<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)*
Lasertechnics, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
518082 10 2
(CUSIP Number)
Richard C.E. Morgan Christopher Smeall, Esq
Amphion Partners L.L.C. Debevoise & Plimpton
590 Madison Avenue, 32nd floor 875 Third Avenue
New York, NY 10022 New York, NY 10022
(212) 849-8120 (212) 909-6457
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 19, 1997
(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 [ ].
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 disclosures 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 purposes 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> 2
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 2 of 25 Pages
(1) Names of Reporting Persons
S.S. or I.R.S. Identifica- Amphion Ventures L.P.
tion Nos. of Above Persons (formerly Wolfensohn
Associates II L.P.)
13-3962697
(2) Check the Appropriate Box (a)
if a Member of a Group N/A (b)
(3) SEC Use Only
(4) Source of Funds BK, AF
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) N/A
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power 6,910,724 (See Item 5.)
Beneficially Owned
by Each Reporting (8) Shared Voting Power
Person With
(9) Sole Dispositive Power 10,671,674 (See Item 5.)
(10) Shared Dispositive Power
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 10,671,674(See Item 5.)
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares N/A
(13) Percent of Class Represented
by Amount in Row 11 16.9% (See Item 5.)
(14) Type of Reporting Person PN
<PAGE> 3
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 3 of 25 Pages
(1) Names of Reporting Persons
S.S. or I.R.S. Identifica- Amphion Partners L.L.C.
tion Nos. of Above Persons (formerly, Wolfensohn
Partners II, LLC)
13-3962696
(2) Check the Appropriate Box (a)
if a Member of a Group N/A (b)
(3) SEC Use Only
(4) Source of Funds BK
AF
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) N/A
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power 567,500 (See Item 5.)
Beneficially Owned
by Each Reporting (8) Shared Voting Power
Person With
(9) Sole Dispositive Power 567,500 (See Item 5.)
(10) Shared Dispositive Power
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 11,239,174 (See Item 5.)
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares N/A
(13) Percent of Class Represented
by Amount in Row 11 17.8% (See Item 5.)
(14) Type of Reporting Person OO
<PAGE> 4
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 4 of 25 Pages
(1) Names of Reporting Persons
S.S. or I.R.S. Identifica- Antiope Partners L.L.C.
tion Nos. of Above Persons (formerly Wolfensohn
Partners, L.P.)
13-3260056
(2) Check the Appropriate Box (a)
if a Member of a Group N/A (b)
(3) SEC Use Only
(4) Source of Funds BK
AF
SC
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) N/A
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power 185,142 (See Item 5.)
Beneficially Owned
by Each Reporting (8) Shared Voting Power
Person With
(9) Sole Dispositive Power 2,428,427(See Item 5.)
(10) Shared Dispositive Power
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 2,428,427(See Item 5.)
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares N/A
(13) Percent of Class Represented
by Amount in Row 11 3.8% (See Item 5.)
(14) Type of Reporting Person OO
<PAGE> 5
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 5 of 25 Pages
1) Names of Reporting Persons
S.S. or I.R.S. Identifica-
tion Nos. of Above Persons Antiope Ventures L.P.
(formerly, Wolfensohn
Associates L.P.)
13-3227766
(2) Check the Appropriate Box (a)
if a Member of a Group N/A (b)
(3) SEC Use Only
(4) Source of Funds N/A
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant
to Items 2(d) or 2(e) N/A
(6) Citizenship or Place of
Organization Delaware
Number of Shares (7) Sole Voting Power 0
Beneficially Owned
by Each Reporting (8) Shared Voting Power
Person With
(9) Sole Dispositive Power 0
(10) Shared Dispositive Power
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 0
(12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares N/A
(13) Percent of Class Represented
by Amount in Row 11 0
(14) Type of Reporting Person PN
<PAGE> 6
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 6 of 25 Pages
CONTINUATION PAGES OF AMENDMENT NO. 7
TO SCHEDULE 13D
This Amendment No. 7 to the Schedule 13D, dated October 4, 1985
(the "Schedule 13D"), previously filed by Wolfensohn Associates L.P. (now known
as Antiope Ventures L.L.C.) ("Associates") and Wolfensohn Partners, L.P. (now
known as Antiope Partners L.L.C.) ("Partners") is the initial electronic filing
by Associates, Partners, Wolfensohn Associates II L.P. (now known as Amphion
Ventures L.P.) ("Associates II") and Wolfensohn Partners II LLC (now known as
Amphion Partners L.L.C.) ("Partners II") and, in accordance with Rule
101(a)(2)(ii) of Securities and Exchange Commission Regulation S-T, restates and
amends the Schedule 13D.
This amendment and filing reports the following transactions:
Between May 18, 1995 and September 15, 1995, Associates, in
exchange for making a total of $3,100,000 of loans to Lasertechnics, Inc. (the
"Company"), received convertible demand promissory notes in the aggregate amount
of $3,100,000 and 214,777 warrants exercisable for shares of common stock, par
value $0.01 per share of the Company ("Common Stock").
On August 8, 1995, Associates converted $1,500,000 of debt into
1,153,846 shares of Series A Convertible Preferred Stock of the Company ("Series
A Preferred"). Each share of Series A Preferred is convertible into one share of
Common Stock at any time at the option of the holder.
On September 26, 1995, Associates converted $1,500,000 of debt
into 1,056,338 shares of Series B Convertible Preferred Stock of the Company
("Series B Preferred"). Each share of Series B Preferred is convertible into one
share of Common Stock at any time at the option of the holder.
On October 10, 1995, the Company repaid $2,000,000 in debt to
Associates.
On December 15, 1995, using $690,000 of debt owed to Associates
by the Company, Associates exercised 534,105 warrants (including the 214,777
warrants received between May 18, 1995 and September 15, 1995) for which
Associates received 534,105 shares of Common Stock.
On December 27, 1995, Associates converted debt in the principal
amount of $210,000 plus accrued interest in the amount of $259,879 into 311,179
shares of Series C Convertible Preferred Stock of the Company ("Series C
Preferred"). Each share of Series C Preferred is convertible into one share of
Common Stock at any
<PAGE> 7
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 7 of 25 Pages
time at the option of the holder. As of December 27, 1997, all demand promissory
notes outstanding to Associates (including the $3,100,000 of demand promissory
notes received between May 18, 1995 and September 15, 1995) either had been
repaid or converted as described above.
On December 29, 1995, Associates purchased 198,676 shares of
Series C Preferred for $300,000.
Between June 20, 1996 and July 26, 1996, Associates made a total
of $1,700,000 in loans to the Company and received a total of 56,341 warrants.
These warrants have not been exercised. The warrants may be exercised by the
holder at any time on or prior to December 31, 2001. The exercise price for
29,499 of the warrants is $3.39 per share, the exercise price for 17,668 of the
warrants is $2.83 and the exercise price for the remaining 9,174 warrants is
$2.18 per share.
On August 2, 1996, the Company repaid Associates the $1,700,000
of debt incurred between June 20, 1996 and July 26, 1996.
Between March 27, 1997 and May 14, 1997, Partners made a series
of loans to the Company in the aggregate amount of $1,000,000, in consideration
of which Partners received 72,727 common stock warrants and notes in the
aggregate amount of $1,000,000.
On June 25, 1997, Partners, J.P. Morgan Investment Corporation
("JPMIC") and the Company entered into a Note Purchase Agreement (the "Note
Agreement"). The Note Agreement is attached hereto as Exhibit 12 and
incorporated herein by reference and the following description is subject
thereto.
Pursuant to the Note Agreement and in consideration of the
cancellation and surrender of (a) notes in the aggregate amount of $1,000,000,
representing the loans made between March 27, 1997 and May 14, 1997, (b)
$19,709.58 in accrued interest, (c) and 72,727 warrants convertible into Common
Stock received in connection with such loans, a new senior promissory note in
the amount of $1,019,709.58 was issued to Partners by the Company in accordance
with the Note Agreement and Partners received (i) 102,857 shares of Common Stock
and (ii) warrants convertible into 200,000 shares of Common Stock. In connection
with the Note Agreement, the parties thereto also executed a Pledge Agreement as
of August 18, 1997. The warrants may be exercised by holder at any time on or
prior to August 6, 2000 at an exercise price of $0.70 per share.
Pursuant to the Note Agreement, in consideration of advances made
by Partners in the amounts and on the dates
<PAGE> 8
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 8 of 25 Pages
indicated below, Partners received Common Stock of the Company (a portion of
which constituted a fee for extending the loan) and warrants convertible into
Common Stock, as follows:
<PAGE> 9
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 9 of 25 Pages
<TABLE>
<CAPTION>
COMMON STOCK
(total,
AMOUNT OF including WARRANTS
DATE ADVANCE Loan Fee) RECEIVED
- ---- --------- ------------ --------
<S> <C> <C> <C>
June 25, 1997 $500,000 51,428 100,000
July 16, 1997 $ 75,000 7,714 15,000
July 31, 1997 $225,000 23,143 45,000
-------- ------- -------
Total $800,000 82,285 160,000
</TABLE>
The unpaid principal amount of any of the above advances under
the Note Agreement were exchangeable on 30 days' notice, in whole or in part,
for an equal amount of convertible debentures of the Company having the same
economic terms and conditions as the Company's existing 10% convertible
debentures due March 1, 1999, which in turn would have been convertible into
Common Stock at the option of the holder at the lesser of $1.00 or 85% of the
average 5-day closing bid price of the Company's Common Stock prior to
conversion. However, pursuant to the Amendment Agreement dated December 23,
1997, which Amendment Agreement is attached hereto as Exhibit 21 and
incorporated herein by reference (the "Amendment Agreement") the notes with
respect to the above advances ceased to be convertible. Any of the above
warrants may be exercised at any time on or prior to August 6, 2000 at an
exercise price of $0.70 per share. Common Stock issued pursuant to the Note
Agreement is unregistered.
As consideration for execution of a standstill agreement, dated
as of July 14, 1997 (the "Standstill Agreement"), Partners received warrants for
90,000 shares of Common Stock of the Company. The warrants may be exercised at
any time on or prior to July 14, 2002 at an exercise price of $1.00 per share.
The Standstill Agreement changed the terms of convertibility into Common Stock
of certain securities of the Company as set forth therein, and is attached
hereto as Exhibit 11 and incorporated herein by reference.
On July 23, 1997, Partners acquired 48 shares of Series F
Convertible Preferred Stock of the Company ("Series F Preferred"). Each share of
Series F Preferred has a liquidation preference of $10,000 plus interest, as set
out in the Series F Preferred Stock Certificate of Designation which is attached
hereto as Exhibit 20 and incorporated herein by reference and is
<PAGE> 10
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 10 of 25 Pages
convertible into Common Stock based on the formula set forth in the Series F
Preferred Stock Certificate of Designation.
As of August 19, 1997, Associates transferred all of its assets
and liabilities to Associates II, in exchange for 100% of the limited
partnership interests of Associates II (which constituted 99.8% of the total
partnership interests of Associates II). Upon such transfer, Associates ceased
to be a beneficial owner of the Common Stock of the Company within the meaning
of the Securities and Exchange Act of 1934, as amended, because it ceased to
have voting power or investment power with respect to such Common Stock. The
general partner of Associates II is Partners II, which owns the remaining 0.2%
of the total partnership interests of Associates II. The assets of Associates so
transferred included the following equity securities of the Company:
<TABLE>
<CAPTION>
COMMON STOCK
SECURITY EQUIVALENT
-------- ----------
<S> <C>
Common Stock 6,443,901
Series A Preferred 1,153,846
Series B Preferred 1,056,338
Series C Preferred 509,855
Warrants 56,341
Options 76,855
</TABLE>
At the same time, Partners assigned the Note Agreement to
Associates II with respect to all future advances.
Since August 19, 1997, pursuant to the Note Agreement and in
consideration of advances made by Associates II in the amounts and on the dates
indicated below, Associates II received Common Stock (a portion of which
constituted a fee for extending the advances indicated) and warrants convertible
into Common Stock, as follows:
<TABLE>
<CAPTION>
COMMON STOCK
(total,
including
DATE AMOUNT OF ADVANCE Loan Fee) WARRANTS
- ------------------ ----------------- ------------ ----------------
<S> <C> <C> <C>
August 26, 1997 $150,000 15,429 30,000
September 2, 1997 $150,000 15,429 30,000
September 19, 1997 $100,000 10,286 20,000
- ------------------ -------- ------ ------
Total $400,000 41,144 80,000
</TABLE>
The unpaid principal amount of any advances under the Note
Agreement were exchangeable, in whole or in part, for an equal amount of
convertible debentures of the Company having the same economic terms and
conditions as the Company's existing 10%
<PAGE> 11
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 11 of 25 Pages
convertible debentures due March 1, 1999, which in turn would have been
convertible into Common Stock at the option of the holder at the lesser of $1.00
or 85% of the average 5-day closing bid price of the Company's Common Stock
prior to conversion. However, pursuant to the Amendment Agreement, the notes
with respect to the above advances ceased to be convertible. 60,000 of the
warrants may be exercised at any time prior to September 5, 2000. The remaining
20,000 warrants, which the Company is obligated to issue and deliver to
Associates II and which have not yet been issued, will be exercisable at any
time prior to the third anniversary of the date of issue at an exercise price of
$0.70. Common Stock issued pursuant to the Note Agreement is unregistered.
Since September 19, 1997, Associates II has made loans to the
Company in the following amounts and acquired the following shares of Common
Stock and warrants convertible into Common Stock, on substantially the same
terms as the advances made pursuant to the Note Agreement. The parties are
negotiating but have not yet finalized a note agreement with respect to these
advances.
<TABLE>
<CAPTION>
COMMON STOCK
AMOUNT OF (including
DATE LOAN Loan Fee) WARRANTS
- ------------------ ------------- ------------ ----------------
<S> <C> <C> <C>
September 19, 1997 $ 150,000.00 15,429 30,000
September 26, 1997 $ 300,000.00 30,857 60,000
September 29, 1997 $ 500,000.00 51,428 100,000
October 10, 1997 $ 175,000.00 18,000 35,000
October 14, 1997 $ 340,000.00 34,971 68,000
October 22, 1997 $ 287,000.00 29,520 57,400
October 28, 1997 $ 500,000.00 51,428 100,000
November 20, 1997 $ 25,000.00 2,571 5,000
November 25, 1997 $ 622,000.00 63,977 124,400
December 4, 1997 $ 180,000.00 18,514 36,000
December 8, 1997 $ 255,000.00 26,228 51,000
December 15, 1997 $ 304,000.00 31,268 60,800
December 19, 1997 $ 303,000.00 31,166 60,600
December 24, 1997 $ 197,575.00 20,322 39,515
------------- ------- -------
Total $4,138,575.00 425,679 827,715
</TABLE>
With respect to each of the above loans, it is expected that the
corresponding note, which the Company is obligated to issue and deliver but
which has not yet been issued and delivered, will not provide for conversion and
will be on substantially the same terms as the notes delivered pursuant to the
Note Agreement. The warrants, which the Company is obligated to issue and
deliver to Associates but which have not been so issued and delivered, are
expected to have an exercise price of $0.70 per share and to be exercisable at
any time prior to the third anniversary of the date of issue. The Common Stock
issued during this period is unregistered.
<PAGE> 12
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 12 of 25 Pages
Partners II acquired the following shares of Common Stock at the
prices and on the dates indicated:
<PAGE> 13
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 13 of 25 Pages
<TABLE>
<CAPTION>
COMMON AGGREGATE
DATE STOCK PRICE
- ------------------ -------------- -----------------
<S> <C> <C>
November 11, 1997 50,000 $ 18,750
November 12, 1997 45,000 $ 21,780
November 12, 1997 5,000 $ 2,500
November 14, 1997 5,000 $ 2,344
November 17, 1997 20,000 $ 8,600
November 18, 1997 29,000 $ 12,180
November 24, 1997 25,000 $ 9,375
November 25, 1997 6,000 $ 2,250
November 26, 1997 5,000 $ 1,875
November 26, 1997 5,000 $ 1,875
December 2, 1997 5,000 $ 1,875
December 3, 1997 9,000 $ 3,375
December 4, 1997 5,000 $ 1,641
December 4, 1997 62,000 $ 21,309
December 5, 1997 66,000 $ 20,625
December 5, 1997 41,500 $ 14,264
December 5, 1997 58,000 $ 19,938
December 11, 1997 35,000 $ 9,842
December 15, 1997 23,000 $ 6,468
December 16, 1997 5,500 $ 1,547
December 17, 1997 5,500 $ 1,547
December 18, 1997 57,000 $ 16,028
------- --------
Total 567,500 $199,988
</TABLE>
On December 23, 1997, Partners, Associates II and the Company
signed the Amendment Agreement which, inter alia, changed the convertibility of
the senior promissory notes issued pursuant to the Note Agreement. A copy of the
Amendment Agreement is attached hereto as Exhibit 21, and is incorporated herein
by reference.
Except as set forth herein, there are no material changes since
the filing of the most recent amendment to Schedule 13D by Associates and
Partners in May 1995.
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is
the Common Stock, $.01 par value per share of the Company, a Delaware
corporation, which has its principal executive offices at 3208 Commander Dr.,
Carrollton, Texas 75006.
Item 2. Identity and Background.
<PAGE> 14
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 14 of 25 Pages
This statement is amended by Associates and Partners and filed by
Associates II and Partners II.
Associates and Associates II are Delaware limited partnerships
with their principal business and principal office at 590 Madison Avenue, 32nd
floor, New York, New York 10022. Associates II is principally engaged in the
business of investing its capital with the principal objective of realizing
appreciation in the value of securities or other assets thereby acquired. The
assets of Associates consist primarily of cash and its interests in Associates
II. The general partner of Associates is Partners. The general partner of
Associates II is Partners II. On October 23, 1997, Associates amended its
certificate of limited partnership to change its name from Wolfensohn Associates
L.P. to Antiope Ventures L.P. On October 10, 1997, Associates II amended its
certificate of limited partnership to change its name from Wolfensohn Associates
II L.P. to Amphion Ventures L.P.
On September 29, 1997, Partners converted from a Delaware limited
partnership to a Delaware limited liability company in accordance with Delaware
law, and changed its name from Wolfensohn Partners L.P. to Wolfensohn Partners
LLC. Richard C.E. Morgan and James D. Wolfensohn, who were general partners of
Partners (and, in the case of Mr. Wolfensohn, a general partner of a general
partner), became managing members of Partners. On October 23, 1997, Partners
amended its certificate of formation to change its name to Antiope Partners
L.L.C.
Partners II is a Delaware limited liability company with its
principal business and principal office at 590 Madison Avenue, 32nd floor, New
York, New York 10022. Partners II is principally engaged in serving as general
partner of Associates II and is controlled by its managing members: Richard C.E.
Morgan and James D. Wolfensohn. On October 10, 1997, Partners II amended its
certificate of formation to change its name from Wolfensohn Partners II, LLC to
Amphion Partners L.L.C.
During the last five years, neither Partners, Partners II,
Associates nor Associates II has been convicted in a criminal proceeding or was
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.
(a) The managing members of Partners and Partners II are Richard
C.E. Morgan and James D. Wolfensohn. Mr. Morgan and Mr. Wolfensohn disclaim
beneficial ownership of all Common Stock and other securities of the Company
owned by Associates II, Partners or Partners, or previously owned by Associates.
<PAGE> 15
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 15 of 25 Pages
(b) The business address of Messrs. Morgan and Wolfensohn is 590
Madison Avenue, 32nd Floor, New York, New York 10022.
(c) Mr. Morgan's present principal occupation is serving as a
managing member of Partners and Partners II. Mr. Morgan also serves as a
chairman of the board of directors and chief executive officer of the Company.
The present principal occupation of Mr. Wolfensohn is president of the World
Bank.
(d) During the last five years, neither Mr. Morgan nor Mr.
Wolfensohn has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five years, neither Mr. Wolfensohn nor Mr.
Morgan was a party to a civil proceeding of any 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.
(f) Mr. Morgan is a citizen of the United Kingdom. Mr. Wolfensohn
is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The warrants received by Associates during the period beginning
May 18, 1995 and ending September 15, 1995 were part of the consideration
received for loans to the Company made by Associates in aggregate amount of
$3,100,000. The 1,153,846 shares of Series A Preferred acquired by Associates on
August 8, 1995 was the result of conversion of $1,500,000 of debt. The 1,056,338
shares of Series B Preferred acquired by associates on September 26, 1995 was
the result of conversion of $1,500,000 of debt. The 311,179 shares of Series C
Preferred acquired by Associates on December 27, 1995 was the result of
conversion of debt and accrued interest in the amount of $469,879. The 198,676
shares of Series C Preferred acquired by Associates on December 27, 1995 were
paid for in cash. All warrants received during this period were exercised no
later than December 27, 1995.
The warrants received by Associates on June 20, 1996, July 10,
1996 and July 26 1996 were part of the consideration for loans in the aggregate
amount of $1,700,000. These warrants have not been exercised by Associates and
have been assigned to Associates II, and may be exercised by Associates II on or
prior to December 31, 2001. The exercise price for 29,499 of the warrants is
$3.39, the exercise price for 17,668 of the warrants is $2.83 per share and the
exercise price for the remaining 9,174
<PAGE> 16
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 16 of 25 Pages
of the warrants is $2.18 per share. Each Share of Series A Preferred, Series B
Preferred and Series C Preferred is convertible into one share of Common Stock
at any time at the option of the holder.
The aggregate 72,127 warrants received by Partners between March
27, 1997 and May 14, 1997 were part of the consideration for an aggregate of
$1,000,000 of loans to the Company by Partners. These warrants and the note
representing the $1,000,000 loan plus interest were canceled and surrendered
pursuant to the Note Agreement on June 25, 1997, in partial consideration of
102,857 shares of Common Stock and warrants convertible into 200,000 shares of
Common Stock and the $1,019,710 was recorded under a new senior promissory note
in accordance with the Note Purchase Agreement. The aggregate 82,285 shares of
Common Stock and the 160,000 warrants convertible into Common Stock that
Partners received between June 25, 1997 and July 31, 1997 were part of the
consideration received for advances to the Company made by Partners in the
aggregate amount of $800,000 and the loan fee on such amounts, pursuant to the
Note Agreement. Partners has not exercised these warrants. The total of 360,000
warrants received by Partners under the Note Agreement may be exercised at any
time prior to August 6, 2000 at an exercise price of $0.70 per share.
The unpaid principal amount of advances under the Note Agreement ceased to be
convertible pursuant to the Amendment Agreement.
The 48 shares of Series F Preferred Stock that Partners received
on July 23, 1997 were in consideration of cash in the amount of $480,000.
The 90,000 warrants received by Partners on July 23, 1997 were in
consideration of the execution by Partners of the Standstill Agreement. These
warrants may be exercised at any time on or prior to July 14, 2002 at an
exercise price of $1.00 per share.
The transfer of all assets and liabilities of Associates on
August 19, 1997, including the 6,443,901 shares of Common Stock, the 1,153,846
shares of Series A Preferred, the 1,056,338 shares of Series B Preferred, the
509,855 shares of Series C Preferred and the 56,341 warrants and 76,855 options,
were part of the consideration received for 100% of the limited partnership
interests of Associates II, representing 99.8% of the total partnership
interests of Associates II. The assignment of the Note Agreement by Partners to
Associates II was in consideration of Associates II's assumption of future
funding obligations thereunder.
The 41,144 shares of Common Stock and the 80,000 warrants
received by Associates II between August 26, 1997 and September 19, 1997 were
part of the consideration received for
<PAGE> 17
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 17 of 25 Pages
advances to the Company made by Associates II in the aggregate amount of
$400,000 plus the loan fee on such amounts pursuant to the Note Agreement.
Associates II has not exercised these warrants. 60,000 of these warrants may be
exercised at any time on or prior to September 5, 2000 at an exercise of $0.70
per share. The remaining 20,000 of these warrants, which the Company is
obligated to issue and deliver to Associates II, have not yet been issued but
will be exercisable at any time on or prior to third anniversary of the date of
issuance of the warrant, at an exercise price of $0.70 per share.
The 298,181 shares of Common Stock and 579,800 warrants received
by Associates II between September 19, 1997, and November 25, 1997, were part of
the consideration received for loans to the Company in the aggregate amount of
$2,899,000. The warrants, which the Company is obligated to issue and deliver to
Associates II, have not yet been issued but are expected to be exercisable at
any time prior to the third anniversary of the issuance of the warrant at an
exercise price of $0.70.
The aggregate 185,000 shares of Common Stock acquired by Partners
II between November 11, 1997, and November 25, 1997, were acquired for a total
of $77,779 in cash on the market.
The 127,499 shares of Common Stock and 247,915 warrants received
by Associates II between December 4, 1997, and December 24, 1997, were part of
the consideration received for loans to the Company in the aggregate amount of
$1,239,575. The warrants, which the Company is obligated to issue and deliver to
Associates II, have not yet been issued but are expected to be exercisable at
any time prior to the third anniversary of the issuance of the warrant at an
exercise price of $0.70.
The aggregate 377,500 shares of Common Stock acquired by Partners
II between November 26, 1997 and December 18, 1997, were acquired for a total of
$120,332 in cash on the market.
Funds used by Partners for the transactions described herein were
obtained from current income and loans from James D. Wolfensohn pursuant to a
grid note dated April 1, 1994. Prior to August 19, 1997 funds used by Associates
for the transactions described herein were obtained from current income of
Associates or from Republic National Bank of New York pursuant to an agreement,
dated December 6, 1996. After August 19, 1997, funds used by Associates II to
make the loans reported herein were obtained from capital contributions from
limited partners of Associates II or pursuant to the loan agreement between
Associates and Republic National Bank of New York, dated as of December 6, 1996,
which Note Agreement was assigned by Associates to Associates II on August 19,
1997 and amended and restated as of
<PAGE> 18
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 18 of 25 Pages
such date. Funds used by Partners II were obtained from a loan from James D.
Wolfensohn.
The Amendment Agreement, dated as of December 23, 1997, was in
consideration of the mutual premises set forth therein.
Item 4. Purpose of Transactions.
The purchases and loans made by Partners, Partners II, Associates
and Associates II and reported herein were all in connection with their
respective general investment activities.
In addition to the loans described herein, Partners, Partners II,
Associates and Associates II each has the right to acquire additional shares of
Common Stock (or other capital stock of the Company), and to dispose of some or
all of their respective current holdings of Common Stock or other capital stock
of the Company or to exercise any warrants or other rights any of them may in
the future have in respect thereof, in one or more open-market or privately
negotiated transactions or otherwise, on such terms and at such times as each
considers desirable.
Item 5. Interest in Securities of the Issuer.
(a) As of August 19, 1997, Associates had transferred all assets
and liabilities of Associates (including all Common Stock of the Company) to
Associates II, in exchange for 100% of the limited partner interests of
Associates II (which constituted 99.8% of the total partnership interests of
Associates II). Upon such transfer, Associates ceased to be a beneficial owner
of the Common Stock of the Company within the meaning of the Securities and
Exchange Act of 1934, as amended, because it ceased to have voting power or
investment power with respect to such Common Stock.
As of December 24, 1997, Associates II owned the following
interests in the Company:
<PAGE> 19
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 19 of 25 Pages
<TABLE>
<CAPTION>
COMMON STOCK
EQUIVALENT-IF
TYPE OF SECURITY AMOUNT CONVERTED
- ------------------------ ---------- -------------
<S> <C> <C>
Senior Promissory Notes $4,538,575 N/A
Common Stock 6,910,724 N/A
Series A Convertible 1,153,846 1,153,846
Preferred Stock
Series B Convertible 1,056,338 1,056,338
Preferred Stock
Series C Convertible 509,855 509,855
Preferred Stock
Warrants 964,056 964,056
Options 76,855 76,855
</TABLE>
As of December 24, 1997, Associates II owns 6,910,724 shares of
Common Stock, which Associates II estimates is approximately 14.5% of the total
issued and outstanding shares of the Common Stock of the Company. If Associates
II were to exercise all of its rights to convert all of the Series A Preferred,
the Series B Preferred, the Series C Preferred, the warrants and the options
held by it into Common Stock, it would be deemed the beneficial holder of
10,671,674 shares of Common Stock, which is estimated by Associates II to
constitute approximately 16.9% of the issued and outstanding shares of the
Company (assuming all outstanding warrants had been exercised and all
outstanding convertible securities had been converted into Common Stock as of
December 15, 1997).
As of December 24, 1997, Partners owned the following interests
of Company:
<TABLE>
<CAPTION>
COMMON STOCK EQUIVALENT IF
TYPE OF SECURITY AMOUNT CONVERTED
- -------------------------- ------------ ----------------------------
<S> <C> <C>
Senior Promissory Notes $1,800,000 N/A
Common Stock 185,142 N/A
Series F Preferred 48 434,206 to 1,793,285 (1)
Warrants 450,000 450,000
</TABLE>
NOTE: (1) This spread is based on the formula contained in the
Series F Preferred Stock Certificate of Designation,
assuming for purposes of such formula a "conversion price"
(as defined in such Certificate of Designation) between
$1.1406 and $0.2762, which was 87.5% of the average
closing bid price for the Common Stock during the 10
trading
<PAGE> 20
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 20 of 25 Pages
days prior to the conversion (assuming that conversion
occurred on December 15, 1997 and that the shares of
Series F Preferred were held for 125 days prior to
conversion). The Certificate of Designation of Series F
Preferred Stock is attached hereto as Exhibit 20 and
incorporated herein by reference. The actual number of
shares of Common Stock which would be received by Partners
on an actual conversion may vary depending on market price
and the length of time held prior to conversion.
As of December 24, 1997, Partners owns 185,142 shares of Common
Stock, which Partners estimates is approximately 0.4% of the total outstanding
shares of the Common Stock of Company. If Partners were to exercise all of its
rights to convert the Series F Preferred and the warrants into Common Stock, and
the lower price was assumed in the spread noted above, then Partners would be
deemed the beneficial holder of 2,428,427 shares of Common Stock, which is
estimated by Partners would constitute approximately 3.8% of the issued and
outstanding shares of the Company (assuming all outstanding warrants had been
exercised and all outstanding convertible securities had been converted into
Common Stock as of December 15, 1997).
As of December 24, 1997, Partners II owned 567,500 shares of
Common Stock, which is estimated by Partners II to represent approximately 1.2%
of the issued and outstanding shares of the Common Stock of the Company. (In
addition, see the holdings of Associates II, above in which Partners II is a
general partner and holds 0.2% of the total partnership interests).
Richard C.E. Morgan, a managing member of Partners and Partners
II and Chairman of the Board and Chief Executive Officer of the Company, owns
327,266 shares of Common Stock and options to purchase 50,000 additional shares.
The 327,266 shares of Common Stock owned by Mr. Morgan is estimated to represent
0.7% of the total outstanding shares of the Common Stock of the Company. If Mr.
Morgan were to exercise all his options, he would be deemed the beneficial owner
of 377,266 shares of Common Stock, which is estimated by Mr. Morgan would
constitute approximately 0.6% of the issued and outstanding shares of the
Company (assuming all outstanding warrants had been exercised and all
outstanding securities had been converted into Common Stock as of December 15,
1997).
James D. Wolfensohn, a managing member of Partners I and Partners
II, is a general partner of Jackson Hole Investments Acquisitions L.P., a
Delaware limited partnership which owns 68,750 shares of Common Stock and
198,678 shares of Series C Preferred. The 68,750 shares of Common Stock held by
Jackson Hole
<PAGE> 21
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 21 of 25 Pages
Acquisitions L.P. is estimated to represent 0.1% of the total outstanding shares
of Common Stock. If Jackson Hole Investments Acquisitions L.P. were to convert
its Series C Preferred to Common Stock, it would be deemed the beneficial owner
of 267,428 shares of Common Stock, which is estimated would constitute
approximately 0.4% of the issued and outstanding shares of the Company (assuming
all outstanding warrants had been exercised and all outstanding convertible
securities had been converted into Common Stock as of December 15, 1997).
(b) Partners has the sole power to vote or direct the vote and to
dispose or direct the disposition of all shares of Common Stock (or warrants or
securities convertible into Common Stock) beneficially owned by Partners. The
power can only be exercised by the unanimous agreement of all managing members
of Partners. Partners II, as the general partner of Associates II, has the sole
power, on behalf of Associates II, to vote or direct the vote and to dispose or
direct the disposition of all shares of Common Stock (or warrants or securities
convertible into Common Stock) beneficially owned by Associates II. Partners II
has the sole power to vote or direct the vote and to dispose or direct all of
the shares of Common Stock (or warrants or securities convertible into Common
Stock) beneficially owned by Partners II. This power can only be exercised by
the unanimous agreement of all the managing members of Partners II. Richard C.E.
Morgan has the sole power to vote and dispose or direct the Common Stock
beneficially owned by him. Please refer to item 5(a) for numbers of shares of
Common Stock and other securities, James D. Wolfensohn shares with the other
general partners of Jackson Hole Investments Acquisitions L.P., the power to
vote and dispose or direct the Common Stock of the Company beneficially owned by
Jackson Hole Investments Acquisitions L.P.
(c) Except as reported herein, and except that Richard Morgan
purchased on the market for cash (i) 50,000 shares of Common Stock at an average
price per share of $0.4856 on November 12, 1997 (ii) 25,000 shares of Common
Stock at an average share price of $0.46 on November 13, 1997, (iii) 5,000
shares of Common Stock at an average share price of $0.43 on November 17, 1997
and (iv) 29,000 shares at an average share price of $0.42 on November 18, 1997,
none of Associates, Associates II, Partners, or Partners II or, to the best
knowledge of each of them or any of the managing members of Partners or of
Partners II, any of their controlling persons, has effected any transactions in
the Common Stock (or securities convertible into Common Stock) during the past
sixty days.
(d) Associates II is entitled to receive the dividends associated
with and the proceeds from any sale of shares of Common Stock (or securities
convertible into Common Stock) that it beneficially owns. Partners is entitled
to receive the dividends
<PAGE> 22
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 22 of 25 Pages
associated with and the proceeds from any sale of shares of Common Stock that it
beneficially owns. Partners II is entitled to receive the dividends associated
with and the proceeds from any sale of shares of Common Stock that it
beneficially owns. Richard C.E. Morgan is entitled to receive the dividends
associated with and proceeds of any sale of shares of Common Stock that he
beneficially owns. Jackson Hole Investments Acquisitions L.P. is entitled to
receive the dividends associated with and proceeds of any sale of shares of
Common stock beneficially owned by it.
(e) Associates and Partners ceased to be beneficial owners of
more than 5% of the Common Stock as of August 19, 1997.
Item 6. Contracts, Arrangement, Understandings or Relationships with
Respect to Securities of the Issuer.
Except as reported herein and in previous reports, none of
Associates, Partners, Associates II, Partners II or, to the best knowledge of
Associates, Partners, Associates II and Partners II, none of the managing
members of Partners or Partners II or any of their controlling persons has
entered into any contracts, arrangements, understandings or relationships (legal
or otherwise) with any person with respect to any securities of the Company,
which are in effect as of the date hereof.
Item 7. Material to be Filed as Exhibits .
Exhibit 1. Joint Filing Agreement
Exhibit 2. Stock Option Grant Pursuant to Draw Notes of
February and April 1994.
Exhibit 3. Grid Note, dated April 1, 1994, between
Partners and James D. Wolfensohn
Exhibit 4. Common Stock purchase Warrant No. 32, dated
June 19, 1996, between Company and Associates
for 29,499 shares of Common Stock
Exhibit 5. Common Stock Purchase Warrant No. 33, undated,
between Company and Associates, for 17,668
shares of Common Stock
Exhibit 6. Common Stock Purchase Warrant No. 34, undated,
between Company and Associates, for 9,174
shares of Common Stock
Exhibit 7. Senior Promissory Grid Note, dated June 25,
1997, between Company and Partners
<PAGE> 23
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 23 of 25 Pages
Exhibit 8. Common Stock Purchase Warrant No. 1, dated
August 6, 1997, between Company and Partners
for 360 shares of Common Stock
Exhibit 9. Common Stock Purchase Warrant No. F-8, dated
July 14, 1997, between Company and Partners
for 90,000 shares of Common Stock
Exhibit 10. Common Stock Purchase Warrant, dated September
5, 1997, between Company and Associates II for
60,000 shares of Common Stock
Exhibit 11. Standstill Agreement, dated as of July 14,
1997, between the Company and each of the
shareholders indicated therein, including
Partners
Exhibit 12. Note Purchase Agreement, dated June 25, 1997,
between the Company, Partners and J.P. Morgan
Investment Corporation.
Exhibit 13. Pledge Agreement, dated August 18, 1997, among
the Company, Partners and J.P. Morgan
Investment Corporation
Exhibit 14. Assignment Agreement, dated as of August 19,
1997, between Associates II and Partner s.
Exhibit 15. Assignment Agreement, dated as of August 19,
1997, between Associates and Associates II.
Exhibit 16. Amended and Restated Note Agreement, dated as
of August 19, 1997, between Republic National
Bank of New York and Associates II
Exhibit 17. Certificate of Designation for Series A
Preferred Stock.
Exhibit 18. Certificate of Designation for Series B
Preferred Stock.
Exhibit 19. Certificate of Designation for Series C
Preferred Stock.
Exhibit 20. Certificate of Designation of Series F
Preferred Stock and Amendment thereto.
Exhibit 21. Amendment to the Note Purchase Agreement, dated
as of December 23, 1997 among Partners, Associates
II and the Company.
Exhibit 22. Continuing Security Agreement, dated as of
December 6, 1996, as amended, among Republic
National Bank and Associates, as amended.
<PAGE> 24
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 24 of 25 Pages
Documents evidencing warrants that have been exercised or canceled, loans and
advances that have been repaid as of the date hereof and agreements relating to
any of the foregoing are not attached hereto.
Notes and warrants which the Company is obligated to issue but has not yet
issued are not attached hereto.
<PAGE> 25
SCHEDULE 13D
CUSIP No. 518082 10 2 Page 25 of 25 Pages
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.
Dated: December 24, 1997
ANTIOPE VENTURES L.P.
(formerly Wolfensohn Associates L.P.)
By: Antiope Partners L.L.C.,
its general partner
By: /s/ Richard C.E. Morgan
--------------------------------------
Richard C.E. Morgan
a Managing Member
ANTIOPE PARTNERS L.L.C.
(formerly Wolfensohn Partners L.P.)
By: /s/ Richard C.E. Morgan
--------------------------------------
Richard C.E. Morgan
a Managing Member
AMPHION VENTURES L.P.
(formerly, Wolfensohn Associates II L.P.)
By: Amphion Partners L.L.C.
(formerly Wolfensohn Partners II, LLC)
its general partner
By: /s/ Richard C.E. Morgan
--------------------------------------
Richard C.E. Morgan
a Managing Member
AMPHION PARTNERS L.L.C.
(formerly Wolfensohn Partners II, LLC)
By: /s/ Richard C.E. Morgan
--------------------------------------
Richard C.E. Morgan
a Managing Member
<PAGE> 26
EXHIBIT INDEX
Exhibit 1. Joint Filing Agreement
Exhibit 2. Stock Option Grant Pursuant to Draw Notes of
February and April 1994.
Exhibit 3. Grid Note, dated April 1, 1994, between
Partners and James D. Wolfensohn
Exhibit 4. Common Stock purchase Warrant No. 32, dated
June 19, 1996, between Company and Associates
for 29,499 shares of Common Stock
Exhibit 5. Common Stock Purchase Warrant No. 33, undated,
between Company and Associates, for 17,668
shares of Common Stock
Exhibit 6. Common Stock Purchase Warrant No. 34, undated,
between Company and Associates, for 9,174
shares of Common Stock
Exhibit 7. Senior Promissory Grid Note, dated June 25,
1997, between Company and Partners
<PAGE> 27
Exhibit 8. Common Stock Purchase Warrant No. 1, dated
August 6, 1997, between Company and Partners
for 360 shares of Common Stock
Exhibit 9. Common Stock Purchase Warrant No. F-8, dated
July 14, 1997, between Company and Partners
for 90,000 shares of Common Stock
Exhibit 10. Common Stock Purchase Warrant, dated September
5, 1997, between Company and Associates II for
60,000 shares of Common Stock
Exhibit 11. Standstill Agreement, dated as of July 14,
1997, between the Company and each of the
shareholders indicated therein, including
Partners
Exhibit 12. Note Purchase Agreement, dated June 25, 1997,
between the Company, Partners and J.P. Morgan
Investment Corporation.
Exhibit 13. Pledge Agreement, dated August 18, 1997, among
the Company, Partners and J.P. Morgan
Investment Corporation
Exhibit 14. Assignment Agreement, dated as of August 19,
1997, between Associates II and Partners.
Exhibit 15. Assignment Agreement, dated as of August 19,
1997, between Associates and Associates II.
Exhibit 16. Amended and Restated Note Agreement, dated as
of August 19, 1997, between Republic National
Bank of New York and Associates II
Exhibit 17. Certificate of Designation for Series A
Preferred Stock.
Exhibit 18. Certificate of Designation for Series B
Preferred Stock.
Exhibit 19. Certificate of Designation for Series C
Preferred Stock.
Exhibit 20. Certificate of Designation of Series F
Preferred Stock and Amendment thereto.
Exhibit 21. Amendment to the Note Purchase Agreement, dated
as of December 23, 1997 among Partners, Associates
II and the Company.
Exhibit 22. Continuing Security Agreement, dated as of
December 6, 1996, as amended, among Republic
National Bank and Associates, as amended.
<PAGE> 1
Exhibit 1
JOINT FILING AGREEMENT
The undersigned hereby agree to the joint filing of the Schedule 13D
to which this Agreement is attached.
Dated: December __, 1997
ANTIOPE VENTURES L.P.
(formerly, Wolfensohn Associates, L.P.)
By: Antiope Partners L.L.C.,
its general partner
By: /s/ Richard C.E. Morgan
-----------------------------------
Richard C.E. Morgan
a Managing Member
ANTIOPE PARTNERS L.L.C.
(formerly, Wolfensohn Partners L.P.)
By: /s/ Richard C.E. Morgan
-----------------------------------
Richard C.E. Morgan
a Managing Member
<PAGE> 2
AMPHION VENTURES L.P.
(formerly, Wolfensohn Associates II, L.P.)
By: Amphion Partners L.L.C.
(formerly, Wolfensohn Partners II, L.L.C.)
its general partner
By: /s/ Richard C.E. Morgan
-------------------------------------
Richard C.E. Morgan
a Managing Member
AMPHION PARTNERS L.L.C.
(formerly, Wolfensohn Partners II, L.L.C.)
By: /s/ Richard C.E. Morgan
-------------------------------------
Richard C.E. Morgan
a Managing Member
2
<PAGE> 1
Exhibit 2
Letterhead of Lasertechnics
May 16, 1994
Wolfensohn Associates L.P.
40th Floor
599 Lexington Avenue
New York, New York 10022
Attn: Mr. Richard C.E. Morgan
RE: STOCK OPTION GRANT PURSUANT TO DRAW NOTES OF FEBRUARY AND APRIL, 1994
Dear Sirs:
This letter is intended to evidence the grant to you by Lasertechnics,
Inc. of stock options resulting from your loans to the Company aggregating
$1,000,000 pursuant to the two Draw Promissory Notes with Stock Options, each in
the principal amount of $500,000 and dated February 18, 1994 and April 13, 1994,
respectively. As a result of these loans, you became entitled to receive, as of
April 15, 1994, options to purchase a total of 76,855 shares of the Company's
authorized but unissued common stock at prices ranging from $1.28 per share to
$1.34 per share as shown on the attached schedule contained in a Company
memorandum, dated April 1994, to Jim Alley from Gary Tomlin.
The options granted to you and evidenced by this grant letter are
subject to the terms and conditions hereafter stated in this letter. They may be
exercised in whole or in part at any time for a period of five years commencing
April 15, 1994 and ending April 15, 1999. The Board of Directors has set aside
and reserved for issuance a total of 76,855 shares of stock for exercise of the
options granted hereby.
These options and your rights under it are not transferrable. Any stock
you purchase from the Company pursuant to the exercise of these options shall be
restricted stock and any certificate evidencing such stock shall bear the
following legend restricting transfer of the securities it represents:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or any state securities
law. They may not be sold or offered for
<PAGE> 2
Wolfensohn Associates L.P.
May 16, 1994
Page 2
sale in the absence of an effective registration statement under the
applicable securities laws or an exemption from such registration under
such laws."
In the event of a stock split or reverse split, stock dividend,
subdivision or similar event with respect to the Company's common stock or in
the event of any reorganization or recapitalization affecting the Company's
common stock, the number of shares or price per share specified for your options
is subject to adjustment so as to treat you fairly and put your option rights in
the same economic position as they were prior to such event. If any questions
should arise between you and the Company as to the appropriate adjustment, it
shall be determined by the Company's independent public accountants.
Subject to the foregoing, you may exercise the options in whole or in
part any time or times within the five year period by delivering to the Company
at its principal office a writing signed by you and notifying the Company of
your exercise, accompanied by a check in the full amount of the purchase price
for the shares being purchased pursuant to the exercise at that time.
The granting of these options, their exercise and the sale of the
Company's common stock acquired pursuant thereto may result in significant
federal income tax consequences. You may want to consult tax counsel concerning
this option.
If you have any questions concerning the foregoing, please do not
hesitate to contact me.
Sincerely yours,
/s/ Richard M. Clarke
---------------------------
Richard M. Clarke, Chairman
Board of Directors
RMC/mth
Enclosure
2
<PAGE> 1
Exhibit 3
Promissory Note
$2,000,000 April 1, 1994
FOR VALUE RECEIVED, the undersigned, Wolfensohn Partners L.P. (the
"Partnership") hereby promises to pay to James D. Wolfensohn (the "Payee"), or
order, on demand, the lesser of (i) the principal amount shown on the schedule
attached hereto or on a continuation of such schedule attached to and made a
part hereof (the "Schedule") and (ii) Two Million Dollars ($2,000,000) plus, in
each case, interest on the principal amount hereof outstanding from time to time
as shown on the Schedule, at the rate of 7.00% per annum for the period for
which interest is being determined, compounded semiannually. Payments of
principal shall be recorded by the Payee on the Schedule.
This Promissory Note may be prepaid in whole or in part at any time and
from time to time, without penalty or premium.
Without the prior written consent of the Payee, the Partnership shall
not directly or indirectly make any dividend or other distribution or redeem,
purchase or otherwise acquire all or any portion of any partnership or other
equity interest in the Partnership so long as any principal or interest payable
hereunder remains unpaid.
Payment of principal and interest hereunder shall be made in lawful
money of the United States of America.
This Promissory Note is delivered in the State of New York and shall be
governed by the laws of the State of New York without regard to its conflict of
law rules.
WOLFENSOHN PARTNERS L.P.
By: /s/ James D. Wolfensohn
------------------------
Title: Managing Partner
<PAGE> 2
Note (cont'd)
SCHEDULE OF PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
UNPAID AMOUNT OF
PRINCIPAL PRINCIPAL NOTATION
DATE BALANCE REPAID MADE BY
-------- ------------- --------- --------
<S> <C> <C> <C>
3/31/94 $ 185,000.00
4/05/94 335,000.00
4/06/94 445,000.00
4/08/94 550,000.00
4/12/94 750,000.00
4/13/94 950,000.00
4/14/94 1,098,000.00
4/22/94 1,190,000.00
4/28/94 1,435,000.00
5/04/94 1,535,000.00
5/06/94 1,557,000.00
5/09/94 1,657,000.00
5/12/94 1,992,000.00
7/14/94 1,642,000.00
8/30/94 1,592,000.00
11/03/95 1,079,000.00
2/01/96 1,779,000.00
3/01/96 1,829,000.00
3/05/96 1,879,000.00
3/28/96 1,904,000.00
4/10/96 2,654,000.00
6/06/96 2,654,000.00
9/10/96 400,000.00
</TABLE>
2
<PAGE> 3
Note (cont'd)
SCHEDULE OF PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
UNPAID AMOUNT OF
PRINCIPAL PRINCIPAL NOTATION
DATE BALANCE REPAID MADE BY
-------- ------------ --------- --------
<S> <C> <C> <C>
10/24/95 710,000.00
10/28/96 810,000.00
11/04/96 935,000.00
11/07/96 1,202,000.00
12/13/96 1,451,000.00
12/18/96 1,734,000.00
12/30/96 1,995,000.00
1/03/97 2,395,000.00
1/14/97 2,915,000.00
1/21/97 3,210,000.00
1/29/97 3,575,000.00
2/10/97 3,585,000.00
2/13/97 3,845,000.00
2/14/97 3,920,000.00
2/21/97 4,065,000.00
2/26/97 4,375,000.00
3/03/97 4,758,682.27
3/12/97 5,185,682.27
3/21/97 5,325,682.27
3/26/97 6,036,682.27
4/01/97 6,211,682.27
4/02/97 6,251,682.27
4/04/97 6,416,682.27
</TABLE>
3
<PAGE> 4
Note (cont'd)
SCHEDULE OF PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
UNPAID AMOUNT OF
PRINCIPAL PRINCIPAL NOTATION
DATE BALANCE REPAID MADE BY
------- ------------ --------- --------
<S> <C> <C> <C>
4/10/97 6,641,682.27
4/14/97 6,741,682.27
4/15/97 6,794,682.27
4/18/97 7,129,682.27
4/23/97 7,539,682.27
5/02/97 7,675,682.27
5/06/97 8,028,682.27
5/13/97 8,528,682.27
5/14/97 9,030,019.27
5/15/97 9,068,019.27
5/21/97 9,135,019.27
5/23/97 9,343,019.27
5/28/97 9,587,019.27
6/04/97 9,771,019.27
6/12/97 10,021,019.27
6/19/97 10,281,019.27
6/25/97 11,131,019.27
</TABLE>
4
<PAGE> 1
Exhibit 4
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
Warrant No. 32 For the Purchase of 29,499 Shares
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wolfensohn Associates
L.P. ("Wolfensohn") or its successors in interest, assigns or transferees
(collectively, the "Warrant Holder"), is entitled to subscribe for and purchase
from Lasertechnics, Inc., a Delaware corporation (the "Company"), 29,499 shares
of the Company's Common Stock (as defined in paragraph 10 hereof) (the "Warrant
Shares") at the "Exercise Price" (as hereinafter defined) per share, as the
number of Warrant Shares and the Exercise Price shall be adjusted and readjusted
or changed from time to time in accordance with paragraph 4 hereof. The Exercise
Price shall be the lesser of (i) $ 3.39 or (ii) if the Company completes an
equity financing of Five Million Dollars ($5,000,000) or more, on or before
December 31, 1996, the price per share at which shares of Common Stock are
issued in such financing or if such financing involves convertible or
exchangeable securities, the price at which such securities may be converted
into or exchanged for Common Stock.
This Warrant may be exercised at any time and from time to
time on or prior to December 31, 2001.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the
Warrant Holder, in whole or in part, by (a) delivering to the Company a duly
executed notice of exercise in the form of Annex A hereto and (b) at the Warrant
Holder's option, either (i) delivering a check payable to (or wire transfer to
the account of) the Company in an amount equal to the product of
<PAGE> 2
(x) the Exercise Price times (y) the number of Warrant Shares as to which this
Warrant is being exercised (such product, the "Total Exercise Price") or (ii)
delivering to the Company a letter (the "Conversion Letter") requesting
conversion or exchange of a portion of any indebtedness owed by the Company to
the Warrant Holder in an amount equal to the Total Exercise Price or (iii)
surrendering to the Company a portion of this Warrant with a "Value" (as defined
below) equal to the Total Exercise Price. For the purpose of clause (b) (iii)
above, "Value" shall mean the product of (I) the amount by which the average of
the closing prices of the Company's Common Stock on the thirty trading days
preceding the date of exercise, as reported in The Wall Street Journal, exceeds
the Exercise Price and (II) the number of Warrant Shares as to which this
Warrant is surrendered for the purpose of effecting payment for Warrant Shares.
This Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of delivery of a duly executed notice of exercise,
together with the amount (in cash or by delivering the Conversion Letter or by
surrender of a portion of this Warrant) payable upon exercise of this Warrant
and, as of such moment, (i) the rights of the Warrant Holder, as such, with
respect to the number of Warrant Shares as to which this Warrant is being
exercised (and, if applicable, surrendered as payment of the Total Exercise
Price) shall cease, and (ii) such Warrant Holder shall be deemed to be the
record holder of the shares of Common Stock issuable upon such exercise. As soon
as practicable after the exercise, in whole or in part, of this Warrant, and in
any event within 5 business days thereafter, the Company at its expense
(including the payment by it of any applicable issuance or stamp taxes) will
cause to be issued in the name of and delivered to the Warrant Holder, or as the
Warrant Holder (upon payment by the Warrant Holder of any applicable transfer
taxes) may direct, a certificate of certificates for the number of fully paid
and nonassessable shares of Common Stock to which the Warrant Holder shall be
entitled upon such exercise. In the event of partial exercise of this Warrant
and, if applicable, partial surrender of this Warrant pursuant to clause (b)
(iii) of this paragraph, the Warrant need not be delivered to the Company
provided that the Warrant Holder agrees to make a notation of such partial
exercise and, if applicable, surrender on the Warrant. If this Warrant is
delivered to the Company, the Company shall issue and deliver to the Warrant
Holder a new Warrant evidencing the rights to purchase the remaining Warrant
Shares, which new Warrant shall in all other respects be identical to this
Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that
the Warrant Holder is acquiring this Warrant for its own account or the account
of an affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that they have not
been registered under the Act, and may not be sold by the Warrant Holder except
pursuant to an effective registration or pursuant to an
2
<PAGE> 3
exemption from registration. Wolfensohn shall be entitled to include the Warrant
Shares in any demand or piggyback registration to which Wolfensohn is entitled
in respect of Common Stock held by it.
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been
duly authorized and validly issued and warrants and agrees that all shares of
Common Stock that may be issued upon the exercise of the rights represented by
this Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further warrants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as
follows:
(a) In case the Company shall (i) pay a stock dividend or make
a distribution to holders of Common Stock in shares of its Common
Stock, (ii) subdivide its outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of
shares, or (iv) issue by reclassification of its shares of Common Stock
any shares of capital stock of the Company, (A) the Exercise Price
shall be increased or decreased, as the case may be, to an amount which
shall bear the same relation to the Exercise Price in effect
immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total
number of shares outstanding immediately after such action and (B) this
Warrant automatically shall be adjusted so that it shall thereafter
evidence the right to purchase the kind and number of Warrant Shares or
other securities which the Warrant Holder would have owned and would
have been entitled to receive after such action if this Warrant had
been exercised immediately prior to such action or any record date with
respect thereto. An adjustment made pursuant to this subparagraph (a)
shall become effective retroactively immediately after the record date
in the case of a dividend or distribution of Common Stock and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(b) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of (i) assets
3
<PAGE> 4
(other than cash dividends or cash distributions payable out of
consolidated net income or retained earnings or dividends payable in
Common Stock), (ii) evidences of indebtedness or other debt or equity
securities of the Company, or of any corporation other than the Company
(except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights, options or warrants are
immediately exercisable (hereinafter collectively called "Distributions
on Common Stock"), the Company shall make provisions for the Warrant
Holder to receive upon exercise of this Warrant, a proportional amount
(depending upon the extent to which this Warrant is exercised) of such
assets, evidences of indebtedness, securities or such other rights, as
if such Warrant Holder had exercised this Warrant on or before such
record date.
(c) In case of any consolidation or merger of the Company with
or into another corporation or the sale of all or substantially all of
the assets of the Company to another corporation, this Warrant
thereafter shall be exercisable for the kind and amount of shares of
stock or other securities or property to which a holder of the number
of shares of Common Stock of the Company deliverable upon exercise of
this Warrant would have been entitled upon such consolidation, merger
or sale; and, in such case, appropriate adjustment shall be made in the
application of the provisions in this paragraph 4, to the end that the
provisions set forth in this paragraph 4 (including provisions with
respect to changes in and adjustments of the exercise price) shall
thereafter be applicable, as nearly as reasonably may be, in relation
to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(d) If any event shall occur as to which the provisions of
this paragraph 4 shall not be strictly applicable, but with respect to
which the failure to make any adjustment to the Exercise Price and the
number of Warrant Shares issuable upon exercise of this Warrant would
not fairly protect the purchase rights represented by this Warrant in
accordance with the intent and principles of this paragraph 4, upon
request of the Warrant Holder, the Company shall appoint a firm of
independent public accountants reasonably acceptable to the Warrant
Holder which shall give its opinion upon the adjustments, if any,
consistent with the intent and principles established in this paragraph
4 necessary to preserve without dilution the purchase rights
represented by this Warrant. Upon receipt of such opinion, the Company
will promptly mail a copy thereof to the Warrant Holder and shall make
the adjustments described therein.
(e) Upon the occurrence of each adjustment or readjustment of
the exercise price or any change in the number of Warrant Shares or in
the shares of stock or other securities or property deliverable upon
exercise of this Warrant pursuant to this paragraph 4, the Company at
its expense shall promptly compute such adjustment or readjustment
4
<PAGE> 5
and change in accordance with the terms hereof and furnish to each
holder hereof a certificate signed by the chief financial officer of
the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or
readjustment and change is based. The Company shall, upon the written
request at any time of the Warrant Holder, furnish or cause to be
furnished to such Holder, a similar certificate setting forth (i) such
adjustment or readjustment and change, (ii) the Exercise Price then in
effect, and (iii) the number of Warrant Shares and the amount, if any,
of other shares of stock and other securities and property which would
be received upon the exercise of the Warrant.
(f) The Company shall not be required upon the exercise of
this Warrant to issue any fraction of shares, but shall make any
adjustment therefor by rounding the number of shares obtainable upon
exercise to the next highest whole number of shares.
5. Notice to Warrant Holder.
If at any time,
(a) the Company shall take any action which would require an
adjustment in the Exercise Price or in the number of Warrant Shares
pursuant to paragraph 4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of any Distributions on Common Stock as set forth in
paragraph 4(b), and notice thereof shall be given to holders of Common
Stock; or
(c) the Company shall issue any additional shares of Common
Stock or declare any dividend (or any other distribution) on its Common
Stock (other than its regular quarterly dividends); or
(d) there shall be any capital reorganization or
reclassification of the Common Stock (other than a change in par value
or from par value to no par value or from no par value to par value of
the Common Stock), or any consolidation or merger to which the Company
is a party, or any sale or transfer of all or substantially all of the
assets of the Company; or
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give written notice to
the Warrant Holder, not less than 20 days before any record date or other date
set for definitive action, or of
5
<PAGE> 6
the date on which such reorganization, reclassification, sale, consolidation,
merger, dissolution, liquidation or winding-up shall take place, as the case may
be. Such notice shall also set forth such facts as shall indicate the effect of
such action (to the extent such effect may be known at the date of such notice)
on the current Exercise Price and the kind and amount of the Warrant Shares and
other securities and property deliverable upon exercise of this Warrant. Such
notice shall also specify the date as of which the holders of the Common Stock
of record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification, sale,
consolidation, merger, dissolution, liquidation or winding-up, as the case may
be.
6. Transfer of Rights.
This Warrant is transferable in whole or in part, at the
option of the Warrant Holder upon delivery of the Warrant Assignment Form
annexed as Annex B hereto, duly executed. The Company shall execute and deliver
a new Warrant or Warrants in the form of this Warrant with appropriate changes
to reflect the issuance of subsequent Warrants, in the name of the assignee or
assignees named in such instrument of assignment and, if the Warrant Holder's
entire interest is not being transferred or assigned, in the name of the Warrant
Holder, and this Warrant shall promptly be cancelled. Any transfer or exchange
of this Warrant shall be without charge to the Warrant Holder and any new
Warrant or Warrants issued shall be dated the date hereof. The term "Warrant" as
used herein includes any Warrants into which this Warrant may be divided or for
which it may be exchanged.
7. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
8. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to
any voting or other rights of a shareholder of the Company, either at law or
equity, and the rights of the Warrant Holder are limited to those expressed in
this Warrant.
9. Successors.
All the provisions of this Warrant by or for the benefit of
the Company or the Warrant Holder shall bind and inure to the benefit of their
respective successors and assigns.
6
<PAGE> 7
10. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and
include the Company's currently authorized common stock, $.01 par value
per share (or, at the election of the Warrant Holder, non-voting common
stock, $.01 par value per share) and stock of any other class or other
consideration into which such currently authorized Common Stock may
hereafter have been changed.
(b) This Warrant shall be construed in accordance with and
governed by the laws of the State of New York without regard to
principles of conflicts and choice of laws.
(c) The caption headings used in this Warrant are for
convenience of reference only and shall not be construed in any way to
affect the interpretation of any provisions of this Warrant.
11. Notices.
Any notice pursuant to this Warrant shall be sufficiently
given if sent by first-class mail, postage prepaid, or delivered by facsimile
transmission, addressed as follows:
If to the Company, then to it at:
Lasertechnics, Inc.
5500 Wilshire Avenue, N.E.
Albuquerque, New Mexico 87113
Attention: Ronald Bencke, Vice President
Facsimile No.: (505) 821-2213
(or to such other address as the Company may have furnished in
writing to the Warrant Holder for this purpose);
If to Wolfensohn, then to it at:
Wolfensohn Associates L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Richard C.E. Morgan
Facsimile No.: (212) 745-9473
7
<PAGE> 8
If to any other Warrant Holder, then to it at such address as such
Warrant Holder may have furnished in writing to the Company for this
purpose.
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the 19th day of June, 1996.
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mottorano
----------------------------------
Name: E.A. Milo Mottorano
Title: Vice President and C.F.O.
Attest:
/s/ Jean-Pierre Arnaudo
- ----------------------------------
Name: Jean-Pierre Arnaudo
Title: Secretary
8
<PAGE> 9
ANNEX A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
-------------, 19--_
TO: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in
Warrant No.-------, hereby irrevocably elects and agrees to purchase ----------
shares of the Company's common stock [or nonvoting common stock] covered by such
Warrant, and makes payment herewith in full therefor of the Total Exercise Price
of $--------------- in the following form:
[specify cash payment or conversion of debt or surrender of portion of Warrant]
- -------------------------------------------------------------------------------
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate for investment
purposes and not with the view to any offering or distribution and that the
Warrant Holder will not sell or otherwise dispose of the underlying Warrant
Shares in violation of applicable securities laws. [When applicable: If said
number of shares is less than all of the shares purchasable hereunder the
undersigned requests that a new Warrant evidencing the rights to purchase the
remaining Warrant Shares (which new Warrant shall in all other respects be
identical to the Warrant exercised hereby) be registered in the name of
- ----------------------------------- whose address is:
- -----------------------
- -----------------------
- -----------------------
9
<PAGE> 10
Signature: ------------------------
Printed Name: ------------------------
Address: ------------------------
------------------------
------------------------
10
<PAGE> 11
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED -------------------------- hereby sells,
assigns and transfers all of its rights as set forth in Warrant No. ___ with
respect to the shares of the Company's Common Stock covered thereby as set forth
below unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
- --------------------- ------------------------- -------------
-------------------------
All notices to be given by the Company to the Warrant Holder
pursuant to paragraph 5 of Warrant No.------ shall be sent to the Assignee(s) at
the above listed address(es), and, if the number of shares being hereby assigned
is less than all of the shares covered by Warrant No.--------, then also to the
undersigned.
The undersigned requests that the Company execute and deliver,
if necessary to comply with the provisions of paragraph 6 of Warrant No.-----, a
new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No.-------, new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated:----------, 19--
Signature:
----------------------
Printed Name:
----------------------
Address: ----------------------
----------------------
----------------------
11
<PAGE> 1
Exhibit 5
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
Warrant No. 33 For the Purchase of 17,668 Shares
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wolfensohn Associates
L.P. ("Wolfensohn") or its successors in interest, assigns or transferees
(collectively, the "Warrant Holder"), is entitled to subscribe for and purchase
from Lasertechnics, Inc., a Delaware corporation (the "Company"), 17,668 shares
of the Company's Common Stock (as defined in paragraph 10 hereof) (the "Warrant
Shares") at the "Exercise Price" (as hereinafter defined) per share, as the
number of Warrant Shares and the Exercise Price shall be adjusted and readjusted
or changed from time to time in accordance with paragraph 4 hereof. The Exercise
Price shall be the lesser of (i) $2.83 or (ii) if the Company completes an
equity financing of Five Million Dollars ($5,000,000) or more, on or before
December 31, 1996, the price per share at which shares of Common Stock are
issued in such financing or if such financing involves convertible or
exchangeable securities, the price at which such securities may be converted
into or exchanged for Common Stock.
This Warrant may be exercised at any time and from time to
time on or prior to December 31, 2001.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the Warrant
Holder, in whole or in part, by (a) delivering to the Company a duly executed
notice of exercise in the form of Annex A hereto and (b) at the Warrant Holder's
option, either (i) delivering a check payable to (or wire transfer to the
account of) the Company in an amount equal to the product of (x) the Exercise
Price times (y) the number of Warrant Shares as to which this Warrant is being
exercised (such product, the "Total Exercise Price") or (ii) delivering to the
Company a letter (the "Conversion Letter") requesting conversion or exchange of
a portion of any indebtedness owed by the Company to the Warrant Holder in an
amount equal to the Total Exercise Price or (iii) surrendering to the Company a
portion of this Warrant with a "Value" (as defined below) equal to the Total
Exercise Price. For the purpose of clause (b) (iii) above, "Value" shall mean
the
<PAGE> 2
product of (I) the amount by which the average of the closing prices of the
Company's Common Stock on the thirty trading days preceding the date of
exercise, as reported in The Wall Street Journal, exceeds the Exercise Price and
(II) the number of Warrant Shares as to which this Warrant is surrendered for
the purpose of effecting payment for Warrant Shares. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of delivery of a duly executed notice of exercise, together with the amount
(in cash or by delivering the Conversion Letter or by surrender of a portion of
this Warrant) payable upon exercise of this Warrant and, as of such moment, (i)
the rights of the Warrant Holder, as such, with respect to the number of Warrant
Shares as to which this Warrant is being exercised (and, if applicable,
surrendered as payment of the Total Exercise Price) shall cease, and (ii) such
Warrant Holder shall be deemed to be the record holder of the shares of Common
Stock issuable upon such exercise. As soon as practicable after the exercise, in
whole or in part, of this Warrant, and in any event within 5 business days
thereafter, the Company at its expense (including the payment by it of any
applicable issuance or stamp taxes) will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder (upon payment by the
Warrant Holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock to which the Warrant Holder shall be entitled upon such exercise. In the
event of partial exercise of this Warrant and, if applicable, partial surrender
of this Warrant pursuant to clause (b) (iii) of this paragraph, the Warrant need
not be delivered to the Company provided that the Warrant Holder agrees to make
a notation of such partial exercise and, if applicable, surrender on the
Warrant. If this Warrant is delivered to the Company, the Company shall issue
and deliver to the Warrant Holder a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical to this Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the account of
an affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that they have not
been registered under the Act, and may not be sold by the Warrant Holder except
pursuant to an effective registration or pursuant to an exemption from
registration. Wolfensohn shall be entitled to include the Warrant Shares in any
demand or piggyback registration to which Wolfensohn is entitled in respect of
Common Stock held by it.
2
<PAGE> 3
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and warrants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further warrants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as
follows:
(a) In case the Company shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, (A) the Exercise Price shall be increased or decreased, as the case
may be, to an amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total number of
shares outstanding immediately after such action and (B) this Warrant
automatically shall be adjusted so that it shall thereafter evidence the right
to purchase the kind and number of Warrant Shares or other securities which the
Warrant Holder would have owned and would have been entitled to receive after
such action if this Warrant had been exercised immediately prior to such action
or any record date with respect thereto. An adjustment made pursuant to this
subparagraph (a) shall become effective retroactively immediately after the
record date in the case of a dividend or distribution of Common Stock and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights, options or warrants are immediately
exercisable (hereinafter collectively called "Distributions on Common Stock"),
the
3
<PAGE> 4
Company shall make provisions for the Warrant Holder to receive upon exercise of
this Warrant, a proportional amount (depending upon the extent to which this
Warrant is exercised) of such assets, evidences of indebtedness, securities or
such other rights, as if such Warrant Holder had exercised this Warrant or on
before such record date.
(c) In case of any consolidation or merger of the Company with or into
another corporation or the sale of all or substantially all of the assets of the
Company to another corporation, this Warrant thereafter shall be exercisable for
the kind and amount of shares of stock or other securities or property to which
a holder of the number of shares of Common Stock of the Company deliverable upon
exercise of this Warrant would have been entitled upon such consolidation,
merger, or sale; and, in such case, appropriate adjustment shall be made in the
application of the provisions in this paragraph 4, to the end that the
provisions set forth in this paragraph 4 (including provisions with respect to
changes in and adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other securities or property thereafter deliverable upon the exercise of this
Warrant.
(d) If any event shall occur as to which the provisions of this
paragraph 4 shall not be strictly applicable, but with respect to which the
failure to make any adjustment to the Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant would not fairly protect the
purchase rights represented by this Warrant in accordance with the intent and
principles of this paragraph 4, upon request of the Warrant Holder, the Company
shall appoint a firm of independent public accountants reasonably acceptable to
the Warrant Holder which shall give its opinion upon the adjustments, if any,
consistent with the intent and principles established in this paragraph 4
necessary to preserve without dilution the purchase rights represented by this
Warrant. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the Warrant Holder and shall make the adjustments described therein.
(e) Upon the occurrence of each adjustment or readjustment of the
exercise price or any change in the number of Warrant Shares or in the shares of
stock or other securities or property deliverable upon exercise of this Warrant
pursuant to this paragraph 4, the Company at its expense shall promptly compute
such adjustment or readjustment and change in accordance with the terms hereof
and furnish to each holder hereof a certificate signed by the chief financial
officer of the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or readjustment and
change is based. The Company shall, upon the written request at any time of the
Warrant Holder, furnish or cause to be furnished to such Holder, a similar
certificate setting forth (i) such adjustment or readjustment and change, (ii)
the Exercise Price then in effect, and (iii) the number of Warrant Shares and
the amount, if any, of other shares of stock and other securities and property
which would be received upon the exercise of the Warrant.
4
<PAGE> 5
(f) The Company shall not be required upon the exercise of this Warrant
to issue any fraction of shares, but shall make any adjustment therefor by
rounding the number of shares obtainable upon exercise to the next highest whole
number of shares.
5. Notice to Warrant Holder. If at any time,
(a) the Company shall take any action which would require an
adjustment in the Exercise Price or in the number of Warrant Shares
pursuant to paragraph 4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of any Distributions on Common Stock as set forth in
paragraph 4(b), and notice thereof shall be given to holders of Common
Stock; or
(c) the Company shall issue any additional shares of Common
Stock or declare any dividend (or any other distribution) on its Common
Stock (other than its regular quarterly dividends); or
(d) there shall be any capital reorganization or
reclassification of the Common Stock (other than a change in par value
or from par value to no par value or from no par value to par value of
the Common Stock), or any consolidation or merger to which the Company
is a party, or any sale or transfer of all or substantially all of the
assets of the Company; or
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give written notice to
the Warrant Holder, not less than 20 days before any record date or other date
set for definitive action, or of the date on which such reorganization,
reclassification, sale, consolidation, merger, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also set
forth such facts as shall indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the current Exercise Price
and the kind and amount of the Warrant Shares and other securities and property
deliverable upon exercise of this Warrant. Such notice shall also specify the
date as of which the holders of the Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, sale, consolidation, merger, dissolution,
liquidation or winding up, as the case may be.
5
<PAGE> 6
6. Transfer of Rights.
This Warrant is transferable in whole or in part, at the option of the
Warrant Holder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. The Company shall execute and deliver a new Warrant or
Warrants in the form of this Warrant with appropriate changes to reflect the
issuance of subsequent Warrants, in the name of the assignee or assignees named
in such instrument of assignment and, if the Warrant Holder's entire interest is
not being transferred or assigned, in the name of the Warrant Holder, and this
Warrant shall promptly be cancelled. Any transfer or exchange of this Warrant
shall be without charge to the Warrant Holder and any new Warrant or Warrants
issued shall be dated the date hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or for which it may
be exchanged.
7. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
8. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.
9. Successors.
All the provisions of this Warrant by or for the benefit of the Company
or the Warrant Holder shall bind and inure to the benefit of their respective
successors and assigns.
10. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and
include the Company's currently authorized common stock, $.01 par value
per share (or, at the election of the Warrant Holder, non-voting common
stock, $.01 par value per share) and stock of any other class or other
consideration into which such currently authorized Common Stock may
hereafter have been changed.
(b) This Warrant shall be construed in accordance with and
governed by the laws of the State of New York without regard to
principles of conflicts and choice of laws.
6
<PAGE> 7
(c) The caption headings used in this Warrant are for
convenience of reference only and shall not be construed in any way to
affect the interpretation of any provisions of this Warrant.
11. Notices.
Any notice pursuant to this Warrant shall be sufficiently given if sent
by first class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows:
If to the Company, then to it at:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
Attention: E.A. Milo Mattorano, Vice President
Facsimile No.: (214) 407-9085
(or to such other address as the Company may have furnished in writing
to the Warrant Holder for this purpose);
If to Wolfensohn, then to it at:
Wolfensohn Associates L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Richard C.E. Morgan
Facsimile No.: (212) 745-9473
If to any other Warrant Holder, then to it at such address as such
Warrant Holder may have furnished in writing to the Company for this
purpose.
7
<PAGE> 8
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the ______ day of __________________,
1996.
LASERTECHNTICS, INC.
By: /s/ E.A. Milo Mattorano
-------------------------------
Name: E.A. Milo Mattorano
Title: Vice President and CFO
Attest:
By: /s/ Jean-Pierre Arnaudo
--------------------------
Name: Jean-Pierre Arnaudo
Title: Director
8
<PAGE> 9
ANNEX A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
______________, 19___
TO: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in
Warrant No. _____, hereby irrevocably elects and agrees to purchase ___________
shares of the Company's common stock [or nonvoting common stock] covered by such
Warrant, and makes payment herewith in full therefor of the Total Exercise Price
of $_____________ in the following form:
[specify cash payment or conversion of debt or surrender of portion of Warrant]
_______________________________________________________________________
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate for investment
purposes and not with the view to any offering or distribution and that the
Warrant Holder will not sell or otherwise dispose of the underlying Warrant
Shares in violation of applicable securities laws. [When applicable: If said
number of shares is less than all of the shares purchasable hereunder the
undersigned requests that a new Warrant evidencing the rights to purchase the
remaining Warrant Shares (which new Warrant shall in all other respects be
identical to the Warrant exercised hereby) be registered in the name of
_____________________________________ whose address is
_____________________
_____________________
_____________________
9
<PAGE> 10
Signature: ________________________
Printed Name: ________________________
Address: ________________________
________________________
________________________
10
<PAGE> 11
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED ________________________ hereby sells,
assigns and transfers all of its rights as set forth in Warrant No. ___ with
respect to the shares of the Company's Common Stock covered thereby as set forth
below unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
_____________________ _________________________ _________
_________________________
All notices to be given by the Company to the Warrant Holder
pursuant to paragraph 5 of Warrant No. ____ shall be sent to the Assignee(s) at
the above listed address(es), and, if the number of shares being hereby assigned
is less than all of the shares covered by Warrant No. ____, then also to the
undersigned.
The undersigned requests that the Company execute and deliver,
if necessary to comply with the provisions of paragraph 6 of Warrant No. ____, a
new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No. ___, new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated: _______________, 19__
Signature: ________________________
Printed Name: ________________________
Address: ________________________
________________________
________________________
11
<PAGE> 1
Exhibit 6
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
Warrant No. 34 For the Purchase of 9,174 Shares
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wolfensohn Associates
L.P. ("Wolfensohn") or its successors in interest, assigns or transferees
(collectively, the "Warrant Holder"), is entitled to subscribe for and purchase
from Lasertechnics, Inc., a Delaware corporation (the "Company"), 9,174 shares
of the Company's Common Stock (as defined in paragraph 10 hereof) (the "Warrant
Shares") at the "Exercise Price" (as hereinafter defined) per share, as the
number of Warrant Shares and the Exercise Price shall be adjusted and readjusted
or changed from time to time in accordance with paragraph 4 hereof. The Exercise
Price shall be the lesser of (i) $2.18 or (ii) if the Company completes an
equity financing of Five Million Dollars ($5,000,000) or more, on or before
December 31, 1996, the price per share at which shares of Common Stock are
issued in such financing or if such financing involves convertible or
exchangeable securities, the price at which such securities may be converted
into or exchanged for Common Stock.
This Warrant may be exercised at any time and from time to
time on or prior to December 31, 2001.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the Warrant
Holder, in whole or in part, by (a) delivering to the Company a duly executed
notice of exercise in the form of Annex A hereto and (b) at the Warrant Holder's
option, either (i) delivering a check payable to (or wire transfer to the
account of) the Company in an amount equal to the product of (x) the Exercise
Price times (y) the number of Warrant Shares as to which this Warrant is being
exercised
<PAGE> 2
(such product, the "Total Exercise Price") or (ii) delivering to the Company a
letter (the "Conversion Letter") requesting conversion or exchange of a portion
of any indebtedness owed by the Company to the Warrant Holder in an amount equal
to the Total Exercise Price or (iii) surrendering to the Company a portion of
this Warrant with a "Value" (as defined below) equal to the Total Exercise
Price. For the purpose of clause (b) (iii) above, "Value" shall mean the product
of (I) the amount by which the average of the closing prices of the Company's
Common Stock on the thirty trading days preceding the date of exercise, as
reported in The Wall Street Journal, exceeds the Exercise Price and (II) the
number of Warrant Shares as to which this Warrant is surrendered for the purpose
of effecting payment for Warrant Shares. This Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of
delivery of a duly executed notice of exercise, together with the amount (in
cash or by delivering the Conversion Letter or by surrender of a portion of this
Warrant) payable upon exercise of this Warrant and, as of such moment, (i) the
rights of the Warrant Holder, as such, with respect to the number of Warrant
Shares as to which this Warrant is being exercised (and, if applicable,
surrendered as payment of the Total Exercise Price) shall cease, and (ii) such
Warrant Holder shall be deemed to be the record holder of the shares of Common
Stock issuable upon such exercise. As soon as practicable after the exercise, in
whole or in part, of this Warrant, and in any event within 5 business days
thereafter, the Company at its expense (including the payment by it of any
applicable issuance or stamp taxes) will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder (upon payment by the
Warrant Holder of any applicable transfer taxes) may direct, a certificate of
certificates for the number of fully paid and nonassessable shares of Common
Stock to which the Warrant Holder shall be entitled upon such exercise. In the
event of partial exercise of this Warrant and, if applicable, partial surrender
of this Warrant pursuant to clause (b) (iii) of this paragraph, the Warrant need
not be delivered to the Company provided that the Warrant Holder agrees to make
a notation of such partial exercise and, if applicable, surrender on the
Warrant. If this Warrant is delivered to the Company, the Company shall issue
and deliver to the Warrant Holder a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical to this Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the account of
an affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that they have not
been registered under the Act, and may not be sold by the Warrant Holder except
pursuant to an effective registration or pursuant to an exemption from
registration. Wolfensohn shall be entitled to include the Warrant Shares in any
2
<PAGE> 3
demand or piggyback registration to which Wolfensohn is entitled in respect of
Common Stock held by it.
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and warrants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further warrants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, (A) the Exercise Price shall be increased or decreased, as the case
may be, to an amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total number of
shares outstanding immediately after such action and (B) this Warrant
automatically shall be adjusted so that it shall thereafter evidence the right
to purchase the kind and number of Warrant Shares or other securities which the
Warrant Holder would have owned and would have been entitled to receive after
such action if this Warrant had been exercised immediately prior to such action
or any record date with respect thereto. An adjustment made pursuant to this
subparagraph (a) shall become effective retroactively immediately after the
record date in the case of a dividend or distribution of Common Stock and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the
3
<PAGE> 4
Common Stock of the Company) or (iii) subscription rights, options or warrants
to purchase any of the foregoing assets or securities, whether or not such
rights, options or warrants are immediately exercisable (hereinafter
collectively called "Distributions on Common Stock"), the Company shall make
provisions for the Warrant Holder to receive upon exercise of this Warrant, a
proportional amount (depending upon the extent to which this Warrant is
exercised) of such assets, evidences of indebtedness, securities or such other
rights, as if such Warrant Holder had exercised this Warrant on or before such
record date.
(c) In case of any consolidation or merger of the Company with or into
another corporation or the sale of all or substantially all of the assets of the
Company to another corporation, this Warrant thereafter shall be exercisable for
the kind and amount of shares of stock or other securities or property to which
a holder of the number of shares of Common Stock of the Company deliverable upon
exercise of this Warrant would have been entitled upon such consolidation,
merger or sale; and, in such case, appropriate adjustment shall be made in the
application of the provisions in this paragraph 4, to the end that the
provisions set forth in this paragraph 4 (including provisions with respect to
changes in and adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other securities or property thereafter deliverable upon the exercise of this
Warrant.
(d) If any event shall occur as to which the provisions of this
paragraph 4 shall not be strictly applicable, but with respect to which the
failure to make any adjustment to the Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant would not fairly protect the
purchase rights represented by this Warrant in accordance with the intent and
principles of this paragraph 4, upon request of the Warrant Holder, the Company
shall appoint a firm of independent public accountants reasonably acceptable to
the Warrant Holder which shall give its opinion upon the adjustments, if any,
consistent with the intent and principles established in this paragraph 4
necessary to preserve without dilution the purchase rights represented by this
Warrant. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the Warrant Holder and shall make the adjustments described therein.
(e) Upon the occurrence of each adjustment or readjustment of the
exercise price or any change in the number of Warrant Shares or in the shares of
stock or other securities or property deliverable upon exercise of this Warrant
pursuant to this paragraph 4, the Company at its expense shall promptly compute
such adjustment or readjustment and change in accordance with the terms hereof
and furnish to each holder hereof a certificate signed by the chief financial
officer of the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or readjustment and
change is based. The Company shall, upon the written request at any time of the
Warrant Holder, furnish or cause to be furnished to such Holder, a similar
certificate setting forth (i) such adjustment or readjustment and change, (ii)
the Exercise Price then in effect, and (iii) the number of Warrant Shares and
the
4
<PAGE> 5
amount, if any, of other shares of stock and other securities and property which
would be received upon the exercise of the Warrant.
(f) The Company shall not be required upon the exercise of this Warrant
to issue any fraction of shares, but shall make any adjustment therefor by
rounding the number of shares obtainable upon exercise to the next highest whole
number of shares.
5. Notice to Warrant Holder. If at any time,
(a) the Company shall take any action which would require an
adjustment in the Exercise Price or in the number of Warrant Shares
pursuant to paragraph 4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of any Distributions on Common Stock as set forth in
paragraph 4(b), and notice thereof shall be given to holders of Common
Stock; or
(c) the Company shall issue any additional shares of Common
Stock or declare any dividend (or any other distribution) on its Common
Stock (other than its regular quarterly dividends); or
(d) there shall be any capital reorganization or
reclassification of the Common Stock (other than a change in par value
or from par value to no par value or from no par value to par value of
the Common Stock), or any consolidation or merger to which the Company
is a party, or any sale or transfer of all or substantially all of the
assets of the Company; or
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give written notice to
the Warrant Holder, not less than 20 days before any record date or other date
set for definitive action, or of the date on which such reorganization,
reclassification, sale, consolidation, merger, dissolution, liquidation or
winding-up shall take place, as the case may be. Such notice shall also set
forth such facts as shall indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the current Exercise Price
and the kind and amount of the Warrant Shares and other securities and property
deliverable upon exercise of this Warrant. Such notice shall also specify the
date as of which the holders of the Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, sale, consolidation, merger, dissolution,
liquidation or winding-up, as the case may be.
5
<PAGE> 6
6. Transfer of Rights.
This Warrant is transferable in whole or in part, at the option of the
Warrant Holder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. The Company shall execute and deliver a new Warrant or
Warrants in the form of this Warrant with appropriate changes to reflect the
issuance of subsequent Warrants, in the name of the assignee or assignees named
in such instrument of assignment and, if the Warrant Holder's entire interest is
not being transferred or assigned, in the name of the Warrant Holder, and this
Warrant shall promptly be cancelled. Any transfer or exchange of this Warrant
shall be without charge to the Warrant Holder and any new Warrant or Warrants
issued shall be dated the date hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or for which it may
be exchanged.
7. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
8. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.
9. Successors.
All the provisions of this Warrant by or for the benefit of the Company
or the Warrant Holder shall bind and inure to the benefit of their respective
successors and assigns.
10. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and
include the Company's currently authorized common stock, $.01 par value
per share (or, at the election of the Warrant Holder, non-voting common
stock, $.01 par value per share) and stock of any other class or other
consideration into which such currently authorized Common Stock may
hereafter have been changed.
(b) This Warrant shall be construed in accordance with and
governed by the laws of the State of New York without regard to
principles of conflicts and choice of laws.
6
<PAGE> 7
(c) The caption headings used in this Warrant are for
convenience of reference only and shall not be construed in any way to
affect the interpretation of any provisions of this Warrant.
11. Notices.
Any notice pursuant to this Warrant shall be sufficiently given if sent
by first-class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows:
If to the Company, then to it at:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
Attention: E.A. Milo Mattorano, Vice President
Facsimile No.: (214) 407-9085
(or to such other address as the Company may have furnished in writing to the
Warrant Holder for this purpose);
If to Wolfensohn, then to it at:
Wolfensohn Associates L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Richard C.E. Morgan
Facsimile No.: (212) 745-9473
If to any other Warrant Holder, then to it at such address as such
Warrant Holder may have furnished in writing to the Company for this
purpose.
7
<PAGE> 8
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the ________ day of __________________,
1996.
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mattorano
-------------------------------
Name: E.A. Milo Mattorano
Title: Vice President and CFO
Attest:
/s/ Jean-Pierre Arnaudo
- -------------------------------
Name: Jean-Pierre Arnaudo
Title: Director
8
<PAGE> 9
ANNEX A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
------------, 19--
TO: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in Warrant No.------,
hereby irrevocably elects and agrees to purchase -------------- shares of the
Company's common stock [or nonvoting common stock] covered by such Warrant, and
makes payment herewith in full therefor of the Total Exercise Price of
$------------ in the following form:
[specify cash payment or conversion of debt or surrender of portion of Warrant]
- ------------------------------------------------------------------------------
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate for investment
purposes and not with the view to any offering or distribution and that the
Warrant Holder will not sell or otherwise dispose of the underlying Warrant
Shares in violation of applicable securities laws. When applicable: If said
number of shares is less than all of the shares purchasable hereunder the
undersigned requests that a new Warrant evidencing the rights to purchase the
remaining Warrant Shares (which new Warrant shall in all other respects be
identical to the Warrant exercised hereby) be registered in the name
- ----------------- of whose address is:
--------------------
--------------------
--------------------
Signature:
------------------------
Printed Name:
------------------------
Address:
------------------------
------------------------
------------------------
9
<PAGE> 10
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED ---------------------------- hereby sells,
assigns and transfers all of its rights as set forth in Warrant No. ------- with
respect to the shares of the Company's Common Stock covered thereby as set forth
below unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
- --------------------- ------------------------- -------------
-------------------------
All notices to be given by the Company to the Warrant Holder
pursuant to paragraph 5 of Warrant No.------ shall be sent to the Assignee(s) at
the above listed address(es), and, if the number of shares being hereby assigned
is less than all of the shares covered by Warrant No.--------, then also to the
undersigned.
The undersigned requests that the Company execute and deliver,
if necessary to comply with the provisions of paragraph 6 of Warrant No.-----, a
new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No.-------, new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated:-------------, 19--
Signature:
----------------------------
Printed Name:
----------------------------
Address:
----------------------------
----------------------------
----------------------------
10
<PAGE> 1
Exhibit 7
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, OR APPLICABLE STATE SECURITIES LAWS, NOR THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THEY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THOSE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION THEREFROM.
LASERTECHNICS, INC.
SENIOR PROMISSORY NOTE
June 25, 1997
LASERTECHNICS, INC., a Delaware corporation having its principal place
of business in Carrollton, Texas (the "Company"), for value received, hereby
promises to pay to the order of Wolfensohn Partners L.P., a Delaware limited
partnership, or its transferees or assigns (the "Holder"), on December 31, 1997
(the "Final Maturity Date"), the unpaid principal amount of all advances made by
the Holder to the Company hereunder ("Advances"), as recorded on the grid below,
including any additional pages (the "Grid"), together with interest thereon from
the date of such Advance recorded on the Grid, at the rate of ten percent (10%)
per annum, calculated on the basis of the actual number of days elapsed over a
364- (or 365-) day year (the "Base Interest Rate"). Each payment received by the
Holder hereunder shall be applied to Advances in reverse of the order in which
such Advances were made, and each such payment shall be applied first to the
interest accrued on and then to the unpaid principal amount of the applicable
Advance. This Note is one of the Senior Promissory Notes ("Notes") issued and
sold by the Company under the Note Purchase Agreement dated as of June 25, 1997
(the "Note Purchase Agreement"), among the Company, the initial Holder and the
other purchaser named therein, and the Holder shall be entitled to the benefits
of any collateral security provided for therein for the benefit of Holders of
Senior Notes.
Payment of principal and interest shall be made in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts. All such payments
shall be paid by wire transfer of Federal funds in accordance with the written
instructions of the Holder or, in the absence of such instructions, by check
mailed to the Holder at the address last given to the Company by the Holder in
writing for such purpose.
This Note may be prepaid in whole or in part at any time at the option
of the Company, without premium or penalty, upon not less than 20 days' prior
written notice to the Holder.
Page 1 of 3
<PAGE> 2
If any time after the date hereof the Company or any subsidiary
completes (i) an equity or long-term debt financing, (ii) a sale of assets
outside the ordinary course of business, (iii) a sale-leaseback or similar
financing, or (iv) a joint venture or other strategic partnership (any such
transaction, an "Extraordinary Transaction"), and such Extraordinary Transaction
results in cash proceeds to the Company (together with the cash proceeds of any
other Extraordinary Transaction after the date hereof, to the extent not
previously applied) in excess of $ 1,000,000 (such excess, the "Available Cash
Proceeds"), then the full amount of Available Cash Proceeds shall be applied to
prepay this Note as provided herein; provided, however, that if the Available
Cash Proceeds are not sufficient to pay in full the principal of, and accrued
interest on, this Note and all other Notes issued under the Note Purchase
Agreement, then the Available Cash Proceeds shall be applied to prepay this Note
and all other Notes issued under the Note Purchase Agreement on a pro rata
basis, in proportion to the respective aggregate unpaid principal amounts
thereof.
The Company hereby waives presentment for payment, demand for payment,
notice of nonpayment, protest and notice of protest.
This Note may be prepaid in whole or in part (in amounts not less than
$50,000) at any time at the option of the Company, upon not less than 20 days'
prior written notice to the Holder, without premium or penalty; provided,
however, that any amounts prepaid hereunder or under any of the other Notes
shall be applied to prepay this Note and all other Notes issued under the Note
Purchase Agreement on a pro rata basis, in proportion to the respective
aggregate unpaid principal amounts thereof.
This Note shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of the Holder and its successors, assigns
and transferees.
If the Company fails to pay any amount of principal or interest when
due, the entire unpaid principal of and accrued interest on all Advances shall
forthwith become absolutely due and payable without any notice, demand, protest
or presentment whatsoever, all of which are hereby expressly waived. Interest on
any past due principal amount, whether at the Final Maturity Date or by
acceleration, shall accrue at a rate equal to the Base Interest Rate plus five
percent (5%) per annum, but in no event higher than the maximum legal rate of
interest permitted under applicable law. In addition, if any amount payable
hereunder shall remain unpaid after 3:00 p.m., New York City time, on the Final
Maturity Date, the Company shall pay to the record Holder of this Note at such
time the Additional Consideration provided for in the Note Purchase Agreement
(as such term is defined therein). The Company shall pay to the Holder all costs
and expenses of collection and enforcement relating to this Note, including
without limitation reasonable attorneys' fees and expenses.
Page 2 of 3
<PAGE> 3
This Note shall be governed by and construed in accordance with the
laws of the State of New York, without reference to its rules as to conflicts of
law. Any judicial proceeding brought against the Company to enforce, or
otherwise in connection with, this Note may be brought in any court of competent
jurisdiction in the City of New York, and, by execution and delivery of this
Note, the Company (i) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any final judgment rendered thereby in connection with
this Note and (ii) irrevocably waives any objection it may now or hereafter have
as to the venue of any such proceeding brought in such a court or that such a
court is an inconvenient forum.
THE COMPANY HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES TRIAL BY JURY
IN ANY ACTION, SUIT, COUNTERCLAIM OR CROSS CLAIM ARISING OUT OF OR IN CONNECTION
WITH THIS NOTE.
IN WITNESS WHEREOF, the Company has caused this Note to be signed by
its Vice President and has caused its corporate seal to be affixed and attested
by its Secretary.
[Corporate Seal] Attested: LASERTECHNICS, INC.
By: /s/ E. A. Milo Mattorano By: /s/ E. A. Milo Mattorano
---------------------------- ------------------------------------------
E.A. Milo Mattorano E. A. Milo Mattorano
Secretary Vice President and Chief Financial Officer
GRID
<TABLE>
<CAPTION>
ADVANCES PAYMENTS
------------------------------ --------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance Due
Date Made Amount Date Made Principal Interest on Principal Recorded By
6/25/97 $1,019,709.58
6/25/97 $ 500,000
7/9/97 $ 75,000
7/31/97 $ 225,000
</TABLE>
Page 3 of 3
<PAGE> 1
Exhibit 8
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
WARRANT NO. 1 FOR THE PURCHASE OF 360,000 SHARES
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wolfensohn Partners
L.P. or its successors in interest, assigns or transferees (collectively, the
"Warrant Holder"), is entitled to purchase from Lasertechnics, Inc., a Delaware
corporation (the "Company"), 360,000 shares of the Company's Common Stock (as
defined in paragraph 9(a) hereof) (the "Warrant Shares") at the exercise price
of SEVENTY CENTS ($.70) per share ("Exercise Price"). The number of Warrant
Shares and the Exercise Price shall be adjusted and readjusted or changed from
time to time in accordance with paragraph 4 hereof.
This Warrant may be exercised at any time and from time to
time on or prior to the third anniversary of the date of issuance set forth on
the signature page of this Warrant.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the Warrant
Holder, in whole or in part, by (a) delivering to the Company a duly executed
notice of exercise in the form of Annex A hereto and (b) at the Warrant Holder's
option, either (i) delivering a check payable to (or wire transfer to the
account of) the Company in an amount equal to the product of (x) the Exercise
Price times (y) the number of Warrant Shares as to which this Warrant is being
exercised (such product, the "Total Exercise Price") or (ii) delivering to the
company a letter (the "Conversion Letter") requesting conversion or exchange of
a portion of any indebtedness owed by the Company to the Warrant Holder in an
amount equal to the Total Exercise Price or (iii) surrendering to the Company a
portion of this Warrant with a "Value" (as defined below) equal to the Total
Exercise Price. For the purpose of clause (b)(iii) above, "Value" shall mean the
Page 1 of 10
<PAGE> 2
product of (I) the amount by which the average closing price per share of the
Company's Common Stock over the ten trading days preceding the date of exercise,
as reported in The Wall Street Journal, exceeds the Exercise Price and (II) the
number of Warrant Shares as to which this Warrant is surrendered for the purpose
of effecting payment for Warrant Shares. This Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of
delivery of a duly executed notice of exercise, together with the amount (in
cash or by delivering the Conversion Letter or by surrender of a portion of this
Warrant) payable upon exercise of this Warrant and, as of such moment, (i) the
rights of the Warrant Holder, as such, with respect to the number of Warrant
Shares as to which this Warrant is being exercised (and, if applicable,
surrendered as payment of the Total Exercise Price) shall cease, and (ii) such
Warrant Holder shall be deemed to be the record holder of the shares of Common
Stock issuable upon such exercise. As soon as practicable after the exercise, in
whole or in part, of this Warrant, and in any event within 5 business days
thereafter, the Company at its expense (including the payment by it of any
applicable issuance or stamp taxes) will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder (upon payment by the
Warrant Holer of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock to which the Warrant Holder shall be entitled upon such exercise. In the
event of partial exercise of this Warrant and, if applicable, partial surrender
of this Warrant pursuant to clause (b)(iii) of this paragraph, the Warrant need
not be delivered to the Company provided that the Warrant Holder agrees to make
a notation of such partial exercise and, if applicable, surrender on the
Warrant. If this Warrant is delivered to the Company, the Company shall issue
and deliver to the Warrant Holder a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical to this Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the account of
an affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that they have not
been registered under the Act, and may not be sold by the Warrant Holder except
pursuant to an effective registration or pursuant to an exemption from
registration. The Warrant Holder shall be entitled to include the Warrant Shares
in any demand or piggyback registration to which Warrant Holder is otherwise
entitled in respect of Common Stock held by it, in accordance with (and subject
to) the terms and conditions of any agreement between the Company and the
Warrant Holder with respect to such registration rights.
Page 2 0f 10
<PAGE> 3
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and covenants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as follows:
(a) If the Company shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, (A) the Exercise Price shall be increased or decreased, as the case
may be, to an amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total number of
shares outstanding immediately after such action and (B) this Warrant
automatically shall be adjusted so that it shall thereafter evidence the right
to purchase the kind and number of Warrant Shares or other securities which the
Warrant Holder would have owned and would have been entitled to receive after
such action if this Warrant had been exercised immediately prior to such action
or any record date with respect thereto. An adjustment made pursuant to this
subparagraph (a) shall become effective retroactively immediately after the
record date in the case of a dividend or distribution of Common Stock and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(b) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights, options or warrants are immediately
exercisable (hereinafter collectively called "Distributions on Common Stock"),
the Company shall
Page 3 of 10
<PAGE> 4
make provisions for the Warrant Holder to receive upon exercise of this Warrant,
a proportional amount (depending upon the extent to which this Warrant is
exercised) of such assets, evidences of indebtedness, securities or such other
rights, as if such Warrant Holder had exercised this Warrant on or before such
record date.
(c) In the case of any consolidation or merger of the Company with or
into another corporation or the sale of all or substantially all the assets of
the Company to another person or entity, this Warrant thereafter shall be
exercisable for the kind and amount of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock of the
Company deliverable upon exercise of this Warrant would have been entitled upon
such consolidation, merger or sale; and, in such case, appropriate adjustment
shall be made in the application of the provisions in this paragraph 4, to the
end that the provisions set forth in this paragraph 4 (including provisions with
respect to changes in and adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other securities or property thereafter deliverable upon the exercise of this
Warrant.
(d) Upon the occurrence of each adjustment or readjustment of the
exercise price or any change in the number of Warrant Shares or in the shares of
stock or other securities or property deliverable upon exercise of this Warrant
pursuant to this paragraph 4, the Company at its expense shall promptly compute
such adjustment or readjustment and change in accordance with the terms hereof
and furnish to each holder hereof a certificate signed by the chief financial
officer of the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or readjustment and
change is based. The Company shall, upon the written request at any time of the
Warrant Holder, furnish or cause to be furnished to such Holder, a similar
certificate setting forth (i) such adjustment or readjustment and change, (ii)
the Exercise Price then in effect, and (iii) the number of Warrant Shares and
the amount, if any, of other shares of stock and other securities and property
which would be received upon the exercise of the Warrant.
(e) The Company shall not be required upon the exercise of this Warrant
to issue any fraction of shares, but shall make any adjustment therefor by
rounding the number of shares obtainable upon exercise to the next highest whole
number of shares.
5. Transfer of Rights.
This Warrant is transferable in whole or in part, at the option of the
Warrant Holder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. The Company shall execute and deliver a new Warrant or
Warrants in the form of this Warrant with appropriate changes to reflect the
issuance of subsequent Warrants, in the name of the assignee or assignees named
in such instrument of assignment and, if the Warrant Holder's entire interest
Page 4 of 10
<PAGE> 5
is not being transferred or assigned, in the name of the Warrant Holder, and
this Warrant shall promptly be canceled. Any transfer or exchange of this
Warrant shall be without charge to the Warrant Holder and any new Warrant or
Warrants issued shall be dated the date hereof. The term "Warrant" as used
herein includes any Warrants into which this Warrant may be divided or for which
it may be exchanged. The Warrant Holder (and not the Company) will be
responsible for any stamp, transfer or other taxes payable on any such transfer.
Page 5 of 10
<PAGE> 6
6. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like denomination and date.
7. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.
8. Successors.
All the provisions of this Warrant by or for the benefit of the Company
or the Warrant Holder shall bind and inure to the benefit of their respective
successors and assigns.
9. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and include the
Company's currently authorized common stock, $.01 par value per share, and stock
of any other class or other consideration into which such currently authorized
Common Stock may hereafter have been changed.
(b) This Warrant shall be construed in accordance with and governed by
the laws of the State of Delaware.
(c) The caption headings used in this Warrant are for convenience of
reference only and shall not be construed in any way to affect the
interpretation of any provisions of this Warrant.
10. Notices.
Any notice pursuant to this Warrant shall be effective if sent by
first-class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows:
Page 6 of 10
<PAGE> 7
If to the Company, then to it at:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
Attention: Chief Financial Officer
Facsimile No.: (972) 407-9085
(or to such other address as the Company may have furnished in writing
to the Warrant Holder for this purpose); and
If to the Warrant Holder, then to it at such address as such Warrant
Holder may have furnished in writing to the Company for this purpose.
Page 7 of 10
<PAGE> 8
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the date set forth below.
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mattorano
-----------------------------------------------
Name: E.A. Milo Mattorano
Title: Vice President, Chief Financial Officer
Attest:
/s/ E.A. Milo Mattorano
- --------------------------
Name: E.A. Milo Mattorano
Title: Secretary
ISSUANCE DATE: AUGUST 6, 1997
Page 8 of 10
<PAGE> 9
ANNEX A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
19
To: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in Warrant No. ,
hereby irrevocably elects and agrees to purchase shares of the Company's
Common Stock covered by such Warrant, and makes payment herewith in full
therefor of the Total Exercise Price of $_______________.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate and will not sell or
otherwise dispose of the underlying Warrant Shares in violation of applicable
securities laws. If said number of shares is less than all of the shares
purchasable hereunder the undersigned requests that a new Warrant evidencing the
rights to purchase the remaining Warrant Shares (which new Warrant shall in all
other respects be identical to the Warrant exercised hereby) be registered in
the name of whose address is:
--------------------
--------------------
--------------------
Signature: ---------------------
Printed Name: ---------------------
Address: ---------------------
---------------------
---------------------
Page 9 of 10
<PAGE> 10
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED hereby sells, assigns and
transfers all of its rights as set forth in Warrant No. with respect to
the shares of the Company's Common Stock covered thereby as set forth below
unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
- --------------------- ------------------------- -------------
- --------------------- ------------------------- -------------
All notices to be given by the Company to the Warrant Holder pursuant
to paragraph 10 of Warrant No. shall be sent to the Assignee(s) at the
above stated address(es), and, if the number of shares being hereby assigned is
less than all of the shares covered by Warrant No. , than also to the
undersigned.
The undersigned requests that the Company execute and deliver, if
necessary to comply with the provisions of paragraph 5 of Warrant No. ,
a new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No. , new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated: , 19
Signature:
-----------------------------
Printed Name:
-----------------------------
Address:
-----------------------------
-----------------------------
-----------------------------
Page 10 of 10
<PAGE> 1
Exhibit 9
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
WARRANT NO. F-8 FOR THE PURCHASE OF 90,000 SHARES
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wolfensohn Partners L.P. or
its successors in interest, assigns or transferees (collectively, the "Warrant
Holder"), is entitled to purchase from Lasertechnics, Inc., a Delaware
corporation (the "Company"), 90,000 shares of the Company's Common Stock (as
defined in paragraph 9(a) hereof) (the "Warrant Shares") at the exercise price
of ONE DOLLAR ($1.00) per share ("Exercise Price"). The number of Warrant Shares
and the Exercise Price shall be adjusted and readjusted or changed from time to
time in accordance with paragraph 4 hereof.
This Warrant may be exercised at any time and from time to time on or
prior to July 14, 2002.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the Warrant
Holder, in whole or in part, by (a) delivering to the Company a duly executed
notice of exercise in the form of Annex A hereto and (b) delivering a check
payable to (or wire transfer to the account of) the Company in an amount equal
to the product of (x) the Exercise Price times (y) the number of Warrant Shares
as to which this Warrant is being exercised (such product, the "Total Exercise
Price"). This Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of delivery of a duly executed notice of
exercise, together with the amount payable upon exercise of this Warrant and, as
of such moment, (i) the rights of the Warrant Holder, as such, with respect to
the number of Warrant Shares as to which this Warrant is being exercised shall
cease, and (ii) such Warrant Holder shall be deemed to be the record holder of
the
<PAGE> 2
shares of Common Stock issuable upon such exercise. As soon as practicable after
the exercise, in whole or in part, of this Warrant, and in any event within 5
business days thereafter, the Company at its expense (including the payment by
it of any applicable issuance or stamp taxes) will cause to be issued in the
name of and delivered to the Warrant Holder, or as the Warrant Holder (upon
payment by the Warrant Holder of any applicable transfer taxes) may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which the Warrant Holder shall be entitled upon such
exercise. In the event of partial exercise of this Warrant, the Warrant need not
be delivered to the Company provided that the Warrant Holder agrees to make a
notation of such partial exercise on the Warrant. If this Warrant is delivered
to the Company, the Company shall issue and deliver to the Warrant Holder a new
Warrant evidencing the rights to purchase the remaining Warrant Shares, which
new Warrant shall in all other respects be identical to this Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the account of
an affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that, until such time as the
Warrant Shares are registered under the Act or resold pursuant to Rule 144
thereunder, the certificates representing any Warrant Shares will bear a legend
indicating that they have not been registered under the Act, and may not be sold
by the Warrant Holder except pursuant to an effective registration or pursuant
to an exemption from registration. The Warrant Holder shall be entitled to
include the Warrant Shares in any demand or piggyback registration to which the
Warrant Holder is entitled in respect of Common Stock held by it under the
Registration Rights Agreement dated as of July 29, 1996, among the Company, the
initial holder of this Warrant and the other parties thereto (the "Registration
Rights Agreement") (provided that such registration is on a form that permits
the resale of the Warrant Shares by the Warrant Holder to be registered
thereunder), to the same extent as if the Warrant Shares were included in the
definition of Registrable Securities set forth therein.
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and warrants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further warrants and agrees that
dining the period within which the rights represented by this Warrant may be
exercised, the Company
Page 2 of 9
<PAGE> 3
will at all times have authorized and reserved a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, (A) the Exercise Price shall be increased or decreased, as the case
may be, to an amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total number of
shares outstanding immediately after such action and (B) this Warrant
automatically shall be adjusted so that it shall thereafter evidence the right
to purchase the kind and number of Warrant Shares or other securities which the
Warrant Holder would have been entitled to receive after such action if this
Warrant had been exercised immediately prior to such action or any record date
with respect thereto. An adjustment made pursuant to this subparagraph (a) shall
become effective retroactively immediately after the record date in the case of
a dividend or distribution of Common Stock and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights, options or warrants are immediately
exercisable (hereinafter collectively called "Distributions on Common Stock"),
the Company shall make provisions for the Warrant Holder to receive upon
exercise of this Warrant, a proportional amount (depending upon the extent to
which this Warrant is exercised) of such assets, evidences of indebtedness,
securities or such other rights, as if such Warrant Holder had exercised this
Warrant on or before such record date.
(c) In case of any consolidation or merger of the Company with or into
another corporation or the sale of all or substantially all of the assets of the
Company to another corporation, this Warrant thereafter shall be exercisable for
the kind and amount of shares of stock
Page 3 of 9
<PAGE> 4
or other securities or property to which a holder of the number of shares of
Common Stock of the Company deliverable upon exercise of this Warrant would have
been entitled upon such consolidation, merger or sale; and, in such case,
appropriate adjustment shall be made in the application of the provisions in
this paragraph 4, to the end that the provisions set forth in this paragraph 4
(including provisions with respect to changes in and adjustments of the exercise
price) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(d) Upon the occurrence of each adjustment or readjustment of the
exercise price or any change in the number of Warrant Shares or in the shares of
stock or other securities or property deliverable upon exercise of this Warrant
pursuant to this paragraph 4, the Company at its expense shall promptly compute
such adjustment or readjustment and change in accordance with the terms hereof
and furnish to each holder hereof a certificate signed by the chief financial
officer of the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or readjustment and
change is based. The Company shall, upon the written request at any time of the
Warrant Holder, furnish or cause to be furnished to such Holder, a similar
certificate setting forth (i) such adjustment or readjustment and change, (ii)
the Exercise Price then in effect, and (iii) the number of Warrant Shares and
the amount. if any, of other shares of stock and other securities and property
which would be received upon the exercise of the Warrant.
(e) The Company shall not be required upon the exercise of this Warrant
to issue any fraction of shares, but shall make any adjustment therefor by
rounding the number of shares obtainable upon exercise to the next highest whole
number of shares.
5. Transfer of Rights.
This Warrant is transferable in whole or in part, at the option of the
Warrant Holder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. The Company shall execute and deliver a new Warrant or
Warrants in the form of this Warrant with appropriate changes to reflect the
issuance of subsequent Warrants, in the name of the assignee or assignees named
in such instrument of assignment and, if the Warrant Holder's entire interest is
not being transferred or assigned, in the name of the Warrant Holder, and this
Warrant shall promptly be canceled. Any transfer or exchange of this Warrant
shall be without charge to the Warrant Holder and any new Warrant or Warrants
issued shall be dated the date hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or for which it may
be exchanged. The Warrant Holder (and not the Company) will be responsible for
any stamp, transfer or other taxes payable on any such transfer.
Page 4 of 9
<PAGE> 5
6. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor, denomination and date.
7. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.
8. Successors.
All the provisions of this Warrant by or for the benefit of the Company
or the Warrant Holder shall bind and inure to the benefit of their respective
successors and assigns.
9. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and include the
Company's currently authorized common stock, $.01 par value per share, and stock
of any other class or other consideration into which such currently authorized
Common Stock may hereafter have been changed.
(b) This Warrant shall be construed in accordance with and governed by
the laws of the State of Delaware.
(c) The caption headings used in this Warrant are for convenience of
reference only and shall not be construed in any way to affect the
interpretation of any provisions of this Warrant.
10. Notices.
Any notice pursuant to this Warrant shall be efficiently given if sent
by first-class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows:
Page 5 of 9
<PAGE> 6
If to the Company, then to it at:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
Attention: Chief Financial Officer
Facsimile No.: (972) 407-9085
(or to such other address as the Company may have furnished in writing
to the Warrant Holder for this purpose); and
If to the Warrant Holder, then to it at such address as such
Warrant Holder may have furnished in writing to the Company for this purpose.
11. Securities Act Representation.
The initial holder of this Warrant, by taking and holder the same,
represents to the Company that such holder is acquiring this Warrant for
investment only and not with a view to the distribution thereof, except pursuant
to sales that are exempt from the registration requirements of the Securities
Act and/or sales registered under the Securities Act.
Page 6 of 9
<PAGE> 7
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the 14th day of July, 1997.
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the_____day of______________, 1996.
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mattorano
--------------------------
Name: E.A. Milo Mattorano
Title: Vice President
Attest:
/s/ E.A. Milo Mattorano
- --------------------------
Name: E.A. Milo Mattorano
Title: Secretary
Page 7 of 9
<PAGE> 8
ANNEX A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
_________________, 19__
To: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in Warrant No.___________,
hereby irrevocably elects and agrees to purchase___________________shares of the
Company's Common Stock covered by such Warrant, and makes payment herewith in
full therefor of the Total Exercise Price of $___________________.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate and will not sell or
otherwise dispose of the underlying Warrant Shares in violation of applicable
securities laws. If said number of shares is less than all of the shares
purchasable hereunder the undersigned requests that a new Warrant evidencing the
rights to purchase the remaining Warrant Shares (which new Warrant shall in all
other respects be identical to the Warrant exercised hereby) be registered in
the name of_____________whose address is:
____________________
____________________
____________________
Signature: _____________________
Printed Name: _____________________
Address: _____________________
_____________________
_____________________
Page 8 of 9
<PAGE> 9
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED ___________________________ hereby sells, assigns
and transfers all of its rights as set forth in Warrant No. ___ with respect to
the shares of the Company's Common Stock covered thereby as set forth below
unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
_____________________ _________________________ _____________
_____________________ _________________________ _____________
All notices to be given by the Company to the Warrant Holder pursuant
to paragraph 10 of Warrant No. ____________ shall be sent to the Assignee(s) at
the above stated address(es), and, if the number of shares being hereby assigned
is less than all of the shares covered by Warrant No. ___________, then also to
the undersigned.
The undersigned requests that the Company execute and deliver, if
necessary to comply with the provisions of paragraph 5 of Warrant No. ________,
a new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No. ________, new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated: _______________, 19__
Signature: _____________________
Printed Name: _____________________
Address: _____________________
_____________________
_____________________
Page 9 of 9
<PAGE> 1
Exhibit 10
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
WARRANT NO. 3 FOR THE PURCHASE OF 60,000 SHARES
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, Wolfensohn Associates II
L.P. or its successors in interest, assigns or transferees (collectively, the
"Warrant Holder"), is entitled to purchase from Lasertechnics, Inc., a Delaware
corporation (the "Company"), 60,000 shares of the Company's Common Stock (as
defined in paragraph 9(a) hereof) (the "Warrant Shares") at the exercise price
of SEVENTY CENTS ($.70) per share ("Exercise Price"). The number of Warrant
Shares and the Exercise Price shall be adjusted and readjusted or changed from
time to time in accordance with paragraph 4 hereof.
This Warrant may be exercised at any time and from time to time on or
prior to the third anniversary of the date of issuance set forth on the
signature page of this Warrant.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the Warrant
Holder, in whole or in part, by (a) delivering to the Company a duly executed
notice of exercise in the form of Annex A hereto and (b) at the Warrant Holder's
option, either (i) delivering a check payable to (or wire transfer to the
account of) the Company in an amount equal to the product of (x) the Exercise
Price times (y) the number of Warrant Shares as to which this Warrant is being
exercised (such product, the "Total Exercise Price") or (ii) delivering to the
company a letter (the "Conversion Letter") requesting conversion or exchange of
a portion of any indebtedness owed by the Company to the Warrant Holder in an
amount equal to the Total Exercise Price or (iii) surrendering to the Company a
portion of this Warrant with a "Value" (as defined below) equal to the Total
Exercise Price. For the purpose of clause (b)(iii) above, "Value" shall mean the
product of (I) the amount by which the average closing price per share of the
Company's Common Stock over the ten trading days preceding the date of exercise,
as reported in The Wall Street Journal, exceeds the Exercise Price and (II) the
number of Warrant Shares as to which this Warrant is surrendered for the purpose
of effecting payment for Warrant Shares. This Warrant shall be deemed to have
been
1
<PAGE> 2
exercised immediately prior to the close of business on the date of delivery of
a duly executed notice of exercise, together with the amount (in cash or by
delivering the Conversion Letter or by surrender of a portion of this Warrant)
payable upon exercise of this Warrant and, as of such moment, (i) the rights of
the Warrant Holder, as such, with respect to the number of Warrant Shares as to
which this Warrant is being exercised (and, if applicable, surrendered as
payment of the Total Exercise Price) shall cease, and (ii) such Warrant Holder
shall be deemed to be the record holder of the shares of Common Stock issuable
upon such exercise. As soon as practicable after the exercise, in whole or in
part, of this Warrant, and in any event within 5 business days thereafter, the
Company at its expense (including the payment by it of any applicable issuance
or stamp taxes) will cause to be issued in the name of and delivered to the
Warrant Holder, or as the Warrant Holder (upon payment by the Warrant Holder of
any applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock to which the
Warrant Holder shall be entitled upon such exercise. In the event of partial
exercise of this Warrant and, if applicable, partial surrender of this Warrant
pursuant to clause (b)(iii) of this paragraph, the Warrant need not be delivered
to the Company provided that the Warrant Holder agrees to make a notation of
such partial exercise and, if applicable, surrender on the Warrant. If this
Warrant is delivered to the Company, the Company shall issue and deliver to the
Warrant Holder a new Warrant evidencing the rights to purchase the remaining
Warrant Shares, which new Warrant shall in all other respects be identical to
this Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that the Warrant
Holder is acquiring this Warrant for its own account or the account of an
affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that they have not
been registered under the Act, and may not be sold by the Warrant Holder except
pursuant to an effective registration or pursuant to an exemption from
registration. The Warrant Holder shall be entitled to include the Warrant Shares
in any demand or piggyback registration to which Warrant Holder is otherwise
entitled in respect of Common Stock held by it, in accordance with (and subject
to) the terms and conditions of any agreement between the Company and the
Warrant Holder with respect to such registration rights.
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and covenants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will
2
<PAGE> 3
at all times have authorized and reserved a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as follows:
(a) If the Company shall (i) pay a stock dividend or make a distribution
to holders of Common Stock in shares of its Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its shares of Common Stock any shares of capital stock of the Company, (A)
the Exercise Price shall be increased or decreased, as the case may be, to an
amount which shall bear the same relation to the Exercise Price in effect
immediately prior to such action as the total number of shares outstanding
immediately prior to such action shall bear to the total number of shares
outstanding immediately after such action and (B) this Warrant automatically
shall be adjusted so that it shall thereafter evidence the right to purchase the
kind and number of Warrant Shares or other securities which the Warrant Holder
would have owned and would have been entitled to receive after such action if
this Warrant had been exercised immediately prior to such action or any record
date with respect thereto. An adjustment made pursuant to this subparagraph (a)
shall become effective retroactively immediately after the record date in the
case of a dividend or distribution of Common Stock and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
(b) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights, options or warrants are immediately
exercisable (hereinafter collectively called "Distributions on Common Stock"),
the Company shall make provisions for the Warrant Holder to receive upon
exercise of this Warrant, a proportional amount (depending upon the extent to
which this Warrant is exercised) of such assets, evidences of indebtedness,
securities or such other rights, as if such Warrant Holder had exercised this
Warrant on or before such record date.
(c) In the case of any consolidation or merger of the Company with or into
another corporation or the sale of all or substantially all the assets of the
Company to another person or entity, this Warrant thereafter shall be
exercisable for the kind and amount of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock of the
Company deliverable upon exercise of this Warrant would have been entitled upon
such
3
<PAGE> 4
consolidation, merger or sale; and, in such case, appropriate adjustment shall
be made in the application of the provisions in this paragraph 4, to the end
that the provisions set forth in this paragraph 4 (including provisions with
respect to changes in and adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other securities or property thereafter deliverable upon the exercise of this
Warrant.
(d) Upon the occurrence of each adjustment or readjustment of the exercise
price or any change in the number of Warrant Shares or in the shares of stock or
other securities or property deliverable upon exercise of this Warrant pursuant
to this paragraph 4, the Company at its expense shall promptly compute such
adjustment or readjustment and change in accordance with the terms hereof and
furnish to each holder hereof a certificate signed by the chief financial
officer of the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or readjustment and
change is based. The Company shall, upon the written request at any time of the
Warrant Holder, furnish or cause to be furnished to such Holder, a similar
certificate setting forth (i) such adjustment or readjustment and change, (ii)
the Exercise Price then in effect, and (iii) the number of Warrant Shares and
the amount. if any, of other shares of stock and other securities and property
which would be received upon the exercise of the Warrant.
(e) The Company shall not be required upon the exercise of this Warrant to
issue any fraction of shares, but shall make any adjustment therefor by rounding
the number of shares obtainable upon exercise to the next highest whole number
of shares.
5. Transfer of Rights.
This Warrant is transferable in whole or in part, at the option of the
Warrant Holder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. The Company shall execute and deliver a new Warrant or
Warrants in the form of this Warrant with appropriate changes to reflect the
issuance of subsequent Warrants, in the name of the assignee or assignees named
in such instrument of assignment and, if the Warrant Holder's entire interest is
not being transferred or assigned, in the name of the Warrant Holder, and this
Warrant shall promptly be canceled. Any transfer or exchange of this Warrant
shall be without charge to the Warrant Holder and any new Warrant or Warrants
issued shall be dated the date hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or for which it may
be exchanged. The Warrant Holder (and not the Company) will be responsible for
any stamp, transfer or other taxes payable on any such transfer.
6. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like denomination and date.
4
<PAGE> 5
7. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to any voting
or other rights of a shareholder of the Company, either at law or equity, and
the rights of the Warrant Holder are limited to those expressed in this Warrant.
8. Successors.
All the provisions of this Warrant by or for the benefit of the Company or
the Warrant Holder shall bind and inure to the benefit of their respective
successors and assigns.
9. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and include the
Company's currently authorized common stock, $.0l par value per share, and stock
of any other class or other consideration into which such currently authorized
Common Stock may hereafter have been changed.
(b) This Warrant shall be construed in accordance with and governed by
the laws of the State of Delaware.
(c) The caption headings used in this Warrant are for convenience of
reference only and shall not be construed in any way to affect the
interpretation of any provisions of this Warrant.
10. Notices.
Any notice pursuant to this Warrant shall be effective if sent by
first-class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows:
If to the Company, then to it at:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
Attention: Chief Financial Officer
Facsimile No.: (972) 407-9085
(or to such other address as the Company may have furnished in writing to
the Warrant Holder for this purpose); and
If to the Warrant Holder, then to it at such address as such Warrant
Holder may have furnished in writing to the Company for this purpose.
5
<PAGE> 6
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby, has
caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the date set forth below.
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mattorano
--------------------------------------------
Name: E.A. Milo Mattorano
Title: Vice President
Attest:
/s/ E.A. Milo Mattorano
- ------------------------------
Name: E.A. Milo Mattorano
Title: Secretary
ISSUANCE DATE: September 5, 1997
6
<PAGE> 7
ANNEX A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
____________________, 19__
To: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in Warrant No. ________,
hereby irrevocably elects and agrees to purchase _______ shares of the Company's
Common Stock covered by such Warrant, and makes payment herewith in full
therefor of the Total Exercise Price of $_______.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate and will not sell or
otherwise dispose of the underlying Warrant Shares in violation of applicable
securities laws. If said number of shares is less than all of the shares
purchasable hereunder the undersigned requests that a new Warrant evidencing the
rights to purchase the remaining Warrant Shares (which new Warrant shall in all
other respects be identical to the Warrant exercised hereby) be registered in
the name of ____________________________ whose address is:
Signature:______________________________
Printed Name:___________________________
Address:________________________________
7
<PAGE> 8
ANNEX B
ASSIGNMENT
FOR VALUE RECEIVED ____________ hereby sells, assigns and transfers all of
its rights as set forth in Warrant No. ________ with respect to the shares of
the Company's Common Stock covered thereby as set forth below unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
All notices to be given by the Company to the Warrant Holder pursuant to
paragraph 10 of Warrant No. _________ shall be sent to the Assignee(s) at the
above stated addresses, and, if the number of shares being hereby assigned is
less than all of the shares covered by Warrant No. _______, then also to the
undersigned.
The undersigned requests that the Company execute and deliver, if
necessary to comply with the provisions of paragraph 5 of Warrant No. _________,
a new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No. _______, new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated:._________, 19_
Signature:_______________________________
Printed Name:____________________________
Address:_________________________________
8
<PAGE> 1
EXHIBIT 11
LASERTECHNICS, INC.
3208 COMMANDER DRIVE
CARROLLTON, TEXAS 75006
AS OF JULY 14, 1997
(FINAL)
To the Holders listed on Schedule I attached hereto:
STANDSTILL AGREEMENT
Dear Sirs:
This Standstill Agreement sets forth the terms and conditions on
which Lasertechnics, Inc., a Delaware corporation (the "Company"), and the
undersigned holders of record ("Holders") of (i) shares of the Series D
Preferred Stock, $.01 par value per share, of the Company (the "Series D
Preferred Stock"), (ii) shares of the Series E Preferred Stock, $.01 par value
per share, of the Company (the "Series E Preferred Stock" and, together with the
Series D Preferred Stock, the "Preferred Stock"), (iii) the Company's 10%
Subordinated Convertible Debentures, Due March 1, 1999 ("March 1996
Debentures"), and (iv) the Company's 10% Convertible Debentures, Due March 1,
1999, Series B (the "Series B Debentures" and, together with the March 1996
Debentures, the "Convertible Debentures") have agreed to amend the terms of the
Preferred Stock and the Convertible Debentures to provide for, among other
things, certain limitations on the convertibility of such securities.
1. Exchange of Preferred Stock and Convertible Debentures:
Standstill Provisions. (a) Upon the effectiveness of the Standstill pursuant to
paragraph l(c) of this Agreement, each of the Holders shall exchange all shares
of Series D Preferred Stock and Series E Preferred Stock held by such Holder for
an equal number of shares of a new series of preferred stock of the Company to
be designated the Series F Preferred Stock, par value $.01 per share (the
"Series F Preferred Stock"). The Certificate of Designation for the Series F
Preferred Stock (the "Series F Certificate of Designation") shall be in the form
attached hereto as Exhibit B.
(b) Upon the effectiveness of the Standstill pursuant to paragraph
l(c) of this Agreement, the March 1996 Debentures and the Series B Debentures
shall each be amended (i) by reducing the "Fixed Conversion Price" therein by
$1.00, and (ii) by adding a new paragraph (f) to the end of Section 4 of each
such Convertible Debenture, in each case as provided in the form of Allonge to
10% Convertible Debenture Due March 1, 1999, attached hereto as Exhibit C (the
"Form of Allonge").
<PAGE> 2
Lasertechnics, Inc.
Standstill Agreement dated as of July 14, 1997 (Final)
Page 2 of 7
(c) Each Holder of shares of Preferred Stock or Convertible
Debentures hereby agrees to the limitations on the convertibility of such
securities provided for in Section 5(f) of the Series F Certificate of
Designation and the Form of Allonge, respectively (such limitations on
convertibility, collectively, the "Standstill"), effective on the date that a
counterpart of this Agreement is executed and delivered by the Company and each
Holder listed on Schedule I attached hereto (other than any such Holder all of
whose shares of Preferred Stock and Convertible Debentures are either (x)
redeemed or otherwise acquired by the Company and canceled, or (y) acquired by
another Holder (who may or may not be an affiliate of the Company) that executes
and delivers a counterpart of this Agreement).
2. Warrant Coverage. Upon the effectiveness of the Standstill
pursuant to paragraph l(c) of this Agreement, and in consideration of such
Standstill and the other representations, warranties and agreements of the
Holders set forth herein, the Company shall issue to each Holder a warrant
("Warrant") in substantially the form attached hereto as Exhibit A, to purchase
up to that whole number of shares of Common Stock, $.01 par value per share, of
the Company as is set forth opposite the name of such Holder on Schedule I
attached hereto, at an exercise price of $ 1.00 per share of such Common Stock.
3. Registration Rights. (a) The Registration Rights Agreement dated
as of March 13, 1996, between the Company and the initial holders of the March
1996 Debentures, is hereby amended (i) to include the initial holder of the
Series B Debentures as a party thereto and (ii) to include within the definition
of Registrable Securities set forth in Section 1(b) of such Registration Rights
Agreement the shares of Common Stock issuable or issued upon conversion of the
Series B Debentures and the shares of Common Stock issuable or issued upon the
exercise of the Warrants issued hereunder to the Holders of the March 1996
Debentures and Series B Debentures, to the same extent as if such shares of
Common Stock were issuable or issued upon conversion of March 1996 Debentures.
(b) The Registration Rights Agreement dated as of July 29, 1996,
between the Company and the initial holders of the Series D Preferred Stock is
hereby amended (i) to include Wolfensohn Partners LP ("WPLP") and the initial
holder of the Series E Preferred Stock as a party thereto and (ii) to include
within the definition of Registrable Securities set forth in Section 1(b) of
such Registration Rights Agreement the shares of Common Stock issuable or issued
upon conversion of shares of Series F Preferred Stock and the shares of Common
Stock issuable or issued upon the exercise of the Warrants issued hereunder to
the Holders of the Series D Preferred Stock and the Series E Preferred Stock (or
upon the exercise of substantially identical warrants to be issued to WPLP in
connection with the purchase by WPLP from the Company of shares of Series F
Preferred Stock, the proceeds of which shall be used by the Company to acquire
and cancel shares of Series D Preferred Stock pursuant to paragraph I (a)(x)
hereof) to the same extent as if such shares of Common Stock were issuable or
issued upon conversion of shares of Series D Preferred Stock.
<PAGE> 3
Lasertechnics, Inc.
Standstill Agreement dated as of July 14, 1997 (Final)
Page 3 of 7
4. Entire Agreement. This Agreement, including Schedule I and
Exhibits A, B and C attached hereto, constitutes our entire agreement with
respect to the subject matter hereof, and may not be modified or amended or any
provision hereof waived except by an instrument in writing signed by the Company
and each Holder.
5. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. This Agreement may be executed in any number of counterparts and on
separate counterparts, each of which shall be an original instrument, but all of
which together shall constitute a single agreement. One or more signature pages
from any counterpart of this Agreement may be attached to any other counterpart
of this Agreement without in any way changing the effect thereof. This Agreement
shall be effective as between the Company and each Holder that signs a
counterpart of this Agreement, as of such time as the Standstill Agreement
becomes effecting pursuant to Section 1(c) hereof.
6. Governing Law. This Agreement shall be construed according to
the laws of the State of Delaware.
If the foregoing correctly sets forth your understanding of our
agreement, please so indicate by signing and returning to the Company the
enclosed counterpart of this Agreement.
Very truly yours,
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mattorano
----------------------------------------
Name: E.A. Milo Mattorano
Title: Vice Pres. & CFO
The undersigned agree to the foregoing terms and provisions as of the date first
above written.
BANQUE EDOUARD CONSTANT SA
By: /s/ J.G. Mallet /s/ M.L. Agustoni
------------------------------------------
Name: J.G. Mallet M.L. Agustoni
Title: Legal Adviser
<PAGE> 4
Lasertechnics, Inc.
Standstill Agreement dated as of July 14, 1997 (Final)
Page 4 of 7
The undersigned agree to the
foregoing terms and provisions
as of the date first above written.
QUEENSWAY FINANCIAL HOLDINGS LTD
By: /s/ David Rooney
-------------------------------------
Name: David Rooney
Title: President
MATTHEW FUND
By: /s/ A. Aoiglo For and on behalf of
-------------------------------------
Name: ABN AMRO Trust Company (Cayman) Limited
Title: Administrator, Matthew Fund
GAM ARBITRAGE INVESTMENTS, INC. By Angelo, Gordon & Co., L.P.
Investment Adviser
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
LEONARDO, L.P. By Angelo, Gordon & Co., L.P.
General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<PAGE> 5
Lasertechnics, Inc.
Standstill Agreement dated as of July 14, 1997 (Final)
Page 5 of 7
The undersigned agree to
the foregoing terms and provisions
as of the date first above written.
RAPHAEL, L.P.
By: /s/ Michael L. Gordon
---------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
H.T. ARDINGER
By: /s/ H.T. Ardinger, Jr.
---------------------------------------
Name:
Title:
CAPITAL VENTURES INTERNATIONAL
By: /s/ Martin Uobinger
---------------------------------------
Name: Martin Uobinger
Title: Managing Director
MEINL BANK AG
By: /s/ R. Kolfer /s/ C. Wegscheidler
---------------------------------------
Name: R. Kolfer C. Wegscheidler
Title: Director Deputy Manager
<PAGE> 6
Lasertechnics, Inc.
Standstill Agreement dated as of July 14, 1997 (Final)
Page 6 of 7
Agreed to for the purposes of paragraph 3(b) hereof, only:
WOLFENSOHN PARTNERS L.P.
By: /s/ R.C.E. Morgan
-----------------------------------
Name: R.C.E. Morgan
Title: General Partner
<PAGE> 7
Lasertechnics, Inc.
Standstill Agreement dated as of July 14, 1997 (Final)
Page 7 of 7
SCHEDULE I
<TABLE>
<CAPTION>
UNCONVERTED PORTION OF BALANCE NUMBER OF
HOLDERS BALANCE SUBJECT TO LOCKUP* WARRANT SHARES**
- --------------------------------- ------------- ------------------ ----------------
<S> <C> <C> <C>
A. Series D Preferred Stock
Banque Edouard Constant $ 250,000.00 $ 190,000.00 47,500
Merced Partners $ 250,000.00 $ 190,000.00 47,500
Queensway Fin'l $ 150,000.00 $ 120,000.00 30,000
Matthew Fund $ 150,000.00 $ 120,000.00 30,000
Lakeshore International $ 100,000.00 $ 80,000.00 20,000
Richcourt $ 130,000.00 $ 100,000.00 25,000
GAM Arbitrage $ 150,000.00 $ 120,000.00 30,000
Leonardo LP $1,000,000.00 $ 750,000.00 187,500
Raphael $ 150,000.00 $ 120,000.00 30,000
------------- ------------- -------
Subtotal: $2,330,000.00 $1,790,000.00 447,500
B. Series E Preferred Stock
H.T. Ardinger $ 500,000.00 $ 380,000.00 95,000
C. March 1996 Debentures
Capital Ventures Int'l $ 950,000.00 $ 712,500.00 178,125
D. Series B Debentures
Meinl Bank AG $ 500,000.00 $ 375,000.00 93,750
------------- ------------- -------
Total: $4,280,000.00 $3,257,000.00 814,375
============= ============= =======
</TABLE>
- --------
* This column represents 75% of the unconverted balance, rounded up in the
case of the Preferred Stock to the next higher multiple of $10,000.
Rounding is necessary in the case of the Preferred Stock because
fractional shares cannot be converted. Each share of Preferred Stock has a
stated value of $10,000.
** 25% warrant coverage on balance subject to lockup.
<PAGE> 8
EXHIBIT A
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH SHARES MAY BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM SUCH REGISTRATION.
WARRANT NO. ___ FOR THE PURCHASE OF _____ SHARES
LASERTECHNICS, INC.
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, _______________________________
("___________________") or its successors in interest, assigns or transferees
(collectively, the "Warrant Holder"), is entitled to purchase from
Lasertechnics, Inc., a Delaware corporation (the "Company"), shares of the
Company's Common Stock (as defined in paragraph 9(a) hereof) (the "Warrant
Shares") at the exercise price of ONE DOLLAR ($1.00) per share ("Exercise
Price"). The number of Warrant Shares and the Exercise Price shall be adjusted
and readjusted or changed from time to time in accordance with paragraph 4
hereof.
This Warrant may be exercised at any time and from time to time on or
prior to July 14, 2002.
1. Exercise of Warrant.
The rights represented by this Warrant may be exercised by the Warrant
Holder, in whole or in part, by (a) delivering to the Company a duly executed
notice of exercise in the form of Annex A hereto and (b) delivering a check
payable to (or wire transfer to the account of) the Company in an amount equal
to the product of (x) the Exercise Price times (y) the number of Warrant Shares
as to which this Warrant is being exercised (such product, the "Total Exercise
Price"). This Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of delivery of a duly executed notice of
exercise, together with the amount payable upon exercise of this Warrant and, as
of such moment, (i) the rights of the Warrant Holder, as such, with respect to
the number of Warrant Shares as to which this Warrant is being exercised shall
cease, and (ii) such Warrant Holder shall be deemed to be the record holder of
the shares of Common Stock issuable upon such exercise. As soon as practicable
after the exercise,
<PAGE> 9
in whole or in part, of this Warrant, and in any event within 5 business days
thereafter, the Company at its expense (including the payment by it of any
applicable issuance or stamp taxes) will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder (upon payment by the
Warrant Holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable shares of Common
Stock to which the Warrant Holder shall be entitled upon such exercise. In the
event of partial exercise of this Warrant, the Warrant need not be delivered to
the Company provided that the Warrant Holder agrees to make a notation of such
partial exercise on the Warrant. If this Warrant is delivered to the Company,
the Company shall issue and deliver to the Warrant Holder a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical to this Warrant.
2. Investment Representation.
The Warrant Holder by accepting this Warrant represents that the Warrant
Holder is acquiring this Warrant for its own account or the account of an
affiliate for investment purposes and not with the view to any offering or
distribution and that the Warrant Holder will not sell or otherwise dispose of
this Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that, until such time as the
Warrant Shares are registered under the Act or resold pursuant to Rule 144
thereunder, the certificates representing any Warrant Shares will bear a legend
indicating that they have not been registered under the Act, and may not be sold
by the Warrant Holder except pursuant to an effective registration or pursuant
to an exemption from registration. The Warrant Holder shall be entitled to
include the Warrant Shares in any demand or piggyback registration to which the
Warrant Holder is entitled in respect of Common Stock held by it under the
Registration Rights Agreement dated as of [March 13, 1996] [July 29, 1996,]*
among the Company, the initial holder of this Warrant and the other parties
thereto (the "Registration Rights Agreement") (provided that such registration
is on a form that permits the resale of the Warrant Shares by the Warrant Holder
to be registered thereunder), to the same extent as if the Warrant Shares were
included in the definition of Registrable Securities set forth therein.
3. Validity of Warrant and Issue of Shares.
The Company represents and warrants that this Warrant has been duly
authorized and validly issued and warrants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights represented by this
Warrant will, when issued upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issue thereof. The Company further warrants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company
- --------
* March 13, 1996 Agreement relates to Convertible Debentures. July 29, 1996
Agreement, the Series D Preferred Stock.
Page 2 of 9
<PAGE> 10
will at all times have authorized and reserved a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
4. Antidilution Provisions.
The terms of this Warrant shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock of
the Company, (A) the Exercise Price shall be increased or decreased, as the case
may be, to an amount which shall bear the same relation to the Exercise Price in
effect immediately prior to such action as the total number of shares
outstanding immediately prior to such action shall bear to the total number of
shares outstanding immediately after such action and (B) this Warrant
automatically shall be adjusted so that it shall thereafter evidence the right
to purchase the kind and number of Warrant Shares or other securities which the
Warrant Holder would have been entitled to receive after such action if this
Warrant had been exercised immediately prior to such action or any record date
with respect thereto. An adjustment made pursuant to this subparagraph (a) shall
become effective retroactively immediately after the record date in the case of
a dividend or distribution of Common Stock and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other debt
or equity securities of the Company, or of any corporation other than the
Company (except for the Common Stock of the Company) or (iii) subscription
rights, options or warrants to purchase any of the foregoing assets or
securities, whether or not such rights, options or warrants are immediately
exercisable (hereinafter collectively called "Distributions on Common Stock"),
the Company shall make provisions for the Warrant Holder to receive upon
exercise of this Warrant, a proportional amount (depending upon the extent to
which this Warrant is exercised) of such assets, evidences of indebtedness,
securities or such other rights, as if such Warrant Holder had exercised this
Warrant on or before such record date.
(c) In case of any consolidation or merger of the Company with or into
another corporation or the sale of all or substantially all of the assets of the
Company to another corporation, this Warrant thereafter shall be exercisable for
the kind and amount of shares of stock or other securities or property to which
a holder of the number of shares of Common Stock of the Company deliverable upon
exercise of this Warrant would have been entitled upon such
Page 3 of 9
<PAGE> 11
consolidation, merger or sale; and, in such case, appropriate adjustment shall
be made in the application of the provisions in this paragraph 4, to the end
that the provisions set forth in this paragraph 4 (including provisions with
respect to changes in and adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other securities or property thereafter deliverable upon the exercise of this
Warrant.
(d) Upon the occurrence of each adjustment or readjustment of the
exercise price or any change in the number of Warrant Shares or in the shares of
stock or other securities or property deliverable upon exercise of this Warrant
pursuant to this paragraph 4, the Company at its expense shall promptly compute
such adjustment or readjustment and change in accordance with the terms hereof
and furnish to each holder hereof a certificate signed by the chief financial
officer of the Company, setting forth such adjustment or readjustment and change
and showing in detail the facts upon which such adjustment or readjustment and
change is based. The Company shall, upon the written request at any time of the
Warrant Holder, furnish or cause to be furnished to such Holder, a similar
certificate setting forth (i) such adjustment or readjustment and change, (ii)
the Exercise Price then in effect, and (iii) the number of Warrant Shares and
the amount, if any, of other shares of stock and other securities and property
which would be received upon the exercise of the Warrant.
(e) The Company shall not be required upon the exercise of this Warrant
to issue any fraction of shares, but shall make any adjustment therefor by
rounding the number of shares obtainable upon exercise to the next highest whole
number of shares.
5. Transfer of Rights.
This Warrant is transferable in whole or in part, at the option of the
Warrant Holder upon delivery of the Warrant Assignment Form annexed as Annex B
hereto, duly executed. The Company shall execute and deliver a new Warrant or
Warrants in the form of this Warrant with appropriate changes to reflect the
issuance of subsequent Warrants, in the name of the assignee or assignees named
in such instrument of assignment and, if the Warrant Holder's entire interest is
not being transferred or assigned, in the name of the Warrant Holder, and this
Warrant shall promptly be canceled. Any transfer or exchange of this Warrant
shall be without charge to the Warrant Holder and any new Warrant or Warrants
issued shall be dated the date hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or for which it may
be exchanged. The Warrant Holder (and not the Company) will be responsible for
any stamp, transfer or other taxes payable on any such transfer.
6. Lost, Mutilated or Missing Warrant.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor, denomination and date.
Page 4 of 9
<PAGE> 12
7. Rights of Warrant Holder.
The Warrant Holder shall not, by virtue hereof, be entitled to any voting
or other rights of a shareholder of the Company, either at law or equity, and
the rights of the Warrant Holder are limited to those expressed in this Warrant.
8. Successors.
All the provisions of this Warrant by or for the benefit of the Company
or the Warrant Holder shall bind and inure to the benefit of their respective
successors and assigns.
9. Miscellaneous.
(a) As used herein, the term "Common Stock" shall mean and include the
Company's currently authorized common stock, $.01 par value per share, and stock
of any other class or other consideration into which such currently authorized
Common Stock may hereafter have been changed.
(b) This Warrant shall be construed in accordance with and governed by
the laws of the State of Delaware.
(c) The caption headings used in this Warrant are for convenience of
reference only and shall not be construed in any way to affect the
interpretation of any provisions of this Warrant.
10. Notices.
Any notice pursuant to this Warrant shall be efficiently given if sent by
first class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows:
If to the Company, then to it at:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, Texas 75006
Attention: Chief Financial Officer
Facsimile No.: (972) 407-9085
(or to such other address as the Company may have furnished in writing to
the Warrant Holder for this purpose); and
Page 5 of 9
<PAGE> 13
If to the Warrant Holder, then to it at such address as such Warrant
Holder may have furnished in writing to the Company for this purpose.
11. [ADDITIONAL RESTRICTIONS ON EXERCISE;] Securities Act Representation.
[NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IN NO EVENT
SHALL THE WARRANT HOLDER EXERCISE THIS WARRANT TO THE EXTENT THAT (i) THE NUMBER
OF SHARES OF COMMON STOCK BENEFICIALLY OWNED BY SUCH HOLDER AND ITS AFFILIATES
(OTHER THAN SHARES OF COMMON STOCK WHICH MAY BE DEEMED BENEFICIALLY OWNED
THROUGH THE OWNERSHIP OF THE UNEXERCISED PORTION OF THIS WARRANT OR THE
UNEXERCISED OR UNCONVERTED PORTION OF ANY OTHER SECURITIES OF THE COMPANY
(INCLUDING, WITHOUT LIMITATION, THE COMPANY'S 10% CONVERTIBLE DEBENTURES DUE
MARCH 1, 1999 AND/OR WARRANTS ISSUED TO THE INITIAL HOLDER HEREOF) SUBJECT TO A
LIMITATION ON CONVERSION, EXCHANGE OR EXERCISE ANALOGOUS TO THE LIMITATION
CONTAINED HEREIN) AND (ii) THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT (OR PORTION THEREOF) WITH RESPECT TO WHICH THE
DETERMINATION DESCRIBED HEREIN IS BEING MADE, WOULD RESULT IN BENEFICIAL
OWNERSHIP BY THE WARRANT HOLDER AND ITS AFFILIATES OF MORE THAN 4.9% OF THE
OUTSTANDING SHARES OF THE COMMON STOCK. FOR PURPOSES OF THE IMMEDIATELY
PRECEDING SENTENCE, BENEFICIAL OWNERSHIP SHALL BE DETERMINED IN ACCORDANCE WITH
SECTION 13(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND REGULATION
13D-G THEREUNDER, EXCEPT AS OTHERWISE PROVIDED IN CLAUSE (i) OF THE PRECEDING
SENTENCE.]** The initial holder of this Warrant, by taking and holding the same,
represents to the Company that such holder is acquiring this Warrant for
investment only and not with a view to the distribution thereof, except pursuant
to sales that are exempt from the registration requirements of the Securities
Act and/or sales registered under the Securities Act.
- --------
** To be included at the request of any initial Warrant Holder that requests
this "savings" clause.
Page 6 of 9
<PAGE> 14
IN WITNESS WHEREOF, the Company, intending to be legally bound hereby,
has caused this Warrant to be signed by its Vice President, and attested by its
Secretary or Assistant Secretary as of the 14th day of July, 1997.
LASERTECHNICS, INC.
By: _______________________________
Name:
Title:
Attest:
_______________________________
Name:
Title:
Page 7 of 9
<PAGE> 15
Annex A
COMMON STOCK PURCHASE WARRANT
NOTICE OF EXERCISE
____________ 19__
To: LASERTECHNICS, INC.
The undersigned, pursuant to the provisions set forth in Warrant No.______,
hereby irrevocably elects and agrees to purchase ___________ shares of the
Company's Common Stock covered by such Warrant, and makes payment herewith in
full therefor of the Total Exercise Price of $__________________.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account or the account of an affiliate and will not sell or
otherwise dispose of the underlying Warrant Shares in violation of applicable
securities laws. If said number of shares is less than all of the shares
purchasable hereunder the undersigned requests that a new Warrant evidencing the
rights to purchase the remaining Warrant Shares (which new Warrant shall in all
other respects be identical to the Warrant exercised hereby) be registered in
the name of ________________________________ whose address is:
______________________________
______________________________
______________________________
Signature: _______________________________
Printed name:_______________________________
Address: _______________________________
_______________________________
_______________________________
Page 8 of 9
<PAGE> 16
Annex B
ASSIGNMENT
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers all of its rights as set forth in Warrant No. _____________ with
respect to the shares of the Company's Common Stock covered thereby as set forth
below unto:
NAME OF ASSIGNEE(S) ADDRESS(ES) NO. OF SHARES
- ------------------- ----------- -------------
_________________________ ________________________ _______________
_________________________ ________________________ _______________
All notices to be given by the Company to the Warrant Holder pursuant to
paragraph 10 of Warrant No._______ shall be sent to the Assignee(s) at the
above stated address(es), and, if the number of shares being hereby assigned is
less than all of the shares covered by Warrant No._______ , than also to the
undersigned.
The undersigned requests that the Company execute and deliver, if
necessary to comply with the provisions of paragraph 5 of Warrant No.________, a
new Warrant or, if the number of shares being hereby assigned is less than all
of the shares covered by Warrant No.________, new Warrants in the name of the
undersigned, the assignee and/or the assignees, as is appropriate.
Dated: _______________________, 19__
Signature: ______________________________
Printed name: ______________________________
Address: ______________________________
______________________________
______________________________
Page 9 of 9
<PAGE> 17
EXHIBIT B
See Exhibit 20
attached to Amendment No. 7
to Schedule 13D
<PAGE> 18
EXHIBIT C
THE SECURITIES TO WHICH THIS ALLONGE IS ATTACHED HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
LASERTECHNICS, INC.
No. _________________ July 14, 1997
ALLONGE TO 10% CONVERTIBLE DEBENTURE
DUE MARCH 1, 1999
----------------------------------
REFERENCE IS MADE to that certain 10% Convertible Debenture Due
March 1, 1999 (the "Debenture"), of LASERTECHNICS, INC., a Delaware corporation
(the "Company"), payable to _______________ or its registered assign (the
"Holder"). This Allonge amends the Debenture, effective as of the date first
written above: (i) to provide for certain limitations on the right of the Holder
to convert the Debenture during the Standstill Period (as defined herein) and
(ii) to reduce the Fixed Conversion Price (as defined in the Debenture) by
$1.00.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be bound hereby, the Company hereby covenants and
agrees with and for the benefit of the Holder, its successors and assigns, as
follows:
SECTION 1. The Debenture is hereby amended, effective as of the date
first written above, by adding a new subsection "(f)" to such Section 4 of the
Debenture, as follows:
"(f) Standstill. Anything contained herein to the contrary
notwithstanding, during the period from and including July 14, 1997, to
and including February 13, 1998 (the "Standstill Period"), no record
Holder of Debentures shall be entitled to convert any Debentures held by
such Holder, except to the extent that the aggregate principal amount of
Debentures converted by such Holder (or redeemed by the Company in lieu of
conversion) during the Standstill Period does not, during the period
indicated below, exceed the applicable aggregate percentage set forth
below of the
<PAGE> 19
principal amount of Debentures held by such Holder on the first day of the
Standstill Period:
<TABLE>
<CAPTION>
Portion of Standstill Period Aggregate Percentage
---------------------------- --------------------
<S> <C>
From and including July 14, 1997,
to and including October 13, 1997.... 25%
From and including October 14, 1997,
to and including November 13, 1997... 40%
From and including November 14, 1997,
to and including December 13, 1997... 55%
From and including December 14, 1997,
to and including January 13, 1998.... 70%
From and including January 14, 1998,
to and including February 13, 1998... 85%
From and after February 14, 1998........... 100%
</TABLE>
For all purposes of this Section 4(f) any Holder (a "Transferee") that
acquires Debentures during the Standstill Period from another Holder (the
"Transferor") in any single transaction (the "Transfer") shall be deemed
(i) to have held at the beginning of the Standstill Period Debentures in
the aggregate principal amount equal to the product of (x) the aggregate
principal amount of Debentures held by the Transferor at the beginning of
the Standstill Period times (y) the Acquired Percentage; and (ii) to have
converted (or have had redeemed by the Company in lieu of conversion)
during the period from the beginning of the Standstill Period through the
date of such Transfer Debentures in the aggregate principal amount equal
to the product of (x) the aggregate principal amount of Debentures
converted by such Transferor (or redeemed by the Company in lieu of
conversion) from the beginning of the Standstill Period through the date
of such Transfer times (y) the Acquired Percentage. As used in this
paragraph, the term "Acquired Percentage" means the percentage that the
aggregate principal amount of Debentures acquired by the Transferee from
the Transferor in such Transfer bears to the aggregate principal amount of
Debentures held by the Transferor immediately before giving effect to such
Transfer. Upon any Transfer, for all purposes of this Section 4(f), the
Transferor shall be deemed (i) to have held at the beginning of the
Standstill Period Debentures in the aggregate principal amount equal to
the product of (x) the aggregate principal amount of Debentures held by
the Transferor at the beginning of the Standstill Period times (y) the
difference between 100% and the Acquired Percentage; and (ii) to have
converted (or have had
Page 2 of 4
<PAGE> 20
redeemed by the Company in lieu of conversion) during the period from the
beginning of the Standstill Period through the date of such Transfer
Debentures in the aggregate principal amount equal to the product of (x)
the aggregate principal amount of Debentures converted by such Transferor
(or redeemed by the Company in lieu of conversion) from the beginning of
the Standstill Period through the date of such Transfer times (y) the
difference between 100% and the Acquired Percentage. In the event of
successive Transfers, this paragraph will be applied successively.
Notwithstanding anything herein to the contrary, if at any time during the
Standstill Period the Company shall, in breach of its obligations
hereunder, fail to convert (or to redeem in lieu of conversion) any
Debentures (or portion thereof) held of record by the Holder of this
Debenture and properly presented for conversion by the Holder pursuant to
this Section 4 (and which the Holder is entitled to convert pursuant to
this Section 4(f)), then, upon written notice by the Holder to the Company
given pursuant to this paragraph (and without limiting any other rights or
remedies of the Holder in respect of such failure to convert), so long as
such default by the Company shall continue, the provisions of this Section
4(f) shall not apply to the Holder.
SECTION 2. The Debenture is hereby amended, effective as of the date
first written above, by deleting the figure "$2.00" in clause (x) of Section
4(a), immediately prior to the words "(the 'Fixed Conversion Price')" and
inserting the figure "$1.00" in lieu thereof.
SECTION 3. Except as otherwise expressly provided herein, the
Debenture shall remain in full force and effect as originally issued, and all
the terms and provisions thereof, except as expressly modified herein, are
hereby ratified and affirmed.
SECTION 4. The Holder represents and warrants that it is the
beneficial and record owner of the Debenture on the date first written above and
covenants and agrees to firmly affix this Allonge to the Debenture, whereupon it
shall become a part thereof.
Page 3 of 4
<PAGE> 21
IN WITNESS WHEREOF, the undersigned Lasertechnics, Inc., has caused
this Allonge to 10% Convertible Debentures Due March 1, 1999, to be executed,
delivered and affixed to the Debenture as and for an allonge thereto, all on as
of the date first written above.
LASERTECHNICS, INC.
By _______________________________________
Name:
Title:
ACCEPTED AND AGREED to as of
the date first written above, as and for an
allonge to the Debentures.
[HOLDER]
By __________________________
Name:
Title:
Page 4 of 4
<PAGE> 1
Exhibit 12
LASERTECHNICS, INC.
3208 Commander Drive
Carrollton, Texas 75006
June 25, 1997
Wolfensohn Partners L.P. ("WPLP")
590 Madison Avenue, 32nd Floor
New York, New York 10022
J.P. Morgan Investment Corporation ("JPMIC")
60 Wall Street
New York, New York 10260
Note Purchase Agreement
Dear Sirs:
This letter sets forth the terms and conditions on which
Lasertechnics, Inc., a Delaware corporation (the "Company"), is issuing and
selling to each of WPLP and JPMIC (each, a "Purchaser") on the date hereof: (a)
a Senior Promissory Note of the Company in substantially the form attached
hereto as Exhibit A (each, a "Note"); (b) the number of shares (the "Restricted
Shares") of Common Stock, $.01 par value (the "Common Stock"), of the Company
determined as set forth in paragraph 2, below; and (c) a warrant in
substantially the form attached hereto as Exhibit B (each, a "Warrant") to
purchase the number of shares (the "Warrant Shares") of Common Stock determined
as set forth in paragraph 3, below.
1. Senior Promissory Notes.
(a) General. The Senior Promissory Notes shall
represent and evidence the indebtedness of the Company to the Purchasers for
advances made by the Purchasers to the Company from time to time thereunder
("Advances"), including without limitation the unpaid principal amount of, and
accrued interest on, all Advances, and any additional amounts that may be owed
by the Company to the Purchasers in respect thereof. Advances shall be made from
time to time in cash, or by the cancellation and exchange of other existing
indebtedness, as the Company may request; provided, however, that (i) the
Purchasers shall not be obligated to make any Advances in excess of the initial
Advances made by each Purchaser on the date hereof, (ii) the Purchasers shall
not be entitled to make any Advances, or to purchase any Notes or Warrants
hereunder, unless requested by the Company, and (iii) except as
<PAGE> 2
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 2 of 11
provided in paragraph 1(c), below, any Advances made by the Purchasers hereunder
shall be made 60% by WPLP and 40% by JPMIC, unless both WPLP and JPMIC agree to
a different ratio. The rights and obligations of WPLP and JPMIC hereunder are
several and independent, and nothing herein shall be construed to constitute
either WPLP or JPMIC as the agent, representative, partner, joint venturer or
fiduciary of the other.
(b) Interest Rate. The Base Interest Rate for
all Advances by WPLP under its Note shall be 10.00% per annum. The Base Interest
Rate for all Advances by JPMIC under its Note shall be 6.64% per annum.
(c) Prior Advance by WPLP. Concurrently with
the purchase and sale of the Notes hereunder (the "Initial Closing"), the
Company and WPLP have agreed to convert certain prior advances by WPLP to the
Company in the aggregate principal amount of $1,000,000 (the "Prior Advances")
into Advances under the Notes. Accordingly, at the Initial Closing: (i) the
Prior Advances shall be recorded with appropriate notations on the Notes; (ii)
all promissory notes representing the Prior Advances, and all common stock
warrants issued by the Company to WPLP in respect of the Prior Advances, shall
be canceled and surrendered to the Company against receipt of the securities
issued to WPLP hereunder; and (iii) the indebtedness of the Company to WPLP
represented by the Prior Advances shall constitute an Advance by WPLP to the
Company under the Notes in the aggregate principal amount of the Prior Advances,
for all purposes hereof.
2. Restricted Shares. Upon the making of each Advance
under the Notes, the Company shall issue to each Purchaser 45.714 Restricted
Shares for each $1,000 principal amount of such Advance.
3. Common Stock Warrants. Upon the making of each
Advance under the Notes, the Company shall issue to each Purchaser a Warrant
representing the right to purchase 200 Warrant Shares for each $1,000 principal
amount of such Advance, at an exercise price of $.70 per share. Each Warrant
shall be exercisable for a period of three years from the date of issuance.
4. Allocation of Purchase Price. The amount of each
Advance hereunder shall be allocated as purchase price among the Notes (or, in
the case of any Advance following the Initial Closing, the increase in the
principal amount of the Notes), the Restricted Shares and the Warrants being
purchased by each Purchaser hereunder in such manner as such Purchaser shall
reasonably determine with the Company's consent, which consent shall not
unreasonably be withheld or delayed;
<PAGE> 3
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 3 of 11
provided, however, that the portion of such purchase price allocated to such
Restricted Shares shall not in any event be less than the par value per share of
the Common Stock at the time of such Advance multiplied by the number of such
shares.
5. Loan Fee. In consideration for work performed in
connection with structuring, arranging for and providing the financings
contemplated hereby, upon the making of each Advance under the Notes, the
Company shall pay to each Purchaser a loan fee (the "Loan Fee") in the amount of
4% of the principal amount of such Advance, payable in shares of Common Stock,
valued at $.70 per share (the "Loan Fee Shares").
6. Pledge of Subsidiary Stock.
(a) The obligations of the Company under the Notes,
including without limitation the principal amount of, and
accrued interest on, all Advances, shall be ratably secured by
the pledge and collateral assignment of, and the grant of a
security interest in, all the issued and outstanding shares
(the "Pledged Shares") of capital stock of Lasertechnics
Marking Corporation, a wholly-owned subsidiary of the Company
(the "Stock Pledge"). The Stock Pledge shall be on such terms
as are reasonable and customary for transactions such as the
transactions contemplated hereby. Prior to the occurrence of
an event of default under the Notes, the Purchasers shall not
have any rights with respect to the voting or disposition of
any shares of such subsidiary capital stock so pledged.
(b) Concurrently, with the execution and delivery of
this Agreement, the Company is delivering to JPMIC, as
collateral agent for the benefit of the holders of the Notes,
ratably in proportion to the respective aggregate unpaid
principal amounts thereof (the "Collateral Agent"),
certificates representing the Pledged Shares, together with
stock powers in customary form. The Company hereby pledges the
Pledged Shares to the Collateral Agent, and grants to the
Collateral Agent a security interest therein, to secure the
full and timely payment and performance of all obligations of
the Company under the Notes, in accordance with paragraph
6(a), above, effective at the Initial Closing. The parties
shall use their respective best commercially reasonable
efforts to negotiate, execute and deliver a definitive pledge
agreement, in customary and reasonable form, to further
document the Stock Pledge on terms and conditions consistent
with the terms and conditions set forth
<PAGE> 4
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 4 of 11
herein (the "Pledge Agreement"), and upon the effectiveness of
the Pledge Agreement, the terms of the Pledge Agreement shall
amend and supersede any contrary provisions of this paragraph
6(b).
7. Late Payment. In the event the Company fails to repay the
entire principal amount of, and accrued interest on, all Advances by 3:00 p.m.,
New York City time, on the Final Maturity Date, the Company shall issue to each
Purchaser the following additional consideration as a late payment fee:
(a) that number of shares of Common Stock equal to
(i) the aggregate unpaid principal amount of all Advances
outstanding on the Final Maturity Date, times (ii) 1%, divided
by (iii) the average closing price per share of the Common
Stock for the 10 trading days immediately preceding the Final
Maturity Date, as reported in the Wall Street Journal (or, if
not so reported, as determined in good faith by a majority of
the disinterested members of the Board of Directors of the
Company) (such average, the "Current Market Price"); and
(b) a Warrant to purchase that number of shares of
Common Stock equal to (i) the aggregate unpaid principal
amount of all Advances outstanding on the Final Maturity Date,
times (ii) 5%, divided by (iii) the Current Market Price on
the Final Maturity Date; such warrant to be exercisable for a
period of three years commencing on the Final Maturity Date,
at an exercise price per share equal to the Current Market
Price on the Final Maturity Date.
The provision of this paragraph 7 will be subject to
appropriate adjustments in the event of any stock split, reverse stock split, or
similar transaction affecting the Common Stock between the date hereof and the
Final Maturity Date.
8. Securities Act Legend. The securities issued pursuant to
this Agreement, including the Notes, the Restricted Shares, the Warrants, the
Loan Fee Shares, and any additional shares of Common Stock and Warrants issued
pursuant to paragraph 7 hereof, will not be registered under the Securities Act
of 1933, as amended (the "Securities Act"). Certificates representing the
Restricted Shares, shares of Common Stock issued upon exercise of Warrants, and
shares of Common Stock issued in payment of the Loan Fee or pursuant to
paragraph 7(a) shall bear a restrictive legend substantially to the effect of
the following:
<PAGE> 5
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 5 of 11
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, OR APPLICABLE STATE
SECURITIES LAWS, NOR THE SECURITIES LAWS OF ANY OTHER
JURISDICTION. THEY MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THOSE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM."
9. Right to Exchange Notes. Each Purchaser shall have the
non-assignable right, exercisable upon 30 days' prior written notice to the
Company given at any time after September 1, 1997, to exchange the unpaid
principal amount of the Advances of such Purchaser, in whole or in part, for an
equal principal amount of convertible debentures of the Company having
substantially the same economic terms and conditions as the Company's existing
10% convertible debentures due March 1, 1999 (or any other convertible debt
security issued to refinance, or in substitution or exchange for, such
convertible debentures), as such terms and conditions shall be in effect at the
time of any exchange pursuant to this paragraph 9.
10. Representations and Warranties by the Company. The Company
hereby represents and warrants to each Purchaser as follows:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, and has the corporate power and authority
to execute, deliver and perform its obligations under this
Agreement, the Notes, the Warrants and the Pledge Agreement.
(b) The execution and delivery by the Company of this
Agreement, the Notes, the Warrants and the Pledge Agreement,
and the performance by the Company of its obligations
hereunder and thereunder, have been duly authorized by all
requisite corporate action on the part of the Company and will
not (i) violate any provision of law, statute, rule or
regulation or any order of any court or other agency of
government, (ii) conflict with or violate the Certificate of
Incorporation or By-Laws of the Company, in each case as
amended to the date hereof, or (iii) violate, conflict with or
constitute (with due notice or lapse of time or both) a
default under any indenture, mortgage, lease, license,
agreement or other contract or instrument or result in the
creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon the properties or assets of the
Company or any of its subsidiaries
<PAGE> 6
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 6 of 11
(other than the lien of the Stock Pledge granted hereunder and
under the Pledge Agreement), in each case if such violation,
conflict, default, lien, charge or encumbrance would have a
material adverse effect on the Company.
(c) This Agreement, the Notes and the Warrants have
been duly executed and delivered by the Company and
constitute, and the Pledge Agreement when duly executed and
delivered will constitute, the valid and legally binding
obligations of the Company, enforceable in accordance with
their respective terms, except to the extent the
enforceability thereof may be limited by applicable
bankruptcy, moratorium or similar laws affecting the rights of
creditors generally.
(d) Based in part upon the representations and
warranties of each Purchaser contained in this Agreement, no
registration or filing with, or consent or approval of, or
other action by, any federal, state or other governmental
department, commission, board, bureau, agency or
instrumentality or any third party is or will be necessary for
(a) the Company's execution and delivery of this Agreement,
the Notes and the Warrants, and the Company's performance of
its obligations hereunder and thereunder.
(e) Attached hereto as Schedule 10(e) are (i) a
memorandum dated June 19, 1997, from the Company's subsidiary
Sandia Imaging Systems Corporation, stating that division's
outstanding accounts receivable, firm orders and verbal orders
as of June 18, 1997, and (ii) a letter dated June 20, 1997,
from the Company's subsidiary Lasertechnics Marking
Corporation, stating that division's outstanding accounts
receivable and firm orders as of June 18, 1997. Such
memorandum and letter, and the attachments thereto, were
prepared by the Company in good faith and are believed by the
Company to be accurate. The accounts receivable reflected
therein represent valid accounts for goods sold and/or
services performed in the conduct of the Company's business.
(f) The Restricted Shares and the Loan Fee Shares
issued to such Purchaser hereunder are, and the Warrant
Shares, when issued upon the exercise of such Purchaser's
Warrant in accordance with the terms hereof will be, duly
authorized, validly issued, fully paid and non-assessable, and
are not subject to any pre-emptive rights.
<PAGE> 7
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 7 of 11
(g) The Company is the record holder and beneficial
owner of the Pledged Shares and owns the Pledged Shares free
and clear of all liens and encumbrances, other than the lien
of the Stock Pledge created hereunder and under the Pledge
Agreement.
11. Representations and Warranties of Each Purchaser. Each
Purchaser hereby severally represents and warrants to the Company as follows:
(a) Such Purchaser is acquiring the Note, the Warrant
and the Restricted Shares to be purchased by it hereunder, and
the Loan Fee Shares issued to it pursuant to paragraph 5
hereof (collectively, the "Acquired Securities"), and, if such
Purchaser acquires Warrant Shares upon the exercise of such
Warrant, such Purchaser will be acquiring such Warrant Shares,
for its own account, for investment and not with a view to the
distribution thereof within the meaning of the Securities Act.
(b) Such Purchaser understands that the Acquired
Securities have not been, and the Warrant Shares will not be,
registered under the Act, by reason of their issuance by the
Company in transactions exempt from the registration
requirements of the Act, and that such Acquired Securities and
Warrant Shares must be held by such Purchaser indefinitely
unless a subsequent disposition thereof is registered under
the Act or is exempt from such registration.
(c) Such Purchaser further understands that the
exemption from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Act
depends on the satisfaction of various conditions, and that,
if applicable, Rule 144 may afford the basis for sales only in
limited amounts.
(d) Such Purchaser understands that its investments
hereunder involve substantial risks and represents and
warrants that it has made such independent examination and
investigation of the Company as it has deemed necessary in
making its investment decision.
(e) Such Purchaser is able to bear the economic risk
of the investments contemplated by this Agreement and has such
knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the
investment contemplated by this Agreement.
<PAGE> 8
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 8 of 11
12. Miscellaneous. (a) This Agreement, the Notes and the
Warrants constitute our entire agreement with respect to the subject matter
hereof, and this Agreement may not be modified or amended or any provision
hereof waived except by an instrument in writing signed by the Company and each
Purchaser.
(b) This Agreement, the Notes and the Warrants shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. The
rights of each Purchaser hereunder shall be assignable to any
holder of the Notes, provided that the right of each Purchaser
under paragraph 9 above to exchange Notes for Convertible
Debentures shall not be assignable to any person without the
prior written consent of the Company. Except as provided in
the immediately preceding sentence, this Agreement and the
rights of the Purchasers hereunder shall not be assignable and
any purported assignment thereof shall be void.
(c) This Agreement may be executed in any number of
counterparts and on separate counterparts, each of which shall
be an original instrument, but all of which together shall
constitute a single agreement. One or more signature pages
from any counterpart of this Agreement may be attached to any
other counterpart of this Agreement without in any way
changing the effect thereof. This Agreement shall be effective
as to each Purchaser, severally, when executed and delivered
by the Company and such Purchaser.
(d) All notices, requests, demands, consents,
waivers, or other communications made hereunder or under the
Notes or the Warrants to any party or holder thereof shall be
in writing and shall be deemed to have been duly given if
delivered personally or sent by nationally-recognized
overnight courier or first class registered or certified mail,
return receipt requested, postage prepaid, addressed to such
party at the address set forth below:
if to the Company, to:
Lasertechnics, Inc.
3208 Commander Drive
Carrollton, TX 75006
Attention: Chief Financial Officer
<PAGE> 9
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 9 of 11
with a copy to:
Baker & Botts, L.L.P.
599 Lexington Avenue
New York, New York 10022
Attention: Marc A. Leaf, Esq.
if to a Purchaser, to such Purchaser at its address
first set forth above,
or to such other address as the party to whom such
communication is to be given may have furnished to the other
party in writing in accordance herewith. All such notices,
requests, demands, consents, waivers or other communications
shall be deemed to have been delivered (i) in the case of
personal delivery, on the date of delivery, (ii) if sent by
overnight courier, on the next business day following the date
when send and (iii) in the case of mailing, on the third
business day following such mailing.
(e) All representations, warranties and agreements
contained herein and in the Notes and the Warrants shall
survive the execution and delivery of this Agreement and the
sale of the Notes and the Warrants hereunder.
(f) Nothing contained herein shall be construed to
prohibit either Purchaser from selling or otherwise disposing
of any Acquired Securities acquired by such Purchaser
hereunder; provided that such sale or disposition, and any and
all related offers, are made in compliance with the Securities
Act, any other applicable securities and blue sky laws, and
all applicable rules and regulations thereunder.
(g) THIS AGREEMENT AND ALL RIGHTS, OBLIGATIONS AND
LIABILITIES HEREUNDER SHALL BE CONSTRUED ACCORDING TO THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO
BE PERFORMED WHOLLY THEREIN. Any judicial proceeding brought
against the Company to enforce, or otherwise in connection
with, this Agreement may be brought in any court of competent
jurisdiction in the City of New York, and, by execution and
delivery of this Agreement, the Company (i) accepts, generally
and unconditionally, the nonexclusive
<PAGE> 10
Lasertechnics, Inc.
Note Purchase Agreement, dated June 25, 1997
Page 10 of 11
jurisdiction of such courts and any related appellate court
and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Agreement and (ii)
irrevocably waives any objection it may now or hereafter have
as to the venue of any such proceeding brought in such a court
or that such a court is an inconvenient forum.
<PAGE> 11
If the foregoing correctly sets forth your understanding of
our agreement, please so indicate by signing and returning to the Company the
enclosed counterpart of this Agreement.
Very truly yours,
LASERTECHNICS, INC.
By: /s/ E.A. Milo Mattorano
-----------------------
Name: E.A. Milo Mattorano
Title: VP and CFO
Each of the undersigned agrees with and accepts the foregoing terms and
provisions as of the date first above written.
WOLFENSOHN PARTNERS L.P.
By: /s/ R.C.E. Morgan
-----------------------------
Name: R.C.E. Morgan
Title: General Partner
J.P. MORGAN INVESTMENT CORPORATION
By:
------------------------------
Name:
Title:
<PAGE> 1
Exhibit 13
PLEDGE AGREEMENT.
PLEDGE AGREEMENT dated as of the 18th day of August, 1997 (the
"Agreement") by and among Lasertechnics, Inc., a Delaware corporation (the
pledgor"), Wolfensohn Partners L.P., a Delaware limited partnership (the
"Partnership"), J.P. Morgan Investment Corporation, a Delaware corporation
("JPMIC"), and JPMIC as agent for the Partnership and JPMIC.
WHEREAS, in order to induce the Partnership and JPMIC to, among other
things, make the loans contemplated by that certain Note Purchase Agreement,
dated as of June 25, 1997 (the "Note Purchase Agreement"), by and among the
Pledgor, the Partnership and JPMIC, Pledgor has agreed to grant a pledge and
security interest to Agent (as such term is hereinafter defined) for the ratable
benefit of the Partnership and JPMIC (collectively, the "Lenders") in the shares
of Lasertechnics Marking Corporation, a Delaware corporation and wholly-owned
subsidiary of Pledgor ("Marking"), now owned and hereafter acquired by Pledgor
(the "Shares") on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto agree as follows:
1. Creation of Security Interest. (a) As collateral security for the
payment in full of all of the Secured Obligations (as such term is hereinafter
defined), the Pledgor hereby pledges, hypothecates, assigns, transfers, sets
over and delivers unto the Agent, and hereby grants to the Agent for the ratable
benefit of the Partnership and JPMIC a first lien and security interest in, all
of the Shares, the proceeds thereof, and all cash, securities or other property
at any time and from time to time receivable or otherwise distributed in respect
of or in exchange for any of the Shares (all the Shares, proceeds thereof, cash,
securities and other property being hereinafter collectively referred to as the
"Collateral"). Concurrently with the execution of this Agreement, the Pledgor is
delivering to the Agent (i) the stock certificates listed on Schedule A hereto
(the "Delivered Stock"), and (ii) duly endorsed irrevocable stock powers in
blank for the Delivered Stock.
(b) This Agreement secures, and the Collateral is collateral
security for, the prompt payment and performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including the payment of amounts that would become due but for the
operation of the
<PAGE> 2
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)), of all obligations and liabilities of every nature of Pledgor
now or hereafter existing under or arising out of or in connection with the Note
Purchase Agreement and the Senior Promissory Notes issued thereunder (the
"Senior Promissory Notes"), and all extensions or renewals thereof, whether for
principal, interest (including interest that, but for the filing of a petition
in bankruptcy with respect to Pledgor, would accrue on such obligations), fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Agent or either
Lender as a preference, fraudulent transfer or otherwise, and all obligations of
every nature of Pledgor now or hereafter existing under this Agreement (all such
obligations of Pledgor being the "Secured Obligations").
2. Stock Dividends and Adjustments; Voting Rights.
(a) In the event that during the term of this Agreement any stock
dividend, reclassification, stock split, readjustment, warrant, option or right
to acquire additional securities is issued with respect to the Collateral or any
part thereof, or any other changes are made in the capital structure of Marking,
the Pledgor shall deliver promptly to the Agent all the new, substituted or
additional shares or securities (collectively, the "Additional Securities") it
has received together with appropriate instruments of transfer duly endorsed in
blank. From and after the time the Pledgor has received any Additional
Securities they shall be deemed to be part of the Collateral pledged hereunder.
(b) So long as a Default, as defined below, shall not have
occurred and be continuing, the Pledgor shall be the sole owner of the
securities that are part of the Collateral and shall have and be entitled to
exercise all rights which a holder of such securities would be entitled to
exercise, including the right (i) to vote all securities that are part of the
Collateral and (ii) to dispose of the securities that are part of the Collateral
in a transaction which results in the discharge of Pledgor's obligations under
the Senior Promissory Notes. Upon the occurrence and during the continuance of a
Default, the Agent shall have exclusive voting rights for such securities.
3. Representations, Warranties and Covenants. The Pledgor hereby
represents, warrants and covenants that:
2
<PAGE> 3
(i) the Pledgor is the sole legal and beneficial owner of
the Collateral, free and clear of any adverse claims, and the Pledgor has the
unrestricted right to transfer, pledge and deliver the Collateral to the Company
hereunder;
(ii) the Delivered Stock constitutes all of the issued and
outstanding capital stock of Marking as of the date hereof (in this regard
Pledgor represents and the other parties hereto acknowledge that options to
purchase 482,500 shares of the Common Stock, par value $.01 per share ("Common
Stock"), have been issued to directors and employees of Marking pursuant to the
1995 Stock Option Plan of Marking (the "Plan") and 17,500 additional shares of
Common Stock may be issued pursuant to the Plan);
(iii) the Pledgor will preserve and defend all right, title
and interest of the Agent in and to the Collateral against all claims made by
third parties thereon; and
(iv) the pledge of the Delivered Stock made hereby and the
delivery of the Delivered Stock in accordance herewith are effective to vest in
the Agent a valid and perfected first priority security interest in the
Delivered Stock as set forth herein.
4. Default, Remedies. (a) A "Default" shall occur hereunder if:
(i) the Pledgor shall fail to pay the principal of, or
interest on, any Senior Promissory Note on the date when due, whether at
maturity, by acceleration or otherwise; or
(ii) an Insolvency Event (as such term is hereinafter
defined) occurs with respect to the Pledgor or Marking; or
(iii) this Agreement shall for any reason whatsoever cease
to be a valid, binding and enforceable agreement against Pledgor; or
(iv) the Pledgor sells, assigns, transfers or otherwise
disposes of, or grants a lien on or security interest in or option or right with
respect to, or otherwise encumbers the Collateral or any part thereof or any
interest therein, provided that either of the following shall not be deemed to
be a Default: (A) any issuance of Common Stock upon the exercise of options
granted pursuant to the Plan or
3
<PAGE> 4
(B) a disposition of securities that are part of the Collateral contemplated by
Section 2(b); or
(v) any of the Collateral shall be attached or levied
upon or seized in any legal proceedings, or held by virtue of any levy or
distraint, which attachment, levy or distraint shall not be vacated within 60
days; or
(vi) the Pledgor otherwise defaults in the observance or
performance of any material representation or other material covenant or
agreement contained herein, the Senior Promissory Notes or in the Note Purchase
Agreement, and such default continues for a period of 20 days after notice
thereof.
(b) Upon the occurrence and during the continuance of a Default
hereunder, the Agent shall have the right, at the request of the Required
Lenders (as such term is hereinafter defined), in addition to any other rights
granted under the Note Purchase Agreement or the Senior Promissory Notes, to
pursue all of the rights and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code as adopted and amended in the
State of New York as in effect from time to time or any other applicable law,
all of which rights and remedies, to the full extent permitted by law, shall be
cumulative and not alternative. In addition, from and after the occurrence of a
Default, each Lender may independently exercise any rights or remedies in
respect of the Senior Promissory Notes not provided for herein, and the Agent
acknowledges the authority of the Lenders to exercise such rights and remedies.
(c) The Pledgor agrees that ten business days shall constitute
reasonable notice of a sale or other disposition of the Collateral. The proceeds
from any such sale or other disposition, after deducting therefrom all expenses
incurred in connection therewith (including reasonable legal fees and expenses)
and after payment in full of the Secured Obligations, shall be paid over to the
Pledgor. The Agent agrees that a private sale of the Collateral shall be held on
commercially reasonable terms; provided, however, that the Agent is authorized
in its absolute discretion to restrict the prospective purchasers to such
persons who represent and agree to the satisfaction of the Agent and its counsel
that such person is purchasing the Collateral for his own account, for
investment, and not with a view to or for sale in connection with a distribution
in violation of the Securities Act of 1933 or any other applicable law or
regulation.
(d) As used in this Agreement, an "Insolvency Event" with respect
to any Person (as such term is hereinafter defined) shall mean, the making by
such Person of a general assignment made by such Person for the benefit of
creditors;
4
<PAGE> 5
or an order, judgment or decree is entered adjudicating such Person bankrupt or
insolvent; or any order for relief with respect to such Person is entered under
the Bankruptcy Code; or such Person petitions or applies to any tribunal for the
appointment of a custodian, trustee, receiver or liquidator of such Person or of
any substantial part of the assets of such Person, or commences any proceeding
relating to such Person under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against such Person and either (A) such Person by any
act indicates its approval thereof, consent thereto or acquiescence therein or
(B) such petition, application or proceeding is not dismissed within 30 days.
(e) As used in this Agreement, the term "Person" shall mean and
include an individual, a partnership, a limited liability company, a joint
venture, a corporation, a trust, an unincorporated organization and a
governmental entity or any department or agency thereof.
5. Waiver of Rights or Remedies. (a) The Agent, by act, delay,
omission, acceptance of partial payment or otherwise, shall not be deemed to
have waived any rights or remedies hereunder, unless such waiver is in writing
and signed by the Agent, and then only to the extent therein set forth. A waiver
by the Agent of any right or remedy on any one occasion, shall not be construed
as a bar to or waiver of any such right or remedy, or both, which the Agent
otherwise would have had on any future occasion.
(b) To the full extent that the Pledgor may lawfully so agree, the
Pledgor shall not at any time plead, claim or take the benefit of any moratorium
or redemption law now or hereafter enforced, in order to prevent or delay the
enforcement of this Agreement or the application of any portion or all of the
Collateral as provided by this Agreement, and the Pledgor, for itself and all
who may claim under the Pledgor, to the extent legally permitted, hereby waive
the benefit of all such laws. Nothing herein constitutes a waiver of the
Pledgor's rights arising under the provisions of the Uniform Commercial Code as
in effect in the State of New York from time to time.
6. Further Assurances. The Pledgor agrees that it shall at the request
of the Agent execute and deliver all such further assignments, endorsements and
other documents and take all such further action as the Agent may reasonably
request in order to effect the purposes and provisions of this Agreement and to
perfect, continue,
5
<PAGE> 6
better assure or confirm the rights of the Agent in the Collateral provided for
hereunder.
7. Termination. The security interest and assignment created and
granted hereunder shall terminate only when the Pledgor has fully satisfied all
of the obligations under the Senior Promissory Notes and no Default, or event
which with notice or lapse of time or both would constitute a Default, has
occurred and is continuing, and upon such termination all Collateral in the
possession of the Agent shall be returned to the Pledgor, accompanied by
appropriate stock powers, without recourse to the Agent.
8. Notices. Notices or other communications to any of the parties
hereto shall be in writing and shall be given, in the case of the Pledgor and
the Lenders, as provided in the Note Purchase Agreement and, in the case of the
Agent, to J.P. Morgan Investment Corporation, 60 Wall Street, New York, New York
10260, attention: Mr. Robert Kiss and Mr. James P. Marriott. Pledgor agrees that
any notices or other communications sent by it to either Lender shall also be
sent to the Agent.
9. Appointment of Agent.
(a) By the execution and delivery of this Agreement, each of the
Lenders appoints, and by its execution hereof the Pledgor hereby acknowledges,
JPMIC, as collateral agent for itself and the Partnership under this Agreement
and for the purposes herein stated and any and all incidental and related
rights, powers, remedies, actions, steps and matters (in such capacity herein
referred to as the "Agent," which term shall include successors and assigns), to
take any and every action allowed pursuant to this Agreement, and to protect all
rights of each Lender as herein provided or as otherwise agreed, from time to
time, by those Lenders holding at least 90% of the aggregate total of the
Secured Obligations owed to all Lenders (the "Required Lenders"); provided,
however, if a Default shall have occurred, either Lender, acting individually,
may instruct the Agent to the same extent as the Required Lenders, but without
approval of, or consent by, the Pledgor or any other Person, including with
respect to all rights as provided in the Uniform Commercial Code of the State of
New York as now in effect or hereafter amended or any other applicable law, as
now in effect or hereafter amended to increase said rights of the Agent or the
Lenders; provided, however, that with respect to any determination to be made at
such time as only one Lender shall hold any Secured Obligations, the Agent shall
act solely at the request of such Lender. It is acknowledged and agreed that the
relationship of the Agent and Lenders shall be that of principals and agent and
not, in any event, that of partners or joint venturers. Neither this Agreement
nor any document executed in
6
<PAGE> 7
connection herewith shall be deemed to create or establish a partnership or
joint venture among any of the parties hereto or thereto. Agent shall not have,
by reason of this Agreement or otherwise, a fiduciary relationship in respect of
any Lender.
(b) The security interests granted to the respective Lenders shall
each be of equal priority and any and all amounts realized as a result of any
disposition or collection of Collateral shall be shared on a pro rata basis
based upon the ratio of the amount of Secured Obligations owed to each
respective Lender to the aggregate total of the Secured Obligations owed to all
Lenders, such ratio to be calculated on the basis of the Secured Obligations
outstanding on the date of determination (such ratio is hereinafter referred to
as such Lender's "Pro Rata Share").
(c) Neither the Agent nor any of its officers, directors, employees
or agents shall be liable to Lenders for any action taken or omitted by Agent
under or in connection with this Agreement except to the extent caused by
Agent's gross negligence or willful misconduct. The Agent shall be entitled to
refrain from any act or the taking of any action (including the failure to take
an action) in connection with this Agreement or from the exercise of any power,
discretion or authority vested in it hereunder unless and until Agent shall have
received instructions in respect thereof from the Required Lenders and, upon
receipt of such instructions from the Required Lenders, Agent shall be entitled
to act or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions. Without prejudice
to the generality of the foregoing, (i) Agent shall be entitled to rely, and
shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Pledgor and its subsidiaries or for any Lender), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against Agent as a result of Agent acting or
(where so instructed) refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of Required Lenders.
(d) Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Agent, to the extent that Agent shall not have been
reimbursed by Pledgor, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against Agent
in exercising its powers, rights and remedies or performing its duties hereunder
or otherwise in its capacity as Agent in any way relating to or
7
<PAGE> 8
arising out of this Agreement; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. If any indemnity furnished to Agent for any
purposes shall, in the opinion of Agent, be insufficient or become impaired,
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
(e) Agent may resign at any time by giving 30 days' prior written
notice thereof to Lenders and Pledgor, and Agent may be removed at any time with
or without cause by an instrument or concurrent instruments in writing delivered
to Pledgor and Agent and signed by the Required Lenders. Upon any such notice of
resignation or any such removal, the Required Lenders shall have the right, upon
five business days' notice to Pledgor, to appoint a successor Agent. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent and the
retiring or removed Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Agent's resignation or
removal hereunder as Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. Notwithstanding anything in this Agreement to the
contrary, JPMIC may resign as Agent hereunder at any time and substitute the
Partnership as the successor Agent, and upon notice of such substitution, the
Partnership shall become the Agent hereunder.
10. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of New
York without regard to the principles of conflicts of law thereof. In the event
that any term or provision of this Agreement shall, for any reason, be held to
be illegal, invalid or unenforceable under the laws of any governmental
authority to which this Agreement is subject, that term or provision shall be
deemed severed from this Agreement, and the remaining terms and provisions shall
be enforceable, to the fullest extent permitted by law.
(b) This Agreement shall inure to the benefit of and shall be
binding upon the respective successors, assigns and legal representatives of the
parties and any holder of Senior Promissory Notes, except that the Pledgor shall
not be permitted to assign this Agreement or any interest herein or in the
Collateral, or any part thereof, or otherwise pledge, encumber or grant any
option with respect to the
8
<PAGE> 9
Collateral, or any part thereof, or any cash or property held by the Agent as
Collateral under this Agreement. The Agent may assign this Agreement, any
interest herein or in the Collateral or any part thereof, to an affiliated
entity of the Agent.
(c) Captions used herein are inserted for reference only and shall
not affect the interpretation or meaning of this Agreement.
(d) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
(e) This Agreement may not be changed, modified or amended except
by a written instrument signed by the party to be charged therewith; provided,
however, that Section 9 hereof may be changed, modified or amended by a written
instrument signed by the Lenders, a copy of which shall be provided to the
Pledgor.
(f) All judicial proceedings brought against Pledgor arising out
of or relating to this Agreement, or any obligations hereunder, may be brought
in any state or federal court of competent jurisdiction in the state, county and
city of New York. By executing and delivering this Agreement, Pledgor, for
itself and in connection with its properties, irrevocably
(i) accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts;
(ii) waives any defense of forum non conveniens;
(iii) agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Pledgor at its address provided in the Note Purchase
Agreement;
(iv) agrees that service as provided in clause (iii) above
is sufficient to confer personal jurisdiction over Pledgor in any such
proceeding in any such court, and otherwise constitutes effective and binding
service in every respect;
(v) agrees that the Agent and the Lenders retain the
right to serve process in any other manner permitted by law or to bring
proceedings against Pledgor in the courts of any other jurisdiction; and
9
<PAGE> 10
(vi) agrees that the provisions of this Section 10(f)
relating to jurisdiction and venue shall be binding and enforceable to the
fullest extent permissible under New York General Obligations Law Section 5-1402
or otherwise.
10
<PAGE> 11
IN WITNESS WHEREOF, the Pledgor has executed this Agreement on the date
first above written.
/s/ E.A. Milo Mattorano
-----------------------------------------------
Name: E.A. Milo Mattorano
Title: Vice President & Chief Financial Officer
AGREED TO AND ACCEPTED:
WOLFENSOHN PARTNERS L.P.
By: /s/ R.C.E. Morgan
------------------------
its general partner
By: /s/ R.C.E. Morgan
-------------------------
Name: R.C.E. Morgan
Title: General Partner
J.P. MORGAN INVESTMENT CORPORATION
(Individually and as Agent)
By:
-------------------------
Name:
Title:
11
<PAGE> 12
PLEDGOR
LASERTECHNICS, INC.
---------------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
WOLFENSOHN PARTNERS L.P.,
By: /s/ R.C.E. Morgan
-------------------------
its general partner
By:
-------------------------
Name:
Title:
J.P. MORGAN INVESTMENT CORPORATION
(Individually and as Agent)
By:
-------------------------
Name:
Title:
12
<PAGE> 13
PLEDGOR
LASERTECHNICS, INC.
-------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
WOLFENSOHN PARTNERS L.P.,
By:
-------------------------
its general partner
By:
-------------------------
Name:
Title:
J.P. MORGAN INVESTMENT CORPORATION
(Individually and as Agent)
By: /s/ Robert E. Kiss
-------------------------
Name: Robert E. Kiss
Title: Vice President
13
<PAGE> 14
SCHEDULE A
Delivered Stock
Certificate for 2,400,000 shares of Convertible Preferred Stock, par value $.01
per share, of Marking
Certificate for 200,000 shares of Convertible Preferred Stock, par value $.01
per share, of Marking
Certificate for 10 shares of Common Stock, par value $.01 per share, of Marking
14
<PAGE> 1
Exhibit 14
ASSIGNMENT AND ASSUMPTION OF LASERTECHNICS
NOTE PURCHASE AGREEMENT
ASSIGNMENT AND ASSUMPTION OF LASERTECHNICS NOTE PURCHASE AGREEMENT
dated as of August 19, 1997 between WOLFENSOHN PARTNERS, L.P., a Delaware
limited partnership ("Assignor"), WOLFENSOHN ASSOCIATES II, L.P., a Delaware
limited partnership ("Assignee"), and LASERTECHNICS, INC. ("Company"), a
Delaware corporation.
W I T N E S S E T H:
WHEREAS, Assignor desires to assign all of its rights, title, interest
and obligations in and to the Note Purchase Agreement dated as of June 25, 1997
(the "Note Agreement"), and all of its liabilities and obligations under the
Note Agreement, in each case from and after the date first written above and
Assignee desires to accept the assignment of such rights, title and interest and
to assume such liabilities and obligations and the Company accepts such an
Assignment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, Assignor hereby sells, assigns,
transfers and sets over to Assignee all of its rights, title, interests in and
to, the Note Agreement from and after the date first written above.
Assignee hereby accepts the foregoing assignment and hereby assumes and
agrees to perform all of Assignor's obligations under the Note Agreement from
and after the date first written above.
This Assignment and Assumption of the Note Agreement is made without
any representation or warranty by Assignor.
The Company hereby gives its written consent to the assignment of the
Note Agreement, including without limitation, for purposes of Section 12(b)
thereof.
[Remainder of Page intentionally left blank; signature page follows]
<PAGE> 2
IN WITNESS WHEREOF, this Assignment and Assumption of the
Lasertechnics, Inc., Note Agreement and its related documents has been executed
by the parties hereto as of the day and year first above written.
WOLFENSOHN PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ Richard C. E. Morgan
--------------------------
Name: Richard C. E. Morgan
Title:
WOLFENSOHN ASSOCIATES II L.P.,
a Delaware limited partnership
By: WOLFENSOHN PARTNERS II LLC,
its general partner
By: /s/ Richard C. E. Morgan
--------------------------
Name: Richard C. E. Morgan
Title:
LASERTECHNICS, INC.
a Delaware Corporation
By: /s/ Richard C. E. Morgan
--------------------------
Name: Richard C. E. Morgan
Title:
<PAGE> 1
Exhibit 15
ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated
as of August 19, 1997, between WOLFENSOHN ASSOCIATES L.P., a Delaware limited
partnership ("Assignor"), and WOLFENSOHN ASSOCIATES II L.P., a Delaware limited
partnership (acting through its general partner, Wolfensohn Partners II LLC, a
Delaware limited liability company (the "General Partner") (together with its
successors and assigns, "Assignee").
W I T N E S S E T H:
WHEREAS, Assignor has formed the Assignee as a limited
partnership under the laws of the State of Delaware pursuant to a Certificate of
Limited Partnership filed with the Office of the Secretary of State of the State
of Delaware on August 12, 1997 and an Agreement of Limited Partnership (the
"Partnership Agreement", dated as of August 12, 1997, by and among the General
Partner and the Initial Limited Partner (as defined in the Partnership
Agreement) for the purpose of holding certain assets and investments of the
Assignor;
WHEREAS, Assignor, Wolfensohn Partners L.P., a Delaware
limited partnership and the general partner of Assignor, and Landmark Equity
Partners V, L.P. have entered into an Investment Agreement, dated August 7, 1997
(the "Landmark Agreement"), pursuant to which Assignor has agreed, subject to
the consent of its limited partners, to transfer and assign to Assignee certain
assets and liabilities as a capital contribution in exchange for all of the
limited partnership interests of the Assignee; and
WHEREAS, Assignee wishes to acquire such assets and assume
such liabilities;
WHEREAS, the requisite number of limited partners of the
Assignor have approved the transfer of assets and liabilities pursuant to the
Consent and Amendment Number 8, dated as of August 15, 1997, to the Amended and
Restated Limited Partnership Agreement of the Assignor, dated as of April 16,
1984, as further amended, by and among the General Partner and the limited
partners named on the signature pages thereto (the "WALP Partnership
Agreement");
WHEREAS, certain assets and liabilities of Assignor relating
to IVEX Corporation, ONTOS, Inc. and Quantrad Sensor Inc. were transferred to
Assignee
Assignment and Assumption
Agreement (Omnibus)
<PAGE> 2
pursuant to that certain Assignment and Assumption Agreement, dated as of August
18, 1997, between Assignor and Assignee (the "IVEX Assignment Agreement");
NOW, THEREFORE, in consideration of the foregoing, the mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Transfer of Assets. Subject to Section 2, Assignor hereby
assigns, transfers, sets over and conveys to Assignee all of the right, title
and interest of Assignor in and to all of the assets (in each case subject to
any security interests of Republic National Bank pursuant to the Continuing
General Security Agreement, dated December 5, 1996) of the Assignor as the same
shall exist on the date hereof, including, without limitation, the following
(collectively, the "Transferred Assets"), in exchange for 100% of the Class A
and Class B limited partnership interests of the Assignee:
(a) all Securities (as defined in the Securities Act of 1933,
as amended) of the issuers named on Schedule A attached hereto (the
"Portfolio Companies") owned by Assignor;
(b) all contracts and written agreements arising out of,
pertaining to or in connection with the Transferred Assets (other than
any agreement between Assignor and its consultants and employees) to
which Assignor is a party (the "Investment Agreements") and any and all
pledge, security or guaranty agreements with respect to the Transferred
Assets, and any and all contractual rights relating to the Portfolio
Companies or the Securities issued by the Portfolio Companies,
including any right to assert claims and take other rightful actions in
respect of breaches, defaults and other violations of such Investment
Agreements;
(c) all (i) proceeds paid to the Assignor from the sale,
assignment, transfer, conversion, exchange, redemption, exercise,
repayment, waiver, release, compromise, settlement or satisfaction of
any Transferred Assets, and (ii) distributions, dividends, interest and
payments of cash, Securities or other property declared, paid or made
with respect to or in connection with the Transferred Assets after
April 30, 1997, including all interest earned on dividends and on
distributions of Securities sold or otherwise liquidated, distributions
and other payments, in each case received by the Assignor between
2
Assignment and Assumption
Agreement (Omnibus)
<PAGE> 3
August 7, 1997 and the First Closing Date (as defined in the Landmark
Agreement);
(d) all notes, bonds and other evidence of indebtedness of and
rights to receive payment from any person or entity held by Assignor
(other than amounts payable by Wolfensohn Partners L.P. to the Assignor
pursuant to the WALP Partnership Agreement, including, without
limitation, under Section 6.2 (Management Fees) and Article XII
(Dissolution and Winding-Up) of the WALP Partnership Agreement), all
cash on hand and in bank accounts, certificates of deposit and cash
equivalents held by Assignor, including the bank accounts listed in
Schedule C hereto and amounts held therein;
(e) all guaranties, warranties, indemnities and similar rights
in favor of Assignor with respect to the Transferred Assets; and
(f) all other property and assets of Assignor of every kind,
nature and description, real, personal and mixed, tangible and
intangible, wherever situated, including all assets reflected on the
books of account of the Assignor as of the date hereof.
2. Third Party Consents. This Agreement shall not constitute
an assignment or transfer to Assignee of any interest in or right under any
Investment Agreement or of title to any asset or property, if an assignment or
transfer, or an attempt to make such assignment or transfer, without the consent
of any party other than Assignor would constitute a breach or violation thereof,
unless and until such consent has been obtained.
3. Assumption of Liabilities. Assignee hereby assumes and
agrees to pay, satisfy, honor, perform and discharge, as and when due, and
otherwise in accordance with the relevant governing agreements and instruments
all liabilities, obligations, debts, contracts and commitments of any kind,
character or description of Assignor, whether absolute, accrued, liquidated,
unliquidated, contingent, executory or otherwise, howsoever and whensoever
arising, that remain unpaid or unsatisfied (the "Assumed Liabilities"),
including, without limitation, the following:
(a) all duties, obligations and liabilities of Assignor under
or in respect of the Transferred Assets, and all obligations and
liabilities of Assignor under all Investment Agreements assigned by
Assignor to Assignee pursuant to Section 1 of this Agreement; and
3
Assignment and Assumption
Agreement (Omnibus)
<PAGE> 4
(b) all duties, obligations and liabilities of the Assignor
under the secured revolving credit facility from Republic National Bank
of New York ("Republic Bank"), as evidenced by the Grid Notes, dated
December 5, 1996, in the principal amount of $7,000,000 and May 20,
1997, in the principal amount of $2,500,000, issued by the Assignor to
Republic Bank, the Continuing General Security Agreement, dated
December 5, 1996, between the Assignor and Republic Bank and any and
all related security, pledge or guaranty agreements to which the
Assignor is a party; and
(c) all liabilities shown on the balance sheet of Assignor
dated June 30, 1997 (other than liabilities, if any, relating to IVEX
Corporation, ONTOS, Inc. and Quantrad Sensor Inc. and assumed by
Assignee pursuant to the IVEX Assignment Agreement).
4. Agreement to be Bound. The Assignee hereby assumes the
obligations of the Assignor assigned and transferred pursuant to this Agreement
and hereby agrees to be bound by and comply with all of the terms of the
Investment Agreements as if Assignee was initially a party thereto in the place
of the Assignor.
5. Further Assurances. Each party hereto agrees promptly to
execute and deliver any and all such instruments and to take any and all such
other actions as either party may from time to time reasonably request in order
to vest in Assignor title to the assets transferred hereby and give effect to
the foregoing provisions of this Agreement.
6. Power of Attorney. Assignor hereby constitutes and appoints
Assignee the true and lawful attorney of Assignor with full power of
substitution, in the name of Assignor or otherwise, and on behalf and for the
benefit of Assignee, to demand and receive from time to time any and all
Transferred Assets; to give receipts, releases and acquittances for or in
respect of the same or any part thereof; to collect, for the account of
Assignee, all receivables and other items transferred to Assignee as provided
herein, and to endorse with the name of Assignor any check received on account
of any such receivables or any other item; from time to time to institute and
prosecute in the name of Assignor or otherwise any and all proceedings at law,
in equity or otherwise, which Assignee may deem proper to collect, assert or
enforce any claim, right, title, debt or account hereby assigned and transferred
or intended so to be; and to take any action necessary to effect the transfer to
Assignee of full legal title in and to, and beneficial ownership of, the
Transferred Assets. Assignor hereby declares that the foregoing powers are
coupled with an interest and shall not be revocable by it in any manner or for
any reason.
4
Assignment and Assumption
Agreement (Omnibus)
<PAGE> 5
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE DELAWARE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
8. Miscellaneous. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument. This Agreement shall not
be assigned by either party without the prior written consent of the other
party. This Agreement shall inure to the benefit of, and be binding on and
enforceable against, the successors and permitted assigns of the parties
hereto. This Agreement may not be amended, nor may any term hereof be waived,
except by an agreement in writing signed by both parties.
5
Assignment and Assumption
Agreement (Omnibus)
<PAGE> 6
IN WITNESS WHEREOF, Assignor and Assignee have duly executed
this Assignment and Assumption Agreement by their authorized representatives as
of the date first above written.
Assignor:
WOLFENSOHN ASSOCIATES L.P.,
By: WOLFENSOHN PARTNERS L.P.,
its general partner
By: /s/ James D. Wolfensohn
---------------------------
Name: James D. Wolfensohn
Title: General Partner
Assignee:
WOLFENSOHN ASSOCIATES II L.P.,
By: WOLFENSOHN PARTNERS II, LLC,
its general partner
By: /s/ Robert J. Bertoldi
---------------------------
Name: Robert J. Bertoldi
Title: Manager
6
<PAGE> 1
Exhibit 16
AMENDED AND RESTATED
GRID NOTE WITH LIBOR PRICING
New York, New York
$7,000,000 As of August 19, 1997
WHEREAS, on December 5, 1996, a Grid Note with Libor Pricing in the
principal amount of $7,000,000 (the "Original Note") was entered into between
Republic National Bank of New York ("Bank") and Wolfensohn Associates, L.P.
("WALP I").
WHEREAS, on August 18, 1997 and August 19, 1997, WALP I and Wolfensohn
Associates II L.P. ("WALP II") entered into an Assignment and Assumption
Agreement (collectively, the "Agreements") providing for the transfer by WALP I
of all of its assets to WALP II and the assumptions by WALP II of the
obligations and liabilities of WALP I, including without limitation under the
Original Note and the Continuing General Security Agreement dated December 5,
1996 between WALP I and the Bank.
NOW THEREFORE, to reflect changes to the terms and conditions of the
Original Note agreed to between WALP II and the Bank, the undersigned and the
Bank agree to amend and restate the Original Note in its entirety as follows:
FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to the
order of REPUBLIC NATIONAL BANK OF NEW YORK ("Bank") at its principal banking
office at 452 Fifth Avenue, New York, New York 10018 or at any of its other
banking offices in New York as Bank may designate by written notice to Maker,
the sum of SEVEN MILLION DOLLARS, or so much thereof as shall be advanced by
Bank to Maker, in Bank's sole discretion, in one or more loans (each an
"Advance" and collectively the "Advances") and not repaid, on August 31, 1998
(the "Maturity Date"), or with respect to each Advance on the Due Date (as
defined below) of such Advance, whichever first occurs, and to pay interest on
each Advance from the date of such Advance until the date on which such Advance
is paid in full, at the rate and in the manner provided below.
Each Advance shall be due on a date (the "Due Date") one or more months
from the date of such Advance (the "Term") and have an Interest Period (as
defined below) as specified in writing by the Maker in the Maker's request (the
"Request") for such Advance. In no event shall any Term for any Advance end
later than the Maturity Date. Provided that no Event of Default (as defined
below) has occurred and is continuing, Maker may make a written request upon
Bank (the "Extension Request") to extend the maturity date of an Advance beyond
its original Term or the then current additional Term, as the case may be, for
an additional Term, to commence on the expiration of the original Term or the
then current additional Term, as the case may be, and end on or prior to the
Maturity Date, and have an Interest Period, as specified
1
<PAGE> 2
by Maker in the Extension Request. Bank must receive the Extension Request at
least seven Business Days prior to the expiration of the original Term or the
then current additional Term, as the case may be, of said Advance and shall
decide in its sole discretion, for no reason or for any reason whatsoever,
whether to agree to the requested extension. If Maker does not receive written
notice from Bank at least three Business Days prior to the expiration of the
original Term for such Advance that Bank has agreed to the Extension Request,
then such Advance will continue to be due and payable on the last day of the
original Term or the then current additional Term, as the case may be. In any
event, interest on such Advance shall continue to be due and payable as set
forth herein regardless of whether Bank agrees to the Extension Request.
Prior to the occurrence of any Event of Default, each Advance shall
bear interest during its Term at a rate (the "Contract Rate") equal to 2% per
annum above LIBOR (as defined below) for each Interest Period applicable to such
Advance, each adjustment to take effect on the first day of each Interest Period
applicable to such Advance.
Interest on each Advance will be due and payable on the last day of
each month and on the last day of each Interest Period and on payment in full of
such Advance. After the occurrence of an Event of Default, interest under this
Note on each Advance shall be payable on demand and shall accrue on each Advance
at a rate per annum equal to 2% per annum above the Contract Rate otherwise
chargeable on such Advance hereunder. Interest shall be calculated on the basis
of a 360-day year for actual days elapsed. In no event shall the interest rate
applicable at any time to this Note exceed the maximum rate permitted by law.
For purposes hereof, the term "Interest Period" shall mean for each
Advance, each consecutive one, two, three or six month period, as specified by
Maker in the Request for such Advance. The first Interest Period in respect of
an Advance shall commence on the date of such Advance and each successive
Interest Period in respect of such Advance shall commence immediately at the end
of the preceding Interest Period. Maker must specify an Interest Period for each
Advance such that the Term for each Advance must be equal to or an integral
multiple of the specified Interest Period for such Advance.
As used herein, "LIBOR" means with respect to an Advance the rate per
annum, rounded upward to the nearest 1/8th of 1%, quoted at approximately 11:00
A.M. London time, two Business Days (as defined below) prior to the first day of
each successive Interest Period by Bank's principal branch in London, England,
for offering to leading banks in the London Interbank Market for United States
Dollar deposits in an amount comparable to the principal amount of such Advance
for a period equal to the Interest Period applicable to such Advance.
If Bank determines, in its sole discretion, during the term of this
Note, that (A) by reason of circumstances affecting the London Interbank Market
generally, adequate and fair means do not exist for ascertaining an applicable
LIBOR or it is impractical for Bank to continue to fund any Advance during an
applicable Interest Period, or (B) quotes for funds in United States Dollars
2
<PAGE> 3
in sufficient amounts comparable to any Advance and for the duration of the
applicable Interest Period for such Advance would not be available to Bank in
the London Interbank Market, or (C) quotes for funds in United States Dollars in
the London Interbank Market will not accurately reflect the cost to Bank of
funding any Advance during an applicable Interest Period, or (D) the making or
funding of loans, or charging of interest at rates, based on LIBOR shall be
unlawful or unenforceable for any reason, then as long as such circumstance(s)
shall continue, any such Advance shall bear interest at a variable rate equal to
the Reference Rate (as defined below) and such rate shall be the Contract Rate
for all other purposes hereof. As used herein, "Reference Rate" means the rate
established by Bank from time to time at its principal domestic office as its
reference rate for domestic commercial loans. Bank may make loans to customers
above, at or below the Reference Rate. Any change in the Reference Rate shall
become effective on the date of such change.
This Note evidences Advances made by Bank to Maker from time to time.
The Bank agrees to make Advances to Maker prior to the Maturity Date and
provided that (a) no Event of Default (as hereinafter defined) has occurred and
(b) no Margin Shortfall (as defined in the Amended Margin Agreement dated as of
August 19, 1997 and executed and delivered by the Maker to the Bank as a rider
to the Continuing General Security Agreement dated December 5, 1996 from
Wolfensohn Associates L.P. in favor of the Bank and any amendments, restatements
or modifications thereto) has occurred and is continuing at the time an Advance
hereunder is requested by the Maker.
The unpaid principal balance of this Note at any time shall be the
total of all Advances made by Bank to Maker in Bank's sole discretion, less the
total amount of principal payments made hereon by Maker. The date, the amount of
each such Advance, the Due Date and applicable Contract Rate as adjusted as set
forth above for each such Advance, any extensions of an Advance as agreed to by
Bank as set forth herein and in its sole discretion, and each payment on account
of principal thereof shall be recorded by Bank on its books and records, and
when so recorded shall represent evidence thereof binding upon Maker in the
absence of manifest error.
Each payment to be made hereunder shall be free and clear of, and
without deductions for or on account of any present or future taxes, imposts,
charges, levies, compulsory loans or other withholdings or deductions
whatsoever. If the Maker shall be required by applicable law to make any such
deduction from any payment hereunder, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this paragraph) the Bank
receives an amount equal to the sum it would have received had no deductions
been made, (ii) the Maker shall make such deductions, and (iii) the Maker shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. In addition, the Maker agrees to
pay, if necessary, all stamp, documentary, or similar taxes or any other excise
or property taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this instrument.
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<PAGE> 4
To induce Bank, in its sole discretion, to make Advances to Maker,
Maker represents, warrants and covenants to Bank that (i) Maker is a limited
partnership which is duly formed and validly existing in good standing under the
laws of the jurisdiction of its formation, with full power and authority to
make, deliver and perform this Note; (ii) the execution, delivery and
performance by Maker of this Note have been duly authorized, by all necessary
action, and does not and will not violate or conflict with, its partnership
agreement, or in any case, any law, rule, regulation or order binding on Maker
or any agreement or instrument to which Maker is a party or which may be binding
on Maker; (iii) this Note has been fully executed by the general partner of
Maker and, in any case, constitutes a legal, valid, binding and enforceable
obligation of Maker; (iv) no authorization, consent, approval, license,
exemption of or filing or registration with, any court or government or
governmental agency is or will be necessary to the valid execution, delivery or
performance by Maker of this Note; (v) the Advances evidenced by this Note will
be used for general business purposes and investments; and (vi) there are no
pending or threatened actions, suits or proceedings against or affecting maker
by or before any court, commission, bureau or other governmental agency or
instrumentality, which, individually or in the aggregate, if determined
adversely to Maker, would have a material adverse effect on the business,
properties, operations, or condition, financial or otherwise, or Maker.
Requests for Advances to Maker from Bank and directions as to the
deposition of the proceeds thereof must be given in writing to Bank by the
general partner of Maker or other persons authorized to borrow on Maker's behalf
by borrowing authority and certification of Maker's general partner heretofore
delivered to Bank, as such authority may be amended or superseded from time to
time, provided that any such amending or superseding authority shall have been
certified by an authorized signatory of Maker's general partner, and a copy
thereof, so certified by the authorized signatory of Maker's general partner
shall have been delivered to an officer of Bank at its office for payment. Bank
may conclusively rely on the authorities contained in said resolutions. Any such
Advance so made shall be conclusively presumed to have been made to or for the
benefit of Maker and Maker shall be liable in respect thereof when made in
accordance with any such request or direction, or when deposited to any account
of Maker with Bank, even though persons other than those authorized to borrow on
behalf of Maker may have authority to draw against such account. Bank may rely
on any such request or direction which it believes to be genuine, and Bank shall
be fully protected in so doing without any duty to make further inquiry as to
such genuineness or in otherwise acting in good faith in the premises. By making
a request for an Advance, Maker shall be deemed to be representing to Bank that
all of the representations and warranties of Maker set forth in this Note are
true and correct as of the date of such request as if made on and as of such
date and shall also be deemed to be representing and warranting to Bank that on
such date Maker is not in breach of any of its covenants to Bank set forth in
this Note or in any other document or instruments of Maker to Bank and no event
of default has occurred and is continuing with respect to any Obligations (as
defined below).
This Note shall be payable in lawful money of the United States of
America ("United States Dollars") in immediately available funds. All payments
on this Note shall be
4
<PAGE> 5
applied to the payment of accrued interest before being applied to the payment
of principal. Any payment which is required to be made on a day which is not a
Business Day (as defined below) shall be payable on the next succeeding Business
Day and such additional time shall be included in the computation of interest.
In the event that any other Obligations of Maker to Bank are due at any time
that Bank receives a payment from Maker on account of this Note or any such
other Obligations of Maker, Bank may apply such payment to amounts due under
this Note or any such other Obligations in such manner as Bank, in its sole
discretion, elects, regardless of any instructions from Maker to the contrary.
As used herein, "Business Day" shall mean a day on which (A) banks are regularly
open for business in both London and New York City and (B) Bank's principal
banking office at 452 Fifth Avenue, New York, New York shall be open for
ordinary business.
Maker shall be entitled to prepay any Advances in whole but not in part
without penalty or the prior consent of Bank before 11:00 A.M. New York City
time on the last day of any Interest Period (or the next succeeding Business Day
if the last day of such Interest Period is not a Business Day, referred to
herein as a "Prepayment Date") for such Advance together with the payment of all
interest accrued and unpaid on such Advance to the date of such prepayment
provided that Bank has received written notice from Maker, at least seven
Business Days prior to such Prepayment Date, informing Bank that such prepayment
will be made on such Prepayment Date. Maker also shall be entitled to prepay any
Advance in whole but not in part before 11:00 A.M. New York City time on any
Business Day which is not the last day of an Interest Period without the prior
consent of, or any prior notice to, Bank provided that any such prepayment shall
be made together with (i) the payment of all interest accrued and unpaid on the
prepaid Advance to the date of prepayment and (ii) the payment of the Liquidated
Cost (as defined below). As used herein, "Liquidated Cost" means, with respect
to any prepayment, an amount necessary to compensate Bank for the cost of
reinvesting, for the period commencing on the date of the prepayment and
extending to the last day of the then current Interest Period of such prepaid
Advance, the prepaid principal amount received by Bank at a rate or rates which
may be less than the Contract Rate for such prepaid Advance. Maker and Bank
acknowledge that determining the actual amount of the Liquidated Cost may be
difficult or impossible in any specific instance and accordingly Maker agrees
with Bank that the Liquidated Cost shall equal the excess, if any, of (i) the
product of (A) the amount of principal prepaid, multiplied by (B) the Contract
Rate applicable to such Advance which is being prepaid, divided by 360,
multiplied by (C) the remaining number of days from the date of the prepayment
to the end of the then current Interest Period of the Advance which is being
prepaid, over (ii) that amount of interest which Bank determines that the holder
of a Treasury Obligation (as defined below) selected by Bank in the amount (or
as close to such amount as is feasible) of such prepaid Advance and having a
maturity date on the last day of the stated term of such prepaid Advance (or as
soon thereafter as is feasible), would earn if that Treasury Obligation were
purchased in the secondary market on the date of the prepayment and were held to
the last day of the then current Interest Period of such prepaid Advance. Maker
agrees that the determination of Liquidated Cost shall be based on amounts which
a holder of a Treasury Obligation could receive under these circumstances,
whether or not Bank actually invests
5
<PAGE> 6
the prepaid principal amount in any Treasury Obligation. As used herein,
"Treasury Obligation" means a note, bill or bond issued by the United States
Treasury Department as a full faith and credit general obligation of the United
States. Maker agrees that the payment of Liquidated Cost as a premium in
connection with any prepayment is reasonable to compensate Bank for lost income
resulting from such prepayment because Maker is receiving the benefit of having
the Contract Rate priced based on LIBOR.
If any law, regulation, directive or treaty or any change therein or in
the interpretation or application thereof shall make it unlawful for Bank to
maintain the Advances evidenced by this Note or to claim or receive any amount
otherwise payable under this Note, Bank shall so notify Maker. In the case of
any such notice, Maker shall prepay the outstanding principal amount of this
Note in full together with all accrued interest on such earlier date prior to
the respective Due Dates as Bank may specify and on which Bank may lawfully
receive such payment, if payment on such earlier date is reasonably required as
a result of such impending illegality.
If, after the date of this Note, the adoption of any applicable law,
ordinance, regulation or rule (a "Governmental Rule"), any change in any
applicable Governmental Rule, any change in the interpretation or administration
of any applicable Governmental Rule by any person charged with the
interpretation or administration thereof, or compliance by Bank with any request
or directive (whether or not having the force of law) of any such person
(a) shall subject Bank to any tax, duty or other charge with
respect to all or any portion of the Advances or shall change
the basis of taxation of payments to Bank of any amounts due
under this Note (except for changes in the rate of tax on the
overall net income of Bank or any of its offices imposed by
the tax laws of any jurisdiction in the world); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit,
capital adequacy requirement, capital equivalency, ratio of
assets to liabilities or any other capital substitute or
similar requirement against assets of, deposits with or for
the account of, credit extended by, letters of credit issued
and maintained by, or collateral subject to a lien in favor of
the Bank, or shall impose on Bank any other condition
affecting all or any portion of the Advances,
and the result of any of the foregoing is to increase the cost to or to impose a
cost on Bank of making or maintaining all or any portion of the Advances, or to
reduce the amount of any sum received or receivable by Bank under this Note, or
(in the case of a capital adequacy or similar requirement) to reduce the rate of
return on Bank's capital as a consequence of maintaining all or any portion of
the Advances to a level below that which could have been achieved but for the
6
<PAGE> 7
imposition of such requirement (taking into consideration Bank's capital
adequacy policies), then, within 30 days after demand by Bank, Maker shall pay
Bank for its own account such additional amount or amounts as will compensate
Bank for such increased cost or reduction. Bank will promptly notify Maker of
any event of which it has knowledge, occurring after the date of this Note,
which will entitle Bank to compensation pursuant to this paragraph. A
certificate of Bank claiming compensation for itself under this paragraph and
setting forth in reasonable detail the additional amount or amounts to be paid
to Bank shall be conclusive evidence of the amount of such compensation absent
manifest error. In determining such amount, Bank may use any reasonable
averaging and attribution methods.
Upon the occurrence of any of the following (each, an "Event of
Default") with respect to any Maker, general partner of Maker, indorser of the
indebtedness evidenced by this Note or James D. Wolfensohn: (i) default in
payment of any amount due (whether at stated maturity, by acceleration, by
notice from Maker as to a prepayment or otherwise) under this Note or in the
payment or performance of any other Obligation or agreement of any nature or
description to or with Bank; (ii) any of them shall commence any case,
proceeding or other action under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to any of them, or seeking to adjudicate any of them a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to any of
them or any of their debts, or seeking appointment of a receiver, trustee,
custodian or other similar official for any of them or for all or any
substantial part of the assets of any of them, or any of them shall make a
general assignment for the benefit of its creditors, or there shall be commenced
against any of them any case, proceeding or other action of a nature referred to
in this clause (ii), or there shall be commenced against any of them any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
the assets of any of them which results in the entry of an order for any such
relief, or any of them shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
this clause (ii), or any of them shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; (iii)
entry of a judgment against any of them not paid within 30 days or appealed in
good faith; (iv) failure to pay or remit any tax when assessed or due in excess
of $100,000 (other than taxes contested in good faith); (v) death or
dissolution; (vi) making a bulk transfer or sending notice of intent to do so;
(vii) granting any security interest (other than to Bank); (viii) suspension or
liquidation of the usual business; (ix) failing to furnish Bank with any
requested financial information or failing to permit inspection of books or
records by Bank or any of its agents, attorneys or accountants; (x) making any
misrepresentation to Bank material to the Bank's credit decision; (xi)
impairment of financial responsibility of any of them in Bank's good faith
opinion; (xii) Bank shall in good faith deem itself insecure at any time; (xiii)
the Bank receives notice of the termination of any guarantee of James D.
Wolfensohn relating to the indebtedness evidenced by this Note; or (xiv) the
occurrence of a default or event of default under any security agreement
securing any Obligations of Maker; then, in the case of any Event of Default
other than those referred to in
7
<PAGE> 8
clause (ii) of this sentence, Bank may declare by notice to Maker any and all
Obligations of Maker (including, without limitation, all Liquidated Costs
relating to such Obligations) to be immediately due and payable, and in case of
any Event of Default referred to in clause (ii) of this sentence all of the
Obligations of Maker (including, without limitation, all Liquidated Costs
relating to such Obligations) shall automatically become due and payable
immediately without notice or demand.
Bank shall have a continuing lien and/or right of set-off on, and is
hereby granted a security interest in, all deposits (general and special) and
credits with Bank or any Bank Affiliate of any Maker and indorser, and may apply
all or part of the same to any Obligations (whether contingent or unmatured) of
Maker, at any time or times, without notice. Bank shall have a continuing lien
on, and is hereby granted a security interest in, all property of every Maker
and indorser and the proceeds thereof held or received by or for Bank or any
Bank Affiliate for any purpose, whether or not for the express purpose of
serving as collateral security for the Obligations of Maker. As used in this
Note, the term "Bank Affiliate" includes any individual, partnership or
corporation acting as nominee or agent for Bank, and any corporation or bank
which is directly or indirectly owned or controlled by, or under common control
with, Bank. Any notice of disposition of property shall be deemed reasonable if
mailed at least five days before such disposition to the last address of Maker
or indorser on Bank's records. If the Obligations of Maker to Bank evidenced by
this Note are secured by a security agreement and/or other security documents
which Maker has separately delivered to Bank (whether or not such documents make
specific reference to this Note), reference to such documents is made for a
description of the collateral provided thereby and of the rights of Maker and
Bank therein. The rights and remedies of Bank provided for hereunder (including
but not limited to the right to accelerate Obligations of Maker and to realize
on any security for any such Obligations) are cumulative with the rights and
remedies of Bank available under any other instrument or agreement or under
applicable law. As used in this Note, the term "Obligations" of a person means
all amounts payable under this Note and any and all other indebtedness,
obligations and liabilities of that person to Bank, and all claims of Bank
against such person, now existing or hereafter arising, direct or indirect
(including participations or any interest of Bank in indebtedness of such person
to others), acquired outright, conditionally, or as collateral security from
another, absolute or contingent, joint or several, secured or unsecured, matured
or unmatured, monetary or non-monetary, arising out of contract or tort,
liquidated or unliquidated, arising by operation of law or otherwise, and all
extensions, renewals, refundings, replacements and modifications of any of the
foregoing. "Person" means any individual, partnership, limited partnership,
corporation, association, trust or other entity.
In the case of the occurrence of an Event of Default, each Maker and
indorser shall be jointly and severally liable for all costs of enforcement and
collection of this Note incurred by Bank or any other holder of this Note,
including but not limited to reasonable attorneys' fees, disbursements and court
costs. In addition, in the event of a default hereunder, Maker shall pay all
reasonable attorneys' fees and disbursements incurred by Bank in obtaining
advice as to its rights and remedies in connection with such default.
8
<PAGE> 9
Maker and each indorser hereby separately waive presentment, demand for
payment, notice of dishonor, protest and notice of protest, and any or all other
notices or demands in connection with the delivery, acceptance, performance,
default, endorsement or guarantee of this Note. The liability of any Maker or
indorser hereunder shall be unconditional and shall not be in any manner
affected by any indulgence whatsoever granted or consented to by the holder
hereof, including but not limited to any extension of time, renewal, waiver or
other modification. Any failure of the holder to exercise any right hereunder
shall not be construed as a waiver of the right to exercise the same or any
other right at any time and from time to time thereafter. Bank or any holder may
accept late payments, or partial payments, even though marked "payment in full"
or containing words of similar import or other conditions, without waiving any
of its rights. No amendment, modification or waiver of any provision of this
Note nor consent to any departure by Maker therefrom shall be effective,
irrespective of any course of dealing, unless the same shall be in writing and
signed by Bank, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. This Note cannot
be changed or terminated orally or by estoppel or waiver or by any alleged oral
modification regardless of any claimed partial performance referable thereto.
Any notice from Bank to Maker or any indorser shall be deemed given
when delivered to Maker or such indorser by hand or when deposited in the United
States mail and addressed to Maker or such indorser at the last address of Maker
or such indorser appearing on Bank's records.
This Note shall be governed by and construed in accordance with the
laws of the State of New York applicable to instruments made and to be performed
wholly within that state. If any provision of this Note is held to be illegal or
unenforceable for any reason whatsoever, such illegality or unenforceability
shall not affect the validity of any other provision hereof.
MAKER AND EACH INDORSER AGREE THAT ANY ACTION, DISPUTE, PROCEEDING,
CLAIM OR CONTROVERSY BETWEEN MAKER OR SUCH INDORSER AND BANK, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE ("DISPUTE" OR "DISPUTES") SHALL, AT BANK'S
ELECTION, WHICH ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE COMMENCEMENT OF A
JUDICIAL PROCEEDING BY BANK, OR IN THE EVENT OF A JUDICIAL PROCEEDING INSTITUTED
BY MAKER OR SUCH INDORSER AT ANY TIME PRIOR TO THE LAST DAY TO ANSWER AND/OR
RESPOND TO A SUMMONS AND/OR COMPLAINT MADE BY MAKER OR SUCH INDORSER, BE
RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH AND
SHALL, AT THE ELECTION OF BANK, INCLUDE ALL DISPUTES ARISING OUT OF OR IN
CONNECTION WITH (1) THIS NOTE OR ANY RELATED AGREEMENTS OR INSTRUMENTS, (2) ALL
PAST, PRESENT AND FUTURE AGREEMENTS INVOLVING MAKER OR SUCH INDORSER AND BANK,
(3) ANY TRANSACTION RELATED TO THIS NOTE AND ALL PAST, PRESENT AND FUTURE
9
<PAGE> 10
TRANSACTIONS INVOLVING MAKER OR SUCH INDORSER AND BANK, AND (4) ANY ASPECT OF
THE PAST, PRESENT OR FUTURE RELATIONSHIP OF MAKER OR SUCH INDORSER AND BANK.
Bank may elect to require arbitration of any Dispute with Maker or any indorser
without thereby being required to arbitrate all Disputes between Bank and Maker
or such indorser. Any such Dispute shall be resolved by binding arbitration in
accordance with Article 75 of the New York Civil Practice Law and Rules and the
Commercial Arbitration Rules of the American Arbitration Association ("AAA"). In
the event of any inconsistency between such Rules and these arbitration
provisions, these provisions shall supersede such Rules. All statutes of
limitations which would otherwise be applicable shall apply to any arbitration
proceeding under this paragraph. In any arbitration proceeding subject to this
paragraph, the arbitration panel (the "arbitrator") is specifically empowered to
decide (by documents only, or with a hearing, at the arbitrator's sole
discretion) pre-hearing motions which are substantially similar to pre-hearing
motions to dismiss and motions for summary adjudication. In any such arbitration
proceeding, the arbitrator shall not have the power or authority to award
punitive damages to any party. Judgment upon the award rendered may be entered
in any court having jurisdiction. Whenever an arbitration is required, the
parties shall select an arbitrator in the manner provided in this paragraph. No
provision of, nor the exercise of any rights under, this paragraph shall limit
the right of Bank (1) to foreclose against any real or personal property
collateral through judicial foreclosure, by the exercise of the power of sale
under a deed of trust, mortgage or other security agreement or instrument,
pursuant to applicable provisions of the Uniform Commercial Code, or otherwise
herein pursuant to applicable law, (2) to exercise self-help remedies including
but not limited to setoff and repossession, or (3) to request and obtain from a
court having jurisdiction before, during or after the pendency of any
arbitration, provisional or ancillary remedies and relief including but not
limited to injunctive or mandatory relief or the appointment of a receiver. The
institution and maintenance of an action or judicial proceeding for, or pursuit
of, provisional or ancillary remedies or exercise of self-help remedies shall
not constitute a waiver of the right of Bank, even if Bank is the plaintiff, to
submit the Dispute to arbitration if Bank would otherwise have such right.
Whenever an arbitration is required under this paragraph, the arbitrator shall
be selected, except as otherwise herein provided, in accordance with the
Commercial Arbitration Rules of the AAA. A single arbitrator shall decide any
claim of $100,000 or less and he or she shall be an attorney with at least five
years' experience. Where the claim of any party exceeds $100,000, the Dispute
shall be decided by a majority of three arbitrators, at least two of whom shall
be attorneys (at least one of whom shall have not less than five years'
experience representing commercial banks). The arbitrator shall have the power
to award recovery of all costs and fees (including attorneys' fees,
administrative fees, arbitrator's fees, and court costs) to the prevailing
party. In the event of any Dispute governed by this paragraph, each of the
parties shall, subject to the award of the arbitrator, pay an equal share of the
arbitrator's fees.
MAKER AND EACH INDORSER AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN
RESPECT OF OR ARISING OUT OF THIS NOTE MAY BE INITIATED AND PROSECUTED IN THE
STATE OR FEDERAL COURTS, AS THE
10
<PAGE> 11
CASE MAY BE, LOCATED IN NEW YORK COUNTY, NEW YORK AND ANY ARBITRATION PROCEEDING
PURSUANT HERETO SHALL BE CONDUCTED IN NEW YORK, NEW YORK. MAKER AND EACH
INDORSER CONSENT TO AND SUBMIT TO THE EXERCISE OF JURISDICTION OVER ITS PERSON
BY ANY SUCH COURT HAVING JURISDICTION OVER THE SUBJECT MATTER, WAIVE PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENT THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO MAKER OR SUCH INDORSER AT ITS
ADDRESS SET FORTH BELOW OR TO ANY OTHER ADDRESS AS MAY APPEAR IN BANK'S RECORDS
AS THE ADDRESS OF MAKER OR SUCH INDORSER. MAKER AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
IN ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
NOTE, MAKER AND EACH INDORSER WAIVE (I) THE RIGHT TO INTERPOSE ANY SET-OFF OR
COUNTERCLAIM OF ANY NATURE OR DESCRIPTION, (II) ANY OBJECTION BASED ON FORUM NON
CONVENIENS OR VENUE AND (III) ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL
DAMAGES.
TO THE EXTENT THAT MAKER OR ANY INDORSER HAS OR HEREAFTER ACQUIRES ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM
SERVICE OF NOTICE, ATTACHMENT IN AID OF EXECUTION, ATTACHMENT PRIOR TO JUDGMENT,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, MAKER AND EACH
INDORSER IRREVOCABLY WAIVE SUCH IMMUNITY IN RESPECT OF THEIR OBLIGATIONS UNDER
THIS NOTE.
IN ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
NOTE, BANK, MAKER AND EACH INDORSER WAIVE TRIAL BY JURY.
11
<PAGE> 12
Bank is authorized to fill in any blank spaces and to otherwise
complete this Note and correct any patent errors herein.
Wolfensohn Associates II L.P.
By: Wolfensohn Partners II LLC,
its General Partner
/s/ Robert J. Bertoldi
-----------------------------------
Robert J. Bertoldi, Member
Address for Notices:
590 Madison Avenue
New York, New York 10022
Fax: (212) 849-8170
c/o Jackson Hole Mgt. Co.
12
<PAGE> 1
Exhibits 17 - 19
State of Delaware
Office of the Secretary of State
------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "LASERTECHNICS, INC.", FILED IN THIS OFFICE ON THE TWENTY-NINTH
DAY OF DECEMBER, A.D. 1995, AT 4:30 O'CLOCK P.M.
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
0948912 8100 AUTHENTICATION: 8498702
971184550 DATE: 06-05-97
<PAGE> 2
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 12/29/1995
960000858 - 948912
CERTIFICATE OF DESIGNATIONS
For
SERIES A, B AND C CONVERTIBLE PREFERRED STOCK
Of
LASERTECHNICS, INC.
(Pursuant to Section 151 of the General Corporation Law of the State of
Delaware)
The undersigned, pursuant to Section 151(g) of the General Corporation
Law of the State of Delaware, does hereby certify that, attached hereto as
Exhibits A, B and C are copies of the resolutions duly adopted by the Board of
Directors of Lasertechnics, Inc., a Delaware corporation, on the dates indicated
which create and set forth the powers, designations, preferences, rights,
qualifications, limitations or restrictions for Series A, Series B and Series C
Convertible Preferred Stock of Lasertechnics, Inc. and authorize the number of
shares of each series of such convertible preferred stock to which the
resolutions apply.
IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of December,
1995 and affirm that the foregoing Certificate of Designations is the act and
deed of the Corporation and that the facts stated herein are true.
LASERTECHNICS, INC.
By: /s/ Ronald Bencke
-----------------------------
Ronald Bencke, Vice President
and Chief Financial Officer
ATTEST:
/s/ James B. Alley, Jr.
- ------------------------------
James B. Alley, Jr., Secretary
<PAGE> 3
LASERTECHNICS, INC.
RESOLUTION ADOPTED BY BOARD OF DIRECTORS
ON 7 AUGUST 1995 CREATING AND AUTHORIZING SERIES A
CONVERTIBLE PREFERRED STOCK
OUT OF THE CORPORATION'S AUTHORIZED PREFERRED STOCK
RESOLVED, that there is hereby created from the authorized preferred
stock a class of convertible preferred stock known as "Series A Convertible
Preferred Stock," consisting of 1,500,000 shares, no par value, which shall have
the rights, duties and preferences set forth in Exhibit I-A attached hereto.
EXHIBIT A
<PAGE> 4
LASERTECHNICS, INC.
SERIES A CONVERTIBLE PREFERRED STOCK OF LASERTECHNICS, INC.
(1,500,000 SHARES AUTHORIZED)
---------------------------------------------------
The rights, duties and preferences of Series A Convertible Preferred
Stock are as follows:
(a) Stated value per share of $1.30;
(b) Cumulative dividends payable on stated value per share:
RATE PERIOD
---- ------
0% Through 31 Dec. 95
5% 1 Jan 96 through 31 March 96
7-1/2% 1 April 96 through 30 June 96
10% 1 July 96 and thereafter
(c) Dividends payable within 15 days following the end of each calendar
quarter commencing 31 Dec. 95;
(d) Dividends payable in cash or in additional shares of such preferred
stock at the option only of the Company through 30 June 96 and thereafter
dividends payable in cash or in additional shares of such preferred stock at the
option only of stockholder;
(e) Any dividends paid in kind on such preferred stock valued on basis
of stated value per share;
(f) Each share of such preferred stock shall be convertible into a
share of common stock on a one for one basis at any time at the option of
stockholder;
(g) A preference over all common stock of the Company in any
liquidation and/or dissolution of the Company equal to the stated value of all
such shares of preferred stock outstanding at the time thereof plus accrued
dividends; and
(h) All such shares of preferred stock are redeemable by the Company at
their stated value plus accrued dividends at any time without penalty subject to
stockholder's right to convert to common stock for 10 business days following
receipt of Company's notice of redemption.
(i) All such shares of preferred stock are entitled to vote as if
converted into common stock except upon matters as to which such preferred stock
is entitled by law to vote as a separate class.
EXHIBIT I-A
<PAGE> 1
LASERTECHNICS, INC.
RESOLUTION ADOPTED BY BOARD OF DIRECTORS
ON 25 SEPTEMBER 1995 CREATING AND AUTHORIZING SERIES B
CONVERTIBLE PREFERRED STOCK
OUT OF THE CORPORATION'S AUTHORIZED PREFERRED STOCK
RESOLVED, that there is hereby created from the authorized preferred
stock a class of convertible preferred stock known as "Series B Convertible
Preferred Stock," consisting of 1,500,000 shares, no par value, which shall have
the rights, duties and preferences set forth in Exhibit I-B attached hereto.
EXHIBIT B
<PAGE> 2
LASERTECHNICS, INC.
SERIES B CONVERTIBLE PREFERRED STOCK OF LASERTECHNICS, INC.
(1,500,000 SHARES AUTHORIZED)
---------------------------------------------------
The rights, duties and preferences of Series A Convertible Preferred
Stock are as follows:
(a) Stated value per share of $1.30;
(b) Cumulative dividends payable on stated value per share:
RATE PERIOD
---- ------
0% Through 31 Dec. 95
5% 1 Jan 96 through 31 March 96
7-1/2% 1 April 96 through 30 June 96
10% 1 July 96 and thereafter
(c) Dividends payable within 15 days following the end of each calendar
quarter commencing 31 Dec. 95;
(d) Dividends payable in cash or in additional shares of such preferred
stock at the option only of the Company through 30 June 96 and thereafter
dividends payable in cash or in additional shares of such preferred stock at the
option only of stockholder;
(e) Any dividends paid in kind on such preferred stock valued on basis
of stated value per share;
(f) Each share of such preferred stock shall be convertible into a
share of common stock on a one for one basis at any time at the option of
stockholder;
(g) A preference over all common stock of the Company in any
liquidation and/or dissolution of the Company equal to the stated value of all
such shares of preferred stock outstanding at the time thereof plus accrued
dividends; and
(h) All such shares of preferred stock are redeemable by the Company at
their stated value plus accrued dividends at any time without penalty subject to
stockholder's right to convert to common stock for 10 business days following
receipt of Company's notice of redemption.
(i) All such shares of preferred stock are entitled to vote as if
converted into common stock except upon matters as to which such preferred stock
is entitled by law to vote as a separate class.
EXHIBIT I-B
<PAGE> 1
LASERTECHNICS, INC.
RESOLUTION ADOPTED BY BOARD OF DIRECTORS
ON 21 DECEMBER 1995 CREATING AND AUTHORIZING SERIES C
CONVERTIBLE PREFERRED STOCK
OUT OF THE CORPORATION'S AUTHORIZED PREFERRED STOCK
---------------------------------------------------
RESOLVED, that there is hereby created from the authorized preferred
stock a class of convertible preferred stock known as "Series C Convertible
Preferred Stock," consisting of 1,500,000 shares, no par value, which shall have
the rights, duties and preferences set forth in Exhibit I-C attached hereto.
EXHIBIT C
<PAGE> 2
LASERTECHNICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK OF LASERTECHNICS, INC.
(1,500,000 SHARES AUTHORIZED)
---------------------------------------------------
The rights, duties and preferences of Series C Convertible Preferred
Stock are as follows:
(a) Stated value per share of $1.51;
(b) Cumulative dividends payable on stated value per share:
ANNUAL RATE PERIOD
----------- ------
10% Commencing 1 January 1996
(c) Dividends payable within 15 days following the end of each calendar
quarter commencing 31 March;
(d) Dividends payable in cash or in additional shares of such preferred
stock at the option only of the Company through 30 September 96 and thereafter
dividends payable in cash or in additional shares of such preferred stock at the
option only of stockholder;
(e) Any dividends paid in kind on such preferred stock valued on basis
of stated value per share;
(f) Each share of such preferred stock shall be convertible into a
share of common stock on a one for one basis at any time at the option of
stockholder;
(g) A preference over all common stock of the Company in any
liquidation and/or dissolution of the Company equal to the stated value of all
such shares of preferred stock outstanding at the time thereof plus accrued
dividends; and
(h) All such shares of preferred stock are redeemable by the Company at
their stated value plus accrued dividends at any time without penalty subject to
stockholder's right to convert to common stock for 10 business days following
receipt of Company's notice of redemption.
(i) All such shares of preferred stock are entitled to vote as if
converted into common stock except upon matters as to which such preferred stock
is entitled by law to vote as a separate class.
EXHIBIT I-C
<PAGE> 1
Exhibit 20
CERTIFICATE OF CORRECTION
Filed pursuant to Section 103(f)
of the Delaware General Corporation Law
with respect to the
CERTIFICATE OF DESIGNATION
OF
SERIES F PREFERRED STOCK
OF
LASERTECHNICS, INC.
WHEREAS, on August 1, 1997, Lasertechnics, Inc. (the "Company") filed
with the Secretary of State of the State of Delaware a Certificate of
Designation of Series F Preferred Stock of the Company (the "Certificate of
Designation");
WHEREAS, no shares of the Company's Series F Preferred Stock are issued
and outstanding; and
WHEREAS, the last sentence of Section 5(f) of the Certificate of
Designation inaccurately reflects the corporate action taken with respect to the
subject matter thereof and should be deleted, and in its place four sentences
should be inserted at the end of such Section 5(f).
NOW, THEREFORE, the Certificate of Designation is hereby corrected in
accordance with the provisions of Section 103(f) of the Delaware General
Corporation Law as follows:
The last sentence of Section 5(f) of the Certificate of Designation
which currently reads as follows:
"For purposes of this Section 5(f), any Holder (a "Transferee") that
acquires shares of Series F Preferred Stock during the Standstill
Period directly or indirectly from another Holder (the "Transferor")
that held such shares at the beginning of the Standstill Period, shall
only be entitled to convert such shares to the extent that the
aggregate number of such shares converted by such Transferee (or
redeemed by the Company in lieu of conversion) during the remainder of
the Standstill Period does not at any time exceed the product of (x)
the applicable percentage set forth above times (y) the percentage of
the Transferor's shares of Series F Preferred Stock held at the
beginning of the Standstill Period that had not been converted (or
redeemed by the Company in lieu of Conversion) at the time of the
transfer to the Transferee."
shall be deleted from the Certificate of Designation and the following four last
sentences to Section 5(f) shall be substituted in its place:
<PAGE> 2
"For all purposes of this Section 5(f) any Holder (a "Transferee") that
acquires shares of Series F Preferred Stock during the Standstill Period
from another Holder (the "Transferor") in any single transaction (the
"Transfer") shall be deemed (i) to have held at the beginning of the
Standstill Period a number of shares of Series F Preferred Stock equal to
the product of (x) the number of shares of Series F Preferred Stock held
by the Transferor at the beginning of the Standstill Period times (y) the
Acquired Percentage; and (ii) to have converted (or have had redeemed by
the Company in lieu of conversion) during the period from the beginning of
the Standstill Period through the date of such Transfer a number of shares
of Series F Preferred Stock equal to the product of (x) the number of
shares of Series F Preferred Stock converted by such Transferor (or
redeemed by the Company in lieu of conversion) from the beginning of the
Standstill Period through the date of such Transfer times (y) the Acquired
Percentage. As used in this paragraph, the term "Acquired Percentage"
means the percentage that the total number of shares of Series F Preferred
Stock acquired by the Transferee from the Transferor in such Transfer
bears to the total number of shares of Series F Preferred Stock held by
the Transferor immediately before giving effect to such Transfer. Upon any
Transfer, for all purposes of this Section 5(f), the Transferor shall be
deemed (i) to have held at the beginning of the Standstill Period a number
of shares of Series F Preferred Stock equal to the product of (x) the
number of shares of Series F Preferred Stock held by the Transferor at the
beginning of the Standstill Period times (y) the difference between 100%
and the Acquired Percentage; and (ii) to have converted (or have had
redeemed by the Company in lieu of conversion) during the period from the
beginning of the Standstill Period through the date of such Transfer a
number of shares of Series F Preferred Stock equal to the product of (x)
the number of shares of Series F Preferred Stock converted by such
Transferor (or redeemed by the Company in lieu of conversion) from the
beginning of the Standstill Period through the date of such Transfer times
(y) the difference between 100% and the Acquired Percentage. In the event
of successive Transfers, this paragraph will be applied successively.
Notwithstanding anything herein to the contrary, if at any time
during the Standstill Period the Company shall, in breach of its
obligations hereunder, fail to convert (or to redeem in lieu of
conversion) any shares of Series F Preferred Stock held of record by the
Holder thereof and properly presented for conversion by the Holder
pursuant to this Section 5 (and which the Holder is entitled to convert
pursuant to this Section 5(f)), then, upon written notice by the Holder to
the Company given pursuant to this paragraph (and without limiting any
other rights or remedies of the Holder in respect of such failure to
convert), so long as such default by the Company shall continue, the
provisions of this Section 5(f) shall not apply to the Holder."
2
<PAGE> 3
Executed on the date set forth below by the undersigned duly authorized
officer of the Company.
Date: August 8, 1997 /s/ E.A. Milo Mattorano
------------------------------
Name: E.A. Milo Mattorano
Title: Vice President and CFO
Attest:
/s/ E.A. Milo Mattorano
- --------------------------
Name: E.A. Milo Mattorano
Title: Secretary
3
<PAGE> 4
CERTIFICATE OF DESIGNATION OF
SERIES F PREFERRED STOCK
OF
LASERTECHNICS, INC.
It is hereby certified that:
1. The name of the Company (hereinafter called the "Company") is
Lasertechnics, Inc., a Delaware corporation.
2. The certificate of incorporation of the Company authorizes the
issuance of Seven Million (7,000,000) shares of preferred stock, $.01 value per
share, and expressly vests in the Board of Directors of the Company the
authority provided therein to issue any or all of said shares in one or more
series and by resolution or resolutions to establish the designation and number
and to fix the relative rights and preferences of each series to be issued.
3. The Board of Directors of the Company, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Series F issue of Preferred Stock:
RESOLVED, that NINE HUNDRED (900) of the Seven Million (7,000,000)
authorized shares of Preferred Stock of the Company shall be designated Series F
Preferred Stock, $.01 par value per share, and shall possess the rights and
preferences set forth below:
Section 1. Designation and Amount. The shares of such series shall have
a par value of $.01 per share and shall be designated as Series F Preferred
Stock (the "Series F Preferred Stock") and the number of shares constituting the
Series F Preferred Stock shall be NINE HUNDRED (900). The Series F Preferred
Stock shall have a stated value of Ten Thousand Dollars ($10,000) per share (the
"Original Series F Issue Price"), with an eight percent (8%) per annum accretion
rate as set forth herein. The Series F Preferred Stock shall be issued by the
Company only (i) in exchange for an equal number of outstanding shares of Series
D Preferred Stock or Series E Preferred Stock or (ii) for cash, in a transaction
the proceeds of which are used by the Company to fund the redemption or
repurchase of shares of Series D Preferred Stock or Series E Preferred Stock.
Section 2. Rank. The Series F Preferred Stock shall rank: (i) junior to
any other class or series of capital stock of the Company hereafter created
specifically ranking by its terms senior to the Series F Preferred Stock
(collectively, the "Senior Securities"); (ii) prior to all of the
1
<PAGE> 5
Company's Common Stock, $.01 par value per share ("Common Stock"); (iii) prior
to any class or series of capital stock of the Company hereafter created not
specifically ranking by its terms senior to or on parity with any Series F
Preferred Stock of whatever subdivision (collectively, with the Common Stock,
"Junior Securities"); and (iv) on parity with the Series A Preferred Stock of
the Company, par value $.01 per share (the "Series A Preferred Stock"), the
Series B Preferred Stock of the Company, par value $.01 per share (the "Series B
Preferred Stock"), the Series C Preferred Stock of the Company, par value $.01
per share (the "Series C Preferred Stock"), the Series D Preferred Stock of the
Company, par value $.01 per share (the "Series D Preferred Stock"), the Series E
Preferred Stock of the Company, par value $.01 per share (the "Series E
Preferred Stock") and any class or series of capital stock of the Company
hereafter created specifically ranking by its terms on parity with the Series F
Preferred Stock ("Parity Securities") in each case as to distributions of assets
upon liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary (all such distributions being referred to collectively as
"Distributions").
Section 3. Dividends. The Series F Preferred Stock will bear no
dividends, and the holders of the Series F Preferred Stock ("Holders") shall not
be entitled to receive dividends on the Series F Preferred Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of
the Company ("Liquidation Event"), either voluntary or involuntary, the Holders
of shares of Series F Preferred Stock shall be entitled to receive, immediately
after any distributions to Senior Securities required by the Company's
Certificate of Incorporation or any certificate of designation, and prior in
preference to any distribution to Junior Securities but in parity with any
distribution to Parity Securities, an amount for each share of Series F
Preferred Stock then outstanding equal to the sum of (i) the Original Series F
Issue Price and (ii) an amount equal to eight percent (8%) of the Original
Series F Issue Price per annum for the period that has passed since the date
(the "Initial Funding Date") that, in connection with the consummation of the
original issuance and sale of shares of Series D Preferred Stock by the Company,
the escrow agent first had in its possession funds representing full payment for
the share of Series D Preferred Stock delivered in exchange for such share of
Series F Preferred Stock (such amount being referred to herein as the
"Premium"). If upon the occurrence of such event, and after payment in full of
the preferential amounts with respect to the Senior Securities, the assets and
funds available to be distributed among the Holders of the Series F Preferred
Stock and Parity Securities shall be insufficient to permit the payment to such
Holders of the full preferential amounts due to the Holders of the Series F
Preferred Stock and the Parity Securities, respectively, then the entire assets
and funds of the Company legally available for distribution shall be distributed
among the Holders of the Series F Preferred Stock and the Parity Securities, pro
rata, based on the respective liquidation amounts to which each such series of
stock is entitled by the Company's Certificate of
2
<PAGE> 6
Incorporation and any certificate(s) of designation relating thereto.
Notwithstanding the foregoing, for all purposes hereof, including without
limitation calculating the Premium: in the case of any share of Series F
Preferred Stock issued in exchange for a share of Series E Preferred Stock, the
Initial Funding Date should be May 18, 1997; and in the case of any share of
Series F Preferred Stock issued for cash pursuant to clause (ii) of Section 1
hereof, the Initial Funding Date shall be the date on which such share was
purchased and paid for by the original holder thereof.
(b) Upon the completion of the distribution required by subsection
4(a), if assets remain in this Company, they shall be distributed to holders of
Junior Securities in accordance with the Company's Certificate of Incorporation
including any duly adopted certificate(s) of designation.
(c) At each Holder's option, a sale, conveyance or disposition of
all or substantially all of the assets of the Company or the effectuation by the
Company of a transaction or series of related transactions in which any person
or entity acquires more than fifty percent (50%) of the voting power of the
Company (a "Change of Control") shall be deemed to be a Liquidation Event as
defined in Section 4(a); provided further that (i) a consolidation, merger,
acquisition, or other business combination of the Company with or into any other
publicly traded company or companies shall not be treated as a Liquidation Event
as defined in Section 4(a), but instead shall be treated pursuant to Section
5(e)(iii) hereof, and (ii) a consolidation, merger, acquisition, or other
business combination of the Company with or into any other non-publicly traded
company or companies shall be treated as a Liquidation Event as defined in
Section 4(a). The Company shall not effect any transaction described in
subsection 4(c)(ii) unless it first gives thirty (30) business days prior notice
of such transaction (during which time the Holder shall be entitled to convert
its shares of Series F Preferred Stock into Common Stock). For purposes of this
Section 4(c), the public offering, sale or distribution of shares of stock (or
assets) of the Company's Sandia Imaging Systems Corp. subsidiary or the
Lasertechnics Marking Corporation subsidiary (but not both) shall not be deemed
to be a Liquidation Event.
(d) In the event that, immediately prior to the closing of a
transaction described in Section 4(c) which would constitute a Liquidation
Event, the cash distributions required by Section 4(a) or Section 6 have not
been made, the Company shall either: (i) cause such closing to be postponed
until such cash distributions have been made, or (ii) cancel such transaction,
in which event the rights of the Holders of Series F Preferred Stock shall be
the same as existing immediately prior to such proposed transaction.
Section 5. Conversion. The record Holders of this Series F Preferred
Stock shall have conversion rights as follows (the "Conversion Rights"):
3
<PAGE> 7
(a) Right to Convert. Subject to the Company's right of redemption
set forth in Section 6(a) and to the limitations set forth in Section 5(f), and
on the terms and subject to the conditions set forth in this Certificate of
Designation, each record Holder of Series F Preferred Stock shall be entitled to
convert the shares of Series F Preferred Stock held by such Holder, in whole at
any time and in part from time to time, into that number of fully-paid and
non-assessable shares of Common Stock of the Company calculated in accordance
with the following formula (the "Conversion Rate"):
Number of shares issued upon conversion of one share of Series F
Preferred Stock =
(.08) (N/365) (10,000) + 10,000
-------------------------------
Conversion Price
where,
- N = the number of days between (i) the Initial Funding Date for the
shares of Series F Preferred Stock for which conversion is being
elected, and (ii) the applicable Date of Conversion (as defined in
Section 5(c)(iv) below) for the shares of Series F Preferred Stock for
which conversion is being elected, and
- Conversion Price = the lesser of (x) $1.1406 (the "Fixed Conversion
Price"), or (y) X% of the average Closing Bid Price, as that term is
defined below, of the Company's Common Stock for the ten (10) trading
days immediately preceding the Date of Conversion, as defined below
(the "Variable Conversion Price"), where X is determined as follows:
<TABLE>
<CAPTION>
No. of Days Between Last
Closing Date and Date of Conversion X =
----------------------------------- ---
<S> <C>
60 - 119 90%
120 - 179 87.5%
180(+) 85%
</TABLE>
For purposes hereof, the term "Closing Bid Price" shall mean the closing
bid price on the Nasdaq Small Cap Market, or if no longer traded on the Nasdaq
Small Cap Market, the closing bid price on the principal national securities
exchange or the National Market System on which the Common Stock is so traded
and if not available, the mean of the high and low prices on the principal
national securities exchange or the National Market System on which the Common
Stock is so traded. The term "Last Closing Date" means July 29, 1996.
(b) Mechanics of Conversion. In order to convert Series F Preferred
Stock into full shares of Common Stock, the Holder shall (i) fax, on or prior to
8:00 p.m., New York City
4
<PAGE> 8
time (the "Conversion Notice Deadline") on the date of conversion, a copy of the
fully executed notice of conversion ("Notice of Conversion") to the Company at
the office of the Company or its designated transfer agent (the "Transfer
Agent") for the Series F Preferred Stock stating that the Holder elects to
convert, which notice shall specify the date of conversion, the number of shares
of Series F Preferred Stock to be converted, the applicable conversion price and
a calculation of the number of shares of Common Stock issuable upon such
conversion (together with a copy of the front page of each certificate to be
converted) and (ii) surrender to a common courier for delivery to the office of
the Company or the Transfer Agent the original certificates representing the
Series F Preferred Stock being converted (the "Preferred Stock Certificates"),
duly endorsed for transfer; provided, however, that the Company shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless either the Preferred Stock Certificates are
delivered to the Company or its Transfer Agent as provided above, or the Holder
notifies the Company or its Transfer Agent that such certificates have been
lost, stolen or destroyed (subject to the requirements of subparagraph (i)
below). Upon receipt by Company of a facsimile copy of a Notice of Conversion,
Company shall immediately send, via facsimile, a confirmation of receipt of the
Notice of Conversion to Holder which shall specify that the Notice of Conversion
has been received and the name and telephone number of a contact person at the
Company whom the Holder should contact regarding information related to the
Conversion. In the case of a dispute as to the calculation of the Conversion
Rate, the Company shall promptly issue to the Holder the number of Shares that
are not disputed and shall submit the disputed calculations to its outside
accountant via facsimile within three (3) days of receipt of Holder's Notice of
Conversion. The Company shall cause the accountant to perform the calculations
and notify Company and Holder of the results no later than forty-eight (48)
hours from the time it receives the disputed calculations. Accountant's
calculation shall be deemed conclusive absent manifest error.
(i) Lost or Stolen Certificates. Upon receipt by the Company of
evidence of the loss, theft, destruction or mutilation of any Preferred Stock
Certificates representing shares of Series F Preferred Stock, and (in the case
of loss, theft or destruction) of indemnity or security reasonably satisfactory
to the Company, and upon surrender and cancellation of the Preferred Stock
Certificate(s), if mutilated, the Company shall execute and deliver new
Preferred Stock Certificate(s) of like tenor and date. However, Company shall
not be obligated to re-issue such lost or stolen Preferred Stock Certificates if
Holder contemporaneously requests Company to convert such Series F Preferred
Stock into Common Stock.
(ii) Delivery of Common Stock Upon Conversion. The Transfer Agent or
the Company (as applicable) shall use its best efforts to, no later than the
close of business on the second (2nd) business day and in no event later than
the third (3rd) business day (the "Deadline") after receipt by the Company or
the Transfer Agent of a facsimile copy of a Notice of Conversion and receipt by
Company or the Transfer Agent of all necessary documentation duly executed and
in proper form required for conversion, including the original Preferred Stock
5
<PAGE> 9
Certificates to be converted (or after provision for security or indemnification
in the case of lost or destroyed certificates, if required), issue and surrender
to a common courier for either overnight or (if delivery is outside the United
States) two-day delivery to the Holder at the address of the Holder as shown on
the stock records of the Company a certificate for the number of shares of
Common Stock to which the Holder shall be entitled as aforesaid.
(iii) No Fractional Shares. If any conversion of the Series
F Preferred Stock would create a fractional share of Common Stock or a right to
acquire a fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock issuable upon conversion,
in the aggregate, shall be the next lower number of shares.
(iv) Date of Conversion. The date on which conversion
occurs (the "Date of Conversion") shall be deemed to be the date set forth in
such Notice of Conversion, provided (i) that the advance copy of the Notice of
Conversion is faxed to the Company before 8:00 p.m., New York City time, on the
Date of Conversion, and (ii) that the original Preferred Stock Certificates
representing the shares of Series F Preferred Stock to be converted are
surrendered by depositing such certificates with a common courier, for delivery
to the Company or the Transfer Agent as provided above, as soon as practicable
after the Date of Conversion. The person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record Holder or Holders of such shares of Common Stock on the
Date of Conversion.
(c) Reservation of Stock Issuable Upon Conversion. The Company
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the Series F Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all then outstanding
Series F Preferred Stock; and if at any time the number of authorized but
unissued of Series F Preferred Stock, the Company will take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
(d) Automatic Conversion. Each share of Series F Preferred Stock
outstanding on the date which is three (3) years after the Last Closing Date
automatically shall be converted into Common Stock on such date at the
Conversion Rate then in effect (calculated in accordance with the formula in
Section 5(a) above), and the date which is three (3) years after the Last
Closing Date shall be deemed the Date of Conversion with respect to such
conversion.
(e) Adjustment to Conversion Rate.
(i) Adjustment to Fixed Conversion Price Due to Stock
Split, Stock Dividend, Etc. If, prior to the conversion of all of the Series F
Preferred Stock, the number of
6
<PAGE> 10
outstanding shares of Common Stock is increased by a stock split, stock
dividend, or other similar event, the Fixed Conversion Price shall be
proportionately reduced, or if the number of outstanding shares of Common Stock
is decreased by a combination or reclassification of shares, or other similar
event, the Fixed Conversion Price shall be proportionately increased.
(ii) Adjustment to Variable Conversion Price. If, at any
time when any shares of the Series F Preferred Stock are issued and outstanding,
the number of outstanding shares of Common Stock is increased or decreased by a
stock split, stock dividend, or other similar event, which event shall have
taken place during the reference period for determination of the Conversion
Price for any conversion of the Series F Preferred Stock, then the Variable
Conversion Price shall be calculated giving appropriate effect to the stock
split, stock dividend, combination, reclassification or other similar event for
all five (5) trading days immediately preceding the Date of Conversion.
(iii) Adjustment Due to Merger, Consolidation, Etc. If,
prior to the conversion of all Series F Preferred Stock, there shall be any
merger, consolidation, exchange of shares, recapitalization, reorganization, or
other similar event, as a result of which shares of Common Stock of the company
shall be changed into the same or a different number of shares of the same or
another class or classes of stock or securities of the Company or another entity
or there is a sale of all or substantially all the Company's assets or there is
a Change of Control not deemed to be a liquidation pursuant to section 4(c),
then the Holders of Series F Preferred Stock shall thereafter have the right to
receive upon conversion of Series F Preferred Stock, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such stock, securities and/or
other assets which the Holder would have been entitled to receive in such
transaction had the Series F Preferred Stock been converted immediately prior to
such transaction, and in any such case appropriate provisions shall be made with
respect to the rights and interests of the Holders of the Series F Preferred
Stock to the end that the provisions hereof (including, without limitation,
provisions for the adjustment of the Conversion Price and of the number of
shares issuable upon conversion of the Series F Preferred Stock) shall
thereafter be applicable, as nearly as may be practicable in relation to any
securities thereafter deliverable upon the exercise hereof. The Company shall
not effect any transaction described in this subsection 5(3)(iii) unless (a) it
first gives thirty (30) business days prior notice of such merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event (during which time the Holder shall be entitled to convert its
shares of Series F Preferred Stock into Common Stock) and (b) the resulting
successor or acquiring entry (if not the Company) assumes by written instrument
the obligations of the Company under this Certificate of Designation including
this subsection 5(e)(iii).
(iv) No Fractional Shares. If any adjustment under this
Section 5(e) would create a fractional share of Common Stock or a right to
acquire a fractional share of
7
<PAGE> 11
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon conversion shall be the next lower number
of shares.
(f) Standstill. Anything contained herein to the contrary
notwithstanding, during the period from and including July 14, 1997, to and
including February 13, 1998 (the "Standstill Period"), no record Holder of
Series F Preferred Stock shall be entitled to convert any shares of Series F
Preferred Stock held by such Holder, except to the extent that the aggregate
number of shares of Series F Preferred Stock converted by such Holder (or
redeemed by the Company in lieu of conversion) during the Standstill Period does
not, during the period indicated below, exceed the applicable aggregate
percentage set forth below of the number of shares of Series F Preferred Stock
held by such Holder on the first day of the Standstill Period:
<TABLE>
<CAPTION>
Portion of Standstill Period Aggregate Percentage
---------------------------- --------------------
<S> <C>
From and including July 14, 1997,
to and including October 13, 1997...... 25%
From and including October 14, 1997,
to and including November 13, 1997..... 40%
From and including November 14, 1997,
to and including December 13, 1997..... 55%
From and including December 14, 1997,
to and including January 13, 1998...... 70%
From and including January 14, 1998,
to and including February 13, 1998..... 85%
From and after February 14, 1998............. 100%
</TABLE>
For purposes of this Section 5(f), any Holder (a "Transferee") that acquires
shares of Series F Preferred Stock during the Standstill Period directly or
indirectly from another Holder (the "Transferor") that held such shares at the
beginning of the Standstill Period, shall only be entitled to convert such
shares to the extent that the aggregate number of such shares converted by such
Transferee (or redeemed by the Company in lieu of conversion) during the
remainder of the Standstill Period does not at any time exceed the product of
(x) the applicable percentage set forth above times (y) the percentage of the
Transferor's shares of Series F Preferred Stock held at the beginning of the
Standstill Period that had not been converted (or redeemed by the Company in
lieu of Conversion) at the time of the transfer to the Transferee.
8
<PAGE> 12
Section 6. Redemption by Company.
(a) Company's Right to Redeem Upon Receipt of Notice of
Conversion. If the Conversion Price of the Company's Common Stock is less than
the Fixed Conversion Price (as defined in Section 5(a)), at the time of receipt
of a Notice of Conversion pursuant to Section 5, the Company shall have the
right, in its sole discretion, to redeem in whole or in part any Series F
Preferred Stock submitted for conversion, immediately prior to and in lieu of
conversion ("Redemption Upon Receipt of Notice of Conversion"). If the Company
elects to redeem some, but not all, of the Series F Preferred Stock submitted
for conversion, the Company shall redeem from among the Series F Preferred Stock
submitted by the various shareholders for conversion on the applicable date, a
pro-rata amount from each such Holder so submitting Series F Preferred Stock for
conversion.
(i) Redemption Price Upon Receipt of a Notice of
Conversion. The redemption price per share of Series F Preferred Stock under
this Section 6(a) shall be calculated in accordance with the following formula
("Redemption Rate"):
[[(.08)(N/365)(10,000)] + 10,000] X Closing Bid Price on Date of Conversion
---------------------------------------
Conversion Price
where,
"N", "Date of Conversion", "Closing Bid Price" and "Conversion Price"
shall have the same meanings as defined in Section 5.
(ii) Mechanics of Redemption Upon Receipt of
Notice of Conversion. The Company shall effect each such redemption by giving
notice of its election to redeem, by facsimile, by 5:00 p.m. New York City time
the next business day following receipt of a Notice of Conversion from a Holder,
and the Company shall provide a copy of such redemption notice by overnight or
two-day courier, to (A) the Holder of the Series F Preferred Stock submitted for
conversion at the address and facsimile number of such Holder appearing in the
Company's register for the Series F Preferred Stock and (B) the Company's
Transfer Agent. Such redemption notice shall indicate whether the Company will
redeem all or part of the Series F Preferred Stock submitted for conversion and
the applicable redemption price.
(b) Company's Rights to Redeem at its Election. At any
time, commencing twelve months and one day after the Last Closing Date, the
Company shall have the right, in its sole discretion, to redeem ("Redemption at
Company's Election"), from time to time, any or all of the Series F Preferred
Stock; provided (i) Company shall first provide thirty (30) business days
advance written notice as provided in subparagraph 6(b)(ii) below (which can be
given beginning thirty (30) business days prior to the date which is twelve
months and one day after the Last
9
<PAGE> 13
Closing Date), and (ii) that, in the case of any partial redemption, the Company
shall only be entitled to redeem Series F Preferred Stock having an aggregate
Stated Value (as defined below) of at least One Million Dollars ($1,000,000). If
the Company elects to redeem some, but not all, of the Series F Preferred Stock,
the Company shall redeem a pro rata amount from each Holder of the Series F
Preferred Stock.
(i) Redemption Price At Company's Election. The "Redemption Price
At Company's Election" shall be calculated as a percentage of Stated Value, as
that term is defined below, of the Series F Preferred Stock redeemed pursuant to
this Section 6(b), which percentage shall vary depending on the date of
Redemption at Company's Election (as defined below), and shall be determined as
follows:
Date of Notice of Redemption at Company's Election % of Stated Value
- -------------------------------------------------- -----------------
12 months and 1 day to 18 months following Last Closing Date 130%
18 months and 1 day to 24 months following Last Closing Date 125%
24 months and 1 day to 30 months following Last Closing Date 120%
30 months and 1 day to 36 months following Last Closing Date 115%
For purposes hereof, "Stated Value" shall mean the Original Series F
Issue Price (as defined in Section 1) of the shares of Series F Preferred Stock
being redeemed pursuant to this Section 6(b), together with the accreted but
unpaid Premium (as defined in Section 4(a)).
(ii) Mechanics of Redemption at Company's Election. The Company
shall effect each such redemption by giving at least thirty (30) business days
prior written notice ("Notice of Redemption At Company's Election") to (A) the
Holders of the Series F Preferred Stock selected for redemption, at the address
and facsimile number of such Holder appearing in the Company's Series F
Preferred Stock register and (B) the Transfer Agent, which Notice of Redemption
At Company's Election shall be deemed to have been delivered three (3) business
days after the Company's mailing (by overnight or two-day courier, with a copy
by facsimile) of such Notice of Redemption At Company's Election. Such Notice of
Redemption At Company's Election shall indicate (i) the number of shares of
Series F Preferred Stock that have been selected for redemption, (ii) the date
which such redemption is to become effective (the "Date of Redemption At
Company's Election") and (iii) the applicable Redemption Price At Company's
Election, as defined in subsection (b)(i) above. Notwithstanding the above,
Holder may convert into Common Stock pursuant to Section 5, prior to the close
of business on the Date of Redemption at Company's Election, any Series F
Preferred Stock which it is otherwise entitled to convert, including Series F
Preferred Stock that has been selected for redemption at Company's election
pursuant to this subsection 6(b); provided, however, that the Company shall
still be entitled to exercise its right to redeem upon receipt of a Notice of
Conversion pursuant to section 6(a).
10
<PAGE> 14
(c) Company Must Have Immediately Available Funds or Credit
Facilities. The Company shall not be entitled to send any Redemption Notice and
begin the redemption procedure under Sections 6(a) and 6(b) unless it has:
(i) the full amount of the redemption price in cash,
available in a demand or other immediately available account in a bank or
similar financial institution; or
(ii) immediately available credit facilities, in the full
amount of the redemption price with a bank or similar financial institution; or
(iii) an agreement with a standby underwriter willing to
purchase from the Company a sufficient number of shares of stock to provide
proceeds necessary to redeem any stock that is not converted prior to
redemption; or
(iv) a combination of the items set forth in (i), (ii) and
(iii) above, aggregating the full amount of the redemption price.
If the foregoing conditions of this Section 6(c) are satisfied and
Company complies with Section 6(d) hereof, then any shares of Series F Preferred
Stock called for by a Redemption at Company's Election shall cease to be
outstanding for all purposes hereunder (including the right to convert or to
accrete additional Premium or to exercise any other right or privilege
hereunder) on the Date of Redemption at Company's Election and shall instead
represent the right to receive the Redemption Price at Company's Election
without interest from and after the Date of Redemption at Company's Election.
(d) Payment of Redemption Price.
(i) Each Holder submitting Preferred Stock being redeemed
under this Section 6 shall send their Series F Preferred Stock Certificates so
redeemed to the Company or its Transfer Agent, and the Company shall pay the
applicable redemption price to that Holder within five (5) business days of the
Date of Redemption at Company's Election. The Company shall not be obligated to
deliver the redemption price unless the Preferred Stock Certificates so redeemed
are delivered to the Company or its Transfer Agent, or, in the event one (1) or
more certificates have been lost, stolen, mutilated or destroyed, unless the
Holder has complied with Section 5(c)(i).
(ii) If Company elects to redeem pursuant to Section 6(a)
hereof, and Company fails to pay Holder the redemption price within the time
frame as required by this Section 6(d), then Company shall issue shares of
Common Stock to any such Holder who has submitted a Notice of Conversion in
compliance with Section 5(c) hereof. The shares to be issued to Holder pursuant
to this provision shall be the number of shares determined using a Conversion
11
<PAGE> 15
Price (as defined in Section 6 hereof) that equals the lesser of (i) the
Conversion Price on the date Holder sends its Notice of Conversion to Company or
Transfer Agent via facsimile or (ii) the Conversion Price on the date the
Transfer Agent issues Common Stock pursuant to this Section 6(d)(ii).
(e) Blackout Period. Notwithstanding the foregoing, the Company may
not either send out a redemption notice or effect a redemption pursuant to
Section 6(b) above during a Blackout Period (defined as a period during which
the Company's officers or directors would not be entitled to buy or sell stock
because of their holding of material non-public information), unless the Company
shall first disclose the non-public information that resulted in the Blackout
Period; provided, however, that no redemption shall be effected until at least
ten (10) days after the Company shall have given the Holder written notice that
the Blackout Period has been lifted.
Section 7. Advance Notice of Redemption.
(a) Holder's Right to Elect to Receive Notice of Cash Redemption by
the Company. Holder shall have the right to require Company to provide advance
notice stating whether the Company will elect to redeem Holder's shares of
Series F Preferred Stock in cash, pursuant to the Company's redemption rights
discussed in Section 6(a).
(b) Mechanics of Holder's Election Notice. Holder shall send notice
("Election Notice") to the Company and such other person(s) as the Company may
designate via facsimile, stating Holder's intention to require Company to
disclose that if Holder were to exercise his, her or its right of conversion
(pursuant to Section 5) whether Company would elect to redeem a specific number
of shares of Holder's Series F Preferred Stock for cash in lieu of issuing
Common Stock. Company is required to disclose to Holder what action Company
would take over the subsequent twenty (20) business day period, including the
date of such Election Notice, as further discussed in subsection 7(c).
(c) Company's Response. Upon receipt by the Company of a facsimile
copy of an Election Notice, Company shall immediately send, via facsimile, a
confirmation of receipt of the Election Notice to Holder, which shall specify
that the Election Notice has been received and the name and telephone number of
a contact person at the Company whom the Holder should contact regarding
information related to the requested advance notice. Thereafter, the Company
must respond by the close of business on the next business day following receipt
of Holder's Election Notice (1) via facsimile and (2) by depositing such
response with an overnight or two-day courier. The Company's response must state
whether it would redeem the shares, in whole or in part, or allow conversion
into shares of Common Stock without redemption. If Company does not respond to
Holder within one (1) business day via facsimile and overnight or two-day
courier, Company shall be required to issue to Holder Common Stock upon Holder's
conversion within the subsequent twenty (20) business day period of Holder's
Election Notice. However, if the
12
<PAGE> 16
Company's Common Stock price decreases so that under the Conversion Rate Company
would be required to issue more than an additional ten percent (10%) of shares
of Common Stock than Holder was entitled to receive at the time Holder sent
Company its Election Notice, then Company shall no longer be bound to convert
Holder's Preferred Stock into Common Stock but may elect to redeem for cash.
Section 8. Voting Rights. The Holders of the Series F Preferred Stock
shall have no voting power whatsoever, except as otherwise provided by the
corporation law of the State of Delaware Law ("Delaware Law"), and no Holder of
Series F Preferred Stock shall vote or otherwise participate in any proceeding
in which actions shall be taken by the Company or the shareholders thereof or be
entitled to notification as to any meeting of the shareholders.
Notwithstanding the above, Company shall provide Holder with
notification of any meeting of the shareholders regarding any major corporate
events affecting the Company. In the event of any taking by the Company of a
record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of any class or any other
securities or property (including by way of merger, consolidation or
reorganization), or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Company, or any proposed liquidation, dissolution or winding up of the
Company, the Company shall mail a notice to Holder, at least ten (10) days prior
to the record date specified therein, of the date on which any such record is to
be taken for the purpose of such dividend, distribution, right or other event,
and a brief statement regarding the amount and character of such dividend,
distribution, right or other event to the extent known at such time.
To the extent that under Delaware Law the vote of the Holders of the
Series F Preferred Stock, voting separately as a class, is required to authorize
a given action of the Company, the affirmative vote or consent of the Holders of
at least a majority of shares of the Series F Preferred Stock represented at a
duly held meeting at which a quorum is present or by written consent of a
majority of the shares of Series F Preferred Stock (except as otherwise may be
required under Delaware Law) shall constitute the approval of such action by the
class. To the extent that under Delaware Law the Holders of the Series F
Preferred Stock are entitled to vote on a matter with holders of Common Stock,
voting together as one (1) class, each share of Series F Preferred Stock shall
be entitled to a number of votes equal to the number of shares of Common Stock
into which it is then convertible using the record date for the taking of such
vote of stockholders as the date as of which the Conversion Price is calculated.
Holders of the Series F Preferred Stock also shall be entitled to notice of all
shareholder meetings or written consents with respect to which they would be
entitled to vote, which notice would be provided pursuant to the Company's
by-laws and applicable statutes.
13
<PAGE> 17
Section 9. Prospective Provision. So long as shares of Series F
Preferred Stock are outstanding, the Company shall not without first obtaining
the approval (by vote or written consent, as provided by Delaware Law) of the
Holders of at least seventy-five (75%) of the then outstanding shares of Series
F Preferred Stock, and at least seventy-five (75%) of the then outstanding
Holders:
(a) alter or change the rights, preferences or privileges of the
Series F Preferred Stock or any Senior Securities so as to affect adversely the
Series F Preferred Stock; provided, however, that no such change may be approved
at any time on or prior to the fortieth (40th) day following the Last Closing
Date unless such change is unanimously approved by all Holders;
(b) create any new class or series of stock having a preference over
the Series F Preferred Stock with respect to Distributions (as defined in
Section 2 above) or increase the size of the authorized number of Series F
Preferred; or
(c) do any act or thing not authorized or contemplated by this
Certificate of Designation which would result in taxation of the holders of
shares of the Series F Preferred Stock under Section 305 of the Internal Revenue
Code of 1986, as amended (or any comparable provision of the Internal Revenue
Code as hereafter from time to time amended).
In the event Holders of at least seventy-five percent (75%) of the then
outstanding shares of Series F Preferred Stock and at least seventy-five percent
(75%) of the then outstanding Holders agree to allow the Company to alter or
change the rights, preferences or privileges of the shares of Series F Preferred
Stock, pursuant to subsection (a) above, so as to affect the Series F Preferred
Stock, then the Company will deliver notice of such approved change to the
Holders of the Series F Preferred Stock that did not agree to such alteration or
change (the "Dissenting Holders") and Dissenting Holders shall have the right
for a period of thirty (30) business days to convert pursuant to the terms of
this Certificate of Designation as they exist prior to such alteration or change
(notwithstanding the provisions of Section 5(f) hereof), or continue to hold
their shares of Series F Preferred Stock provided, however, that the Dissenting
Holders may not convert anytime on or before the fortieth (40th) day following
the Last Closing Date.
Section 10. Status of Converted or Redeemed Stock. In the event any
shares of Series F Preferred Stock shall be converted or redeemed pursuant to
Section 5 or Section 6 hereof, the shares so converted or redeemed shall be
canceled, shall return to the status of authorized but unissued Preferred Stock
of no designated series, and shall not be issuable by the Company as Series F
Preferred Stock.
Section 11. Preference Rights. Nothing contained herein shall be
construed to prevent the Board of Directors of the Company from issuing one or
more series of Preferred Stock with
14
<PAGE> 18
dividend and/or liquidation preferences junior to or on parity with the dividend
and liquidation preferences of the Series F Preferred Stock.
Signed on July 30, 1997
/s/ E.A. Milo Mattorano
-----------------------------------------
E.A. Milo Mattorano, Vice President & CFO
Attest:
/s/ E.A. MiLO Mattorano
- ------------------------------
E.A. Milo Mattorano, Secretary
15
<PAGE> 1
Exhibit 21
LASERTECHNICS, INC.
3208 COMMANDER DRIVE
CARROLLTON, TEXAS 75006
December 23, 1997
Amphion Ventures L.P. ("Ventures II")
Antiope Partners L.L.C. ("Partners")
c/o Jackson Hole Management Company
590 Madison Avenue, 32nd Floor
New York, New York 10022
J.P. Morgan Investment Corporation ("JPMIC")
60 Wall Street
New York, New York 10260
AMENDMENT TO NOTE PURCHASE AGREEMENT
------------------------------------
Dear Sirs:
This letter sets forth certain amendments to (i) the Note Purchase
Agreement dated as of June 25, 1997 (the "Original Note Purchase Agreement"),
among Lasertechnics, Inc., a Delaware corporation (the "Company"), Antiope
Partners L.L.C. (formerly, Wolfensohn Partners, L.P.) ("Partners") and J.P.
Morgan Investment Corporation ("JPMIC"), which Note Purchase Agreement was
assigned by Antiope Partners L.L.C. to Amphion Ventures L.P. (formerly
Wolfensohn Associates II L.P.) ("Ventures II") by Assignment Agreement dated as
of August 19, 1997 and (ii) the several Senior Promissory Notes issued and sold
by the Company pursuant to the Original Note Purchase Agreement. Capitalized
terms used herein and not otherwise defined are used as defined in the Original
Note Purchase Agreement, as modified and amended herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be bound hereby,
hereby agree to amend the Original Note Purchase Agreement, the Senior
Promissory Notes and the Pledge Agreement, as follows:
1. EXTENSION OF FINAL MATURITY DATE. The Final Maturity Date under the
Note Purchase Agreement and each of the Senior Promissory Notes is hereby
extended to December 31, 1998, for all purposes of the Note Purchase Agreement,
the Senior Promissory Notes and the Pledge Agreement, except as expressly
provided in paragraph 2 of this Amendment to Note Purchase Agreement.
<PAGE> 2
Lasertechnics, Inc.
Amendment to Note Purchase Agreement
Page 2 of 3
2. ADDITIONAL CONSIDERATION. Notwithstanding the extension of the Final
Maturity Date as provided herein, on December 31, 1997, the Company shall pay
and deliver to each registered holder of the Senior Promissory Notes the
additional consideration provided for in paragraph 7 of the Original Note
Purchase Agreement, with respect to any and all Senior Promissory Notes
outstanding on such date.
3. RIGHT TO EXCHANGE NOTES. The exchange right set forth in paragraph 9
of the Original Note Purchase Agreement is hereby terminated, and the Original
Note Purchase Agreement is hereby amended to delete such paragraph 9 in its
entirety.
4. MISCELLANEOUS. (a) Except to the extent modified and amended herein,
the terms and provisions of the Original Note Purchase Agreement, Senior
Promissory Notes and Pledge Agreement shall remain in full force and effect as
originally executed. All references in the Senior Promissory Notes, the Pledge
Agreement or any other instrument or agreement to the Note Purchase Agreement
shall be deemed for all purposes to refer to the Note Purchase Agreement as
amended hereby.
(b) This Amendment and the amendments and modifications provided for
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(c) This Amendment may be executed in any number of counterparts and on
separate counterparts, each of which shall be an original instrument, but all
of which together shall constitute a single agreement. One or more signature
pages from any counterpart of this Amendment may be attached to any other
counterpart of this Amendment without in any way changing the effect thereof.
This Amendment shall be effective as to each of the undersigned, severally,
when executed and delivered by the Company and such signatory.
(d) The Company, Partners and Ventures II acknowledge that this letter
agreement is being executed by them, and is effective as between them
(notwithstanding anything in the original Note Purchase Agreement to the
contrary), prior to its execution by JPMIC. If this letter agreement is not
executed by JPMIC within thirty days after the date hereof, the Company,
Partners and Ventures II will negotiate with each other in good faith with
respect to an appropriate modification to this letter agreement. If any
modifications to the terms of this letter agreement are made in connection with
the execution hereof by JPMIC, and such terms are more favorable to JPMIC, the
Company agrees to amend this letter so that it is on substantially the same
terms as the letter with JPMIC.
<PAGE> 3
If the foregoing correctly sets forth your understanding of our agreement,
please so indicate by signing and returning to the Company the enclosed
counterpart of this Amendment.
Very truly yours,
LASERTECHNICS, INC.
By: /s/ Richard C.E. Morgan
-----------------------------
Name: Richard C.E. Morgan
Title:
Each of the undersigned agrees with and
accepts the foregoing terms and provisions
as of the date first above written.
AMPHION VENTURES L.P.
By: Amphion Partners L.L.C., its general partner
By: /s/ Richard C.E. Morgan
----------------------------------------
Managing Member
ANTIOPE PARTNERS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Managing Member
J.P. MORGAN INVESTMENT CORPORATION
By:
--------------------------------------------
Name:
Title:
<PAGE> 1
Exhibit 22
CONTINUING GENERAL SECURITY AGREEMENT
Dated: 5 December 1996
As used in this Agreement:
"Collateral" means all right, title and interest of the Obligor in and to any
and all of the following property, whether now or hereafter existing or acquired
and wherever located, all products and Proceeds (including but not limited to
insurance proceeds) of such property, wherever located and in whatever form, and
all books and records pertaining to such property and all other property of the
Obligor in which Bank now or hereafter is granted a security interest pursuant
to this Agreement or otherwise:
[mark or initial the applicable boxes]
Accounts, |_| All Accounts (including, without limitation, all
General accounts receivable), General Intangibles (including,
Intangibles, without limitation, contract rights and tax refunds) and
Chattel all returned or repossessed Goods, all Chattel Paper
Paper and (including, without limitation, leases) and Instruments,
Instruments and all interests of the Obligor in all guarantees,
security agreements and other property securing the
payment or performance of obligations under any of the
foregoing.
Imported |_| All Imported Inventory, and all Documents (including,
Inventory without limitation, all documents of title, transport or
and otherwise) relating to such Inventory.
Documents
Inventory |_| All Inventory of every description (including, without
and limitation, Imported Inventory, raw materials, work in
Documents process and finished Goods), and all Documents
(including, without limitation, all documents of title,
transport or otherwise) relating to such Inventory.
Equipment |_| All Equipment of every description and all Accessions
thereto.
Fixtures |_| All Fixtures of every description and all Accessions
thereto located at the Collateral Location or at_______
_______________________________________________________
_______________________________________________________.
Specific |X| All of the following property: Custody Account # ___ in
Property the name of Wolfensohn Associates L.P. and any and all
present and future securities, cash, interest, accounts,
contract rights, instruments, dividends, mutual fund
shares, security entitlements, financial assets, general
intangibles and other property held in such account or
received or receivable in respect of or in exchange for
any such investments held in such accounts and all
interest and dividends on and proceeds of any of the
foregoing.
All Property |_|* All property of every description (including, without
limitation, all Accounts, General Intangibles, Chattel
Paper, Instruments, Inventory, Documents, Equipment,
Fixtures, Goods and all Accessions to any of the
foregoing).
* If no box is marked, Collateral shall mean All Property.
"Collateral Location" means the following address(es) where all Collateral
consisting of Inventory, Equipment, Fixtures or other tangible property is
located: 452 Fifth Avenue, New York, NY 10018
<PAGE> 2
"Obligor" means Wolfensohn Associates L.P. and its successors and assigns, and
if more than one person is named as Obligor, "Obligor" shall mean each, any or
all of them, and their liabilities and obligations hereunder shall be joint and
several. Obligor is/are:
|_| individual(s)
|_| a corporation organized under the laws of ___________________________.
|_| a partnership organized under the laws of __________________________.
|_| a limited partnership organized under the laws of __________________.
|_| other (specify) _____________________________________________________.
In consideration of any extension of credit or other financial
accommodation heretofore, now or hereafter made by Bank to or for the account of
the Obligor, or to or for the account of any other Person made by Bank at the
request of the Obligor or with respect to which the Obligor's agreements
hereunder have been required by Bank, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Obligor, the
Obligor agrees as follows:
1. Security Interest; Right of Set-Off. As security for the prompt and
unconditional payment of any and all Obligations, the Obligor does hereby
grant to Bank a continuing lien upon and security interest in, and does
hereby pledge, assign and transfer to Bank, all of the Collateral. In
order to secure further the payment of the Obligations, Bank is hereby
given a continuing lien upon and is granted a security interest in any
and all monies, securities and any and all other property of the Obligor
and the proceeds thereof, now or hereafter actually or constructively
held or received by or in transit in any manner to or from Bank, its
correspondents or agents from or for the Obligor, whether for
safekeeping, custody, pledge, transmission, collection or for any other
purpose (whether or not for the express purpose of being used by Bank as
collateral security), or coming into the possession of Bank or its
correspondents or agents in any way, or placed in any safe deposit box
leased by Bank to the Obligor, and all such monies, securities and other
property shall also constitute "Collateral" and shall be held subject to
all the terms of this Agreement as collateral security for the prompt and
unconditional payment of any and all Obligations. Obligor hereby assigns
and grants Bank a security interest in, and Bank is also given a
continuing lien on and/or right of set-off for the amount of the
Obligations with respect to, any and all deposits (general or special)
and credits of the Obligor with, and any and all claims of the Obligor
against, Bank at any time existing, and Bank is hereby authorized at any
time or times, without prior notice, to apply such deposit or credits, or
any part thereof, to the Obligations in such amounts as Bank may elect,
although the Obligations may be contingent or unmatured, and whether the
collateral security therefor is deemed adequate or not.
2. Representations of Obligor. The Obligor represents and warrants to bank
that (a) no financing statement or other filing listing any of the
Collateral as collateral is on file in any jurisdiction (other than any
financing statement filed on behalf of Bank, as secured party); (b) the
chief executive office of the Obligor, if any, is located at the address
set forth in the space provided therefor in this Agreement; (c) all
Collateral, other than intangible property and property which is in the
possession of Bank or its agents, is located at the Collateral Location(s)
and the Obligor has no place of business other than the chief executive
office specified herein, if any, and the Collateral Location(s); (d) the
Obligor has not created and is not aware of any Lien on or affecting any
Collateral other than the lien created by this Agreement in favor of Bank;
(e) if the Obligor is not a natural person, the execution, delivery and
performance of this Agreement have been duly authorized by all required
corporate, partnership or other applicable actions of the Obligor; (f)
this Agreement constitutes a valid, binding and enforceable obligation of
the Obligor; (g) the execution, delivery and performance of this Agreement
do not violate any law or any agreement or undertaking to which the
Obligor is a party or by which the Obligor may be bound and do not result
in the imposition of any Lien upon any Collateral other than the Lien in
favor of Bank created by this Agreement; (h) all consents, approvals,
authorizations, permits and licenses necessary for the Obligor to enter
and perform its obligations under this Agreement and the Obligations
and/or to conduct its business have been obtained; (i) the Obligor did not
have or conduct business under any name or trade name in any jurisdiction
during the past six years other than its name and trade names, if any, set
forth on the signature page of this Agreement, and the Obligor is entitled
to use such name and trade names; and (j) the Obligor is the legal and
beneficial owner of all Collateral specifically identified on page 1 of
this Agreement (alongside the box designated "Specific Property") and any
Collateral specifically identified in any rider, schedule or exhibit to
this Agreement.
3. Covenants. Unless and until all of the Obligations have been indefeasibly
paid in full and all commitments of Bank to extend credit which, once
extended, would give rise to Obligations, have expired or been terminated,
the Obligor shall: (a) keep the Collateral free and clear of any Lien of
any kind other than the Lien created by this Agreement; (b) promptly pay,
when due, all taxes and transportation, storage,
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warehousing and other charges and fees affecting or arising out of the
Collateral and defend the Collateral against all claims and demands of all
Persons at any time claiming any interest therein adverse to or the same
as that of Bank; (c) at all times keep all insurable Collateral insured at
the expense of the Obligor to Bank's satisfaction against loss by fire,
theft and any other risks to which the Collateral may be subject, and
cause all such policies to be endorsed in favor of Bank and to name Bank
as loss payee and as an additional insured, and, if Bank so requests,
deposit the same with Bank, and cause all such policies to provide that
each insurer will give Bank not less than 30 days' notice in writing prior
to the exercise of any right of cancellation; (d) keep the Collateral in
good condition at all times (normal wear and tear excepted) and provide
Bank with such information as Bank may from time to time request with
respect to the location of the Collateral and the Obligor's places of
business; (e) give Bank at least 30 days' prior written notice before
changing the Obligor's name or chief executive office or changing the
location or disposing of any Collateral (other than in connection with the
sale of any Inventory in the ordinary course of business); (f) not sell or
otherwise dispose of any Collateral except on commercially reasonable
terms and in the ordinary course of business; (g) permit Bank, by its
officers and agents, to have access to, examine and copy at all reasonable
times the Collateral, properties, minute books and other corporate or
partnership records, books of accounts, and financial and other business
records of the Obligor (including, without limitation, all books, records,
ledger cards, computer programs, tapes and computer disks and diskettes
and other property recording, evidencing or relating to any Collateral);
and (h) promptly notify Bank upon the occurrence of any Event of Default
of which the Obligor has knowledge.
4. Events of Default. The occurrence of any of the following events shall
constitute an Event of Default: (a) the failure of the Obligor to pay when
due any of the Obligations, (b) any representation or warranty of the
Obligor to Bank in this Agreement or any other instrument or agreement
with or in favor of Bank shall prove to be inaccurate or untrue; (c) the
breach by the Obligor of any covenant in this Agreement or in any other
instrument or agreement with or in favor of Bank; (d) Bank shall in good
faith deem itself insecure at any time with respect to the Obligor's
financial condition or ability to pay the Obligations; or (e) Bank shall
have determined in good faith that the value of the Collateral has
materially decreased after the date of this Agreement. The occurrence of
any of the following events with respect to any Obligor, maker, endorser,
acceptor, surety or guarantor of, or any other party to, the Obligations
or the Collateral shall also constitute an Event of Default: (aa) a
default in respect of any liabilities, obligations or agreements, present
or future, absolute or contingent, secured or unsecured, matured or
unmatured, several or joint, original or acquired, of any of the
Responsible Parties to or with Bank; (bb) death (in the case of any of the
Responsible Parties who is an individual) or dissolution (in the case of
any of the Responsible Parties which is not a natural person); (cc) death
or suspension of the usual business activities of any member of any
partnership included in the term "the Responsible Parties"; (dd) making,
or sending a notice of, an intended bulk transfer; (ee) granting a
security interest to anyone other than Bank in any property including,
without limitation, the rights of any of the Responsible Parties in the
Collateral; (ff) suspension of payment; (gg) the whole or partial
suspension or liquidation of its usual business; (hh) failing, after
demand, to furnish to Bank any financial information or to permit
inspection of books and records of account; (ii) making any
misrepresentation to Bank for the purpose of obtaining credit or an
extension of credit; (jj) failing to pay any tax, or failing to withhold,
collect or remit any tax or tax deficiency when assessed or due; (kk)
failing to pay when due any obligations, whether or not in writing; (ll)
making of any tax assessment by the United States or any state or foreign
country; (mm) entry of a judgment or issuance of an order of attachment or
an injunction against, or against any of the property of, any of the
Responsible Parties; (nn) commencement against any of the Responsible
Parties of any proceeding for enforcement of a money judgment under
Article 52 of the New York Civil Practice Law and Rules or amendments
thereto; (oo) if any of the Responsible Parties or if any of the
Obligations or Collateral at any time fails to comply with Regulation U of
the Federal Reserve Board or any amendments thereto; (pp) the issuance of
any warrant, process or order of attachment, garnishment or lien, and/or
the filing of a lien as a result thereof against any of the property of
the Obligor whether or not Collateral; (qq) any of the Responsible Parties
challenges or institutes any proceeding, or any proceedings are
instituted, which challenge the validity, binding effect or enforceability
of this Agreement; (rr) any of the Responsible Parties makes, receives or
retains any payment on account of indebtedness subordinated to the
Obligations in violation of the terms of such subordination; (ss) any of
the Responsible Parties or any partnership of which any of the Responsible
Parties is a member is expelled from or suspended by any stock or
securities exchange or other exchange; (tt) any of the Responsible Parties
shall make an assignment for the benefit of creditors or a composition
with creditors, shall be unable or admit in writing an inability to pay
its respective debts as they mature, shall file a petition in bankruptcy,
shall become insolvent (however such insolvency may be evidenced), shall
be adjudicated insolvent or bankrupt, shall petition or apply to any
tribunal for the appointment of any receiver, liquidator or trustee of or
for any of the Responsible Parties or any substantial part of the property
or assets of any of the Responsible Parties, shall commence any
proceedings relating to it under any bankruptcy, reorganization,
arrangement, readjustment of debt,
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receivership, dissolution or liquidation, law or statute of any
jurisdiction, whether now or hereafter in effect, or there shall be
commenced against any of the Responsible Parties any such proceeding, or
any order, judgment or decree approving the petition in any such
proceeding shall be entered, or any of the Responsible Parties shall by
any act or failure to act indicate its consent to, approval of or
acquiescence in any such proceeding or in the appointment of any receiver,
liquidator or trustee of or for any of the Responsible Parties or any
substantial part of the property or assets of any of the Responsible
Parties, or shall suffer any such appointment, or any of the Responsible
Parties shall take any action for the purpose of effecting any of the
foregoing, or any court of competent jurisdiction shall assume
jurisdiction with respect to any such proceeding or a receiver or trustee
or other officer or representative of the court or of creditors, or any
court, governmental officer or agency, shall under color of legal
authority, take and hold possession of any substantial part of the
Collateral or the property or assets of any of the Responsible Parties; or
(uu) Bank shall in good faith deem itself insecure with respect to the
financial condition of any of the Responsible Parties.
5. Remedies of Bank.
(a) After the occurrence of an Event of Default, Bank shall have no
obligation to make further loans, extensions of credit or other
financial accommodations to or on behalf of the Obligor, anything in
any other agreement to the contrary notwithstanding.
(b) After the occurrence of an Event of Default, other than an Event of
Default referred to in clause (tt) of the second sentence of Section
4, Bank may declare by notice to the Obligor, any and all
Obligations to be immediately due and payable and in the case of any
Event of Default referred to in clause (tt) of the second sentence
of Section 4 all of the Obligations shall automatically be and
become due and payable, in either case without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Obligor, anything in any other agreement to the contrary
notwithstanding.
(c) After the occurrence of an Event of Default, Bank may, without
notice to or demand (other than any notice required by law, the
giving of which is not waivable), upon the Obligor (all of which
are hereby waived by the Obligor), without releasing the Obligor
from any obligation under this Agreement or any other instruments
or agreements with Bank and without waiving any rights Bank may
have or impairing any declaration of default or election to cause
the Collateral to be sold or any sale proceeding predicated on the
same: (i) demand, collect or receive upon all or any part of the
Collateral and assemble or require the Obligor, at the Obligor's
expense, to assemble all or any part of the Collateral and, if Bank
so requests, the Obligor shall assemble the Collateral and make it
available to Bank at a place to be designated by Bank; (ii) without
notice, demand or other process and without charge enter any of the
Obligor's premises and without breach of peace until Bank completes
the enforcement of its rights in the Collateral, take possession of
such premises or place custodians in exclusive control thereof,
remain on such premises and use the same and any of the Obligor's
equipment for the purpose of completing any work-in-process,
preparing any Collateral for disposition and disposing of or
collecting any Collateral, and in exercise of its rights under this
Agreement, without payment of compensation of any kind, use any and
all trademarks, trade styles, trade names, patents, patent
applications, licenses, franchizes and the like to the extent of
the Obligor's rights therein and the Obligor hereby grants a
license and the right to grant sublicenses for that purpose; (iii)
in such manner and to such extent as Bank may deem necessary to
protect the Collateral or the interests, rights, powers or duties
of Bank, enter into and upon any premises of the Obligor and take
and hold possession of all or any part of the Collateral (the
Obligor hereby waiving and releasing any claim for damages in
respect of such taking) and exclude the Obligor and all other
Persons from the Collateral, operate and manage the Collateral and
rent and lease the same, perform such reasonable acts of repair or
protection as may be reasonably necessary or proper to conserve the
value of the Collateral, collect any and all income, rents, issues,
profits and proceeds from the Collateral, the same being hereby
assigned and transferred to Bank, and from time to time apply or
accumulate such income, rents, issues, profits and proceeds in such
order and manner as Bank, in its sole discretion, shall instruct,
it being understood that the collection or receipt of income,
rents, issues, profits or proceeds from the Collateral after
declaration of default and election to cause the Collateral to be
sold under and pursuant to the terms of this Agreement shall not
affect or impair any event of default or declaration of default
under any agreement or instrument between the Obligor and Bank or
election to cause any Collateral to be sold or any sale proceedings
predicated on the same, but such proceedings may be conducted and
sale effected notwithstanding the collection or receipt of any such
income, rents, issues, profits and proceeds; (iv) take control of
any and all of the Accounts, contractual or other rights that are
included in the
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Collateral and Proceeds arising from any such Accounts or
contractual or other rights, enforce collection, either in the name
of Bank or in the name of the Obligor, of any or all of the
Accounts, contractual and other rights that are included in the
Collateral and Proceeds by suit or otherwise, receive, receipt for,
surrender, release or exchange all or any part of such Collateral or
compromise, settle, extend or renew (whether or not longer than the
original period) any indebtedness under such Collateral; (v) sell
all or any part of the Collateral at public or private sale at such
place or places and at such time or times and in such manner and
upon such terms, whether for cash or credit, as Bank in its sole
discretion may determine; (vi) endorse in the name of the Obligor
any Instrument, however received by Bank, representing Collateral or
Proceeds of any of the Collateral; (vii) require the Obligor to turn
over, or instruct the financial institutions holding the same to
turn over, all monies and investments in any of Obligor's accounts
to Bank; and (viii) exercise all the rights and remedies granted to
a secured party under the New York Uniform Commercial Code and all
other rights and remedies given to Bank under this Agreement or any
other instrument or agreement or otherwise available at law or in
equity. Bank shall be under no obligation to make any of the
payments or do any of the acts referred to in this Section 5 or
elsewhere in this Agreement and any of the actions referred to in
this Section 5 or elsewhere in this Agreement may be taken
regardless of whether any notice of default or election to sell has
been given under this Agreement (provided, however, that all notices
required by law, the giving of which may not be waived, shall be
given in accordance with such law) without regard to the adequacy of
the security for the Obligations.
(d) The Obligor hereby waives notice of the sale of any Collateral by
Bank pursuant to any provision of this Agreement or any applicable
provisions of the Uniform Commercial Code or other applicable law.
In the event that notice of the sale of Collateral cannot be waived
or Bank gives notice of such sale to the Obligor, Bank will give the
Obligor notice of the time and place of any public sale of the
Collateral or of the time after which any private sale or any other
intended disposition thereof is to be made by sending notice, as
provided below, at least five days before the time of the sale or
disposition, which provisions for notice the Obligor and Bank agree
are reasonable. No such notice need be given by Bank with respect to
Collateral which is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market.
(e) Bank may apply the net proceeds of any sale, lease or other
disposition of Collateral, after deducting all costs and expenses
of every kind incurred thereon or incidental to the retaking,
holding, preparing for sale, selling, leasing or the like of the
Collateral or in any way relating to the rights of Bank thereunder,
including attorneys' fees and expenses hereinafter provided for, to
the payment, in whole or in part, in such order as Bank may elect,
of one or more of the Obligations, whether due or not due, absolute
or contingent, making proper rebate for interest or discount on
items not then due, and only after so applying such net proceeds
and after the payment by Bank of any other amounts required by any
existing or future provision of law (including Section 9-504(l)(c)
of the Uniform Commercial Code of any jurisdiction in which any of
the Collateral may at the time be located) need Bank account for
the surplus, if any. The Obligor shall remain liable to Bank for
the payment of any deficiency, with interest at the default rate
provided for in the instruments, if any, evidencing the
Obligations, but if there is no such instrument with respect to any
Obligation or no default rate is specified therein, at a variable
rate equal to 4% above the Bank's reference lending rate applicable
to domestic commercial loans as established by Bank from time to
time, but in no event shall such rate exceed the maximum rate
allowed by law. Bank may make loans to its customers above, at or
below its reference rate.
(f) Whether or not an Event of Default shall have occurred, Bank may
sell all or any part of the Collateral, although the Obligations may
be contingent or unmatured, whenever in its discretion Bank
considers such sale necessary for its protection. Any such sale may
be made without prior demand for payment on account, margin or
additional margin or any other demands whatsoever; the making of any
such demands shall not establish a course of conduct nor constitute
a waiver of the right of Bank to sell the Collateral as herein
provided or of the right of Bank to accelerate the maturity of the
Obligations as herein provided.
6. Additional Rights of Bank and Duties of Obligor Regarding Obligations and
Collateral.
(a) If the Obligor, as registered holder of any Collateral, shall become
entitled to receive or does receive any stock certificate, option or
right, whether as an addition to, in substitution of, or in exchange
for, such Collateral, or otherwise, the Obligor agrees to accept
same as Bank's agent and to hold same in trust for Bank, and to
forthwith deliver the same to Bank in the exact form
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received, with the Obligor's endorsement when necessary or requested
by Bank, to be held by Bank as Collateral.
(b) The Obligor waives protest demand for payment, notice of default or
nonpayment to the Obligor or any other party liable for or upon any
of said Obligations or Collateral.
(c) The Obligor consents that the obligation of any party upon or of any
guarantor, surety or indemnitor for any Obligations or any
Collateral may, from time to time, in whole or in part, be renewed,
extended, modified, accelerated, compromised, settled or released
and that any Collateral or Liens for any Obligations may, from time
to time, in whole or in part, be exchanged, sold, released or
surrendered, by Bank, all without any notice to, or further assent
by, or any reservation of rights against, the Obligor, and all
without in any way affecting or releasing the liability of the
Obligor with respect to such Obligations or any security interest
hereby created.
(d) Bank shall not be liable for failure to collect or realize upon the
Obligations or upon the Collateral, or any part thereof, or for any
delay in so doing, nor shall Bank be under any obligation to take
any action whatsoever with regard thereto. Bank shall use
reasonable care in the custody and preservation of the Collateral
in its possession but need not take any steps to preserve rights
against prior parties or to keep the Collateral identifiable. Bank
shall have no obligation to comply with any recording,
re-recording, filing, re-filing or other legal requirements
necessary to establish or maintain the validity, priority or
enforceability of, or Bank's rights in and to the Collateral or any
part thereof. Bank may exercise any right of the Obligor with
respect to any Collateral. Bank shall have no duty to exercise any
of the aforesaid rights, privileges or options with respect to any
Collateral and shall not be responsible for any failure to do so or
delay in so doing.
(e) In any statutory or non-statutory proceeding affecting the Obligor
or any Collateral, Bank or its nominee may, whether or not an Event
of Default shall have occurred and regardless of the amount of the
Obligations, file a proof of claim for the full amount of any
Collateral and vote such Claim for the full amount thereof (i) for
or against any proposal or resolution; (ii) for a trustee or
trustees or for a committee of creditors; and/or (iii) for the
acceptance or rejection of any proposed arrangement, plan of
reorganization, wage earners' plan, composition or extension; and
Bank or its nominee may receive any payment or distribution and give
acquittance therefor and may exchange or release any Collateral.
(f) Whether or not an Event of Default shall have occurred, Bank may,
without notice to or demand upon the Obligor, (i) commence, appear
in or defend any action or proceeding purporting to affect all or
any part of the Collateral or the interests, rights, powers or
duties of Bank, whether brought by or against the Obligor or Bank;
and/or (ii) pay, purchase, contest or compromise any claim, debt,
lien, charge or encumbrance which in the judgment of Bank may affect
or appear to affect the Collateral or the interests, rights, powers
or duties of Bank.
(g) Any and all stocks, bonds or other securities held by Bank as
Collateral hereunder may, without notice (and whether or not a
default exists), be registered in the name of Bank or its nominee
without disclosing that Bank is a pledgee. Bank (whether or not a
default exists and regardless of the amount of the Obligations) or
its nominee may, without notice, exercise all voting and corporate
rights at any meeting of any corporation issuing such stocks, bonds
or other securities, and exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options
pertaining to such stocks, bonds or other securities as if the
absolute owner thereof, including, without limitation, the right to
exchange, at its discretion, any and all of such stocks, bonds or
other securities for other stocks, bonds, securities or any other
property upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any corporation issuing
the same or upon the exercise by the issuing corporation or Bank of
any right, privilege or option pertaining to such stocks, bonds or
other securities, and in connection therewith, to deposit and
deliver any and all of such stocks, bonds or other securities with
any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may
determine, all without liability except to account for property
actually received by it. Bank shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or for any delay in so doing.
7. Sale of Collateral Consisting of Securities. The Obligor recognizes that
Bank may be unable to effect a public sale of any securities which may
constitute a portion of the Collateral by reason of certain
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<PAGE> 7
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws and instead may resort to one or more private sales of
such Collateral to a restricted group of purchasers who would be obliged
to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. The Obligor recognizes and agrees that, because of this
restriction, sales of securities may result in prices and other terms less
favorable to the seller than if the disposition were made pursuant to a
public sale and, notwithstanding such circumstances, agrees that any such
private or limited sale or sales shall be deemed to have been made in a
commercially reasonable manner. Bank shall be under no obligation to delay
a sale of any of the securities constituting part of the Collateral for
the period of time necessary to permit the issuer of such securities to
register them for public sale under the Securities Act of 1933 or under
applicable state securities laws.
8. Collection Rights of Bank. The Obligor agrees that at any time, whether or
not an Event of Default shall have occurred, Bank shall have the right to
notify an account debtor (with respect to any Collateral consisting of
Accounts), or the obligor on any Instrument or other right or claim of the
Obligor to any payment which is Collateral, to make payment directly to
Bank, whether or not an Event of Default shall have occurred and whether
or not the Obligor was theretofore making collections on such Collateral,
and also to take control of any Proceeds Bank is entitled to under Section
9-306 of the New York Uniform Commercial Code. If any Collateral consists
of Accounts, Instruments or other rights or claims of the Obligor to any
payment, then at Bank's request, the Obligor shall promptly notify (in
manner, form and substance satisfactory to Bank) all Persons obligated to
the Obligor under any such Accounts, Instruments or other rights or claims
of the Obligor to any payment that Bank possesses a security interest in
such Accounts, Instruments or other rights or claims of the Obligor to any
payment and that all payments in respect of such Accounts, Instruments or
other rights or claims of the Obligor to any payment are to be made
directly to Bank. The Obligor shall not settle, compromise or adjust any
disputed amount, or allow any credit, rebate or discount with respect to
any Account, Instrument or other right or claim of the Obligor to any
payment which constitutes Collateral. After Bank shall have given any
notice of the type specified in the first sentence of this Section 8, any
and all amounts received by the Obligor from the account debtor or other
obligor so notified shall be promptly remitted to Bank, and until so
remitted shall be segregated by the Obligor and held in trust for Bank.
9. Additional Security. If Bank shall at any time hold security for any
Obligations in addition to the Collateral, Bank may enforce the terms of
this Agreement or otherwise realize upon the Collateral, at its option,
either before or concurrently with the exercise of remedies as to such
other security or, after a sale is made of such other security, it may
apply the proceeds upon the Obligations without affecting the status of or
waiving any right to exhaust all or any other security, including the
Collateral, and without waiving any breach or default or any right or
power whether exercised under this Agreement, contained in this Agreement,
or provided for in respect of any such other security.
10. Preservation and Protection of Security Interest; Power of Attorney. The
Obligor will faithfully preserve and protect the Lien in the Collateral
created by this Agreement and will, at its own cost and expense, cause
such Lien to be perfected and continue to be perfected and to be and
remain prior to all other Liens, so long as all or any part of the
Obligations are outstanding and unpaid, and for such purpose the Obligor
will from time to time at the request of Bank (i) make notations of the
security interest in certificates of title of Collateral, a security
interest in which is perfected by such notation, and deliver the same to
Bank, (ii) deliver possession of Collateral (concurrent with the
acquisition of such Collateral) to Bank, a security interest in which is
perfected by the taking of possession, and (iii) file or record, or cause
to be filed or recorded, such instruments, documents and notices,
including financing statements and continuation statements, as Bank may
reasonably deem necessary or advisable from time to time in order to
perfect and continue to perfect such Liens and to maintain their priority
over all other Liens. The Obligor will do all such other acts and things
and will execute and deliver all such other instruments and documents,
including further security agreements, pledges, endorsements, assignments,
and notices as Bank may reasonably deem necessary or advisable from time
to time in order to perfect and preserve the priority of the Liens in the
Collateral as contemplated by this Agreement. Bank, acting through its
officers, employees and authorized agents, is hereby irrevocably appointed
the attorney-in-fact of the Obligor to do, at the Obligor's expense, all
acts and things which Bank may reasonably deem necessary or advisable to
preserve, perfect, continue to perfect and/or maintain the priority of
such Liens in the Collateral, including the signing of financing,
continuation or other similar statements and notices on behalf of the
Obligor, and which the Obligor is required to do by the terms of this
Agreement. The Obligor hereby authorizes Bank to sign and file financing
statements with respect to the Collateral without the signature of the
Obligor. The Obligor shall pay all filing fees for financing statements
with respect to the Collateral.
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<PAGE> 8
11. Risk of Loss; Insurance. Risk of loss of, damage to or destruction of the
Collateral is and shall remain upon the Obligor. If the Obligor fails to
obtain and keep in force insurance covering the Collateral as required by
Section 3 of this Agreement, or fails to pay the premiums on such
insurance when due, Bank may, but is not obligated to, do so for the
account of the Obligor and the cost of so doing shall thereupon become an
Obligation. Such amounts shall be payable by the Obligor upon demand by
the Bank and following demand shall bear interest at a variable rate equal
to 4% above the Bank's reference lending rate applicable to domestic
commercial loans as established by Bank from time to time, but in no event
shall such rate exceed the maximum rate allowed by law. Bank, acting
through its officers, employees and authorized agents, is hereby
irrevocably appointed the attorney-in-fact of the Obligor to endorse any
draft or check that may be payable to the Obligor in order to collect the
proceeds of such insurance or any return or unearned premiums.
12. Change in Law. In the event of the passage, after the date of this
Agreement, of any law which has the effect of changing in any way the laws
now in force for the taxation of security documents such as this Agreement
or debts secured by such security documents or the manner of the
collection of any such taxes so as in any case to affect this Agreement or
to impose payment of the whole or any portion of any taxes, assessments or
other similar charges against the Collateral upon Bank, the Obligations
shall immediately become due and payable at the option of Bank and upon 30
days notice to the Obligor.
13. Expenses. The Obligor hereby agrees to pay any and all expenses incurred
by Bank in enforcing any rights under this Agreement or in defending any
of its rights to any amounts received hereunder. Without limiting the
foregoing, the Obligor agrees that whenever any attorney is used by Bank
to obtain payment hereunder, to advise it as to its rights, to adjudicate
the rights of the parties hereunder or for the defense of any of its
rights to amounts secured, received or to be received hereunder, Bank
shall be entitled to recover all reasonable attorneys' fees and
disbursements, court costs and all other expenses attributable thereto.
14. Notices. Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by registered or certified mail or by
facsimile transmitter or tested telex, and shall be effective when sent,
and shall be sent as follows:
If to the Obligor, to the address set forth below its signature or such
other address as it may designate, by written notice to Bank as herein
provided or to any other address as may appear in the records of Bank as
Obligor's address.
If to Bank, to Republic National Bank of New York, 452 Fifth Avenue, New
York, New York 10018, Attention: Loan Department, or such other address as
it may designate, by written notice to the Obligor as herein provided.
15. Additional Definitions. The following terms have the following meanings
unless otherwise specified herein:
"Accessions," "Account," "Chattel Paper," "Document," "Equipment,"
"Fixtures," "General Intangibles," "Goods," "Instrument" and "Inventory"
have the meanings assigned to those terms by the New York Uniform
Commercial Code, as amended.
"Agreement" means this Continuing General Security Agreement.
"Bank" means Republic National Bank of New York, a National Banking
Association, and its successors and assigns, and any Person acting as
agent or nominee for Republic National Bank of New York and any
corporation the stock of which is owned or controlled directly or
indirectly by, or is under common control with, Republic National Bank of
New York and/or Republic New York Corporation.
"Claims" means each "claim" as that term is defined under Section 101(4)
of the United States Bankruptcy Code, and any amendments thereto (Title
11, United States Code).
"Event of Default means any of the events described in Section 4 of this
Agreement.
"Imported Inventory" means all Inventory of the Obligor of every
description (including, without limitation, raw materials, work in process
and finished Goods) imported from outside of the United States, including
but not limited to Inventory consisting of parts or components produced in
whole or in part in the United States and sent outside of the United
States for assembly, completion or packaging.
8
<PAGE> 9
"Lien" means any lien, security interest, pledge, hypothecation,
encumbrance or other claim in or with respect to any property.
"Obligations" means any and all indebtedness, obligations and liabilities
of the Obligor to Bank, and all Claims of Bank against the Obligor, now
existing or hereafter arising, direct or indirect (including
participations or any interest of Bank in indebtedness of the Obligor to
others), acquired outright, conditionally, or as collateral security from
another, absolute or contingent, joint or several, secured or unsecured,
matured or unmatured, monetary or non-monetary, arising out of contract or
tort, liquidated or unliquidated, arising by operation of law or
otherwise, and all extensions, renewals, refundings, replacements and
modifications of any of the foregoing.
"Person" means any natural person, corporation, partnership, trust,
government or other association or legal entity.
"Proceeds" has the meaning assigned to that term by the New York Uniform
Commercial Code, as amended, and also means all "proceeds," "products,"
"offspring," "rents" or "profits" of any property, as such quoted terms
are used in the United States Bankruptcy Code, and any amendments thereto
(Title 11, United States Code).
"Responsible Parties" includes all Obligors and all makers, endorsers,
acceptors, sureties and guarantors of, and all other parties to, the
Obligations or the Collateral.
16. Miscellaneous. This Agreement shall remain in full force and effect and
shall be binding upon the Obligor, its successors and assigns, in
accordance with its terms, notwithstanding any increase, decrease or
change in the partners of the Obligor, if it should be a partnership, or
the merger, consolidation, or reorganization of the Obligor, if it be a
corporation, or any other change concerning the form, structure or
substance of any such entity. If there is more than one Person named as an
Obligor in this Agreement, this Agreement shall be binding upon each of
the Obligors who execute and deliver this Agreement to Bank even if this
Agreement is not executed by any other Person or Persons also named as an
Obligor herein. Bank may assign all or a portion of its rights under this
Agreement and may deliver the Collateral, or any part thereof, to any
assignee and such assignee shall thereupon become vested with all the
powers and rights given to Bank in respect thereof; and Bank shall
thereafter be forever relieved and discharged from any liability or
responsibility in the matter but, with respect to any Collateral not so
delivered or assigned, Bank shall retain all powers and rights given to it
hereby. The execution and delivery hereafter to Bank by the Obligor of a
new security agreement shall not terminate, supersede or cancel this
Agreement, unless expressly provided therein, and this Agreement shall not
terminate, supersede or cancel any security agreement previously delivered
to Bank by the Obligor, and all rights and remedies of Bank hereunder or
under any security agreement hereafter or heretofore executed and
delivered to Bank by the Obligor shall be cumulative and may be exercised
singly or concurrently. This Agreement may not be changed or terminated
orally, but only by a writing executed by the Obligor and a duly
authorized officer of Bank. Unless Bank, in its discretion, otherwise
agrees, the security interests granted in this Agreement shall not
terminate until all of the Obligations have been indefeasibly paid in full
and all commitments of Bank to extend credit which, once extended, would
give rise to Obligations have expired or been terminated. No delay on the
part of Bank in exercising any of its options, powers or rights, or
partial or single exercise thereof, shall constitute a waiver thereof. No
modification or waiver of this Agreement or any provision hereof or of any
other agreement or instrument made or issued in connection herewith or
contemplated hereby, nor consent to any departure by the Obligor
therefrom, shall in any event be effective, irrespective of any course of
dealing between the parties, unless the same shall be in a writing
executed by a duly authorized officer of Bank, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Obligor in
any case shall thereby entitle the Obligor to any other or further notice
or demand in the same, similar or other circumstances. The remedies herein
provided are cumulative and not exclusive of any other remedies provided
at equity or by law and all such remedies may be exercised singly or
concurrently. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining provisions
contained herein shall not (to the full extent permitted by law) in any
way be affected or impaired. The descriptive headings used in this
Agreement are for convenience only and shall not be deemed to affect the
meaning or construction of any provision hereof. The word "including"
shall be deemed to be followed by the words "without limitation." The
Obligor waives any and all notice of the acceptance of this Agreement by
Bank, or of the creation, accrual or maturity (whether by declaration or
otherwise) of any and all Obligations, or of any renewals or extensions
thereof from time to time, or of Bank's reliance on this Agreement.
9
<PAGE> 10
17. Governing Law; Consent to Jurisdiction; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed wholly
within that state. The Obligor hereby consents to the jurisdiction of the
courts of the State of New York and the courts of the United States of
America for the Southern District of New York and consents that any action
or proceeding hereunder may be brought in such courts, and waives any
objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the
same; and authorizes the service of process on the Obligor by registered
or certified mail sent to any address authorized in Section 14 as an
address for the sending of notices.
18. RIGHT OF BANK TO ARBITRATE DISPUTES.
(a) THE OBLIGOR AGREES THAT ANY ACTION, DISPUTE, PROCEEDING, CLAIM OR
CONTROVERSY BETWEEN OR AMONG THE PARTIES WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE ("DISPUTE" OR "DISPUTES") SHALL, AT
BANK'S ELECTION, WHICH ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE
COMMENCEMENT OF A JUDICIAL PROCEEDING BY BANK, OR IN THE EVENT OF A
JUDICIAL PROCEEDING INSTITUTED BY THE OBLIGOR AT ANY TIME PRIOR TO
THE LAST DAY TO ANSWER AND/OR RESPOND TO A SUMMONS AND/OR COMPLAINT
MADE BY THE OBLIGOR, BE RESOLVED BY ARBITRATION IN NEW YORK, NEW
YORK IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 18 AND SHALL,
AT THE ELECTION OF BANK, INCLUDE ALL DISPUTES ARISING OUT OF OR IN
CONNECTION WITH (I) THIS AGREEMENT OR ANY RELATED AGREEMENTS OR
INSTRUMENTS, (II) ALL PAST, PRESENT AND FUTURE AGREEMENTS INVOLVING
THE PARTIES, (III) ANY TRANSACTION CONTEMPLATED HEREBY AND ALL PAST,
PRESENT AND FUTURE TRANSACTIONS INVOLVING THE PARTIES AND (IV) ANY
ASPECT OF THE PAST, PRESENT OR FUTURE RELATIONSHIP OF THE PARTIES.
Bank may elect to require arbitration of any Dispute with the
Obligor without thereby being required to arbitrate all Disputes
between Bank and the Obligor. Any such Dispute shall be resolved by
binding arbitration in accordance with Article 75 of the New York
Civil Practice Law and Rules and the Commercial Arbitration Rules of
the American Arbitration Association ("AAA"). In the event of any
inconsistency between such Rules and these arbitration provisions,
these provisions shall supersede such Rules. All statutes of
limitations which would otherwise be applicable shall apply to any
arbitration proceeding under this subsection 18(a). In any
arbitration proceeding subject to these provisions, the arbitration
panel (the "arbitrator") is specifically empowered to decide (by
documents only, or with a hearing, at the arbitrator's sole
discretion) pre-hearing motions which are substantially similar to
pre-hearing motions to dismiss and motions for summary adjudication.
In any such arbitration proceeding, the arbitrator shall not have
the power or authority to award punitive damages to any party.
Judgment upon the award rendered may be entered in any court having
jurisdiction. Whenever an arbitration is required, the parties shall
select an arbitrator in the manner provided in subsection 18(d).
(b) No provision of, nor the exercise of any rights under, subsection
18(a) shall limit the right of any party (i) to foreclose against
any real or personal property collateral through judicial
foreclosure, by the exercise of a power of sale under a deed of
trust, mortgage or other security agreement or instrument, pursuant
to applicable provisions of the Uniform Commercial Code, or
otherwise pursuant to applicable law, (ii) to exercise self help
remedies including but not limited to setoff and repossession, or
(iii) to request and obtain from a court having jurisdiction before,
during or after the pendency or any arbitration, provisional or
ancillary remedies and relief including but not limited to
injunctive or mandatory relief or the appointment of a receiver. The
institution and maintenance of an action or judicial proceeding for,
or pursuit of, provisional or ancillary remedies or exercise of self
help remedies shall not constitute a waiver of the right of Bank,
even if Bank is the plaintiff, to submit the Dispute to arbitration
if Bank would otherwise have such right.
(c) Bank may require arbitration of any Dispute(s) concerning the
lawfulness, unconscionableness, propriety, or reasonableness of any
exercise by Bank of its right to take or dispose of any Collateral
or its exercise of any other right in connection with Collateral
including, without limitation, judicial foreclosure, exercising a
power of sale under a deed of trust or mortgage, obtaining or
executing a writ of attachment, taking or disposing of property with
or without
10
<PAGE> 11
judicial process pursuant to Article 9 of the Uniform Commercial
Code or otherwise as permitted by applicable law, notwithstanding
any such exercise by Bank.
(d) Whenever an arbitration is required under subsection 18(a), the
arbitrator shall be selected, except as otherwise herein provided,
in accordance with the Commercial Arbitration Rules of the AAA. A
single arbitrator shall decide any claim of $100,000 or less and he
or she shall be an attorney with at least five years' experience.
Where the claim of any party exceeds $100,000, the Dispute shall be
decided by a majority vote of three arbitrators, at least two or
whom shall be attorneys (at least one of whom shall have not less
than five years' experience representing commercial banks).
(e) In the event of any Dispute governed by this Section 18, each of the
parties shall, subject to the award of the arbitrator, pay an equal
share of the arbitrator's fees. The arbitrator shall have the power
to award recovery of all costs and fees (including attorneys' fees,
administrative fees, arbitrators' fees, and court costs) to the
prevailing party.
19. WAIVER OF TRIAL BY JURY. EACH OF BANK AND THE OBLIGOR HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT
ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS AGREEMENT OR THE OBLIGATIONS.
20. WAIVER OF CERTAIN OTHER RIGHTS. THE OBLIGOR HEREBY WAIVES THE RIGHT TO
INTERPOSE ANY DEFENSE BASED UPON ANY CLAIMS OF LACHES OR SET-OFF OR
COUNTERCLAIM OF ANY NATURE OR DESCRIPTION, ANY OBJECTION BASED ON FORUM
NON CONVENIENS OR VENUE, AND ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR
SPECIAL DAMAGES.
IN WITNESS WHEREOF, the Obligor(s) has/have executed this Continuing
General Security Agreement.
Chief Executive Office: Wolfensohn Associates, L.P.
Name of the Obligor, if an Entity
By: Wolfensohn Partners, L.P., General Partner
By: /s/ Richard Morgan
- -------------------------------- ------------------------------------------
Title: Richard C.E. Morgan, Managing Partner
- -------------------------------- ------------------------------------------
Address of the Obligor: RICHARD C. E. MORGAN
GENERAL PARTNER
WOLFENSOHN PARTNERS L.P.
GENERAL PARTNER
WOLFENSOHN ASSOCIATES L.P.
------------------------------------------
Signature of Individual Obligor
- -------------------------------- ------------------------------------------
Print Name
- --------------------------------
Address of Additional Obligor:
------------------------------------------
Signature of Additional Obligor
- -------------------------------- ------------------------------------------
Print Name
- --------------------------------
<PAGE> 12
[Individual Acknowledgment(s)]
STATE OF NEW YORK
COUNTY OF ______________
On this ______ day of _______________, 19___, before me personally
appeared _______________________________ and __________________________, to me
known, and known to me to be the individual(s) described in and who executed the
foregoing instrument and (t)(s) he(y) duly acknowledged to me that (t)(s)he(y)
executed the same.
-------------------------------
Notary Public
[Partnership Acknowledgment]
STATE OF NEW YORK
COUNTY OF _____________
On this ______ day of _______________, 19___, before me personally
appeared _______________________________ and __________________________ to me
known and known to me to be the members of __________________________, the
partnership mentioned and described in and which executed the foregoing
instrument, and the said members duly acknowledged to me that they executed said
instrument for and on behalf of and with the authority of the said partnership
for the uses and purposes therein mentioned.
-------------------------------
Notary Public
[Corporate Acknowledgment]
STATE OF NEW YORK
COUNTY OF _____________
On this ______ day of _______________, 19___, before me personally
came _______________________________ and __________________________ to me known
who, being duly sworn, deposes and says that (t)(s)he(y) is/are the
__________________________ and __________________________, the corporation
described in and which executed the above instrument; that (t)(s)he(y) know(s)
the seal of the corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation and (t)(s)he(y) signed his(her)(their) name(s) by like order.
-------------------------------
Notary Public
12
<PAGE> 13
SECRETARY'S CERTIFICATE
I, __________________________________, do hereby certify as follows:
1. I am duly elected, qualified and acting Secretary of
___________________________________, a _____________________________
corporation (the "Corporation"), and as such Secretary have the care and
custody of the corporate books and records, have personal knowledge of the
matters set forth herein, and have authority to make this Certificate for
and on behalf of the Corporation.
2. At a special meeting of the directors of the Corporation, called in
accordance with the provisions of the By-Laws of the Corporation and held
on ___________, 19__, or pursuant to the unanimous written consent of the
directors of the Corporation dated ____________, 19__, as authorized by
the By-Lass of the Corporation, the following resolutions were adopted by
the unanimous vote or consent of all the directors.
WHEREAS, the Corporation desires to Republic National Bank of New York
(hereinafter referred to as the "Bank") hereafter to extend credit or
other financial accommodations to the Corporation upon such terms and
conditions as may be required by the Bank,
IT IS, THEREFORE, RESOLVED, that the Corporation shall grant to the Bank a
security interest in property of the Corporation designated by any officer
of the Corporation to secure any and all obligations of the Corporation to
the Bank, whether now existing or hereafter incurred; and
FURTHER RESOLVED, that any officer of the Corporation be, and each of them
hereby is, authorized and directed to execute, and the Secretary or any
Assistant Secretary of the Corporation is hereby authorized and directed
to attest to and to affix the seal of the Corporation to, any security
agreements and other instruments or documents related thereto, in the form
required by the Bank; and
FURTHER RESOLVED, that the Corporation shall agree to submit to
arbitration and to waive the right of trial by jury with respect to any
dispute arising under such security agreement or any related document.
3. I further certify that the foregoing resolutions remain in full force and
effect and have not been rescinded or modified in any manner whatsoever
and neither their adoption nor their implementation violate the
Corporation's certificate of incorporation or by-laws or breach or
constitute a default under any agreement or indenture to which the
Corporation is a party or by which it is bound.
IN WITNESS WHEREOF, I have set my hand and the seal of
________________________________, at ___________________________ this
______________________ day of _____________, 19____.
[SEAL]
------------------------
Secretary
13
<PAGE> 14
Amendment to the Continuing
General Security Agreement
Rider to Continuing General Security Agreement (dated December 5, 1996
from Wolfenson Associates L.P., Obligor, in favor of the Bank (as defined
therein)).
1. Section 4 of the Continuing General Security Agreement is hereby amended
as follows:
a. Clause (b) is amended to insert the words "material to the Bank's
credit decision" after the words "representation or warranty" and
prior to the words "of the Obligor".
b. Clause (c) is amended to insert the words "material to the Bank's
credit decision" after the words "any covenant" and prior to the
words "in this Agreement".
c. The word "or" is inserted prior to clause (d) and deleted prior to
clause (e).
d. Clause (e) is deleted in its entirety.
e. The words "or guarantor of" are deleted from the second sentence
thereof, and the words "James D. Wolfensohn" are inserted in their
place. The words "(other than Richard Morgan, Robert Bertoldi or
Seth Cunningham)" are inserted after the words "or any other party"
and prior to the words "to, the Obligations".
f. Clause (ff) is deleted in its entirety.
g. Clause (jj) is amended to insert at the end thereof the words "in
excess of $100,000, provided that this clause (jj) shall not apply
with respect to taxes or tax deficiencies being contested in good
faith."
h. Clause (ll) is amended to insert at the end thereof the words "not
paid within 30 days thereof or contested in good faith".
i. Clause (mm) is amended to insert at the end thereof the words "in
excess of $100,000, provided that this clause (mm) shall not apply
with respect to judgments, orders and injunctions being contested in
good faith".
j. Clause (nn) is amended to insert at the end thereof the words "that
is not stayed pursuant to the filing of an appeal or other
proceeding in good faith".
<PAGE> 15
2. Section 15 is amended to delete from the definition of Responsible Parties
the words "guarantors of" and to insert in their place the words "James D.
Wolfensohn", and to insert after the words "all other parties" and prior
to the words "to, the Obligations" the words "(other than Richard Morgan,
Robert Bertoldi and Seth Cunningham)".
IN WITNESS WHEREOF, this Rider is signed as of August 19, 1997.
WOLFENSOHN ASSOCIATES II L.P.
By: Wolfensohn Partners II, LLC,
its general partner
/s/ Richard Morgan
---------------------------------
Richard Morgan
Member
REPUBLIC NATIONAL BANK
OF NEW YORK
/s/ Mary A. Pan
- -------------------------------
By: Mary A. Pan
Title: First Vice President
2
<PAGE> 16
AMENDED MARGIN AGREEMENT
Rider to Continuing General Security Agreement (dated December 5, 1996
from Wolfensohn Associates L.P., Obligor, in favor of the Bank (as defined
therein)).
Reference is made to the heading "Specific Property" referred to in this
Continuing General Security Agreement and to the securities ("Marketable
Securities") of the types described in Exhibit A, attached hereto, and to
any renewals, substitutions or replacements and all proceeds thereof, from
time to time held in Account No. 7771 or any successor account ("Account")
referred to under such heading. Obligor acknowledges and agrees that the
value of the Marketable Securities shall at all times have the Collateral
Value, as defined below, at least equal to the Obligations. If at any time
the Collateral Value is less than the Obligations (a "Margin Shortfall"),
the Bank may give notice to the Obligor in accordance with Section 14
hereof, at the address set forth below, that a Margin Shortfall exists and
the amount of such Shortfall (the "Margin Shortfall Notice"). If within 15
business days of the date of such Margin Shortfall Notice, the Obligor has
neither (a) deposited with the Bank in the Account an amount equal to the
amount set forth in the Margin Shortfall Notice of cash and/or additional
Marketable Securities satisfactory to the Bank and approved by the Bank in
writing or (b) prepaid an amount of the Obligations at least equal to the
amount set forth in the Margin Shortfall Notice, then the Bank may, in
its sole discretion, (x) sell such amount of Marketable Securities and
apply the proceeds of such sale to the Obligations so as to cause the
Obligations to cease to be less than the Collateral Value or (y) declare
the Obligations immediately due and payable notwithstanding the absence of
any default by the Borrower under the Obligations whereupon an Event of
Default shall be deemed to have occurred hereunder and the Bank may sell
the Marketable Securities and otherwise exercise its remedies hereunder or
as are otherwise available to it. As used herein, the term "Collateral
Value" shall mean the sum of any cash held in such Account and the sum of
the respective products obtained by multiplying the fair market value, as
determined by the Bank, of each type of Marketable Security held in such
Account, by applicable percentage for such type of security set forth in
Exhibit A hereto.
This Margin Agreement amends and restates in the entirety the Margin
Agreement from Wolfensohn Associates L.P. in favor of the Bank originally
attached to the Continuing General Security Agreement.
Dated: As of August 19, 1997 WOLFENSOHN ASSOCIATES II L.P.
By: Wolfensohn Partners II, LLC,
its General Partner
/s/ Richard Morgan
--------------------------------
Richard Morgan, Member
Republic National Bank of New York
Addresses for Notices
590 Madison Avenue
New York, New York 10022
By: /s/ Mary Pan Fax No. (212) 849-8170
---------------------------- c/o Jackson Hole Mgt. Co. Inc.
