reasonable out
of pocket costs and expenses incurred by the Trustee in the exercise of
its rights under this Section 5.1(e).
(f) EXPENSES. The Obligors jointly and severally will pay to
the Trustee all out of pocket expenses (including court costs and
reasonable attorneys' fees and expenses) of, or incident to, the
enforcement of any of the provisions of this Agreement (including,
without limitation, the filing of the Default Assignment) and all other
charges due against the Trademarks including, without limitation,
taxes, assessments, security interests, Liens or encumbrances upon the
Trademarks and any expenses, including transfer or other taxes, arising
in connection with any sale, transfer or other disposition of the
Trademarks.
5.2 OTHER ENFORCEMENT RIGHTS.
The Trustee may proceed to protect and enforce this Agreement by suit
or suits or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement in this Agreement contained or
in execution or aid of any power in this Agreement granted, or for foreclosure
under this Agreement, or for the appointment of a receiver or receivers for the
Trademarks or any part thereof, for the recovery of judgment for the obligations
secured by this Agreement or for the enforcement of any other proper, legal or
equitable remedy available under applicable law.
5.3 APPLICATION OF PROCEEDS.
The proceeds of any exercise of rights with respect to the Trademarks,
or any part thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to and applied in accordance with the provisions of the
Trust Indenture. If there is a deficiency, the Obligors jointly and severally
shall, subject always to the other provisions of this Agreement, remain liable
therefor and shall forthwith pay the amount of any such deficiency to the
Trustee.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
All communications under this Agreement shall be in writing and shall
be made to the Persons and addresses, and in the manner, provided in the Trust
Indenture.
8
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 11
6. MISCELLANEOUS
6.2 WAIVER AND AMENDMENT.
No provision of this Agreement will be waived, amended, modified or
supplemented except by a written instrument executed by the Obligors and the
Trustee in accordance with the Trust Indenture.
6.3 SURVIVAL.
All warranties, representations, certifications and covenants made by
the Obligors in this Agreement and in the other Lending Documents or in any
certificate or other document or instrument delivered by it or on behalf of it
under this Agreement or any other Lending Document shall be considered to have
been relied upon by the Trustee and each holder of the Secured Obligations and
shall survive the delivery to each holder of Secured Obligations of any
instrument or other document evidencing the same regardless of any investigation
made by the Trustee, any of the Beneficiaries or on their behalf. All statements
in any such certificate or other instrument shall constitute warranties and
representations by the Obligors under this Agreement. This Agreement shall be
binding upon the Obligors and inure to the benefit of and be enforceable by the
Trustee and the Beneficiaries.
6.4 SUCCESSORS AND ASSIGNS.
Whenever any of the parties to this Agreement is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all the covenants, promises and agreements in this Agreement contained by or
on behalf of any of the Obligors, or by or on behalf of the Trustee, shall bind
and inure to the benefit of the respective successors and assigns of such
parties whether so expressed or not.
6.5 ADDITIONAL PARTIES.
Any Person which becomes a Subsidiary after the Closing Date and which
is required, pursuant to the Trust Indenture or any other Lending Document, to
become a party to this Agreement shall execute and deliver a duplicate original
of this Agreement and, upon acceptance thereof by the Trustee, such Subsidiary
shall become an "Obligor" under this Agreement for all purposes and shall be
deemed to have made the covenants and agreements of each Obligor set forth
herein as of the date of the execution and delivery of such acknowledgment and
agreement (including, without limitation, the grant of the security interest
contained in Section 3) and shall comply with all other obligations to be
performed by an Obligor party hereto.
6.6 SUBJECT TO TRUST INDENTURE.
Any and all rights granted to the Trustee under this Agreement are to
be held and exercised by the Trustee as trustee for the benefit of the
Beneficiaries, pursuant to the provisions of the Trust Indenture. To the extent
set forth in the Lending Documents and any other document or instrument creating
or evidencing any Secured Obligation, each of the Beneficiaries shall be a
beneficiary of the terms of this Agreement. Any and all obligations under this
Agreement of the parties to this Agreement, and the rights and indemnities
granted to the Trustee
9
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 12
6. MISCELLANEOUS
under this Agreement, are created and granted subject to, and in furtherance
(and not in limitation) of, the terms of the Trust Indenture. Nothing in this
Agreement expressed or implied is intended or shall be construed to give to any
Person other than the Obligors, the Beneficiaries and the Trustee any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
covenant, condition or provision herein contained, and all such covenants,
conditions and provisions are and shall be held to be for the sole and exclusive
benefit of the Obligors, the Beneficiaries and the Trustee.
6.7 TERM OF AGREEMENT.
This Agreement shall be and remain in full force and effect until
terminated in accordance with the Trust Indenture; provided, that all
indemnities of the Obligors contained in this Agreement shall survive, and
remain operative and in full force and effect regardless of, the termination of
this Agreement.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.9 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
to this Agreement, and each set of counterparts which, collectively, show
execution by each party to this Agreement shall constitute one duplicate
original.
[Remainder of page blank. Next page is signature page.]
10
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 13
IN WITNESS WHEREOF, each Obligor has caused this Agreement to be
executed by an authorized officer, and Fleet National Bank, as Trustee, has
caused this Agreement to be executed by an authorized officer, all as of the day
and year first above written.
Signed, sealed and delivered SPECTRAN CORPORATION
in the presence of:
/s/ Brian M. Hand
- ----------------------------
Name: Brian M. Hand By /s/ Bruce A. Cannon
------------------------
Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- ----------------------------
Name: Ellen M. Grace
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ Brian M. Hand
- ----------------------------
Name: Brian M. Hand By /s/ Bruce A. Cannon
------------------------
Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- ----------------------------
Name: Ellen M. Grace
SPECTRAN SPECIALTY OPTICS COMPANY
/s/ Brian M. Hand
- ----------------------------
Name: Brian M. Hand By /s/ Bruce A. Cannon
------------------------
Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- ----------------------------
Name: Ellen M. Grace
APPLIED PHOTONIC DEVICES, INC.
/s/ Brian M. Hand
- ----------------------------
Name: Brian M. Hand By /s/ Bruce A. Cannon
------------------------
Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- ----------------------------
Name: Ellen M. Grace
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 14
FLEET NATIONAL BANK, as Trustee
/s/ Ellen M. Grace By /s/ Michael T. Quaile
- ---------------------------- --------------------------
Name: Ellen M. Grace
Name: Michael T. Quaile
Title: Corporate Trust Officer
/s/ David Silber
- ----------------------------
Name: David Silber
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 15
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of SPECTRAN CORPORATION, a Delaware corporation, and acknowledged that
such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Lori L. Bridwell
-------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of SPECTRAN COMMUNICATION FIBER TECHNOLIGIES, INC., a Delaware
corporation, and acknowledged that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Lori L. Bridwell
-------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 16
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation, and
acknowledged that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Lori L. Bridwell
-------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of APPLIED PHOTONIC DEVICES, INC., a Delaware corporation, and
acknowledged that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Lori L. Bridwell
-------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 17
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 23, 1996, before me, the undersigned, a notary public in
and for said County and State, duly commissioned and sworn, personally appeared
Michael T. Quaile, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Corporate Trust Officer of FLEET NATIONAL BANK, a national banking association,
and acknowledged that such national banking association executed the same as
security trustee thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Lori L. Bridwell
-------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires:
[SEAL]
LORI L. BRIDWELL
NOTARY PUBLIC
MY COMMISSION EXPIRES NOV. 30, 2000
SPECTRAN CORPORATION TRADEMARK SECURITY AGREEMENT
<PAGE> 18
Schedule A to Trademark Security Agreement
Existing Trademarks
See attached list.
<PAGE> 19
Pannie & Edmonds
October 28, 1998
Page 1
- ------------------------------------------------------------------------
SPECTRAN CORPORATION
TRADEMARK REPORT
- ------------------------------------------------------------------------
AVIOPTICS Ref: 003686-0074-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY
App No: 75/093106 APR 22, 1996 PENDING APP.
Classes: 9
9 FIBER OPTIC CABLE
- ------------------------------------------------------------------------
FLIGHTGUIDE Ref: 003686-0073-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY
App No: 75/039555 JAN 03, 1996 PENDING APP.
Classes: 9
9 FIBER OPTIC CABLE
- ------------------------------------------------------------------------
SPECTRAGUIDE Ref: 00336-0007-999 UNITED STATES
SPECTRAN CORPORATION
Reg No: 1,324,144 MAR 12, 1985 REGISTERED
App No: 437,452 AUG 01, 1983
RENEWAL DUE: MAR 12, 2005
Classes: 9
9 FIBER LIGHT GUIDES FOR USE IN DATA COMMUNICATIONS
- ------------------------------------------------------------------------
SPECTRAN AND DESIGN Ref: 00386-0047-999 UNITED STATES
SPECTRAN CORPORATION
Reg No: 1,753,738 FEB 23, 1993 REGISTERED
App No: 74/285779 JUN 17, 1992
[SPECTRAN RENEWAL DUE: FEB 23, 2003
LOGO] SEC. 8 &/OR 15: FEB 23, 1999
Classes: 9
9 OPTICAL FIBERS
- ------------------------------------------------------------------------
STC AND DESIGN Ref: 00386-0011-999 UNITED STATES
SPECTRAN CORPORATION
Reg No: 1,394,757 MAY 27, 1986 ABANDONED
App No: 564,860 OCT 24, 1985
[SPECTRAN
CORPORATION
LOGO]
Classes: 9
9 FIBER OPTICS EQUIPMENT, NAMELY, GLASS CAPILLARY FIBERS
AND GLASS COATED WIRE
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<PAGE> 20
Pannie & Edmonds
October 28, 1998
Page 2
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SPECTRAN CORPORATION
TRADEMARK REPORT
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ULTRASIL Ref: 003586-0075-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY
App No: 75/039656 JAN 03, 1996 PENDING APP.
Classes: 9
9 OPTIC FIBER
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V-SYSTEM Ref: 003586-0078-999 UNITED STATES
SPECTRAN SPECIALTY OPTICS COMPANY
App No: 75/039657 JAN 03, 1996 PENDING APP.
Classes: 9
9 OPTICAL FIBER CABLING SYSTEM COMPRISED OF OPTIC FIBER,
CONNECTORS AND TERMINATION SET, NAMELY CLAMP TOOL, CLEAVE
TOOL, BUFFER STRIPPING TOOL AND JACKET STRIPPING TOOL
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<PAGE> 21
Schedule A to Trademark Security Agreement
Existing Trademarks
See attached list.
<PAGE> 22
SCHEDULE 4.4
The SpecTran trademark has been sublicensed to General Photonics, LLC.
Schedule 4.4-1
<PAGE> 23
EXHIBIT 1
TRADEMARK ASSIGNMENT
WHEREAS, [NAME OF OBLIGOR], a [________] corporation, (the "OBLIGOR") owns
and has used in its business certain trademarks which are registered or for
which a registration has been applied for, as listed in Schedule A hereto; and
WHEREAS, an "Event of Default" has occurred under the terms of the Trust
Indenture, dated as of December 1, 1996, among the Obligor, certain of its
affiliates, and FLEET NATIONAL BANK, in its capacity as security trustee (the
"TRUSTEE") and the Trademark Security Agreement, dated as of December 1, 1996,
among the Obligor, certain of its affiliates and the Trustee (collectively, the
"SECURITY DOCUMENTS"); and
WHEREAS, the Trustee, pursuant to its rights as a secured party under the
Security Documents, and pursuant to and in exercise of its rights as a secured
party under the Massachusetts Uniform Commercial Code, has chosen to exercise
its rights upon default;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Obligor does hereby absolutely sell, assign, transfer and convey
unto the Trustee all of the Obligor's right, title and interest in and to:
(i) the trademarks, together with the goodwill of the business
symbolized by the trademarks, the registrations and applications thereof
as set forth on Schedule A attached hereto;
(ii) all trade names, trade styles, service marks, prints and labels
on which said trademarks, trade names, trade styles and service marks have
appeared or appear, designs and general intangibles of like nature; and
(iii) all proceeds of the foregoing (including, without limitation,
license royalties and proceeds of infringement suits).
IN WITNESS WHEREOF, [NAME OF OBLIGOR] has caused this Trademark Assignment
to be duly executed by its duly authorized officer as of ____________ ___,
199__.
[NAME OF OBLIGOR]
By:____________________________
Name:
Title:
SPECTRAN CORPORATION Exhibit 1-1 TRADEMARK SECURITY AGREEMENT
<PAGE> 24
STATE OF _______________ )
) ss.
COUNTY OF _____________ )
On _______________, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared
_____________________________, personally known to me or proved to me to be on
the basis of satisfactory evidence to be the person who executed the within
instrument as the ___________________________________ of
_________________________, a _______________ corporation, and acknowledged that
such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public in and for the
County of ____________________,
State of ______________________
My Commission Expires: __________________
[SEAL]
SPECTRAN CORPORATION Exhibit 1-2 TRADEMARK SECURITY AGREEMENT
<PAGE> 25
SCHEDULE A
TRADEMARKS AND TRADEMARK APPLICATIONS AND REGISTRATIONS
SPECTRAN CORPORATION Schedule A-1 TRADEMARK SECURITY AGREEMENT
<PAGE> 1
EXHIBIT 10.92
<PAGE> 2
SPECTRAN CORPORATION
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
TO
FLEET NATIONAL BANK, AS TRUSTEE
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PATENT COLLATERAL ASSIGNMENT
---------------------
DATED AS OF DECEMBER 1, 1996
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PATENT COLLATERAL ASSIGNMENT
PATENT COLLATERAL ASSIGNMENT (as may be amended, restated or otherwise
modified from time to time, this "AGREEMENT"), dated as of December 1, 1996,
among each of SPECTRAN CORPORATION (together, with its successors and assigns,
the "COMPANY"), a Delaware corporation, SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC., a Delaware corporation, SPECTRAN SPECIALTY OPTICS COMPANY, a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC., a Delaware corporation
(all of the foregoing (other than the Company), together with their respective
successors and assigns, referred to herein, individually, as a "GUARANTOR," and,
collectively, as the "GUARANTORS;" the Company and the Guarantors being
collectively referred to herein as the "OBLIGORS"), and FLEET NATIONAL BANK, a
national banking association, as security trustee under a certain Trust
Indenture (as may be amended, restated or otherwise modified from time to time,
the "TRUST INDENTURE"), dated as of the date hereof, among the Obligors, Fleet
National Bank (in its capacity as such security trustee, and together with any
successor or co-security trustee that becomes such in accordance with the
provisions of the Trust Indenture, the "TRUSTEE") and the other parties
signatory thereto.
1. PRELIMINARY STATEMENTS
1.1 The Liens granted herein to the Trustee by each of the Obligors are
for the ratable benefit of the Beneficiaries, as provided in the Trust
Indenture.
1.2 The Trustee is to act as trustee on behalf of the Beneficiaries in
accordance with the terms of the Trust Indenture and the other Security
Documents.
1.3 All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of each of the Obligors necessary to
constitute this Agreement a valid and binding agreement for the uses and
purposes set forth herein, in accordance with its terms, have been done and
taken, and the execution and delivery hereof has been in all respects duly
authorized.
2. INTERPRETATION OF THIS AGREEMENT
2.1 TERMS DEFINED.
As used in this Agreement, the following terms have the respective
meanings set forth below or provided for in the section or other part of this
Agreement referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined)
or, if not defined herein, then as defined in the Trust Indenture.
AGREEMENT, THIS -- introductory sentence.
BANK AGREEMENT -- has the meaning specified in the Trust Indenture.
BANK LENDER -- has the meaning specified in the Trust Indenture.
BENEFICIARY -- has the meaning specified in the Trust Indenture
SPECTRAN CORPORATION 1 PATENT COLLATERAL ASSIGNMENT
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2. INTERPRETATION OF THIS AGREEMENT
CODE -- means the Uniform Commercial Code as in effect from time to time
in any specified or applicable jurisdiction.
COLLATERAL -- Section 3.
COMPANY -- the introductory sentence.
EVENT OF DEFAULT -- has the meaning specified in the Trust Indenture.
GUARANTORS -- introductory sentence.
LENDING DOCUMENTS -- has the meaning specified in the Trust Indenture.
LIEN -- has the meaning specified in the Security Agreement.
OBLIGORS -- introductory sentence.
PATENTS -- means and includes:
(a) all foreign and United States (including, without limitation,
each individual state thereof) patents, letters patent and patent
applications and registrations and general intangibles of like nature, and
all improvements to each of the foregoing, including, without limitation,
those listed on Schedule A and those further provided for in Section 4.3,
and any and all rights pertaining to any of the foregoing;
(b) all proceeds of the foregoing (including, without limitation,
license royalties and proceeds of infringement suits); all general
intangibles associated with any of the foregoing, including, without
limitation, all goodwill associated with the foregoing and with the
business of the Obligor to which the foregoing relates;
(c) the right to sue for past, present and future infringements, all
rights corresponding thereto; and
(d) all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof.
PERSON -- means an individual, a partnership, a corporation, a trust, a
limited liability company, an unincorporated organization, or a government or
agency or political subdivision thereof.
SECURED OBLIGATIONS -- has the meaning specified in the Trust Indenture.
SECURITY AGREEMENT -- means that certain Security Agreement, dated as of
the date hereof, among each of the Obligors and the Trustee, together with any
acknowledgements and agreements delivered in connection therewith, as the same
may be amended, restated, modified or supplemented from time to time.
SPECTRAN CORPORATION 2 PATENT COLLATERAL ASSIGNMENT
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2. INTERPRETATION OF THIS AGREEMENT
SECURITY DOCUMENTS -- has the meaning specified in the Trust Indenture.
SUBSIDIARY -- has the meaning specified in the Trust Indenture.
TRUST INDENTURE -- introductory sentence.
TRUSTEE -- introductory sentence.
2.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections of this
Agreement appear as a matter of convenience only, do not constitute a part
hereof and shall not affect the construction hereof. The words "herein,"
"hereof," "hereunder" and "hereto" refer to this Indenture as a whole and
not to any particular Section or other subdivision. References to Sections
are, unless otherwise specified, references to Sections of this Agreement.
References to Annexes, Schedules, Exhibits and Attachments are, unless
otherwise specified, references to Annexes, Schedules, Exhibits and
Attachments attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
2.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Obligors and the
Trustee, this Agreement shall be construed and interpreted as a separate
Agreement between each Obligor, respectively, and the Trustee, and any whole or
partial invalidity of this Agreement in respect of any Obligor shall not have
any effect on the validity or enforceability of this Agreement as among each
other Obligor, respectively, as the case may be, and the Trustee.
2.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of this
Agreement shall not render any other provision or provisions contained in this
Agreement unenforceable or invalid.
2.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT TO THE EXTENT THAT
THE PERFECTION OF THE LIENS IN AND TO THE COLLATERAL ARE GOVERNED BY THE LAWS OF
ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS.
SPECTRAN CORPORATION 3 PATENT COLLATERAL ASSIGNMENT
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3. GRANT OF SECURITY INTEREST
3. GRANT OF SECURITY INTEREST
As security for the payment by each Obligor of the Secured Obligations and
the performance by such Obligor of its other obligations and undertakings under
this Agreement and under the other Lending Documents, each Obligor does hereby
grant, bargain, convey, assign, transfer, mortgage, hypothecate, pledge, confirm
and grant a continuing security interest to the Trustee in and to all Patents in
which such Obligor has any right title or interest, in each case, whether
presently existing or hereafter acquired (all such Property collectively
referred to as "COLLATERAL").
4. REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING PATENTS
4.1 PATENTS, ETC.
Each Obligor represents, warrants and covenants that:
(a) Schedule A completely and accurately lists all Patents in which
such Obligor has any right, title or interest as of the date of its
execution and delivery of this Agreement and describes the nature of the
interest and all sub-licenses and other interests granted by such Obligor
in such Patent;
(b) the Patents are subsisting and have not been adjudged invalid or
unenforceable, in whole or in part;
(c) each of the Patents (and the Obligors license therein, as the
case may be) is valid and enforceable;
(d) such Obligor has the unqualified right to enter into this
Agreement and perform its terms and has entered and will enter into
written agreements with each of its present and future employees, agents
and consultants that will enable it to comply with the covenants herein
contained.
4.2 NO INCONSISTENT AGREEMENTS.
Until all of the Secured Obligations shall have been satisfied in full and
no Bank Lender is obligated to make a further advance under the Bank Agreement,
no Obligor will, without the Trustee's prior written consent, enter into any
agreement (including, without limitation, a license agreement) that is
inconsistent with such Obligor's obligations under this Agreement.
4.3 AFTER-ACQUIRED PATENTS SUBJECT TO THIS AGREEMENT.
(a) If while any Secured Obligation is outstanding or any Bank
Lender is obligated to make an advance under the Bank Agreement, any
Obligor shall obtain rights to any new patentable inventions, or become
entitled to the benefit of any patent, letter patent or patent application
or registration for any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Patent or any improvement on any
Patent, the
SPECTRAN CORPORATION 4 PATENT COLLATERAL ASSIGNMENT
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4. REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING PATENTS
same shall automatically be deemed subject to this Agreement and included
within the term "Patent," and such Obligor shall give to the Trustee
prompt notice thereof in writing.
(b) Each Obligor grants the Trustee a power-of-attorney, irrevocable
so long as any Secured Obligations remain outstanding or any Bank Lender
is obligated to make any advance under the Bank Agreement, to modify this
Agreement from time to time by amending Schedule A (without requirement of
any consent or further action on the part of any Obligor) to include any
future Patents to which any Obligor shall have any right, title or
interest.
4.4 LICENSE.
Unless and until there shall have occurred and be continuing an Event of
Default, the Trustee hereby grants to each Obligor the exclusive,
nontransferable right and license to make, have made, use and sell the
inventions disclosed and claimed in the Patents for such Obligor's own benefit
and account and for no other. Each Obligor agrees that it will not, without the
prior written consent of the Majority Beneficiaries, sell or assign its interest
in, or grant any sublicense under, the license granted to such Obligor in this
Section.
4.5 PATENT APPLICATIONS; ENFORCEMENT RIGHTS.
Each Obligor shall have the duty to prosecute diligently any patent
application of the Patents, pending as of the date of this Agreement or
thereafter until the Secured Obligations shall have been paid in full and no
Bank Lender is obligated to make a further advance under the Bank Agreement, to
make application on unpatented but patentable inventions and to preserve and
maintain all rights in patent applications and patents of the Patents. Any
expenses incurred in connection with such an application shall be borne by such
Obligor. No Obligor shall abandon any right to file a patent application, or any
pending patent application or patent without the consent of the Trustee. Each
Obligor shall further enter into such agreements with its employees, and take
such other reasonable measures, as are necessary to insure that such Obligor
shall have and enjoy all rights to apply for, register and use, subject to
Section 4.3, patents with respect to patentable inventions invented by such
employees in the ordinary course of their employment; provided, that the
Obligors may fairly compensate such employees for having invented such
inventions.
4.6 FURTHER ASSURANCES.
So long as any of the Secured Obligations shall be outstanding or any Bank
Lender is obligated to make an advance under the Bank Agreement, each Obligor,
at its own expense, will timely execute, acknowledge, deliver, file and record,
or will cause to be executed, acknowledged, delivered, filed or recorded, all
such further instruments, agreements, assignments and assurances as may be
necessary or appropriate (and, in any event, as may be reasonably requested by
the Trustee):
(a) to preserve and continue in force each of the patent
applications, letters patent and patents contained in the Patents and to
pay any and all fees and expenses
SPECTRAN CORPORATION 6 PATENT COLLATERAL ASSIGNMENT
<PAGE> 8
4. REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING PATENTS
in connection therewith (including, without limitation, payment of such
maintenance fees, if any, as may be imposed by the United States Patent
and Trademark Office); and
(b) to subject to this Agreement, and to preserve, continue and
protect the Lien of this Agreement on, and the rights of the Trustee in
and to, the Patents, including, without limitation, any Patents acquired
after the date of this Agreement (as set forth in Section 4.3), except
in the case of a Patent that, in the reasonable judgment of the Company
and subject to the prior written consent of the Trustee, has either lost
its strategic value, or the cost of maintenance of which outweighs its
benefit to the Company.
4.7 CERTAIN ACTIONS PERMITTED.
Notwithstanding Section 4.3 and Section of this Agreement, each Obligor
may
(a) license to any other Obligor, and license, in the ordinary
course of its business, solely to purchasers of its fiber optic cable and
other fiber optic products or to a third party in connection with an
agreement for the distribution or sale of such Obligor's products (which
distribution agreement may be on an exclusive basis in a given territory)
or with an agreement to develop a product that when developed and sold in
the ordinary course of business will result in revenue to such Obligor,
the nonexclusive right to use such products, and
(b) grant technology licenses or sublicenses to the extent permitted
by the other Lending Documents.
5. DEFAULTS -- REMEDIES
5.1 DEFAULT REMEDIES.
(a) All of the Trustee's rights and remedies with respect to the
Patents, whether established hereby or by the Security Agreement, or by
any other agreement or by law, shall be cumulative and may be exercised
singularly or concurrently. Without limiting the foregoing, this Agreement
is executed in furtherance of, and supplementary to, the provisions of the
Security Agreement, the terms and conditions of which are incorporated
hereby as if set forth in full herein. In the event any provision of the
Security Agreement conflicts with any provision of this Agreement, the
provisions of the Security Agreement shall prevail and this Agreement
shall be deemed to have been modified to the extent necessary to conform
to the provisions of the Security Agreement.
(b) If an Event of Default exists, the Trustee may exercise all of
the rights and remedies of a secured party under the Code and all of the
rights and remedies conferred in this Agreement, in the Security Agreement
or in any other Lending Document, it being expressly understood that no
such remedy is intended to be exclusive of any other remedy or remedies,
but each and every remedy shall be cumulative and shall be in addition to
every other remedy given in this Agreement, in the Security Agreement or
in
SPECTRAN CORPORATION 6 PATENT COLLATERAL ASSIGNMENT
<PAGE> 9
5. DEFAULTS -- REMEDIES
any other Lending Document or now or hereafter existing at law or in
equity or by statute, and may be exercised from time to time as often as
may be deemed expedient by the Trustee. Without limiting the generality of
the foregoing, if an Event of Default exists and is continuing, the
Trustee may immediately terminate the license granted to any Obligor
pursuant to Section 4.4 to use the Patents, and, without demand of
performance and without other notice (except as set forth in clause (c)
below), or demand whatsoever to such Obligor, all of which are hereby
expressly waived, and without advertisement, sell at public or private
sale or otherwise realize upon, in the Commonwealth of Massachusetts or
elsewhere, the whole or from time to time any part of the Patents, or any
interest that any or all of the Obligors may have therein.
(c) Each Obligor and the Trustee agree that ten (10) days' notice to
the Obligors of any public or private sale or other disposition of the
Patents shall be reasonable notice thereof, and such sale shall be at such
reasonable locations as the Trustee shall designate in such notice. Any
other requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived by each Obligor. The Trustee shall have
the right to bid at any such sale on behalf of any one or more of the
Beneficiaries (who shall also have the right to bid individually).
Proceeds arising from any such sale shall be applied in the manner set
forth in the Trust Indenture.
(d) If any Event of Default exists, the Trustee shall have the
right, but shall in no way be obligated to, bring suit in its own name to
enforce the Patents and any license thereunder, in which event each
Obligor shall at the request of the Trustee do any and all lawful acts and
execute any and all proper documents reasonably required by the Trustee in
aid of such enforcement, and each Obligor shall promptly, upon demand,
reimburse and indemnify the Trustee for all reasonable costs and expenses
incurred by the Trustee in the exercise of its rights under this Section
5.1(d).
(e) The Obligors jointly and severally will pay to the Trustee all
reasonable expenses (including court costs and attorneys' fees and
expenses) of, or incident to, the enforcement of any of the provisions of
this Agreement and all other charges due against the Patents including,
without limitation, taxes, assessments, security interests, Liens or
encumbrances upon the Patents and any expenses, including transfer or
other taxes, arising in connection with any sale, transfer or other
disposition of the Patents.
5.2 OTHER ENFORCEMENT RIGHTS.
The Trustee may proceed to protect and enforce this Agreement by suit or
suits or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement in this Agreement contained or
in execution or aid of any power in this Agreement granted, or for foreclosure
under this Agreement, or for the appointment of a receiver or receivers for the
Patents or any part thereof, for the recovery of judgment for the obligations
secured by this Agreement or for the enforcement of any other proper, legal or
equitable remedy available under applicable law.
SPECTRAN CORPORATION 7 PATENT COLLATERAL ASSIGNMENT
<PAGE> 10
5. DEFAULTS -- REMEDIES
5.3 APPLICATION OF PROCEEDS.
The proceeds of any exercise of rights with respect to the Patents, or any
part thereof, and the proceeds and the avails of any remedy under this Agreement
shall be paid to and applied in accordance with the provisions of the Trust
Indenture. If there is a deficiency, the Obligors jointly and severally shall,
subject always to the other provisions of this Agreement, remain liable therefor
and shall forthwith pay the amount of any such deficiency to the Trustee.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
All communications under this Agreement shall be in writing and shall be
made to the Persons and addresses, and in the manner, provided in the Trust
Indenture.
6.2 WAIVER AND AMENDMENT.
No provision of this Agreement will be waived, amended, modified or
supplemented except by a written instrument executed by the Obligors and the
Trustee in accordance with the Trust Indenture.
6.3 SURVIVAL.
All warranties, representations, certifications and covenants made by the
Obligors in this Agreement and in the other Lending Documents or in any
certificate or other document or instrument delivered by it or on behalf of it
under this Agreement or any other Lending Document shall be considered to have
been relied upon by the Trustee and each holder of the Secured Obligations and
shall survive the delivery to each holder of Secured Obligations of any
instrument or other document evidencing the same regardless of any investigation
made by the Trustee, any of the Beneficiaries or on their behalf. All statements
in any such certificate or other instrument shall constitute warranties and
representations by the Obligors under this Agreement. This Agreement shall be
binding upon the Obligors and inure to the benefit of and be enforceable by the
Trustee and the Beneficiaries.
6.4 SUCCESSORS AND ASSIGNS.
Whenever any of the parties to this Agreement is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all the covenants, promises and agreements in this Agreement contained by or
on behalf of any of the Obligors, or by or on behalf of the Trustee, shall bind
and inure to the benefit of the respective successors and assigns of such
parties whether so expressed or not.
SPECTRAN CORPORATION 8 PATENT COLLATERAL ASSIGNMENT
<PAGE> 11
6. MISCELLANEOUS
6.5 ADDITIONAL PARTIES.
Any Person which becomes a Subsidiary after the Closing Date and which is
required, pursuant to the Trust Indenture or any other Lending Document, to
become a party to this Agreement shall execute and deliver a duplicate original
of this Agreement and, upon acceptance thereof by the Trustee, such Subsidiary
shall become an "Obligor" under this Agreement for all purposes and shall be
deemed to have made the covenants and agreements of each Obligor set forth
herein as of the date of the execution and delivery of such acknowledgment and
agreement (including, without limitation, the grant of the security interest
contained in Section 3) and shall comply with all other obligations to be
performed by an Obligor party hereto.
6.6 SUBJECT TO TRUST INDENTURE.
Any and all rights granted to the Trustee under this Agreement are to be
held and exercised by the Trustee as trustee for the benefit of the
Beneficiaries, pursuant to the provisions of the Trust Indenture. To the extent
set forth in the Lending Documents and any other document or instrument creating
or evidencing any Secured Obligation, each of the Beneficiaries shall be a
beneficiary of the terms of this Agreement. Any and all obligations under this
Agreement of the parties to this Agreement, and the rights and indemnities
granted to the Trustee under this Agreement, are created and granted subject to,
and in furtherance (and not in limitation) of, the terms of the Trust Indenture.
Nothing in this Agreement expressed or implied is intended or shall be construed
to give to any Person other than the Obligors, the Beneficiaries and the Trustee
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any covenant, condition or provision herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Obligors, the Beneficiaries and the Trustee.
6.7 TERM OF AGREEMENT.
This Agreement shall be and remain in full force and effect until
terminated in accordance with the Trust Indenture; provided, that all
indemnities of the Obligors contained in this Agreement shall survive, and
remain operative and in full force and effect regardless of, the termination of
this Agreement.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.9 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
to this Agreement, and each
SPECTRAN CORPORATION 9 PATENT COLLATERAL ASSIGNMENT
<PAGE> 12
6. MISCELLANEOUS
set of counterparts which, collectively, show execution by each party to this
Agreement shall constitute one duplicate original.
[Remainder of page blank. Next page is signature page.]
SPECTRAN CORPORATION 10 PATENT COLLATERAL ASSIGNMENT
<PAGE> 13
IN WITNESS WHEREOF, each Obligor has caused this Agreement to be executed
by an authorized officer, and Fleet National Bank, as Trustee, has caused this
Agreement to be executed by an authorized officer, all as of the day and year
first above written.
Signed, sealed and delivered SPECTRAN CORPORATION
in the presence of:
/s/ Brian M. Hand By /s/ Bruce A. Cannon
- ----------------------------- -----------------------------
Name: Brian M. Hand Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- -----------------------------
Name: Ellen M. Grace
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ Brian M. Hand By /s/ Bruce A. Cannon
- ----------------------------- -----------------------------
Name: Brian M. Hand Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- -----------------------------
Name: Ellen M. Grace
SPECTRAN SPECIALTY OPTICS COMPANY
/s/ Brian M. Hand By /s/ Bruce A. Cannon
- ----------------------------- -----------------------------
Name: Brian M. Hand Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- -----------------------------
Name: Ellen M. Grace
APPLIED PHOTONIC DEVICES, INC.
/s/ Brian M. Hand By /s/ Bruce A. Cannon
- ----------------------------- -----------------------------
Name: Brian M. Hand Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- -----------------------------
Name: Ellen M. Grace
SPECTRAN CORPORATION PATENT COLLATERAL ASSIGNMENT
<PAGE> 14
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation, and
acknowledged that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Lori Bridwell
------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of APPLIED PHOTONIC DEVICES, INC., a Delaware corporation, and
acknowledged that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Lori Bridwell
-------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
SPECTRAN CORPORATION PATENT COLLATERAL ASSIGNMENT
<PAGE> 15
STATE OF HARTFORD )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of SPECTRAN CORPORATION, a Delaware corporation, and acknowledged that
such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Lori Bridwell
--------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 26, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared Bruce A.
Cannon, personally known to me or proved to me to be on the basis of
satisfactory evidence to be the person who executed the within instrument as the
Secretary of SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware
corporation, and acknowledged that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Lori Bridwell
--------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires: Nov. 30, 2000
[SEAL]
SPECTRAN CORPORATION PATENT COLLATERAL ASSIGNMENT
<PAGE> 16
FLEET NATIONAL BANK, as Trustee
/s/ Ellen M. Grace By /s/ Michael Quaile
- ----------------------------- ---------------------------------
Name: Ellen M. Grace Name: Michael Quaile
Title: Corporate Trust Officer
/s/ David Silber
- -----------------------------
Name: David Silber
<PAGE> 17
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On December 23, before me, the undersigned, a notary public in and for
said County and State, duly commissioned and sworn, personally appeared
Michael T. Quaile, personally known to me or proved to me to be on
the basis of satisfactory evidence to be the person who executed the within
instrument as the Corporate Trust Officer of FLEET NATIONAL BANK, a national
banking association, and acknowledged that such national banking association
executed the same as security trustee thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Lori Bridwell
--------------------------------------
Notary Public in and for the
County of Hartford,
State of Connecticut
My Commission Expires:
[SEAL]
[SEAL]
SPECTRAN CORPORATION PATENT COLLATERAL ASSIGNMENT
<PAGE> 18
Schedule A to Patent Collateral Assignment
PATENTS, LETTERS PATENT AND PATENT APPLICATIONS AND REGISTRATIONS
See attached list.
<PAGE> 19
PATENT REPORT
- -------------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR UNITED KINGDOM
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No.: 2186072 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App No.: 8602464.3 JANUARY 31, 1986
Ref: 003585-0002-002
- -------------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR FRANCE
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No.: 8601457 FEBRUARY 03, 1986 Expires: FEBRUARY 03, 2006 PATENTED
App No.: 8601457 FEBRUARY 03, 1986
Ref: 003585-0002-004
- -------------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR SWEDEN
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No.: 8600433-0 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App No.: 8600433-0 JANUARY 31, 1986
Ref: 003585-0002-016
JAEGER, Raymond E. ASLAMI, Mohd
- -------------------------------------------------------------------------------
FIBER OPTIC MAGNETIC FIELD SENSOR UNITED STATES
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No.: 4,550,281 MARCH 17, 1987 PATENTED
App No.: 08/624,355 JUNE 25, 1984
Ref: 003585-0002-999
- -------------------------------------------------------------------------------
-1-
<PAGE> 20
PATENT REPORT
- --------------------------------------------------------------------------------
HIGH TENSILE STRENGTH OPTICAL FIBER UNITED STATES
Inventors - JAEGER, RAYMON E.; ASLAMI, MOHD
Pat No: 4,660,928 APRIL 28, 1987 PATENTED
App No: 05/653,113 SEPTEMBER 21, 1984
Ref: 003585-0004-999
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR UNITED KINGDOM
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No: 2188073 JANUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App No: 8602465.0 JANUARY 31, 1986
Ref: 003585-0005-002
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR FRANCE
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No: 8601458 FEBRUARY 31, 1986 Expires: FEBRUARY 03, 2006 PATENTED
App No: 8601458 FEBRUARY 31, 1986
Ref: 003585-0005-004
- --------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR SWEDEN
Owner: SPECTRAN CORPORATION
Inventors - JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No: 8600434-8 FEBRUARY 31, 1986 Expires: JANUARY 31, 2006 PATENTED
App No: 8600434-8 FEBRUARY 31, 1986
Ref: 003585-0005-016
JAEGER Raymond E. ASLAMI, Mohd
- --------------------------------------------------------------------------------
-2-
<PAGE> 21
PATENT REPORT
- -------------------------------------------------------------------------------
FIBER OPTIC PRESSURE SENSOR UNITED STATES
Inventors - JEAGER RAYMOND E.; ASLAMI, MOHD
Pat No: 4,701,614 OCTOBER 20, 1987 PATENTED
App No: 05/624.259 JUNE 25, 1984
Ref: 003585-0005-999
- -------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS CANADA
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDMURI, SATYABRATA; SCHULTZ, PETER C.
Pat No: 1,295,892 FEBRUARY 18, 1992 Expires: FEBRUARY 18, 2009 PATENTED
App No: 532.631 MARCH 20, 1987
Ref: 003585-0020-001
- -------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS UNITED KINGDOM
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat No: G80301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App No: 57903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-002
- -------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS GERMANY
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat No: DE0301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App No: 87903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-003
- -------------------------------------------------------------------------------
HERMETIC COATINGS FOR OPTICAL FIBERS FRANCE
Owner: SPECTRAN CORPORATION
Inventors - RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat No: FR0301030 MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App No: 87903021.1 MARCH 31, 1987
Basic App: PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-004
- -------------------------------------------------------------------------------
-3-
<PAGE> 22
PATENT REPORT
_______________________________________________________________________________
HERMETIC COATING FOR OPTICAL FIBER BRAZIL
Owner: SPECTRAN CORPORATION
Inventors -- RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat No:
App No: PIE707655 MARCH 31, 1987 PENDING
Basic App: PCT/US87/00733 Ref: 003685-0020-037
HERMETIC COATINGS FOR OPTICAL FIBERS TAIWAN
_______________________________________________________________________________
Owner: SPECTRAN CORPORATION
Inventors -- RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat No :NI-35477 DECEMBER 11, 1989 Expires: DECEMBER 11, 2004 PATENTED
App No .76-101935 APRIL 08, 1987
Ref: 003585-0020-185
_______________________________________________________________________________
HERMETIC COATINGS FOR OPTICAL FIBERS EUROPEAN PATENT CONV.
Owner: SPECTRAN CORPORATION
Inventors -- RAYCHAUDHURI, SATYABRATA; SCHULTZ, PETER C.
Pat No :0301103C MARCH 31, 1987 Expires: MARCH 31, 2007 PATENTED
App No:87903C21.1 MARCH 31, 1987
Basic App:PCT/US87/00733 MARCH 31, 1986 Ref: 003585-0020-227
_______________________________________________________________________________
HERMETIC COATING FOR OPTICAL FIBER AND PRODUCT UNITED STATES
Inventors -- SCHULTZ, PETER C.; RAYCHAUDHURI, SATYABRATA
Pat No :4,735,358 APRIL 03, 1989 PATENTED
App No:08/846,331 MARCH 31, 1986
Ref: 003585-0020-395
_______________________________________________________________________________
PRESSURE OR STRAIN SENSITIVE OPTICAL FIBER CANADA
Owner: SPECTRAN CORPORATION
Inventors -- LEVIN, PHILIP S.; SVETAKA, PATRICE A.
Pat No .1,304,243 JUNE 30, 1992 Expires: JUNE 30,2009 PATENTED
App No: 551,402 NOVEMBER 09, 1987
Ref: 003585-0022-001
_______________________________________________________________________________
-4-
<PAGE> 23
PATENT REPORT
________________________________________________________________________________
PRESSURE OR STRAIN SENSITIVE OPTICAL FIBER TAIWAN
Owner: SPECTRAN CORPORATION
Inventors -- LEVIN, PHILIP S.; SVETAKA, PATRICE A.
Pat No :NI-34110 OCTOBER 01, 1989 Expires: OCTOBER 01, 2004 PATENTED
App No: 77-100108 JANUARY 08, 1988
Ref: 003585-0022-185
________________________________________________________________________________
PRESSURE SENSITIVE OPTICAL FIBER UNITED STATES
Inventors -- LEVIN, PHILIP S.; SVETAKA, PATRICE A.
Pat No :4,770,492 SEPTEMBER 13, 1988 PATENTED
App No: 06/924093 OCTOBER 28, 1986
Ref: 003585-0022-599
________________________________________________________________________________
COMPOSITE CAPILLARY TUBE STRUCTURE AND METHOD OF FORMING UNITED STATES
Inventors -- JAEGER, RAYMOND E.; ASLAMI, MOHD
Pat No :4,812,344 MARCH 14, 1989 PATENTED
App No:07/173,952 MARCH 28, 1988
Ref: 003585-0023-999
________________________________________________________________________________
OXIDE COATINGS FOR FLUORIDE GLASS CANADA
Owner: SPECTRAN CORPORATION
Inventors -- VACHA, LUBOS J. B.; MOYNIHAN, CORNELIUS T.;
SCHULTZ, PETER C.
Pat No :1,323,222 OCTOBER 19, 1993 Expires: OCTOBER 19, 2010 PATENTED
App No:572,088 JULY 14, 1988
Ref: 003585-0024-001
________________________________________________________________________________
-5-
<PAGE> 24
PATENT REPORT
- -------------------------------------------------------------------------------
OXIDE COATINGS FOR FLUORIDE GLASS UNITED STATES
Inventors - VACHA LOBOS J. B.; MOYNIHAN, CORNELIUS T.;
SCHULTZ, PETER C.
Pat No: 4,883,339 NOVEMBER 28, 1989 PATENTED
App No: 07/074,646 JULY 17, 1987
Ref: 003585-0024-999
- -------------------------------------------------------------------------------
HERMETIC COATINGS FOR NON-SILCA BASED OPTICAL FIBERS UNITED STATES
Inventors - VACHA, LOBOS J. B.; SCHULTZ, PETER C.; MOYNIHAN,
CORNELIUS T.; RAYCHAUDHURI, SATYABRATA; CADIEN, KEN C.;
MOSSADECH, REZA; HARRISON, BARRY B.
Pat No: 4,874,222 OCTOBER 17, 1989 PATENTED
App No: 07/160,545 FEBRUARY 25, 1988
Ref: 003586-0025-999
- -------------------------------------------------------------------------------
CVD TORCH UNITED STATES
Inventor - LEVIN, PHILIP S.
Pat No: 4,863,102 SEPTEMBER 05, 1989 PATENTED
App No: 07/272,281 DECEMBER 19, 1988
Ref: 003585-0036-999
- -------------------------------------------------------------------------------
OXIDE COATINGS FOR FLUORIDE GLASS UNITED STATES
Inventors - VACHA, LOBOS J. B.; MOYNIHAN, CORNELIUS T.;
SCHULTZ, PETER C.
Pat No: 4,938,662 JULY 03, 1990 PATENTED
App No: 07/379,847 JULY 14, 1989
Ref: 003585-0038-999
- -------------------------------------------------------------------------------
COMPOSITION HAVING IMPROVED OPTICAL QUALITIES CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 1,221,797 MAY 12, 1987 Expires: MAY 12, 2004 PATENTED
App No: 472,370 JANUARY 18, 1985
Ref: 003585-0051-001
- -------------------------------------------------------------------------------
-6-
<PAGE> 25
PATENT REPORT
- --------------------------------------------------------------------------------
FLUOROACRYLATES HAVING IMPROVED OPTICAL QUALITIES AUSTRALIA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 569145 MARCH 08, 1985 Expires: MARCH 08, 2006 PATENTED
App No: 39659/85 MARCH 08, 1985
Ref: 003585-0051-007;
- --------------------------------------------------------------------------------
COMPOSITION HAVING IMPROVED OPTICAL QUALITIES UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 4,511,209 APRIL 15, 1985 Expires: APRIL 16, 2002 PATENTED
App No: DE/572.397 JANUARY 20, 1984
Ref: 003585-0051-999;
- --------------------------------------------------------------------------------
FIBER OPTIC COUPLER CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: 1,287,763 AUGUST 20, 1991 Expires: AUGUST 20, 2008 PATENTED
App No: 543,354 JULY 30, 1987
Ref: 003585-0052-001;
- --------------------------------------------------------------------------------
FIBER OPTIC COUPLER GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: DE3751674 JULY 31, 1987 Expires: JULY 31, 2007 PATENTED
App No: 87306838.1 JULY 31, 1987
Ref: 003585-0052-003
- --------------------------------------------------------------------------------
FIBER OPTIC COUPLER EUROPEAN PATENT CONV.
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No: 0271177 JULY 31, 1987 Expires: JULY 31, 2007 PATENTED
App No: 87306838.1 JULY 31, 1987
Ref: 003585-0052-227;
- --------------------------------------------------------------------------------
-7-
<PAGE> 26
PATENT REPORT
- -------------------------------------------------------------------------------
OPTICAL FIBER COUPLER UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - HODGE, MALCOLM H.; MORAS, JAMES A.; DILLON, RICHARD T.
Pat No.: 4,784,452 NOVEMBER 15, 1988 Expires: NOVEMBER 15, 2005 PATENTED
App No.: 06/992.799 AUGUST 01, 1986
Ref: 003585-0052-999;
- -------------------------------------------------------------------------------
ANGLED INPUT FIBER FACE GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No.: Expires: OCTOBER 10, 2010 FILED WAIT EXAM
App No.: P4032184.3 OCTOBER 10, 1990
Ref: 003585-0053-003;
- -------------------------------------------------------------------------------
ANGLED INPUT FIBER FACE FRANCE
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No.: 9012701 OCTOBER 15, 1990 Expires: OCTOBER 15, 2010 PATENTED
App No.: 9012701 OCTOBER 15, 1990
Ref: 003585-0053-004;
- -------------------------------------------------------------------------------
ANGLED INPUT FIBER FACE JAPAN
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No.: Expires: OCTOBER 16, 2010 FILED WAIT EXAM
App No.: 2-275471 OCTOBER 16, 1990
Ref: 003585-0053-012;
- -------------------------------------------------------------------------------
ANGLED OPTICAL FIBER INPUT END FACE AND METHOD FOR UNITED STATES
DELIVERING ENERGY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - PURCELL, JR., EARL E.
Pat No.: 4,993,691 FEBRUARY 25,1991 Expires: FEBRUARY 26, 2008 PATENTED
App No.: 07/42/,877 OCTOBER 16, 1989
Ref: 003585-0053-999;
- -------------------------------------------------------------------------------
-8-
<PAGE> 27
PATENT REPORT
- -------------------------------------------------------------------------------
CLEAVING TOOL FOR OPTICAL FIBERS UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - VINES, JOSEPH J.
Pat No: 5.108.021 APRIL 28, 1992 Expires: APRIL 28, 2009 PATENTED
App No: 07/575.979 AUGUST 31, 1990
Ref: 003585-0054-953:
- -------------------------------------------------------------------------------
FIBER OPTIC DIFFUSER TIP GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT C.;
LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: Expires: NOVEMBER 30, 2014 PENDING
App No: P4442523.6 NOVEMBER 30, 1994
Ref: 003585-0053-003
- -------------------------------------------------------------------------------
FIBER OPTIC DIFFUSER TIP JAPAN
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT C.;
LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: Expires: DECEMBER 31, 2004 PENDING
App No: 6-309328 DECEMBER 13, 1994
Ref: 003585-0055-012
- -------------------------------------------------------------------------------
FIBER OPTIC DIFFUSER TIP UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT C.;
LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: 5.373,571 DECEMBER 13, 1994 Expires: DECEMBER 13, 2011 PATENTED
App No: 08/053,193 MARCH 16, 1993
Ref: 003585-0055-999:
- -------------------------------------------------------------------------------
OPTICAL FIBER CABLE CONNECTOR ASSEMBLY GERMANY
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; LUTZEN, JON A.; MONTGELAS, RUDOLPH A.
Pat No: Expires: NOVEMBER 30, 2014 FILED WAIT EXAM
App No: P4442524.4 NOVEMBER 30, 1994
Ref: 0003526-0055-003.
- -------------------------------------------------------------------------------
-9-
<PAGE> 28
PATENT REPORT
- -------------------------------------------------------------------------------
OPTICAL FIBER CABLE CONNECTOR ASSEMBLY JAPAN
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; LUTZEN, JON A.; MONTGELAS, RUDOLPH A.
Pat No: Expires: NOVEMBER 30, 2014 FILED WAIT EXAM
App No: 6-297560 NOVEMBER 30, 1994
Ref: 003685-0056-012
- -------------------------------------------------------------------------------
OPTICAL FIBER CABLE CONNECTOR ASSEMBLY UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; LUTZEN, JON A.; MONTGELAS, RUDOLPH A.
Pat No: 5,455,880 OCTOBER 03, 1995 Expires: DECEMBER 01, 2013 PATENTED
App No: 08/159,832 DECEMBER 01, 1993
Ref: 003585-0056-999
- -------------------------------------------------------------------------------
COATING COMPOSITIONS CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No: 1,307,071 SEPTEMBER 01, 1992 Expires: SEPTEMBER 01, 2009 PATENTED
App No: 545,139 AUGUST 24, 1987
Ref: 003585-0059-001
- -------------------------------------------------------------------------------
COATING COMPOSITIONS UNITED KINGDOM
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No: 2209034 AUGUST 25, 1987 Expires: AUGUST 25, 2007 PATENTED
App No: 8719985.7 AUGUST 25, 1987
Ref: 003585-0059-002
- -------------------------------------------------------------------------------
COATING COMPOSITIONS FRANCE
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No: 8712288 SEPTEMBER 04, 1987 Expires: SEPTEMBER 04, 2007 PATENTED
App No: 8712288 SEPTEMBER 04, 1987
Ref: 003585-0055-004
- -------------------------------------------------------------------------------
-10-
<PAGE> 29
PATENT REPORT
- -------------------------------------------------------------------------------
COATING COMPOSITIONS FOR OPTICAL FIBERS UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No: 4,707,078 NOVEMBER 17, 1987 Expires: NOVEMBER 17, 2004 PATENTED
App No: 08/722,828 APRIL 12, 1985
Ref: 003585-0053-999
- -------------------------------------------------------------------------------
OPTICAL FIBER AND METHOD OF PRODUCING SAME JAPAN
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 2519728 AUGUST 06, 1985 Expires: AUGUST 06, 2005 PATENTED
App No: 60-171925 AUGUST 06, 1985
Ref: 003585-0060-012
- -------------------------------------------------------------------------------
OPTICAL FIBER AND METHOD OF PRODUCING SAME UNITED STATES
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 4,599,098 JULY 08, 1986 Expires: JULY 08, 2003 PATENTED
App No: 08/579,496 FEBRUARY 13, 1984
Ref: 003585-0060-999
- -------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES AND WAVEGUIDES MADE THEREBY JAPAN
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: Expires: JANUARY 30, 2007 PENDING
App No: 62-018760 JANUARY 30, 1987
Ref: 003585-0061-012
- -------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES UNITED STATES
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 5,028,246 JULY 02, 1991 Expires: JULY 02, 2008 PATENTED
App No: 07/308,886 FEBRUARY 08, 1989
Ref: 003585-0061-999
- -------------------------------------------------------------------------------
-11-
<PAGE> 30
PATENT REPORT
- -------------------------------------------------------------------------------
OPTICAL WAVEGUIDES HAVING REDUCED BENDING LOSS AND METHOD OF UNITED STATES
MAKING THE SAME
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - DABBY, FRANKLIN W.
Pat No: 5,175,785 DECEMBER 29, 1992 Expires: DECEMBER 29, 2009 PATENTED
App No.07/894,652 MARCH 02, 1991
Ref: 003585-0062-999:
- -------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES AND WAVEGUIDES MADE UNITED STATES
THEREBY
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - MERRITT, TREVOR
Pat No: 5,318,511 JUNE 07, 1994 Expires: JUNE 07,2011 PATENTED
App No.07/851,489 MARCH 13, 1992
Ref: 003585-0063-999:
- -------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES UNITED STATES
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 5,384,430 NOVEMBER 15, 1994 Expires: NOVEMBER 15, 2011 PATENTED
App No.08/002,077 JANUARY 08, 1993
Ref: 003585-0064-999:
Archive: 11,595
- -------------------------------------------------------------------------------
OPTICAL FIBER CLADDING CANADA
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.
Pat No: 1,221,795 MAY 12, 1987 Expires: MAY 12, 2004 PATENTED
App No.422,209 FEBRUARY 23, 1983
Ref: 003585-0065-001:
- -------------------------------------------------------------------------------
COATING COMPOSITION FRANCE
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventor - SKUTNIK, BOLESH J.; BRIELMANN, HARRY L.
Pat No: Expires: SEPTEMBER 04, 2007 FILED WAIT EXAM
App No.9215010 SEPTEMBER 04, 1987
Ref: 003585-0066-004:
- -------------------------------------------------------------------------------
-12-
<PAGE> 31
PATENT REPORT
- ------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES AND WAVEGUIDES MADE JAPAN
THEREBY
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: Expires: JANUARY 14, 2013 PENDING
App No: 5-21868 JANUARY 14, 1993
Ref: 003585-0065-012:
- ------------------------------------------------------------------------------
METHODS OF MAKING OPTICAL WAVEGUIDES UNITED STATES
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: 5,558,693 SEPTEMBER 24, 1996 Expires: SEPTEMBER 24, 2013 PATENTED
App No: 08/319,394 OCTOBER 06, 1994
Ref: 003585-0070-999
- ------------------------------------------------------------------------------
METHOD OF MAKING OPTICAL WAVEGUIDES AND WAVEGUIDES MADE UNITED STATES
THEREBY
Owner: SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
Inventor - SARKAR, ARNAB
Pat No: PENDING
App No: 08/475,545 JUNE 06, 1995
Ref: 003585-0071-999
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FIBER OPTIC DIFFUSER TIP UNITED STATES
Owner: SPECTRAN SPECIALTY OPTICS COMPANY
Inventors - REID, ROBERT A.; MONTGELAS, RUDOLPH A.; SULLIVAN, ROBERT
C.; LUTZEN, JON A.; DE CARLO, MICHAEL G.
Pat No: REISSUE
AUGUST 08, 1995
Ref: 003585-0072-999
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METHOD OF MAKING AN OPTICAL FIBER PREFORM UNITED STATES
Inventors - WU, FENGOING; HURETA, AURELIA
Pat No: UNFILED
Ref: 003585-0079-999
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<PAGE> 32
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
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.
<PAGE> 33
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.
<PAGE> 1
EXHIBIT 10.93
<PAGE> 2
SPECTRAN CORPORATION
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
TO
FLEET NATIONAL BANK, AS TRUSTEE
---------------------
PLEDGE AGREEMENT
---------------------
DATED AS OF DECEMBER 1, 1996
<PAGE> 3
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as may be amended, restated or otherwise
modified from time to time, this "AGREEMENT"), dated as of December 1, 1996, by
and among each of SPECTRAN CORPORATION (together, with its successors and
assigns, the "PLEDGOR"), a Delaware corporation, SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC., a Delaware corporation, SPECTRAN SPECIALTY OPTICS COMPANY, a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC., a Delaware corporation
(all of the foregoing (other than the Pledgor), together with their respective
successors and assigns, referred to herein, collectively, as the "CURRENT
SUBSIDIARIES"), and FLEET NATIONAL BANK, a national banking association, as
security trustee under a certain Trust Indenture (as may be amended, restated or
otherwise modified from time to time, the "TRUST INDENTURE"), dated as of the
date hereof, among the Pledgor, the Subsidiaries, Fleet National Bank (in its
capacity as such security trustee, and together with any successor or
co-security trustee that becomes such in accordance with the provisions of the
Trust Indenture, the "TRUSTEE") and the other parties signatory thereto.
1. PRELIMINARY STATEMENTS
1.1 The Liens granted herein to the Trustee by the Pledgor are for the
ratable benefit of the Beneficiaries, as provided in the Trust Indenture.
1.2 The Trustee is to act as trustee on behalf of the Beneficiaries in
accordance with the terms of the Trust Indenture and the other Security
Documents.
1.3 All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of each of the Pledgor and the Subsidiaries
necessary to constitute this Agreement a valid and binding agreement for the
uses and purposes set forth herein, in accordance with its terms, have been done
and taken, and the execution and delivery hereof has been in all respects duly
authorized.
2. INTERPRETATION OF THIS AGREEMENT
2.1 TERMS DEFINED.
As used in this Agreement, the following terms have the respective
meanings set forth below or provided for in the section or other part of this
Agreement referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined)
or, if not defined herein, then as defined in the Trust Indenture.
AGREEMENT, THIS -- the introductory paragraph.
BANK AGREEMENT -- has the meaning specified in the Trust Indenture.
BANK LENDER -- has the meaning specified in the Trust Indenture.
BENEFICIARY -- has the meaning specified in the Trust Indenture.
BUSINESS DAY -- has the meaning specified in the Trust Indenture.
1
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 4
2. INTERPRETATION OF THIS AGREEMENT
CLOSING DATE -- has the meaning specified in the Trust Indenture.
CODE -- the Uniform Commercial Code as in effect from time to time in
any specified or applicable jurisdiction.
COLLATERAL -- Section 3.1(b).
CURRENT SUBSIDIARIES -- the introductory sentence hereto.
DEFAULT -- an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.
EVENT OF DEFAULT -- has the meaning specified in the Trust Indenture.
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.
LENDING DOCUMENTS -- has the meaning specified in the Trust Indenture.
LIEN -- has the meaning specified in the Trust Indenture.
MAJORITY BENEFICIARIES -- has the meaning specified in the Trust
Indenture.
NOTE PURCHASE AGREEMENT -- has the meaning specified in the Trust
Indenture.
PERSON -- means an individual, sole proprietorship, partnership,
corporation, trust, joint venture, unincorporated organization, limited
liability company or a government or agency or political subdivision thereof.
PLEDGED STOCK -- means all the Pledgor's present and future right,
title, and interest in
(i) the capital stock of the Subsidiaries owned as of the date hereof
by it, and
(ii) all additional shares of capital stock of any Subsidiary from time
to time acquired by the Pledgor in any manner.
2
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 5
2. INTERPRETATION OF THIS AGREEMENT
PLEDGED STOCK COLLATERAL -- Section 3.1(a).
PLEDGOR -- the introductory paragraph.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
SECURED OBLIGATIONS -- has the meaning specified in the Trust
Indenture.
SECURITIES ACT -- means the Securities Act of 1933, as amended.
SECURITY -- means "security" as defined in section 2(1) of the
Securities Act.
SECURITY DOCUMENTS -- has the meaning specified in the Trust Indenture.
SUBSIDIARY -- has the meaning specified in the Trust Indenture.
TRUST INDENTURE -- the introductory paragraph.
TRUSTEE -- the introductory paragraph.
2.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections of this
Agreement appear as a matter of convenience only, do not constitute a
part hereof and shall not affect the construction hereof. The words
"herein," "hereof," "hereunder" and "hereto" refer to this Indenture as
a whole and not to any particular Section or other subdivision.
References to Sections are, unless otherwise specified, references to
Sections of this Agreement. References to Annexes, Schedules, Exhibits
and Attachments are, unless otherwise specified, references to Annexes,
Schedules, Exhibits and Attachments attached to this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
2.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Pledgor, the
Subsidiaries and the Trustee, this Agreement shall be construed and interpreted
as a separate Agreement between the Pledgor and each Subsidiary, respectively,
and the Trustee, and any whole or partial invalidity of this Agreement in
respect of the Pledgor or any Subsidiary shall not have any effect on the
validity or enforceability of this Agreement as among the Pledgor or each
Subsidiary, respectively, as the case may be, and the Trustee.
3
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 6
3. GRANT OF SECURITY INTEREST
2.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
2.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT TO THE EXTENT
THAT THE PERFECTION OF THE LIENS IN AND TO THE COLLATERAL ARE GOVERNED BY THE
LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS.
3. GRANT OF SECURITY INTEREST
3.1 GRANT OF SECURITY INTEREST.
As security for the payment by the Pledgor of the Secured Obligations
and the performance by the Pledgor of its other obligations and undertakings
under the Lending Documents to which it is a party and as security for the
performance of the obligations of the Pledgor hereunder, the Pledgor does hereby
grant, bargain, sell, release, convey, assign, transfer, mortgage, hypothecate,
pledge, confirm and grant a security interest to the Trustee, for the benefit of
the Beneficiaries in all of the Pledgor's right, title and interest in, to, and
under
(a) the Pledged Stock and all rights, options, warrants,
stock, other Securities or other Property of any kind whatsoever which
may hereafter be received, receivable or distributed in respect of, or
exchanged for, all or any of such Pledged Stock and all certificates
representing the foregoing (all of the foregoing being herein referred
to, collectively, as the "PLEDGED STOCK COLLATERAL"), and
(b) all proceeds of the Pledged Stock Collateral and any
replacements, additions, or substitutions thereof or thereto, all
after-acquired Property in connection therewith, and all accounts and
proceeds arising from the sale and disposition thereof, including,
where applicable, insurance proceeds (the Pledged Stock Collateral and
the proceeds and other Property described in this clause (b) are
collectively referred to herein as the "COLLATERAL").
3.2 PERFECTION OF SECURITY INTEREST IN COLLATERAL.
(a) DELIVERY OF PLEDGED STOCK. Contemporaneously with the
execution of this Agreement, the Pledgor shall deliver, or cause to be
delivered, to the Trustee:
(i) all certificates and other instruments evidencing
the shares of Pledged Stock owned as of the Closing Date by
the Pledgor and listed on Annex 1, accompanied by undated
stock powers and such other instruments and
4
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 7
3. GRANT OF SECURITY INTEREST
documents as the Trustee may reasonably request, duly endorsed
in blank by the registered owners of such certificates, with
signatures properly guaranteed;
(ii) any and all certificates or other instruments or
documents representing any of the Collateral; and
(iii) all other Property comprising part of the
Collateral with proper instruments of assignment, duly
executed, and such other instruments or documents as the
Trustee may reasonably request.
(b) DELIVERY OF OTHER COLLATERAL. If the Pledgor shall become
entitled to receive or shall receive any shares of stock (including,
without limitation, shares of Pledged Stock acquired after the Closing
Date), options, warrants, rights or other similar Property (including,
without limitation, any certificate representing a stock dividend, or
any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in
connection with any reorganization of any Subsidiary or any other
subsidiary of the Pledgor) in respect of the Pledged Stock Collateral
(whether as an addition to, in substitution of, or in exchange for,
such Pledged Stock Collateral or otherwise), the Pledgor agrees:
(i) to accept the same as the agent of the Trustee;
(ii) to hold the same in trust on behalf of and for
the benefit of the Trustee; and
(iii) to deliver the same to the Trustee on or before
the close of business on the second Business Day following the
receipt thereof by the Pledgor, in the exact form received,
with the endorsement in blank of the Pledgor when necessary
and with appropriate undated stock powers duly executed in
blank (with signatures properly guaranteed), to be held by the
Trustee subject to the terms of this Agreement, as additional
Collateral.
3.3 FURTHER ASSURANCES.
The Pledgor agrees that it will cooperate with the Trustee and the
Beneficiaries and will execute and deliver, or cause to be executed and
delivered, all such additional conveyances, stock powers, proxies, assignments,
financing statements and other recordings, instruments and documents as are
required to maintain the perfection of the security interests herein granted to
the Trustee for the benefit of the Beneficiaries and will take all such other
action, as the Trustee or the Majority Beneficiaries may reasonably request from
time to time in order to assure and confer unto the Trustee its rights and
remedies hereunder and to carry out the provisions and purposes hereof.
5
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 8
3. GRANT OF SECURITY INTEREST
3.4 ACTION BY TRUSTEE AND BENEFICIARIES.
The Trustee shall not be required to take any steps to perfect the
security interest in the Collateral or to realize upon the Collateral or
otherwise to enforce any of the rights hereunder. Without limiting the
generality of the foregoing, the Trustee shall not be under any obligation to
take any steps necessary to preserve rights in any of the Collateral against any
other parties but may do so upon the written instruction of the Majority
Beneficiaries, and all reasonable expenses incurred in connection therewith
shall be for the sole account of the Pledgor. The Beneficiaries shall not be
required to take any steps to perfect the security interest in the Collateral or
to realize upon the Collateral or otherwise to enforce any of the rights
hereunder. Without limiting the generality of the foregoing, the Beneficiaries
shall not be under any obligation to take any steps necessary to preserve rights
in any of the Collateral against any other parties.
3.5 POWER OF ATTORNEY.
(a) TRANSFER OF COLLATERAL. The Pledgor hereby makes,
constitutes and appoints the Trustee (or any duly authorized officer
thereof), with full power of substitution, as its true and lawful agent
and attorney-in-fact to arrange, at the request of the Trustee, for the
transfer of any shares of the Collateral comprised of registered
Securities on the books of the issuer thereof to the name of the
Trustee or the Trustee's nominee at any time after the occurrence and
during the continuance of an Event of Default.
(b) EXERCISE OF RIGHTS. The Pledgor hereby makes, constitutes,
and appoints the Trustee (or any duly authorized officer thereof), with
full power of substitution, its true and lawful agent and
attorney-in-fact in order to effect any or all of the rights set forth
in this Agreement; in addition thereto, the Pledgor hereby authorizes
and empowers the Trustee (or any duly authorized officer thereof), as
its lawful agent and attorney-in-fact as provided for in this Section
3.5(b), to execute on behalf of the Pledgor, or in its own name,
assignments, notices of assignments, financing statements, and other
public records and notices in respect of the Collateral, and to do
any and all things necessary or take any action in the name and on
behalf of the Pledgor to carry out the intent of this Agreement,
including, without limitation, to protect the interests in the
Collateral granted to the Trustee.
(c) LIABILITY. The Pledgor agrees that neither the Trustee,
Beneficiaries (or any of their respective officers, directors,
employees, agents, investment advisors and affiliates) shall have any
liability for any acts of commission or omission, or for any error of
judgment or mistake of fact or law, with respect to the exercise of the
powers of attorney granted under this Section 3.5, except that any
Person exercising such powers of attorney may be liable for any such
acts, errors, or mistakes resulting from its, his, or her own gross
negligence or willful misconduct. The powers of attorney granted under
this Section 3.5 are coupled with an interest and shall be irrevocable
for so long as any of the Secured Obligations shall not have been
fully and finally paid.
6
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 9
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
4.1 COLLATERAL.
(a) SAFEKEEPING OF COLLATERAL. The Trustee shall not have any
duty with respect to any Collateral other than the duty to use
reasonable care in accordance with its customary practices in the
safekeeping of any certificate or instrument evidencing such Collateral
in its physical possession. Neither the Trustee nor any of the
Beneficiaries shall be liable for any loss or damage to any of the
Collateral arising from any act or default of any carrier, forwarding
agency or other similar Person. Neither the Trustee nor any of the
Beneficiaries shall be liable for any diminution in value of any of the
Collateral.
(b) PAYMENTS AND DISTRIBUTIONS. If, while this Agreement is in
effect, the Pledgor shall become entitled to receive or shall receive
(i) any payment or distribution upon the dissolution,
liquidation (in whole or in part), reorganization or
insolvency of any issuer of Collateral, or
(ii) any payment or distribution of capital on
account of any Collateral, the Pledgor agrees:
(A) to accept the same as the agent of the Trustee;
(B) to hold the same separate and apart from any of
its other funds or Property and in trust on behalf of and for
the benefit of the Trustee; and
(C) to deliver, or cause the delivery of, the same to
the Trustee, on or before the close of business on the second
Business Day following the receipt thereof by the Pledgor, in
the exact form received, with the endorsement of the Pledgor
when necessary, as additional Collateral.
(c) PAYMENTS AND DISTRIBUTIONS RETAINED BY PLEDGOR. Section
4.1(b) notwithstanding, this Agreement shall not limit the Pledgor's
right to receive, for so long as no Event of Default or Default shall
have occurred and be continuing, ordinary cash dividends in respect of
the Pledged Stock to the extent the same are permitted to be paid
pursuant to each of the other Lending Documents. Upon the occurrence
and during the continuance of any such Event of Default or Default, all
the rights of the Pledgor described in the preceding sentence shall
cease, and all such rights shall thereupon become vested in the
Trustee, which shall have the sole and exclusive right and authority to
retain and receive such dividends. If the Pledgor shall receive such
cash dividends in contravention of this Section 4.1(c), the Pledgor
shall promptly pay, or cause to be paid, all such cash dividends to the
Trustee and, while the Pledgor is in possession of any such moneys
received after an Event of Default, it shall hold the same separate and
apart from any of its other funds or Property and in trust for the
benefit of the Trustee. Any and all money and other Property paid over
to or received by the Trustee pursuant to this
7
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 10
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
Section 4.1 shall be retained by the Trustee in an account to be
established by the Trustee upon receipt of such money or other Property
and shall be applied in accordance with the provisions of Section 5.5.
4.2 VOTING RIGHTS CONCERNING PLEDGED STOCK COLLATERAL.
(a) PLEDGOR'S RIGHT TO VOTE. During the term of this
Agreement, and so long as no Event of Default shall have occurred and
be continuing, this Agreement shall not limit the Pledgor's right to
vote the Pledged Stock and the other Collateral (to the extent such
other Collateral has voting rights) on all corporate questions for all
purposes. To that end, if the Trustee transfers, or causes the transfer
of, such Pledged Stock or other Collateral into its name or the name of
its nominee, the Trustee shall, upon the request of the Pledgor, unless
an Event of Default shall have occurred and be continuing, execute and
deliver or cause to be executed and delivered to the Pledgor proxies
with respect to such Pledged Stock and other Collateral authorizing the
Pledgor or its nominee to vote such Pledged Stock or such other
Collateral.
(b) TRUSTEE'S RIGHT TO VOTE. Upon the occurrence and during
the continuance of an Event of Default, all rights of the Pledgor to
exercise the voting rights described in Section 4.2(a) shall cease, and
the Trustee, upon written notice to the Pledgor (given in accordance
with written instructions from the Majority Beneficiaries), shall be
entitled to exercise all voting powers and corporate rights pertaining
to the Pledged Stock and the other Collateral (including, without
limitation, exchange, subscription and other rights, privileges and
options with respect thereto), and the Trustee may, upon the occurrence
and during the continuance of an Event of Default, upon written notice
to the Pledgor (given in accordance with written instructions from the
Majority Beneficiaries), declare all proxies theretofore executed by
the Trustee to be terminated and to be null and void, and upon such
notice, such proxies shall terminate and thereafter be null and void
and of no effect whatsoever, and the Pledgor, forthwith upon the
request of the Trustee (given in accordance with written instructions
from the Majority Beneficiaries), shall cause the removal (if not
already secured by the Trustee) of the officers and directors of each
Subsidiary in order that the Trustee may elect the officers and
directors of each Subsidiary that the Trustee would be entitled to
elect pursuant to the voting rights under the Pledged Stock and other
Collateral. The Pledgor shall execute and deliver to the Trustee all
such documents and instruments (including, without limitation, proxies)
as the Trustee shall request in order to effect the purposes of this
Section 4.2(b).
4.3 REPRESENTATIONS CONCERNING PLEDGED STOCK COLLATERAL.
The Pledgor warrants and represents as follows:
(a) OWNERSHIP OF COLLATERAL.
(i) Except for the security interests granted
hereunder, the Pledgor is the direct owner, beneficially and
of record, of the Pledged Stock and holds the
8
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 11
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
Collateral free and clear of all Liens and security interests
of every kind and nature.
(ii) The Pledgor has the full right and legal
authority to pledge the Collateral in the manner hereby done
or contemplated.
(b) PRIORITY OF LIEN OF TRUSTEE. By virtue of the execution
and delivery by the Pledgor of this Agreement, when the certificates
representing the Pledged Stock owned by the Pledgor are delivered to
the Trustee in accordance with this Agreement, the Trustee will obtain
a valid and perfected first priority Lien upon and security interest in
such Pledged Stock.
(c) VOTING RESTRICTIONS. There are no contractual restrictions
upon the voting rights or upon the transfer of any of the shares of the
Pledged Stock set forth on Annex 1.
(d) RIGHT TO VOTE. The Pledgor has the right to vote (to the
extent such shares have voting rights), pledge, and grant a security
interest in the Pledged Stock free of any encumbrances.
(e) GOVERNMENTAL AUTHORITIES. The Pledgor's execution and
delivery of this Agreement, the pledging of the Collateral hereunder
and the perfection of the security interest granted to the Trustee
hereby does not require the consent, approval or authorization of, or
filing, registration or qualification with, any Governmental Authority,
including, without limitation, any securities exchange, other than the
filing of appropriate Uniform Commercial Code financing statements (or
other appropriate instruments evidencing security interests) in each of
the jurisdictions listed on Annex 2.
(f) PLEDGED STOCK. The stock certificates set forth on Annex 1
evidence all of the issued and outstanding shares of capital stock of
the Subsidiaries.
(g) ENFORCEABILITY. This Agreement constitutes the legal,
valid and binding obligation of the Pledgor, enforceable in accordance
with its terms, except as such enforceability may be affected by
applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights generally and by general
principles of equity, including judicial discretion in the enforcement
thereof.
(h) NO CONFLICT. The execution, delivery and performance in
accordance with its terms of this Agreement do not violate, conflict
with, result in a breach of or constitute a default under
(i) any charter, bylaw, contract or other instrument of
agreement to which the Pledgor is a party or by which its
Property may be bound, or
(ii) to the Pledgor's knowledge, applicable law.
9
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 12
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
4.4 SUBSEQUENT CHANGES AFFECTING THE COLLATERAL.
The Pledgor represents and warrants that it has made its own
arrangements for keeping informed of changes or potential changes affecting the
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that neither the Trustee nor
any of the Beneficiaries shall have any responsibility or liability for
informing the Pledgor of any such changes or potential changes or for taking any
action or omitting to take any action with respect thereto.
4.5 PLEDGED STOCK COVENANTS.
(a) STOCK ISSUANCE. The Pledgor shall not permit or suffer any
Subsidiary or any other subsidiary of the Pledgor to, and no Subsidiary
shall:
(i) issue any stock, any right to receive stock or
any similar right (including, without limitation, warrants,
options and other similar agreements) whether in addition to,
by stock dividend or other distribution upon, or in
substitution for, the Pledged Stock or otherwise, unless such
issuance is not prohibited by any of the Lending Documents and
such stock or other Securities are effectively pledged
hereunder in a manner satisfactory to the Trustee; or
(ii) sell, assign, transfer, exchange or otherwise
dispose of, or grant any option with respect to, the
Collateral.
(b) SUBSIDIARIES. The Pledgor shall not:
(i) permit or suffer any Subsidiary or any other
subsidiary of the Pledgor to, and no Subsidiary shall,
dissolve or liquidate, retire any of its capital stock, reduce
its capital or merge or consolidate with any other entity,
except as otherwise expressly permitted by each of the Lending
Documents; or
(ii) vote any of the Pledged Stock in favor of any of
the foregoing.
(c) LIENS. The Pledgor will not cause or permit, or agree or
consent to cause or permit in the future (upon the happening of a
contingency or otherwise), any of the Collateral, whether now owned or
hereafter acquired, to be subject to a Lien other than the security
interest created by this Agreement.
4.6 PROTECTION OF COLLATERAL; REIMBURSEMENT.
All necessary expenses of protecting, storing, insuring, handling,
maintaining and shipping the Collateral, and all excise, property, sales and use
taxes imposed by any Governmental Authority on any of the Collateral or in
respect of the sale or other transfer thereof shall be borne and paid by the
Pledgor; and if the Pledgor shall fail to so pay any portion thereof when due,
the Trustee may at its option, but shall not be required to, pay the same and
charge the Pledgor
10
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 13
4. COVENANTS AND WARRANTIES CONCERNING COLLATERAL
therefor, and the Pledgor agrees to promptly reimburse the Trustee therefor with
interest at the highest rate then payable on any of the Secured Obligations. The
Pledgor shall pay all sums so paid or incurred by the Trustee in respect of any
of the foregoing, any and all sums for which the Pledgor may become liable under
this Agreement or under any other Lending Document and all costs and
out-of-pocket expenses (including reasonable attorneys' fees, legal expenses and
court costs) that the Trustee may incur in evaluating, asserting, enforcing,
defending or protecting its security interest in or rights and interest in, the
Collateral, or any of its rights or remedies under this Agreement or under any
other Lending Document, and, until paid by the Pledgor with interest at the
highest rate then payable on any of the Secured Obligations, such sums shall be
considered as additional Secured Obligations owing by the Pledgor and, as such,
shall be secured by the Collateral and the proceeds from the sale thereof.
5. DEFAULTS - REMEDIES
5.1 DEFAULT REMEDIES.
(a) REMEDIES. If an Event of Default shall exist hereunder,
the Trustee shall have, in addition to any other rights, all of the
rights and remedies with respect to the Collateral of a secured party
under the Code. In addition, to the extent permitted by applicable law,
if an Event of Default shall exist hereunder, the Trustee, at the
written instruction of the Majority Beneficiaries and on behalf of all
Beneficiaries, shall sell or cause to be sold all or any part of the
Collateral at public or private sale, in one (1) or more sales or lots,
at such price as the Majority Beneficiaries may deem best, and for cash
or on credit, or for future delivery, without assumption of any credit
risk, and the purchaser of any or all of the Collateral so sold shall
thereafter hold the Collateral so purchased absolutely, and free from
any claim, encumbrance, or right of the Pledgor of any kind whatsoever.
The Trustee will give the Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of
the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial
institutions disposing of Property similar to the Collateral shall be
deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is delivered to the Pledgor, as
provided herein, at least ten (10) days before the time of the sale or
disposition. Any other requirement of notice, demand, or advertisement
for sale is, to the extent permitted by law, waived.
(b) SETOFF. If an Event of Default shall exist hereunder, any
of the Beneficiaries may, without notice (with or without proceeding
with or causing a sale or sales, or a foreclosure or foreclosures, of
the Collateral or demanding performance by the Pledgor of the Secured
Obligations owing to such Beneficiary), appropriate and apply to the
payment of the Secured Obligations owed to it any and all Collateral in
its possession and any and all balances, credits, deposit accounts,
reserves, or other moneys due or owing to the Pledgor held by such
Beneficiary hereunder or otherwise, subject, however, to the terms and
provisions of the Trust Indenture.
11
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 14
5. DEFAULTS - REMEDIES
(c) PRIVATE SALE. Anything herein to the contrary
notwithstanding, and in view of the fact that federal and state
Securities laws may impose certain restrictions on the method by which
a sale of the Securities constituting all or part of the Collateral may
be effected after and during the continuance of an Event of Default,
the Pledgor agrees that, if an Event of Default shall exist hereunder,
the Trustee may, from time to time, attempt to sell all or any part of
such Securities by means of a private placement, restricting the
bidders and prospective purchasers to those who will represent or agree
as to their investment intent or method of resale or both in a manner
reasonably required by the Trustee to assure compliance with applicable
Securities laws. In so doing, the Trustee may solicit offers to buy
such Securities or any part thereof, for cash, from a limited number of
investors deemed by the Trustee, in its exclusive judgment or the
exclusive judgment of the Majority Beneficiaries, to be responsible
parties who might be interested in purchasing such Securities. If the
Trustee solicits such offers from not fewer than three (3) such
investors, then the acceptance by the Trustee of the highest offer
obtained therefrom shall be deemed to be a commercially reasonable
method of disposition of such Securities.
(d) REMEDIES ARE CUMULATIVE. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings
of the Pledgor contained in this Agreement and the other Lending
Documents, or in any document referred to herein or therein, or
contained in any agreement supplementary hereto or thereto, shall be
deemed in addition to, and not in derogation or substitution of, any of
the terms, covenants, conditions, or agreements of the Pledgor herein
or therein contained; and the giving, taking, or enforcement of any
other or additional security, collateral, or guaranty for the payment
or performance of the Secured Obligations shall not operate to
prejudice, waive, or affect the security of this Agreement, or any
rights, powers, or remedies hereunder, nor shall the Beneficiaries or
the Trustee be required to first look to, enforce, or exhaust, any such
other or additional security, collateral or guaranties. No course of
dealing on the part of any of the Beneficiaries or the Trustee, nor any
delay or failure on the part of such Beneficiaries or the Trustee to
exercise any right, shall impair such right or operate as a waiver of
such right or otherwise prejudice the rights, powers, and remedies of
such Beneficiaries or the Trustee. No waiver by the Beneficiaries or
the Trustee of any Default or Event of Default, whether such waiver be
full or partial, shall extend to or be taken to affect any subsequent
Default or Event of Default, or to impair the rights resulting
therefrom.
(e) EXPENSES. The Pledgor upon demand shall pay to the
Beneficiaries and the Trustee all of their respective out-of-pocket
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the
provisions hereof and all other charges due against the Collateral,
including, without limitation, taxes, assessments, and other amounts
secured by security interests, Liens, or encumbrances upon the
Collateral and any expenses, including transfer or other taxes, arising
in connection with any sale, transfer, collection, or other disposition
of the Collateral.
12
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 15
5. DEFAULTS - REMEDIES
5.2 EFFECT OF SALE, ETC.
(a) TITLE. Any sale or sales pursuant to the provisions of
this Agreement, whether under any right or power granted hereby or
pursuant to any legal proceedings, shall operate to divest the Pledgor
of all right, title, interest, claim and demand whatsoever, either at
law or in equity, of, in and to the Collateral, or any part thereof, so
sold, and any Property so sold shall be free and clear of any and all
rights of redemption by, through or under the Pledgor. At any such sale
one or more Beneficiaries or the Trustee acting on behalf of such
Beneficiaries may, to the extent permitted by applicable law, bid for
and purchase the Property sold and may make payment therefor as set
forth in Section 5.2(b), and any such Person so purchasing any such
Property, upon compliance with the terms of sale, may hold, retain and
dispose of such Property without further accountability to the Pledgor.
(b) APPLICATION OF PROCEEDS. The receipt by the Trustee, or by
any Person authorized under any judicial proceedings to make any such
sale, of the proceeds of any such sale shall be a sufficient discharge
to any purchaser of the Collateral, or of any part thereof, sold as
aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the event
that, at any such sale, any of the Beneficiaries is the successful
purchaser, it shall be entitled, for the purpose of making settlement
or payment, to use and apply such Collateral to its Secured Obligations
by crediting thereon the amount apportionable and applicable thereto
out of the net proceeds of such sale.
5.3 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any of the Beneficiaries (in accordance with the
Trust Indenture) shall have instituted any proceeding to enforce any right or
remedy hereunder, and such proceeding shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the Trustee or such
Beneficiary, then and in every such case, the Trustee and such Beneficiary
shall, subject to any determination in any such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and such Beneficiary shall continue as
though no such proceeding had been instituted.
5.4 CONSENT; MARSHALLING; SUBROGATION, ETC.
(a) CONSENT. The Pledgor hereby consents that from time to
time, before or after the occurrence or existence of any Event of
Default, with or without notice to or assent from the Pledgor, any
Collateral at such time held by or available to the Trustee or any of
the Beneficiaries or any other collateral at any time held by or
available to any such Beneficiary or the Trustee for any obligation of
any other Person secondarily or otherwise liable for any of the Secured
Obligations, may be exchanged, surrendered, or released, and any of the
obligations secured hereby or any of the obligations of such other
Person may be changed, modified, altered, renewed, extended, continued,
surrendered, compromised, waived, or released, in whole or in part, or
any other indulgences may be granted to the Pledgor, all as such
Beneficiary or the Trustee may
13
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 16
5. DEFAULTS - REMEDIES
see fit, and the Pledgor shall remain bound under this Agreement
notwithstanding any such exchange, surrender, change, modification,
alteration, renewal, extension, continuance, compromise, waiver, or
release.
(b) MARSHALLING. The Pledgor hereby acknowledges that neither
the Trustee nor any Beneficiary shall be under any obligation to
marshal any assets in favor of the Pledgor or against or in payment of
any or all of the Secured Obligations.
(c) SUBROGATION, ETC. The Pledgor hereby acknowledges that
until all of the Secured Obligations shall have been indefeasibly paid
in full and no Bank Lender is obligated to make a further advance under
the Bank Agreement, the Pledgor shall have no right of subrogation,
reimbursement, or indemnity whatsoever arising out of remedies
exercised by the Trustee or any Beneficiary.
5.5 APPLICATION OF PROCEEDS.
The proceeds of any exercise of rights with respect to the Collateral,
or any part thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to the Trustee and applied by the Trustee in accordance
with the provisions of the Trust Indenture. If there is a deficiency, the
Pledgor shall, subject always to the other provisions of this Agreement, remain
liable therefor and shall forthwith pay the amount of any such deficiency to the
Trustee.
5.6 WAIVERS BY THE PLEDGOR.
(a) ACCEPTANCE. The Pledgor hereby waives notice of acceptance
of this Agreement. The Pledgor further waives presentment and demand
for payment of any of the Secured Obligations, protest and notice of
dishonor or default with respect to any of the Secured Obligations, and
all other notices to which the Pledgor might otherwise be entitled,
except as otherwise expressly provided in this Agreement or any of the
other Lending Documents to which it is party.
(b) WAIVER OF VALUATIONS, ETC. The Pledgor (to the extent that
it may lawfully do so) covenants that it shall not at any time insist
upon or plead, or in any manner claim or take the benefit or advantage
of, any stay (except in connection with a pending appeal), valuation,
appraisal, redemption or extension law now or at any time hereafter in
force that, but for this waiver, might be applicable to any sale made
under any judgment, order or decree based on this Agreement or any
other Lending Document to which it is a party; and the Pledgor (to the
extent that it may lawfully do so) hereby expressly waives and
relinquishes all benefit and advantage of any and all such laws and
hereby covenants that it will not hinder, delay or impede the execution
of any power in this Agreement or in any other Lending Document granted
and delegated to the Trustee, but that it will suffer and permit the
execution of every such power as though no such law or laws had been
made or enacted.
14
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 17
5. DEFAULTS - REMEDIES
5.7 REGISTRATION RIGHTS.
In furtherance of the right of the Trustee to sell any or all of the
Collateral pursuant to Section 5.1, the Pledgor and each Subsidiary, as the case
may be, agrees that, following the occurrence of an Event of Default and upon
request of the Trustee and without expense to the Trustee, it will (and it will
cause the issuer of any of the Collateral to):
(a) use its best efforts to obtain all necessary governmental
approvals for the sale by the Trustee of the Collateral or any part
thereof;
(b) prepare, cause to be filed and use its best efforts to
cause to become effective with respect to the Collateral, regardless of
the number of shares or principal amount thereof, then held by the
Trustee, one or more registration statements under the Securities Act,
on Form S-1 (or such other form for which the respective issuer of the
shares or other Securities constituting Collateral then qualifies and
which is available for the sale of the Collateral in accordance with
the method of disposition thereof) or one or more qualifications for
exemption from registration under the Securities Act, or one or more
similar documents pursuant to any statute then in effect corresponding
to the Securities Act, relating to any public offering or sale by the
Trustee of such Collateral;
(c) prepare, cause to be filed and use its best efforts to
have such Collateral qualified or registered under the securities or
"Blue Sky" laws of such other jurisdictions as the Trustee may request
in connection with any such offering or sale;
(d) include in any such registration statement, qualification
statement or similar document all appropriate information relating to
the transaction or transactions in which the Trustee proposes to offer
or sell such Collateral;
(e) cause to be filed such post-effective amendments and
supplements to each such registration statement, qualification
statement or similar document (including, without limitation, any
prospectus or offering circular) as may be necessary to make any
statement therein contained not untrue or misleading, and such filing,
qualification or registration to be kept effective for such period as
the Trustee may deem appropriate to facilitate the sale or other
disposition of such Collateral;
(f) furnish the Trustee with such number of copies of each
such registration statement, qualification statement or similar
document, preliminary prospectus, prospectus, offering circular and any
post-effective amendments or supplements thereto as the Trustee may
request; and
(g) do such further acts and things as the Trustee may deem
necessary or advisable to effectuate the offering and sale by the
Trustee of such Collateral.
The Pledgor further agrees to indemnify and hold harmless the Trustee, each
Beneficiary and each underwriter (as defined in the Securities Act or any
statute then in effect corresponding to the Securities Act) acting in the
transaction, and each Person controlling (within the meaning of
15
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 18
5. DEFAULTS - REMEDIES
the Securities Act or such corresponding statute) the Trustee, any Beneficiary
or any such underwriter, from and against any and all claims, actions, damages,
demands, judgments, losses, liabilities and expenses based upon or arising out
of any actual or alleged untrue statement of a material fact contained in any
such registration statement, qualification statement or similar document, or
part thereof, or any actual or alleged omission to state a material fact
required to be stated in any such registration statement, qualification
statement or similar document, or part thereof, or necessary to make the
statements contained therein not misleading.
If the indemnification provided for in this Section 5.7 is unavailable
to or otherwise insufficient to hold harmless an indemnified party hereunder in
respect of any claims, actions, demands, judgments, losses, liabilities or
expenses referred to above, then the Pledgor shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of any claims, actions, demands, judgments, losses,
liabilities or expenses referred to above in such proportion as is appropriate
to reflect the relative fault of the Pledgor, the Trustee, each Beneficiary and
each underwriter in connection with the statements or omissions which resulted
in such indemnified party suffering any such claims, actions, demands,
judgments, losses, liabilities or expenses, as well as any other equitable
considerations. The relative fault of the Pledgor, the Trustee, each Beneficiary
and each underwriter shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Pledgor, the Trustee, such Beneficiary or such underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by the Pledgor as
a result of any claims, actions, damages, demands, judgments, losses,
liabilities and expenses shall be deemed to include any legal or other fees or
expenses reasonably incurred by any indemnified party in connection with
investigating or defending any action or claim. The Pledgor and the Trustee
agree that it would not be just and equitable if contribution pursuant to this
paragraph were determined by any method of allocation that did not take account
of the equitable considerations referred to in this paragraph.
The registration and other rights provided in this Section 5.7 may be
transferred to any purchaser of the Collateral, or any portion thereof, at any
sale described in Section 5.1. The Trustee may exercise its rights and powers
under this Section 5.1 prior to any sale pursuant to Section 5.1 or,
alternatively, the Trustee may assign such rights to the purchaser at any such
sale, who shall then have the registration rights and other rights specified
herein.
The Pledgor and each Subsidiary further agrees that a breach of any of
the covenants contained in this Section 5.7 will cause irreparable injury to the
Beneficiaries, that the Beneficiaries have no adequate remedy at law in respect
of such breach and, as a consequence, agrees that each and every covenant
contained in this Section 5.7 shall be specifically enforceable against the
Pledgor and each Subsidiary, and the Pledgor and each Subsidiary hereby waives
and agrees not to assert any defenses against an election for specific
performance of such covenants except for a defense that no portion of the
Secured Obligations is then due and payable.
16
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 19
6. MISCELLANEOUS 6. MISCELLANEOUS
6.1 NOTICES.
All communications under this Agreement shall be in writing and shall
be made to the Persons and addresses, and in the manner, provided in the Trust
Indenture.
6.2 WAIVER AND AMENDMENT.
No provision of this Agreement will be waived, amended, modified or
supplemented except by a written instrument executed by the Obligors and the
Trustee in accordance with the Trust Indenture.
6.3 SURVIVAL.
All warranties, representations, and covenants made by the Pledgor
herein or in any certificate or other document or instrument delivered by it or
on its behalf under this Agreement shall be considered to have been relied upon
by the Beneficiaries and shall survive the delivery to the Trustee of the
Collateral regardless of any investigation made by such Beneficiaries, from time
to time, of Secured Obligations or any other Person on their behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Pledgor hereunder. This Agreement shall be
binding upon the Pledgor and its successors and assigns, and shall inure to the
benefit of and be enforceable by the Beneficiaries.
6.4 SUCCESSORS AND ASSIGNS.
Whenever any of the parties to this Agreement is referred to, such
reference shall be deemed to include the successors and assigns of such party,
and all the covenants, promises and agreements in this Agreement contained by or
on behalf of any of the Obligors, or by or on behalf of the Trustee, shall bind
and inure to the benefit of the respective successors and assigns of such
parties whether so expressed or not.
6.5 ADDITIONAL PARTIES.
Any Person which becomes the owner of capital stock Subsidiary after
the Closing Date and which is required, pursuant to the Trust Indenture or any
other Lending Document, to become a party to this Agreement shall execute and
deliver a duplicate original of this Agreement and, upon acceptance thereof by
the Trustee, such Person shall become a "Pledgor" under this Agreement for all
purposes and shall be deemed to have made the covenants and agreements of the
Pledgor set forth herein as of the date of the execution and delivery of such
acknowledgment and agreement (including, without limitation, the grant of the
security interest contained in Section 3) and shall comply with all other
obligations to be performed by a Pledgor.
17
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 20
6. MISCELLANEOUS
6.6 SUBJECT TO TRUST INDENTURE.
Any and all rights granted to the Trustee under this Agreement are to
be held and exercised by the Trustee as security trustee for the benefit of the
Beneficiaries pursuant to the provisions of the Trust Indenture. To the extent
set forth in the Lending Documents, each of the Beneficiaries shall be a
beneficiary of the terms of this Agreement. Any and all obligations under this
Agreement of the parties to this Agreement, and the rights and indemnities
granted to the Trustee under this Agreement, are created and granted subject to,
and in furtherance (and not in limitation) of, the terms of the Trust Indenture.
Nothing in this Agreement expressed or implied is intended or shall be construed
to give to any Person other than the Pledgor, the Beneficiaries and the Trustee
any legal or equitable right, remedy, or claim under or in respect of this
Agreement or any covenant, condition, or provision herein contained; and all
such covenants, conditions, and provisions are and shall be held to be for the
sole and exclusive benefit of the Pledgor, the Beneficiaries and the Trustee.
6.7 TERM OF AGREEMENT.
This Agreement shall be and remain in full force and effect until
terminated in accordance with the Trust Indenture; provided, that all
indemnities of the Pledgor contained in this Agreement shall survive, and remain
operative and in full force and effect regardless of, the termination of this
Agreement.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
6.9 COUNTERPARTS.
This Agreement may be executed and delivered in any number of
counterparts, each of such counterparts constituting an original but all
together one (1) and the same Agreement.
[Remainder of page intentionally blank. Next page is signature page.]
18
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Agreement of the
date first above mentioned.
SPECTRAN CORPORATION
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN SPECIALTY OPTICS
COMPANY
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
APPLIED PHOTONIC DEVICES, INC.
By /s/ Bruce A. Cannon
--------------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 22
FLEET NATIONAL BANK, AS TRUSTEE
By /s/ Michael T. Quaile
--------------------------------------
Name: Michael T. Quaile
Title: Corporate Trust Officer
SPECTRAN CORPORATION PLEDGE AGREEMENT
<PAGE> 23
Annex 1 to Pledge Agreement
PLEDGED STOCK
SpecTran Specialty Optics Company Stock Certificate No. 1 for 10 shares of
common stock, par value $.01 per share, issued to SpecTran Corporation.*
SpecTran Communication Fiber Technologies, Inc. Stock Certificate No. 1 for 10
shares of common stock, par value $.01 per share, issued to SpecTran
Corporation.**
Applied Photonic Devices, Inc. Stock Certificate No. 1 for 10 shares of common
stock, par value $.01 per share, issued to SpecTran Corporation.
* This stock certificate was issued under the name EBOC Acquisition Corp.
The company changed its name to SpecTran Specialty Optics Company on
February 7, 1994.
** This stock certificate was issued under the name PTI Acquisition Corp.
The company changed its name to SpecTran Fiber Communication
Technologies, Inc. on October 8, 1995.
<PAGE> 24
ANNEX 2
LIST OF OFFICES IN WHICH FINANCING STATEMENTS OR OTHER APPROPRIATE
INSTRUMENTS EVIDENCING SECURITY INTERESTS ARE FILED
<TABLE>
<CAPTION>
DEBTOR NAME SECURED PARTY FILING OFFICE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SPECTRAN CORPORATION Fleet National Bank, as Trustee Financing Statements:
---------------------
Massachusetts Secretary of the Commonwealth
Worcester County, MA
Town of Sturbridge, MA
Connecticut Secretary of the State
Patent & Trademark:
-------------------
Commissioner of Patents & Trademarks
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN COMMUNICATION FIBER Fleet National Bank Financing Statements:
TECHNOLOGIES, INC. ---------------------
Massachusetts Secretary of the Commonwealth
Worcester County, MA
Town of Sturbridge, MA
Florida Secretary of State
Virginia Secretary of the Commonwealth
Mortgage:
---------
Worcester County, Registry of Deeds
Patent & Trademark:
-------------------
Commissioner of Patents & Trademarks
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN SPECIALTY OPTICS COMPANY Fleet National Bank Financing Statements:
---------------------
Connecticut Secretary of the State
Town Clerk, Avon, CT
Massachusetts Secretary of the Commonwealth
Town of Sturbridge, MA
Mortgage:
---------
Town Clerk, Avon, CT
Patent & Trademark:
-------------------
Commissioner of Patents & Trademarks
- -----------------------------------------------------------------------------------------------------------------------------
SPECTRAN CORPORATION Annex 2-1 PLEDGE AGREEMENT
</TABLE>
<PAGE> 25
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
APPLIED PHOTONIC DEVICES, INC. Fleet National Bank, as Financing Statements:
Trustee Connecticut Secretary of the
State
Town Clerk, Killingly, CT
Town Clerk, Brooklyn, CT
Massachusetts Secretary of the
Commonwealth
Town Clerk, Avon, CT
Patent & Trademark:
Commissioner of Patents &
Trademarks
- ---------------------------------------------------------------------------------------------
</TABLE>
SPECTRAN CORPORATION Annex 2-2 PLEDGE AGREEMENT
<PAGE> 1
EXHIBIT 10.94
<PAGE> 2
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (as
amended, extended, renewed, consolidated, spread or otherwise modified from time
to time, this "MORTGAGE") is dated as of December 1, 1996, by SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation whose address and
principal place of business is 50 Hall Road, Sturbridge, Massachusetts 01566
("GRANTOR"), to FLEET NATIONAL BANK, a national banking association, not
individually but solely as security trustee under a certain Trust Indenture (as
may be amended, restated or otherwise modified from time to time, the "TRUST
INDENTURE"), dated as of the date hereof, among the Grantor, Fleet National Bank
(in its capacity as such security trustee, and together with any successor or
co-security trustee that becomes such in accordance with the provisions of the
Trust Indenture, the "GRANTEE") and the other parties signatory thereto.
W I T N E S S E T H:
WHEREAS, Grantor, SpecTran Corporation, a Delaware corporation having
an address at 50 Hall Road, Sturbridge, Massachusetts 01566 (the "PARENT"),
SpecTran Specialty Optics Company ("SSOC"), a Delaware corporation having an
address at 150 Fisher Drive, Avon, Connecticut 06001, and Applied Photonic
Devices, Inc. ("APD"), a Delaware corporation having an address at 300 Lake
Road, Dayville, Connecticut 06241, and Fleet National Bank, a national banking
association as "LENDER," have entered into a certain Loan Agreement (as amended
from time to time, the "LOAN AGREEMENT") dated as of December 1, 1996, a copy of
which is attached hereto as SCHEDULE 1 and made a part hereof and the terms of
which are incorporated herein, which provides for the extension of credit to
Grantor, the Parent, SSOC and APD in the nature of a revolving line of credit
facility (the "FACILITY") as evidenced by a certain revolving promissory note in
face amount of $20,000,000, which may be increased by amendment from time to
time, dated December 1, 1996, bearing interest and being payable as set forth
therein and in the Loan Agreement, and maturing on December 31, 1999, all as
more particularly provided therein and in the Loan Agreement (as presently
constituted and as they hereafter may be amended, extended, renewed or
consolidated from time to time, together with any and all promissory notes that
may have been or may be exchanged or given in substitution therefor from time to
time, being collectively referred to herein as the "REVOLVING CREDIT NOTES"), a
copy of which is attached hereto as SCHEDULE 2 and made a part hereof and the
terms of which are incorporated herein;
WHEREAS, Grantor is primarily, unconditionally and jointly and
severally liable along with the Parent, SSOC and APD for the indebtedness
evidenced by the Revolving Credit Notes;
WHEREAS, the Parent has entered into certain Note Purchase Agreements
dated as of December 1, 1996 (as the same may be amended from time to time,
collectively, the "NOTE
AFTER RECORDING, PLEASE RETURN
THIS INSTRUMENT TO:
HEBB & GITLIN, A PROFESSIONAL CORPORATION
ONE STATE STREET
HARTFORD, CONNECTICUT 06103
ATTENTION: THOMAS J. LOVE, ESQ.
<PAGE> 3
AGREEMENTS") with each of the persons listed on Schedule A attached thereto
(collectively, the "PURCHASERS"), pursuant to which the Purchasers have agreed,
subject to the terms and conditions contained in their respective Note
Agreements, to purchase one or more of the Parent's (i) 9.24% Series A Senior
Secured Notes due December 26, 2003, in the aggregate principal amount of
$16,000,000 (the "SERIES A NOTES"), or (ii) 9.39% Series B Senior Secured Notes
due December 26, 2004, in the aggregate principal amount of $8,000,000 (the
"SERIES B NOTES") (the Series A Notes and the Series B Notes, as presently
constituted and as they hereafter may be amended, extended, renewed or
consolidated from time to time, together with any and all promissory notes that
may have been or may be exchanged or given in substitution therefor from time to
time, being collectively referred to herein as the "TERM NOTES");
WHEREAS, each of the Term Notes is dated December 26, 1996, and each of
the Term Notes bears interest, provides for the payment of certain premiums
(including a Make-Whole Amount, as such term is defined therein) and other
amounts (including late charges, fees, reimbursements, costs, expenses and
indemnities) and is payable as set forth therein (with final maturity on the due
date thereof specified above);
WHEREAS, Grantor has guarantied, among other things, the due and
punctual payment of the principal (in the aggregate amount of $24,000,000) of,
and accrued and unpaid interest (including, without limitation, interest which
otherwise may cease to accrue by operation of any insolvency law, rule,
regulation or interpretation thereof) and the Make-Whole Amount on the Term
Notes and the due and punctual payment and performance by the Parent of all
other obligations of the Parent contained in the Term Notes and the Note
Agreements, all pursuant to a certain Guaranty Agreement of even date herewith
by Guarantor and the other parties signatory thereto (as amended from time to
time, the "GUARANTY AGREEMENT"), a copy of which is attached hereto as SCHEDULE
3 and made a part hereof and the terms of which are incorporated herein;
WHEREAS, all capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Trust Indenture; and
WHEREAS, as required by the Loan Agreement and the Note Agreements,
Grantor has agreed to execute and deliver this Mortgage to the Grantee as
security trustee for the benefit of the Beneficiaries as security for Grantor's
obligations from time to time evidenced by or arising in connection with the
Revolving Credit Notes, the Guaranty Agreement, the Trust Indenture or the other
Lending Documents (whether consisting of principal, interest, premiums, late
charges, fees, reimbursements, costs, expenses, indemnities or any other amounts
whatsoever) (said aggregate indebtedness and other obligations being hereinafter
referred to as the "SECURED INDEBTEDNESS") and as security for the keeping,
performance and observance of, and compliance with, all covenants, agreements,
conditions and other provisions required to be kept, performed, observed and
complied with by or on behalf of Grantor from time to time pursuant to the Trust
Indenture or the Lending Documents;
NOW THEREFORE, to secure the payment of the Secured Indebtedness and
the keeping, performance and observance of, and compliance with, all of such
covenants, agreements, conditions and other provisions, and in consideration of
the sum of Ten Dollars ($10) paid to Grantor and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Grantor does hereby grant, bargain, sell,
alienate, remise, release, convey, assign, transfer, mortgage,
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hypothecate, pledge, deliver, set over, warrant and confirm unto Grantee, its
successors and assigns, as security trustee as aforesaid, with MORTGAGE
COVENANTS, the following (collectively, the "PROPERTY"):
THE PROPERTY
The land described in EXHIBIT A attached hereto and made a part hereof
(the "LAND"), together with (i) all buildings, structures and improvements now
or hereafter situated on the Land (collectively, the "BUILDING"), (ii) all
right, title and interest of Grantor, whether now owned or hereafter acquired,
in and to all fixtures, fittings, machinery, appliances, equipment, apparatus,
furnishings and other tangible personal property now or hereafter located in or
on, or attached to, and used or intended to be used in connection with the Land
or the Building or in connection with the operation thereof (collectively, the
"EQUIPMENT") (the Building and the Equipment being hereinafter collectively
referred to as the "IMPROVEMENTS"), (iii) all right, title and interest of
Grantor, whether now owned or hereafter acquired, in and to all streets, roads,
sidewalks, alleys, ways, passages, public places, vaults, water courses, strips
and gores adjoining or otherwise providing access to, or used or intended to be
used in connection with, the Land or any of the Improvements, and the land lying
in the bed thereof, and (iv) all proceeds, products, extensions, additions,
improvements, betterments, renewals, substitutions, replacements, accessions,
accretions and relictions of and to all or any part of the Property described
above;
TOGETHER WITH all easements, rights-of-way, estates, interests,
benefits, powers, rights (including lateral support, drainage, slope, riparian,
littoral, sewer, water, air, oil, gas, mineral and subsurface rights),
privileges, claims, franchises, licenses, profits, tenements, hereditaments,
reversions, remainders and appurtenances in any way now or hereafter belonging,
relating to or appertaining to all or any part of the Property described above;
TOGETHER WITH all right, title and interest of Grantor (whether as
lessor, lessee or otherwise) in and to any and all leases, subleases, use,
occupancy and similar agreements now or hereafter relating to all or any part of
the Property described above (collectively, the "LEASES"), together with any and
all guaranties and security of, for or otherwise relating to any of the Leases,
and together with all rents, royalties, issues, profits, revenues, income and
other monetary benefits of and from the Property described above, whether now or
hereafter payable or accruing (collectively, the "RENTS"), including all rent
and other money now or hereafter payable or accruing under or in connection with
any of the Leases, and all rights of Grantor to collect and receive the same;
provided, however, that permission is hereby given to Grantor, so long as no
Default (as hereinafter defined) shall have occurred, to collect and use the
Rents as, but not before, they become due and payable, which permission shall
terminate immediately, without the necessity of any action, upon the occurrence
of any Default;
TOGETHER WITH all judgments, settlements, claims, awards, insurance
proceeds and other proceeds and compensation, and interest thereon, now or
hereafter made or payable in connection with any casualty or other damage to any
Property described above, or in connection with any condemnation proceedings
affecting any such Property or any damage to or taking of any such Property or
any rights thereto or any interest therein in connection with any exercise of
the power of eminent domain (or any conveyance in lieu of or under threat of any
such taking), together with any and all refunds or rebates of, or with respect
to, any insurance premiums, utility charges, taxes or other impositions relating
to any such Property and interest thereon, and
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together with all accounts, contract rights, general intangibles, actions and
rights in action arising from or relating to any such Property (including all
rights of Grantor in and to unearned or prepaid insurance premiums, utility
charges, taxes or other impositions relating to any such Property, any deposits
with respect thereto and any interest thereon); and
TOGETHER WITH all further or greater estate, right, title and interest
of Grantor, of whatever character (whether vested or contingent and whether now
owned or hereafter acquired), in and to any of the Property described above and
any rights or interests appurtenant thereto.
TO HAVE AND TO HOLD the Property unto Grantee, its successors and
assigns forever, to its and their own proper use and behoof, upon and subject to
the terms and conditions of this Mortgage.
This mortgage is upon the STATUTORY CONDITION and upon the further
condition that in the event of any breach thereof or upon the occurrence of any
Default (as hereinafter defined), Grantee shall have the STATUTORY POWER OF SALE
and may pursue any other right, power or remedy available to Grantee pursuant to
the Trust Indenture, any of the other Lending Documents or at law or in equity.
Grantor covenants and agrees with Grantee and the Beneficiaries, in
addition to the STATUTORY CONDITION, as follows:
ARTICLE I
SECTION 1.1. Grantor, for itself and its successors and assigns
forever, hereby covenants with and warrants to Grantee, its successors and
assigns forever, that Grantor is well and lawfully seized of the Land, the
Building and all other parts of the Property constituting real property as a
good indefeasible estate in fee simple, that Grantor has good and absolute title
to the Equipment and all other parts of the Property constituting personal
property (except Equipment owned by any person, other than Grantor, leasing
space in the Building and Equipment leased by any such lessee from any person
other than Grantor), that Grantor has good right, full power and lawful
authority, without the joinder or consent of any person, to give, grant,
bargain, sell, assign and confirm the Property in manner and form as written
above, and that the Property is free and clear of all claims, demands, liens,
security interests, charges, encumbrances and exceptions to title whatsoever,
except as permitted by the Lending Documents (the "PERMITTED EXCEPTIONS").
Grantor hereby binds itself, and its successors and assigns forever, to WARRANT
and DEFEND the Property unto Grantee, its successors and assigns forever,
against the claims of all persons whomsoever claiming or who may claim the same
or any part thereof, subject, however, to the Permitted Exceptions.
SECTION 1.2. Grantor shall keep, perform, observe and comply with, or
shall cause to be kept, performed, observed and complied with, all covenants,
agreements, conditions and other provisions required to be kept, performed,
observed and complied with by or on behalf of Grantor from time to time pursuant
this Mortgage, the Trust Indenture or the other Lending Documents. Without
limiting the generality of the immediately preceding sentence, Grantor shall
pay, when due, all Secured Indebtedness.
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SECTION 1.3. Grantor shall pay, when due, any and all mortgage
recording, intangible property and documentary stamp taxes, all similar taxes,
and all filing, registration and recording fees, which are now or hereafter may
become payable in connection with the Secured Indebtedness, this Mortgage, the
Trust Indenture or any of the other Lending Documents. Grantor shall pay when
due any and all excise, transfer and conveyance taxes which are now or hereafter
may become payable in connection with the Secured Indebtedness, this Mortgage,
the Revolving Credit Notes, the Guaranty or any of the other Lending Documents.
SECTION 1.4. The assignment set forth in the section entitled "The
Property" shall not be deemed to impose upon Grantee or any of the Beneficiaries
any of the obligations, duties or liabilities of Grantor under or in respect of
any lease. To the extent permitted by law, such assignment shall constitute an
absolute and present assignment of the rents, royalties, issues, profits,
revenues, income and other benefits described in said paragraph, subject,
however, to the conditional permission given to Grantor to collect and use the
same as provided above. Neither the existence nor the exercise of such
conditional permission shall subordinate such assignment to any subsequent
assignment by Grantor. Grantee is hereby irrevocably authorized and empowered,
at its option, (a) to demand, collect, receive and enforce payment of any and
all such Rents after the occurrence of any Default, and to give receipts,
releases and satisfactions therefor, whether or not Grantee shall have taken, or
at any time shall take, possession of all or any part of the Land or the
Improvements, and (b) to notify all lessees, licensees, invitees, occupants and
other users of all or any part of the Property of Grantee's rights under this
Mortgage.
SECTION 1.5. Grantor (as Debtor) hereby grants to Grantee (as Secured
Party) a security interest in all personal property and fixtures described in
the above section entitled "The Property", and in any and all other personal
property and fixtures now or hereafter constituting part of the Property. This
Mortgage, when filed for record in the real estate records of the recording
jurisdiction in which the Land is situated, shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures described in
the above section entitled "The Property". In addition to all rights and
remedies specified herein, Grantee shall have all the rights and remedies of a
secured party under the Uniform Commercial Code as in effect in the State in
which the Land is situated and under other applicable law. Any failure to file
any financing statement relating to this Mortgage shall not impair the validity
and enforceability of this Mortgage in any respect whatsoever.
SECTION 1.6. Upon request by Grantee or any Beneficiary, Grantor from
time to time shall make, execute and deliver, or cause to be made, executed and
delivered, to Grantee and the Beneficiaries, and where appropriate shall cause
to be recorded or filed, and from time to time thereafter to be re-recorded and
refiled at such times and in such offices and places as Grantee or any
Beneficiary shall reasonably deem desirable, any and all such further mortgages,
assignments, security agreements, financing statements, instruments of further
assurance, certificates and such other documents as Grantee or any Beneficiary
may reasonably consider necessary or desirable in order to effectuate, complete,
perfect, continue or preserve the obligations of Grantor under the Lending
Documents or the lien of this Mortgage upon all or any part of the Property.
SECTION 1.7. All money advanced by Grantee or by any of the
Beneficiaries pursuant to this Mortgage, the Trust Indenture or the other
Lending Documents, all money otherwise
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advanced by Grantee or by any of the Beneficiaries to protect the security of
this Mortgage and all costs, expenses and liabilities paid or incurred by
Grantee or by any of the Beneficiaries and reimbursable or payable by Grantor
pursuant to this Mortgage, the Trust Indenture or the other Lending Documents,
together with interest thereon at the Default Interest Rate or as otherwise
provided by law, shall be deemed to be a part of the Secured Indebtedness and
shall be secured by this Mortgage to the extent permitted by applicable law.
SECTION 1.8. Any and all future indebtedness of Grantor to any of the
Beneficiaries (including, without limitation, any amounts, costs, expenses and
liabilities payable by Grantor pursuant to any of the Lending Documents, any
additional loans or advances contemplated by any of the Lending Documents and
any and all other future indebtedness) shall be secured by this Mortgage equally
with, and with the same priority as, the proceeds initially advanced in respect
of the Secured Indebtedness.
ARTICLE II
DEFAULTS AND REMEDIES
SECTION 2.1. The term "DEFAULT", as used herein, means the occurrence
of any Event of Default under the Trust Indenture, as well as any failure of
Grantor to perform punctually and properly any agreement or condition contained
in this Mortgage.
SECTION 2.2. At any time during the continuance of any Default, Grantee
may, at Grantee's option, to the extent permitted by law, (i) take any one or
more of the actions and exercise and enforce any one or more of the rights and
remedies provided in this Mortgage, the Trust Indenture or any other Lending
Document, or (ii) pursue any other right, power or remedy available to Grantee,
at law or in equity. Grantee may take such actions and exercise and enforce such
rights and remedies, at Grantee's option, separately or concurrently and in such
order as Grantee may desire, either with or without entry in or on or taking
possession of all or any part of the Property and whether or not all or any part
of the Secured Indebtedness shall have been declared to be immediately due and
payable or shall otherwise be due and payable.
SECTION 2.3. Without limiting the foregoing, at any time during the
continuance of any Default, Grantee may, at its option, proceed by any
appropriate judicial or non-judicial action or proceeding to (i) foreclose this
Mortgage and sell or cause the sale of the Property, as an entirety or in
separate portions, pursuant to the judgment, order or decree of any court of
competent jurisdiction or pursuant to the STATUTORY POWER OF SALE or any other
power of sale now or hereafter available to Grantee under applicable law, or
(ii) to the extent permitted by law, pursue the partial foreclosure of this
Mortgage for any part of the Secured Indebtedness then due and payable, subject
to the continuing encumbrance of this Mortgage as security for the balance of
the Secured Indebtedness not then due and payable.
SECTION 2.4. Without limiting the foregoing, at any time during the
continuance of any Default, Grantee, to the extent permitted by law and without
regard to the value or adequacy of the Property or any other security for the
Secured Indebtedness or the solvency of Grantor, shall be entitled as a matter
of right and without notice, if it so elects, to the appointment of a receiver
to enter upon and take possession of the Property, collect the Rents and apply
the Rents so collected as the court making such appointment may direct or as
otherwise permitted by law.
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Grantor hereby specifically and irrevocably consents to such appointment. The
receiver shall have all rights and powers permitted under law and such other
rights and powers as the court making such appointment shall confer. The
receiver shall be liable to account only for Rents actually received by the
receiver.
SECTION 2.5. Without limiting the foregoing, at any time during the
continuance of any Default, Grantee, to the extent permitted by law and without
regard to the value or adequacy of the Property or any other security for the
Secured Indebtedness or the solvency of Grantor, shall have the right, power and
authority, if it so elects, with or without taking possession of all or any part
of the Property, in Grantee's own name or otherwise, demand, collect, receive,
sue for, attach and levy the Rents, give proper receipts, releases and
acquittances therefor and, after deducting all necessary and reasonable expenses
of collection (including reasonable attorneys' fees), apply the net proceeds
thereof, together with any funds of Grantor or any other person deposited with
Grantee, toward payment of the Secured Indebtedness, in such order and priority
as Grantee may determine. Collection and application of the Rents as
contemplated in this Section shall not cure or waive any Default, waive, modify
or affect any notice of default under the terms of any of the Lender Documents
or this Mortgage, or invalidate any act done pursuant to any such notice, and
any exercise of Grantee's right to collect and apply the Rents shall continue
for so long as Grantee shall elect, notwithstanding that such collection and
application of the Rents may have cured for a time the original Default. If,
after exercising rights under this Section, Grantee shall thereafter elect to
discontinue the exercise of such right, the same or any other right under this
Section may be reasserted at any time and from time to time following any
subsequent Default.
SECTION 2.6. Neither Grantee nor any Beneficiary shall be obligated to
perform or discharge any obligation, duty or liability under any of the Leases
or under or by reason of this Mortgage. Grantor shall, and does hereby agree to,
defend and indemnify Grantee and each of the Beneficiaries, and hold each of
them harmless, from and against (i) any and all liability, loss or damage which
may or might be incurred by any or all of them under any of the Leases or under
or by reason of this Mortgage or in any manner related to the Property or the
use thereof or to the operation of any enterprise on or related to the Property,
and (ii) any and all claims and demands whatsoever which may or might be
asserted against any or all of them by reason of any alleged obligations or
undertakings on its or their part to perform or discharge any of the terms,
covenants or agreements contained in any of the Leases or under or by reason of
this Mortgage. It is further understood that this Mortgage shall not operate to
place responsibility upon Grantee or the Beneficiaries, or any of them, for the
control, care, management or repair of the Property or for the carrying out of
any of the terms and conditions of any of the Leases; nor shall this Mortgage
operate to make Grantee or the Beneficiaries, or any of them, responsible or
liable for any act or omission by any lessee under any of the Leases or by
Grantor, or for any waste committed on the Property by any such lessee or by
Grantor or any other person, or for any dangerous, defective or illegal
condition of the Property, or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss, injury or death to any
lessee, licensee, invitee, occupant, user, employee or stranger, and Grantor
shall, and does hereby agree to, defend and indemnify Grantee and the
Beneficiaries, and hold each of them harmless, from and against the same.
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ARTICLE III
MISCELLANEOUS
SECTION 3.1. To the extent any term or provision of this Mortgage is
irreconcilably inconsistent with any provision of any Lender Document, such
inconsistent provision of the Lending Document shall control only as between
Grantor and each party to the Lending Documents but not any person which is not
a party thereto. All covenants, agreements conditions and other provisions of
this Mortgage shall run with the Land and shall bind and inure to the benefit of
Grantor, Grantee, the Beneficiaries and their respective successors and assigns,
whether so expressed or not. Any and all rights granted to the Grantee under
this Mortgage are to be held and exercised by the Grantee as security trustee
for the benefit of the Beneficiaries, pursuant to the provisions of the Trust
Indenture. To the extent set forth in the Lending Documents and any other
document or instrument creating or evidencing any Secured Indebtedness, each of
the Beneficiaries shall be a beneficiary of the terms of this Mortgage. Any and
all obligations of Grantor under this Mortgage, and the rights and indemnities
granted to the Grantee under this Mortgage, are created and granted subject to,
and in furtherance (and not in limitation) of, the terms of the Trust Indenture.
Nothing in this Mortgage expressed or implied is intended or shall be construed
to give to any Person other than the Grantor, the Beneficiaries and the Grantee
any legal or equitable right, remedy or claim under or in respect of this
Mortgage or any covenant, condition or provision herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Grantor, the Beneficiaries and the Grantee.
SECTION 3.2. Grantor agrees, to the extent permitted by law, that
neither Grantor nor any person at any time claiming through or under Grantor or
who hereafter may otherwise acquire any interest in or title to all or any part
of the Property or any other security for the Secured Indebtedness shall set up,
claim or seek to take advantage of any law now or hereafter in force pertaining
to the rights of sureties or providing for any appraisement, valuation, stay,
notice of election to accelerate maturity or to declare the Secured Indebtedness
due, extension, redemption, moratorium, homestead or exemption from execution or
sale, in order to prevent or hinder the foreclosure of this Mortgage during the
continuance of any Default, the final and absolute sale of all or any part of
the Property or the final and absolute putting into possession thereof,
immediately after any such sale, of the purchaser or purchasers at such sale or
the enforcement of any other rights or remedies of Grantee or any of the
Beneficiaries under this Mortgage, the Trust Indenture or any of the other
Lending Documents. Grantor, for itself and for any and all persons who may at
any time claim through or under Grantor or who hereafter may otherwise acquire
any interest in or title to all or any part of the Property or any other
security for the Secured Indebtedness, hereby irrevocably waives and releases,
to the extent permitted by law, all benefit of any and all such laws, any and
all rights of redemption from sale pursuant to any judgment, order or decree of
foreclosure of this Mortgage or any power of sale now or hereafter available to
Grantee under applicable law, and any and all right to have the assets
constituting the Property or any other security for the Secured Indebtedness
marshalled upon any foreclosure or other enforcement of this Mortgage. Neither
Grantee nor any of the Beneficiaries shall be required to accept the Property,
any part or parts thereof or any other security for the Secured Indebtedness in
satisfaction of all or any part of the Secured Indebtedness. Neither Grantee nor
any of the Beneficiaries shall be required to accept any apportionment of the
Secured Indebtedness to or among any part or parts of the Property or any
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0ther security for the Secured Indebtedness. If any law now in force of which
Grantor might take advantage despite this Section shall be repealed or shall
cease to be in force after the date hereof, then such law shall not thereafter
be deemed to preclude the application of this Section.
SECTION 3.3. If any provision of this Mortgage is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
of this Mortgage, the legality, validity, and enforceability of the remaining
provisions of this Mortgage shall not be affected thereby, and in lieu of each
such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Mortgage a provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable. If the rights and liens created by this Mortgage shall
be invalid or unenforceable as to any part of the Secured Indebtedness, then the
unsecured portion of the Secured Indebtedness shall be completely paid prior to
the payment of the remaining and secured portion of the Secured Indebtedness,
and all payments made on the Secured Indebtedness shall be considered to have
been paid on and applied first to the complete payment of the unsecured portion
of the Secured Indebtedness.
SECTION 3.4. Whenever this Mortgage requires or permits any consent,
approval, notice (except for notice of a foreclosure which shall be given in the
manner required by law), request, or demand from one party to another, the
consent, approval, notice, request, or demand must be in writing to be effective
and shall be deemed to have been given when sent or delivered in accordance with
the provisions of the Trust Indenture.
SECTION 3.5. This Mortgage will be construed under and governed by the
laws of the Commonwealth of Massachusetts.
SECTION 3.6. Time is of the essence of this Mortgage.
SECTION 3.7. Nothing contained in this Mortgage or the other Lending
Documents shall be construed to create a relationship of principal and agent,
partnership, or joint venture between Grantor, on the one hand, and Grantee and
the Beneficiaries, on the other.
SECTION 3.8. Each reference in this Mortgage to any gender shall be
deemed also to include any other gender, and the use in this Mortgage of the
singular shall be deemed also to include the plural and vice versa, unless the
context clearly requires otherwise. As used in this Mortgage, the term "PERSON"
means any and all individuals, sole proprietorships, partnerships, joint
ventures, associations, trusts, estates, business trusts, limited liability
companies, corporations (non-profit or otherwise), financial institutions,
governments (and agencies, instrumentalities and political subdivisions
thereof), and other entities, authorities and organizations of every type. As
used in this Mortgage, unless the context clearly requires otherwise, (i) the
words "herein," "hereof," "hereunder," "hereinafter" and "hereto" and words of
similar import shall be deemed to refer to this Mortgage as a whole and not to
any particular Article, Section, subsection, paragraph, subparagraph, Exhibit or
Schedule, and (ii) the words "include" and "including" shall be deemed to be
followed by the words "but not limited to."
SECTION 3.9. Grantor or certain affiliates of Grantor have heretofore
executed and delivered, and may hereafter execute and deliver, to Grantee
certain other mortgages, deeds of trust and other documents and instruments
encumbering certain other property of Grantor and
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such affiliates located in various States of the United States of America as
additional security for the Secured Indebtedness or for the obligations of such
affiliates under certain guaranties of the Secured Indebtedness. The holder of
any such security or any such guaranty, whether acting as a fiduciary or
otherwise, may foreclose pursuant to the Statutory Power of Sale or otherwise
enforce such security or such guaranty or otherwise enforce its rights, powers
and remedies with respect to, and realize upon, such security or guaranty,
either before or concurrently with or after a foreclosure or other enforcement
of this Mortgage, any other such security or guaranty or any of the Lending
Documents, all without being deemed to have waived any rights, benefits, liens
or security interests evidenced by or arising under or in connection with this
Mortgage, any other such security or guaranty or any of the Lending Documents
and without being deemed to have made an election thereby or to have accepted
the benefits of such security or guaranty (or the proceeds thereof) in full
settlement of the Secured Indebtedness and of its rights with respect thereto.
No judgment, order or decree with respect to any such other security or guaranty
or any of the Lending Documents, whether rendered in the State in which the Land
is situated or elsewhere, shall in any manner affect the security of this
Mortgage, and any deficiency or other debt represented by any such judgment,
order or decree shall, to the extent permitted by law, be secured by this
Mortgage to the same extent that the Secured Indebtedness shall have been
secured by this Mortgage prior to the rendering of such judgment, order or
decree. Grantor, for itself and for any and all persons who may at any time
claim through or under Grantor or who hereafter may otherwise acquire any
interest in or title to all or any part of the Property or any other security
for the Secured Indebtedness, hereby irrevocably waives and releases, to the
extent permitted by law, all benefit of any and all laws that would limit or
prohibit the effectiveness of anything set forth in this Section.
SECTION 3.10. If all or any part of any payment on account of the
Secured Indebtedness shall be invalidated, set aside, declared or found to be
void or voidable or required to be repaid to Grantor or to any trustee,
custodian, receiver, conservator, master, liquidator or other person pursuant to
any present or future law relating to bankruptcy, reorganization, arrangement,
composition, readjustment, liquidation, dissolution or insolvency or pursuant to
any common law or equitable cause, then, to the extent of such invalidation, set
aside, voidness, voidability or required repayment, neither the Secured
Indebtedness nor the lien or security of this Mortgage shall be deemed to have
been paid, satisfied, released or discharged, and, to the extent of such
invalidation, set aside, voidness, voidability or required repayment, the
Secured Indebtedness and the lien and security of this Mortgage shall be
immediately and automatically revived without the necessity of any action by
Grantor, Grantee or any of the Beneficiaries, and the lien and security of this
Mortgage shall continue in full force and effect thereafter until all of the
Secured Indebtedness shall have been fully, finally and indefeasibly paid.
[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE AND ACKNOWLEDGMENT
PAGE FOLLOWS]
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IN WITNESS WHEREOF, Grantor has executed this Mortgage as of the date
and year first above written.
Witnessed By: SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ Brian M. Hand By: Bruce A. Cannon
- ----------------------------- -------------------------------------
Name: Brian M. Hand Name: Bruce A. Cannon
Title: Secretary
[MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT OF
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.]
<PAGE> 13
STATE OF CONNECTICUT )
) SS.
COUNTY OF HARTFORD )
On this 26th day of December, 1996, before me personally appeared
Bruce A. Cannon, to me personally known, who, being by me duly sworn, did say
that he/she is the Secretary of SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.,
a Delaware corporation, that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, that he/she signed the foregoing instrument
on behalf of said corporation by authority of its board of directors, and
acknowledged said instrument to be his/her free act and deed and the free act
and deed of said corporation.
/s/ Lori L. Bridwell
---------------------------------------------
Notary Public
My Commission Expires: Nov. 30, 2000
[SEAL]
[MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT OF
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.]
<PAGE> 14
EXHIBIT A
Legal Description
PARCEL 1
- --------
The land situated in Sturbridge, Worcester County, Massachusetts, on the
easterly side of Hall Road, bounded and described as follows:
BEGINNING at the northwesterly corner thereof at an iron pipe in the ground at
a stone wall on the easterly line of Hall Road, being at the southwesterly
corner of land now or formerly of Frank T. Haynes;
THENCE S. 68 22' E. along stone wall by said Haynes land, 262.4 feet to an iron
pipe;
THENCE S. 69 05' E. the first part of the way along stone wall by said Haynes
land, 754 feet to a drill hole in stone wall at land now or formerly of Richard
McGilpin;
THENCE S. 41 13' W. along stone wall by said McGilpin land, 311.6 feet to a
point;
THENCE S. 42 17' W. along stone wall by said McGilpin land, 373.3 feet to an
iron pipe at land now or formerly of Hall;
THENCE N. 73 57' W. the last portion of the way along stone wall by land of
said Hall, 810.0 feet to an iron pipe in the ground at the easterly line of
Hall Road;
THENCE N. 24 25' 06" E. by the easterly line of Hall Road, 717.0 feet to the
point of beginning.
Containing 12.65 acres, more or less.
BEING the same premises conveyed to SpecTran Corporation by deed of Richard
Athanas, Robert J. Athanas and Patricia A. Turner, Trustees of Whithall Acres
dated June 10, 1981 and recorded with the Worcester District Registry of Deeds
in Book 7251, Page 329.
Exhibit A - 1
<PAGE> 15
PARCEL 2
- --------
The land situated in Sturbridge, Worcester County, Massachusetts, on the
easterly side of Hall Road, bounded and described as follows:
BEGINNING at an iron pipe on the easterly line of Hall Road distant 65.54 feet
southerly from an iron pipe on the easterly line of Hall Road at the
southwesterly corner of land of Whithall Acres Trust, and also distant 204.54
feet southerly from an intermediate highway bound opposite station 26+50 of the
1961 layout of Hall Road;
THENCE northeasterly along a curve to the right having a radius of 15.62 feet
by land now or formerly of Ernest W. Hall, et ux. 21.37 feet to an iron pipe;
THENCE S. 73 57' E. parallel to and 50 feet distant southerly from the
southerly boundary of land of said Whithall Acres Trust, by land now or
formerly of Ernest W. Hall, et ux. 197.26 feet to an iron pipe;
THENCE S. 24 25' 06" W. by land now or formerly of Ernest W. Hall, et ux.
230.88 feet to an iron pipe;
THENCE N. 65 34' 54" W. by land now or formerly of Ernest W. Hall, et ux.
210.00 feet to an iron pipe on the easterly line of Hall Road;
THENCE N. 24 25' 06" E. by the easterly line of Hall Road 185.00 feet to the
point of beginning.
Containing 43,600 square feet, more or less.
BEING the same premises conveyed to SpecTran Corporation by deed of Sylvia Aho,
Executor of the Estate of Katharine A. Fairbanks dated April 4, 1988 and
recorded with the Worcester District Registry of Deeds in Book 11286, Page 202.
Exhibit A - 2
<PAGE> 16
PARCEL 3
The land situated on the easterly side of Hall Road in Sturbridge, Worcester
County, Massachusetts, and being shown as Parcel "A" on a "Plan of Land in
Sturbridge, Massachusetts surveyed for the Estate of Ernest Hall" by Robert F.
Para, Land Surveyor", dated June 14, 1984 and recorded in the Worcester
District Registry of Deed at Plan Book 521 Plan 105, bounded and described
as follows:
BEGINNING at an iron pin on the easterly side of said Hall Road, at the
southwesterly corner of said parcel and at the northwesterly corner of Parcel
"B" on said plan;
THENCE S. 65 42' 45" E. along Parcel "B" on said plan 1000.84 feet to an iron
pin;
THENCE N. 14 49' 41" E. along land now or formerly of the Estate of William A.
Swiacki 415.07 feet to a point at the end of a stone wall;
THENCE N. 14 20' 10" E. along said Swiacki land 428.82 feet to a point;
THENCE S. 42 53' 41" W. along land now or formerly of SpecTran Corporation
174.32 feet to an iron pin;
THENCE N. 73 57' W. along said SpecTran land 810.00 feet to an iron pin on the
easterly side of said Hall Road;
THENCE S. 24 25' 06" W. along the easterly side of Hall Road 65.54 feet to a
point;
THENCE along land now or formerly of P. Fairbanks land northerly and then
easterly direction on a curve having a radius of 15.62 a distance of 21.37 feet
to a point;
THENCE N. 73 57' E. along said Fairbanks land 197.26 feet to an iron pin;
THENCE S. 24 25' 06" W. along said Fairbanks land 230.88 feet to an iron pin;
THENCE N. 65 21' 00" W. along said Fairbanks land 210.00 feet to an iron pin on
the easterly side of said Hall Road;
THENCE S. 24 25' 06" W. along the easterly side of said Hall Road 300.00 feet
to an iron pin at the point of beginning.
Containing an area of 12.258 acres.
BEING the same premises conveyed to SpecTran Corporation by deed of M. Mahmud
Awan dated October 18, 1984 and recorded with the Worcester District Registry
of Deeds in Book 8413, Page 48.
Exhibit A-3
<PAGE> 17
PARCEL 4
The land situated on the easterly side of Hall Road in Sturbridge, Worcester
County, Massachusetts, and being shown on a plan entitled "Plan of Land in
Sturbridge, MA. Surveyed for SpecTran Corporation, October 17, 1983, Robert F.
Para, Land Surveyor", said plan being recorded with the Worcester Registry of
Deeds in Plan Book 512, Plan 76 and more particularly bounded and described as
follows:
BEGINNING at an iron pipe at the southwest corner of tract herein described on
the easterly side of the 1961 Town layout of Hall Road, at the northwest corner
of other land of SpecTran Corporation;
THENCE N. 24 25' 06" E. along the easterly side of said Road, a distance of
629.02 feet to a granite bound;
THENCE running northerly along the easterly side of said Road, on a curve to
the right, having a radius of 1190.00 feet and a length of 252.12 feet to a
granite bound;
THENCE S. 51 54' 44" E. along a stone wall and land now or formerly of the
Estate of William A. Swiacki, a distance of 596.90 feet to an iron pipe;
THENCE S. 50 31' 50" E. along a stone wall and said Swiacki land, a distance
of 215.40 feet to an iron pipe;
THENCE S. 50 28' 50" E. along a stone wall and said Swiacki land, a distance of
171.66 feet to an iron pipe;
THENCE S. 49 27' 10" E. along a stone wall and said Swiacki land, a distance
of 211.61 feet to an iron pipe in a corner of walls;
THENCE S. 42 01' 47" W. along a stone wall and said Swiacki land, a distance
of 455.11 feet to an iron pipe;
THENCE S. 43 05' 27" W. along a stone wall and said Swiacki land, a distance
of 101.68 feet to a drill hole;
THENCE N. 68 32' 05" W. along the remains of a virginia rail fence and a stone
wall and land of SpecTran Corporation, a distance of 753.00 feet to an iron
pipe;
THENCE N. 68 22' 00" W. along a stone wall and said SpecTran land, a distance
of 262.4 feet to the point of beginning.
Containing an area of 18.20 acres.
BEING the same premises conveyed to SpecTran Corporation by deed of Frank T.
Haynes dated December 12, 1983 and recorded with the Worcester District
Registry of Deeds in Book 8019, Page 6.
Exhibit A-4
<PAGE> 18
SCHEDULE 1
LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of December 1, 1996 and is among SPECTRAN
CORPORATION ("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY ("Optics"), APPLIED
PHOTONIC DEVICES, INC. ("Photonic"), SPECTRAN COMMUNICATION FIBER TECHNOLOGIES,
INC. ("Communication") and FLEET NATIONAL BANK (the "Lender"). Each of SpecTran,
Optics, Photonic and Communication are sometimes referred to as a "Borrower" and
collectively the "Borrowers".
W I T N E S S E T H:
BACKGROUND. The Borrowers have requested the Lender to lend up to the sum of
$20,000,000.00 (the "Loan") and the Lender is willing to do so upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained, and each
intending to be legally bound hereby, the parties agree as follows:
ARTICLE
1
DEFINITIONS
As used herein:
1.1 "Affiliate" means, as to any Person, each other Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.
1.2 "Agreement" means this Loan Agreement, as the same may from time to time be
amended or supplemented.
1.3 "Borrowing Base" means $20,000,000.00 minus the face amount of all
outstanding letters of credit issued by the Lender for the account of any
Borrower.
1.4 "Business Day" means a day other than a Saturday, a Sunday, or a day on
which commercial banks in Worcester, Massachusetts are authorized to close.
1.5 "Capital Leases" means capital leases, conditional sales contracts and other
title retention agreements relating to the purchase or acquisition of
Consolidated Capital Assets.
<PAGE> 19
1.6 "Change in Control" means, if, prior to January 1, 2000, 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), other than Current
Management, or a group of which Current Management is a part, become the
"beneficial owners" (as such term is used in Rule 13d-3 under the Exchange Act
as in effect on the date of the Closing), directly or indirectly, of more than
the Control Percentage of the total voting power of all classes then outstanding
of SpecTran's voting stock.
1.7 "Closing" has the meaning given to such term in Section 3.1.
1.8 "Collateral Documents" means the Mortgages, the Security Agreement, the
Trust Indenture, the Pledge Agreement, the Patent Collateral Assignment, the
Trademark Security Agreement and the documents, whether deliverable at or after
the Closing, referenced in Exhibit 3.1(q) attached hereto.
1.9 "Consolidated Assets" means all assets of the Borrowers, including without
limitation, all assets that should be classified as assets on the consolidated
balance sheet of the Borrowers prepared in accordance with GAAP.
1.10 "Consolidated Capital Assets" means Consolidated Assets of the Borrowers
that are required or permitted to be depreciated or amortized in accordance with
GAAP.
1.11 "Consolidated Capital Expenditures" means, for the applicable period, the
aggregate amount of the Borrowers' expenditures for the acquisition,
construction, improvement, replacement or purchase of Consolidated Capital
Assets, including but not limited to, expenditures funded under Capital Leases.
1.12 "Consolidated Earnings Available for Fixed Charges" means, for the
applicable period, Consolidated Net Income plus Consolidated Interest, income
tax expense and Consolidated Minimum Operating Lease Rentals to the extent
deducted in the determination of Consolidated Net Income for the applicable
period, determined on a consolidated basis for the applicable period, 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 Consolidated Indebtedness in
connection therewith, assuming for purposes of calculation but all such
acquisitions and dispositions that occurred during such period occurred on the
first day of such period.
1.13 "Consolidated EBITDA Cumulative" means, Consolidated Operating Income minus
income (based on the equity method of accounting in accordance with GAAP)
derived from unconsolidated Subsidiaries or other Persons plus Consolidated
Interest and consolidated taxes, depreciation and amortization determined on a
rolling four (4) quarters basis in accordance with GAAP.
1.14 "Consolidated Fixed Charges" means, for the applicable period, the sum of
Consolidated Minimum Operating Lease Rentals for such period plus Consolidated
Interest to the extent
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<PAGE> 20
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 Consolidated Indebtedness 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.
1.15 "Consolidated Indebtedness" means, as to the Borrowers:
(a) Obligations for borrowed money;
(b) Obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of the Borrowers' business payable on terms customary in the trade);
(c) Obligations, whether or not assumed, secured by liens;
(d) Obligations with respect to notes, acceptances, letters of
credit, guarantees or other instruments; and
(e) Obligations under Capital Leases.
1.16 "Consolidated Interest" means, for the applicable period, interest paid or
payable by the Borrowers, including but not limited to, interest paid or payable
on Consolidated Indebtedness determined in accordance with GAAP.
1.17 "Consolidated Interest Coverage Ratio" means, for the applicable period,
the ratio of Consolidated Earnings Available for Fixed Charges to Consolidated
Fixed Charges.
1.18 "Consolidated Leverage Ratio" means the ratio of Consolidated Liabilities
to Consolidated Tangible Net Worth.
1.19 "Consolidated Liabilities" means all liabilities of the Borrowers,
including without limitation, all liabilities that should be classified as
liabilities on a consolidated balance sheet of the Borrowers prepared in
accordance with GAAP.
1.20 "Consolidated Operating Lease Rentals" means, for the applicable period,
(a) all payments made by any Borrower 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 any Borrower by others in respect of fixed rental
payments under noncancelable subleases with a term of at least one (1) year on
properties of such Borrower subject to leases described in the immediately
preceding clause (a).
1.21 "Consolidated Net Income" means, for the applicable period, the Borrowers'
net income determined in accordance with GAAP.
3
<PAGE> 21
1.22 "Consolidated Operating Income" means, for the applicable period,
Consolidated Net Income less the sum of (a) extraordinary and non-recurring
gains and (b) gains from the sale of Consolidated Capital Assets plus the sum of
(x) extraordinary and non-recurring losses and (y) losses from the sale of
Consolidated Capital Assets.
1.23 "Consolidated Stockholders' Equity" means the aggregate of the following
accounts on the consolidated balance sheet of the Borrowers prepared in
accordance with GAAP: (a) the par or stated value of all outstanding capital
stock, (b) capital surplus and (c) retained earnings.
1.24 "Consolidated Tangible Net Worth" means Consolidated Stockholders' Equity,
less the sum of (a) any surplus resulting from any write up of Consolidated
Assets, (b) goodwill, including any amounts however designated on the
consolidated balance sheet of the Borrowers representing the excess of the
purchase price paid for assets or stock acquired over the value assigned thereto
on the books of any Borrower, (c) patents, trademarks, trade names, copyrights
and licenses, (d) any amount at which shares of capital stock of any Borrower
appear as an asset on the consolidated balance sheet of the Borrowers, (e) loans
and advances to Affiliates, stockholders, directors, officers or employees, (f)
deferred expenses, and (g) any other amount in respect of an intangible (except
for the tax intangible related to FASB 109) that should be classified as an
asset on a consolidated balance sheet of the Borrowers in accordance with GAAP.
1.25 "Control Percentage" means, prior to July 1, 2000, 30% and on and after
July 1, 2000, 50%.
1.26 "Current Management" means (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 SpecTran during the
proceeding period of twenty-four (24) consecutive months.
1.27 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.28 "Event of Default" has the meaning provided in Section 7.1.
1.29 "Financial Statements" means the audited, consolidated cash flow
statements, income statements and balance sheets of the Borrowers as of December
31, 1994 and December 31, 1995 and notes thereto certified by KPMG Peat Marwick,
LLP to present fairly the consolidated financial position and results of
operations of the Borrowers at such dates and for such periods in accordance
with GAAP and all other financial information delivered to the Lender from time
to time pursuant to Sections 6.01(b)(i), 6.01(b)(ii) and 6.01(b)(iii) of this
Agreement.
1.30 "GAAP" means generally accepted accounting principles applied consistently
with such changes or modifications thereto as may be approved in writing by the
Lender.
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<PAGE> 22
1.31 "Intellectual Property" means trademarks, service marks, trade names, trade
styles, logos, goodwill, trade secrets, patents, and licenses acquired under any
statutory, common law or registration process in any state or nation at any time
or under any agreement executed with any Person at any time. The term "license"
refers not only to rights granted by agreement from the owner of patents,
trademarks, service marks and the like but also to rights granted by a
franchiser under a franchise or similar agreement. The foregoing enumeration is
not intended as a limitation of the meaning of the word "license".
1.32 "Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any government or political subdivision or
agency thereof or of any court or similar entity established by any thereof.
1.33 "Mortgages" means the Mortgage, Assignment of Rents and Security Agreement
covering Communication's real property in Sturbridge, Massachusetts and the
Open-End Mortgage, Assignment of Rents and Security Agreement covering Optic's
real property in Avon, Connecticut each granted to the Trustee (as defined in
the Trust Indenture) and each dated as of December 1, 1996, as from time to time
supplemented or amended.
1.34 "Obligations" is intended to be used in its most comprehensive sense and
means the obligations of the Borrowers:
(a) To pay the principal of, and interest on, the Revolving
Note in accordance with the terms thereof and to satisfy all other liabilities
to the Lender (including without limitation with respect to letters of credit
issued by the Lender for the account of any Borrower) whether hereunder or
otherwise, whether now existing or hereafter incurred, matured or unmatured,
direct or contingent, joint or several, including any extensions, modifications,
renewals thereof and substitutions therefor;
(b) To repay to the Lender all amounts advanced by the Lender
hereunder or otherwise on behalf of any Borrower, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, or
repairs to, or maintenance or storage of, any of the Consolidated Assets; and
(c) To reimburse the Lender, on demand, for all of the
Lender's expenses and costs, including without limitation the reasonable fees
and expenses of its counsel, in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and the documents
required hereunder, including, without limitation, any proceeding brought, or
threatened, to enforce payment of any of the obligations referred to in the
foregoing paragraphs (a) and (b).
1.35 "Offering" means any public and/or private offering of the capital stock of
SpecTran occurring after the date of this Agreement.
1.36 "Note Purchase Agreements" means the Note Purchase Agreements between
SpecTran and each of Massachusetts Life Insurance Company, CM Life Insurance
Company, Mutual Life
5
<PAGE> 23
Insurance Company of New York and Pacific Mutual Life Insurance Company each
dated as of December 1, 1996, as from time to time supplemented or amended.
1.37 "Patent Collateral Assignment" means, the Patent Collateral Assignment
among the Borrowers and the Trustee (as defined in the Trust Indenture) dated as
of December 1, 1996, as from time to time supplemented or amended.
1.38 "Person" means any individual, corporation, limited liability corporation,
partnership, limited liability partnership, association, joint-stock company,
trust, unincorporated organization, joint venture, court, or government or
political subdivision or agency thereof.
1.39 "Permitted Liens" means:
(a) Liens for taxes, assessments, statutory obligations or
similar charges, incurred in the ordinary course of business, that are not yet
due and payable or if overdue being contested in good faith by appropriate and
lawful proceedings, so long as levy and execution thereon have been stayed and
continue to be stayed and they do not, in the aggregate, materially detract from
the value of the property of any Borrower or materially impair the operation of
any Borrower's business;
(b) Pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate in any
fund in connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(c) Liens of mechanics, materialmen, warehousemen, carriers or
other like liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable;
(d) Encumbrances consented to by the Lender in writing
including zoning restrictions, easements, or other restrictions on the use of
real property, none of which materially impairs the use of such property by any
Borrower in the operation of its business, and none of which is violated in any
material respect by existing or proposed structures or land use;
(e) Purchase money security interests granted to secure the
purchase price of assets, the purchase of which does not violate the terms of
this Agreement;
(f) Liens consented to by the Lender in writing; and
(g) Liens evidenced by the Collateral Documents
1.40 "Pledge Agreement" means the Pledge Agreement among the Borrowers and the
Trustee (as defined in the Trust Indenture) dated as of December 1, 1996, as
from time to time supplemented or amended.
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<PAGE> 24
1.41 "Records" means correspondence, memoranda, tapes, discs, papers, books and
other documents, or transcribed information of any type, whether expressed in
ordinary or machine readable language.
1.42 "Revolving Note" means the Revolving Note substantially in the form of
Exhibit 1.42 attached hereto.
1.43 "Security Agreement" means the Security Agreement among the Borrowers and
the Trustee (as defined in the Trust Indenture) dated as of December 1, 1996, as
from time to time supplemented or amended.
1.44 "Subsidiary" means any Affiliate (a) that is directly, or indirectly
through one or more intermediaries, controlled by any Borrower or (b) of which
not less than 50% of the voting capital stock is owned, directly or through one
or more intermediaries, by any Borrower.
1.45 "Trademark Security Agreement" means the Trademark Security Agreement among
the Borrowers and the Trustee (as defined in the Trust Indenture) dated as of
December 1, 1996, as from time to time supplemented or amended.
1.46 "Trust Indenture" means, the Trust Indenture among the Borrowers and the
Trustee (as defined therein) dated as of December 1, 1996 as from time to time
supplemented or amended.
1.47 Accounting. Accounting terms used and not otherwise defined in this
Agreement have the meanings determined by, and all calculations with respect to
accounting or financial matters unless otherwise provided herein shall be
computed in accordance with, GAAP.
ARTICLE
2
THE LOAN
2.1 General Terms.
Subject to the terms hereof, the Lender will lend the Borrowers the
principal sum of $20,000,000.00 on a revolving loan basis.
2.2 Disbursement.
The Lender will credit the proceeds of the Revolving Note to the Lender
to pay the existing Consolidated Indebtedness to the Lender in full and
thereafter, from time to time and subject to the terms hereof, to the Borrowers'
deposit account identified in Exhibit 2.2 attached hereto for working capital
and general corporate matters.
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<PAGE> 25
2.3 Revolving Note.
Subject to the terms hereof, the Lender will lend the Borrowers, from
time to time until December 31, 1999 (the "Termination Date") or the occurrence
of an Event of Default, whichever occurs first, such sums in integral multiples
of $1,000.00 (pursuant to the terms of the Revolving Note, advances subject to
LIBOR interest rates must be in multiples of $500,000.00) as any Borrower may
request by reasonable same day notice to the Lender, received by the Lender not
later than 12:00 p.m. of such day, but which shall not exceed, in the aggregate
principal amount at any one time outstanding, the Borrowing Base. The
Termination Date may be extended by the Lender, as determined in its sole and
absolute discretion, by written notice to any Borrower. The Borrowers may
borrow, repay without penalty or premium (except for repayments of principal
subject to LIBOR interest rates prior to the expiration of the Index Period as
more fully set forth in the Revolving Note) and reborrow hereunder, from the
date of this Agreement until the Termination Date or the occurrence of an Event
of Default, whichever occurs first. It is the intention of the parties that the
outstanding principal amount of the Revolving Note will not exceed the Borrowing
Base, and if, at any time, an excess shall for any reason exist, the full amount
of such excess, together with accrued and unpaid interest thereon, shall be
immediately due and payable in full.
2.4 Interest Rate and Payments of Interest.
Interest on the principal balance of the Loan from time to time
outstanding shall accrue at the rates and be payable as set forth in the
Revolving Note.
2.5 Payment to the Lender.
The Borrowers have designated the deposit account identified in Exhibit
2.2 attached hereto as the account for all payments under the Revolving Note and
hereunder. Notwithstanding such designation, the Lender may charge against any
deposit account of any Borrower all or any part of any amount due under the
Revolving Note and hereunder.
2.6 The Unused Facility Fee.
From and after the date hereof until the Termination Date, the Borrower
shall pay an Unused Facility Fee of one quarter of one percent (0.25%) per annum
on the average daily undisbursed amount of the Loan. The Unused Facility Fee
shall be payable quarterly in arrears on the first Business Day of each April,
July, October and January.
2.7 The Commitment Fee.
At the Closing, the Borrowers shall pay a commitment fee to the Lender
in the amount of $50,000.00.
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ARTICLE
3
CONDITIONS PRECEDENT
The obligation of the Lender to make the Loan is subject to the following
conditions precedent:
3.1 Documents Required for the Closing.
The Borrowers shall have delivered to the Lender, prior to the initial
disbursement of the Loan (the "Closing"), the following:
(a) The Revolving Note duly executed by the Borrowers;
(b) Copies of the Mortgages, which shall have been duly
executed by all proper parties and recorded at the appropriate recording office,
with all recording fees therefor paid;
(c) The Financial Statements;
(d) A copy of the Security Agreement and/or the financing
statements and other instruments required thereunder, which shall have been duly
executed by all proper parties and filed at the appropriate filing office, with
all filing fees therefor paid;
(e) A copy of the Trust Indenture, which shall have been
executed by all proper parties;
(f) A copy of the Pledge Agreement and other instruments
required thereunder, which shall have been executed by all proper parties;
(g) A copy of the Patent Collateral Assignment which shall
have been duly executed by all proper parties and filed at the appropriate
filing office, with all filing fees therefor paid;
(h) A copy of the Trademark Security Agreement which shall
have been duly executed by all proper parties and filed at the appropriate
filing office, with all filing fees therefor paid;
(i) Evidence that the Note Purchase Agreements have been
executed and delivered and the proceeds delivered to SpecTran;
(j) A copy, certified as of the date of the Closing, of votes
of the boards of directors of each Borrower and shareholders (except for
SpecTran) of each Borrower, authorizing the execution, delivery, and performance
of this Agreement, the Revolving Note, the Collateral Documents and each other
document to be delivered pursuant hereto;
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(k) A copy, certified as of the date of the Closing, of the
bylaws of each Borrower;
(l) A certificate (dated the date of the Closing) of the
corporate clerk and/or secretary of each Borrower as to the incumbency and
signatures of the officers of each Borrower signing this Agreement, the
Revolving Note, the Collateral Documents and each other document to be delivered
pursuant hereto;
(m) A copy, certified as of the most recent date practicable
by the secretary of the state of incorporation, of the charter of each Borrower
and all amendments thereto, together with a certificate (dated the date of the
Closing) of the corporate clerk and/or secretary of each Borrower to the effect
that such charter has not been further amended since the date of the aforesaid
certification of the secretary of the state of incorporation;
(n) A certificate of good standing dated as of the most recent
date practicable, issued by the secretary of the state of incorporation as to
the legal existence, charter, and good legal standing of each Borrower;
(o) Certificates, as of the most recent dates practicable, of
the secretary of each state in which any Borrower is qualified as a foreign
corporation and, if applicable, of the department of revenue or taxation of each
of such states, as to the good tax standing of each Borrower;
(p) A written opinion of the law firm of Hackmyer & Nordlicht,
legal counsel for the Borrowers, dated the date of the Closing and addressed to
the Lender, in form and content satisfactory to the Lender and its counsel; and
(q) Each of the agreements and documents referred to in that
certain Closing Document Agenda and that certain Closing Agenda, copies of which
are attached hereto as Exhibit 3.1(q).
3.2 Documents Required for Subsequent Disbursements.
At the time of, and as a condition to, any disbursement of any part of
the Loan to be made by the Lender subsequent to the Closing, the Lender may
require the Borrowers to deliver to the Lender a certificate, dated the date on
which any such disbursement is to be made, signed by the chief financial officer
of SpecTran and to the effect that:
(a) As of the date thereof, no Event of Default has occurred
and is continuing, and no event has occurred and is continuing that, but for the
giving of notice or passage of time or both, would be an Event of Default;
(b) No material adverse change has occurred in the business
prospects,financial condition, or results of operations of any Borrower since
the date of the most recent Financial Statements delivered to the Lender in
accordance with this Agreement; and
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(c) Each of the representations and warranties contained
herein is true and correct in all respects as if made on and as of the date of
such disbursement.
3.3 Certain Events.
At the time of, and as a condition to, the Closing and each
disbursement of any part of the Loan to be made by the Lender at or subsequent
to the Closing:
(a) No Event of Default shall have occurred and be continuing,
and no event shall have occurred and be continuing that, with the giving of
notice or passage of time or both, would be an Event of Default;
(b) No material adverse change shall have occurred in the
financial condition, or results of operations of any Borrower since the date of
the most recent Financial Statements delivered to the Lender in accordance with
this Agreement; and
(c) All of the Collateral Documents shall have remained in
full force and effect.
3.4 Legal Matters.
At the time of the Closing and each subsequent disbursement, all legal
matters incidental thereto shall be reasonably satisfactory to Mirick,
O'Connell, DeMallie & Lougee, LLP legal counsel to the Lender.
ARTICLE
4
SECURITY
4.1 Composition of the Security.
The Obligations of the Borrowers are secured by the Consolidated Assets
of the Borrowers as evidenced by the Collateral Documents. The Consolidated
Assets shall stand as one general, continuing collateral security for all
Obligations and may be retained by the Lender until all Obligations have been
satisfied in full.
4.2 Rights in Property Held by the Lender.
As security for the prompt satisfaction of all Obligations, each
Borrower hereby assigns, transfers, and sets over to the Lender all of its
right, title, and interest in and to, and grants the Lender a lien on and a
security interest in, all amounts that may be owing, from time to time, by the
Lender to any Borrower in any capacity, including, but without limitation, any
balance or share belonging to any Borrower, or any deposit or other account with
the Lender, which lien and
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security interest shall be independent of, and in addition to, any of the
Lender's rights of set-off.
4.3 Priority of Liens.
The liens evidenced by the Collateral Documents shall constitute first
priority liens.
4.4 Financing Statements.
(a) Each Borrower will:
(i) Execute such financing statements (including
amendments thereto and continuation statements thereof) in form satisfactory to
the Lender as the Lender, from time to time, may specify;
(ii) Pay, or reimburse the Lender for paying, all
costs and taxes of filing or recording the same in such public offices as the
Lender may designate; and
(iii) Take such other steps as the Lender, from time
to time, may direct, including the noting of the Lender's lien on the
Consolidated Assets and on any certificates of title therefor, all to perfect to
the satisfaction of the Lender the Lender's interest in the Consolidated Assets.
(b) In addition to the foregoing, and not in limitation
thereof: to the extent lawful, each Borrower hereby appoints the Lender as its
attorney-in-fact (without requiring the Lender to act as such) to execute any
financing statement in the name of any Borrower, and to perform all other acts
that the Lender deems appropriate to perfect and continue its security interest
in, and to protect and preserve, the Consolidated Assets.
4.5 Mortgagees', Landlords', and Warehousemen's Waivers.
Each Borrower will obtain from any mortgagee of real estate owned by
any Borrower, any landlord of premises leased by any Borrower, and any
warehouseman or other bailee on whose premises any of the Consolidated Assets
may be located, instruments, in form and substance satisfactory to the Lender,
by which such mortgagee, landlord or warehouseman or other bailee waives its
rights, if any, in and to the Consolidated Assets of the Borrowers.
ARTICLE
5
REPRESENTATIONS AND WARRANTIES
5.1 Original.
To induce the Lender to enter into this Agreement, the Borrowers
jointly and severally represent and warrant to the Lender as follows:
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(a) Each Borrower is a corporation duly organized, validly
existing, and in good standing under the Laws of the state of its incorporation;
no Borrower has any Subsidiaries, except as set forth in Exhibit 5.1(a) attached
hereto; each Borrower has the lawful power to own its properties and to engage
in the business it conducts and is duly qualified and in good standing as a
foreign corporation in the jurisdictions wherein the nature of the business
transacted by it or property owned by it makes such qualification necessary; the
states in which each Borrower is qualified to do business are set forth in
Exhibit 5.1(a); the identity of each shareholder of each Borrower (except for
SpecTran) and the number of shares owned by each is set forth in Exhibit 5.1(a);
and the addresses of all places of business of each Borrower are as set forth in
Exhibit 5.1(a);
(b) No Borrower is directly or indirectly controlled by, or
acting on behalf of, any Person which is an "Investment Company", within the
meaning of the Investment Company Act of 1940, as amended;
(c) No Borrower is in default with respect to any of its
existing Consolidated Liabilities, and the making and performance of this
Agreement, the Revolving Note and the Collateral Documents will not (immediately
or with the passage of time, the giving of notice, or both):
(i) Violate the charter or by-laws of any Borrower,
or violate any Laws or result in a default under any contract, agreement, or
instrument to which any Borrower is a party or by which any Borrower or its
property is bound; or
(ii) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the Consolidated
Assets of any Borrower, except as set forth in the Collateral Documents;
(d) Each Borrower to the extent applicable to it, has the
power and authority to enter into and perform this Agreement, the Revolving Note
and the Collateral Documents, and to incur the obligations herein and therein
provided for, and has taken all actions necessary to authorize the execution,
delivery, and performance of this Agreement, the Revolving Note and the
Collateral Documents;
(e) This Agreement, the Revolving Note and the Collateral
Documents are, or when delivered will be, valid, binding, and enforceable in
accordance with their respective terms, except to the extent enforceability is
subject to the exercise of judicial discretion in accordance with general
equitable principles and to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws for the relief of debtors heretofore or hereafter
enacted;
(f) Except as disclosed on Exhibit 5.1(f) attached hereto,
there is no pending order, notice, claim (other than claims arising in the
ordinary course of business for amounts not exceeding $25,000.00 individually or
$100,000.00 in the aggregate), litigation, proceeding, or investigation against
or affecting any Borrower, whether or not covered by insurance;
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(g) Each Borrower has good and marketable title to all of its
Consolidated Assets, none of which is subject to any security interest,
encumbrance or lien, or claim of any third Person, except for Permitted Liens;
(h) The Financial Statements, including any schedules and
notes pertaining thereto, have been prepared in accordance with GAAP, and fully
and fairly present the financial condition of the Borrowers at the dates thereof
and the results of operations for the periods covered thereby, and there have
been no material adverse changes in the financial condition or business of any
Borrower from the date of the most recent Financial Statements to the date
hereof;
(i) As of the date hereof, the Borrowers have no Consolidated
Indebtedness of any nature, except as disclosed on Exhibit 5.1(i) attached
hereto;
(j) Each Borrower has filed all federal, state, and local tax
returns and other reports required by any applicable Laws to have been filed
prior to the date hereof, has paid or caused to be paid all taxes, assessments,
and other governmental charges that are due and payable prior to the date
hereof, and has made adequate provision for the payment of such taxes,
assessments, or other charges accruing but not yet payable; no Borrower has
knowledge of any deficiency or additional assessment in a materially important
amount in connection with any taxes, assessments, or charges not provided for on
its books;
(k) Except to the extent that the failure to comply would not
materially interfere with the conduct of the business of any Borrower, each
Borrower has complied with all applicable Laws with respect to (i) any
restrictions, specifications, or other requirements pertaining to products that
it manufactures or sells or to the services it performs, (ii) the conduct of its
business and (iii) the use, maintenance, and operation of the real and personal
properties owned or leased by it in the conduct of its business;
(l) No representation or warranty by or with respect to any
Borrower contained herein or in any certificate or other document furnished by
any Borrower pursuant hereto contains any untrue statement of a material fact or
omits to state a material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made;
(m) Each consent, approval or authorization of, or filing,
registration or qualification with, any Person required to be obtained or
effected by any Borrower in connection with the execution and delivery of this
Agreement, the Revolving Note and the Collateral Documents or the undertaking or
performance of any obligation hereunder or thereunder has been duly obtained or
effected;
(n) To the best of each Borrower's knowledge, the Borrowers
and all other parties to all material leases, contracts, and other commitments
to which any Borrower is a party have all complied in all material respects with
the provisions of such leases, contracts, and other
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commitments and no party is in default under any thereof and no event has
occurred which, but for the giving of notice or the passage of time, or both,
would constitute a default;
(o) No Borrower has made any agreement or taken any action
which may cause anyone to become entitled to a commission or finder's fee as a
result of or in connection with the making of the Loan;
(p) Each Borrower's federal tax returns for all years of
operation, including the year ended December 31, 1995, have been filed with the
Internal Revenue Service and have not been challenged;
(q) Any Employee Pension Benefit Plans, as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), of any
Borrower meet, as of the date hereof, the minimum funding standards of 29
U.S.C.A. 1082 (Section 302 of ERISA), and no Reportable Event or Prohibited
Transaction, as defined in ERISA, has occurred with respect to any Employee
Benefit Plans, as defined in ERISA, of any Borrower;
(r) SpecTran has filed all registration statements, forms and
other reports with the Securities and Exchange Commission required by any
applicable Laws to have been filed prior to the date hereof; and
(s) The liens created pursuant to the Collateral Documents and
Section 4.2 of this Agreement are in all cases first priority liens.
5.2 Survival.
All of the representations and warranties set forth in Section 5.1
shall survive until all Obligations are satisfied in full and there remain no
outstanding commitments hereunder.
ARTICLE
6
COVENANTS OF THE BORROWERS
6.1 Affirmative Covenants.
The Borrowers do hereby jointly and severally covenant and agree with
the Lender that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, the Borrowers will comply at all times
with the following affirmative covenants:
(a) The Borrowers will use the proceeds of the Loan only for
working capital and general corporate purposes, and will furnish the Lender such
evidence as it may reasonably require with respect to such use;
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(b) SpecTran will furnish the Lender:
(i) As soon as available, but in any event within
thirty (30) days after the close of each calendar month in each fiscal year: (1)
consolidated and consolidating statements of cash flows of the Borrower for such
month, (2) consolidated and consolidating income statements of the Borrowers for
such month and (3) consolidated and consolidating balance sheets of the
Borrowers as of the end of such month-all such statements and balance sheets to
be in reasonable detail, including all supporting schedules and comments,
subject to normal year-end audit adjustments and certified by the chief
financial officer of SpecTran to have been prepared in accordance with GAAP and
to present fairly the financial position and results of operations of the
Borrowers;
(ii) As soon as available, but in any event within
forty-five (45) days after the close of each of the initial three quarterly
accounting periods in each fiscal year (i.e. March 31, June 30 and September 30)
a copy of SpecTran's Form 10-Q, and management's: (1) consolidated and
consolidating statements of cash flows of the Borrowers for such quarter, (2)
consolidated and consolidating income statements of the Borrowers for such
quarter and (3) consolidated and consolidating balance sheets of the Borrowers
as of the end of such quarter-all such statements and balance sheets to be in
reasonable detail, including all supporting schedules and comments, subject to
normal year-end audit adjustments and certified by the chief financial officer
of SpecTran to have been prepared in accordance with GAAP and to present fairly
the financial position and results of operations of the Borrowers;
(iii) As soon as available, but in any event within
ninety (90) days after the close of each fiscal year, a copy of SpecTran's Form
10-K and Annual Report (including the audited consolidated financial statements
prepared by KPMG Peat Marwick, LLP or another independent certified public
accountant selected by SpecTran and reasonably acceptable to the Lender) and
management's: (1) consolidated and consolidating statements of cash flows for
the Borrowers for such fiscal year, (2) consolidated and consolidating income
statements of the Borrowers for such fiscal year and (3) consolidated and
consolidating balance sheets of the Borrowers as of the end of such fiscal
year-all such statements and balance sheets to be in reasonable detail,
including all supporting schedules and comments; the consolidated statements and
balance sheets included in the Form 10-K and Annual Report to be audited by KPMG
Peat Marwick, LLP or another independent certified public accountant selected by
SpecTran and reasonably acceptable to the Lender and certified by such
accountants to have been prepared in accordance with GAAP and to present fairly
the financial position and results of operations of the Borrower; in addition,
SpecTran will obtain from such independent certified public accountants and
deliver to the Lender, within ninety (90) days after the close of each fiscal
year, their written statement that in making the examination necessary to their
certification they have obtained no knowledge of any Event of Default by the
Borrowers, or disclosing all Events of Default of which they have obtained
knowledge (it being understood and agreed by the Lender that in making their
examination, such accountants shall not be required to go beyond the bounds of
generally accepted auditing procedures for the purpose of certifying financial
statements); the Lender shall have the right, from time to time to discuss the
affairs of any Borrower directly with
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such independent certified public accountants after notice to SpecTran and
opportunity of SpecTran to be represented at any such discussions;
(iv) Contemporaneously with the year-end financial
report required by the foregoing paragraph (3), a copy of the management letter
issued to SpecTran by KPMG Peat Marwick or another certified public accountant
selected by SpecTran and reasonably acceptable to the Lender;
(v) Contemporaneously with each quarterly and
year-end financial report required by the foregoing paragraphs (2) and (3) a
certificate of the chief financial officer of SpecTran substantially in the form
of Exhibit 6.1(b)(v) attached hereto stating that he has individually reviewed
the provisions of this Agreement and that a review of the activities of the
Borrowers during such quarterly period or year, as the case may be, has been
made by him or under his supervision, with a view to determining whether the
Borrowers have fulfilled all of their obligations under this Agreement, and
that, to the best of his knowledge, the Borrowers have observed and performed
each undertaking contained in this Agreement and are not in default in the
observance or performance of any of the provisions hereof or, if the Borrowers
shall be so in default, specifying all such defaults and events of which he may
have knowledge;
(vi) As soon as available but in no event later than
thirty (30) days prior to the commencement of the next fiscal year, management
prepared financial projections, including (1) consolidated and consolidating
statements of cash flow, (2) consolidated and consolidating income statements
and (3) consolidated and consolidating balance sheets; and
(vii) Promptly after the sending or making available
or filing of the same, copies of all reports, proxy statements and financial
statements that any Borrower sends or makes available to its stockholders and
all registration statements and reports that any Borrower files with the
Securities and Exchange Commission or any successor Person;
(c) Each Borrower will maintain its Consolidated Assets in
good condition and repair (normal wear and tear excepted), and will pay and
discharge or cause to be paid and discharged, when due, the cost of repairs to,
or maintenance of, the same to the extent it is commercially reasonable for such
repairs to be made or maintenance to be performed, and will pay or cause to be
paid in a timely manner all rental or mortgage payments due on any real estate.
Each Borrower hereby agrees that, in the event it fails to pay or cause to be
paid any such payment, it will promptly notify the Lender thereof, and the
Lender may, in its discretion, do so and on demand be reimbursed therefor by the
Borrowers;
(d) Each Borrower will maintain public liability insurance and
fire and extended coverage insurance on all Consolidated Assets that are of a
character usually insured by corporations engaged in the same or similar
businesses, all in form and amount sufficient to indemnify each Borrower for
100% of the appraised value of any Asset lost or damaged subject to any
deductible customary in the industry. Each Borrower will cause all such
insurance policies to be payable to the Lender. Such policies shall contain a
provision whereby they cannot be canceled except after thirty (30) days' written
notice to the Lender. Each Borrower will
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<PAGE> 35
furnish to the Lender such evidence of insurance as the Lender may reasonably
require. Each Borrower hereby agrees that, in the event it fails to pay or cause
to be paid the premium on any such insurance when due, the Lender, in its
discretion, may do so and be reimbursed by the Borrowers therefor. Each Borrower
hereby assigns to the Lender any returned or unearned premiums that may be due
any Borrower upon cancellation by the insurer of any such policy for any reason
whatsoever and directs any such insurer to pay the Lender any amounts so due.
The Lender is hereby appointed the attorney-in-fact of each Borrower (without
requiring the Lender to act as such) to endorse any check which may be payable
to any Borrower, to collect any premiums or the proceeds of such insurance
(other than proceeds of public liability insurance) and any amount so collected
may be applied by the Lender toward satisfaction of any of the Obligations
whether due or not yet due;
(e) Each Borrower will pay when due, all taxes, assessments,
and charges or levies imposed upon it or on any of its property or which it is
required to withhold and pay except where contested in good faith by appropriate
proceedings with adequate reserves therefor having been set aside on its books;
provided, however, that each Borrower shall pay or cause to be paid all such
taxes, assessments, charges or levies forthwith whenever foreclosure on any lien
that may have attached (or security therefor) appears imminent;
(f) The Borrowers will maintain on a consolidated basis:
(i) a Consolidated Interest Coverage Ratio of at
least 3.00:1.00 to be measured quarterly on a rolling four (4) quarters basis
(i.e. as of March 31, June 30, September 30, December 31);
(ii) a Consolidated Tangible Net Worth of at least
$18,500,000.00 as of the Closing; thereafter Consolidated Tangible Net Worth
must increase (1) as of December 31 of each fiscal year by an amount equal to
seventy-five percent (75%) of that fiscal year's Consolidated Net Income (to be
added only if a positive number) and (2) after any Offering by an amount equal
to the net proceeds of any such Offering; Consolidated Tangible Net Worth to be
measured quarterly (i.e. as of March 31, June 30, September 30, December 31);
(g) Each Borrower will, when requested to do so, make
available for inspection by duly authorized representatives of the Lender any of
its books and Records and will furnish the Lender any information regarding its
business affairs and financial condition within a reasonable time after written
request therefor, provided that any confidential information disclosed to the
Lender shall not be disclosed by the Lender to any unauthorized Person and
further provided that SpecTran may require the Lender to provide a certificate
of an officer of the Lender stating that the confidential information will not
be disclosed to any unauthorized Person;
(h) Each Borrower will (i) carry on and conduct its business
in substantially the same manner and in substantially the same fields of
expertise as presently conducted, (ii) do all things necessary to remain duly
incorporated, validly existing and in good standing in its state of
incorporation, (iii) maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and where the failure to
maintain authority would have a
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<PAGE> 36
materially adverse effect on any of the Borrowers and (iv) comply in all
material respects with all present and future Laws applicable to it in the
operation of its business and all material agreements to which it is subject;
(i) Each Borrower will collect its accounts and sell its
inventory only in the ordinary course of business;
(j) Each Borrower will keep accurate and complete Records of
its accounts, inventory and equipment consistent with sound business practices;
(k) Each Borrower will give immediate notice to the Lender of
any litigation or proceeding in which it is a party;
(l) Within ten (10) days after the filing thereof, each
Borrower will furnish the Lender with copies of federal income tax returns filed
by any Borrower;
(m) Each Borrower will pay when due (or within applicable
grace periods) all of its Consolidated Liabilities, except when the amount
thereof is being contested in good faith by appropriate proceedings and with
adequate reserves therefor being set aside on its books and as otherwise
disclosed in Exhibit 6.1(m) attached hereto. If default be made by any Borrower
in the payment of any of its Consolidated Liabilities, the Lender shall have the
right, in its discretion, to pay such amount for the account of any Borrower and
be reimbursed by the Borrowers therefor, except for Consolidated Liabilities
being contested in good faith by appropriate and lawful proceedings, so long as
levy and execution thereon have been stayed and continue to be stayed and they
do not, in the aggregate, materially detract from the value of the property of
the Borrowers or materially impair the use thereof in the operation of their
businesses and for which adequate reserves have been established;
(n) Each Borrower will notify the Lender immediately if it
becomes aware of the occurrence of any Event of Default or of any fact,
condition, or event that with the giving of notice or passage of time or both,
could become an Event of Default or if it becomes aware of any material adverse
change in the business prospects, financial condition (including, without
limitation, proceedings in bankruptcy, insolvency, reorganization, or the
appointment of a receiver or trustee), or results of operations of any Borrower,
or of the failure of any Borrower to observe any undertakings hereunder or under
the Collateral Documents;
(o) Each Borrower will notify the Lender thirty (30) days in
advance of any change in the location of any of its places of business or of the
establishment of any new or the discontinuance of any existing, place of
business;
(p) Each Borrower will (i) fund any of its Employee Pension
Benefit Plans in accordance with no less than the minimum funding standards of
29 U.S.C.A. 1082 (Section 302 of ERISA), (ii) furnish the Lender, promptly after
the filing of the same, with copies of any reports or other statements filed
with the United States Department of Labor or the Internal Revenue Service with
respect to any such Plan and (iii) promptly advise the Lender of the
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occurrence of any Reportable Event or Prohibited Transaction with respect to any
Employee Benefit Plan;
(q) SpecTran will file all registration statements, forms and
other reports with the Securities and Exchange Commission required by any
applicable Law to be filed; and
(r) The Borrowers will each maintain all of their principal
depository accounts with the Lender and the Lender's Affiliates and the Lender
and the Lender's Affiliates will continue to manage the Borrowers' cash;
notwithstanding the foregoing, the Borrowers may maintain depository accounts
with other financial institutions for convenience only provided the aggregate
amount of all such deposit accounts does not exceed $250,000.00.
6.2 Negative Covenants.
The Borrowers do hereby jointly and severally covenant and agree with
the Lender that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, the Borrowers will comply at all times
with the following negative covenants:
(a) No Borrower will change its name, enter into any merger,
consolidation, reorganization or recapitalization, or reclassify its capital
stock;
(b) The Borrowers will not, in the aggregate, sell, transfer,
lease, or otherwise dispose of Consolidated Assets (except in the ordinary
course of business) having a value in excess of $500,000.00 during the term of
this Agreement;
(c) No Borrower will sell or otherwise dispose of, or for any
reason cease operating, any of its divisions, franchises, or lines of business;
(d) No Borrower will mortgage, pledge, grant, or permit to
exist a security interest in, or a lien upon, any of its assets of any kind, now
owned or hereafter acquired, except for Permitted Liens;
(e) The Borrowers will not, in the aggregate, become liable,
directly or indirectly, as guarantor or otherwise for any obligation of any
other Person, except for (i) the endorsement of commercial paper for deposit or
collection in the ordinary course of business, (ii) liabilities not to exceed
$250,000.00 during the term of this Agreement and (iii) the obligations of any
Borrower to the extent otherwise permitted hereunder;
(f) No Borrower will incur, create, assume, or permit to exist
any liabilities except: (i) the Loan, (ii) Consolidated Indebtedness of the
Borrowers listed on Exhibit 5.1(i) to the extent shown on such Exhibit 5.1(i) to
be permitted to exist after the Closing, (iii) liabilities to any Borrower and
(iv) trade liabilities incurred in the ordinary course of business (provided,
however, that no Borrower may acquire inventory other than for cash or on open
account except as expressly approved in writing and in advance by the Lender);
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(g) No Borrower will make any assignment or transfer of
accounts, or, other than in the ordinary course of business, of inventory;
(h) The Borrowers will not, in the aggregate, form any
Subsidiary (except for wholly owned Subsidiaries which are capitalized with less
than $100.00), make any investment in (including any assignment of inventory or
other property), or make any loan in the nature of an investment to, any Person,
except for investments up to $500,000.00 during the term of this Agreement and
investments in or loans to any Borrower;
(i) The Borrowers will not make any loan or advance to any
Person, except for (i) business travel and similar temporary advances in the
ordinary course of business, (ii) in the aggregate, up to $100,000.00 during the
term of this Agreement and (iii) loans or advances to any Borrower;
(j) No Borrower will purchase or otherwise invest in or hold
securities, nonoperating real estate, or other nonoperating Consolidated Assets,
except for investments meeting the parameters set forth in Section 6.2(h) hereof
and Exhibit 6.2 (j) attached hereto;
(k) No Borrower will enter into any sale-leaseback
transaction;
(l) No Borrower will acquire or agree to acquire any stock in,
or all or substantially all of the assets of, any Person;
(m) The Borrowers will not, in the aggregate, pay or commit to
pay during any one fiscal year (commencing with the current fiscal year), lease
obligations (including without limitation Capital Leases and operating leases)
in excess of $500,000.00;
(n) No Borrower will furnish the Lender any certificate or
other document that will contain any untrue statement of material fact or that
will omit to state a material fact necessary to make it not misleading in light
of the circumstances under which it was furnished;
(o) No Borrower will directly or indirectly apply any part of
the proceeds of the Loan to the purchasing or carrying of any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations, or rulings thereunder; and
(p) The Borrowers will not permit on a consolidated basis:
(i) the Consolidated Leverage Ratio to exceed
1.50:1.00 to be measured quarterly (i.e. as of March 31, June 30, September 30,
December 31); after any Offering, the Consolidated Leverage Ratio may not exceed
1.00:1.00;
(ii) the ratio of Consolidated Indebtedness to
Consolidated EBITDA Cumulative to exceed 3.25:1.00, to be measured quarterly on
a rolling four (4) quarters basis (i.e.
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as of March 31, June 30, September 30, December 31); as of December 31, 1997 and
thereafter the ratio may not exceed 3.00:1.00; and
(iii) aggregate Consolidated Capital Expenditures to
exceed $20,000,000.00 during the fiscal year ending December 31, 1996;
$59,000,000.00 during the two (2) consecutive fiscal year period ending December
31, 1997; $77,000,000.00 during the three (3) consecutive fiscal year period
ending December 31, 1998; and for each fiscal year thereafter, commencing with
the fiscal year ending December 31, 1999, the Borrowers may incur, in the
aggregate, Consolidated Capital Expenditures up to but not to exceed
$7,000,000.00.
ARTICLE
7
DEFAULT
7.1 Events of Default.
The occurrence of any one or more of the following events shall
constitute an Event of Default hereunder:
(a) Any Borrower shall fail to pay when due any of its
Obligations to the Lender;
(b) Any Borrower shall fail to observe or perform any of the
obligations set forth in Section 6.1(b), Section 6.1(d), Section 6.1(k), Section
6.1(l) and Section 6.1(o) of this Agreement and such failure shall continue for
ten (10) days after (i) notice of such failure from the Lender; or (ii) the
Lender is notified of such failure or should have been so notified pursuant to
the provisions of Section 6.1(n), whichever is earlier;
(c) Any Borrower shall fail to observe or perform any one of
the obligations set forth in Section 6.1(c), Section 6.1(e) and Section
6.1(h)(ii) of this Agreement and such failure shall continue for thirty (30)
days after (i) notice of such failure from the Lender; or (ii) the Lender is
notified of such failure or should have been so notified pursuant to the
provisions of Section 6.1(n), whichever is earlier, provided, it shall not be an
Event of Default hereunder if any of the Borrowers has commenced taking action
to cure the default within the time period set forth in this Section 7.1(c) and
such cure could not reasonably be completed within such time period and
continues to diligently attempt to cure such default; at no time will the cure
period exceed sixty (60) days;
(d) Any Borrower shall fail to observe or perform any other
obligation to be observed or performed by it hereunder;
(e) Any Borrower shall fail to pay any Consolidated
Indebtedness due any third Persons (except as disclosed in Exhibit 6.1(m)
attached hereto), or any Borrower shall suffer to exist any other event of
default beyond any applicable cure period under any agreement binding any
Borrower, except for a failure to pay or an event of default which is being
contested in good
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faith by appropriate and lawful proceedings, so long as levy and execution
thereon have been stayed and continue to be stayed and such failure to pay or
event of default does not materially detract from the value of the property of
any Borrower or materially impair the use thereof in the operation of any of
their businesses, provided further that such failure to pay or event of default
shall continue for ten (10) days after (i) notice of such failure or event of
default from the Lender; or (ii) the Lender is notified of such failure or event
of default or should have been so notified pursuant to the provisions of Section
6.1(n), whichever is earlier;
(f) Any financial statement, representation, warranty, or
certificate made or furnished by or with respect to any Borrower to the Lender
in connection with this Agreement, or as inducement to the Lender to enter into
this Agreement, or in any separate statement or document to be delivered to the
Lender hereunder, shall be materially false, incorrect, or incomplete when made;
(g) Any Borrower shall admit its inability to pay its debts as
they mature or shall make an assignment for the benefit of itself or any of its
creditors;
(h) Proceedings in bankruptcy, or for reorganization of any
Borrower for the readjustment of any of its debts under the Bankruptcy Code, as
amended, or any part thereof, or under any other Laws, whether state or federal,
for the relief of debtors, now or hereafter existing, shall be commenced against
or by any Borrower and, except with respect to any such proceedings instituted
by any Borrower, shall not be discharged within sixty (60) days of their
commencement;
(i) A receiver or trustee shall be appointed for any Borrower
or for any substantial part of its Consolidated Assets, or any proceedings shall
be instituted for the dissolution or the full or partial liquidation of any
Borrower, and except with respect to any such appointments requested or
instituted by any Borrower, such receiver or trustee shall not be discharged
within sixty (60) days of his appointment, and except with respect to any such
proceedings instituted by any Borrower, such proceedings shall not be discharged
within sixty (60) days of their commencement, or any Borrower shall discontinue
business or materially change the nature of its business;
(j) Any Borrower shall suffer final judgments for payment of
money and shall not discharge the same within a period of sixty (60) days
unless, pending further proceedings, execution has not been commenced or, if
commenced, has been effectively stayed;
(k) A judgment creditor of any Borrower shall obtain
possession of any of the Consolidated Assets by any means, including (without
implied limitation) levy, distraint, replevin, or self-help;
(l) The occurrence of an Event of Default under (and as
defined in) either of the Mortgages;
(m) The occurrence of an Event of Default under (and as
defined in) the Security Agreement;
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(n) The occurrence of an Event of Default under (and as
defined in) the Pledge Agreement;
(o) The occurrence of an Event of Default under (and as
defined in) the Patent Collateral Assignment;
(p) The occurrence of an Event of Default under (and as
defined in) the Trademark Security Agreement;
(q) The occurrence of an Event of Default under (and as
defined in) the Trust Indenture;
(r) The occurrence of an Event of Default under (and as
defined in) any one or more of the Note Purchase Agreements; or
(s) The occurrence of a Change in Control.
7.2 Acceleration.
At its option, and at any time, whether immediately or otherwise, the
Lender may, upon the occurrence of any Event of Default, declare all Obligations
immediately due payable without further action of any kind, including without
notice, demand or presentment. Notwithstanding the foregoing, if at any time
after the Obligations have been declared due and payable and before any judgment
with respect thereto has been entered, every Event of Default has been made good
or cured, then the Lender may, by written instrument delivered to SpecTran,
rescind and annul such declaration and its consequences; but no such rescission
shall extend to or effect any subsequent default or Event of Default or impair
any rights of the Lender.
ARTICLE
8
THE LENDER'S RIGHTS AND REMEDIES
8.1 The Lender's Rights Upon Default
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender, without presentment, demand, notice, protest or advertisement of any
kind, will have all rights under the Uniform Commercial Code and all Laws,
including without limitation all of the rights set forth in the Collateral
Documents and hereafter.
8.2 Notification of Default to Third Parties
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender may notify any of the Borrower's suppliers, account debtors and other
third parties of the default and
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of any and all decisions made and actions taken by the Lender with respect to
this Agreement, the Obligations or the Consolidated Assets, without liability of
any kind. The Lender will provide written notice of such action to SpecTran.
Failure to provide such notice will not impair the Lender's rights.
8.3 Right of Set-Off.
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender may, and is hereby authorized by each Borrower, to the fullest extent
permitted by applicable Laws, without advance notice to any Borrower (any such
notice being expressly waived by the Borrowers), set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and any other indebtedness at any time owing by the Lender to, or for the
credit or the account of, any Borrower against any or all of the Obligations of
the Borrowers, now or hereafter existing, whether or not such Obligations have
matured and irrespective of whether the Lender has exercised any other rights
that it has or may have with respect to such Obligations, including without
limitation any acceleration rights. The Lender agrees promptly to notify the
applicable Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender hereunder are in addition to the other
rights and remedies (including, without limitation, other rights of set-off)
which the Lender may have.
8.4 Cumulative Rights and Remedies
All rights and remedies of the Lender, whether provided for herein or
in other agreements, instruments or documents or conferred by Law, are
cumulative and may be exercised alone or simultaneously.
ARTICLE
9
ATTORNEY-IN-FACT
9.1 Attorney-In-Fact
Each Borrower hereby irrevocably appoints the Lender, or its designee,
as each Borrower's true and lawful attorney-in-fact, with full power, after the
occurrence of an Event of Default, as follows: (i) to endorse the name of any
Borrower on any assignments, notes, checks, drafts, money orders, or other
instruments of payment for Consolidated Assets; (ii) to sign or endorse the name
of any Borrower on any negotiable instrument, invoice, freight or express bill,
bill of lading, storage or warehouse receipts, drafts, assignments,
verifications and notices in connection with accounts, (iii) to obtain, adjust,
settle and cancel, in any Borrower's name, insurance policies as required herein
and to sign any Borrower's name on settlement checks or drafts, (iv) in any
Borrower's name, to do any act which this Agreement requires any Borrower to do
and (v) to give notice to the United States Post Office to effect changes of
address so that mail
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addressed to any Borrower may be delivered directly to the Lender. In exercising
this power-of-attorney, the Lender shall not be liable to the extent that it
acts in good faith.
ARTICLE
10
MISCELLANEOUS
10.1 Connecticut Waiver.
TO THE EXTENT ANY ASSETS AND/OR REAL ESTATE IS LOCATED IN CONNECTICUT,
THE BORROWERS ACKNOWLEDGE THAT THIS AGREEMENT AND EACH TRANSACTION RELATED TO IT
IS A "COMMERCIAL TRANSACTION" WITHIN THE MEETING OF CHAPTER 903A OF THE
CONNECTICUT GENERAL STATUTES, AS AMENDED. THE BORROWERS HEREBY WAIVE ANY RIGHT
WHICH THEY MIGHT HAVE TO NOTICE IN A HEARING OR A PRIOR COURT ORDER, UNDER SAID
CHAPTER 903A OR AS OTHERWISE PROVIDED UNDER ANY APPLICABLE FEDERAL OR STATE LAW,
IN THE EVENT THE LENDER SEEKS ANY PREJUDGMENT REMEDY AT ANY TIME PRIOR TO FINAL
JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT WHETHER
BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR REPLEVIN.
10.2 Appraisals/Audit.
The Lender may perform, at the Borrowers' expense, periodic appraisals
of any Borrower's equipment and real estate and the cost of each appraisal will
be borne by the Borrowers. The Lender agrees that appraisals will not be
required more frequently than annually unless required by applicable Laws or
after the occurrence of an Event of Default. The Lender may perform, at the
Borrowers' expense, periodic audits of any Borrower at any time and the cost of
each audit will be borne by the Borrowers.
10.3 Joint and Several.
All Obligations of the Borrowers hereunder are the joint and several
obligations of each of SpecTran, Optics, Photonic and Communications.
10.4 Construction.
The provisions of this Agreement shall be in addition to those of any
guaranty, pledge or security agreement, note, or other evidence of liability now
or hereafter held by the Lender, all of which shall be construed as
complementary to each other. Nothing herein contained shall prevent the Lender
from enforcing any or all other guaranty, pledge or security agreements, notes,
or other evidences of liability in accordance with their respective terms.
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10.5 Further Assurance.
From time to time, each Borrower will execute and deliver to the Lender
such additional documents and will provide such additional information as the
Lender may reasonably require to carry out the terms of this Agreement and be
informed of the status and affairs of each Borrower.
10.6 Enforcement and Waiver by the Lender.
The Lender shall have the right at all times to enforce the provisions
of this Agreement and the Collateral Documents in strict accordance with the
terms hereof and thereof, notwithstanding any conduct or custom on the part of
the Lender in refraining from so doing at any time or times. The failure of the
Lender at any time or times to enforce its rights under such provisions,
strictly in accordance with the same, shall not be construed as having created a
custom in any way or manner contrary to specific provisions of this Agreement or
as having in any way or manner modified or waived the same. All rights and
remedies of the Lender are cumulative and concurrent and the exercise of one
right or remedy shall not be deemed a waiver or release of any other right or
remedy.
10.7 Expenses of the Lender.
The Borrowers will, on demand, reimburse the Lender for all expenses,
including the reasonable fees and expenses of legal counsel for the Lender,
incurred by the Lender in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and the Collateral
Documents and the collection or attempted collection of any of the Obligations.
10.8 Notices.
Any notices, requests or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered if delivered in
person or if sent by certified mail, postage prepaid, return receipt requested,
facsimile or telegraph, as follows, unless such address is changed by written
notice hereunder:
(a) If to the Borrowers:
SpecTran Corporation
Attention: Bruce Cannon, C.F.O.
50 Hall Road
Sturbridge, MA 01566
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<PAGE> 45
(b) If to the Lender:
Fleet National Bank
Attention: John F. Lynch, V.P.
370 Main Street
Worcester, MA 01608
10.9 Waiver and Release by the Borrowers.
To the maximum extent permitted by applicable Laws, each Borrower:
(a) Waives (i) protest of all commercial paper at any time
held by the Lender on which any Borrower is in any way liable, (ii) except as
the same may herein be specifically granted, notice of acceleration and of
intention to accelerate and (iii) notice and opportunity to be heard before
exercise by the Lender of the remedies of self-help, set-off, or of other
summary procedures permitted by any applicable Laws or by any agreement with any
Borrower, and, except where required hereby or by any applicable Laws, notice of
any other action taken by the Lender (the Lender agrees to provide notice to
SpecTran of acceleration of the Obligations and such notice will reference a
Section or Sections of this Agreement under which a default has occurred,
failure to send such notice will not impair the Lender's rights hereunder); and
(b) Releases the Lender and its officers, attorneys, agents,
and employees from all claims for loss or damage caused by any act or omission
on the part of any of them except willful misconduct.
10.10 Participation.
Notwithstanding any other provision of this Agreement, each Borrower
understands that the Lender may at any time enter into participation agreements
with one or more participating banks whereby the Lender will allocate certain
percentages of its commitment to them. Each Borrower acknowledges that, for the
convenience of all parties, this Agreement is being entered into with the Lender
only and that its obligations under this Agreement are undertaken for the
benefit of, and as an inducement to, any such participating bank as well as the
Lender, and each Borrower hereby grants to each such participating bank, to the
extent of its participation in the Loan, the right to set off deposit accounts
maintained by any Borrower with such bank subject to the terms of this
Agreement. The Lender agrees to provide SpecTran with five (5) days prior
written notice of any such participation. The Lender will also provide five (5)
days prior written notice of any pledge or assignment of any of the Revolving
Note, except in connection with an acquisition of the Lender.
10.11 Applicable Law.
This Agreement is entered into and performable in the Commonwealth of
Massachusetts and shall be subject to and construed and enforced in accordance
with the laws of the Commonwealth of Massachusetts.
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<PAGE> 46
10.12 Consent to Jurisdiction.
EACH OF THE BORROWERS HEREBY CONSENTS TO THE JURISDICTION OF THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF MASSACHUSETTS, AS WELL AS TO THE JURISDICTION OF ALL COURTS FROM
WHICH AN APPEAL MAY BE TAKEN FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF THE BORROWERS'
OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT, AND EXPRESSLY WAIVES ANY
AND ALL OBJECTIONS ANY OF THE BORROWERS MAY HAVE AS TO VENUE IN ANY OF SUCH
COURTS.
10.13 Binding Effect, Assignment, and Entire Agreement.
This Agreement shall inure to the benefit of, and shall be binding
upon, the respective successors and permitted assigns of the parties hereto. No
Borrower has the right to assign any of its rights or obligations hereunder
without the prior written consent of the Lender. This Agreement, including the
Exhibits hereto, all of which are hereby incorporated herein by reference, and
the documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties and may be amended only by a writing signed on
behalf of each party.
10.14 Severability.
If any provision of this Agreement shall be held invalid under any
applicable Laws, such invalidity shall not affect any other provision of this
Agreement that can be given effect without the invalid provision, and, to this
end, the provisions hereof are severable.
10.15 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
10.16 Waiver of Jury Trial
THE LENDER AND THE BORROWERS AGREE THAT THEY (INCLUDING ANY ASSIGNEE OR
SUCCESSOR) SHALL NOT SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM,
OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT,
ANY RELATED INSTRUMENTS, ANY ASSETS OR THE DEALINGS OR THE RELATIONSHIP AMONG
ANY OF THEM. THEY SHALL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
29
<PAGE> 47
LENDER AND THE BORROWERS AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
THEY HAVE NOT AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF
THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as a
sealed instrument as of the day and year first above written.
BORROWERS:
SPECTRAN CORPORATION
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS
COMPANY
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
APPLIED PHOTONIC DEVICES, INC.
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
30
<PAGE> 48
LENDER:
FLEET NATIONAL BANK
/s/ [illegible] By: /s/ John F. Lynch, VP
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
31
<PAGE> 49
REVOLVING NOTE
$20,000,000.00 As of December 1, 1996
Worcester, Massachusetts
FOR VALUE RECEIVED, SPECTRAN CORPORATION, a Delaware corporation with a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation with a
principal place of business at 150 Fisher Drive, Avon, Connecticut ("Optics"),
APPLIED PHOTONIC DEVICES, INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut ("Photonic") and SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation with a principal
place of business at 50 Hall Road, Sturbridge, Massachusetts ("Communication")
(SpecTran, Optics, Photonic and Communication are sometimes collectively
referred to herein as the "Borrowers"), jointly and severally promise to pay to
FLEET NATIONAL BANK, a national banking association having an office located at
370 Main Street, Worcester, Massachusetts 01608 (the "Lender"), or order, at the
Lender's offices, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
on the unpaid balance hereof at the rates and in the manner hereafter provided.
The unpaid principal of this Note from time to time outstanding shall
bear interest, payable quarterly in arrears, computed on the basis of the actual
number of days elapsed over a year assumed to have 360 days, at a rate per annum
to be selected by the Borrowers from time to time. Subject to the terms hereof,
the Borrowers shall have the right to select, from time to time, any of the
rates set forth below to be used in computing the rate of interest to be paid on
the unpaid principal balance hereof. Such rate shall be selected in advance by
the Borrowers by written notice to the Lender, or the holder hereof, specifying
the rate selected, the effective date of such selection, and the portion, in
$500,000.00 increments (except for amounts subject to interest at the rate
stated in clause (i) below which may be in any amount), of the unpaid principal
balance to which such rate selection shall apply (the "Rate Selection"). The
Rate Selection must be received by the Lender, or the holder hereof, not less
than three (3) banking days prior to the effective date of the Rate Selection.
If the Borrowers select a rate based on a one (1), three (3), or six (6) month
index (clauses (ii), (iii) and (iv) below), the Rate Selection shall not be
changed until the period of time specified in the rate index, i.e., one (1)
month, three (3) months and six (6) months (the "Index Period"), has elapsed
from the effective date of the Rate Selection. If a new Rate Selection has not
been made in accordance with the terms hereof, then the Rate Selection will be
as stated in clause (i) below. The Borrowers may, subject to the terms and
conditions hereof, designate more than one Rate Selection for incremental
portions of the unpaid principal balance.
Pursuant to the foregoing paragraph, the Borrowers shall select from
the following rates of interest:
<PAGE> 50
(i) a rate equal to the Lender's Prime Rate of interest established
from time to time by the Lender (the "Prime Rate"), such interest rate to be
adjusted from time to time on the effective date of any change in the Prime Rate
announced by the Lender. The Prime Rate shall be that rate of interest announced
by the Lender as its Prime Rate;
(ii) a rate equal to the LIBOR (defined below) 1-month index rate plus
one hundred fifty (150) basis points;
(iii) a rate equal to the LIBOR 3-months index rate plus one hundred
fifty (150) basis points; or
(iv) a rate equal to the LIBOR 6-months index rate plus one hundred
fifty (150) basis points.
The term "LIBOR" shall mean, the rate as determined on the basis of the
offered rates for deposits in U.S. dollars for an Index Period which appears on
the Telerate page 3750 or Reuter's LIBO page as of 11:00 a.m. London time on the
day that is two London banking days preceding the effective date of the Rate
Selection. If such rate does not appear on the Telerate page 3750, the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for an Index Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is three banking days preceding the effective date of the Rate Selection. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for the applicable Index Period
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is three banking days preceding the effective date of
the Rate Selection. In the event that the Lender is unable to obtain any such
quotation as provided above, the Rate Selection will be as stated in clause (i)
above.
If the Borrowers fail to select an interest rate for all or any portion
of the unpaid principal balance, or if the LIBOR interest rates become
unavailable, then the rate of interest will be as stated in clause (i) above.
If at any time (i) the Lender reasonably determines that maintenance of
that portion of the outstanding principal balance hereof which bears interest
based on a LIBOR rate would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender shall suspend the
availability of the LIBOR interest rates and require all outstanding principal
amounts bearing interest at a LIBOR interest rate to be repaid immediately, or
(ii) if the Lender reasonably determines that (a) deposits of a type and
maturity appropriate to match fund a LIBOR interest rate are not available, the
Lender shall suspend the availability of LIBOR interest rates, or (b) the LIBOR
interest rates do not accurately reflect the cost of making available or
maintaining such LIBOR interest rates, then the Lender shall suspend the
availability of LIBOR interest rates.
2
<PAGE> 51
If any payment of principal bearing interest at a LIBOR interest rate
is made on a date which is not the last day of the Index Period, whether because
of acceleration, prepayment or otherwise, the Borrowers will indemnify the
Lender for all losses or costs (including lost profits) incurred by it resulting
therefrom; provided, however, the provisions of this paragraph will not apply to
a prepayment resulting from the Lender's suspension of LIBOR interest rates as
set forth in the immediately preceding paragraph.
Interest shall be payable quarterly in arrears, the first such payment
of interest to be due and payable beginning on the first banking day of January
1997 and thereafter on the first banking day of each succeeding quarter, i.e.
the first banking day of each April, July, October and January. If not sooner
paid, all indebtedness evidenced by this Note is due and payable on December 31,
1999.
Each payment made hereunder shall be applied first to interest then due
on the unpaid balance of principal and then to principal. Whenever any payment
of principal or interest due under this Note shall not be paid within ten (10)
days of its due date, the Borrowers shall pay in addition thereto as a late
charge five percent (5%) of the amount of such payment.
This Note is issued pursuant to a certain Loan Agreement among the
Borrowers and the Lender of even date herewith (the "Agreement"), and is subject
to all of the terms and conditions contained in the Agreement. Subject to the
terms and conditions of the Agreement, through and including the earlier of
December 31, 1999 or the occurrence of an Event of Default under the Agreement,
the Borrowers may borrow, repay (subject to prepayment fees for amounts subject
to LIBOR interest rates paid before the end of the applicable Index Period) and
reborrow amounts under this Note from time to time as provided in the Agreement.
In no event will outstanding indebtedness hereunder exceed the Borrowing Base as
defined in the Agreement.
An Event of Default under the Agreement shall also constitute an Event
of Default hereunder. At its option, and at any time, whether immediately or
otherwise, the Lender may, upon the occurrence of an Event of Default, declare
all obligations of the Borrowers to the Lender (including all amounts hereunder)
immediately due and payable without further action of any kind, including
without notice, demand or presentment. Notwithstanding anything to the contrary
contained herein, ON AND AFTER THE EARLIER OF DECEMBER 31, 1999 OR ACCELERATION
OF ALL OUTSTANDING OBLIGATIONS HEREUNDER, THE INTEREST RATE AS TO ALL SUCH
OUTSTANDING OBLIGATIONS WILL BE THE PRIME RATE PLUS FOUR PERCENT (4.00%) PER
ANNUM.
Any deposits or other sums at any time credited by or due from the
holder to any of the Borrowers, any endorser or guarantor hereof, may at all
times be held and treated as collateral for the payment of this Note and any and
all other liabilities (direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, now existing or
hereafter arising) of any such maker to the holder. The holder may apply or
set-off such deposits or other sums against such liabilities at any time in the
case of any of the Borrowers but only with respect to matured liabilities in the
case of endorsers and guarantors.
3
<PAGE> 52
Each of the Borrowers and each guarantor, endorser or other person now
or hereafter liable for the payment of any of the indebtedness evidenced by this
Note, severally agrees, by making, guaranteeing or endorsing this Note or by
making any agreement to pay any of the indebtedness evidenced by this Note, to
waive presentment for payment, protest and demand, notice of protest, demand and
of dishonor and nonpayment of this Note, and consents, on one or more occasions,
without notice of further assent (a) to the substitution, exchange or release of
the collateral securing this Note or any part thereof at any time, (b) to the
acceptance or release by the holder or holders hereof at any time of any
additional collateral or security for or other guarantors of this Note, (c) to
the modification or amendment, at any time and from time to time, of this Note,
the Agreement or any instrument securing this Note at the request of any person
liable hereon, (d) to the granting by the holder hereof of any extension of time
with respect to the payment of this Note or for the performance of the
agreements, covenants and conditions contained in this Note, the Agreement or
any other instrument securing this Note, at the request of any person liable
hereon, and (e) to any and all forbearances and indulgences whatsoever. Such
consent shall not alter nor diminish the liability of any person.
The Borrowers agree to pay all reasonable expenses or costs, including
attorneys' fees and costs of collection, which may be incurred by the holder
hereof in connection with the enforcement of any obligations hereunder or
representation with respect to bankruptcy or insolvency proceedings.
The Borrowers' obligations hereunder are secured by all assets of each
of the Borrowers as provided in the Agreement and the Collateral Documents (as
defined in the Agreement).
This Note constitutes the joint and several obligation of each of
SpecTran, Optics, Photonic and Communication.
Executed as a sealed instrument as of the 1st day of December, 1996.
SPECTRAN CORPORATION
___________________________ By:______________________________
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
___________________________ By:______________________________
Witness Its Duly Authorized Officer
4
<PAGE> 53
APPLIED PHOTONIC DEVICES, INC.
___________________________ By:______________________________
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
___________________________ By:______________________________
Witness Its Duly Authorized Officer
5
<PAGE> 54
Exhibit 2.2
DEPOSIT ACCOUNT
Account No. 00792489
<PAGE> 55
Exhibit 3.1(q)
Counsel for Bank: Counsel for Borrower:
Paul J. D'Onfro, Esquire Brian Hand, Esquire
Mirick, O'Connell, DeMallie Hackmyer & Nordlicht
& Lougee 645 Fifth Avenue
1700 Bank of Boston Tower New York, NY 10022
Worcester, MA 01608-1477 (212) 421-6500
(508) 799-0541 ("H&N")
("MODL")
FLEET NATIONAL BANK
(the "Bank")
$20,000,000.00 LOAN
TO
SPECTRAN CORPORATION
("SpecTran")
and
SPECTRAN SPECIALTY OPTICS COMPANY
("Optics")
and
APPLIED PHOTONIC DEVICES, INC.
("Photonic")
and
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
("COMMUNICATION")
(SpecTran, Optics, Photonic and Communication
are collectively referred to as the "Borrowers")
CLOSING DOCUMENT AGENDA
Responsible
Party
MODL 1. Loan Agreement among the Borrowers and the Bank
MODL 2. Borrowers' $20,000,000.00 Revolving Note
H&N 3. Federal and State Tax Lien Searches for SpecTran
H&N 4. Composite Certificate of Secretary of SpecTran with attached:
<PAGE> 56
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 5. Certificate of Legal Existence and Good Standing for SpecTran
issued by the Delaware Secretary of State
H&N 6. Certificate of Qualification To Do Business in Massachusetts
for SpecTran issued by the Massachusetts Secretary of State
H&N 7. Certificate of Good Tax Standing for SpecTran issued by the
Massachusetts Department of Revenue
H&N 8. Federal and State Tax Lien Searches for Optics
H&N 9. Composite Certificate of Secretary of Optics with attached:
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 10. Certificate of Legal Existence and Good Standing for Optics
issued by the Delaware Secretary of State
H&N 11. Certificate of Qualification To Transact Business in
Connecticut for Optics issued by the Connecticut Secretary of
State
H&N 12. Accountant's letter regarding filing of tax returns and payment
of taxes
H&N 13. Federal and State Tax Lien Searches for Photonic
H&N 14. Composite Certificate of Secretary of Photonic with attached:
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 15. Certificate of Legal Existence and Good Standing for Photonic
issued by the Delaware Secretary of State
H&N 16. Certificate of qualification To Transact Business in
Connecticut for Photonic issued by the Connecticut Secretary
of State
H&N 17. Accountant's letter regarding filing of tax returns and payment
of taxes
<PAGE> 57
H&N 18. Federal and State Tax Lien Searches for Communication
H&N 19. Composite Certificate of Secretary of Communication with attached:
a) Certificate of Incorporation with all amendments (certified to
by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 20. Certificate of Legal Existence and Good Standing for
Communication issued by the Delaware Secretary of State
H&N 21. Certificate of Qualification To Do Business in Massachusetts for
Communication issued by the Massachusetts Secretary of State
H&N 22. Certificate of Good Tax Standing for Communication issued by the
Massachusetts Department of Revenue
H&N 23. Opinion of Counsel to Borrowers regarding due execution,
authority, and enforceability
MODL 24. Disbursement Authorization
H&N 25. Discharge of Mortgage
<PAGE> 58
Exhibit 3.1(q)
CLOSING AGENDA
SPEC TRAN CORPORATION
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE DECEMBER 1, 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE DECEMBER 1, 2004
================================================================================
Closing Date: [December , 1996]
- --------------------------------------------------------------------------------
Closing Location: [ ]
- --------------------------------------------------------------------------------
Purchasers' Counsel: Hebb & Gitlin ("H&G")
- --------------------------------------------------------------------------------
Company's Counsel: Hackmyer & Nordlicht ("H&N")
- --------------------------------------------------------------------------------
Security Trustee: [Fleet National Bank]
- --------------------------------------------------------------------------------
Security Trustee's [Mirick O'Connell]
Counsel:
================================================================================
================================================================================
Description Procurement/
Drafting
Responsibility
================================================================================
1. NOTE PURCHASE AGREEMENT H&G
- --------------------------------------------------------------------------------
2. TRUST INDENTURE H&G
Exhibit C to the Note Purchase Agreement, as required
by Section 4.10(a) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
3. SECURITY AGREEMENT H&G
Exhibit D to the Note Purchase Agreement, as required
by Section 4.10(b) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
4. PATENT COLLATERAL ASSIGNMENT H&G
Exhibit E to the Note Purchase Agreement, as required
by Section 4.10(c) of the Note Purchase Agreement,
duly recorded with the United States Patent and Trademark
Office.
- --------------------------------------------------------------------------------
5. TRADEMARK SECURITY AGREEMENT H&G
Exhibit F to the Note Purchase Agreement, as required
by Section 4.10(d) of the Note Purchase Agreement,
duly recorded with the United States Patent and Trademark
Office; together with a Trademark Assignment, separately
executed by each of the Company and its Subsidiaries,
substantially in the form of Exhibit 1 to the Trademark
Security Agreement, as required by Section 4.10(d) to the
Note Purchase Agreement.
- --------------------------------------------------------------------------------
6. PLEDGE AGREEMENT H&G
Exhibit G to the Note Purchase Agreement, as required
by Section 4.10(f) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
7. STOCK CERTIFICATES Company
Stock certificates and undated stock powers executed in
blank to be delivered to the Security Trustee as
required by Section 4.10(f) of the Note Purchase
Agreement.
- --------------------------------------------------------------------------------
8. OFFICER'S CERTIFICATE draft H&G;
Officer's Certificate of the Company, as required by final,
Section 4.3(a) of the Note Purchase Agreement. Company
- --------------------------------------------------------------------------------
<PAGE> 59
<TABLE>
<CAPTION>
==============================================================================================================
Description Procurement/
Drafting
Responsibility
==============================================================================================================
<S> <C> <C>
9. SECRETARY'S CERTIFICATE - COMPANY draft, H&G;
As required by Section 4.3(b) of the Note Purchase Agreement setting forth the final,
following attachments: a. Resolutions, Company
b. By-laws of the Company,
c. Specimen signatures of officers of the Company,
d. Long Form Good Standing Certificate.
- -------------------------------------------------------------------------------------------------------------
10. SECRETARY'S CERTIFICATE - SUBSIDIARIES draft H&G;
As required by Section 4.3(c) of the Note Purchase Agreement setting forth the final,
following attachments: a. Resolutions, Company
b. By-laws of the Subsidiary,
c. Specimen signatures of officers of the Subsidiary,
d. Long Form Good Standing Certificate.
- -------------------------------------------------------------------------------------------------------------
11. FOREIGN QUALIFICATION AND GOOD STANDING CERTIFICATES Company
For the Company and each Subsidiary, foreign corporate good standing certificates,
from each jurisdiction where each of the Company or such Subsidiary conducts
significant business activities as a foreign corporation.
- -------------------------------------------------------------------------------------------------------------
12. UCC SEARCHES Company
UCC and fixture filing searches in the jurisdictions listed on Exhibit A attached hereto.
- -------------------------------------------------------------------------------------------------------------
13. UCC FINANCING STATEMENTS H&G
Uniform Commercial Code Financing Statements by each of the Company and its
Subsidiaries in favor of the Security Trustee, duly recorded in the appropriate filing
jurisdictions, as required by Section 4.10(g) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
14. UCC FIXTURE FINANCING STATEMENTS H&G
Uniform Commercial Code Financing Statements by each of the Company and its
Subsidiaries in favor of the Security Trustee, duly recorded in the appropriate real
property filing jurisdictions, as required by Section 4.10(g) of the Note Purchase
Agreement.
- -------------------------------------------------------------------------------------------------------------
15. TERMINATION AND ASSIGNMENT OF EXISTING LIENS Company
The filing of all appropriate Uniform Commercial Code assignment statements, the
recording of all appropriate mortgage releases, and patent and trademark releases, as
required by Section 4.10(h) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
16. MORTGAGE H&G
Exhibit H to the Note Purchase Agreement, as required by Section 4.10(i) of the Note
Purchase Agreement, duly filed in the appropriate recording offices.
- -------------------------------------------------------------------------------------------------------------
17. LEASEHOLDS Company
A copy of each lease in respect of any leasehold interest of the Company or any
Subsidiary in any real property, certified as true and correct, as required by Section
4.10(i) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
18. SUBSIDIARY GUARANTY H&G
Exhibit I to the Note Purchase Agreement, as required by Section 4.11 of the Note
Purchase Agreement for each Subsidiary.
- -------------------------------------------------------------------------------------------------------------
19. OFFEREE LETTER H&G
Offeree Letter of Fleet Corporate Finance regarding the manner of the offering of the
Notes.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 60
================================================================================
Description Procurement/
Drafting Responsibility
================================================================================
20. PRIVATE PLACEMENT NUMBERS H&G
Documentation of private placement numbers for
the Series A Notes and the Series B Notes, in
each case, from CUSIP Service Bureau of Standard
& Poor's, a division of McGraw-Hill, Inc., as
required by Section 4.8 of the Note Purchase
Agreement.
- --------------------------------------------------------------------------------
21. NOTES H&G
Series A Notes and Series B Notes as set forth on
Schedule A to the Note Purchase Agreement, in the
form of Exhibit A1 and Exhibit A2, respectively,
to the Note Purchase Agreement.
- --------------------------------------------------------------------------------
22. CROSS-RECEIPT H&G
Cross-Receipt for the Notes and the wire transfers
in payment thereof.
- --------------------------------------------------------------------------------
23. OPINION OF COMPANY'S COUNSEL draft, H&G;
Opinion of Hackmyer & Nordlicht, Exhibit B1 to final, H&N
the Note Purchase Agreement, as required by
Section 4.4(a) of the Note Purchase Agreement
- --------------------------------------------------------------------------------
24. OPINION OF SECURITY TRUSTEE'S COUNSEL draft, H&G;
Opinion of Mirick O'Connell, Exhibit B2 to the final, [ ]
Note Purchase Agreement, as required by
Section 4.4(b) of the Note Purchase Agreement
- --------------------------------------------------------------------------------
25. OPINION OF HEBB & GITLIN H&G
Opinion of Hebb & Gitlin, Exhibit B3 to the Note
Purchase Agreement, as required by Section 4.4(c)
of the Note Purchase Agreement
- --------------------------------------------------------------------------------
26. EXPENSES Company
Evidence of the payment of all fees and
disbursements required to be paid pursuant to
Section 4.7 of the Note Purchase Agreement.
================================================================================
3
<PAGE> 61
Exhibit 5.1(a)
<TABLE>
<CAPTION>
Name and Addresses Jurisdiction Foreign
of Borrower: of Incorporation: Qualifications: Shareholders:
- ------------ ----------------- --------------- -------------
<S> <C> <C> <C>
SpecTran Corporation Delaware Massachusetts N/A
50 Hall Road
Sturbridge, MA 01566
69-70 Hall Road
Sturbridge, MA 01566
SpecTran Communication Delaware Massachusetts SpecTran
Fiber Technologies, Inc. Corporation
50 Hall Road 10 shares
Sturbridge, MA 01566 Comm. Stock
69-70 Hall Road
Sturbridge, MA 01566
SpecTran Specialty Optics Delaware Connecticut SpecTran
Company Corporation
150 Fisher Drive 10 shares
Avon, CT 06001* Comm. Stock
18 Parkside Lane
Avon, CT 06001
*SpecTran Specialty Optics Company will be moving its principal offices to 55
Darling Drive, Avon, CT 06001.
Applied Photonic Devices, Inc. Delaware Connecticut SpecTran
300 Lake Road Corporation
Dayville, CT 06241 Comm. Stock
50 Tiffany Street
Brooklyn, CT 06259
</TABLE>
35
<PAGE> 62
Exhibit 5.1(f)
LITIGATION
None
36
<PAGE> 63
Exhibit 5.1(i)
CONSOLIDATED INDEBTEDNESS
$24,000,000.00 principal amount of Senior Secured Notes due 2006, as provided
for in the Note Purchase Agreement as defined in the Agreement.
37
<PAGE> 64
Exhibit 6.1(b)(v)
<TABLE>
<CAPTION>
Section Covenant Limit Actual
- ------- -------- ----- ------
<S> <C> <C>
6.01
f(i) Consolidated Interest Coverage Ratio 3.00:1.00
f(ii) Consolidated Tangible Net Worth $18,500,000(*)
</TABLE>
<TABLE>
<CAPTION>
Section
- -------
<S> <C> <C>
6.02
p(i) Consolidated Leverage Ratio 1.50:1.00
p(ii) Consolidated Indebtedness to
Consolidated EBITDA Cumulative 3.25:1.00
p(iii) Consolidated Capital Expenditures 20,000,000.00(**)
</TABLE>
*to step-up as set forth in the Agreement
**changes annually as set forth in the Agreement
I, the undersigned officer of SpecTran hereby certify that I have read the Loan
Agreement among the Borrowers and the Lender dated as of December 1, 1996, and
to the best of my knowledge and belief, as of ______________________, the
Borrowers are in compliance with all the covenants, terms and provisions
contained in the Loan Agreement and no Event of Default exists thereunder.
SPECTRAN CORPORATION
By:_______________________________
Its Chief Financial Officer
38
<PAGE> 65
Exhibit 6.1(m)
APD has a dispute with the landlord of its facility at 300 Lake Road, Dayville,
Connecticut, arising from (i) the landlord's failure to pay utility costs
resulting in the gas company turning off the heat to the facility and (ii) the
failure of the landlord to make necessary repairs to the roof of the facility,
resulting in leaks. The landlord's actions have caused damage to the facility
and the loss of work days due to the lack of heat in the facility. APD has
notified the landlord that it is withholding November rent and all future rent
payments pending the landlord's reimbursement of APD for these damages.
39
<PAGE> 66
Exhibit 6.2(j)
The investment objective will be to maximize total return within the
confines of a short to average overall maturity framework. The fund will utilize
US Governments, domestic corporates, asset-backed paper (AAA rated), Govt Agency
mortgage-backed paper including short term CMO's and Govt Agency backed
short-term floating rate paper. Positions required for liquidity needs will be
held in high grade short-term or money market balances. The horizon on these
corporate funds will be approximately 1/3 for immediate liquidity needs (if
necessary), approximately 1/3 to be used for intermediate term purposes, and the
remaining approximately third for long term expansion purposes. SpecTran will
have full authority and discretion on all investment changes.
40
<PAGE> 67
SCHEDULE 2
REVOLVING NOTE
$20,000,000.00 As of December 1, 1996
Worcester, Massachusetts
FOR VALUE RECEIVED, SPECTRAN CORPORATION, a Delaware corporation with a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation with a
principal place of business at 150 Fisher Drive, Avon, Connecticut ("Optics"),
APPLIED PHOTONIC DEVICES, INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut ("Photonic") and SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation with a principal
place of business at 50 Hall Road, Sturbridge, Massachusetts ("Communication")
(SpecTran, Optics, Photonic and Communication are sometimes collectively
referred to herein as the "Borrowers"), jointly and severally promise to pay to
FLEET NATIONAL BANK, a national banking association having an office located at
370 Main Street, Worcester, Massachusetts 01608 (the "Lender"), or order, at the
Lender's offices, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
on the unpaid balance hereof at the rates and in the manner hereafter provided.
The unpaid principal of this Note from time to time outstanding shall
bear interest, payable quarterly in arrears, computed on the basis of the actual
number of days elapsed over a year assumed to have 360 days, at a rate per annum
to be selected by the Borrowers from time to time. Subject to the terms hereof,
the Borrowers shall have the right to select, from time to time, any of the
rates set forth below to be used in computing the rate of interest to be paid on
the unpaid principal balance hereof. Such rate shall be selected in advance by
the Borrowers by written notice to the Lender, or the holder hereof, specifying
the rate selected, the effective date of such selection, and the portion, in
$500,000.00 increments (except for amounts subject to interest at the rate
stated in clause (i) below which may be in any amount), of the unpaid principal
balance to which such rate selection shall apply (the "Rate Selection"). The
Rate Selection must be received by the Lender, or the holder hereof, not less
than three (3) banking days prior to the effective date of the Rate Selection.
If the Borrowers select a rate based on a one (1), three (3), or six (6) month
index (clauses (ii), (iii) and (iv) below), the Rate Selection shall not be
changed until the period of time specified in the rate index, i.e., one (1)
month, three (3) months and six (6) months (the "Index Period"), has elapsed
from the effective date of the Rate Selection. If a new Rate Selection has not
been made in accordance with the terms hereof, then the Rate Selection will be
as stated in clause (i) below. The Borrowers may, subject to the terms and
conditions hereof, designate more than one Rate Selection for incremental
portions of the unpaid principal balance.
Pursuant to the foregoing paragraph, the Borrowers shall select from
the following rates of interest:
<PAGE> 68
(i) a rate equal to the Lender's Prime Rate of interest established
from time to time by the Lender (the "Prime Rate"), such interest rate to be
adjusted from time to time on the effective date of any change in the Prime Rate
announced by the Lender. The Prime Rate shall be that rate of interest announced
by the Lender as its Prime Rate;
(ii) a rate equal to the LIBOR (defined below) 1-month index rate plus
one hundred fifty (150) basis points;
(iii) a rate equal to the LIBOR 3-months index rate plus one hundred
fifty (150) basis points; or
(iv) a rate equal to the LIBOR 6-months index rate plus one hundred
fifty (150) basis points.
The term "LIBOR" shall mean, the rate as determined on the basis of the
offered rates for deposits in U.S. dollars for an Index Period which appears on
the Telerate page 3750 or Reuter's LIBO page as of 11:00 a.m. London time on the
day that is two London banking days preceding the effective date of the Rate
Selection. If such rate does not appear on the Telerate page 3750, the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for an Index Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is three banking days preceding the effective date of the Rate Selection. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for the applicable Index Period
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is three banking days preceding the effective date of
the Rate Selection. In the event that the Lender is unable to obtain any such
quotation as provided above, the Rate Selection will be as stated in clause (i)
above.
If the Borrowers fail to select an interest rate for all or any portion
of the unpaid principal balance, or if the LIBOR interest rates become
unavailable, then the rate of interest will be as stated in clause (i) above.
If at any time (i) the Lender reasonably determines that maintenance of
that portion of the outstanding principal balance hereof which bears interest
based on a LIBOR rate would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender shall suspend the
availability of the LIBOR interest rates and require all outstanding principal
amounts bearing interest at a LIBOR interest rate to be repaid immediately, or
(ii) if the Lender reasonably determines that (a) deposits of a type and
maturity appropriate to match fund a LIBOR interest rate are not available, the
Lender shall suspend the availability of LIBOR interest rates, or (b) the LIBOR
interest rates do not accurately reflect the cost of making available or
maintaining such LIBOR interest rates, then the Lender shall suspend the
availability of LIBOR interest rates.
2
<PAGE> 69
If any payment of principal bearing interest at a LIBOR interest rate
is made on a date which is not the last day of the Index Period, whether because
of acceleration, prepayment or otherwise, the Borrowers will indemnify the
Lender for all losses or costs (including lost profits) incurred by it resulting
therefrom; provided, however, the provisions of this paragraph will not apply to
a prepayment resulting from the Lender's suspension of LIBOR interest rates as
set forth in the immediately preceding paragraph.
Interest shall be payable quarterly in arrears, the first such payment
of interest to be due and payable beginning on the first banking day of January
1997 and thereafter on the first banking day of each succeeding quarter, i.e.
the first banking day of each April, July, October and January. If not sooner
paid, all indebtedness evidenced by this Note is due and payable on December 31,
1999.
Each payment made hereunder shall be applied first to interest then due
on the unpaid balance of principal and then to principal. Whenever any payment
of principal or interest due under this Note shall not be paid within ten (10)
days of its due date, the Borrowers shall pay in addition thereto as a late
charge five percent (5%) of the amount of such payment.
This Note is issued pursuant to a certain Loan Agreement among the
Borrowers and the Lender of even date herewith (the "Agreement"), and is subject
to all of the terms and conditions contained in the Agreement. Subject to the
terms and conditions of the Agreement, through and including the earlier of
December 31, 1999 or the occurrence of an Event of Default under the Agreement,
the Borrowers may borrow, repay (subject to prepayment fees for amounts subject
to LIBOR interest rates paid before the end of the applicable Index Period) and
reborrow amounts under this Note from time to time as provided in the Agreement.
In no event will outstanding indebtedness hereunder exceed the Borrowing Base as
defined in the Agreement.
An Event of Default under the Agreement shall also constitute an Event
of Default hereunder. At its option, and at any time, whether immediately or
otherwise, the Lender may, upon the occurrence of an Event of Default, declare
all obligations of the Borrowers to the Lender (including all amounts hereunder)
immediately due and payable without further action of any kind, including
without notice, demand or presentment. Notwithstanding anything to the contrary
contained herein, ON AND AFTER THE EARLIER OF DECEMBER 31, 1999 OR ACCELERATION
OF ALL OUTSTANDING OBLIGATIONS HEREUNDER, THE INTEREST RATE AS TO ALL SUCH
OUTSTANDING OBLIGATIONS WILL BE THE PRIME RATE PLUS FOUR PERCENT (4.00%) PER
ANNUM.
Any deposits or other sums at any time credited by or due from the
holder to any of the Borrowers, any endorser or guarantor hereof, may at all
times be held and treated as collateral for the payment of this Note and any and
all other liabilities (direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, now existing or
hereafter arising) of any such maker to the holder. The holder may apply or
set-off such deposits or other sums against such liabilities at any time in the
case of any of the Borrowers but only with respect to matured liabilities in the
case of endorsers and guarantors.
3
<PAGE> 70
Each of the Borrowers and each guarantor, endorser or other person now
or hereafter liable for the payment of any of the indebtedness evidenced by this
Note, severally agrees, by making, guaranteeing or endorsing this Note or by
making any agreement to pay any of the indebtedness evidenced by this Note, to
waive presentment for payment, protest and demand, notice of protest, demand and
of dishonor and nonpayment of this Note, and consents, on one or more occasions,
without notice of further assent (a) to the substitution, exchange or release of
the collateral securing this Note or any part thereof at any time, (b) to the
acceptance or release by the holder or holders hereof at any time of any
additional collateral or security for or other guarantors of this Note, (c) to
the modification or amendment, at any time and from time to time, of this Note,
the Agreement or any instrument securing this Note at the request of any person
liable hereon, (d) to the granting by the holder hereof of any extension of time
with respect to the payment of this Note or for the performance of the
agreements, covenants and conditions contained in this Note, the Agreement or
any other instrument securing this Note, at the request of any person liable
hereon, and (e) to any and all forbearances and indulgences whatsoever. Such
consent shall not alter nor diminish the liability of any person.
The Borrowers agree to pay all reasonable expenses or costs, including
attorneys' fees and costs of collection, which may be incurred by the holder
hereof in connection with the enforcement of any obligations hereunder or
representation with respect to bankruptcy or insolvency proceedings.
The Borrowers' obligations hereunder are secured by all assets of each
of the Borrowers as provided in the Agreement and the Collateral Documents (as
defined in the Agreement).
This Note constitutes the joint and several obligation of each of
SpecTran, Optics, Photonic and Communication.
Executed as a sealed instrument as of the 1st day of December, 1996.
SPECTRAN CORPORATION
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
4
<PAGE> 71
APPLIED PHOTONIC DEVICES, INC.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
5
<PAGE> 72
SCHEDULE 3
================================================================================
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
---------------------
GUARANTY AGREEMENT
---------------------
DATED AS OF DECEMBER 1, 1996
================================================================================
<PAGE> 73
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
1. PRELIMINARY STATEMENTS................................................................................. 1
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS............................................................. 2
2.1 Guarantied Obligations........................................................................ 2
2.2 Payments and Performance...................................................................... 2
2.3 Waivers and Other Agreements.................................................................. 3
2.4 Nature of Guaranty............................................................................ 4
2.5 Obligations Absolute.......................................................................... 4
2.6 No Investigation by Noteholder................................................................ 5
2.7 Indemnity..................................................................................... 5
2.8 Subordination, Subrogation, Etc............................................................... 5
2.9 Waiver........................................................................................ 6
2.10 Limitation on Guarantied Obligations.......................................................... 6
2.11 Marshaling.................................................................................... 6
2.12 Setoff, Counterclaim or Other Deductions...................................................... 6
2.13 No Election of Remedies by Noteholders........................................................ 6
2.14 Separate Action; Other Enforcement Rights..................................................... 7
2.15 Noteholder Setoff............................................................................. 7
2.16 Delay or Omission; No Waiver.................................................................. 7
2.17 Restoration of Rights and Remedies............................................................ 7
2.18 Cumulative Remedies........................................................................... 7
3. INTERPRETATION OF THIS GUARANTY AGREEMENT.............................................................. 8
3.1 Terms Defined................................................................................. 8
3.2 Headings; Independent Construction............................................................ 9
3.3 Separate Agreements........................................................................... 9
3.4 Partial Invalidity............................................................................ 9
3.5 Governing Law................................................................................. 10
4. WARRANTIES AND REPRESENTATIONS......................................................................... 10
5. GENERAL COVENANTS...................................................................................... 10
5.1 Undertakings in Note Purchase Agreement....................................................... 10
5.2 Further Assurances............................................................................ 10
6. MISCELLANEOUS.......................................................................................... 10
6.1 Communications................................................................................ 10
6.2 Amendment..................................................................................... 11
6.3 Successors and Assigns........................................................................ 11
6.4 Survival...................................................................................... 11
6.5 Joinder Agreement............................................................................. 11
6.6 Expense....................................................................................... 12
6.7 Benefits of Guaranty Restricted to Noteholders................................................ 12
6.8 Entire Agreement.............................................................................. 12
6.9 Connecticut Waiver............................................................................ 13
6.10 Counterparts.................................................................................. 13
</TABLE>
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GUARANTY AGREEMENT
GUARANTY AGREEMENT (as may be amended, restated or otherwise modified
from time to time, this "AGREEMENT"), dated as of December 1, 1996, by SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC. ("SCFT"), a Delaware corporation,
SPECTRAN SPECIALTY OPTICS COMPANY ("SSOC"), a Delaware corporation, and APPLIED
PHOTONIC DEVICES, INC. ("APD"), a Delaware corporation (SCFT, SSOC and APD,
together with each other Person that becomes a party hereto from time to time by
execution and delivery of a Joinder Agreement, and including their respective
successors and assigns, the "GUARANTORS"), in favor of each of the Noteholders
(as such term is hereinafter defined).
1. PRELIMINARY STATEMENTS
1.1 Spectran Corporation (together with its successors and assigns, the
"COMPANY"), a Delaware corporation, has authorized the issuance of
(a) its 9.24% Series A Senior Secured Notes due 2003 (as may
be amended, restated or otherwise modified from time to time, the
"SERIES A NOTES"), in the aggregate principal amount of $16,000,000,
and
(b) its 9.39% Series B Senior Secured Notes due 2004 (as may
be amended, restated or otherwise modified from time to time, the
"SERIES B NOTES," and collectively with the Series A Notes and any and
all other notes for which such notes, or any successor notes, may be
substituted or exchanged, all as may be amended, restated or otherwise
modified from time to time, the "NOTES"), in the aggregate principal
amount of $8,000,000,
pursuant to the separate Note Purchase Agreements (collectively, as may be
amended, restated or otherwise modified from time to time, the "NOTE PURCHASE
AGREEMENT"), each dated as of December 1, 1996, with each of the purchasers
named on Schedule A thereto (the "PURCHASERS").
1.2 In order to induce the Purchasers to purchase the Notes, each of
SCFT, SSOC and APD has agreed to become a Guarantor hereunder and the Company
has agreed, pursuant to the Note Purchase Agreement, that each other Person that
at any time becomes a direct or indirect Subsidiary will be required to become a
Guarantor hereunder.
1.3 The Guarantors and the Company are operated as part of one
consolidated business entity. The Guarantors are directly dependent upon the
Company for and in connection with their respective business activities and
their respective financial resources. Each Guarantor will receive direct and
indirect economic and financial benefits from the indebtedness incurred under
the Note Purchase Agreement and the Notes by the Company, and under this
Agreement, and the incurrence of such indebtedness is in the best interests of
such Guarantor.
1.4 All acts and proceedings required by law and by the constitutive
documents of each Guarantor necessary to constitute this Agreement a valid and
binding agreement for the uses and purposes set forth herein, in accordance with
its terms, have been done and taken, and the execution and delivery hereof has
been in all respects duly authorized.
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2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.1 GUARANTIED OBLIGATIONS.
Each Guarantor, in consideration of the execution and delivery of the
Note Purchase Agreement, the purchase of the Notes by the Purchasers and other
consideration, hereby irrevocably, unconditionally, absolutely, jointly and
severally guarantees to each Noteholder, as and for each such Guarantor's own
debt:
(a) the due and punctual payment of the principal of and
accrued and unpaid interest (including, without limitation, interest
which otherwise may cease to accrue by operation of any insolvency law,
rule, regulation or interpretation thereof) and Make-Whole Amount on
the Notes and the due and punctual payment of all other obligations of
the Company to the Noteholders under the Note Purchase Agreement, the
Notes and the other Financing Documents when due, whether by mandatory
or optional prepayment, acceleration or otherwise, all in accordance
with the terms thereof, including, without limitation, overdue
interest, indemnification payments and all reasonable costs and
expenses incurred by the Noteholders and the Trustee in connection with
enforcing any obligations of the Company under the Note Purchase
Agreement, the Notes and the other Financing Documents, including,
without limitation, the reasonable fees and disbursements of
Noteholders' special counsel;
(b) the punctual and faithful performance, keeping,
observance, and fulfillment by the Company of all duties, agreements,
covenants and obligations of the Company contained in the Note Purchase
Agreement, the Notes and the other Financing Documents to be performed
or observed on the part of the Company; and
(c) the prompt and complete payment, on demand, of any and all
reasonable costs and expenses incurred by the Noteholders in connection
with enforcing the obligations of such Guarantor hereunder, including,
without limitation, the reasonable fees and disbursements of the
Noteholders' special counsel.
All of the obligations set forth in clauses (a), (b) and (c) of this Section 2.1
are referred to herein as the "GUARANTIED OBLIGATIONS" and the guaranty thereof
contained herein is a primary, original and immediate obligation of each
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment and performance and shall remain in full force and effect until the
full, final and indefeasible payment of the Guarantied Obligations.
2.2 PAYMENTS AND PERFORMANCE.
If for any reason any duty, agreement or obligation of the Company
contained in the Note Purchase Agreement or any other Financing Document shall
not be performed or observed by the Company as provided therein, or if any
amount payable under or in connection with the Note Purchase Agreement, the
Notes or any other Financing Document shall not be paid in full when the same
becomes due and payable, each Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and obligations and to pay
forthwith each
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2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
such amount to the Noteholders regardless of any defense or setoff or
counterclaim which the Company may have or assert, and regardless of any other
condition or contingency.
2.3 WAIVERS AND OTHER AGREEMENTS.
Each Guarantor hereby unconditionally:
(a) waives any requirement that the Noteholders, upon the
occurrence of an Event of Default, first make demand upon, or seek to
enforce remedies against, the Company before demanding payment under or
seeking to enforce the obligations of such Guarantor under this
Agreement;
(b) agrees that the obligations of such Guarantor under this
Agreement will not be discharged except by complete performance of all
obligations of the Company contained in the Note Purchase Agreement,
the Notes and the other Financing Documents;
(c) agrees that the obligations of such Guarantor under this
Agreement shall remain in full force and effect without regard to, and
shall not be affected or impaired, without limitation, by any
invalidity, irregularity or unenforceability in whole or in part of the
Note Purchase Agreement, the Notes or any other Financing Document, or
any limitation on the liability of any Guarantor under this Agreement,
or any limitation on the method or terms of payment under the Note
Purchase Agreement, the Notes or any other Financing Document which may
at any time be caused or imposed in any manner whatsoever (including,
without limitation, usury laws);
(d) waives diligence, presentment and protest with respect to,
and any notice of default or dishonor in the payment of any amount at
any time payable by the Company under or in connection with the Note
Purchase Agreement, the Notes or any other Financing Document, and
further waives any requirement of notice of acceptance of, or other
formality relating to, the obligations of such Guarantor under this
Agreement; and
(e) agrees that to the extent the Company makes a payment or
payments to any Noteholder, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required, for any of the foregoing reasons
or for any other reason, to be repaid or paid over to a custodian,
trustee, receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, state or federal
law, or any common law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if
said payment had not been made and each Guarantor shall be primarily
liable for such obligation.
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<PAGE> 77
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.4 NATURE OF GUARANTY.
The obligations of each Guarantor under this Agreement constitute an
absolute and unconditional and irrevocable guaranty of payment and not a
guaranty of collection and are wholly independent of and in addition to other
rights and remedies of the Noteholders and are not contingent upon the pursuit
by the Noteholders of any such rights and remedies, such pursuit being hereby
waived by such Guarantor. Notwithstanding anything to the contrary set forth in
the Note Purchase Agreement, the Notes or any other Financing Document, the
obligations of each Guarantor under this Agreement are joint and several with
the obligations of each other Guarantor and any other guarantor of all or any
part of the Guarantied Obligations.
2.5 OBLIGATIONS ABSOLUTE.
The obligations, covenants, agreements and duties of each Guarantor
under this Agreement shall not be released, affected or impaired by any of the
following, whether or not undertaken with notice to or consent of such
Guarantor:
(a) any assignment or transfer, in whole or in part, of any
Note although made without notice to or consent of such Guarantor; or
(b) any waiver by any Noteholder, or by any other Person, of
the performance or observance by the Company of any of the agreements,
covenants, terms or conditions contained in the Note Purchase Agreement
or in any other Financing Document; or
(c) any indulgence in or the extension of the time for payment
by the Company of any amounts payable under or in connection with the
Note Purchase Agreement, the Notes or any other Financing Document, or
of the time for performance by the Company of any other obligations
under or arising out of the Note Purchase Agreement, the Notes or any
other Financing Document, or the extension or renewal thereof; or
(d) the modification, amendment or waiver (whether material or
otherwise) of any duty, agreement or obligation of the Company set
forth in the Note Purchase Agreement, the Notes or any other Financing
Document (the modification, amendment or waiver from time to time of
the Note Purchase Agreement, the Notes and the other Financing
Documents being expressly authorized without further notice to or
consent of such Guarantor); or
(e) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of the Company or
any receivership, insolvency, bankruptcy, reorganization or other
similar proceedings affecting the Company or any of its assets; or
(f) the merger or consolidation of the Company or any
Guarantor with any other Person; or
(g) the release or discharge of the Company from the
performance or observance of any agreement, covenant, term or condition
contained in the Note
4
<PAGE> 78
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
Purchase Agreement, the Notes or any other Financing Document, by
operation of law; or
(h) any other cause, whether similar or dissimilar to the
foregoing, that would release, affect or impair the obligations,
covenants, agreements or duties of any Guarantor under this Agreement.
2.6 NO INVESTIGATION BY NOTEHOLDER.
Each Guarantor hereby waives unconditionally any obligation that, in
the absence of such provision, the Noteholders might otherwise have to
investigate or to assure that there has been compliance with the law of any
jurisdiction with respect to the Guarantied Obligations, recognizing that, to
save both time and expense, such Guarantor has requested that the Noteholders
not undertake such investigation. Each Guarantor hereby expressly confirms that
the obligations of such Guarantor hereunder shall remain in full force and
effect without regard to compliance or noncompliance with any such law and
irrespective of any investigation or knowledge of any such law by any
Noteholder.
2.7 INDEMNITY.
As a separate, additional and continuing obligation, each Guarantor
unconditionally and irrevocably undertakes and agrees with the Noteholders that,
should the Guarantied Obligations not be recoverable from such Guarantor for any
reason whatsoever (including, without limitation, by reason of any provision of
the Note Purchase Agreement, the Notes, any other Financing Document or any
other agreement or instrument executed in connection therewith being or becoming
void, unenforceable or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Noteholder at any time, such
Guarantor as sole, original and independent obligor, upon demand by the Required
Holders, will make payment of the Guarantied Obligations to the Noteholders by
way of a full indemnity in such currency and otherwise in such manner as is
provided in the Note Purchase Agreement and the Notes.
2.8 SUBORDINATION, SUBROGATION, ETC.
Each Guarantor agrees that any present or future indebtedness,
obligations or liabilities of the Company to such Guarantor shall be fully
subordinate and junior in right and priority of payment to any present or future
indebtedness, obligations or liabilities of the Company to the Noteholders. Each
Guarantor waives any right of subrogation to the rights of the Noteholders
against the Company or any other Person obligated for payment of the Guarantied
Obligations and any right of reimbursement, contribution or indemnity whatsoever
(including, without limitation, any such right as against any other Guarantor)
arising or accruing out of any payment that such Guarantor may make pursuant to
this Agreement, and any right of recourse to security for the debts and
obligations of the Company, unless and until the entire amount of the Guarantied
Obligations shall have been paid in full.
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<PAGE> 79
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.9 WAIVER.
To the extent that it lawfully may, each Guarantor agrees that it will
not at any time insist upon or plead, or in any manner whatsoever claim or take
any benefit or advantage of, any applicable present or future stay, extension or
moratorium law, which may affect observance or performance of the provisions of
this Agreement, the Note Purchase Agreement, the Notes or any other Financing
Document; nor will it claim, take or insist upon any benefit or advantage of any
present or future law providing for the evaluation or appraisal of any security
for its obligations hereunder or the Company under the Note Purchase Agreement,
the Notes or any other Financing Document prior to any sale or sales thereof
which may be made under or by virtue of any instrument governing the same; nor
will it, after any such sale or sales, claim or exercise any right, under any
applicable law, to redeem any portion of such security so sold.
2.10 LIMITATION ON GUARANTIED OBLIGATIONS.
Notwithstanding anything in Section or elsewhere in this Agreement, the
Note Purchase Agreement, the Notes or any other Financing Document to the
contrary, the obligations of each Guarantor under this Agreement shall at each
point in time be limited to an aggregate amount equal to the greatest amount
that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under
applicable law (including, without limitation, to the extent, and only to the
extent, applicable to any such Guarantor, Section 548 of the Bankruptcy Code of
the United States of America and any comparable provisions of the law of any
other jurisdiction, any capital preservation law of any jurisdiction and any
other law of any jurisdiction that at such time limits the enforceability of the
obligations of such Guarantor under this Agreement).
2.11 MARSHALING.
Neither any Noteholder nor any Person acting for the benefit of any
Noteholder shall be under any obligation to marshal any assets in favor of any
Guarantor or against or in payment of any or all of the Guarantied Obligations.
2.12 SETOFF, COUNTERCLAIM OR OTHER DEDUCTIONS.
Except as otherwise required by law, each payment by each Guarantor
shall be made without setoff, counterclaim or other deduction.
2.13 NO ELECTION OF REMEDIES BY NOTEHOLDERS.
No election to proceed in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of such Noteholder's
right to proceed in any other form of action or proceeding or against other
parties unless such Noteholder has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by any Noteholder against the Company or any Guarantor under any
document or instrument evidencing obligations of the Company or any Guarantor to
such Noteholder shall serve to diminish the liability of any Guarantor under
this Agreement, except to the extent that
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<PAGE> 80
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
such Noteholder finally and unconditionally shall have realized payment by such
action or proceeding in respect of the Guarantied Obligations.
2.14 SEPARATE ACTION; OTHER ENFORCEMENT RIGHTS.
Each of the rights and remedies granted under this Agreement to each
Noteholder in respect of the Notes held by such Noteholder may be exercised by
such Noteholder without notice by such Noteholder to, or the consent of or any
other action by, any other Noteholder. Each Noteholder may proceed to protect
and enforce this Agreement by suit or suits or proceedings in equity, at law or
in bankruptcy, and whether for the specific performance of any covenant or
agreement contained herein or in execution or aid of any power herein granted or
for the recovery of judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
2.15 NOTEHOLDER SETOFF.
Each Noteholder shall have, to the fullest extent permitted by law and
this Agreement, a right of set-off against any and all credits and any and all
other property of each Guarantor now or at any time whatsoever, with or in the
possession of such Noteholder, or anyone acting for such Noteholder, to ensure
the full performance of any and all obligations of each Guarantor hereunder.
2.16 DELAY OR OMISSION; NO WAIVER.
No course of dealing on the part of any Noteholder and no delay or
failure on the part of any such Person to exercise any right hereunder shall
impair such right or operate as a waiver of such right or otherwise prejudice
such Person's rights, powers and remedies hereunder. Every right and remedy
given by this Agreement or by law to any Noteholder may be exercised from time
to time as often as may be deemed expedient by such Person.
2.17 RESTORATION OF RIGHTS AND REMEDIES.
If any Noteholder shall have instituted any proceeding to enforce any
right or remedy under this Agreement or under any Note held by such Noteholder,
and such proceeding shall have been dismissed, discontinued or abandoned for any
reason, or shall have been determined adversely to such Noteholder, then and in
every such case each such Noteholder, the Company and each Guarantor shall,
except as may be limited or affected by any determination (including, without
limitation, any determination in connection with any such dismissal) in such
proceeding, be restored severally and respectively to its respective former
positions hereunder and thereunder, and thereafter, subject as aforesaid, the
rights and remedies of such Noteholders shall continue as though no such
proceeding had been instituted.
2.18 CUMULATIVE REMEDIES.
No remedy under this Agreement, the Note Purchase Agreement, the Notes
or any other Financing Document is intended to be exclusive of any other remedy,
but each and every remedy
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2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
shall be cumulative and in addition to any and every other remedy given pursuant
to this Agreement, the Note Purchase Agreement, the Notes or any other Financing
Document.
3. INTERPRETATION OF THIS GUARANTY AGREEMENT
3.1 TERMS DEFINED.
For purposes of this Agreement, the following terms have the meanings
specified below or provided for in the section of this Agreement referred to
immediately following such term (such definitions to be equally applicable to
both the singular and plural forms of the terms defined) or, if not defined
herein, then as defined in the Trust Indenture.
COMPANY -- Section 1.1.
DEFAULT -- has the meaning assigned to such term in the Note Purchase
Agreement.
EVENT OF DEFAULT -- has the meaning assigned to such term in the Note
Purchase Agreement.
GUARANTIED OBLIGATIONS -- Section 2.1.
GUARANTORS -- has the meaning assigned to such term in the introductory
paragraph hereof.
JOINDER AGREEMENT -- Section 6.5.
LIEN -- has the meaning assigned to such term in the Note Purchase
Agreement.
NOTE PURCHASE AGREEMENT -- Section 1.1(b).
NOTEHOLDER -- means, at any time, each Person that is the holder of any
Note at such time.
NOTES -- has the meaning assigned to such term in Preliminary Statement
A.
PERSON -- means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
PURCHASERS -- Section 1.1(b).
PROPERTY -- means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.
REQUIRED HOLDERS -- has the meaning assigned to such term in the Note
Purchase Agreement.
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<PAGE> 82
3. INTERPRETATION OF THIS GUARANTY AGREEMENT
SERIES A NOTES -- Section 1.1(a), 1.1(a), 1.1(b).
SERIES B NOTES -- Section 1.1(b).
SUBSIDIARY -- has the meaning assigned to such term in the Note
Purchase Agreement.
TRUSTEE -- has the meaning assigned to such term in the Trust
Indenture, dated as of December 1, 1996, among the Company, the Guarantors,
Fleet National Bank as trustee, and the other parties signatory thereto, as
amended, modified or supplemented from time to time.
3.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections and Table
of Contents of this Agreement appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Indenture as a whole and not to any particular Section or other
subdivision. References to Sections are, unless otherwise specified,
references to Sections of this Agreement. References to Annexes,
Schedules, Exhibits and Attachments are, unless otherwise specified,
references to Annexes, Schedules, Exhibits and Attachments attached to
this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
3.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Guarantors and
the Trustee, this Agreement shall be construed and interpreted as a separate
Agreement between each Guarantor and the Trustee, and any whole or partial
invalidity of this Agreement in respect of any Guarantor shall not have any
effect on the validity or enforceability of this Agreement as among each other
Guarantor, respectively, as the case may be, and the Trustee.
3.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
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<PAGE> 83
3.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS EXCLUDING CHOICE-OF-LAW PRINCIPLES
OF THE LAW OF SUCH JURISDICTION THAT WOULD REQUIRE THE APPLICATION OF THE LAWS
OF A JURISDICTION OTHER THAN SUCH JURISDICTION.
4. WARRANTIES AND REPRESENTATIONS
Each Guarantor warrants and represents, as of the date such Guarantor
becomes a Guarantor hereunder, that each of the warranties and representations
made by the Company in Section 5 of the Note Purchase Agreement with respect to
Subsidiaries generally are true with respect to such Guarantor on the date that
such Guarantor becomes a Guarantor, with the same effect as though such
warranties and representations were made on and as of such date rather than on
and as of the date of this Agreement.
5. GENERAL COVENANTS
Each Guarantor covenants and agrees that on and after the date hereof
and so long as any of the Guarantied Obligations shall be outstanding:
5.1 UNDERTAKINGS IN NOTE PURCHASE AGREEMENT.
Each Guarantor will comply with each of the undertakings of the Company
in the Note Purchase Agreement in respect of which the Company undertakes to
cause such Guarantor (in its capacity as a Guarantor and as a Subsidiary) to
comply with such undertakings, as if such undertakings (as they apply to such
Guarantor) were set forth at length herein as the undertakings of such
Guarantor.
5.2 FURTHER ASSURANCES.
Each Guarantor will cooperate with the Noteholders and execute such
further instruments and documents as the Required Holders shall reasonably
request to carry out, to the reasonable satisfaction of the Required Holders,
the transactions contemplated by this Agreement and the other Financing
Documents.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
All communications hereunder shall be in writing, shall be delivered in
the manner required by the Note Purchase Agreement, and shall be addressed, if
to any Guarantor, at the applicable address set forth on Annex 1 hereto, and if
to any of the Noteholders:
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<PAGE> 84
6 MISCELLANEOUS
(a) if such Noteholder is a Purchaser, at the address for such
Noteholder set forth on Schedule A to the Note Purchase Agreement, and
further including any parties referred to on such Schedule A which are
required to receive notices in addition to such Noteholder, and
(b) if such Noteholder is not a Purchaser, at the address for
such Noteholder set forth in the register for the registration and
transfer of Notes maintained pursuant to Section 13.1 of the Note
Purchase Agreement,
or to any such party at such other address as such party may designate by notice
duly given in accordance with this Section 6.1. Notices shall be deemed given
only when actually received.
6.2 AMENDMENT.
This Agreement may be amended in, and the observance of any term hereof
may be waived (either retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the Required Holders, except that no
amendment or waiver of any of the provisions of Section 2, or any defined term
as it is used therein, will be effective unless consented to by each Guarantor
and each Noteholder in writing; provided that this Agreement may, in the manner
specified in Section 6.5, be amended to add one or more new Guarantors hereunder
without the consent of any other Guarantor or any holder of Notes.
6.3 SUCCESSORS AND ASSIGNS.
(a) All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto shall 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.
(b) Each Guarantor agrees to take such action as may be
reasonably requested by any Noteholder to confirm such Guarantor's
guaranty of the Guarantied Obligations in connection with the transfer
of the Notes of such Noteholder.
6.4 SURVIVAL.
All representations and warranties contained herein or made in writing
by any Guarantor in connection herewith shall survive the execution and delivery
of this Agreement. So long as the Guarantied Obligations and all payment
obligations of each Guarantor hereunder shall not have been fully and finally
performed and indefeasibly paid, the obligations of each Guarantor hereunder
shall survive the transfer and payment of any Note and the payment in full of
all the Notes.
6.5 JOINDER AGREEMENT.
Upon execution and delivery by any Person of a counterpart of a Joinder
Agreement substantially in the form attached to this Agreement as Annex 2 (each,
a "JOINDER AGREEMENT"), this Agreement shall for all purposes, without further
action, be deemed to have been amended
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6 MISCELLANEOUS
to add such Person as a Guarantor hereunder with the same effect as if such
Person had been an original party hereto.
6.6 EXPENSE.
(a) AMENDMENTS AND WAIVERS. The Guarantors will pay when
billed the reasonable costs and expenses (including reasonable
attorneys' fees) incurred by the Noteholders in connection with the
consideration, negotiation, preparation or execution of any amendments,
waivers, consents, standstill agreements and other similar agreements
with respect hereto (whether or not any such amendments, waivers,
consents, standstill agreements or other similar agreements are
executed or become effective).
(b) RESTRUCTURING AND WORKOUT, INSPECTIONS. At any time when
the Guarantors and the Noteholders are conducting restructuring or
workout negotiations in respect hereof, or a Default or Event of
Default exists, the Guarantors will pay when billed the reasonable
costs and expenses (including reasonable attorneys' fees and the fees
of professional advisors) incurred by the Noteholders in connection
with the assessment, analysis or enforcement of any rights or remedies
that are or may be available to the Noteholders and in connection with
inspections made pursuant to Section 7.3 of the Note Purchase
Agreement.
(c) COLLECTION AND ENFORCEMENT. If the Guarantors shall fail
to pay when due any of the Guarantied Obligations or shall otherwise
fail to comply with any provision of this Agreement, the Guarantors
will pay to each Noteholder, to the extent permitted by law, such
amounts as shall be sufficient to cover the costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred by
such Noteholder in collecting any sums due hereunder and in enforcing
any rights or remedies that are or may be available to such Noteholder.
6.7 BENEFITS OF GUARANTY RESTRICTED TO NOTEHOLDERS.
Nothing express or implied in this Agreement is intended or shall be
construed to give to any Person other than the Guarantors and the Noteholders
any legal or equitable right, remedy or claim under or in respect hereof or any
covenant, condition or provision therein or herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Guarantors and the Noteholders.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
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<PAGE> 86
6. MISCELLANEOUS
6.9 CONNECTICUT WAIVER.
TO THE EXTENT ANY ASSETS AND/OR REAL ESTATE OF ANY GUARANTOR IS LOCATED
IN CONNECTICUT, EACH GUARANTOR ACKNOWLEDGES THAT THIS AGREEMENT AND EACH
TRANSACTION RELATED HERETO IS A "COMMERCIAL TRANSACTION" WITHIN THE MEETING OF
CHAPTER 903A OF THE CONNECTICUT GENERAL STATUES, AS AMENDED. EACH GUARANTOR
HEREBY WAIVES ANY RIGHT WHICH IT MIGHT HAVE TO NOTICE IN A HEARING OR A PRIOR
COURT ORDER, UNDER SAID CHAPTER 903A OR AS OTHERWISE PROVIDED UNDER ANY
APPLICABLE FEDERAL OR STATE LAW, IN THE EVENT THE TRUSTEE OR ANY NOTEHOLDER
SEEKS ANY PREJUDGMENT REMEDY AT ANY TIME PRIOR TO FINAL JUDGMENT IN ANY
LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT, WHETHER BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR
REPLEVIN.
6.10 COUNTERPARTS.
This Agreement may be executed and delivered in any number of
counterparts, each of such counterparts constituting an original but altogether
only one Agreement.
[Remainder of page intentionally left blank; next page is signature page.]
13
<PAGE> 87
IN WITNESS WHEREOF, each Guarantor has caused this Agreement to be
executed on its behalf by one of its duly authorized officers as of the date
first set forth above.
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
By /s/ Bruce A. Cannon
-------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN SPECIALTY OPTICS
COMPANY
By /s/ Bruce A. Cannon
-------------------------------
Name: Bruce A. Cannon
Title: Secretary
APPLIED PHOTONIC DEVICES, INC.
By /s/ Bruce A. Cannon
--------------------------------
Name: Bruce A. Cannon
Title: Secretary
[GUARANTY AGREEMENT]
<PAGE> 88
Annex 1 to Guaranty Agreement
Addresses of Guarantors
SpecTran Communication Fiber Technologies, Inc.
50 Hall Road
Sturbridge, MA 01566
Attn: Chief Executive Officer
SpecTran Specialty Optics Company
150 Fisher Drive
Avon CT 060011(*)
Attn: President
Applied Photonic Devices, Inc.
300 Lake Road
Dayville, CT 06241(**5)
Attn: Chief Executive Officer
* Spectran Specialty Optics Company intends to move its principal executive
offices to 55 Darling Drive, Avon, Connecticut 06001 during 1997.
Applied Photonic Devices, Inc. intends to move its principal executive offices
to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
- ----------
(5)Applied Photonic Devices, Inc. intends to move its principal
executive offices to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
<PAGE> 89
ANNEX 2
[FORM OF JOINDER AGREEMENT]
JOINDER AGREEMENT
[Date]
To each of the Noteholders (as defined in the Guaranty
Agreement hereinafter referred to)
Ladies and Gentlemen:
Reference is made to the Guaranty Agreement, dated as of December 1,
1996 (as amended, restated or otherwise modified from time to time, the
"GUARANTY AGREEMENT"), by SpecTran Communication Fiber Technologies, Inc.
("SCFT"), a Delaware corporation, SpecTran Specialty Optics Company ("SSOC"), a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC. ("APD"), a Delaware
corporation (SCFT, SSOC and APD, together with each other Person that becomes a
party to the Guaranty Agreement, the "GUARANTORS"), in favor of each of the
Noteholders (as defined in the Agreement). Capitalized terms used herein and not
otherwise defined have the meanings ascribed to such terms in the Guaranty
Agreement.
[NEW GUARANTOR], a ___________________ corporation (the "NEW
GUARANTOR"), agrees with you as follows:
1. GUARANTY. The New Guarantor hereby unconditionally and expressly
agrees to become, and by execution and delivery of this Agreement does become, a
"Guarantor" under and as defined in the Guaranty Agreement. Without limitation
of the foregoing or of anything in the Guaranty Agreement, by such execution and
delivery hereof the New Guarantor does become fully liable, as a Guarantor, for
the payment of the Guarantied Obligations as further provided in Section 1 of
the Guaranty Agreement. As provided in Section 6.5 of the Guaranty Agreement,
the Guaranty Agreement is hereby amended, without any further action, to add the
New Guarantor as a Guarantor thereunder as if the New Guarantor had been an
original party to the Guaranty Agreement. Annex 1 to the Guaranty Agreement is
hereby amended by adding the following address of the New Guarantor for purposes
of communications pursuant to Section 6.1 of the Guaranty Agreement: [insert
name and address of New Guarantor].
2. FURTHER ASSURANCES. The New Guarantor agrees to cooperate with the
Noteholders and execute such further instruments and documents as the Required
Holders shall reasonably request to effect, to the reasonable satisfaction of
the Required Holders, the purposes of this Agreement.
3. BINDING EFFECT. This Agreement shall be binding upon the New
Guarantor and shall inure to the benefit of the Noteholders and their respective
successors and assigns.
Annex 2-1
<PAGE> 90
IN WITNESS WHEREOF, the New Guarantor has caused this Agreement to be
executed on its behalf by one of its duly authorized officers.
[NEW GUARANTOR]
By
------------------------------------
Name:
Title:
Annex 2-2
<PAGE> 1
EXHIBIT 10.95
<PAGE> 2
OPEN-END MORTGAGE,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT (as amended, extended, renewed, consolidated, spread or otherwise
modified from time to time, this "MORTGAGE") is dated as of December 1, 1996, by
SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation whose address and
principal place of business is 150 Fisher Drive, Avon, Connecticut 06001
("GRANTOR"), to FLEET NATIONAL BANK, a national banking association, not
individually but solely as security trustee under a certain Trust Indenture (as
may be amended, restated or otherwise modified from time to time, the "TRUST
INDENTURE"), dated as of the date hereof, among the Grantor, Fleet National Bank
(in its capacity as such security trustee, and together with any successor or
co-security trustee that becomes such in accordance with the provisions of the
Trust Indenture, the "GRANTEE") and the other parties signatory thereto.
W I T N E S S E T H:
WHEREAS, Grantor, SpecTran Corporation, a Delaware corporation having
an address at 50 Hall Road, Sturbridge, Massachusetts 01566 (the "PARENT"),
SpecTran Communication Fiber Technologies, Inc. ("SCFT"), a Delaware corporation
having an address at 50 Hall Road, Sturbridge, Massachusetts 01566, and Applied
Photonic Devices, Inc. ("APD"), a Delaware corporation having an address at 300
Lake Road, Dayville, Connecticut 06241, and Fleet National Bank, a national
banking association as "LENDER," have entered into a certain Loan Agreement (as
amended from time to time, the "LOAN AGREEMENT") dated as of December 1, 1996, a
copy of which is attached hereto as SCHEDULE 1 and made a part hereof and the
terms of which are incorporated herein, which provides for the extension of
credit to Grantor, the Parent, SCFT and APD in the nature of a revolving line of
credit facility (the "FACILITY") in the face amount of $20,000,000, as evidenced
by a certain revolving promissory note in said principal amount, dated December
1, 1996, bearing interest and being payable as set forth therein and in the Loan
Agreement, and maturing on December 31, 1999, all as more particularly provided
therein and in the Loan Agreement (as presently constituted and as they
hereafter may be amended, extended, renewed or consolidated from time to time,
together with any and all promissory notes that may have been or may be
exchanged or given in substitution therefor from time to time, being
collectively referred to herein as the "REVOLVING CREDIT NOTES"), a copy of
which is attached hereto as SCHEDULE 2 and made a part hereof and the terms of
which are incorporated herein;
WHEREAS, the Facility is a "commercial revolving loan" and the Loan
Agreement is a "commercial revolving loan agreement," both within the meaning
and coverage of Section 49-2(c) of the Connecticut General Statutes, and this
Mortgage hereby permits advances and readvances.
AFTER RECORDING, PLEASE RETURN
THIS INSTRUMENT TO:
HEBB & GITLIN, A PROFESSIONAL CORPORATION
ONE STATE STREET
HARTFORD, CONNNECTICUT 06103
ATTENTION: THOMAS J. LOVE, ESQ.
<PAGE> 3
(including future advances and readvances) of proceeds available from time to
time in respect of the Facility, which advances and readvances shall be made
pursuant to the Loan Agreement;
WHEREAS, Grantor is primarily, unconditionally and jointly and
severally liable along with the Parent, SCFT and APD for the entire amount of
the indebtedness evidenced by the Revolving Credit Notes;
WHEREAS, the Parent has entered into certain Note Purchase Agreements
dated as of December 1, 1996 (as the same may be amended from time to time,
collectively, the "NOTE AGREEMENTS") with each of the persons listed on Schedule
A attached thereto (collectively, the "PURCHASERS"), pursuant to which the
Purchasers have agreed, subject to the terms and conditions contained in their
respective Note Agreements, to purchase one or more of the Parent's (i) 9.24%
Series A Senior Secured Notes due December 26, 2003 in the aggregate principal
amount of $16,000,000 (the "SERIES A NOTES"), or (ii) 9.39% Series B Senior
Secured Notes due December 26, 2004 in the aggregate principal amount of
$8,000,000 (the "SERIES B NOTES") (the Series A Notes and the Series B Notes, as
presently constituted and as they hereafter may be amended, extended, renewed or
consolidated from time to time, together with any and all promissory notes that
may have been or may be exchanged or given in substitution therefor from time to
time, being collectively referred to herein as the "TERM NOTES");
WHEREAS, each of the Term Notes is dated December 26, 1996, and each of
the Term Notes bears interest, provides for the payment of certain premiums
(including a Make-Whole Amount, as such term is defined therein) and other
amounts (including late charges, fees, reimbursements, costs, expenses and
indemnities) and is payable as set forth therein (with final maturity on the due
date thereof specified above);
WHEREAS, Grantor has guarantied, among other things, the due and
punctual payment of the principal (in the aggregate amount of $24,000,000) of,
and accrued and unpaid interest (including, without limitation, interest which
otherwise may cease to accrue by operation of any insolvency law, rule,
regulation or interpretation thereof) and the Make-Whole Amount on the Term
Notes and the due and punctual payment and performance by the Parent of all
other obligations of the Parent contained in the Term Notes and the Note
Agreements, all pursuant to a certain Guaranty Agreement of even date herewith
by Guarantor and the other parties signatory thereto (as amended from time to
time, the "GUARANTY AGREEMENT"), a copy of which is attached hereto as SCHEDULE
3 and made a part hereof and the terms of which are incorporated herein;
WHEREAS, Grantor has not guarantied any obligations under the Guaranty
Agreement which would constitute "open-end loans" within the meaning and
coverage of Section 49-4b of the Connecticut General Statutes;
WHEREAS, all capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Trust Indenture; and
WHEREAS, as required by the Loan Agreement and the Note Agreements,
Grantor has agreed to execute and deliver this Mortgage to the Grantee as
security trustee for the benefit of the Beneficiaries as security for Grantor's
obligations from time to time evidenced by or arising in connection with the
Revolving Credit Notes, the Guaranty Agreement, the Trust Indenture or the other
Lending Documents (whether consisting of principal, interest, premiums, late
charges,
2
<PAGE> 4
fees, reimbursements, costs, expenses, indemnities or any other amounts
whatsoever) (said aggregate indebtedness and other obligations being hereinafter
referred to as the "SECURED INDEBTEDNESS") and as security for the keeping,
performance and observance of, and compliance with, all covenants, agreements,
conditions and other provisions required to be kept, performed, observed and
complied with by or on behalf of Grantor from time to time pursuant to the Trust
Indenture or the Lending Documents;
NOW THEREFORE, to secure the payment of the Secured Indebtedness and
the keeping, performance and observance of, and compliance with, all of such
covenants, agreements, conditions and other provisions, and in consideration of
the sum of Ten Dollars ($10) paid to Grantor and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Grantor does hereby grant, bargain, sell,
alienate, remise, release, convey, assign, transfer, mortgage, hypothecate,
pledge, deliver, set over, warrant and confirm unto Grantee, its successors and
assigns, as security trustee as aforesaid, the following (collectively, the
"PROPERTY"):
THE PROPERTY
The land described in EXHIBIT A attached hereto and made a part hereof
(the "LAND"), together with (i) all buildings, structures and improvements now
or hereafter situated on the Land (collectively, the "BUILDING"), (ii) all
right, title and interest of Grantor, whether now owned or hereafter acquired,
in and to all fixtures, fittings, machinery, appliances, equipment, apparatus,
furnishings and other tangible personal property now or hereafter located in or
on, or attached to, and used or intended to be used in connection with the Land
or the Building or in connection with the operation thereof (collectively, the
"EQUIPMENT") (the Building and the Equipment being hereinafter collectively
referred to as the "IMPROVEMENTS"), (iii) all right, title and interest of
Grantor, whether now owned or hereafter acquired, in and to all streets, roads,
sidewalks, alleys, ways, passages, public places, vaults, water courses, strips
and gores adjoining or otherwise providing access to, or used or intended to be
used in connection with, the Land or any of the Improvements, and the land lying
in the bed thereof, and (iv) all proceeds, products, extensions, additions,
improvements, betterments, renewals, substitutions, replacements, accessions,
accretions and relictions of and to all or any part of the Property described
above;
TOGETHER WITH all easements, rights-of-way, estates, interests,
benefits, powers, rights (including lateral support, drainage, slope, riparian,
littoral, sewer, water, air, oil, gas, mineral and subsurface rights),
privileges, claims, franchises, licenses, profits, tenements, hereditaments,
reversions, remainders and appurtenances in any way now or hereafter belonging,
relating to or appertaining to all or any part of the Property described above;
TOGETHER WITH all right, title and interest of Grantor (whether as
lessor, lessee or otherwise) in and to any and all leases, subleases, use,
occupancy and similar agreements now or hereafter relating to all or any part of
the Property described above (collectively, the "LEASES"), together with any and
all guaranties and security of, for or otherwise relating to any of the Leases,
and together with all rents, royalties, issues, profits, revenues, income and
other monetary benefits of and from the Property described above, whether now or
hereafter payable or accruing (collectively, the "RENTS"), including all rent
and other money now or hereafter payable or accruing under or in connection with
any of the Leases, and all rights of Grantor to collect and receive the same;
provided, however, that permission is hereby given to Grantor, so
3
<PAGE> 5
long as no Default (as hereinafter defined) shall have occurred, to collect and
use the Rents as, but not before, they become due and payable, which permission
shall terminate immediately, without the necessity of any action, upon the
occurrence of any Default;
TOGETHER WITH all judgments, settlements, claims, awards, insurance
proceeds and other proceeds and compensation, and interest thereon, now or
hereafter made or payable in connection with any casualty or other damage to any
Property described above, or in connection with any condemnation proceedings
affecting any such Property or any damage to or taking of any such Property or
any rights thereto or any interest therein in connection with any exercise of
the power of eminent domain (or any conveyance in lieu of or under threat of any
such taking), together with any and all refunds or rebates of, or with respect
to, any insurance premiums, utility charges, taxes or other impositions relating
to any such Property and interest thereon, and together with all accounts,
contract rights, general intangibles, actions and rights in action arising from
or relating to any such Property (including all rights of Grantor in and to
unearned or prepaid insurance premiums, utility charges, taxes or other
impositions relating to any such Property, any deposits with respect thereto and
any interest thereon); and
TOGETHER WITH all further or greater estate, right, title and interest
of Grantor, of whatever character (whether vested or contingent and whether now
owned or hereafter acquired), in and to any of the Property described above and
any rights or interests appurtenant thereto.
TO HAVE AND TO HOLD the Property unto Grantee, its successors and
assigns forever, to its and their own proper use and behoof, upon and subject to
the terms and conditions of this Mortgage.
Grantor covenants and agrees with Grantee and the Beneficiaries as
follows:
ARTICLE I
Section 1.1. Grantor, for itself and its successors and assigns
forever, hereby covenants with and warrants to Grantee, its successors and
assigns forever, that Grantor is well and lawfully seized of the Land, the
Building and all other parts of the Property constituting real property as a
good indefeasible estate in fee simple, that Grantor has good and absolute title
to the Equipment and all other parts of the Property constituting personal
property (except Equipment owned by any person, other than Grantor, leasing
space in the Building and Equipment leased by any such lessee from any person
other than Grantor), that Grantor has good right, full power and lawful
authority, without the joinder or consent of any person, to give, grant,
bargain, sell, assign and confirm the Property in manner and form as written
above, and that the Property is free and clear of all claims, demands, liens,
security interests, charges, encumbrances and exceptions to title whatsoever,
except as permitted by the Lending Documents (the "PERMITTED EXCEPTIONS").
Grantor hereby binds itself, and its successors and assigns forever, to WARRANT
and DEFEND the Property unto Grantee, its successors and assigns forever,
against the claims of all persons whomsoever claiming or who may claim the same
or any part thereof, subject, however, to the Permitted Exceptions.
Section 1.2. Grantor shall keep, perform, observe and comply with, or
shall cause to be kept, performed, observed and complied with, all covenants,
agreements, conditions and other provisions required to be kept, performed,
observed and complied with by or on behalf of
4
<PAGE> 6
Grantor from time to time pursuant this Mortgage, the Trust Indenture or the
other Lending Documents. Without limiting the generality of the immediately
preceding sentence, Grantor shall pay, when due, all Secured Indebtedness.
Section 1.3. Grantor shall pay, when due, any and all mortgage
recording, intangible property and documentary stamp taxes, all similar taxes,
and all filing, registration and recording fees, which are now or hereafter may
become payable in connection with the Secured Indebtedness, this Mortgage, the
Trust Indenture or any of the other Lending Documents. Grantor shall pay when
due any and all excise, transfer and conveyance taxes which are now or hereafter
may become payable in connection with the Secured Indebtedness, this Mortgage,
the Revolving Credit Notes, the Guaranty or any of the other Lending Documents.
Section 1.4. The assignment set forth in the section entitled "The
Property" shall not be deemed to impose upon Grantee or any of the Beneficiaries
any of the obligations, duties or liabilities of Grantor under or in respect of
any lease. To the extent permitted by law, such assignment shall constitute an
absolute and present assignment of the rents, royalties, issues, profits,
revenues, income and other benefits described in said paragraph, subject,
however, to the conditional permission given to Grantor to collect and use the
same as provided above. Neither the existence nor the exercise of such
conditional permission shall subordinate such assignment to any subsequent
assignment by Grantor. Grantee is hereby irrevocably authorized and empowered,
at its option, (a) to demand, collect, receive and enforce payment of any and
all such Rents after the occurrence of any Default, and to give receipts,
releases and satisfactions therefor, whether or not Grantee shall have taken, or
at any time shall take, possession of all or any part of the Land or the
Improvements, and (b) to notify all lessees, licensees, invitees, occupants and
other users of all or any part of the Property of Grantee's rights under this
Mortgage.
Section 1.5. Grantor (as Debtor) hereby grants to Grantee (as Secured
Party) a security interest in all personal property and fixtures described in
the above section entitled "The Property", and in any and all other personal
property and fixtures now or hereafter constituting part of the Property. This
Mortgage, when filed for record in the real estate records of the recording
jurisdiction in which the Land is situated, shall be effective as a financing
statement filed as a fixture filing with respect to all fixtures described in
the above section entitled "The Property". In addition to all rights and
remedies specified herein, Grantee shall have all the rights and remedies of a
secured party under the Uniform Commercial Code as in effect in the State in
which the Land is situated and under other applicable law. Any failure to file
any financing statement relating to this Mortgage shall not impair the validity
and enforceability of this Mortgage in any respect whatsoever.
Section 1.6. Upon request by Grantee or any Beneficiary, Grantor from
time to time shall make, execute and deliver, or cause to be made, executed and
delivered, to Grantee and the Beneficiaries, and where appropriate shall cause
to be recorded or filed, and from time to time thereafter to be re-recorded and
refiled at such times and in such offices and places as Grantee or any
Beneficiary shall reasonably deem desirable, any and all such further mortgages,
assignments, security agreements, financing statements, instruments of further
assurance, certificates and such other documents as Grantee or any Beneficiary
may reasonably consider necessary or desirable in order to effectuate, complete,
perfect, continue or preserve the
5
<PAGE> 7
obligations of Grantor under the Lending Documents or the lien of this Mortgage
upon all or any part of the Property.
Section 1.7. All money advanced by Grantee or by any of the
Beneficiaries pursuant to this Mortgage, the Trust Indenture or the other
Lending Documents, all money otherwise advanced by Grantee or by any of the
Beneficiaries to protect the security of this Mortgage and all costs, expenses
and liabilities paid or incurred by Grantee or by any of the Beneficiaries and
reimbursable or payable by Grantor pursuant to this Mortgage, the Trust
Indenture or the other Lending Documents, together with interest thereon at the
Default Interest Rate or as otherwise provided by law, shall be deemed to be a
part of the Secured Indebtedness and shall be secured by this Mortgage to the
extent permitted by applicable law.
Section 1.8. This Mortgage as it relates to the Facility is an OPEN-END
MORTGAGE, and Grantee shall have all rights, powers and protections authorized
and allowed by Section 49-2 of the Connecticut General Statutes or by other
statutes and applicable law, subject only to such limitations as are imposed by
law. Grantee is specifically permitted, at its option and in its discretion, to
make additional loans or advancements in respect of the Facility under this
Mortgage, as permitted by Section 49-2(c) of the Connecticut General Statutes
(but only at the request of Grantor or as otherwise contemplated by the Loan
Agreement). In addition to advances and readvances of proceeds available from
time to time in respect of the Facility (which advances and readvances shall be
made pursuant to the Loan Agreement as contemplated by this Mortgage), such
loans or advancements also may include loans or advancements in respect of the
Facility otherwise contemplated by Section 49-2(c). Each and every such loan or
advancement shall be secured by this Mortgage equally with, and with the same
priority as, the proceeds initially advanced in respect of the Facility;
provided, however, that (a) each such loan or advancement in respect of the
Facility which is not evidenced by the Revolving Credit Notes shall be evidenced
by a promissory note reciting that it is secured by this Mortgage, (b) no such
loan or advancement shall cause the maximum principal amount of the indebtedness
evidenced by the Revolving Credit Notes to exceed $20,000,000 (and in no event
shall the maximum principal amount of the indebtedness guarantied pursuant to
the Guaranty exceed $24,000,000), and (c) the time of repayment of such loans or
advancements shall not extend the time of repayment of the Revolving Credit
Notes beyond the maturity of the original indebtedness evidenced by the
Revolving Credit Notes.
ARTICLE II
DEFAULTS AND REMEDIES
Section 2.1. The term "DEFAULT", as used herein, means the occurrence
of any Event of Default under the Trust Indenture, as well as any failure of
Grantor to perform punctually and properly any agreement or condition contained
in this Mortgage.
Section 2.2. At any time during the continuance of any Default, Grantee
may, at Grantee's option, to the extent permitted by law, (i) take any one or
more of the actions and exercise and enforce any one or more of the rights and
remedies provided in this Mortgage, the Trust Indenture or any other Lending
Document, or (ii) pursue any other right, power or remedy available to Grantee,
at law or in equity. Grantee may take such actions and exercise and enforce such
rights and remedies, at Grantee's option, separately or concurrently and in such
6
<PAGE> 8
order as Grantee may desire, either with or without entry in or on or taking
possession of all or any part of the Property and whether or not all or any part
of the Secured Indebtedness shall have been declared to be immediately due and
payable or shall otherwise be due and payable.
Section 2.3. Without limiting the foregoing, at any time during the
continuance of any Default, Grantee may, at its option, proceed by any
appropriate judicial or non-judicial action or proceeding to (i) foreclose this
Mortgage and sell or cause the sale of the Property, as an entirety or in
separate portions, pursuant to the judgment, order or decree of any court of
competent jurisdiction or pursuant to any power of sale now or hereafter
available to Grantee under applicable law, or (ii) to the extent permitted by
law, pursue the partial foreclosure of this Mortgage for any part of the Secured
Indebtedness then due and payable, subject to the continuing encumbrance of this
Mortgage as security for the balance of the Secured Indebtedness not then due
and payable.
Section 2.4. Without limiting the foregoing, at any time during the
continuance of any Default, Grantee, to the extent permitted by law and without
regard to the value or adequacy of the Property or any other security for the
Secured Indebtedness or the solvency of Grantor, shall be entitled as a matter
of right and without notice, if it so elects, to the appointment of a receiver
to enter upon and take possession of the Property, collect the Rents and apply
the Rents so collected as the court making such appointment may direct or as
otherwise permitted by law. Grantor hereby specifically and irrevocably consents
to such appointment. The receiver shall have all rights and powers permitted
under law and such other rights and powers as the court making such appointment
shall confer. The receiver shall be liable to account only for Rents actually
received by the receiver.
Section 2.5. Without limiting the foregoing, at any time during the
continuance of any Default, Grantee, to the extent permitted by law and without
regard to the value or adequacy of the Property or any other security for the
Secured Indebtedness or the solvency of Grantor, shall have the right, power and
authority, if it so elects, with or without taking possession of all or any part
of the Property, in Grantee's own name or otherwise, demand, collect, receive,
sue for, attach and levy the Rents, give proper receipts, releases and
acquittances therefor and, after deducting all necessary and reasonable expenses
of collection (including reasonable attorneys' fees), apply the net proceeds
thereof, together with any funds of Grantor or any other person deposited with
Grantee, toward payment of the Secured Indebtedness, in such order and priority
as Grantee may determine. Collection and application of the Rents as
contemplated in this Section shall not cure or waive any Default, waive, modify
or affect any notice of default under the terms of any of the Lender Documents
or this Mortgage, or invalidate any act done pursuant to any such notice, and
any exercise of Grantee's right to collect and apply the Rents shall continue
for so long as Grantee shall elect, notwithstanding that such collection and
application of the Rents may have cured for a time the original Default. If,
after exercising rights under this Section, Grantee shall thereafter elect to
discontinue the exercise of such right, the same or any other right under this
Section may be reasserted at any time and from time to time following any
subsequent Default.
Section 2.6. Neither Grantee nor any Beneficiary shall be obligated to
perform or discharge any obligation, duty or liability under any of the Leases
or under or by reason of this Mortgage. Grantor shall, and does hereby agree to,
defend and indemnify Grantee and each of the Beneficiaries, and hold each of
them harmless, from and against (i) any and all liability, loss
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<PAGE> 9
or damage which may or might be incurred by any or all of them under any of the
Leases or under or by reason of this Mortgage or in any manner related to the
Property or the use thereof or to the operation of any enterprise on or related
to the Property, and (ii) any and all claims and demands whatsoever which may or
might be asserted against any or all of them by reason of any alleged
obligations or undertakings on its or their part to perform or discharge any of
the terms, covenants or agreements contained in any of the Leases or under or by
reason of this Mortgage. It is further understood that this Mortgage shall not
operate to place responsibility upon Grantee or the Beneficiaries, or any of
them, for the control, care, management or repair of the Property or for the
carrying out of any of the terms and conditions of any of the Leases; nor shall
this Mortgage operate to make Grantee or the Beneficiaries, or any of them,
responsible or liable for any act or omission by any lessee under any of the
Leases or by Grantor, or for any waste committed on the Property by any such
lessee or by Grantor or any other person, or for any dangerous, defective or
illegal condition of the Property, or for any negligence in the management,
upkeep, repair or control of the Property resulting in loss, injury or death to
any lessee, licensee, invitee, occupant, user, employee or stranger, and Grantor
shall, and does hereby agree to, defend and indemnify Grantee and the
Beneficiaries, and hold each of them harmless, from and against the same.
ARTICLE III
MISCELLANEOUS
Section 3.1. To the extent any term or provision of this Mortgage is
irreconcilably inconsistent with any provision of any Lender Document, such
inconsistent provision of the Lending Document shall control only as between
Grantor and each party to the Lending Documents but not any person which is not
a party thereto. All covenants, agreements conditions and other provisions of
this Mortgage shall run with the Land and shall bind and inure to the benefit of
Grantor, Grantee, the Beneficiaries and their respective successors and assigns,
whether so expressed or not. Any and all rights granted to the Grantee under
this Mortgage are to be held and exercised by the Grantee as security trustee
for the benefit of the Beneficiaries, pursuant to the provisions of the Trust
Indenture. To the extent set forth in the Lending Documents and any other
document or instrument creating or evidencing any Secured Indebtedness, each of
the Beneficiaries shall be a beneficiary of the terms of this Mortgage. Any and
all obligations of Grantor under this Mortgage, and the rights and indemnities
granted to the Grantee under this Mortgage, are created and granted subject to,
and in furtherance (and not in limitation) of, the terms of the Trust Indenture.
Nothing in this Mortgage expressed or implied is intended or shall be construed
to give to any Person other than the Grantor, the Beneficiaries and the Grantee
any legal or equitable right, remedy or claim under or in respect of this
Mortgage or any covenant, condition or provision herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Grantor, the Beneficiaries and the Grantee.
Section 3.2. Grantor agrees, to the extent permitted by law, that
neither Grantor nor any person at any time claiming through or under Grantor or
who hereafter may otherwise acquire any interest in or title to all or any part
of the Property or any other security for the Secured Indebtedness shall set up,
claim or seek to take advantage of any law now or hereafter in force pertaining
to the rights of sureties or providing for any appraisement, valuation, stay,
notice of election to accelerate maturity or to declare the Secured Indebtedness
due, extension,
8
<PAGE> 10
redemption, moratorium, homestead or exemption from execution or sale, in order
to prevent or hinder the foreclosure of this Mortgage during the continuance of
any Default, the final and absolute sale of all or any part of the Property or
the final and absolute putting into possession thereof, immediately after any
such sale, of the purchaser or purchasers at such sale or the enforcement of any
other rights or remedies of Grantee or any of the Beneficiaries under this
Mortgage, the Trust Indenture or any of the other Lending Documents. Grantor,
for itself and for any and all persons who may at any time claim through or
under Grantor or who hereafter may otherwise acquire any interest in or title to
all or any part of the Property or any other security for the Secured
Indebtedness, hereby irrevocably waives and releases, to the extent permitted by
law, all benefit of any and all such laws, any and all rights of redemption from
sale pursuant to any judgment, order or decree of foreclosure of this Mortgage
or any power of sale now or hereafter available to Grantee under applicable law,
and any and all right to have the assets constituting the Property or any other
security for the Secured Indebtedness marshalled upon any foreclosure or other
enforcement of this Mortgage. Neither Grantee nor any of the Beneficiaries shall
be required to accept the Property, any part or parts thereof or any other
security for the Secured Indebtedness in satisfaction of all or any part of the
Secured Indebtedness. Neither Grantee nor any of the Beneficiaries shall be
required to accept any apportionment of the Secured Indebtedness to or among any
part or parts of the Property or any other security for the Secured
Indebtedness. If any law now in force of which Grantor might take advantage
despite this Section shall be repealed or shall cease to be in force after the
date hereof, then such law shall not thereafter be deemed to preclude the
application of this Section.
Section 3.3. If any provision of this Mortgage is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
of this Mortgage, the legality, validity, and enforceability of the remaining
provisions of this Mortgage shall not be affected thereby, and in lieu of each
such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Mortgage a provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable. If the rights and liens created by this Mortgage shall
be invalid or unenforceable as to any part of the Secured Indebtedness, then the
unsecured portion of the Secured Indebtedness shall be completely paid prior to
the payment of the remaining and secured portion of the Secured Indebtedness,
and all payments made on the Secured Indebtedness shall be considered to have
been paid on and applied first to the complete payment of the unsecured portion
of the Secured Indebtedness.
Section 3.4. Whenever this Mortgage requires or permits any consent,
approval, notice (except for notice of a foreclosure which shall be given in the
manner required by law), request, or demand from one party to another, the
consent, approval, notice, request, or demand must be in writing to be effective
and shall be deemed to have been given when sent or delivered in accordance with
the provisions of the Trust Indenture.
Section 3.5. The substantive laws of the State of Connecticut and of
the United States of America shall govern the validity, construction,
enforcement and interpretation of this Mortgage, to the extent required by
principles of conflicts of laws recognized in such State or in the United States
of America; otherwise, the laws of the Commonwealth of Massachusetts shall
govern.
Section 3.6. Time is of the essence of this Mortgage.
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<PAGE> 11
Section 3.7. Nothing contained in this Mortgage or the other Lending
Documents shall be construed to create a relationship of principal and agent,
partnership, or joint venture between Grantor, on the one hand, and Grantee and
the Beneficiaries, on the other.
Section 3.8. Each reference in this Mortgage to any gender shall be
deemed also to include any other gender, and the use in this Mortgage of the
singular shall be deemed also to include the plural and vice versa, unless the
context clearly requires otherwise. As used in this Mortgage, the term "PERSON"
means any and all individuals, sole proprietorships, partnerships, joint
ventures, associations, trusts, estates, business trusts, limited liability
companies, corporations (non-profit or otherwise), financial institutions,
governments (and agencies, instrumentalities and political subdivisions
thereof), and other entities, authorities and organizations of every type. As
used in this Mortgage, unless the context clearly requires otherwise, (i) the
words "herein," "hereof," "hereunder," "hereinafter" and "hereto" and words of
similar import shall be deemed to refer to this Mortgage as a whole and not to
any particular Article, Section, subsection, paragraph, subparagraph, Exhibit
or Schedule, and (ii) the words "include" and "including" shall be deemed to be
followed by the words "but not limited to."
Section 3.9. GRANTOR ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS
MORTGAGE IS A PART IS A COMMERCIAL TRANSACTION, AND, TO THE EXTENT ALLOWED UNDER
SECTIONS 52-278a THROUGH 52-278n, INCLUSIVE, OR BY OTHER APPLICABLE LAW, GRANTOR
HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT
REMEDY THAT GRANTEE, ANY OF THE BENEFICIARIES OR ANY OF THEIR RESPECTIVE
SUCCESSORS OR ASSIGNS, MAY DESIRE TO USE.
Section 3.10. Grantor or certain affiliates of Grantor have heretofore
executed and delivered, and may hereafter execute and deliver, to Grantee
certain other mortgages, deeds of trust and other documents and instruments
encumbering certain other property of Grantor and such affiliates located in
various States of the United States of America as additional security for the
Secured Indebtedness or for the obligations of such affiliates under certain
guaranties of the Secured Indebtedness. The holder of any such security or any
such guaranty, whether acting as a fiduciary or otherwise, may foreclose or
otherwise enforce such security or such guaranty or otherwise enforce its
rights, powers and remedies with respect to, and realize upon, such security or
guaranty, either before or concurrently with or after a foreclosure or other
enforcement of this Mortgage, any other such security or guaranty or any of the
Lending Documents, all without being deemed to have waived any rights, benefits,
liens or security interests evidenced by or arising under or in connection with
this Mortgage, any other such security or guaranty or any of the Lending
Documents and without being deemed to have made an election thereby or to have
accepted the benefits of such security or guaranty (or the proceeds thereof) in
full settlement of the Secured Indebtedness and of its rights with respect
thereto. No judgment, order or decree with respect to any such other security or
guaranty or any of the Lending Documents, whether rendered in the State in which
the Land is situated or elsewhere, shall in any manner affect the security of
this Mortgage, and any deficiency or other debt represented by any such
judgment, order or decree shall, to the extent permitted by law, be secured by
this Mortgage to the same extent that the Secured Indebtedness shall have been
secured by this Mortgage prior to the rendering of such judgment, order or
decree. Grantor, for itself and for any and all persons who may at any time
claim through or under Grantor or who hereafter may otherwise acquire any
interest in or title to all or any part of the Property or any other security
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for the Secured Indebtedness, hereby irrevocably waives and releases, to the
extent permitted by law, all benefit of any and all laws that would limit or
prohibit the effectiveness of anything set forth in this Section.
Section 3.11. If all or any part of any payment on account of the
Secured Indebtedness shall be invalidated, set aside, declared or found to be
void or voidable or required to be repaid to Grantor or to any trustee,
custodian, receiver, conservator, master, liquidator or other person pursuant to
any present or future law relating to bankruptcy, reorganization, arrangement,
composition, readjustment, liquidation, dissolution or insolvency or pursuant to
any common law or equitable cause, then, to the extent of such invalidation, set
aside, voidness, voidability or required repayment, neither the Secured
Indebtedness nor the lien or security of this Mortgage shall be deemed to have
been paid, satisfied, released or discharged, and, to the extent of such
invalidation, set aside, voidness, voidability or required repayment, the
Secured Indebtedness and the lien and security of this Mortgage shall be
immediately and automatically revived without the necessity of any action by
Grantor, Grantee or any of the Beneficiaries, and the lien and security of this
Mortgage shall continue in full force and effect thereafter until all of the
Secured Indebtedness shall have been fully, finally and indefeasibly paid.
THE CONDITION OF THIS DEED is such that whereas Grantor is indebted to
the Beneficiaries pursuant to the Revolving Credit Note, the Guaranty, the Trust
Indenture and the other Lending Documents in a principal amount of up to
FORTY-FOUR MILLION DOLLARS ($44,000,000), and this Mortgage is also made to
secure the keeping, performance and observance of, and compliance with, all
covenants, agreements, conditions and other provisions required to be kept,
performed, observed and complied with by or on behalf of Grantor from time to
time pursuant to the Trust Indenture or the other Lending Documents;
NOW, THEREFORE, if the Secured Indebtedness shall be paid in full and
if Grantor shall keep, perform, observe and comply all such covenants,
agreements, conditions and other provisions, then, subject to Section 3.11, this
Mortgage shall be null and void and of no further force and effect, but
otherwise shall remain in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE AND
ACKNOWLEDGMENT PAGE FOLLOWS]
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<PAGE> 13
IN WITNESS WHEREOF, Grantor has executed this Mortgage as of the date
and year first above written.
Signed and Delivered SPECTRAN SPECIALTY OPTICS COMPANY
in the presence of:
/s/ By: /s/ Bruce A. Cannon
- ------------------------------- --------------------------------------
Name: Name: Bruce A. Cannon
Title: Secretary
/s/ Ellen M. Grace
- -------------------------------
Name: Ellen M. Grace
[OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
OF SPECTRAN SPECIALTY OPTICS COMPANY]
<PAGE> 14
STATE OF CONNECTICUT )
) ss. December 26, 1996
COUNTY OF HARTFORD )
Personally appeared Bruce A. Cannon, Secretary of
SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation, signer of the
foregoing instrument, and acknowledged the same to be his/her free act and deed
as such Secretary and the free act and deed of such corporation, before
me.
/s/ Lori L. Bridwell
--------------------------------------
Notary Public in and for said State
[Affix Seal] Print Name: Lori L. Bridwell
--------------------------
My Commission Expires: Nov. 30, 2000
---------------
[OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
OF SPECTRAN SPECIALTY OPTICS COMPANY]
<PAGE> 15
EXHIBIT A
Legal Description
A certain piece or parcel of land with the buildings and improvements
thereon and appurtenances thereto situated on the northwesterly side of Darling
Drive in the Town of Avon, County of Hartford and State of Connecticut, shown
as "Parcel 18 Area - 13.85 Acres" on a map entitled: "Plan of Subdivision -
Parcel 18 Land Owned by Avon Park Properties Darling Drive Avon, Connecticut
Scale 1"=40' May 1981 Certified substantially correct in accordance with Class
A-2 of the Code of Recommended Practice for Accuracy of Survey & Maps, Edward
F. Reuber, Surveyor, Hodge Surveying Associates P.C." and being more
particularly bounded and described as follows:
Commencing at a point in the northwesterly line of Darling Drive, which
point is marked by a monument set at the southeasterly corner of land now or
formerly of The Avon Volunteer Fire Department Inc. as shown on said map; thence
in a southwesterly and westerly direction along a curve to the right having a
radius of 285.26 feet, 351.71 feet to a monument; thence S 82(degrees) 03' 30"
W, 336.20 feet to a point; the last two courses being along said northwesterly
line of Darling Drive; thence N 15(degrees) 02' 16" W, 693.50 feet to a point;
thence N 20(degrees) 27' 10" E, 72.42 feet to a point, the last two courses
being along land now or formerly of Colbert & Pariseleti; thence N 02(degrees)
45' 22" W along land now or formerly of Darworth Inc., 227.84 feet to a point;
thence N 80(degrees) 06' 46" E, 460.94 feet to a point; thence S 36(degrees) 22'
07" E, 419.47 feet to a point, the last two courses being along land now or
formerly of Avon Park Properties; thence S 14(degrees) 57' 34" W, 457.13 feet to
a point; thence S 74(degrees) 50' 30" E, 161.97 feet to a point or place of
beginning, the last two courses being along said land now or formerly of The
Avon Volunteer Fire
Exhibit A-1
<PAGE> 16
SCHEDULE 1
LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of December 1, 1996 and is among SPECTRAN
CORPORATION ("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY ("Optics"), APPLIED
PHOTONIC DEVICES, INC. ("Photonic"), SPECTRAN COMMUNICATION FIBER TECHNOLOGIES,
INC. ("Communication") and FLEET NATIONAL BANK (the "Lender"). Each of SpecTran,
Optics, Photonic and Communication are sometimes referred to as a "Borrower" and
collectively the "Borrowers".
W I T N E S S E T H:
BACKGROUND. The Borrowers have requested the Lender to lend up to the sum of
$20,000,000.00 (the "Loan") and the Lender is willing to do so upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained, and each
intending to be legally bound hereby, the parties agree as follows:
ARTICLE
1
DEFINITIONS
As used herein:
1.1 "Affiliate" means, as to any Person, each other Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.
1.2 "Agreement" means this Loan Agreement, as the same may from time to time be
amended or supplemented.
1.3 "Borrowing Base" means $20,000,000.00 minus the face amount of all
outstanding letters of credit issued by the Lender for the account of any
Borrower.
1.4 "Business Day" means a day other than a Saturday, a Sunday, or a day on
which commercial banks in Worcester, Massachusetts are authorized to close.
1.5 "Capital Leases" means capital leases, conditional sales contracts and other
title retention agreements relating to the purchase or acquisition of
Consolidated Capital Assets.
<PAGE> 17
1.6 "Change in Control" means, if, prior to January 1, 2000, 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), other than Current
Management, or a group of which Current Management is a part, become the
"beneficial owners" (as such term is used in Rule 13d-3 under the Exchange Act
as in effect on the date of the Closing), directly or indirectly, of more than
the Control Percentage of the total voting power of all classes then outstanding
of SpecTran's voting stock.
1.7 "Closing" has the meaning given to such term in Section 3.1.
1.8 "Collateral Documents" means the Mortgages, the Security Agreement, the
Trust Indenture, the Pledge Agreement, the Patent Collateral Assignment, the
Trademark Security Agreement and the documents, whether deliverable at or after
the Closing, referenced in Exhibit 3.1(q) attached hereto.
1.9 "Consolidated Assets" means all assets of the Borrowers, including without
limitation, all assets that should be classified as assets on the consolidated
balance sheet of the Borrowers prepared in accordance with GAAP.
1.10 "Consolidated Capital Assets" means Consolidated Assets of the Borrowers
that are required or permitted to be depreciated or amortized in accordance with
GAAP.
1.11 "Consolidated Capital Expenditures" means, for the applicable period, the
aggregate amount of the Borrowers' expenditures for the acquisition,
construction, improvement, replacement or purchase of Consolidated Capital
Assets, including but not limited to, expenditures funded under Capital Leases.
1.12 "Consolidated Earnings Available for Fixed Charges" means, for the
applicable period, Consolidated Net Income plus Consolidated Interest, income
tax expense and Consolidated Minimum Operating Lease Rentals to the extent
deducted in the determination of Consolidated Net Income for the applicable
period, determined on a consolidated basis for the applicable period, 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 Consolidated Indebtedness in
connection therewith, assuming for purposes of calculation but all such
acquisitions and dispositions that occurred during such period occurred on the
first day of such period.
1.13 "Consolidated EBITDA Cumulative" means, Consolidated Operating Income minus
income (based on the equity method of accounting in accordance with GAAP)
derived from unconsolidated Subsidiaries or other Persons plus Consolidated
Interest and consolidated taxes, depreciation and amortization determined on a
rolling four (4) quarters basis in accordance with GAAP.
1.14 "Consolidated Fixed Charges" means, for the applicable period, the sum of
Consolidated Minimum Operating Lease Rentals for such period plus Consolidated
Interest to the extent
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<PAGE> 18
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 Consolidated Indebtedness 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.
1.15 "Consolidated Indebtedness" means, as to the Borrowers:
(a) Obligations for borrowed money;
(b) Obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of the Borrowers' business payable on terms customary in the trade);
(c) Obligations, whether or not assumed, secured by liens;
(d) Obligations with respect to notes, acceptances, letters of
credit, guarantees or other instruments; and
(e) Obligations under Capital Leases.
1.16 "Consolidated Interest" means, for the applicable period, interest paid or
payable by the Borrowers, including but not limited to, interest paid or payable
on Consolidated Indebtedness determined in accordance with GAAP.
1.17 "Consolidated Interest Coverage Ratio" means, for the applicable period,
the ratio of Consolidated Earnings Available for Fixed Charges to Consolidated
Fixed Charges.
1.18 "Consolidated Leverage Ratio" means the ratio of Consolidated Liabilities
to Consolidated Tangible Net Worth.
1.19 "Consolidated Liabilities" means all liabilities of the Borrowers,
including without limitation, all liabilities that should be classified as
liabilities on a consolidated balance sheet of the Borrowers prepared in
accordance with GAAP.
1.20 "Consolidated Operating Lease Rentals" means, for the applicable period,
(a) all payments made by any Borrower 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 any Borrower by others in respect of fixed rental
payments under noncancelable subleases with a term of at least one (1) year on
properties of such Borrower subject to leases described in the immediately
preceding clause (a).
1.21 "Consolidated Net Income" means, for the applicable period, the Borrowers'
net income determined in accordance with GAAP.
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<PAGE> 19
1.22 "Consolidated Operating Income" means, for the applicable period,
Consolidated Net Income less the sum of (a) extraordinary and non-recurring
gains and (b) gains from the sale of Consolidated Capital Assets plus the sum of
(x) extraordinary and non-recurring losses and (y) losses from the sale of
Consolidated Capital Assets.
1.23 "Consolidated Stockholders' Equity" means the aggregate of the following
accounts on the consolidated balance sheet of the Borrowers prepared in
accordance with GAAP: (a) the par or stated value of all outstanding capital
stock, (b) capital surplus and (c) retained earnings.
1.24 "Consolidated Tangible Net Worth" means Consolidated Stockholders' Equity,
less the sum of (a) any surplus resulting from any write up of Consolidated
Assets, (b) goodwill, including any amounts however designated on the
consolidated balance sheet of the Borrowers representing the excess of the
purchase price paid for assets or stock acquired over the value assigned thereto
on the books of any Borrower, (c) patents, trademarks, trade names, copyrights
and licenses, (d) any amount at which shares of capital stock of any Borrower
appear as an asset on the consolidated balance sheet of the Borrowers, (e) loans
and advances to Affiliates, stockholders, directors, officers or employees, (f)
deferred expenses, and (g) any other amount in respect of an intangible (except
for the tax intangible related to FASB 109) that should be classified as an
asset on a consolidated balance sheet of the Borrowers in accordance with GAAP.
1.25 "Control Percentage" means, prior to July 1, 2000, 30% and on and after
July 1, 2000, 50%.
1.26 "Current Management" means (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 SpecTran during the
proceeding period of twenty-four (24) consecutive months.
1.27 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.28 "Event of Default" has the meaning provided in Section 7.1.
1.29 "Financial Statements" means the audited, consolidated cash flow
statements, income statements and balance sheets of the Borrowers as of December
31, 1994 and December 31, 1995 and notes thereto certified by KPMG Peat Marwick,
LLP to present fairly the consolidated financial position and results of
operations of the Borrowers at such dates and for such periods in accordance
with GAAP and all other financial information delivered to the Lender from time
to time pursuant to Sections 6.01(b)(i), 6.01(b)(ii) and 6.01(b)(iii) of this
Agreement.
1.30 "GAAP" means generally accepted accounting principles applied consistently
with such changes or modifications thereto as may be approved in writing by the
Lender.
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<PAGE> 20
1.31 "Intellectual Property" means trademarks, service marks, trade names, trade
styles, logos, goodwill, trade secrets, patents, and licenses acquired under any
statutory, common law or registration process in any state or nation at any time
or under any agreement executed with any Person at any time. The term "license"
refers not only to rights granted by agreement from the owner of patents,
trademarks, service marks and the like but also to rights granted by a
franchiser under a franchise or similar agreement. The foregoing enumeration is
not intended as a limitation of the meaning of the word "license".
1.32 "Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any government or political subdivision or
agency thereof or of any court or similar entity established by any thereof.
1.33 "Mortgages" means the Mortgage, Assignment of Rents and Security Agreement
covering Communication's real property in Sturbridge, Massachusetts and the
Open-End Mortgage, Assignment of Rents and Security Agreement covering Optic's
real property in Avon, Connecticut each granted to the Trustee (as defined in
the Trust Indenture) and each dated as of December 1, 1996, as from time to time
supplemented or amended.
1.34 "Obligations" is intended to be used in its most comprehensive sense and
means the obligations of the Borrowers:
(a) To pay the principal of, and interest on, the Revolving
Note in accordance with the terms thereof and to satisfy all other liabilities
to the Lender (including without limitation with respect to letters of credit
issued by the Lender for the account of any Borrower) whether hereunder or
otherwise, whether now existing or hereafter incurred, matured or unmatured,
direct or contingent, joint or several, including any extensions, modifications,
renewals thereof and substitutions therefor;
(b) To repay to the Lender all amounts advanced by the Lender
hereunder or otherwise on behalf of any Borrower, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, or
repairs to, or maintenance or storage of, any of the Consolidated Assets; and
(c) To reimburse the Lender, on demand, for all of the
Lender's expenses and costs, including without limitation the reasonable fees
and expenses of its counsel, in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and the documents
required hereunder, including, without limitation, any proceeding brought, or
threatened, to enforce payment of any of the obligations referred to in the
foregoing paragraphs (a) and (b).
1.35 "Offering" means any public and/or private offering of the capital stock of
SpecTran occurring after the date of this Agreement.
1.36 "Note Purchase Agreements" means the Note Purchase Agreements between
SpecTran and each of Massachusetts Life Insurance Company, CM Life Insurance
Company, Mutual Life
5
<PAGE> 21
Insurance Company of New York and Pacific Mutual Life Insurance Company each
dated as of December 1, 1996, as from time to time supplemented or amended.
1.37 "Patent Collateral Assignment" means, the Patent Collateral Assignment
among the Borrowers and the Trustee (as defined in the Trust Indenture) dated as
of December 1, 1996, as from time to time supplemented or amended.
1.38 "Person" means any individual, corporation, limited liability corporation,
partnership, limited liability partnership, association, joint-stock company,
trust, unincorporated organization, joint venture, court, or government or
political subdivision or agency thereof.
1.39 "Permitted Liens" means:
(a) Liens for taxes, assessments, statutory obligations or
similar charges, incurred in the ordinary course of business, that are not yet
due and payable or if overdue being contested in good faith by appropriate and
lawful proceedings, so long as levy and execution thereon have been stayed and
continue to be stayed and they do not, in the aggregate, materially detract from
the value of the property of any Borrower or materially impair the operation of
any Borrower's business;
(b) Pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate in any
fund in connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(c) Liens of mechanics, materialmen, warehousemen, carriers or
other like liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable;
(d) Encumbrances consented to by the Lender in writing
including zoning restrictions, easements, or other restrictions on the use of
real property, none of which materially impairs the use of such property by any
Borrower in the operation of its business, and none of which is violated in any
material respect by existing or proposed structures or land use;
(e) Purchase money security interests granted to secure the
purchase price of assets, the purchase of which does not violate the terms of
this Agreement;
(f) Liens consented to by the Lender in writing; and
(g) Liens evidenced by the Collateral Documents
1.40 "Pledge Agreement" means the Pledge Agreement among the Borrowers and the
Trustee (as defined in the Trust Indenture) dated as of December 1, 1996, as
from time to time supplemented or amended.
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1.41 "Records" means correspondence, memoranda, tapes, discs, papers, books and
other documents, or transcribed information of any type, whether expressed in
ordinary or machine readable language.
1.42 "Revolving Note" means the Revolving Note substantially in the form of
Exhibit 1.42 attached hereto.
1.43 "Security Agreement" means the Security Agreement among the Borrowers and
the Trustee (as defined in the Trust Indenture) dated as of December 1, 1996, as
from time to time supplemented or amended.
1.44 "Subsidiary" means any Affiliate (a) that is directly, or indirectly
through one or more intermediaries, controlled by any Borrower or (b) of which
not less than 50% of the voting capital stock is owned, directly or through one
or more intermediaries, by any Borrower.
1.45 "Trademark Security Agreement" means the Trademark Security Agreement among
the Borrowers and the Trustee (as defined in the Trust Indenture) dated as of
December 1, 1996, as from time to time supplemented or amended.
1.46 "Trust Indenture" means, the Trust Indenture among the Borrowers and the
Trustee (as defined therein) dated as of December 1, 1996 as from time to time
supplemented or amended.
1.47 Accounting. Accounting terms used and not otherwise defined in this
Agreement have the meanings determined by, and all calculations with respect to
accounting or financial matters unless otherwise provided herein shall be
computed in accordance with, GAAP.
ARTICLE
2
THE LOAN
2.1 General Terms.
Subject to the terms hereof, the Lender will lend the Borrowers the
principal sum of $20,000,000.00 on a revolving loan basis.
2.2 Disbursement.
The Lender will credit the proceeds of the Revolving Note to the Lender
to pay the existing Consolidated Indebtedness to the Lender in full and
thereafter, from time to time and subject to the terms hereof, to the Borrowers'
deposit account identified in Exhibit 2.2 attached hereto for working capital
and general corporate matters.
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2.3 Revolving Note.
Subject to the terms hereof, the Lender will lend the Borrowers, from
time to time until December 31, 1999 (the "Termination Date") or the occurrence
of an Event of Default, whichever occurs first, such sums in integral multiples
of $1,000.00 (pursuant to the terms of the Revolving Note, advances subject to
LIBOR interest rates must be in multiples of $500,000.00) as any Borrower may
request by reasonable same day notice to the Lender, received by the Lender not
later than 12:00 p.m. of such day, but which shall not exceed, in the aggregate
principal amount at any one time outstanding, the Borrowing Base. The
Termination Date may be extended by the Lender, as determined in its sole and
absolute discretion, by written notice to any Borrower. The Borrowers may
borrow, repay without penalty or premium (except for repayments of principal
subject to LIBOR interest rates prior to the expiration of the Index Period as
more fully set forth in the Revolving Note) and reborrow hereunder, from the
date of this Agreement until the Termination Date or the occurrence of an Event
of Default, whichever occurs first. It is the intention of the parties that the
outstanding principal amount of the Revolving Note will not exceed the Borrowing
Base, and if, at any time, an excess shall for any reason exist, the full amount
of such excess, together with accrued and unpaid interest thereon, shall be
immediately due and payable in full.
2.4 Interest Rate and Payments of Interest.
Interest on the principal balance of the Loan from time to time
outstanding shall accrue at the rates and be payable as set forth in the
Revolving Note.
2.5 Payment to the Lender.
The Borrowers have designated the deposit account identified in Exhibit
2.2 attached hereto as the account for all payments under the Revolving Note and
hereunder. Notwithstanding such designation, the Lender may charge against any
deposit account of any Borrower all or any part of any amount due under the
Revolving Note and hereunder.
2.6 The Unused Facility Fee.
From and after the date hereof until the Termination Date, the Borrower
shall pay an Unused Facility Fee of one quarter of one percent (0.25%) per annum
on the average daily undisbursed amount of the Loan. The Unused Facility Fee
shall be payable quarterly in arrears on the first Business Day of each April,
July, October and January.
2.7 The Commitment Fee.
At the Closing, the Borrowers shall pay a commitment fee to the Lender
in the amount of $50,000.00.
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ARTICLE
3
CONDITIONS PRECEDENT
The obligation of the Lender to make the Loan is subject to the following
conditions precedent:
3.1 Documents Required for the Closing.
The Borrowers shall have delivered to the Lender, prior to the initial
disbursement of the Loan (the "Closing"), the following:
(a) The Revolving Note duly executed by the Borrowers;
(b) Copies of the Mortgages, which shall have been duly
executed by all proper parties and recorded at the appropriate recording office,
with all recording fees therefor paid;
(c) The Financial Statements;
(d) A copy of the Security Agreement and/or the financing
statements and other instruments required thereunder, which shall have been duly
executed by all proper parties and filed at the appropriate filing office, with
all filing fees therefor paid;
(e) A copy of the Trust Indenture, which shall have been
executed by all proper parties;
(f) A copy of the Pledge Agreement and other instruments
required thereunder, which shall have been executed by all proper parties;
(g) A copy of the Patent Collateral Assignment which shall
have been duly executed by all proper parties and filed at the appropriate
filing office, with all filing fees therefor paid;
(h) A copy of the Trademark Security Agreement which shall
have been duly executed by all proper parties and filed at the appropriate
filing office, with all filing fees therefor paid;
(i) Evidence that the Note Purchase Agreements have been
executed and delivered and the proceeds delivered to SpecTran;
(j) A copy, certified as of the date of the Closing, of votes
of the boards of directors of each Borrower and shareholders (except for
SpecTran) of each Borrower, authorizing the execution, delivery, and performance
of this Agreement, the Revolving Note, the Collateral Documents and each other
document to be delivered pursuant hereto;
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(k) A copy, certified as of the date of the Closing, of the
bylaws of each Borrower;
(l) A certificate (dated the date of the Closing) of the
corporate clerk and/or secretary of each Borrower as to the incumbency and
signatures of the officers of each Borrower signing this Agreement, the
Revolving Note, the Collateral Documents and each other document to be delivered
pursuant hereto;
(m) A copy, certified as of the most recent date practicable
by the secretary of the state of incorporation, of the charter of each Borrower
and all amendments thereto, together with a certificate (dated the date of the
Closing) of the corporate clerk and/or secretary of each Borrower to the effect
that such charter has not been further amended since the date of the aforesaid
certification of the secretary of the state of incorporation;
(n) A certificate of good standing dated as of the most recent
date practicable, issued by the secretary of the state of incorporation as to
the legal existence, charter, and good legal standing of each Borrower;
(o) Certificates, as of the most recent dates practicable, of
the secretary of each state in which any Borrower is qualified as a foreign
corporation and, if applicable, of the department of revenue or taxation of each
of such states, as to the good tax standing of each Borrower;
(p) A written opinion of the law firm of Hackmyer & Nordlicht,
legal counsel for the Borrowers, dated the date of the Closing and addressed to
the Lender, in form and content satisfactory to the Lender and its counsel; and
(q) Each of the agreements and documents referred to in that
certain Closing Document Agenda and that certain Closing Agenda, copies of which
are attached hereto as Exhibit 3.1(q).
3.2 Documents Required for Subsequent Disbursements.
At the time of, and as a condition to, any disbursement of any part of
the Loan to be made by the Lender subsequent to the Closing, the Lender may
require the Borrowers to deliver to the Lender a certificate, dated the date on
which any such disbursement is to be made, signed by the chief financial officer
of SpecTran and to the effect that:
(a) As of the date thereof, no Event of Default has occurred
and is continuing, and no event has occurred and is continuing that, but for the
giving of notice or passage of time or both, would be an Event of Default;
(b) No material adverse change has occurred in the business
prospects,financial condition, or results of operations of any Borrower since
the date of the most recent Financial Statements delivered to the Lender in
accordance with this Agreement; and
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(c) Each of the representations and warranties contained
herein is true and correct in all respects as if made on and as of the date of
such disbursement.
3.3 Certain Events.
At the time of, and as a condition to, the Closing and each
disbursement of any part of the Loan to be made by the Lender at or subsequent
to the Closing:
(a) No Event of Default shall have occurred and be continuing,
and no event shall have occurred and be continuing that, with the giving of
notice or passage of time or both, would be an Event of Default;
(b) No material adverse change shall have occurred in the
financial condition, or results of operations of any Borrower since the date of
the most recent Financial Statements delivered to the Lender in accordance with
this Agreement; and
(c) All of the Collateral Documents shall have remained in
full force and effect.
3.4 Legal Matters.
At the time of the Closing and each subsequent disbursement, all legal
matters incidental thereto shall be reasonably satisfactory to Mirick,
O'Connell, DeMallie & Lougee, LLP legal counsel to the Lender.
ARTICLE
4
SECURITY
4.1 Composition of the Security.
The Obligations of the Borrowers are secured by the Consolidated Assets
of the Borrowers as evidenced by the Collateral Documents. The Consolidated
Assets shall stand as one general, continuing collateral security for all
Obligations and may be retained by the Lender until all Obligations have been
satisfied in full.
4.2 Rights in Property Held by the Lender.
As security for the prompt satisfaction of all Obligations, each
Borrower hereby assigns, transfers, and sets over to the Lender all of its
right, title, and interest in and to, and grants the Lender a lien on and a
security interest in, all amounts that may be owing, from time to time, by the
Lender to any Borrower in any capacity, including, but without limitation, any
balance or share belonging to any Borrower, or any deposit or other account with
the Lender, which lien and
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security interest shall be independent of, and in addition to, any of the
Lender's rights of set-off.
4.3 Priority of Liens.
The liens evidenced by the Collateral Documents shall constitute first
priority liens.
4.4 Financing Statements.
(a) Each Borrower will:
(i) Execute such financing statements (including
amendments thereto and continuation statements thereof) in form satisfactory to
the Lender as the Lender, from time to time, may specify;
(ii) Pay, or reimburse the Lender for paying, all
costs and taxes of filing or recording the same in such public offices as the
Lender may designate; and
(iii) Take such other steps as the Lender, from time
to time, may direct, including the noting of the Lender's lien on the
Consolidated Assets and on any certificates of title therefor, all to perfect to
the satisfaction of the Lender the Lender's interest in the Consolidated Assets.
(b) In addition to the foregoing, and not in limitation
thereof: to the extent lawful, each Borrower hereby appoints the Lender as its
attorney-in-fact (without requiring the Lender to act as such) to execute any
financing statement in the name of any Borrower, and to perform all other acts
that the Lender deems appropriate to perfect and continue its security interest
in, and to protect and preserve, the Consolidated Assets.
4.5 Mortgagees', Landlords', and Warehousemen's Waivers.
Each Borrower will obtain from any mortgagee of real estate owned by
any Borrower, any landlord of premises leased by any Borrower, and any
warehouseman or other bailee on whose premises any of the Consolidated Assets
may be located, instruments, in form and substance satisfactory to the Lender,
by which such mortgagee, landlord or warehouseman or other bailee waives its
rights, if any, in and to the Consolidated Assets of the Borrowers.
ARTICLE
5
REPRESENTATIONS AND WARRANTIES
5.1 Original.
To induce the Lender to enter into this Agreement, the Borrowers
jointly and severally represent and warrant to the Lender as follows:
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(a) Each Borrower is a corporation duly organized, validly
existing, and in good standing under the Laws of the state of its incorporation;
no Borrower has any Subsidiaries, except as set forth in Exhibit 5.1(a) attached
hereto; each Borrower has the lawful power to own its properties and to engage
in the business it conducts and is duly qualified and in good standing as a
foreign corporation in the jurisdictions wherein the nature of the business
transacted by it or property owned by it makes such qualification necessary; the
states in which each Borrower is qualified to do business are set forth in
Exhibit 5.1(a); the identity of each shareholder of each Borrower (except for
SpecTran) and the number of shares owned by each is set forth in Exhibit 5.1(a);
and the addresses of all places of business of each Borrower are as set forth in
Exhibit 5.1(a);
(b) No Borrower is directly or indirectly controlled by, or
acting on behalf of, any Person which is an "Investment Company", within the
meaning of the Investment Company Act of 1940, as amended;
(c) No Borrower is in default with respect to any of its
existing Consolidated Liabilities, and the making and performance of this
Agreement, the Revolving Note and the Collateral Documents will not (immediately
or with the passage of time, the giving of notice, or both):
(i) Violate the charter or by-laws of any Borrower,
or violate any Laws or result in a default under any contract, agreement, or
instrument to which any Borrower is a party or by which any Borrower or its
property is bound; or
(ii) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the Consolidated
Assets of any Borrower, except as set forth in the Collateral Documents;
(d) Each Borrower to the extent applicable to it, has the
power and authority to enter into and perform this Agreement, the Revolving Note
and the Collateral Documents, and to incur the obligations herein and therein
provided for, and has taken all actions necessary to authorize the execution,
delivery, and performance of this Agreement, the Revolving Note and the
Collateral Documents;
(e) This Agreement, the Revolving Note and the Collateral
Documents are, or when delivered will be, valid, binding, and enforceable in
accordance with their respective terms, except to the extent enforceability is
subject to the exercise of judicial discretion in accordance with general
equitable principles and to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws for the relief of debtors heretofore or hereafter
enacted;
(f) Except as disclosed on Exhibit 5.1(f) attached hereto,
there is no pending order, notice, claim (other than claims arising in the
ordinary course of business for amounts not exceeding $25,000.00 individually or
$100,000.00 in the aggregate), litigation, proceeding, or investigation against
or affecting any Borrower, whether or not covered by insurance;
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(g) Each Borrower has good and marketable title to all of its
Consolidated Assets, none of which is subject to any security interest,
encumbrance or lien, or claim of any third Person, except for Permitted Liens;
(h) The Financial Statements, including any schedules and
notes pertaining thereto, have been prepared in accordance with GAAP, and fully
and fairly present the financial condition of the Borrowers at the dates thereof
and the results of operations for the periods covered thereby, and there have
been no material adverse changes in the financial condition or business of any
Borrower from the date of the most recent Financial Statements to the date
hereof;
(i) As of the date hereof, the Borrowers have no Consolidated
Indebtedness of any nature, except as disclosed on Exhibit 5.1(i) attached
hereto;
(j) Each Borrower has filed all federal, state, and local tax
returns and other reports required by any applicable Laws to have been filed
prior to the date hereof, has paid or caused to be paid all taxes, assessments,
and other governmental charges that are due and payable prior to the date
hereof, and has made adequate provision for the payment of such taxes,
assessments, or other charges accruing but not yet payable; no Borrower has
knowledge of any deficiency or additional assessment in a materially important
amount in connection with any taxes, assessments, or charges not provided for on
its books;
(k) Except to the extent that the failure to comply would not
materially interfere with the conduct of the business of any Borrower, each
Borrower has complied with all applicable Laws with respect to (i) any
restrictions, specifications, or other requirements pertaining to products that
it manufactures or sells or to the services it performs, (ii) the conduct of its
business and (iii) the use, maintenance, and operation of the real and personal
properties owned or leased by it in the conduct of its business;
(l) No representation or warranty by or with respect to any
Borrower contained herein or in any certificate or other document furnished by
any Borrower pursuant hereto contains any untrue statement of a material fact or
omits to state a material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made;
(m) Each consent, approval or authorization of, or filing,
registration or qualification with, any Person required to be obtained or
effected by any Borrower in connection with the execution and delivery of this
Agreement, the Revolving Note and the Collateral Documents or the undertaking or
performance of any obligation hereunder or thereunder has been duly obtained or
effected;
(n) To the best of each Borrower's knowledge, the Borrowers
and all other parties to all material leases, contracts, and other commitments
to which any Borrower is a party have all complied in all material respects with
the provisions of such leases, contracts, and other
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<PAGE> 30
commitments and no party is in default under any thereof and no event has
occurred which, but for the giving of notice or the passage of time, or both,
would constitute a default;
(o) No Borrower has made any agreement or taken any action
which may cause anyone to become entitled to a commission or finder's fee as a
result of or in connection with the making of the Loan;
(p) Each Borrower's federal tax returns for all years of
operation, including the year ended December 31, 1995, have been filed with the
Internal Revenue Service and have not been challenged;
(q) Any Employee Pension Benefit Plans, as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), of any
Borrower meet, as of the date hereof, the minimum funding standards of 29
U.S.C.A. 1082 (Section 302 of ERISA), and no Reportable Event or Prohibited
Transaction, as defined in ERISA, has occurred with respect to any Employee
Benefit Plans, as defined in ERISA, of any Borrower;
(r) SpecTran has filed all registration statements, forms and
other reports with the Securities and Exchange Commission required by any
applicable Laws to have been filed prior to the date hereof; and
(s) The liens created pursuant to the Collateral Documents and
Section 4.2 of this Agreement are in all cases first priority liens.
5.2 Survival.
All of the representations and warranties set forth in Section 5.1
shall survive until all Obligations are satisfied in full and there remain no
outstanding commitments hereunder.
ARTICLE
6
COVENANTS OF THE BORROWERS
6.1 Affirmative Covenants.
The Borrowers do hereby jointly and severally covenant and agree with
the Lender that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, the Borrowers will comply at all times
with the following affirmative covenants:
(a) The Borrowers will use the proceeds of the Loan only for
working capital and general corporate purposes, and will furnish the Lender such
evidence as it may reasonably require with respect to such use;
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(b) SpecTran will furnish the Lender:
(i) As soon as available, but in any event within
thirty (30) days after the close of each calendar month in each fiscal year: (1)
consolidated and consolidating statements of cash flows of the Borrower for such
month, (2) consolidated and consolidating income statements of the Borrowers for
such month and (3) consolidated and consolidating balance sheets of the
Borrowers as of the end of such month-all such statements and balance sheets to
be in reasonable detail, including all supporting schedules and comments,
subject to normal year-end audit adjustments and certified by the chief
financial officer of SpecTran to have been prepared in accordance with GAAP and
to present fairly the financial position and results of operations of the
Borrowers;
(ii) As soon as available, but in any event within
forty-five (45) days after the close of each of the initial three quarterly
accounting periods in each fiscal year (i.e. March 31, June 30 and September 30)
a copy of SpecTran's Form 10-Q, and management's: (1) consolidated and
consolidating statements of cash flows of the Borrowers for such quarter, (2)
consolidated and consolidating income statements of the Borrowers for such
quarter and (3) consolidated and consolidating balance sheets of the Borrowers
as of the end of such quarter-all such statements and balance sheets to be in
reasonable detail, including all supporting schedules and comments, subject to
normal year-end audit adjustments and certified by the chief financial officer
of SpecTran to have been prepared in accordance with GAAP and to present fairly
the financial position and results of operations of the Borrowers;
(iii) As soon as available, but in any event within
ninety (90) days after the close of each fiscal year, a copy of SpecTran's Form
10-K and Annual Report (including the audited consolidated financial statements
prepared by KPMG Peat Marwick, LLP or another independent certified public
accountant selected by SpecTran and reasonably acceptable to the Lender) and
management's: (1) consolidated and consolidating statements of cash flows for
the Borrowers for such fiscal year, (2) consolidated and consolidating income
statements of the Borrowers for such fiscal year and (3) consolidated and
consolidating balance sheets of the Borrowers as of the end of such fiscal
year-all such statements and balance sheets to be in reasonable detail,
including all supporting schedules and comments; the consolidated statements and
balance sheets included in the Form 10-K and Annual Report to be audited by KPMG
Peat Marwick, LLP or another independent certified public accountant selected by
SpecTran and reasonably acceptable to the Lender and certified by such
accountants to have been prepared in accordance with GAAP and to present fairly
the financial position and results of operations of the Borrower; in addition,
SpecTran will obtain from such independent certified public accountants and
deliver to the Lender, within ninety (90) days after the close of each fiscal
year, their written statement that in making the examination necessary to their
certification they have obtained no knowledge of any Event of Default by the
Borrowers, or disclosing all Events of Default of which they have obtained
knowledge (it being understood and agreed by the Lender that in making their
examination, such accountants shall not be required to go beyond the bounds of
generally accepted auditing procedures for the purpose of certifying financial
statements); the Lender shall have the right, from time to time to discuss the
affairs of any Borrower directly with
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<PAGE> 32
such independent certified public accountants after notice to SpecTran and
opportunity of SpecTran to be represented at any such discussions;
(iv) Contemporaneously with the year-end financial
report required by the foregoing paragraph (3), a copy of the management letter
issued to SpecTran by KPMG Peat Marwick or another certified public accountant
selected by SpecTran and reasonably acceptable to the Lender;
(v) Contemporaneously with each quarterly and
year-end financial report required by the foregoing paragraphs (2) and (3) a
certificate of the chief financial officer of SpecTran substantially in the form
of Exhibit 6.1(b)(v) attached hereto stating that he has individually reviewed
the provisions of this Agreement and that a review of the activities of the
Borrowers during such quarterly period or year, as the case may be, has been
made by him or under his supervision, with a view to determining whether the
Borrowers have fulfilled all of their obligations under this Agreement, and
that, to the best of his knowledge, the Borrowers have observed and performed
each undertaking contained in this Agreement and are not in default in the
observance or performance of any of the provisions hereof or, if the Borrowers
shall be so in default, specifying all such defaults and events of which he may
have knowledge;
(vi) As soon as available but in no event later than
thirty (30) days prior to the commencement of the next fiscal year, management
prepared financial projections, including (1) consolidated and consolidating
statements of cash flow, (2) consolidated and consolidating income statements
and (3) consolidated and consolidating balance sheets; and
(vii) Promptly after the sending or making available
or filing of the same, copies of all reports, proxy statements and financial
statements that any Borrower sends or makes available to its stockholders and
all registration statements and reports that any Borrower files with the
Securities and Exchange Commission or any successor Person;
(c) Each Borrower will maintain its Consolidated Assets in
good condition and repair (normal wear and tear excepted), and will pay and
discharge or cause to be paid and discharged, when due, the cost of repairs to,
or maintenance of, the same to the extent it is commercially reasonable for such
repairs to be made or maintenance to be performed, and will pay or cause to be
paid in a timely manner all rental or mortgage payments due on any real estate.
Each Borrower hereby agrees that, in the event it fails to pay or cause to be
paid any such payment, it will promptly notify the Lender thereof, and the
Lender may, in its discretion, do so and on demand be reimbursed therefor by the
Borrowers;
(d) Each Borrower will maintain public liability insurance and
fire and extended coverage insurance on all Consolidated Assets that are of a
character usually insured by corporations engaged in the same or similar
businesses, all in form and amount sufficient to indemnify each Borrower for
100% of the appraised value of any Asset lost or damaged subject to any
deductible customary in the industry. Each Borrower will cause all such
insurance policies to be payable to the Lender. Such policies shall contain a
provision whereby they cannot be canceled except after thirty (30) days' written
notice to the Lender. Each Borrower will
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<PAGE> 33
furnish to the Lender such evidence of insurance as the Lender may reasonably
require. Each Borrower hereby agrees that, in the event it fails to pay or cause
to be paid the premium on any such insurance when due, the Lender, in its
discretion, may do so and be reimbursed by the Borrowers therefor. Each Borrower
hereby assigns to the Lender any returned or unearned premiums that may be due
any Borrower upon cancellation by the insurer of any such policy for any reason
whatsoever and directs any such insurer to pay the Lender any amounts so due.
The Lender is hereby appointed the attorney-in-fact of each Borrower (without
requiring the Lender to act as such) to endorse any check which may be payable
to any Borrower, to collect any premiums or the proceeds of such insurance
(other than proceeds of public liability insurance) and any amount so collected
may be applied by the Lender toward satisfaction of any of the Obligations
whether due or not yet due;
(e) Each Borrower will pay when due, all taxes, assessments,
and charges or levies imposed upon it or on any of its property or which it is
required to withhold and pay except where contested in good faith by appropriate
proceedings with adequate reserves therefor having been set aside on its books;
provided, however, that each Borrower shall pay or cause to be paid all such
taxes, assessments, charges or levies forthwith whenever foreclosure on any lien
that may have attached (or security therefor) appears imminent;
(f) The Borrowers will maintain on a consolidated basis:
(i) a Consolidated Interest Coverage Ratio of at
least 3.00:1.00 to be measured quarterly on a rolling four (4) quarters basis
(i.e. as of March 31, June 30, September 30, December 31);
(ii) a Consolidated Tangible Net Worth of at least
$18,500,000.00 as of the Closing; thereafter Consolidated Tangible Net Worth
must increase (1) as of December 31 of each fiscal year by an amount equal to
seventy-five percent (75%) of that fiscal year's Consolidated Net Income (to be
added only if a positive number) and (2) after any Offering by an amount equal
to the net proceeds of any such Offering; Consolidated Tangible Net Worth to be
measured quarterly (i.e. as of March 31, June 30, September 30, December 31);
(g) Each Borrower will, when requested to do so, make
available for inspection by duly authorized representatives of the Lender any of
its books and Records and will furnish the Lender any information regarding its
business affairs and financial condition within a reasonable time after written
request therefor, provided that any confidential information disclosed to the
Lender shall not be disclosed by the Lender to any unauthorized Person and
further provided that SpecTran may require the Lender to provide a certificate
of an officer of the Lender stating that the confidential information will not
be disclosed to any unauthorized Person;
(h) Each Borrower will (i) carry on and conduct its business
in substantially the same manner and in substantially the same fields of
expertise as presently conducted, (ii) do all things necessary to remain duly
incorporated, validly existing and in good standing in its state of
incorporation, (iii) maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and where the failure to
maintain authority would have a
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<PAGE> 34
materially adverse effect on any of the Borrowers and (iv) comply in all
material respects with all present and future Laws applicable to it in the
operation of its business and all material agreements to which it is subject;
(i) Each Borrower will collect its accounts and sell its
inventory only in the ordinary course of business;
(j) Each Borrower will keep accurate and complete Records of
its accounts, inventory and equipment consistent with sound business practices;
(k) Each Borrower will give immediate notice to the Lender of
any litigation or proceeding in which it is a party;
(l) Within ten (10) days after the filing thereof, each
Borrower will furnish the Lender with copies of federal income tax returns filed
by any Borrower;
(m) Each Borrower will pay when due (or within applicable
grace periods) all of its Consolidated Liabilities, except when the amount
thereof is being contested in good faith by appropriate proceedings and with
adequate reserves therefor being set aside on its books and as otherwise
disclosed in Exhibit 6.1(m) attached hereto. If default be made by any Borrower
in the payment of any of its Consolidated Liabilities, the Lender shall have the
right, in its discretion, to pay such amount for the account of any Borrower and
be reimbursed by the Borrowers therefor, except for Consolidated Liabilities
being contested in good faith by appropriate and lawful proceedings, so long as
levy and execution thereon have been stayed and continue to be stayed and they
do not, in the aggregate, materially detract from the value of the property of
the Borrowers or materially impair the use thereof in the operation of their
businesses and for which adequate reserves have been established;
(n) Each Borrower will notify the Lender immediately if it
becomes aware of the occurrence of any Event of Default or of any fact,
condition, or event that with the giving of notice or passage of time or both,
could become an Event of Default or if it becomes aware of any material adverse
change in the business prospects, financial condition (including, without
limitation, proceedings in bankruptcy, insolvency, reorganization, or the
appointment of a receiver or trustee), or results of operations of any Borrower,
or of the failure of any Borrower to observe any undertakings hereunder or under
the Collateral Documents;
(o) Each Borrower will notify the Lender thirty (30) days in
advance of any change in the location of any of its places of business or of the
establishment of any new or the discontinuance of any existing, place of
business;
(p) Each Borrower will (i) fund any of its Employee Pension
Benefit Plans in accordance with no less than the minimum funding standards of
29 U.S.C.A. 1082 (Section 302 of ERISA), (ii) furnish the Lender, promptly after
the filing of the same, with copies of any reports or other statements filed
with the United States Department of Labor or the Internal Revenue Service with
respect to any such Plan and (iii) promptly advise the Lender of the
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<PAGE> 35
occurrence of any Reportable Event or Prohibited Transaction with respect to any
Employee Benefit Plan;
(q) SpecTran will file all registration statements, forms and
other reports with the Securities and Exchange Commission required by any
applicable Law to be filed; and
(r) The Borrowers will each maintain all of their principal
depository accounts with the Lender and the Lender's Affiliates and the Lender
and the Lender's Affiliates will continue to manage the Borrowers' cash;
notwithstanding the foregoing, the Borrowers may maintain depository accounts
with other financial institutions for convenience only provided the aggregate
amount of all such deposit accounts does not exceed $250,000.00.
6.2 Negative Covenants.
The Borrowers do hereby jointly and severally covenant and agree with
the Lender that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, the Borrowers will comply at all times
with the following negative covenants:
(a) No Borrower will change its name, enter into any merger,
consolidation, reorganization or recapitalization, or reclassify its capital
stock;
(b) The Borrowers will not, in the aggregate, sell, transfer,
lease, or otherwise dispose of Consolidated Assets (except in the ordinary
course of business) having a value in excess of $500,000.00 during the term of
this Agreement;
(c) No Borrower will sell or otherwise dispose of, or for any
reason cease operating, any of its divisions, franchises, or lines of business;
(d) No Borrower will mortgage, pledge, grant, or permit to
exist a security interest in, or a lien upon, any of its assets of any kind, now
owned or hereafter acquired, except for Permitted Liens;
(e) The Borrowers will not, in the aggregate, become liable,
directly or indirectly, as guarantor or otherwise for any obligation of any
other Person, except for (i) the endorsement of commercial paper for deposit or
collection in the ordinary course of business, (ii) liabilities not to exceed
$250,000.00 during the term of this Agreement and (iii) the obligations of any
Borrower to the extent otherwise permitted hereunder;
(f) No Borrower will incur, create, assume, or permit to exist
any liabilities except: (i) the Loan, (ii) Consolidated Indebtedness of the
Borrowers listed on Exhibit 5.1(i) to the extent shown on such Exhibit 5.1(i) to
be permitted to exist after the Closing, (iii) liabilities to any Borrower and
(iv) trade liabilities incurred in the ordinary course of business (provided,
however, that no Borrower may acquire inventory other than for cash or on open
account except as expressly approved in writing and in advance by the Lender);
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<PAGE> 36
(g) No Borrower will make any assignment or transfer of
accounts, or, other than in the ordinary course of business, of inventory;
(h) The Borrowers will not, in the aggregate, form any
Subsidiary (except for wholly owned Subsidiaries which are capitalized with less
than $100.00), make any investment in (including any assignment of inventory or
other property), or make any loan in the nature of an investment to, any Person,
except for investments up to $500,000.00 during the term of this Agreement and
investments in or loans to any Borrower;
(i) The Borrowers will not make any loan or advance to any
Person, except for (i) business travel and similar temporary advances in the
ordinary course of business, (ii) in the aggregate, up to $100,000.00 during the
term of this Agreement and (iii) loans or advances to any Borrower;
(j) No Borrower will purchase or otherwise invest in or hold
securities, nonoperating real estate, or other nonoperating Consolidated Assets,
except for investments meeting the parameters set forth in Section 6.2(h) hereof
and Exhibit 6.2 (j) attached hereto;
(k) No Borrower will enter into any sale-leaseback
transaction;
(l) No Borrower will acquire or agree to acquire any stock in,
or all or substantially all of the assets of, any Person;
(m) The Borrowers will not, in the aggregate, pay or commit to
pay during any one fiscal year (commencing with the current fiscal year), lease
obligations (including without limitation Capital Leases and operating leases)
in excess of $500,000.00;
(n) No Borrower will furnish the Lender any certificate or
other document that will contain any untrue statement of material fact or that
will omit to state a material fact necessary to make it not misleading in light
of the circumstances under which it was furnished;
(o) No Borrower will directly or indirectly apply any part of
the proceeds of the Loan to the purchasing or carrying of any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations, or rulings thereunder; and
(p) The Borrowers will not permit on a consolidated basis:
(i) the Consolidated Leverage Ratio to exceed
1.50:1.00 to be measured quarterly (i.e. as of March 31, June 30, September 30,
December 31); after any Offering, the Consolidated Leverage Ratio may not exceed
1.00:1.00;
(ii) the ratio of Consolidated Indebtedness to
Consolidated EBITDA Cumulative to exceed 3.25:1.00, to be measured quarterly on
a rolling four (4) quarters basis (i.e.
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as of March 31, June 30, September 30, December 31); as of December 31, 1997 and
thereafter the ratio may not exceed 3.00:1.00; and
(iii) aggregate Consolidated Capital Expenditures to
exceed $20,000,000.00 during the fiscal year ending December 31, 1996;
$59,000,000.00 during the two (2) consecutive fiscal year period ending December
31, 1997; $77,000,000.00 during the three (3) consecutive fiscal year period
ending December 31, 1998; and for each fiscal year thereafter, commencing with
the fiscal year ending December 31, 1999, the Borrowers may incur, in the
aggregate, Consolidated Capital Expenditures up to but not to exceed
$7,000,000.00.
ARTICLE
7
DEFAULT
7.1 Events of Default.
The occurrence of any one or more of the following events shall
constitute an Event of Default hereunder:
(a) Any Borrower shall fail to pay when due any of its
Obligations to the Lender;
(b) Any Borrower shall fail to observe or perform any of the
obligations set forth in Section 6.1(b), Section 6.1(d), Section 6.1(k), Section
6.1(l) and Section 6.1(o) of this Agreement and such failure shall continue for
ten (10) days after (i) notice of such failure from the Lender; or (ii) the
Lender is notified of such failure or should have been so notified pursuant to
the provisions of Section 6.1(n), whichever is earlier;
(c) Any Borrower shall fail to observe or perform any one of
the obligations set forth in Section 6.1(c), Section 6.1(e) and Section
6.1(h)(ii) of this Agreement and such failure shall continue for thirty (30)
days after (i) notice of such failure from the Lender; or (ii) the Lender is
notified of such failure or should have been so notified pursuant to the
provisions of Section 6.1(n), whichever is earlier, provided, it shall not be an
Event of Default hereunder if any of the Borrowers has commenced taking action
to cure the default within the time period set forth in this Section 7.1(c) and
such cure could not reasonably be completed within such time period and
continues to diligently attempt to cure such default; at no time will the cure
period exceed sixty (60) days;
(d) Any Borrower shall fail to observe or perform any other
obligation to be observed or performed by it hereunder;
(e) Any Borrower shall fail to pay any Consolidated
Indebtedness due any third Persons (except as disclosed in Exhibit 6.1(m)
attached hereto), or any Borrower shall suffer to exist any other event of
default beyond any applicable cure period under any agreement binding any
Borrower, except for a failure to pay or an event of default which is being
contested in good
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faith by appropriate and lawful proceedings, so long as levy and execution
thereon have been stayed and continue to be stayed and such failure to pay or
event of default does not materially detract from the value of the property of
any Borrower or materially impair the use thereof in the operation of any of
their businesses, provided further that such failure to pay or event of default
shall continue for ten (10) days after (i) notice of such failure or event of
default from the Lender; or (ii) the Lender is notified of such failure or event
of default or should have been so notified pursuant to the provisions of Section
6.1(n), whichever is earlier;
(f) Any financial statement, representation, warranty, or
certificate made or furnished by or with respect to any Borrower to the Lender
in connection with this Agreement, or as inducement to the Lender to enter into
this Agreement, or in any separate statement or document to be delivered to the
Lender hereunder, shall be materially false, incorrect, or incomplete when made;
(g) Any Borrower shall admit its inability to pay its debts as
they mature or shall make an assignment for the benefit of itself or any of its
creditors;
(h) Proceedings in bankruptcy, or for reorganization of any
Borrower for the readjustment of any of its debts under the Bankruptcy Code, as
amended, or any part thereof, or under any other Laws, whether state or federal,
for the relief of debtors, now or hereafter existing, shall be commenced against
or by any Borrower and, except with respect to any such proceedings instituted
by any Borrower, shall not be discharged within sixty (60) days of their
commencement;
(i) A receiver or trustee shall be appointed for any Borrower
or for any substantial part of its Consolidated Assets, or any proceedings shall
be instituted for the dissolution or the full or partial liquidation of any
Borrower, and except with respect to any such appointments requested or
instituted by any Borrower, such receiver or trustee shall not be discharged
within sixty (60) days of his appointment, and except with respect to any such
proceedings instituted by any Borrower, such proceedings shall not be discharged
within sixty (60) days of their commencement, or any Borrower shall discontinue
business or materially change the nature of its business;
(j) Any Borrower shall suffer final judgments for payment of
money and shall not discharge the same within a period of sixty (60) days
unless, pending further proceedings, execution has not been commenced or, if
commenced, has been effectively stayed;
(k) A judgment creditor of any Borrower shall obtain
possession of any of the Consolidated Assets by any means, including (without
implied limitation) levy, distraint, replevin, or self-help;
(l) The occurrence of an Event of Default under (and as
defined in) either of the Mortgages;
(m) The occurrence of an Event of Default under (and as
defined in) the Security Agreement;
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(n) The occurrence of an Event of Default under (and as
defined in) the Pledge Agreement;
(o) The occurrence of an Event of Default under (and as
defined in) the Patent Collateral Assignment;
(p) The occurrence of an Event of Default under (and as
defined in) the Trademark Security Agreement;
(q) The occurrence of an Event of Default under (and as
defined in) the Trust Indenture;
(r) The occurrence of an Event of Default under (and as
defined in) any one or more of the Note Purchase Agreements; or
(s) The occurrence of a Change in Control.
7.2 Acceleration.
At its option, and at any time, whether immediately or otherwise, the
Lender may, upon the occurrence of any Event of Default, declare all Obligations
immediately due payable without further action of any kind, including without
notice, demand or presentment. Notwithstanding the foregoing, if at any time
after the Obligations have been declared due and payable and before any judgment
with respect thereto has been entered, every Event of Default has been made good
or cured, then the Lender may, by written instrument delivered to SpecTran,
rescind and annul such declaration and its consequences; but no such rescission
shall extend to or effect any subsequent default or Event of Default or impair
any rights of the Lender.
ARTICLE
8
THE LENDER'S RIGHTS AND REMEDIES
8.1 The Lender's Rights Upon Default
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender, without presentment, demand, notice, protest or advertisement of any
kind, will have all rights under the Uniform Commercial Code and all Laws,
including without limitation all of the rights set forth in the Collateral
Documents and hereafter.
8.2 Notification of Default to Third Parties
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender may notify any of the Borrower's suppliers, account debtors and other
third parties of the default and
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of any and all decisions made and actions taken by the Lender with respect to
this Agreement, the Obligations or the Consolidated Assets, without liability of
any kind. The Lender will provide written notice of such action to SpecTran.
Failure to provide such notice will not impair the Lender's rights.
8.3 Right of Set-Off.
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender may, and is hereby authorized by each Borrower, to the fullest extent
permitted by applicable Laws, without advance notice to any Borrower (any such
notice being expressly waived by the Borrowers), set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and any other indebtedness at any time owing by the Lender to, or for the
credit or the account of, any Borrower against any or all of the Obligations of
the Borrowers, now or hereafter existing, whether or not such Obligations have
matured and irrespective of whether the Lender has exercised any other rights
that it has or may have with respect to such Obligations, including without
limitation any acceleration rights. The Lender agrees promptly to notify the
applicable Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender hereunder are in addition to the other
rights and remedies (including, without limitation, other rights of set-off)
which the Lender may have.
8.4 Cumulative Rights and Remedies
All rights and remedies of the Lender, whether provided for herein or
in other agreements, instruments or documents or conferred by Law, are
cumulative and may be exercised alone or simultaneously.
ARTICLE
9
ATTORNEY-IN-FACT
9.1 Attorney-In-Fact
Each Borrower hereby irrevocably appoints the Lender, or its designee,
as each Borrower's true and lawful attorney-in-fact, with full power, after the
occurrence of an Event of Default, as follows: (i) to endorse the name of any
Borrower on any assignments, notes, checks, drafts, money orders, or other
instruments of payment for Consolidated Assets; (ii) to sign or endorse the name
of any Borrower on any negotiable instrument, invoice, freight or express bill,
bill of lading, storage or warehouse receipts, drafts, assignments,
verifications and notices in connection with accounts, (iii) to obtain, adjust,
settle and cancel, in any Borrower's name, insurance policies as required herein
and to sign any Borrower's name on settlement checks or drafts, (iv) in any
Borrower's name, to do any act which this Agreement requires any Borrower to do
and (v) to give notice to the United States Post Office to effect changes of
address so that mail
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addressed to any Borrower may be delivered directly to the Lender. In exercising
this power-of-attorney, the Lender shall not be liable to the extent that it
acts in good faith.
ARTICLE
10
MISCELLANEOUS
10.1 Connecticut Waiver.
TO THE EXTENT ANY ASSETS AND/OR REAL ESTATE IS LOCATED IN CONNECTICUT,
THE BORROWERS ACKNOWLEDGE THAT THIS AGREEMENT AND EACH TRANSACTION RELATED TO IT
IS A "COMMERCIAL TRANSACTION" WITHIN THE MEETING OF CHAPTER 903A OF THE
CONNECTICUT GENERAL STATUTES, AS AMENDED. THE BORROWERS HEREBY WAIVE ANY RIGHT
WHICH THEY MIGHT HAVE TO NOTICE IN A HEARING OR A PRIOR COURT ORDER, UNDER SAID
CHAPTER 903A OR AS OTHERWISE PROVIDED UNDER ANY APPLICABLE FEDERAL OR STATE LAW,
IN THE EVENT THE LENDER SEEKS ANY PREJUDGMENT REMEDY AT ANY TIME PRIOR TO FINAL
JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT WHETHER
BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR REPLEVIN.
10.2 Appraisals/Audit.
The Lender may perform, at the Borrowers' expense, periodic appraisals
of any Borrower's equipment and real estate and the cost of each appraisal will
be borne by the Borrowers. The Lender agrees that appraisals will not be
required more frequently than annually unless required by applicable Laws or
after the occurrence of an Event of Default. The Lender may perform, at the
Borrowers' expense, periodic audits of any Borrower at any time and the cost of
each audit will be borne by the Borrowers.
10.3 Joint and Several.
All Obligations of the Borrowers hereunder are the joint and several
obligations of each of SpecTran, Optics, Photonic and Communications.
10.4 Construction.
The provisions of this Agreement shall be in addition to those of any
guaranty, pledge or security agreement, note, or other evidence of liability now
or hereafter held by the Lender, all of which shall be construed as
complementary to each other. Nothing herein contained shall prevent the Lender
from enforcing any or all other guaranty, pledge or security agreements, notes,
or other evidences of liability in accordance with their respective terms.
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10.5 Further Assurance.
From time to time, each Borrower will execute and deliver to the Lender
such additional documents and will provide such additional information as the
Lender may reasonably require to carry out the terms of this Agreement and be
informed of the status and affairs of each Borrower.
10.6 Enforcement and Waiver by the Lender.
The Lender shall have the right at all times to enforce the provisions
of this Agreement and the Collateral Documents in strict accordance with the
terms hereof and thereof, notwithstanding any conduct or custom on the part of
the Lender in refraining from so doing at any time or times. The failure of the
Lender at any time or times to enforce its rights under such provisions,
strictly in accordance with the same, shall not be construed as having created a
custom in any way or manner contrary to specific provisions of this Agreement or
as having in any way or manner modified or waived the same. All rights and
remedies of the Lender are cumulative and concurrent and the exercise of one
right or remedy shall not be deemed a waiver or release of any other right or
remedy.
10.7 Expenses of the Lender.
The Borrowers will, on demand, reimburse the Lender for all expenses,
including the reasonable fees and expenses of legal counsel for the Lender,
incurred by the Lender in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and the Collateral
Documents and the collection or attempted collection of any of the Obligations.
10.8 Notices.
Any notices, requests or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered if delivered in
person or if sent by certified mail, postage prepaid, return receipt requested,
facsimile or telegraph, as follows, unless such address is changed by written
notice hereunder:
(a) If to the Borrowers:
SpecTran Corporation
Attention: Bruce Cannon, C.F.O.
50 Hall Road
Sturbridge, MA 01566
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(b) If to the Lender:
Fleet National Bank
Attention: John F. Lynch, V.P.
370 Main Street
Worcester, MA 01608
10.9 Waiver and Release by the Borrowers.
To the maximum extent permitted by applicable Laws, each Borrower:
(a) Waives (i) protest of all commercial paper at any time
held by the Lender on which any Borrower is in any way liable, (ii) except as
the same may herein be specifically granted, notice of acceleration and of
intention to accelerate and (iii) notice and opportunity to be heard before
exercise by the Lender of the remedies of self-help, set-off, or of other
summary procedures permitted by any applicable Laws or by any agreement with any
Borrower, and, except where required hereby or by any applicable Laws, notice of
any other action taken by the Lender (the Lender agrees to provide notice to
SpecTran of acceleration of the Obligations and such notice will reference a
Section or Sections of this Agreement under which a default has occurred,
failure to send such notice will not impair the Lender's rights hereunder); and
(b) Releases the Lender and its officers, attorneys, agents,
and employees from all claims for loss or damage caused by any act or omission
on the part of any of them except willful misconduct.
10.10 Participation.
Notwithstanding any other provision of this Agreement, each Borrower
understands that the Lender may at any time enter into participation agreements
with one or more participating banks whereby the Lender will allocate certain
percentages of its commitment to them. Each Borrower acknowledges that, for the
convenience of all parties, this Agreement is being entered into with the Lender
only and that its obligations under this Agreement are undertaken for the
benefit of, and as an inducement to, any such participating bank as well as the
Lender, and each Borrower hereby grants to each such participating bank, to the
extent of its participation in the Loan, the right to set off deposit accounts
maintained by any Borrower with such bank subject to the terms of this
Agreement. The Lender agrees to provide SpecTran with five (5) days prior
written notice of any such participation. The Lender will also provide five (5)
days prior written notice of any pledge or assignment of any of the Revolving
Note, except in connection with an acquisition of the Lender.
10.11 Applicable Law.
This Agreement is entered into and performable in the Commonwealth of
Massachusetts and shall be subject to and construed and enforced in accordance
with the laws of the Commonwealth of Massachusetts.
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10.12 Consent to Jurisdiction.
EACH OF THE BORROWERS HEREBY CONSENTS TO THE JURISDICTION OF THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF MASSACHUSETTS, AS WELL AS TO THE JURISDICTION OF ALL COURTS FROM
WHICH AN APPEAL MAY BE TAKEN FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF THE BORROWERS'
OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT, AND EXPRESSLY WAIVES ANY
AND ALL OBJECTIONS ANY OF THE BORROWERS MAY HAVE AS TO VENUE IN ANY OF SUCH
COURTS.
10.13 Binding Effect, Assignment, and Entire Agreement.
This Agreement shall inure to the benefit of, and shall be binding
upon, the respective successors and permitted assigns of the parties hereto. No
Borrower has the right to assign any of its rights or obligations hereunder
without the prior written consent of the Lender. This Agreement, including the
Exhibits hereto, all of which are hereby incorporated herein by reference, and
the documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties and may be amended only by a writing signed on
behalf of each party.
10.14 Severability.
If any provision of this Agreement shall be held invalid under any
applicable Laws, such invalidity shall not affect any other provision of this
Agreement that can be given effect without the invalid provision, and, to this
end, the provisions hereof are severable.
10.15 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
10.16 Waiver of Jury Trial
THE LENDER AND THE BORROWERS AGREE THAT THEY (INCLUDING ANY ASSIGNEE OR
SUCCESSOR) SHALL NOT SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM,
OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT,
ANY RELATED INSTRUMENTS, ANY ASSETS OR THE DEALINGS OR THE RELATIONSHIP AMONG
ANY OF THEM. THEY SHALL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
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<PAGE> 45
LENDER AND THE BORROWERS AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
THEY HAVE NOT AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF
THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as a
sealed instrument as of the day and year first above written.
BORROWERS:
SPECTRAN CORPORATION
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS
COMPANY
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
APPLIED PHOTONIC DEVICES, INC.
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
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LENDER:
FLEET NATIONAL BANK
/s/ [illegible] By: /s/ John F. Lynch, VP
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
31
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Exhibit 1.42
REVOLVING NOTE
$20,000,000.00 As of December 1, 1996
Worcester, Massachusetts
FOR VALUE RECEIVED, SPECTRAN CORPORATION, a Delaware corporation with a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation with a
principal place of business at 150 Fisher Drive, Avon, Connecticut ("Optics"),
APPLIED PHOTONIC DEVICES, INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut ("Photonic") and SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation with a principal
place of business at 50 Hall Road, Sturbridge, Massachusetts ("Communication")
(SpecTran, Optics, Photonic and Communication are sometimes collectively
referred to herein as the "Borrowers"), jointly and severally promise to pay to
FLEET NATIONAL BANK, a national banking association having an office located at
370 Main Street, Worcester, Massachusetts 01608 (the "Lender"), or order, at the
Lender's offices, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
on the unpaid balance hereof at the rates and in the manner hereafter provided.
The unpaid principal of this Note from time to time outstanding shall
bear interest, payable quarterly in arrears, computed on the basis of the actual
number of days elapsed over a year assumed to have 360 days, at a rate per annum
to be selected by the Borrowers from time to time. Subject to the terms hereof,
the Borrowers shall have the right to select, from time to time, any of the
rates set forth below to be used in computing the rate of interest to be paid on
the unpaid principal balance hereof. Such rate shall be selected in advance by
the Borrowers by written notice to the Lender, or the holder hereof, specifying
the rate selected, the effective date of such selection, and the portion, in
$500,000.00 increments (except for amounts subject to interest at the rate
stated in clause (i) below which may be in any amount), of the unpaid principal
balance to which such rate selection shall apply (the "Rate Selection"). The
Rate Selection must be received by the Lender, or the holder hereof, not less
than three (3) banking days prior to the effective date of the Rate Selection.
If the Borrowers select a rate based on a one (1), three (3), or six (6) month
index (clauses (ii), (iii) and (iv) below), the Rate Selection shall not be
changed until the period of time specified in the rate index, i.e., one (1)
month, three (3) months and six (6) months (the "Index Period"), has elapsed
from the effective date of the Rate Selection. If a new Rate Selection has not
been made in accordance with the terms hereof, then the Rate Selection will be
as stated in clause (i) below. The Borrowers may, subject to the terms and
conditions hereof, designate more than one Rate Selection for incremental
portions of the unpaid principal balance.
Pursuant to the foregoing paragraph, the Borrowers shall select from
the following rates of interest:
<PAGE> 48
(i) a rate equal to the Lender's Prime Rate of interest established
from time to time by the Lender (the "Prime Rate"), such interest rate to be
adjusted from time to time on the effective date of any change in the Prime Rate
announced by the Lender. The Prime Rate shall be that rate of interest announced
by the Lender as its Prime Rate;
(ii) a rate equal to the LIBOR (defined below) 1-month index rate plus
one hundred fifty (150) basis points;
(iii) a rate equal to the LIBOR 3-months index rate plus one hundred
fifty (150) basis points; or
(iv) a rate equal to the LIBOR 6-months index rate plus one hundred
fifty (150) basis points.
The term "LIBOR" shall mean, the rate as determined on the basis of the
offered rates for deposits in U.S. dollars for an Index Period which appears on
the Telerate page 3750 or Reuter's LIBO page as of 11:00 a.m. London time on the
day that is two London banking days preceding the effective date of the Rate
Selection. If such rate does not appear on the Telerate page 3750, the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for an Index Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is three banking days preceding the effective date of the Rate Selection. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for the applicable Index Period
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is three banking days preceding the effective date of
the Rate Selection. In the event that the Lender is unable to obtain any such
quotation as provided above, the Rate Selection will be as stated in clause (i)
above.
If the Borrowers fail to select an interest rate for all or any portion
of the unpaid principal balance, or if the LIBOR interest rates become
unavailable, then the rate of interest will be as stated in clause (i) above.
If at any time (i) the Lender reasonably determines that maintenance of
that portion of the outstanding principal balance hereof which bears interest
based on a LIBOR rate would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender shall suspend the
availability of the LIBOR interest rates and require all outstanding principal
amounts bearing interest at a LIBOR interest rate to be repaid immediately, or
(ii) if the Lender reasonably determines that (a) deposits of a type and
maturity appropriate to match fund a LIBOR interest rate are not available, the
Lender shall suspend the availability of LIBOR interest rates, or (b) the LIBOR
interest rates do not accurately reflect the cost of making available or
maintaining such LIBOR interest rates, then the Lender shall suspend the
availability of LIBOR interest rates.
2
<PAGE> 49
If any payment of principal bearing interest at a LIBOR interest rate
is made on a date which is not the last day of the Index Period, whether because
of acceleration, prepayment or otherwise, the Borrowers will indemnify the
Lender for all losses or costs (including lost profits) incurred by it resulting
therefrom; provided, however, the provisions of this paragraph will not apply to
a prepayment resulting from the Lender's suspension of LIBOR interest rates as
set forth in the immediately preceding paragraph.
Interest shall be payable quarterly in arrears, the first such payment
of interest to be due and payable beginning on the first banking day of January
1997 and thereafter on the first banking day of each succeeding quarter, i.e.
the first banking day of each April, July, October and January. If not sooner
paid, all indebtedness evidenced by this Note is due and payable on December 31,
1999.
Each payment made hereunder shall be applied first to interest then due
on the unpaid balance of principal and then to principal. Whenever any payment
of principal or interest due under this Note shall not be paid within ten (10)
days of its due date, the Borrowers shall pay in addition thereto as a late
charge five percent (5%) of the amount of such payment.
This Note is issued pursuant to a certain Loan Agreement among the
Borrowers and the Lender of even date herewith (the "Agreement"), and is subject
to all of the terms and conditions contained in the Agreement. Subject to the
terms and conditions of the Agreement, through and including the earlier of
December 31, 1999 or the occurrence of an Event of Default under the Agreement,
the Borrowers may borrow, repay (subject to prepayment fees for amounts subject
to LIBOR interest rates paid before the end of the applicable Index Period) and
reborrow amounts under this Note from time to time as provided in the Agreement.
In no event will outstanding indebtedness hereunder exceed the Borrowing Base as
defined in the Agreement.
An Event of Default under the Agreement shall also constitute an Event
of Default hereunder. At its option, and at any time, whether immediately or
otherwise, the Lender may, upon the occurrence of an Event of Default, declare
all obligations of the Borrowers to the Lender (including all amounts hereunder)
immediately due and payable without further action of any kind, including
without notice, demand or presentment. Notwithstanding anything to the contrary
contained herein, ON AND AFTER THE EARLIER OF DECEMBER 31, 1999 OR ACCELERATION
OF ALL OUTSTANDING OBLIGATIONS HEREUNDER, THE INTEREST RATE AS TO ALL SUCH
OUTSTANDING OBLIGATIONS WILL BE THE PRIME RATE PLUS FOUR PERCENT (4.00%) PER
ANNUM.
Any deposits or other sums at any time credited by or due from the
holder to any of the Borrowers, any endorser or guarantor hereof, may at all
times be held and treated as collateral for the payment of this Note and any and
all other liabilities (direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, now existing or
hereafter arising) of any such maker to the holder. The holder may apply or
set-off such deposits or other sums against such liabilities at any time in the
case of any of the Borrowers but only with respect to matured liabilities in the
case of endorsers and guarantors.
3
<PAGE> 50
Each of the Borrowers and each guarantor, endorser or other person now
or hereafter liable for the payment of any of the indebtedness evidenced by this
Note, severally agrees, by making, guaranteeing or endorsing this Note or by
making any agreement to pay any of the indebtedness evidenced by this Note, to
waive presentment for payment, protest and demand, notice of protest, demand and
of dishonor and nonpayment of this Note, and consents, on one or more occasions,
without notice of further assent (a) to the substitution, exchange or release of
the collateral securing this Note or any part thereof at any time, (b) to the
acceptance or release by the holder or holders hereof at any time of any
additional collateral or security for or other guarantors of this Note, (c) to
the modification or amendment, at any time and from time to time, of this Note,
the Agreement or any instrument securing this Note at the request of any person
liable hereon, (d) to the granting by the holder hereof of any extension of time
with respect to the payment of this Note or for the performance of the
agreements, covenants and conditions contained in this Note, the Agreement or
any other instrument securing this Note, at the request of any person liable
hereon, and (e) to any and all forbearances and indulgences whatsoever. Such
consent shall not alter nor diminish the liability of any person.
The Borrowers agree to pay all reasonable expenses or costs, including
attorneys' fees and costs of collection, which may be incurred by the holder
hereof in connection with the enforcement of any obligations hereunder or
representation with respect to bankruptcy or insolvency proceedings.
The Borrowers' obligations hereunder are secured by all assets of each
of the Borrowers as provided in the Agreement and the Collateral Documents (as
defined in the Agreement).
This Note constitutes the joint and several obligation of each of
SpecTran, Optics, Photonic and Communication.
Executed as a sealed instrument as of the 1st day of December, 1996.
SPECTRAN CORPORATION
___________________________ By:______________________________
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
___________________________ By:______________________________
Witness Its Duly Authorized Officer
4
<PAGE> 51
APPLIED PHOTONIC DEVICES, INC.
___________________________ By:______________________________
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
___________________________ By:______________________________
Witness Its Duly Authorized Officer
5
<PAGE> 52
Exhibit 2.2
DEPOSIT ACCOUNT
Account No. 00792489
33
<PAGE> 53
Exhibit 3.1(q)
Counsel for Bank: Counsel for Borrower:
Paul J. D'Onfro, Esquire Brian Hand, Esquire
Mirick, O'Connell, DeMallie Hackmyer & Nordlicht
& Lougee 645 Fifth Avenue
1700 Bank of Boston Tower New York, NY 10022
Worcester, MA 01608-1477 (212) 421-6500
(508) 799-0541 ("H&N")
("MODL")
FLEET NATIONAL BANK
(the "Bank")
$20,000,000.00 LOAN
TO
SPECTRAN CORPORATION
("SpecTran")
and
SPECTRAN SPECIALTY OPTICS COMPANY
("Optics")
and
APPLIED PHOTONIC DEVICES, INC.
("Photonic")
and
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
("COMMUNICATION")
(SpecTran, Optics, Photonic and Communication
are collectively referred to as the "Borrowers")
CLOSING DOCUMENT AGENDA
Responsible
Party
MODL 1. Loan Agreement among the Borrowers and the Bank
MODL 2. Borrowers' $20,000,000.00 Revolving Note
H&N 3. Federal and State Tax Lien Searches for SpecTran
H&N 4. Composite Certificate of Secretary of SpecTran with attached:
<PAGE> 54
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 5. Certificate of Legal Existence and Good Standing for SpecTran
issued by the Delaware Secretary of State
H&N 6. Certificate of Qualification To Do Business in Massachusetts
for SpecTran issued by the Massachusetts Secretary of State
H&N 7. Certificate of Good Tax Standing for SpecTran issued by the
Massachusetts Department of Revenue
H&N 8. Federal and State Tax Lien Searches for Optics
H&N 9. Composite Certificate of Secretary of Optics with attached:
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 10. Certificate of Legal Existence and Good Standing for Optics
issued by the Delaware Secretary of State
H&N 11. Certificate of Qualification To Transact Business in
Connecticut for Optics issued by the Connecticut Secretary of
State
H&N 12. Accountant's letter regarding filing of tax returns and payment
of taxes
H&N 13. Federal and State Tax Lien Searches for Photonic
H&N 14. Composite Certificate of Secretary of Photonic with attached:
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 15. Certificate of Legal Existence and Good Standing for Photonic
issued by the Delaware Secretary of State
H&N 16. Certificate of qualification To Transact Business in
Connecticut for Photonic issued by the Connecticut Secretary
of State
H&N 17. Accountant's letter regarding filing of tax returns and payment
of taxes
<PAGE> 55
H&N 18. Federal and State Tax Lien Searches for Communication
H&N 19. Composite Certificate of Secretary of Communication with attached:
a) Certificate of Incorporation with all amendments (certified to
by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 20. Certificate of Legal Existence and Good Standing for
Communication issued by the Delaware Secretary of State
H&N 21. Certificate of Qualification To Do Business in Massachusetts for
Communication issued by the Massachusetts Secretary of State
H&N 22. Certificate of Good Tax Standing for Communication issued by the
Massachusetts Department of Revenue
H&N 23. Opinion of Counsel to Borrowers regarding due execution,
authority, and enforceability
MODL 24. Disbursement Authorization
H&N 25. Discharge of Mortgage
<PAGE> 56
Exhibit 3.1(q)
CLOSING AGENDA
SPEC TRAN CORPORATION
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE DECEMBER 1, 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE DECEMBER 1, 2004
================================================================================
Closing Date: [December , 1996]
- --------------------------------------------------------------------------------
Closing Location: [ ]
- --------------------------------------------------------------------------------
Purchasers' Counsel: Hebb & Gitlin ("H&G")
- --------------------------------------------------------------------------------
Company's Counsel: Hackmyer & Nordlicht ("H&N")
- --------------------------------------------------------------------------------
Security Trustee: [Fleet National Bank]
- --------------------------------------------------------------------------------
Security Trustee's [Mirick O'Connell]
Counsel:
================================================================================
================================================================================
Description Procurement/
Drafting
Responsibility
================================================================================
1. NOTE PURCHASE AGREEMENT H&G
- --------------------------------------------------------------------------------
2. TRUST INDENTURE H&G
Exhibit C to the Note Purchase Agreement, as required
by Section 4.10(a) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
3. SECURITY AGREEMENT H&G
Exhibit D to the Note Purchase Agreement, as required
by Section 4.10(b) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
4. PATENT COLLATERAL ASSIGNMENT H&G
Exhibit E to the Note Purchase Agreement, as required
by Section 4.10(c) of the Note Purchase Agreement,
duly recorded with the United States Patent and Trademark
Office.
- --------------------------------------------------------------------------------
5. TRADEMARK SECURITY AGREEMENT H&G
Exhibit F to the Note Purchase Agreement, as required
by Section 4.10(d) of the Note Purchase Agreement,
duly recorded with the United States Patent and Trademark
Office; together with a Trademark Assignment, separately
executed by each of the Company and its Subsidiaries,
substantially in the form of Exhibit 1 to the Trademark
Security Agreement, as required by Section 4.10(d) to the
Note Purchase Agreement.
- --------------------------------------------------------------------------------
6. PLEDGE AGREEMENT H&G
Exhibit G to the Note Purchase Agreement, as required
by Section 4.10(f) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
7. STOCK CERTIFICATES Company
Stock certificates and undated stock powers executed in
blank to be delivered to the Security Trustee as
required by Section 4.10(f) of the Note Purchase
Agreement.
- --------------------------------------------------------------------------------
8. OFFICER'S CERTIFICATE draft H&G;
Officer's Certificate of the Company, as required by final,
Section 4.3(a) of the Note Purchase Agreement. Company
- --------------------------------------------------------------------------------
<PAGE> 57
<TABLE>
<CAPTION>
==============================================================================================================
Description Procurement/
Drafting
Responsibility
==============================================================================================================
<S> <C> <C>
9. SECRETARY'S CERTIFICATE - COMPANY draft, H&G;
As required by Section 4.3(b) of the Note Purchase Agreement setting forth the final,
following attachments: a. Resolutions, Company
b. By-laws of the Company,
c. Specimen signatures of officers of the Company,
d. Long Form Good Standing Certificate.
- -------------------------------------------------------------------------------------------------------------
10. SECRETARY'S CERTIFICATE - SUBSIDIARIES draft H&G;
As required by Section 4.3(c) of the Note Purchase Agreement setting forth the final,
following attachments: a. Resolutions, Company
b. By-laws of the Subsidiary,
c. Specimen signatures of officers of the Subsidiary,
d. Long Form Good Standing Certificate.
- -------------------------------------------------------------------------------------------------------------
11. FOREIGN QUALIFICATION AND GOOD STANDING CERTIFICATES Company
For the Company and each Subsidiary, foreign corporate good standing certificates,
from each jurisdiction where each of the Company or such Subsidiary conducts
significant business activities as a foreign corporation.
- -------------------------------------------------------------------------------------------------------------
12. UCC SEARCHES Company
UCC and fixture filing searches in the jurisdictions listed on Exhibit A attached hereto.
- -------------------------------------------------------------------------------------------------------------
13. UCC FINANCING STATEMENTS H&G
Uniform Commercial Code Financing Statements by each of the Company and its
Subsidiaries in favor of the Security Trustee, duly recorded in the appropriate filing
jurisdictions, as required by Section 4.10(g) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
14. UCC FIXTURE FINANCING STATEMENTS H&G
Uniform Commercial Code Financing Statements by each of the Company and its
Subsidiaries in favor of the Security Trustee, duly recorded in the appropriate real
property filing jurisdictions, as required by Section 4.10(g) of the Note Purchase
Agreement.
- -------------------------------------------------------------------------------------------------------------
15. TERMINATION AND ASSIGNMENT OF EXISTING LIENS Company
The filing of all appropriate Uniform Commercial Code assignment statements, the
recording of all appropriate mortgage releases, and patent and trademark releases, as
required by Section 4.10(h) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
16. MORTGAGE H&G
Exhibit H to the Note Purchase Agreement, as required by Section 4.10(i) of the Note
Purchase Agreement, duly filed in the appropriate recording offices.
- -------------------------------------------------------------------------------------------------------------
17. LEASEHOLDS Company
A copy of each lease in respect of any leasehold interest of the Company or any
Subsidiary in any real property, certified as true and correct, as required by Section
4.10(i) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
18. SUBSIDIARY GUARANTY H&G
Exhibit I to the Note Purchase Agreement, as required by Section 4.11 of the Note
Purchase Agreement for each Subsidiary.
- -------------------------------------------------------------------------------------------------------------
19. OFFEREE LETTER H&G
Offeree Letter of Fleet Corporate Finance regarding the manner of the offering of the
Notes.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 58
================================================================================
Description Procurement/
Drafting Responsibility
================================================================================
20. PRIVATE PLACEMENT NUMBERS H&G
Documentation of private placement numbers for
the Series A Notes and the Series B Notes, in
each case, from CUSIP Service Bureau of Standard
& Poor's, a division of McGraw-Hill, Inc., as
required by Section 4.8 of the Note Purchase
Agreement.
- --------------------------------------------------------------------------------
21. NOTES H&G
Series A Notes and Series B Notes as set forth on
Schedule A to the Note Purchase Agreement, in the
form of Exhibit A1 and Exhibit A2, respectively,
to the Note Purchase Agreement.
- --------------------------------------------------------------------------------
22. CROSS-RECEIPT H&G
Cross-Receipt for the Notes and the wire transfers
in payment thereof.
- --------------------------------------------------------------------------------
23. OPINION OF COMPANY'S COUNSEL draft, H&G;
Opinion of Hackmyer & Nordlicht, Exhibit B1 to final, H&N
the Note Purchase Agreement, as required by
Section 4.4(a) of the Note Purchase Agreement
- --------------------------------------------------------------------------------
24. OPINION OF SECURITY TRUSTEE'S COUNSEL draft, H&G;
Opinion of Mirick O'Connell, Exhibit B2 to the final, [ ]
Note Purchase Agreement, as required by
Section 4.4(b) of the Note Purchase Agreement
- --------------------------------------------------------------------------------
25. OPINION OF HEBB & GITLIN H&G
Opinion of Hebb & Gitlin, Exhibit B3 to the Note
Purchase Agreement, as required by Section 4.4(c)
of the Note Purchase Agreement
- --------------------------------------------------------------------------------
26. EXPENSES Company
Evidence of the payment of all fees and
disbursements required to be paid pursuant to
Section 4.7 of the Note Purchase Agreement.
================================================================================
3
<PAGE> 59
Exhibit 5.1(a)
<TABLE>
<CAPTION>
Name and Addresses Jurisdiction Foreign
of Borrower: of Incorporation: Qualifications: Shareholders:
- ------------ ----------------- --------------- -------------
<S> <C> <C> <C>
SpecTran Corporation Delaware Massachusetts N/A
50 Hall Road
Sturbridge, MA 01566
69-70 Hall Road
Sturbridge, MA 01566
SpecTran Communication Delaware Massachusetts SpecTran
Fiber Technologies, Inc. Corporation
50 Hall Road 10 shares
Sturbridge, MA 01566 Comm. Stock
69-70 Hall Road
Sturbridge, MA 01566
SpecTran Specialty Optics Delaware Connecticut SpecTran
Company Corporation
150 Fisher Drive 10 shares
Avon, CT 06001* Comm. Stock
18 Parkside Lane
Avon, CT 06001
*SpecTran Specialty Optics Company will be moving its principal offices to 55
Darling Drive, Avon, CT 06001.
Applied Photonic Devices, Inc. Delaware Connecticut SpecTran
300 Lake Road Corporation
Dayville, CT 06241 Comm. Stock
50 Tiffany Street
Brooklyn, CT 06259
</TABLE>
35
<PAGE> 60
Exhibit 5.1(f)
LITIGATION
None
36
<PAGE> 61
Exhibit 5.1(i)
CONSOLIDATED INDEBTEDNESS
$24,000,000.00 principal amount of Senior Secured Notes due 2006, as provided
for in the Note Purchase Agreement as defined in the Agreement.
37
<PAGE> 62
Exhibit 6.1(b)(v)
<TABLE>
<CAPTION>
Section Covenant Limit Actual
- ------- -------- ----- ------
<S> <C> <C>
6.01
f(i) Consolidated Interest Coverage Ratio 3.00:1.00
f(ii) Consolidated Tangible Net Worth $18,500,000(*)
</TABLE>
<TABLE>
<CAPTION>
Section
- -------
<S> <C> <C>
6.02
p(i) Consolidated Leverage Ratio 1.50:1.00
p(ii) Consolidated Indebtedness to
Consolidated EBITDA Cumulative 3.25:1.00
p(iii) Consolidated Capital Expenditures 20,000,000.00(**)
</TABLE>
*to step-up as set forth in the Agreement
**changes annually as set forth in the Agreement
I, the undersigned officer of SpecTran hereby certify that I have read the Loan
Agreement among the Borrowers and the Lender dated as of December 1, 1996, and
to the best of my knowledge and belief, as of ______________________, the
Borrowers are in compliance with all the covenants, terms and provisions
contained in the Loan Agreement and no Event of Default exists thereunder.
SPECTRAN CORPORATION
By:_______________________________
Its Chief Financial Officer
38
<PAGE> 63
Exhibit 6.1(m)
APD has a dispute with the landlord of its facility at 300 Lake Road, Dayville,
Connecticut, arising from (i) the landlord's failure to pay utility costs
resulting in the gas company turning off the heat to the facility and (ii) the
failure of the landlord to make necessary repairs to the roof of the facility,
resulting in leaks. The landlord's actions have caused damage to the facility
and the loss of work days due to the lack of heat in the facility. APD has
notified the landlord that it is withholding November rent and all future rent
payments pending the landlord's reimbursement of APD for these damages.
39
<PAGE> 64
Exhibit 6.2(j)
The investment objective will be to maximize total return within the
confines of a short to average overall maturity framework. The fund will utilize
US Governments, domestic corporates, asset-backed paper (AAA rated), Govt Agency
mortgage-backed paper including short term CMO's and Govt Agency backed
short-term floating rate paper. Positions required for liquidity needs will be
held in high grade short-term or money market balances. The horizon on these
corporate funds will be approximately 1/3 for immediate liquidity needs (if
necessary), approximately 1/3 to be used for intermediate term purposes, and the
remaining approximately third for long term expansion purposes. SpecTran will
have full authority and discretion on all investment changes.
40
<PAGE> 65
SCHEDULE 2
REVOLVING NOTE
$20,000,000.00 As of December 1, 1996
Worcester, Massachusetts
FOR VALUE RECEIVED, SPECTRAN CORPORATION, a Delaware corporation with a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation with a
principal place of business at 150 Fisher Drive, Avon, Connecticut ("Optics"),
APPLIED PHOTONIC DEVICES, INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut ("Photonic") and SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation with a principal
place of business at 50 Hall Road, Sturbridge, Massachusetts ("Communication")
(SpecTran, Optics, Photonic and Communication are sometimes collectively
referred to herein as the "Borrowers"), jointly and severally promise to pay to
FLEET NATIONAL BANK, a national banking association having an office located at
370 Main Street, Worcester, Massachusetts 01608 (the "Lender"), or order, at the
Lender's offices, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
on the unpaid balance hereof at the rates and in the manner hereafter provided.
The unpaid principal of this Note from time to time outstanding shall
bear interest, payable quarterly in arrears, computed on the basis of the actual
number of days elapsed over a year assumed to have 360 days, at a rate per annum
to be selected by the Borrowers from time to time. Subject to the terms hereof,
the Borrowers shall have the right to select, from time to time, any of the
rates set forth below to be used in computing the rate of interest to be paid on
the unpaid principal balance hereof. Such rate shall be selected in advance by
the Borrowers by written notice to the Lender, or the holder hereof, specifying
the rate selected, the effective date of such selection, and the portion, in
$500,000.00 increments (except for amounts subject to interest at the rate
stated in clause (i) below which may be in any amount), of the unpaid principal
balance to which such rate selection shall apply (the "Rate Selection"). The
Rate Selection must be received by the Lender, or the holder hereof, not less
than three (3) banking days prior to the effective date of the Rate Selection.
If the Borrowers select a rate based on a one (1), three (3), or six (6) month
index (clauses (ii), (iii) and (iv) below), the Rate Selection shall not be
changed until the period of time specified in the rate index, i.e., one (1)
month, three (3) months and six (6) months (the "Index Period"), has elapsed
from the effective date of the Rate Selection. If a new Rate Selection has not
been made in accordance with the terms hereof, then the Rate Selection will be
as stated in clause (i) below. The Borrowers may, subject to the terms and
conditions hereof, designate more than one Rate Selection for incremental
portions of the unpaid principal balance.
Pursuant to the foregoing paragraph, the Borrowers shall select from
the following rates of interest:
<PAGE> 66
(i) a rate equal to the Lender's Prime Rate of interest established
from time to time by the Lender (the "Prime Rate"), such interest rate to be
adjusted from time to time on the effective date of any change in the Prime Rate
announced by the Lender. The Prime Rate shall be that rate of interest announced
by the Lender as its Prime Rate;
(ii) a rate equal to the LIBOR (defined below) 1-month index rate plus
one hundred fifty (150) basis points;
(iii) a rate equal to the LIBOR 3-months index rate plus one hundred
fifty (150) basis points; or
(iv) a rate equal to the LIBOR 6-months index rate plus one hundred
fifty (150) basis points.
The term "LIBOR" shall mean, the rate as determined on the basis of the
offered rates for deposits in U.S. dollars for an Index Period which appears on
the Telerate page 3750 or Reuter's LIBO page as of 11:00 a.m. London time on the
day that is two London banking days preceding the effective date of the Rate
Selection. If such rate does not appear on the Telerate page 3750, the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for an Index Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is three banking days preceding the effective date of the Rate Selection. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for the applicable Index Period
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is three banking days preceding the effective date of
the Rate Selection. In the event that the Lender is unable to obtain any such
quotation as provided above, the Rate Selection will be as stated in clause (i)
above.
If the Borrowers fail to select an interest rate for all or any portion
of the unpaid principal balance, or if the LIBOR interest rates become
unavailable, then the rate of interest will be as stated in clause (i) above.
If at any time (i) the Lender reasonably determines that maintenance of
that portion of the outstanding principal balance hereof which bears interest
based on a LIBOR rate would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender shall suspend the
availability of the LIBOR interest rates and require all outstanding principal
amounts bearing interest at a LIBOR interest rate to be repaid immediately, or
(ii) if the Lender reasonably determines that (a) deposits of a type and
maturity appropriate to match fund a LIBOR interest rate are not available, the
Lender shall suspend the availability of LIBOR interest rates, or (b) the LIBOR
interest rates do not accurately reflect the cost of making available or
maintaining such LIBOR interest rates, then the Lender shall suspend the
availability of LIBOR interest rates.
2
<PAGE> 67
If any payment of principal bearing interest at a LIBOR interest rate
is made on a date which is not the last day of the Index Period, whether because
of acceleration, prepayment or otherwise, the Borrowers will indemnify the
Lender for all losses or costs (including lost profits) incurred by it resulting
therefrom; provided, however, the provisions of this paragraph will not apply to
a prepayment resulting from the Lender's suspension of LIBOR interest rates as
set forth in the immediately preceding paragraph.
Interest shall be payable quarterly in arrears, the first such payment
of interest to be due and payable beginning on the first banking day of January
1997 and thereafter on the first banking day of each succeeding quarter, i.e.
the first banking day of each April, July, October and January. If not sooner
paid, all indebtedness evidenced by this Note is due and payable on December 31,
1999.
Each payment made hereunder shall be applied first to interest then due
on the unpaid balance of principal and then to principal. Whenever any payment
of principal or interest due under this Note shall not be paid within ten (10)
days of its due date, the Borrowers shall pay in addition thereto as a late
charge five percent (5%) of the amount of such payment.
This Note is issued pursuant to a certain Loan Agreement among the
Borrowers and the Lender of even date herewith (the "Agreement"), and is subject
to all of the terms and conditions contained in the Agreement. Subject to the
terms and conditions of the Agreement, through and including the earlier of
December 31, 1999 or the occurrence of an Event of Default under the Agreement,
the Borrowers may borrow, repay (subject to prepayment fees for amounts subject
to LIBOR interest rates paid before the end of the applicable Index Period) and
reborrow amounts under this Note from time to time as provided in the Agreement.
In no event will outstanding indebtedness hereunder exceed the Borrowing Base as
defined in the Agreement.
An Event of Default under the Agreement shall also constitute an Event
of Default hereunder. At its option, and at any time, whether immediately or
otherwise, the Lender may, upon the occurrence of an Event of Default, declare
all obligations of the Borrowers to the Lender (including all amounts hereunder)
immediately due and payable without further action of any kind, including
without notice, demand or presentment. Notwithstanding anything to the contrary
contained herein, ON AND AFTER THE EARLIER OF DECEMBER 31, 1999 OR ACCELERATION
OF ALL OUTSTANDING OBLIGATIONS HEREUNDER, THE INTEREST RATE AS TO ALL SUCH
OUTSTANDING OBLIGATIONS WILL BE THE PRIME RATE PLUS FOUR PERCENT (4.00%) PER
ANNUM.
Any deposits or other sums at any time credited by or due from the
holder to any of the Borrowers, any endorser or guarantor hereof, may at all
times be held and treated as collateral for the payment of this Note and any and
all other liabilities (direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, now existing or
hereafter arising) of any such maker to the holder. The holder may apply or
set-off such deposits or other sums against such liabilities at any time in the
case of any of the Borrowers but only with respect to matured liabilities in the
case of endorsers and guarantors.
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<PAGE> 68
Each of the Borrowers and each guarantor, endorser or other person now
or hereafter liable for the payment of any of the indebtedness evidenced by this
Note, severally agrees, by making, guaranteeing or endorsing this Note or by
making any agreement to pay any of the indebtedness evidenced by this Note, to
waive presentment for payment, protest and demand, notice of protest, demand and
of dishonor and nonpayment of this Note, and consents, on one or more occasions,
without notice of further assent (a) to the substitution, exchange or release of
the collateral securing this Note or any part thereof at any time, (b) to the
acceptance or release by the holder or holders hereof at any time of any
additional collateral or security for or other guarantors of this Note, (c) to
the modification or amendment, at any time and from time to time, of this Note,
the Agreement or any instrument securing this Note at the request of any person
liable hereon, (d) to the granting by the holder hereof of any extension of time
with respect to the payment of this Note or for the performance of the
agreements, covenants and conditions contained in this Note, the Agreement or
any other instrument securing this Note, at the request of any person liable
hereon, and (e) to any and all forbearances and indulgences whatsoever. Such
consent shall not alter nor diminish the liability of any person.
The Borrowers agree to pay all reasonable expenses or costs, including
attorneys' fees and costs of collection, which may be incurred by the holder
hereof in connection with the enforcement of any obligations hereunder or
representation with respect to bankruptcy or insolvency proceedings.
The Borrowers' obligations hereunder are secured by all assets of each
of the Borrowers as provided in the Agreement and the Collateral Documents (as
defined in the Agreement).
This Note constitutes the joint and several obligation of each of
SpecTran, Optics, Photonic and Communication.
Executed as a sealed instrument as of the 1st day of December, 1996.
SPECTRAN CORPORATION
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
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<PAGE> 69
APPLIED PHOTONIC DEVICES, INC.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
5
<PAGE> 70
SCHEDULE 3
================================================================================
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
---------------------
GUARANTY AGREEMENT
---------------------
DATED AS OF DECEMBER 1, 1996
================================================================================
<PAGE> 71
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
1. PRELIMINARY STATEMENTS................................................................................. 1
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS............................................................. 2
2.1 Guarantied Obligations........................................................................ 2
2.2 Payments and Performance...................................................................... 2
2.3 Waivers and Other Agreements.................................................................. 3
2.4 Nature of Guaranty............................................................................ 4
2.5 Obligations Absolute.......................................................................... 4
2.6 No Investigation by Noteholder................................................................ 5
2.7 Indemnity..................................................................................... 5
2.8 Subordination, Subrogation, Etc............................................................... 5
2.9 Waiver........................................................................................ 6
2.10 Limitation on Guarantied Obligations.......................................................... 6
2.11 Marshaling.................................................................................... 6
2.12 Setoff, Counterclaim or Other Deductions...................................................... 6
2.13 No Election of Remedies by Noteholders........................................................ 6
2.14 Separate Action; Other Enforcement Rights..................................................... 7
2.15 Noteholder Setoff............................................................................. 7
2.16 Delay or Omission; No Waiver.................................................................. 7
2.17 Restoration of Rights and Remedies............................................................ 7
2.18 Cumulative Remedies........................................................................... 7
3. INTERPRETATION OF THIS GUARANTY AGREEMENT.............................................................. 8
3.1 Terms Defined................................................................................. 8
3.2 Headings; Independent Construction............................................................ 9
3.3 Separate Agreements........................................................................... 9
3.4 Partial Invalidity............................................................................ 9
3.5 Governing Law................................................................................. 10
4. WARRANTIES AND REPRESENTATIONS......................................................................... 10
5. GENERAL COVENANTS...................................................................................... 10
5.1 Undertakings in Note Purchase Agreement....................................................... 10
5.2 Further Assurances............................................................................ 10
6. MISCELLANEOUS.......................................................................................... 10
6.1 Communications................................................................................ 10
6.2 Amendment..................................................................................... 11
6.3 Successors and Assigns........................................................................ 11
6.4 Survival...................................................................................... 11
6.5 Joinder Agreement............................................................................. 11
6.6 Expense....................................................................................... 12
6.7 Benefits of Guaranty Restricted to Noteholders................................................ 12
6.8 Entire Agreement.............................................................................. 12
6.9 Connecticut Waiver............................................................................ 13
6.10 Counterparts.................................................................................. 13
</TABLE>
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<PAGE> 72
GUARANTY AGREEMENT
GUARANTY AGREEMENT (as may be amended, restated or otherwise modified
from time to time, this "AGREEMENT"), dated as of December 1, 1996, by SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC. ("SCFT"), a Delaware corporation,
SPECTRAN SPECIALTY OPTICS COMPANY ("SSOC"), a Delaware corporation, and APPLIED
PHOTONIC DEVICES, INC. ("APD"), a Delaware corporation (SCFT, SSOC and APD,
together with each other Person that becomes a party hereto from time to time by
execution and delivery of a Joinder Agreement, and including their respective
successors and assigns, the "GUARANTORS"), in favor of each of the Noteholders
(as such term is hereinafter defined).
1. PRELIMINARY STATEMENTS
1.1 Spectran Corporation (together with its successors and assigns, the
"COMPANY"), a Delaware corporation, has authorized the issuance of
(a) its 9.24% Series A Senior Secured Notes due 2003 (as may
be amended, restated or otherwise modified from time to time, the
"SERIES A NOTES"), in the aggregate principal amount of $16,000,000,
and
(b) its 9.39% Series B Senior Secured Notes due 2004 (as may
be amended, restated or otherwise modified from time to time, the
"SERIES B NOTES," and collectively with the Series A Notes and any and
all other notes for which such notes, or any successor notes, may be
substituted or exchanged, all as may be amended, restated or otherwise
modified from time to time, the "NOTES"), in the aggregate principal
amount of $8,000,000,
pursuant to the separate Note Purchase Agreements (collectively, as may be
amended, restated or otherwise modified from time to time, the "NOTE PURCHASE
AGREEMENT"), each dated as of December 1, 1996, with each of the purchasers
named on Schedule A thereto (the "PURCHASERS").
1.2 In order to induce the Purchasers to purchase the Notes, each of
SCFT, SSOC and APD has agreed to become a Guarantor hereunder and the Company
has agreed, pursuant to the Note Purchase Agreement, that each other Person that
at any time becomes a direct or indirect Subsidiary will be required to become a
Guarantor hereunder.
1.3 The Guarantors and the Company are operated as part of one
consolidated business entity. The Guarantors are directly dependent upon the
Company for and in connection with their respective business activities and
their respective financial resources. Each Guarantor will receive direct and
indirect economic and financial benefits from the indebtedness incurred under
the Note Purchase Agreement and the Notes by the Company, and under this
Agreement, and the incurrence of such indebtedness is in the best interests of
such Guarantor.
1.4 All acts and proceedings required by law and by the constitutive
documents of each Guarantor necessary to constitute this Agreement a valid and
binding agreement for the uses and purposes set forth herein, in accordance with
its terms, have been done and taken, and the execution and delivery hereof has
been in all respects duly authorized.
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<PAGE> 73
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.1 GUARANTIED OBLIGATIONS.
Each Guarantor, in consideration of the execution and delivery of the
Note Purchase Agreement, the purchase of the Notes by the Purchasers and other
consideration, hereby irrevocably, unconditionally, absolutely, jointly and
severally guarantees to each Noteholder, as and for each such Guarantor's own
debt:
(a) the due and punctual payment of the principal of and
accrued and unpaid interest (including, without limitation, interest
which otherwise may cease to accrue by operation of any insolvency law,
rule, regulation or interpretation thereof) and Make-Whole Amount on
the Notes and the due and punctual payment of all other obligations of
the Company to the Noteholders under the Note Purchase Agreement, the
Notes and the other Financing Documents when due, whether by mandatory
or optional prepayment, acceleration or otherwise, all in accordance
with the terms thereof, including, without limitation, overdue
interest, indemnification payments and all reasonable costs and
expenses incurred by the Noteholders and the Trustee in connection with
enforcing any obligations of the Company under the Note Purchase
Agreement, the Notes and the other Financing Documents, including,
without limitation, the reasonable fees and disbursements of
Noteholders' special counsel;
(b) the punctual and faithful performance, keeping,
observance, and fulfillment by the Company of all duties, agreements,
covenants and obligations of the Company contained in the Note Purchase
Agreement, the Notes and the other Financing Documents to be performed
or observed on the part of the Company; and
(c) the prompt and complete payment, on demand, of any and all
reasonable costs and expenses incurred by the Noteholders in connection
with enforcing the obligations of such Guarantor hereunder, including,
without limitation, the reasonable fees and disbursements of the
Noteholders' special counsel.
All of the obligations set forth in clauses (a), (b) and (c) of this Section 2.1
are referred to herein as the "GUARANTIED OBLIGATIONS" and the guaranty thereof
contained herein is a primary, original and immediate obligation of each
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment and performance and shall remain in full force and effect until the
full, final and indefeasible payment of the Guarantied Obligations.
2.2 PAYMENTS AND PERFORMANCE.
If for any reason any duty, agreement or obligation of the Company
contained in the Note Purchase Agreement or any other Financing Document shall
not be performed or observed by the Company as provided therein, or if any
amount payable under or in connection with the Note Purchase Agreement, the
Notes or any other Financing Document shall not be paid in full when the same
becomes due and payable, each Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and obligations and to pay
forthwith each
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<PAGE> 74
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
such amount to the Noteholders regardless of any defense or setoff or
counterclaim which the Company may have or assert, and regardless of any other
condition or contingency.
2.3 WAIVERS AND OTHER AGREEMENTS.
Each Guarantor hereby unconditionally:
(a) waives any requirement that the Noteholders, upon the
occurrence of an Event of Default, first make demand upon, or seek to
enforce remedies against, the Company before demanding payment under or
seeking to enforce the obligations of such Guarantor under this
Agreement;
(b) agrees that the obligations of such Guarantor under this
Agreement will not be discharged except by complete performance of all
obligations of the Company contained in the Note Purchase Agreement,
the Notes and the other Financing Documents;
(c) agrees that the obligations of such Guarantor under this
Agreement shall remain in full force and effect without regard to, and
shall not be affected or impaired, without limitation, by any
invalidity, irregularity or unenforceability in whole or in part of the
Note Purchase Agreement, the Notes or any other Financing Document, or
any limitation on the liability of any Guarantor under this Agreement,
or any limitation on the method or terms of payment under the Note
Purchase Agreement, the Notes or any other Financing Document which may
at any time be caused or imposed in any manner whatsoever (including,
without limitation, usury laws);
(d) waives diligence, presentment and protest with respect to,
and any notice of default or dishonor in the payment of any amount at
any time payable by the Company under or in connection with the Note
Purchase Agreement, the Notes or any other Financing Document, and
further waives any requirement of notice of acceptance of, or other
formality relating to, the obligations of such Guarantor under this
Agreement; and
(e) agrees that to the extent the Company makes a payment or
payments to any Noteholder, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required, for any of the foregoing reasons
or for any other reason, to be repaid or paid over to a custodian,
trustee, receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, state or federal
law, or any common law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if
said payment had not been made and each Guarantor shall be primarily
liable for such obligation.
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<PAGE> 75
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.4 NATURE OF GUARANTY.
The obligations of each Guarantor under this Agreement constitute an
absolute and unconditional and irrevocable guaranty of payment and not a
guaranty of collection and are wholly independent of and in addition to other
rights and remedies of the Noteholders and are not contingent upon the pursuit
by the Noteholders of any such rights and remedies, such pursuit being hereby
waived by such Guarantor. Notwithstanding anything to the contrary set forth in
the Note Purchase Agreement, the Notes or any other Financing Document, the
obligations of each Guarantor under this Agreement are joint and several with
the obligations of each other Guarantor and any other guarantor of all or any
part of the Guarantied Obligations.
2.5 OBLIGATIONS ABSOLUTE.
The obligations, covenants, agreements and duties of each Guarantor
under this Agreement shall not be released, affected or impaired by any of the
following, whether or not undertaken with notice to or consent of such
Guarantor:
(a) any assignment or transfer, in whole or in part, of any
Note although made without notice to or consent of such Guarantor; or
(b) any waiver by any Noteholder, or by any other Person, of
the performance or observance by the Company of any of the agreements,
covenants, terms or conditions contained in the Note Purchase Agreement
or in any other Financing Document; or
(c) any indulgence in or the extension of the time for payment
by the Company of any amounts payable under or in connection with the
Note Purchase Agreement, the Notes or any other Financing Document, or
of the time for performance by the Company of any other obligations
under or arising out of the Note Purchase Agreement, the Notes or any
other Financing Document, or the extension or renewal thereof; or
(d) the modification, amendment or waiver (whether material or
otherwise) of any duty, agreement or obligation of the Company set
forth in the Note Purchase Agreement, the Notes or any other Financing
Document (the modification, amendment or waiver from time to time of
the Note Purchase Agreement, the Notes and the other Financing
Documents being expressly authorized without further notice to or
consent of such Guarantor); or
(e) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of the Company or
any receivership, insolvency, bankruptcy, reorganization or other
similar proceedings affecting the Company or any of its assets; or
(f) the merger or consolidation of the Company or any
Guarantor with any other Person; or
(g) the release or discharge of the Company from the
performance or observance of any agreement, covenant, term or condition
contained in the Note
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<PAGE> 76
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
Purchase Agreement, the Notes or any other Financing Document, by
operation of law; or
(h) any other cause, whether similar or dissimilar to the
foregoing, that would release, affect or impair the obligations,
covenants, agreements or duties of any Guarantor under this Agreement.
2.6 NO INVESTIGATION BY NOTEHOLDER.
Each Guarantor hereby waives unconditionally any obligation that, in
the absence of such provision, the Noteholders might otherwise have to
investigate or to assure that there has been compliance with the law of any
jurisdiction with respect to the Guarantied Obligations, recognizing that, to
save both time and expense, such Guarantor has requested that the Noteholders
not undertake such investigation. Each Guarantor hereby expressly confirms that
the obligations of such Guarantor hereunder shall remain in full force and
effect without regard to compliance or noncompliance with any such law and
irrespective of any investigation or knowledge of any such law by any
Noteholder.
2.7 INDEMNITY.
As a separate, additional and continuing obligation, each Guarantor
unconditionally and irrevocably undertakes and agrees with the Noteholders that,
should the Guarantied Obligations not be recoverable from such Guarantor for any
reason whatsoever (including, without limitation, by reason of any provision of
the Note Purchase Agreement, the Notes, any other Financing Document or any
other agreement or instrument executed in connection therewith being or becoming
void, unenforceable or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Noteholder at any time, such
Guarantor as sole, original and independent obligor, upon demand by the Required
Holders, will make payment of the Guarantied Obligations to the Noteholders by
way of a full indemnity in such currency and otherwise in such manner as is
provided in the Note Purchase Agreement and the Notes.
2.8 SUBORDINATION, SUBROGATION, ETC.
Each Guarantor agrees that any present or future indebtedness,
obligations or liabilities of the Company to such Guarantor shall be fully
subordinate and junior in right and priority of payment to any present or future
indebtedness, obligations or liabilities of the Company to the Noteholders. Each
Guarantor waives any right of subrogation to the rights of the Noteholders
against the Company or any other Person obligated for payment of the Guarantied
Obligations and any right of reimbursement, contribution or indemnity whatsoever
(including, without limitation, any such right as against any other Guarantor)
arising or accruing out of any payment that such Guarantor may make pursuant to
this Agreement, and any right of recourse to security for the debts and
obligations of the Company, unless and until the entire amount of the Guarantied
Obligations shall have been paid in full.
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<PAGE> 77
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.9 WAIVER.
To the extent that it lawfully may, each Guarantor agrees that it will
not at any time insist upon or plead, or in any manner whatsoever claim or take
any benefit or advantage of, any applicable present or future stay, extension or
moratorium law, which may affect observance or performance of the provisions of
this Agreement, the Note Purchase Agreement, the Notes or any other Financing
Document; nor will it claim, take or insist upon any benefit or advantage of any
present or future law providing for the evaluation or appraisal of any security
for its obligations hereunder or the Company under the Note Purchase Agreement,
the Notes or any other Financing Document prior to any sale or sales thereof
which may be made under or by virtue of any instrument governing the same; nor
will it, after any such sale or sales, claim or exercise any right, under any
applicable law, to redeem any portion of such security so sold.
2.10 LIMITATION ON GUARANTIED OBLIGATIONS.
Notwithstanding anything in Section or elsewhere in this Agreement, the
Note Purchase Agreement, the Notes or any other Financing Document to the
contrary, the obligations of each Guarantor under this Agreement shall at each
point in time be limited to an aggregate amount equal to the greatest amount
that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under
applicable law (including, without limitation, to the extent, and only to the
extent, applicable to any such Guarantor, Section 548 of the Bankruptcy Code of
the United States of America and any comparable provisions of the law of any
other jurisdiction, any capital preservation law of any jurisdiction and any
other law of any jurisdiction that at such time limits the enforceability of the
obligations of such Guarantor under this Agreement).
2.11 MARSHALING.
Neither any Noteholder nor any Person acting for the benefit of any
Noteholder shall be under any obligation to marshal any assets in favor of any
Guarantor or against or in payment of any or all of the Guarantied Obligations.
2.12 SETOFF, COUNTERCLAIM OR OTHER DEDUCTIONS.
Except as otherwise required by law, each payment by each Guarantor
shall be made without setoff, counterclaim or other deduction.
2.13 NO ELECTION OF REMEDIES BY NOTEHOLDERS.
No election to proceed in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of such Noteholder's
right to proceed in any other form of action or proceeding or against other
parties unless such Noteholder has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by any Noteholder against the Company or any Guarantor under any
document or instrument evidencing obligations of the Company or any Guarantor to
such Noteholder shall serve to diminish the liability of any Guarantor under
this Agreement, except to the extent that
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2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
such Noteholder finally and unconditionally shall have realized payment by such
action or proceeding in respect of the Guarantied Obligations.
2.14 SEPARATE ACTION; OTHER ENFORCEMENT RIGHTS.
Each of the rights and remedies granted under this Agreement to each
Noteholder in respect of the Notes held by such Noteholder may be exercised by
such Noteholder without notice by such Noteholder to, or the consent of or any
other action by, any other Noteholder. Each Noteholder may proceed to protect
and enforce this Agreement by suit or suits or proceedings in equity, at law or
in bankruptcy, and whether for the specific performance of any covenant or
agreement contained herein or in execution or aid of any power herein granted or
for the recovery of judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
2.15 NOTEHOLDER SETOFF.
Each Noteholder shall have, to the fullest extent permitted by law and
this Agreement, a right of set-off against any and all credits and any and all
other property of each Guarantor now or at any time whatsoever, with or in the
possession of such Noteholder, or anyone acting for such Noteholder, to ensure
the full performance of any and all obligations of each Guarantor hereunder.
2.16 DELAY OR OMISSION; NO WAIVER.
No course of dealing on the part of any Noteholder and no delay or
failure on the part of any such Person to exercise any right hereunder shall
impair such right or operate as a waiver of such right or otherwise prejudice
such Person's rights, powers and remedies hereunder. Every right and remedy
given by this Agreement or by law to any Noteholder may be exercised from time
to time as often as may be deemed expedient by such Person.
2.17 RESTORATION OF RIGHTS AND REMEDIES.
If any Noteholder shall have instituted any proceeding to enforce any
right or remedy under this Agreement or under any Note held by such Noteholder,
and such proceeding shall have been dismissed, discontinued or abandoned for any
reason, or shall have been determined adversely to such Noteholder, then and in
every such case each such Noteholder, the Company and each Guarantor shall,
except as may be limited or affected by any determination (including, without
limitation, any determination in connection with any such dismissal) in such
proceeding, be restored severally and respectively to its respective former
positions hereunder and thereunder, and thereafter, subject as aforesaid, the
rights and remedies of such Noteholders shall continue as though no such
proceeding had been instituted.
2.18 CUMULATIVE REMEDIES.
No remedy under this Agreement, the Note Purchase Agreement, the Notes
or any other Financing Document is intended to be exclusive of any other remedy,
but each and every remedy
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2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
shall be cumulative and in addition to any and every other remedy given pursuant
to this Agreement, the Note Purchase Agreement, the Notes or any other Financing
Document.
3. INTERPRETATION OF THIS GUARANTY AGREEMENT
3.1 TERMS DEFINED.
For purposes of this Agreement, the following terms have the meanings
specified below or provided for in the section of this Agreement referred to
immediately following such term (such definitions to be equally applicable to
both the singular and plural forms of the terms defined) or, if not defined
herein, then as defined in the Trust Indenture.
COMPANY -- Section 1.1.
DEFAULT -- has the meaning assigned to such term in the Note Purchase
Agreement.
EVENT OF DEFAULT -- has the meaning assigned to such term in the Note
Purchase Agreement.
GUARANTIED OBLIGATIONS -- Section 2.1.
GUARANTORS -- has the meaning assigned to such term in the introductory
paragraph hereof.
JOINDER AGREEMENT -- Section 6.5.
LIEN -- has the meaning assigned to such term in the Note Purchase
Agreement.
NOTE PURCHASE AGREEMENT -- Section 1.1(b).
NOTEHOLDER -- means, at any time, each Person that is the holder of any
Note at such time.
NOTES -- has the meaning assigned to such term in Preliminary Statement
A.
PERSON -- means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
PURCHASERS -- Section 1.1(b).
PROPERTY -- means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.
REQUIRED HOLDERS -- has the meaning assigned to such term in the Note
Purchase Agreement.
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<PAGE> 80
3. INTERPRETATION OF THIS GUARANTY AGREEMENT
SERIES A NOTES -- Section 1.1(a), 1.1(a), 1.1(b).
SERIES B NOTES -- Section 1.1(b).
SUBSIDIARY -- has the meaning assigned to such term in the Note
Purchase Agreement.
TRUSTEE -- has the meaning assigned to such term in the Trust
Indenture, dated as of December 1, 1996, among the Company, the Guarantors,
Fleet National Bank as trustee, and the other parties signatory thereto, as
amended, modified or supplemented from time to time.
3.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections and Table
of Contents of this Agreement appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Indenture as a whole and not to any particular Section or other
subdivision. References to Sections are, unless otherwise specified,
references to Sections of this Agreement. References to Annexes,
Schedules, Exhibits and Attachments are, unless otherwise specified,
references to Annexes, Schedules, Exhibits and Attachments attached to
this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
3.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Guarantors and
the Trustee, this Agreement shall be construed and interpreted as a separate
Agreement between each Guarantor and the Trustee, and any whole or partial
invalidity of this Agreement in respect of any Guarantor shall not have any
effect on the validity or enforceability of this Agreement as among each other
Guarantor, respectively, as the case may be, and the Trustee.
3.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
9
<PAGE> 81
3.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS EXCLUDING CHOICE-OF-LAW PRINCIPLES
OF THE LAW OF SUCH JURISDICTION THAT WOULD REQUIRE THE APPLICATION OF THE LAWS
OF A JURISDICTION OTHER THAN SUCH JURISDICTION.
4. WARRANTIES AND REPRESENTATIONS
Each Guarantor warrants and represents, as of the date such Guarantor
becomes a Guarantor hereunder, that each of the warranties and representations
made by the Company in Section 5 of the Note Purchase Agreement with respect to
Subsidiaries generally are true with respect to such Guarantor on the date that
such Guarantor becomes a Guarantor, with the same effect as though such
warranties and representations were made on and as of such date rather than on
and as of the date of this Agreement.
5. GENERAL COVENANTS
Each Guarantor covenants and agrees that on and after the date hereof
and so long as any of the Guarantied Obligations shall be outstanding:
5.1 UNDERTAKINGS IN NOTE PURCHASE AGREEMENT.
Each Guarantor will comply with each of the undertakings of the Company
in the Note Purchase Agreement in respect of which the Company undertakes to
cause such Guarantor (in its capacity as a Guarantor and as a Subsidiary) to
comply with such undertakings, as if such undertakings (as they apply to such
Guarantor) were set forth at length herein as the undertakings of such
Guarantor.
5.2 FURTHER ASSURANCES.
Each Guarantor will cooperate with the Noteholders and execute such
further instruments and documents as the Required Holders shall reasonably
request to carry out, to the reasonable satisfaction of the Required Holders,
the transactions contemplated by this Agreement and the other Financing
Documents.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
All communications hereunder shall be in writing, shall be delivered in
the manner required by the Note Purchase Agreement, and shall be addressed, if
to any Guarantor, at the applicable address set forth on Annex 1 hereto, and if
to any of the Noteholders:
10
<PAGE> 82
6 MISCELLANEOUS
(a) if such Noteholder is a Purchaser, at the address for such
Noteholder set forth on Schedule A to the Note Purchase Agreement, and
further including any parties referred to on such Schedule A which are
required to receive notices in addition to such Noteholder, and
(b) if such Noteholder is not a Purchaser, at the address for
such Noteholder set forth in the register for the registration and
transfer of Notes maintained pursuant to Section 13.1 of the Note
Purchase Agreement,
or to any such party at such other address as such party may designate by notice
duly given in accordance with this Section 6.1. Notices shall be deemed given
only when actually received.
6.2 AMENDMENT.
This Agreement may be amended in, and the observance of any term hereof
may be waived (either retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the Required Holders, except that no
amendment or waiver of any of the provisions of Section 2, or any defined term
as it is used therein, will be effective unless consented to by each Guarantor
and each Noteholder in writing; provided that this Agreement may, in the manner
specified in Section 6.5, be amended to add one or more new Guarantors hereunder
without the consent of any other Guarantor or any holder of Notes.
6.3 SUCCESSORS AND ASSIGNS.
(a) All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto shall 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.
(b) Each Guarantor agrees to take such action as may be
reasonably requested by any Noteholder to confirm such Guarantor's
guaranty of the Guarantied Obligations in connection with the transfer
of the Notes of such Noteholder.
6.4 SURVIVAL.
All representations and warranties contained herein or made in writing
by any Guarantor in connection herewith shall survive the execution and delivery
of this Agreement. So long as the Guarantied Obligations and all payment
obligations of each Guarantor hereunder shall not have been fully and finally
performed and indefeasibly paid, the obligations of each Guarantor hereunder
shall survive the transfer and payment of any Note and the payment in full of
all the Notes.
6.5 JOINDER AGREEMENT.
Upon execution and delivery by any Person of a counterpart of a Joinder
Agreement substantially in the form attached to this Agreement as Annex 2 (each,
a "JOINDER AGREEMENT"), this Agreement shall for all purposes, without further
action, be deemed to have been amended
11
<PAGE> 83
6 MISCELLANEOUS
to add such Person as a Guarantor hereunder with the same effect as if such
Person had been an original party hereto.
6.6 EXPENSE.
(a) AMENDMENTS AND WAIVERS. The Guarantors will pay when
billed the reasonable costs and expenses (including reasonable
attorneys' fees) incurred by the Noteholders in connection with the
consideration, negotiation, preparation or execution of any amendments,
waivers, consents, standstill agreements and other similar agreements
with respect hereto (whether or not any such amendments, waivers,
consents, standstill agreements or other similar agreements are
executed or become effective).
(b) RESTRUCTURING AND WORKOUT, INSPECTIONS. At any time when
the Guarantors and the Noteholders are conducting restructuring or
workout negotiations in respect hereof, or a Default or Event of
Default exists, the Guarantors will pay when billed the reasonable
costs and expenses (including reasonable attorneys' fees and the fees
of professional advisors) incurred by the Noteholders in connection
with the assessment, analysis or enforcement of any rights or remedies
that are or may be available to the Noteholders and in connection with
inspections made pursuant to Section 7.3 of the Note Purchase
Agreement.
(c) COLLECTION AND ENFORCEMENT. If the Guarantors shall fail
to pay when due any of the Guarantied Obligations or shall otherwise
fail to comply with any provision of this Agreement, the Guarantors
will pay to each Noteholder, to the extent permitted by law, such
amounts as shall be sufficient to cover the costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred by
such Noteholder in collecting any sums due hereunder and in enforcing
any rights or remedies that are or may be available to such Noteholder.
6.7 BENEFITS OF GUARANTY RESTRICTED TO NOTEHOLDERS.
Nothing express or implied in this Agreement is intended or shall be
construed to give to any Person other than the Guarantors and the Noteholders
any legal or equitable right, remedy or claim under or in respect hereof or any
covenant, condition or provision therein or herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Guarantors and the Noteholders.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
12
<PAGE> 84
6. MISCELLANEOUS
6.9 CONNECTICUT WAIVER.
TO THE EXTENT ANY ASSETS AND/OR REAL ESTATE OF ANY GUARANTOR IS LOCATED
IN CONNECTICUT, EACH GUARANTOR ACKNOWLEDGES THAT THIS AGREEMENT AND EACH
TRANSACTION RELATED HERETO IS A "COMMERCIAL TRANSACTION" WITHIN THE MEETING OF
CHAPTER 903A OF THE CONNECTICUT GENERAL STATUES, AS AMENDED. EACH GUARANTOR
HEREBY WAIVES ANY RIGHT WHICH IT MIGHT HAVE TO NOTICE IN A HEARING OR A PRIOR
COURT ORDER, UNDER SAID CHAPTER 903A OR AS OTHERWISE PROVIDED UNDER ANY
APPLICABLE FEDERAL OR STATE LAW, IN THE EVENT THE TRUSTEE OR ANY NOTEHOLDER
SEEKS ANY PREJUDGMENT REMEDY AT ANY TIME PRIOR TO FINAL JUDGMENT IN ANY
LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT, WHETHER BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR
REPLEVIN.
6.10 COUNTERPARTS.
This Agreement may be executed and delivered in any number of
counterparts, each of such counterparts constituting an original but altogether
only one Agreement.
[Remainder of page intentionally left blank; next page is signature page.]
13
<PAGE> 85
IN WITNESS WHEREOF, each Guarantor has caused this Agreement to be
executed on its behalf by one of its duly authorized officers as of the date
first set forth above.
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
By /s/ Bruce A. Cannon
-------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN SPECIALTY OPTICS
COMPANY
By /s/ Bruce A. Cannon
-------------------------------
Name: Bruce A. Cannon
Title: Secretary
APPLIED PHOTONIC DEVICES, INC.
By /s/ Bruce A. Cannon
--------------------------------
Name: Bruce A. Cannon
Title: Secretary
[GUARANTY AGREEMENT]
<PAGE> 86
Annex 1 to Guaranty Agreement
Addresses of Guarantors
SpecTran Communication Fiber Technologies, Inc.
50 Hall Road
Sturbridge, MA 01566
Attn: Chief Executive Officer
SpecTran Specialty Optics Company
150 Fisher Drive
Avon CT 060011(*)
Attn: President
Applied Photonic Devices, Inc.
300 Lake Road
Dayville, CT 06241(**5)
Attn: Chief Executive Officer
* Spectran Specialty Optics Company intends to move its principal executive
offices to 55 Darling Drive, Avon, Connecticut 06001 during 1997.
Applied Photonic Devices, Inc. intends to move its principal executive offices
to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
- ----------
(5)Applied Photonic Devices, Inc. intends to move its principal
executive offices to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
<PAGE> 87
ANNEX 2
[FORM OF JOINDER AGREEMENT]
JOINDER AGREEMENT
[Date]
To each of the Noteholders (as defined in the Guaranty
Agreement hereinafter referred to)
Ladies and Gentlemen:
Reference is made to the Guaranty Agreement, dated as of December 1,
1996 (as amended, restated or otherwise modified from time to time, the
"GUARANTY AGREEMENT"), by SpecTran Communication Fiber Technologies, Inc.
("SCFT"), a Delaware corporation, SpecTran Specialty Optics Company ("SSOC"), a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC. ("APD"), a Delaware
corporation (SCFT, SSOC and APD, together with each other Person that becomes a
party to the Guaranty Agreement, the "GUARANTORS"), in favor of each of the
Noteholders (as defined in the Agreement). Capitalized terms used herein and not
otherwise defined have the meanings ascribed to such terms in the Guaranty
Agreement.
[NEW GUARANTOR], a ___________________ corporation (the "NEW
GUARANTOR"), agrees with you as follows:
1. GUARANTY. The New Guarantor hereby unconditionally and expressly
agrees to become, and by execution and delivery of this Agreement does become, a
"Guarantor" under and as defined in the Guaranty Agreement. Without limitation
of the foregoing or of anything in the Guaranty Agreement, by such execution and
delivery hereof the New Guarantor does become fully liable, as a Guarantor, for
the payment of the Guarantied Obligations as further provided in Section 1 of
the Guaranty Agreement. As provided in Section 6.5 of the Guaranty Agreement,
the Guaranty Agreement is hereby amended, without any further action, to add the
New Guarantor as a Guarantor thereunder as if the New Guarantor had been an
original party to the Guaranty Agreement. Annex 1 to the Guaranty Agreement is
hereby amended by adding the following address of the New Guarantor for purposes
of communications pursuant to Section 6.1 of the Guaranty Agreement: [insert
name and address of New Guarantor].
2. FURTHER ASSURANCES. The New Guarantor agrees to cooperate with the
Noteholders and execute such further instruments and documents as the Required
Holders shall reasonably request to effect, to the reasonable satisfaction of
the Required Holders, the purposes of this Agreement.
3. BINDING EFFECT. This Agreement shall be binding upon the New
Guarantor and shall inure to the benefit of the Noteholders and their respective
successors and assigns.
Annex 2-1
<PAGE> 88
IN WITNESS WHEREOF, the New Guarantor has caused this Agreement to be
executed on its behalf by one of its duly authorized officers.
[NEW GUARANTOR]
By
------------------------------------
Name:
Title:
Annex 2-2
<PAGE> 1
EXHIBIT 10.96
<PAGE> 2
SCHEDULE 3
================================================================================
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
SPECTRAN SPECIALTY OPTICS COMPANY
APPLIED PHOTONIC DEVICES, INC.
---------------------
GUARANTY AGREEMENT
---------------------
DATED AS OF DECEMBER 1, 1996
================================================================================
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C>
1. PRELIMINARY STATEMENTS................................................................................. 1
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS............................................................. 2
2.1 Guarantied Obligations........................................................................ 2
2.2 Payments and Performance...................................................................... 2
2.3 Waivers and Other Agreements.................................................................. 3
2.4 Nature of Guaranty............................................................................ 4
2.5 Obligations Absolute.......................................................................... 4
2.6 No Investigation by Noteholder................................................................ 5
2.7 Indemnity..................................................................................... 5
2.8 Subordination, Subrogation, Etc............................................................... 5
2.9 Waiver........................................................................................ 6
2.10 Limitation on Guarantied Obligations.......................................................... 6
2.11 Marshaling.................................................................................... 6
2.12 Setoff, Counterclaim or Other Deductions...................................................... 6
2.13 No Election of Remedies by Noteholders........................................................ 6
2.14 Separate Action; Other Enforcement Rights..................................................... 7
2.15 Noteholder Setoff............................................................................. 7
2.16 Delay or Omission; No Waiver.................................................................. 7
2.17 Restoration of Rights and Remedies............................................................ 7
2.18 Cumulative Remedies........................................................................... 7
3. INTERPRETATION OF THIS GUARANTY AGREEMENT.............................................................. 8
3.1 Terms Defined................................................................................. 8
3.2 Headings; Independent Construction............................................................ 9
3.3 Separate Agreements........................................................................... 9
3.4 Partial Invalidity............................................................................ 9
3.5 Governing Law................................................................................. 10
4. WARRANTIES AND REPRESENTATIONS......................................................................... 10
5. GENERAL COVENANTS...................................................................................... 10
5.1 Undertakings in Note Purchase Agreement....................................................... 10
5.2 Further Assurances............................................................................ 10
6. MISCELLANEOUS.......................................................................................... 10
6.1 Communications................................................................................ 10
6.2 Amendment..................................................................................... 11
6.3 Successors and Assigns........................................................................ 11
6.4 Survival...................................................................................... 11
6.5 Joinder Agreement............................................................................. 11
6.6 Expense....................................................................................... 12
6.7 Benefits of Guaranty Restricted to Noteholders................................................ 12
6.8 Entire Agreement.............................................................................. 12
6.9 Connecticut Waiver............................................................................ 13
6.10 Counterparts.................................................................................. 13
</TABLE>
i
<PAGE> 4
GUARANTY AGREEMENT
GUARANTY AGREEMENT (as may be amended, restated or otherwise modified
from time to time, this "AGREEMENT"), dated as of December 1, 1996, by SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC. ("SCFT"), a Delaware corporation,
SPECTRAN SPECIALTY OPTICS COMPANY ("SSOC"), a Delaware corporation, and APPLIED
PHOTONIC DEVICES, INC. ("APD"), a Delaware corporation (SCFT, SSOC and APD,
together with each other Person that becomes a party hereto from time to time by
execution and delivery of a Joinder Agreement, and including their respective
successors and assigns, the "GUARANTORS"), in favor of each of the Noteholders
(as such term is hereinafter defined).
1. PRELIMINARY STATEMENTS
1.1 Spectran Corporation (together with its successors and assigns, the
"COMPANY"), a Delaware corporation, has authorized the issuance of
(a) its 9.24% Series A Senior Secured Notes due 2003 (as may
be amended, restated or otherwise modified from time to time, the
"SERIES A NOTES"), in the aggregate principal amount of $16,000,000,
and
(b) its 9.39% Series B Senior Secured Notes due 2004 (as may
be amended, restated or otherwise modified from time to time, the
"SERIES B NOTES," and collectively with the Series A Notes and any and
all other notes for which such notes, or any successor notes, may be
substituted or exchanged, all as may be amended, restated or otherwise
modified from time to time, the "NOTES"), in the aggregate principal
amount of $8,000,000,
pursuant to the separate Note Purchase Agreements (collectively, as may be
amended, restated or otherwise modified from time to time, the "NOTE PURCHASE
AGREEMENT"), each dated as of December 1, 1996, with each of the purchasers
named on Schedule A thereto (the "PURCHASERS").
1.2 In order to induce the Purchasers to purchase the Notes, each of
SCFT, SSOC and APD has agreed to become a Guarantor hereunder and the Company
has agreed, pursuant to the Note Purchase Agreement, that each other Person that
at any time becomes a direct or indirect Subsidiary will be required to become a
Guarantor hereunder.
1.3 The Guarantors and the Company are operated as part of one
consolidated business entity. The Guarantors are directly dependent upon the
Company for and in connection with their respective business activities and
their respective financial resources. Each Guarantor will receive direct and
indirect economic and financial benefits from the indebtedness incurred under
the Note Purchase Agreement and the Notes by the Company, and under this
Agreement, and the incurrence of such indebtedness is in the best interests of
such Guarantor.
1.4 All acts and proceedings required by law and by the constitutive
documents of each Guarantor necessary to constitute this Agreement a valid and
binding agreement for the uses and purposes set forth herein, in accordance with
its terms, have been done and taken, and the execution and delivery hereof has
been in all respects duly authorized.
1
<PAGE> 5
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.1 GUARANTIED OBLIGATIONS.
Each Guarantor, in consideration of the execution and delivery of the
Note Purchase Agreement, the purchase of the Notes by the Purchasers and other
consideration, hereby irrevocably, unconditionally, absolutely, jointly and
severally guarantees to each Noteholder, as and for each such Guarantor's own
debt:
(a) the due and punctual payment of the principal of and
accrued and unpaid interest (including, without limitation, interest
which otherwise may cease to accrue by operation of any insolvency law,
rule, regulation or interpretation thereof) and Make-Whole Amount on
the Notes and the due and punctual payment of all other obligations of
the Company to the Noteholders under the Note Purchase Agreement, the
Notes and the other Financing Documents when due, whether by mandatory
or optional prepayment, acceleration or otherwise, all in accordance
with the terms thereof, including, without limitation, overdue
interest, indemnification payments and all reasonable costs and
expenses incurred by the Noteholders and the Trustee in connection with
enforcing any obligations of the Company under the Note Purchase
Agreement, the Notes and the other Financing Documents, including,
without limitation, the reasonable fees and disbursements of
Noteholders' special counsel;
(b) the punctual and faithful performance, keeping,
observance, and fulfillment by the Company of all duties, agreements,
covenants and obligations of the Company contained in the Note Purchase
Agreement, the Notes and the other Financing Documents to be performed
or observed on the part of the Company; and
(c) the prompt and complete payment, on demand, of any and all
reasonable costs and expenses incurred by the Noteholders in connection
with enforcing the obligations of such Guarantor hereunder, including,
without limitation, the reasonable fees and disbursements of the
Noteholders' special counsel.
All of the obligations set forth in clauses (a), (b) and (c) of this Section 2.1
are referred to herein as the "GUARANTIED OBLIGATIONS" and the guaranty thereof
contained herein is a primary, original and immediate obligation of each
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment and performance and shall remain in full force and effect until the
full, final and indefeasible payment of the Guarantied Obligations.
2.2 PAYMENTS AND PERFORMANCE.
If for any reason any duty, agreement or obligation of the Company
contained in the Note Purchase Agreement or any other Financing Document shall
not be performed or observed by the Company as provided therein, or if any
amount payable under or in connection with the Note Purchase Agreement, the
Notes or any other Financing Document shall not be paid in full when the same
becomes due and payable, each Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and obligations and to pay
forthwith each
2
<PAGE> 6
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
such amount to the Noteholders regardless of any defense or setoff or
counterclaim which the Company may have or assert, and regardless of any other
condition or contingency.
2.3 WAIVERS AND OTHER AGREEMENTS.
Each Guarantor hereby unconditionally:
(a) waives any requirement that the Noteholders, upon the
occurrence of an Event of Default, first make demand upon, or seek to
enforce remedies against, the Company before demanding payment under or
seeking to enforce the obligations of such Guarantor under this
Agreement;
(b) agrees that the obligations of such Guarantor under this
Agreement will not be discharged except by complete performance of all
obligations of the Company contained in the Note Purchase Agreement,
the Notes and the other Financing Documents;
(c) agrees that the obligations of such Guarantor under this
Agreement shall remain in full force and effect without regard to, and
shall not be affected or impaired, without limitation, by any
invalidity, irregularity or unenforceability in whole or in part of the
Note Purchase Agreement, the Notes or any other Financing Document, or
any limitation on the liability of any Guarantor under this Agreement,
or any limitation on the method or terms of payment under the Note
Purchase Agreement, the Notes or any other Financing Document which may
at any time be caused or imposed in any manner whatsoever (including,
without limitation, usury laws);
(d) waives diligence, presentment and protest with respect to,
and any notice of default or dishonor in the payment of any amount at
any time payable by the Company under or in connection with the Note
Purchase Agreement, the Notes or any other Financing Document, and
further waives any requirement of notice of acceptance of, or other
formality relating to, the obligations of such Guarantor under this
Agreement; and
(e) agrees that to the extent the Company makes a payment or
payments to any Noteholder, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required, for any of the foregoing reasons
or for any other reason, to be repaid or paid over to a custodian,
trustee, receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, state or federal
law, or any common law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if
said payment had not been made and each Guarantor shall be primarily
liable for such obligation.
3
<PAGE> 7
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.4 NATURE OF GUARANTY.
The obligations of each Guarantor under this Agreement constitute an
absolute and unconditional and irrevocable guaranty of payment and not a
guaranty of collection and are wholly independent of and in addition to other
rights and remedies of the Noteholders and are not contingent upon the pursuit
by the Noteholders of any such rights and remedies, such pursuit being hereby
waived by such Guarantor. Notwithstanding anything to the contrary set forth in
the Note Purchase Agreement, the Notes or any other Financing Document, the
obligations of each Guarantor under this Agreement are joint and several with
the obligations of each other Guarantor and any other guarantor of all or any
part of the Guarantied Obligations.
2.5 OBLIGATIONS ABSOLUTE.
The obligations, covenants, agreements and duties of each Guarantor
under this Agreement shall not be released, affected or impaired by any of the
following, whether or not undertaken with notice to or consent of such
Guarantor:
(a) any assignment or transfer, in whole or in part, of any
Note although made without notice to or consent of such Guarantor; or
(b) any waiver by any Noteholder, or by any other Person, of
the performance or observance by the Company of any of the agreements,
covenants, terms or conditions contained in the Note Purchase Agreement
or in any other Financing Document; or
(c) any indulgence in or the extension of the time for payment
by the Company of any amounts payable under or in connection with the
Note Purchase Agreement, the Notes or any other Financing Document, or
of the time for performance by the Company of any other obligations
under or arising out of the Note Purchase Agreement, the Notes or any
other Financing Document, or the extension or renewal thereof; or
(d) the modification, amendment or waiver (whether material or
otherwise) of any duty, agreement or obligation of the Company set
forth in the Note Purchase Agreement, the Notes or any other Financing
Document (the modification, amendment or waiver from time to time of
the Note Purchase Agreement, the Notes and the other Financing
Documents being expressly authorized without further notice to or
consent of such Guarantor); or
(e) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of the Company or
any receivership, insolvency, bankruptcy, reorganization or other
similar proceedings affecting the Company or any of its assets; or
(f) the merger or consolidation of the Company or any
Guarantor with any other Person; or
(g) the release or discharge of the Company from the
performance or observance of any agreement, covenant, term or condition
contained in the Note
4
<PAGE> 8
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
Purchase Agreement, the Notes or any other Financing Document, by
operation of law; or
(h) any other cause, whether similar or dissimilar to the
foregoing, that would release, affect or impair the obligations,
covenants, agreements or duties of any Guarantor under this Agreement.
2.6 NO INVESTIGATION BY NOTEHOLDER.
Each Guarantor hereby waives unconditionally any obligation that, in
the absence of such provision, the Noteholders might otherwise have to
investigate or to assure that there has been compliance with the law of any
jurisdiction with respect to the Guarantied Obligations, recognizing that, to
save both time and expense, such Guarantor has requested that the Noteholders
not undertake such investigation. Each Guarantor hereby expressly confirms that
the obligations of such Guarantor hereunder shall remain in full force and
effect without regard to compliance or noncompliance with any such law and
irrespective of any investigation or knowledge of any such law by any
Noteholder.
2.7 INDEMNITY.
As a separate, additional and continuing obligation, each Guarantor
unconditionally and irrevocably undertakes and agrees with the Noteholders that,
should the Guarantied Obligations not be recoverable from such Guarantor for any
reason whatsoever (including, without limitation, by reason of any provision of
the Note Purchase Agreement, the Notes, any other Financing Document or any
other agreement or instrument executed in connection therewith being or becoming
void, unenforceable or otherwise invalid under any applicable law) then,
notwithstanding any knowledge thereof by any Noteholder at any time, such
Guarantor as sole, original and independent obligor, upon demand by the Required
Holders, will make payment of the Guarantied Obligations to the Noteholders by
way of a full indemnity in such currency and otherwise in such manner as is
provided in the Note Purchase Agreement and the Notes.
2.8 SUBORDINATION, SUBROGATION, ETC.
Each Guarantor agrees that any present or future indebtedness,
obligations or liabilities of the Company to such Guarantor shall be fully
subordinate and junior in right and priority of payment to any present or future
indebtedness, obligations or liabilities of the Company to the Noteholders. Each
Guarantor waives any right of subrogation to the rights of the Noteholders
against the Company or any other Person obligated for payment of the Guarantied
Obligations and any right of reimbursement, contribution or indemnity whatsoever
(including, without limitation, any such right as against any other Guarantor)
arising or accruing out of any payment that such Guarantor may make pursuant to
this Agreement, and any right of recourse to security for the debts and
obligations of the Company, unless and until the entire amount of the Guarantied
Obligations shall have been paid in full.
5
<PAGE> 9
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.9 WAIVER.
To the extent that it lawfully may, each Guarantor agrees that it will
not at any time insist upon or plead, or in any manner whatsoever claim or take
any benefit or advantage of, any applicable present or future stay, extension or
moratorium law, which may affect observance or performance of the provisions of
this Agreement, the Note Purchase Agreement, the Notes or any other Financing
Document; nor will it claim, take or insist upon any benefit or advantage of any
present or future law providing for the evaluation or appraisal of any security
for its obligations hereunder or the Company under the Note Purchase Agreement,
the Notes or any other Financing Document prior to any sale or sales thereof
which may be made under or by virtue of any instrument governing the same; nor
will it, after any such sale or sales, claim or exercise any right, under any
applicable law, to redeem any portion of such security so sold.
2.10 LIMITATION ON GUARANTIED OBLIGATIONS.
Notwithstanding anything in Section or elsewhere in this Agreement, the
Note Purchase Agreement, the Notes or any other Financing Document to the
contrary, the obligations of each Guarantor under this Agreement shall at each
point in time be limited to an aggregate amount equal to the greatest amount
that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under
applicable law (including, without limitation, to the extent, and only to the
extent, applicable to any such Guarantor, Section 548 of the Bankruptcy Code of
the United States of America and any comparable provisions of the law of any
other jurisdiction, any capital preservation law of any jurisdiction and any
other law of any jurisdiction that at such time limits the enforceability of the
obligations of such Guarantor under this Agreement).
2.11 MARSHALING.
Neither any Noteholder nor any Person acting for the benefit of any
Noteholder shall be under any obligation to marshal any assets in favor of any
Guarantor or against or in payment of any or all of the Guarantied Obligations.
2.12 SETOFF, COUNTERCLAIM OR OTHER DEDUCTIONS.
Except as otherwise required by law, each payment by each Guarantor
shall be made without setoff, counterclaim or other deduction.
2.13 NO ELECTION OF REMEDIES BY NOTEHOLDERS.
No election to proceed in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of such Noteholder's
right to proceed in any other form of action or proceeding or against other
parties unless such Noteholder has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by any Noteholder against the Company or any Guarantor under any
document or instrument evidencing obligations of the Company or any Guarantor to
such Noteholder shall serve to diminish the liability of any Guarantor under
this Agreement, except to the extent that
6
<PAGE> 10
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
such Noteholder finally and unconditionally shall have realized payment by such
action or proceeding in respect of the Guarantied Obligations.
2.14 SEPARATE ACTION; OTHER ENFORCEMENT RIGHTS.
Each of the rights and remedies granted under this Agreement to each
Noteholder in respect of the Notes held by such Noteholder may be exercised by
such Noteholder without notice by such Noteholder to, or the consent of or any
other action by, any other Noteholder. Each Noteholder may proceed to protect
and enforce this Agreement by suit or suits or proceedings in equity, at law or
in bankruptcy, and whether for the specific performance of any covenant or
agreement contained herein or in execution or aid of any power herein granted or
for the recovery of judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law.
2.15 NOTEHOLDER SETOFF.
Each Noteholder shall have, to the fullest extent permitted by law and
this Agreement, a right of set-off against any and all credits and any and all
other property of each Guarantor now or at any time whatsoever, with or in the
possession of such Noteholder, or anyone acting for such Noteholder, to ensure
the full performance of any and all obligations of each Guarantor hereunder.
2.16 DELAY OR OMISSION; NO WAIVER.
No course of dealing on the part of any Noteholder and no delay or
failure on the part of any such Person to exercise any right hereunder shall
impair such right or operate as a waiver of such right or otherwise prejudice
such Person's rights, powers and remedies hereunder. Every right and remedy
given by this Agreement or by law to any Noteholder may be exercised from time
to time as often as may be deemed expedient by such Person.
2.17 RESTORATION OF RIGHTS AND REMEDIES.
If any Noteholder shall have instituted any proceeding to enforce any
right or remedy under this Agreement or under any Note held by such Noteholder,
and such proceeding shall have been dismissed, discontinued or abandoned for any
reason, or shall have been determined adversely to such Noteholder, then and in
every such case each such Noteholder, the Company and each Guarantor shall,
except as may be limited or affected by any determination (including, without
limitation, any determination in connection with any such dismissal) in such
proceeding, be restored severally and respectively to its respective former
positions hereunder and thereunder, and thereafter, subject as aforesaid, the
rights and remedies of such Noteholders shall continue as though no such
proceeding had been instituted.
2.18 CUMULATIVE REMEDIES.
No remedy under this Agreement, the Note Purchase Agreement, the Notes
or any other Financing Document is intended to be exclusive of any other remedy,
but each and every remedy
7
<PAGE> 11
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
shall be cumulative and in addition to any and every other remedy given pursuant
to this Agreement, the Note Purchase Agreement, the Notes or any other Financing
Document.
3. INTERPRETATION OF THIS GUARANTY AGREEMENT
3.1 TERMS DEFINED.
For purposes of this Agreement, the following terms have the meanings
specified below or provided for in the section of this Agreement referred to
immediately following such term (such definitions to be equally applicable to
both the singular and plural forms of the terms defined) or, if not defined
herein, then as defined in the Trust Indenture.
COMPANY -- Section 1.1.
DEFAULT -- has the meaning assigned to such term in the Note Purchase
Agreement.
EVENT OF DEFAULT -- has the meaning assigned to such term in the Note
Purchase Agreement.
GUARANTIED OBLIGATIONS -- Section 2.1.
GUARANTORS -- has the meaning assigned to such term in the introductory
paragraph hereof.
JOINDER AGREEMENT -- Section 6.5.
LIEN -- has the meaning assigned to such term in the Note Purchase
Agreement.
NOTE PURCHASE AGREEMENT -- Section 1.1(b).
NOTEHOLDER -- means, at any time, each Person that is the holder of any
Note at such time.
NOTES -- has the meaning assigned to such term in Preliminary Statement
A.
PERSON -- means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
PURCHASERS -- Section 1.1(b).
PROPERTY -- means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.
REQUIRED HOLDERS -- has the meaning assigned to such term in the Note
Purchase Agreement.
8
<PAGE> 12
3. INTERPRETATION OF THIS GUARANTY AGREEMENT
SERIES A NOTES -- Section 1.1(a), 1.1(a), 1.1(b).
SERIES B NOTES -- Section 1.1(b).
SUBSIDIARY -- has the meaning assigned to such term in the Note
Purchase Agreement.
TRUSTEE -- has the meaning assigned to such term in the Trust
Indenture, dated as of December 1, 1996, among the Company, the Guarantors,
Fleet National Bank as trustee, and the other parties signatory thereto, as
amended, modified or supplemented from time to time.
3.2 HEADINGS; INDEPENDENT CONSTRUCTION.
(a) SECTION HEADINGS ETC. The titles of the Sections and Table
of Contents of this Agreement appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Indenture as a whole and not to any particular Section or other
subdivision. References to Sections are, unless otherwise specified,
references to Sections of this Agreement. References to Annexes,
Schedules, Exhibits and Attachments are, unless otherwise specified,
references to Annexes, Schedules, Exhibits and Attachments attached to
this Agreement.
(b) CONSTRUCTION. Each covenant contained herein shall be
construed (absent an express contrary provision herein) as being
independent of each other covenant contained herein, and compliance
with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
3.3 SEPARATE AGREEMENTS.
Notwithstanding that this Agreement is among each of the Guarantors and
the Trustee, this Agreement shall be construed and interpreted as a separate
Agreement between each Guarantor and the Trustee, and any whole or partial
invalidity of this Agreement in respect of any Guarantor shall not have any
effect on the validity or enforceability of this Agreement as among each other
Guarantor, respectively, as the case may be, and the Trustee.
3.4 PARTIAL INVALIDITY.
The unenforceability or invalidity of any provision or provisions of
this Agreement shall not render any other provision or provisions contained in
this Agreement unenforceable or invalid.
9
<PAGE> 13
3.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS EXCLUDING CHOICE-OF-LAW PRINCIPLES
OF THE LAW OF SUCH JURISDICTION THAT WOULD REQUIRE THE APPLICATION OF THE LAWS
OF A JURISDICTION OTHER THAN SUCH JURISDICTION.
4. WARRANTIES AND REPRESENTATIONS
Each Guarantor warrants and represents, as of the date such Guarantor
becomes a Guarantor hereunder, that each of the warranties and representations
made by the Company in Section 5 of the Note Purchase Agreement with respect to
Subsidiaries generally are true with respect to such Guarantor on the date that
such Guarantor becomes a Guarantor, with the same effect as though such
warranties and representations were made on and as of such date rather than on
and as of the date of this Agreement.
5. GENERAL COVENANTS
Each Guarantor covenants and agrees that on and after the date hereof
and so long as any of the Guarantied Obligations shall be outstanding:
5.1 UNDERTAKINGS IN NOTE PURCHASE AGREEMENT.
Each Guarantor will comply with each of the undertakings of the Company
in the Note Purchase Agreement in respect of which the Company undertakes to
cause such Guarantor (in its capacity as a Guarantor and as a Subsidiary) to
comply with such undertakings, as if such undertakings (as they apply to such
Guarantor) were set forth at length herein as the undertakings of such
Guarantor.
5.2 FURTHER ASSURANCES.
Each Guarantor will cooperate with the Noteholders and execute such
further instruments and documents as the Required Holders shall reasonably
request to carry out, to the reasonable satisfaction of the Required Holders,
the transactions contemplated by this Agreement and the other Financing
Documents.
6. MISCELLANEOUS
6.1 COMMUNICATIONS.
All communications hereunder shall be in writing, shall be delivered in
the manner required by the Note Purchase Agreement, and shall be addressed, if
to any Guarantor, at the applicable address set forth on Annex 1 hereto, and if
to any of the Noteholders:
10
<PAGE> 14
6 MISCELLANEOUS
(a) if such Noteholder is a Purchaser, at the address for such
Noteholder set forth on Schedule A to the Note Purchase Agreement, and
further including any parties referred to on such Schedule A which are
required to receive notices in addition to such Noteholder, and
(b) if such Noteholder is not a Purchaser, at the address for
such Noteholder set forth in the register for the registration and
transfer of Notes maintained pursuant to Section 13.1 of the Note
Purchase Agreement,
or to any such party at such other address as such party may designate by notice
duly given in accordance with this Section 6.1. Notices shall be deemed given
only when actually received.
6.2 AMENDMENT.
This Agreement may be amended in, and the observance of any term hereof
may be waived (either retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the Required Holders, except that no
amendment or waiver of any of the provisions of Section 2, or any defined term
as it is used therein, will be effective unless consented to by each Guarantor
and each Noteholder in writing; provided that this Agreement may, in the manner
specified in Section 6.5, be amended to add one or more new Guarantors hereunder
without the consent of any other Guarantor or any holder of Notes.
6.3 SUCCESSORS AND ASSIGNS.
(a) All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto shall 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.
(b) Each Guarantor agrees to take such action as may be
reasonably requested by any Noteholder to confirm such Guarantor's
guaranty of the Guarantied Obligations in connection with the transfer
of the Notes of such Noteholder.
6.4 SURVIVAL.
All representations and warranties contained herein or made in writing
by any Guarantor in connection herewith shall survive the execution and delivery
of this Agreement. So long as the Guarantied Obligations and all payment
obligations of each Guarantor hereunder shall not have been fully and finally
performed and indefeasibly paid, the obligations of each Guarantor hereunder
shall survive the transfer and payment of any Note and the payment in full of
all the Notes.
6.5 JOINDER AGREEMENT.
Upon execution and delivery by any Person of a counterpart of a Joinder
Agreement substantially in the form attached to this Agreement as Annex 2 (each,
a "JOINDER AGREEMENT"), this Agreement shall for all purposes, without further
action, be deemed to have been amended
11
<PAGE> 15
6 MISCELLANEOUS
to add such Person as a Guarantor hereunder with the same effect as if such
Person had been an original party hereto.
6.6 EXPENSE.
(a) AMENDMENTS AND WAIVERS. The Guarantors will pay when
billed the reasonable costs and expenses (including reasonable
attorneys' fees) incurred by the Noteholders in connection with the
consideration, negotiation, preparation or execution of any amendments,
waivers, consents, standstill agreements and other similar agreements
with respect hereto (whether or not any such amendments, waivers,
consents, standstill agreements or other similar agreements are
executed or become effective).
(b) RESTRUCTURING AND WORKOUT, INSPECTIONS. At any time when
the Guarantors and the Noteholders are conducting restructuring or
workout negotiations in respect hereof, or a Default or Event of
Default exists, the Guarantors will pay when billed the reasonable
costs and expenses (including reasonable attorneys' fees and the fees
of professional advisors) incurred by the Noteholders in connection
with the assessment, analysis or enforcement of any rights or remedies
that are or may be available to the Noteholders and in connection with
inspections made pursuant to Section 7.3 of the Note Purchase
Agreement.
(c) COLLECTION AND ENFORCEMENT. If the Guarantors shall fail
to pay when due any of the Guarantied Obligations or shall otherwise
fail to comply with any provision of this Agreement, the Guarantors
will pay to each Noteholder, to the extent permitted by law, such
amounts as shall be sufficient to cover the costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred by
such Noteholder in collecting any sums due hereunder and in enforcing
any rights or remedies that are or may be available to such Noteholder.
6.7 BENEFITS OF GUARANTY RESTRICTED TO NOTEHOLDERS.
Nothing express or implied in this Agreement is intended or shall be
construed to give to any Person other than the Guarantors and the Noteholders
any legal or equitable right, remedy or claim under or in respect hereof or any
covenant, condition or provision therein or herein contained, and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Guarantors and the Noteholders.
6.8 ENTIRE AGREEMENT.
This Agreement constitutes the final written expression of all of the
terms hereof and is a complete and exclusive statement of those terms.
12
<PAGE> 16
6. MISCELLANEOUS
6.9 CONNECTICUT WAIVER.
TO THE EXTENT ANY ASSETS AND/OR REAL ESTATE OF ANY GUARANTOR IS LOCATED
IN CONNECTICUT, EACH GUARANTOR ACKNOWLEDGES THAT THIS AGREEMENT AND EACH
TRANSACTION RELATED HERETO IS A "COMMERCIAL TRANSACTION" WITHIN THE MEETING OF
CHAPTER 903A OF THE CONNECTICUT GENERAL STATUES, AS AMENDED. EACH GUARANTOR
HEREBY WAIVES ANY RIGHT WHICH IT MIGHT HAVE TO NOTICE IN A HEARING OR A PRIOR
COURT ORDER, UNDER SAID CHAPTER 903A OR AS OTHERWISE PROVIDED UNDER ANY
APPLICABLE FEDERAL OR STATE LAW, IN THE EVENT THE TRUSTEE OR ANY NOTEHOLDER
SEEKS ANY PREJUDGMENT REMEDY AT ANY TIME PRIOR TO FINAL JUDGMENT IN ANY
LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT, WHETHER BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR
REPLEVIN.
6.10 COUNTERPARTS.
This Agreement may be executed and delivered in any number of
counterparts, each of such counterparts constituting an original but altogether
only one Agreement.
[Remainder of page intentionally left blank; next page is signature page.]
13
<PAGE> 17
IN WITNESS WHEREOF, each Guarantor has caused this Agreement to be
executed on its behalf by one of its duly authorized officers as of the date
first set forth above.
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
By /s/ Bruce A. Cannon
-------------------------------
Name: Bruce A. Cannon
Title: Secretary
SPECTRAN SPECIALTY OPTICS
COMPANY
By /s/ Bruce A. Cannon
-------------------------------
Name: Bruce A. Cannon
Title: Secretary
APPLIED PHOTONIC DEVICES, INC.
By /s/ Bruce A. Cannon
--------------------------------
Name: Bruce A. Cannon
Title: Secretary
[GUARANTY AGREEMENT]
<PAGE> 18
Annex 1 to Guaranty Agreement
Addresses of Guarantors
SpecTran Communication Fiber Technologies, Inc.
50 Hall Road
Sturbridge, MA 01566
Attn: Chief Executive Officer
SpecTran Specialty Optics Company
150 Fisher Drive
Avon CT 060011(*)
Attn: President
Applied Photonic Devices, Inc.
300 Lake Road
Dayville, CT 06241(**5)
Attn: Chief Executive Officer
* Spectran Specialty Optics Company intends to move its principal executive
offices to 55 Darling Drive, Avon, Connecticut 06001 during 1997.
Applied Photonic Devices, Inc. intends to move its principal executive offices
to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
- ----------
(5)Applied Photonic Devices, Inc. intends to move its principal
executive offices to 50 Hall Road, Sturbridge, Massachusetts by the end of 1996.
<PAGE> 19
ANNEX 2
[FORM OF JOINDER AGREEMENT]
JOINDER AGREEMENT
[Date]
To each of the Noteholders (as defined in the Guaranty
Agreement hereinafter referred to)
Ladies and Gentlemen:
Reference is made to the Guaranty Agreement, dated as of December 1,
1996 (as amended, restated or otherwise modified from time to time, the
"GUARANTY AGREEMENT"), by SpecTran Communication Fiber Technologies, Inc.
("SCFT"), a Delaware corporation, SpecTran Specialty Optics Company ("SSOC"), a
Delaware corporation, and APPLIED PHOTONIC DEVICES, INC. ("APD"), a Delaware
corporation (SCFT, SSOC and APD, together with each other Person that becomes a
party to the Guaranty Agreement, the "GUARANTORS"), in favor of each of the
Noteholders (as defined in the Agreement). Capitalized terms used herein and not
otherwise defined have the meanings ascribed to such terms in the Guaranty
Agreement.
[NEW GUARANTOR], a ___________________ corporation (the "NEW
GUARANTOR"), agrees with you as follows:
1. GUARANTY. The New Guarantor hereby unconditionally and expressly
agrees to become, and by execution and delivery of this Agreement does become, a
"Guarantor" under and as defined in the Guaranty Agreement. Without limitation
of the foregoing or of anything in the Guaranty Agreement, by such execution and
delivery hereof the New Guarantor does become fully liable, as a Guarantor, for
the payment of the Guarantied Obligations as further provided in Section 1 of
the Guaranty Agreement. As provided in Section 6.5 of the Guaranty Agreement,
the Guaranty Agreement is hereby amended, without any further action, to add the
New Guarantor as a Guarantor thereunder as if the New Guarantor had been an
original party to the Guaranty Agreement. Annex 1 to the Guaranty Agreement is
hereby amended by adding the following address of the New Guarantor for purposes
of communications pursuant to Section 6.1 of the Guaranty Agreement: [insert
name and address of New Guarantor].
2. FURTHER ASSURANCES. The New Guarantor agrees to cooperate with the
Noteholders and execute such further instruments and documents as the Required
Holders shall reasonably request to effect, to the reasonable satisfaction of
the Required Holders, the purposes of this Agreement.
3. BINDING EFFECT. This Agreement shall be binding upon the New
Guarantor and shall inure to the benefit of the Noteholders and their respective
successors and assigns.
Annex 2-1
<PAGE> 20
IN WITNESS WHEREOF, the New Guarantor has caused this Agreement to be
executed on its behalf by one of its duly authorized officers.
[NEW GUARANTOR]
By
------------------------------------
Name:
Title:
Annex 2-2
<PAGE> 1
EXHIBIT 10.97
<PAGE> 2
LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of December 1, 1996 and is among SPECTRAN
CORPORATION ("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY ("Optics"), APPLIED
PHOTONIC DEVICES, INC. ("Photonic"), SPECTRAN COMMUNICATION FIBER TECHNOLOGIES,
INC. ("Communication") and FLEET NATIONAL BANK (the "Lender"). Each of SpecTran,
Optics, Photonic and Communication are sometimes referred to as a "Borrower" and
collectively the "Borrowers".
W I T N E S S E T H:
BACKGROUND. The Borrowers have requested the Lender to lend up to the sum of
$20,000,000.00 (the "Loan") and the Lender is willing to do so upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained, and each
intending to be legally bound hereby, the parties agree as follows:
ARTICLE
1
DEFINITIONS
As used herein:
1.1 "Affiliate" means, as to any Person, each other Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.
1.2 "Agreement" means this Loan Agreement, as the same may from time to time be
amended or supplemented.
1.3 "Borrowing Base" means $20,000,000.00 minus the face amount of all
outstanding letters of credit issued by the Lender for the account of any
Borrower.
1.4 "Business Day" means a day other than a Saturday, a Sunday, or a day on
which commercial banks in Worcester, Massachusetts are authorized to close.
1.5 "Capital Leases" means capital leases, conditional sales contracts and other
title retention agreements relating to the purchase or acquisition of
Consolidated Capital Assets.
<PAGE> 3
1.6 "Change in Control" means, if, prior to January 1, 2000, 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), other than Current
Management, or a group of which Current Management is a part, become the
"beneficial owners" (as such term is used in Rule 13d-3 under the Exchange Act
as in effect on the date of the Closing), directly or indirectly, of more than
the Control Percentage of the total voting power of all classes then outstanding
of SpecTran's voting stock.
1.7 "Closing" has the meaning given to such term in Section 3.1.
1.8 "Collateral Documents" means the Mortgages, the Security Agreement, the
Trust Indenture, the Pledge Agreement, the Patent Collateral Assignment, the
Trademark Security Agreement and the documents, whether deliverable at or after
the Closing, referenced in Exhibit 3.1(q) attached hereto.
1.9 "Consolidated Assets" means all assets of the Borrowers, including without
limitation, all assets that should be classified as assets on the consolidated
balance sheet of the Borrowers prepared in accordance with GAAP.
1.10 "Consolidated Capital Assets" means Consolidated Assets of the Borrowers
that are required or permitted to be depreciated or amortized in accordance with
GAAP.
1.11 "Consolidated Capital Expenditures" means, for the applicable period, the
aggregate amount of the Borrowers' expenditures for the acquisition,
construction, improvement, replacement or purchase of Consolidated Capital
Assets, including but not limited to, expenditures funded under Capital Leases.
1.12 "Consolidated Earnings Available for Fixed Charges" means, for the
applicable period, Consolidated Net Income plus Consolidated Interest, income
tax expense and Consolidated Minimum Operating Lease Rentals to the extent
deducted in the determination of Consolidated Net Income for the applicable
period, determined on a consolidated basis for the applicable period, 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 Consolidated Indebtedness in
connection therewith, assuming for purposes of calculation but all such
acquisitions and dispositions that occurred during such period occurred on the
first day of such period.
1.13 "Consolidated EBITDA Cumulative" means, Consolidated Operating Income minus
income (based on the equity method of accounting in accordance with GAAP)
derived from unconsolidated Subsidiaries or other Persons plus Consolidated
Interest and consolidated taxes, depreciation and amortization determined on a
rolling four (4) quarters basis in accordance with GAAP.
1.14 "Consolidated Fixed Charges" means, for the applicable period, the sum of
Consolidated Minimum Operating Lease Rentals for such period plus Consolidated
Interest to the extent
2
<PAGE> 4
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 Consolidated Indebtedness 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.
1.15 "Consolidated Indebtedness" means, as to the Borrowers:
(a) Obligations for borrowed money;
(b) Obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of the Borrowers' business payable on terms customary in the trade);
(c) Obligations, whether or not assumed, secured by liens;
(d) Obligations with respect to notes, acceptances, letters of
credit, guarantees or other instruments; and
(e) Obligations under Capital Leases.
1.16 "Consolidated Interest" means, for the applicable period, interest paid or
payable by the Borrowers, including but not limited to, interest paid or payable
on Consolidated Indebtedness determined in accordance with GAAP.
1.17 "Consolidated Interest Coverage Ratio" means, for the applicable period,
the ratio of Consolidated Earnings Available for Fixed Charges to Consolidated
Fixed Charges.
1.18 "Consolidated Leverage Ratio" means the ratio of Consolidated Liabilities
to Consolidated Tangible Net Worth.
1.19 "Consolidated Liabilities" means all liabilities of the Borrowers,
including without limitation, all liabilities that should be classified as
liabilities on a consolidated balance sheet of the Borrowers prepared in
accordance with GAAP.
1.20 "Consolidated Operating Lease Rentals" means, for the applicable period,
(a) all payments made by any Borrower 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 any Borrower by others in respect of fixed rental
payments under noncancelable subleases with a term of at least one (1) year on
properties of such Borrower subject to leases described in the immediately
preceding clause (a).
1.21 "Consolidated Net Income" means, for the applicable period, the Borrowers'
net income determined in accordance with GAAP.
3
<PAGE> 5
1.22 "Consolidated Operating Income" means, for the applicable period,
Consolidated Net Income less the sum of (a) extraordinary and non-recurring
gains and (b) gains from the sale of Consolidated Capital Assets plus the sum of
(x) extraordinary and non-recurring losses and (y) losses from the sale of
Consolidated Capital Assets.
1.23 "Consolidated Stockholders' Equity" means the aggregate of the following
accounts on the consolidated balance sheet of the Borrowers prepared in
accordance with GAAP: (a) the par or stated value of all outstanding capital
stock, (b) capital surplus and (c) retained earnings.
1.24 "Consolidated Tangible Net Worth" means Consolidated Stockholders' Equity,
less the sum of (a) any surplus resulting from any write up of Consolidated
Assets, (b) goodwill, including any amounts however designated on the
consolidated balance sheet of the Borrowers representing the excess of the
purchase price paid for assets or stock acquired over the value assigned thereto
on the books of any Borrower, (c) patents, trademarks, trade names, copyrights
and licenses, (d) any amount at which shares of capital stock of any Borrower
appear as an asset on the consolidated balance sheet of the Borrowers, (e) loans
and advances to Affiliates, stockholders, directors, officers or employees, (f)
deferred expenses, and (g) any other amount in respect of an intangible (except
for the tax intangible related to FASB 109) that should be classified as an
asset on a consolidated balance sheet of the Borrowers in accordance with GAAP.
1.25 "Control Percentage" means, prior to July 1, 2000, 30% and on and after
July 1, 2000, 50%.
1.26 "Current Management" means (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 SpecTran during the
proceeding period of twenty-four (24) consecutive months.
1.27 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.28 "Event of Default" has the meaning provided in Section 7.1.
1.29 "Financial Statements" means the audited, consolidated cash flow
statements, income statements and balance sheets of the Borrowers as of December
31, 1994 and December 31, 1995 and notes thereto certified by KPMG Peat Marwick,
LLP to present fairly the consolidated financial position and results of
operations of the Borrowers at such dates and for such periods in accordance
with GAAP and all other financial information delivered to the Lender from time
to time pursuant to Sections 6.01(b)(i), 6.01(b)(ii) and 6.01(b)(iii) of this
Agreement.
1.30 "GAAP" means generally accepted accounting principles applied consistently
with such changes or modifications thereto as may be approved in writing by the
Lender.
4
<PAGE> 6
1.31 "Intellectual Property" means trademarks, service marks, trade names, trade
styles, logos, goodwill, trade secrets, patents, and licenses acquired under any
statutory, common law or registration process in any state or nation at any time
or under any agreement executed with any Person at any time. The term "license"
refers not only to rights granted by agreement from the owner of patents,
trademarks, service marks and the like but also to rights granted by a
franchiser under a franchise or similar agreement. The foregoing enumeration is
not intended as a limitation of the meaning of the word "license".
1.32 "Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any government or political subdivision or
agency thereof or of any court or similar entity established by any thereof.
1.33 "Mortgages" means the Mortgage, Assignment of Rents and Security Agreement
covering Communication's real property in Sturbridge, Massachusetts and the
Open-End Mortgage, Assignment of Rents and Security Agreement covering Optic's
real property in Avon, Connecticut each granted to the Trustee (as defined in
the Trust Indenture) and each dated as of December 1, 1996, as from time to time
supplemented or amended.
1.34 "Obligations" is intended to be used in its most comprehensive sense and
means the obligations of the Borrowers:
(a) To pay the principal of, and interest on, the Revolving
Note in accordance with the terms thereof and to satisfy all other liabilities
to the Lender (including without limitation with respect to letters of credit
issued by the Lender for the account of any Borrower) whether hereunder or
otherwise, whether now existing or hereafter incurred, matured or unmatured,
direct or contingent, joint or several, including any extensions, modifications,
renewals thereof and substitutions therefor;
(b) To repay to the Lender all amounts advanced by the Lender
hereunder or otherwise on behalf of any Borrower, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, or
repairs to, or maintenance or storage of, any of the Consolidated Assets; and
(c) To reimburse the Lender, on demand, for all of the
Lender's expenses and costs, including without limitation the reasonable fees
and expenses of its counsel, in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and the documents
required hereunder, including, without limitation, any proceeding brought, or
threatened, to enforce payment of any of the obligations referred to in the
foregoing paragraphs (a) and (b).
1.35 "Offering" means any public and/or private offering of the capital stock of
SpecTran occurring after the date of this Agreement.
1.36 "Note Purchase Agreements" means the Note Purchase Agreements between
SpecTran and each of Massachusetts Life Insurance Company, CM Life Insurance
Company, Mutual Life
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Insurance Company of New York and Pacific Mutual Life Insurance Company each
dated as of December 1, 1996, as from time to time supplemented or amended.
1.37 "Patent Collateral Assignment" means, the Patent Collateral Assignment
among the Borrowers and the Trustee (as defined in the Trust Indenture) dated as
of December 1, 1996, as from time to time supplemented or amended.
1.38 "Person" means any individual, corporation, limited liability corporation,
partnership, limited liability partnership, association, joint-stock company,
trust, unincorporated organization, joint venture, court, or government or
political subdivision or agency thereof.
1.39 "Permitted Liens" means:
(a) Liens for taxes, assessments, statutory obligations or
similar charges, incurred in the ordinary course of business, that are not yet
due and payable or if overdue being contested in good faith by appropriate and
lawful proceedings, so long as levy and execution thereon have been stayed and
continue to be stayed and they do not, in the aggregate, materially detract from
the value of the property of any Borrower or materially impair the operation of
any Borrower's business;
(b) Pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate in any
fund in connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(c) Liens of mechanics, materialmen, warehousemen, carriers or
other like liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable;
(d) Encumbrances consented to by the Lender in writing
including zoning restrictions, easements, or other restrictions on the use of
real property, none of which materially impairs the use of such property by any
Borrower in the operation of its business, and none of which is violated in any
material respect by existing or proposed structures or land use;
(e) Purchase money security interests granted to secure the
purchase price of assets, the purchase of which does not violate the terms of
this Agreement;
(f) Liens consented to by the Lender in writing; and
(g) Liens evidenced by the Collateral Documents
1.40 "Pledge Agreement" means the Pledge Agreement among the Borrowers and the
Trustee (as defined in the Trust Indenture) dated as of December 1, 1996, as
from time to time supplemented or amended.
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1.41 "Records" means correspondence, memoranda, tapes, discs, papers, books and
other documents, or transcribed information of any type, whether expressed in
ordinary or machine readable language.
1.42 "Revolving Note" means the Revolving Note substantially in the form of
Exhibit 1.42 attached hereto.
1.43 "Security Agreement" means the Security Agreement among the Borrowers and
the Trustee (as defined in the Trust Indenture) dated as of December 1, 1996, as
from time to time supplemented or amended.
1.44 "Subsidiary" means any Affiliate (a) that is directly, or indirectly
through one or more intermediaries, controlled by any Borrower or (b) of which
not less than 50% of the voting capital stock is owned, directly or through one
or more intermediaries, by any Borrower.
1.45 "Trademark Security Agreement" means the Trademark Security Agreement among
the Borrowers and the Trustee (as defined in the Trust Indenture) dated as of
December 1, 1996, as from time to time supplemented or amended.
1.46 "Trust Indenture" means, the Trust Indenture among the Borrowers and the
Trustee (as defined therein) dated as of December 1, 1996 as from time to time
supplemented or amended.
1.47 Accounting. Accounting terms used and not otherwise defined in this
Agreement have the meanings determined by, and all calculations with respect to
accounting or financial matters unless otherwise provided herein shall be
computed in accordance with, GAAP.
ARTICLE
2
THE LOAN
2.1 General Terms.
Subject to the terms hereof, the Lender will lend the Borrowers the
principal sum of $20,000,000.00 on a revolving loan basis.
2.2 Disbursement.
The Lender will credit the proceeds of the Revolving Note to the Lender
to pay the existing Consolidated Indebtedness to the Lender in full and
thereafter, from time to time and subject to the terms hereof, to the Borrowers'
deposit account identified in Exhibit 2.2 attached hereto for working capital
and general corporate matters.
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2.3 Revolving Note.
Subject to the terms hereof, the Lender will lend the Borrowers, from
time to time until December 31, 1999 (the "Termination Date") or the occurrence
of an Event of Default, whichever occurs first, such sums in integral multiples
of $1,000.00 (pursuant to the terms of the Revolving Note, advances subject to
LIBOR interest rates must be in multiples of $500,000.00) as any Borrower may
request by reasonable same day notice to the Lender, received by the Lender not
later than 12:00 p.m. of such day, but which shall not exceed, in the aggregate
principal amount at any one time outstanding, the Borrowing Base. The
Termination Date may be extended by the Lender, as determined in its sole and
absolute discretion, by written notice to any Borrower. The Borrowers may
borrow, repay without penalty or premium (except for repayments of principal
subject to LIBOR interest rates prior to the expiration of the Index Period as
more fully set forth in the Revolving Note) and reborrow hereunder, from the
date of this Agreement until the Termination Date or the occurrence of an Event
of Default, whichever occurs first. It is the intention of the parties that the
outstanding principal amount of the Revolving Note will not exceed the Borrowing
Base, and if, at any time, an excess shall for any reason exist, the full amount
of such excess, together with accrued and unpaid interest thereon, shall be
immediately due and payable in full.
2.4 Interest Rate and Payments of Interest.
Interest on the principal balance of the Loan from time to time
outstanding shall accrue at the rates and be payable as set forth in the
Revolving Note.
2.5 Payment to the Lender.
The Borrowers have designated the deposit account identified in Exhibit
2.2 attached hereto as the account for all payments under the Revolving Note and
hereunder. Notwithstanding such designation, the Lender may charge against any
deposit account of any Borrower all or any part of any amount due under the
Revolving Note and hereunder.
2.6 The Unused Facility Fee.
From and after the date hereof until the Termination Date, the Borrower
shall pay an Unused Facility Fee of one quarter of one percent (0.25%) per annum
on the average daily undisbursed amount of the Loan. The Unused Facility Fee
shall be payable quarterly in arrears on the first Business Day of each April,
July, October and January.
2.7 The Commitment Fee.
At the Closing, the Borrowers shall pay a commitment fee to the Lender
in the amount of $50,000.00.
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ARTICLE
3
CONDITIONS PRECEDENT
The obligation of the Lender to make the Loan is subject to the following
conditions precedent:
3.1 Documents Required for the Closing.
The Borrowers shall have delivered to the Lender, prior to the initial
disbursement of the Loan (the "Closing"), the following:
(a) The Revolving Note duly executed by the Borrowers;
(b) Copies of the Mortgages, which shall have been duly
executed by all proper parties and recorded at the appropriate recording office,
with all recording fees therefor paid;
(c) The Financial Statements;
(d) A copy of the Security Agreement and/or the financing
statements and other instruments required thereunder, which shall have been duly
executed by all proper parties and filed at the appropriate filing office, with
all filing fees therefor paid;
(e) A copy of the Trust Indenture, which shall have been
executed by all proper parties;
(f) A copy of the Pledge Agreement and other instruments
required thereunder, which shall have been executed by all proper parties;
(g) A copy of the Patent Collateral Assignment which shall
have been duly executed by all proper parties and filed at the appropriate
filing office, with all filing fees therefor paid;
(h) A copy of the Trademark Security Agreement which shall
have been duly executed by all proper parties and filed at the appropriate
filing office, with all filing fees therefor paid;
(i) Evidence that the Note Purchase Agreements have been
executed and delivered and the proceeds delivered to SpecTran;
(j) A copy, certified as of the date of the Closing, of votes
of the boards of directors of each Borrower and shareholders (except for
SpecTran) of each Borrower, authorizing the execution, delivery, and performance
of this Agreement, the Revolving Note, the Collateral Documents and each other
document to be delivered pursuant hereto;
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(k) A copy, certified as of the date of the Closing, of the
bylaws of each Borrower;
(l) A certificate (dated the date of the Closing) of the
corporate clerk and/or secretary of each Borrower as to the incumbency and
signatures of the officers of each Borrower signing this Agreement, the
Revolving Note, the Collateral Documents and each other document to be delivered
pursuant hereto;
(m) A copy, certified as of the most recent date practicable
by the secretary of the state of incorporation, of the charter of each Borrower
and all amendments thereto, together with a certificate (dated the date of the
Closing) of the corporate clerk and/or secretary of each Borrower to the effect
that such charter has not been further amended since the date of the aforesaid
certification of the secretary of the state of incorporation;
(n) A certificate of good standing dated as of the most recent
date practicable, issued by the secretary of the state of incorporation as to
the legal existence, charter, and good legal standing of each Borrower;
(o) Certificates, as of the most recent dates practicable, of
the secretary of each state in which any Borrower is qualified as a foreign
corporation and, if applicable, of the department of revenue or taxation of each
of such states, as to the good tax standing of each Borrower;
(p) A written opinion of the law firm of Hackmyer & Nordlicht,
legal counsel for the Borrowers, dated the date of the Closing and addressed to
the Lender, in form and content satisfactory to the Lender and its counsel; and
(q) Each of the agreements and documents referred to in that
certain Closing Document Agenda and that certain Closing Agenda, copies of which
are attached hereto as Exhibit 3.1(q).
3.2 Documents Required for Subsequent Disbursements.
At the time of, and as a condition to, any disbursement of any part of
the Loan to be made by the Lender subsequent to the Closing, the Lender may
require the Borrowers to deliver to the Lender a certificate, dated the date on
which any such disbursement is to be made, signed by the chief financial officer
of SpecTran and to the effect that:
(a) As of the date thereof, no Event of Default has occurred
and is continuing, and no event has occurred and is continuing that, but for the
giving of notice or passage of time or both, would be an Event of Default;
(b) No material adverse change has occurred in the business
prospects,financial condition, or results of operations of any Borrower since
the date of the most recent Financial Statements delivered to the Lender in
accordance with this Agreement; and
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(c) Each of the representations and warranties contained
herein is true and correct in all respects as if made on and as of the date of
such disbursement.
3.3 Certain Events.
At the time of, and as a condition to, the Closing and each
disbursement of any part of the Loan to be made by the Lender at or subsequent
to the Closing:
(a) No Event of Default shall have occurred and be continuing,
and no event shall have occurred and be continuing that, with the giving of
notice or passage of time or both, would be an Event of Default;
(b) No material adverse change shall have occurred in the
financial condition, or results of operations of any Borrower since the date of
the most recent Financial Statements delivered to the Lender in accordance with
this Agreement; and
(c) All of the Collateral Documents shall have remained in
full force and effect.
3.4 Legal Matters.
At the time of the Closing and each subsequent disbursement, all legal
matters incidental thereto shall be reasonably satisfactory to Mirick,
O'Connell, DeMallie & Lougee, LLP legal counsel to the Lender.
ARTICLE
4
SECURITY
4.1 Composition of the Security.
The Obligations of the Borrowers are secured by the Consolidated Assets
of the Borrowers as evidenced by the Collateral Documents. The Consolidated
Assets shall stand as one general, continuing collateral security for all
Obligations and may be retained by the Lender until all Obligations have been
satisfied in full.
4.2 Rights in Property Held by the Lender.
As security for the prompt satisfaction of all Obligations, each
Borrower hereby assigns, transfers, and sets over to the Lender all of its
right, title, and interest in and to, and grants the Lender a lien on and a
security interest in, all amounts that may be owing, from time to time, by the
Lender to any Borrower in any capacity, including, but without limitation, any
balance or share belonging to any Borrower, or any deposit or other account with
the Lender, which lien and
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security interest shall be independent of, and in addition to, any of the
Lender's rights of set-off.
4.3 Priority of Liens.
The liens evidenced by the Collateral Documents shall constitute first
priority liens.
4.4 Financing Statements.
(a) Each Borrower will:
(i) Execute such financing statements (including
amendments thereto and continuation statements thereof) in form satisfactory to
the Lender as the Lender, from time to time, may specify;
(ii) Pay, or reimburse the Lender for paying, all
costs and taxes of filing or recording the same in such public offices as the
Lender may designate; and
(iii) Take such other steps as the Lender, from time
to time, may direct, including the noting of the Lender's lien on the
Consolidated Assets and on any certificates of title therefor, all to perfect to
the satisfaction of the Lender the Lender's interest in the Consolidated Assets.
(b) In addition to the foregoing, and not in limitation
thereof: to the extent lawful, each Borrower hereby appoints the Lender as its
attorney-in-fact (without requiring the Lender to act as such) to execute any
financing statement in the name of any Borrower, and to perform all other acts
that the Lender deems appropriate to perfect and continue its security interest
in, and to protect and preserve, the Consolidated Assets.
4.5 Mortgagees', Landlords', and Warehousemen's Waivers.
Each Borrower will obtain from any mortgagee of real estate owned by
any Borrower, any landlord of premises leased by any Borrower, and any
warehouseman or other bailee on whose premises any of the Consolidated Assets
may be located, instruments, in form and substance satisfactory to the Lender,
by which such mortgagee, landlord or warehouseman or other bailee waives its
rights, if any, in and to the Consolidated Assets of the Borrowers.
ARTICLE
5
REPRESENTATIONS AND WARRANTIES
5.1 Original.
To induce the Lender to enter into this Agreement, the Borrowers
jointly and severally represent and warrant to the Lender as follows:
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(a) Each Borrower is a corporation duly organized, validly
existing, and in good standing under the Laws of the state of its incorporation;
no Borrower has any Subsidiaries, except as set forth in Exhibit 5.1(a) attached
hereto; each Borrower has the lawful power to own its properties and to engage
in the business it conducts and is duly qualified and in good standing as a
foreign corporation in the jurisdictions wherein the nature of the business
transacted by it or property owned by it makes such qualification necessary; the
states in which each Borrower is qualified to do business are set forth in
Exhibit 5.1(a); the identity of each shareholder of each Borrower (except for
SpecTran) and the number of shares owned by each is set forth in Exhibit 5.1(a);
and the addresses of all places of business of each Borrower are as set forth in
Exhibit 5.1(a);
(b) No Borrower is directly or indirectly controlled by, or
acting on behalf of, any Person which is an "Investment Company", within the
meaning of the Investment Company Act of 1940, as amended;
(c) No Borrower is in default with respect to any of its
existing Consolidated Liabilities, and the making and performance of this
Agreement, the Revolving Note and the Collateral Documents will not (immediately
or with the passage of time, the giving of notice, or both):
(i) Violate the charter or by-laws of any Borrower,
or violate any Laws or result in a default under any contract, agreement, or
instrument to which any Borrower is a party or by which any Borrower or its
property is bound; or
(ii) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the Consolidated
Assets of any Borrower, except as set forth in the Collateral Documents;
(d) Each Borrower to the extent applicable to it, has the
power and authority to enter into and perform this Agreement, the Revolving Note
and the Collateral Documents, and to incur the obligations herein and therein
provided for, and has taken all actions necessary to authorize the execution,
delivery, and performance of this Agreement, the Revolving Note and the
Collateral Documents;
(e) This Agreement, the Revolving Note and the Collateral
Documents are, or when delivered will be, valid, binding, and enforceable in
accordance with their respective terms, except to the extent enforceability is
subject to the exercise of judicial discretion in accordance with general
equitable principles and to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws for the relief of debtors heretofore or hereafter
enacted;
(f) Except as disclosed on Exhibit 5.1(f) attached hereto,
there is no pending order, notice, claim (other than claims arising in the
ordinary course of business for amounts not exceeding $25,000.00 individually or
$100,000.00 in the aggregate), litigation, proceeding, or investigation against
or affecting any Borrower, whether or not covered by insurance;
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(g) Each Borrower has good and marketable title to all of its
Consolidated Assets, none of which is subject to any security interest,
encumbrance or lien, or claim of any third Person, except for Permitted Liens;
(h) The Financial Statements, including any schedules and
notes pertaining thereto, have been prepared in accordance with GAAP, and fully
and fairly present the financial condition of the Borrowers at the dates thereof
and the results of operations for the periods covered thereby, and there have
been no material adverse changes in the financial condition or business of any
Borrower from the date of the most recent Financial Statements to the date
hereof;
(i) As of the date hereof, the Borrowers have no Consolidated
Indebtedness of any nature, except as disclosed on Exhibit 5.1(i) attached
hereto;
(j) Each Borrower has filed all federal, state, and local tax
returns and other reports required by any applicable Laws to have been filed
prior to the date hereof, has paid or caused to be paid all taxes, assessments,
and other governmental charges that are due and payable prior to the date
hereof, and has made adequate provision for the payment of such taxes,
assessments, or other charges accruing but not yet payable; no Borrower has
knowledge of any deficiency or additional assessment in a materially important
amount in connection with any taxes, assessments, or charges not provided for on
its books;
(k) Except to the extent that the failure to comply would not
materially interfere with the conduct of the business of any Borrower, each
Borrower has complied with all applicable Laws with respect to (i) any
restrictions, specifications, or other requirements pertaining to products that
it manufactures or sells or to the services it performs, (ii) the conduct of its
business and (iii) the use, maintenance, and operation of the real and personal
properties owned or leased by it in the conduct of its business;
(l) No representation or warranty by or with respect to any
Borrower contained herein or in any certificate or other document furnished by
any Borrower pursuant hereto contains any untrue statement of a material fact or
omits to state a material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made;
(m) Each consent, approval or authorization of, or filing,
registration or qualification with, any Person required to be obtained or
effected by any Borrower in connection with the execution and delivery of this
Agreement, the Revolving Note and the Collateral Documents or the undertaking or
performance of any obligation hereunder or thereunder has been duly obtained or
effected;
(n) To the best of each Borrower's knowledge, the Borrowers
and all other parties to all material leases, contracts, and other commitments
to which any Borrower is a party have all complied in all material respects with
the provisions of such leases, contracts, and other
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commitments and no party is in default under any thereof and no event has
occurred which, but for the giving of notice or the passage of time, or both,
would constitute a default;
(o) No Borrower has made any agreement or taken any action
which may cause anyone to become entitled to a commission or finder's fee as a
result of or in connection with the making of the Loan;
(p) Each Borrower's federal tax returns for all years of
operation, including the year ended December 31, 1995, have been filed with the
Internal Revenue Service and have not been challenged;
(q) Any Employee Pension Benefit Plans, as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), of any
Borrower meet, as of the date hereof, the minimum funding standards of 29
U.S.C.A. 1082 (Section 302 of ERISA), and no Reportable Event or Prohibited
Transaction, as defined in ERISA, has occurred with respect to any Employee
Benefit Plans, as defined in ERISA, of any Borrower;
(r) SpecTran has filed all registration statements, forms and
other reports with the Securities and Exchange Commission required by any
applicable Laws to have been filed prior to the date hereof; and
(s) The liens created pursuant to the Collateral Documents and
Section 4.2 of this Agreement are in all cases first priority liens.
5.2 Survival.
All of the representations and warranties set forth in Section 5.1
shall survive until all Obligations are satisfied in full and there remain no
outstanding commitments hereunder.
ARTICLE
6
COVENANTS OF THE BORROWERS
6.1 Affirmative Covenants.
The Borrowers do hereby jointly and severally covenant and agree with
the Lender that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, the Borrowers will comply at all times
with the following affirmative covenants:
(a) The Borrowers will use the proceeds of the Loan only for
working capital and general corporate purposes, and will furnish the Lender such
evidence as it may reasonably require with respect to such use;
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(b) SpecTran will furnish the Lender:
(i) As soon as available, but in any event within
thirty (30) days after the close of each calendar month in each fiscal year: (1)
consolidated and consolidating statements of cash flows of the Borrower for such
month, (2) consolidated and consolidating income statements of the Borrowers for
such month and (3) consolidated and consolidating balance sheets of the
Borrowers as of the end of such month-all such statements and balance sheets to
be in reasonable detail, including all supporting schedules and comments,
subject to normal year-end audit adjustments and certified by the chief
financial officer of SpecTran to have been prepared in accordance with GAAP and
to present fairly the financial position and results of operations of the
Borrowers;
(ii) As soon as available, but in any event within
forty-five (45) days after the close of each of the initial three quarterly
accounting periods in each fiscal year (i.e. March 31, June 30 and September 30)
a copy of SpecTran's Form 10-Q, and management's: (1) consolidated and
consolidating statements of cash flows of the Borrowers for such quarter, (2)
consolidated and consolidating income statements of the Borrowers for such
quarter and (3) consolidated and consolidating balance sheets of the Borrowers
as of the end of such quarter-all such statements and balance sheets to be in
reasonable detail, including all supporting schedules and comments, subject to
normal year-end audit adjustments and certified by the chief financial officer
of SpecTran to have been prepared in accordance with GAAP and to present fairly
the financial position and results of operations of the Borrowers;
(iii) As soon as available, but in any event within
ninety (90) days after the close of each fiscal year, a copy of SpecTran's Form
10-K and Annual Report (including the audited consolidated financial statements
prepared by KPMG Peat Marwick, LLP or another independent certified public
accountant selected by SpecTran and reasonably acceptable to the Lender) and
management's: (1) consolidated and consolidating statements of cash flows for
the Borrowers for such fiscal year, (2) consolidated and consolidating income
statements of the Borrowers for such fiscal year and (3) consolidated and
consolidating balance sheets of the Borrowers as of the end of such fiscal
year-all such statements and balance sheets to be in reasonable detail,
including all supporting schedules and comments; the consolidated statements and
balance sheets included in the Form 10-K and Annual Report to be audited by KPMG
Peat Marwick, LLP or another independent certified public accountant selected by
SpecTran and reasonably acceptable to the Lender and certified by such
accountants to have been prepared in accordance with GAAP and to present fairly
the financial position and results of operations of the Borrower; in addition,
SpecTran will obtain from such independent certified public accountants and
deliver to the Lender, within ninety (90) days after the close of each fiscal
year, their written statement that in making the examination necessary to their
certification they have obtained no knowledge of any Event of Default by the
Borrowers, or disclosing all Events of Default of which they have obtained
knowledge (it being understood and agreed by the Lender that in making their
examination, such accountants shall not be required to go beyond the bounds of
generally accepted auditing procedures for the purpose of certifying financial
statements); the Lender shall have the right, from time to time to discuss the
affairs of any Borrower directly with
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such independent certified public accountants after notice to SpecTran and
opportunity of SpecTran to be represented at any such discussions;
(iv) Contemporaneously with the year-end financial
report required by the foregoing paragraph (3), a copy of the management letter
issued to SpecTran by KPMG Peat Marwick or another certified public accountant
selected by SpecTran and reasonably acceptable to the Lender;
(v) Contemporaneously with each quarterly and
year-end financial report required by the foregoing paragraphs (2) and (3) a
certificate of the chief financial officer of SpecTran substantially in the form
of Exhibit 6.1(b)(v) attached hereto stating that he has individually reviewed
the provisions of this Agreement and that a review of the activities of the
Borrowers during such quarterly period or year, as the case may be, has been
made by him or under his supervision, with a view to determining whether the
Borrowers have fulfilled all of their obligations under this Agreement, and
that, to the best of his knowledge, the Borrowers have observed and performed
each undertaking contained in this Agreement and are not in default in the
observance or performance of any of the provisions hereof or, if the Borrowers
shall be so in default, specifying all such defaults and events of which he may
have knowledge;
(vi) As soon as available but in no event later than
thirty (30) days prior to the commencement of the next fiscal year, management
prepared financial projections, including (1) consolidated and consolidating
statements of cash flow, (2) consolidated and consolidating income statements
and (3) consolidated and consolidating balance sheets; and
(vii) Promptly after the sending or making available
or filing of the same, copies of all reports, proxy statements and financial
statements that any Borrower sends or makes available to its stockholders and
all registration statements and reports that any Borrower files with the
Securities and Exchange Commission or any successor Person;
(c) Each Borrower will maintain its Consolidated Assets in
good condition and repair (normal wear and tear excepted), and will pay and
discharge or cause to be paid and discharged, when due, the cost of repairs to,
or maintenance of, the same to the extent it is commercially reasonable for such
repairs to be made or maintenance to be performed, and will pay or cause to be
paid in a timely manner all rental or mortgage payments due on any real estate.
Each Borrower hereby agrees that, in the event it fails to pay or cause to be
paid any such payment, it will promptly notify the Lender thereof, and the
Lender may, in its discretion, do so and on demand be reimbursed therefor by the
Borrowers;
(d) Each Borrower will maintain public liability insurance and
fire and extended coverage insurance on all Consolidated Assets that are of a
character usually insured by corporations engaged in the same or similar
businesses, all in form and amount sufficient to indemnify each Borrower for
100% of the appraised value of any Asset lost or damaged subject to any
deductible customary in the industry. Each Borrower will cause all such
insurance policies to be payable to the Lender. Such policies shall contain a
provision whereby they cannot be canceled except after thirty (30) days' written
notice to the Lender. Each Borrower will
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furnish to the Lender such evidence of insurance as the Lender may reasonably
require. Each Borrower hereby agrees that, in the event it fails to pay or cause
to be paid the premium on any such insurance when due, the Lender, in its
discretion, may do so and be reimbursed by the Borrowers therefor. Each Borrower
hereby assigns to the Lender any returned or unearned premiums that may be due
any Borrower upon cancellation by the insurer of any such policy for any reason
whatsoever and directs any such insurer to pay the Lender any amounts so due.
The Lender is hereby appointed the attorney-in-fact of each Borrower (without
requiring the Lender to act as such) to endorse any check which may be payable
to any Borrower, to collect any premiums or the proceeds of such insurance
(other than proceeds of public liability insurance) and any amount so collected
may be applied by the Lender toward satisfaction of any of the Obligations
whether due or not yet due;
(e) Each Borrower will pay when due, all taxes, assessments,
and charges or levies imposed upon it or on any of its property or which it is
required to withhold and pay except where contested in good faith by appropriate
proceedings with adequate reserves therefor having been set aside on its books;
provided, however, that each Borrower shall pay or cause to be paid all such
taxes, assessments, charges or levies forthwith whenever foreclosure on any lien
that may have attached (or security therefor) appears imminent;
(f) The Borrowers will maintain on a consolidated basis:
(i) a Consolidated Interest Coverage Ratio of at
least 3.00:1.00 to be measured quarterly on a rolling four (4) quarters basis
(i.e. as of March 31, June 30, September 30, December 31);
(ii) a Consolidated Tangible Net Worth of at least
$18,500,000.00 as of the Closing; thereafter Consolidated Tangible Net Worth
must increase (1) as of December 31 of each fiscal year by an amount equal to
seventy-five percent (75%) of that fiscal year's Consolidated Net Income (to be
added only if a positive number) and (2) after any Offering by an amount equal
to the net proceeds of any such Offering; Consolidated Tangible Net Worth to be
measured quarterly (i.e. as of March 31, June 30, September 30, December 31);
(g) Each Borrower will, when requested to do so, make
available for inspection by duly authorized representatives of the Lender any of
its books and Records and will furnish the Lender any information regarding its
business affairs and financial condition within a reasonable time after written
request therefor, provided that any confidential information disclosed to the
Lender shall not be disclosed by the Lender to any unauthorized Person and
further provided that SpecTran may require the Lender to provide a certificate
of an officer of the Lender stating that the confidential information will not
be disclosed to any unauthorized Person;
(h) Each Borrower will (i) carry on and conduct its business
in substantially the same manner and in substantially the same fields of
expertise as presently conducted, (ii) do all things necessary to remain duly
incorporated, validly existing and in good standing in its state of
incorporation, (iii) maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and where the failure to
maintain authority would have a
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materially adverse effect on any of the Borrowers and (iv) comply in all
material respects with all present and future Laws applicable to it in the
operation of its business and all material agreements to which it is subject;
(i) Each Borrower will collect its accounts and sell its
inventory only in the ordinary course of business;
(j) Each Borrower will keep accurate and complete Records of
its accounts, inventory and equipment consistent with sound business practices;
(k) Each Borrower will give immediate notice to the Lender of
any litigation or proceeding in which it is a party;
(l) Within ten (10) days after the filing thereof, each
Borrower will furnish the Lender with copies of federal income tax returns filed
by any Borrower;
(m) Each Borrower will pay when due (or within applicable
grace periods) all of its Consolidated Liabilities, except when the amount
thereof is being contested in good faith by appropriate proceedings and with
adequate reserves therefor being set aside on its books and as otherwise
disclosed in Exhibit 6.1(m) attached hereto. If default be made by any Borrower
in the payment of any of its Consolidated Liabilities, the Lender shall have the
right, in its discretion, to pay such amount for the account of any Borrower and
be reimbursed by the Borrowers therefor, except for Consolidated Liabilities
being contested in good faith by appropriate and lawful proceedings, so long as
levy and execution thereon have been stayed and continue to be stayed and they
do not, in the aggregate, materially detract from the value of the property of
the Borrowers or materially impair the use thereof in the operation of their
businesses and for which adequate reserves have been established;
(n) Each Borrower will notify the Lender immediately if it
becomes aware of the occurrence of any Event of Default or of any fact,
condition, or event that with the giving of notice or passage of time or both,
could become an Event of Default or if it becomes aware of any material adverse
change in the business prospects, financial condition (including, without
limitation, proceedings in bankruptcy, insolvency, reorganization, or the
appointment of a receiver or trustee), or results of operations of any Borrower,
or of the failure of any Borrower to observe any undertakings hereunder or under
the Collateral Documents;
(o) Each Borrower will notify the Lender thirty (30) days in
advance of any change in the location of any of its places of business or of the
establishment of any new or the discontinuance of any existing, place of
business;
(p) Each Borrower will (i) fund any of its Employee Pension
Benefit Plans in accordance with no less than the minimum funding standards of
29 U.S.C.A. 1082 (Section 302 of ERISA), (ii) furnish the Lender, promptly after
the filing of the same, with copies of any reports or other statements filed
with the United States Department of Labor or the Internal Revenue Service with
respect to any such Plan and (iii) promptly advise the Lender of the
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occurrence of any Reportable Event or Prohibited Transaction with respect to any
Employee Benefit Plan;
(q) SpecTran will file all registration statements, forms and
other reports with the Securities and Exchange Commission required by any
applicable Law to be filed; and
(r) The Borrowers will each maintain all of their principal
depository accounts with the Lender and the Lender's Affiliates and the Lender
and the Lender's Affiliates will continue to manage the Borrowers' cash;
notwithstanding the foregoing, the Borrowers may maintain depository accounts
with other financial institutions for convenience only provided the aggregate
amount of all such deposit accounts does not exceed $250,000.00.
6.2 Negative Covenants.
The Borrowers do hereby jointly and severally covenant and agree with
the Lender that, so long as any of the Obligations remain unsatisfied or any
commitments hereunder remain outstanding, the Borrowers will comply at all times
with the following negative covenants:
(a) No Borrower will change its name, enter into any merger,
consolidation, reorganization or recapitalization, or reclassify its capital
stock;
(b) The Borrowers will not, in the aggregate, sell, transfer,
lease, or otherwise dispose of Consolidated Assets (except in the ordinary
course of business) having a value in excess of $500,000.00 during the term of
this Agreement;
(c) No Borrower will sell or otherwise dispose of, or for any
reason cease operating, any of its divisions, franchises, or lines of business;
(d) No Borrower will mortgage, pledge, grant, or permit to
exist a security interest in, or a lien upon, any of its assets of any kind, now
owned or hereafter acquired, except for Permitted Liens;
(e) The Borrowers will not, in the aggregate, become liable,
directly or indirectly, as guarantor or otherwise for any obligation of any
other Person, except for (i) the endorsement of commercial paper for deposit or
collection in the ordinary course of business, (ii) liabilities not to exceed
$250,000.00 during the term of this Agreement and (iii) the obligations of any
Borrower to the extent otherwise permitted hereunder;
(f) No Borrower will incur, create, assume, or permit to exist
any liabilities except: (i) the Loan, (ii) Consolidated Indebtedness of the
Borrowers listed on Exhibit 5.1(i) to the extent shown on such Exhibit 5.1(i) to
be permitted to exist after the Closing, (iii) liabilities to any Borrower and
(iv) trade liabilities incurred in the ordinary course of business (provided,
however, that no Borrower may acquire inventory other than for cash or on open
account except as expressly approved in writing and in advance by the Lender);
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(g) No Borrower will make any assignment or transfer of
accounts, or, other than in the ordinary course of business, of inventory;
(h) The Borrowers will not, in the aggregate, form any
Subsidiary (except for wholly owned Subsidiaries which are capitalized with less
than $100.00), make any investment in (including any assignment of inventory or
other property), or make any loan in the nature of an investment to, any Person,
except for investments up to $500,000.00 during the term of this Agreement and
investments in or loans to any Borrower;
(i) The Borrowers will not make any loan or advance to any
Person, except for (i) business travel and similar temporary advances in the
ordinary course of business, (ii) in the aggregate, up to $100,000.00 during the
term of this Agreement and (iii) loans or advances to any Borrower;
(j) No Borrower will purchase or otherwise invest in or hold
securities, nonoperating real estate, or other nonoperating Consolidated Assets,
except for investments meeting the parameters set forth in Section 6.2(h) hereof
and Exhibit 6.2 (j) attached hereto;
(k) No Borrower will enter into any sale-leaseback
transaction;
(l) No Borrower will acquire or agree to acquire any stock in,
or all or substantially all of the assets of, any Person;
(m) The Borrowers will not, in the aggregate, pay or commit to
pay during any one fiscal year (commencing with the current fiscal year), lease
obligations (including without limitation Capital Leases and operating leases)
in excess of $500,000.00;
(n) No Borrower will furnish the Lender any certificate or
other document that will contain any untrue statement of material fact or that
will omit to state a material fact necessary to make it not misleading in light
of the circumstances under which it was furnished;
(o) No Borrower will directly or indirectly apply any part of
the proceeds of the Loan to the purchasing or carrying of any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations, or rulings thereunder; and
(p) The Borrowers will not permit on a consolidated basis:
(i) the Consolidated Leverage Ratio to exceed
1.50:1.00 to be measured quarterly (i.e. as of March 31, June 30, September 30,
December 31); after any Offering, the Consolidated Leverage Ratio may not exceed
1.00:1.00;
(ii) the ratio of Consolidated Indebtedness to
Consolidated EBITDA Cumulative to exceed 3.25:1.00, to be measured quarterly on
a rolling four (4) quarters basis (i.e.
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as of March 31, June 30, September 30, December 31); as of December 31, 1997 and
thereafter the ratio may not exceed 3.00:1.00; and
(iii) aggregate Consolidated Capital Expenditures to
exceed $20,000,000.00 during the fiscal year ending December 31, 1996;
$59,000,000.00 during the two (2) consecutive fiscal year period ending December
31, 1997; $77,000,000.00 during the three (3) consecutive fiscal year period
ending December 31, 1998; and for each fiscal year thereafter, commencing with
the fiscal year ending December 31, 1999, the Borrowers may incur, in the
aggregate, Consolidated Capital Expenditures up to but not to exceed
$7,000,000.00.
ARTICLE
7
DEFAULT
7.1 Events of Default.
The occurrence of any one or more of the following events shall
constitute an Event of Default hereunder:
(a) Any Borrower shall fail to pay when due any of its
Obligations to the Lender;
(b) Any Borrower shall fail to observe or perform any of the
obligations set forth in Section 6.1(b), Section 6.1(d), Section 6.1(k), Section
6.1(l) and Section 6.1(o) of this Agreement and such failure shall continue for
ten (10) days after (i) notice of such failure from the Lender; or (ii) the
Lender is notified of such failure or should have been so notified pursuant to
the provisions of Section 6.1(n), whichever is earlier;
(c) Any Borrower shall fail to observe or perform any one of
the obligations set forth in Section 6.1(c), Section 6.1(e) and Section
6.1(h)(ii) of this Agreement and such failure shall continue for thirty (30)
days after (i) notice of such failure from the Lender; or (ii) the Lender is
notified of such failure or should have been so notified pursuant to the
provisions of Section 6.1(n), whichever is earlier, provided, it shall not be an
Event of Default hereunder if any of the Borrowers has commenced taking action
to cure the default within the time period set forth in this Section 7.1(c) and
such cure could not reasonably be completed within such time period and
continues to diligently attempt to cure such default; at no time will the cure
period exceed sixty (60) days;
(d) Any Borrower shall fail to observe or perform any other
obligation to be observed or performed by it hereunder;
(e) Any Borrower shall fail to pay any Consolidated
Indebtedness due any third Persons (except as disclosed in Exhibit 6.1(m)
attached hereto), or any Borrower shall suffer to exist any other event of
default beyond any applicable cure period under any agreement binding any
Borrower, except for a failure to pay or an event of default which is being
contested in good
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faith by appropriate and lawful proceedings, so long as levy and execution
thereon have been stayed and continue to be stayed and such failure to pay or
event of default does not materially detract from the value of the property of
any Borrower or materially impair the use thereof in the operation of any of
their businesses, provided further that such failure to pay or event of default
shall continue for ten (10) days after (i) notice of such failure or event of
default from the Lender; or (ii) the Lender is notified of such failure or event
of default or should have been so notified pursuant to the provisions of Section
6.1(n), whichever is earlier;
(f) Any financial statement, representation, warranty, or
certificate made or furnished by or with respect to any Borrower to the Lender
in connection with this Agreement, or as inducement to the Lender to enter into
this Agreement, or in any separate statement or document to be delivered to the
Lender hereunder, shall be materially false, incorrect, or incomplete when made;
(g) Any Borrower shall admit its inability to pay its debts as
they mature or shall make an assignment for the benefit of itself or any of its
creditors;
(h) Proceedings in bankruptcy, or for reorganization of any
Borrower for the readjustment of any of its debts under the Bankruptcy Code, as
amended, or any part thereof, or under any other Laws, whether state or federal,
for the relief of debtors, now or hereafter existing, shall be commenced against
or by any Borrower and, except with respect to any such proceedings instituted
by any Borrower, shall not be discharged within sixty (60) days of their
commencement;
(i) A receiver or trustee shall be appointed for any Borrower
or for any substantial part of its Consolidated Assets, or any proceedings shall
be instituted for the dissolution or the full or partial liquidation of any
Borrower, and except with respect to any such appointments requested or
instituted by any Borrower, such receiver or trustee shall not be discharged
within sixty (60) days of his appointment, and except with respect to any such
proceedings instituted by any Borrower, such proceedings shall not be discharged
within sixty (60) days of their commencement, or any Borrower shall discontinue
business or materially change the nature of its business;
(j) Any Borrower shall suffer final judgments for payment of
money and shall not discharge the same within a period of sixty (60) days
unless, pending further proceedings, execution has not been commenced or, if
commenced, has been effectively stayed;
(k) A judgment creditor of any Borrower shall obtain
possession of any of the Consolidated Assets by any means, including (without
implied limitation) levy, distraint, replevin, or self-help;
(l) The occurrence of an Event of Default under (and as
defined in) either of the Mortgages;
(m) The occurrence of an Event of Default under (and as
defined in) the Security Agreement;
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(n) The occurrence of an Event of Default under (and as
defined in) the Pledge Agreement;
(o) The occurrence of an Event of Default under (and as
defined in) the Patent Collateral Assignment;
(p) The occurrence of an Event of Default under (and as
defined in) the Trademark Security Agreement;
(q) The occurrence of an Event of Default under (and as
defined in) the Trust Indenture;
(r) The occurrence of an Event of Default under (and as
defined in) any one or more of the Note Purchase Agreements; or
(s) The occurrence of a Change in Control.
7.2 Acceleration.
At its option, and at any time, whether immediately or otherwise, the
Lender may, upon the occurrence of any Event of Default, declare all Obligations
immediately due payable without further action of any kind, including without
notice, demand or presentment. Notwithstanding the foregoing, if at any time
after the Obligations have been declared due and payable and before any judgment
with respect thereto has been entered, every Event of Default has been made good
or cured, then the Lender may, by written instrument delivered to SpecTran,
rescind and annul such declaration and its consequences; but no such rescission
shall extend to or effect any subsequent default or Event of Default or impair
any rights of the Lender.
ARTICLE
8
THE LENDER'S RIGHTS AND REMEDIES
8.1 The Lender's Rights Upon Default
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender, without presentment, demand, notice, protest or advertisement of any
kind, will have all rights under the Uniform Commercial Code and all Laws,
including without limitation all of the rights set forth in the Collateral
Documents and hereafter.
8.2 Notification of Default to Third Parties
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender may notify any of the Borrower's suppliers, account debtors and other
third parties of the default and
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of any and all decisions made and actions taken by the Lender with respect to
this Agreement, the Obligations or the Consolidated Assets, without liability of
any kind. The Lender will provide written notice of such action to SpecTran.
Failure to provide such notice will not impair the Lender's rights.
8.3 Right of Set-Off.
Upon the occurrence of an Event of Default and at any time thereafter,
the Lender may, and is hereby authorized by each Borrower, to the fullest extent
permitted by applicable Laws, without advance notice to any Borrower (any such
notice being expressly waived by the Borrowers), set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and any other indebtedness at any time owing by the Lender to, or for the
credit or the account of, any Borrower against any or all of the Obligations of
the Borrowers, now or hereafter existing, whether or not such Obligations have
matured and irrespective of whether the Lender has exercised any other rights
that it has or may have with respect to such Obligations, including without
limitation any acceleration rights. The Lender agrees promptly to notify the
applicable Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender hereunder are in addition to the other
rights and remedies (including, without limitation, other rights of set-off)
which the Lender may have.
8.4 Cumulative Rights and Remedies
All rights and remedies of the Lender, whether provided for herein or
in other agreements, instruments or documents or conferred by Law, are
cumulative and may be exercised alone or simultaneously.
ARTICLE
9
ATTORNEY-IN-FACT
9.1 Attorney-In-Fact
Each Borrower hereby irrevocably appoints the Lender, or its designee,
as each Borrower's true and lawful attorney-in-fact, with full power, after the
occurrence of an Event of Default, as follows: (i) to endorse the name of any
Borrower on any assignments, notes, checks, drafts, money orders, or other
instruments of payment for Consolidated Assets; (ii) to sign or endorse the name
of any Borrower on any negotiable instrument, invoice, freight or express bill,
bill of lading, storage or warehouse receipts, drafts, assignments,
verifications and notices in connection with accounts, (iii) to obtain, adjust,
settle and cancel, in any Borrower's name, insurance policies as required herein
and to sign any Borrower's name on settlement checks or drafts, (iv) in any
Borrower's name, to do any act which this Agreement requires any Borrower to do
and (v) to give notice to the United States Post Office to effect changes of
address so that mail
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addressed to any Borrower may be delivered directly to the Lender. In exercising
this power-of-attorney, the Lender shall not be liable to the extent that it
acts in good faith.
ARTICLE
10
MISCELLANEOUS
10.1 Connecticut Waiver.
TO THE EXTENT ANY ASSETS AND/OR REAL ESTATE IS LOCATED IN CONNECTICUT,
THE BORROWERS ACKNOWLEDGE THAT THIS AGREEMENT AND EACH TRANSACTION RELATED TO IT
IS A "COMMERCIAL TRANSACTION" WITHIN THE MEETING OF CHAPTER 903A OF THE
CONNECTICUT GENERAL STATUTES, AS AMENDED. THE BORROWERS HEREBY WAIVE ANY RIGHT
WHICH THEY MIGHT HAVE TO NOTICE IN A HEARING OR A PRIOR COURT ORDER, UNDER SAID
CHAPTER 903A OR AS OTHERWISE PROVIDED UNDER ANY APPLICABLE FEDERAL OR STATE LAW,
IN THE EVENT THE LENDER SEEKS ANY PREJUDGMENT REMEDY AT ANY TIME PRIOR TO FINAL
JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT WHETHER
BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT OR REPLEVIN.
10.2 Appraisals/Audit.
The Lender may perform, at the Borrowers' expense, periodic appraisals
of any Borrower's equipment and real estate and the cost of each appraisal will
be borne by the Borrowers. The Lender agrees that appraisals will not be
required more frequently than annually unless required by applicable Laws or
after the occurrence of an Event of Default. The Lender may perform, at the
Borrowers' expense, periodic audits of any Borrower at any time and the cost of
each audit will be borne by the Borrowers.
10.3 Joint and Several.
All Obligations of the Borrowers hereunder are the joint and several
obligations of each of SpecTran, Optics, Photonic and Communications.
10.4 Construction.
The provisions of this Agreement shall be in addition to those of any
guaranty, pledge or security agreement, note, or other evidence of liability now
or hereafter held by the Lender, all of which shall be construed as
complementary to each other. Nothing herein contained shall prevent the Lender
from enforcing any or all other guaranty, pledge or security agreements, notes,
or other evidences of liability in accordance with their respective terms.
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10.5 Further Assurance.
From time to time, each Borrower will execute and deliver to the Lender
such additional documents and will provide such additional information as the
Lender may reasonably require to carry out the terms of this Agreement and be
informed of the status and affairs of each Borrower.
10.6 Enforcement and Waiver by the Lender.
The Lender shall have the right at all times to enforce the provisions
of this Agreement and the Collateral Documents in strict accordance with the
terms hereof and thereof, notwithstanding any conduct or custom on the part of
the Lender in refraining from so doing at any time or times. The failure of the
Lender at any time or times to enforce its rights under such provisions,
strictly in accordance with the same, shall not be construed as having created a
custom in any way or manner contrary to specific provisions of this Agreement or
as having in any way or manner modified or waived the same. All rights and
remedies of the Lender are cumulative and concurrent and the exercise of one
right or remedy shall not be deemed a waiver or release of any other right or
remedy.
10.7 Expenses of the Lender.
The Borrowers will, on demand, reimburse the Lender for all expenses,
including the reasonable fees and expenses of legal counsel for the Lender,
incurred by the Lender in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and the Collateral
Documents and the collection or attempted collection of any of the Obligations.
10.8 Notices.
Any notices, requests or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered if delivered in
person or if sent by certified mail, postage prepaid, return receipt requested,
facsimile or telegraph, as follows, unless such address is changed by written
notice hereunder:
(a) If to the Borrowers:
SpecTran Corporation
Attention: Bruce Cannon, C.F.O.
50 Hall Road
Sturbridge, MA 01566
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(b) If to the Lender:
Fleet National Bank
Attention: John F. Lynch, V.P.
370 Main Street
Worcester, MA 01608
10.9 Waiver and Release by the Borrowers.
To the maximum extent permitted by applicable Laws, each Borrower:
(a) Waives (i) protest of all commercial paper at any time
held by the Lender on which any Borrower is in any way liable, (ii) except as
the same may herein be specifically granted, notice of acceleration and of
intention to accelerate and (iii) notice and opportunity to be heard before
exercise by the Lender of the remedies of self-help, set-off, or of other
summary procedures permitted by any applicable Laws or by any agreement with any
Borrower, and, except where required hereby or by any applicable Laws, notice of
any other action taken by the Lender (the Lender agrees to provide notice to
SpecTran of acceleration of the Obligations and such notice will reference a
Section or Sections of this Agreement under which a default has occurred,
failure to send such notice will not impair the Lender's rights hereunder); and
(b) Releases the Lender and its officers, attorneys, agents,
and employees from all claims for loss or damage caused by any act or omission
on the part of any of them except willful misconduct.
10.10 Participation.
Notwithstanding any other provision of this Agreement, each Borrower
understands that the Lender may at any time enter into participation agreements
with one or more participating banks whereby the Lender will allocate certain
percentages of its commitment to them. Each Borrower acknowledges that, for the
convenience of all parties, this Agreement is being entered into with the Lender
only and that its obligations under this Agreement are undertaken for the
benefit of, and as an inducement to, any such participating bank as well as the
Lender, and each Borrower hereby grants to each such participating bank, to the
extent of its participation in the Loan, the right to set off deposit accounts
maintained by any Borrower with such bank subject to the terms of this
Agreement. The Lender agrees to provide SpecTran with five (5) days prior
written notice of any such participation. The Lender will also provide five (5)
days prior written notice of any pledge or assignment of any of the Revolving
Note, except in connection with an acquisition of the Lender.
10.11 Applicable Law.
This Agreement is entered into and performable in the Commonwealth of
Massachusetts and shall be subject to and construed and enforced in accordance
with the laws of the Commonwealth of Massachusetts.
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10.12 Consent to Jurisdiction.
EACH OF THE BORROWERS HEREBY CONSENTS TO THE JURISDICTION OF THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF MASSACHUSETTS, AS WELL AS TO THE JURISDICTION OF ALL COURTS FROM
WHICH AN APPEAL MAY BE TAKEN FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF THE BORROWERS'
OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT, AND EXPRESSLY WAIVES ANY
AND ALL OBJECTIONS ANY OF THE BORROWERS MAY HAVE AS TO VENUE IN ANY OF SUCH
COURTS.
10.13 Binding Effect, Assignment, and Entire Agreement.
This Agreement shall inure to the benefit of, and shall be binding
upon, the respective successors and permitted assigns of the parties hereto. No
Borrower has the right to assign any of its rights or obligations hereunder
without the prior written consent of the Lender. This Agreement, including the
Exhibits hereto, all of which are hereby incorporated herein by reference, and
the documents executed and delivered pursuant hereto, constitute the entire
agreement between the parties and may be amended only by a writing signed on
behalf of each party.
10.14 Severability.
If any provision of this Agreement shall be held invalid under any
applicable Laws, such invalidity shall not affect any other provision of this
Agreement that can be given effect without the invalid provision, and, to this
end, the provisions hereof are severable.
10.15 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
10.16 Waiver of Jury Trial
THE LENDER AND THE BORROWERS AGREE THAT THEY (INCLUDING ANY ASSIGNEE OR
SUCCESSOR) SHALL NOT SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM,
OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT,
ANY RELATED INSTRUMENTS, ANY ASSETS OR THE DEALINGS OR THE RELATIONSHIP AMONG
ANY OF THEM. THEY SHALL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
29
<PAGE> 31
LENDER AND THE BORROWERS AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
THEY HAVE NOT AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF
THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as a
sealed instrument as of the day and year first above written.
BORROWERS:
SPECTRAN CORPORATION
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS
COMPANY
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
APPLIED PHOTONIC DEVICES, INC.
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ John F. Lynch By: /s/ [illegible]
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
30
<PAGE> 32
LENDER:
FLEET NATIONAL BANK
/s/ [illegible] By: /s/ John F. Lynch, VP
- ------------------------------ -----------------------------
Witness Its Duly Authorized Officer
31
<PAGE> 33
REVOLVING NOTE
$20,000,000.00 As of December 1, 1996
Worcester, Massachusetts
FOR VALUE RECEIVED, SPECTRAN CORPORATION, a Delaware corporation with a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation with a
principal place of business at 150 Fisher Drive, Avon, Connecticut ("Optics"),
APPLIED PHOTONIC DEVICES, INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut ("Photonic") and SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation with a principal
place of business at 50 Hall Road, Sturbridge, Massachusetts ("Communication")
(SpecTran, Optics, Photonic and Communication are sometimes collectively
referred to herein as the "Borrowers"), jointly and severally promise to pay to
FLEET NATIONAL BANK, a national banking association having an office located at
370 Main Street, Worcester, Massachusetts 01608 (the "Lender"), or order, at the
Lender's offices, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
on the unpaid balance hereof at the rates and in the manner hereafter provided.
The unpaid principal of this Note from time to time outstanding shall
bear interest, payable quarterly in arrears, computed on the basis of the actual
number of days elapsed over a year assumed to have 360 days, at a rate per annum
to be selected by the Borrowers from time to time. Subject to the terms hereof,
the Borrowers shall have the right to select, from time to time, any of the
rates set forth below to be used in computing the rate of interest to be paid on
the unpaid principal balance hereof. Such rate shall be selected in advance by
the Borrowers by written notice to the Lender, or the holder hereof, specifying
the rate selected, the effective date of such selection, and the portion, in
$500,000.00 increments (except for amounts subject to interest at the rate
stated in clause (i) below which may be in any amount), of the unpaid principal
balance to which such rate selection shall apply (the "Rate Selection"). The
Rate Selection must be received by the Lender, or the holder hereof, not less
than three (3) banking days prior to the effective date of the Rate Selection.
If the Borrowers select a rate based on a one (1), three (3), or six (6) month
index (clauses (ii), (iii) and (iv) below), the Rate Selection shall not be
changed until the period of time specified in the rate index, i.e., one (1)
month, three (3) months and six (6) months (the "Index Period"), has elapsed
from the effective date of the Rate Selection. If a new Rate Selection has not
been made in accordance with the terms hereof, then the Rate Selection will be
as stated in clause (i) below. The Borrowers may, subject to the terms and
conditions hereof, designate more than one Rate Selection for incremental
portions of the unpaid principal balance.
Pursuant to the foregoing paragraph, the Borrowers shall select from
the following rates of interest:
<PAGE> 34
(i) a rate equal to the Lender's Prime Rate of interest established
from time to time by the Lender (the "Prime Rate"), such interest rate to be
adjusted from time to time on the effective date of any change in the Prime Rate
announced by the Lender. The Prime Rate shall be that rate of interest announced
by the Lender as its Prime Rate;
(ii) a rate equal to the LIBOR (defined below) 1-month index rate plus
one hundred fifty (150) basis points;
(iii) a rate equal to the LIBOR 3-months index rate plus one hundred
fifty (150) basis points; or
(iv) a rate equal to the LIBOR 6-months index rate plus one hundred
fifty (150) basis points.
The term "LIBOR" shall mean, the rate as determined on the basis of the
offered rates for deposits in U.S. dollars for an Index Period which appears on
the Telerate page 3750 or Reuter's LIBO page as of 11:00 a.m. London time on the
day that is two London banking days preceding the effective date of the Rate
Selection. If such rate does not appear on the Telerate page 3750, the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for an Index Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is three banking days preceding the effective date of the Rate Selection. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for the applicable Index Period
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is three banking days preceding the effective date of
the Rate Selection. In the event that the Lender is unable to obtain any such
quotation as provided above, the Rate Selection will be as stated in clause (i)
above.
If the Borrowers fail to select an interest rate for all or any portion
of the unpaid principal balance, or if the LIBOR interest rates become
unavailable, then the rate of interest will be as stated in clause (i) above.
If at any time (i) the Lender reasonably determines that maintenance of
that portion of the outstanding principal balance hereof which bears interest
based on a LIBOR rate would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender shall suspend the
availability of the LIBOR interest rates and require all outstanding principal
amounts bearing interest at a LIBOR interest rate to be repaid immediately, or
(ii) if the Lender reasonably determines that (a) deposits of a type and
maturity appropriate to match fund a LIBOR interest rate are not available, the
Lender shall suspend the availability of LIBOR interest rates, or (b) the LIBOR
interest rates do not accurately reflect the cost of making available or
maintaining such LIBOR interest rates, then the Lender shall suspend the
availability of LIBOR interest rates.
2
<PAGE> 35
If any payment of principal bearing interest at a LIBOR interest rate
is made on a date which is not the last day of the Index Period, whether because
of acceleration, prepayment or otherwise, the Borrowers will indemnify the
Lender for all losses or costs (including lost profits) incurred by it resulting
therefrom; provided, however, the provisions of this paragraph will not apply to
a prepayment resulting from the Lender's suspension of LIBOR interest rates as
set forth in the immediately preceding paragraph.
Interest shall be payable quarterly in arrears, the first such payment
of interest to be due and payable beginning on the first banking day of January
1997 and thereafter on the first banking day of each succeeding quarter, i.e.
the first banking day of each April, July, October and January. If not sooner
paid, all indebtedness evidenced by this Note is due and payable on December 31,
1999.
Each payment made hereunder shall be applied first to interest then due
on the unpaid balance of principal and then to principal. Whenever any payment
of principal or interest due under this Note shall not be paid within ten (10)
days of its due date, the Borrowers shall pay in addition thereto as a late
charge five percent (5%) of the amount of such payment.
This Note is issued pursuant to a certain Loan Agreement among the
Borrowers and the Lender of even date herewith (the "Agreement"), and is subject
to all of the terms and conditions contained in the Agreement. Subject to the
terms and conditions of the Agreement, through and including the earlier of
December 31, 1999 or the occurrence of an Event of Default under the Agreement,
the Borrowers may borrow, repay (subject to prepayment fees for amounts subject
to LIBOR interest rates paid before the end of the applicable Index Period) and
reborrow amounts under this Note from time to time as provided in the Agreement.
In no event will outstanding indebtedness hereunder exceed the Borrowing Base as
defined in the Agreement.
An Event of Default under the Agreement shall also constitute an Event
of Default hereunder. At its option, and at any time, whether immediately or
otherwise, the Lender may, upon the occurrence of an Event of Default, declare
all obligations of the Borrowers to the Lender (including all amounts hereunder)
immediately due and payable without further action of any kind, including
without notice, demand or presentment. Notwithstanding anything to the contrary
contained herein, ON AND AFTER THE EARLIER OF DECEMBER 31, 1999 OR ACCELERATION
OF ALL OUTSTANDING OBLIGATIONS HEREUNDER, THE INTEREST RATE AS TO ALL SUCH
OUTSTANDING OBLIGATIONS WILL BE THE PRIME RATE PLUS FOUR PERCENT (4.00%) PER
ANNUM.
Any deposits or other sums at any time credited by or due from the
holder to any of the Borrowers, any endorser or guarantor hereof, may at all
times be held and treated as collateral for the payment of this Note and any and
all other liabilities (direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, now existing or
hereafter arising) of any such maker to the holder. The holder may apply or
set-off such deposits or other sums against such liabilities at any time in the
case of any of the Borrowers but only with respect to matured liabilities in the
case of endorsers and guarantors.
3
<PAGE> 36
Each of the Borrowers and each guarantor, endorser or other person now
or hereafter liable for the payment of any of the indebtedness evidenced by this
Note, severally agrees, by making, guaranteeing or endorsing this Note or by
making any agreement to pay any of the indebtedness evidenced by this Note, to
waive presentment for payment, protest and demand, notice of protest, demand and
of dishonor and nonpayment of this Note, and consents, on one or more occasions,
without notice of further assent (a) to the substitution, exchange or release of
the collateral securing this Note or any part thereof at any time, (b) to the
acceptance or release by the holder or holders hereof at any time of any
additional collateral or security for or other guarantors of this Note, (c) to
the modification or amendment, at any time and from time to time, of this Note,
the Agreement or any instrument securing this Note at the request of any person
liable hereon, (d) to the granting by the holder hereof of any extension of time
with respect to the payment of this Note or for the performance of the
agreements, covenants and conditions contained in this Note, the Agreement or
any other instrument securing this Note, at the request of any person liable
hereon, and (e) to any and all forbearances and indulgences whatsoever. Such
consent shall not alter nor diminish the liability of any person.
The Borrowers agree to pay all reasonable expenses or costs, including
attorneys' fees and costs of collection, which may be incurred by the holder
hereof in connection with the enforcement of any obligations hereunder or
representation with respect to bankruptcy or insolvency proceedings.
The Borrowers' obligations hereunder are secured by all assets of each
of the Borrowers as provided in the Agreement and the Collateral Documents (as
defined in the Agreement).
This Note constitutes the joint and several obligation of each of
SpecTran, Optics, Photonic and Communication.
Executed as a sealed instrument as of the 1st day of December, 1996.
SPECTRAN CORPORATION
___________________________ By:______________________________
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
___________________________ By:______________________________
Witness Its Duly Authorized Officer
4
<PAGE> 37
APPLIED PHOTONIC DEVICES, INC.
___________________________ By:______________________________
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
___________________________ By:______________________________
Witness Its Duly Authorized Officer
5
<PAGE> 38
Exhibit 2.2
DEPOSIT ACCOUNT
Account No. 00792489
33
<PAGE> 39
Counsel for Bank: Counsel for Borrower:
Paul J. D'Onfro, Esquire Brian Hand, Esquire
Mirick, O'Connell, DeMallie Hackmyer & Nordlicht
& Lougee 645 Fifth Avenue
1700 Bank of Boston Tower New York, NY 10022
Worcester, MA 01608-1477 (212) 421-6500
(508) 799-0541 ("H&N")
("MODL")
FLEET NATIONAL BANK
(the "Bank")
$20,000,000.00 LOAN
TO
SPECTRAN CORPORATION
("SpecTran")
and
SPECTRAN SPECIALTY OPTICS COMPANY
("Optics")
and
APPLIED PHOTONIC DEVICES, INC.
("Photonic")
and
SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
("COMMUNICATION")
(SpecTran, Optics, Photonic and Communication
are collectively referred to as the "Borrowers")
CLOSING DOCUMENT AGENDA
Responsible
Party
MODL 1. Loan Agreement among the Borrowers and the Bank
MODL 2. Borrowers' $20,000,000.00 Revolving Note
H&N 3. Federal and State Tax Lien Searches for SpecTran
H&N 4. Composite Certificate of Secretary of SpecTran with attached:
<PAGE> 40
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 5. Certificate of Legal Existence and Good Standing for SpecTran
issued by the Delaware Secretary of State
H&N 6. Certificate of Qualification To Do Business in Massachusetts
for SpecTran issued by the Massachusetts Secretary of State
H&N 7. Certificate of Good Tax Standing for SpecTran issued by the
Massachusetts Department of Revenue
H&N 8. Federal and State Tax Lien Searches for Optics
H&N 9. Composite Certificate of Secretary of Optics with attached:
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 10. Certificate of Legal Existence and Good Standing for Optics
issued by the Delaware Secretary of State
H&N 11. Certificate of Qualification To Transact Business in
Connecticut for Optics issued by the Connecticut Secretary of
State
H&N 12. Accountant's letter regarding filing of tax returns and payment
of taxes
H&N 13. Federal and State Tax Lien Searches for Photonic
H&N 14. Composite Certificate of Secretary of Photonic with attached:
a) Certificate of Incorporation with all amendments
(certified to by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 15. Certificate of Legal Existence and Good Standing for Photonic
issued by the Delaware Secretary of State
H&N 16. Certificate of qualification To Transact Business in
Connecticut for Photonic issued by the Connecticut Secretary
of State
H&N 17. Accountant's letter regarding filing of tax returns and payment
of taxes
<PAGE> 41
H&N 18. Federal and State Tax Lien Searches for Communication
H&N 19. Composite Certificate of Secretary of Communication with attached:
a) Certificate of Incorporation with all amendments (certified to
by the Delaware Secretary of State)
b) By-Laws
c) Votes
H&N 20. Certificate of Legal Existence and Good Standing for
Communication issued by the Delaware Secretary of State
H&N 21. Certificate of Qualification To Do Business in Massachusetts for
Communication issued by the Massachusetts Secretary of State
H&N 22. Certificate of Good Tax Standing for Communication issued by the
Massachusetts Department of Revenue
H&N 23. Opinion of Counsel to Borrowers regarding due execution,
authority, and enforceability
MODL 24. Disbursement Authorization
H&N 25. Discharge of Mortgage
<PAGE> 42
Exhibit 3.1(q)
CLOSING AGENDA
SPEC TRAN CORPORATION
$16,000,000 9.24% SERIES A SENIOR SECURED NOTES DUE DECEMBER 1, 2003
$8,000,000 9.39% SERIES B SENIOR SECURED NOTES DUE DECEMBER 1, 2004
================================================================================
Closing Date: [December , 1996]
- --------------------------------------------------------------------------------
Closing Location: [ ]
- --------------------------------------------------------------------------------
Purchasers' Counsel: Hebb & Gitlin ("H&G")
- --------------------------------------------------------------------------------
Company's Counsel: Hackmyer & Nordlicht ("H&N")
- --------------------------------------------------------------------------------
Security Trustee: [Fleet National Bank]
- --------------------------------------------------------------------------------
Security Trustee's [Mirick O'Connell]
Counsel:
================================================================================
================================================================================
Description Procurement/
Drafting
Responsibility
================================================================================
1. NOTE PURCHASE AGREEMENT H&G
- --------------------------------------------------------------------------------
2. TRUST INDENTURE H&G
Exhibit C to the Note Purchase Agreement, as required
by Section 4.10(a) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
3. SECURITY AGREEMENT H&G
Exhibit D to the Note Purchase Agreement, as required
by Section 4.10(b) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
4. PATENT COLLATERAL ASSIGNMENT H&G
Exhibit E to the Note Purchase Agreement, as required
by Section 4.10(c) of the Note Purchase Agreement,
duly recorded with the United States Patent and Trademark
Office.
- --------------------------------------------------------------------------------
5. TRADEMARK SECURITY AGREEMENT H&G
Exhibit F to the Note Purchase Agreement, as required
by Section 4.10(d) of the Note Purchase Agreement,
duly recorded with the United States Patent and Trademark
Office; together with a Trademark Assignment, separately
executed by each of the Company and its Subsidiaries,
substantially in the form of Exhibit 1 to the Trademark
Security Agreement, as required by Section 4.10(d) to the
Note Purchase Agreement.
- --------------------------------------------------------------------------------
6. PLEDGE AGREEMENT H&G
Exhibit G to the Note Purchase Agreement, as required
by Section 4.10(f) of the Note Purchase Agreement.
- --------------------------------------------------------------------------------
7. STOCK CERTIFICATES Company
Stock certificates and undated stock powers executed in
blank to be delivered to the Security Trustee as
required by Section 4.10(f) of the Note Purchase
Agreement.
- --------------------------------------------------------------------------------
8. OFFICER'S CERTIFICATE draft H&G;
Officer's Certificate of the Company, as required by final,
Section 4.3(a) of the Note Purchase Agreement. Company
- --------------------------------------------------------------------------------
<PAGE> 43
<TABLE>
<CAPTION>
==============================================================================================================
Description Procurement/
Drafting
Responsibility
==============================================================================================================
<S> <C> <C>
9. SECRETARY'S CERTIFICATE - COMPANY draft, H&G;
As required by Section 4.3(b) of the Note Purchase Agreement setting forth the final,
following attachments: a. Resolutions, Company
b. By-laws of the Company,
c. Specimen signatures of officers of the Company,
d. Long Form Good Standing Certificate.
- -------------------------------------------------------------------------------------------------------------
10. SECRETARY'S CERTIFICATE - SUBSIDIARIES draft H&G;
As required by Section 4.3(c) of the Note Purchase Agreement setting forth the final,
following attachments: a. Resolutions, Company
b. By-laws of the Subsidiary,
c. Specimen signatures of officers of the Subsidiary,
d. Long Form Good Standing Certificate.
- -------------------------------------------------------------------------------------------------------------
11. FOREIGN QUALIFICATION AND GOOD STANDING CERTIFICATES Company
For the Company and each Subsidiary, foreign corporate good standing certificates,
from each jurisdiction where each of the Company or such Subsidiary conducts
significant business activities as a foreign corporation.
- -------------------------------------------------------------------------------------------------------------
12. UCC SEARCHES Company
UCC and fixture filing searches in the jurisdictions listed on Exhibit A attached hereto.
- -------------------------------------------------------------------------------------------------------------
13. UCC FINANCING STATEMENTS H&G
Uniform Commercial Code Financing Statements by each of the Company and its
Subsidiaries in favor of the Security Trustee, duly recorded in the appropriate filing
jurisdictions, as required by Section 4.10(g) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
14. UCC FIXTURE FINANCING STATEMENTS H&G
Uniform Commercial Code Financing Statements by each of the Company and its
Subsidiaries in favor of the Security Trustee, duly recorded in the appropriate real
property filing jurisdictions, as required by Section 4.10(g) of the Note Purchase
Agreement.
- -------------------------------------------------------------------------------------------------------------
15. TERMINATION AND ASSIGNMENT OF EXISTING LIENS Company
The filing of all appropriate Uniform Commercial Code assignment statements, the
recording of all appropriate mortgage releases, and patent and trademark releases, as
required by Section 4.10(h) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
16. MORTGAGE H&G
Exhibit H to the Note Purchase Agreement, as required by Section 4.10(i) of the Note
Purchase Agreement, duly filed in the appropriate recording offices.
- -------------------------------------------------------------------------------------------------------------
17. LEASEHOLDS Company
A copy of each lease in respect of any leasehold interest of the Company or any
Subsidiary in any real property, certified as true and correct, as required by Section
4.10(i) of the Note Purchase Agreement.
- -------------------------------------------------------------------------------------------------------------
18. SUBSIDIARY GUARANTY H&G
Exhibit I to the Note Purchase Agreement, as required by Section 4.11 of the Note
Purchase Agreement for each Subsidiary.
- -------------------------------------------------------------------------------------------------------------
19. OFFEREE LETTER H&G
Offeree Letter of Fleet Corporate Finance regarding the manner of the offering of the
Notes.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 44
================================================================================
Description Procurement/
Drafting Responsibility
================================================================================
20. PRIVATE PLACEMENT NUMBERS H&G
Documentation of private placement numbers for
the Series A Notes and the Series B Notes, in
each case, from CUSIP Service Bureau of Standard
& Poor's, a division of McGraw-Hill, Inc., as
required by Section 4.8 of the Note Purchase
Agreement.
- --------------------------------------------------------------------------------
21. NOTES H&G
Series A Notes and Series B Notes as set forth on
Schedule A to the Note Purchase Agreement, in the
form of Exhibit A1 and Exhibit A2, respectively,
to the Note Purchase Agreement.
- --------------------------------------------------------------------------------
22. CROSS-RECEIPT H&G
Cross-Receipt for the Notes and the wire transfers
in payment thereof.
- --------------------------------------------------------------------------------
23. OPINION OF COMPANY'S COUNSEL draft, H&G;
Opinion of Hackmyer & Nordlicht, Exhibit B1 to final, H&N
the Note Purchase Agreement, as required by
Section 4.4(a) of the Note Purchase Agreement
- --------------------------------------------------------------------------------
24. OPINION OF SECURITY TRUSTEE'S COUNSEL draft, H&G;
Opinion of Mirick O'Connell, Exhibit B2 to the final, [ ]
Note Purchase Agreement, as required by
Section 4.4(b) of the Note Purchase Agreement
- --------------------------------------------------------------------------------
25. OPINION OF HEBB & GITLIN H&G
Opinion of Hebb & Gitlin, Exhibit B3 to the Note
Purchase Agreement, as required by Section 4.4(c)
of the Note Purchase Agreement
- --------------------------------------------------------------------------------
26. EXPENSES Company
Evidence of the payment of all fees and
disbursements required to be paid pursuant to
Section 4.7 of the Note Purchase Agreement.
================================================================================
3
<PAGE> 45
Exhibit 5.1(a)
<TABLE>
<CAPTION>
Name and Addresses Jurisdiction Foreign
of Borrower: of Incorporation: Qualifications: Shareholders:
- ------------ ----------------- --------------- -------------
<S> <C> <C> <C>
SpecTran Corporation Delaware Massachusetts N/A
50 Hall Road
Sturbridge, MA 01566
69-70 Hall Road
Sturbridge, MA 01566
SpecTran Communication Delaware Massachusetts SpecTran
Fiber Technologies, Inc. Corporation
50 Hall Road 10 shares
Sturbridge, MA 01566 Comm. Stock
69-70 Hall Road
Sturbridge, MA 01566
SpecTran Specialty Optics Delaware Connecticut SpecTran
Company Corporation
150 Fisher Drive 10 shares
Avon, CT 06001* Comm. Stock
18 Parkside Lane
Avon, CT 06001
*SpecTran Specialty Optics Company will be moving its principal offices to 55
Darling Drive, Avon, CT 06001.
Applied Photonic Devices, Inc. Delaware Connecticut SpecTran
300 Lake Road Corporation
Dayville, CT 06241 Comm. Stock
50 Tiffany Street
Brooklyn, CT 06259
</TABLE>
35
<PAGE> 46
Exhibit 5.1(f)
LITIGATION
None
36
<PAGE> 47
Exhibit 5.1(i)
CONSOLIDATED INDEBTEDNESS
$24,000,000.00 principal amount of Senior Secured Notes due 2006, as provided
for in the Note Purchase Agreement as defined in the Agreement.
37
<PAGE> 48
Exhibit 6.1(b)(v)
<TABLE>
<CAPTION>
Section Covenant Limit Actual
- ------- -------- ----- ------
<S> <C> <C>
6.01
f(i) Consolidated Interest Coverage Ratio 3.00:1.00
f(ii) Consolidated Tangible Net Worth $18,500,000(*)
</TABLE>
<TABLE>
<CAPTION>
Section
- -------
<S> <C> <C>
6.02
p(i) Consolidated Leverage Ratio 1.50:1.00
p(ii) Consolidated Indebtedness to
Consolidated EBITDA Cumulative 3.25:1.00
p(iii) Consolidated Capital Expenditures 20,000,000.00(**)
</TABLE>
*to step-up as set forth in the Agreement
**changes annually as set forth in the Agreement
I, the undersigned officer of SpecTran hereby certify that I have read the Loan
Agreement among the Borrowers and the Lender dated as of December 1, 1996, and
to the best of my knowledge and belief, as of ______________________, the
Borrowers are in compliance with all the covenants, terms and provisions
contained in the Loan Agreement and no Event of Default exists thereunder.
SPECTRAN CORPORATION
By:_______________________________
Its Chief Financial Officer
38
<PAGE> 49
Exhibit 6.1(m)
APD has a dispute with the landlord of its facility at 300 Lake Road, Dayville,
Connecticut, arising from (i) the landlord's failure to pay utility costs
resulting in the gas company turning off the heat to the facility and (ii) the
failure of the landlord to make necessary repairs to the roof of the facility,
resulting in leaks. The landlord's actions have caused damage to the facility
and the loss of work days due to the lack of heat in the facility. APD has
notified the landlord that it is withholding November rent and all future rent
payments pending the landlord's reimbursement of APD for these damages.
39
<PAGE> 50
Exhibit 6.2(j)
The investment objective will be to maximize total return within the
confines of a short to average overall maturity framework. The fund will utilize
US Governments, domestic corporates, asset-backed paper (AAA rated), Govt Agency
mortgage-backed paper including short term CMO's and Govt Agency backed
short-term floating rate paper. Positions required for liquidity needs will be
held in high grade short-term or money market balances. The horizon on these
corporate funds will be approximately 1/3 for immediate liquidity needs (if
necessary), approximately 1/3 to be used for intermediate term purposes, and the
remaining approximately third for long term expansion purposes. SpecTran will
have full authority and discretion on all investment changes.
40
<PAGE> 51
REVOLVING NOTE
$20,000,000.00 As of December 1, 1996
Worcester, Massachusetts
FOR VALUE RECEIVED, SPECTRAN CORPORATION, a Delaware corporation with a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("SpecTran"), SPECTRAN SPECIALTY OPTICS COMPANY, a Delaware corporation with a
principal place of business at 150 Fisher Drive, Avon, Connecticut ("Optics"),
APPLIED PHOTONIC DEVICES, INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut ("Photonic") and SPECTRAN
COMMUNICATION FIBER TECHNOLOGIES, INC., a Delaware corporation with a principal
place of business at 50 Hall Road, Sturbridge, Massachusetts ("Communication")
(SpecTran, Optics, Photonic and Communication are sometimes collectively
referred to herein as the "Borrowers"), jointly and severally promise to pay to
FLEET NATIONAL BANK, a national banking association having an office located at
370 Main Street, Worcester, Massachusetts 01608 (the "Lender"), or order, at the
Lender's offices, the principal sum of TWENTY MILLION and 00/100 DOLLARS
($20,000,000.00), in lawful money of the United States of America, with interest
on the unpaid balance hereof at the rates and in the manner hereafter provided.
The unpaid principal of this Note from time to time outstanding shall
bear interest, payable quarterly in arrears, computed on the basis of the actual
number of days elapsed over a year assumed to have 360 days, at a rate per annum
to be selected by the Borrowers from time to time. Subject to the terms hereof,
the Borrowers shall have the right to select, from time to time, any of the
rates set forth below to be used in computing the rate of interest to be paid on
the unpaid principal balance hereof. Such rate shall be selected in advance by
the Borrowers by written notice to the Lender, or the holder hereof, specifying
the rate selected, the effective date of such selection, and the portion, in
$500,000.00 increments (except for amounts subject to interest at the rate
stated in clause (i) below which may be in any amount), of the unpaid principal
balance to which such rate selection shall apply (the "Rate Selection"). The
Rate Selection must be received by the Lender, or the holder hereof, not less
than three (3) banking days prior to the effective date of the Rate Selection.
If the Borrowers select a rate based on a one (1), three (3), or six (6) month
index (clauses (ii), (iii) and (iv) below), the Rate Selection shall not be
changed until the period of time specified in the rate index, i.e., one (1)
month, three (3) months and six (6) months (the "Index Period"), has elapsed
from the effective date of the Rate Selection. If a new Rate Selection has not
been made in accordance with the terms hereof, then the Rate Selection will be
as stated in clause (i) below. The Borrowers may, subject to the terms and
conditions hereof, designate more than one Rate Selection for incremental
portions of the unpaid principal balance.
Pursuant to the foregoing paragraph, the Borrowers shall select from
the following rates of interest:
<PAGE> 52
(i) a rate equal to the Lender's Prime Rate of interest established
from time to time by the Lender (the "Prime Rate"), such interest rate to be
adjusted from time to time on the effective date of any change in the Prime Rate
announced by the Lender. The Prime Rate shall be that rate of interest announced
by the Lender as its Prime Rate;
(ii) a rate equal to the LIBOR (defined below) 1-month index rate plus
one hundred fifty (150) basis points;
(iii) a rate equal to the LIBOR 3-months index rate plus one hundred
fifty (150) basis points; or
(iv) a rate equal to the LIBOR 6-months index rate plus one hundred
fifty (150) basis points.
The term "LIBOR" shall mean, the rate as determined on the basis of the
offered rates for deposits in U.S. dollars for an Index Period which appears on
the Telerate page 3750 or Reuter's LIBO page as of 11:00 a.m. London time on the
day that is two London banking days preceding the effective date of the Rate
Selection. If such rate does not appear on the Telerate page 3750, the rate for
that date will be determined on the basis of the offered rates for deposits in
U.S. dollars for an Index Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is three banking days preceding the effective date of the Rate Selection. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for the applicable Index Period
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that is three banking days preceding the effective date of
the Rate Selection. In the event that the Lender is unable to obtain any such
quotation as provided above, the Rate Selection will be as stated in clause (i)
above.
If the Borrowers fail to select an interest rate for all or any portion
of the unpaid principal balance, or if the LIBOR interest rates become
unavailable, then the rate of interest will be as stated in clause (i) above.
If at any time (i) the Lender reasonably determines that maintenance of
that portion of the outstanding principal balance hereof which bears interest
based on a LIBOR rate would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender shall suspend the
availability of the LIBOR interest rates and require all outstanding principal
amounts bearing interest at a LIBOR interest rate to be repaid immediately, or
(ii) if the Lender reasonably determines that (a) deposits of a type and
maturity appropriate to match fund a LIBOR interest rate are not available, the
Lender shall suspend the availability of LIBOR interest rates, or (b) the LIBOR
interest rates do not accurately reflect the cost of making available or
maintaining such LIBOR interest rates, then the Lender shall suspend the
availability of LIBOR interest rates.
2
<PAGE> 53
If any payment of principal bearing interest at a LIBOR interest rate
is made on a date which is not the last day of the Index Period, whether because
of acceleration, prepayment or otherwise, the Borrowers will indemnify the
Lender for all losses or costs (including lost profits) incurred by it resulting
therefrom; provided, however, the provisions of this paragraph will not apply to
a prepayment resulting from the Lender's suspension of LIBOR interest rates as
set forth in the immediately preceding paragraph.
Interest shall be payable quarterly in arrears, the first such payment
of interest to be due and payable beginning on the first banking day of January
1997 and thereafter on the first banking day of each succeeding quarter, i.e.
the first banking day of each April, July, October and January. If not sooner
paid, all indebtedness evidenced by this Note is due and payable on December 31,
1999.
Each payment made hereunder shall be applied first to interest then due
on the unpaid balance of principal and then to principal. Whenever any payment
of principal or interest due under this Note shall not be paid within ten (10)
days of its due date, the Borrowers shall pay in addition thereto as a late
charge five percent (5%) of the amount of such payment.
This Note is issued pursuant to a certain Loan Agreement among the
Borrowers and the Lender of even date herewith (the "Agreement"), and is subject
to all of the terms and conditions contained in the Agreement. Subject to the
terms and conditions of the Agreement, through and including the earlier of
December 31, 1999 or the occurrence of an Event of Default under the Agreement,
the Borrowers may borrow, repay (subject to prepayment fees for amounts subject
to LIBOR interest rates paid before the end of the applicable Index Period) and
reborrow amounts under this Note from time to time as provided in the Agreement.
In no event will outstanding indebtedness hereunder exceed the Borrowing Base as
defined in the Agreement.
An Event of Default under the Agreement shall also constitute an Event
of Default hereunder. At its option, and at any time, whether immediately or
otherwise, the Lender may, upon the occurrence of an Event of Default, declare
all obligations of the Borrowers to the Lender (including all amounts hereunder)
immediately due and payable without further action of any kind, including
without notice, demand or presentment. Notwithstanding anything to the contrary
contained herein, ON AND AFTER THE EARLIER OF DECEMBER 31, 1999 OR ACCELERATION
OF ALL OUTSTANDING OBLIGATIONS HEREUNDER, THE INTEREST RATE AS TO ALL SUCH
OUTSTANDING OBLIGATIONS WILL BE THE PRIME RATE PLUS FOUR PERCENT (4.00%) PER
ANNUM.
Any deposits or other sums at any time credited by or due from the
holder to any of the Borrowers, any endorser or guarantor hereof, may at all
times be held and treated as collateral for the payment of this Note and any and
all other liabilities (direct or indirect, absolute or contingent, sole, joint
or several, secured or unsecured, due or to become due, now existing or
hereafter arising) of any such maker to the holder. The holder may apply or
set-off such deposits or other sums against such liabilities at any time in the
case of any of the Borrowers but only with respect to matured liabilities in the
case of endorsers and guarantors.
3
<PAGE> 54
Each of the Borrowers and each guarantor, endorser or other person now
or hereafter liable for the payment of any of the indebtedness evidenced by this
Note, severally agrees, by making, guaranteeing or endorsing this Note or by
making any agreement to pay any of the indebtedness evidenced by this Note, to
waive presentment for payment, protest and demand, notice of protest, demand and
of dishonor and nonpayment of this Note, and consents, on one or more occasions,
without notice of further assent (a) to the substitution, exchange or release of
the collateral securing this Note or any part thereof at any time, (b) to the
acceptance or release by the holder or holders hereof at any time of any
additional collateral or security for or other guarantors of this Note, (c) to
the modification or amendment, at any time and from time to time, of this Note,
the Agreement or any instrument securing this Note at the request of any person
liable hereon, (d) to the granting by the holder hereof of any extension of time
with respect to the payment of this Note or for the performance of the
agreements, covenants and conditions contained in this Note, the Agreement or
any other instrument securing this Note, at the request of any person liable
hereon, and (e) to any and all forbearances and indulgences whatsoever. Such
consent shall not alter nor diminish the liability of any person.
The Borrowers agree to pay all reasonable expenses or costs, including
attorneys' fees and costs of collection, which may be incurred by the holder
hereof in connection with the enforcement of any obligations hereunder or
representation with respect to bankruptcy or insolvency proceedings.
The Borrowers' obligations hereunder are secured by all assets of each
of the Borrowers as provided in the Agreement and the Collateral Documents (as
defined in the Agreement).
This Note constitutes the joint and several obligation of each of
SpecTran, Optics, Photonic and Communication.
Executed as a sealed instrument as of the 1st day of December, 1996.
SPECTRAN CORPORATION
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
4
<PAGE> 55
APPLIED PHOTONIC DEVICES, INC.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
- ---------------------------- ------------------------------
Witness Its Duly Authorized Officer
5
