EXHIBIT B
LETTER OF INTENT
February 25, 1999
The Holders of Series A Preferred Stock set forth on Schedule I hereto
Dimensional Fund Advisors, Inc.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxxx Xxxxxxxxxx
National Electrical Benefit Fund
0000 00xx Xxxxxx, X.X.
Washington, D.C. 20005
Attention: Xx. Xxxxxxx Xxxx, Advisor
Re: Proposed Restructuring
Ladies and Gentlemen:
This letter, upon your execution and return, will confirm our Agreement in
Principle regarding the proposed restructuring (the "Restructuring") of
Ramtron International Corporation (the "Company") in respect of (i) the
Company's outstanding Series A Convertible Preferred Stock, par value $.01 per
share (the "Series A Preferred Stock"), (ii) the Company's obligations under
those certain Stock Purchase Agreements (the "DFA Contracts") dated as of
December 23, 1997 by and between the Company and certain persons (each a "DFA
Advised Entity") advised by Dimensional Fund Advisors, Inc. ("DFA"), and
(iii) the $7,000,000 loan (the "NEBF Credit Facility") to the Company from the
National Electrical Benefit Fund (the "NEBF").
References herein to dollar amounts and to shares (whether common or
preferred) are based on the Company's current authorized and outstanding
capital, and would be adjusted for any share authorizations or stock splits
necessary to effect the Restructuring.
1. SERIES A PREFERRED STOCK. On the terms and subject to the conditions set
forth herein, as soon as practicable after the receipt of the approvals of the
Board of Directors of the Company and the stockholders of the Company,
including the holders of the Series A Preferred Stock, referred to in
Paragraph 5, the Company will amend the terms of the Series A Preferred Stock
so that, as amended, the Series A Preferred Stock will have only such rights,
preferences and privileges set forth on Exhibit A hereto (as so amended, the
"New Preferred Stock"). As set forth in Exhibit A hereto, the New Preferred
Stock will offer the holders thereof the options set forth in subparagraphs
(a)-(c) below, as such holder may elect. All references herein to the Series
A Preferred Stock or the New Preferred Stock shall be deemed to include all
rights to dividends or other distributions in respect of such Series A
Preferred Stock or the New Preferred Stock.
Page B-1
(a) OPTION 1 - CASH. The New Preferred Stock shall be exchangeable at
the option of the holder thereof at any time prior to the date which
is ten days after the Closing Date (as defined in Paragraph 5 below)
for cash in amount equal to 50% of the face value of the New
Preferred Stock plus all accrued but unpaid dividends on the Series A
Preferred Stock, up to an aggregate amount of $6.4 million face value
and accrued and unpaid dividends. If, in the judgment of the Board
of Directors of the Company, the Company's financial condition and
results of operations permit the Company to permit the exchange for
cash of more than $6.4 million face value (plus accrued dividends) of
the New Preferred Stock, the terms of the New Preferred Stock will
permit the exchange for cash of up to $8.0 million face value (plus
accrued and unpaid dividends) of the New Preferred Stock. To the
extent that holders of Series A Preferred Stock desire to exchange in
the aggregate a greater face value (plus accrued and unpaid
dividends) of the New Preferred Stock than is permitted under the
terms of the New Preferred Stock, New Preferred Stock will be
accepted for exchange by the Company for cash on a pro rata basis
based upon the aggregate face value (plus accrued and unpaid
dividends) of the New Preferred Stock tendered for exchange.
(b) OPTION 2 - COMMON STOCK. The New Preferred Stock shall be
exchangeable at the option of the holder thereof at any time prior to
the date which is ten days after the Closing Date for shares of
Common Stock, par value $.01 per share, of the Company (the "Common
Stock") at an exchange ratio of $.75 face value of New Preferred
Stock per share of Common Stock plus dividends accruing to the date
that the Common Stock becomes freely tradable in accordance with the
provisions of the following sentence. The Company will register with
the Securities and Exchange Commission (the "SEC") such shares of
Common Stock issuable for resale by the holders thereof on SEC Form
S-3 (or other applicable form) to be filed within ten days after the
Closing Date and made effective within not more than 120 days
thereafter, subject to extension if satisfaction of SEC review, if
any, requires additional time (such date of effect being the
"Registration Date").
(c) OPTION 3 - NEW PREFERRED STOCK. The holders of the New Preferred
Stock may elect to retain their New Preferred Stock to the extent not
exchanged for cash and/or Common Stock pursuant to Option 1 and
Option 2 within ten (10) days after the Closing Date. Holders of the
Series A Preferred Stock who do not elect any of Option 1, Option 2
or Option 3 shall be deemed to have elected Option 3 within ten (10)
days after the Closing Date. The New Preferred Stock shall be
convertible into shares of Common Stock and will have such other
terms and conditions as set forth on Exhibit A hereto. The Company
will register the shares of Common Stock into which the New Preferred
Stock is convertible for resale by the holders on SEC Form S-3 (or
other applicable form) to be filed ten days after the Closing Date
and made effective on the Registration Date.
Page B-2
In the event that a registration statement is not effective within 130 days
following the Closing with respect to Options 2 and 3, the New Preferred Stock
shall accrue dividends from and after the end of such 130 day period at a rate
of 18% per annum, until such time as the registration statement is declared
effective.
2. DFA CONTRACTS. The Company and DFA will agree that, effective on the
Closing Date, the DFA Contracts will be terminated and in consideration
thereof the Company shall execute and issue to each DFA Advised Entity
unsecured promissory notes in the aggregate principal amount of $3,223,712,
being the amount of cash currently due under the DFA Contracts (the "Note").
The Note will bear interest at a rate of 8% per annum, will be convertible
into Common Stock at a conversion rate of one share of Common Stock for each
$1.00 principal amount of the Note and shall mature and become due and payable
on the first anniversary of the Closing. DFA and the Company will agree to
amend the DFA Contracts to provide that the maximum amount of Common Stock
that may be held by DFA and the DFA Advised Entities will be increased from
4.99% to 9.99% of the outstanding shares of Common Stock and the Note will
provide that the Company may, at its option, substitute fully registered and
tradable Common Stock at the then prevailing market price, for cash in
repayment of the principal and interest payable on the Note prior to its
maturity, up to the 9.99% maximum.
3. NEBF CREDIT FACILITY. The Company and the NEBF will agree to extend the
NEBF Credit Facility, (i) to allow for the payment of cash as set forth in
Paragraph 1(a), above, to the holders of the New Preferred Stock, (ii) to
extend the maturity of the NEBF Credit Facility to March 15, 2002 and (iii) to
release from the collateral pledged as security to the NEBF the Company's
trade account receivables (but not license or royalty payments or similar type
payments) and, potentially the Company's inventories, upon certain financial
targets, to be agreed between the Company and the NEBF, being obtained. Upon
reaching such agreement, such trade account receivables, and potentially, the
Company's inventories, may be used as collateral with other lenders for future
borrowings. The NEBF's conversion right shall be at the rate of $1.00 for
each share of Common Stock; provided, however, that such rate shall be reduced
to the conversion rate of the new Preferred Stock to the extent that the
conversion rate of the New Preferred Stock is decreased below $1.00.
4. CONDITIONS. The obligations of the Company to effect the Restructuring
will be conditioned upon (i) approval by the Board of Directors of the Company
of the Restructuring, (ii) approval by the holders of a majority of the
outstanding shares of Common Stock, at a duly convened meeting of stockholders
of the Company, of the Restructuring, including, without limitation, one or
more reverse stock splits necessary to increase the authorized number of
shares of Common Stock available to the Company to effect the Restructuring,
(iii) approval by the holders of a majority of the outstanding shares of
Series A Preferred Stock of the Restructuring at a duly convened meeting of
stockholders of the Company or by action by written consent, (iv) the
termination with prejudice of all litigation in effect at the Closing (as
Page B-3
defined in Paragraph 5, below) between any of the parties signatory hereto (or
their respective affiliates, associates, stockholders, partners, members or
other related parties), on the one hand, and the Company and its officers,
directors, affiliates, associates, stockholders, partners, members or other
related parties, on the other hand, (v) execution of appropriate definitive
documentation, and (vi) other customary closing conditions. In addition, the
obligations of the Company and each other party signatory hereto to effect the
Restructuring shall be conditioned upon each of the transactions contemplated
by the Restructuring being effected simultaneously.
5. TIMETABLE. Set forth below is an estimated timetable for completion of
the Restructuring:
March 1 Conditional approval of the Restructuring by a
majority of Series A Preferred Stockholders, DFA
and the NEBF by execution of this letter of intent
March 1 Approval of the Restructuring by the Company's
Board of Directors
March 2 Refiling of an amended Proxy Statement with the
SEC describing the Restructuring
April 7 - 14 Meeting of holders of Common Stock to approve
Restructuring
April 7 - 14 Meeting of, or action by written consent by, the
Series A Preferred Stockholders to approve the
Restructuring
April 14 - 23 Closing of the Restructuring
April 23 - May 3 Filing of a registration statement with the SEC for
Common Stock to be issued in connection with the
Restructuring
As used herein, the term "Closing Date" shall mean the date on which the
closing of the Restructuring (the "Closing") shall occur.
6. STOCKHOLDERS' MEETING. Following the approval of the Board of Directors
of the Company of the Restructuring, the Company will promptly (i) prepare and
file the required proxy materials with the SEC, (ii) mail copies of the
required proxy materials to the Company's stockholders in accordance with
applicable law and the Company's bylaws and (iii) schedule and hold meetings
of holders of Common Stock and Series A Preferred Stock to vote on the
Restructuring.
7. BEST EFFORTS. The Company and the other parties to this letter of intent
(together, the "Parties") will use their best efforts to give effect to the
Restructuring and will cooperate with each other to the fullest extent in the
preparation of all necessary documentation and in obtaining all necessary
consents, approvals and releases from third parties. The Parties will use
their best efforts meet the timetable set forth in Paragraph 5 hereof and to
take all steps necessary to permit the Closing to take place no later than
April 23, 1999.
Page B-4
8. NO ISSUANCE OF ADDITIONAL SECURITIES. The Parties agree that until such
time as this letter of intent is terminated, the Company will not, and will
not be obliged to, issue any shares of capital stock, including, without
limitation, Common Stock, or options, rights or securities to acquire any
shares of capital stock, including, without limitation, Common Stock, to any
person, except as contemplated by the Restructuring.
9. PUBLIC DISCLOSURE. Except as otherwise required by law or the rules of
the NASD, a Party shall not make a public announcement of the transactions
contemplated by this letter without the prior written approval of the other
Parties, which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, the Company will be entitled to issue such press releases as
may be necessary or appropriate in the sole judgment of management of the
Company without the consent of any other Party.
10. TERMINATION. This letter of intent may be terminated and the
Restructuring may be abandoned or terminated at any time by mutual agreement
of all the Parties or at the option of the Company. This letter of intent
shall terminate automatically if the Closing shall not have occurred on or
prior to April 23, 1999.
11. NATURE OF THIS LETTER. The Company and each recipient hereof understands
and agrees that this letter is not and shall not be deemed to be an offer or
the solicitation of offers to purchase or sell any securities of the Company.
Each recipient of this letter acknowledges that the existence and content of
this letter are non-public information with respect to the Company and subject
to all applicable rules of the Securities Exchange Act of 1934. It is
understood that this letter of intent merely constitutes a statement of our
mutual intentions with respect to the Restructuring, does not contain all
matters upon which agreement must be reached in order for the Restructuring to
be consummated and, therefore, does not constitute an obligation binding on
any Party. Notwithstanding the foregoing, the provisions of Paragraph 8,
Paragraph 9, Paragraph 10, and this Paragraph 11 are agreed to be fully
binding on the Parties upon execution of this letter of intent and shall
survive the termination of this letter of intent unless and until they are
superseded by another agreement between all Parties. This letter of intent
shall be governed by the laws of the State of New York, without regard to
applicable principles of conflict of laws. This letter of intent may be
executed in two or more counterparts, each of which shall constitute an
original and all of which shall constitute one and the same instrument.
Page B-5
If the foregoing accurately summarizes our understanding, we request that the
recipient approve of this letter of intent and evidence such approval by
causing the enclosed copy of this letter of intent to be signed on behalf of
the recipient, dated and returned to the undersigned.
RAMTRON INTERNATIONAL CORPORATION
By: /S/ X. Xxxxx Xxxxx
Name: X. Xxxxx Xxxxx
Title: Chairman and CEO
ACCEPTED AND AGREED TO ON THE DATE SET FORTH HEREUNDER:
SERIES A PREFERRED STOCKHOLDERS
By:----------------------
Name:--------------------
Title:------------------- Date:------------
DIMENSIONAL FUND ADVISORS, INC.
By:----------------------
Name:--------------------
Title:------------------- Date:------------
NATIONAL ELECTRICAL BENEFIT FUND
By:----------------------
Name:--------------------
Title:------------------- Date:------------
Page B-6
SCHEDULE I
SERIES A PREFERRED STOCKHOLDERS
Xx. Xxxxxxxxx X. Xxxxxxxx Xx. Xxxxxx X. Xxxxxxxx, Xx.
0000 Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Xx. Xxxxxx Xxxxxx Xx. Xxxxxx X. Xxxxxxxx
0 Xxxxx Xxxxx Xxxx 0000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000 Xxxxx Xxxxxx, XX 00000
Xx. Xxxxxxx Xxxxxx Mr. Xxxxx Xxxxxx
Xxxxx Xxxxxxxx Non-Traditional 000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxx, X.X. Hauppauge, NY 11788
0000 Xxxxxx of the Stars
2nd Xxxxx
Xxx Xxxxxxx, XX 00000
CC Investments, LDC Xx. Xxxxxxxx Xxxxxx
c/o Xx. Xxxx Xxxxxxxxx JMG Capital Partners, L.P.
Castle Creek Partners 0000 Xxxxxx of the Stars, Suite 0000
00 X. Xxxxxx Xxxxx, Xxxxx 0000 Xxx Xxxxxxx, XX 00000
Xxxxxxx, XX 00000
Xx. Xxxx X. Xxxxxx Xx. Xxx Xxxxxxxxx
Anvil Investment Partners, L.P. KEYWAY Investments, Ltd.
000 Xxxxxxxx Xxxx, 00xx 00 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000 Douglas, Isle of Man 1M1 2QG
United Kingdom
Xx. Xxxxxxxxxx X. Xxxxxx, Xxxxxxx and Xxxxxxx X. Xxxxxx
Xxxxxxxxxx X. Xxxxxx Trust Xxxxxx Xxxxxx
Dated 6/8/93
P.O. Box 9248
00000 Xxxxx Xxxxxxx
Xxxxxx Xxxxx Xx, XX 00000
Xx. Xxxxxxx X. Xxxxxxx Xx. Xxxxxxxx X. Xxxxxxxxxx
Deere Park Capital Management, LLC Laredo Capital Partners
00 Xxxxxx Xxxxxxxxx, Xxxxx 000 000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Xx. Xxxx X. Xxxxx, Xx. Xxxxxxxx Xxxxxx and Xxxxxxx Xxxxxx, JT
0000 X. Xxxxxxx Xxxx, Xxxxx 0000 00 Xxxxxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Mr. Xxxx X. Xxxxxxxxx Xx. Xxxxxx X. Xxxxxxxxxx
1979 Memorial Drive 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
Page B-7
Xx. Xxxxxxxx X. Xxxxxxxxxx Xx. Xxxxxx X. Xxxx
LICAP Partners 0000 Xxxxxxx Xxxx
000 Xxxxxxxxxx Xxxxx Xxxxxxx Xxxxxxx, XX 00000
Xxxxx 000
Xxxxxxxxx, XX 00000 Xx. Xxxxx X. Xxxxx
SIL Nominees, Ltd.
Xx. Xxxx X. Xxxxx c/x Xxxxx Capital Corporation
0000 Xxxxxxx Xxx, #000 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxx Xxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Xx. Xxxxxxx Xxxxx Shine Xx. Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx 0 Xxxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000 Xxx Xxxxx, XX 00000
Xxxxx X. Xxxxxx Xx. Xxxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx #0 Triton Capital Holdings, Ltd.
Los Angeles, CA 00000 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Xx. Xxxxxxx Xxxxxx
Offense Group Associates, L.P. Xx. Xxxxx Xxxxx
0000 Xxxxxx of the Stars, ELARA Ltd.
2nd Floor 00000 XxXxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000 Xxxxxx Xxxx, XX 00000
Xx. Xxxx Xxxxxxxx
0 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxx Xxxxxxx, XX 00000
Xx. Xxxxx X. Xxxxxxxxxx
0000 Xxxxx Xxxxxxx 000, Xxxxx 000
Xxxxxxxxxx, XX 00000
Xx. Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Page B-8
EXHIBIT A
11% REDEEMABLE CONVERTIBLE PREFERRED STOCK
Issuer: Ramtron International Corporation
Securities to be Offered: Maximum of 10,456 shares (the "Shares") of
Redeemable Convertible Preferred Stock, par
value $.01 per share, (which includes accrued
dividends through February 15, 1999) plus any
additional shares of such stock issued from time
to time in lieu of cash dividends (the "New
Preferred Stock"). The Shares shall be issued
in exchange (the "Exchange") for outstanding
Series A Convertible Preferred Stock of the
Company.
Liquidation Preference: $1,000 per share, plus accumulated and unpaid
dividends.
Conversion: 1,000 shares of Common Stock per share of New
Preferred Stock ($1.00 per share of Common
Stock).
Exchange Rights (Cash): At any time prior to April XX, 1999, the New
Preferred Stock shall be exchangeable at the
option of the holder for cash in amount equal to
50% of the face value of the New Preferred Stock
plus all accrued but unpaid dividends on the
Series A Preferred Stock, up to an aggregate
amount of $6.4 million face value and accrued
and unpaid dividends. If, in the judgment of
the Board of Directors of the Company, the
Company's financial condition and results of
operations permit the Company to permit the
exchange for cash of more than $6.4 million face
value (plus accrued dividends) of the New
Preferred Stock, the terms of the New Preferred
Stock will permit the exchange for cash of up to
$8.0 million face value (plus accrued and unpaid
dividends) of the New Preferred Stock. To the
extent that holders of Series A Preferred Stock
desire to exchange in the aggregate a greater
face value (plus accrued and unpaid dividends)
of the New Preferred Stock than is permitted
under the terms of the New Preferred Stock, New
Preferred Stock will be accepted for exchange by
the Company for cash on a pro rata basis based
upon the aggregate face value (plus accrued and
unpaid dividends) of the New Preferred Stock
tendered for exchange.
Page B-9
Exchange Rights
(Common Stock): At any time prior to April XX, 1999, the New
Preferred Stock shall be exchangeable at the
option of the holder for shares of Common Stock,
par value $.01 per share, of the Company (the
"Common Stock") at an exchange ratio of $.75
face value of New Preferred Stock per share of
Common Stock plus accrued and unpaid dividends.
Optional Redemption: The New Preferred Stock is redeemable, at the
option of the Company and subject to the consent
of its lenders, in whole or in part, at any time
on or after April 15, 2000 at an amount equal to
its liquidation preference plus, without
duplication, accumulated and unpaid dividends to
the date of redemption.
Mandatory Redemption: The Company is required, to redeem all of the
New Preferred Stock outstanding on April 15,
2002 at a redemption price equal to 100% of the
liquidation preference thereof, plus, without
duplication, accumulated and unpaid dividends to
the date of redemption.
Dividends: At a rate equal to 11% per annum of the
liquidation preference per share, payable
semi-annually. Prior to April 15, 2000, all
dividends will be paid in New Preferred Stock.
After April 15, 2000, dividends may be paid, at
the Company's option, on any dividend payment
date, either in cash or by the issuance of
additional shares of New Preferred Stock (and
payment of cash in lieu of fractional shares)
having an aggregate liquidation preference equal
to the amount of such dividends. In the event
that after April 15, 2000, dividends are paid in
additional shares of New Preferred Stock the
dividend rate will increase by 2% for such
dividend payment period. In the event that a
registration statement is not effective within
130 days after April XX, 1999 with respect to
the Exchange Rights (Cash) and the Exchange
Rights (Common Stock) described above, the New
Preferred Stock shall accrue dividends from and
after the end of such 130 day period at a rate
of 18% per annum until such time as the
registration statement is declared effective.
Page B-10
Dividend Payment Date: April 15 and October 15 commencing October 15,
1999. Cash dividends are payable beginning
April 15, 2000.
Voting: The New Preferred Stock will be non-voting,
except as otherwise required by law and except
in certain circumstances described herein,
including (i) amending certain rights of the
holders of the New Preferred Stock and (ii) the
issuance of any class of equity securities that
ranks pari passu with or senior to the New
Preferred Stock other than certain additional
shares of New Preferred Stock.
Ranking: The New Preferred Stock will, with respect to
dividend rights and rights on liquidation,
winding-up, and dissolution of the Company, rank
senior to any classes of Common Stock. The New
Preferred Stock will rank senior to any
subsequent issue of other preferred stock.
Certain Restrictive
Provisions: Pursuant to the Preferred Stock Exchange Offer
Registration Rights Agreement (to be defined),
the Company must use its best efforts to file
and cause to become effective as of the Exchange
Date (as defined) a registration statement for
Common Stock of the Company issuable upon
exchange or conversion of the New Preferred
Stock.
Page B-11
