Fiskars OY AB
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 (other
than in the event Buyer makes a Buyer's Tender of Closing to Shareholders
on or before such date, Buyer shall have made all payments due under this
letter agreement, and the Shareholders fail to proceed with Closing on or
before such date), 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 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.
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 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.
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: /s/ Xxxx Xxxxxxxx
Title: President
FISKARS HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxxx
Title: President
DELTEC POWER SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxxx
Title: Chairman
The undersigned hereby confirms and agrees to the
terms of the foregoing Amendment Agreement this
9th day of February, 1996.
EXIDE ELECTRONICS GROUP, INC.
By: /s/Xxxxxxxx X. Xxxxxxxx
Title: Vice President, Chief Administrative
Officer and General Counsel
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.
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 February 9, 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 "Certificate 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 "Series 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 "Holders") 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 "Common
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.
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 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 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.
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 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 unreasonably withheld, 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 exceecded $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 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 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 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 February, 1996.
EXIDE ELECTRONICS GROUP, INC.
BY:____________________________
Name:
Title:
ATTEST:
By:________________________
Name:
Title: Secretary
