SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 25, 1995
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-17577 22-2537194
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
110 Summit Drive Exton, PA 19341
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 524-7000
ITEM 2. Acquisition or Disposition of Assets
On August 25, 1995 (the "Closing"), the Company sold all of the
assets of its Furnishings Business, consisting of the business of
designing, manufacturing and distributing space-efficient, modular
workstation systems and a line of complementary office products,
including cable and wiring systems, ergonomically designed seating
products, and air management systems for temperature blending and
breathing zone filtration. The Company had conducted the Furnishings
Business directly, and through its 90% owned subsidiary, Corel Corporate
Seating, Inc. ("Corel"). This business includes the Company's modular,
configured furniture systems business as well as the commercial and
industrial seating business of its subsidiary Corel. The Company will
continue to operate its security and control system integration and
installation business through its subsidiary Maris Equipment Company,
Inc. ("Maris") and its indoor air quality and hospital/healthcare
environmental control business through its subsidiary Airo Clean, Inc.
("Airo Clean").
The assets sold include accounts receivable, furniture, fixtures,
machinery and equipment, intellectual property (including rights to the
name "CenterCore"), inventory, real property leases, leasehold
improvements, and outstanding dealer agreements, government supply
contracts, and other agreements. As a part of the sale, the Company and
the Buyer granted to each other royalty-free licenses (the "License
Agreements") to use certain patents and trademarks relating to air
circulation and filtration products which were marketed by both
CenterCore and Airo Clean. The Buyer will have the right to market the
products in all places where contract furniture may be sold, and the
Company will have the right to market the products in hospital and
industrial cleanroom applications, except where the Buyer may sell
contract furniture.
The Furnishings Business was sold to The CenterCore Group, Inc. (the
"Buyer"), which is a newly formed Delaware corporation which was
organized for the sole purpose of acquiring the assets of and operating
the Furnishings Business. The Buyer was organized by the principals of
The Apollo Group, Inc. ("Apollo"), a private investment group
specializing in the acquisition and continued management of established
manufacturing companies. Prior to the transaction, the Buyer had no
material assets, properties or liabilities. Apollo was founded in 1983,
and has participated in the acquisition and management of 12 small to
middle market size operating companies. Neither the Buyer, Apollo nor
its principals are affiliated with the Company, and neither the Company
nor any of its current executive officers, directors, nor controlling
persons has any ownership interest in the Buyer. A former executive
officer of the Company was employed by the Buyer upon consummation of
the sale, and may be granted an equity interest in the Buyer.
The purchase price (the "Purchase Price") was determined as a result
of arm's length negotiations with the Buyer, after an extensive search
for potential purchasers was conducted on behalf of the Company by a
business broker in the furniture business. The Purchase Price is
comprised of three components, determined based on a balance sheet of
the assets and liabilities sold to the Buyer, as follows: cash
consideration (the "Cash Consideration") of $2.5 million less the
amount, if any, by which the working capital at Closing (defined as
accounts receivable plus inventory minus accounts payable) is less than
$5 million (the "Working Capital Deficit"); installment payments equal
to the sum of $1 million, plus the amount of accounts receivable at
Closing less assumed liabilities at Closing, plus one-half the excess of
the amount of inventory at Closing over $1 million, less the Cash
Consideration (the "Installment Payments"); and a subordinated note
component which is equal to one-half of the difference between the
amount of inventory at Closing less $1 million, less any excess
inventory reserve at Closing, plus $1.065 million plus capital
expenditures (determined in accordance with GAAP) between January 1,
1995 and the Closing, less the book value of fixed assets disposed of
between January 1, 1995 and the Closing, plus security deposits and pre-
paid expenses at Closing (the "Subordinated Note Component").
Based on the preliminary pro forma closing date balance sheet (the
"Preliminary Balance Sheet") prepared by the Company at Closing, the
Cash Consideration paid was $2.5 million, the aggregate Installment
Payments will be $2.1 million, and the principal amount of the
Subordinated Note is $1.9 million, for an aggregate Purchase Price of
$6.5 million. The Cash Consideration and the amount of the Installment
Payments will be adjusted, as required, after Closing based on a final
audited closing date balance sheet. The amounts of the components of
the Purchase Price were estimated in the Company's Information Statement
mailed to its stockholders on August 4, 1995 in connection with the
stockholders' vote to approve the sale to be Cash Consideration of $2.5
million, aggregate Installment Payments of $2 million, and a
Subordinated Note of $2 million, for an aggregate Purchase Price of $6.5
million. Therefore, the actual amount of the aggregate Purchase Price
was the same as the amount estimated in the Information Statement.
The Installment Payments are to be made in four payments with the
first installment for one-fifth of the total amount payable nine months
after the Closing Date. The remaining three installments will be in
equal amounts, and will be due on June 30, 1996, September 30, 1996 and
December 31, 1996. The Installment Payments will be non-interest
bearing, will be subordinated to the Company's senior debt, and will be
secured by a second lien on all of the Buyer's assets.
The Subordinated Note bears interest at the rate of 8% per annum,
commencing to accrue on the first anniversary of the closing date. The
principal amount of the Subordinated Note will be amortized on a seven
year level schedule with semi-annual payments and with a balloon payment
due on the fifth anniversary of the closing date. Interest and
principal payments will commence 18 months after the closing date and
continue semi-annually thereafter until maturity. In the event that
Buyer's EBITAD (earnings before interest, taxes, depreciation and
amortization) exceeds $2 million dollars for any fiscal year prior to
repayment of the Subordinated Note, an additional principal payment
equal to 50% of such excess shall be payable by the Buyer and applied
against the Subordinated Note in the inverse order of maturity. The
Subordinated Note is subordinate to the Buyer's senior debt and is
secured by a second lien on all of the fixed assets purchased by the
Buyer. There can be no assurance that the Company will be able to
collect all or any part of the Installment Payments and the Subordinated
Note payments.
All of the cash proceeds of the sale have been applied to repay
outstanding bank debt.
ITEM 5. Other Events
In connection with the above described sale of the Company's
Furnishings Business, the Company has changed its name to Core
Technologies (Pennsylvania), Inc. This name change was approved by the
stockholders of the Company at its 1994 Annual Meeting of Stockholders
held on May 6, 1994.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(b) Pro Forma Financial Information
The pro forma financial information required pursuant to
Article 11 of Regulation S-X was presented in the Company's
definitive information statement dated August 4, 1995, which was
filed with the Commission on that date. Such information is
incorporated herein by reference.
(c) Exhibits
2.1 Asset Purchase Agreement dated May 26, 1995 between the
Company, Corel Corporate Seating, Inc., Safeguard Scientifics, Inc. and
The CenterCore Group, Inc.
2.2 Amendment No. 1 dated as of June 30, 1995 to the Asset
Purchase Agreement.
3.1 Amended and Restated Certificate of Incorporation.
20.1 The Company's Definitive Information Statement dated August
4, 1995.
20.2 The Company's 1994 Annual Report to Stockholders.
20.3 Press Release dated August 30, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: September 8, 1995 CORE TECHNOLOGIES
(PENNSYLVANIA), INC.
By: /s/ George E. Mitchell
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George E. Mitchell
President and
Chief Executive Officer
EXHIBIT INDEX
2.1 Asset Purchase Agreement dated May 26, 1995 between the Company,
Corel Corporate Seating, Inc., Safeguard Scientifics, Inc. and
The CenterCore Group, Inc. (1)(Appendix 99.2)
2.2 Amendment No. 1 dated as of June 30, 1995 to the Asset Purchase
Agreement. (2)(Appendix 99.2)
3.1 Amended and Restated Certificate of Incorporation.
20.1 The Company's Definitive Information Statement dated August 4,
1995. (3)
20.2 The Company's 1994 Annual Report to Stockholders. (4)(Appendix
99.1)
20.3 Press Release dated August 30, 1995.
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(1) Filed as an appendix to the Preliminary Information Statement on
Schedule 14C (No. 000-17577) filed on June 26, 1995 and
incorporated herein by reference.
(2) Filed as an appendix to the revised Preliminary Information
Statement on Schedule 14C (No. 000-17577) filed on August 1, 1995
and incorporated herein by reference.
(3) Filed on August 4, 1995 and incorporated herein by reference.
(4) Filed as an appendix to the Definitive Information Statement on
Schedule 14C (No. 000-17577) filed on August 4, 1995 and
incorporated herein by reference.
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
FIRST: Corporate Name. The name of the Corporation is "Core
Technologies (Pennsylvania), Inc."
SECOND: Registered Office. The registered office of the
corporation is to be located at Corporation Trust Center, 1209 Orange
Street in the City of Wilmington, in the County of New Castle, in the
State of Delaware. The name of its registered agent at that address is
The Corporation Trust Company.
THIRD: Corporate Purpose. The purchase of the corporation is to
engage in any lawful act or activity for which a corporation may now or
hereafter be organized under the Delaware General Corporation Law.
FOURTH: Capital Stock. The corporation shall be authorized to
issue Twenty-One Million (21,000,000) shares, of which Twenty Million
(20,000,000) shall be Common Stock, par value $.01 per share, and One
Million (1,000,000) shares shall be Series Preferred Stock, par value
$.01 per share. The powers, designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof with respect to the Series Preferred
Stock or any series thereof shall be fixed by resolution of the Board of
Directors of the corporation.
FIFTH: Election of Directors. Elections of directors
need not be by written ballot.
SIXTH: By-laws. The Board of Directors shall have the
power, in addition to the stockholders, to make, alter, or repeal the
by-laws of the corporation.
SEVENTH: Liability of Directors. A director of the corporation
shall not be liable to the corporation or its stockholders for monetary
damages (including, without limitation, any judgment, amount paid in
settlement, fine, penalty, punitive damages, excise tax assessed with
respect to an employee benefit plan, or expense of any nature (including
attorneys' fees)) for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involved intentional misconduct or a knowing violation of
laws; (iii) under Section 174 of the Delaware Corporation Law; or (iv)
for any transaction from which the director derived an improper personal
benefit.
EIGHTH: Indemnification. The corporation shall, to the fullest
extent permitted by the General Corporation Law of Delaware, as the same
may be amended and supplemented, indemnify any and all directors of the
corporation and each representative of the corporation as may have been
designated by the board of directors of the corporation from and against
any and all costs, expenses (including attorneys' fees), damages,
judgments, penalties, fines, punitive damages, excise taxes assessed
with respect to an employee benefit plan and amounts paid in settlement
in connection with any action, suit or proceeding, whether by or in the
right of the corporation, a class of its security holders or otherwise
in which the director or designated representative may be involved as a
party or otherwise, by reason of the fact that such person was serving
as a director, officer, employee or agent of the corporation.
Notwithstanding the preceding sentence, the corporation shall not
indemnify a director or designated representative for any liability
incurred in an action, suit or proceeding initiated by the person
seeking indemnification (which shall not be deemed to include counter-
claims or affirmative defenses) unless the action, suit or proceeding is
authorized, either before or after its commencement, by the affirmative
vote of a majority of the directors in office. The indemnification
provided for in this Article EIGHTH shall not be deemed exclusive of any
other rights to which those persons indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in their official capacities and as to
action in another capacity while holding office, and shall continue as
to a person who has ceased to be a director or designated representative
and shall inure to the benefit of the heirs, executors and
administrators of such a person.
NINTH: Reservation of Right to Amend. The corporation
reserves the right to amend, alter, change or repeal any provision
contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon
stockholders are granted subject to this reservation.
Powers, Designations,
Preferences and Relative, Participating,
Optional or Other Special Rights, and the
Qualifications, Limitations or Restrictions
Thereof of Series A Redeemable Convertible Preferred Stock
I. Designation of Series. The distinctive serial designation of this
series shall be "Series A Redeemable Convertible Preferred Stock"
(hereinafter called "Series A Redeemable Convertible").
II. Stated Value. The Series A Redeemable Convertible shall have a
stated value of $100.00 per share.
III. Number of Shares. The number of shares of Series A Redeemable
Convertible shall initially be 15,000. Shares of Series A Redeemable
Convertible redeemed, purchased or otherwise acquired by the Corporation
shall be canceled and shall be returned to the status of authorized but
unissued shares of undesignated preferred stock of the Corporation.
IV. Dividends. Beginning with the calendar quarter commencing July 1,
1994, the holders of shares of Series A Redeemable Convertible shall be
entitled to receive a quarterly dividend, in arrears, equal to $1.50 per
share (as adjusted for any stock dividends, combinations or splits with
respect to such shares) out of funds legally available therefor. Such
dividends shall be payable only when, as and if declared by the Board of
Directors, provided that quarterly dividends that are not so declared
and paid shall accumulate. No dividend or other distribution shall be
declared or paid on the Common Stock or on other Dividend Junior Stock
unless all dividends on the Series A Redeemable Convertible accrued for
all past quarterly dividend periods shall have been paid and the full
dividend thereon for the current quarterly dividend period shall be paid
or declared and set apart for payment. The Board of Directors shall not
declare any dividend if such declaration or payment would contravene any
loan covenants of the Corporation or would reduce the Corporation's
working capital below that deemed necessary by the Board of Directors.
V. Liquidation Rights. (A) The holders of Series A Redeemable
Convertible shall be entitled, before any distribution or payment is
made to the holders of any Liquidation Junior Stock, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, to be paid in full the amount of $100.00 per
share of Series A Redeemable Convertible held plus a further amount
equal to all accrued and unpaid dividends accumulated on such shares.
(B) If, upon such liquidation, dissolution or winding up, the
amounts available for distribution to the holders of Series A Redeemable
Convertible and all Liquidation Parity Stock shall be insufficient to
permit the payment in full to such holders of the preferential amounts
to which they are entitled, then such amounts shall be paid ratably
among the shares of Series A Redeemable Convertible and Liquidation
Parity Stock in accordance with the respective preferential amounts
(including unpaid cumulative dividends on such Liquidation Parity Stock)
payable with respect thereto, if paid in full.
(C) If payment on liquidation, dissolution or winding up of the
affairs of the Corporation shall have been made in full to holders of
all shares of Series A Redeemable Convertible and Liquidation Parity
Stock, the remaining assets of the Corporation shall be distributed
among the holders of Liquidation Junior Stock, according to their
respective rights and preferences.
(D) For the purposes of this Section V, the consolidation or
merger of the Corporation with or into any other corporation as a result
of which the former stockholders of the Corporation control less than
50% of the voting power of the surviving entity, or the conveyance or
transfer of the property and assets of the Corporation as, or
substantially as, an entirety shall, at the election of the holders of a
majority of Series A Redeemable Convertible outstanding, be deemed to
constitute a liquidation, dissolution or winding up of the Corporation.
VI. Redemption. (A) The Corporation may redeem all outstanding
shares of Series A Redeemable Convertible at any time after June 1,
1995, following notice given as hereinafter specified, at the
redemption price of $100.00 per share, together with all accrued and
unpaid dividends thereon to the date on which the shares are redeemed
("Redemption Date"), provided, however, that the Corporation shall be
required to redeem all outstanding shares of Series A Redeemable
Convertible on June 1, 2001.
(B) Notice of every redemption of shares of Series A Redeemable
Convertible shall be mailed by first class mail, postage prepaid,
addressed to the holders of record of the shares to be redeemed at their
respective last addresses as they shall appear on the books of the
Corporation. Such mailing shall be at least 30 days and not more than
60 days prior to the Redemption Date, but failure to mail such notice or
any defect therein or in the mailing thereof shall not affect the
validity of the proceeding for the redemption of any shares so to be
redeemed. The notice of redemption shall state: (1) the Redemption
Date; (2) the amount of accrued and unpaid dividends on each share of
Series A Redeemable Convertible and the amount of the redemption price;
(3) the Conversion Price on the date of the notice; (4) that on the
Redemption Date the redemption price plus the amount of accrued but
unpaid dividends will become due and payable upon each share and
dividends shall cease to accrue as of the close of business on the
business day prior to the Redemption Date, unless default shall be made
in the payment of the redemption price; and (6) the place or places
where certificates representing shares of Series A Redeemable
Convertible ("Series A Redeemable Convertible Certificates") to be
redeemed are to be surrendered for payment of the redemption price.
(C) If notice of redemption as provided in subsection (B) above
shall have been duly given or if the Corporation shall have given to the
bank or trust company hereinafter referred to irrevocable authorization
promptly to give such notice, and if on or before the Redemption Date
specified therein the Corporation shall have deposited the funds
necessary for such redemption with such bank or trust company in trust
for the pro rata benefit of the holders of the shares called for
redemption, then, notwithstanding that any certificates for shares so
called for redemption shall not have been surrendered for cancellation,
from and after the Redemption Date, all shares so called for redemption
shall no longer be deemed to be outstanding and all rights with respect
to such shares shall forthwith cease and terminate, except only the
right of the holders thereof to receive from such bank or trust company
at any time after the time of such deposit the funds so deposited,
without interest, and the right to exercise, until the close of business
on the business day preceding the Redemption Date, privileges of
conversion, if any, not theretofore expired. Any interest accrued on
such funds shall be paid to the Corporation from time to time. The
aforesaid bank or trust company shall be organized and in good standing
under the laws of the United States of America, the State of Delaware or
the Commonwealth of Pennsylvania, shall be doing business in Delaware or
in Pennsylvania, shall have capital, surplus and undivided profits
aggregating at least $10,000,000 according to its last published
statement of condition, and shall be identified in the notice of
redemption. Any funds so set aside or deposited by the Corporation
which shall not be required for such redemption because of the exercise
of any right of conversion subsequent to the date of such deposit shall
be released or repaid to the Corporation forthwith. Any funds so set
aside or deposited, as the case may be, and unclaimed at the end of two
years from such Redemption Date shall, to the extent permitted by law,
be released or repaid to the Corporation, after which repayment the
holders of the shares so called for redemption shall look only to the
Corporation for payment thereof.
VII. Optional Conversion. (A) Subject to any conditions herein
contained, any or all of the shares of Series A Redeemable Convertible
and all accrued and unpaid dividends accumulated on such shares shall be
convertible at any time and from time to time, at the option of the
holder of record thereof, into fully paid and non-assessable shares of
Common Stock, par value $.01 per share, of the Corporation upon
surrender of the certificate or certificates representing the Series A
Redeemable Convertible to be converted; and upon receipt by the
Corporation of such surrendered certificate or certificates with any
appropriate endorsement thereon, as may be prescribed by the Board of
Directors, such holder shall be entitled to receive a certificate or
certificates representing the shares of Common Stock into which such
shares of Series A Redeemable Convertible and accrued and unpaid
dividends are convertible. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such
surrender of the shares of Series A Redeemable Convertible to be
converted, and 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
as of such date. The basis for such conversion shall be the "Conversion
Rate" in effect at the time of conversion, which for the purposes hereof
shall mean the number of shares of Common Stock issuable for each share
of Series A Redeemable Convertible surrendered for conversion.
"Conversion Price" means the price per share of Common Stock into which
one share of Series A Redeemable Convertible is convertible at the
Conversion Rate then in effect. Initially, the Conversion Rate shall be
one hundred (i.e., one hundred shares of Common Stock for each share
of Series A Redeemable Convertible being converted) and the Conversion
Price shall be $1.00. In the event that unpaid dividends have accrued
on shares of Series A Preferred on or prior to conversion, the amount of
such dividends shall also be convertible into shares of Common Stock on
the basis of the Conversion Price then in effect.
(B) Conversion Price Adjustments. The Conversion Price and
Conversion Rate of Series A Redeemable Convertible shall be subject to
adjustment from time to time as follows:
(1) Stock Dividends. In case shares of Common Stock are issued as
a dividend or other distribution on the Common Stock, the Conversion
Price in effect at the opening of business on the business day next
succeeding the date fixed for the determination of the holders of
Common Stock entitled to receive such dividend or other distribution
shall be decreased to an amount equal to the Conversion Price then in
effect multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock issued and outstanding at the close
of business on the date fixed for such determination and the
denominator of which shall be the sum of said number of shares issued
and outstanding at the close of business on the date fixed for such
determination and the number of shares constituting such dividend or
other distribution, such decrease becoming effective immediately
after the opening of business on the business day next succeeding the
date fixed for such determination.
(2) Stock Splits. In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares or outstanding
shares shall be combined into a smaller number of shares, the
Conversion Price in effect at the opening of business on the business
day next succeeding the day upon which such subdivision or
combination becomes effective shall be decreased or increased, as the
case may be, to an amount equal to the Conversion Price so in effect
multiplied by a fraction, the numerator of which shall be the number
of shares outstanding immediately before such subdivision or
combination becomes effective and the denominator of which shall be
the number of shares outstanding at the opening of business on the
business day next succeeding the day upon which such subdivision or
combination immediately after the opening of business on the business
day next succeeding the day upon which such subdivision or
combination becomes effective.
(3) Recapitalization, Reclassification. If the Corporation shall
issue any securities by recapitalization or reclassification of the
Common Stock, each share of Common Stock into which a share of the
Series A Redeemable Convertible may immediately prior thereto be
converted shall be replaced for the purposes hereof by the securities
issuable or distributable in respect to each such reclassification
and appropriate adjustment of the Conversion Rate in effect
immediately prior to such recapitalization or reclassification shall
be made, such adjustment to become effective immediately after the
opening of business on the day on which such recapitalization or
reclassification shall become effective.
(4) Adjustment of Number of Shares. Upon each adjustment in the
Conversion Price pursuant to any provisions of this Section VII(B),
the Conversion Rate shall be adjusted, to the nearest one hundredth
of a whole share, to the product obtained by multiplying the
Conversion Rate in effect immediately prior to such adjustment in the
Conversion Rate by a fraction, the numerator of which shall be the
Conversion Price immediately prior to such adjustment and the
denominator of which shall be the Conversion Price immediately
thereafter.
(5) Other Provisions Applicable to Adjustments Under this Section.
The following provisions will be applicable to the making of
adjustments in the Conversion Price hereinabove provided in this
Section VII(B):
(a) Adjustment Threshold. No reduction of the Conversion Price
shall be made in an amount less than 1 cent per share, provided
that any adjustments which are not required to be made by reason of
this sentence shall be carried forward and shall be either taken
into account in any subsequent adjustment made prior to three years
from the date of the event giving rise to the adjustment being
carried forward, or, if no such adjustment is made, shall be made
at the end of three years from the date of the event giving rise to
the adjustment being carried forward.
(b) Fractional Shares. No fractional shares shall be issued upon
conversion of the Series A Redeemable Convertible, and the number
of shares of Common Stock to be issued shall be rounded to the
nearest whole share. Whether or not fractional shares are issuable
upon such conversion shall be determined on the basis of the total
number of shares of Series A Redeemable Convertible the holder is
at the time converting into Common Stock and the number of shares
of Common Stock issuable upon such aggregate conversion.
(c) Notice of Adjustments. Whenever the Conversion Rate and
Conversion Price are adjusted as herein provided, the Corporation,
at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Redeemable Convertible a
certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Redeemable
Convertible, furnish or cause to be furnished to such holder a like
certificate setting forth (1) such adjustment and readjustment, (2)
the Conversion Price at the time in effect, and (3) the number of
shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of a share
of Series A Redeemable Convertible.
(6) Other Action Affecting Capital Stock. In case after the date
hereof the Corporation shall take any action affecting the Capital
Stock other than an action described in any of the foregoing
subsections (B)(1)-(5) hereof, inclusive, which in the opinion of the
Corporation's Board of Directors would have a materially adverse
effect upon the rights of the holders of the Series A Redeemable
Convertible, the Conversion Price then in effect shall be adjusted in
such manner and at such time as the Board of Directors on the advice
of the Corporation's independent public accountants may in good faith
determine to be equitable in the circumstances.
(C) Merger, Consolidation, Etc. In case of any consolidation
or merger of the Corporation with or into another corporation, or in
case of any sale, lease, mortgage, pledge, conveyance or other
disposition to another corporation of all or substantially all the
property of the Corporation, each holder of a share of Series A
Redeemable Convertible then outstanding and thereafter remaining
outstanding shall have the right thereafter to convert each share held
into the kind and amount of shares, other securities, cash and property
receivable upon such transaction by a holder of the number of shares of
Common Stock into which such share might have been converted immediately
prior to such transaction; in any such event, effective provision shall
be made, in the certificate of incorporation or otherwise, so that the
provisions set forth herein for the protection of the conversion rights
of the Series A Redeemable Convertible shall thereafter be applicable,
as nearly as possible, in relation to any securities, cash and property
deliverable upon conversion of the shares of Series A Redeemable
Convertible remaining outstanding or other convertible share or
securities received by the holders in place thereof, and any such
resulting or surviving corporation shall expressly assume the obligation
to deliver, upon the exercise of the conversion privilege, such shares,
other securities, cash or property as the holders of the shares of
Series A Redeemable Convertible remaining outstanding, or other
convertible shares of securities received by the holders in place
thereof, shall be entitled to receive pursuant to the provisions hereof,
and to make provision for the protection of the conversion right as
above provided.
(D) Notice of Certain Actions. In the event of any taking by
the Corporation of a record of the holders of any class of securities
for the purpose of determining the holders thereof who are entitled to
receive any dividend (other than a cash dividend) or other distribution,
any right to subscribe for, purchase or otherwise acquire any shares of
stock or any class of any other securities or property, or to receive
any other right, this Corporation shall mail to each holder of Series A
Redeemable Convertible, at least 20 days prior to the date specified
therein, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right. Any notice
required by the provisions of this Section VII to be given to the
holders of shares of Series A Redeemable Convertible shall be deemed
given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books
of this Corporation.
(E) Reservation of Shares. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of
Common Stock solely for the purpose of effecting the conversion of the
shares of the Series A Convertible such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Series A Convertible; and if at any
time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then outstanding
shares of the Series A Redeemable Convertible, the Corporation will take
such corporate action as may, in the opinion of counsel to the holders
of Series A Redeemable Convertible, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares
as shall be sufficient for such purposes. In the event such action is
not taken, the Corporation shall redeem such Series A Redeemable
Convertible as may not be converted as a result of such insufficiency in
reserved and unissued stock for the price and according to the terms set
forth in Section VI.
VIII. Voting Rights. Except upon matters with respect to which holders
of Series A Redeemable Convertible have separate voting rights as
provided herein or as otherwise required by law, holders of Series A
Redeemable Convertible shall be entitled to vote with holders of Common
Stock and holders of any other series of Preferred Stock of the
Corporation having the right to vote with holders of Common Stock under
the terms of such series, and in so voting, a holder of shares of Series
A Redeemable Convertible shall be entitled to cast one vote for each
share of Common Stock into which such Series A Redeemable Convertible
could then be converted (with any fractional share determined on an
aggregate conversion basis being rounded to the nearest whole share).
IX. Definitions. As used herein with respect to Series A Redeemable
Convertible, the following terms shall have the following meanings:
(A) The term "Common Stock" as used herein shall be deemed to
mean stock of any class of the Corporation which has no preference in
respect of dividends or of amounts payable in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation
and which is not subject to redemption by the Corporation. Shares
issuable on conversion of shares of Series A Redeemable Convertible
shall include shares of the class designated as Common Stock of the
Corporation as of the first date of issuance of any share of Series A
Redeemable Convertible, or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation and which are not subject to redemption by the
Corporation; provided that if at any time there shall be more than one
such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to
the total number of shares of all such classes resulting from all such
reclassifications.
(B) The term "Dividend Parity Stock" shall be deemed to mean
all other stock of the Corporation ranking equally with the Series A
Preferred Stock as to payment of dividends so long as the same is
outstanding. The term "Liquidation Parity Stock" shall be deemed to
mean all other stock of the Corporation ranking equally with the Series
A Preferred Stock as to distribution of assets upon liquidation so long
as the same is outstanding.
(C) The term "Junior Stock" shall be deemed to mean the Common
Stock and all other stock of the Corporation ranking junior to Series A
Redeemable Convertible as to the payment of dividends and the
distribution of assets upon liquidation. The term "Dividend Junior
Stock" shall be deemed to mean the Common Stock and all other stock of
the Corporation ranking junior to the Series A Redeemable Convertible as
to the payment of dividends. The term "Liquidation Junior Stock" shall
be deemed to mean the Common Stock and all other stock of the
Corporation ranking junior to Series A Redeemable Convertible as to
distribution of assets upon liquidation.
(D) The term "Senior Stock" as used herein shall be deemed to
mean all other stock of the Corporation ranking senior to the Series A
Preferred Stock as to the payment of dividends or distribution of assets
upon liquidation.
Exhibit 20.3
Core Technologies, Inc.
CORE TECHNOLOGIES COMPLETES SALE OF FURNITURE UNIT
Exton, Pennsylvania -- August 30, 1995 -- Core Technologies, the Exton-
based company that integrates and installs advanced electronic security
systems and is engaged in the supply of cleanroom products, announced
today it has completed the sale of its CenterCore Furniture subsidiary
to an acquisition company formed by The Apollo Group, Inc.
"In addition to completing the sale of our furniture unit, we have
successfully re-negotiated our bank line which now positions the Company
to pursue the growing markets in security software integration and clean
air environments," noted George E. Mitchell, chairman and CEO of Core
Technologies.
Founded in 1984, Core Technologies is based in Exton, Pennsylvania and
has offices in Exton, Pennsylvania; Austin, Texas; San Antonio, Texas
and Los Angeles, California. Manufacturing facilities for Airo Clean
are located in Exton, Pennsylvania.
N E W S R E L E A S E
