EXHIBIT 10.01
EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement") is made and entered into as of
November 10, 1995 by and among AmeriQuest Technologies, Inc., a Delaware
corporation ("AmeriQuest"), Xxxxxx X. Xxxxxxx ("Xxxxxxx Sr."), Xxxxxx X. Xxxxxxx
("Xxxxxxx Jr."), Xxxxxxxxx X. Xxxxxx, Xx. ("Xxxxxx") and G. Xxxxxx XxXxxxxx
("XxXxxxxx"). (Xxxxxxx Sr., Xxxxxxx Jr., Xxxxxx and XxXxxxxx are referred to
herein collectively as the "Principal Shareholders.")
W I T N E S S E T H
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WHEREAS, AmeriQuest, Robec, Inc., a Pennsylvania corporation ("Robec") and
the Principal Shareholders are parties to an Amended and Restated Agreement and
Plan of Reorganization effective as of August 11, 1994, as subsequently amended
(the "Exchange/Merger Agreement");
WHEREAS, pursuant to the terms of the Exchange/Merger Agreement, on
Septemer 22, 1994, the Principal Shareholders exchanged certain shares of Robec
Common Stock held by them for shares of AmeriQuest Common Stock issued by
AmeriQuest. (The exchange provided for in the Exchange/Merger Agreement is
referred to herein as the "Exchange.") Under Section 1.01 of the
Exchange/Merger Agreement, AmeriQuest is required to issue additional shares of
its Common Stock to the Principal Shareholders in connection with the exchange.
WHEREAS, there are not sufficient shares of authorized AmeriQuest Common
Stock to complete the Exchange in accordance with Section 1.01 of the
Exchange/Merger Agreement.
WHEREAS, AmeriQuest has proposed that the Principal Shareholders accept
shares of its Series G Preferred Stock, the terms and conditions of which are
set forth on the Certificate of Designations attached as Exhibit A hereto and
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filed with the Secretary of State of Delaware on November 9, 1995 (the "Series G
Preferred Stock"), which shares will be convertible into the same number of
shares of AmeriQuest Common Stock that the Principal Shareholders would have
received at the Merger Closing (as defined in the Exchange/Merger Agreement) had
AmeriQuest been able to satisfy its remaining obligations under Section 1.01 of
the Exchange/Merger Agreement.
WHEREAS, Computer 2000, AG, which owns more than a majority of the voting
stock of AmeriQuest, has agreed to vote its shares of AmeriQuest capital stock
entitled to vote thereon in favor of (i) increasing the authorized Common Stock
of AmeriQuest to authorize the shares issuable upon conversion of the Series G
Preferred Stock; and (ii) the conversion of the Series G Preferred Stock.
WHEREAS, Xxxxxx Xxxxxxxx LLP has provided an opinion to the Principal
Shareholders and Robec that the transactions contemplated by this Exchange
Agreement will not affect their opinion attached as an Exhibit to the AmeriQuest
registration statement on Form S-4 and referred to in the Prospectus/Proxy
Statement dated August 28, 1995.
WHEREAS, AmeriQuest has received approval for listing on the New York Stock
Exchange (the "NYSE") the shares of AmeriQuest Common Stock to be issued by
AmeriQuest
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pursuant to the merger contemplated by Sections 1.03 and 1.07 of the the
Exchange/Merger Agreement and the Plan of Merger attached thereto as Exhibit A
(the "Merger").
WHEREAS, in view of the foregoing circumstances, and in order to permit the
Merger to be consummated, the Principal Shareholders have agreed to accept
AmeriQuest's proposal and enter into this Agreement.
WHEREAS, the Merger is being consummated contemporaneously with the signing
of this Exchange Agreement.
WHEREAS, Robec acknowledges this Agreement and agrees to this Agreement to
the extent that it modifies Section 1.01 of the Exchange/Merger Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
agreements, representations and warranties set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Issuance of Stock. On the date hereof, AmeriQuest shall issue to the
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Principal Shareholders shares of the Series G Preferred Stock as set forth in
Exhibit B below, which shares shall be duly and validly issued, fully paid and
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nonassessable and duly approved for listing on the NYSE upon official notice of
issuance. AmeriQuest shall also cause its special counsel, Fenwick & West, to
deliver a legal opinion to the Principal Shareholders to the foregoing effect.
The issuance by AmeriQuest of such shares in accordance with the foregoing
sentence shall be deemed to satisfy AmeriQuest's obligations under Section 1.01
of the Exchange/Merger Agreement with respect to the Exchange.
1.1 Authorization and Registration of Common Shares. AmeriQuest
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shall use its best efforts to, as soon as practicable, (i) call a shareholder
meeting to (A) increase the authorized number of shares of AmeriQuest Common
Stock to allow conversion of the Series G Preferred Stock and payment of all
Common Stock dividends thereon and (B) authorize the conversion of the Series G
Preferred Stock; (ii) cause a shelf registration on Form S-3 covering the resale
by the Principal Shareholders in the public market in brokers' transactions (as
defined in Rule 144 under the Securities Act of 1933, as amended) of the shares
of Common Stock that the Principal Shareholders receive upon conversion of their
shares of the Series G Preferred Stock (including all stock dividends payable
with respect to their shares of the Series G Preferred Stock) (the "Shelf
Registration") to become effective and to cause the Shelf Registration to remain
effective until the earlier of (I) the second anniversary of the issuance of the
Series G Preferred Stock (except that, as long as any Principal Shareholder
holds shares of AmeriQuest Common Stock issued upon conversion of the Series G
Preferred Stock that constitute more than 1% of the number of shares of
AmeriQuest Common Stock then outstanding, the registration statement will remain
effective until the third anniversary of the issuance of the Series G Preferred
Stock) or (II) the date that none of the Principal Shareholders continues to
hold any of the AmeriQuest Common Stock issued upon such conversion and (iii)
cause the shares of Common Stock that the Principal Shareholders receive upon
conversion of their shares of the
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Series G Preferred Stock (including all stock dividends payable with respect
thereto) to be duly approved for listing on the NYSE upon notice of issuance
thereof.. AmeriQuest will notify the Principal Shareholders as soon as the
Shelf Registration becomes effective and upon conversion of the Series G
Preferred. Until the Shelf Registration becomes effective, AmeriQuest will not
to register any shares (other than shares currently subject to an effective
registration statement) that are issued or subject to issuance upon the exercise
of warrants held by any person or entity (other than Computer 2000) or the
conversion of any convertible security held by any person or entity other than
Computer 2000. The parties hereto agree that the registration rights agreement
currently applicable to the shares of AmeriQuest Common Stock issuable upon such
conversion (the "Current Registration Rights Agreement") is hereby amended so
that the obligations of AmeriQuest under the Current Registration Rights
Agreement with respect to the shares of Common Stock issuable upon conversion of
the Series G Preferred Stock are hereby replaced by the obligations set forth in
this Section 1.1, and the Principal Shareholders hereby waive any registration
rights with respect to such shares other than those set forth in this Section
1.1.
1.2 Indemnification. AmeriQuest hereby agrees to indemnify and hold
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harmless each present director of Robec and the Principal Shareholder who is not
a director (each of whom is herein referred to as an "Indemnified Party")
against any costs or expenses (including attorneys' fees), judgments, fines,
losses, damages, liabilities and amounts payable in settlement in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out or of pertaining to the
authorization or execution of this Agreement or the transactions provided for
herein, the delay in consummating the Merger, the consummation of the Merger or
otherwise arising out of or pertaining to this Agreement or the enforcement of
this Agreement by any indemnified party, which costs, expenses, judgments,
fines, losses, damages, liabilities and amounts (collectively, the
"Indemnification Amounts") shall be promptly paid by AmeriQuest on behalf of
such Indemnified Party directly to the third parties to whom such
Indemnification Amounts are owed; it is provided, however, that the
indemnification obligations of AmeriQuest under this Section 1.2 shall apply
only to any Indemnification Amounts in excess of the amounts actually paid or
required to be paid under the insurance coverage available under Robec's current
directors' and officers' liability insurance policy. Any Indemnified Party
entitled to indemnification under this Section 1.2 shall promptly give written
notice to AmeriQuest of any claim, or the institution of any action, suit,
proceeding or investigation, subject to this Section 1.2, but the failure to do
so shall not affect AmeriQuest's obligations hereunder unless AmeriQuest is
materially prejudiced thereby. AmeriQuest shall have the right to assume the
defense of any such claim, action, suit, proceeding or investigation and to
retain such legal counsel as it may select which is reasonably acceptable to the
Indemnified Party (subject to such rights as the insurance company may have
under directors' and officers' insurance policy referred to above). Any
Indemnified party entitled to indemnification under this Section 1.2 shall
cooperate with AmeriQuest in connection with any such claim, action, suit,
proceeding or investigation.
1.3 Merger Closing. The parties agree that the Merger Closing shall
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occur contemporaneously with the execution and delivery of this Agreement or on
the next business day thereafter and that the last clause of the first sentence
of Section 1.07 of the Exchange/Merger Agreement which ends "provided, however,
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that in no case shall the Merger Closing Date be later than the second business
day following the Meeting Date" is hereby deleted and is of no further force or
effect.
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2. Miscellaneous.
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2.1 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, but all of which together shall
constitute one and the same instrument.
2.2 Power and Authority. Each party hereto represents and warrants
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to each other party hereto that such party has full power and authority to enter
into this Agreement, and that this Agreement constitutes its or his valid and
binding obligation, enforceable against such party in accordance with the terms
hereof.
2.3 Pennsylvania Law. All of the terms sand provisions of this
----------------
Agreement and the rights and obligations of the parties hereto shall be
interpreted and enforced in accordance with the laws of the Commonwealth of
Pennsylvania.
2.4 Further Assurances. Each of the parties shall cooperate with the
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other parties, and execute such further instruments, documents and agreements as
may be reasonably requested by the other parties or any of them, in order to
reflect or effectuate the transactions provided for in this Agreement.
2.5 Entire Agreement; No Amendment. This Agreement sets forth the
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entire agreement and understanding among the parties hereto with respect to the
specific subject matter hereof and supersedes all prior or concurrent
negotiations, agreements, understandings, representations or warranties other
than those expressly set forth herein with respect to such subject matter. This
Agreement shall not be amended except by a writing duly executed by each of the
parties hereto. Except as explicitly set forth herein, this Agreement shall not
be deemed to modify the Exchange/Merger Agreement.
2.6 Third Party Beneficiaries. Each Indemnified party who is not a
-------------------------
party hereto is hereby acknowledged to be a third party beneficiary of Section
1.2 of this Agreement, and each such third party beneficiary may enforce the
provisions of that Section against AmeriQuest to the same extent as if he was a
party.
2.7 Waiver of Past Violations. The Principal Shareholders agree that
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this Agreement constitutes a waiver by the Principal Shareholders of any breach
by AmeriQuest of the Exchange/Merger Agreement or any other agreement on or
prior to the date hereof known to the Principal Shareholders on the date hereof
and any other claims known to the Principal Shareholders or arising out of
matters that are known to any of them on the date hereof against AmeriQuest, and
any claims known to the Principal Shareholders or arising out of matters that
are known to any of them on the date hereof against AmeriQuest's officers,
directors or affiliates, of any kind or nature, whether accrued, accruing,
contingent or otherwise, that may exist as of the date hereof; provided,
however, that this Agreement shall not be deemed to or constitute a waiver by
the Principal Shareholders of any breach of this Agreement or any other
agreement or any other claim which arises or becomes known to the Principal
Shareholders after the date of this Agreement. The Principal Shareholders
further agree not to seek injunctive relief or take any other action to prevent
the conversion of the Series G Preferred Stock issues pursuant to this Agreement
as the result of any action or inaction taken by AmeriQuest prior to the
execution of this Agreement.
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WHEREAS, the parties have executed this Agreement as of the first date set
forth above.
AMERIQUEST TECHNOLOGIES, INC.
Attest:
/s/Xxxxxx X. Xxxxxxx /s/Xxxxx XxXxxxx
____________________________ ______________________________________
Xxxxxx X. Xxxxxxx, Secretary Xxxxx XxXxxxx, Chief Executive Officer
PRINCIPAL SHAREHOLDERS
/s/Xxxxxx X. Xxxxxxx
___________________________
Xxxxxx X. Xxxxxxx
/s/Xxxxxx X. Xxxxxxx
___________________________
Xxxxxx X. Xxxxxxx
/s/Xxxxxxxxx X. Xxxxxx, Xx.
___________________________
Xxxxxxxxx X. Xxxxxx, Xx.
/s/G. Xxxxxx XxXxxxxx
___________________________
G. Xxxxxx XxXxxxxx
Robec, Inc. acknowledges this Exchange Agreement between AmeriQuest and the
Principal Shareholders and consents to this Agreement to the extent that it
modifies Sections 1.01 or 1.07 of the Exchange/Merger Agreement.
ROBEC, INC.
Attest:
/s/Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
____________________________ ___________________________________
Xxxxxx X. Xxxxxxx, Secretary Xxxxxx X. Xxxxxxx, Chairman, Chief
Executive Officer and President
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EXHIBIT A
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CERTIFICATE OF DESIGNATIONS
OF
AMERIQUEST TECHNOLOGIES, INC.
AmeriQuest Technologies, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), in
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accordance with the provisions of Section 151(g) thereof, hereby certifies as
follows:
Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Amendment of the Certificate of Incorporation of the Corporation
filed with the Office of the Secretary of State of the State of Delaware on
September 14, 1994, the Board of Directors on November 2, 1995 adopted the
following resolutions creating a new series of Preferred Stock:
RESOLVED, that, pursuant to the authority granted to the Board of Directors
by the Fourth Article of the Certificate of Amendment of the Certificate of
Incorporation of the Corporation filed with the Office of the Secretary of State
of the State of Delaware on September 14, 1994, a new series of the class of
Preferred Stock of the Corporation is hereby created, and the designations and
amounts thereof and the powers, preferences, privileges, restrictions,
limitations, qualifications and rights of the shares of such series are as
follows:
SERIES G PREFERRED STOCK
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The following number of shares of authorized and unissued Preferred Stock,
par value $0.01 per share, of the Corporation are hereby designated as follows,
with the respective powers, preferences, rights, limitations and restrictions
specified herein: Twenty Five Thousand, Eight Hundred and Thirty One (25,831)
shares are designated as Series G Preferred Stock (hereinafter referred to as
the "Series G Preferred Stock").
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1 Definitions. For purposes of this Certificate, the following
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definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Corporation.
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(b) "Corporation" shall mean this corporation.
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(c) "Common Stock" shall mean the Common Stock, $0.01 par value of the
------------
Corporation.
(d) "Original Issue Date" shall mean the date on which this
-------------------
Certificate of Designations is filed with the Delaware Secretary of State.
(e) "Original Issue Price" shall mean $118.75 per share.
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(f) "Issued Preferred Stock" shall mean the Series A Preferred Stock,
----------------------
Series B Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
Series F Preferred Stock of the Corporation.
(g) "Issued Preferred Preference" shall have the meaning set forth in
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Section 1.2 of the Certificate of Designations previously filed by the
Corporation with the Office of the Secretary of State of Delaware with respect
to the Corporation's Series A Preferred Stock, Series B Preferred Stock, Series
D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock.
(h) "Subsidiary" shall mean any corporation of which at least 50% of
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the outstanding voting stock is at the time owned directly or indirectly by the
Corporation or by one or more of such subsidiary corporations.
2 Dividends. The holders of the outstanding Series G Preferred Stock
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shall be entitled to receive a dividend at the rate of $17.8125 per share per
annum (15% of the Original Issue Price) computed for the period commencing
September 29, 1995 and ending on the date on which the outstanding shares of the
Series G Preferred Stock are converted into shares of Common Stock pursuant to
Section 5 below (the "Conversion Date"), which dividend shall be payable in
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shares of Common Stock (valued for the purposes of the dividend at $1.1875 per
share of Common Stock) and on the earlier of (a) the Conversion Date or (b) the
Redemption Date (as defined in Section 6), provided, however, that if there are
not sufficient shares of Common Stock available to pay such dividend on the
Redemption Date, then such dividend shall instead be paid in cash on such date.
No fractional shares of Common Stock shall be issued by the Corporation in such
dividend. In lieu of any fractional share to which the holder would otherwise
be entitled, the Corporation shall pay cash equal to the product of such
fraction multiplied by the Common Stock Price (as defined below) as of the
Conversion Date. The term "Common Stock Price" shall mean the average of the
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closing prices of the Common Stock on the New York Stock Exchange during the ten
business days immediately preceding the business day that immediately precedes
the Conversion Date or, if not listed on the New York Stock Exchange during such
period, as determined in accordance with Section 3(d) below but using the time
periods previously referred to in this sentence. If the Conversion Date does
not occur before April 30, 1996, then, for the period commencing April 30, 1996
and continuing until the Conversion Date, each holder of the then outstanding
shares of the Series G Preferred Stock shall be entitled to receive an
additional dividend (the "10% Per Month Dividend") payable on the last day of
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each month, commencing with May 31, 1996, in shares of Common Stock in an amount
equal to 10% of the shares of Common Stock that are then subject to issuance to
such holder on conversion of the shares of the Series G Preferred Stock that are
outstanding on such payment date; it is provided, however, that the 10% Per
Month Dividend will not accrue or be paid during any period in which the
conversion of the Series G Preferred Stock, or the taking of any action
necessary for such conversion, is prevented as a result of any action, suit or
proceeding taken or brought by any present or former stockholder in Robec, Inc.
If the Conversion Date occurs after April 30, 1996
2
on any day other than the last day of any month, the 10% Per Month Dividend for
such month shall be payable on the Conversion Date, and the number of shares of
Common Stock payable in such dividend shall be pro rated to coincide with the
portion of the month elapsed prior to and including the Conversion Date.
3 Liquidation Preferences.
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(a) Preference for Series G Preferred Stock. In the event of any
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liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the holders of each share of the Series G Preferred Stock then
outstanding shall be entitled to be paid out of the assets and funds of the
Corporation available for distribution to its stockholders, before any payment
or declaration and setting apart for payment of any amount shall be made in
respect of the Common Stock or any other stock of the Corporation ranking on
liquidation junior to or in pari passu with the Series G Preferred Stock, but
after payment or setting apart for payment of the Issued Preferred Preference,
(i) an amount per share equal to the Original Issue Price of the Series G
Preferred Stock plus (ii) an amount per share equal to all unpaid dividends on
the Series G Preferred Stock plus (iii) an amount equal to any liquidation
preference on any other stock of the Corporation ranking on liquidation in pari
passu with the Series G Preferred Stock (the "Series G Preferred Preference").
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All payments of the Series G Preferred Preference shall be made pro rata to all
holders of the Series G Preferred Stock and to all holders of any other stock of
the Corporation ranking on liquidation in pari passu with the Series G
Preferred, based on the applicable Original Issue Price and, with respect to any
such other stock, based on the applicable preference amount. If upon any
liquidation, dissolution or winding up of the Corporation, the assets and funds
to be distributed to the holders of the Series G Preferred Stock and to all
holders of any other stock of the Corporation ranking on liquidation in pari
passu with the Series G Preferred (after payment or setting apart for payment of
the Issued Preferred Preference) shall be insufficient to permit the payment to
such stockholders of the full Series G Preferred Preference, then all of the
remaining assets of the Corporation shall be distributed ratably to the holders
of the Series G Preferred Stock and to all holders of any other stock of the
Corporation ranking on liquidation in pari passu with the Series G Preferred,
based on the aggregate Series G Preferred Preference for the shares held by each
such holder of the Series G Preferred Stock and of any other stock eligible to
receive payment of any portion of the Series G Preferred Preference.
(b) No Participating Preference. If, after the payment in full of the
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Issued Preferred Preference and the Series G Preferred Preference, the
Corporation has assets or funds remaining available for distribution to
stockholders, then the remaining assets and funds of the Corporation available
for distribution to stockholders shall be distributed to the holders of
outstanding Common Stock without participation by the holders of the Issued
Preferred Stock or the holders of the Series G Preferred Stock.
(c) Merger or Sale of Assets. A consolidation or merger of the
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Corporation with or into any other corporation or corporations in which the
holders of the Corporation's outstanding shares before the consolidation or
merger do not retain a majority of the voting power of the surviving corporation
(or its parent), or a sale of all or substantially all of the assets
3
of the Corporation, shall be deemed to be a liquidation, dissolution or winding
up of the Corporation as those terms are used in this Section.
(d) Non-Cash Consideration. In the case of any event described in
----------------------
paragraph (c) above, if the consideration received by the Corporation is other
than cash, indebtedness or securities, the value of such consideration shall be
its fair market value as determined in good faith by the Board. Any securities
to be delivered pursuant to paragraphs (a) or (b) above, shall be valued as
follows:
(i) Securities not subject to investment letter or other similar
restrictions on free marketability:
(A) If traded on a national securities exchange or the NASDAQ National
Market System, the value shall be deemed to be the average of the closing prices
of the securities on such exchange or system over the 30-day period ending three
days prior to the closing; and
(B) If actively traded over-the-counter, the value shall be deemed to
be the average of the closing bid prices over the 30-day period ending three
days prior to the closing; and
(C) If there is no active public market, the value shall be the fair
market value thereof, as determined in good faith by the Board.
(ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability shall be to make an
appropriate discount from the market value determined as above in clause (i)(A),
(B) or (C) to reflect the approximate fair market value thereof, as determined
in good faith by the Board.
4 Voting Rights. Except as otherwise expressly provided herein, or as
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required by law, the holders of the Series G Preferred Stock and the holders of
Common Stock shall vote together and not as separate classes. Each holder of
shares of the Series G Preferred Stock shall be entitled to the number of votes
equal to the number of whole shares of Common Stock into which such shares of
the Series G Preferred Stock could be converted pursuant to the provisions of
Section 5 below at the record date for the determination of the stockholders
entitled to vote on such matters or, if no such record date is established, the
date such vote is taken or any written consent of stockholders is solicited.
5 Conversion Rights. The outstanding shares of the Series G Preferred
-----------------
Stock shall be convertible to Common Stock as follows:
(a) Automatic Conversion. Each share of the Series G Preferred Stock
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will be converted into fully paid and nonassessable shares of Common Stock as
provided herein only at such time as (i) all necessary corporate and stockholder
action has been taken to amend the Corporation's Certificate of Incorporation to
increase the number of authorized shares of
4
Common Stock such that there are a sufficient number of authorized shares of
Common Stock legally and validly reserved to effect the conversion of all
outstanding shares of the Issued Preferred Stock and the Series G Preferred
Stock and the payment of all stock dividends payable with respect to the Series
G Preferred Stock and such amendment has been filed with the Delaware Secretary
of State; (ii) the stockholders of the Corporation have approved the conversion
of the Series G Preferred Stock in accordance with the provisions of this
Section 5; and (iii) the resale by the persons to whom the shares of Series G
Preferred Stock are originally issued (the "Original Holders") of any of the
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shares of Common Stock issued or issuable upon conversion of their shares of the
Series G Preferred and the resale of the stock dividends payable with respect to
their shares of the Series G Preferred are registered under the Securities Act
of 1933, as amended, pursuant to a registration statement on Form S-3 in
compliance with the Exchange Agreement dated as of November ___, 1995 among the
Corporation and the Original Holders. The Corporation shall promptly file with
the Secretary of State of the State of Delaware an Amendment to the
Corporation's Certificate of Incorporation to reflect any increase in the
authorized capital stock of the Corporation approved by the Corporation's
stockholders.
(b) Conversion Price. Each share of the Series G Preferred Stock shall
----------------
be convertible into the number of shares of Common Stock which results from (i)
dividing the Original Issue Price by the conversion price of the Series G
Preferred Stock that is in effect at the time of conversion (the "Conversion
----------
Price") and (ii) multiplying such quotient by 100. The initial Conversion Price
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shall be the Original Issue Price. The Conversion Price shall be subject to
adjustment from time to time as provided below.
(c) Adjustment for Stock Splits and Combinations. If the Corporation
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shall at any time or from time to time after the Original Issue Date effect a
stock split or subdivision of the outstanding Common Stock, the Conversion Price
in effect immediately before that subdivision shall be proportionately
decreased, and, conversely, if the Corporation shall at any time or from time to
time after the Original Issue Date combine the outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this subsection (c) shall become effective at the close of
business on the date the stock split, subdivision or combination becomes
effective. The appropriate corresponding adjustment shall also be made to any
unpaid dividend that is payable after the stock split, subdivision or
combination becomes effective.
(d) Adjustment for Common Stock Dividends and Distributions. If the
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Corporation at any time or from time to time after the Original Issue Date
makes, or fixes, a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable solely in
additional shares of Common Stock, in each such event the Conversion Price that
is then in effect shall be decreased as of the time of such issuance or, in the
event such record date is fixed, as of the close of business on such record
date, by multiplying the Conversion Price then in effect by a fraction (i) the
numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (ii) the denominator of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such
5
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution; provided,
however, that if such record date is fixed and such dividend is not fully paid
or if such distribution is not fully made on the date fixed therefor, the
Conversion Price shall be recomputed accordingly as of the close of business on
such record date and thereafter the Conversion Price shall be adjusted pursuant
to this subsection (d) to reflect the actual payment of such dividend or
distribution. The appropriate corresponding adjustment shall also be made to any
unpaid dividend that is payable after the dividend or distribution referred to
above.
(e) Adjustments for Other Dividends and Distributions. If the
-------------------------------------------------
Corporation at any time or from time to time after the Original Issue Date
makes, or fixes 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, in each such event
appropriate provision shall be made so that the holders of the Series G
Preferred Stock shall receive on the date of such dividend or distribution the
amount of securities of the Corporation which they would have received had their
Series G Preferred Stock been converted into Common Stock on the date of such
event.
(f) Adjustment for Reclassification, Exchange and Substitution. If at
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any time or from time to time after the Original Issue Date, the Common Stock
issuable upon the conversion of the Series G Preferred Stock is changed into the
same or a different number of shares of any class or classes of stock, whether
by recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares, stock dividend, other dividend or distribution, or a
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 5 or in Section 3(c)), then in any such event each holder of the
Series G Preferred Stock shall have the right thereafter to convert such stock,
including all Common Stock dividends to which the holders would otherwise be
entitled, into the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change by
holders of the number of shares of Common Stock into which the Series G
Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
(g) Reorganizations. If at any time or from time to time after the
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Original Issue Date there is a capital reorganization of the Common Stock (other
than a recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this Section 5 or in Section
3(c)), as a part of such capital reorganization provision shall be made so that
the holders of the Series G Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series G Preferred Stock (and with respect to all
Common Stock dividends to which such holders would otherwise be entitled) the
number of shares of stock or other securities or property of the Corporation to
which a holder of the number of shares of Common Stock deliverable upon
conversion (including all dividends) would have been entitled on such capital
reorganization, subject to adjustment in respect of such stock or securities by
the terms thereof. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 5 with respect to the rights
of the holders of the Series G Preferred
6
Stock after such capital reorganization to the end that the provisions of this
Section 5 (including adjustment of the Conversion Price then in effect and the
number of shares issuable upon conversion of the Series G Preferred Stock) shall
be applicable after that event and be as nearly equivalent as practicable.
(h) Certificate of Adjustment. In each case of an adjustment or
-------------------------
readjustment of any Conversion Price for the number of shares of Common Stock or
other securities issuable upon conversion of the Series G Preferred Stock, the
Corporation, at its expense, shall cause its Chief Financial Officer to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by first class mail, postage prepaid, to each registered
holder of the Series G Preferred Stock at the holder's address as shown in the
Corporation's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (i) the applicable Conversion
Price at the time in effect and (ii) the type and amount, if any, of other
property which at the time would be received upon conversion of the Series G
Preferred Stock.
(i) Notices of Record Date. Upon (i) any taking by the Corporation of
----------------------
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (ii) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation with or into any other
corporation, or any transfer of all or substantially all the assets of the
Corporation to any other person or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of the Series G Preferred Stock at least ten days prior to the record
date specified therein a notice specifying (1) the date on which any such record
is to be taken for the purpose of such dividend or distribution and a
description of such dividend or distribution, (2) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective, and (3) the date, if
any, that is to be fixed as to when the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock (or
other securities) for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up.
(j) Mechanics of Conversion. If and at the time that the conditions
-----------------------
for conversion set forth in Section 5(a) have been satisfied, the outstanding
shares of the Series G Preferred Stock shall be converted into Common Stock
automatically without the need for any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
-------- -------
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificates
evidencing such shares of the Series G Preferred Stock are delivered to the
Corporation or its transfer agent as provided below, or the holder notifies the
Corporation or its 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 with such
certificates. Upon the
7
occurrence of such automatic conversion of the Series G Preferred Stock, the
holders of the Series G Preferred Stock shall surrender the certificates
representing such shares at the office of the Corporation or any transfer agent
for the Series G Preferred Stock or Common Stock. Thereupon, there shall be
issued and delivered to each such holder promptly at such office and in its name
as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
the Series G Preferred Stock surrendered were convertible on the date on which
such automatic conversion occurred.
(k) Fractional Shares. No fractional shares of Common Stock shall be
-----------------
issued upon conversion of the Series G Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to the product of such fraction multiplied by
the Common Stock's per share fair market value as determined by the average of
the closing prices of the Common Stock on the New York Stock Exchange during the
ten business days immediately preceding the business day that immediately
precedes conversion or, if not listed on the New York Stock Exchange during such
period, as determined in good faith by the Board as of the date of conversion.
(l) Reservation of Stock Issuable Upon Conversion. The Corporation
---------------------------------------------
will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient to effect the conversion of all of the
shares of Series G Preferred Stock and the payment of Common Stock dividends
payable thereon and thereafter 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 G Preferred Stock and the
payment of all unpaid Common Stock dividends thereon, 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 G Preferred Stock and the
payment of such dividends.
(m) Notices. Any notice required by the provisions of this Section 5
-------
to be given to the holders of shares of the Series G Preferred Stock shall be
deemed given upon the earlier of actual receipt or deposit in the United States
mail, by certified or registered mail, return receipt requested, postage
prepaid, addressed to each holder of record at the address of such holder
appearing on the books of the Corporation.
(n) Payment of Taxes. The Corporation will pay all transfer taxes or
----------------
charges that may be imposed with respect to the issue or delivery of shares of
Common Stock upon conversion of shares of the Series G Preferred Stock, except
for any tax or other charge imposed in connection with any transfer involved in
the issue and delivery of shares of Common Stock in a name other than that in
which the shares of the Series G Preferred Stock so converted were registered.
Amounts hereunder will be paid by the Corporation directly to the third parties
to whom such taxes are owed.
(o) No Impairment. The Corporation shall not amend its Certificate of
-------------
Incorporation or participate in any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, for the purpose of avoiding
8
or seeking to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but shall at all times in
good faith assist in carrying out all such action as may be reasonably necessary
or appropriate in order to protect the conversion and dividend rights of the
holders of the Series G Preferred Stock against dilution or other impairment.
(p) No Reissuance of Series G Preferred Stock. No share or shares of
-----------------------------------------
the Series G Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue.
6 Right of Redemption. Commencing on the fifth anniversary of the
-------------------
Original Issue Date (the "Redemption Date"), each holder of any then outstanding
---------------
shares of the Series G Preferred Stock shall have the right to require the
Corporation to redeem such shares at a price equal to the liquidation preference
with respect to such shares plus the amount of any accrued and unpaid dividends
thereon. In order to exercise such right to require the Corporation to redeem
such shares, such holder shall deliver to the Corporation (a) a written notice
of such holder's exercise of such right, specifying the number of shares of the
Series G Preferred Stock as to which the right is being exercised, and (b) the
certificate(s) representing the shares to be redeemed. The Corporation shall
redeem such shares and pay the redemption price provided for above within 30
days after receipt of such notice and certificate(s).
IN WITNESS WHEREOF, AmeriQuest Technologies, Inc., has caused this
Certificate of Designations to be duly executed and attested this ____ day of
_____________, 1995.
AMERIQUEST TECHNOLOGIES, INC.
By:_____________________________________________
Xxxx X. Xxxxxxx
President
Attest:
_____________________________
Xxxxxx X. Xxxxxxx
Secretary
9
EXHIBIT B
No. of Shares of Series G No. of Shares of Common Stock
Preferred Stock Issuable Upon Conversion of
Principal Shareholder ("Preferred Shares") Preferred Shares
-------------------------- --------------------------------- ---------------------------------------
G. Xxxxxx XxXxxxxx 4,849.82 484,982
Xxxxxxxxx X. Xxxxxx, Xx. 1,124.28 112,428
Xxxxxx X.Xxxxxxx. 3,272.08 327,208
Xxxxxx X. Xxxxxxx 16,583.92 1,658,392
--------- ---------
25,830.10 2,583,010
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