EXHIBIT 10
AGREEMENT
AGREEMENT, dated as of April 24, 2000 (this "Agreement"), among FMC
Corporation, a Delaware corporation ("FMC"), Key Technology, Inc., an Oregon
corporation ("Key"), KTC Acquisition Corp., an Oregon corporation and a wholly
owned subsidiary of Key ("Sub"), and Advanced Machine Vision Corporation, a
California corporation ("AMVC").
RECITALS
WHEREAS, Key, Sub and AMVC have entered into an Agreement and Plan of
Merger, made as of February 15, 2000, as amended as of February 25, 2000 (the
"Merger Agreement");
WHEREAS, FMC owns all of AMVC's Series B Preferred Stock, 119,106
shares of which are issued and outstanding (the "Company Series B Preferred
Stock"), owns an Option dated October 14, 1998 for the purchase of AMVC's Class
A Common Stock, has a right to designate a director on the AMVC board and has
rights under the Series B Purchase Agreement, the Registration Rights Agreement
and the Representative Agreement, in each case dated as of October 14, 1998;
WHEREAS, it is a condition to the obligations of the parties under the
Merger Agreement that the holder of the Company Series B Preferred Stock shall
have voted in favor of the Merger Agreement; and
WHEREAS, in order to, among other things, induce FMC to vote in favor
of the Merger Agreement and to relinquish its option and other valuable rights,
Key, Sub and AMVC have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the promises and the covenants and
agreements set forth herein, the parties agree as follows:
1. Merger Agreement. (a) Key, Sub and AMVC hereby agree that,
effective with the execution and delivery of this Agreement, Sections 2.5 and
2.6 of the Merger Agreement are amended and restated to read as follows:
"2.5 Conversion and Exchange of Shares. The manner and basis of
converting at the Effective Time Company Common Stock into cash and shares
of Parent's Series B Convertible Preferred Stock, $10.00 par value, having
the rights and preferences set forth in the attached Exhibit 2.5A (the
"Series B Preferred") with the attached redeemable Warrant to purchase
shares of Parent's Common Stock in the form attached as Exhibit 2.5B, the
exchange of certificates therefor, the manner and basis of converting the
Company Series B Preferred Stock into Parent's Series C Convertible
Preferred Stock, $20.00 par value, having the rights and preferences set
forth in the attached Exhibit 2.5C (the "Series C Preferred") with the
attached redeemable Warrant to purchase shares of
Parent's Common Stock in the form attached as Exhibit 2.5B and the manner
and basis of converting Company Options outstanding at the Effective Time
shall be as set forth herein.
(a) Conversion of Shares.
(i) (A) Each share of Company Common Stock (both Class A and Class B)
issued and outstanding immediately prior to the Effective Time (except
Dissenting Shares) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive
$1.00 in cash and one-tenth of a share of Series B Preferred, with each
share of Series B Preferred to be accompanied by a Warrant, redeemable at
any time by the holder for $2.50 in cash and exercisable at any time to
purchase .25 of a share of Parent's Common Stock at a price of $15.00 per
share (such Series B Preferred shares and attached Warrants to be issued
for each share of Company Common Stock constituting the "AMVC Common
Conversion Ratio").
(B) Each Dissenting Share shall be converted into the right to
receive payment from the Surviving Corporation with respect thereto in
accordance with the provisions of the CCL.
(ii) Each share of the Company Series B Preferred Stock outstanding
at the Effective Date shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to receive
one share of Series C Preferred, with each share of Series C Preferred to
be accompanied by a Warrant, redeemable at any time by the holder for $2.50
in cash and exercisable at any time to purchase .25 of a share of Parent's
Common Stock at a price of $15.00 per share (such Series C Preferred shares
and attached Warrants to be issued for each share of Company Series B
Preferred Stock constituting the "Series B Conversion Ratio" and, together
with the AMVC Conversion Ratio, the "Conversion Ratios").
(iii) Each share of Sub Common Stock issued and outstanding as of the
Effective Time, shall, by virtue of the Merger and without any action on
the part of Parent, the sole stockholder of Sub, be converted into one
share of legally and validly issued, fully paid and nonassessable Common
Stock, without par value, of the Surviving Corporation. The stock
certificate of Sub evidencing ownership of Sub Common Stock shall by virtue
of the Merger evidence ownership of Common Stock of the Surviving
Corporation.
(iv) In the event of any stock split, combination, reclassification,
recapitalization, exchange, stock dividend or other distribution payable in
Parent Common Stock with respect to shares of Parent Common Stock (or if a
record date with respect to any of the foregoing should occur) during the
period between the date of this Agreement and the Effective Time, then the
Conversion Ratios will be appropriately adjusted to reflect such stock
split, combination, reclassification, recapitalization, exchange, stock
dividend or other distribution.
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2.6 Exchange of Certificates; Payment. Series B Preferred and
attached Warrants into which Company Common Stock shall be converted
pursuant to the Merger and Series C Preferred and attached Warrants into
which Company Series B Preferred Stock shall be converted pursuant to the
Merger shall be deemed to have been issued at the Effective Time. At the
Closing, Parent shall deliver to the Transfer Agent certificates evidencing
the number of shares of Series B Preferred and attached Warrants to which
that Stockholder is entitled under Section 2.5, together with the cash
payment applicable thereto. The Company will cause to be delivered such
transmittal letters, documents and instruments as Parent or Parent's
transfer agent may reasonably request, each in form reasonably acceptable
to Parent or such transfer agent. Parent shall also deliver to the
Transfer Agent certificates evidencing the number of shares of Series C
Preferred and attached Warrants to be issued pursuant to section 2.5(ii)
above with respect to any shares of Company Series B Preferred Stock
outstanding on the Effective Date."
(b) The parties agree that, at the Effective Time, the Option dated
October 14, 1998 for the purchase of Class A Common Stock of AMVC held by FMC
(the "FMC Option") shall be exchanged for an Option (the "Key Option"), with an
identical term and an aggregate exercise price of $2.52 million, to receive
210,000 shares of Key's Series B Convertible Preferred Stock, par value $10 per
share (the "Key Series B Shares"), with an attached redeemable Warrant to
purchase 52,500 shares of Key's Common Stock at an exercise price of $15.00 per
share (the "Key Series B Warrants"). The Key Series B Shares and the attached
Warrants shall be in the forms attached as Exhibits 2.5A and 2.5B, respectively,
to the Merger Agreement.
2. Representations and Warranties.
(a) FMC represents and warrants to the other parties hereto as
follows:
(i) FMC is the record and beneficial owner of, and has good and
marketable title to, the Company Series B Preferred Stock. FMC has the sole
right to vote, and the sole power of disposition with respect to, the
Company Series B Preferred Stock, and none of the Company Series B
Preferred Stock is subject to any voting trust, proxy or other agreement,
arrangement or restriction with respect to the voting or disposition of
such Company Series B Preferred Stock, except as contemplated by the Series
B Preferred Stock Purchase Agreement dated as of October 14, 1998 (the
"Series B Purchase Agreement") between AMVC and FMC and by this Agreement.
(ii) This Agreement has been duly authorized, executed and delivered
by FMC. Assuming the due authorization, execution and delivery of this
Agreement by the other parties hereto, this Agreement constitutes the valid
and binding agreement of FMC enforceable against FMC in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application
which may affect the enforcement of creditors' rights generally and by
general equitable principles. The execution and delivery of this Agreement
by FMC does not and will not conflict with any agreement, order or other
instrument binding upon FMC, nor require FMC to make or obtain any
regulatory filing or approval other than
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filings, if any, required pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
(b) Key represents and warrants to FMC as follows:
(i) This Agreement has been duly authorized, executed and delivered
by Key and Sub. Assuming the due authorization, execution and delivery of
this Agreement by the other parties hereto, this Agreement constitutes the
valid and binding agreement of Key and Sub enforceable against Key and Sub
in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
of general application which may affect the enforcement of creditors'
rights generally and by general equitable principles. The execution and
delivery of this Agreement by Key and Sub does not and will not conflict
with any agreement, order or other instrument binding upon Key or Sub, nor
require Key or Sub to make or obtain any regulatory filing or approval
other than filings, if any, required pursuant to the Exchange Act.
(ii) The representations and warranties of Key contained in Article
4 of the Merger Agreement are true and correct in all respects as of the
date hereof and will be true and correct as of the Effective Time as if
made at the Effective Time. Key has delivered a true and correct copy of
the Parent Disclosure Letter to FMC.
(iii) Since September 30, 1999, there has not been a material adverse
change in the business, operations, properties, assets or condition of Key
and its subsidiaries (taken as a whole).
(iv) The Key Series C Convertible Preferred Stock, par value $20 per
share, to be issued to the holder of the Company Series B Preferred Stock
pursuant to the Merger (the "Key Series C Shares" and, together with the
Key Series B Shares, the "Key Preferred Shares"), the Warrants to purchase
Common Stock of Key attached to the Key Series C Shares (the "Key Series C
Warrants" and, together with the Key Series B Warrants, the "Key
Warrants"), the Key Option, the Key Series B Shares and the Key Series B
Warrants will be duly authorized, validly issued, fully paid and non-
assessable and free of preemptive rights. The shares of Common Stock of Key
issuable upon conversion of the Key Preferred Shares or exercise of the Key
Warrants (the "Underlying Shares") have been duly and validly authorized
and, upon conversion of the Key Preferred Shares or exercise of the Key
Warrants, will be validly issued, fully paid and nonassessable and free of
preemptive rights. As of the Effective Time, the Key Series B Preferred
Shares, the Key Warrants and the Underlying Shares shall have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), and freely tradeable in the hands of FMC. As of the Effective Time,
the Underlying Shares shall have been authorized for listing on the Nasdaq
National Market.
(v) The Board of Directors of Key in approving this Agreement and the
provisions contained herein has taken all action necessary or advisable to
render the restrictions contained in any "fair price," "business
combination," "control share acquisition," "super-majority voting" statute
or other similar anti-takeover statute or
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regulation or provision of Key's charter or by-laws that may be applicable
to FMC's right to receive Key securities at the Effective Time, and such
restrictions are, inapplicable to this Agreement, the provisions contained
herein and the transactions contemplated hereby.
(vi) The Board of Directors of Key will not declare FMC to be an
Adverse Person under that certain Rights Agreement, dated as of June 20,
1998 (the "Rights Agreement"), between Key and ChaseMellon Shareholder
Services, L.L.C., as rights agent, nor shall a Distribution Date or the
separation of the Rights occur thereunder, as a result of the execution or
delivery of this Agreement, the public announcement of any such execution
and delivery or the performance or agreement by Key of its obligations and
covenants contained in this Agreement.
(c) AMVC represents and warrants to FMC as follows:
(i) This Agreement has been duly authorized, executed and delivered
by AMVC. Assuming the due authorization, execution and delivery of this
Agreement by the other parties hereto, this Agreement constitutes the valid
and binding agreement of AMVC enforceable against AMVC in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application
which may affect the enforcement of creditors' rights generally and by
general equitable principles. The execution and delivery of this Agreement
by AMVC does not and will not conflict with any agreement, order or other
instrument binding upon AMVC, nor require AMVC to make or obtain any
regulatory filing or approval other than filings, if any, required pursuant
to the Exchange Act.
3. Other Covenants of FMC, Key and AMVC. (a) Until the termination of
this Agreement in accordance with Section 7, FMC agrees and, with respect to,
(ii) and (iii) below, AMVC agrees as follows:
(i) At the AMVC Shareholders Meeting (including any adjournment or
postponement thereof), FMC shall vote (or cause to be voted) any AMVC
voting securities it may hold in favor of the Merger Agreement.
(ii) At the Effective Time, the Series B Purchase Agreement (except
for Section 8.4 thereof which shall survive indefinitely) and the
Registration Rights Agreement dated as of October 14, 1998 between AMVC and
FMC shall terminate and be of no further force or effect.
(iii) At the Effective Time, the Representative Agreement dated as of
October 14, 1998 (the "Representative Agreement") between AMVC and FMC
shall terminate and be of no further force or effect.
(b) Key agrees as follows:
(i) Key will cause the Key Series B Preferred Shares, the Key
Warrants and the Underlying Shares to be registered under the Securities
Act and freely tradeable in the hands of FMC. Key shall cause the
Underlying Shares to be authorized for listing on the
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Nasdaq National Market. Key shall, at all times, reserve and keep available
out of its authorized but unissued shares of Common Stock, such number of
shares of Common Stock as shall from time to time be sufficient to effect
the conversion of the Key Preferred Shares and the exercise of the Key
Warrants.
(ii) The Board of Directors of Key shall take all action necessary or
advisable to render the restrictions contained in (A) any "fair price,"
"business combination," "control share acquisition," "super-majority
voting" statute or other similar antitakeover statute or regulation or
provision of Key's charter or by-laws or (B) the Rights Agreement
inapplicable to this Agreement, the provisions contained herein and the
transactions contemplated hereby. Key shall not take any action to impede
or otherwise frustrate this Agreement, the provisions contained herein and
the transactions contemplated hereby or to any subsequent transactions by
FMC involving Common Stock of Key.
4. Release And Waiver. Each of Key and AMVC, for itself and its
subsidiaries, predecessors, successors and assigns, and for each of its and
their respective directors, officers, employees, managers, agents, shareholders
and attorneys acting as such (collectively, the "Releasing Persons"), does
hereby forever and unconditionally release, acquit and discharge FMC and its
subsidiaries, stockholders, affiliates, directors, officers, employees, agents,
attorneys and consultants, and the predecessors, successors and assigns of each
of them (collectively, the "Released Persons"), and FMC for itself and all such
persons releases Key and AMVC and all such persons from any and all claims,
controversies, covenants, representations, warranties, demands, promises,
contracts, agreements, causes of action, suits, liabilities, obligations, debts
or other responsibility of whatever kind or nature, whether known or unknown,
whether in law or in equity, which the Releasing Persons ever had, now have or
may have against any Released Person for any matter, thing, event, action or
omission which in any way, directly or indirectly, relates to or arises out of
or is connected to (i) the Merger Agreement, the Company Series B Preferred
Stock or the Representative Agreement (including the provisions of Section 2(8)
thereof), (ii) any act or omission by any representative of FMC (including Xxx
Xxxxxx, Xxxxxxx Xxxxx and Xxxx X. Xxxxx) in respect of matters pertaining to
AMVC or (iii) the operation of the businesses operated by AMVC, or any other
acts, facts, omissions, transactions, occurrences or other subject matters
relating thereto, arising therefrom or in connection therewith; provided,
however, that nothing contained herein shall release any obligation created
under this Agreement or claim to enforce it.
5. Indemnification. Key agrees to pay, perform and discharge and
indemnify and hold harmless each FMC Group Member from and against any and all
Expenses incurred by such FMC Group Member in connection with or arising from:
(i) any claim, action, suit or proceeding made by stockholders or former
stockholders of AMVC in their capacities as such or putatively on behalf of
AMVC, in each case relating to or arising out of the Merger Agreement, this
Agreement or any of the transactions contemplated thereby or hereby or (ii) any
inaccuracy in or breach of any of the representations or warranties made by Key
herein or any breach by Key of its covenants or agreements contained herein,
including all efforts taken by FMC to collect payments due it under this Section
5. For purposes of this Agreement, "FMC Group Member" means FMC, its
subsidiaries and its and their respective directors, officers, employees,
agents, attorneys and consultants. "Expenses" means any and all reasonable
expenses incurred
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in connection with investigating, defending or asserting any claim, action, suit
or proceeding (including expenses relating to settlement costs, court filing
fees, court costs, arbitration fees or costs, witness fees and reasonable fees
and disbursements of legal counsel, investigators, expert witnesses, accountants
and other professionals) and, in addition to the foregoing, shall include
settlement costs, but only if Key shall have consented to pay such settlement
costs on the basis that such settlement costs may decrease the total
indemnification liability hereunder, which consent shall not be unreasonably
withheld.
6. Termination. The obligations of the parties hereunder shall
terminate upon the termination of the Merger Agreement for any reason, except
for Sections 4 and 5 hereof which shall survive any termination of obligations
hereunder indefinitely. In addition, FMC shall have the right to terminate its
obligations hereunder if (a) a material Breach of any provision of this
Agreement has been committed by any other party hereto, and in any such case
such Breach has not been waived by FMC or is not cured by such other party
hereto within ten days following receipt of notice of the Breach, (b) the Merger
Agreement shall have been amended without the prior written approval of FMC or
any provision in the Merger Agreement shall have been waived by AMVC without the
prior written approval of FMC or (c) if the Merger is enjoined by the order of
any court of competent jurisdiction if such order remains in effect for a period
of 30 or more calendar days; provided, however, that, notwithstanding clause
(b), the Merger Agreement may be amended without the consent of FMC to increase
the consideration being paid to holders of AMVC Common Stock in the Merger so
long as there is a proportionate increase to the consideration being paid with
respect to the Company Series B Preferred Stock and in exchange for the FMC
Option.
7. Further Assurances. The parties hereto will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as any party may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
8. Successors, Assigns and Transferees Bound. Any successor,
assignee or transferee (including a successor, assignee or transferee as a
result of the death of any party hereto who is an individual, such as an
executor or heir) shall be bound by the terms hereof, and the parties hereto
shall take any and all actions necessary to obtain the written confirmation from
such successor, assignee or transferee that it is bound by the terms hereof.
9. Remedies. Each of the parties hereto acknowledges that money
damages would be both incalculable and an insufficient remedy for any breach of
this Agreement by it, and that any such breach would cause the other parties
irreparable harm. Accordingly, each of the parties hereto agrees that in the
event of any breach or threatened breach of this Agreement, the other parties,
in addition to any other remedies at law or in equity it may have, shall be
entitled, without the requirement of posting a bond or other security, to
equitable relief, including injunctive relief and specific performance.
10. Severability. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement in such jurisdiction, or
the validity or enforceability of any provision of this Agreement in any other
jurisdiction.
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11. Amendment. This Agreement may be amended only by means of a
written instrument executed and delivered by all of the parties hereto.
12. Governing Law. This Agreement shall be governed by, and
construed in accordance in accordance with, the laws of the State of Oregon,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
13. Capitalized Terms. Capitalized terms used in this Agreement that
are not defined herein shall have such meanings as set forth in the Merger
Agreement.
14. Counterparts. For the convenience of the parties, this Agreement
may be executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
15. No limitation on Actions of Xxxx X. Xxxxx as Director.
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended or shall be construed to require Xxxx X. Xxxxx to take or
in any way limit any action that Xxxx X. Xxxxx may take to discharge his
fiduciary duties as a director of AMVC.
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IN WITNESS WHEREOF, FMC, Key, Sub and AMVC have caused this Agreement
to be duly executed as of the date first written above.
FMC CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
KEY TECHNOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and CEO
KTC ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
ADVANCED MACHINE VISION
CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman, President and CEO
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CERTIFICATE OF DESIGNATION
SERIES C CONVERTIBLE PREFERRED STOCK
KEY TECHNOLOGY, INC.
Key Technology, Inc., an Oregon corporation (the "Corporation"),
certifies that pursuant to the authority contained in Article II of its Restated
Articles of Incorporation, and in accordance with the provisions of Section
60.134 of the Oregon Revised Statutes, its Board of Directors has adopted the
following resolution creating a series of its $.0001 par Preferred Stock:
RESOLVED, that, pursuant to authority conferred upon the Board of
Directors by the Articles of Incorporation of the Corporation, the Board of
Directors hereby authorizes the issuance of Series C Convertible Preferred Stock
of the Corporation and hereby designates, pursuant to Section 60.134 of the
Oregon Revised Statutes, the rights, preferences, privileges, restrictions and
other matters relating to such Series C Preferred Stock as follows.
1. Designation and Amount.
One Hundred Nineteen Thousand, One Hundred Six (119,106) shares of
the Corporation's authorized Preferred Stock are hereby designated as the Series
C Convertible Preferred Stock (the "Series C Preferred Stock").
2. Dividends.
No dividends shall be declared and set aside for any shares of the
Series C Preferred Stock except in the event that the Board of Directors of the
Corporation shall declare a dividend payable upon the then outstanding shares of
the Common Stock of the Corporation, in which event the holders of the Series C
Preferred Stock shall be entitled to the amount of dividends per share of Series
C Preferred Stock as would be declared payable on the largest number of whole
shares of Common Stock into which each share of Series C Preferred Stock held by
each holder thereof could be converted pursuant to the provisions of Section 5
hereof (such number determined as of the record date for the determination of
holders of Common Stock entitled to receive such dividend).
3. Liquidation, Dissolution or Winding Up
3.1 Preference. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of each
share of Series C Preferred Stock shall be entitled to be paid first out of the
assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes (whether such assets are capital,
surplus or earnings) before any sums shall be paid or any assets distributed
among the holders of Common Stock, an amount equal to $20 per share of Series C
Preferred Stock plus an amount equal to all accrued and unpaid dividends
thereon, if any, computed up to and including the date full payment shall be
tendered to the holders of the Series C Preferred Stock with respect to such
liquidation, dissolution or winding up.
If the assets of the Corporation shall be insufficient to permit the
payment in full to holders of the Series C Preferred Stock of the amount thus
distributable, then the entire assets of the Corporation available for such
distribution shall be distributed ratably among the holders of the Series C
Preferred Stock.
3.2 Distributions Other than Cash. Whenever the distribution
provided for in this Section 3 shall be paid in property other than cash, the
value of such distribution shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.
4. Voting Power.
Except as otherwise required by law, each holder of Series C Preferred
Stock shall be entitled to vote on all matters and shall be entitled to that
number of votes equal to the number of votes that would be accorded to the
largest number of whole shares of Common Stock into which such holder's shares
of Series C Preferred Stock could be converted, pursuant to the provisions of
Section 5 of this Certificate, at the record date for the determination of
shareholders entitled to vote on such matter or, if no such record date is
established, at the date such vote is taken or any written consent of
shareholders is solicited. The holders of shares of Series C Preferred Stock
and Common Stock shall be entitled to vote together as a single class on all
matters. The holders of Series C Preferred Stock shall not be entitled to vote
as a separate class or voting group on any plan of merger.
5. Conversion Rights.
The holders of the Series C Preferred Stock shall have the following
conversion rights:
5.1 General. Subject to and in compliance with the provisions of
this Section 5, any shares of Series C Preferred Stock may, at the option of the
holder, be converted at any time or from time to time into fully paid and
nonassessable shares (calculated as to each conversion to the largest whole
share) of Common Stock. The number of shares of Common Stock to which a holder
of Series C Preferred Stock shall be entitled upon conversion shall be the
product obtained by multiplying the appropriate Applicable Conversion Rate
(determined as provided in Sections 5.3, 5.4 and 5.5) by the number of shares of
Series C Preferred Stock being converted.
5.2 Mandatory Conversion.
(a) Conversion Upon Merger, Consolidation, Share Exchange or
Sale of Assets.
All the outstanding shares of Series C Preferred Stock
shall, at the option of the Corporation and upon written notice to the holders
thereof given not less than 30 days prior to the closing of a merger or
consolidation of the Corporation with or into another Corporation, share
exchange or the sale of all or substantially all of the Corporation's assets to
any
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other person, be converted, effective upon such closing, into the number of
shares of Common Stock to which a holder of Series C Preferred Stock shall be
entitled upon conversion pursuant to Section 5.1, unless redeemed by the holder
as provided herein. For purposes of the preceding sentence, a merger,
consolidation or share exchange shall only be deemed to occur if, after giving
effect to such merger, consolidation or share exchange, the holders of the
Corporation's outstanding capital stock (determined on a fully diluted basis)
immediately prior to the merger, consolidation or share exchange, will cease to
own immediately following the merger, consolidation or share exchange the
Corporation's (or the surviving corporation's) outstanding capital stock (on a
fully diluted basis) representing at lest 50% of the equity value of the
Corporation (or the surviving corporation) as reasonably determined by the
Corporation's board of directors. Such conversion shall occur automatically on
the effective date of such event without any further action by such holders and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent for the Common Stock, except that any holder
may elect to have such holder's Series C shares redeemed at the liquidation
value by sending a notice of redemption to the Corporation at any time prior to
the expiration of the 30 day notice. Nothing in this Section 5.2, however, shall
limit or in any way restrict the rights of the holders of shares of Series C
Preferred Stock to convert such shares into shares of Common Stock at any time
pursuant to Section 5.1 immediately above. Notwithstanding any other provision
of this subparagraph, the occurrence of a merger or consolidation of the
Corporation with or into another corporation, share exchange or the sale of all
or substantially all of the Corporation's assets to any other person, shall not
be considered a liquidation, dissolution or winding up of the Corporation under
Section 3 of this Certificate.
(b) Surrender of Certificates.
Upon the occurrence of a conversion specified in this
Section 5.2, the holders of such Series C Preferred Stock shall surrender the
certificates representing such shares at the office of the Corporation or of its
transfer agent for the Common Stock. Thereupon, the Corporation or its transfer
agent shall issue and deliver to such holder a certificate or certificates for
the number of shares of Common Stock into which the shares of the Series C
Preferred Stock surrendered were convertible on the date on which such
conversion occurred. The Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless certificates evidencing such shares of the Series C Preferred Stock being
converted are either delivered to the Corporation or any such transfer agent or
the holder notifies the Corporation or any such transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith.
5.3 Series C Applicable Conversion Rate. The conversion rate for
each share of the Series C Preferred Stock in effect at any time (the "Series C
Applicable Conversion Rate") shall be the quotient obtained by dividing $20 by
the Applicable Conversion Value, calculated as provided in Section 5.4.
5.4 Applicable Conversion Value. The Applicable Conversion Value
shall be $12 for the Series C Preferred Stock, except that such amount shall be
adjusted from time to time in accordance with this Section 5.
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5.5 Adjustments to Applicable Conversion Value. Upon the
happening of an Extraordinary Common Stock Event (as hereinafter defined), the
Applicable Conversion Value shall, simultaneously with the happening of such
Extraordinary Common Stock Event, be adjusted by multiplying the then effective
Applicable Conversion Value by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
"Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) the subdivision of outstanding shares of Common
Stock into a greater number of shares of the Common Stock or (iii) the
combination of outstanding shares of Common Stock into a smaller number of
shares of Common Stock.
5.6 Dividends. In the event the Corporation shall make, issue
or fix a record date for the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock or in assets, then and in each
such event provision shall be made so that the holders of Series C Preferred
Stock shall receive upon conversion thereof in addition to the number of shares
of Common Stock receivable thereupon the number of securities or such other
assets of the Corporation that they would have received had their Series C
Preferred Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event to and
including the Conversion Date (as that term is hereafter defined in Section 5.9,
retained such securities or such other assets during such period, giving
application to all adjustments called for during such period under this Section
5 with respect to the rights of the holders of Series C Preferred Stock.
5.7 Recapitalization or Reclassification. If the Common Stock
issuable upon the conversion of the Series C Preferred Stock shall be changed
into the same or different number of shares of any class or classes of stock of
the Corporation, whether by recapitalization, reclassification or otherwise
(other than a reorganization, merger, consolidation or sale of assets), then and
in each such event the holder of each share of Series C Preferred Stock shall
have the right thereafter to convert such share into the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such share of Series C Preferred Stock might
have been converted immediately prior to such reorganization, reclassification
or change, all subject to further adjustment as provided herein.
5.8 Certificate as to Adjustments. In each case of an
adjustment or readjustment of the Applicable Conversion Rate, the Corporation
will furnish each holder of Series C Preferred Stock with a certificate showing
such adjustment or readjustment, and stating in reasonable detail the facts upon
which such adjustment or readjustment is based.
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5.9 Exercise of Conversion Privilege. To exercise a conversion
privilege, a holder of Series C Preferred Stock shall surrender the certificate
or certificates representing the shares being converted to the Corporation at
its principal office, and shall give written notice to the Corporation at the
office that such holder elects to convert such shares. The certificate or
certificates for shares of Series C Preferred Stock surrendered for conversion
shall be accompanied by proper assignment thereof to the Corporation or in
blank. The date when such written notice is received by the Corporation,
together with the certificate or certificates representing the shares of Series
C Preferred Stock being converted, is the "Conversion Date." As promptly as
practicable after the Conversion Date, the Corporation shall issue and deliver
to the holder of the shares of Series C Preferred Stock being converted (i) such
certificate or certificates as it may request for the number of whole shares of
Common Stock issuable upon the conversion of such shares of Series C Preferred
Stock in accordance with the provisions of this Section 5, (ii) cash in the
amount of all accrued and unpaid dividends on such shares of Series C Preferred
Stock, if any, computed up to and including the Conversion Date and (iii) cash,
as provided in Section 5.10 in respect of any fraction of a share of Common
Stock issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the Conversion Date,
and at such time the rights of the holder as holder of the converted shares of
Series C Preferred Stock shall cease and the person or person in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby.
5.10 Cash in Lieu of Fractional Shares. No fractional shares of
Common Stock shall be issued upon the conversion of shares of Series C Preferred
Stock. Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of Series C Preferred Stock, the Corporation shall pay
to the holder of the shares of Series C Preferred Stock which were converted a
cash adjustment in respect of such fractional shares in an amount equal to the
same fraction of the market price per share of the Common Stock (as determined
in a reasonable manner prescribed by the Board of Directors) at the close of
business on the Conversion Date. The determination as to whether or not any
fractional shares are issuable shall be based upon the total number of shares of
Series C Preferred Stock being converted at any one time by any holder thereof,
not upon each share of Series C Preferred Stock being converted.
5.11 Partial Conversion. In the event some but not all of the shares
of Series C Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and deliver
to the holder a new certificate representing the number of shares of Series C
Preferred Stock that were not converted.
5.12 Reservation of Common Stock. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the shares of the
Series C Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of the Series C Preferred Stock. If at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series C Preferred Stock, the
Corporation shall take such corporate
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action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
6. Redemption Rights
6.1 Mandatory Redemption. Except as otherwise provided in this
Section 6, on the fifth anniversary of the first date on which shares of Series
C Preferred Stock are issued (the "Mandatory Redemption Date"), the Corporation
shall redeem, out of funds legally available therefor, all outstanding shares of
Series C Preferred Stock, by paying therefor $20 per share, plus an amount equal
to any declared and unpaid dividends, if any, to such date, in cash (the
"Redemption Value").
6.2 Notice of Redemption. Notice of any redemption of shares of
Series C Preferred Stock pursuant to Section 6.1 shall be given by notice to the
registered holders of the Series C Preferred Stock not less than 30, nor more
than 60 days prior to the date fixed for redemption (a "Redemption Notice"), to
each holder of Series C Preferred Stock to be redeemed, at such holder's address
as it appears on the transfer books of the Corporation. In order to facilitate
the redemption of Series C Preferred Stock, the Board of Directors may fix a
record date for the determination of Series C Preferred Stock to be redeemed, or
may cause the transfer books of the Corporation for the Series C Preferred Stock
to be closed, not more than 60 days or less than 30 days prior to the date fixed
for such redemption. At any time prior to the expiration of the Redemption
Notice, any holder of the Series C shares may exercise the conversion rights
pursuant to the provisions of Section 5.9 above.
6.3 Cancellation of Series C Preferred Stock. Notice of Redemption
having been given as aforesaid in respect of shares of Series C Preferred Stock
to be redeemed pursuant to Section 6.1, notwithstanding that any certificates
for such shares shall not have been surrendered for cancellation, from and after
the date of redemption designated in the notice of redemption (i) the shares
represented thereby shall no longer be deemed outstanding, (ii) the rights to
receive dividends thereon shall cease to accrue, and (iii) all rights of the
holders of Series C Preferred Stock to be redeemed shall cease and terminate,
excepting only the right to receive the $20 per share redemption price therefor,
plus all accumulated and unpaid dividends (whether or not earned or declared) to
the date of redemption.
7. Put Right
7.1 The Put. The Corporation hereby irrevocably grants and issues to
each holder of Series C Preferred Stock the right to require the Corporation to
purchase at any time (hereinafter referred to as the "Put") any or all of such
Series C Preferred Stock at the Redemption Value.
7.2 Exercise of Put. The holders of Series C Preferred Stock may
exercise the Put any time after the Issue Date (the "Exercise Period"). Any
holder of Series C Preferred Stock may exercise the Put during the Exercise
Period by delivery of a written notice to the Corporation specifying the number
of Series C Preferred Stock as to which the Put is being exercised, together
with delivery of one or more certificates representing the number of Series C
shares as to which
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the Put is being exercised, duly endorsed in blank by the holders of Series C
Preferred Stock or having attached thereto a stock power duly executed by the
holder of Series C Preferred Stock in proper form for transfer.
7.3 Payment and Delivery of Series C Preferred Stock. The
Corporation shall, within 20 calendar days of the receipt of notice from a
holder of Series C Preferred Stock of its exercise of the Put, pay to such
holder of Series C Preferred Stock in cash or by check, the Redemption Value for
each share of Series C Preferred Stock as to which such holder of Series C
Preferred Stock has exercised the Put. Any residual Series C shares represented
by the certificates surrendered but not included within the Put will be issued
in the name of the holder by the Corporation.
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