<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 10)
Grow Group, Inc.
(Name of issuer)
Common Stock, par value $.10 per share
(Title of class of securities)
399820-10-9
(CUSIP Number)
JOSE GREGORIO GARCIA
CORIMON, S.A.C.A., CALLE HANS NEUMANN
EDIFICION CORIMON, LOS CORTIJOS DE LOURDES
CARACAS, VENEZUELA 0171 011 (582) 203-5560
(Name, address and telephone number of person authorized
to receive notices and communications)
February 14, 1995
(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 [ ].
(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.
(Continued on following pages)
(Page 1 of 13 pages)
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CUSIP NO. 399820-10-9 13D Page 2 of 13 Pages
-------------------- ---------------------
-----------------------------------------------------------
-
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon Corporation
-----------------------------------------------------------
-
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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-
3. SEC USE ONLY
-----------------------------------------------------------
-
4. SOURCE OF FUNDS
Not Applicable
-----------------------------------------------------------
-
5. CHECK BOX 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 4,025,841 shares
SHARES --------------------------------------------
-
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH
---------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,841 shares
WITH
---------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,841 shares
-----------------------------------------------------------
-
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
-----------------------------------------------------------
-
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
-----------------------------------------------------------
-
14. TYPE OF REPORTING PERSON
CO
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-
* SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH
SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
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-------------------- ---------------------
CUSIP NO. 399820-10-9 13D Page 3 of 13 Pages
-------------------- ---------------------
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon International Holdings Limited
-----------------------------------------------------------
-
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
-----------------------------------------------------------
-
3. SEC USE ONLY
-----------------------------------------------------------
-
4. SOURCE OF FUNDS
Not Applicable
-----------------------------------------------------------
-
5. CHECK BOX 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 4,025,841 shares
SHARES --------------------------------------------
-
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH --------------------------------------------
-
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,841 shares
WITH --------------------------------------------
-
10. SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------
-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,841 shares (possible indirect beneficial
ownership)
-----------------------------------------------------------
-
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
-----------------------------------------------------------
-
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
-----------------------------------------------------------
-
14. TYPE OF REPORTING PERSON
HC, CO
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-
<PAGE>
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-------------------- ---------------------
CUSIP NO. 399820-10-9 13D Page 4 of 13 Pages
-------------------- ---------------------
-----------------------------------------------------------
-
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon, S.A.C.A.
-----------------------------------------------------------
-
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
-----------------------------------------------------------
-
3. SEC USE ONLY
-----------------------------------------------------------
-
4. SOURCE OF FUNDS
Not Applicable
-----------------------------------------------------------
-
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
-----------------------------------------------------------
-
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
-----------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 4,025,841 shares
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH
----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,841 shares
WITH
----------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
-----------------------------------------------------------
-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,841 shares (possible indirect beneficial
ownership)
-----------------------------------------------------------
-
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
-----------------------------------------------------------
-
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
-----------------------------------------------------------
-
14. TYPE OF REPORTING PERSON
HC, CO
-----------------------------------------------------------
-
<PAGE>
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Item 1 Security and Issuer
This statement relates to the common stock, par
value $.10 per share (the "Common Stock"), of Grow Group,
Inc., a New York corporation, (the "Company"). The
principal executive offices of the Company are located at
200 Park Avenue, New York, New York 10166.
Introductory Statement.
This statement is filed on behalf of Corimon
Corporation, a Delaware corporation ("Corimon Corp."),
which is a wholly-owned subsidiary of Corimon International
Holdings Limited ("Holdings"), which is a wholly-owned
subsidiary of Corimon, S.A.C.A., a Venezuelan corporation
("Corimon"). The principal executive offices of Corimon
Corp., Holdings and Corimon are located at Edificio
Corimon, Calle Hans Neumann, Los Cortijos de Lourdes,
Caracas, Venezuela. Corimon Corp., Holdings and Corimon
are herein referred to collectively as the "Reporting
Persons." In a private transaction, prior to February 14,
1995, Corimon Corp. acquired 500 additional shares (a non-
material amount) of the Company's Common Stock in order to
maintain its percentage ownership above 25%.
This Amendment No. 10 otherwise includes
amendments to Items 4 and 6 only.
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Item 4 Purpose of Transaction
The following supplements, but does not replace,
the contents of Item 4 of this report on Schedule 13D, as
previously amended. Reference is made to the Standstill
Agreement and the Registration Rights Agreement, between
the Company, on the one hand, and Corimon and/or Corimon
Corp., on the other. Reference is also made to the
financing transactions by Corimon Corp. with Fidelity
Capital & Income Fund ("FCI"), as more fully described
under Item 6 below.
By a letter agreement dated February 14, 1995
among the Company, Corimon and Corimon Corp., the
Standstill Agreement was amended to extend the term thereof
in Section 1.2 for an additional year, or more specifically
until the earlier of (i) the date on which directors of the
Company are elected at the Company's 1996 Annual Meeting of
shareholders or (ii) October 31, 1996. Further, the
Company consented to the issuance by Corimon Corp. to FCI
of $8 million of Exchangeable Preferred Stock of Corimon
Corp., which is exchangeable for 516,129 shares of the
Common Stock of the Company, and to the transfer of such
shares to FCI in accordance with the terms of such
Preferred Stock. Additionally, the Company consented to
the pledge by Corimon Corp. to FCI of up to 1,350,000
shares of the Company's Common Stock held by Corimon Corp.
to secure indebtedness of Corimon Corp. owing to FCI. A
copy of such letter agreement dated February 14, 1995 is
filed as Exhibit 8 hereto. The
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foregoing description is subject to and qualified in its
entirety by reference to such exhibit, which is
incorporated herein by reference.
By Amendment to Registration Rights Agreement,
dated February 14, 1995, between the Company and Corimon,
the Company agreed to certain modifications of the
Registration Rights Agreement necessary for Corimon to
assign certain of its rights and obligations, relating to
the above-mentioned 516,129 shares of the Company's Common
Stock, subject to customary adjustments, to FCI. A copy of
such Amendment dated February 14, 1995 is filed as Exhibit
9 hereto. The foregoing description is subject to and
qualified in its entirety by reference to such exhibit,
which is incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer
The following supplements, but does not replace,
the contents of Item 6 of this report on Schedule 13D, as
previously amended. On February 14, 1995, Corimon Corp.
issued to FCI in a private transaction: (i) $8 million (or
516,129 shares) of its Prime Rate Series A Cumulative
Exchangeable Preferred Stock ("Preferred Stock") and (ii)
$9,939,175 principal amount of its Put Notes due 2000 ("Put
Notes").
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<PAGE> 8
The Preferred Stock is exchangeable after
October 31, 1995 for 516,129 shares of the Company's Common
Stock, subject to customary adjustments; provided that
Corimon Corp. always has the option of delivering cash in
lieu of Common Stock of the Company. The terms of the
Preferred Stock are established by the Certificate of
Designations therefor, which is filed as Exhibit 10 hereto,
and which is incorporated herein by reference.
The Put Notes mature in five years, bear interest
payable quarterly at the prime rate, and are exchangeable
for common shares (or the equivalent in ADSs) of Corimon;
provided that Corimon always has the option of delivering
cash in lieu of its shares or ADSs.
For purposes of the Preferred Stock, Corimon
Corp. placed in escrow with U.S. Trust Company of New York
("Escrow Agent"), pursuant to an Escrow Agreement dated
February 14, 1995 between itself and Escrow Agent, 516,129
shares of the Company's Common Stock into which such
Preferred Stock is exchangeable. The purpose of such
Escrow Agreement is to prevent the disposition of the
escrowed shares in a manner that would be inconsistent with
the exchange rights of the holder of the Preferred Stock.
Otherwise, Corimon Corp. retains the rights to vote such
shares, receive regular cash dividends thereon and direct
the disposition thereof in the case of any extraordinary
corporate transaction affecting the Company.
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<PAGE> 9
In connection with the issuance of the Put Notes,
Corimon Corp. pledged 1,336,360 shares of the Company's
Common Stock to U.S. Trust Company of New York ("Collateral
Agent"), pursuant to a Pledge Agreement dated February 14,
1995 between itself and Pledge Agent, to secure its
obligations to FCI under the Put Notes. Except in the case
of an event of default in respect of the Put Notes, Corimon
Corp. retained the rights to vote such shares, receive
regular cash dividends thereon and direct the disposition
thereof in the case of any extraordinary corporate
transaction affecting the Company.
Except as noted above, Corimon Corp. considers
that it has retained the voting power and the investment
power with respect to the above-mentioned escrowed and
pledged securities. However, depending upon future events,
based on such arrangements, such power may in the future be
exercised by the Escrow Agent, the Collateral Agent or FCI.
<PAGE>
<PAGE> 10
Item 7. Material to be Filed as Exhibits
Additional exhibits as follows are filed
herewith:
Exhibit 8 Letter Agreement dated February
14, 1995 by and among Corimon
Corporation, Corimon, S.A.C.A. and
Grow Group, Inc. (with respect to
the Standstill Agreement)
Exhibit 9 Amendment to Registration Rights
Agreement, dated February 14,
1995, by and between Grow Group,
Inc. and Corimon S.A.C.A.
Exhibit 10 Certificate of Designations for
Corimon Corporation Exchangeable
Preferred Stock
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<PAGE> 11
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
CORIMON CORPORATION
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Director
Date: February 23, 1995
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<PAGE> 12
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
CORIMON INTERNATIONAL HOLDINGS
LIMITED
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: President
Date: February 23, 1995
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<PAGE> 13
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
CORIMON, S.A.C.A.
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Executive Vice President
By: /s/ Jose Gregorio Garcia
Name: Jose Gregorio Garcia
Title: Corporate Treasurer
Date: February 23, 1995
<PAGE>
<PAGE> 14
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Page
8 Letter Agreement dated
February 14, 1995 by and
among Corimon Corporation,
Corimon, S.A.C.A. and Grow
Group, Inc. (with respect
to the Standstill
Agreement)
9 Amendment to Registration
Rights Agreement, dated
February 14, 1995, by and
between Grow Group, Inc.
and Corimon S.A.C.A.
10 Certificate of Designations
for Corimon Corporation
Exchangeable Preferred
Stock
<PAGE> 1
Exhibit 8
GROW GROUP, INC.
200 Park Avenue
New York, New York 10166
February 14, 1995
Corimon, S.A.C.A.
Calle Hans Neumann Edf. Corimon
Los Cortijos de Lourdes
Venezuela
Attention: Mr. Arthur Broslat
Chief Financial Officer, and
Gustavo Mata-Borjas, Esq.
General Counsel
Gentlemen:
We refer to the Standstill Agreement dated
July 21, 1992, as amended (the "Agreement"), by and among
Grow Group, Inc., a New York corporation (the "Company"),
on the one hand, and Corimon, S.A.C.A., a Venezuelan corpo-
ration ("Corimon"), and Corimon Corporation, a Delaware
corporation and indirect wholly-owned subsidiary of Corimon
(and, together with Corimon, the "Shareholders"), on the
other hand. All capitalized words or terms used in this
letter have the same meanings ascribed to them in the
Agreement unless otherwise specifically defined herein.
1. Clauses (i) and (ii) of Section 1.2 of the
Agreement are amended in their entirety to read as follows:
"(i) the date on which directors of the
Company are elected at the Company's 1996
Annual Meeting of Shareholders or
(ii) October 31, 1996;"
and the remainder of Section 1.2 of the Agreement shall
remain unchanged and in full force and effect.
2. In accordance with Sections 3.1 and 4.1 of
the Agreement, the Company, acting pursuant to the vote of
a majority of the members of its Board of Directors who are
not Shareholder Designees, hereby consents to (i) the
issuance by Corimon Corporation to Fidelity Capital &
Income Fund ("Fidelity Capital") of $8 million aggregate
principal amount of Exchangeable Preferred Stock (the
"Preferred Stock") which is exchangeable for 516,129 of the
Shares of Common Stock owned by the Shareholders, subject
to customary adjustments, in accordance with the terms of
Appendix A hereto captioned "Terms of CRM Exchangeable
Preferred Stock," and (ii) the transfer of such Shares of
Common Stock
<PAGE>
<PAGE> 2
to Fidelity Capital in accordance with the terms of the
Preferred Stock. The foregoing consent by the Company is
subject to the condition that, and will not take effect
unless, all proceeds received by the Shareholders in
connection with the sale of the Preferred Stock to Fidelity
Capital are used by the Shareholders to make investments in
Standard Brands Paint Company ("Standard Brands").
3. In accordance with Section 4.1 of the
Agreement, the Company, acting pursuant to the vote of a
majority of the members of its Board of Directors who are
not Shareholder Designees, hereby consents to the pledge by
the Shareholders to Fidelity Capital of up to 1,350,000 of
the Shares of Common Stock held by the Shareholders to
secure indebtedness of Corimon Corporation issued to
Fidelity Capital. The foregoing consent by the Company is
subject to the condition that, and will not take effect
unless, all amounts which are secured by such Shares of
Common Stock are used by the Shareholders to make
investments in Standard Brands.
4. The Shareholders represent and warrant to the
Company that, in connection with the transactions between
the Shareholders and Fidelity Capital referred to herein,
(i) the information and disclosures made by the
Shareholders to Fidelity Capital do not contain any untrue
statement of a material fact and do not omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading and
(ii) Fidelity Capital and its representatives have been
given the opportunity to ask questions of, and receive
information from, the Shareholders relating to the Company,
its business and prospects. The Shareholders agree to
indemnify and hold harmless the Company, its officers,
directors and affiliates from any and all liabilities,
damages, costs and expenses (including attorneys fees)
arising from or relating to the transactions between the
Shareholders and Fidelity Capital referred to in
paragraphs 2 and 3 hereof, including, without limitation,
any liability under the federal securities law.
5. This letter, when countersigned by the
Shareholders, will constitute an amendment of Section 1.2
of the Agreement as set forth in paragraph 1 hereof,
consent by the Company to the matters specifically referred
to paragraphs 2 and 3 hereof, and the agreement of the
Shareholders as set fort in paragraph 4 hereof. Except as
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<PAGE> 3
otherwise specifically provided herein, the Agreement will
remain in full force and effect.
Very truly yours,
Grow Group, Inc.
By:/s/ Russell Banks
Russell Banks,
President
Agreed to this 14th day
of February 1995:
CORIMON, S.A.C.A.
By: /s/ Arthur Broslat
Arthur W. Broslat,
Director-Chief Financial Officer
By: /s/ Gustavo Mata-Borjas
Gustavo Mata-Borjas,
Director-General Counsel
CORIMON CORPORATION
By: /s/ Arthur Broslat
Arthur W. Broslat, Director
<PAGE>
<PAGE> 1
Appendix A
Terms of CRM Exchangeable Preferred Stock
Issuer Corimon corporation, a
Delaware corporation
Description exchangeable preferred stock
Amount $8 million
Number of Shares 516,129
Issue Price and Liquidation $15.50 per share
Preference
Dividends Quarterly at prime rate,
when, as and if declared by
the board of directors;
undeclared dividends
accumulate
Exchange Feature Exchangeable at any time
after 10/31/95 into common
stock of Grow Group Inc.
("GRO") held by CRM at a
price equal to $15.50 per
share (100% of Issue Price
per share), subject to
customary adjustments;
however in lieu of
transferring GRO common stock
on exchange, as to the whole
or part of any exchange, CRM
may deliver the cash
equivalent thereof based on
the then-current market price
of the GRO common stock
(according to a formula to be
negotiated by the parties as
part of the definitive
agreement)
Redemption Mandatory on fifth
anniversary of Closing at a
price equal to liquidation
preference plus accumulated
dividends, if any
Call Provision Anytime prior to 10/31/95 at
$15.75 (for first month,
increasing by $0.25 each
month thereafter until
$17.75) plus accumulated
dividends, if any;
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<PAGE> 2
anytime after 10/31/95 and
prior to second anniversary
of Closing upon change of
control, reorganization or
recapitalization of GRO at
higher of (i) change of
control, reorganization or
recapitalization price or
(ii) liquidation preference
plus accumulated dividends,
if any; anytime after second
anniversary of Closing at
liquidation preference plus
accrued dividends, if any
(the exchange right will
remain applicable until
completion of such call for
redemption)
Registration The CRM preferred stock will
be privately placed and
restricted as to transfer.
CRM will use best efforts to
cause GRO to register the GRO
common stock transferable
upon exchange, or to cause
GRO to extend registration
rights to FCI permitting
resale of the GRO common
stock. Otherwise the GRO
common stock will be legended
and have the status of
restricted securities.
<PAGE> 1
Exhibit 9
AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
AMENDMENT, dated February 14, 1995, by and
between GROW GROUP, INC., a New York corporation (the
"Company"), and CORIMON, S.A.C.A., a Venezuelan corporation
("Corimon").
W I T N E S S E T H
WHEREAS, the Company and Corimon have entered
into a Registration Rights Agreement dated August 7, 1992
(the "Agreement");
WHEREAS, Corimon Corporation, a Delaware
corporation and a wholly-owned subsidiary of Corimon,
intends to issue to Fidelity Capital & Income Fund
("Fidelity Capital") $8 million aggregate principal amount
of Exchangeable Preferred Stock, which is initially
exchangeable for 516,129 shares of common stock, $0.10 par
value, of the Company, subject to customary adjustments
(such 516,129 shares as adjusted being referred to herein
as the "Shares") in accordance with the "Terms of CRM
Exchangeable Preferred Stock" annexed hereto as Appendix A;
and
WHEREAS, Corimon has requested that the Agreement
be amended to permit Corimon to assign to Fidelity Capital
its registration rights under the Agreement with respect to
the Shares.
NOW, THEREFORE, in consideration of the above
premises and the mutual agreements contained herein, the
parties hereto hereby agree as follows:
1. Notwithstanding the provisions of
Section 2(a), 2(b)(ii) and 2(d)(ii) of the Agreement, the
Company consents to the assignment by Corimon to Fidelity
Capital of its rights and obligations under the Agreement
relating to the Shares.
2. The term "Corimon" as used in the Agreement,
where necessary to assign the rights and obligations of
Corimon to Fidelity Capital as it relates to the Shares,
shall be deemed to refer to Fidelity Capital.
3. Notwithstanding the provisions of clause (i)
of Section 3(a) of the Agreement, in the event the Current
Market Price (as defined in Section 1 of the Agreement) of
the Shares is less than $10,000,000, the Company will
permit
<PAGE>
<PAGE> 2
Fidelity Capital to register all but not less than all of
the Shares.
4. Nothing contained herein shall require the
Company to effect an aggregate of more than two Demand
Registrations pursuant to Section 3 of the Agreement.
5. Corimon shall give the Company prior written
notice of any assignment by Corimon of its rights and
obligations as contemplated hereby to Fidelity Capital.
IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed and delivered by their
respective authorized officers as of the date first written
above.
GROW GROUP, INC.
By: /s/ Russell Banks
Russell Banks, President
CORIMON, S.A.C.A.
By: /s/ Arthur Broslat
Arthur W. Broslat,
Director - Chief Financial
Officer
By: /s/ Gustavo Mata-Borjas
Gustavo Mata-Borjas,
Director - General Counsel
<PAGE>
<PAGE> 1
Appendix A
Terms of CRM Exchangeable Preferred Stock
Issuer Corimon corporation, a
Delaware corporation
Description exchangeable preferred stock
Amount $8 million
Number of Shares 516,129
Issue Price and Liquidation $15.50 per share
Preference
Dividends Quarterly at prime rate,
when, as and if declared by
the board of directors;
undeclared dividends
accumulate
Exchange Feature Exchangeable at any time
after 10/31/95 into common
stock of Grow Group Inc.
("GRO") held by CRM at a
price equal to $15.50 per
share (100% of Issue Price
per share), subject to
customary adjustments;
however in lieu of
transferring GRO common stock
on exchange, as to the whole
or part of any exchange, CRM
may deliver the cash
equivalent thereof based on
the then-current market price
of the GRO common stock
(according to a formula to be
negotiated by the parties as
part of the definitive
agreement)
Redemption Mandatory on fifth
anniversary of Closing at a
price equal to liquidation
preference plus accumulated
dividends, if any
Call Provision Anytime prior to 10/31/95 at
$15.75 (for first month,
increasing by $0.25 each
month thereafter until
$17.75) plus accumulated
dividends, if any;
<PAGE>
<PAGE> 2
anytime after 10/31/95 and
prior to second anniversary
of Closing upon change of
control, reorganization or
recapitalization of GRO at
higher of (i) change of
control, reorganization or
recapitalization price or
(ii) liquidation preference
plus accumulated dividends,
if any; anytime after second
anniversary of Closing at
liquidation preference plus
accrued dividends, if any
(the exchange right will
remain applicable until
completion of such call for
redemption)
Registration The CRM preferred stock will
be privately placed and
restricted as to transfer.
CRM will use best efforts to
cause GRO to register the GRO
common stock transferable
upon exchange, or to cause
GRO to extend registration
rights to FCI permitting
resale of the GRO common
stock. Otherwise the GRO
common stock will be legended
and have the status of
restricted securities.
<PAGE> 1
Exhibit 10
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PREFERRED STOCK
OF
CORIMON CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, the undersigned duly authorized officers of
Corimon Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware
(the "Corporation"), in accordance with the provisions of
Section 103 thereof, and pursuant to Section 151 thereof,
do hereby certify:
That pursuant to the authority conferred upon the
Board of Directors by the Certificate of Incorporation of
the Corporation, the Board of Directors of the Corporation
on February 8, 1995 approved the creation of the following
series of Preferred Stock and adopted the following
resolution creating a series of 516,129 shares of Preferred
Stock, par value $.01 per share, each designated as set
forth below:
RESOLVED, that pursuant to the authority vested
in the Board of Directors of the Corporation in accordance
with the provisions of its Certificate of Incorporation, a
series of the class designated as the Preferred Stock (the
"Preferred Stock") of the Corporation be and it hereby is
created, and that the designation and amount thereof and
the preferences and relative, optional and other special
rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, are as
follows:
(i) The distinctive serial designation of this
series shall be "Prime Rate Series A Cumulative
Exchangeable Preferred Stock" (hereinafter called the
"Series A Preferred Stock"). Each share of Series A
Preferred Stock shall be identical in all respects with the
other shares of Series A Preferred Stock except as to the
dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares of Series A Preferred
Stock shall initially be 516,129, which number may from
time to time be increased or decreased (but not below the
number then outstanding) by the Board of Directors. Shares
of Series A Preferred Stock redeemed, purchased by the
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<PAGE> 2
Corporation or exchanged for Common Stock of Grow
(hereinafter defined) shall be canceled and shall revert to
authorized but unissued Preferred Stock undesignated as to
series.
(iii) The holders of shares of Series A Preferred
Stock shall be entitled to receive, when and as declared by
the Board of Directors, but only out of funds legally
available therefor, cumulative cash dividends at a rate
calculated daily equal to the prime lending rate specified
by Citibank, N.A. for each day during the applicable
dividend period, and no more, payable quarterly on the
first days of February, May, August and November,
respectively, in each year with respect to the quarterly
dividend period (or portion thereof) ending on the day
preceding such respective dividend payment date, to
stockholders of record on the respective date, not
exceeding fifty days preceding such dividend payment date,
fixed for the purpose by the Board of Directors in advance
of payment of each particular dividend. Dividends shall be
computed at such daily rate based on the involuntary
liquidation amount per Share (as defined below) and based
on the actual number of days elapsed divided by a 360-day
year. However, the Corporation may disregard any change in
such prime lending rate made in the last 5 days of any
dividend period (but an equal and opposite adjustment shall
be made in the next period).
(iv) Dividends on the shares of Series A Preferred
Stock shall be cumulative from the original issuance date
(the "Issuance Date") of such shares.
So long as any share of Series A Preferred Stock
remains outstanding, no dividend whatever shall be paid or
declared and no distribution made on any junior stock other
than a dividend payable in junior stock, and no shares of
junior stock shall be purchased, redeemed or otherwise
acquired for consideration by the Corporation, directly or
indirectly (other than as a result of a reclassification of
junior stock, or the exchange or conversion of one junior
stock for or into another junior stock, or other than
through the use of the proceeds of a substantially
contemporaneous sale of other junior stock), unless all
dividends on the Series A Preferred Stock accrued for all
past quarter-yearly dividend periods shall have been paid
and the full dividend thereon for the then current
quarter-yearly dividend period shall have been paid or
declared and set apart for payment. Subject to the
foregoing, and not otherwise, such dividends (payable in
cash, stock or otherwise) as may be determined by the Board
of Directors may be declared and paid on any junior stock
from time to time out of any funds legally available
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<PAGE> 3
therefor, and the Series A Preferred Stock shall not be
entitled to participate in any such dividends, whether
payable in cash, stock or otherwise.
(v) In the event of any voluntary liquidation,
dissolution or winding up of the affairs of the
Corporation, the holders of shares of Series A Preferred
Stock shall be entitled, before any distribution or payment
is made to the holders of any junior stock, to be paid in
full the redemption price in effect at the time of such
distribution or payment date as provided in subparagraph
(vi) hereof, together with accrued dividends to such
distribution or payment date whether or not earned or
declared. In the event of any involuntary liquidation,
dissolution or winding up of the affairs of the
Corporation, then, before any distribution or payment shall
be made to the holders of any junior stock, the holders of
shares of Series A Preferred Stock shall be entitled to be
paid in full an amount equal to $15.50 per share (which
amount is hereinafter referred to as the "involuntary
liquidation amount"), together with accrued dividends to
such distribution or payment date whether or not earned or
declared.
If such payment shall have been made in full to
all holders of shares of Series A Preferred Stock, the
remaining assets of the Corporation shall be distributed
among the holders of junior stock, according to their
respective rights and preferences and in each case
according to their respective numbers of shares. For the
purposes of this subparagraph (v), the consolidation or
merger of the Corporation with any other corporation shall
not be deemed to constitute a liquidation, dissolution or
winding up of the Corporation.
(vi) The Corporation, at the option of the Board of
Directors, may redeem the whole or any part of the shares
of Series A Preferred Stock at the time outstanding, at any
time or from time to time, upon notice given as hereinafter
specified, at the redemption price in effect at the
redemption date as provided in this subparagraph (vi),
together with accrued dividends to the redemption date.
The redemption price per share of Series A Preferred Stock
shall be as set forth below:
Prior to October 31, 1995:
For the first month after the Issuance Date
(i.e. February 1995), at $15.75, for the
second month thereafter (i.e. March 1995) at
$16.00, and so on increasing by $0.25 each
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<PAGE> 4
month thereafter until $17.75 is reached
(not increasing thereafter).
At any time after the second anniversary of the
Issuance Date:
At $15.50.
The Corporation, at the option of the Board of
Directors, may redeem the whole or any part of the shares
of Series A Preferred Stock at the time outstanding, at any
time or from time to time after October 31, 1995 and prior
to the second anniversary of the Issuance Date upon the
occurrence of a Significant Event at the Significant Event
Redemption Price, together with accrued dividends to the
redemption date. As used in this subparagraph (vi), the
term "Significant Event" shall mean any change of control,
reorganization, recapitalization or other similar
transaction involving Grow Group, Inc., a New York
corporation ("Grow"). As used in this subparagraph (vi),
the term "Significant Event Redemption Price" shall mean
the higher of (a) the price assigned to the shares of
common stock of Grow in a Significant Event and (b) $15.50
per share.
The Corporation will redeem the whole of the
shares of Series A Preferred Stock at the time outstanding,
on the fifth anniversary of the Issuance Date, at the
mandatory redemption price in effect at such mandatory
redemption date as provided in this subparagraph (vi),
together with accrued dividends to the redemption date.
The mandatory redemption price for shares of Series A
Preferred Stock shall be $15.50 per share.
Notice of every redemption of shares of Series A
Preferred Stock shall be mailed by first class mail,
postage prepaid, addressed to the holders of record of the
shares to be redeemed at their respective last addresses as
they shall appear on the books of the Corporation. Such
mailing shall be at least 15 days and not more than 60 days
prior to the date fixed for redemption. Any notice which
is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or
not the stockholder receives such notice, and failure duly
to give such notice by mail, or any defect in such notice,
to any holder of shares of Series A Preferred Stock
designated for redemption shall not affect the validity of
the proceedings for the redemption of any other shares of
Series A Preferred Stock.
In case of redemption of a part only of the
shares of Series A Preferred Stock at the time outstanding
the
<PAGE>
<PAGE> 5
redemption will be pro rata. The Board of Directors shall
have full power and authority, subject to the provisions
herein contained, to prescribe the terms and conditions
upon which shares of the Series A Preferred Stock shall be
redeemed from time to time.
If notice of redemption shall have been duly
given, and if, on or before the redemption date specified
therein, all funds necessary for such redemption shall have
been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the
holders of the shares called for redemption, so as to be
and continue to be available therefor, then,
notwithstanding that any certificate for shares so called
for redemption shall not have been surrendered for
cancellation, all shares so called for redemption shall no
longer be deemed outstanding on and after such redemption
date, and all rights with respect to such shares shall
forthwith on such redemption date cease and terminate,
except only the right of the holders thereof to receive the
amount payable on redemption thereof, without interest.
If such notice of redemption shall have been duly
given or if the Corporation shall have given to the bank or
trust company hereinafter referred to irrevocable
authorization promptly to give such notice, and if on or
before the redemption date specified therein the funds
necessary for such redemption shall have been deposited by
the Corporation with such bank or trust company in trust
for the pro rata benefit of the holders of the shares
called for redemption, then, notwithstanding that any
certificate for shares so called for redemption shall not
have been surrendered for cancellation, from and after the
time of such deposit, all shares so called for redemption
shall no longer be deemed to be outstanding and all rights
with respect to such shares shall forthwith cease and
terminate, except only the right of the holders thereof to
receive from such bank or trust company at any time after
the time of such deposit the funds so deposited, without
interest, and the right to exercise, on or before the date
fixed for redemption, privileges of exchange or conversion,
if any, not theretofore expiring. The aforesaid bank or
trust company shall be organized and in good standing under
the laws of the United States of America or of the State of
New York, shall be doing business in the Borough of
Manhattan, The City of New York, shall have capital,
surplus and undivided profits aggregating at least
$10,000,000 according to its last published statement of
condition, and shall be identified in the notice of
redemption. Any interest accrued on such funds shall be
paid to Corporation from time to time.
<PAGE>
<PAGE> 6
Any funds so set aside or deposited by the
Corporation which shall not be required for such redemption
because of the exercise of any right of exchange subsequent
to the date of such deposit shall be released or repaid to
the Corporation forthwith. Any funds so set aside or
deposited, as the case may be, and unclaimed at the end of
three years from such redemption date shall, to the extent
permitted by law, be released or repaid to the Corporation,
after which repayment the holders of the shares so called
for redemption shall look only to the Corporation for
payment thereof.
(vii) The holders of shares of Series A Preferred
Stock shall have the right, at their option, to exchange
such shares into Common Stock of Grow at any time after
October 31, 1995 on and subject to the following terms and
conditions:
(a) The shares of Series A Preferred Stock shall
be exchangeable at a location in Boston or New York
acceptable to the Corporation, and at such other
office or offices, if any, as the Board of Directors
may designate, into fully paid and non-assessable
shares (calculated as to each exchangeable share to
the nearest 1/100th of a share) of Common Stock of
Grow, at the exchange price, determined as hereinafter
provided, in effect at the time of exchange, each
share of Series A Preferred Stock initially being
taken at $15.50 for the purpose of such exchange. The
price at which Common Stock of Grow shall be delivered
upon exchange (herein called the "exchange price")
shall initially be $15.50 per share of Common Stock of
Grow.
(b) In order to exchange shares of Series A
Preferred Stock into Common Stock of Grow the holder
thereof shall surrender at the location hereinabove
mentioned the certificate or certificates therefor,
duly endorsed or assigned to the Corporation or in
blank, and give written notice to the Corporation that
he elects to exchange such shares. Upon exchange no
allowance or adjustment shall be made for dividends on
either class of stock except as provided in sub-
divisions (d) and (k) below.
Shares of Series A Preferred Stock shall be
deemed to have been exchanged immediately prior to the
close of business on the day of the surrender of such
shares for exchange in accordance with the foregoing
provisions, and the person or persons entitled to
receive the Common Stock of Grow issuable upon such
exchanges shall be treated for all purposes as the
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<PAGE> 7
record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the
exchange date, the Corporation shall deliver at said
office (or by mail if so requested by the person
converting), a certificate or certificates for the
number of full shares of Common Stock of Grow
transferrable upon such exchange, together with
payment in lieu of any fraction of a share, as
hereinafter provided, to the person or persons
entitled to receive the same. In case shares of
Series A Preferred Stock are called for redemption,
any right to exchange such shares shall cease and
terminate at the close of business on the date fixed
for redemption, unless default shall be made in
payment of the redemption price.
(c) No fractional share of Common Stock of Grow
shall be issued upon exchange of shares of Series A
Preferred Stock, but, instead of any fraction which
would otherwise be issuable in respect of the
aggregate number of shares of Series A Preferred Stock
surrendered for exchange at one time by the same
holder, the Corporation shall pay a cash adjustment in
an amount equal to the same fraction of the Closing
Price (as hereinafter defined) on the date on which
the certificate or certificates for such shares were
duly surrendered for exchange, or, if such date is not
a Trading Day (as hereinafter defined), on the next
Trading Day.
(d) The exchange price shall be adjusted from
time to time as follows:
(A) In case Grow shall (i) pay a dividend
or make a distribution on its outstanding shares
of Common Stock in shares of its capital stock,
(ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of
Common Stock, (iv) issue by reclassification of
its shares of Common Stock (whether pursuant to a
merger or consolidation or otherwise) any other
shares of Grow, or (v) in case of any other
consolidation of Grow with, or other merger of
Grow into, any other entity, any other merger of
another entity into Grow (other than a merger
which does not result in any reclassification,
conversion, exchange or cancellation of the
Common Stock of Grow) or any sale or transfer of
all or substantially all of the assets of Grow,
the holder of any shares of Series A Preferred
Stock
<PAGE>
<PAGE> 8
surrendered for exchange after the record date
for such dividend or distribution (which for this
purpose shall be at the close of business on the
date fixed by the Board of Directors of Grow as
the record date), or after the close of business
on the effective date of such subdivision,
combination or reclassification, or merger,
consolidation or sale of assets, as the case may
be (the close of business times being hereinafter
in this clause (A) referred to as "such record
date"), shall be entitled to receive the
aggregate number and kind of shares of capital
stock of Grow, or other securities, cash and
other property, which, if such shares of Series A
Preferred Stock had been exchanged immediately
prior to such record date at the exchange price
then in effect, he would have been entitled to
receive by virtue of such dividend, distribution,
subdivision, combination or reclassification, or
merger, consolidation or sale of assets; and the
exchange price shall be deemed to have been
adjusted after such record date to apply to such
aggregate number and kind of shares, or other
securities, cash and other property. Such
adjustment shall be made whenever any of the
events listed above shall occur. If necessary,
appropriate adjustment shall be made in the
application of the provisions set forth herein
with respect to the rights and interests
thereafter of the holders of the Series A
Preferred Stock, to the end that the provisions
set forth herein shall thereafter correspondingly
be made applicable, as nearly as may reasonably
be, in relation to any shares of stock or other
securities or property thereafter deliverable on
the exchange of the Series A Preferred Stock.
(B) In case Grow shall fix a record date
for issuing to all holders of shares of Common
Stock of Grow rights or warrants entitling them
to subscribe for or purchase shares of Common
Stock of Grow at a price per share less than the
current market price per share (as determined
pursuant to clause (D) below) on such record
date, the exchange price in effect from and after
such record date shall be adjusted so that it
shall be equal to the price determined by
multiplying the exchange price in effect
immediately prior to such record date by a
fraction, of which the numerator shall be the
number of shares of Common Stock of Grow
outstanding on such record date plus the
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<PAGE> 9
number of shares of Common Stock of Grow which
the aggregate offering price of the total number
of shares of Common Stock of Grow so offered for
subscription or purchase would purchase at such
current market price and of which the denominator
shall be the number of shares of Common Stock of
Grow outstanding on such record date plus the
number of additional shares of Common Stock of
Grow so offered for subscription or purchase.
For the purpose of this clause (B), the issuance
of rights or warrants to subscribe for or
purchase securities convertible into shares of
Common Stock of Grow shall be deemed to be the
issuance of rights or warrants to purchase the
shares of Common Stock of Grow into which such
securities are convertible at an aggregate
offering price equal to the aggregate offering
price of such securities plus the minimum
aggregate amount (if any) payable upon conversion
of such securities into shares of Common Stock of
Grow. Such adjustment shall be made successively
whenever such a record date is fixed. In the
event that such rights or warrants are not issued
after such a record date has been fixed, the
exchange price shall be retroactively adjusted to
the exchange price which would have been in
effect if such record date had not been fixed.
(C) In case Grow shall fix a record date
for the distribution to all holders of shares of
its Common Stock (whether pursuant to a merger or
consolidation or otherwise) of evidence of its
indebtedness or assets (excluding cash dividends
at an annual rate not exceeding 1.5 times the
annual rate on the date hereof), or rights to
subscribe (excluding those referred to in
clause (B) above), then in each such case the
exchange price in effect from and after such
record date shall be adjusted so that the same
shall be equal to the price determined by
multiplying the exchange price in effect
immediately prior to such record date by a
fraction, of which the numerator shall be the
current market price per share (determined as
provided in clause (D) below) of the shares of
Common Stock of Grow on such record date less the
fair market value (as determined by a resolution
of the Board of Directors of the Corporation
which determination shall be conclusive) of the
portion of the evidences of indebtedness or
assets so distributed or of such rights to
subscribe
<PAGE>
<PAGE> 10
applicable to one share of Common Stock of Grow
and of which the denominator shall be such
current market price per share of Common Stock of
Grow. Such adjustment shall be made whenever any
such record date is fixed. In the event that
such distribution is not made after such a record
date has been fixed, the exchange price shall be
retroactively adjusted to the exchange price
which would have been in effect if such record
date had not been fixed.
(D) For the purpose of any computation
under clauses (B) and (C) above, the current
market price per share of Common Stock on any
date shall be deemed to be the average of the
daily Closing Prices for 20 Trading Days before
the date in question.
(E) In any case in which this subdivision
(d) shall require that an adjustment as a result
of any event become effective from and after a
record date, the Corporation may elect to defer
until after the occurrence of such event
(i) issuing to the holder of any shares of Series
A Preferred Stock exchanged after such record
date and before the occurrence of such event the
additional shares of Common Stock of Grow
issuable upon such exchange over and above the
shares issuable on the basis of the exchange
price in effect immediately prior to adjustment
and (ii) paying to such holder any amount in cash
in lieu of a fractional share of Common Stock of
Grow pursuant to subdivision (c) above. In lieu
of the shares the issuance of which is deferred
pursuant to item (i) above, the Corporation shall
issue or cause one of its transfer agents to
issue due bills or other appropriate evidence of
the right to receive such shares.
(F) Any adjustment in the exchange price
otherwise required by this subparagraph (vii) to
be made may be postponed if such adjustment (plus
any other adjustments postponed pursuant to this
clause (F) and not theretofore made) would not
require an increase or decrease of more than 1%
in such price. All calculations under this
subdivision (d) shall be made to the nearest cent
or to the nearest 1/100 of a share, as the case
may be.
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<PAGE> 11
(G) The Board of Directors of the
Corporation shall have the power to resolve any
ambiguity or correct any error in this
subdivision (d) or in subdivision (k) below and
its action in so doing, as evidenced by a Board
resolution, shall be final and conclusive.
(H) In the event that at any time, as a
result of an adjustment made pursuant to
clause (A) above, the holder of any shares of
Series A Preferred Stock thereafter surrendered
for exchange shall become entitled to receive any
shares of capital stock of Grow other than shares
of Common Stock of Grow, thereafter the number of
such other shares so receivable upon exchange of
such shares of Series A 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
shares of Common Stock of Grow contained in
clauses (A) to (G), inclusive, above, and the
other provisions of this subdivision (d) with
respect to the shares of Common Stock of Grow
shall apply on like terms to any such other
shares.
(e) Whenever the exchange price is adjusted as
herein provided:
(A) The Corporation shall compute the
adjusted exchange price and shall cause to be
prepared a certificate signed by the
Corporation's treasurer setting forth the
adjusted exchange price and a brief statement of
the facts requiring such adjustment and the
computation thereof; such certificate shall
forthwith be filed with the transfer agent for
the Series A Preferred Stock; and
(B) A notice stating that the exchange
price has been adjusted and setting forth the
adjusted exchange price shall, as soon as
practicable, be mailed to the holders of record
of outstanding shares of the Series A Preferred
Stock.
(f) The Corporation will pay any and all
security transfer taxes that may be payable in respect
of the issuance or delivery of shares of Common Stock
of Grow on exchange of shares of Series A Preferred
Stock. The Corporation shall not, however, be
required to pay any tax which may be payable in
respect of any transfer
<PAGE>
<PAGE> 12
involved in the issuance and delivery of shares of
Common Stock of Grow in a name other than that in
which the shares of Series A Preferred Stock so
converted were registered, and no such issuance or
delivery shall be made unless and until the person
requesting such issuance has paid to the Corporation
the amount of any such tax or has established to the
satisfaction of the Corporation that such tax has been
paid.
(g) For the purpose of this subparagraph (vii),
the term "shares of Common Stock" shall include any
shares of Grow of any class or series which has no
preference or priority in the payment of dividends or
in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of
Grow and which is not subject to redemption by Grow.
However, shares of Common Stock of Grow issuable upon
exchange of shares of Series A Preferred Stock shall
include only shares of the class designated as shares
of Common Stock of Grow as of the original date of
issuance of the shares of Series A Preferred Stock, or
shares of Grow of any classes or series resulting from
any reclassification or reclassifications thereof and
which have no preference or priority in the payment of
dividends or in the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or
winding up of Grow and which are not subject to
redemption by Grow, provided that if at any time there
shall be more than one such resulting class or series,
the shares of each such class and series then so
issuable shall be substantially in the proportion
which the total number of shares of such class and
series resulting from all such reclassifications bears
to the total number of shares of all such classes and
series resulting from all such reclassifications.
(h) As used in this subparagraph (vii), the term
"Closing Price" on any day shall mean the reported
last sale price per share of Common Stock of Grow
regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing
bid and asked prices regular way, in each case on the
New York Stock Exchange, or, if the shares of Common
Stock of Grow are not listed or admitted to trading on
such Exchange, on the American Stock Exchange, or, if
the shares of Common Stock of Grow are not listed or
admitted to trading on such Exchange, on the principal
national securities exchange on which the shares of
Common Stock of Grow are listed or admitted to
trading, or, if the shares of Common Stock of Grow are
not listed or admitted to trading on any national
<PAGE>
<PAGE> 13
securities exchange, the average of the closing bid
and asked prices in the over-the-counter market as
reported by the National Association of Securities
Dealers' Automated Quotation System, or, if not so
reported, as reported by the National Quotation
Bureau, Incorporated, or any successor thereof, or, if
not so reported, the average of the closing bid and
asked prices as furnished by any member of the
National Association of Securities Dealers, Inc.
selected from time to time by the Corporation for that
purpose; and the term "Trading Day" shall mean a day
on which the principal national securities exchange on
which the shares of Common Stock of Grow are listed or
admitted to trading is open for the transaction of
business or, if the shares of Common Stock of Grow are
not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday,
Thursday or Friday on which banking institutions in
the Borough of Manhattan, City and State of New York
are not authorized or obligated by law or executive
order to close.
(i) The certificate of any independent firm of
public accountants of recognized standing selected by
the Board of Directors of the Corporation shall be
presumptive evidence of the correctness of any
computation made under this subparagraph (vii).
(j) Notwithstanding anything contained in this
subparagraph (vii), the Corporation shall have the
option, in lieu of delivering shares of Common Stock
of Grow upon exchange, as to the whole or part of such
exchange, of paying to such holder a cash amount equal
to the current market price per share of Common Stock
of Grow, as determined under clause (vii)(d)(D) above,
multiplied by the number of shares of Common Stock of
Grow issuable upon such exchange.
(k) Notwithstanding anything contained in this
subparagraph (vii), the Corporation shall have the
option, in lieu of delivering shares of Common Stock
of Grow upon exchange, of delivering the Exchange
Property, as hereinafter defined, which will be
allocated pro rata among the shares of Series A
Preferred Stock, upon any such exchange. To the
extent the Corporation determines that it will be
practicable to do so, the Corporation ordinarily
expects to accumulate and so exchange Exchange
Property in lieu of Common Stock of Grow. In case the
Corporation exercises its option under this
subparagraph (k), no adjustment of the exchange price
shall be effected in
<PAGE>
<PAGE> 14
accordance with the preceding "anti-dilution"
provisions of this subparagraph (vii), to the extent,
but only to the extent, that by virtue of receiving
such Exchange Property upon any exchange of the
Series A Preferred Stock, the holder thereof will be
protected against the dilution of its economic
interest that such anti-dilution adjustments were
otherwise intended to prevent. If the Corporation or
the Escrow Agent incurs any federal, state, local or
foreign tax liability as a result of a transaction
resulting in the accumulation of Exchange Property
pursuant to this subparagraph (k), the same shall be
deducted in such manner as the Corporation shall
determine to be reasonable, from the Exchange
Property. The Corporation may take into account any
such tax consequences in determining whether it is
practicable, or impracticable, to utilize this
subparagraph (k). For this purpose, "Exchange
Property" means (i) 516,129 shares (the "Escrowed
Shares") of Common Stock of Grow owned by the
Corporation, for which the Series A Preferred Stock
initially is exchangeable, and which will be delivered
to U.S. Trust Company of New York, as escrow agent
(the "Escrow Agent") pursuant to the terms of the
Escrow Agreement, dated on or about the Issuance Date
(the "Escrow Agreement"), between the Corporation and
the Escrow Agent, (ii) any property (including cash)
distributed in respect of the Escrowed Shares or other
Exchange Property, (iii) any property (including cash)
issued or distributed upon the exchange or conversion
of Exchange Property, including upon any
reorganization, consolidation or merger or any sale or
transfer or lease of all or substantially all the
assets of Grow or any other issuer of a security
constituting Exchange Property, (iv) any property
(including cash) paid by any person in connection with
a tender offer or exchange offer for the Escrowed
Shares or other Exchange Property, and (v) any
interest paid or accrued on investments which are made
by the Escrow Agent in respect of the Exchange
Property in accordance with the terms of the Escrow
Agreement; provided, that, in the event that any of
the property described in clauses (i) through (v) is
converted into or exchanged for or otherwise
reclassified into any other securities and/or
property, "Exchange Property" will mean (x) such other
securities and/or property received by the Escrow
Agent upon conversion thereof or in exchange therefor
and (y) any securities or other property issued to the
Escrow Agent with respect to the securities described
in clause (x); provided, further, that Exchange
Property shall not include any cash dividends paid on
the Escrowed Shares at an annual rate
<PAGE>
<PAGE> 15
not exceeding 1.5 times the current annual rate
thereon, and any reinvestment thereof; and provided,
further, that Exchange Property shall be reduced by
the amount of any tax liability of either the
Corporation or the Escrow Agent, as referred to above,
according to such provisions for that reduction as the
Corporation may determine to be reasonable.
(viii) The holders of Series A Preferred Stock shall
be entitled to no voting rights, except as hereinafter
provided.
If and whenever six quarterly dividends payable
on any shares of Series A Preferred Stock shall be in
arrears in whole or in part whether or not earned or
declared, the number of directors then constituting the
Board of Directors of the Corporation shall be increased by
two and the holders of shares of Series A Preferred Stock,
together with the holders of shares of every other series
of Preferred Stock similarly entitled to vote for the
election of two additional directors, voting separately as
a class, regardless of series, shall be entitled to elect
the two additional directors at any annual meeting of
stockholders or special meeting held in place thereof, or
at a special meeting of the holders of such series of the
Preferred Stock called as hereinafter provided. Whenever
all arrears in dividends on the shares of Series A
Preferred Stock then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment,
then the right of the holders of the shares of Series A
Preferred Stock to elect such additional two directors
shall cease (but subject always to the same provisions for
the vesting of such voting rights in the case of any
similar future arrearages in dividends), and the terms of
office of all persons elected as directors by the holders
of such shares of Series A Preferred Stock shall forthwith
terminate and the number of the Board of Directors shall be
reduced accordingly. At any time after such voting power
shall have been so vested in the holders of shares of
Series A Preferred Stock, the secretary of the Corporation
may, and upon the written request of any holder of shares
of Series A Preferred Stock (addressed to the secretary at
the principal office of the Corporation) shall, call a
special meeting of the holders of the Series A Preferred
Stock for the election of the two directors to be elected
by them as herein provided, such call to be made by notice
similar to that provided in the by-laws for a special
meeting of the stockholders or as required by law. If any
such special meeting required to be called as above
provided shall not be called by the secretary within 20
days after receipt of any such request,
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<PAGE> 16
then any holder of shares of Series A Preferred Stock may
call such meeting, upon the notice above provided, and for
that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special
meeting shall hold office until the next annual meeting of
the stockholders or special meeting held in place thereof
if such office shall not have previously terminated as
above provided. In case any vacancy shall occur among the
directors elected by the holders of the shares of Series A
Preferred Stock, a successor shall be elected by the Board
of Directors to serve until the next annual meeting of the
stockholders or special meeting held in place thereof upon
the nomination of the then remaining director elected by
the holders of such series or the successor of such
remaining director.
(ix) So long as any shares of Series A Preferred
Stock are outstanding, in addition to any other vote or
consent of stockholders required by law or by the
certificate of incorporation, the consent of the holders of
at least 66 2/3% of the shares of Series A Preferred Stock,
at the time outstanding, acting as a single class, given in
person or by proxy, either in writing without a meeting or
by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any
of the provisions of the certificate of incorporation,
or of the by-laws, of the Corporation, which affects
adversely the voting powers, rights or preferences of
the holders of shares of the Series A Preferred Stock;
provided, however, that the amendment of the
provisions of the certificate of incorporation so as
to authorize or create, or to increase the authorized
amount of, any junior stock or any shares of any class
ranking on a parity with the Series A Preferred Stock
shall not be deemed to affect adversely the voting
powers, rights or preferences of the holders of shares
of the Series A Preferred Stock;
(b) The authorization or creation of, or the
increase in the authorized amount of, any shares of
any class or any security convertible into shares of
any class ranking prior to the Series A Preferred
Stock in the distribution of assets on any
liquidation, dissolution or winding up of the
Corporation or in the payment of dividends;
(c) The merger or consolidation of the
Corporation with or into any other corporation, unless
the resulting corporation will thereafter have no
class
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<PAGE> 17
of shares and no other securities either authorized or
outstanding ranking prior to Series A Preferred Stock
in the distribution of its assets on liquidation,
dissolution or winding up or in the payment of
dividends, except the same number of shares and the
same amount of other securities with the same rights
and preferences as the shares and securities of the
Corporation respectively authorized and outstanding
immediately preceding such merger or consolidation,
and each holder of shares of Series A Preferred Stock
immediately preceding such merger or consolidation
shall receive the same number of shares, with the same
rights and preferences, of the resulting corporation;
or
(d) The commencement of any case, proceeding or
other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its
assets, or a general assignment for the benefit of its
creditors;
provided, however, that no such consent of the holders of
Series A Preferred Stock shall be required if, at or prior
to the time when such amendment, alteration or repeal is to
take effect or when the issuance of any such prior shares
or convertible security is to be made, or when such
consolidation or merger, purchase or redemption is to take
effect, or when such case, proceeding or action is
commenced, as the case may be, provision is made for the
redemption of all shares of Series A Preferred Stock at the
time outstanding.
(x) So long as any shares of Series A Preferred
Stock are outstanding, in addition to any other vote or
consent of stockholders required by law or by the
certificate of incorporation, the consent of the holders of
at least a majority of the shares of Series A Preferred
Stock, at the time outstanding, acting as a single class,
given in person or by proxy, either in writing without a
meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating any increase
in the authorized amount of the Series A Preferred Stock,
or
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<PAGE> 18
the authorization or creation of, or the increase in the
authorized amount of, any shares of any class or any
security convertible into shares of any class, ranking on a
parity with the Series A Preferred Stock in the
distribution of assets on any liquidation, dissolution, or
winding up of the Corporation or in the payment of
dividends; provided, however, that no such consent shall be
required if, at or prior to the time such increase,
authorization, or creation of parity shares is to be made,
provision is made for the redemption of all shares of
Series A Preferred Stock at the time outstanding.
(xi) As used herein with respect to Series A
Preferred Stock, the following terms shall have the
following meanings:
(a) The term "junior stock" shall mean the
Common Stock and any other class or series of shares
of the Corporation hereafter authorized over which
Series A Preferred Stock has preference or priority in
the payment of dividends or in the distribution of
assets on any liquidation, dissolution or winding up
of the Corporation.
(b) The term "accrued dividends", with respect
to any share of any class or series, shall mean an
amount computed at the applicable dividend rate for
the class or series of which the particular share is a
part, from the date on which dividends on such share
became cumulative to and including the date to which
such dividends are to be accrued, less the aggregate
amount of all dividends theretofore paid thereon.
(xii) The shares of Series A Preferred Stock shall
not have any relative, participating, optional or other
special rights and powers other than as set forth herein.
<PAGE>
<PAGE> 19
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PREFERRED STOCK
IN WITNESS WHEREOF, we have signed this
certificate on the 8th day of February, and affirm the
statements contained herein as true under penalties of
perjury.
/s/ Arthur Broslat
President
/s/ Roland F. Breault
Assistant Secretary
