Re: ABTE
If this has already been posted here, my apologies. This sounds convoluted. A customer advances funds to ABTE who loans the funds to a third party who then purchases the Notes and Preferred Stock from the original owners?
prnewswire.com
Able Telecom Holding Corp. Announces Additional Information
Regarding Transaction
PR Newswire - February 19, 1999 14:43
WEST PALM BEACH, Fla., Feb. 19 /PRNewswire/ -- Able Telecom Holding Corp. (Nasdaq: ABTE) reported today, in further explanation of its release Wednesday afternoon with respect to its 12% Senior subordinated Notes (the "Notes") and its Series B Preferred Stock, that the Notes and a majority of the outstanding shares of Series B Preferred Stock have been purchased by a third party (the "Purchaser") from the original holders thereof. The original holders of the Series B Preferred Stock retained ownership of an aggregate of approximately 22% of the currently outstanding Series B Preferred Stock. Such original holders of the Series B Preferred Stock also retained ownership of all warrants to purchase common stock (the "Warrants") issued by Able in connection with the initial issuance of the Series B Preferred Stock.
The funds used to purchase the Notes and Series B Preferred Stock were advanced to Able by one of its largest customers. Able then loaned the funds to the Purchaser. The loan by Able to the Purchaser and the advance to Able are each due on the earlier of October 31, 2000 or such date as the Purchaser receives funds, either in redemption of the
Series B Preferred Stock, payment of the Notes or sale of such securities.
In connection with the transfer of the Notes and the Series B Preferred Stock, the Purchaser and the remaining holders of the Series B Preferred Stock agreed to either waive all outstanding defaults under such securities or refrain from exercising any remedies with respect to any such outstanding defaults for a period of 90 days from February 17, 1999. During such period of time, Able has agreed to use its best efforts to have declared effective a registration statement
covering the resale of shares of common stock underlying the Series B Preferred Stock and the related warrants.
The Purchaser also agreed (i) not to exercise any default remedy until March 1, 2000, (ii) to extend the maturity date of the Notes until March 1, 2000 and (iii) to establish a floor conversion price of $8.25 for all shares of Series B Preferred Stock held by the Purchaser under all circumstances. In exchange for these additional agreements, Able agreed to reduce the conversion price of any Warrants subsequently purchased by the Purchaser from the current holders thereof upon
such purchase to a price per share equal to not more than 85% of the closing price of Able common stock on the date prior to such purchase and, if less, to a price per share equal to such closing price minus $3.00.
Further, in connection with the above-described transactions, the current conversion price of (i) Warrants to purchase a total of 375,000 shares of Able common stock has been reduced to $13.25 per share and (ii) of Warrants to purchase in aggregate of 625,000 of Able common stock has been reduced to $13.50 per share.
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