CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Convertible Preferred Stock Purchase Agreement (the "Agreement"),
dated as of February 8, 1999, among ▇▇▇▇▇▇▇▇, Inc., a Minnesota corporation
(the "Company"), and the individuals and entities listed on Exhibit A hereto
(sometimes referred to herein as a "Purchaser" and collectively as the
"Purchasers").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers and the
Purchasers desire to acquire shares of the Company's Series E Convertible
Preferred Stock, par value $1.00 per share (the "Series E Preferred").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, the Company and the Purchasers agree as follows:
PURCHASE AND SALE OF PREFERRED SHARES
1.1 Purchase and Sale.
(a) Subject to the terms and conditions set forth herein, at the
Closing (as defined below), the Company shall issue and sell to the
Purchasers and the Purchasers, severally and not jointly, shall purchase up
to 10,000 shares of Series E Preferred (the "Shares").
(b) The Shares shall have the respective rights, preferences and
privileges set forth in the Certificate of Designation attached hereto as
Exhibit B (the "Certificate of Designation"), which shall be filed on or
prior to the Closing Date (as defined below) by the Company with the
Secretary of State of Minnesota. The Shares, the Warrants (as defined in
Section 3.2) and the Underlying Shares (as defined in Section 2.1 (d)) are
sometimes collectively referred to herein as the "Securities."
1.2 Purchase Price. The purchase price per Share shall be $1,000.
1.3 The Closing.
(a) The Closing of the purchase and sale of the Shares (the
"Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.P.,
4200 IDS Center, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ on February 26,
1999. The date of the Closing is hereinafter referred to as the "Closing
Date."
(b) At the Closing, the Company shall deliver (A) to each Purchaser,
a stock certificate registered in the name of such Purchaser for such number
of Shares set forth opposite such Purchaser's name on Exhibit A; (B) to each
Purchaser, a Warrant to purchase that number of shares of Common Stock of the
Company set forth opposite such Purchaser's name on Exhibit A; and (C) all
other documents, instruments and writings required to have been delivered at
or prior to the Closing by the Company to Purchasers pursuant to this
Agreement. At the Closing, each Purchaser shall deliver to the Company the
purchase price set forth opposite such Purchaser's name on Exhibit A by wire
transfer of same day funds.
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to the
Purchasers:
(a) Organization. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Minnesota, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement, the Certificate of Designation,
the Registration Rights Agreement (defined in Section 4.1(h)) and the
Warrants (the "Transaction Documents") and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of each
Transaction Document by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company. Each Transaction Document has been duly
executed by the Company and, when delivered or filed in accordance with the
terms hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(c) Capitalization. The authorized, issued and outstanding capital
stock of the Company is set forth in Schedule 2.1(c). Except as specifically
disclosed in Schedule 2.1(c), no shares of Common Stock of the Company are
entitled to preemptive or similar rights, nor is any holder of the Common
Stock of the Company entitled to preemptive or similar rights. Except as
disclosed in Schedule 2.1(c), there are no outstanding options, warrants or
commitments of any character whatsoever relating to, or, except as a result
of the purchase and sale of the Shares and Warrants hereunder, securities,
rights or obligations convertible into or exchangeable for, or giving any
person any right to subscribe for or acquire any shares of Common Stock of
the Company, or contracts, commitments, understandings, or arrangements by
which the Company is bound to issue additional shares of the Company's Common
Stock, or securities or rights convertible or exchangeable into shares of the
Company's Common Stock.
(d) Issuance of Shares and Warrants. The Shares and the Warrants are
duly authorized and, when issued in accordance with the terms hereof, the
Certificate of Designation or the Warrants, as the case may be, shall be
validly issued, fully paid and non-assessable. As of the Closing Date, the
Company will have and, at all times while any Shares or any Warrants are
outstanding, will maintain, an adequate reserve of duly authorized shares of
its Common Stock to enable it to perform its obligations under this
Agreement, the Warrants and the Certificate of Designation with respect to
the number of Shares and Warrants issued and outstanding at such Closing
Date. The shares of Common Stock issuable upon conversion of the Shares and
exercise of the Warrants and which may be issued as payment of dividends on
the Shares are collectively referred to herein as the "Underlying Shares."
When issued in accordance with the terms hereof, the Certificate of
Designation or the Warrants, as the case may be, the Underlying Shares will
be duly authorized, validly issued, fully paid (except that Underlying Shares
issued upon exercise of Warrants shall be fully paid upon delivery of the
applicable exercise price therefor) and non-assessable, free and clear of all
liens, claims, encumbrances or defects of any kind (collectively, "Liens"),
except as set forth in any required legends thereon.
(e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated thereby do not and will not (i) conflict with
or violate any provision of its Articles of Incorporation or Bylaws; or (ii)
subject to obtaining the consents referred to in Section 2.1(f), conflict
with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party; or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the
Company is subject (other than (x) a violation of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), as a result
of a failure of the representations and warranties of the Purchasers set
forth in Section 2.2 to be accurate; or (y) a violation of any federal and
state securities laws requiring filings with such authorities and the
delivery of certain information pursuant to Rule 502(b)(1) promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, to the Purchasers who are deemed not to be
accredited investors as a result of a failure of the representations and
warranties of the Purchasers set forth in Section 2.2 to be accurate), or by
which any property or asset of the Company is bound or affected, except in
the case of each of clauses (ii) and (iii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as
could not reasonably be expected to, individually or in the aggregate, have
or result in a material adverse effect on the results of operations, assets
or financial condition of the Company and its subsidiaries, taken as a whole
(a "Material Adverse Effect").
(f) Consents and Approvals. Except as specifically set forth in
Schedule 2.1(f), and assuming that the representations and warranties of the
Purchasers contained in Section 2.2 are true and correct in all respects, the
Company is not required to obtain any consent, waiver, authorization or order
of, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other person in connection
with the execution, delivery and performance by the Company of the
Transaction Documents, except for (i) the filings of the Certificate of
Designation with respect to the Shares with the Secretary of State of
Minnesota; (ii) the filing of the Underlying Securities Registration
Statement(s) (as defined in the Registration Rights Agreement) with the
Securities and Exchange Commission (the "Commission"); (iii) the
application(s) or any letter(s) acceptable to and approved by the National
Association of Securities Dealers, Inc. ("NASD") for the designation of the
Underlying Shares for trading on the Nasdaq National Market (and with any
other national securities exchange or market on which the Common Stock is
then listed); (iv) any filings, notices or registrations under applicable
federal or state securities laws and any filing that may be required under
the HSR Act as a result of a failure of the representations and warranties of
the Purchasers set forth in Section 2.2 to be accurate; and (v) other than,
in all other cases, where the failure to obtain such consent, waiver,
authorization or order, or to give or make such notice or filing, would not
materially impair or delay the ability of the Company to effect the Closing
and to deliver to the Purchasers the Shares (and, upon conversion of the
Shares and exercise of Warrants, the Underlying Shares) in the manner
contemplated hereby and by the Registration Rights Agreement (together with
the consents, waivers, authorizations, orders, notices and filings referred
to in Schedule 2.1(f), the "Required Approvals").
(g) Litigation; Proceedings. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its properties
before or by any court, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) which could reasonably
be expected to, individually or in the aggregate, have a Material Adverse
Effect.
(h) No Default or Violation. Neither the Company nor any subsidiary
(i) is in default under or in violation of any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound; or (ii) is in violation of any
order of any court, arbitrator or governmental body, except as could not
reasonably be expected to, in any such case (individually or in the
aggregate) have or result in a Material Adverse Effect.
(i) SEC Documents. The Company has filed all reports required to be
filed by it under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including, pursuant to Section 13(a) or 15(d) thereof, for
the three years preceding the date hereof (the foregoing materials being
collectively referred to herein as the "SEC Documents"), on a timely basis,
or has received a valid extension of such time of filing and has filed any
such SEC Documents prior to the expiration of any such extension. As of
their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder. The
financial statements of the Company included in the SEC Documents comply in
all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved, except as may be otherwise indicated in such financial statements
or the notes thereto, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal year-end audit adjustments.
Since the date of the financial statements included in the Company's last
filed Quarterly Report on Form 10-Q for the quarter ended November 30, 1998,
there has been no event, occurrence or development that has had a Material
Adverse Effect which has not been specifically disclosed to the Purchasers by
the Company.
2.2 Representations and Warranties of the Purchasers. Each
Purchaser, severally and not jointly, hereby represents and warrants to the
Company as follows:
(a) Organization; Authority. Such Purchaser is a corporation duly
incorporated or a limited partnership duly formed, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
formation or an individual, in each case, with the requisite power and
authority to enter into and to consummate the transactions contemplated by
the Transaction Documents to which it is a party and otherwise to carry out
its obligations hereunder and thereunder. The purchase by such Purchaser of
Securities hereunder has been duly authorized by all necessary action on the
part of such Purchaser. Each of this Agreement and the Registration Rights
Agreement has been duly executed and delivered by such Purchaser and
constitutes the valid and legally binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity.
(b) Investment Intent. Such Purchaser is acquiring the Securities
for its own account for investment purposes only and not with a view to or
for distributing or reselling such Securities or any part thereof or interest
therein, without prejudice, however, to such Purchaser's right, subject to
the provisions of this Agreement and the Registration Rights Agreement, at
all times to sell or otherwise dispose of all or any part of such Securities
pursuant to an effective registration statement under the Securities Act and
in compliance with applicable state securities laws or under an exemption
from such registration.
(c) Purchaser Status. At the time such Purchaser was offered the
Shares and the Warrants, it was and, at the date hereof, it is, and at the
Closing Date it will be, an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (4) under the Securities Act.
(d) Experience of Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment to
its satisfaction.
(e) Ability of Purchaser to Bear Risk of Investment. On the Closing
Date, such Purchaser is able to bear the economic risk of an investment in
the Securities and is able to afford a complete loss of such investment.
(f) Access to Information. Each Purchaser acknowledges that it has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Securities, and
the merits and risks of investing in the Securities; (ii) access to
information about the Company and the Company's financial condition, results
of operations, business, properties, management and prospects sufficient to
enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information which the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to its investment.
(g) Reliance. Each Purchaser understands and acknowledges that (i)
the Securities are being offered and sold to the Purchaser without
registration under the Securities Act in a private placement that is exempt
from the registration provisions of the Securities Act under Section 4(2) of
the Securities Act or Regulation D promulgated thereunder; and (ii) the
availability of such exemption depends in part on, and the Company will rely
upon the accuracy and truthfulness of, the foregoing representations and such
Purchaser hereby consents to such reliance.
(h) No Affiliation. No Purchaser is an Affiliate or Associate (as
such terms are defined in Rule 12b-2 under the Exchange Act) of any other
Purchaser or is acting in concert with any other Purchaser. No Purchaser
beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange
Act) any Securities of any other Purchaser.
(i) No Conflicts. The execution, delivery and performance of the
Transaction Documents by such Purchaser and the consummation by such
Purchaser of the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of its certificate or articles of
incorporation, bylaws, partnership agreement or other governing instrument,
as applicable (each as amended through the date hereof), or result in a
violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which such
Purchaser is subject (including foreign, federal and state securities laws
and regulations).
(j) Consents and Approvals. Except for Schedule 13D and Form 4
filings by Molex Incorporated, such Purchaser is not required to obtain any
consent, waiver, authorization or order of, or make any filing or
registration with, any court or other foreign, federal, state, local or other
governmental authority or other person in connection with the execution,
delivery and performance by such Purchaser of the Transaction Documents.
(k) Litigation; Proceedings. There is no action, suit, notice of
violation, proceeding or investigation pending, or to the knowledge of such
Purchaser, threatened against or affecting such Purchaser before or by any
court, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which would adversely affect the
legality, validity or enforceability of any of the Transaction Documents in
any respect or adversely impair such Purchaser's ability to perform fully on
a timely basis its obligations under the Transaction Documents.
(l) Beneficial Ownership of ▇▇▇▇▇▇▇▇ Stock. At and after the
Closing, no Purchaser shall be a Beneficial Owner of fifteen percent (15%) or
more of outstanding shares of the Company's Common Stock. For purposes of
this Section 2.2(l), "Beneficial Owner" shall have the meaning set forth in
Section 1(d) of the Rights Agreement dated June 16, 1996, as amended
effective July 25, 1998, by and between the Company and Norwest Bank
Minnesota, N.A., as the same may be amended or modified from time to time
(the "Rights Agreement"). Each Purchaser has been provided, upon its
request, with a copy of such definition and has had an opportunity to review
it with such Purchaser's legal counsel. Each Purchaser acknowledges that
the transactions contemplated by the Transaction Documents shall not be
deemed to have received any required approval under the terms of such Rights
Agreement. Notwithstanding the foregoing, for purposes of Molex
Incorporated, such references above to fifteen percent (15%) shall be deemed
to refer to twenty-two percent (22%).
(m) Residency. Each Purchaser is a resident of the state set forth
opposite its name on Exhibit A attached hereto.
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions.
(a) If any Purchaser should decide to dispose of any of the Securities
held by it, such Purchaser understands and agrees that it may do so only
pursuant to an effective registration statement under the Securities Act,
to the Company or pursuant to an available exemption from the registration
requirements of the Securities Act. In connection with any transfer of
any Securities other than pursuant to an effective registration statement
or to the Company or to an Affiliate of such Purchaser or pursuant to Rule
144 under the Securities Act ("Rule 144"), the Company may require the
transferor thereof to provide to the Company a written opinion of counsel
experienced in the area of United States securities laws selected by the
transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not
require registration of such transferred securities under the Securities Act.
(b) Each Purchaser agrees to the imprinting, so long as is required
by this Section 3.1(b), of the following legend on the Securities:
[NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]] [THE SECURITIES REPRESENTED
HEREBY] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
[FOR SHARES ONLY] ▇▇▇▇▇▇▇▇, INC. WILL FURNISH WITHOUT CHARGE TO EACH
SHAREHOLDER WHO SO REQUESTS A STATEMENT OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS OF THE CLASS OF STOCK OR SERIES THEREOF TO WHICH THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE A PART AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
The Underlying Shares issuable upon conversion of Shares and exercise
of the Warrants, as the case may be, shall not contain the legend set forth
above (or any other legend other than those that identify the existence of
the Rights Agreement) if the conversion of such Shares or exercise of the
Warrants, as the case may be, occurs at any time while the Underlying
Securities Registration Statement is effective under the Securities Act or in
the event there is not an effective Underlying Securities Registration
Statement at such time, if the Underlying Shares have been sold pursuant to
Rule 144, or if in the written opinion of counsel to the Company experienced
in the area of United States securities laws such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretation and pronouncements issued by the staff of the Commission).
The Company makes no representation, warranty or agreement as to the
availability of any exemption from registration under the Securities Act with
respect to any resale of any Securities.
3.2 The Warrants. At the Closing, the Company shall issue and
deliver Common Stock purchase warrants (the "Warrants") entitling the
Purchasers to purchase, on the terms and conditions set forth in Exhibit C
hereto, an aggregate of 10 shares of Common Stock for each share of Series E
Preferred Stock at a price per share equal to 125% of the Conversion Price
(as defined in the Certificate of Designation attached hereto as Exhibit B)
(the "Warrant Exercise Price"). Each Purchaser shall receive that number of
Warrants as is set forth opposite the Purchaser's name on Exhibit A.
3.3 Use Of Proceeds. The Company shall use the Net Proceeds from the
placement of the Shares and Warrants to enhance the Company's capital
structure, provide capital liquidity and repay debt.
ARTICLE IV
CONDITIONS
4.1 Conditions Precedent to the Obligation of the Purchasers to
Purchase the Series E Shares. The obligation of each Purchaser hereunder to
acquire and pay for the Shares and the Warrants is subject to the
satisfaction or waiver by such Purchaser, at or before the Closing, of each
of the following conditions:
(a) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company contained herein shall be true
and correct in all material respects as of the date when made and as of the
Closing Date, as though made on and as of such date;
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
Closing Date;
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by
this Agreement;
(d) No Suspensions of Trading in Common Stock. The trading in the
Common Stock shall not have been suspended by the Commission or on the Nasdaq
National Market (except for any suspension of trading of limited duration
solely to permit dissemination of material information regarding the Company
or any suspension of trading of securities generally);
(e) Legal Opinion. The Company shall have delivered to such
Purchaser an opinion of outside legal counsel to the Company as to the
matters attached hereto as Exhibit D and dated the Closing Date;
(f) Required Approvals. All Required Approvals shall have been
obtained;
(g) Delivery of Stock Certificates and Warrants. The Company shall
have delivered to such Purchaser or such Purchaser's designee the stock
certificate(s) representing the Shares being purchased at the Closing and the
Warrants to be received by each Purchaser, registered in the name of such
Purchaser, each in form satisfactory to such Purchaser;
(h) Registration Rights Agreement. The Company and the Purchasers
shall have entered into the Registration Rights Agreement in the form of
Exhibit E.
4.2 Conditions Precedent to the Company's Obligations. The
obligations of the Company hereunder are subject to the following conditions:
(a) Accuracy of the Representations and Warranties of Purchasers.
The representations and warranties of the Purchasers contained herein shall
be true and correct in all material respects as of the date when made and as
of the Closing Date, as though made on and as of such date;
(b) Performance by the Purchasers. The Purchasers shall have
performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to
be performed, satisfied or complied with by the Purchasers at or prior to the
Closing Date;
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by
this Agreement;
(d) Required Approvals. All Required Approvals shall have been
obtained;
(e) Payment of Purchase Price. Each Purchaser shall have paid the
purchase price set forth opposite the Purchaser's name on Exhibit A.
MISCELLANEOUS
5.1 Fees and Expenses. Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement, except as set forth in
the Registration Rights Agreement. Each Purchaser shall be responsible for
such Purchaser's own tax liability that may arise as a result of the
investment hereunder or the transactions contemplated by this Agreement.
5.2 Entire Agreement: Amendments. This Agreement, together with the
Exhibits and Schedules hereto, the Registration Rights Agreement, the
Certificate of Designation (when filed) and the Warrants referenced in
Section 3.2, contains the entire understanding of the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters.
5.3 Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if delivered
on a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered on
a business day after during normal business hours where such notice is to be
received); or (b) on the business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:
If to the Company: Sheldahl, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Purchaser: To the address set forth on Exhibit A
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
5.4 Amendment; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an
amendment, by both the Company and each Purchaser; or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought.
No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right accruing to it
thereafter.
5.5 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns. Neither the Company nor any Purchaser may assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
other. Notwithstanding anything to the contrary contained herein, each
Purchaser may assign its rights hereunder in connection with any sale or
transfer of such Purchaser's Securities to any Affiliate of such Purchaser as
long as the transferee Affiliate agrees in writing to be bound by the
applicable provisions of this Agreement, in which case the term "Purchaser"
shall be deemed to refer to such transferee as though such transferee were an
original signatory thereto.
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
5.8 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Minnesota
without regard to the principles of conflicts of law thereof.
5.9 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and
the same agreement and shall become binding with respect to each Purchaser on
the date the acceptance form hereto is executed and delivered by such
Purchaser and with respect to the Company on the date executed and delivered
by the Company, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature page were an
original thereof.
5.10 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its authorized representative and each Purchaser has caused this
Agreement to be executed by signing in counterpart the acceptance form
attached to this Agreement.
COMPANY:
▇▇▇▇▇▇▇▇, INC.
By____________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its Vice President - Finance
ACCEPTANCE
The undersigned hereby accepts the terms and conditions set forth in the
Convertible Preferred Stock Purchase Agreement, dated February 8, 1999, among
▇▇▇▇▇▇▇▇, Inc., a Minnesota corporation (the "Company") and certain Purchasers
listed in Exhibit A thereto as the terms and conditions applicable to the
purchase of Shares of Series E Convertible Preferred Stock of the Company
by the undersigned. By execution of this Acceptance, the undersigned
hereby makes each of the representations contained in Section 2.2 of the
Convertible Preferred Stock Purchase Agreement.
PURCHASER:
By: ________________________________
Title: _______________________________
Dated: February 8, 1999
EXHIBIT A
Schedule of Purchasers
Share
Purchaser Purchase Purchase # of # of State of
Name & Address Amount Price Shares Warrants Residence
SCHEDULE 2.1(c)
Capitalization
Common Stock authorized: 50,000,000 shares, $.25 par value
Preferred Stock authorized: 500,000 shares, $1.00 par value
* Common Stock outstanding
as of February 8, 1999: 11,152,560 shares, $.25 par value
* Series B Convertible Preferred Stock
outstanding as of February 8, 1999: 167 shares
* Series D Convertible Preferred Stock
outstanding as of February 8, 1999: 32,917 shares
* Warrants outstanding
as of February 8, 1999: 496,982 warrants
* Options outstanding
as of February 8, 1999: 1,589,946 options
1. Rights granted under the Rights Agreement dated June 16, 1996 and
amended July 25, 1998 between ▇▇▇▇▇▇▇▇, Inc. and Norwest Bank
Minnesota, N.A. (150,000 shares of Series A Junior Participating
Preferred Stock reserved for issuance, subject to increase as provided
therein).
2. Additional options may be granted to employees and directors of the
Company under the Company's Stock Option Plans and Employee Stock
Purchase Plan.
3. Agreement Relating to ▇▇▇▇▇▇▇▇ dated November 18, 1998 between the
Company and Molex, Incorporated providing Molex with certain rights to
participate in future stock or debt offerings by the Company, including
the Series E Preferred Stock under this Agreement.
SCHEDULE 2.1(f)
Required Approvals
1. Consent required of Norwest Bank Minnesota, N.A., ▇▇▇▇▇▇ Trust and
Savings Bank, NBD Bank, and The CIT Group under Amended and Restated
Credit and Security Agreement with respect to payment of cash
dividends.
2. Consent required of Northern Life Insurance Company under Note
Purchase Agreement dated August 31, 1995 with respect to payment of
cash dividends.
3. See Item 3 of Schedule 2.1(c) incorporated herein by reference.