UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
AMENDMENT NO. 1 TO SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
OCEAN OPTIQUE DISTRIBUTORS, INC.
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
674864 10 3
(CUSIP Number)
ROBERT L. KOEPPEL, C/O OCEAN OPTIQUE DISTRIBUTORS, INC., 2 N.E. 40TH STREET,
MIAMI, FLORIDA 33137
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
FEBRUARY 20, 1998
(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
statement 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 purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP NO. 674864 10 3 PAGE 2 OF 6 PAGES
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Robert L. Koeppel
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2 [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 48,130,000(1)
SHARES
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON
WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
48,130,000(1)
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
48,130,000(1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Represents shares beneficially owned by XR Co., of which the reporting
person is the sole shareholder.
<PAGE>
SCHEDULE 13D
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CUSIP NO. 674864 10 3 PAGE 3 OF 6 PAGES
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- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
XR Co. Fed. I.D. applied for
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2 [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 48,130,000
SHARES
BENEFICIALLY -------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON
WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
48,130,000
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
48,130,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
In January 1998, Ocean Optique Distributors, Inc. ("Ocean") entered
into a Consulting Agreement (the "Consulting Agreement") with XR Co., a
privately held Miami-based investment company. The Consulting Agreement
contemplated, among other matters, that XR Co. would assist Ocean in
increasing its net tangible assets by approximately $1.0 million in
exchange for which, among other matters, XR Co. received shares of
Ocean's Series D Preferred Stock (the "Series D Preferred Stock"),
which gave it voting control of Ocean. Subsequent to the date of the
Consulting Agreement, XR Co. and Ocean determined that the amount by
which Ocean's net tangible assets needed to be increased was
significantly in excess of the $1.0 million originally contemplated. On
February 20, 1998, Ocean and XR Co. entered into a Purchase Agreement
(the "Purchase Agreement") pursuant to which XR Co. purchased from
Ocean all of the outstanding capital stock of two of Ocean's
subsidiaries, Classic Optical, Inc. ("Classic") and European
Manufacturers Agency, Inc. ("EMA"), in exchange for XR Co.'s purchase
of the liabilities of Classic and EMA through the acquisition of their
outstanding capital stock. Classic and EMA had combined assets of
approximately $183,000 and combined liabilities of approximately
$2,730,000.
In connection with the purchase transaction, Ocean and XR Co. also
supplemented the Consulting Agreement pursuant to which Ocean issued to
XR Co. 5,926 shares of Ocean's newly-designated Series E Preferred
Stock (the "Series E Preferred Stock"). The Series E Preferred Stock
pays cumulative dividends at the annual rate of 2.5% of liquidation
preference beginning on July 1, 1998, has a liquidation preference of
$2.70 per share after July 1, 1998, and is subordinate to Ocean's
previously issued series of preferred stock, other than the Series D
Preferred Stock with which it ranks pari passu. The shares of Series E
Preferred Stock may be converted by XR Co. into shares of Ocean's
common stock at the rate of 5,000 shares of common stock for each $270
of liquidation value plus accumulated but unpaid dividends for each
share converted. The Series B Preferred Stock has 5,000 votes per share
and votes together with Ocean's common stock and other voting preferred
stock as a single class on all matters (except as required by law). As
a result of the transaction, XR Co. holds approximately 76% voting
control of Ocean.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
VOTING POWER DISPOSITIVE POWER
------------ -----------------
SOLE SHARED SOLE SHARED
---- ------ ---- ------
48,130,000 (1) -0- 48,130,000(1) -0-
(1) Reflects 2,846,154 shares of Series D Cumulative Convertible Preferred
Stock, each of which is convertible into 6.5 shares of Common Stock of
Ocean, and 5,926 shares of Series E Cumulative Convertible Preferred
Stock, each of which is convertible into 5,000 shares of Common Stock
for each $270 of liquidation value plus accumulated but unpaid
dividends for each share converted.
4
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
See Item 3. above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Purchase Agreement
Exhibit 2 - Addendum to Consulting Agreement
5
<PAGE>
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.
/S/ROBERT L. KOEPPEL
-------------------------------
Robert L. Koeppel
XR CO.
By: /S/ ROBERT L. KOEPPEL
-------------------------------
Robert L. Koeppel, President
Dated: March 5, 1998
6
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
1 Purchase Agreement
2 Addendum to Consulting Agreement
EXHIBIT 1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is entered into as of the
20th day of February, 1998 by and between Ocean Optique Distributors, Inc., a
Florida corporation (the "Company") and XR Co., a Florida corporation
("Purchaser").
WITNESSETH:
WHEREAS, the Company is sole shareholder of Classic Optical, Inc., a
Michigan corporation ("Classic"), owning all of Classic's 300 issued and
outstanding shares of Class A common stock, par value $10.00 per share and 75
issued and outstanding shares of Class B non-voting common stock, par value
$10.00 per share (collectively, "Classic Shares"); and
WHEREAS, the Company is also the sole shareholder of European
Manufacturers Agency, Inc., a Florida corporation ("EMA"), owning all of EMA's
100 issued and outstanding shares of common stock, par value $1.00 per share
("EMA Shares"); and
WHEREAS, the Company represents that Classic and EMA have combined
assets of approximately $183,000 and combined liabilities of approximately
$2,703,000; and
WHEREAS, in January 1998, Purchaser acquired voting control of the
Company and in connection therewith agreed, among other matters, to assist the
Company in increasing its net tangible assets; and
WHEREAS, the purchase by the Purchaser from the Company of all of the
Classic Shares and the EMA Shares will result in a significant increase in the
Company's net tangible assets; and
WHEREAS, the Company desires to sell to Purchaser, and Purchaser
desires to purchase from the Company, all of the Classic Shares and the EMA
Shares, in exchange for the Purchaser's purchase of the liabilities of Classic
and EMA through acquisition of the Classic Shares and the EMA Shares pursuant to
this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and the
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Purchaser agree as follows:
1. RECITALS. The foregoing recitals are true and correct and are
hereby incorporated into this Agreement by this reference.
2. PURCHASE OF THE CLASSIC SHARES AND THE EMA SHARES. Simultaneously
with the execution of this Agreement and in consideration for the Purchaser's
purchase of the liabilities of Classic and EMA through the acquisition of the
Classic Shares and the EMA Shares, the
<PAGE>
Company hereby sells, conveys and transfers to the Purchaser and the Purchaser
hereby purchases from the Company the Classic Shares and the EMA Shares.
3. DELIVERIES BY THE PARTIES. Upon execution of this Agreement:
(a) The Company will deliver to the Purchaser (i) a stock
certificate evidencing the Classic Shares and a stock certificate evidencing the
EMA Shares, together with a stock power for each; (ii) a Good Standing
Certificate for each of Classic and EMA issued by the Department of State of the
state of incorporation for each of Classic and EMA; (iii) a certified copy of
resolutions of the Board of Directors of the Company authorizing the execution
and delivery of this Agreement and consummation of the transactions contemplated
hereby; and (iv) a counterpart of this Agreement signed by an authorized officer
of the Company. The Company shall pay all applicable documentary stamp and
transfer taxes in connection with the transfer of the Classic Shares and the EMA
Shares to the Purchaser pursuant to this Agreement.
(b) The Purchaser will deliver to the Company: (i) a
counterpart of this Agreement signed by the President of the Purchaser; and (ii)
a certified copy of the resolutions of the Board of Directors of the Purchaser
authorizing the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser acknowledges, represents, warrants and covenants as follows:
(a) RECEIPT OF CORPORATE INFORMATION. All requested documents,
records and books pertaining to Classic, EMA, as well as the Company's ownership
of the Classic Shares and the EMA Shares, including but not limited to
information contained in the Company's public filings such as, without
limitation, the Company's Annual Report on Form 10-KSB for the Year Ended June
30, 1997 and Quarterly Report on Form 10-QSB for the Quarter Ended December 31,
1997, have been delivered to the Purchaser and/or its advisors, and all of the
Purchaser's questions and requests for information have been answered to the
Purchaser's satisfaction. The Purchaser acknowledges that, except as
specifically set forth herein, no representation or warranty is given by the
Company with regard to Classic, EMA, or the Classic Shares or the EMA Shares,
and that it is purchasing the Classic Shares and the EMA Shares "AS IS, WHERE
IS," subject to whatever claims, liens or any other encumbrances that may exist
affecting said shares and/or the assets, liabilities or business of Classic or
EMA.
(b) AUTHORITY; ENFORCEABILITY. The Purchaser has the full
right, power, and authority to execute and deliver this Agreement and perform
its obligations hereunder.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
acknowledges, represents and warrants as follows:
(a) CORPORATE ORGANIZATION OF CLASSIC AND EMA. Classic is
duly organized, validly existing and in good standing under the laws of the
State of Michigan, and EMA is duly organized, validly existing and in good
standing under the laws of the State of Florida. Each
-2-
<PAGE>
of Classic and EMA has full corporate power, authority and legal right to own
its properties and to conduct the businesses in which it is now engaged. Each of
Classic and EMA is duly licensed or qualified to transact business as a foreign
corporation and is in good standing in each jurisdiction where the ownership or
lease of its assets or the operation of its business requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on its business, operations, property or financial or
other condition (a "Material Adverse Effect").
(b) CAPITALIZATION OF CLASSIC AND EMA. The authorized capital
stock of Classic consists of 5,000 shares of Class A common stock, $10.00 par
value per share and 5,000 shares of Class B non-voting common stock, $10.00 par
value per share, of which 300 shares of Class A common stock and 75 shares of
Class B common stock are issued and outstanding. The authorized capital stock of
EMA consists of 1,000 shares of common stock, $1.00 par value per share, of
which 100 shares are issued and outstanding. The Company is the record holder of
all such issued and outstanding shares of common stock of each of Classic and
EMA.
(c) AUTHORITY. The Company has full corporate power and
authority to execute and deliver this Agreement and to perform all of its
covenants and agreements hereunder. The execution and delivery of this Agreement
by the Company, the performance by the Company of its covenants and agreements
hereunder and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action.
(d) ENFORCEABILITY. This Agreement has been duly executed and
delivered and constitutes the valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms except as
such enforceability may be limited by (i) bankruptcy, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by the
principles governing the availability of specific performance, injunctive relief
and other equitable remedies (regardless of whether such enforceability is
considered in equity or at law), including requirements of reasonableness and
good faith in the exercise of rights and remedies thereunder; and (ii)
applicable laws and court decisions which may limit or render unenforceable
certain terms and provisions contained therein, but which in our opinion do not
substantially interfere with the practical realization of the benefits thereof,
except for the economic consequences of any procedural delay which may be
imposed by, relate to or result from such laws and court decisions.
6. ADDENDUM TO CONSULTING AGREEMENT. Simultaneously with the execution
and delivery of this Agreement, the Company and Purchaser shall execute and
deliver an addendum to the Consulting Agreement by and between the Company and
Purchaser dated as of January 8, 1998.
7. POST-CLOSING COVENANTS. From the date hereof through June 30, 1998
(the "Transition Period"), the Company will provide Purchaser with transition
services relating to the transfer of the assets and business of Classic and EMA,
including accounting and similar services. The Company will bear the expense of
such services. In addition, from time to time
-3-
<PAGE>
during the Transition Period, the Company and Purchaser will make such
post-closing adjustments as may be advisable in the normal course of business.
8. NOTICES. All notices, reports and other communications to the
Purchaser of the Company hereunder shall be in writing, shall refer specifically
to this Agreement and shall be hand delivered or sent by facsimile transmission
or by registered mail or certified mail, return receipt requested, postage
prepaid, in each case to the respective persons and addresses specified below
(or to such other persons or addresses as may be specified in writing to the
other party):
If to the Purchaser, to: XR Co.
3551 St. Gaudens
Coconut Grove, Florida 33133
Attn: President
Fax No.: (305) 461-1600
If to the Company, to: Ocean Optique Distributors, Inc.
2 N.E. 40th Street
Miami, Florida 33137
Attn: Chief Financial Officer
Fax No.: (305) 573-7626
Any notice or communication given in conformity with this
Section shall be deemed to be effective when received by the addressee if
delivered by hand or overnight courier or by facsimile (with confirmed receipt),
and three days after mailing, if mailed.
9. AMENDMENTS. No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, nor consent to any departure
therefrom, shall in any event be effective unless the same shall be in writing
specifically identifying this Agreement and the provision(s) intended to be
amended, modified, waived, terminated or discharged and signed by the Purchaser
and the Company, and each amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Purchaser and the Company.
10. INTEGRATION. This Agreement represents the entire understanding and
agreement of the parties with respect to the subject matter hereof. No other
representations, statements or warranties whatsoever have been made other than
what is written herein.
11. ATTORNEYS' FEES. Except as otherwise set forth herein, all costs
and expenses, including reasonable attorneys' fees incurred in the enforcement
of this Agreement, shall be paid to the prevailing party by the non-prevailing
party upon demand.
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<PAGE>
12. GOVERNING LAW. This Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of Florida,
without application of conflicts of laws or choice of law principles.
13. EXPENSES. The parties shall pay all of their own expenses relating
to this Agreement, including, without limitation, the fees and expenses of their
respective counsel, accountants and financial advisors.
14. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors,
assigns, heirs and personal representatives.
15. HEADINGS. The headings or captions under sections of this Agreement
are for convenience and reference only and do not in any way modify, interpret
or construe the intent of the parties or effect any of the provisions of this
Agreement.
16. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and if any portion shall be held invalid, illegal or unenforceable for
any reason, the remainder of this Agreement shall be effective and binding upon
the parties.
17. COUNTERPARTS. This Agreement may be executed in counterparts, all
of which when taken together shall constitute one instrument.
18. FURTHER ASSURANCES. The parties hereto will execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
19. LEGAL COUNSEL. The Purchaser acknowledges that it has consulted
with its legal counsel prior to executing and delivering this Agreement to the
extent it deems necessary, and by the signature of its duly authorized officer
below represents that it has full understanding and knowledge of its rights and
obligations hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, through their duly authorized
officers, have executed this Agreement as of the date first written above.
THE COMPANY:
OCEAN OPTIQUE DISTRIBUTORS,
INC., A FLORIDA CORPORATION
By: /S/ HANS WILLI
-----------------------------------
Name: Hans Willi
Title: Chairman of the Board
PURCHASER:
XR CO., A FLORIDA CORPORATION
By: /S/ ROBERT L. KOEPPEL
-----------------------------------
Name: Robert L. Koeppel
Title: President
-6-
ADDENDUM TO CONSULTING AGREEMENT
THIS ADDENDUM TO CONSULTING AGREEMENT dated effective as of February
20, 1998 (the "Addendum") is made and entered into by and between XR CO., a
Florida corporation (the "Consultant"), and OCEAN OPTIQUE DISTRIBUTORS, INC., a
Florida corporation (the "Company").
WITNESSETH:
WHEREAS, the Consultant and the Company had heretofore entered into a
Consulting Agreement dated effective as of January 8, 1998 (the "Agreement");
and
WHEREAS, the Agreement contemplated, among other matters, that the
Consultant would assist the Company in increasing its net tangible assets by
approximately $1,000,000 in exchange for which, among other matters, the
Consultant would receive certain shares of the Company's Series D Preferred
Stock (the "Series D Preferred Stock"); and
WHEREAS, subsequent to the date of the Agreement, in fulfilling its
obligations thereunder, the Consultant and the Company have determined that the
amount by which the Company's net tangible assets needs to be increased is
significantly in excess of the $1,000,000 originally contemplated; and
WHEREAS, pursuant to a Purchase Agreement of even date herewith between
the Consultant and the Company, the Consultant, by acquiring all of the
outstanding capital stock of certain subsidiaries of the Company, representing
approximately $183,000 in assets and approximately $2,703,000 in liabilities of
the Company; and
WHEREAS, based on the foregoing, the Consultant and the Company desire
to supplement the Agreement with this Addendum to provide for the issuance of
additional shares of preferred stock to the Consultant.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and the
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. The foregoing recitals are true and correct and are hereby
incorporated into this Agreement by this reference.
2. The Company shall issue to the Consultant 5,926 shares of Series E
Preferred Stock (the "Series E Preferred Stock"). The preferences, designations,
rights and limitations of the Series E Preferred Stock are set forth on Exhibit
"A" hereto.
<PAGE>
3. The parties agree that the conditions of Section 4.02 of the
Agreement have been satisfied and the redemption rights are terminated.
4. Except as supplemented hereby, the Agreement is ratified, approved
and confirmed in all respects by the Consultant and the Company and is in full
force and effect.
IN WITNESS WHEREOF, the parties to this Addendum have set their hands
hereto as of the date first above written.
OCEAN OPTIQUE DISTRIBUTORS, INC.
By: /S/ HANS WILLI
-----------------------------------
Name: Hans Willi
Title: Chairman of the Board
XR CO.
By: /S/ ROBERT L. KOEPPEL
-----------------------------------
Name: Robert L. Koeppel
Title: President
-2-
<PAGE>
EXHIBIT "A"
The Series E Preferred Stock shall mean the following preferences,
designations, rights and limitations:
(i) VOTING. The Series E Preferred Stock shall vote with the
Common Stock and other shares of voting preferred stock as
one class (except as otherwise `permitted under Florida
law) and shall be entitled to 5,000 votes per share of
Series E Preferred Stock.
(ii) DIVIDENDS. The Series E Preferred Stock shall be entitled
to dividends at the rate of 2.5% of the liquidation value
thereof. Dividends shall begin to accrue on July 1, 1998,
and shall be cumulative.
(iii) LIQUIDATION. The liquidation value of the Series E
Preferred Stock shall be $0.00 until June 30, 1998, and
shall thereafter be $270 per share, plus accumulated but
unpaid dividends.
(iv) SUBORDINATION; PRIORITY. The Series E Preferred Stock
shall be pari passu with the Series D Preferred Stock
and subordinate in liquidation and the payment of
dividends to the Series A Cumulative Convertible 3%
Preferred Stock, the Series B Cumulative Convertible 2%
Preferred Stock, and the Series C Non- Cumulative
Convertible Preferred Stock. No liquidating
distributions shall be paid on any share of Common
Stock or other equity security of the Company not
described in this Clause (iv) until the holder(s) of
the Series D and Series E Preferred Stock shall have
received liquidating distributions totaling the
aggregate liquidation value and accumulated but unpaid
dividends on all shares of Series D or Series E
Preferred Stock or its earlier conversion. No dividends
shall be declared, set aside, or paid on any share of
Common Stock or other equity security of the Company
not described in this Clause (iv) until the holder(s)
of the Series D or Series E Preferred Stock shall have
received dividend distributions totaling the aggregate
accumulated but unpaid dividends, together with the
dividends accrued for the period immediately prior to
such declaration, set aside, or payment, on all shares
of Series D or Series E Preferred Stock.
(v) CONVERSION. Each share of Series E Preferred Stock shall
be convertible into 5,000 shares of Common Stock, or
fraction thereof, for each $270 of liquidation value plus
accumulated but unpaid dividends associated with such
share. The Series E Preferred Stock shall be convertible,
in whole or in part, from time to time, at the election of
the holder(s) thereof at any time.
(vi) ANTI-DILUTION; PRE-EMPTIVE RIGHTS. The Series E Preferred
Stock shall be anti-dilutive with respect to its voting
rights and conversion privilege. In addition, the
holder(s) of the Series E Preferred Stock shall be
entitled to pre-emptive rights with respect to any sale of
Common Stock or other equity securities of the Company on
the same terms and conditions.
A-1
