Exhibit 4.7
AMENDMENT NO. 1
TO
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE
AGREEMENT (the "Amendment") is made and entered into as of May , 1996, by
and among the parties (the "Parties") to that certain Series A Convertible
Preferred Stock Purchase Agreement dated as of November 22, 1994 (the
"Agreement") with respect to the purchase and sale of 4,368,937 shares of
Series A Preferred Stock of QCS Corporation, a Delaware corporation (the
"Company"). Terms not otherwise defined herein shall have the meanings given
to them in the Agreement.
WHEREAS, the Agreement contains provisions that require the Company to
make certain cash payments and/or issue additional shares of capital stock of
the Company to the Purchasers if the financial results described in Section
2.4 of the Agreement (the "Financial Results") are not achieved;
WHEREAS, the Shareholders' Agreement dated as of November 22, 1994 (the
"Shareholders' Agreement"), among certain parties, including the Founders and
the Purchasers, contains provisions that require the Founders to make certain
cash payments and/or contribute to the Company shares of capital stock of the
Company if the Financial Results are not achieved
WHEREAS, it appears that the Financial Results will not be achieved;
WHEREAS, the Founders have entered into an agreement with the
Purchasers, pursuant to which the Founders have acknowledged that the
Financial Results will not be achieved and have agreed to make certain
payments and/or issue certain shares of capital stock of the Company to the
Purchasers in accordance with the terms thereof; and
WHEREAS, in light of the foregoing, the Parties desire to amend the
Agreement in the manner set forth below;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parties, the Parties
agree as follows:
1. SECTION 2.1. The seventh sentence of Section 2.1 of the Agreement
(which begins "Unless earlier converted") shall be deleted in its entirety
and replaced with the following sentence:
"Unless earlier converted, all Series A Preferred shall be automatically
converted into Common Stock in accordance with the terms of the Class U
Warrants."
2. AMENDMENT OF CLASS U WARRANTS. The Class U Warrants shall be
amended and restated to read in their entirety as set forth on EXHIBIT A
attached hereto.
1.
3. SECTION 2.4(d). Section 2.4(d) of the Agreement shall be deleted in
its entirety.
4. SECTION 5.1(i). The following language in Section 5. l(i) of the
Agreement shall be deleted in its entirety: "; PROVIDED THAT such changes and
material deviations shall be subject to the unanimous consent of the Board of
Directors or of the Conseil d' Administration, as the case may be, at their
respective regular quarterly meetings should such changes and material
deviations require extra cash in excess of five hundred thousand Dollars
($500,000) in the aggregate for both Companies for any given quarter."
5. SECTION 5.2(d). Section 5.2(d) of the Agreement shall be deleted
in its entirety.
6. ARTICLE VII. Article VII of the Agreement shall be deleted in its
entirety and replaced with the following Article VII:
"ARTICLE VII
RIGHT OF FIRST REFUSAL
7.1 RIGHT OF FIRST REFUSAL.
(a) Subject to any restrictions contained in the Company's
Certificate of Incorporation, as amended, Bylaws, as amended, or in
any other agreement to which the Company is a party or by which it
is bound, the Company may issue New Securities at any time without
prior notice to the Purchasers. Except as otherwise provided in
Section 7.2(c) below, within 5 days after such issuance, the Company
shall give each Purchaser written notice of the issuance describing
the New Securities and the consideration for and the general terms
upon which they were issued. Except as otherwise provided in Section
7.2(c) below, each Purchaser shall have 20 days (or such longer
period as the Company, in its sole discretion, may determine) from
the date of mailing of any such notice to agree to purchase up to
its Post-Event Pro Rata Participation of such New Securities at the
same price and upon the general terms specified in such notice by
giving written notice to the Company and stating the quantity of New
Securities to be purchased. Such right of first refusal shall
terminate, if not theretofore exercised upon the expiration of such
20 day period.
(b) In lieu of complying with the provisions of Section 7.1
(a) above, the Company may, in its discretion, but shall not be
obligated to, provide the Purchasers with written notice and an
opportunity to acquire their Pro Rata Share of any issuance of New
Securities (except as specifically excluded under Section 7.2(c)
below) before the Company offers such New Securities to others. In
the event the Company elects to proceed under this Section 7.1 (b)'
(i) the Company shall give each Purchaser written notice of the
issuance describing the New Securities and the consideration for and
the general terms upon which they are proposed to be issued; (ii)
each Purchaser shall have 20 days (or such longer
2.
period as the Company, in its sole discretion, may determine) from
the date of mailing of any such notice to purchase up to its Pro
Rata Share of such New Securities at the same price and upon the
general terms specified in such notice by giving written notice
to the Company and stating the quantity of New Securities to be
purchased; and (iii) the Company shall have 90 days after the
expiration of such 20 day period to sell to others any New
Securities not acquired by the Purchasers, at a price and upon
general terms and conditions materially no more favorable to the
purchasers thereof than specified in the Company's notice to the
Purchasers.
7.2 DEFINITIONS.
(a) "Post-Event Pro Rata Participation" shall mean the
number of New Securities necessary to maintain the Purchaser's Pro
Rata Share, as such existed immediately prior to an Issuance Event.
(b) The "Pro Rata Share" for any Purchaser, for purposes of
this Agreement, is the ratio of (i) the number of shares of Common
Stock then owned or issuable upon conversion of Preferred Stock then
owned by such Purchaser, to (ii) the total number of shares of
Common Stock outstanding immediately prior to the issuance of the
New Securities, assuming full conversion of all outstanding shares
of Preferred Stock and assuming that all outstanding options and
warrants exercisable for Common Stock had been exercised.
(c) "New Securities" shall mean any capital stock of the
Company, whether now authorized or not, and rights, options, or
warrants to purchase said capital stock, and securities of any type
whatsoever that are, or may become, convertible into said capital
stock. Notwithstanding anything to the contrary contained herein,
the fight of first refusal established by this Article VII shall not
apply to any of the following New Securities'
(i) securities issuable upon conversion of Series A
Preferred;
(ii) securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or
similar business combination;
(iii) securities issued pursuant to any fights or
agreements or options or warrants outstanding as of the date
of this Agreement;
(iv) securities issued pursuant to any fights or
agreements or options or warrants granted after the date of
this Agreement, provided that, excepts as otherwise provided
in this Section 7.2(c), the fight of first refusal
established by this Article VII applied with respect to the
initial sale or grant by the Company of such fights or
agreements or options or warrants;
3.
(v) shares of Common Stock (and/or options,
warrants or other rights to acquire the same) issued or to be
issued to employees, officers or directors of, or consultants
or advisors to, the Company or any subsidiary of the Company,
pursuant to stock option plans or other arrangements that are
approved by the Board of Directors;
(vi) securities issued in connection with any stock
split, stock dividend, or similar recapitalization by the
Company;
(vii) securities issued pursuant to any equipment
leasing arrangement, or bank financing; or
(viii) securities issued in connection with strategic
transactions involving the Company and other entities,
including (A) joint ventures, manufacturing, marketing or
distribution arrangements or (B) technology transfer, license
or development arrangements; provided that such strategic
transactions and the issuance of securities pursuant thereto,
have been approved by the Company's Board of Directors.
(d) "Issuance Event" shall mean any issuance of New
Securities.
7.3 TRANSFERABILITY. The fight of first refusal of each Purchaser
pursuant to this Article VII may be assigned by a Purchaser to a transferee
or assignee of Series A Preferred which (i) is a subsidiary, parent,
general partner, limited partner or retired partner of a Purchaser, or (ii)
is a Purchaser's family member or trust for the benefit of an individual
Purchaser; provided, however, (A) the transferor shall, within 10 days
after such transfer, furnish to the Company written notice of the name and
address of such transferee or assignee and the securities with respect to
which such rights of first refusal are being assigned and (B) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement."
7. SECTION 8.3. For purposes of Section 8.3 of the Agreement, all
notices, requests, demands and other communications to be made to the Company
shall be addressed to'
QCS Corporation
000 Xxxxxx Xxxxxx, 000
Xxxxxxxx Xxxx, XX 00000
Attn: President
Fax: (000) 000-0000
8. DIVIDENDS.
(a) The Parties acknowledge and agree that Article 4, Section (c)
of the Company's Certificate of Incorporation, as amended (entitled
"Dividends"), was intended to have, and shall have, the following meaning:
4.
"Holders of Series A Preferred, in preference to the holders of any other
stock of the Corporation, shall be entitled to receive only out of funds
that are legally available therefor, dividends at the rate of five percent
(5%) per annum of the original issue price of one Dollar and three Cents
($1.03) per share on each outstanding share of Series A Preferred (as
adjusted for any stock dividends, combinations, splits, recapitalizations
and the like with respect to such shares). Such dividends shall be
cumulative beginning November 22, 1994 and shall begin compounding annually
on January 1, 1996. Such dividends shall be payable only upon the first to
occur of the liquidation of the corporation pursuant to Section (d) below
or, with respect to any shares of Series A Preferred that are converted
into shares of Common Stock pursuant to the Class U Warrant, such dividends
shall be payable six months following such conversion to the holder of
record of the Series A Preferred on the date of such conversion; provided,
however, that the Corporation's Board of Directors, in its discretion, may,
but shall not be obligated to, declare and pay any such dividends prior to
the liquidation of the Corporation or the date that is six months after the
conversion of Series A Preferred; and, provided, further, that the
conversion of a share of Series A Preferred shall not cause any dividends
to become payable with respect to any other shares of Series A Preferred
that have not been converted. Dividends payable on the Series A Preferred
shall be paid in cash."
(b) The Parties agree that as soon as practicable after the
effective date of this Amendment, the Parties shall take all reasonable
actions, and execute all documents, instruments and agreements, necessary
or appropriate to cause Article 4, Section (c) of the Company's Certificate
of Incorporation, as amended, to be amended to read as specified in Section
7(a) hereof.
9. EFFECTIVE DATE. This Amendment shall become effective on the date
on which it has been executed and delivered by all parties hereto and all of
the following agreements have been executed and delivered by all parties
thereto, and shall not become effective unless and until all such parties
have so executed and delivered such agreements' (a) the Amended and Restated
Shareholders' Agreement of even date attached hereto as EXHIBIT B; (b) the
Agreement of even date by the Founders in favor of the Purchasers attached
hereto as EXHIBIT C; and (c) the Amended and Restated Class U Warrant
attached hereto as EXHIBIT D.
10. TERMINATION. The Agreement and this Amendment shall terminate and
be of no further force or effect upon the effective date of a registration
statement pertaining to, and subject to the consummation of, an underwritten
public offering of the Company's Common Stock at a price of at least $5.00
per share. In addition to the foregoing, the rights of the Purchasers under
Section 6 hereof (and Article VII of the Agreement) shall terminate and be of
no further force or effect upon the adoption by all of the members of the
Board of Directors of a resolution to that effect.
5.
11. GOVERNING LAW; JURISDICTION. This Amendment and the legal
relationship between the Parties shall be governed by and construed in
accordance with the internal laws of the State of New York exclusively,
without regard to conflicts of law principles.
12. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by
signing any such counterpart.
13. REMAINDER OF AGREEMENT UNCHANGED. Except as set forth above or in
any other amendment to any exhibit to the Agreement, the Agreement shall
remain in full force and effect as of the date thereof.
6.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
QCS CORPORATION
By:
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Name:
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Title:
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QCS DEVELOPMENT COMPANY S.A.
By:
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Name:
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Title:
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PURCHASERS:
CARLYLE QCS PARTNERS, L.P.
By:
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Name:
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Title:
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STF MANAGEMENT LIMITED, as General Partner
of Sharp Technology Fund I Limited
Partnership
By:
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Name:
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Title:
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7.
STF MANAGEMENT LIMITED, as General Partner
of Sharp Technology Fund II Limited
Partnership
By:
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Name:
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Title:
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LAGUNITAS PARTNERS, L.P.
By:
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Name:
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Title:
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PROACTIVE PARTNERS, L.P.
By:
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Name:
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Title:
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OAKWOOD HOLDINGS, BVI
By:
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Name:
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Title:
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DE NOYANGE S.A.
By:
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Name:
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Title:
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8.
XXXXXXX CAPITAL MANAGEMENT
By:
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Name:
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Title:
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Xx. Xxxx Xxxxxx
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Xx. Xxxxxx Xxxxxxxxx
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Xx. Xxxx Xxxxxx
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Mr. Xxxxx Xxxxx
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Xx. Xxxxx Xxxxx
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Xx. Xxxxxx Xxxxx
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9.
