GENERAL KINETICS SIGNS AGREEMENT WITH GUTZWILLER & PARTNER, A.G.
ROCKVILLE, Md., Nov. 18 ~PRNewswire~ -- General Kinetics Incorporated (GKI) (AMEX: GKI), a designer, producer and marketer of high-end, digital secure facsimile equipment, plastic sorting and food testing equipment, and precision enclosures headquartered in Rockville, made the following announcements: As previously announced, GKI has entered into an agreement with Gutzwiller & Partner, A.G., a Swiss investor, pursuant to which Gutzwiller will invest a net amount of $5 million in GKI in exchange for 2.6 million shares of GKI common stock plus subordinated debentures in a face amount of $2.75 million convertible into up to 2 million additional common shares at a conversion price of $1.375 per share. The parties are currently in the final stages of documenting and consummating the transaction and Gutzwiller has advanced $3.4 million to GKI on an interim basis to alleviate GKI's severe cash flow problems and avoid disruption of basic company operations. At the request of Gutzwiller, John B. Gunter, Thomas L. Herb, Louis R. Schap and S. Goran Stakig have resigned as directors of GKI. David A. Shaw, chairman of the board and president, and John Muczko, executive vice president, continue to serve as directors of GKI. Gutzwiller has further requested that four of its nominees be added to the board. In light of Gutzwiller's foreign nationality, it is GKI's understanding that steps satisfactory to the Department of Defense's Defense Investigative Service (DIS) must be taken to insulate GKI from potential foreign influence or control and that the DIS ordinarily requires significant foreign shareholders to appoint disinterested U.S. nationals to act as trustees or proxies to vote their stock on all but a limited category of corporate transactions. In addition, it is GKI's understanding that the DIS typically restricts a foreign shareholder's access to company facilities. Accordingly, GKI has requested Gutzwiller to withdraw its board nominees until arrangements satisfactory to the DIS can implemented, and Gutzwiller has agreed to do so. Representatives of Gutzwiller have further provided assurances to GKI that, if required by the DIS, Gutzwiller will agree to such restrictions on its voting power and access to company facilities. -0- 11~18~92 ~CONTACT: David A. Shaw of General Kinetics, 301-881-2044~ (GKI)
CO: General Kinetics, Inc.; Gutzwiller & Partner, A.G. ST: Maryland IN: CPR SU: FNC
IH -- DC021 -- 2475 11~18~92 15:04 EST
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|Date:||Nov 18, 1992|
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