0
XXXXXX 00.0
XXXXXXX XX XX
FISKARS HOLDINGS, INC.
DELTEC POWER SYSTEMS, INC.
XXXXXXXXXXXXXXX 00 X
00000 XXXXXXXX 00
XXXXXXX
February 9, 1996
Exide Electronics Group, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Re: Amendment to Stock Purchase Agreement dated November 16, 1995
(the "Stock Purchase Agreement")
Gentlemen:
We are parties to the Stock Purchase Agreement under the terms of which
Exide Electronics Group, Inc. ("Buyer") agreed to buy and Fiskars OY AB
("Fiskars") and Fiskars Holdings, Inc. ("Holdings") (Fiskars and Holdings are
collectively referred to herein as "Shareholders") agreed to sell all of the
issued and outstanding capital stock of Deltec Power Systems, Inc. ("Company").
This letter agreement may be referred to in other writings as the "Amendment
Agreement." Article 9 of the Stock Purchase Agreement provides that the Closing
of the transactions contemplated by the Stock Purchase Agreement would take
place at the offices of the Company at the close of business on January 4, 1996,
or at such other time as we would mutually agree. The Closing did not occur on
January 4, 1996. At Buyer's request, we have agreed to extend the time for
Closing in consideration for amendments to the Stock Purchase Agreement and
certain financial concessions as follows:
1. The introductory paragraph of Article 9 of the Stock Purchase Agreement
is hereby amended to read in its entirety as follows:
"The closing of this transaction (the "Closing") shall take place at
the offices of the Company, 0000 Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx, at
the close of business on the earlier of (i) the date that Buyer closes on
and is entitled to funding under its secured term and revolving credit
facility with X.X. Xxxxxx & Co., as agent bank, and its contemplated bond
financing, with aggregate net available funds of at least $158,500,000
(collectively, the "Anticipated Financing") or (ii) March 15, 1996. Such
date is referred to in this Agreement as the "Closing Date." Time is of the
essence as to the Closing."
2. In the event that the Closing of the transactions contemplated by the
Stock Purchase Agreement does not occur on or before the close of business on
March 15, 1996 for any reason whatsoever, Buyer shall pay to Shareholders, as a
break-up fee, $5 million, which shall be paid by wire transfer of immediately
available funds on the second business day following such date. In the event
payment is not made when due, such amount shall bear interest at a rate per
annum equal to five percent (5%) in excess of the prime lending rate announced
from time to time by Firstar Bank Milwaukee, N.A. (the "Prime Rate"), which rate
shall change as and when the Prime Rate changes. Such break-up fee shall be paid
to Shareholders in lieu of any other claims or damages Shareholders may have as
a result of Buyer's failure to close such transactions, provided that if Buyer's
failure to close did not result from its inability (notwithstanding its good
faith and reasonable efforts) to obtain the Anticipated Financing, the
Shareholders shall retain their right to bring an action for
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specific performance to cause Buyer to close such transactions. Such payment
shall be made to the following account:
Skandinaviska Enskilda Banken, New York
Routing Number (ABA#): 000000000
For Further Credit to: Fiskars Oy Ab,
Account #3843
Contact: Xxxx Xxxxxx (000) 000-0000
3. In consideration of the agreement of the Shareholders to postpone
Closing as provided in Section 1 hereof, Buyer shall pay the Shareholders the
following amounts:
(a) $1.5 million; and
(b) An amount equal to 12% per annum of $75 million ($24,658 per day)
from January 19, 1996 until the earliest to occur of the: (i) termination
of the Stock Purchase Agreement in accordance with its terms as amended by
this Amendment ("Termination"), (ii) Closing or (iii) March 15, 1996; and
(c) An amount equal to interest that would accrue at one percent (1%)
per annum in excess of the Prime Rate on $82.5 million from January 19,
1996 until the earliest to occur of: (i) Termination, (ii) Closing or (iii)
March 15, 1996.
The sum of the amount described in Section 3(a), plus the amounts described
in Sections 3(b) and 3(c) for the period from January 19 through January 31,
1996, shall be paid by Buyer on Friday, February 9, 1996. The amounts accruing
under Sections 3(b) and 3(c) for the period after January 31 and before March 1,
1996 shall be paid on March 1, 1996 and for the period after February 29, 1996
and before Closing or March 15, 1996, as the case may be, shall be paid on the
Closing Date or March 15, 1996, as the case may be. All such payments shall be
made by a wire transfer of immediately available funds to the account described
in Section 2 above. In the event that Buyer obtains bridge financing for the
cash portion of the Purchase Price payable to the Shareholders under the Stock
Purchase Agreement, and the transactions contemplated by the Stock Purchase
Agreement close on or before February 15, 1996, the Buyer may credit against the
cash Purchase Price payable to Fiskars at the Closing one-half of the amount
paid to the Shareholders pursuant to Section 3.(a) hereof, provided that Buyer
must obtain the consent of Shareholders to any bridge financing that: (i)
contains any warrants, options, stock or other equity exercisable or issuable at
less than market value when exercised or issued and that dilute (or could
dilute) Shareholders' interest in Buyer to an extent unacceptable to
Shareholders, or (ii) is not customary bridge financing obtained from recognized
financial institutions or investment or merchant bankers.
4. Each of the parties to the Stock Purchase Agreement hereby waives each
and every one of the conditions precedent to its obligation to proceed with
Closing, provided that the following conditions precedent shall remain in full
force and effect: (i) the condition in Sections 6.2 and 7.2 to deliver the
closing documents specified in Sections 9.1 and 9.2 (with the exception of the
Compliance Certificates described in Sections 9.1(b) and 9.2(c)); and (ii) the
condition that a party may refuse to close if it has been enjoined from Closing
by a court of competent jurisdiction in an action not brought by the party
asserting the condition precedent. None of such waived conditions shall be
asserted by any party as a reason not to close the transactions contemplated by
the Stock Purchase Agreement. In the event Closing occurs, nothing in this
Amendment Agreement shall waive a party's rights to indemnity under Article 8 of
the Stock Purchase Agreement except to the extent of Claims released pursuant to
Section 1 of the Agreement Not to Xxx or Interfere of even date herewith among
the parties.
5. [Intentionally left blank].
6. Buyer shall pay and indemnify and hold the Shareholders and the Company
harmless against all reasonable expenses of the Shareholders' accountants, KPMG
Peat Marwick and Price Waterhouse, in providing supplemental financial
information requested by Buyer for the Anticipated Financing.
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7. Buyer agrees to instruct its employees, consultants and agents who may
be dealing with the Company and its subsidiaries with respect to coordination of
technical developments, sales and marketing programs and other matters that the
transactions contemplated by the Stock Purchase Agreement have not closed and
that all such cooperative efforts should be discontinued until Closing, except
as provided below. Buyer, on the one hand, and Shareholder and Company, on the
other hand, hereby confirm their respective duties to maintain information
received from the Shareholders and Company, on the one hand, and from Buyer, on
the other hand, confidential pursuant to those certain confidentiality
agreements executed and delivered prior to the Stock Purchase Agreement with
respect to all information that has been disclosed to Buyer or to Shareholder
and Company, or to their respective employees, consultants and agents or will be
disclosed to them as part of due diligence or otherwise as part of these
transactions. Notwithstanding the foregoing, Buyer and Deltec shall continue to
pursue two pending business transactions that involve (i) Deltec manufacturing
and selling certain products to Buyer on a private label basis and (ii) a joint
technical project related to combining Deltec software and Buyer's hardware for
the purpose of designing a product to satisfy a supply contract with 3COM,
provided that any disclosure by Deltec to Buyer of any source code relating to
Deltec's software shall be subject to a special confidentiality agreement
related to such software on terms mutually acceptable to Deltec and Buyer. The
Shareholders shall cause Deltec: (i) to maintain any proprietary information
received from Buyer related to such development project confidential, (ii) not
to use such information without the written consent of Buyer in the event the
transactions contemplated by the Stock Purchase Agreement do not close, and
(iii) not to pursue (either singly or with others) a supply contract with 3COM
competitive with Buyer for the product(s) that is the subject of the joint
technical project described above. Each of Deltec and Buyer may decide, in its
absolute discretion, to enter into a joint supply arrangement with the other
party for the 3COM product, which supply arrangement will be on reasonable and
customary terms and conditions. In addition, Shareholders and Company
acknowledge and consent that Buyer may continue to discuss the terms and
conditions of post-closing employment arrangements with the senior management of
the Company.
8. Section 2.1 of the Stock Purchase Agreement is hereby amended as
follows:
(a) Section 2.1.(d) is restated as follows:
"To Fiskars, (i) 825,000 shares of Buyer's Common Stock, valued at a
fixed price of $20.00 per share and (ii) 1,000,000 shares of Buyer's
Series G Convertible Preferred Stock (which stock shall have the
rights, privileges and preferences set forth on Schedule 2.1.(d)
attached hereto), valued at a fixed price of $20.00 per share;"
(b) The final sentence of Section 2.1 of the Stock Purchase Agreement
is restated as follows:
"Notwithstanding anything set forth in this Section 2.1, the
aggregate cash consideration to be paid by Buyer for the Shares
pursuant to this Agreement shall not, except as set forth in Section
2.3.(d) and 8.2, exceed $158,500,000. In addition to the Purchase
Price for the Shares, Buyer shall pay to Fiskars at the Closing, by
wire transfer of immediately available funds, the sum of $1,000,000
as reimbursement for certain expenses incurred by the Shareholders in
connection with the negotiation, due diligence investigation and
closing of the transactions contemplated by this Agreement."
9. Section 10.1. of the Stock Purchase Agreement is hereby amended to read
in its entirety as follows:
"10.1. Right of Termination. This Agreement may be terminated at any
time prior to the Closing:
10.1.(a) By mutual written agreement of Buyer and Shareholders, or
10.1.(b) By Shareholders if the Closing shall not have occurred on
or before the close of business on March 15, 1996 provided that, on such
date, Shareholders tendered or were prepared to tender the documents
described in Section 9.1 of this Agreement other than the compliance
certificate described in Section 9.1.(b) ("Shareholders' Tender of
Closing to Buyer") and Buyer refused to close, or
10.1.(c) By Buyer if the Closing shall not have occurred on or
before the close of business on April 15, 1996, provided that, on such
date, Buyer tendered or was prepared to tender the payments
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and documents described in Section 9.2 of this Agreement and the
Amendment Agreement other than the compliance certificate described in
Section 9.2.(c) ("Buyer's Tender of Closing to Shareholders") and
Shareholders refused to close."
10. Section 10.2 of the Stock Purchase Agreement is hereby restated as
follows:
"10.2. Termination for Breach. Except as provided in 10.1.(a) above,
neither Buyer nor the Shareholders may terminate this Agreement prior to
March 15, 1996, provided that Shareholders may terminate the Agreement by
written notice to Buyer, if Buyer shall have failed to make any payment to
Shareholders required by Section 3 of that certain Amendment Agreement,
dated February 9, 1996, or Buyer shall have failed to satisfy its
obligation in Section 12 of such agreement, and such failure shall be
continuing on the date of Termination."
11. Section 1.1.(a) of that certain Stockholder Agreement that is attached
to the Stock Purchase Agreement as Schedule 9.1.(f) shall be amended to delete
the third sentence thereof and insert the following in lieu thereof:
"The rights of Stockholder set forth herein will be limited to one
Stockholder Representative at any time that the number of shares of Company
Common Stock beneficially owned by the Stockholder, when combined with the
number of shares of Company Common Stock that could be obtained upon
conversion of the Company Series G Convertible Preferred Stock beneficially
owned by Stockholder (such combined number defined as the "Imputed Common
Stock Ownership"), equals less than ten percent (10%) of the Company Common
Stock that would be outstanding upon such conversion without taking into
consideration any warrants, options, stock or other equity issued in
connection with the Anticipated Financing (as defined in Article 9 of the
Purchase Agreement, as amended) except for Company Common Stock issued
pursuant to warrants, options or other rights exercisable at a price at
least equal to the market value of such Common Stock on the date of
exercise (the "Financing Equity"), and the Stockholder shall have no right
to a Stockholder Representative at any time that its Imputed Common Stock
Ownership is less than five percent (5%) of the Company Common Stock that
would be outstanding upon conversion of the Series G Convertible Preferred
Stock beneficially owned by Stockholder without taking into consideration
the Financing Equity; provided, however, that the ownership of the
Company's Common Stock or Preferred Stock by an entity controlling,
controlled by or under common control with the Stockholder with the prior
consent of the Company (which consent shall not be unreasonably withheld),
and which has agreed in a writing delivered to the Company to be obligated
as the Stockholder hereunder (in the case of ownership of Common Stock),
shall be attributed to the Stockholder for purposes of this 1.1.(a). The
initial Stockholder Representatives shall be Xxxx Xxxxxxxx and Xxxx Xxxx."
12. Buyer agrees to deliver to the Shareholders on or before Thursday,
February 15, 1996, a written commitment from X. X. Xxxxxx & Co. to extend its
financial commitments to Buyer to finance the transactions contemplated by the
Stock Purchase Agreement until March 15, 1996.
Except as expressly amended by this letter agreement or the Agreement Not
to Xxx or Interfere of even date herewith among the parties, all other terms and
conditions of the Stock Purchase Agreement remain in full force and effect
without amendment or modification. Capitalized terms used but not defined herein
shall have the meanings given them in the Stock Purchase Agreement. This letter
agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Facsimile copies of this letter agreement that contain signatures
shall be deemed to be original signed versions for purposes of this letter
agreement.
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If the foregoing is acceptable to you as an expression of our agreement
with respect to these matters, please sign a counterpart of this letter and
deliver it to the undersigned.
Sincerely yours,
FISKARS OY AB
By:
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Title:
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FISKARS HOLDINGS, INC.
By:
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Title:
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DELTEC POWER SYSTEMS, INC.
By:
------------------------------
Title:
---------------------------
The undersigned hereby confirms and agrees to the
terms of the foregoing Amendment Agreement this
____ day of February, 1996.
EXIDE ELECTRONICS GROUP, INC.
By:
--------------------------------------------
Title:
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SCHEDULE 2.1.(D)
Terms of Preferred Stock
See Certificate of Designation of the Series G Convertible Preferred Stock
of Exide Electronics Group, Inc. attached hereto.
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CERTIFICATE OF DESIGNATION
OF THE
SERIES G PREFERRED STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
PURSUANT TO SECTION 151(G) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted on , 1996, by the Board of Directors (the
"Board") of EXIDE ELECTRONICS GROUP, INC., a Delaware corporation (the
"Corporation"), acting pursuant to the authority granted to the Board in
accordance with provisions of Section 151(g) of the General Corporation Law of
the State of Delaware, at a duly convened meeting of the Board at which a quorum
was present and acted throughout.
RESOLVED, that pursuant to the authority expressly granted to the Board by
the provisions of the Certificate of Incorporation of the Corporation (the
"CorporationCertificate of Incorporation"), there is hereby created a Series G
Convertible Preferred Stock, par value $.01 per share, which shall consist of
1,000,000 shares of serial preferred stock (hereinafter called the
"CorporationCertificate of IncorporationSeries G Preferred Stock"). The Series G
Preferred Stock shall have the following powers, designations, preferences and
relative participating, optional and other special rights, and the
qualifications, limitations and restrictions (in addition to the powers,
designations, preferences and relative, participating optional and other special
rights, and the qualifications, limitations or restrictions thereof, set forth
in the Certificate of Incorporation, which may be applicable to the serial
preferred stock) as follows:
A. DIVIDENDS
1. Cumulative. The holders of shares of Series G Preferred Stock
(hereinafter called the "CorporationCertificate of IncorporationSeries G
Preferred StockHolders") shall be entitled to receive, out of any assets at the
time legally available therefor, cash dividends at the rate of: (i) eighty cents
($0.80) per share per annum, and no more, through March 31, 2001, and (ii)
thereafter at a rate of one dollar twenty cents ($1.20) per share, and no more.
Dividends shall be payable in cash quarterly, in arrears, commencing on June 30,
1996, and thereafter on the last business day of March, June, September and
December of each year that any Series G Preferred Stock shall be outstanding.
Such dividends are prior and in preference to any declaration or payment of any
distribution (as defined below) on the common stock of the Corporation (the
"CorporationCertificate of IncorporationSeries G Preferred StockHoldersCommon
Stock"), and shall be prior and in preference to any declaration or payment of
any distribution on any other preferred stock of the Corporation unless such
stock is expressly senior to the Series G Preferred Stock after written consent
of Holders, which consent will not be unreasonably withheld. Such dividends
shall accrue on each share of Series G Preferred Stock from day to day from the
date of initial issuance thereof whether or not earned, declared, or paid, and
whether or not funds are legally available therefor, so that if such dividends
with respect to any previous dividend period at the rate provided for herein
have not been paid on, or declared and set apart for, all shares of Series G
Preferred Stock at the time outstanding, the deficiency shall be fully paid on,
or declared and set apart for, such shares before any distribution shall be paid
on, or declared and set apart for Common Stock or any other series of preferred
stock except as aforesaid.
2. All cash dividends shall be paid by the Corporation to the Holders
except to the extent (but only to the extent) a payment would cause the
Corporation to violate any covenant or condition under any of its credit or debt
financing agreements. In the event any part or all of a dividend payment will
cause such violation, the Corporation will use reasonable and good faith efforts
to obtain waivers of compliance with its debt covenants for the purpose of such
dividend and will so notify the Holders; provided, that such efforts shall not
require the Corporation to incur additional expenses, except for reasonable
legal expenses related to preparing such waivers.
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3. The Corporation shall pay all cash dividends by certified bank check or
wire transfer.
4. For purposes of this Section (A), unless the context otherwise requires,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by directors, employees or consultants of the Corporation upon termination
of their directorship, employment or services pursuant to agreements providing
for such repurchase, which agreements were either in effect prior to the Closing
Date or in forms which are customary and reasonable based on similar industry or
Corporation standards) for cash or property, including any such transfer,
purchase or redemption by a subsidiary of the Corporation.
B. PREFERENCE ON LIQUIDATION
1. In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the Holders of shares of Series G Preferred Stock
then outstanding shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders, whether from
capital, surplus or earnings, before any payment shall be made in respect of the
Common Stock (and before payment with respect to any other series of preferred
stock then in existence and outstanding which is not expressly senior to the
Series G Preferred Stock as permitted by Section (A)), if any, an amount equal
to Twenty Dollars ($20) per share of Series G Preferred Stock, plus all accrued
and unpaid dividends thereon to the date fixed for distribution. After setting
apart or paying in full the preferential amounts due to the Holders, the
remaining assets of the Corporation available for distribution to stockholders,
if any, shall be distributed exclusively to the holders of Common Stock, each
such issued and outstanding share of Common Stock entitling the holder thereof
to receive an equal proportion of said remaining assets, unless the rights,
preferences or privileges of another series of preferred stock then in existence
and outstanding has priority over the Common Stock, in which case the holders of
such preferred stock would be entitled to receive assets prior to the receipt by
holders of the Common Stock as mandated by the terms of such preferred stock
issue. If upon the liquidation, dissolution or winding up of the Corporation,
the assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the Holders the full amount to which they shall be
entitled, the Holders shall share ratably in any distribution of assets
according to the respective amounts which would be payable in respect of the
shares of Series G Preferred Stock held by them upon such distribution if all
amounts payable on or with respect to said shares were paid in full.
2. In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the Corporation shall, within ten (10) days after
the date the Board of Directors approves such action, or twenty (20) days prior
to any stockholders' meeting called to approve such action, or twenty (20) days
after the commencement of any involuntary proceeding, whichever is earlier, give
each Holder initial written notice of the proposed action by airmail or other
express delivery service. Such initial written notice shall describe the
material terms and conditions of such proposed action, including a description
of the stock, cash and property to be received by the Holders upon consummation
of the proposed action and the date of delivery thereof. If any material change
in the facts set forth in the initial notice shall occur, the Corporation shall
promptly give written notice by airmail or other express delivery service to
each Holder of such material change.
3. The Corporation shall not consummate any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation before the expiration
of thirty (30) days after the mailing by airmail or other express delivery
service of the initial notice or ten (10) days after the mailing by airmail or
other express delivery service of any subsequent written notice, whichever is
later; provided that any such 30-day or 10-day period may be shortened upon the
written consent of the Holders of all of the outstanding shares of Series G
Preferred Stock.
4. In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation which will involve the distribution of assets
other than cash, the Corporation shall promptly engage competent independent
appraisers to determine the value of the assets to be distributed to the
Holders, the holders of shares of other series of preferred stock then in
existence and outstanding, if any, and the holders of shares of Common Stock (it
being understood that with respect to the valuation of securities, the
Corporation shall
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engage such appraiser as shall be approved by the Holders of a majority of
outstanding shares of Series G Preferred Stock, which approval shall not be
unreasonably withheld). The Corporation shall, upon receipt of such appraiser's
valuation, give prompt written notice to each Holder of the appraiser's
valuation.
C. VOTING
Except as otherwise required by law or as set forth herein, the shares of
Series G Preferred Stock shall be voted in accordance with any stockholder
agreement then in effect between the Corporation and the Holder, and if no
stockholder agreement is then in effect, such shares shall be voted in the
manner the Holders deem appropriate; in each case as if it were Common Stock.
Subject to the terms of any stockholders agreement in effect, each Holder shall
be entitled to such number of votes for the Series G Preferred Stock held by the
Holder on the record date fixed for such meeting, or on the effective date of
such written consent, as shall be equal to the largest number of whole shares of
the Corporation's Common Stock into which all of the Holder's shares of Series G
Preferred Stock are convertible immediately after the close of business on the
record date fixed for such meeting or the effective date of such written
consent. Notwithstanding anything herein to the contrary, the Holders shall be
entitled to vote as a separate class for any changes in the rights and
privileges of the Series G Preferred Stock.
D. CONVERSION RIGHTS
Each share of Series G Preferred Stock shall be convertible at any time
into fully paid and nonassessable shares of Common Stock of the Corporation at
the option of the Holder. The number of shares of Common Stock into which each
share of the Series G Preferred Stock may be converted shall be determined by
dividing the Original Purchase Price by the Series G Conversion Price
(determined as hereinafter provided) in effect at the time of the conversion.
The Original Purchase Price of the Series G Preferred Stock is $20 per share.
Subject to adjustment of the Series G Conversion Price pursuant to Section (E),
the Series G Preferred Stock shall be convertible on a share-for-share basis
into the Corporation's Common Stock.
1. The Series G Conversion Price per share at which shares of Common Stock
shall be initially issuable upon conversion of any shares of Series G Preferred
Stock shall be twenty dollars ($20).
2. The Holder may exercise the conversion rights as to all shares of Series
G Preferred Stock owned by the Holder or any part thereof by delivering to the
Corporation during regular business hours, at the office of any transfer agent
of the Corporation for the Series G Preferred Stock, or at the principal office
of the Corporation or at such other place as may be designated by the
Corporation, the certificate or certificates for the shares to be converted,
duly endorsed for transfer to the Corporation (if required by it), accompanied
by written notice stating that the Holder elects to convert such shares.
3. Conversion shall be deemed to have been effected on the date when such
delivery is made or to be made, and such date is referred to herein as the
"Conversion Date". As promptly as practicable after delivery of the certificates
representing Series G Preferred Stock to be converted the Corporation shall
issue and deliver to or upon the written order of such Holder, at such office or
other place designated by the Holder, a certificate or certificates for the
number of full shares of Common Stock to which such Holder is entitled and a
check for cash with respect to any fractional interest in a share of Common
Stock as provided in subparagraph (4) of this Section (D). The Holder shall be
deemed to have become the holder of record of the Common Stock on the applicable
Conversion Date unless the transfer books of the Corporation are closed on the
date, in which event it shall be deemed to have become the holder of record of
the Common Stock on the next succeeding date on which the transfer books are
open, but the Series G Conversion Price shall be that in effect on the
Conversion Date. Upon conversion of only a portion of the number of shares of
Series G Preferred Stock represented by a certificate surrendered for
conversion, the Corporation shall issue and deliver to or upon the written order
of the Holder, at the expense of the Corporation, a new certificate covering the
number of shares of Series G Preferred Stock representing the unconverted
portion of the certificate so surrendered.
4. No fractional shares of Common Stock or script shall be issued upon
conversion of shares of Series G Preferred Stock. If more than one share of
Series G Preferred Stock shall be surrendered for conversion at any
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one time by the same Holder, the number of full shares of Common Stock issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of shares of Series G Preferred Stock so surrendered. Instead of any fractional
shares of Common Stock which would otherwise be issuable upon conversion of any
shares of Series G Preferred Stock, the Corporation shall pay a cash adjustment
in respect of such fractional interest equal to the fair market value of such
fractional interest as determined by the Corporation's Board of Directors.
5. At the time the Corporation delivers shares of Common Stock to the
Holder, the Corporation shall pay to the Holder the unpaid dividends on the
converted Series G Preferred Stock accrued through the Conversion Date to the
extent otherwise permitted in accordance with the terms hereof, including
without limitation, Section A.2 hereof. In the event the payment of such unpaid
dividends is not permitted in accordance with the terms hereof, the Holder may
elect, at the Holder's option, to purchase additional shares of the
Corporation's Common Stock with such unpaid dividends at the Series G Conversion
Price at which the Holder is converting Series G Preferred Stock into the
Corporation's Common Stock. Such election shall be made by the Holder sending a
written notice to the Corporation within ten (10) days following the
Corporation's failure to pay such dividends. The Corporation shall deliver
certificates for shares of the Corporation's Common Stock so purchased as
promptly as practicable after receipt of the Holder's notice. Unpaid dividends
that are not used by the Holder to purchase the Corporation's Common Stock shall
remain accrued and outstanding and shall be paid at such time as the
restrictions against payment of such dividends no longer apply.
6. The Corporation shall pay any and all United States issue and other
taxes (other than taxes with respect to income, gain or receipts) that may be
payable in respect of any issue or delivery of shares of Common Stock on
conversion of Series G Preferred Stock pursuant thereto. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that in which the Series G Preferred Stock so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the amount of any such
tax, or has established, to the satisfaction of the Corporation, that such tax
has been paid.
7. The Corporation shall at all times reserve and keep available, out of
its authorized but unissued Common Stock, solely for the purpose of effecting
the conversion of Series G Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all Series G Preferred Stock from time
to time outstanding. The Corporation shall from time to time (subject to
obtaining necessary director and stockholder action), in accordance with the
laws of the State of Delaware, increase the authorized amount of its Common
Stock remaining unissued to an amount that is sufficient to permit the
conversion of all of the shares of Series G Preferred Stock at the time
outstanding.
8. All shares of Common Stock which may be issued upon conversion of the
shares of Series G Preferred Stock will upon issuance by the Corporation be
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges with respect to the issuance thereof.
E. ADJUSTMENT OF SERIES G CONVERSION PRICE
The Series G Conversion Price from time to time in effect shall be subject
to adjustment from time to time as follows:
1. Stock Splits, Dividends and Combinations.
In case the Corporation shall at any time subdivide the outstanding
shares of Common Stock, or shall issue a stock dividend on its outstanding
Common Stock, the Series G Conversion Price in effect immediately prior to
such subdivision or the issuance of such dividend shall be proportionately
decreased, and in case the Corporation shall at any time combine the
outstanding shares of Common Stock, the Series G Conversion Price in effect
immediately prior to such combination shall be proportionately increased,
effective at the close of business on the date of such subdivision,
dividend or combination, as the case may be.
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2. Non-Cash Dividends, Stock Purchase Rights, Capital Reorganizations
and Dissolutions.
In case:
a. the Corporation shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash; or
b. the Corporation shall take a record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase any
shares of stock of any class or to receive any other rights; or
c. of any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation (other than a
subdivision or combination of its outstanding shares of Common Stock),
consolidation or merger of the Corporation with or into another
corporation or conveyance of all or substantially all of the assets of
the Corporation to another corporation; or
d. of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then, and in any such case, the Corporation shall cause to be mailed to the
transfer agent for the Series G Preferred Stock and to the Holders of
record, at least ten (10) days prior to the date hereinafter specified, a
notice stating the date on which (x) a record is to be taken for the
purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
3. In the event the Corporation shall declare a distribution payable
in securities of other persons or evidences of indebtedness issued by other
persons, then, in each such case, the Holders shall be entitled to the
distributions at the rate provided for in Section (A) above before any
distribution shall be made to the holders of Common Stock, and no
adjustment to the Series G Conversion Price provided for in this Section
(E) shall be applicable.
4. The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Corporation, but will at all times in good faith assist in the carrying
out of all of the provisions of this Section (E) and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the Holders. In any such event, the Series G
Conversion Price shall be equitably adjusted, if necessary, to reflect the
effect on the Series G Preferred Stock and the Corporation's Common Stock
from any such events.
5. Upon the occurrence of each adjustment or readjustment of the
Series G Conversion Price pursuant to this Section (E), the Corporation at
its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof, and prepare and furnish to each Holder
affected thereby a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at
any time of any Holder, furnish or cause to be furnished to such Holder a
like certificate setting forth (A) such adjustment or readjustment, (B) the
Series G Conversion Price at the time in effect, and (C) the number of
shares of Common Stock and the amount, if any, of other property which at
the time would be received upon the conversion of its shares.
6. Any shares of Series G Preferred Stock that are converted shall
resume the status of authorized but unissued shares of Series G Preferred
Stock.
7. So long as any shares of Series G Preferred Stock are outstanding,
the Corporation shall not, without first obtaining the approval by vote or
written consent, in the manner provided by law, of the Holders of at least
fifty-one percent (51%) of the total number of shares of Series G Preferred
Stock
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outstanding, voting separately as a class, (a) reduce or eliminate any or
all of the rights, preferences, privileges and restrictions granted to or
imposed upon the Series G Preferred Stock or increase or decrease the
authorized number of shares of Series G Preferred Stock; or (b) amend the
provisions of this paragraph (7); provided, however, that the Corporation
may, with the Holders' written consent, which consent will not be
, create new class or series of shares of preferred stock senior to
or on a parity with the Series G Preferred Stock as to voting rights,
dividends or a distribution of assets of the Corporation in liquidation.
F. REDEMPTION
1. Optional Redemption: Corporation.
At any time after March 31, 1996, if the Market Price, as defined below, of
the Corporation's Common Stock has exceeded $28 for thirty (30) consecutive
trading days ended within five (5) trading days prior to the date of the
Corporation's Call Notice, as defined below, the Corporation may redeem any
number of shares of Series G Preferred Stock then outstanding at the following
redemption prices per share:
CALL REDEMPTION DATE PRICE PER SHARE
----------------------------------------------------------------------- ---------------
March 31, 1996 - March 30, 1997........................................ $20
March 31, 1997 - March 30, 1998........................................ 26
March 31, 1998 and thereafter.......................................... 24
plus an amount equal to any accrued, but unpaid dividends thereon through the
Call Redemption Date (such price per share plus the amount of such dividends the
"Call Redemption Price"); provided, however, that until the Call Redemption
Date, as defined below, the Holders shall have the option to exercise their
conversion right pursuant to Section (D) hereof, and in the event and to the
extent that such conversion right is exercised, the Corporation's Call Notice
shall be ineffective and not apply to the number of shares of Series G Preferred
Stock that are subject to such conversion. For purposes of this Certificate,
"Market Price" shall mean the closing price of the Corporation's Common Stock as
quoted on the NASDAQ National Market System (or if the Corporation's Common
Stock is no longer listed on NASDAQ, as quoted on such other national exchange
on which the Common Stock is then traded).
If on any redemption date specified by the Corporation pursuant to this
paragraph 1 (hereinafter, the "Call Redemption Date"), more shares of Series G
Preferred Stock are outstanding than the Corporation has called for redemption,
the Corporation shall redeem shares of Series G Preferred Stock pro rata based
upon the number of outstanding shares of Series G Preferred Stock then owned by
each Holder.
(i) Notice of Redemption.
The Corporation shall specify a Call Redemption Date in a written
notice, which shall be sent by air mail or other express delivery service,
postage prepaid, to the Holders at least thirty (30) days prior to such
Call Redemption Date (the "Call Notice"). The Call Notice shall be
addressed to each Holder at the address of such Holder appearing on the
books of the Corporation or given by such Holder to the Corporation for the
purpose of notice, or if no such address appears or is so given, at the
place where the principal office of the Corporation is located. In addition
to the Call Redemption Date, the notice shall state the Call Redemption
Price, the number of shares of Series G Preferred Stock of such Holder to
be redeemed and shall call upon such Holder to surrender to the Corporation
on the Call Redemption Date at the place designated in the notice such
Holder's certificate or certificates representing the shares of Series G
Preferred Stock to be redeemed. Upon receipt of the Call Notice by a Holder
and at any time prior to the applicable Call Redemption Date, the Holder
may convert all or any shares of Series G Preferred Stock then owned by the
Holder, following which only the Holder's shares of Series G Preferred
Stock which have not been so converted may be redeemed by the Corporation.
On the applicable Call Redemption Date, the Holder or Holders shall
surrender to the Corporation at a place designated by the Corporation a
certificate or certificates representing the shares of Series G Preferred Stock
to be redeemed (the "Redeemed Shares"). Upon surrender of such certificate or
certificates, the
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Corporation shall transmit payment in full for each Holder's Redeemed Shares in
the manner in which cash dividends are paid hereunder.
2. Optional Redemption: Holder.
Any Holder may, at any time after September 30, 2006 require the
Corporation to repurchase and redeem all or any part of the Holder's shares of
Series G Preferred Stock (each Holder requesting such repurchase and redemption,
a "Requesting Holder").
The redemption price per share of Series G Preferred Stock shall be
twenty-four dollars ($24) per share plus an amount equal to any accrued, but
unpaid dividends thereon through the Holder Redemption Date (the "Holder
Redemption Price").
(i) Notice of Redemption.
Each Requesting Holder who desires to have Series G Preferred Stock
owned of record by such Requesting Holder redeemed by the Corporation shall
so specify in a written notice to the Corporation (the "Holder Redemption
Notice"). A Holder Redemption Notice shall be sent to the Corporation at
its principal place of business by air mail or other express delivery
service, postage prepaid and within thirty (30) days from receipt thereof
the Corporation shall set a closing date for redemption of the Requesting
Holder's shares (the "Holder Redemption Date"). Further, upon receipt of
the Holder Redemption Notice, the Corporation shall promptly notify all
other Holders of the redemption request of a Requesting Holder and of the
applicable Holder Redemption Date (the "Corporation Notice"). If any other
Holders (collectively, the "Other Holders" ) desire the Corporation to
redeem all or any portion of the Series G Stock owned of record by the
Other Holders, each Other Holder shall send a Holder Redemption Notice to
the Corporation within ten (10) days after receipt of the Corporation
Notice.
On the applicable Holder Redemption Date, the Requesting Holder and, if
applicable, the Other Holders shall surrender to the Corporation at a place
designated by the Corporation a certificate or certificates representing the
shares of Series G Preferred Stock to be redeemed (the "Redeemed Shares"). Upon
surrender of such certificate or certificates, the Corporation shall transmit
payment in full for the Redeemed Shares in the manner in which cash dividends
are paid.
The Call Redemption Date and the Holder Redemption Date are hereinafter
called collectively the "Redemption Date" and the Call Redemption Price and the
Holder Redemption Price are hereinafter called collectively the "Redemption
Price".
Notwithstanding any provisions set forth in this Section (F), the
Corporation shall not redeem any shares of Series G Preferred Stock pursuant to
paragraph 1 of this Section (F) unless the Corporation (i) is in compliance with
all its debt covenants set forth in any and all credit and debt financing
agreements the Corporation is a party to, or (ii) obtained a waiver of its
compliance with any debt covenant which prevents the Corporation from redeeming
shares of Series G Preferred Stock pursuant to paragraph 1 of this Section (F).
Furthermore, the Corporation shall redeem any shares of Series G Preferred Stock
pursuant to Paragraph 2 of this Section (F) except to the extent (but only to
the extent) a redemption of shares would cause the Corporation to violate any
covenant or condition under any of its credit or debt financing agreements. In
the event a redemption of any number of shares under Paragraph 2 of this Section
(F) will cause such violation, the Corporation will use reasonable and good
faith efforts to obtain waivers of compliance with its debt covenants for the
purpose of such redemption and will so notify the Holders.
4. Termination of Rights After Redemption.
From and after the Redemption Date (unless default shall be made by the
Corporation in duly paying the Redemption Price, in which case all the rights of
the Holders of Redeemed Shares shall continue) the Holders of the Redeemed
Shares shall cease to have any rights as Holders of such Redeemed Shares except
the right to receive, without interest, the Redemption Price thereof upon
surrender of certificates representing the shares of Series G Preferred Stock,
and such shares shall not thereafter be transferred (except with the consent of
the Corporation) on the books of the Corporation and shall not be deemed
outstanding for any purpose whatsoever. Any money deposited for payments of the
Redemption Price which is unclaimed by a
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Holder for two (2) years after the Redemption Date, as of the case may be,
thereof shall be returned to the Corporation.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by , its ,
and attested by , its Secretary, this day of
, 1996.
EXIDE ELECTRONICS GROUP, INC.
By:
------------------------------------
Name:
Title:
ATTEST:
By:
----------------------------------
Name:
Title: Secretary
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