Exhibit 4.2
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HIGH VOLTAGE ENGINEERING CORPORATION
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of March 19, 1998
to
INDENTURE
Dated as of August 8, 1997
by and between
HIGH VOLTAGE ENGINEERING CORPORATION
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
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$155,000,000
10 1/2% Senior Notes Due 2004
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FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated
as of March 19, 1998, by and between HIGH VOLTAGE ENGINEERING CORPORATION, a
Massachusetts corporation (the "Company") and STATE STREET BANK AND TRUST
COMPANY (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee have entered into that certain
Indenture dated as of August 8, 1997 (the "Original Indenture") providing for
the issuance and delivery by the Company of its 10 1/2% Senior Notes due 2004;
and
WHEREAS, the Company is entering into certain financing and related
transactions (the "Transactions") which will benefit the Company and its
Subsidiaries; and
WHEREAS, Article 8 of the Indenture provides a manner by which the
Indenture may be amended, and by which compliance with the provisions of the
Original Indenture may be waived, with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes by
written act of said Holders delivered to the Company and the Trustee; and
WHEREAS, the Holders of a majority in aggregate principal amount of
the outstanding Notes have delivered said consents to the Trustee and the
Company; and
WHEREAS, pursuant to and in accordance with Section 8.02 of the
Original Indenture, and with the consent of the Holders of a majority in
aggregate principal amount of the outstanding Notes, the Company and the
Trustee have agreed to enter into this Supplemental Indenture;
NOW THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows
for the benefit of each other party and for the equal and ratable benefit of
the Holders of the Company's 10 1/2% Senior Notes due 2004:
Section 1. AMENDMENTS AND WAIVER.
1.1. Subject to Section 2.2 hereof, the following definitions are
added to Section 1.01 of the Original Indenture as follows:
"▇▇▇▇▇▇ ▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇, Inc., an Illinois corporation.
"HVE Acquisition Corp." means HVE Acquisition Corp., an Illinois
corporation.
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Instrument Corporation, an
Illinois corporation.
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Acquisition" means the acquisition directly or
indirectly of all of the issued and outstanding shares of capital stock
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and of each of ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Instruments
(Barbados) Inc., a Barbados corporation, TTS Mexican Holding Company,
Inc., an Illinois corporation, and Instrumentos ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ de
Mexico, S.A. de C.V,. a Mexican corporation, pursuant to the certain
Stock Purchase Agreement, dated as of February 4, 1998, by and among
▇▇▇▇▇▇▇ Corporation, a wholly owned subsidiary of the Company, and the
direct and indirect selling shareholders of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ listed on the
signature pages attached thereto.
1.2. Subject to Section 2.2 hereof, the definition of
"Intercompany Notes" contained in Section 1.01 of the Original Indenture is
hereby amended to read in its entirety as follows:
"Intercompany Notes" means the Intercompany Notes issued by certain
Subsidiaries of the Company in the following principal amounts: (i)
Robicon: $39.5 million; (ii) PHI: $39.5 million; (iii) Datcon: $19.0
million; (iv) ▇▇▇▇▇▇▇▇: $19.0 million; (v) HIVEC Holdings: $3.5 million;
and (vi) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇: $20.0 million.
1.3. Subject to Section 2.2 hereof, the definition of
"Restricted Subsidiary" contained in Section 1.01 of the Original Indenture
is hereby amended to read in its entirety as follows:
"Restricted Subsidiary" means a Subsidiary of the Company other
than an Unrestricted Subsidiary and includes (i) all of the direct and
indirect Subsidiaries of the Company existing as of the Issue Date and
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, HVE Acquisition Corp. and each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇
wholly owned Subsidiar-
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ies. The Board of Directors of the Company may designate any Unrestricted
Subsidiary or any Person to be acquired that is to become a Subsidiary
as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been incurred
at the time of such action), (i) the Company could have incurred at
least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.06 of this Indenture, or (ii) the
Company's Fixed Charge Coverage Ratio (determined on a pro forma basis
for the last four fiscal quarters of the Company for which financial
statements are available at the date of determination in accordance with
Section 4.06 of this Indenture) does not decrease, the Company does not
incur any Indebtedness (other than Indebtedness under the Notes
permitted under clause (ii) of the definition of "Permitted
Indebtedness") and such Subsidiary shall execute and deliver to the
Trustee a supplemental indenture, in form reasonably satisfactory to the
Trustee, providing for the Guarantee by such Subsidiary of the payment
of the obligations of the Company under the Notes in the manner set
forth under Article X; provided, however that the Indebtedness
incurrence condition set forth under clause (i) above shall not apply to
the designation as a Restricted Subsidiary of the Subsidiary ("▇▇▇▇▇▇▇▇
Ireland") to which is to be transferred the assets and liabilities of
the Fermoy, Ireland division of HIVEC, B.V. that is associated with the
business of ▇▇▇▇▇▇▇▇.
1.4. Subject to Section 2.2 hereof, Section 2.02 of the Original
Indenture is hereby amended to read in its entirety as follows:
Section 2.02 Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
(each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Notes for the Company
by manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer at the
time of such execution but no longer holds that office at the time the
Trustee
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authenticates the Note, the Note shall be valid nevertheless.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate
upon any Note shall be conclusive evidence, and the only evidence, that
such Note has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Note shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and
the Company shall deliver such Note to the Trustee for cancellation as
provided in Section 2.11, for all purposes of this Indenture such Note
shall be deemed never to have been authenticated and delivered hereunder
and shall never be entitled to the benefits of this Indenture.
The Trustee or an authenticating agent shall authenticate (i) Notes
for original issue in the aggregate principal amount of up to
$135,000,000 upon a Company Request and (ii) Notes for issuance
subsequent to the Issue Date upon the consummation of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Acquisition in the aggregate principal amount of up to $20,000,000 upon
a Company Request. The aggregate principal amount of Notes outstanding
at any time may not exceed such amount except as provided in Section
2.07 hereof. Upon receipt of the Company Request and an Officers'
Certificate certifying that the registration statement relating to the
exchange offer specified in the Registration Rights Agreement is
effective and that the conditions precedent to a Private Exchange
thereunder have been met, the Trustee shall authenticate one or more
additional series of Notes in an aggregate principal amount not to
exceed $155,000,000 for issuance in exchange for all Notes previously
issued pursuant to an exchange offer registered under the Securities Act
or pursuant to a Private Exchange. Exchange Notes or Private Exchange
Notes may have such distinctive series designations and such changes in
the form thereof as are specified in the Company Request referred to in
the preceding sentence. The Exchange Notes and Private Exchange Notes
shall be issuable only in registered form
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without coupons and only in denominations of $1,000 and integral
multiples thereof.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Notes. Unless otherwise
provided in the appointment, an authenticating agent may authenticate
the Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to
deal with the Company and Affiliates of the Company. Each Paying Agent
is designated as an authenticating agent for purposes of this Indenture.
The Notes shall be issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof.
1.5. Subject to Section 2.2 hereof, Section 4.09 of the Original
Indenture is hereby amended to read in its entirety as follows:
Section 4.09. Limitation on Restricted Payments.
The Company shall not make, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to
such Restricted Payment;
(b) immediately after giving pro forma effect to such
Restricted Payment, the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section
4.06; and
(c) immediately after giving effect to such Restricted
Payment, the aggregate of all Restricted Payments declared or made
after the Issue Date does not exceed the sum of (1) 50% of the
Company's cumulative Consolidated Net Income after the Issue Date
(or minus 100% of any cumulative deficit in Consolidated Net Income
during such period), (2) 100% of the ag-
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gregate Net Proceeds and the fair market value of securities or
other property received by the Company as a capital contribution to
the common equity of the Company after the Issue Date and from the
issue or sale, after the Issue Date, of Capital Stock (other than
Disqualified Capital Stock or Capital Stock of the Company issued
to any Subsidiary of the Company) of the Company or any
Indebtedness or other securities of the Company convertible into or
exercisable or exchangeable for Capital Stock (other than
Disqualified Capital Stock) of the Company which has been so
converted or exercised or exchanged, as the case may be and (3)
$350,000. For purposes of determining under this clause (c) the
amount expended for Restricted Payments, cash distributed shall be
valued at the face amount thereof and property other than cash
shall be valued at its fair market value.
The provisions of this covenant shall not prohibit (i) the payment
of any distribution within 60 days after the date of declaration
thereof, if at such date of declaration such payment would comply with
the provisions of this Indenture, (ii) the retirement of any shares of
Capital Stock of the Company or subordinated Indebtedness by conversion
into, or by or in exchange for, shares of Capital Stock (other than
Disqualified Capital Stock), or out of, the Net Proceeds of the
substantially concurrent sale (other than to a Subsidiary of the
Company) of other shares of Capital Stock of the Company (other than
Disqualified Capital Stock), (iii) the redemption or retirement of
Indebtedness of the Company subordinated to the Notes in exchange for,
by conversion into, or out of the Net Proceeds of, a substantially
concurrent sale or incurrence of Indebtedness (other than any
Indebtedness owed to a Subsidiary) of the Company that is contractually
subordinated in right of payment to the Notes to at least the same
extent as the Subordinated Indebtedness being redeemed or retired, (iv)
the retirement of any shares of Disqualified Capital Stock by conversion
into, or by exchange for, shares of Disqualified Capital Stock, or out
of the Net Proceeds of the substantially concurrent sale (other than to
a Subsidiary of the Company) of other shares of Disqualified Capital
Stock, (v) so long as no Default
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or Event of Default shall have occurred and be continuing, the payment of
cash dividends on the Series A Preferred Stock when such dividends are
required to be paid in cash in accordance with the Restated Articles, (vi)
payment, from the net proceeds of the Offerings, of up to $2,250,000 to
Parent to be used to repurchase from the High Voltage Engineering
Corporation Retirement Plan shares of the common stock of Parent within 60
days of the Issue Date for not more than $2,250,000, and fund a
proportional accrual relating to the Subordinated Notes Warrants of up to
$150,000, (vii) so long as no Default or Event of Default shall have
occurred and be continuing, the exchange of Warrants for Subsidiary
Warrants or Common Shares for Subsidiary Shares in the event of a Qualified
Subsidiary IPO, (viii) payments required to effect the reclassification of
an Unrestricted Subsidiary as a Restricted Subsidiary in compliance Section
4.22 and (ix) the payment of management fees for services provided by
Parent or its employees in an aggregate annual amount not to exceed
$750,000; provided, however, that any amounts paid by the Company pursuant
to clauses (i), (v), (vi) and (vii) shall reduce amounts otherwise
available for Restricted Payments.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating
that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.09 were computed,
which calculations may be based upon the Company's latest available
financial statements, and that no Default or Event of Default exists and
is continuing and no Default or Event of Default will occur immediately
after giving effect to any Restricted Payments.
1.6. Subject to Section 2.2 hereof, Section 4.25 of the Original
Indenture is hereby amended to read in its entirety as follows:
Section 4.25. Limitation on Business of HIVEC
Holdings; Capital Stock of
Foreign Subsidiaries
HIVEC Holdings shall not engage in any trade or business, incur any
Indebtedness other than Permit-
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▇▇▇ Indebtedness, incur any liabilities other than nominal expenses
necessary to maintain its corporate existence, hold any assets other
than the capital stock of HIVEC, B.V., or sell, pledge, encumber or
transfer or cause or permit the sale, pledge, encumbrance or transfer of
Capital Stock of any of its direct or indirect Subsidiaries. Datcon
shall not sell, pledge, encumber or transfer the Capital Stock of any of
its direct or indirect foreign subsidiaries including, but not limited
to, Instrumentos ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ de Mexico, S.A. de C.V. Notwithstanding
the foregoing, by May 31, 1998, the Company shall cause HIVEC Holdings
and HIVEC, B.V. to: (i) transfer (directly or indirectly) to Datcon all
of the capital stock of Industrias Jorda that is not held by Datcon (or
a direct or indirect subsidiary of Datcon); and (ii) transfer (directly
or indirectly) all of the assets of ▇▇▇▇▇▇▇▇ Ireland to ▇▇▇▇▇▇▇▇ (or a
direct or indirect subsidiary of ▇▇▇▇▇▇▇▇) ((i) and (ii) together, the
"Foreign Realignment").
1.7. Subject to Section 2.2 hereof, Section 10.05 of the
Original Indenture is hereby amended to read in its entirety as follows:
Section 10.05. Release of Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if:
(i) the Guarantor has sold all or substantially all of its
assets or the Company and its Restricted Subsidiaries have sold all
of the Capital Stock of the Guarantor owned by them, in each case
in a transaction in compliance with Sections 4.10 and 5.01 hereof;
or
(ii) the Guarantor merges with or into or consolidates with,
or transfers all or substantially all of its assets to, (i) the
Company, (ii) another Guarantor or (iii) a Restricted Subsidiary
that is an obligor under an Intercompany Note in a transaction in
compliance with Section 5.01 hereof;
and in each such case, such Guarantor has delivered to the Trustee an
Officers' Certificate and an Opin-
8
ion of Counsel, each stating that all conditions precedent herein
provided for relating to such transactions have been complied with.
1.8. Subject to Section 2.2 hereof, paragraph 5 of Exhibit A,
the Form of Notes, is hereby amended to read in its entirety as follows:
Optional Redemption. The Company, at its option, may redeem the
Notes, in whole or in part, at any time on or after August 15, 2001
upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount), set forth below,
together, in each case, with accrued and unpaid interest to the
Redemption Date, if redeemed during the twelve month period beginning on
August 15 of each year listed below:
Redemption
Year Price
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2001........................................................ 105.250%
2002........................................................ 102.625%
2003 and thereafter......................................... 100.000%
Notwithstanding the foregoing, the Company may redeem in the
aggregate up to 35% of the original principal amount of Notes at any
time and from time to time on or prior to August 15, 2000 at a
redemption price equal to 110.500% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon to the Redemption Date
with the Net Proceeds of one or more Qualified Equity Offerings of the
Company or Parent to the extent such proceeds were contributed to the
Company as common equity; provided, that at least $100.75 million of the
principal amount of Notes originally issued remains outstanding
immediately after the occurrence of any such redemption and that any
such redemption occurs within 60 days following the closing of any such
Qualified Equity Offering.
1.9. Subject to Section 2.2 hereof, compliance by the Company
with Sections 5.01 and 5.02 of the Original Indenture are hereby waived to
the extent any default would occur under such Sections as a result of the
transactions contemplated by the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Acquisition (as defined in
the Of-
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fering Memorandum of the Company dated of March 16, 1998 relating to the
Company's 10 1/2% Senior Notes due 2004).
Section 2. MISCELLANEOUS.
2.1. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE
COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.
2.2. Operative Time. Upon the execution and delivery of this
Supplemental Indenture by the Company and the Trustee, the Indenture shall
be supplemented in accordance herewith, and this Supplemental Indenture
shall form a part of the Original Indenture for all purposes, and every
Holder of Notes heretofore or hereafter authenticated and delivered under
the Original Indenture shall be bound hereby and thereby; provided,
however, that Section 1 hereof shall become operative upon the satisfaction
(or waiver by the Company) of the Acquisition Condition (as defined in the
Consent Solicitation Statement, dated March 5, 1998, that was provided to
Holders of Notes in connection with the Company's solicitation of consents
by such Holders to the waiver and amendments set forth herein). Upon the
receipt by the Trustee of (i) an Officers' Certificate certifying that such
conditions have been satisfied, or waived by the Company, and (ii) an
Opinion of Counsel to the effect set forth in Section 8.06 of the Original
Indenture, the amendments set forth herein shall become operative.
2.3. Confirmation of the Original Indenture. Except as amended
hereby, the Original Indenture shall remain in full force and effect and is
hereby ratified and confirmed in all respects.
2.4. Multiple Counterparts. The parties may sign multiple
counterparts of this Supplemental Indenture. Each signed counterpart shall
be deemed an original, but all of them together represent one and the same
agreement.
2.5. Separability. Each provision of this Supplemental
Indenture shall be considered separable and if for any reason any provision
which is not essential to the effectuation of the basic purpose of this
Supplemental Indenture shall be
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invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
2.6. Headings. The captions of the various section headings of
this Supplemental Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
2.7. The Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained
herein, all of which recitals are made solely by the Company.
2.8. Definitions. All terms defined in the Original Indenture
shall have the same meaning in this Supplemental Indenture unless otherwise
defined herein.
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IN WITNESS WHEREOF, the parties hereto caused this Supplemental
Indenture to be duly executed as of this day of March, 1998.
HIGH VOLTAGE ENGINEERING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President, Chief
Financial Officer and Clerk
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Chi C. Ma
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Name: Chi C. Ma
Title: Assistant Vice President
