1
EXHIBIT 4.5
December 20, 1999
DDJ Capital Management, LLC
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: Metretek Technologies, Inc.
---------------------------
Ladies and Gentlemen:
Reference is made to the Securities Purchase Agreement between Metretek
Technologies, Inc. (the "Company") and the Purchasers named therein, dated
December 9, 1999 (the "Purchase Agreement"). Capitalized terms not defined
herein have the meanings given them in the Purchase Agreement. Reference is also
made to the letter agreement between the Company and DDJ Capital Management, LLC
dated December 9, 1999 (the "Side Letter").
In furtherance of the transactions contemplated by the Side Letter, and
in consideration of the agreement of funds and accounts managed by DDJ Capital
Management, LLC to purchase Units at the Initial Closing and conditional
agreement to purchase Units at the Second Closing and the Company's agreements
herein, the parties hereto agree as follows:
1. The Company shall include in the Proxy Statement, and recommend that
the stockholders of the Company approve as part of the Stockholders Meeting
Matter, the amendments to the Company's Certificate of Incorporation described
herein. The Company shall use its best efforts to obtain the approval of its
stockholders (whether at the Special Stockholders Meeting or otherwise) and the
Bank of Canada.
2. Immediately after the Special Stockholders Meeting the Company shall
make all filings with the Delaware Secretary of State necessary to amend and
restate Section A.2 of the Series B Preferred Stock to read as follows if the
stockholders of the Company have approved such amendments:
"2. Election of Directors.
----------------------
(a) So long as an aggregate of at least 2,000 shares of
Convertible Preferred Stock remain outstanding, the holders of outstanding
shares of Convertible Preferred Stock shall, voting together as a separate
class, be entitled to elect one (1) Director. Such Director shall be the
individual receiving the greatest number of affirmative votes of the outstanding
shares of Convertible Preferred Stock (the "Convertible Preferred Stock Director
Designee"), with each share of Convertible Preferred Stock entitled to one (1)
vote, and with votes cast
2
against such person and votes withheld having no legal effect. Each Director so
elected shall hold office until a new Convertible Preferred Stock Director
Designee is elected Director as provided below, provided that such Director
shall in any event cease to hold office at such time as the holders of
Convertible Preferred Stock are no longer entitled to elect a Director in
accordance with this Section A.2. The election of the Convertible Preferred
Stock Director Designee by the holders of the Convertible Preferred Stock shall
occur (i) at the annual meeting of holders of Common Stock, (ii) if there is
then no Convertible Preferred Stock Director Designee serving as a Director, at
any special meeting of holders of capital stock, (iii) if there is then no
Convertible Preferred Stock Director Designee serving as a Director, at any
special meeting of holders of Convertible Preferred Stock called by holders of a
majority of the outstanding shares of Convertible Preferred Stock (a "Majority
Interest") or (iv) in lieu of an election at a meeting, by the written consent
of holders of not less than sixty-six and two-thirds percent (662/3%) of the
outstanding shares of Convertible Preferred Stock (a "Two Thirds Interest"). If
at any time when any share of Convertible Preferred Stock is outstanding the
Convertible Preferred Stock Director Designee should cease to be a Director for
any reason, the vacancy shall only be filled by the vote or written consent of
holders of the outstanding shares of Convertible Preferred Stock, voting
together as a separate class, in the manner and on the basis specified above.
The holders of a majority of the outstanding shares of Convertible Preferred
Stock, may, in their sole discretion, determine to elect fewer than one (1)
Convertible Preferred Stock Director Designee from time to time, and during any
such period the Board of Directors nonetheless shall be deemed duly constituted.
The holders of Common Stock and the holders of any other class or series of
capital stock of the Company with the right to vote in the election of directors
shall be entitled to elect the remaining members of the Board of Directors.
(b) Notwithstanding the provisions of paragraph 2(a) above, in
the event that the Corporation fails for any reason to redeem the Convertible
Preferred Stock in full in accordance with the terms of Section A.5(a) hereof,
then the number of Directors on the Corporation's Board of Directors shall
immediately and without any action taken by the Corporation or any of its
stockholders, be increased by the minimum such number as is necessary to ensure
that the directors elected under this paragraph 2(b) (the "Default Preferred
Directors") will constitute a majority of the Corporation's Board of Directors,
and the holders of the Convertible Preferred Stock shall be entitled to elect
the Default Preferred Directors, with each share of Convertible Preferred Stock
entitled to one (1) vote. Each Default Preferred Director so elected shall hold
office in accordance with the terms for directors elected at such meeting as
provided by law, the Certificate of Incorporation, as amended, or the by-laws of
the Corporation in effect at the time, provided that such Director shall in any
event cease to hold office at such time as the holders of Convertible Preferred
Stock are no longer entitled to elect Default Preferred Directors in accordance
with this Section A.2(b). The election of the Default Preferred Directors by the
holders of the Convertible Preferred Stock shall occur (i) at the annual meeting
of holders of Common Stock, (ii) if there is then no Convertible Preferred Stock
Director Designee serving as a Director, at any special meeting of holders of
capital stock, (iii) if there is then no Convertible Preferred Stock Director
Designee serving as a Director, at any special meeting of holders of Convertible
Preferred Stock called by a Majority Interest or (iv) in lieu of an election at
a meeting, by the written consent of holders of a Two
3
Thirds Interest. If at any time when any share of Convertible Preferred Stock is
outstanding any Default Preferred Director should cease to be a Director for any
reason, the vacancy shall only be filled by the vote or written consent of
holders of the outstanding shares of Convertible Preferred Stock, voting
together as a separate class, in the manner and on the basis specified above.
The holders of a majority of the outstanding shares of Convertible Preferred
Stock may, in their sole discretion, determine to elect fewer than all of the
Default Preferred Directors from time to time, and during any such period the
Board of Directors nonetheless shall be deemed duly constituted. Upon full
payment by the Corporation of all amounts payable to the holders of the
Convertible Preferred Stock pursuant to Section A.5(a) hereof, including any
interest thereon, which the Board of Directors shall cause to be made by the
Corporation as soon as is lawful and practicable, the right of the holders of
Convertible Preferred Stock to elect Default Preferred Directors under this
paragraph 2(a) shall terminate, the terms of all such Default Preferred
Directors shall forthwith cease, and the number of Directors shall forthwith be
reduced by an amount equal to the number of Default Preferred Directors which
the holders of the Convertible Preferred Stock were previously entitled to elect
hereunder.
(c) Whenever the holders of Convertible Preferred Stock are entitled to
take any action under either paragraph (a) or (b) of this Section A.2(b), a
Majority Interest shall have the right to fix any record date and the date, time
and location, to the extent applicable, of any meeting or written consent
referred to therein and to send any required notices. If a Majority Interest
requests that the Corporation take any of such actions, it will do so
immediately. The Corporation will not take any action, including amending its
Certificate of Incorporation or bylaws, which is inconsistent with the intent or
purposes of Section A.2."
3. The terms of the Side Letter shall remain in full force and effect
unless and until the amendments referred to in paragraph 2. above have been
filed with the Secretary of State of Delaware and have become effective in
accordance with applicable law.
4
Sincerely,
METRETEK TECHNOLOGIES, INC.
By: /s/ X. Xxxxxxx Xxxxxxx
----------------------------
Name: X. Xxxxxxx Xxxxxxx
Title: Executive Vice President
Xxxxxxxxxxx and agreed:
DDJ CAPITAL MANAGEMENT
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Member
