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refusal applies. We cannot agree that under those circumstances
and in the absence of a bona fide offer to the warrantholders the
right of first refusal was triggered.
Respondent also points to a portion of the letter of intent
which proposes: “Buyer will contribute to the capital of the
Company the funds necessary to repay the Company’s outstanding
indebtedness, currently estimated to be $55,000,000.” Respondent
contends that since the pending stock acquisition by WCP involved
a prepayment of all NMG’s subordinated debt, a mandatory call
provision contained in the NMG warrants was triggered.
Respondent claims that “Accordingly, NMG was free to redeem
Arbeit’s NMG warrant at any time thereafter, as and if necessary,
to facilitate acceptance and/or consummation of WCP’s offer.” We
cannot agree. The mandatory call provision was only triggered
upon the prepayment or voluntary redemption of the subordinated
debt. Those events did not occur until after the assignment of
the warrants.
Respondent notes that the letter of intent was “accepted and
agreed” by Ewel Grossberg, Randolph K. Ginsberg, Jim Cooper, and
John Woodlock. He argues that those individuals’ acceptance and
agreement was significant in that they held approximately 92.62
percent of NMG’s outstanding common stock and 100 percent of
NMG’s outstanding preferred stock as of September 28, 1993, and
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