ESCH » Topics » (h) Special Redemption .

This excerpt taken from the ESCH 10-K filed Mar 31, 2005.

(h)           Special Redemption.

 

(i)            If a Change of Control is proposed to occur, the Corporation shall give prompt written notice of such Change of Control describing in reasonable detail the material terms and date of consummation thereof to each holder of Preferred Stock, but in any event such notice shall not be given later than twenty (20) days prior to the consummation of such Change of Control, and the Corporation shall give each holder of Preferred Stock prompt written notice of any material change in the terms or timing of such transaction.  The holders of at least sixty percent (60%) of the then outstanding shares of Preferred Stock may require the Corporation to redeem all or any portion (on a Pro Rata Basis) of the Preferred Stock owned by such holders (the “Special Redemption Shares”) by giving written notice to the Corporation of such election prior to the later of:  (A) ten (10) days prior to the consummation of the Change of Control or (B) ten (10) days after receipt of the Corporation’s notice (the “Expiration Date”).  The price per share for each share of Series A Preferred Stock included in the Special Redemption Shares shall be equal to the Special Series A Redemption Price; the price per share for each share of Series B Preferred Stock included in the Special Redemption Shares shall be equal to the Series B Redemption Price.  The Corporation shall give prompt written notice of any such election to all other holders of Preferred Stock within five (5) days prior to the consummation of the Change of Control, and each such holder shall have until two (2) days after the receipt of such second notice to request redemption hereunder (by giving written notice to the Corporation) of all or any portion of the Preferred Stock owned by such holder

 

(ii)           Upon receipt of such election(s), the Corporation shall be obligated to redeem the aggregate number of shares of Preferred Stock specified therein upon the consummation of the Change of Control (the “Special Redemption Closing”) (the date of such Special Redemption Closing, the “Special Redemption Date”).  If any proposed Change of Control does not occur, all requests for redemption in connection therewith shall be automatically rescinded, or if there has been a material change in the terms or the timing of the transaction, the holders of at least sixty percent (60%) of the then outstanding shares of Preferred Stock may rescind all requests for redemption in connection therewith by delivering written notice of such rescission to the Corporation prior to the consummation of the transaction.

 

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(iii)          “Change of Control” means the sale of all or substantially all the assets of the Corporation and its Subsidiaries on a consolidated basis (measured either by book value in accordance with generally accepted accounting principles consistently applied or by fair market value (as determined in good faith by the Board of Directors)) in any transaction or series of related transactions, or any merger, consolidation or reorganization of the Corporation into or with another corporation or other similar transaction or series of related transactions in which the stockholders of the Corporation immediately prior to such merger, consolidation or reorganization of the Corporation into or with another corporation or other similar transaction or series of related transactions (i) hold less than fifty percent (50%) of the outstanding voting securities of the surviving corporation following the merger, consolidation or reorganization or (ii) hold less than fifty percent (50%) of the outstanding voting securities of an affiliated entity of the surviving corporation (if such securities of an affiliated entity are issued to the stockholders of the Company in such transaction).

 

(iv)          The “Series A Special Redemption Price” per share of Series A Preferred Stock shall be: (A) the Series A Liquidation Preference, if the Change of Control occurs on or prior to the fifth (5th) anniversary of the Series A Original Issue Date; or (B) the Series A Redemption Price, if the Change of Control occurs after the fifth (5th) anniversary of the Series A Original Issue Date.

 

(v)           Redemptions made pursuant to this Section 5(h) shall not relieve the Corporation of its obligation to redeem the Mandatory Redemption Shares pursuant to Section 5(a) above.

 

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