AMENDMENT AND WAIVER
OF THE TERMS OF THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
CARLYLE GOLF, INC.
WHEREAS, Carlyle Golf, Inc., a Colorado corporation (the"Corporation") is
purchasing from Star Point Enterprises Inc, d/b/a Pro-Line Cap Company, a
Texas corporation ("Seller"), certain assets relating to Seller's headwear
manufacturing business pursuant to that certain Asset Purchase Agreement
entered into effective December 31, 1996 among the Corporation, Seller and
Xxxxxxxx X. Xxxxx (the "Asset Purchase Agreement"); and
WHEREAS, in connection with the Asset Purchase Agreement (a) certain
debtholders of Seller (the "Debtholders") have agreed to convert certain debt
obligations of Seller into shares of the Corporation's Convertible Preferred
Stock pursuant to that certain Debt Conversion and Registration Rights
Agreement dated as of December 31, 1996 (the "Debt Conversion Agreement"), and
(b) Xxxxxxx X. Xxxxx and Xxxxxxxx X. Xxxxx (the "Building Owner") have agreed
to sell a building to the Corporation (the "Building Purchase Agreement") and
to accept shares of the Corporation's Convertible Preferred Stock in partial
consideration for the building; and
WHEREAS, the terms negotiated between the parties to the Asset Purchase
Agreement, the Debt Conversion Agreement and the Building Purchase Agreement
regarding the Convertible Preferred Stock differ from the terms of the
Convertible Preferred Stock set forth in Attachment A to the Corporation's
Amended and Restated Articles of Incorporation, dated April 11, 1994 (the
"Articles"), in ways which may be amended or waived by the holders of the
Convertible Preferred Stock pursuant to Paragraph 4(c) of Attachment A to the
Articles; and
WHEREAS, the undersigned represent all of the persons entitled to receive
Convertible Preferred Stock of the Corporation pursuant to the Asset Purchase
Agreement, Debt Conversion Agreement, and the Building Purchase Agreement, and
the undersigned have executed this Amendment and Waiver as a condition to
conversion of the debt obligations and delivery of the Convertible Preferred
Stock issuable pursuant to the Debt Conversion Agreement.
NOW THEREFORE, the undersigned, being, for purposes of this Amendment and
Waiver, all of the holders of the Convertible Preferred Stock, par value $.001
per share, of the Corporation, in accordance with paragraph 4(c) of the Terms
of Convertible Preferred Stock (the "Terms") included as Attachment A to the
Corporation's Articles, do hereby amend the terms of the Convertible Preferred
Stock and waive any right the undersigned would otherwise have pursuant to the
Articles that is inconsistent with terms set forth herein, including without
limitation any rights included in any text deleted hereby, as follows:
1. Paragraph 3(a) of the Terms is hereby amended by deleting the first
sentence thereof and substituting the following:
The holder of any share or shares of Convertible Preferred Stock shall
have the right, at his, or its option, to convert all or any portion of such
shares into fully paid and nonassessable shares of Common Stock of the
Corporation at any time and from time to time after the first anniversary of
the date of issuance. The number of shares of Common Stock into which the
Convertible Preferred Stock is convertible shall be determined by dividing the
Original Purchase Price of $1.00 per share by $2.50, subject to the making of
any adjustment specified in subparagraph (d) hereof (the number of shares of
Common Stock issuable at any time, giving effect to the latest prior
adjustment pursuant to subparagraph (d) hereof, if any, in exchange for one
share of Convertible Preferred Stock being hereinafter called the "Conversion
Rate").
2. Paragraph 3(d) of the Terms is hereby amended by deleting
subparagraphs (iii) through (ix).
3. The first phrase of the first sentence of Paragraph 4(a) of the
Terms is hereby amended to read as follows:
Except as provided herein or as required by the
corporation law of the State of Colorado,
4. Subparagraph (ii) of Paragraph 4(b) of the Terms is hereby amended
and restated as follows:
(ii) Amend the Articles of Incorporation of the Corporation if the
amendment would:
a) Increase or decrease the aggregate number of authorized
shares of Convertible Preferred Stock;
b) Effect an exchange or reclassification of all or part of
the shares of Convertible Preferred Stock into shares of
another class;
c) Effect an exchange or reclassification, or create the
right of exchange, of all or part of the shares of another
class into shares of Convertible Preferred Stock;
d) Change the designation, preferences, limitations, or
relative rights of all or part of the shares of
Convertible Preferred Stock;
e) Change the shares of all or part of Convertible Preferred
Stock into a different number of shares of the same class;
f) Create a new class of shares having rights or preferences
with respect to distributions or dissolution that are
prior, superior, or substantially equal to the shares of
Convertible Preferred Stock;
g) Increase the rights, preferences, or number of authorized
shares of any class that, after giving effect to the
amendment, have rights or preferences with respect to
distribution or to dissolution that are prior, superior,
or substantially equal to the shares of Convertible
Preferred Stock;
h) Limit or deny an existing preemptive right of all or part
of the shares of Convertible Preferred Stock; or
i) Cancel or otherwise affect rights to distributions or
dividends that have accumulated but have not yet been
declared on all or part of the shares of Convertible
Preferred Stock.
5. Paragraph 5(f) of the Terms is hereby amended by adding to the end
thereof the following language:
or which results in aggregate gross proceeds to the Company of at
least $5,000,000 and a price per share equal to at least 120% of the
Conversion Price then in effect.
6. The Terms are hereby further amended by adding a new Paragraph 6 as
follows:
6. Redemption.
The Convertible Preferred Stock may be redeemed, in whole but
not in part, by the Corporation, in its sole discretion, upon thirty
(30) days prior written notice to the holders thereof, if any time
the closing price of the Corporation's Common Stock is 120% of the
Conversion Price then in effect or higher, for a period of twenty
(20) consecutive trading days.
IN WITNESS WHEREOF the undersigned have caused this Amendment and Waiver
to be signed this 24th day of January, 1997, effective as of December 31,
1996.
The Debtholders:
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx as Life Tenant
By: /s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx as Remainderman
Xxxxxxx Xxxxx Ten-Year Grit Trust
By: /s/ Xxxxxxxx X. Xxxxx
Trustee
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, as an Individual
The Building Owner:
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
/s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
ACKNOWLEDGED AND AGREED TO this 24th day of January, 1997.
CARLYLE GOLF, INC.
By: /s/ Xxxxxx X. Xxxxx
Its: President
