UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
WPI Group, Inc.
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class and Securities)
929930k107
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(CUSIP Number)
Sunrise Capital Partners, L.P.
685 Third Avenue, 15th Floor
New York, NY 10017
Att: Joseph Julian
212-582-3015
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 9, 2000
(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 that is the subject of this Schedule 13D, and is
filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section
240.13d-7 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).
SCHEDULE 13D
CUSIP No. 929930k107
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Sunrise Capital Partners, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (X)
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 9,514,944
SHARES
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BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 1,359,342
EACH
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REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 9,514,944
WITH
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10. SHARED DISPOSITIVE POWER
None
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,874,286
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
57%
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14. TYPE OF REPORTING PERSON
PN
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This Schedule 13D is being filed pursuant to Rule 13d-2 of the Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Act") by Sunrise Capital Partners, L.P., a Delaware limited partnership
("Sunrise"), with respect to the common stock, par value $0.01 per share
(the "Common Stock"), of WPI Group, Inc. (the "Company").
Item 1. SECURITY AND ISSUER
This Schedule relates to the Common Stock, $0.01 par value, of WPI
Group, Inc., 1155 Elm Street, Manchester, New Hampshire 03101.
Item 2. IDENTITY AND BACKGROUND
(a) - (c)
This statement is filed by Sunrise Capital Partners, L.P.
("Sunrise"), a limited partnership organized under the laws of the State of
Delaware. Pursuant to the requirements of General Instruction C to Schedule
13D, information contained in this Schedule 13D is also provided for the
following persons:
(a) Sunrise Advisors, LLC, the general partner of Sunrise; and
(b) David A. Preiser, the managing member of Sunrise Advisors, LLC.
Sunrise Capital Partners, L.P.
Sunrise is a private investment fund. The principal business
address of Sunrise, which also serves as its principal office, is 685 Third
Avenue, 15th Floor, New York, NY 10017.
Sunrise Advisors, LLC
Sunrise Advisors, LLC ("Advisors") is a Delaware limited
liability company, the principal business of which is serving as the
general partner of Sunrise Capital Partners, L.P. The principal business
address of Sunrise Advisors, LLC, which also serves as its principal
office, is 685 Third Avenue, 15th Floor, New York, NY 10017.
David A. Preiser
David A. Preiser ("Preiser") is a citizen of the state of
Connecticut. Preiser's present principal occupation or employment is
serving as Managing Member of Sunrise Advisors, LLC. Preiser's business
address is 685 Third Avenue, 15th Floor, New York, NY 10017.
Sunrise, Advisors and Preiser are hereinafter sometimes collec
tively referred to as the "Item 2 Persons."
(d)- (e)
None of the Item 2 Persons and none of the executive officers,
controlling persons and directors of the Item 2 Persons have, during the
last five years, (i) been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) been party to a civil
proceeding resulting in a judgment, decree, or final order relating to any
violation of federal or state securities laws.
(f) All of the Item 2 Persons that are individuals are citizens of the
United States.
Item 3. Source and Amount of Funds or Other Consideration
The source of funds used for the purchase of securities is cash held
by Sunrise for investment. The amount is $11,446,784.29.
Item 4. Purpose of Transaction.
The Convertible Note Agreement
On July 31, 2000, Sunrise entered into a certain Convertible Note
Agreement, by and among Sunrise, the Company and the subsidiaries of the
Company (the "Convertible Note Agreement"). Pursuant to the terms of the
Convertible Note Agreement, Sunrise and certain participants (including
certain members of the Company's management and members of the Allard-
Nazarian Group) agreed to purchase from the Company a combination of
convert ible promissory notes (the "Notes"), Common Stock, and warrants
representing the right to purchase shares of Common Stock (the "Warrants").
The Notes, the Warrants and the shares of Common Stock purchased pursuant
to the Convertible Note Agreement are collectively referred to herein as
the "Securities". The Convertible Note Agreement was entered into by
Sunrise for investment purposes. The Company entered into the Convertible
Note Agreement in order to enhance its liquidity and refinance its existing
indebtedness.
The Notes are convertible at any time at the option of the holders
thereof into Common Stock of the Company at a price of $1.75 per share,
subject to adjustment under certain circumstances. The Company may also
require the holders to convert their Notes into Common Stock if certain
requirements relating to the trading price and trading volume of the Com
pany's Common Stock are met.
The Warrants have an exercise price of $1.75 per share, subject to
adjustment under certain circumstances, and are exercisable at any time
before the scheduled expiration date five years from the date of issuance.
Pursuant to the Convertible Note Agreement, and subject to the terms
and conditions thereof, Sunrise and the other participants will purchase
the Securities from the Company in three series. The first series of
Securities ("Term A") will consist of Notes in aggregate principal amount
of $14,116,875, a total of 1,833,906 shares of Common Stock and Warrants
representing the right to purchase in the aggregate 1,613,357 shares of
Common Stock. The second series of Securities ("Term B") will consist of
Notes in aggregate principal amount of $5,000,000 and Warrants representing
the right to purchase in the aggregate 571,427 shares of Common Stock. The
third series of Securities ("Term C") will consist of Notes in an aggregate
principal amount of up to $5,000,000 (the exact amount to specified by
Sunrise) and Warrants representing the right to purchase in the aggregate
the number of shares of Common Stock equal to (x) the number of shares of
Common Stock that would be issuable upon conversion of the Term C Notes
multiplied by (y) .20.
Pursuant to the terms of the Convertible Note Agreement, the Company
will pay to Sunrise and the other participants a closing fee equal to 2% of
the aggregate principal amount of the Notes purchased in each series. The
closing fee may be paid in cash upon sale of each series of Securities, or
it may be paid "in kind" by delivery of additional promissory notes in an
aggregate principal amount equal to the amount of such unpaid closing fee.
On August 9, 2000, Sunrise and the other participants purchased from
the Company the Term A Securities for an aggregate purchase price of
$14,116,875.00. Sunrise purchased (i) Notes in aggregate principal amount
of $11,446,784.29; (ii) 1,534,900 shares of Common Stock; and (iii)
Warrants representing the right to purchase in the aggregate 1,308,204
shares of Common Stock. The purchase price for the Securities purchased by
Sunrise was $11,446,784.29. Based on the conversion price of $1.75, the
Notes purchased by Sunrise are convertible into 6,541,020 shares of Common
Stock.
As part of the sale of the Term A Securities, the Company was
obligated to pay to Sunrise and the other participants a closing fee equal
to $282,337.50. Sunrise's portion of the closing fee was equal to
$228,935.69. The Company elected not to pay the closing fee in cash, and
instead delivered addtional Notes in aggregate principal amount of the
unpaid fees. The Notes received by Sunrise in lieu of the closing fee are
convertible into 130,820 shares of Common Stock.
Subject to the terms and conditions of the Convertible Note
Agreement, Sunrise plans to acquire beneficial ownership of additional
securities of the Company through the purchase of the Term B and Term C
Securities. Sunrise's obligation to purchase the Term B Securities and the
Term C Securities is subject to a number of conditions, including approval
by the Company's stockholders of an amendment to the Company's Articles of
Incorporation increasing the number of shares of Common Stock which the
Company is authorized to issue. This amendment is discussed in more detail
below.
The Item 2 Persons disclaim membership in any group with respect to
the acquisition of Common Stock or other Securities through the Convertible
Note Agreement.
The Stockholders Agreement
Concurrently with the purchase of the Term A Securities, Sunrise
entered into a certain Stockholders Agreement, dated as of August 9, 2000
(the "Stockholders Agreement"), by and among Sunrise, The John R. Allard
Revocable Trust of 1993, Kim A. Socha, The Michael E. Allard Revocable
Trust of 1994, Lisa A. Dibrigida, Gerald R. Allard, The Samy Nazarian
Trust, The David and Angella Nazarian Family Trust, Younes Nazarian,
Richard A. Beyer and Michael Foster. Pursuant to the Stockholders
Agreement, the parties thereto have agreed to vote their respective owned
shares of Common Stock (i) in favor of an amendment to the Articles of
Incorporation of the Company providing for an increase in the number of
shares of common stock permitted to be issued by the Company from
20,000,000 to 75,000,000 (the "Charter Amendment"), and (ii) in favor of up
to four nominees to the board of directors of the Company that are
designated in writing by Sunrise.
The purpose of the Stockholders Agreement is to facilitate
stockholder approval of the Charter Amendment. The Charter Amendment will
enable the Company to reserve for issuance additional shares of Common
Stock that would be issuable upon conversion of the additional Notes and
upon exercise of the additional Warrants to be sold by the Company pursuant
to the Convertible Note Agreement. The obligation of Sunrise to purchase
additional Notes and Warrants is conditioned upon stockholder approval of
the Charter Amendment.
The Stockholders Agreement will also facilitate the election of the
nominees to the Company's board of directors that are designated by
Sunrise. Pursuant to the Convertible Note Agreement, for so long as any
Notes remain outstanding, the Company has agreed to nominate for election
to the Company's Board of Directors at least four nominees designated by
Sunrise. The Stock holders Agreement ensures that the other parties to the
agreement vote their shares of Common Stock in favor of the Sunrise
nominees.
The shares subject to the Stockholders Agreement are as follows:
Shares of
Owner of Record Common Stock
Sunrise Capital Partners, L.P. 1,534,900
=========
The John R. Allard Revocable
Trust of 1993 14,390
Kim A. Socha 30,878
The Michael E. Allard
Revocable Trust of 1994 30,878
Lisa A. Dibrigida 30,878
Gerald R. Allard 482,378
The Samy Nazarian Trust 51,648
The David & Angella Nazarian Family Trust 27,469
Younes Nazarian 75,451
Richard A. Beyer 6,715
Michael Foster 608,657
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Total Shares not Owned by Sunrise 1,359,342
=========
The 1,359,342 shares of Common Stock which are subject to the
Stockholders Agreement and not owned of record by Sunrise are referred to
herein as the "Stockholders Agreement Shares." The Stockholders Agreement
also provides that Common Stock acquired by any party thereto at any time
after execution of the Stockholders Agreement will be subject to the voting
requirements contained therein. To the extent any of the other parties to
the Stockholders Agreement acquire additional Common Stock after the date
of this Schedule 13D, including by conversion or exercise of Securities
purchased pursuant to the Convertible Note Agreement, Sunrise will be
deemed to acquire beneficial ownership of those shares by virtue of the
Stockholders Agreement.
The Stockholders Agreement terminates upon maturity and repayment in
full of the last series of Notes issued pursuant to the Convertible Note
Agreement.
The Item 2 Persons disclaim membership in any group with respect to
the Stockholders Agreement.
Other than as specifically set forth above, Sunrise and the other
Item 2 Persons possess no rights or powers to vote, direct the voting of,
dispose or direct the disposition of the Stockholders Agreement Shares. The
Item 2 Persons disclaim beneficial ownership of the Stockholders Agreement
Shares.
* * * *
The Item 2 Persons may buy or sell additional shares of Common Stock
pursuant to the Convertible Note Agreement, in the open market or otherwise
on such terms and at such times as the Item 2 Persons consider desirable.
Any decision by the Item 2 Persons to increase, decrease, or dispose of
their position in the Company would be based upon factors, including but
not limited to, the business of the Company, the price of the Common Stock,
the terms and conditions of the transaction and prevailing market
conditions.
Except as set forth in this Schedule 13D, the Item 2 Persons have no
present plans or proposals that relate to or would result in any of the
actions described in paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a)
Sunrise
Sunrise is deemed to beneficially own a total of 10,746,366 shares of
Common Stock, comprised of the following:
Common Stock owned of record: 1,534,900
Common Stock issuable upon
exercise of the Warrants held
by Sunrise: 1,308,204
Common Stock issuable upon
conversion of the Notes held by
Sunrise: 6,671,840
Shares of Common Stock not
owned by Sunrise that are the
subject of the Stockholders
Agreement: 1,359,342
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Total Common Stock
Beneficially Owned by Sunrise: 10,874,286
==========
The 10,874,286 shares deemed to be beneficially owned by Sunrise represent
approximately 57% of the fully-diluted number of outstanding shares of
Common Stock of the Company.
All Other Item 2 Persons
Because of their direct or indirect ownership interests in, or
control of, Sunrise, all other Item 2 Persons may be deemed to beneficially
own under Rule 13d-3 of the Act 10,874,286 shares of Common Stock, which
constitutes approximately 57% of of the fully-diluted number of outstanding
shares of Common Stock of the Company.
(b)
Sunrise
Sunrise possesses (or will possess upon issuance of such shares) the
sole voting power to vote or direct the vote of, and the sole power to
dispose or direct the disposition of, 9,514,944 shares of Common Stock,
which constitutes approximately 50% of the fully-diluted number of outstand
ing shares of Common Stock of the Company.
Sunrise possesses the shared power to vote or direct the vote of
1,359,342 shares of Common Stock, which constitutes approximately 7% of the
fully-diluted number of outstanding shares of Common Stock of the Company.
All Other Item 2 Persons
Because of their direct or indirect ownership interests in, or
control of, Sunrise, all other Item 2 Persons may be deemed to possess (or
will be deemed to possess upon issuance of such shares)the sole voting
power to vote or direct the vote of, and the sole power to dispose or
direct the disposi tion of, 9,514,944 shares of Common Stock, which
constitutes approximately 50% of the fully-diluted number of outstanding
shares of Common Stock of the Company.
Because of their direct or indirect ownership interests in, or
control of, Sunrise, all other Item 2 Persons may be deemed to possess the
shared power to vote or direct the vote of 1,359,342 shares of Common
Stock, which constitutes approximately 7% of the fully-diluted number of
outstanding shares of Common Stock of the Company.
(c) As described in ITEM 4 of this Schedule 13D, Sunrise entered into the
Convertible Loan Agreement on July 31, 2000 and the Stockholders Agreement
on August 9, 2000. Both of these transactions resulted in the acquisition
of beneficial ownership of Common Stock. Both of these transactions were
consummated in the last 60 days.
(d) Other than with respect to the voting rights granted pursuant to the
Stockholders Agreement, the Item 2 Persons possess no powers, rights or
privileges with respect to the Stockholders Agreement Shares. All other
powers, rights and privileges with respect to the Stockholders Agreement
Shares remain with the record owners of such shares, including the right to
vote on all matters unrelated to the matters covered by the Stockholders
Agreement, the right to receive and the power to direct the receipt of
dividends from such shares, and the power to direct the proceeds from the
sale of such shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
As described above, Sunrise has entered into the Convertible Note
Agreement with the Company providing for the sale of additional Securities
of the Company to Sunrise.
In connection with the purchase of Securities by Sunrise contemplated
by the Convertible Note Agreement, Sunrise is entitled to receive from the
Company a closing fee equal to 2% of the aggregate principal amount of each
series of Notes purchased by Sunrise. The closing fee may be paid by the
Company in cash or "in kind" by delivery of additional Notes in aggregate
principal amount of such fee.
In addition, Advisors is entitled to receive from the Company a
transac tion fee equal to 2% of the aggregate principal amount of each
series of Notes issued by the Company. The transaction fee is compensation
for the services performed by Advisors in connection with each such
issuance. The transaction fee is payable in cash upon issuance of each
series of Notes.
Pursuant to the Convertible Note Agreement, Advisors is also entitled
to receive from the Company an annual administration fee while any Notes
remain outstanding. The administration fee is payable in cash in quarterly
install ments.
Item 7. Material to be Filed as Exhibits.
Exhibit I Convertible Note Agreement, dated as of July 31, 2000,
By and among WPI Group, Inc., WPI Electronics, Inc.,
WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI Power
Systems, Inc., WPI Termiflex, Inc., WPI Micro Processor
Systems, Inc., WPI Decisionkey, Inc., WPI UK Holding,
Inc., WPI UK Holding II, Inc., WPI Oyster Terminals,
Inc., WPI Husky Technology, Inc., and WPI Instruments,
Inc. as Borrowers, and Sunrise Capital Partners, L.P.
As Lender.
Exhibit II Stockholders Agreement, dated as of August 9, 2000,
made by and among Sunrise Capital Partners, L.P.
and each of The John R. Allard Revocable Trust of
1993, Kim A. Socha, The Michael E. Allard Revocable
Trust of 1994, Lisa A. Dibrigida, Gerald R. Allard,
The Samy Nazarian Trust, The David and Angella
Nazarian Family Trust, Younes Nazarian, Richard A.
Beyer and Michael Foster.
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.
August 19, 2000
--------------------------------
(Date)
--------------------------------
(Signature)
Joseph Julian
Principal
--------------------------------
(Name/Title)
EXHIBIT INDEX
Exhibit I Convertible Note Agreement, dated as of July 31,
2000, By and among WPI Group, Inc., WPI
Electronics, Inc., WPI Magnetec, Inc., WPI Micro
Palm, Inc., WPI Power Systems, Inc., WPI Termiflex,
Inc., WPI Micro Processor Systems, Inc., WPI
Decisionkey, Inc., WPI UK Holding, Inc., WPI UK
Holding II, Inc., WPI Oyster Terminals, Inc., WPI
Husky Technology, Inc., and WPI Instruments, Inc.
as Borrowers, and Sunrise Capital Partners, L.P. As
Lender.
Exhibit II Stockholders Agreement, dated as of August 9, 2000,
made by and among Sunrise Capital Partners, L.P.
and each of The John R. Allard Revocable Trust of
1993, Kim A. Socha, The Michael E. Allard Revocable
Trust of 1994, Lisa A. Dibrigida, Gerald R. Allard,
The Samy Nazarian Trust, The David and Angella
Nazarian Family Trust, Younes Nazarian, Richard A.
Beyer and Michael Foster.
