<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
UNC Incorporated
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(Name of Issuer)
Common Stock, par value $.20 per share
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(Title of Class of Securities)
903070110 0
----------------------------------------------------
(CUSIP Number)
Mr. John W. Gildea
115 East Putnam Avenue, Greenwich, Connecticut 06830
(203) 661-6945
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 30, 1996
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |x|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of ___ Pages
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CUSIP No.
- --------------------------------------------------------------------------------
1 Name of Reporting Person(1)
S.S. or I.R.S. Identification No. of Above Person
Bridge Partners, L.P.
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |_|
b. |x|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
WC; OO
- --------------------------------------------------------------------------------
5 Check If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of 2,014,286(2)
Shares --------------------
Beneficially
Owned By 8 Shared Voting Power
Each
Reporting --------------------
Person
With 9 Sole Dispositive Power
2,014,286(2)
--------------------
10 Shared Dispositive Power
--------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,014,286(2)
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
- --------
(1) Filing jointly pursuant to Rule 13d-1(f)(1) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), with Carson Street Partners,
Inc., John W. Gildea and Network Fund III, Ltd.
(2) Represents shares of Common Stock issuable upon conversion of 141,000
shares of Series B Senior Cumulative Convertible Preferred Stock of the
issuer that may be deemed to be beneficially owned by the Reporting Person
and calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act.
See Items 2 and 5.
Page 2 of ___ Pages
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13 Percent of Class Represented By Amount in Row (11)
10.1%(3)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
PN
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- --------
(3) See footnote 2, above.
Page 3 of ___ Pages
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CUSIP No.
- --------------------------------------------------------------------------------
1 Name of Reporting Person(4)
S.S. or I.R.S. Identification No. of Above Person
Carson Street Partners, Inc.
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |_|
b. |x|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
AF
- --------------------------------------------------------------------------------
5 Check If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
Number of 2,014,286(5)
Shares --------------------
Beneficially
Owned By 8 Shared Voting Power
Each
Reporting --------------------
Person
With 9 Sole Dispositive Power
2,014,286(5)
--------------------
10 Shared Dispositive Power
--------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,104,286(5)
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
- --------
(4) Filing jointly pursuant to Rule 13d-1(f)(1) under the Exchange Act with
Bridge Partners, L.P., John W. Gildea and Network Fund III, Ltd.
(5) Represents shares of Common Stock issuable upon conversion of 141,000
shares of Series B Senior Cumulative Convertible Preferred Stock of the
issuer that may be deemed to be beneficially owned by the Reporting Person
and calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act.
See Items 2 and 5.
Page 4 of ___ Pages
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13 Percent of Class Represented By Amount in Row (11)
10.1%(6)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
- --------
(6) See footnote 5, above.
Page 5 of ___ Pages
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CUSIP No.
- --------------------------------------------------------------------------------
1 Name of Reporting Person(7)
S.S. or I.R.S. Identification No. of Above Person
John W. Gildea
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |_|
b. |x|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
AF; PF
- --------------------------------------------------------------------------------
5 Check If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
U.S.A.
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of 3,000,000(8)
Shares --------------------
Beneficially
Owned By 8 Shared Voting Power
Each
Reporting --------------------
Person
With 9 Sole Dispositive Power
3,000,000(8)
--------------------
10 Shared Dispositive Power
--------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
3,000,000(8)
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
- --------
(7) Filing jointly pursuant to Rule 13d-1(f)(1) under the Exchange Act with
Bridge Partners, L.P., Carson Street Partners, Inc and Network
Fund III, Ltd.
(8) Represents shares of Common Stock issuable upon conversion of 210,000
shares of Series B Senior Cumulative Convertible Preferred Stock of the
issuer that may be deemed to be beneficially owned by the Reporting Person
and calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act.
See Items 2 and 5.
Page 6 of ___ Pages
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13 Percent of Class Represented By Amount in Row (11)
14.4%(9)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
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- --------
(9) See footnote 8, above.
Page 7 of ___ Pages
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CUSIP No.
- --------------------------------------------------------------------------------
1 Name of Reporting Person(10)
S.S. or I.R.S. Identification No. of Above Person
Network Fund III, Ltd.
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group
a. |_|
b. |x|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
WC
- --------------------------------------------------------------------------------
5 Check If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Cayman Islands
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of 842,857(11)
Shares --------------------
Beneficially
Owned By 8 Shared Voting Power
Each
Reporting --------------------
Person
With 9 Sole Dispositive Power
842,857(11)
--------------------
10 Shared Dispositive Power
--------------------
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
842,857(11)
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares |_|
- --------------------------------------------------------------------------------
- --------
(10) Filing jointly pursuant to Rule 13d-1(f)(1) under the Exchange Act with
Bridge Partners, L.P., Carson Street Partners, Inc. and John W.
Gildea.
(11) Represents shares of Common Stock issuable upon conversion of 59,000
shares of Series B Senior Cumulative Convertible Preferred Stock of the
issuer that may be deemed to be beneficially owned by the Reporting Person
and calculated in accordance with Rule 13d-3(d)(1) under the Exchange Act.
See Items 2 and 5.
Page 8 of ___ Pages
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13 Percent of Class Represented By Amount in Row (11)
4.5%(12)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
- --------
(12) See footnote 11, above.
Page 9 of ___ Pages
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Item 1. Security and Issuer.
This Statement on Schedule 13D (the "Schedule 13D") relates to the
Common Stock, par value $.20 per share (the "Common Stock"), of UNC
Incorporated, a Delaware corporation (the "Company"). The address of
the principal executive offices of the Company is 175 Admiral Cochrane
Drive, Annapolis, Maryland 21401.
Item 2. Identity and Background.
This Schedule 13D is filed jointly on behalf of Bridge Partners, L.P.,
a Delaware limited partnership ("Bridge Partners"), Carson Street
Partners, Inc., a Delaware corporation ("Carson Street Partners"),
John W. Gildea, a United States citizen ("Gildea") and Network
Fund III, Ltd., a Cayman Islands exempt company ("Network Fund III"),
pursuant to Rule 13d-1(f)(1) under the Exchange Act.
Carson Street Partners is the sole general partner of Bridge Partners
and has the power to vote and dispose of the 2,014,286 shares of
Common Stock (the "Bridge Common Shares") issuable upon conversion of
the 141,000 shares of Series B Senior Cumulative Convertible Preferred
Stock, par value $1.00 per share, of the Company (the "Series B
Preferred Stock") beneficially owned by Bridge Partners (the "Bridge
Preferred Shares"). Gildea is the Chairman of the Board of Directors,
Chief Executive Officer, President and the sole stockholder of
Carson Street Partners. As a result, Gildea and Carson Street Partners
may be deemed to be the indirect beneficial owners of the Bridge
Common Shares issuable upon conversion of the Bridge Preferred Shares.
In addition, Gildea is the Chairman of the Board of Directors, Chief
Executive Officer, President and the sole stockholder of Gildea
Management Company, a Delaware corporation ("GMC"), which corporation
has the power to dispose of the 842,857 shares of Common Stock (the
"Network Common Shares") issuable upon conversion of the 59,000 shares
of Series B Preferred Stock (the "Network Preferred Shares")
beneficially owned by Network Fund III, by virtue of an Investment
Advisory Agreement, dated February 26, 1996, between GMC and Network
Fund III (the "Investment Advisory Agreement"), a copy of which is
attached hereto as Exhibit 2 and incorporated herein by reference.
As a result, Gildea may be deemed to beneficially own the Network
Common Shares issuable upon conversion of the Network Preferred
Shares. Gildea also owns 10,000 shares of Series B Preferred Stock
in his individual capacity (the "Gildea Preferred Shares") which are
convertible into 142,857 shares of Common Stock (the "Gildea Common
Shares").
Mr. Gildea is also a limited partner in Bridge Partners. Mr. William
P. O'Donnell ("O'Donnell") is an officer, director and a minority
stockholder of Carson Street Partners and GMC, a limited partner in
Bridge Partners and owns 1,000 shares of Series B Preferred Stock (the
"O'Donnell Preferred Shares") convertible into 14,286 shares of Common
Stock (the "O'Donnell Common Shares"). Gildea, Carson Street Partners,
Bridge Partners and Network Fund III disclaim any existence of a
group (within the meaning of Section 13(d) of the Exchange Act) with,
between or among each other or Mr. O'Donnell.
Bridge Partners' principal business is to invest in shares of capital
stock of the Company and the capital stock and other securities of
other entities. Carson Street Partners' principal business is the
management of investments in various publicly traded companies.
Gildea's principal business is managing the investments of various
entities in issuers located principally in the United States. Network
Fund III's principal business is to invest in debt and equity
securities of public and private companies. The principal business
address and the
Page 10 of ___ Pages
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principal office address of each of Bridge Partners, Carson Street
Partners and Gildea is 115 East Putnam Avenue, Greenwich, Connecticut
06830. The principal address and the principal office address of
Network Fund III is P.O. Box 219 Butterfield House, Grand Cayman,
Cayman Islands, B.W.I.
The respective names, business addresses, citizenship and present
principal occupations of each director and executive officer of each
of Carson Street Partners and Network Fund III are set forth on
Schedule I hereto.
None of Bridge Partners, Carson Street Partners, Gildea, Network Fund
III or, to the best knowledge of such parties, any of the persons
listed on Schedule I hereto, has, during the last five years, (i)
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Bridge Partners acquired the Bridge Preferred Shares which are
convertible into the Bridge Common Shares for $100 per share of Series
B Preferred Stock, or an aggregate of $14,100,000, all of which funds
were obtained from the working capital of Bridge Partners.
Gildea acquired the Gildea Preferred Shares which are convertible into
the Gildea Common Shares for $100 per share of Series B Preferred
Stock, or an aggregate of $1,000,000, all of which funds were obtained
from Gildea's personal funds.
Network Fund III acquired the Network Preferred Shares which are
convertible into the Network Common Shares for $100 per share of
Series B Preferred Stock, or an aggregate of $5,900,000, all of which
funds were obtained from the capital contribution of the partners of
Network Fund III.
O'Donnell acquired the O'Donnell Preferred Shares which are
convertible into the O'Donnell Common Shares for $100 per share of
Series B Preferred Stock, or an aggregate of $100,000, all of which
funds were obtained from O'Donnell's personal funds.
Item 4. Purpose of Transaction.
Bridge Partners acquired the Bridge Preferred Shares which are
convertible into the Bridge Common Shares, Network Fund III acquired
the Network Preferred Shares which are convertible into the Network
Common Shares, Gildea acquired the Gildea Preferred Shares which are
convertible into the Gildea Common Shares and O'Donnell acquired the
O'Donnell Preferred Shares which are convertible into the O'Donnell
Common Shares pursuant to the terms of an Amended and Restated Stock
Purchase Agreement, dated as of May 30, 1996, by and among UNC
Incorporated, Network Fund III, Gildea, O'Donnell, Bridge Partners,
Pequod Investments, L.P., EURISTECH S.A. and Mellon Bank N.A., as
Trustee for The General Chemical Group, Inc. Master Pension Trust, a
copy of which agreement is attached hereto as Exhibit 3 and
incorporated herein by reference (the "Stock Purchase Agreement").
Each of Bridge Partners, Network Fund III, Gildea and O'Donnell
currently intend to hold the Bridge Preferred Shares, the Network
Preferred Shares, the Gildea Preferred Shares and the O'Donnell
Preferred
Page 11 of ___ Pages
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Shares and, upon conversion of such shares, the Bridge Common Shares,
the Network Common Shares, the Gildea Common Shares and the O'Donnell
Common Shares, respectively, for investment.
Each of Bridge Partners, Network Fund III, Carson Street Partners,
Gildea and O'Donnell intend to review on a continuing basis their
investment in the Company. As of the date of this Schedule 13D, no
determination has been made by Bridge Partners, Network Fund III,
Carson Street Partners, Gildea or O'Donnell to acquire additional
shares of capital stock of the Company or to dispose of any shares of
capital stock of the Company now held by them, although any of them
may decide to so acquire or dispose of shares of capital stock of the
Company. Any such determination will depend on market conditions
prevailing from time to time and on other conditions which may be
applicable depending on the nature of the transaction or transactions
involved. Pursuant to the Stock Purchase Agreement, the Company has
agreed to nominate one representative of the parties to the Stock
Purchase Agreement for election to the Company's Board of Directors
and it is currently anticipated that Gildea will be nominated and will
serve as a member of the Board of Directors of the Company. Except as
specifically set forth in this Item 4, none of Bridge Partners,
Network Fund III, Carson Street Partners, Gildea or O'Donnell has any
plans or proposals which relate to or would result in any of the
actions or effects set forth in items (a) through (j) of Item 4 of
Schedule 13D, although any of such persons may develop such plans or
proposals, subject to certain restrictive agreements with the Company
set forth in the Stock Purchase Agreement. Gildea, Carson Street
Partners, Bridge Partners and Network Fund III disclaim any existence
of a group (within the meaning of Section 13(d) of the Exchange Act)
with, between or among each other or Mr. O'Donnell.
Item 5. Interest in Securities of the Issuer.
(a) (i) Bridge Partners directly owns the 141,000 Bridge Preferred Shares
which are convertible into the 2,014,286 Bridge Common Shares. As
the sole general partner of Bridge Partners, Carson Street
Partners may be deemed to be the indirect beneficial owner of the
141,000 Bridge Preferred Shares which are convertible into the
2,014,286 Bridge Common Shares. As the Chairman of the Board of
Directors, Chief Executive Officer and controlling stockholder of
Carson Street Partners, Gildea may also be deemed to be the
indirect beneficial owner of the 141,000 Bridge Preferred Shares
which are convertible into the 2,014,286 Bridge Common Shares.
The 141,000 Bridge Preferred Shares which are convertible into
the 2,014,286 Bridge Common Shares represent the right to acquire
10.1% of the 17,861,981 shares of Common Stock of the Company
outstanding on the date hereof, based upon information provided
by the Company and calculated in accordance with Rule 13d-3(d)(1)
under the Exchange Act.
(ii) The 141,000 Bridge Preferred Shares of which Gildea may be deemed
to be the indirect beneficial owner, the 59,000 Network Preferred
Shares of which Gildea may be deemed to be the indirect
beneficial owner and the 10,000 Gildea Preferred Shares owned
directly by Gildea which are convertible into an aggregate of
3,000,000 shares of Common Stock collectively represent the right
to acquire 14.4% of the 17,861,981 shares of Common Stock of the
Company outstanding on the date hereof, based upon information
provided by the Company and calculated in accordance with Rule
13d-3(d)(1) under the Exchange Act.
(iii) The 1,000 O'Donnell Preferred Shares which are convertible into
14,286 O'Donnell Common Shares represent the right to acquire
0.1% of the 17,861,981 shares of Common Stock of the Company
outstanding on the date hereof, based
Page 12 of ___ Pages
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upon information provided by the Company and calculated in
accordance with Rule 13d-3(d)(1) under the Exchange Act.
(iv) The 59,000 Network Preferred Shares which are convertible into
842,857 Network Common Shares represent the right to acquire 4.5%
of the 17,861,981 shares of Common Stock of the Company
outstanding on the date hereof, based upon information provided
by the Company and calculated in accordance with Rule 13d-3(d)(1)
under the Exchange Act.
(b) (i) Carson Street Partners, as the sole general partner of Bridge
Partners, has the power to vote or direct the voting and the
power to dispose or direct the disposition of the Bridge
Preferred Shares and Bridge Common Shares
Gildea, as the Chairman of the Board of Directors, Chief
Executive Officer, President and sole stockholder of
Carson Street Partners, may be deemed to have the indirect power
to vote or direct the voting and to dispose or direct the
disposition of the Bridge Preferred Shares and Bridge Common
Shares.
(ii) Gildea, as the Chairman of the Board of Directors, Chief
Executive Officer, President and sole stockholder of GMC,
may be deemed to have the power to vote or direct the voting and
to dispose or direct the disposition of the Network Preferred
Shares and the Network Common Shares.
(iii) Gildea has the sole power to vote or direct the voting of and to
dispose of or direct the disposition of the Gildea Preferred
Shares and the Gildea Common Shares.
(iv) O'Donnell has the sole power to vote or direct the voting of and
to dispose of or direct the disposition of the O'Donnell
Preferred Shares and the O'Donnell Common Shares.
(c) Except as set forth in this Schedule 13D none of Bridge Partners,
Carson Street Partners, Gildea, Network Fund III, O'Donnell, or, to
the best knowledge of such parties, any of the persons named on
Schedule I hereto, owns any shares of the capital stock of the
Company or has purchased or sold any shares of the capital stock of
the Company during the past 60 days.
(d) Except as set forth in this Schedule 13D and except as may be provided
in the Partnership Agreement of Bridge Partners disclosed in Item 6,
below, no person is known by Bridge Partners, Carson Street Partners,
Gildea or Network Fund III to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the
sale of, the Bridge Common Shares, the Network Common Shares or the
Gildea Common Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Pursuant to an Amended and Restated Agreement of Limited Partnership
of Bridge Partners dated as of May 30, 1996 by and among Carson Street
Partners, as General Partner, and the limited partners signatory
thereto, a copy of which is attached hereto as Exhibit 4 and
incorporated herein by reference (the "Partnership Agreement"), Carson
Street Partners is generally entitled to receive 11% of all net
realized gains on Bridge Partners' investments, which investments
include the Bridge Preferred Shares and the Bridge Common Shares
issuable upon conversion of the Bridge Preferred Shares.
Pursuant to a Consultant Agreement dated May 15, 1996 (the "GCG
Pension Trust Agreement") between The General Chemical Group Inc.
Master Pension Trust (the
Page 13 of ___ Pages
<PAGE>
"GCG Pension Trust") and Iron City Capital LLC, a Delaware limited
liability company of which Gildea is a director, officer and the
controlling stockholder and O'Donnell is an officer, director and the
remaining minority stockholder ("Iron City LLC"), Iron City LLC and
the GCG Pension Trust have agreed that Iron City LLC may, but shall
not be obligated to, provide investment consultant services to the GCG
Pension Trust in connection with the purchase of 20,000 shares of
Series B Preferred Stock (the "GCG Pension Trust Shares") by the GCG
Pension Trust pursuant to the Stock Purchase Agreement. The GCG
Pension Trust Agreement provides, among other things, that the GCG
Pension Trust shall pay to Iron City LLC 20% of the pre-tax net gain
on the sale of the GCG Pension Trust Shares. Gildea disclaims
beneficial ownership of the GCG Pension Trust Shares.
Pursuant to a Consultant Agreement dated May 15, 1996 (the "EURISTECH
Agreement") between EURISTECH, S.A. ("EURISTECH") and Iron City LLC,
Iron City LLC and EURISTECH have agreed that Iron City LLC may, but
shall not be obligated to, provide investment consultant services to
EURISTECH in connection with the purchase of 15,000 shares of Series B
Preferred Stock (the "EURISTECH Shares") purchased by EURISTECH
pursuant to the Stock Purchase Agreement. The EURISTECH Agreement
provides, among other things, that EURISTECH shall pay to Iron City
LLC 20% of the pre-tax net gain on the sale of the EURISTECH Shares as
well as a 1% annual fee on the EURISTECH Shares. Gildea disclaims
beneficial ownership of the EURISTECH Shares.
Except as set forth in this Schedule 13D, there are no contracts,
arrangements, understandings or relationships (legal or otherwise)
among the persons referred to in Item 2 of this Schedule 13D or
between such persons and any other person with respect to any of the
securities of the Company, including, but not limited to, any relating
to the transfer or voting of any of such securities, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees
of profits, division of profits or loss or the giving withholding of
proxies.
Item 7. Materials to Be Filed as Exhibits
1. Joint Filing Agreement, dated June 7, 1996.
2. Investment Advisory Agreement, by and among GMC and Network Fund
III, dated as of February 26, 1996.
3. Amended and Restated Stock Purchase Agreement, by and among the
parties thereto, dated as of May 30, 1996.
4. Amended and Restated Agreement of Limited Partnership dated as of
May 30, 1996.
Page 14 of ___ Pages
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SIGNATURE
After reasonable inquiry and to the best of their respective knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct.
Dated: June 7, 1996
BRIDGE PARTNERS, L.P.
By: CARSON STREET PARTNERS, INC.,
General Partner
By: /s/ John W. Gildea
--------------------------------------------
Name: John W. Gildea
Title: Chief Executive Officer and President
CARSON STREET PARTNERS, INC.
By: /s/ John W. Gildea
--------------------------------------------
Name: John W. Gildea
Title: Chief Executive Officer and President
By: /s/ John W. Gildea
--------------------------------------------
John W. Gildea
NETWORK FUND III, LTD.
By: GILDEA MANAGEMENT COMPANY,
Investment Advisor
By: /s/ John W. Gildea
--------------------------------------------
Name: John W. Gildea
Title: President
Page 15 of ___ Pages
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SCHEDULE I
Reporting Person: Carson Street Partners, Inc.
115 East Putnam Avenue
Greenwich, Connecticut 06830
Executive Officers, Directors and Controlling Person:
Name ............... John W. Gildea
Positions .......... Chairman of the Board, Chief Executive Officer,
President and controlling stockholder of Carson
Street Partners, Inc.
Principal Occupation
and Employment;
Business Address ... General Partner of Gildea Management Company, a
Delaware corporation ("GMC"), investment advisor;
the business address of GMC and Mr. Gildea is: 115
East Putnam Avenue, Greenwich, Connecticut 06830
Citizenship ........ U.S.A.
Name ............... William P. O'Donnell
Positions .......... Vice President, Secretary and Treasurer, Carson
Street Partners, Inc.
Principal Occupation
and Employment;
Business Address ... Executive officer and director of GMC, investment
advisor; the business address of GMC and Mr. O'Donnell
is: 115 East Putnam Avenue, Greenwich, Connecticut
06830.
Citizenship ........ U.S.A.
Page 16 of ___ Pages
<PAGE>
Reporting Person: Network Fund III, Ltd.
P.O. Box 219 Butterfield House
Grand Cayman, Cayman Islands, B.W.I.
Executive Officers, Directors and Controlling Person:
Name: John W. Gildea
Position: Director and Chairman
Principal Occupation
and Employment:
Business Address: Managing Director of GMC; the business address of GMC
and Mr. Gildea is: 115 Putnam Avenue, Greenwich, CT
06830.
By virtue of being Managing Director of GMC which under its
Investment Advisory Agreement with Network (see Exhibit 2) has the
power to dispose of any of the Network Shares which may be held by
Network, and the Chairman of Network, Mr. Gildea may be deemed to be
a controlling person of Network.
Name: William P. O'Donnell
Position: Director and Managing Director
Principal Occupation
and Employment: Managing Director of Gildea Management Company
Business Address: 115 Putnam Avenue
Greenwich, CT 06830
Citizenship: USA
Name: Peter Arthur Neil Bailey
Position: Director
Principal Occupation
and Employment:
Business Address: Director of Abacus Asset Management in Jersey, Channel
Islands, a member of Coopers & Lybrand International, a
limited liability association incorporated in
Switzerland; business address: La Motte Chambers, La
Motte Street, St. Hellier, Jersey, Channel Islands,
U.K. JE1 1BJ
Page 17 of ___ Pages
<PAGE>
Citizenship: U.K.
Name: Geoffrey William Fisher
Position: Director
Principal Occupation
and Employment:
Business Address: Director of Abacus Asset Management in Jersey, Channel
Islands, a member of Coopers & Lybrand International, a
limited liability association incorporated in
Switzerland; business address: La Motte Chambers, La
Motte Street, St. Hellier, Jersey, Channel Islands,
U.K. JE1 1BJ
Citizenship: U.K.
Name: Michael David de Figueiredo
Position: Director
Principal Occupation
and Employment:
Business Address: Director of Abacus (CI) Limited, a member of Coopers &
Lybrand International, a limited liability association
incorporated in Switzerland; business address: La Motte
Chambers, La Motte Street, St. Hellier, Jersey, Channel
Islands, U.K. JE1 1BJ
Citizenship: U.K.
Page 18 of ___ Pages
<PAGE>
EXHIBIT INDEX
Page
Exhibit Number
- ------- ------
1. Joint Filing Agreement, dated June 7, 1996.
2. Investment Advisory Agreement, by and among GMC and Network Fund III, dated
as of February 26, 1996.
3. Amended and Restated Stock Purchase Agreement, by and among the parties
thereto, dated as of May 30, 1996.
4. Amended and Restated Agreement of Limited Partnership dated as of May 30,
1996.
Page 19 of ___ Pages
<PAGE>
EXHIBIT 1
<PAGE>
Exhibit 1
AGREEMENT
The undersigned hereby agree that this statement on Schedule 13D with
respect to the beneficial ownership of shares of Common Stock of UNC
Incorporated is filed jointly, on behalf of each of them.
Dated: June 7, 1996
BRIDGE PARTNERS, L.P.
By: CARSON STREET PARTNERS, INC.,
General Partner
By: /s/ John W. Gildea
----------------------------------
Name: John W. Gildea
Title: Chief Executive Officer and
President
CARSON STREET PARTNERS, INC.
By: /s/ John W. Gildea
----------------------------------
Name: John W. Gildea
Title: Chief Executive Officer and
President
By: /s/ John W. Gildea
----------------------------------
John W. Gildea
NETWORK FUND III, LTD.
By: GILDEA MANAGEMENT COMPANY,
Investment Advisor
By: /s/ John W. Gildea
----------------------------------
Name: John W. Gildea
Title: President
<PAGE>
EXHIBIT 2
<PAGE>
NETWORK FUND III, LTD.
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is entered into as of
February 26, 1996 by and between GILDEA MANAGEMENT COMPANY, a Delaware
corporation (the "Investment Advisor"), and NETWORK FUND III, LTD., a Cayman
Islands exempted company (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund has been formed as a closed-end investment company, the
objective of which is to achieve capital appreciation in accordance with the
investment objectives and strategies as more fully described in the Confidential
Private Placement Memorandum of the Fund dated February 1996 (the "Memorandum");
and
WHEREAS, the Fund wishes to engage the Investment Advisor to provide
investment advisory services with respect to the Fund's assets; and
WHEREAS, the Investment Advisor wishes to accept the same upon the terms
and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained, the parties agree as follows:
1. Investment Management Services. In accordance with the provisions of the
Memorandum and Articles of Association of the Fund, and under the ultimate
supervision of the Board of Directors of the Fund (the "Directors") from time to
time as provided therein, and in accordance with the investment objectives,
policies, guidelines and restrictions which are set forth in the Memorandum or
which are otherwise communicated to the Investment Advisor in writing by the
Fund, the Investment Advisor shall use its reasonable efforts to invest the
assets of the Fund according to the strategy set forth in the Memorandum.
Capitalized terms not otherwise defined herein shall be used herein as defined
in the Memorandum.
2. Authority of the Investment Advisor. The Investment Advisor shall have
full discretion and authority, without obtaining the Fund's prior approval, to
manage the investment and reinvestment of the assets of the Fund in such manner
as the Investment Advisor considers appropriate consistent with the Memorandum.
In furtherance of the foregoing, the Fund hereby designates and appoints the
Investment Advisor as its agent and attorney-in-fact, with full power and
authority and without the need for further approval of the Fund (except as may
be required by law), to carry out the following with respect to the assets of
the Fund:
(a) to effect purchases and sales (including short sales) of (i)
securities of any type whatsoever, denominated in any currency, whether or not
issued by government entities, partnerships, trusts or corporations, (ii) any
put or call options thereon (including the writing of options, whether covered
or uncovered), and (iii) other securities and instruments consistent with
<PAGE>
the Fund's investment policies and program;
(b) to make all decisions relating to the manner, method and timing of
investment transactions, and to select brokers and dealers for the execution,
clearance and settlement of any transactions;
(c) to borrow from banks, brokers or other financial institutions to
the extent permitted by the Memorandum and to pledge assets of the Fund in
connection therewith;
(d) to direct custodians to deliver funds or securities for the
purpose of effecting transactions, and to instruct custodians to exercise or
abstain from exercising any privilege or right attaching to such assets; and
(e) to make and execute, in the name and on behalf of the Fund, all
such documents (including, without limitation, customer agreements and other
documents in connection with the establishment and maintenance of brokerage
accounts) and to take all such other actions as the Investment Advisor considers
necessary or advisable to carry out its investment management duties hereunder.
3. Brokerage. In the course of selecting brokers, dealers, banks and
intermediaries to effect transactions for the Fund, the Investment Advisor may
agree to such commissions, fees and other charges on behalf of the Fund as the
Investment Advisor shall deem reasonable in the circumstances taking into
account all such factors as it deems relevant, including the quality of research
and other services made available to it (even if such services are not for the
exclusive benefit of the Fund). It is understood that the costs of such services
will not necessarily represent the lowest costs available and that the
Investment Advisor is under no obligation to combine or arrange orders so as to
obtain reduced charges.
4. Investments for the Accounts of Others and Allocation of Opportunities.
(a) It is understood that the Investment Advisor and its directors,
officers, employees and principals may from time to time purchase and sell
securities or other investment assets for their own accounts, for the accounts
of their families, for the account of any entity in which they have a beneficial
interest or for the accounts of others for whom they may provide investment
advisory or other services (collectively, "Managed Accounts"), notwithstanding
the fact that the Fund may have or may take an investment position in the same
security; provided, however, that the Investment Advisor shall not cause the
Fund to purchase any asset from or sell any asset to the Investment Advisor, or
any of its directors, officers, employees or principals or any account or entity
controlled by such persons without the consent of the Fund.
(b) It is understood that when the Investment Advisor determines that
it would be appropriate for the Fund and one or more Managed Accounts to
participate in an investment opportunity, the Investment Advisor will seek to
execute orders for the Fund and for such Managed Accounts on an equitable basis.
In such situations, the Investment Advisor may place orders for the Fund and
each Managed Account simultaneously, and if all such orders are not filled at
the same price, the Investment Advisor may cause the Fund and each Managed
Account
2
<PAGE>
to pay or receive the average of the prices at which the orders were filled for
the Fund and all Managed Accounts. If all such orders cannot be fully executed
under prevailing market conditions, the Investment Advisor may allocate the
securities traded among the Fund and the Managed Accounts in a manner which it
considers equitable, taking into account the size of the order placed for the
Fund and each such Managed Account as well as any other factors which it deems
relevant.
(c) The Investment Advisor will not organize any other investment fund
with the same objectives as the Fund (other than a parallel U.S. limited
partnership for U.S. investors) unless at least sixty percent (60%) of the
capital of the Fund has been invested in portfolio securities consistent with
the Fund's objectives.
5. Compensation.
(a) For its services hereunder, the Investment Advisor shall be
entitled to receive a quarterly management fee from the Fund at an annual rate
equal to 1.75% of the Net Value of the Fund (as defined in the Memorandum). The
management fee shall be calculated and payable in arrears after the end of each
calendar quarter based on the Net Value of the Fund as of the end of the
calendar quarter. The management fee shall be paid promptly to the Investment
Advisor after the close of each calendar quarter.
(b) In addition to the management fee, once the Fund has made
aggregate distributions to holders of its Common Shares equal to their initial
investment plus a 7% non-compounded annual return (the "Preferred Return"), then
the Investment Advisor will receive distributions in its capacity as holder of
the Fund's Founders Shares until it has received cumulative distributions equal
to a 1.75% non-compounded annual return on the Fund's capital, and thereafter
distributions will be made 80% to holders of Common Shares of the Fund and 20%
to the Investment Advisor in its capacity as holder of Founders Shares, in each
case as provided in the Memorandum and in the Articles and Memorandum of
Association of the Fund.
6. Scope of Liabilities. The Investment Advisor shall not be liable to the
Fund, its affiliates or shareholders for any losses, damages, expenses or claims
occasioned by any act or omission of the Investment Advisor in connection with
the performance of its services hereunder, other than as a result of its own
willful misconduct, gross negligence or reckless disregard of its duties
hereunder, or as otherwise required by applicable law.
7. Indemnification. The Fund shall indemnify the Investment Advisor (which
shall include solely for purposes of this Section 9 any of its directors,
officers, employees and shareholders) against and hold them harmless from any
expense, loss, liability or damage arising out of any claim asserted or
threatened to be asserted by any third party, in connection with the Investment
Advisor's serving or having served as such pursuant to this Agreement; provided,
however, that the Investment Advisor shall not be entitled to indemnification
with respect to any expense, loss, liability or damage which was caused by its
own gross negligence, willful misconduct or reckless disregard of its duties
hereunder. The Fund shall advance to the Investment Advisor the reasonable costs
and expenses of investigating and/or defending any such claim, subject to
receiving a written undertaking from the Investment Advisor to repay any such
3
<PAGE>
amounts advanced to it in the event and to the extent of any subsequent
determination that the Investment Advisor was not entitled to indemnification
hereunder. In the event that the Investment Advisor is or becomes a party to any
action or proceeding in respect of which indemnification may be sought
hereunder, the Investment Advisor shall promptly notify the Fund thereof.
Following such notice, the Fund shall be entitled to participate therein and, to
the extent that it may wish, to assume the defense thereof with counsel
reasonably satisfactory to the Investment Advisor. After notice from the Fund to
the Investment Advisor of an election so to assume the defense thereof, the Fund
will not be liable to the Investment Advisor hereunder for any legal or other
expenses subsequently incurred by the Investment Advisor in connection with the
defense thereof other than reasonable costs of investigation unless counsel for
the Investment Advisor shall reasonably determine that there is a conflict of
interest which requires separate representation of the parties. The Fund shall
not be liable hereunder for any settlement of any action or claim effected
without its written consent thereto, which consent shall not be unreasonably
withheld, nor shall the Fund enter into any settlement which shall impose any
obligation on the Investment Advisor without its written consent.
8. Independent Contractor. For all purposes of this Agreement, the
Investment Advisor shall be an independent contractor and not an employee or
agent of the Fund, nor shall anything herein be construed as making the Fund a
partner or co-venturer with the Investment Advisor or any of its affiliates.
Except as provided in this Agreement, the Investment Advisor shall not have
authority to bind, obligate or represent the Fund. Without limiting the
generality of the foregoing, the Investment Advisor shall have no authority
whatsoever (nor shall it have any duty) on behalf of the Fund to: (i)
communicate with shareholders of the Fund or with the general public; (ii)
solicit sales of the Shares of the Fund or accept subscriptions therefor; (iii)
maintain the principal corporate records or books of account of the Fund; (iv)
disburse payments of dividends, legal and accounting fees, and directors' and
officers' salaries; or (v) make redemptions of the shares of the Fund.
9. Information Concerning Activities. The Investment Advisor shall send or
arrange that there be sent to the Fund confirmations of all transactions for its
account. The Investment Advisor shall also furnish from time to time such
further information and reports concerning the activities undertaken by the
Investment Advisor on behalf of the Fund as the Fund may reasonably request.
10. Expenses. All expenses incurred directly in connection with
transactions effected or positions held on behalf of the Fund pursuant to the
Investment Advisor's exercise of its duties hereunder (including, without
limitation, custodial fees, clearing fees, brokerage commissions, interest and
commitment fees on loans and debit balances, withholding or transfer taxes and
other expenses as described in the Memorandum) shall be paid or reimbursed by
the Fund. The Investment Advisor shall bear its own overhead and other internal
operating costs, except that the Investment Advisor may cause certain of such
expenses to be paid out of brokerage commissions generated by trading on behalf
of the Fund as described in the Memorandum.
11. Term, Termination, Renewal and Survival.
(a) The initial term of this Agreement shall commence on the date
hereof and
4
<PAGE>
shall continue until the final dissolution and liquidation of the Fund, subject
to termination by either party upon not less than thirty (30) days prior written
notice to the other in the event of any material breach by the other party of
its obligations under this Agreement, which breach is not remedied within such
period.
(b) In the event of the termination of this Agreement, (i) the
Investment Advisor shall be entitled to the management fee accrued through the
date of termination, (ii) the provisions of Sections 6 and 7 shall survive any
termination, and (iii) the Investment Advisor shall have the right, at its
option, to resell the Founders Shares to the Fund at a purchase price equal to
the accrued but unpaid distributions due to the holders of Founders Shares
through the date of such termination based upon the Net Value of the Fund (as
defined in the Memorandum) as of such date.
12. Modification; Waiver. Except as otherwise expressly provided herein,
this Agreement shall not be amended nor shall any provision of this Agreement be
considered modified or waived unless evidenced by a writing signed by the
parties to be charged with such amendment, waiver or modification.
13. Entire Agreement; Binding Effect; Assignment. This Agreement represents
the entire agreement among the parties, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, and their rights
and obligations hereunder shall not be assignable, transferable or delegable
without the written consent of the other party hereto. Any attempted assignment,
transfer or delegation hereof without such consent shall be void.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Cayman Islands, without giving effect to
conflicts of law.
15. Counterparts. This Agreement may be signed in any number of
counterparts. Any single counterpart or a set of counterparts signed in either
case by the parties hereto shall constitute a full and original agreement for
all purposes.
5
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
NETWORK FUND III, LTD.
By: /s/ P. Bailey
-----------------------
Name: P. Bailey
Title: Director
GILDEA MANAGEMENT COMPANY
By: /s/ William P. O'Donnell
-----------------------
Name: William P. O'Donnell
Title: Vice President
6
<PAGE>
EXHIBIT 3
<PAGE>
================================================================================
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
by and among
UNC INCORPORATED
AND
THE PURCHASERS SIGNATORY HERETO
Dated as of May 30, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
1. PURCHASE AND SALE.................................................... 1
1.1 Acquisition Shares............................................. 1
1.2 Firm Shares.................................................... 2
1.3 Terms of Series B Preferred Stock and Series C Preferred Stock. 2
1.4 Purchase Price................................................. 2
1.5 Closing........................................................ 2
1.6 Commitment and Funding Fees.................................... 3
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................ 3
2.1 Corporate Organization and Good Standing....................... 3
2.2 Authorization.................................................. 4
2.3 Consents and Approvals; No Violations.......................... 4
2.4 Capital Stock.................................................. 4
2.5 Good Title..................................................... 5
2.6 Subsidiaries................................................... 5
2.7 Offering of Shares............................................. 5
2.8 SEC Reports; Financial Information............................. 6
2.9 Absence of Certain Changes or Events........................... 6
2.10 Legal Proceedings, etc......................................... 7
2.11 Title to Properties, Absence of Liens and Encumbrances, etc. .. 7
2.12 Contracts and Commitments, etc................................. 7
2.13 Compliance with Applicable Law................................. 7
2.14 Investment Company Act of 1940................................. 8
2.15 Public Utility Holding Company Act of 1935, etc. .............. 8
2.16 No Brokers..................................................... 8
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..................... 8
3.1 Authorization.................................................. 8
3.2 Consents and Approvals; No Violations.......................... 8
3.3 No Brokers..................................................... 9
3.4 Investment Intent; Related Matters............................. 9
3.5 Ownership of Company Capital Stock............................. 9
4. COVENANTS............................................................ 9
4.1 Conduct of the Business of the Company Prior to the Outside
Date........................................................... 9
4.2 Confidentiality................................................ 10
4.3 Public Announcements........................................... 11
4.4 Best Efforts................................................... 11
4.5 Shareholder Rights Plan........................................ 11
-i-
<PAGE>
5. CONDITIONS PRECEDENT TO THE PURCHASERS' OBLIGATIONS.................. 11
5.1 Representations and Warranties of the Company True; Performance
by the Company................................................. 12
5.2 Litigation Affecting Closing................................... 12
5.3 Approvals and Consents......................................... 12
5.4 Opinions of Counsel to the Company............................. 12
5.5 The Shares..................................................... 14
5.6 No Material Adverse Change..................................... 14
5.7 No Adverse Events Under Shareholder Rights Plan................ 14
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY
AT THE CLOSING....................................................... 14
6.1 Representations and Warranties of the Purchasers True;
Performance by the Purchasers.................................. 14
6.2 The Purchase Price............................................. 15
6.3 Opinion of Counsel to the Purchaser............................ 15
6.4 Litigation Affecting Closing................................... 15
6.5 Approvals and Consents......................................... 15
7. REGISTRATION RIGHTS.................................................. 16
7.1 Restrictive Legend............................................. 16
7.2 Required Registrations......................................... 16
7.3 "Piggy-Back" Registrations..................................... 17
7.4 Registration Procedures........................................ 18
7.5 Indemnification; Contribution.................................. 19
8. EXPENSES............................................................. 21
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNITIES.......................................................... 21
10. CERTAIN AGREEMENTS................................................... 23
10.1 Standstill..................................................... 23
10.2 Agreement Respecting Board Representation...................... 24
10.3 No redemptions or cash payments................................ 25
11. NOTICES, ETC......................................................... 25
12. GENERAL.............................................................. 26
12.1 Amendment and Waiver........................................... 26
12.2 Assignment..................................................... 26
12.3 Governing Law.................................................. 27
12.4 Counterparts................................................... 27
12.5 Headings....................................................... 27
12.6 Severability................................................... 27
12.7 Termination.................................................... 27
-ii-
<PAGE>
12.8 Effect of Amended and Restated Agreement Which Shall Terminate
as of the Date Hereof.......................................... 27
SCHEDULES
SCHEDULE 1 Names of Purchasers
SCHEDULE 2 Names of Original Purchasers
SCHEDULE 3 Acceptable Acquisition
EXHIBITS
Exhibit A Series B Certificate of Designation
Exhibit B Series C Certificate of Designation
-iii-
<PAGE>
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT dated as of May 30, 1996, by
and among UNC Incorporated, a Delaware corporation (the "Company"), and the
persons set forth on Schedule 1 hereto (the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company is a party to that certain Stock Purchase Agreement
(the "Original Agreement") currently in effect between the Company and certain
purchasers (the "Original Purchasers") set forth on Schedule 1 thereto, pursuant
to which the Original Purchasers were to purchase from the Company up to 250,000
shares of a newly created series of Preferred Stock of the Company, upon the
terms and subject to the conditions set forth therein; and
WHEREAS, with the exception of Pequod Investments, L.P., each of the
Original Purchasers wishes to assign its rights, interests and obligations in,
to and under the Original Agreement to a Purchaser pursuant to those certain
Assignment and Assumption Agreements dated as of May 30, 1996 (the
"Assignments"); and
WHEREAS, the Company has consented to the Assignments and wishes to replace
the Original Purchasers with the Purchasers by amending and restating the
Original Agreement to provide for such Purchasers.
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE.
1.1 Acquisition Shares. Upon the terms and subject to the conditions set
forth herein, if the Company shall consummate one or more acquisitions of a
business or entity meeting the terms and conditions set forth on Schedule 3
hereto (an "Acceptable Acquisition") on or prior to the Outside Date (as
hereinafter defined), the Company shall have the option (the "Company Option")
to sell to the Purchasers, and each of the Purchasers agrees, severally and not
jointly, to the extent that the Company exercises the Company Option, to
purchase from the Company, on any Closing Date (as hereinafter defined) the
number of shares (collectively, the "Acquisition Shares") of the Company's
Series B Senior Cumulative Convertible Preferred Stock, par value $1.00 per
share (the "Series B Preferred Stock"), set forth opposite the name of each such
Purchaser on Schedule 1 hereto under the column "Acquisition Shares." The
Company Option may be exercised by the Company upon written notice delivered to
each of the Purchasers at least 20 days prior to any Closing Date. The Company
Option may be exercised by the Company, in whole or in part, provided, however,
that the Company Option may only be exercised by the Company for a minimum of
50,000 Acquisition Shares in the aggregate and in integral multiples of 10,000
Acquisition Shares in the aggregate. Any sales of Acquisition Shares by the
Company pursuant to a partial exercise of the Company Option by the Company
shall be made to the Purchasers pro rata in proportion to the number of
Acquisition Shares set forth opposite the name of each Purchaser on Schedule 1
hereto. The Purchasers hereby
<PAGE>
acknowledge receipt of the required notice by the Company of exercise of the
Company Option as to all of the Acquisition Shares.
1.2 Firm Shares. Upon the terms and subject to the conditions set forth
herein, the Purchasers shall have the option (the "Purchasers' Option") to
purchase from the Company, and the Company agrees to sell to the Purchasers, to
the extent that the Purchasers exercise the Purchasers' Option, on the Outside
Date a number of shares (collectively, the "Firm Shares" and, together with the
Acquisition Shares, the "Shares") of Series B Preferred Stock equal to the
positive difference, if any, between (a) 100,000 and (b) the aggregate number of
Acquisition Shares sold by the Company to the Purchasers on or prior to the
Outside Date. The Purchasers' Option may be exercised by the Purchasers, in
whole or in part, provided, however, that the Purchasers' Option may only be
exercised by the Purchasers for a minimum of 10,000 Firm Shares in the aggregate
and in integral multiples of 10,000 Firm Shares in the aggregate. Any purchase
of Firm Shares by the Purchasers pursuant to a partial exercise of the
Purchasers' Option by the Purchasers shall be made by the Purchasers exercising
the Purchasers' Option pro rata in proportion to the number of Acquisition
Shares set forth opposite the name of each Purchaser on Schedule 1 hereto. The
Purchasers' Option may be exercised by the Purchasers upon twenty days prior
written notice delivered to the Company on or prior to May 31, 1996.
1.3 Terms of Series B Preferred Stock and Series C Preferred Stock. The
Series B Preferred Stock shall have such designations, preferences,
qualifications, voting rights, limitations, restrictions and relative rights as
set forth in the Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A (the "Series B Certificate of Designation"). The Series C
Senior Cumulative Preferred Stock, par value $1.00 per share (the "Series C
Preferred Stock"), of the Company issuable as dividends on the Series B
Preferred Stock shall have such designations, preferences, qualifications,
voting rights, limitations, restrictions and relative rights as set forth in the
Certificate of Designation, Preferences and Rights attached hereto as Exhibit B
(the "Series C Certificate of Designation" and, together with the Series B
Certificate of Designation, the "Certificates of Designation").
1.4 Purchase Price. The purchase price for the Shares shall be $100 per
Share (the "Purchase Price").
1.5 Closing. Upon the terms and subject to the conditions set forth herein,
the closing (the "Closing") of the purchase and sale of (a) if the Purchasers'
Option is exercised by the Purchasers, any Firm Shares, and (b) if the Company
Option is exercised by the Company, any Acquisition Shares, shall take place at
the offices of Coudert Brothers, 1114 Avenue of the Americas, New York, New York
10036, at 10:00 a.m., New York time, on (i) with respect to any Acquisition
Shares, the date of closing of the Acceptable Acquisition, and (ii) with respect
to the Firm Shares, the Outside Date, or on such other date and at such other
time and place as the parties hereto may agree (the "Closing Date"). As used in
this agreement the term "Outside Date" shall mean the later of (i) May 31, 1996
or (ii) the date on which the twenty day notice period with respect to the last
Company Option notice or Purchasers' Option notice delivered on or prior to May
31, 1996 expires. In no event shall the Outside Date be later than May 31, 1996.
The Purchasers agree that any Closing with respect to the purchase and sale of
Acquisition Shares shall occur and the Company Option may be exercised by the
Company
- 2 -
<PAGE>
(subject to the notice provisions set forth in Section 1.1 hereof) in a manner
such that the Company receives the proceeds from the sale of the Acquisition
Shares as to which the Company Option is exercised immediately prior to or
simultaneous with the Company's consummation of the Acceptable Acquisition. At
any Closing, the Company shall deliver to each of the Purchasers certificates
representing the number of Shares to be sold to each such Purchaser hereunder
and each such Purchaser shall deliver to the Company by wire transfer of
immediately available funds an amount equal to the Purchase Price for such
Shares. Such Shares shall be delivered to the Purchasers free and clear of all
liens, security interests, options, charges, beneficial interests, claims and
encumbrances of every kind (and free and clear of any agreement to create any of
the foregoing), except for restrictions on transfer imposed by this Agreement
and restrictions on transfer arising under applicable securities laws.
1.6 Commitment and Funding Fees. Simultaneously with the execution of this
Agreement, the Company shall pay Network III Holdings, LDC or its designee
("Network III") a commitment fee in an amount equal to $1.00 multiplied by the
aggregate number of Acquisition Shares set forth opposite the names of all of
the Purchasers on Schedule 1 hereto. At any Closing, the Company shall pay to
Network III an amount equal to $1.75 multiplied by the aggregate number of
Shares purchased by all of the Purchasers at that Closing. In the event that the
Company does not exercise the Option as to all Acquisition Shares and the
Company shall, within one year of the Outside Date, consummate the sale of any
of its equity securities having terms similar to the Series B Preferred Stock
and on terms similar to the terms set forth herein, the Company shall pay to
Network III upon consummation of the sale of such equity securities an amount
equal to $2.00 multiplied by the difference between (a) the aggregate number of
Acquisition Shares set forth opposite the names of all of the Purchasers on
Schedule 1 hereto and (b) the aggregate number of Shares sold by the Company to
all Purchasers on or prior to the Outside Date.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and agrees with each of the Purchasers as follows:
2.1 Corporate Organization and Good Standing. The Company and each
Subsidiary (as defined in Section 2.6 hereof) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to conduct its business
as now being conducted and to own or lease the assets and properties it now owns
or holds under lease. The Company and each Subsidiary is duly qualified or
licensed to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or the
character of the assets and properties owned or leased by it makes such
qualification necessary, except for such jurisdictions where the failure to be
so qualified would not, individually or in the aggregate, have a material
adverse effect on the business, financial condition, operations, properties,
assets or liabilities (collectively, the "Business") of the Company and its
Subsidiaries taken as a whole. The Company has delivered to the Purchaser
complete and correct copies of its Certificate of Incorporation and By-Laws, the
Certificate of Incorporation and By-Laws of each Subsidiary, the Certificates of
Designation and all resolutions of the Board of Directors of the Company
relating to this Agreement or the transactions contemplated hereby (certified as
correct in each
- 3 -
<PAGE>
case by the Company's Secretary or an Assistant Secretary), in each case as in
effect on the date hereof.
2.2 Authorization. The Company has full right, power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The Board of Directors of the Company has duly approved
this Agreement and has duly authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the legal, valid and binding agreement of the Company
enforceable in accordance with its terms. The issuance, sale and delivery of (a)
the Shares, (b) the shares of Series C Preferred Stock, issuable as dividends on
the Shares pursuant to the Series B Certificate of Designation (the "Dividend
Shares"), and (c) the shares of Common Stock, par value $.20 per share, of the
Company (including the associated stock purchase rights, the "Common Stock")
issuable upon conversion of the Shares (the "Conversion Shares") have been duly
authorized by all requisite corporate action on the part of the Company and,
when issued and delivered as provided in this Agreement and the Certificates of
Designation, will be validly issued, fully paid and non-assessable. The Dividend
Shares and Conversion Shares have been, and at all times prior to the issuance
thereof in accordance with the Certificates of Designation, will be, duly
reserved for issuance.
2.3 Consents and Approvals; No Violations. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not: (i) violate any provision of the Certificate of
Incorporation or By-Laws of the Company or any Subsidiary; (ii) assuming that
all required approvals are obtained under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, violate any statute, ordinance, rule, regulation,
order or decree of any court or of any public, governmental or regulatory body,
agency or authority applicable to the Company or any Subsidiary or by which any
of their respective properties or assets may be bound; (iii) except for any
required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
require any filing, declaration or registration with, or permit, consent or
approval of, or the giving of any notice to, any public, governmental or
regulatory body, agency or authority; or (iv) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
or other evidence of indebtedness, indenture, license, franchise, permit,
agreement or other instrument or obligation to which the Company or any
Subsidiary is a party, or by which any of them or any of their respective
properties or assets may be bound, excluding from the foregoing clause (iv)
violations, breaches and defaults which would not have a material adverse effect
on the Business of the Company and the Subsidiaries taken as a whole.
2.4 Capital Stock. The Company's authorized capital stock consists of
50,000,000 shares of Common Stock, 17,861,981 shares of which are issued and
outstanding and 700,000 shares of which are held in treasury on the date hereof,
and 12,000,000 shares of preferred stock (which includes 250,000 shares of
Series A Junior Participating Preferred Stock), no shares of which are issued
and outstanding on the date hereof. All of the issued and outstanding shares of
the Company's capital stock and of each Subsidiary's capital stock have been
duly authorized and validly issued and are fully paid and non-assessable. Other
than approximately 2,346,000 shares of Common Stock reserved for issuance under
employee benefit plans, shares of Common
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Stock reserved for issuance pursuant to the conversion of the Company's 7-1/2%
Convertible Subordinated Debentures Due 2006, up to 625,000 shares of Common
Stock reserved for issuance to senior executives of Garrett Aviation Services
("Management Compensation Shares") and 250,000 shares of Series A Junior
Participating Preferred Stock reserved for issuance under the Shareholder Rights
Plan, as of the date of this Agreement there are no existing options, warrants,
calls, commitments or agreements of any character to which the Company or any
Subsidiary is a party or by which it is bound calling for the issuance or sale
of shares of its respective capital stock or securities convertible into or
exchangeable for shares of such capital stock. As of the date of this Agreement
neither the Company nor any Subsidiary is a party to or otherwise bound by any
agreement, instrument or commitment for the purchase or repurchase of capital
stock of the Company or any Subsidiary or entitled to the benefit of any option,
right of first refusal or other elective privilege to purchase capital stock of
the Company or any Subsidiary. Neither the Company nor any Subsidiary owns,
directly or indirectly, any capital stock or other equity or ownership or
proprietary interest in any other corporation, partnership, association, trust,
joint venture or other entity other than, in the case of the Company and its
Subsidiaries, equity interests in the Subsidiaries.
2.5 Good Title. Upon payment of the Purchase Price by each of the
Purchasers, the Company will deliver to each of the Purchasers good and valid
title to the Shares, and upon the issuance of the Dividend Shares and the
Conversion Shares, the Company will deliver to each of the Purchasers good and
valid title to the Dividend Shares and the Conversion Shares, in each case, free
and clear of all liens, security interests, options, charges, beneficial
interests, claims and encumbrances of every kind (and any agreement to create
any of the foregoing), except for restrictions on transfer imposed by this
Agreement and restrictions on transfer arising under applicable securities laws.
2.6 Subsidiaries. The Company has no direct or indirect subsidiaries other
than those entities listed on Schedule 2.6 hereto (each a "Subsidiary" and
collectively the "Subsidiaries"). All outstanding shares of capital stock of the
Subsidiaries owned by the Company are owned, directly or indirectly, by the
Company free and clear of all liens, security interests, options, beneficial
interests, claims and encumbrances of every kind (and any agreement to create
any of the foregoing). No subsidiary is in default in the performance,
observation or fulfillment of its Certificate of Incorporation or its By-laws.
Except with respect to ordinary course intercompany transactions between or
among the Company and various Subsidiaries and except for obligations of the
Subsidiaries with respect to obligations arising with respect to the Company's
9-1/8% Senior Notes due 2003, the Company's Senior Subordinates Notes due 2006
and the Company's secured Revolving Credit Facility from various Lenders with
First Union Commercial Corporation, as Agent, dated May 30, 1995 (the "Senior
Credit Facility"), neither the Company nor any Subsidiary is subject to any
obligation or requirement to provide funds for or to make any investment (in the
form of a loan, capital contribution or otherwise) in any entity.
2.7 Offering of Shares. Neither the Company nor any person acting on its
behalf has taken or will take any action (including, without limitation, any
offering of any securities of the Company under circumstances which would
require the integration of such offering with the offering of the Shares under
the Securities Act of 1933 (the "Securities Act") and the rules and
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regulations of the Securities and Exchange Commission (the "SEC") thereunder)
which might subject the offering, issuance or sale of the Shares, the Conversion
Shares or the Dividend Shares to the registration requirements of Section 5 of
the Securities Act or to any similar provision of any applicable state blue sky
law.
2.8 SEC Reports; Financial Information. The Company has heretofore
furnished each of the Purchasers with the following information: (i) the
Company's Annual Report on Form 10- K for the fiscal year ended December 31,
1995; (ii) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995; (iii) the Company's
proxy statement for the Company's 1995 Annual Meeting of Stockholders; and (iv)
any other reports or registration statements filed by the Company with the SEC
since December 31, 1993. As of their respective dates, such reports and
statements (including any amendments or supplements thereto) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All of the financial
statements contained in the reports referred to above have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated (subject, in the case of the unaudited interim
statements, to normal year-end audit adjustments). The financial statements in
the reports referred to above present fairly in all material respects the
financial position, results of operations and the related changes in financial
position as at the dates and for the periods indicated. Except for liabilities
or obligations, which were incurred in the ordinary course of business and
consistent with past practice, since June 30, 1995, neither the Company nor any
Subsidiary has incurred any liabilities or obligations which are material to the
Business of the Company and the Subsidiaries taken as a whole.
2.9 Absence of Certain Changes or Events. Since June 30, 1995, there has
not been, occurred or arisen: (i) any event or development which has had or is
reasonably likely to have a material adverse effect on the Business of the
Company and the Subsidiaries taken as a whole; (ii) any change in any accounting
principle or practice of the Company or any Subsidiary; (iii) any damage,
destruction or loss, whether covered by insurance or not, materially adversely
affecting the Business of the Company and the Subsidiaries taken as a whole;
(iv) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) in respect of the capital
stock of the Company or any issuance or sale of any capital stock of the Company
or any Subsidiary or any redemption, purchase or other acquisition of any shares
of capital stock of the Company or any Subsidiary by the Company or any
Subsidiary or any split, combination or reclassification of shares of capital
stock of the Company or any Subsidiary declared or made by the Company or any
Subsidiary; (v) any capital expenditures or commitments by the Company or any
Subsidiary for additions to property or equipment which in the aggregate exceed
$5,000,000 for all such companies taken together or any new borrowings by the
Company or any Subsidiary (other than in the ordinary course of business or
pursuant to the Senior Credit Facility); (vi) any transaction other than in the
ordinary course of business, other than the acquisition by the Company of
Garrett Aviation Services and the issuance by the Company of its Senior
Subordinated Notes due 2006; (vii) any Shares Acquisition Date or Distribution
Date (as defined in the Rights Agreement, dated as of September 25, 1987,
between the Company and Manufacturers Hanover Trust Company (the "Shareholder
Rights Plan")) or any other event causing the Rights issued thereunder to become
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exercisable; and (viii) any agreement, whether in writing or otherwise, to take
any action described in this Section 2.9.
2.10 Legal Proceedings, etc. There are no suits, actions, claims,
proceedings or investigations pending or, to the best knowledge of the Company,
threatened against, relating to or involving the Company or any Subsidiary or
any properties or rights of the Company or any Subsidiary, before any court,
arbitrator or administrative or governmental body, United States or foreign,
which is reasonably likely, either individually or in the aggregate, to have a
material adverse effect on the Business of the Company and the Subsidiaries
taken as a whole. There are no such suits, actions, claims, proceedings or
investigations pending or, to the best knowledge of the Company, threatened
challenging the validity or propriety of the transactions contemplated by this
Agreement. Neither the Company nor any Subsidiary is subject to any judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator or, to the best knowledge of
the Company, any governmental restriction applicable to the Company or any
Subsidiary, which is reasonably likely to have a material adverse effect on the
Business of the Company and the Subsidiaries taken as a whole.
2.11 Title to Properties, Absence of Liens and Encumbrances, etc. Each of
the Company and each of its Subsidiaries has good, valid and marketable title to
or, in the case of leases and licenses, valid and subsisting leasehold interests
or licenses in, all of its assets and property, of whatever kind (whether real
or personal, tangible or intangible), free and clear of all mortgages, liens,
security interests, options, pledges, claims, charges, beneficial interests and
encumbrances of every kind (and any agreement to create any of the foregoing)
other than liens for taxes not delinquent, liens arising in the ordinary course
of business and liens arising under the Senior Credit Facility.
2.12 Contracts and Commitments, etc. As of the date of this Agreement,
neither the Company nor any Subsidiary is a party to or bound by any contract
(including leases), agreement, instrument, arrangement or understanding which is
not disclosed in the Company's SEC reports referred to in Section 2.8 hereof and
which is material to the Business of the Company and its Subsidiaries taken as a
whole. Neither the Company nor any Subsidiary is in violation of or in default
in respect of (nor have any events occurred which with notice or lapse of time
or both would constitute violations of or defaults in respect of) any contract
(including leases), agreement, instrument, arrangement or understanding to which
it is a party or by which it is bound and, to the best knowledge of the Company,
there are no facts or circumstances which would reasonably indicate that the
Company or any Subsidiary will be or may be in violation of or in default in
respect of (or with notice or lapse of time or both would be in violation of or
in default in respect of) any such contract, agreement, instrument, arrangement
or understanding subsequent to the date hereof, except in all cases for such
violations and defaults (and events which, with notice or lapse of time or both,
would constitute violations or defaults) which in the aggregate would not have a
material adverse effect on the Business of the Company and its Subsidiaries
taken as a whole.
2.13 Compliance with Applicable Law. The Company and each Subsidiary
currently holds, and is in compliance with the terms of, all licenses, permits
and authorizations necessary
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for the lawful conduct of their respective businesses, and has complied with,
and, to the best of its knowledge, neither the Company nor any Subsidiary is in
violation of, or in default in any respect under, the applicable statutes,
ordinances, rules, regulations, orders or decrees of all federal, state, local
and foreign governmental bodies, agencies and authorities having, asserting or
claiming jurisdiction over it or over any part of its operations or assets,
except for such violations and defaults which in the aggregate would not have a
material adverse effect on the Business of the Company and its Subsidiaries.
2.14 Investment Company Act of 1940. Neither the Company nor any Subsidiary
is an investment company within the meaning of the Investment Company Act of
1940, as amended.
2.15 Public Utility Holding Company Act of 1935, etc. Neither the Company
nor any Subsidiary is a public utility holding company within the meaning of the
Public Utility Holding Company Act of 1935, as amended, nor is the Company or
any Subsidiary a public utility subject to regulation as such by any federal or
state authority.
2.16 No Brokers. All negotiations relating to this Agreement and the sale
contemplated hereby have been carried on by the Company with the Purchasers
without the intervention of any other person and there exists no basis for any
valid claim against the Company or against any of the Purchasers for a brokerage
commission, finder's fee or other like payment.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each of the
Purchasers, severally and not jointly, represents, warrants and agrees with the
Company, as to itself, as follows:
3.1 Authorization. Each of the Purchasers has full right, power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby has been duly
authorized by each of the Purchasers. This Agreement constitutes the legal,
valid and binding agreement of each of the Purchasers enforceable in accordance
with its terms.
3.2 Consents and Approvals; No Violations. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not: (i) violate any provision of the constitutive
documents, if applicable, of any of the Purchasers; (ii) assuming that all
required approvals are obtained under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, violate any statute, ordinance, rule, regulation,
order or decree of any court or of any public, governmental or regulatory body,
agency or authority applicable to any of the Purchasers or by which any of their
respective properties or assets may be bound; (iii) except for any required
filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, require
any filing, declaration or registration with, or permit, consent or approval of,
or the giving of any notice to, any public, governmental or regulatory body,
agency or authority; or (iv) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, or other evidence of
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indebtedness, indenture, license, franchise, permit, agreement or other
instrument or obligation to which any of the Purchasers is a party, or by which
any of them or any of their respective properties or assets may be bound,
excluding from the foregoing clause (iv) violations, breaches and defaults which
would not have a material adverse effect on such Purchaser.
3.3 No Brokers. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on without the intervention
of any other person and there exists no basis for any valid claim against the
Company or any of the Purchasers for a brokerage commission, finder's fee or
other like payment.
3.4 Investment Intent; Related Matters. (a) The Purchaser acknowledges that
the Shares have not been registered under the Securities Act or any state
securities act. The Purchaser represents that the Shares are being acquired for
investment and without any present view toward distribution thereof in violation
of the Securities Act or any state securities act and the Purchaser will not
sell or otherwise dispose of the Shares except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
state securities act and the rules and regulations under such acts.
(b) Each Purchaser is, and on the Closing Date will be, an "accredited
investor," as such term is defined in Regulation D under the Securities Act.
Each Purchaser possesses such knowledge and experience in business matters that
it is capable of evaluating the merits and risks of its purchase of the Shares.
Each Purchaser acknowledges that it has reviewed such information about the
Company as it deems necessary to evaluate the merits and risks of its investment
in the Shares; provided, however, that such review of such information shall not
be deemed to impair or in any way affect the Purchasers' ability to rely on the
representations and warranties, covenants and other agreements contained herein.
3.5 Ownership of Company Capital Stock. The Purchasers do not presently
have any direct or indirect legal or beneficial ownership interest in any
capital stock of the Company, any securities convertible into capital stock of
the Company or any rights to acquire any capital stock of the Company or any
securities convertible into capital stock of the Company (other than as set
forth herein). Immediately following the Closing Date, the Purchasers will not
have any direct or indirect legal or beneficial ownership interest in any
capital stock of the Company, or securities convertible into capital stock of
the Company, or have any rights with respect to the acquisition of any capital
stock of the Company or securities convertible into capital stock of the Company
other than the Shares, the Dividend Shares and the Conversion Shares.
4. COVENANTS.
4.1 Conduct of the Business of the Company Prior to the Outside Date.
During the period commencing on the date hereof and continuing until the Outside
Date, the Company agrees that:
(a) The Company and each Subsidiary will carry on its business in, and
only in, the usual, regular and ordinary course and consistent with past
practice and, to the extent consistent with such business, use all reasonable
efforts to preserve intact its present business
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organizations, keep substantially available the services of its present
management and preserve its relationships with material customers, suppliers and
others having material business dealings with it.
(b) Except for issuances of up to 2,515,000 shares of Common Stock
pursuant to the terms of employee benefit plans as in effect on the date hereof,
shares of Common Stock issued pursuant to the conversion of the Company's 7-1/2%
Convertible Subordinated Debentures Due 2006 and Series A Junior Participating
Preferred Stock, up to 625,000 Management Compensation Shares or Common Stock
pursuant to the terms of the Shareholder Rights Plan, the Company will not
declare, pay or set aside for payment any dividends on or make other
distributions in respect of its capital stock. Neither the Company nor any
Subsidiary will amend its Certificate of Incorporation or By-Laws as in effect
on the date hereof.
(c) Except for issuances of up to 2,515,000 shares of Common Stock
pursuant to the terms of employee benefit plans as in effect on the date hereof,
shares of Common Stock issued pursuant to the conversion of the Company's 7-1/2%
Convertible Subordinated Debentures Due 2006 and Series A Junior Participating
Preferred Stock, up to 625,000 Management Compensation Shares or Common Stock
pursuant to the terms of the Shareholder Rights Plan, neither the Company nor
any Subsidiary will, directly or indirectly, issue, grant or sell, or authorize
or propose the issuance of, or split, combine, reclassify or redeem, purchase or
otherwise acquire or propose the purchase of, any shares of any class of the
capital stock of the Company or any Subsidiary or issue any securities
convertible into, or rights to subscribe to, or warrants or options to acquire,
or enter into any arrangement or contract with respect to the issuance of, any
such shares or other convertible securities, or make any other changes in its
equity capital structure.
(d) The Company will not knowingly and intentionally (i) breach any of
the terms or provisions of this Agreement, or (ii) cause any of the
representations or warranties of the Company contained herein to be or become
untrue in any material respect.
(e) The Company will, and will cause each Subsidiary, upon reasonable
request by any of the Purchasers, to provide the Purchasers and their respective
accountants, counsel and other authorized representatives full access, during
reasonable business hours and under reasonable circumstances, to any and all
premises, properties, contracts, commitments, books, records and other
information (including tax returns filed and those in preparation) of the
Company and each Subsidiary.
4.2 Confidentiality. The Purchasers will, and will instruct their employees
and agents to, hold in strict confidence, all Confidential Information (as
hereinafter defined), and will not disclose the same to any person without the
prior consent of the Company, unless compelled to disclose any such Confidential
Information by judicial or administrative process or, in the opinion of their
counsel, by other requirements of law. If this Agreement is terminated, the
Purchasers will promptly return to the Company or destroy all documents
(including all copies thereof) furnished by the Company and received by the
Purchasers containing such Confidential Information. For purposes hereof,
"Confidential Information" shall mean all information of any kind concerning the
Company, wherever obtained, except information (i) ascertainable or
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obtained from the public or publicly available information, (ii) received from a
third party not known to the Purchasers to be under an obligation to the Company
to keep such information confidential, (iii) which is or becomes known to the
public (other than through a breach of this Agreement), (iv) which the
Purchasers can demonstrate was in their possession prior to disclosure thereof
to the Purchasers in connection with this Agreement, or (v) which the Purchasers
can demonstrate was independently developed by them.
4.3 Public Announcements. The Company, on the one hand, and the Purchasers,
on the other hand, agree to consult promptly with each other prior to issuing
any press releases or otherwise making public statements with respect to the
transactions contemplated hereby, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by law or by obligations pursuant to any listing agreement with any
national securities exchange.
4.4 Best Efforts. Upon the terms and subject to the conditions hereof, each
of the parties hereto agrees to use its reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement and shall use its reasonable efforts promptly to
obtain all waivers, permits, consents and approvals and to effect all
registrations, filings and notices with or to third parties or governmental or
public bodies or authorities which are necessary or desirable in connection with
the transactions contemplated by this Agreement. Nothing contained in this
Section 4.4 shall require any party to pay any money to any third party other
than filing fees or similar costs or expenses that may be required or imposed by
governmental authorities.
4.5 Shareholder Rights Plan. The Company will take all such action as may
be necessary to ensure that each of the Purchasers and all of the Purchasers
together shall not constitute an "Acquiring Person" under the Shareholder Rights
Plan by reason of their acquisition of the Shares, the Dividend Shares and the
Conversion Shares. The Board of Directors of the Company has determined that,
consistent with the objectives of the Shareholder Rights Plan, the Purchasers
should not be considered "Acquiring Persons" under the Shareholder Rights Plan
with respect to their acquisition of the Shares, the Dividend Shares and the
Conversion Shares and the transactions contemplated by the terms of this
Agreement. The Board of Directors of the Company will take reasonable steps to
amend the Shareholder Rights Plan in order to: (i) confirm, if necessary, that
the Purchaser(s) shall not be Acquiring Persons by reason of their acquisition
of the Shares, the Dividend Shares and the Conversion Shares and (ii) to ensure
that, in the event that rights distributed under the Shareholder Rights Plan
become exercisable, each Purchaser will be provided, with respect to their
Shares, with substantially the same rights that they would have had if such
Shares had theretofore been converted into shares of the Company's Common Stock
(the "Shareholder Rights Plan Amendment"). Such Shareholder Rights Plan
Amendment shall be in a form reasonably satisfactory to the Purchasers.
5. CONDITIONS PRECEDENT TO THE PURCHASERS' OBLIGATIONS. The obligations of
each of the Purchasers under this Agreement to purchase any Shares on any
Closing Date shall be subject to the satisfaction, or waiver in writing (it
being understood that any waiver of a condition with respect to any Closing Date
shall also constitute a waiver with
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respect to any remedy that a Purchaser may otherwise have with respect to the
matter or condition that is the subject of the waiver with respect to Shares
purchased on such Closing Date but not as to any other purchase of Shares
occurring prior or subsequent to such Closing Date), of the following conditions
on the Closing Date.
5.1 Representations and Warranties of the Company True; Performance by the
Company. The representations and warranties of the Company contained in this
Agreement shall each be true and correct in all material respects as of the
Closing Date and, except for representations and warranties which speak of a
specified date, with the same effect as though made on and as of that date. The
Company shall have performed and complied in all material respects with all
agreements and conditions required by this Agreement and the transactions
contemplated hereby to be performed or complied with by the Company before or at
the Closing Date. The Purchasers shall have been furnished with such
certificates of officers of the Company, dated the Closing Date, as the
Purchasers may reasonably request, certifying to the fulfillment of the
foregoing conditions.
5.2 Litigation Affecting Closing. On the Closing Date, no suit, action or
other proceeding shall be pending or threatened before any court or governmental
agency in which it is sought to restrain or prohibit the consummation or
implementation of this Agreement or the transactions contemplated hereby, or to
obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby, and on the Closing Date, no governmental
investigation that might result in any such suit, action or proceeding shall be
pending or, based on a communication from a governmental official, threatened.
5.3 Approvals and Consents. (a) All consents, approvals or authorizations
of regulatory authorities having jurisdiction over the Company's or any
Subsidiary's business relating to the Company's or any Subsidiary's business as
it is currently conducted or in connection with the consummation of the
transactions contemplated hereby shall have been obtained in final and
definitive form and shall be in full force and effect.
(b) All additional consents, approvals or authorizations required for
the consummation of the transactions contemplated hereby or to preserve for the
Company and its Subsidiaries, and to maintain in full force and effect, all
material contracts, leases, instruments and other agreements to which the
Company and its Subsidiaries are a party or by which any of their respective
property or assets are bound, shall have been obtained and shall be in full
force and effect.
5.4 Opinions of Counsel to the Company. The Purchasers shall have been
furnished with an opinion, dated the Closing Date, of Miles & Stockbridge, a
professional corporation, special counsel to the Company, satisfactory to the
Purchasers, substantially in the following form:
(a) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding agreement of the
Company;
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(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, will not result in any
violation of, or constitute a default under, and will not be in conflict with,
any terms of the Company's Certificate of Incorporation or By-Laws, in each case
as amended to date, or to the knowledge of such counsel, the terms of any
mortgage, note, bond, evidence of indebtedness, indenture, contract, lease or
other agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of its assets or properties may be subject;
(c) Upon payment of the Purchase Price for the Shares, the Company
will deliver to the Purchaser good and valid title to the Shares free and clear
of any liens, security interests, options, charges, beneficial interests, claims
and encumbrances of any kind (and any agreement to create any of the foregoing)
except for restrictions on transfer created pursuant to the terms of this
Agreement and applicable securities laws;
(d) The Shares have been duly and validly authorized and issued and
are fully paid and non-assessable, such Shares constitute all of the issued and
outstanding shares of the Series B Preferred Stock, and such Shares are entitled
to all of the rights and preferences set forth in the Certificate of
Designation. The Dividend Shares and the Conversion Shares, when issued in
accordance with the terms of the Certificates of Designation, will be duly and
validly authorized and issued, fully paid and non-assessable;
(e) No consents, approvals, authorizations and orders of any public,
governmental or regulatory body, agency or authority and, to the knowledge of
such counsel, of any other party (except such as shall have been obtained) are
necessary for the due authorization, execution and delivery by the Company of
this Agreement and the valid sale and delivery of the Shares to be sold by the
Company hereunder;
(f) The Company has taken all action, legal or otherwise, necessary to
authorize the issuance of and reserve the Dividend Shares and the Conversion
Shares;
(g) The Company and each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its jurisdiction of incorporation and has full corporate power to own its
property and carry on its business as currently conducted;
(h) To the knowledge of such counsel, there are no actions, suits,
proceedings or investigations pending or, so far as is known to such counsel
after inquiry of the officers of the Company, threatened against the Company or
any of the Subsidiaries which (i) question or challenge the validity of this
Agreement or any action to be taken hereunder or thereunder or (ii) singly or in
the aggregate could reasonably be expected to materially and adversely affect
the Business of the Company and the Subsidiaries taken as a whole;
(i) The issuance, sale and delivery of the Shares, the Dividend Shares
and the Conversion Shares under the circumstances contemplated by this Agreement
are exempted transactions under the registration provisions of the Securities
Act and all applicable state
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securities laws, and do not require the registration of the Shares, the Dividend
Shares or the Conversion Shares thereunder; and
(j) The Company is not an "investment company" or a company controlled
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
In giving the above opinions, such counsel may assume the genuineness of the
signatures of the officers of the Company and may rely, as to factual matters,
without independent check or verification, upon the representations and
warranties made in this Agreement, the documents delivered in connection
herewith and certificates of the officers of the Company. Miles & Stockbridge
may also rely upon opinions given or expressed by Richard H. Lange, Esquire,
General Counsel to the Company, provided that such firm has no reason to believe
that it is unreasonable to so rely on such opinions and provided further that
counsel for the Purchasers consent to such reliance (which consent shall not be
unreasonably withheld).
5.5 The Shares. The Company shall issue and deliver to the Purchasers
certificates representing the Shares registered in the name of the Purchasers.
5.6 No Material Adverse Change. Prior to any Closing Date, there shall be
no material adverse change in the Business of the Company, and the Company shall
have delivered to the Purchaser a certificate, dated the Closing Date, to such
effect.
5.7 No Adverse Events Under Shareholder Rights Plan. The Shareholder Rights
Plan Amendment shall have become effective or the Company and the Purchasers
shall have agreed to other satisfactory arrangements with respect to the
Shareholders Rights Plan. No "Shares Acquisition Date" or "Distribution Date"
(as defined in the Shareholder Rights Plan) or any other event causing the
Rights issued under the Shareholder Rights Plan to become exercisable shall have
occurred and there shall have been no amendment or modification to the
Shareholder Rights Plan other than the Shareholder Rights Plan Amendment.
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY AT THE CLOSING.
The obligations of the Company under this Agreement to sell the Firm Shares and
the Acquisition Shares on any Closing Date shall be subject to the satisfaction,
or waiver in writing (it being understood that any waiver of a condition with
respect to any Closing Date shall also constitute a waiver with respect to any
remedy that the Company may otherwise have with respect to the matter or
condition that is the subject of the waiver with respect to Shares acquired on
such Closing Date but not as to any other sale of Shares occurring prior or
subsequent to such Closing Date), of the following conditions on the Closing
Date:
6.1 Representations and Warranties of the Purchasers True; Performance by
the Purchasers. The representations and warranties of the Purchasers contained
in this Agreement shall each be true and correct in all material respects as of
the Closing Date, with the same effect as though made on and as of that date.
The Purchasers shall have performed and complied in all material respects with
all agreements and conditions required by this Agreement
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and the transactions contemplated hereby to be performed or complied with by the
Purchasers before or at the Closing Date.
6.2 The Purchase Price. Each of the Purchasers shall have delivered to the
Company by wire transfer of immediately available funds an amount equal to the
Purchase Price for the Firm Shares and the Acquisition Shares to be purchased by
such Purchaser.
6.3 Opinion of Counsel to the Purchaser. The Company shall have been
furnished with an opinion, dated the Closing Date, of Coudert Brothers, special
counsel for the Purchasers, satisfactory to the Company, substantially in the
following form:
(a) Upon execution and delivery, this Agreement shall constitute the
legal, valid and binding obligations of the Purchasers;
(b) The execution and delivery of this Agreement by the Purchasers and
the consummation of the transactions contemplated hereby do not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any of the constitutive documents of any of the Purchasers or to the
knowledge of such counsel any mortgage, note, bond or other evidence of
indebtedness or indenture, contract, lease or other agreement known to such
counsel to which any of the Purchasers is a party;
(c) To the knowledge of such counsel, there are no actions, suits,
proceedings or investigations pending or threatened against the Purchasers which
question or challenge the validity of this Agreement or the purchase by the
Purchasers of the Shares hereunder; and
(d) No consents, approvals, authorizations and orders of any public,
governmental or regulatory body, agency or authority (except such as shall have
been obtained) are necessary for the due authorization, execution and delivery
by the Purchasers of this Agreement and the purchase of the Shares to be
purchased by the Purchasers hereunder;
In giving the above opinions, such counsel may assume the genuineness of the
signatures of the Purchasers and their officers or other authorized
representatives and may rely, as to factual matters, without independent check
or verification, upon the representations and warranties made in this Agreement,
the documents delivered in connection herewith and certificates of the
Purchasers and their officers or other authorized representatives.
6.4 Litigation Affecting Closing. On the Closing Date, no suit, action or
other proceeding shall be pending or threatened before any court or governmental
agency in which it is sought to restrain or prohibit the consummation or
implementation of this Agreement or the transactions contemplated hereby, or to
obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby, and on the Closing Date, no governmental
investigation that might result in any such suit, action or proceeding shall be
pending or, based on a communication from a governmental official, threatened.
6.5 Approvals and Consents. (a) All consents, approvals or authorizations
of regulatory authorities having jurisdiction over the Company's or any
Subsidiary's business
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relating to the Company's or any Subsidiary's business as it is currently
conducted or in connection with the consummation of the transactions
contemplated hereby shall have been obtained in final and definitive form and
shall be in full force and effect.
(b) All additional consents, approvals or authorizations required for
the consummation of the transactions contemplated hereby or to preserve for the
Company and its Subsidiaries, and to maintain in full force and effect, all
material contracts, leases, instruments and other agreements to which the
Company and its Subsidiaries are a party or by which any of their respective
properties or assets are bound, shall have been obtained and shall be in full
force and effect.
7. REGISTRATION RIGHTS.
7.1 Restrictive Legend. Each certificate representing the Shares, the
Dividend Shares and the Conversion Shares shall bear legends substantially in
the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT PERTAINING THERETO UNDER SAID ACT AND
COMPLIANCE WITH APPLICABLE STATE LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND COMPLIANCE ARE NOT
REQUIRED.
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS, INCLUDING RESTRICTIONS ON TRANSFERABILITY. THE COMPANY WILL
FURNISH ANY STOCKHOLDER UPON REQUEST AND WITHOUT CHARGE A STATEMENT OF THE
RESTRICTIONS ON TRANSFERABILITY WHICH ARE CONTAINED IN A STOCK PURCHASE
AGREEMENT BY AND AMONG THE COMPANY AND PURCHASERS SIGNATORY THERETO. THE
TERMS CONTAINED IN THAT STOCK PURCHASE AGREEMENT ARE BINDING UPON
TRANSFEREES AND PURCHASERS OF THE SHARES REPRESENTED BY THIS CERTIFICATE IN
CERTAIN CIRCUMSTANCES.
7.2 Required Registrations. If at any time the Company shall be requested
by any of the Purchasers (or the successors and assigns of any of the
Purchasers, who for purposes of this Section 7 shall be deemed to be included
within the term Purchaser) who holds, or upon the conversion of Shares held by
the Purchaser would hold, in the aggregate, at least the number of Conversion
Shares that would be issuable upon the conversion of 50% of the Shares held in
the aggregate by the Purchasers (including the Dividend Shares), to effect the
registration under the Securities Act of the Shares, the Dividend Shares or the
Conversion Shares, the Company shall notify in writing all Purchasers of the
receipt of the registration request within 10 days of said receipt and shall use
its reasonable efforts promptly to effect the registration under the
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Securities Act of such Shares, Dividend Shares and Conversion Shares as were
covered by the original request or as may be requested to be registered in one
or more writings delivered to the Company within 30 days after the giving of
notice by the Company to all Purchasers, for disposition in accordance with the
intended method or methods of disposition specified by the Purchaser requesting
registration of such Shares, Dividend Shares and Conversion Shares, as well as
to effect any notification, registration or qualification under any state
securities laws which shall be reasonably necessary to permit the sale of such
Shares, Dividend Shares and Conversion Shares. The registration statement filed
by the Company with the SEC for the registration of such Shares, Dividend Shares
and Conversion Shares shall be kept effective for such period as may be
requested in the registration request, including any period then permitted under
Rule 415 under the Securities Act (it being understood that in no case, however,
shall the Company be required to keep any registration hereunder effective for a
period of more than two years in the aggregate, not including any period in
which sales of Shares, Dividend Shares or Conversion Shares cannot be made
thereunder). Any obligation of the Company to register Shares, Dividend Shares
or Conversion Shares shall be deemed satisfied when a registration statement
covering the Shares, Dividend Shares and the Conversion Shares shall be declared
effective and shall have remained effective for the period specified above. All
expenses of any registration and offering under this paragraph (including,
without limitation, registration fees and fees and disbursements of the
Company's counsel) shall be borne by the Company, except that the Company shall
not bear underwriting discounts or commissions attributable to Shares, Dividend
Shares or Conversion Shares, fees and expenses of any separate counsel for the
Purchasers selling Shares, Dividend Shares or Conversion Shares or any related
transfer taxes. The Company shall only be required to file two registration
statements covering the Shares, Dividend Shares or Conversion Shares pursuant to
the terms of this Section 7.2.
7.3 "Piggy-Back" Registrations. If at any time the Company shall determine
to register any of its Common Stock or securities convertible into Common Stock
under the Securities Act, whether in connection with a public offering by the
Company, a public offering by shareholders, or both, including, without
limitation, by means of any shelf registration pursuant to Rule 415 under the
Securities Act or any similar rule or regulation, but other than a registration
to implement an employee benefit or dividend reinvestment plan, the Company
shall promptly give written notice thereof to the Purchasers who shall be
registered holders of Shares or Conversion Shares and shall use its reasonable
efforts to effect the registration under the Securities Act of such Conversion
Shares as may be requested in a writing delivered to the Company within 30 days
after such notice by the Purchasers as well as to include such Conversion Shares
in any notifications, registrations or qualifications under any state securities
laws which shall be made or obtained with respect to the securities being
registered by the Company; provided, however, that (a) any distribution of
Conversion Shares pursuant to such registration shall be managed by the
investment banking firm, if any, managing the distribution of the securities
being offered by the Company on the same terms as all other securities to be
registered, and (b) the Company shall not be required under this Section 7.3 to
include Conversion Shares in any registration of securities if the Company shall
have been advised by the investment banking firm managing the offering of the
securities proposed to be registered by the Company or others that the inclusion
of Conversion Shares in such offering would substantially interfere with the
orderly sale of such securities which the Company or others propose to register;
provided, however, that in making any determination under this
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subparagraph (b) as to the inclusion of the Conversion Shares in any such
offering, (i) a first priority shall be given to the registration of 1,750,000
Conversion Shares, (ii) thereafter, a second priority shall be given to all
remaining Conversion Shares over any other securities as to which the Company
has granted or may in the future grant registration rights that were (or will
be) issued by the Company in any merger transaction or similar business
combination transaction and (iii) with respect to circumstances not addressed in
clauses (i) and (ii), Conversion Shares shall be registered on a pro-rata basis
with any other securities as to which the Company has granted or may in the
future grant registration rights. All expenses of any registration and offering
of Conversion Shares pursuant to this Section 7.3 (including, without
limitation, registration fees and fees and disbursements of the Company's
counsel) shall be borne by the Company, except that the Company shall not bear
underwriting discounts or commissions attributable to Conversion Shares, the
fees of any separate counsel for the holders of Conversion Shares or related
transfer taxes.
7.4 Registration Procedures. (a) In connection with any registration
pursuant to Sections 7.2 or Section 7.3 hereof, the Company will prepare and
file with the SEC, a registration statement, and any amendments and supplements
thereto, on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate, and use its reasonable efforts to cause such
registration statement to become effective; provided that before filing with the
SEC a registration statement or prospectus or any amendments or supplements
thereto, the Company will (i) furnish to counsel selected by the Purchasers
copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel, and (ii) notify the Purchasers of any
stop order issued or threatened by the SEC and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered. The
Company will also (i) promptly notify each Purchaser of the effectiveness of
such registration statement, (ii) furnish to each Purchaser such number of
copies of such registration statement, and each amendment and supplement
thereto, the prospectus included in such registration statement and such other
documents as such Purchaser may reasonably request; (iii) use its reasonable
efforts to register or qualify such securities to be registered under such other
securities or blue sky laws of such jurisdictions as any Purchaser reasonably
requests; (iv) use its reasonable efforts to cause all such securities to be
registered to be listed on each securities exchange on which similar securities
issued by the Company are then listed, and to provide a transfer agent and
registrar for such securities to be registered no later than the effective date
of such registration statement; (v) enter in to such customary agreements
(including an underwriting agreement in customary form) and take all such other
actions as the Purchasers or the underwriters retained by the Purchasers, if
any, reasonably request in order to expedite or facilitate the disposition of
such securities to be registered, including customary indemnification; and (vi)
otherwise use its reasonable efforts to comply with all applicable rules and
regulations of the SEC. The terms of this Section 7.4 shall not require the
Company to qualify as a foreign corporation or as a dealer in securities or to
execute or file any general consent to service of process under the laws of any
such jurisdiction where it is not so subject.
(b) The Company shall be entitled to postpone, for up to 60 days, the
filing of any registration statement otherwise required to be prepared and filed
by it pursuant to this Agreement if, at the time it receives a request, the
Company would be required to prepare any financial statements other than those
it customarily prepares or the Company determines in its
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reasonable business judgment that such registration and offering would interfere
with any material financing, acquisition, corporate reorganization or other
material corporate transaction or development involving the Company and the
Company promptly gives the Purchaser written notice of such determination. If
the Company shall so postpone the filing of a registration statement, the
Purchaser shall have the right to withdraw the request by giving written notice
to the Company within 30 days after the receipt of the notice of postponement
and, in the event of such withdrawal, the request which was withdrawn shall not
be deemed to have been made.
(c) In connection with any effective registration statement filed
pursuant to this Agreement, the Company will immediately notify each Purchaser
participating in the distribution to which such registration statement relates
of the happening of any event as a result of which the prospectus included in
such registration statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, and will promptly prepare and furnish to each such Purchaser a
supplement or amendment to such prospectus so that such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Notwithstanding the
foregoing, if the Company determines in its reasonable business judgment that an
amendment or supplement to any such prospectus would interfere with any material
financing, acquisition, corporate reorganization, or other material corporate
transaction or development involving the Company, the Company may delay the
preparation and filing of such amendment or supplement for a period of up to 60
days in order to complete or make a public announcement with respect to such
material transaction or development (it being understood that the Company shall
be obligated to extend the period of time it is required to maintain in effect
any such registration statement to take into account the period of time that the
Purchasers are unable to offer or sell Shares, Dividend Shares or Conversion
Shares by reason of this Section 7.4(c)).
(d) In the event that the Company conducts an underwritten public
offering of Common Stock or securities convertible into Common Stock during the
term of this Agreement, the Purchasers covenant and agree that, except for sales
of Shares, Dividend Shares or Common Shares pursuant to such underwritten public
offering, they shall not offer or sell any of the Shares, Dividend Shares or
Conversion Shares for a period of 120 days following the date on which the
Company's underwritten public offering is consummated. Except for sales of
Shares, Dividend Shares or Common Shares pursuant to such underwritten public
offering, the Purchasers shall be obligated to perform the covenants contained
in this Section 7.4(d) irrespective of whether or not some or all of the
Purchasers' Shares, Dividend Shares or Conversion Shares are included in the
underwritten public offering or are then included in a registration statement
that has been filed pursuant to Section 7.2 of this Agreement (it being
understood that the Company shall be obligated to extend the period of time it
is required to maintain in effect any registration statement that has been filed
pursuant to Section 7.2 of this Agreement at the time an underwritten public
offering is consummated to take into account the period of time that the
Purchasers are unable to offer or sell Shares, Dividend Shares or Conversion
Shares by reason of this Section 7.4(d)).
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7.5 Indemnification; Contribution. (a) Indemnification by the Company. In
connection with each registration effected by the Company pursuant to this
Agreement, the Company agrees to indemnify and hold harmless each holder of
Shares, Dividend Shares and Conversion Shares participating therein (a "Selling
Shareholder"), its officers, directors, agents and Affiliates (as hereinafter
defined) and each underwriter of Shares, Dividend Shares and Conversion Shares
(an "Underwriter") registered and each person who controls any Underwriter
within the meaning of Section 15 of the Securities Act against any and all
losses, claims, damages or liabilities to which any of them may be subject under
the Securities Act or any other statute or the common law, and to reimburse them
for any legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement relating to the sale of such Shares, Dividend Shares and
Conversion Shares, or any post-effective amendment thereof, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of such registration
statement or contained in the prospectus (as amended or supplemented if the
Company shall have filed with the SEC any amendment thereof or supplement
thereto), if used within the period during which the Company is required to keep
the registration statement to which such prospectus relates current pursuant to
the terms of this Agreement, or the omission or alleged omission to state
therein (if so used) a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the indemnification agreement contained in
this subparagraph (a) shall not apply to such losses, claims, damages,
liabilities or actions arising out of, or based upon, any such untrue statement
or alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such Selling Shareholders or
such Underwriter specifically for inclusion in the registration statement or any
preliminary prospectus or prospectus contained in the registration statement or
any such amendment thereof or supplement thereto.
(b) Indemnification By Selling Shareholders and Underwriters. Each
request that registration be effected by the Company pursuant to this Agreement
(and each notice of any Purchaser to the effect that such holder wishes to join
in any such request) shall be accompanied by an agreement of each party making
such request, and shall be accompanied or followed by an agreement of each
Underwriter, to indemnify and hold harmless, which indemnity, as to the
Purchasers, shall be several and not joint and in proportion to the offering
price of the securities sold by each of the Purchasers, in the same manner and
to the same extent as set forth in subparagraph (a) of this Section 7.5, the
Company and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, the directors of the Company or any such
person and those officers of the Company who shall have signed any such
registration statement with respect to any statement in or omission from such
registration statement or any post-effective amendment thereof or any
preliminary prospectus (as amended or as supplemented, if amended or
supplemented as aforesaid) contained in such registration statement, if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by any such holder or
underwriter specifically
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for inclusion in such registration statement or any preliminary prospectus or
prospectus contained in such registration statement or any such amendment
thereof or supplement thereto.
(c) If the indemnification provided for in this Section 7.5 is
unavailable other than in accordance with its terms to an indemnified party
under subparagraph (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages, liabilities or actions referred to in
subparagraph (a) or (b) above in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Selling
Shareholders and Underwriters on the other from the offering of the Shares,
Dividend Shares or Conversion Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Selling Shareholders and Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Selling
Shareholders and Underwriters participating in the offering on the other shall
be deemed to be in the same proportion as (i) the total net proceeds from the
offering (before deducting expenses) received by the Company bear to (ii) the
total net proceeds from the offering (before deducting expenses) received by the
Selling Shareholders and the total underwriting discounts and commissions
received by the Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters or by the
Selling Shareholders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages, liabilities or actions referred to above in this subparagraph
(c) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subparagraph (c). Notwithstanding
the provisions of this subparagraph (c), no Selling Shareholder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares, Dividend Shares and Conversion Shares sold by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Selling Shareholder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Selling Shareholders in this subparagraph (c) to contribute
are several in proportion to the respective number of Shares, Dividend Shares
and Conversion Shares sold by them and not joint.
8. EXPENSES. Each of the parties hereto will pay its own legal fees and
other expenses relating to the transactions contemplated by this Agreement;
provided, however, that the Company agrees to pay to the Purchasers their
reasonable legal fees and up to $10,000 of other expenses incurred by the
Purchasers in connection with the negotiation and execution of this Agreement.
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9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITIES. (a) The
representations and warranties included or provided for in this Agreement shall
survive for a period of two years from the Closing Date; provided that such
survival shall continue during the pendency of any suit, action, claim or other
proceeding brought in respect of such representations and warranties prior to
the termination of such two-year period; and provided, further, that the
representations and warranties contained in Section 2.5 shall survive the
Closing indefinitely. The Company agrees to indemnify, defend and hold harmless
the Purchasers, their respective permitted successors and assigns and the
respective affiliates (as defined in Rule 12b-2 under the Securities Exchange
Act of 1934) of such Purchasers and such respective permitted successors and
assigns (collectively, the "Purchaser Indemnified Parties") from and against and
in respect of any demand, action, damage, deficiency, liability, loss, cost or
expense (including, without limitation, reasonable counsel fees incurred in
litigation or otherwise) to the Purchaser Indemnified Parties arising out of any
breach of representation or warranty or nonfulfillment by it of any agreement or
covenant contained herein (collectively "Purchaser Indemnified Party Losses");
provided, however, that the Company's indemnification obligations under this
Section 9(a) shall arise only in the event that the accumulated amount of all
Purchaser Indemnified Party Losses, in the aggregate, shall exceed $100,000. If
the accumulated amount of all Purchaser Indemnified Party Losses in the
aggregate exceeds $100,000, the Company shall then be liable on a dollar for
dollar basis for the full amount of all Purchaser Indemnified Party Losses. The
Purchasers and the Purchaser Indemnified Parties shall not be entitled to
indemnification with respect to any claim under the foregoing provisions of this
Section 9 as to which notice shall not have been given by a Purchaser
Indemnified Party to the Company within two years of the date of occurrence of
the events giving rise to such claim, or, with respect to indemnification for
claims arising out of the breach of the representations and warranties contained
in Section 2.5, within two years from the date of discovery of the breach by the
Purchaser Indemnified Parties.
(b) Each of the Purchasers agrees to indemnify, defend and hold
harmless the Company from and against and in respect of any demand, action,
damage, deficiency, liability, loss, cost or expense (including, without
limitation, reasonable counsel fees incurred in litigation or otherwise) to the
Company arising out of any material breach of any representation or warranty or
nonfulfillment by such Purchaser of any agreement or covenant contained herein
(collectively "Company Losses"); provided, however, that each Purchaser's
indemnification obligations under this Section 9(b) shall arise only in the
event that the accumulated amount of all Company Losses attributable to all
Purchasers shall exceed $100,000 in the aggregate. If the accumulated amount of
all Company Losses in the aggregate exceeds $100,000 each Purchaser shall then
be liable on a dollar-for-dollar basis for the full amount of all Company Losses
attributable to such Purchaser. The Company shall not be entitled to
indemnification with respect to any claim under the foregoing provision of this
Section 9 as to which notice shall not have been given by the Company to such
Purchaser within two years of the date of the occurrence of the event giving
rise to such claim.
(c) Promptly after receipt by an indemnified party under this
Agreement of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under Section 7.5 or Section 9 hereof, notify the
indemnifying party in writing of the claim or the commencement of that action.
If any such claim or action shall be brought against an indemnified party, and
it shall
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notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under Section 7.5 or Section 9 hereof for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, that the Purchasers shall have the right to employ counsel to represent
jointly the Purchasers and their respective controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Purchasers against the Company under Section 7.5 hereof if, in
the reasonable judgment of the Purchasers, it is advisable for the Purchasers
and such controlling persons to be jointly represented by separate counsel, and
in that event the fees and expenses of such separate counsel shall be paid by
the Company.
10. CERTAIN AGREEMENTS.
10.1 Standstill. (a) For so long as a Purchaser shall hold Shares and/or
Conversion Shares, such Purchaser will not (i) acquire, or make any offer to
acquire or announce any intention to acquire, additional ownership (including
beneficial ownership) of any of the shares of the voting securities of the
Company, or other securities of the Company convertible into voting securities,
or the right or option to acquire any such securities, except for the Shares,
the Dividend Shares and the Conversion Shares, (ii) participate in any "group,"
as that term is defined in Section 13(d)(3) of the Exchange Act, with respect to
the voting securities of the Company, other than any group comprised of the
Purchasers and their respective affiliates, (iii) make or in any way
participate, directly or indirectly, in any material respect in any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
SEC), whether before or after the formal commencement of any such solicitation,
or any solicitation of shareholder written consents, in opposition to, or
designed to influence the management of the Company, (iv) execute any written
consent or initiate any shareholder proposal for action by shareholders, (v)
except as provided in the Certificates of Designation seek to place more than
one representative on the Board of Directors of the Company, seek the removal of
any member of the Board of Directors of the Company, or seek to have called any
meeting of the stockholders of the Company, (vi) otherwise act, alone or in
concert with others, to seek to control or influence in any material respect the
management, Board of Directors or policies of the Company or any of its
Subsidiaries, (vii) request, the Company (or its directors, officers, employees
or agents) to amend or waive any provision of this Section 10.1(a), (viii)
knowingly and intentionally sell or otherwise transfer Shares or Conversion
Shares representing in the aggregate beneficial ownership of 5% or more of the
then outstanding Common Stock to any person, entity or "group", as that term is
defined in Section 13(d)(3) of the Exchange Act, (ix) knowingly and
intentionally sell or otherwise transfer any Shares or Conversion Shares to any
person, entity or "group", as that term is defined in Section 13(d)(3) of the
Exchange Act, as to which person, entity or group the Purchasers have received
notice from the Company of such person, entity or group's intention to seek to
take, assist or participate in any of the actions set forth in clauses (iii)
through (vi) above, and (x) assist, participate in, encourage or solicit in any
material respect any effort or attempt by any other person or group to do or
seek to do any of
- 23 -
<PAGE>
the foregoing. Notwithstanding anything in this Section 10.1(a) to the contrary,
the Purchasers shall have the right to (i) make or effect open-market sales of
any Shares or Conversion Shares through a broker-dealer, without any duty of
inquiry as to the identity of any purchaser of Shares or Conversion Shares (in
the absence of actual knowledge that the purchaser of Shares or Conversion
Shares in the open market from the Purchasers is a person, entity or group of
the type specified in clause (ix) above) and (ii) make or effect transfers to
their affiliates, other persons with respect to whom the Purchaser has
investment authority with respect to any Shares or Conversion Shares to be
transferred to any such person or any person under common investment management
with such Purchaser and other Purchasers and their Permitted Transferees
(collectively, "Permitted Transferees"). Without limiting the foregoing, the
term "Permitted Transferees" shall include any general or limited partner of
Bridge Partners, L.P. or any of their respective affiliates or any persons with
respect to whom any such general or limited partner or affiliate has investment
authority with respect to any Shares or Conversion Shares to be transferred to
such person or any person under common investment management with, or having
investment authority over, such general or limited partner or affiliate.
(b) During the period in which the Purchasers shall hold Shares and/or
Conversion Shares which represent, in the aggregate, 5% of the shares of the
Company's Common Stock issued and outstanding after giving effect to the pro
forma conversion of all outstanding shares into Conversion Shares and ending on
the date on which a Change in Control occurs, each Purchaser covenants and
agrees that he shall not sell, transfer or dispose, in any three-month period,
in the aggregate, Shares or Conversion Shares which, when aggregated with any
sale, transfer or disposal of Shares or Conversion Shares of any other Purchaser
during any such three month period, represent beneficial ownership of more than
the greater of (i) 1,000,000 shares of the Common Stock then issued and
outstanding, or (ii) the volume of Shares and Conversion Shares saleable under
Rule 144(e) promulgated under the Securities Act. The Purchasers shall have the
right to make or effect sales, transfers or other dispositions to their
Permitted Transferees and to other Purchasers and their Permitted Transferees,
without regard to the limitations set forth in this Section 10.1(b), subject to
compliance with all applicable securities laws.
10.2 Agreement Respecting Board Representation. From and after the exercise
of the Company Option by the Company and the purchase of the Acquisition Shares
by the Purchasers (but only for so long as the Purchasers shall hold Shares
and/or Conversion Shares which represent, in the aggregate, 10% of the shares of
the Company's Common Stock issued and outstanding after giving effect to the pro
forma conversion of all outstanding Shares into Conversion Shares), the Company
shall take all action necessary, including, without limitation, increasing the
number of directors constituting the entire Board of Directors of the Company,
to cause one person (the "Purchasers' Nominee") nominated by the Purchasers
holding a majority of the Conversion Shares issued or issuable upon conversion
of the Shares to be nominated for election to the Board of Directors of the
Company, at any regular or special meeting of stockholders of the Company called
for the purpose of filling positions on the Board of Directors of the Company,
or in any written consent executed in lieu of such a meeting of stockholders,
and to recommend the Purchasers' Nominee for election to the Board of Directors
in the same manner as all other nominees of the Company for election as
director. Not fewer than 20 days after receipt of a written notice from the
Company requesting such information,
- 24 -
<PAGE>
the Purchasers shall notify the Secretary of the Company of the identity of the
Purchasers' Nominee and provide such information concerning the Purchasers'
Nominee as may be required by Regulation 14A under the Exchange Act. The Company
shall have the right to reject any particular Purchasers' Nominee if the Company
determines in its reasonable business judgement that the election as a director
of such Purchasers' Nominee would materially impair the Company's reputation in
the business and financial community. Consistent with the foregoing, the Company
will advise the Purchasers promptly of the non-approval of any proposed nominee
so that an alternative can be selected by the Purchasers. In the event of
non-approval, the Purchasers and the Company's Organization Committee will meet
and use their best efforts to agree upon an acceptable nominee. It is hereby
agreed by the Company that John W. Gildea shall be an acceptable nominee. If,
prior to his election to the Board of Directors of the Company, the Purchasers'
Nominee shall, be unable or unwilling to serve as a director of the Company, the
Purchasers who nominated such Purchasers' Nominee shall be entitled to nominate
a replacement who (subject to the procedures set forth in the preceding
sentences with respect to unacceptable nominees) shall then be the Purchasers'
Nominee for purposes of this Section 10.2. If, following election to the Board
of Directors of the Company, any Purchasers' Nominee shall resign or be removed
or be unable to serve for any reason prior to the expiration of his term as a
director of the Company, the Purchasers who nominated such Purchasers' Nominee
shall within 30 days of such event, notify the Board of Directors of the Company
in writing of a replacement Purchasers' Nominee and the Board of Directors of
the Company shall take all action necessary (subject to the procedures set forth
herein with respect to unacceptable nominees) to cause such replacement
Purchasers' Nominee to be elected or appointed to fill the unexpired term of
such Purchasers' Nominee and to recommend the replacement Purchasers' Nominee
for election to the Board of Directors in the same manner as all other nominees
of the Company for election as director at any subsequent annual or special
meeting of shareholders or pursuant to any written consent in lieu of such a
meeting. For purposes of this Section 10.2, the term Purchasers shall refer to
the Purchasers' signatory hereto, persons with respect to whom a Purchaser
signatory has investment authority with respect to any Shares transferred to any
such person and any other person which is under common investment management
with any Purchaser signatory.
10.3 No redemptions or cash payments. The Company hereby covenants and
agrees that, whenever any share of the Series C Preferred Stock is issued and
outstanding, it shall not (i) make or pay any cash dividends, distributions or
other cash payments of any type on or with respect to any Junior Security (as
hereinafter defined) or (ii) redeem for cash (in whole or in part) any Junior
Security. For purposes of this agreement, the term "Junior Security" shall mean
any security constituting part of a class of equity securities of the Company or
any of its Subsidiaries, other than the Series B and Series C Preferred Stock.
11. NOTICES, ETC. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered upon receipt or if mailed:
- 25 -
<PAGE>
If to the Company, to:
UNC Incorporated
175 Admiral Cochrane Drive
Annapolis, Maryland 21401
Attention: Richard H. Lange
General Counsel
with a copy to:
John B. Frisch, Esq.
Miles & Stockbridge,
A Professional Corporation
10 Light Street
Baltimore, Maryland 21202
If to the Purchasers, to:
Gildea Management Company, L.P.
115 East Putnam Avenue
Greenwich, CT 06830
Attention: Mr. William P. O'Donnell
with a copy to:
Thomas J. Drago, Esq.
Coudert Brothers
1114 Avenue of the Americas
New York, NY 10036
12. GENERAL.
12.1 Amendment and Waiver. Neither this Agreement nor any term hereof may
be changed, waived, amended or terminated orally, but only by written act of the
Purchasers and the Company (or, in respect of a waiver, the waiving party or
parties).
12.2 Assignment. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and legal representatives, but
shall not be assignable by any party without the written consent of the other
party; provided, however, that the rights and obligations of any Purchaser may
be assigned to one or more of its affiliates or other persons or entities with
respect to whom such Purchaser has investment authority with respect to any
Shares transferred to such affiliate or other person or entity or which is under
common investment management with any Purchaser, if such affiliate or other
person or entity agrees in writing to be bound by all of the terms and
conditions of this Agreement. The terms of this Agreement, including, without
limitation, Section 9 and Section 10.1 hereof, shall be binding upon any person
or entity who acquires Shares, Dividend Shares or Conversion Shares from a
- 26 -
<PAGE>
Purchaser hereunder unless such Shares are acquired at least three years from
the date such Shares were issued, in an underwritten public offering or in
unsolicited broker's transactions effected in compliance with all of the terms
and provisions of Rule 144 under the Securities Act.
12.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of law provisions thereof.
12.4 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which, when taken together, shall
constitute one and the same instrument.
12.5 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning and interpretation of this Agreement.
12.6 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto hereby waive any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
12.7 Termination. Anything herein to the contrary notwithstanding, this
Agreement may be terminated by either the Purchasers or the Company, upon
written notice to the other, if the Closing of the purchase and sale of any
Shares shall not have occurred on or prior to the Outside Date. This Agreement
may also be terminated by mutual consent of the Purchasers and the Company.
After termination, the Purchasers and the Company shall have no liability or
further obligation to the other under this Agreement, other than their
respective obligations under Sections 1.6, 4.2, 4.3, 8, 9, 10 and Section 12
hereof.
12.8 Effect of Amended and Restated Agreement. This Amended and Restated
Stock Purchase Agreement amends and replaces in its entirety the Original
Agreement and all references herein to this Agreement shall refer to this
Amended and Restated Agreement and all references made to the Original Agreement
in any instrument or document shall, without more, be deemed to refer to this
Amended and Restated Stock Purchase Agreement.
- 27 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
UNC INCORPORATED
By: /s/ Gregory M. Bubb
-----------------------------------
Name: Gregory M. Bubb
Title: Vice President and Treasurer
PURCHASERS
NETWORK FUND III, LTD.
By: /s/ John W. Gildea
-----------------------------------
Name: John Gildea
Title: President
/s/ John W. Gildea
-----------------------------------
John W. Gildea
/s/ William P. O'Donnell
-----------------------------------
William P. O'Donnell
EURISTECH S.A.
By: /s/ P. LaMotte
-----------------------------------
Name: P. LaMotte
Title:
- 28 -
<PAGE>
MELLON BANK, N.A., AS TRUSTEE FOR THE
GENERAL CHEMICAL GROUP INC.
MASTER PENSION TRUST
By: /s/ Allan M. Seaman
-----------------------------------
Name: Allan Seaman
Title: Associate Counsel
BRIDGE PARTNERS, L.P.
By: /s/ William P. O'Donnell
-----------------------------------
Name: William O'Donnell
Title: Carson Street Partners, Inc.
General Partners, Bridge
Partners, L.P.
PEQUOD INVESTMENTS, L.P.
By: /s/ Jonathan Gallen
-----------------------------------
Name: Jonathan Gallen
Title: Managing Member, Pequod LLC
General Partner, Pequod Investments, L.P.
- 29 -
<PAGE>
SCHEDULE 1
Name of Purchaser Acquisition Shares
- ----------------- ------------------
Network Fund III, Ltd. 59,000
John W. Gildea 10,000
William P. O'Donnell 1,000
EURISTECH S.A. 15,000
Mellon Bank, N.A., as Trustee for the
General Chemical Group Inc. Master Pension Trust 20,000
Bridge Partners, L.P. 141,000
Pequod Investments, L.P. 4,000
-------
Total 250,000
=======
<PAGE>
SCHEDULE 2
Network III Holdings, LDC
Gildea Investment Company
Iron City Partners Inc.
Ariel Fund Ltd.
Pequod Investments, L.P.
<PAGE>
SCHEDULE 3
For purposes of this Agreement, an "Acceptable Acquisition" shall mean an
acquisition or series of related acquisitions by the Company of a corporation or
other entity (or its assets, businesses or divisions) whose principal business
or businesses is supplying products and services to the aviation industry of a
nature similar to, or complementary with, the Company's currently existing lines
of business. An Acceptable Acquisition must (a) be approved by the Board of
Directors of the Company and the company to be acquired and, if required, the
stockholders of the Company and the company to be acquired and any third parties
or governmental bodies, agencies and authorities whose approval is required; (b)
not violate any statute, ordinance, rule, regulation, order or decree of any
court or federal, state, local or foreign governmental body, agency or
authority; (c) not violate or result in a default in respect of any contract,
lease, agreement, instrument, arrangement or understanding to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (d) not violate any of the constitutive documents of the
Company or any of its Subsidiaries; and (e) not result in a breach of, or
default under, any of the representations and warranties, covenants and other
agreements and terms of this Agreement.
<PAGE>
EXHIBIT A
Series B Certificate of Designation
<PAGE>
UNC INCORPORATED
CERTIFICATE OF THE DESIGNATION, POWERS,
PREFERENCES AND RIGHTS OF THE SERIES B SENIOR CUMULATIVE
CONVERTIBLE PREFERRED STOCK
PAR VALUE $1.00 PER SHARE
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
The following resolutions were duly adopted by the Board of Directors of
UNC Incorporated, a Delaware corporation (the "Corporation"), pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, on September 29, 1995 at a meeting of the Board of Directors at which
there was at all times present and acting a quorum of the Board of Directors of
the Corporation:
WHEREAS, the Board of Directors of the Corporation is authorized, within
the limitations and restrictions stated in the Certificate of Incorporation, to
fix by resolution or resolutions the designation of each series of Preferred
Stock and the powers, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof,
including, without limiting the generality of the foregoing, such provisions as
may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution or resolutions of the Board of Directors
under the General Corporation Law of the State of Delaware; and
WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to authorize and fix the terms of a
series of such Preferred Stock and the number of shares constituting such
series:
NOW, THEREFORE, BE IT RESOLVED:
(1) Designation and Number of Shares. The designation of said series of
Preferred Stock, par value $1.00 per share (the "Series Preferred Stock"),
authorized by this resolution shall be "Series B Senior Cumulative Convertible
Preferred Stock" (the "Series B Preferred Stock"). The number of shares of
Series B Preferred Stock authorized hereby shall be 250,000 and no more, except
as provided herein.
(2) Rank. The Series B Preferred Stock shall, with respect to dividend
rights and rights on liquidation, winding up and dissolution, rank (a) on a
parity with the Series C Senior Cumulative Preferred Stock, par value $1.00 per
share (the "Series C Preferred Stock"), and (b) prior to any other equity
securities of the Corporation, whether currently authorized or
<PAGE>
hereafter created, including any other series of Series Preferred Stock and the
Common Stock, par value $.20 per share, of the Corporation (the "Common Stock",
all of such equity securities of the Corporation to which the Series B Preferred
Stock ranks prior, including any other series of Series Preferred Stock and the
Common Stock, are referred to herein collectively as the "Junior Securities").
(3) Dividends. (a) (i) The holders of the shares of Series B Preferred
Stock shall be entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends,
cumulative dividends at the annual rate (subject to adjustment as set forth in
subparagraph (iv) below) of $8.50 per share in equal quarterly payments on the
last business day of each calendar quarter (each of such dates being a "Dividend
Payment Date"), commencing with the last day of the calendar quarter in which
the shares of Series B Preferred Stock are issued, in preference to dividends on
the Junior Securities. Such dividends shall be paid to the holders of record at
the close of business on the date which is ten (10) business days prior to the
Dividend Payment Date. Each of such quarterly dividends (whether payable in cash
or in stock) shall be fully cumulative and shall accrue (whether or not
declared), without interest, from the Date of Issuance. Subject to subparagraph
(iii) below, any dividend payments due with respect to the Series B Preferred
Stock on any Dividend Payment Date shall be made by issuing fully paid and
non-assessable shares of Series C Preferred Stock, valued as set forth below (a
"PIK Dividend"); provided, however, that in lieu of issuing shares of Series C
Preferred Stock, dividends may be paid, in the sole discretion of the
Corporation, in cash or any combination of cash and Series C Preferred Stock.
The issuance of such shares or the issuance of such shares together with payment
of cash in lieu of the issuance of any shares shall constitute full payment of
such dividend.
(ii) Shares of Series C Preferred Stock used for the purpose of paying
dividends on the Series B Preferred Stock will be valued at $100.00 per share.
(iii) In the event that the Corporation is no longer a party to any
Restrictive Agreement (as defined below) prohibiting the payment of cash
dividends on the Series B Preferred Stock, dividend payments with respect to the
Series B Preferred Stock shall be made in cash. "Restrictive Agreement" shall
mean any agreement to which the Corporation is a party on the date hereof
(including as modified, amended, extended, refinanced or replaced) which by its
terms restricts the Corporation's ability to (A) pay dividends in cash with
respect to the Series B Preferred Stock or (B) redeem the Series B Preferred
Stock, excluding any such agreement which has been substantially assigned to a
party which is not a party thereto on the date hereof.
(iv) In the event that the Corporation shall make a PIK Dividend at any
time after the third anniversary of the date of issuance of the Series B
Preferred Stock (the "Date of Issuance"), the annual rate of PIK Dividends
payable thereafter with respect to the Series B Preferred Stock shall be
increased to $9.50 per share. In the event that the Corporation shall make a PIK
Dividend at any time after the fourth anniversary of the Date of Issuance, the
annual rate of PIK Dividends payable thereafter with respect to the Series B
Shares shall be increased to $10.50 per share. In the event that the Corporation
shall make a PIK Dividend at any time
-2-
<PAGE>
after the fifth anniversary of the Date of Issuance, the annual rate of PIK
Dividends payable thereafter with respect to the Series B Preferred Stock shall
be increased to $11.00 a share. Any adjustment to the annual rate of PIK
Dividends payable with respect to the Series B Preferred Stock pursuant to this
subparagraph (iv) shall be effective after the date of the applicable PIK
Dividend and the dividend payment in fully paid non-assessable shares of Series
C Preferred Stock with respect to the next following date of PIK Dividend shall
be adjusted to reflect the applicable increased annual rate. Dividend payments,
or any portion thereof, with respect to the Series B Preferred Stock to be paid
in cash will be at annual rate of $8.50 per share.
(b) All dividends paid with respect to shares of Series B Preferred Stock
pursuant to paragraph (3)(a) shall be paid pro rata to the holders entitled
thereto.
(c) No full cash dividends shall be declared or paid or set apart for
payment on the Series C Preferred Stock for any period unless full cumulative
cash dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on the
Series B Preferred Stock for all dividend payment periods terminating on or
prior to the date of payment of such full cumulative dividends. If any cash
dividends are not paid in full, as aforesaid, upon the shares of Series B
Preferred Stock and the Series C Preferred Stock, all cash dividends declared
upon shares of Series B Preferred Stock and the Series C Preferred Stock shall
be declared pro rata so that the amount of cash dividends declared per share on
the Series B Preferred Stock and the Series C Preferred Stock shall in all cases
bear to each other the same ratio that accrued cash dividends per share on the
Series B Preferred Stock and the Series C Preferred Stock bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Series B Preferred Stock which may be in
arrears.
(d) (i) Whenever dividends or distributions payable on the Series B
Preferred Stock as provided in this Section 3 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series B Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(A) declare or pay dividends, or make any other distributions, on any
Junior Securities (either as to dividends or upon liquidation, dissolution
or winding up); or
(B) redeem or purchase or otherwise acquire for consideration shares
of any Junior Securities (either as to dividends or upon liquidation,
dissolution or winding up), provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such Junior Securities
in exchange for shares of any other Junior Securities.
(ii) Subject to the foregoing provisions of this Section 3, the Board of
Directors may declare, and the Corporation may pay or set apart for payment,
dividends and other distributions on any of the Junior Securities, and may
purchase or otherwise redeem any
-3-
<PAGE>
of the Junior Securities or any warrants, rights or options exercisable for or
convertible into any of the Junior Securities, and the holders of the shares of
Series B Preferred Stock shall not be entitled to share therein.
(4) Liquidation Preference. (a) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of shares of Series B Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount in cash equal to $100.00 for each
share outstanding, plus an amount in cash equal to all accrued but unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding up,
before any payment shall be made or any assets distributed to the holders of any
of the Junior Securities. If the assets of the Corporation are not sufficient to
pay in full the liquidation payments payable to the holders of outstanding
shares of Series B Preferred Stock and Series C Preferred Stock, then the
holders of all such shares shall share ratably in such distribution of assets in
accordance with the amount which would be payable on such distribution if the
amounts to which the holders of outstanding shares of Series B Preferred Stock
and Series C Preferred Stock are entitled were paid in full.
(b) The liquidation payment with respect to each fractional share of Series
B Preferred Stock outstanding or accrued but unpaid shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Series B Preferred Stock.
(c) For the purposes of this Section 4, neither the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all the property or assets of
the Corporation or the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, unless such voluntary sale, conveyance,
lease, exchange or transfer shall be in connection with a dissolution or winding
up of the business of the Corporation.
(5) Redemption. (a) Commencing after the Effective Date (as defined below),
the Corporation at its option may redeem, to the extent funds are legally
available therefor, the Series B Preferred Stock, at any time in whole or from
time to time in part, at the per share redemption price equal to $100.00 plus
all accrued and unpaid dividends thereon to the date fixed for redemption,
without interest (the "Redemption Price"). "Effective Date" shall mean, the last
day of any ninety (90) consecutive calendar day period that occurs after the
fourth anniversary of the Date of Issuance in which the last reported sales
price regular way for the Common Stock of the Corporation on the New York Stock
Exchange (or any other national securities exchange or NASDAQ on which the
Common Stock is listed or quoted) on all trading days in that period is at least
equal to 200% of the Conversion Price (as defined in Section 7).
(b) The Corporation shall not optionally redeem the Series B Preferred
Stock, in whole or in part, without first redeeming, all outstanding shares of
Series C Preferred Stock at the Redemption Price for the Series C Preferred
Stock.
-4-
<PAGE>
(c) Unless the Corporation is prohibited by the terms of any Restrictive
Agreement from redeeming any shares of Series B Preferred Stock, in the event of
any Change in Control (as defined below) with respect to the Corporation, each
holder of the Series B Preferred Stock may, from time to time, require the
Corporation to, and the Corporation shall, redeem any number of the shares of
Series B Preferred Stock held by it for the Redemption Price upon thirty (30)
days prior written notice. "Change in Control" shall mean (A) any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation) which will result in the Corporation's
stockholders immediately prior to such transaction not holding (by virtue of
such shares or securities issued solely with respect thereto) at least fifty
percent (50%) of the voting power of the surviving or continuing entity, (B) a
sale of all or substantially all of the assets of the Corporation, unless the
Corporation's stockholders immediately prior to such sale will, as a result of
such sale, hold (by virtue of securities issued as consideration for the
Corporation's sale) at least fifty percent (50%) of the voting power of the
purchasing entity, or (C) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof unless the
election, or the nomination for election by the Corporation's stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
(d) Shares of Series B Preferred Stock which have been issued and
reacquired in any manner, including shares purchased or redeemed or exchanged,
shall (upon compliance with any applicable provisions of the laws of the State
of Delaware) have the status of authorized and unissued shares of the class of
Series Preferred Stock, undesignated as to series, and may be redesignated and
reissued as part of any series of the Series Preferred Stock, par value $1.00
per share, of the Corporation; provided, however, that no such issued and
reacquired shares of Series B Preferred Stock shall be reissued or sold as
Series B Preferred Stock.
(e) Notwithstanding the foregoing provisions of this Section 5, unless the
full cumulative dividends on all outstanding shares of Series B Preferred Stock
shall have been paid or contemporaneously are declared and paid for all past
dividend periods, none of the shares of Series B Preferred Stock shall be
redeemed unless all outstanding shares of Series B Preferred Stock are
simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire (except pursuant to Section 6 hereof) any shares of Series B Preferred
Stock; provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of Series B Preferred Stock pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
Series B Preferred Stock.
(6) Procedure for Redemption. (a) In the event that fewer than all the
outstanding shares of Series B Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors.
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<PAGE>
(b) In the event the Corporation shall redeem shares of Series B Preferred
Stock, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than thirty (30) days nor more than sixty (60) days
prior to the date of redemption (the "Redemption Date"), to each holder of
record of the shares to be redeemed at such holder's address as the same appears
on the stock register of the Corporation; provided, however, that no failure to
mail such notice nor any defect therein shall affect the validity of the
proceeding for the redemption of any shares of Series B Preferred Stock to be
redeemed except as to the holder to whom the Corporation has failed to mail said
notice or except as to the holder whose notice was defective. Each such notice
shall state: (i) the Redemption Date; (ii) the number of shares of Series B
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed from such holder, the number of shares to be redeemed
from such holder; (iii) the Redemption Price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on such Redemption Date.
(c) Notice having been mailed as aforesaid, from and after the Redemption
Date (unless default shall be made by the Corporation in providing money for the
payment of the Redemption Price of the shares called for redemption) dividends
on the shares of Series B Preferred Stock so called for redemption shall cease
to accrue, and said shares shall no longer be deemed to be outstanding and shall
have the status of authorized but unissued shares of Preferred Stock,
unclassified as to series, and shall not be reissued as shares of Series B
Preferred Stock, and all rights of the holders thereof as stockholders of the
Corporation with respect to said shares (except the right to receive from the
Corporation the Redemption Price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the Redemption Price aforesaid. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.
(7) Conversion. (a) Subject to and upon compliance with the provisions of
this Section 7, unless previously redeemed by the Corporation, the holders of
shares of Series B Preferred Stock shall have the right, at such holders'
option, at any time and from time to time, to convert such shares into fully
paid and non-assessable shares of Common Stock of the Corporation. The number of
shares of Common Stock issuable upon conversion of each share of Series B
Preferred Stock shall be equal to $100.00 divided by the Conversion Price (as
hereinafter defined) in effect at the time of conversion, determined as
hereinafter provided. The price at which shares of Common Stock shall be
delivered upon conversion (the "Conversion Price") shall initially be $7.00
(subject to the adjustments set out in this Section 7). The right to convert
shares called for redemption pursuant to this Section 7 shall terminate at the
close of business on the date fixed for such redemption unless the Corporation
shall default in making payment of the amount payable upon such redemption.
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<PAGE>
(b) The holders of shares of Series B Preferred Stock at the close of
business on a dividend payment record date shall be entitled to receive the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof or the Corporation's default in payment
of the dividend due on such Dividend Payment Date. However, shares of Series B
Preferred Stock surrendered for conversion during the period between the close
of business on any dividend payment record date and the opening of business on
the corresponding Dividend Payment Date must be accompanied by payment of an
amount equal to the dividend payable on such shares on such Dividend Payment
Date. A holder of shares of Series B Preferred Stock on a dividend payment
record date who (or whose transferee) surrenders any of such shares for
conversion into shares of Common Stock on a Dividend Payment Date will receive
the dividend payable by the Corporation on such shares of Series B Preferred
Stock on such date, and the converting holder need not include payment in the
amount of such dividend upon surrender of shares of Series B Preferred Stock for
conversion. Except as provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
or for dividends on the shares of Common Stock issued upon such conversion.
(c) (i) In order to exercise the conversion privilege, the holders of each
share of Series B Preferred Stock to be converted shall surrender the
certificate representing such share at the office of the transfer agent for the
Series B Preferred Stock, appointed for such purpose by the Corporation, with
the Notice of Election to Convert on the back of said certificate completed and
signed. Unless the shares of Common Stock issuable on conversion are to be
issued in the same name in which such share of Series B Preferred Stock is
registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax.
(ii) As promptly as practicable after the surrender of the certificates for
shares of Series B Preferred Stock as aforesaid, the Corporation shall issue and
shall deliver at such office to such holder, or on his written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with the provisions of
this Section 7, and any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in paragraph (d)
of this Section 7.
(iii) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for shares
of Series B Preferred Stock shall have been surrendered and such notice received
by the Corporation as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, and such notice received by the
Corporation. All shares of Common Stock delivered upon conversion of
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<PAGE>
the Series B Preferred Stock will upon delivery be duly and validly issued and
fully paid and non-assessable, free of all liens and charges and not subject to
any preemptive rights.
(d) The Conversion Price in effect at any time and the number and kind of
securities issuable upon the conversion of each share of Series B Preferred
Stock shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(i) In the event that the Corporation shall make a PIK Dividend
pursuant to Section 3 hereof after the third anniversary of the Date of
Issuance, then the Conversion Price shall be reduced by five percent (5%);
provided that a reduction in the Conversion Price pursuant to this
subparagraph (i) shall be made only once.
(ii) In case the Corporation shall hereafter (A) pay a dividend or
make a distribution on its Common Stock in shares of its Common Stock, (B)
subdivide its outstanding Common Stock, (C) combine its outstanding Common
Stock into a smaller number of shares, or (D) issue any shares by
reclassification of its Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Corporation is
the continuing corporation), the Conversion Price in effect at the time of
the record date for such dividend or distribution or the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the holder of any share of Series B Preferred Stock
converted after such date shall be entitled to receive the aggregate number
and kind of shares of Common Stock which, if such share of Series B
Preferred Stock had been converted immediately prior to such record date or
effective date, he would have owned upon such conversion and been entitled
to receive upon such dividend, distribution, subdivision, combination or
reclassification.
(iii) In case the Corporation shall hereafter issue rights or warrants
to all holders of its Common Stock entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for or
purchase shares of Common Stock (or securities convertible into Common
Stock) at a price per share (or having a conversion price per share) less
than the Conversion Price in effect on the record date with respect to such
issuance, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect by
a fraction, of which the numerator shall be the number of shares of Common
Stock outstanding on such record date plus the number of additional shares
of Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at the Conversion Price
in effect immediately prior to the date of such issuance, and of which the
denominator shall be the number of shares of Common Stock outstanding on
the record date for determination of the Stockholders entitled to
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<PAGE>
receive such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase (or into which the
convertible securities so offered are then convertible). Such adjustment
shall be made successively whenever such rights or warrants are issued and
shall become effective immediately prior to the date of such issuance; and
to the extent that shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered.
(iv) In case the Corporation shall hereafter distribute to all holders
of its Common Stock shares of stock other than Common Stock or evidences of
its indebtedness or assets (excluding cash dividends or distributions out
of retained earnings and dividends or distributions referred to in
subparagraph (ii) above) or rights or warrants (excluding those referred to
in subparagraph (iii) above), then in each such case the Conversion Price
in effect thereafter shall be determined by multiplying the Conversion
Price in effect immediately prior to the date of such distribution by a
fraction, of which the numerator shall be the total number of outstanding
shares of Common Stock multiplied by the Conversion Price in effect
immediately prior to the date of such distribution, less the then fair
market value (as determined in good faith by the Corporation's Board of
Directors, irrespective of the accounting treatment thereof, whose
determination shall be described in a certified Board Resolution) of said
shares of stock, assets or evidences of indebtedness so distributed or of
such rights or warrants, and of which the denominator shall be the total
number of outstanding shares of Common Stock multiplied by the Conversion
Price in effect immediately prior to the date of such distribution. Such
adjustments shall be made whenever any such distribution is made and shall
become effective immediately prior to the date of such distribution.
(v) In case the Corporation shall hereafter issue shares of its Common
Stock (excluding shares issued (A) in any of the transactions described in
subparagraph (ii) above, (B) upon conversion or exchange of securities
convertible into or exchangeable for Common Stock, or upon conversion of
rights or warrants issued to the holders of Common Stock, for which an
adjustment has already been made pursuant to subparagraph (iii) above, (C)
by grant to or upon exercise of options granted or to be granted to
employees or directors pursuant to any employee benefit plan or program of
the Corporation or any of its subsidiaries in existence on the Date of
Issuance or subsequently approved by the Corporation's stockholders, (D)
upon conversion of shares of Series B Preferred Stock, (E) to shareholders
of any corporation which merges into the Corporation or a subsidiary of the
Corporation in proportion to their stockholdings of such
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<PAGE>
corporation immediately prior to such merger, upon such merger, (F) in a
bona fide public offering pursuant to a firm commitment underwriting, or
(G) pursuant to any stockholders rights plan of the Corporation) for a
consideration per share of Common Stock less than the Conversion Price in
effect on the date the Corporation fixes or has fixed the offering,
conversion, exchange or exercise price of such additional shares, the
Conversion Price shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
thereto by a fraction, of which the numerator shall be the total number of
shares of Common Stock outstanding immediately prior to the issuance of
such additional shares plus the number of shares of Common Stock which the
aggregate consideration received (determined as provided in subparagraph
(vii) below) for the issuance of such additional shares would purchase at
the Conversion Price in effect on the date the Corporation fixes or has
fixed the offering, conversion, exchange or exercise price of such
additional shares, and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after the issuance of such
additional shares. Such adjustment shall be made successively whenever such
an issuance is made and shall become effective immediately prior to the
date of such issuance.
(vi) In case the Corporation shall hereafter issue any securities
convertible into or exchangeable for its Common Stock (excluding securities
issued (A) in transactions described in subparagraphs (iii) and (iv) above
or (B) pursuant to any stockholders rights plan of the Corporation) for a
consideration per share of Common Stock initially deliverable upon
conversion or exchange of such securities (determined as provided in
subparagraph (vii) below) less than the Conversion Price in effect on the
issuance date of such securities, the Conversion Price shall be adjusted so
that it shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the date of such issuance by a
fraction, of which the numerator shall be the number of shares of Common
Stock outstanding immediately prior to such issuance plus the number of
shares of Common Stock which the aggregate consideration received
(determined as provided in subparagraph (vii) below) for such securities
would purchase at the Conversion Price prior to any adjustment pursuant
hereto, and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior to such issuance plus the
maximum number of shares of Common Stock of the Corporation deliverable
upon conversion of or in exchange for such securities at the initial
conversion or exchange price or rate. Such adjustment shall be made
successively whenever such an issuance is made and shall become effective
immediately prior to date of issuance of such securities.
(vii) For purposes of any computation respecting consideration
received pursuant to subparagraphs (v) and (vi) above, the following shall
apply:
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(A) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that in
no case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Corporation for any underwriting of the issue or
otherwise in connection therewith;
(B) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined
in good faith by the Board of Directors of the Corporation (irrespective of
the accounting treatment thereof), whose determination shall be conclusive
and described in a certified Board Resolution; and
(C) in the case of the issuance of securities convertible into or
exchangeable for shares of Common Stock, the aggregate consideration
received therefor shall be deemed to be the consideration received by the
Corporation for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Corporation upon the
conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (A) and (B) of this
subparagraph (vii)).
(viii) In case the Corporation is a participant in a consolidation,
merger or combination with another corporation (other than with a
wholly-owned subsidiary of the Corporation and other than a merger which
does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock) or in case of any sale or transfer of all
or substantially all of the assets of the Corporation, as a result of which
holders of the Common Stock shall be entitled to receive stock, securities
or other property or assets (including cash) with respect to or in exchange
for such Common Stock, or any share exchange whereby the Common Stock is
converted into other securities or property of the Corporation, then as a
condition to the consummation of such transaction, lawful and adequate
provision shall be made so that the holder of each share of Series B
Preferred Stock then outstanding shall have the right, with respect to such
shares of Series B Preferred Stock, to receive stock, other securities or
property or assets (including cash) or any combination thereof, having a
value equal to the value of the stock, other securities, property and
assets (including cash) which such holder would have been entitled to
receive upon such consolidation, merger, combination, sale or transfer, or
exchange, if such holder had held the Common Stock issuable upon the
conversion of such shares of Series B Preferred Stock immediately prior to
such consolidation, merger, combination, sale or transfer, or exchange.
(ix) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least ten cents
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($0.10) in such price; provided, however, that any adjustments not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this paragraph 7(d) shall be
made to the nearest cent or to the nearest one-thousandth of a share, as
the case may be.
(x) Anything in this paragraph 7(d) to the contrary notwithstanding,
the Corporation shall be entitled, but shall not be required, to make such
changes in the Conversion Price, in addition to those required by this
paragraph 7(d), as it in its discretion shall determine to be advisable in
order that any dividend or distribution in shares of Common Stock,
subdivision, reclassification or combination of shares of Common Stock,
issuance of rights or warrants to purchase Common Stock or distribution of
shares of stock other than Common Stock, evidences of indebtedness or
assets (other than distributions in cash out of retained earnings) referred
to hereinabove in this paragraph 7(d), hereafter made by the Corporation to
the holders of the Series B Preferred Stock shall not be taxable to them.
(xi) Whenever the Conversion Price is adjusted, as herein provided,
the Corporation shall promptly cause a notice setting forth the adjusted
Conversion Price and adjusted number of shares issuable upon conversion of
each share of Series B Preferred Stock to be mailed to the holders, at
their last addresses appearing in the Series B Preferred Stock share
register. The certificate setting forth the computation shall be signed by
the chief financial officer of the Corporation.
(xii) In the event that at any time, as a result of any adjustment
made pursuant to paragraph (a) above, the holder of any share of Series B
Preferred Stock thereafter shall become entitled to receive any shares of
the Corporation, other than Common Stock, thereafter the number of such
other shares so receivable upon conversion of any share of Series B
Preferred Stock shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in subparagraphs (i) to (ix)
inclusive, above.
(e) The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purposes of effecting conversions of the Series B
Preferred Stock, the full number of shares of Common Stock deliverable upon the
conversion of all outstanding shares of Series B Preferred Stock not theretofore
converted. For purposes of this paragraph (e), the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding shares
of Series B Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
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<PAGE>
(f) 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 Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series B Preferred Stock against impairment.
(8) Voting Rights. The holders of record of shares of Series B Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 8 or as otherwise provided by law.
(a) Whenever dividends are in arrears and remain unpaid for six (6) or more
Dividend Payment Dates, the holders of the then outstanding Series B Preferred
Stock, voting as a class, shall have the exclusive right to appoint one
additional director to the Board of Directors of the Corporation (in addition to
any rights to appoint or have nominated any director pursuant to any contractual
agreement between the Corporation and any holders of the Series B Preferred
Stock) until such time as all accrued and unpaid dividends shall have been paid
in full, at which time the term of office of such director shall terminate.
(b) So long as any shares of Series B Preferred Stock are outstanding, the
Corporation will not, without the affirmative vote or consent of the holders of
at least a majority of the outstanding shares of Series B Preferred Stock,
voting as a class (i) create, authorize or issue any shares of any other class
of senior or parity dividend stock or senior or parity liquidation stock or
having class voting rights except as required by the Delaware General
Corporation Law or voting rights in excess of one vote per share, (ii) amend,
alter or repeal, whether by merger, consolidation or otherwise, the
Corporation's Certificate of Incorporation if the amendment, alteration or
repeal materially and adversely affects the powers, preferences or special
rights of the Series B Preferred Stock, or (iii) declare any reverse stock
dividend with respect to the Series B Preferred Stock or otherwise reduce the
number of outstanding shares of Series B Preferred Stock other than pursuant to
Section 4, 5 or 7 hereof; provided, however, that the approval of not less than
two-thirds of the outstanding shares of Series B Preferred Stock, voting as a
class, shall be required to amend, alter, or repeal any of the provisions of the
Certificate of Incorporation of the Corporation that would adversely affect the
dividend provisions, liquidation rights, conversion terms, or voting rights of
the Series B Preferred Stock or the holders thereof.
(c) A special meeting of holders of the Series B Preferred Stock (or a
request for a vote by written consent without a meeting) to approve or
disapprove any action of the Corporation on which the holders of the Series B
Preferred Stock are entitled to vote as a separate class by law or pursuant to
this Section 8 may be called by the Secretary of the Corporation or by the
holder(s) of twenty-five percent (25%) or more of the outstanding shares of
Series B Preferred Stock on written notice to the address of each holder thereof
as it appears on the records of the Corporation deposited in the U.S. mail, all
charges prepaid, at least ten
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(f) 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 Company, but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series B Preferred Stock against impairment.
(8) Voting Rights. The holders of record of shares of Series B Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 8 or, except as expressly required by applicable law.
(a) Whenever dividends are in arrears and remain unpaid for six (6) or more
Dividend Payment Dates, the holders of the then outstanding Series B Preferred
Stock, voting as a class, shall have the exclusive right to appoint one
additional director to the Board of Directors of the Corporation (in addition to
any rights to appoint or have nominated any director pursuant to any contractual
agreement between the Corporation and any holders of the Series B Preferred
Stock) until such time as all accrued and unpaid dividends shall have been paid
in full, at which time the term of office of such director shall terminate.
(b) So long as any shares of Series B Preferred Stock are outstanding, the
Corporation will not, without the affirmative vote or consent of the holders of
at least a majority of the outstanding shares of Series B Preferred Stock,
voting as a class (i) create, authorize or issue any shares of any other class
of senior or parity dividend stock or senior or parity liquidation stock or
having class voting rights except as required by the Delaware General
Corporation Law or voting rights in excess of one vote per share, (ii) amend,
alter or repeal, whether by merger, consolidation or otherwise, the
Corporation's Certificate of Incorporation if the amendment, alteration or
repeal materially and adversely affects the powers, preferences or special
rights of the Series B Preferred Stock, or (iii) declare any reverse stock
dividend with respect to the Series B Preferred Stock or otherwise reduce the
number of outstanding shares of Series B Preferred Stock other than pursuant to
Section 4, 5 or 7 hereof; provided, however, that the approval of not less than
two-thirds of the outstanding shares of Series B Preferred Stock, voting as a
class, shall be required to amend, alter, or repeal any of the provisions of the
Certificate of Incorporation of the Corporation that would adversely affect the
dividend provisions, liquidation rights, conversion terms, or voting rights of
the Series B Preferred Stock or the holders thereof.
(c) A special meeting of holders of the Series B Preferred Stock (or a
request for a vote by written consent without a meeting) to approve or
disapprove any action of the Corporation on which the holders of the Series B
Preferred Stock are entitled to vote as a separate class by law or pursuant to
this Section 8 may be called by the Secretary of the Corporation or by the
holder(s) of twenty-five percent (25%) or more of the outstanding shares of
Series B Preferred Stock on written notice to the address of each holder thereof
as it appears on the records of the Corporation deposited in the U.S. mail, all
charges prepaid, at least ten
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(10) but no more than sixty (60) days prior to the applicable vote. The record
date for determination of the holders of the Series B Preferred Stock entitled
to vote by written consent or at a meeting shall be set by the Corporation's
Board of Directors, and only holders who are holding of record on the stock book
of the Corporation on that date will be entitled to participate in such vote. At
any time at which any share of Series B Preferred Stock has been issued and is
outstanding, no proposal for the Corporation to take any action described in
paragraph (b) shall be adopted, nor shall the Corporation be authorized to take
any such action, unless the holders of at least two-thirds of the outstanding
shares of Series B Preferred Stock voting as a separate class vote in favor of
such proposal.
(d) Copies of all notices sent to the holders of Common Stock shall be
simultaneously sent to each holder of the Series B Preferred Stock.
(e) In exercising the voting rights set forth in this Section 8, each share
of Series B Preferred Stock shall have one vote per share.
(f) No consent of the holders of the Series B Preferred Stock, except to
the extent such holders are entitled to vote together with the holders of the
Series Preferred Stock or Common Stock, shall be required for (i) the creation,
authorization or issuance of any indebtedness of any kind of the Corporation,
(ii) the creation, authorization or issuance of any other class of stock of the
Corporation subordinate as to dividends and upon liquidation to the Series B
Preferred Stock, (iii) any increase or decrease in the amount of authorized
Common Stock or Series Preferred Stock or any increase, decrease or change in
the par value thereof, or (iv) any increase in the amount of the Series C
Preferred Stock for the purpose of paying dividends in shares of Series C
Preferred Stock as provided herein, and none of the foregoing shall be deemed to
affect adversely the powers, special rights or preferences of holders of the
Series B Preferred Stock.
IN WITNESS WHEREOF, UNC Incorporated caused this certificate to be signed
by its Chairman of the Board and Chief Executive Officer and attested by its
Secretary this 5th day of October, 1995.
UNC INCORPORATED
By:
------------------------------
Dan A. Colussy
Chairman of the Board and
Chief Executive Officer
ATTEST:
- ------------------------------
Secretary
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EXHIBIT B
Series C Certificate of Designation
<PAGE>
UNC INCORPORATED
CERTIFICATE OF THE DESIGNATION, POWERS,
PREFERENCES AND RIGHTS OF THE SERIES C SENIOR CUMULATIVE
PREFERRED STOCK
PAR VALUE $1.00 PER SHARE
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
The following resolutions were duly adopted by the Board of Directors of
UNC Incorporated, a Delaware corporation (the "Corporation"), pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, on September 29, 1995 at a meeting of the Board of Directors at which
there was at all times present and acting a quorum of the Board of Directors of
the Corporation:
WHEREAS, the Board of Directors of the Corporation is authorized, within
the limitations and restrictions stated in the Certificate of Incorporation, to
fix by resolution or resolutions the designation of each series of Preferred
Stock and the powers, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof,
including, without limiting the generality of the foregoing, such provisions as
may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution or resolutions of the Board of Directors
under the General Corporation Law of the State of Delaware; and
WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to authorize and fix the terms of a
series of such Preferred Stock and the number of shares constituting such
series:
NOW, THEREFORE, BE IT RESOLVED:
(1) Designation and Number of Shares. The designation of said series of
Preferred Stock, par value $1.00 per share (the "Series Preferred Stock"),
authorized by this resolution shall be "Series C Senior Cumulative Preferred
Stock" (the "Series C Preferred Stock"). The number of shares of Series C
Preferred Stock authorized hereby shall be 250,000 and no more, except as
provided herein.
(2) Rank. The Series C Preferred Stock shall, with respect to dividend
rights and rights on liquidation, winding up and dissolution, rank (a) on a
parity with the Series B Senior Cumulative Preferred Stock, par value $1.00 per
share (the "Series B Preferred Stock"), and (b) prior to any other equity
securities of the Corporation, whether currently authorized or
<PAGE>
hereafter created, including any other series of Series Preferred Stock and the
Common Stock, par value $.20 per share, of the Corporation (the "Common Stock",
all of such equity securities of the Corporation to which the Series C Preferred
Stock ranks prior, including any other series of Series Preferred Stock and the
Common Stock, are referred to herein collectively as the "Junior Securities").
(3) Dividends. (a) The holders of the shares of Series C Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
out of funds legally available for the payment of dividends, cumulative
dividends at the annual rate of $8.50 per share in equal quarterly payments on
the last business day of each calendar quarter (each of such dates being a
"Dividend Payment Date"), commencing with the last day of the calendar quarter
in which the shares of Series C Preferred Stock are issued, in preference to
dividends on the Junior Securities. Such dividends shall be paid to the holders
of record at the close of business on the date which is ten (10) business days
prior to the Dividend Payment Date. Each of such quarterly dividends shall be
fully cumulative and shall accrue (whether or not declared), without interest,
from the Date of Issuance. Any dividend payments due with respect to the Series
C Preferred Stock on any Dividend Payment Date shall be made in cash.
(b) All dividends paid with respect to shares of Series C Preferred Stock
pursuant to paragraph (3)(a) hereof shall be paid pro rata to the holders
entitled thereto.
(c) No full cash dividends shall be declared or paid or set apart for
payment on the Series B Preferred Stock for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on the Series
C Preferred Stock for all dividend payment periods terminating on or prior to
the date of payment of such full cumulative dividends. If any cash dividends are
not paid in full, as aforesaid, upon the shares of Series C Preferred Stock and
Series B Preferred Stock, all cash dividends declared upon shares of Series C
Preferred Stock and Series B Preferred Stock shall be declared pro rata so that
the amount of cash dividends declared per share on the Series C Preferred Stock
and Series B Preferred Stock shall in all cases bear to each other the same
ratio that accrued dividends per share on the Series C Preferred Stock and
Series B Preferred Stock bear to each other. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series C Preferred Stock which may be in arrears.
(d) (i) Whenever dividends or distributions payable on the Series C
Preferred Stock as provided in this Section 3 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series C Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(A) declare or pay dividends, or make any other distributions, on any
Junior Securities (either as to dividends or upon liquidation, dissolution
or winding up); or
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<PAGE>
(B) redeem or purchase or otherwise acquire for consideration shares
of any Junior Securities (either as to dividends or upon liquidation,
dissolution or winding up), provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such Junior Securities
in exchange for shares of any other Junior Securities.
(ii) Subject to the foregoing provisions of this Section 3, the Board of
Directors may declare, and the Corporation may pay or set apart for payment,
dividends and other distributions on any of the Junior Securities, and may
purchase or otherwise redeem any of the Junior Securities or any warrants,
rights or options exercisable for or convertible into any of the Junior
Securities, and the holders of the shares of Series C Preferred Stock shall not
be entitled to share therein.
(4) Liquidation Preference. (a) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of shares of Series C Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount in cash equal to $100.00 for each
share outstanding, plus an amount in cash equal to all accrued but unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding up,
before any payment shall be made or any assets distributed to the holders of any
of the Junior Securities. If the assets of the Corporation are not sufficient to
pay in full the liquidation payments payable to the holders of outstanding
shares of Series C Preferred Stock and Series B Preferred Stock, then the
holders of all such shares shall share ratably in such distribution of assets in
accordance with the amount which would be payable on such distribution if the
amounts to which the holders of outstanding shares of Series C Preferred Stock
and Series B Preferred Stock are entitled were paid in full.
(b) The liquidation payment with respect to each fractional share of Series
C Preferred Stock outstanding or accrued but unpaid shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Series C Preferred Stock.
(c) For the purposes of this Section 4, neither the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all the property or assets of
the Corporation or the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, unless such voluntary sale, conveyance,
lease, exchange or transfer shall be in connection with a dissolution or winding
up of the business of the Corporation.
(5) Redemption. (a) The Corporation at its option may redeem, to the extent
funds are legally available therefor, the Series C Preferred Stock, at any time
in whole or from time to time in part, at the per share redemption price equal
to $100.00 plus all accrued and unpaid dividends thereon to the date fixed for
redemption, without interest (the "Redemption Price").
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<PAGE>
(b) The Corporation shall not optionally redeem the Series B Preferred
Stock, in whole or in part, without first redeeming all outstanding shares of
Series C Preferred Stock at the Redemption Price.
(c) Unless the Corporation is prohibited by the terms of any Restrictive
Agreement (as defined below) from redeeming any shares of Series C Preferred
Stock, in the event of any Change in Control (as defined below) with respect to
the Corporation, each holder of the Series C Preferred Stock may, from time to
time, require the Corporation to, and the Corporation shall, redeem any number
of the shares of Series C Preferred Stock held by it for the Redemption Price
upon thirty (30) days prior written notice. "Restrictive Agreement" shall mean
any agreement to which the Corporation is a party on the date hereof (including,
as modified, amended, extended, refinanced or replaced) which by its terms
restricts the Corporation's ability to (A) pay dividends in cash with respect to
the Series C Preferred Stock or (B) redeem the Series C Preferred Stock,
excluding any such agreement which has been substantially assigned to a party
which is not a party thereto on the date hereof. "Change in Control" shall mean
(A) any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation) which will result in
the Corporation's stockholders immediately prior to such transaction not holding
(by virtue of such shares or securities issued solely with respect thereto) at
least fifty percent (50%) of the voting power of the surviving or continuing
entity, (B) a sale of all or substantially all of the assets of the Corporation,
unless the Corporation's stockholders immediately prior to such sale will, as a
result of such sale, hold (by virtue of securities issued as consideration for
the Corporation's sale) at least fifty percent (50%) of the voting power of the
purchasing entity, or (C) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority thereof unless the
election, or the nomination for election by the Corporation's stockholders, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period.
(d) Shares of Series C Preferred Stock which have been issued and
reacquired in any manner, including shares purchased or redeemed or exchanged,
shall (upon compliance with any applicable provisions of the laws of the State
of Delaware) have the status of authorized and unissued shares of the class of
Series Preferred Stock, undesignated as to series, and may be redesignated and
reissued as part of any series of the Series Preferred Stock, par value $1.00
per share, of the Corporation; provided, however, that no such issued and
reacquired shares of Series C Preferred Stock shall be reissued or sold as
Series C Preferred Stock.
(e) Notwithstanding the foregoing provisions of this Section 5, unless the
full cumulative dividends on all outstanding shares of Series C Preferred Stock
shall have been paid or contemporaneously are declared and paid for all past
dividend periods, none of the shares of Series C Preferred Stock shall be
redeemed unless all outstanding shares of Series C Preferred Stock are
simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire (except pursuant to Section 6 hereof) any shares of Series C Preferred
Stock; provided, however, that the foregoing shall not prevent the purchase or
acquisition of shares of Series C Preferred
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<PAGE>
Stock pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding shares of Series C Preferred Stock.
(6) Procedure for Redemption. (a) In the event that fewer than all the
outstanding shares of Series C Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors.
(b) In the event the Corporation shall redeem shares of Series C Preferred
Stock, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than thirty (30) days nor more than sixty (60) days
prior to the date of redemption (the "Redemption Date"), to each holder of
record of the shares to be redeemed at such holder's address as the same appears
on the stock register of the Corporation; provided, however, that no failure to
mail such notice nor any defect therein shall affect the validity of the
proceeding for the redemption of any shares of Series C Preferred Stock to be
redeemed except as to the holder to whom the Corporation has failed to mail said
notice or except as to the holder whose notice was defective. Each such notice
shall state: (i) the Redemption Date; (ii) the number of shares of Series C
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed from such holder, the number of shares to be redeemed
from such holder; (iii) the Redemption Price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on such Redemption Date.
(c) Notice having been mailed as aforesaid, from and after the Redemption
Date (unless default shall be made by the Corporation in providing money for the
payment of the Redemption Price of the shares called for redemption) dividends
on the shares of Series C Preferred Stock so called for redemption shall cease
to accrue, and said shares shall no longer be deemed to be outstanding and shall
have the status of authorized but unissued shares of Preferred Stock,
unclassified as to series, and shall not be reissued as shares of Series C
Preferred Stock (unless reissued as a stock dividend on Series C Preferred Stock
or Series B Preferred Stock), and all rights of the holders thereof as
stockholders of the Corporation with respect to said shares (except the right to
receive from the Corporation the Redemption Price) shall cease. Upon surrender
in accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the Redemption Price aforesaid. In case fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
(7) Voting Rights. The holders of record of shares of Series C Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 7 or as otherwise provided by law.
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<PAGE>
Stock pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding shares of Series C Preferred Stock.
(6) Procedure for Redemption. (a) In the event that fewer than all the
outstanding shares of Series C Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors.
(b) In the event the Corporation shall redeem shares of Series C Preferred
Stock, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than thirty (30) days nor more than sixty (60) days
prior to the date of redemption (the "Redemption Date"), to each holder of
record of the shares to be redeemed at such holder's address as the same appears
on the stock register of the Corporation; provided, however, that no failure to
mail such notice nor any defect therein shall affect the validity of the
proceeding for the redemption of any shares of Series C Preferred Stock to be
redeemed except as to the holder to whom the Corporation has failed to mail said
notice or except as to the holder whose notice was defective. Each such notice
shall state: (i) the Redemption Date; (ii) the number of shares of Series C
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed from such holder, the number of shares to be redeemed
from such holder; (iii) the Redemption Price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on such Redemption Date.
(c) Notice having been mailed as aforesaid, from and after the Redemption
Date (unless default shall be made by the Corporation in providing money for the
payment of the Redemption Price of the shares called for redemption) dividends
on the shares of Series C Preferred Stock so called for redemption shall cease
to accrue, and said shares shall no longer be deemed to be outstanding and shall
have the status of authorized but unissued shares of Preferred Stock,
unclassified as to series, and shall not be reissued as shares of Series C
Preferred Stock (unless reissued as a stock dividend on Series C Preferred Stock
or Series B Preferred Stock), and all rights of the holders thereof as
stockholders of the Corporation with respect to said shares (except the right to
receive from the Corporation the Redemption Price) shall cease. Upon surrender
in accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the Redemption Price aforesaid. In case fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
(7) Voting Rights. The holders of record of shares of Series C Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 7 or, except as expressly required by applicable law.
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<PAGE>
(b) So long as any shares of Series C Preferred Stock are outstanding, the
Corporation will not, without the affirmative vote or consent of the holders of
at least a majority of the outstanding shares of Series C Preferred Stock,
voting as a class (i) create, authorize or issue any shares of any other class
of senior or parity dividend stock or senior or parity liquidation stock or
having class voting rights except as required by the Delaware General
Corporation Law or voting rights in excess of one vote per share, (ii) amend,
alter or repeal, whether by merger, consolidation or otherwise, the
Corporation's Certificate of Incorporation if the amendment, alteration or
repeal materially and adversely affects the powers, preferences or special
rights of the Series C Preferred Stock, or (iii) declare any reverse stock
dividend with respect to the Series C Preferred Stock or otherwise reduce the
number of outstanding shares of Series C Preferred Stock other than pursuant to
Section 4 or 5 hereof; provided, however, that the approval of not less than
two-thirds of the outstanding shares of Series C Preferred Stock, voting as a
class, shall be required to amend, alter, or repeal any of the provisions of the
Certificate of Incorporation of the Corporation that would adversely affect the
dividend provisions, liquidation rights, conversion terms, or voting rights of
the Series C Preferred Stock or the holders thereof.
(c) A special meeting of holders of the Series C Preferred Stock (or a
request for a vote by written consent without a meeting) to approve or
disapprove any action of the Corporation on which the holders of the Series C
Preferred Stock are entitled to vote as a separate class by law or pursuant to
this Section 7 may be called by the Secretary of the Corporation or by the
holder(s) of twenty-five percent (25%) or more of the outstanding shares of
Series C Preferred Stock on written notice to the address of each holder thereof
as it appears on the records of the Corporation deposited in the U.S. mail, all
charges prepaid, at least ten (10) but no more than sixty (60) days prior to the
applicable vote. The record date for determination of the holders of the Series
C Preferred Stock entitled to vote by written consent or at a meeting shall be
set by the Corporation's Board of Directors, and only holders who are holding of
record on the stock book of the Corporation on that date will be entitled to
participate in such vote. At any time at which any share of Series C Preferred
Stock has been issued and is outstanding, no proposal for the Corporation to
take any action described in this paragraph (b) shall be adopted, nor shall the
Corporation be authorized to take any such action, unless the holders of at
least two-thirds of the outstanding shares of Series C Preferred Stock voting as
a separate class vote in favor of such proposal.
(d) Copies of all notices sent to the holders of Common Stock shall be
simultaneously sent to each holder of the Series C Preferred Stock.
(e) In exercising the voting rights set forth in this Section 7, each share
of Series C Preferred Stock shall have one vote per share.
(f) No consent of the holders of the Series C Preferred Stock, except to
the extent such holders are entitled to vote together with the holders of the
Series B Preferred Stock
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<PAGE>
or Common Stock, shall be required for (i) the creation, authorization or
issuance of any indebtedness of any kind of the Corporation, (ii) the creation,
authorization or issuance of any other class of stock of the Corporation
subordinate as to dividends and upon liquidation to the Series C Preferred
Stock, or (iii) any increase or decrease in the amount of authorized Common
Stock or Series B Preferred Stock or any increase, decrease or change in the par
value thereof, and none of the foregoing shall be deemed to affect adversely the
powers, special rights or preferences of holders of the Series C Preferred
Stock.
(8) Business Combinations. In case the Corporation is a participant in a
consolidation, merger or combination with another corporation (other than with a
wholly-owned subsidiary of the Corporation and other than a merger which does
not result in any reclassification, conversion, exchange or cancellation of the
Common Stock) or in case of any sale or transfer of all or substantially all of
the assets of the Corporation, as a result of which holders of the Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or any
share exchange whereby the Common Stock is converted into other securities or
property of the Corporation, then as a condition to the consummation of such
transaction, lawful and adequate provision shall be made so that the holder of
each share of Series C Preferred Stock then outstanding shall have the right,
with respect to such shares of Series B Preferred Stock, to receive stock, other
securities or property or assets (including cash) or any combination thereof,
having a value equal to the product of (a) the quotient obtained by dividing (x)
$100 plus all accrued and unpaid dividends, whether or not declared, on the
Series C Preferred Stock by (y) the then Existing Conversion Price for the
Series B Preferred Stock (as adjusted to give effect to such transaction), and
(b) the value of the stock, other securities, property and assets (including
cash) which each holder of one share of Common Stock is entitled to receive upon
such consolidation, merger, combination, sale or transfer, or exchange.
IN WITNESS WHEREOF, UNC Incorporated has caused this certificate to be
signed by its Chairman of the Board and Chief Executive Officer and attested by
its Secretary this 5th day of October, 1995.
UNC INCORPORATED
By:
------------------------------
Dan A. Colussy
Chairman of the Board and
Chief Executive Officer
ATTEST:
- ------------------------------
Secretary
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<PAGE>
EXHIBIT 4
<PAGE>
BRIDGE PARTNERS, L.P.
Amended and Restated
Agreement of Limited Partnership
Dated as of May 30, 1996
<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BRIDGE PARTNERS, L.P.
This Restatement of the Agreement of Limited Partnership (the
"Agreement") of BRIDGE PARTNERS, L.P. (the "Partnership"), is made as of
the 30th day of May, 1996, among Carson Street Partners, Inc., a
Delaware corporation, as General Partner of the Partnership, and those
persons listed on Schedule A annexed hereto who execute a counterpart to
this Agreement and are hereafter admitted to the Partnership as limited
partners in accordance with the provisions hereof and whose names and
addresses shall upon such admission be added to the books and records of
the Partnership ("Limited Partners").
W I T N E S S E T H :
WHEREAS, the General Partner and the Limited Partners (collectively, the
"Partners") formed a limited partnership in accordance with the Delaware Revised
Uniform Limited Partnership Act (6 Del. C. Section 17-101 et seq.) (the "Act");
WHEREAS, the General Partner and the Limited Partners entered into
an Agreement of Limited Partnership, dated as of July 13, 1995;
WHEREAS, pursuant to Article XIII Section A, the Partners executed
certain transfer and assignment documents ("Transfer Documents");
WHEREAS, pursuant to Article XIV, Section A, of the Agreement of
Limited Partnership dated as of July 13, 1995, the Partners desire to
amend and restate the Agreement of Limited Partnership;
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the General Partner and
the Limited Partners (Collectively, the "Partners") agree as follows:
ARTICLE I.
Formation of Partnership
The Partners hereto have heretofore formed the Partnership under
the provisions of the Act. The General Partner executed and filed a
Certificate of Limited Partnership in accordance with the provisions of
the Act. The Partners hereto shall execute all such instruments and
shall execute, file, record and/or publish such amendments and other
documents, and do any and all other acts and things as may be appropriate
to comply with the requirements for the formation of a limited partnership
under the laws of the State of Delaware. The General Partner may take such
<PAGE>
further actions as it deems necessary or advisable to permit the Partnership
to conduct business as a limited partnership in any jurisdiction.
ARTICLE II.
Name
The business of the Partnership shall be conducted under the firm name of
"Bridge Partners, L.P." or such other name, to the extent permitted by the Act,
as the General Partner shall hereafter designate in writing to the Limited
Partners.
ARTICLE III.
Definitions
For purposes of this Agreement, unless the context otherwise
requires, the following terms shall have the following respective
meanings:
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as the same may at any time or from time to time be
amended.
"Capital Account" shall mean the capital account established and
maintained for a Partner on the books and records of the Partnership in
accordance with the provisions of Article VIII hereof.
"Capital Contribution" shall mean, as to any Partner, the cash
contributed to the Partnership by such Partner in accordance with
Article VII of this Agreement.
"Certificate of Limited Partnership" means the Certificate of
Limited Partnership of the Partnership filed in the State of Delaware as
the same may at any time or from time to time be amended.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any similar Federal internal revenue law enacted in
substitution for the Code.
"Fiscal Year" means the calendar year.
"General Partner" means Carson Street Partners, Inc., a Delaware
corporation, and any other person or entity acting in its capacity as a
general partner of the Partnership, and any substitute therefor as
provided herein.
"Interest" means the aggregate ownership interest of each Partner
in the income, loss, distributions, capital, assets and liabilities of
the Partnership. "Limited Partnership Interest" means an Interest of a
Limited Partner and "General Partnership Interest" means the Interest of
the General Partner. When used herein without qualification, the term
"Interests" means both Limited Partnership Interests and General
Partnership Interests. Interests need not be evidenced by certificates.
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<PAGE>
"Limited Partner" means any person or entity who becomes a limited partner
of the Partnership and who is listed as such on the books and records of the
Partnership.
"Partners" means the General Partner and all Limited Partners where no
distinction is required by the context in which the term is used.
"Percentage Interest" means, as to any Partner, the ratio of such Partner's
Capital Contribution to the aggregate Capital Contributions of all Partners.
"Person" means any individual, partnership, joint venture, association,
corporation, trust or other entity.
"REDLOH" means REDLOH, L.L.C., a Limited Partner, and its successors and
assigns.
"Regulations" or "Treasury Regulations" means Treasury Regulations
promulgated in final, temporary or proposed form under the Code, as such
Treasury Regulations may be amended from time to time. Any reference herein to a
specific Treasury Regulation provision shall be deemed to include a reference to
the corresponding provision of any successor provision.
"Schedule B Percentage Interest" means, with respect to each Partner, such
Partner's percentage interest, as set forth in Schedule A, in the proceeds of
the sale of the Schedule B Stock held by the Partnership.
"Schedule B Stock" means shares of capital stock of the corporation set
forth on Schedule B hereto and any securities which at any time may be issued
or received as a distribution on or in exchange for or upon conversion or
redemption of such shares.
"Schedule C Percentage Interest" means, with respect to each Partner, such
Partner's percentage interest, as set forth in Schedule A, in the proceeds of
the sale of the shares of Schedule C Stock held by the Partnership.
"Schedule C Stock" means shares of capital stock of the corporation set
forth on Schedule C hereto and any securities which at any time may be issued or
received as a distribution on or in exchange for or upon conversion or
redemption of such shares.
"Taxable Income" or "Tax Loss" for any Fiscal Year shall mean the taxable
income or loss of the Partnership for such Fiscal Year, determined in accordance
with Section 703(a) of the Code (for this purpose, all items of income, gain,
loss or deduction required to be stated separately pursuant to Section 703(a)(1)
of the Code shall be included in taxable income or loss).
"Unrecovered Capital Contribution" shall mean, as to any Partner, with
respect to either the Schedule B Stock or the Schedule C Stock, the portion of
such Partner's Capital Contribution allocated to such Stock less the amount of
any distribution pursuant to Section (D) of
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<PAGE>
Article IX designated as a distribution on account of Unrecovered Capital
Contribution with respect to such Stock.
ARTICLE IV.
Purposes
A. Purposes and Business. The purpose and business of the Partnership
shall be to purchase, hold and sell the Schedule B Stock and the Schedule C
Stock and to engage in such activities or acts, including, without limitation,
the purchase, holding and sale of the securities of other companies, which may
lawfully be conducted by a limited partnership formed pursuant to the Act.
B. Powers. The Partnership shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or convenient to or for
the furtherance of the purposes and business described herein and for the
protection and benefit of the Partnership.
ARTICLE V.
Names and Addresses of Partners
The General Partner of the Partnership is Carson Street Partners, Inc., a
Delaware Corporation, having its principal office at 115 East Putnam Avenue,
Greenwich, Connecticut 06830. The names and addresses of the Limited Partners
shall be as set forth in the books and records of the Partnership.
ARTICLE VI.
Principal Place of Business
The principal place of business of the Partnership at which Partnership
records will be kept shall be at 115 East Putnam Avenue, Greenwich, Connecticut
06830. The General Partner may fronm time to time change the principal place of
business of the Partnership and, in such event, the General Partner shall
promptly thereafter notify the Limited Partners. The General Partner may
establish additional places of business for the Partnership when and where
required by the business of the Partnership. The address of the registered
office of the Partnership in the State of Delaware shall be c/o The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, County
of New Castle, Delaware 19801. The Partnership's registered agent at that
address is The Corporation Trust Company, or such other agent as may be
designated from time to time by the General Partner.
ARTICLE VII.
Capital Contributions
A. General Partner's Contribution. The General Partner has contributed in
cash to the capital of the Partnership the amount set forth opposite such
General Partner's name in Schedule A annexed hereto. The General Partner shall
contribute $141,000 in cash to the capital of
4
<PAGE>
the Partnership by May 30, 1998. Such contribution, when made, shall
constitute part of the General Partner's Unrecovered Capital
Contribution attributable to the Schedule B Stock. The General Partner
shall, with respect to any Limited Partnership Interest owned by it,
enjoy all of the rights and privileges and be subject to all of the
obligations and duties of a Limited Partner, in addition to its rights
and privileges as General Partner.
B. Limited Partner's Contribution. Each Limited Partner shall
contribute to the capital of the Partnership in cash the amount set
forth opposite such Partner's name in Schedule A annexed hereto, as the
same may be amended, and shall each be allocated a Limited Partnership
Interest as set forth in Schedule A.
ARTICLE VIII.
Capital Accounts
A. Capital Account.
(1) A Capital Account shall be established and maintained for
each Partner on the books and records of the Partnership.
The Capital Account of a Partner shall be credited with
(a) the amount of such Partner's Capital Contribution,
and (b) such Partner's allocable share of the
Partnership's Taxable Income allocated pursuant to
Article IX; and shall be debited with (a) such Partner's
allocable share of Partnership's Tax Loss allocated
pursuant to Article IX, (b) the amount of any cash or the
value of any property distributed to, or withdrawn by,
such Partner, and (c) the amount of Code section
705(a)(2)(B) expenditures allocated to such Partner. Any
Partner to whom an Interest has been transferred shall
succeed to the Capital Account of his transferor relating
to the Partnership Interest transferred.
(2) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts
are intended to comply with Regulations Section 1.704-1(b),
and shall be interpreted and applied in a manner
consistent with such Regulation.
B. Negative Capital Accounts. At no time during the term of the
Partnership or upon dissolution and liquidation thereof shall a Partner
with a negative balance in its Capital Account have any obligation to
the Partnership or the other Partners to restore such negative balance,
except (i) as may be required by law, or (ii) in respect of any negative
balance resulting from a withdrawal of capital or distribution from the
Partnership in contravention of this Agreement.
C. General Partner Not Liable for Return of Capital or Profits.
Notwithstanding anything to the contrary contained herein, the General
Partner shall not be liable for the distribution or return of the
Capital Contributions or profits of the Limited Partners, or any
portion
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thereof, it being expressly agreed that any such distribution, return or payment
as may be made at any time or from time to time shall be made solely from the
assets of the Partnership.
ARTICLE IX.
Profits and Losses; Distributions
A. Fiscal Year; Fiscal Period; Taxable Year. The fiscal year (the
"Fiscal Year") of the Partnership for Partnership accounting purposes shall be
the same as the taxable year of the Partnership for federal income tax purposes.
Except as otherwise required by the Code, the taxable year of the Partnership
shall end on December 31st.
B. Accounting Method. For Partnership accounting purposes and
federal income tax purposes, the Partnership shall use the accrual method of
accounting.
C. Allocations of Taxable Income and Tax Loss. Gain on sale of
the Schedule B Stock shall be allocated first so as to cause the Capital Account
of each Partner on account of the Schedule B Stock to equal such Partner's
Unrecovered Capital Contribution with respect to the Schedule B Stock, and then
shall be allocated to the Partners in accordance with their Schedule B
Percentage Interests. All other Taxable Income of the Partnership on account of
the Schedule B Stock shall be allocated in accordance with the Schedule B
Percentage Interests. Gain on sale of the Schedule C Stock shall be allocated
first so as to cause the Capital Account of REDLOH on account of the Schedule C
Stock to equal such Partner's Unrecovered Capital Contributions with respect to
the Schedule C Stock, and then shall be allocated to the Partners in accordance
with their Schedule C Percentage Interests. All other Taxable Income of the
Partnership on account of the Schedule C Stock shall be allocated in accordance
with the Schedule C Percentage Interests. All Tax Losses of the Partnership on
account of either the Schedule B Stock or Schedule C Stock shall be allocated in
accordance with the Partners' relative positive Capital Account balances with
respect to such Stock.
D. Distributions. The General Partner shall have sole discretion
in determining the amount and frequency of distributions; provided, that the
General Partner shall make a distribution to the Partners in accordance with the
following provisions of this Subsection IX.D of the amount of any cash dividends
or other cash distributions received on account of the Schedule B Stock or
Schedule C Stock promptly upon, and in any event within 5 days of, the
Partnership's receipt of same, unless a majority in interest of the Limited
Partnership Interests otherwise require; and provided further that the General
Partner, upon request of a majority of the Limited Partnership Interests shall
make such other distributions at such times and in such amounts as a majority in
interest of the Limited Partnership Interests shall request; and provided
further, that upon the request of REDLOH, REDLOH may require a distribution in
kind of the Schedule C Stock; and provided further however, that no distribution
shall be made that would render the Partnership insolvent unless a majority in
interest (over 50%) of all Interests shall determine otherwise. Proceeds of sale
of the Schedule B Stock shall be distributed first, to the Partners to the
extent of their Unrecovered Capital Contributions with respect to the Schedule B
Stock and then to the Partners in accordance with their Schedule B Percentage
Interests. Proceeds of sale of Schedule C Stock shall be distributed first to
REDLOH to the extent of its Unrecovered Capital
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Contribution with respect to the Schedule C Stock, and then to the Partners in
accordance with their Schedule C Percentage Interests. Notwithstanding the
foregoing, if the Partnership recognizes a loss on the sale of either the
Schedule B Stock or the Schedule C Stock, the amount distributable to the
General Partner shall be reduced and the amount distributable to REDLOH shall be
increased such that the General Partner shall receive aggregate distributions on
account of the Schedule B Stock and the Schedule C Stock in an amount equal to
11% of the aggregate net profit recognized by the Partnership on both the
Schedule B Stock and Schedule C Stock. Prior to any distribution of sales
proceeds hereunder, the amount of any unrealized loss on either Schedule B Stock
or Schedule C Stock owned by the Partnership shall be determined and taken into
account pursuant to the prior sentences in determining the amount distributable
to the General Partner and REDLOH. To the extent gain or other distributions
have previously been distributed to the General Partner, the General Partner
agrees to pay all or a portion of such distributions to REDLOH to the extent
necessary such that the General Partner's aggregate distribution on account of
the sale of the Schedule B Stock and Schedule C Stock does not exceed 11% of the
aggregate net profit recognized by the Partnership on the Schedule B and
Schedule C Stock. Notwithstanding the foregoing, in the event of a distribution
in kind of the Schedule C Stock, REDLOH shall be entitled to all shares of
Schedule C Stock held by the Partnership subject to its obligation to pay the
General Partner an amount equal to 11% of the aggregate net profit (after taking
into account any loss on account of the Schedule B Stock) recognized by REDLOH
on the Schedule C Stock in accordance with the provisions of this Section IX.D.
Dividends on account of either the Schedule B Stock or the Schedule C Stock
shall be distributed to the Partners in accordance with their respective
Schedule B Percentage Interests or Schedule C Percentage Interests, as
applicable.
ARTICLE X.
Management and Operation of Partnership Business
A. Management of Partnership Business. The Partnership shall be managed
exclusively by the General Partner and the conduct of the Partnership's business
shall be controlled and conducted solely by the General Partner in accordance
with this Agreement. The General Partner shall not be required to devote full
time to the affairs of the Partnership.
B. Authority of General Partner. In addition to and not in limitation
of any rights and powers conferred by law or other provisions of this
Agreement, and except as limited, restricted or prohibited by the express
provisions of this Agreement, the General Partner shall have and may exercise,
on behalf of the Partnership, all powers and rights necessary, proper,
convenient or advisable to effectuate and carry out the purposes, business and
objectives of the Partnership and shall, except as otherwise provided in this
Agreement or the Act, have and possess the same rights and powers as any
general partner in a partnership without limited partners formed under the laws
of the State of Delaware.
C. Title to Assets of the Partnership. Title to assets of the
Partnership, whether real, personal or mixed or tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner, individually
or collectively, shall have any ownership interest in such assets of the
Partnership or any portion thereof. Title to any or all of the assets of the
Partnership
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may be held in the name of the Partnership, the General Partner or
of one or more nominees, as the General Partner may determine. The General
Partner declares and warrants that any assets of the Partnership for which legal
title is held in the name of the General Partner shall be held in trust by the
General Partner for the use and benefit of the Partnership in accordance with
the terms and provisions of this Agreement. All assets of the Partnership shall
be recorded as the property of the Partnership on its books and records,
irrespective of the name in which legal title to such assets of the Partnership
is held.
D. Liability of the General Partner and General Partner Representation.
The General Partner, and its affiliates, officers, directors, stockholders,
employees and agents of their respective affiliates shall not have any liability
to the Partnership or to any Partner for any loss suffered by the Partnership
which arises out of any action or inaction of the General Partner or such person
from and after the date of this Agreement if the General Partner or such person,
in good faith, determined that such course of conduct was in, or not opposed to,
the best interests of the Partnership and such course of conduct did not
constitute fraud, willful misconduct or criminal conduct. The General Partner
represents and warrants to the Partnership and to each Limited Partner that
neither the General Partner, nor any of its affiliates, officers, directors,
stockholders, employees, agents or agents of their respective affiliates, (a) is
bound by any agreement, or has performed or taken any action prior to the date
of this Agreement, inconsistent with the General Partner's duties and
obligations as General Partner under this Agreement or (b) has entered into, is
bound by or is aware of any agreement or other arrangement pursuant to which any
of the Schedule B Stock or the Schedule C Stock to be purchased by the
Partnership is subject to any lien, encumbrance, security interest, equity,
claim or rights of others of whatever nature, other than those specifically
disclosed in the Securities Purchase Agreement, dates as of July 13, 1995, among
Libra Invest and Trade Ltd., Gallant Overseas Inc., Parkway Ventures SA and the
Partnership and the Amended and Restated Stock Purchase Agreement, dated as of
May 30, 1996, among UNC Incorporated and the purchasers signatory thereto,
respectively.
5. Exculpation; Indemnification.
1. The General Partner, and its affiliates and all officers,
directors, stockholders, employees and agents of the General
Partner and its affiliates and all officers, agents and employees
of the Partnership who are Partners shall not be liable to the
Partnership, to Limited Partners or to any person who has
acquired an interest in the Partnership for any losses sustained
or liabilities incurred, including monetary damages, as a result
of any act or omission of the General Partner or any such other
person from and after the date of this Agreement if the conduct
of the General Partner or such other person did not constitute
fraud, willful misconduct or criminal conduct.
2. To the fullest extent permitted by law, the Partnership shall
indemnify and hold harmless the General Partner, its affiliates
and all officers, directors, stockholders, employees and agents
of the General Partner and its affiliates and all officers,
agents and
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employees of the Partnership who are Partners (for
purposes of this Section E, individually, an "Indemnitee")
from and against any and all losses, judgments,
liabilities, expenses (including without limitation legal
fees and expenses), and other amounts arising from any and
all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, in which the
Indemnitee may be involved, or threatened to be involved,
as a party of otherwise, by reason of his, her or its
management of the affairs of the Partnership or the
General Partner or status as General Partner, an affiliate
thereof, or a partner, director, officer, employee,
stockholder or agent thereof or an officer, agent or
employee of the Partnership or a person serving at the
request of the Partnership, the General Partner or any
affiliate thereof in another entity in a similar capacity,
which relates to or arises out of the Partnership, its
property, business or affairs or the General Partner, its
properties, businesses or affairs or any document filed
with or submitted to the Securities and Exchange
Commission by the Partnership or any indemnification of
underwriters given in connection therewith, regardless of
whether the Indemnitee continues to be the General
Partner, an affiliate thereof or an officer, partner,
director, employee, stockholder or agent thereof or an
officer, agent or employee of the Partnership at the time
any such liability or expense is paid or incurred, and
regardless of whether the liability or expense accrued at
or relates to, in whole or in part, any time before, on or
after the date hereof; provided, however, that this
indemnification shall not apply to any liability or
expense that results from fraud, willful misconduct or
criminal conduct of the Indemnitee. Any indemnification
pursuant to this Section E shall be made only out of the
assetes of the Partnership.
3. An Indemnitee shall not be entitled to indemnification
under this Section E with respect to any claim, issue or
matter in which it has been adjudged liable for fraud,
willful misconduct or criminal conduct unless and only to
the extent that the court in which such action was
brought, or another court of competent jurisdiction,
determines upon application that, despite the adjudication
of liability, but in view of all of the circumstances of
the case, the Indemnitee is fairly and reasonably entitled
to indemnification for such liabilities and expenses as
the court may deem proper.
4. To the fullest extent permitted by law, expenses
(including legal fees) incurred by an Indemnitee in
defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Partnership
prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Partnership
of an
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undertaking by or on behalf of the Indemnitee to repay
such amount if it shall be determined that the Indemnitee
is not entitled to be indemnified as authorized in this
Section E.
5. The indemnification provided by this Section E shall be in
addition to any other rights to which an Indemnitee may be
entitled as a matter of law or otherwise, both as to
action in the Indemnitee's capacity as the General
Partner, an affiliate thereof or a partner, director,
officer, employee, stockholder or agent thereof or the
Partnership and as to action in any other capacity which
relates to or arises out of the Partnership or the
property, business or affairs of the Partnership or the
General Partner, and shall continue as to an Indemnitee
who has ceased to serve in such capacity and shall inure
to the benefit of the heirs, successors, assigns and
administrators of an Indemnitee.
6. In no event may an Indemnitee subject the Limited Partners
or any Limited Partner's assignee to personal liability by
reason of these indemnification provisions.
7. An Indemnitee shall not be denied indemnification in whole
or in part under this Section E because the Indemnitee had
an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
8. The provisions of this Section E are for the benefit of
the Indemnitees and their heirs, successors, assigns,
administrators and personal representatives and shall not
be deemed to create any rights for the benefit of any
other persons. The provisions of this Section E shall not
be amended in any way that would adversely affect the
Indemnitees who are Partners without the consent of the
Partner that is adversely affected.
F. Expenses.
1. The Partnership shall pay all organization expenses
incurred in the creation of the Partnership. The foregoing
expenses may be paid directly by the Partnership and/or
the Partnership may reimburse the General Partner for
advancing payment of such expenses on the Partnership's
behalf. Organization expenses shall mean those expenses
incurred in forming and qualifying the Partnership and any
other expenses actually incurred and directly or
indirectly related to the organization of the Partnership,
including, but not limited to, expenses such as: (a)
initial and ongoing registration fees, filing fees, and
taxes, (b) the costs of preparing, printing, amending,
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supplementing, and distributing this Agreement, (c)
travel, telephone and other expenses in connection with
the organization of the Partnership, (d) accounting,
auditing and legal fees (including disbursements related
thereto) incurred in connection therewith, and (e) any
extraordinary expenses (including, but not limited to,
legal claims and liabilities and litigation costs and any
permitted indemnification associated therewith) related
thereto.
2. All ongoing charges, costs and expenses of the
Partnership's operation and administration will be paid
by the Partnership including, but not limited to, (a)
costs related to the preparation of monthly, annual and
other reports required by law or this Agreement; (b)
periodic fees of legal counsel and independent auditors
and accountants; (c) postage, insurance and filing fees;
(d) rent, salaries and other general "overhead" expenses
incurred by the General Partner in performing services
for the Partnership; and (e) extraordinary expenses
(including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification
related thereto).
G. Compensation of General Partner. The General Partner shall not
be entitled to any fees, commissions or other compensation from the
Partnership for any services rendered to or performed for the
Partnership except as may otherwise be expressly provided herein.
H. Other Business Activities of Partners. Except as otherwise
agreed in writing by any of the Partners hereto, any Partner or
affiliate thereof may have business interests or may engage in other
business ventures of any nature or description whatsoever in addition to
those relating to the Partnership, whether presently existing or
hereafter created, and may compete, directly or indirectly, with the
business of the Partnership and such activities shall not be deemed
wrongful or improper. No Partner or affiliate thereof shall incur any
liability to the Partnership or any other Partner as the result of such
Partner's pursuit of such other business interests and ventures and
competitive activity, and neither the Partnership nor any of the other
Partners shall have any right to participate in such other business
interests or ventures or to receive or share in any income or profits
derived therefrom.
I. Tax Matters Partner. The General Partner is hereby designated
as the "Tax Matters Partner" in accordance with Section 6231(a)(7) of
the Code, provided that the General Partner shall take no action other
than providing notices to the other Partners without the prior consent
of REDLOH.
J. Withdrawal and Removal of the General Partner.
(1) The General Partner may withdraw voluntarily as the General
Partner of the Partnership upon receipt of the prior written consent of
the Limited Partners holding a majority in interest (over 50%) of all
Interests (not including any Interests held by the General Partner).
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(2) The General Partner may be removed upon the affirmative vote of
the Limited Partners together holding a majority in interest (over 50%)
of all Limited Partnership Interests. Any such action for the removal of
the General Partner must also provide for the election of a new general
partner.
ARTICLE XI.
Status of Limited Partners
A. No Management or Control; Limited Liability. The Limited
Partners shall not participate in the management or control of the
Partnership's business nor shall they transact any business for the
Partnership or have the power to sign for or bind the Partnership, said
powers being vested solely and exclusively in the General Partner.
Assuming such Limited Partner does not participate in the control of the
business of the Partnership, no Limited Partner shall be bound by, or be
personally liable for, the expenses, liabilities or obligations of the
Partnership in excess of his Capital Contribution plus his share of the
Partnership's assets and profits remaining in the Partnership, if any,
and such other amounts as he may be liable for pursuant to the Act.
Except as otherwise expressly required by law, a Limited Partner, or
assignee of a Limited Partner as such, shall have no liability in excess
of (i) the amount of its Capital Contribution, (ii) its share, if any,
of any undistributed profits and assets of the Partnership, (iii) its
obligation to make other payments expressly provided for in this
Agreement and (iv) the amount of any distributions wrongfully
distributed to it. For purposes of Section 17-607(b) of the Act, no
Limited Partner or assignee of a Limited Partner that receives a
distribution in violation of Section 17-607(a) of the Act shall be
deemed to know at the time of the distribution that the distribution
violated Section 17-607(a) of the Act without actual knowledge thereof.
The payment of any such money or distribution of any such property to a
Limited Partner or assignee of a Limited Partner, whether or not deemed
to be a return of capital, shall be deemed to be a compromise within the
meaning of Section 17-502(b) of the Act, and the Limited Partner or
assignee of a Limited Partner receiving any such money or property shall
not be required to return any such money or property to any person, the
Partnership or any creditor of the Partnership. Except as provided in
the Act, each Limited Partner's Interest shall be fully paid and no
assessment shall be made against any Limited Partner. No salary shall be
paid to any Limited Partner in his capacity as a Limited Partner, nor
shall any Limited Partner have a drawing account or earn interest on his
contribution.
B. Rights, Duties, etc. The Limited Partners shall have the
following rights, powers, privileges, duties and liabilities:
1. The Limited Partners shall have the right to obtain
information of all things affecting the Partnership and
to examine, during business hours, all of the books and
records of the Partnership, for any purpose. The Limited
Partners shall be entitled to maintain custody, as agent
for the Partnership, of any certificates representing
Schedule Stock B or Schedule Stock C or any other
securities at any time acquired by the Partnership.
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2. The Limited Partners shall receive from the Partnership
the share of the distributions provided for in this
Agreement in the manner and at the times provided for in
this Agreement.
3. Limited Partners shall not have the right to demand the
return of their capital except upon the dissolution and
winding up of the Partnership and then, only as and when
provided in Article XVI. Except as provided in paragraph D
of Article IX, in no event shall a Limited Partner be
entitled to demand or receive property other than cash. No
Limited Partner shall have priority over any other Limited
Partner either as to the return of capital or as to
Taxable Income, Tax Loss or distributions. No Limited
Partner shall have the right to bring an action for
partition against the Partnership.
C. Employees, Agents or Officers of the Partnership or the General
Partner. A Limited Partner or an employee, agent or officer of a Limited
Partner may also be an employee, agent or officer of the Partnership or
the General Partner. The existence of these relationships and acting in
such capacities will not result in a Limited Partner being deemed to be
participating in the conduct or control of the business of the
Partnership.
ARTICLE XII.
Books of Account and Reports
A. Books of Account. Proper books of account shall be kept by the
General Partner and there shall be entered therein all transactions,
matters and things relating to the Partnership's business as are usually
entered into books of account kept by persons engaged in a business of
like character. The books of account shall be kept at the principal
office of the Partnership and each Limited Partner (or any duly
constituted designee of a Limited Partner) shall have, at all times
during normal business hours, free access to and the right to inspect
and copy the same for any purpose.
B. Tax Information. Appropriate tax information (adequate to enable
each Limited Partner to complete and file his federal tax return) shall
be delivered to each Limited Partner as soon as practicable following
the end of each year, but in no event later than 90 days after the end
of each Fiscal Year.
C. Calculation of Capital Account Balances. The Capital Account
balance of each Interest will be calculated at the end of each Fiscal
Year. The General Partner shall distribute to all Limited Partners the
most recently calculated Capital Account balance of each Interest within
90 days after the end of each Fiscal Year.
D. Reports. The General Partner shall provide to each Limited
Partner annual financial statements of the Partnership for each Fiscal
Year, as well as such reports and information, if any, as it may deem
necessary or appropriate.
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E. Certificates of Limited Partnership. Except as otherwise
provided in the Act or this Agreement, the General Partner shall not be
required to mail a copy of any Certificates of Limited Partnership filed
with the Secretary of State of the State of Delaware to any Limited
Partner; however, such certificates shall be maintained at the principal
business office of the Partnership and available for inspection and
copying by the Limited Partners in accordance with the provisions of
this Article XII.
ARTICLE XIII.
Transfers of Partnership Interests
A. Transfer of Limited Partnership Interest. A Limited Partner may
not sell, assign, transfer or otherwise dispose of, or pledge,
hypothecate or in any manner encumber all or any portion of his Interest
or any part of his right, title and interest in the capital or profits
of the Partnership without the prior written consent of all of the
non-transferring Partners, which consent can be given or withheld by any
such non-transferring Partner in his or its sole and absolute
discretion.
B. Transfer of General Partnership Interest. The General Partner
may not sell, assign, transfer or otherwise dispose of, or pledge,
hypothecate or in any manner encumber all or any portion of his Interest
or any part of his right, title and interest in the capital or profits
of the Partnership without the prior written consent of all of the
non-transferring Partners, which consent can be given or withheld by
any such non-transferring Partner in his or its sole and absolute
discretion.
C. Miscellaneous.
1. Any person admitted to the Partnership as a Partner shall
be subject to all of the provisions of this Agreement as
if an original signatory hereto.
2. No Limited Partnership Interest may be subdivided for
resale.
3. The General Partner shall cause the Partnership to make
the election referred to in Section 754 of the Code, and
any similar election provided by state or local law, or
any similar provision enacted in lieu thereof, if
requested by any Partner.
4. Each Limited Partner hereby agrees to indemnify and hold
harmless the Partnership and each Partner against any and
all losses, damages, liabilities or expenses (including,
without limitation, tax liabilities or loss of tax
benefits) arising, directly or indirectly, as a result of
any transfer or purported transfer by such Limited Partner
in violation of any provision contained in this Article
XIII.
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ARTICLE XIV.
Amendment of Limited Partnership Agreement and Meetings
A. Amendments to the Agreement.
1. Amendments to this Agreement may be proposed by any Partner.
Except as specifically provided herein, any such amendment will
become effective upon the vote or written consent of the Partners
holding a majority in interest (over 50%) of all Interests.
Notwithstanding the foregoing, no amendment to this Agreement
which alters the provisions of Articles VII or IX hereof may be
made without the consent of each Partner adversely affected
thereby.
2. Any provision to the contrary contained in subparagraph (1) hereof
notwithstanding, the General Partner may, without the approval of
the Limited Partners, make such amendments to this Agreement which
(a) are necessary to add to the representations, duties or
obligations of the General Partner or surrender any right or power
granted to the General Partner herein for the benefit of the
Limited Partners, (b) are necessary to cure any ambiguity, to
correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under
this Agreement which will not be inconsistent with the provisions
of this Agreement or (c) the General Partner deems advisable or
considers necessary to comply with any applicable law, provided
however, that no amendment shall be adopted pursuant to this
clause (c) unless the adoption thereof (i) is for the benefit of,
or not adverse to, the interests of the Limited Partners; and (ii)
does not adversely affect the limited liability of the Limited
Partners or the status of the Partnership as a partnership for
federal income tax purposes.
3. Upon amendment of this Agreement, the Certificate of Limited
Partnership shall also be amended, if required by the Act, to
reflect such change.
B. Action Without a Meeting. Any action required or permitted to be taken
by Partners by vote may be taken without a meeting on written consent, setting
forth the actions so taken, signed by the holders of the Interests having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which holders of all Interests entitled to
vote thereof were present and voted.
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ARTICLE XV.
Term
The term for which the Partnership is to exist shall commence on the
date of the filing of the Certificate of Limited Partnership in the State of
Delaware, and shall terminate on December 31, 2015, unless (i) sooner dissolved
pursuant to the provisions of Article XVI hereof or as otherwise provided by law
or (ii) extended beyond December 31, 2015 pursuant to an amendment hereto
executed by all the Partners.
ARTICLE XVI.
Termination and Dissolution
A. Events Requiring Termination and Dissolution. The Partnership shall be
terminated and dissolved upon the happening of any of the following events:
1. The expiration of its term as provided in the Agreement
2. The filing of a certificate of dissolution or revocation of the
charter of the General Partner, or the removal, adjudication of
bankruptcy or insolvency of the General Partner, or the occurrence
of any other event which under the Act causes the General Partner
to cease to be the General Partner of the Partnership, or upon the
vote for the removal of the General Partners by the Limited
Partners holding a majority in interest (over 50%) of all
Interests (not including any Interests held by the General
Partner) each of the foregoing events an "Event of Withdrawal"),
unless (a) at the time there is at least one remaining General
Partner and that remaining General Partner carries on the business
of the Partnership or (b) within ninety (90) days of such Event of
Withdrawal all the remaining Partners agree in writing to continue
the business of the Partnership and to the selection, effective as
of the date of such event, of one or more successor General
Partners. If the Partnership is dissolved as a result of an Event
of Withdrawal of the General Partner and a failure of the Partners
to continue the business of the Partnership and appoint a
successor general partner as provided in (b) above, within one
hundred and twenty (120) days of such Event of Withdrawal, Limited
Partners holding a majority in interest (over 50%) of all Interest
(not including any Interests held by the General Partner) may
elect to reconstitute and continue the business of the Partnership
by forming a new limited partnership (the "Reconstituted
Partnership") on the same terms and provisions as set forth in
this Agreement. Any such election must also provide for the
election of a general partner to the Reconstituted Partnership. If
such an election is made, all Limited Partners of the partnership
shall be
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bound thereby and continue as limited partners of the
Reconstituted Partnership.
3. The vote of Limited Partners holding a majority in interest (over
50%) of all Limited Partnership Interests to dissolve the
Partnership.
4. The occurrence of any event which would make unlawful the
continued existence of the Partnership.
The death, legal disability, bankruptcy, insolvency, dissolution, or withdrawal
of any Limited Partner (as long as such Limited Partner is not the sole Limited
Partner of the Partnership) shall not result in the dissolution or termination
of the Partnership, and such Limited Partner, his estate, custodian or personal
representative shall have no right to withdraw or value such Limited Partner's
Limited Partnership Interest. Each Limited Partner expressly agrees that in the
event of his death, he waives on behalf of himself and his estate, and he
directs the legal representative of his estate and any person interested
therein to waive, the furnishings of any inventory, accounting or appraisal
of the assets of the Partnership and any right to an audit or examination
of the books of the Partnership.
B. Distributions on Termination and Dissolution. Upon the dissolution of
the Partnership, the General Partner (or in the event the dissolution is caused
by the filing of a certificate of dissolution or the revocation of the charter
of a General Partner or its withdrawal, removal, bankruptcy or insolvency, such
person as the majority in interest of the Limited Partners may propose and
approve) shall act as liquidating trustee and shall take full charge of the
Partnership assets and liabilities. Thereafter, the business and affairs of the
Partnership shall be wound up and all assets shall be liquidated as promptly as
is consistent with obtaining the fair value thereof, and the proceeds therefrom
shall be applied and distributed in the following order of priority: (1) to the
expenses of liquidation and termination and to creditors, including Partners who
are creditors, to the extent otherwise permitted by law, in satisfaction of
liabilities of the Partnership (whether by payment or by establishment of
reserves) other than liabilities for distributions to Partners, and (2) to the
General Partner and each Limited Partner in accordance with Section D of Article
IX, less any amount owning by such Partner to the Partnership, after giving
effect to all adjustments made pursuant to Article IX and all distributions
theretofore made to the Partners pursuant to Article IX. For purposes of the
distribution of assets, the General Partner shall be deemed a creditor of the
Partnership for any expenses incurred by the General Partner for which the
Partnership is obligated to make reimbursement.
C. Certificate of Cancellation. Following the dissolution and distribution
of the assets of the Partnership, the General Partner shall cause a certificate
of cancellation to be filed in accordance with the Act.
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<PAGE>
ARTICLE XVII.
Limitation on Liability; Litigation
A. Limitation on Liability. Except as otherwise provided in this Agreement
and as otherwise provided under Delaware law, no Limited Partner shall be liable
for claims against or debts of the Partnership in excess of his Capital
Contribution and his share of the Partnership's assets and undistributed
profits. In addition, and subject to the exceptions set forth in the immediately
preceding sentence, the Partnership shall not make a claim against a Limited
Partner with respect to amounts distributed to such Partner or amounts received
by such Partner upon redemption or any exchange of all or any portion of his
Interest unless the net assets of the Partnership (which shall not include any
right of contribution from the General Partner except to the extent previously
made by it pursuant to this Agreement) shall be insufficient to discharge the
liabilities of the Partnership which shall have arisen prior to the payment of
such amounts.
B. Litigation. The General Partner is hereby authorized to prosecute,
defend, settle or compromise actions or claims at law or in equity at the
Partnership's expense as may be necessary or proper to enforce or protect the
Partnership's interests. The General Partner shall satisfy any judgment, decree
or decision of any court, board or authority having jurisdiction or any
settlement of any suit or claim prior to judgment or final decision thereon,
first, out of any insurance proceeds available therefor, next, out of the
Partnership's assets, and thereafter out of the assets of the General Partner.
ARTICLE XVIII.
Miscellaneous
A. Notices. All notices or communications under this Agreement shall be in
writing and shall be effective upon personal delivery, or if sent by mail,
postage prepaid, or if telegraphed, by prepaid telegram; and addressed, in each
such case, to the address set forth in the books and records of the Partnership
or such other address as he may specify in writing, of the party to whom such
notice is to be given, upon the deposit of such notice in the United States
mail.
B. Headings. Article and Paragraph titles or captions contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof.
C. English Usage. Whenever the single number is used in this Agreement and
when required by the context, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders and the word
"persons" shall include invididuals, corporations, firms, partnerships, trusts
or other forms of associations.
D. Counterparts. This Agreement may be executed in several counterparts,
and all so executed shall constitute one agreement, binding on all of the
Partners hereto, notwithstanding that all the Partners are not signatory to the
original or the same counterpart.
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E. Binding Nature of Agreement. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the heirs,
custodians, executors, estates, administrators, personal
representatives, successors and assigns of the respective Partners. For
purposes of determining the rights of any Partner or assignee hereunder,
the Partnership and the General Partner may rely upon the Partnership
records as to who are Partners and assignees and all Partners and
assignees agree that their rights shall be determined and that they
shall be bound thereby.
F. Governing Law. The validity and construction of this Agreement
and all amendments hereto shall be governed by the laws of the State of
Delaware.
G. Creditors. None of the provisions of this Agreement shall be
for the benefit of or enforceable by any creditors of the Partnership.
H. Severability. In the event that any provision of this
Agreement shall be declared invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of the
other provisions of this Agreement, it being hereby agreed that such
provisions are severable and that this Agreement shall be construed in
all respects as if such invalid or unenforceable provision were omitted.
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<PAGE>
IN WITNESS WHEREOF, the Partners hereto have hereunto set their
repsective hands as of the day and year first above written.
GENERAL PARTNER:
CARSON STREET PARTNERS, INC.
By: ____________________________________________
LIMITED PARTNERS:
________________________________________________
John Gildea
________________________________________________
William P. O'Donnell
REDLOH, L.L.C.
By: ____________________________________________
Name:
Title: President
________________________________________________
Richard H. Carrigan
20
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
SCHEDULE B SCHEDULE C
SCHEDULE B SCHEDULE C PERCENTAGE PERCENTAGE
GENERAL PARTNER: CONTRIBUTION CONTRIBUTION INTEREST INTEREST
- ---------------- -------------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Carson Street Partners, Inc. .......... $ 52,555.00 -- 11.2620% 11.0%
LIMITED PARTNERS:
John Gildea ........................... $ 150,000.00 -- 2.5322%
William P. O'Donnell .................. $ 75,000.00 -- 1.2701%
REDLOH, L.L.C. ........................ $4,677,905.00 $14,100,000 79.2193% 89.0%
Richard H. Carrigan ................... $ 300,000.00 -- 5.7083%
-------------- ----------- --------- ---------
TOTAL ................................. $5,255,460.00 $14,100,000 100% 100%
</TABLE>
<PAGE>
SCHEDULE B
Koll Real Estate Group, Inc.
<PAGE>
SCHEDULE C
UNC Incorporated
