<PAGE> 1
Exhibit 10.38(i)
WARRANT
August 29, 2000
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.
Warrant to Purchase 171,041
Shares of Common Stock
TRANSTECHNOLOGY CORPORATION
COMMON STOCK PURCHASE WARRANT
VOID AFTER AUGUST 29, 2010
TransTechnology Corporation (the "COMPANY"), a Delaware corporation, hereby
certifies that for value received, J. H. Whitney Mezzanine Fund, L.P. ("WMF"), a
Delaware limited partnership, or its successors or assigns (the "Holder"), is
entitled to purchase, subject to the terms and conditions hereinafter set forth,
an aggregate of 171,041 fully paid and nonassessable shares of Common Stock (as
hereinafter defined) of the Company, at an exercise price equal to the Purchase
Price, as defined herein, subject to adjustment as provided herein, at any time
or from time to time beginning on the date hereof and prior to 5:00 P.M., New
York City time, on August 29, 2010 (the "Expiration Date").
This Warrant is issued pursuant to the Securities Purchase Agreement (the
"PURCHASE AGREEMENT"), dated as of the date hereof, among the Company, J.H.
Whitney Mezzanine Fund, L.P. ("WMF"), Albion Alliance Mezzanine Fund I, L.P.
("ALBION I"), Albion Alliance Mezzanine Fund II, L.P. ("ALBION II", and together
with Albion I, the "ALBION FUNDS"), The Equitable Life Assurance Society of the
United States ("EQUITABLE"), Fleet Corporate Finance, Inc. ("FLEET") and
Citizens Capital Incorporated ("CITIZENS", and together with WMF, the Albion
Funds, Equitable and Fleet, the "PURCHASERS"), and is subject to the terms
thereof. Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to such terms in the Purchase Agreement. The Holder
is entitled to the rights and subject to the obligations contained in the
Purchase Agreement and the Registration Rights Agreement relating to this
Warrant and the shares of Common Stock issuable upon exercise of this Warrant.
<PAGE> 2
1. DEFINITIONS. For the purposes of this Warrant, the following terms
shall have the meanings indicated:
"APPLICABLE PRICE" shall mean the higher of (a) the Current Market
Price per share of Common Stock on the applicable record or other relevant date
and (b) the Dilution Price.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"CLOSING PRICE" shall mean, with respect to each share of Common
Stock for any day, (a) the last reported sale price or, in case no such sale
takes place on such day, the average of the closing bid and asked prices, in
either case as reported on the principal national securities exchange on which
the Common Stock is listed or admitted for trading or (b) if the Common Stock is
not listed or admitted for trading on any national securities exchange, the last
reported sale price or, in case no such sale takes place on such day, the
average of the highest reported bid and the lowest reported asked quotation for
the Common Stock, in either case as reported on the NASDAQ or a similar service
if NASDAQ is no longer reporting such information.
"CO-INVESTOR WARRANTS" shall mean all warrants, other than the
Warrant, to purchase Common Stock issued pursuant to the Purchase Agreement and
any subsequent warrants issued pursuant to the terms of such warrants.
"COMMON STOCK" means the common stock, par value $.01 per share, of
the Company, and any class of stock resulting from successive changes or
reclassification of such Common Stock.
"COMPANY" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"CURRENT MARKET PRICE" shall be determined in accordance with
Subsection 3(e).
"DILUTION PRICE" shall mean, with respect to each share of Common
Stock, the Purchase Price, subject to appropriate adjustment for events
described in Subsection 3(a).
"EXERCISE DATE" has the meaning ascribed to such term in Subsection
2(d).
"EXPIRATION DATE" has the meaning ascribed to such term in the first
paragraph of this Warrant.
"HOLDER" has the meaning ascribed to such term in the first paragraph
and Section 9 of this Warrant.
"ISSUABLE WARRANT SHARES" means the shares of Common Stock issuable
at any time upon exercise of the Warrant.
2
<PAGE> 3
"ISSUED WARRANT SHARES" means any shares of Common Stock issued upon
exercise of the Warrant.
"NASDAQ" shall mean the Automatic Quotation System of the National
Association of Securities Dealers, Inc.
"PERSON" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
"PURCHASE AGREEMENT" has the meaning ascribed to such term in the
second paragraph of this Warrant.
"PURCHASE PRICE" shall mean, if the Exercise Date is (a) prior to
August 29, 2001, $9.93, or (b) on or after August 29, 2001, the lesser of (i)
$9.93, or (ii) the average Closing Price of the Company's Common Stock for the
ten (10) consecutive Business Days prior to August 29, 2001.
"WARRANT" shall mean this Warrant and any subsequent Warrant issued
pursuant to the terms of this Warrant.
"WARRANT REGISTER" has the meaning ascribed to such term in
Subsection 9(c).
"WMF PLEDGE" shall mean any pledge of the WMF Note, the WMF Warrant
or the shares of stock issued upon exercise of the WMF Warrant pursuant to the
terms of the partnership agreement or other agreement of WMF, pursuant to which
WMF issued any bonds, promissory notes or other evidence of indebtedness.
2. EXERCISE OF WARRANT.
(a) EXERCISE. This Warrant may be exercised, in whole or in part, at
any time or from time to time during the period beginning on the date hereof and
ending on the Expiration Date, by surrendering to the Company at its principal
office this Warrant, with the form of Election to Purchase Shares (the "Election
to Purchase Shares") attached hereto as EXHIBIT A duly executed by the Holder
and accompanied by payment of the Purchase Price for the number of shares of
Common Stock specified in such form.
(b) DELIVERY OF SHARES; PAYMENT OF PURCHASE PRICE. As soon as
practicable after surrender of this Warrant and receipt of payment, the Company
shall promptly issue and deliver to the Holder a certificate or certificates for
the number of shares of Common Stock set forth in the Election to Purchase
Shares, in such name or names as may be designated by such Holder, along with a
check for the amount of cash to be paid in lieu of issuance of fractional
shares, if any. Payment of the Purchase Price may be made as follows (or by any
combination of the following): (i) in United States currency by cash or delivery
of a certified check, bank draft or postal or express money order payable to the
order of the Company, (ii) by assigning to the Company all or any part of the
unpaid principal amount of the WMF Note held by the Holder in a principal amount
equal to
3
<PAGE> 4
the Purchase Price, (iii) by surrender of a number of shares of Common Stock
held by the Holder equal to the quotient obtained by dividing (A) the Purchase
Price payable with respect to the portion of this Warrant then being exercised
by (B) the Current Market Price per share of Common Stock on the Exercise Date,
or (iv) by cancellation of any portion of this Warrant with respect to the
number of shares of Common Stock equal to the quotient obtained by dividing (A)
the aggregate Purchase Price payable with respect to the portion of this Warrant
then being exercised by (B) the difference between (1) Current Market Price per
share of Common Stock on the Exercise Date, and (2) the Purchase Price per share
of Common Stock.
(c) PARTIAL EXERCISE. If this Warrant is exercised for less than all
of the shares of Common Stock purchasable under this Warrant, the Company shall
cancel this Warrant upon surrender hereof and shall execute and deliver to the
Holder a new Warrant of like tenor for the balance of the shares of Common Stock
purchasable hereunder.
(d) WHEN EXERCISE EFFECTIVE. The exercise of this Warrant shall be
deemed to have been effective immediately prior to the close of business on the
Business Day on which this Warrant is surrendered to and the Purchase Price is
received by the Company as provided in this Section 2 (the "Exercise Date") and
the Person in whose name any certificate for shares of Common Stock shall be
issuable upon such exercise, as provided in Subsection 2(b), shall be deemed to
be the record holder of such shares of Common Stock for all purposes on the
Exercise Date.
(e) ISSUED WARRANT SHARES FULLY PAID, NONASSESSABLE. The Company
shall take all actions necessary to ensure that following exercise of this
Warrant in accordance with the provisions of this Section 2, the Issued Warrant
Shares issued hereunder shall, without further action by the Holder, be fully
paid and nonassessable.
(f) CONTINUED VALIDITY. A Holder of shares of Common Stock issued
upon the exercise of this Warrant, in whole or in part, shall continue to be
entitled to all of the rights and subject to all of the obligations set forth in
Section 9.
3. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted from time to time upon the occurrence of the following events:
(a) DIVIDEND, SUBDIVISION, COMBINATION OR RECLASSIFICATION OF COMMON
STOCK. If the Company shall, at any time or from time to time, (i) declare a
dividend on the Common Stock payable in shares of its capital stock (including
Common Stock), (ii) subdivide the outstanding Common Stock into a larger number
of shares of Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares of its Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), THEN in each such case, the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date shall be
proportionately adjusted so that the Holder of any Warrant exercised after such
date shall be entitled to receive, upon payment of the same aggregate amount as
would have been payable before such date, the aggregate number and kind of
4
<PAGE> 5
shares of capital stock which, if such Warrant had been exercised immediately
prior to such date, such Holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. Any such adjustment shall become effective immediately after
the record date of such dividend or the effective date of such subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur. If a dividend is declared and such
dividend is not paid, the Purchase Price shall again be adjusted to be the
Purchase Price in effect immediately prior to such record date (giving effect to
all adjustments that otherwise would be required to be made pursuant to this
Section 3 from and after such record date).
(b) ISSUANCE OF RIGHTS TO PURCHASE COMMON STOCK BELOW CURRENT MARKET
PRICE OR DILUTION PRICE. If the Company shall, at any time or from time to time,
fix a record date for the issuance of rights, options or warrants to all holders
of Common Stock (other than pursuant to Plans) entitling them to subscribe for
or purchase Common Stock, or securities convertible into Common Stock at a price
per share of Common Stock or having a conversion price per share of Common Stock
if a security is convertible into Common Stock (determined in either such case
by dividing (x) the total consideration payable to the Company upon exercise,
conversion or exchange of such rights, options, warrants or other securities
convertible into Common Stock by (y) the total number of shares of Common Stock
covered by such rights, options, warrants or other securities convertible into
Common Stock) which is lower than either the Current Market Price per share of
Common Stock on such record date (or, if an ex-dividend date has been
established for such record date, on the day next preceding such ex-dividend
date) or the Dilution Price, THEN, the Purchase Price shall be reduced to the
price determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so to be offered (or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at the Applicable Price and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible). In case such price for subscription or purchase may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined in good faith by the Board of
Directors of the Company. Any such adjustment shall become effective immediately
after the record date for such rights or warrants. Such adjustment shall be made
successively whenever such a record date is fixed. If such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to the Purchase
Price that otherwise would be in effect but for the fact such record date was
fixed (giving effect to all adjustments that otherwise would be required to be
made pursuant to this Section 3 from and after such record date).
(c) CERTAIN DISTRIBUTIONS. If the Company shall, at any time or from
time to time, fix a record date for the distribution to all holders of Common
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of
indebtedness, assets or other property (other than regularly scheduled cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends payable in capital stock for which adjustment is made under
Subsection 3(a)) or
5
<PAGE> 6
subscription rights, options or warrants (excluding those referred to in
Subsection 3(b)), THEN the Purchase Price shall be reduced to the price
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction (which shall in no event be less than zero), the
numerator of which shall be the Current Market Price per share of Common Stock
on such record date (or, if an ex-dividend date has been established for such
record date, on the next day preceding such ex-dividend date), less the fair
market value (as determined in good faith by the Board of Directors of the
Company) of the portion of the assets, evidences of indebtedness, other
property, subscription rights or warrants so to be distributed applicable to one
share of Common Stock and the denominator of which shall be such Current Market
Price per share of Common Stock. Any such adjustment shall become effective
immediately after the record date for such distribution. Such adjustments shall
be made successively whenever such a record date is fixed. In the event that
such distribution is not so made, the Purchase Price shall be adjusted to the
Purchase Price in effect immediately prior to such record date (giving effect to
all adjustments that otherwise would be required to be made pursuant to this
Section 3 from and after such record date).
(d) ISSUANCE OF COMMON STOCK BELOW CURRENT MARKET PRICE OR DILUTION PRICE.
(i) If the Company shall, at any time and from time to time, after
the date hereof, directly or indirectly, sell or issue shares of Common Stock
(regardless of whether originally issued or from the Company's treasury), or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock) at a price per
share of Common Stock (determined, in the case of rights, options, warrants or
convertible or exchangeable securities, by dividing (x) the total consideration
received or receivable by the Company in consideration of the sale or issuance
of such rights, options, warrants or convertible or exchangeable securities,
plus the total consideration payable to the Company upon exercise or conversion
or exchange thereof, by (y) the total number of shares of Common Stock covered
by such rights, options, warrants or convertible or exchangeable securities)
which is lower than either the Current Market Price per share of Common Stock or
the Dilution Price immediately prior to such sale or issuance, THEN, subject to
clause 3(d)(ii), the Purchase Price shall be reduced to a price determined by
multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale or issuance would purchase at the
Applicable Price and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such sale or issuance. Such
adjustment shall be made successively whenever such sale or issuance is made.
For the purposes of such adjustments, the shares of Common Stock which the
holder of any such rights, options, warrants, or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of such sale or issuance and the
consideration "received" by the Company therefor shall be deemed to be the
consideration actually received or receivable by the Company (plus any
underwriting discounts or commissions in connection therewith) for such rights,
options, warrants or convertible or exchangeable securities, plus the
consideration stated in such rights, options, warrants or convertible or
exchangeable securities to be payable to the Company for the shares of Common
Stock covered thereby. If the Company shall sell or issue shares of Common Stock
for a consideration consisting, in whole or in part, of property other than cash
or its equivalent,
6
<PAGE> 7
then in determining the "price per share of Common Stock" and the
"consideration" received or receivable by or payable to the Company for purposes
of the first sentence and the immediately preceding sentence of this Subsection
3(d), the fair value of such property shall be determined in good faith by the
Board of Directors of the Company. The determination of whether any adjustment
is required under this Subsection 3(d) by reason of the sale and issuance of
rights, options, warrants or convertible or exchangeable securities and the
amount of such adjustment, if any, shall be made only at the time of such
issuance or sale and not at the subsequent time of issuance of shares of Common
Stock upon the exercise of such rights to subscribe or purchase.
(ii) No adjustment shall be made to the Purchase Price pursuant to
clause 3(d)(i) in connection with the issuance of (A) shares issued in any of
the transactions described in Subsections 3(a), (b) and (c) hereof; (B) shares
issued upon exercise of this Warrant or the Co-Investor Warrants; (C) additional
issuances of options to purchase shares of Common Stock pursuant to the
Company's existing stock option plans, under which the Company is authorized to
issue an aggregate of 1,250,000 shares of Common Stock, granted at an exercise
price of not less than the Current Market Price of Common Stock at the time of
grant and issued consistent with previous grants under the Company's stock
option plans; and (D) in any arm's length institutional financing of debt in
which shares of Common Stock or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock are issued as part of a unit, if such shares would otherwise be
included in clause 3(d)(i).
(iii) Notwithstanding any provision in Section 3 to the contrary and
without limitation to any other provision contained in Section 3, in the event
any securities of the Company (other than this Warrant or the Co-Investor
Warrants), including, without limitation, those securities set forth as
exceptions in Subsection 3(d)(ii) (for purposes of this Subsection,
collectively, the "SUBJECT SECURITIES"), are amended or otherwise modified by
operation of its terms or otherwise (including, without limitation, by operation
of such Subject Securities' anti-dilution provisions other than antidilution
provisions substantially similar to those contained in Section 3(a) hereof) in
any manner whatsoever that results in (i) the reduction of the exercise,
conversion or exchange price of such Subject Securities payable upon the
exercise for, or conversion or exchange into, Common Stock or other securities
exercisable for, or convertible or exchangeable into, Common Stock and/or (ii)
such Subject Securities becoming exercisable for, or convertible or exchangeable
into (A) more shares or dollar amount of such Subject Securities which are, in
turn exercisable for, or convertible or exchangeable into, Common Stock, or (B)
more shares of Common Stock, THEN such amendment or modification shall be
treated for purposes of Section 3 as if the Subject Securities which have been
amended or modified have been terminated and new securities have been issued
with the amended or modified terms. The Company shall make all necessary
adjustments (including successive adjustments if required) to the Purchase Price
in accordance with Section 3, but in no event shall the Purchase Price be
greater than it was immediately prior to the application of this Subsection to
the transaction in question. On the expiration or termination of any such
amended or modified Subject Securities for which adjustment has been made
pursuant to the operation of the provisions of this Subsection under Section
3(b) or 3(d), as the case may be, without such Subject Securities having been
exercised, converted or exchanged in full pursuant to their terms, the adjusted
Purchase Price shall be appropriately readjusted in the manner specified in such
Section.
7
<PAGE> 8
(e) DETERMINATION OF CURRENT MARKET PRICE. For the purpose of any
computation under Subsections (b), (c) or (d) of this Section 3 or any other
provision of this Warrant, the Current Market Price per share of Common Stock on
any date shall be deemed to be the average of the daily Closing Prices per share
of Common Stock for the 10 consecutive trading days commencing 15 trading days
before such date. If on any such date the shares of Common Stock are not listed
or admitted for trading on any national securities exchange or quoted by NASDAQ
or a similar service, then the Company, on the one hand, and Holder on the other
hand, shall each promptly appoint as an appraiser an individual who shall be a
member of a nationally recognized investment banking firm. Each appraiser shall
be instructed to, within 30 days of appointment, determine the Current Market
Price per share of Common Stock which shall be deemed to be equal to the fair
market value per share of Common Stock as of such date. If the two appraisers
are unable to agree on the Current Market Price per share of Common Stock within
such 30 day period, then the two appraisers, within 10 days after the end of
such 30 day period shall jointly select a third appraiser. The third appraiser
shall, within 30 days of its appointment, determine, in good faith, the Current
Market Price per share of Common Stock and such determination shall be
controlling. If any party fails to appoint an appraiser or if one of the two
initial appraisers fails after appointment to submit its appraisal within the
required period, the appraisal submitted by the remaining appraiser shall be
controlling. The cost of the foregoing appraisals shall be shared one-half by
the Company and one-half by WMF, PROVIDED, HOWEVER, in the event a third
appraiser is utilized and one of the two initial appraisals (but not the other
initial appraisal) is greater than or less than the appraisal by such third
appraiser by 10% or more, then the cost of all of the foregoing appraisals shall
be borne by the party who appointed the appraiser who made such initial
appraisal.
(f) DE MINIMIS ADJUSTMENTS. No adjustment in the Purchase Price shall
be made if the amount of such adjustment would result in a change in the
Purchase Price per share of less than $0.05, but in such case any adjustment
that would otherwise be required to be made shall be carried forward and shall
be made at the time of and together with the next subsequent adjustment, which
together with any adjustment so carried forward, would result in a change in the
Purchase Price of $0.05 per share or more. If the Company shall, at any time or
from time to time, issue Common Stock by way of dividends on any stock of the
Company or subdivide or combine the outstanding shares of the Common Stock, such
amount of $0.05 (as theretofore increased or decreased, if such amounts shall
have been adjusted in accordance with the provisions of this clause) shall
forthwith be proportionately increased in the case of a combination or decreased
in the case of a subdivision or stock dividend so as appropriately to reflect
the same. Notwithstanding the provisions of the first sentence of this
Subsection 3(f), any adjustment postponed pursuant to this Subsection 3(f) shall
be made no later than the earlier of (i) three years from the date of the
transaction that would, but for the provisions of the first sentence of this
Section 3(f), have required such adjustment, (ii) an Exercise Date or (iii) the
Expiration Date.
(g) ADJUSTMENTS TO OTHER SHARES. In the event that at any time, as a
result of an adjustment made pursuant to Subsection 3(a), the Holder shall
become entitled to receive, upon exercise of this Warrant, any shares of capital
stock of the Company other than shares of Common Stock, the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in Subsections 3(a), (b), (c) and
8
<PAGE> 9
(d), inclusive, and the provisions of Sections 2, 5, 6 and 7 with respect to the
shares of Common Stock shall apply on like terms to any such other shares.
(h) ADJUSTMENT OF NUMBER OF SHARES ISSUABLE UPON EXERCISE. Upon each
adjustment of the Purchase Price as a result of the calculations made in
Subsections 3(a), (b), (c) or (d), this Warrant shall thereafter evidence the
right to receive, at the adjusted Purchase Price, that number of shares of
Common Stock (calculated to the nearest one-hundredth) obtained by dividing (x)
the product of the aggregate number of shares of Common Stock covered by this
Warrant immediately prior to such adjustment and the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price by (y) the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) REORGANIZATION, RECLASSIFICATION, MERGER AND SALE OF ASSETS. If
there occurs any capital reorganization or any reclassification of the Common
Stock of the Company, the consolidation or merger of the Company with or into
another Person (other than a merger or consolidation of the Company in which the
Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of its Common Stock) or the
sale or conveyance of all or substantially all of the assets of the Company to
another Person, THEN the Holder will thereafter be entitled to receive, upon the
exercise of this Warrant in accordance with the terms hereof, the same kind and
amounts of securities (including shares of stock) or other assets, or both,
which were issuable or distributable to the holders of outstanding Common Stock
of the Company upon such reorganization, reclassification, consolidation,
merger, sale or conveyance, in respect of that number of shares of Common Stock
then deliverable upon the exercise of this Warrant if this Warrant had been
exercised immediately prior to such reorganization, reclassification,
consolidation, merger, sale or conveyance; and, in any such case, appropriate
adjustments (as determined in good faith by the Board of Directors of the
Company) shall be made to assure that the provisions hereof (including
provisions with respect to changes in, and other adjustments of, the Purchase
Price) shall thereafter be applicable, as nearly as reasonably may be
practicable, in relation to any securities or other assets thereafter
deliverable upon exercise of this Warrant.
4. CERTIFICATE AS TO ADJUSTMENTS. Whenever the Purchase Price and the
number of shares of Common Stock issuable, or the securities or other property
deliverable, upon the exercise of this Warrant shall be adjusted pursuant to the
provisions hereof, the Company shall promptly give written notice thereof to the
Holder, in accordance with Section 13, in the form of a certificate signed by
the Chairman of the Board, President or one of the Vice Presidents of the
Company, and by the Chief Financial Officer, Treasurer or one of the Assistant
Treasurers of the Company, stating the adjusted Purchase Price, the number of
shares of Common Stock issuable, or the securities or other property
deliverable, upon exercise of the Warrant and setting forth in reasonable detail
the method of calculation and the facts requiring such adjustment and upon which
such calculation is based. Each adjustment shall remain in effect until a
subsequent adjustment is required.
5. FRACTIONAL SHARES. Notwithstanding an adjustment pursuant to Section
3(h) in the number of shares of Common Stock covered by this Warrant or any
other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company may
9
<PAGE> 10
make payment to the Holder, at the time of exercise of this Warrant as herein
provided, of an amount in cash equal to such fraction multiplied by the
Applicable Price.
6. NOTICE OF PROPOSED ACTIONS. In case the Company shall propose at any
time or from time to time (a) to declare or pay any dividend payable in stock of
any class to the holders of Common Stock or to make any other distribution to
the holders of Common Stock (other than a regularly scheduled cash dividend),
(b) to offer to the holders of Common Stock rights or warrants to subscribe for
or to purchase any additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options, (c) to effect any
reclassification of its Common Stock, (d) to effect any consolidation, merger or
sale, transfer or other disposition of all or substantially all of the property,
assets or business of the Company which would, if consummated, adjust the
Purchase Price or the securities issuable upon exercise of the Warrants, (e) to
effect the liquidation, dissolution or winding up of the Company, or (f) to take
any other action that would require a vote of the Company's stockholders, then,
in each such case, the Company shall give to the Holder, in accordance with
Section 13, a written notice of such proposed action, which shall specify (i)
the record date for the purposes of such stock dividend, distribution of rights
or warrants or vote of the stockholders of the Company, or if a record is not to
be taken, the date as of which the holders of shares of Common Stock of record
to be entitled to such dividend, distribution of rights or warrants, or vote is
to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution or
winding up is expected to become effective, and such notice shall be so given as
promptly as possible but in any event at least five (5) Business Days prior to
the applicable record, determination or effective date specified in such notice.
7. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (b) will at all times reserve and keep available the maximum
number of its authorized shares of Common Stock, free from all preemptive rights
therein, which will be sufficient to permit the full exercise of this Warrant,
and (c) will take all such action as may be necessary or appropriate in order
that all shares of Common Stock as may be issued pursuant to the exercise of
this Warrant will, upon issuance, be duly and validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof.
8. REPLACEMENT OF WARRANTS. On receipt by the Company of an affidavit of
an authorized representative of the Holder stating the circumstances of the
loss, theft, destruction or mutilation of this Warrant (and in the case of any
such mutilation, on surrender and cancellation of such Warrant), the Company at
its expense will promptly execute and deliver, in lieu thereof, a new Warrant of
like tenor which shall be exercisable for a like number of shares of Common
Stock. If required by the Company, such Holder must provide an indemnity bond or
other indemnity sufficient in the
10
<PAGE> 11
judgment of the Company to protect the Company from any loss which it may suffer
if a lost, stolen or destroyed Warrant is replaced.
9. RESTRICTIONS ON TRANSFER.
(a) Subject to the provisions of this Section 9 and Section 11.3 of
the Purchase Agreement, this Warrant may be transferred or assigned, in whole or
in part, by the Holder at any time, and from time to time. The term "Holder" as
used herein shall also include any transferee of this Warrant whose name has
been recorded by the Company in the Warrant Register (as hereinafter defined).
Each transferee of the Warrant or the Common Stock issuable upon the exercise of
the Warrant acknowledges that the Warrant or the Common Stock issuable upon the
exercise of the Warrant has not been registered under the Securities Act and may
be transferred only pursuant to an effective registration under the Securities
Act or pursuant to an applicable exemption from the registration requirements of
the Securities Act.
(b) With respect to a transfer (other than in connection with the WMF
Pledge) that should occur prior to the time that the Warrant or the Common Stock
issuable upon the exercise thereof is registered under the Securities Act, such
Holder shall request an opinion of counsel (which shall be rendered by counsel
reasonably acceptable to the Company) that the proposed transfer may be effected
without registration or qualification under any Federal or state securities or
blue sky law. Counsel shall, as promptly as practicable, notify the Company and
the Holder of such opinion and of the terms and conditions, if any, to be
observed in such transfer, whereupon the Holder shall be entitled to transfer
this Warrant or such shares of Common Stock (or portion thereof), subject to any
other provisions and limitations of this Warrant. In the event this Warrant
shall be exercised as an incident to such transfer, such exercise shall relate
back and for all purposes of this Warrant be deemed to have occurred as of the
date of such notice regardless of delays incurred by reason of the provisions of
this Section 9 which may result in the actual exercise on any later date.
(c) The Company shall maintain a register (the "Warrant Register") in
its principal office for the purpose of registering the Warrant and any transfer
thereof, which register shall reflect and identify, at all times, the ownership
of any interest in the Warrant. Upon the issuance of this Warrant, the Company
shall record the name of the initial purchaser of this Warrant in the Warrant
Register as the first Holder. Upon surrender for registration of transfer or
exchange of this Warrant together with a properly executed Form of Assignment
attached hereto as EXHIBIT B at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new Warrants of like
tenor which shall be exercisable for a like aggregate number of shares of Common
Stock, registered in the name of the Holder or a transferee or transferees.
(d) Notwithstanding any provision in this Warrant to the contrary,
the Holder shall not sell, assign, or otherwise transfer to any Person (a
"Transferee") any Issued Warrant Shares prior to the Expiration Date (other than
pursuant to the WMF Pledge) unless such Transferee agrees in writing to be bound
in the same manner as the Holder by the provisions of this Section 9 (to the
extent such provisions have not terminated or expired) as they relate to the
Issued Warrant Shares. The Company acknowledges that each Transferee is an
intended third party beneficiary of, and shall be entitled to, all rights of the
Holder under Sections 12, 13, 14 and 15 hereof with respect to any Issued
Warrant Shares purchased by such Transferee.
11
<PAGE> 12
10. NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a stockholder of the
Company. No provisions hereof, in the absence of affirmative action by the
Holder hereof to purchase Common Stock, and no enumeration herein of the rights
or privileges of the Holder shall give rise to any liability of such Holder as a
stockholder of the Company.
11. CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder hereof for any issue or transfer tax, or other incidental expense, in
respect of the issuance or delivery of such certificates or the securities
represented thereby, all of which taxes and expenses shall be paid by the
Company.
12. AMENDMENT OR WAIVER. Subject to the terms of the Section 11.4 of the
Purchase Agreement, this Warrant and any term hereof may be amended, waived,
discharged or terminated only by and with the written consent of the Company and
the Holder.
13. NOTICES. Any notice or other communication (or delivery) required or
permitted hereunder shall be made in writing and shall be by registered mail,
return receipt requested, telecopier, courier service or personal delivery to
the Company at its principal office as specified in Section 11.2 of the Purchase
Agreement and to the Holder at its address as it appears in the Warrant
Register. All such notices and communications (and deliveries) shall be deemed
to have been duly given: when delivered by hand, if personally delivered; when
delivered by courier, if delivered by commercial overnight courier service; five
Business Days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is acknowledged, if telecopied.
14. CERTAIN REMEDIES. The Holder shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Warrant and to enforce
specifically the terms and provisions of this Warrant in any court of the United
States or any state thereof having jurisdiction, this being in addition to any
other remedy to which such Holder may be entitled at law or in equity.
15. GOVERNING LAW. This Agreement shall be governed by, construed in
accordance with, and enforced under, the Law of the State of New York applicable
to agreements or instruments entered into and performed entirely within such
State.
16. HEADINGS. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
TRANSTECHNOLOGY CORPORATION
By: /s/ Joseph F. Spanier
-------------------------------
Name: Joseph F. Spanier
Title: Vice President, Chief
Financial Officer
12
<PAGE> 13
13
<PAGE> 14
Exhibit A to Common
Stock Purchase Warrant
----------------------
[FORM OF]
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase _____ shares of Common Stock, par value $.01 per share ("Common
Stock"), of [Name of Issuer] (the "Company") and hereby [makes payment of
$_______ therefor] [or] [makes payment therefor by assignment to the Company
pursuant to Section 2(b)(ii) of the Warrant of $_____________ aggregate
principal amount of [WMF] Note (as defined in the Warrant)] [or] [makes payment
therefore by surrendering pursuant to Section 2(b)(iii) _____ shares of Common
Stock of the Company] [or] [makes payment therefor by cancellation pursuant to
Section 2(b)(iv) of a portion of the Warrant with respect to _________ shares of
Common Stock]. The undersigned hereby requests that certificates for such shares
be issued and delivered as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
--------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:
---------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased hereby is less than the
number of shares of Common Stock covered by the Warrant, the undersigned
requests that a new Warrant representing the number of shares of Common Stock
not purchased be issued and delivered as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME OF HOLDER)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO:
---------------------------------------------------------------------
(NAME OF HOLDER)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
Dated: [NAME OF HOLDER]
----------------------
By:
--------------------------------
Name:
Title:
-----------------------
(1) Name of Holder must conform in all respects to name of Holder as specified
on the face of the Warrant.
14
<PAGE> 15
Exhibit B to Common
Stock Purchase Warrant
----------------------
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto the Assignee named below all of the rights of the undersigned to purchase
Common Stock, par value $.01 per share ("Common Stock"), of TRANSTECHNOLOGY
CORPORATION represented by the Warrant, with respect to the number of shares of
Common Stock set forth below:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
and does hereby irrevocably constitute and appoint ____________________________
Attorney to make such transfer on the books of TRANSTECHNOLOGY CORPORATION
maintained for that purpose, with full power of substitution in the premises.
Dated: [NAME OF HOLDER(1)]
---------------------------
By:
-------------------------------
Name:
Title:
------------------------
(1) Name of Holder must conform in all respects to name of Holder as specified
on the face of the Warrant.
15
