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EXHIBIT 3.1
FOURTH AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF IESI CORPORATION
IESI Corporation, a corporation organized and existing under the laws of
the State of Delaware (the "CORPORATION"), hereby certifies as follows:
FIRST: That the name of the Corporation is IESI Corporation, and the
original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on March 13, 1997. The original name
of the Corporation was IESI Holding Corporation. An Amended and Restated
Certificate of Incorporation of the Corporation was filed on June 1, 1998. A
second Amended and Restated Certificate of Incorporation of the Corporation was
filed on December 17, 1998. A Third Amended and Restated Certificate of
Incorporation of the Corporation was filed on June 30, 1999 (the "THIRD AMENDED
CHARTER").
SECOND: That pursuant to Sections 242 and 245 of the General Corporation
Law of the State of Delaware, this Fourth Amended and Restated Certificate of
Incorporation restates and integrates and further amends the Third Amended
Charter.
THIRD: That the Third Amended Charter, be, and it hereby is, amended
and restated to read in its entirety as set forth below.
FOURTH: That the board of directors of the Corporation duly adopted, in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware and the By-laws of the Corporation, the proposed amendment
and restatement of the Third Amended Charter at a meeting of the Board of
Directors of the Corporation held on August 29, 2001 at which a quorum was
present and acting throughout, declaring such amendment and restatement to be
advisable and directing that such amendment and restatement be submitted to the
stockholders of the Corporation for approval.
FIFTH: That thereafter pursuant to the resolution of the board of
directors, the stockholders of the Corporation duly adopted the proposed
amendment and restatement by written consent in lieu of a special meeting, all
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
SIXTH: That the text of the Third Amended Charter is hereby restated and
amended to read in its entirety as follows:
Section 1. The name of the Corporation is IESI Corporation.
Section 2. The registered office of the Corporation in the
State of Delaware is located at Corporation Trust Center, 1209 Orange Street, in
the City of Wilmington, Delaware 19801. The name of its Registered Agent at the
above address is The Corporation Trust Company.
Section 3. The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
Delaware General Corporation Law.
Section 4.
(A) DEFINITIONS.
"ACT" is defined in Section 4(D)6.
"AFFILIATE" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities,
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contract or otherwise, PROVIDED, that TC Carting, L.L.C., TC Carting II, L.L.C.,
Thayer Equity Investors IV, L.P. and their affiliates shall not be deemed
Affiliates of the Corporation.
"ASSET SALE" means any sale or transfer of all or substantially all
of the assets of the Corporation and its Subsidiaries on a consolidated basis
(measured either by book value in accordance with GAAP or by the fair market
value determined in the reasonable good faith judgment of the Corporation's
board of directors) in any transaction or series of transactions (other than
sales in the ordinary course of business).
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday
or a day on which banks are required or authorized by law to be closed in the
City of New York, New York.
"BY-LAWS" is defined in Section 8.
"CALCULATED IRR" means the internal rate of return, calculated on a
per share basis, on an investment in any Preferred Stock compounded annually
from the Original Issue Date of the particular class or series thereof to the
date of (i) in the case of Junior Preferred Stock, the first Triggering Event,
assuming that such share of such Junior Preferred Stock is converted in full
into shares of Common Stock immediately prior to such Triggering Event and is
sold for consideration equal to (1) if such Triggering Event is a Public
Offering, the price per share at which the Corporation sells its Common Stock in
such Public Offering (without deduction for underwriting fees, commission or
discounts), or (2) if such Triggering Event is a Sale Transaction or Asset Sale,
the amount of cash, the Market Price of marketable securities and the appraised
cash value of any other property received in respect of each share of Common
Stock in such Sale Transaction or Asset Sale (or which is exchanged for Common
Stock, in the case of a Sale Transaction where the Corporation is not the
surviving corporation), on a fully diluted basis, excluding any escrowed funds,
contingent payments or other consideration not paid at the consummation of such
Sale Transaction or Asset Sale, PROVIDED, that upon release or payment of such
escrowed funds, contingent payments or other consideration, the internal rate of
return shall be recalculated pursuant to this definition, or (ii) in the case of
Series C Preferred Stock or Series D Preferred Stock, a Public Offering,
assuming a conversion into shares of Common Stock at the Conversion Price then
in effect for the Series C Preferred Stock or Series D Preferred Stock,
respectively, in each case, with a value on such Common Stock at the price at
which shares of Common Stock are sold to the public in such Public Offering
(without deduction for underwriting fees, commission or discounts).
"CAPITAL STOCK" shall mean any class or series of capital stock of
the Corporation.
"CLASS A COMMON STOCK" is defined in Section 4(B).
"CLASS B COMMON STOCK" is defined in Section 4(B).
"COMMON STOCK" shall mean the Class A Common Stock and Class B
Common Stock.
"CONVERSION DATE" is defined in Section 4(D)3(b).
"CONVERSION NOTICE" is defined in Section 4(D)3(b).
"CONVERSION PRICE" is defined in Section 4(D)3(a).
"CONVERSION STOCK" is defined in Section 4(D)3(a).
"CONVERTIBLE SECURITIES" means any evidences of indebtedness,
shares of stock, or other securities directly or indirectly convertible into or
exchangeable for Common Stock.
"CORPORATION" is defined in the preamble.
"EFFECTIVE TIME" is defined in Section 4(B).
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"EQUITY SECURITIES" means any capital stock or other similar
security of the Corporation, including, without limitation, securities
containing equity features and securities containing profit participation
features, and any debt or equity security convertible or exchangeable, with or
without consideration, into or for any stock or similar security, or any
security carrying any warrant, option or right to subscribe for or to purchase
any of the foregoing.
"GAAP", means (1) U.S. generally accepted accounting principles
that are consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect at the relevant date
or for the relevant period, as shall be concurred in by independent certified
public accountants of recognized standing whose report expresses an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been applied; and (2) shall include (to the extent consistent with such
principles) the accounting practices reflected in the consolidated financial
statements of the Corporation for the relevant period.
"HOLDER" shall mean any registered holder of shares of Preferred
Stock.
"HSR ACT" is defined in Section 5.
"ISSUE DATE" means, as to a share of Preferred Stock, the date on
which such share was issued by the Corporation.
"JUNIOR PREFERRED LIQUIDATION PREFERENCE" means an amount equal to
$1,250 plus any accrued and unpaid dividends for each share of Junior Preferred
Stock, if any, adjusted appropriately for stock splits, stock dividends,
recapitalizations and the like with respect to the Junior Preferred Stock.
"JUNIOR PREFERRED STOCK" is defined in Section 4(B).
"JUNIOR SECURITIES" means any Capital Stock or other Equity
Securities of the Corporation, except for the Preferred Stock.
"LIQUIDATION" means any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation.
"LIQUIDATION PREFERENCE" means the Series D Liquidation Preference,
the Series C Liquidation Preference and the Junior Preferred Liquidation
Preference.
"LSA EVENT" means a Liquidation, a Sale Transaction or an Asset
Sale.
"MANDATORY CONVERSION CONDITION" is defined in Section 4(D)3(c).
"MARKET PRICE" means the average of the closing prices of any
security's sales on all securities exchanges on which such security may at the
time be listed, or, if there have been no sales on any such exchange on any day,
the average of the highest bid and lowest asked prices on all such exchanges at
the end of such day, or, if on any day such security is not so listed, the
average of the representative bid and asked prices quoted in the NASDAQ System
as of 4:00 P.M., New York time, or, if on any day such security is not quoted in
the NASDAQ System, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of which
"Market Price" is being determined and the 20 consecutive Business Days prior to
such day. If at any time such security is not listed on any securities exchange
or quoted in the NASDAQ System or the over-the-counter market, the "Market
Price" shall be the fair value thereof determined jointly by the Corporation and
the Holders of a majority (measured by the aggregate Liquidation Preference) of
the Preferred Stock then outstanding. If such parties are unable to reach
agreement within 30 days after the date as of which Market Price is being
determined, such fair value shall be determined by an independent appraiser
experienced in valuing securities jointly selected by the Corporation and the
Holders of a majority
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(measured in Liquidation Preference) of the Preferred Stock then outstanding.
The determination of such appraiser shall be final and binding upon the parties,
and the Corporation shall pay the fees and expenses of such appraiser.
"NEW CLASS A COMMON STOCK" is defined in Section 4(B).
"NEW CLASS B COMMON STOCK" is defined in Section 4(B).
"OLD CLASS A COMMON STOCK" is defined in Section 4(B).
"OLD CLASS B COMMON STOCK" is defined in Section 4(B).
"OPTION" means any right, option, or warrant to subscribe for,
purchase, or otherwise acquire Common Stock or Convertible Securities.
"ORIGINAL ISSUE DATE" means (i) with respect to the Series A
Preferred Stock, June 2, 1998, (ii) with respect to the Series B Preferred
Stock, December 18, 1998, (iii) with respect to the Series C Preferred Stock,
June 30, 1999, and (iv) with respect to Series D Preferred Stock, September 10,
2001.
"PERSON" shall mean any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"PREFERRED STOCK" is defined in Section 4(B).
"PUBLIC OFFERING" shall mean a firm commitment underwritten public
offering of Common Stock, subsequent to which the Common Stock is listed on a
national securities exchange or on the NASDAQ System, at an offering price to
the public (without deduction for underwriting fees, commission or discounts) in
an aggregate amount not less than $20,000,000 pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or any
successor federal statute thereto.
"REDEMPTION DATE" is defined in Section 4(D)2(d).
"SALE TRANSACTION" shall mean any merger, consolidation,
recapitalization, sale, transfer or issuance of shares of Capital Stock by the
Corporation or any holders thereof, or any series of such transactions in each
case, which results in any Person or group of Persons (as the term "group" is
used under the Securities Exchange Act of 1934), other than the holders of
Common Stock and Preferred Stock as of September 10, 2001 and the Affiliates
thereof, owning more than 50% by vote of the voting stock of the Corporation (or
of the surviving corporation, if the Corporation is not the surviving
corporation) outstanding at the time of the consummation of such merger,
consolidation, recapitalization, sale, transfer or issuance or series of such
transactions.
"SERIES A PREFERRED STOCK" is defined in Section 4(B).
"SERIES B PREFERRED STOCK" is defined in Section 4(B).
"SERIES C DIVIDEND PAYMENT DATE" is defined in Section 4(D)1.
"SERIES C LIQUIDATION PREFERENCE" means an amount equal to $1,000
plus all accrued and unpaid dividends for each share of Series C Preferred
Stock, adjusted appropriately for stock splits, stock dividends,
recapitalizations and the like with respect to the Series C Preferred Stock.
"SERIES C PREFERRED STOCK" is defined in Section 4(B).
"SERIES D DIVIDEND PAYMENT DATE" is defined in Section 4(D)1.
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"SERIES D LIQUIDATION PREFERENCE" means an amount equal to $1,000,
adjusted appropriately for stock splits, stock dividends, recapitalizations and
the like with respect to the Series D Preferred Stock. Notwithstanding anything
herein to the contrary, any accrued and unpaid dividends on the Series D
Preferred Stock shall be adjusted together with the Series D Liquidation
Preference if such an adjustment occurs, notwithstanding the fact that such
dividends are not included in this definition.
"SERIES D PREFERRED STOCK" is defined in Section 4(B).
"SUBSIDIARY" means (i) any corporation more than 50% of whose stock
of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (excluding any class or
classes having such voting power solely by reason of the happening of a
contingency) is owned by the Corporation directly or indirectly through other
Subsidiaries, and (ii) any partnership, association, joint venture or other
entity in which the Corporation directly or indirectly through other
Subsidiaries has more than a 50% equity interest.
"THIRD AMENDED CHARTER" is defined in the first recital.
"TRIGGERING EVENT" shall mean a Public Offering, a Sale Transaction
or an Asset Sale.
(B) NUMBER OF SHARES; PAR VALUE.
Effective as of the date and time of the filing of this Fourth Amended
and Restated Charter (the "Effective Time") (i) each ten shares of Class A
Voting Common Stock, par value $.01 per share (the "OLD CLASS A COMMON STOCK"),
issued and outstanding and reserved for issuance or held in treasury, shall
automatically, and without any action by the holder thereof, be reclassified
into one share of Class A Voting Common Stock, par value $.01 per share (the
"NEW CLASS A COMMON STOCK") and (ii) each ten shares of Class B Nonvoting Common
Stock, par value $.01 per share (the "OLD CLASS B COMMON STOCK"), issued and
outstanding and reserved for issuance or held in treasury, shall automatically,
and without any action by the holder thereof, be reclassified into one share of
Class B Nonvoting Common Stock, par value $.01 per share (the "NEW CLASS B
COMMON STOCK"), and each certificate which prior to the Effective Time
represented 10 shares of Old Class A Common Stock or 10 Shares of Old Class B
Common Stock shall, from and after the Effective Time, be deemed for all
purposes to evidence only the right to receive one or more certificates
representing shares of New Class A Common Stock or New Class B Common Stock, as
the case may be. In connection with the preceding calculation, the Corporation
shall issue fractional shares.
The Corporation shall provide certificates representing New Class A
Common Stock and New Class B Common Stock to holders of Old Class A Common Stock
and Old Class B Common Stock, respectively. From and after the Effective Time,
certificates representing Old Class A Common Stock and Old Class B Common Stock
are hereby cancelled and shall represent only the right of the holders thereof
to receive New Class A Common Stock or New Class B Common Stock, as the case may
be. From and after the Effective Time, the term New Class A Common Stock shall
mean Class A Common Stock and New Class B Common Stock shall mean Class B Common
Stock.
As of the Effective Time, the total number of shares of Capital Stock
that the Corporation shall have authority to issue shall be 4,302,100 shares
consisting of the following:
1. 3,600,000 shares of Class A Voting Common Stock, par value
$.01 per share (the "CLASS A COMMON STOCK");
2. 450,000 shares of Class B Nonvoting Common Stock, par
value $.01 per share (the "CLASS B COMMON STOCK");
3. 32,000 shares of Series A Convertible Preferred Stock, par
value $1.00 per share (the "SERIES A PREFERRED STOCK");
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4. 20,100 shares of Series B Convertible Preferred Stock, par
value $1.00 per share (the "SERIES B PREFERRED STOCK");
5. 55,000 shares of Series C Convertible Preferred Stock, par
value $1.00 per share (the "SERIES C PREFERRED STOCK"); and
6. 145,000 shares of Series D Convertible Preferred Stock,
par value $1.00 per share (the "SERIES D PREFERRED STOCK").
The Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock and the Series D Preferred Stock (together, the "PREFERRED
STOCK") shall rank senior to all other Capital Stock; the Series D Preferred
Stock shall rank senior to the Series A Preferred Stock, the Series B Preferred
Stock (together, the "JUNIOR PREFERRED STOCK") and the Series C Preferred Stock;
the Series C Preferred Stock shall rank senior to the Junior Preferred Stock;
and, except as set forth in Section 4(C) hereof, the Class A Common Stock and
the Class B Common Stock shall be identical in all respects, including, without
limitation, with respect to dividends and distributions and upon dissolution or
otherwise.
(C) COMMON STOCK.
1. VOTING RIGHTS. The holders of the Class B Common Stock
shall have no voting power for any purpose whatsoever, and the holders of the
Class A Common Stock shall have full voting power for all purposes.
2. CONVERSION.
(a) Each share of Class B Common Stock shall at any time be
subject to conversion at the option of the holder thereof, and upon any such
conversion such holder shall be entitled to receive one fully paid and
nonassessable share of Class A Common Stock for each share of Class B Common
Stock being converted, subject to adjustment as set forth in Section 4(C)2(b).
(b) ADJUSTMENT. The number of shares of Class A Common Stock
issuable upon conversion of each share of Class B Common Stock shall be subject
to adjustment from time to time as follows:
In case the Corporation shall at any time
change as a whole, by subdivision or consolidation in
any manner or by the making of a stock dividend, the
number of shares of its Class A Common Stock then
outstanding into a different number of shares, with or
without par value, then the number of shares of Class A
Common Stock issuable upon conversion of each share of
Class B Common Stock shall be increased or decreased,
as the case may be, in direct proportion to the
increase or decrease in the number of shares of Class A
Common Stock of the Corporation.
(c) REORGANIZATION. In case of any capital reorganization, or
any reclassification of the stock of the Corporation (other than a change in par
value or from par value to no par value or from no par value to par value or as
a result of a stock dividend or subdivision, split-up or combination of shares),
or the consolidation or merger of the Corporation with or into another
corporation or the sale or other disposition of all or substantially all the
properties and assets of the Corporation, as an entirety, each share of Class B
Common Stock shall after such reorganization, reclassification, consolidation,
merger, sale or other disposition be convertible into the kind and number of
shares of stock or other securities or other property of the Corporation or of
the corporation resulting from such consolidation or surviving such merger or to
which such properties and assets shall have been sold or otherwise disposed to
which the holder thereof would have been entitled if he had converted such share
into Class A Common Stock immediately prior to such reorganization,
reclassification, consolidation, merger, sale or other disposition. The
provisions of this clause (c) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales or other
dispositions.
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(d) NOTICE OF ADJUSTMENT. Whenever the conversion ratio of
Class B Common Stock into Class A Common Stock shall be adjusted, the
Corporation shall forthwith cause written notice thereof to be sent by
registered mail, postage prepaid to each holder of Class B Common Stock at the
address of such holder shown on the books of the Corporation, which notice shall
be accompanied by a certificate of a firm of independent public accountants of
recognized standing setting forth in reasonable detail the facts requiring such
adjustment and the conversion ratio that shall be in effect after such
adjustment.
(e) FRACTIONAL SHARES. If more than one share of Class B
Common Stock shall be surrendered for conversion at any one time by the same
holder, the aggregate number of full shares of Class A Common Stock of the
Corporation issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of Class B Common Stock so surrendered rather
than upon a per share basis as to each such share of Class B Common Stock.
Instead of any fractional shares of Class A Common Stock of the Corporation
which would otherwise be issuable upon conversion of any shares of Class B
Common Stock, the Corporation shall pay a cash adjustment in respect of such
fractional interest in the amount equal to the product obtained by multiplying
such fraction by the Market Price of the Class A Common Stock on the Business
Day immediately prior to conversion. All monetary calculations required pursuant
to the provisions of the Class B Common Stock shall be made to the nearest cent.
(f) TAXES. The Corporation shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares of
Class A Common Stock upon conversion of any shares of Class B Common Stock;
PROVIDED, HOWEVER, that the Corporation shall not be required to pay any taxes
which may be payable in respect of any transfer involved in the issuance or
delivery of any certificate for any such shares in a name other than that of the
holder of the shares of Class B Common Stock being converted.
(g) FULLY PAID, ETC. All shares of Class A Common Stock which
may be issued upon conversion of the shares of Class B Common Stock will upon
issuance by the Corporation be validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issuance thereof.
(h) EXERCISE. The holder of any shares of Class B Common Stock
may exercise the conversion right as the whole or any part thereof by delivering
to the principal office of the Corporation during regular business hours, the
certificate or certificates for the shares to be converted, duly endorsed or
assigned in blank, accompanied by a written notice stating (i) that the holder
elects to convert such shares and (ii) the name or names (with addresses) in
which the certificate or certificates for the shares of Class A Common Stock are
to be issued. The Corporation shall deliver, as soon as practicable after
receipt of such notice and certificates, at said office, to or on the order of
the holder for whose account such certificates for shares of Class B Common
Stock were so surrendered for conversion, a certificate or certificates
representing that number of whole shares of Class A Common Stock which the
holder of such shares of Class B Common Stock shall be entitled to receive,
registered in the name of such Person or Persons as may be specified in the
notice of conversion, together with payment of any cash adjustment to which such
holder may be entitled in accordance with clause (e) of this Section 4(C)2. Any
conversion of shares of Class B Common Stock at the option of the holder thereof
shall be deemed for all purposes to have been effected upon delivery of such
notice of conversion and such surrender of the certificate or certificates for
shares of Class B Common Stock to be so converted; PROVIDED, HOWEVER, that any
such surrender on any date when the stock transfer books of the Corporation
shall be closed shall not be deemed to constitute the Person or Persons in whose
name or names the certificates of Common Stock are to be registered as the
holder or holders thereof for any purpose until the close of business on the
next succeeding day on which such stock transfer books shall be open but such
conversion shall be made at the conversion ratio in effect on the date of such
surrender. Upon conversion of only a portion of the number of shares covered by
a certificate representing shares of Class B Common Stock surrendered for
conversion, the Corporation shall issue and deliver to or upon the written order
of the holder of the certificate so surrendered for conversion, at the expense
of the Corporation, a new certificate covering the number of shares of Class B
Common Stock representing the unconverted portion of the certificate so
surrendered.
(i) RETIREMENT. Shares of Class B Common Stock which have been
converted shall be retired and canceled in the manner provided by law.
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(j) RESTRICTIONS ON CONVERSION. Any other provisions hereof to
the contrary notwithstanding, no Person shall exercise its rights to convert
shares of Class B Common Stock into shares of Class A Common Stock, if, under
any law or under any regulation, rule or other requirement of any governmental
authority at any time applicable to such Person (i) after giving effect to such
conversion, such Person would own, control or have power to vote a greater
quantity of securities of any kind than the Person shall be permitted to own,
control or have power to vote, or (ii) such conversion would not be permitted.
For purposes of this Section 4(C)2, subject to Section 5, a written statement of
the Person converting shares of Class B Common Stock into Class A Common Stock,
delivered to the Corporation upon surrender of any shares of Class B Common
Stock for conversion into any shares of Class A Common Stock, to the effect that
the Person is legally entitled to exercise its rights to convert such shares and
that such conversion will not violate the prohibitions set forth in the
preceding sentence, shall be conclusive and binding upon the Corporation and
shall obligate the Corporation to deliver certificates representing the shares
of Class A Common Stock so converted in accordance with the other provisions
hereof.
(D) PREFERRED STOCK
1. DIVIDENDS; RANKING. The Series D Preferred Stock shall
rank senior to the Series C Preferred Stock, the Junior Preferred Stock and the
Junior Securities with respect to the rights to receive dividends, unless
provided otherwise herein. The Series C Preferred Stock shall rank senior to the
Junior Preferred Stock and the Junior Securities with respect to the rights to
receive dividends. The shares of Series A Preferred Stock and Series B Preferred
Stock shall rank equally as to each other, and senior to the Junior Securities,
with respect to the right to receive dividends.
Without limitation of the foregoing, the Holders of Junior
Preferred Stock, without distinction as to series, shall be entitled to receive
dividends only as and when the Corporation shall declare and pay dividends in
respect of its Common Stock, and absent such a declaration, no dividends shall
be payable, accrue or accumulate in respect of shares of Junior Preferred Stock.
If the Corporation shall declare a dividend in respect of its Common Stock, each
Holder of Preferred Stock shall be paid in an amount equal to the dividend that
would be payable if such Holder had converted his shares of Preferred Stock into
shares of Common Stock immediately prior to the record date for the payment of
such dividend at the Conversion Price then in effect.
The Holders of the outstanding shares of Series D Preferred Stock
shall be entitled to receive, when, as and if declared by the board of directors
(and as provided below), from any source of funds legally available therefor,
distributions in the form of cash dividends on each share of Series D Preferred
Stock, at a rate per annum equal to 10% of the Liquidation Preference, plus all
accrued and unpaid dividends per share, of Series D Preferred Stock from the
Issue Date of such share of Series D Preferred Stock. Such dividends shall
accrue whether or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. All dividends shall be cumulative, whether or not earned
or declared, and shall compound on a semi-annual basis from the Issue Date of
each share of Series D Preferred Stock and shall be payable only upon, and
subject to the provisions of, a LSA Event pursuant to Section 4(D)2 hereof (a
"SERIES D DIVIDEND PAYMENT DATE"). Each distribution in the form of a dividend
shall be payable to the Holders of record of the Series D Preferred Stock as
they appear on the stock register of the Corporation on the relevant Series D
Dividend Payment Date. Dividends shall cease to accumulate in respect of any
shares of Series D Preferred Stock on the Series D Dividend Payment Date with
respect to such shares, unless the Corporation shall have failed to comply with
the provisions of Section 4(D)2 hereof.
The Holders of the outstanding shares of Series C Preferred Stock
shall be entitled to receive, when, as and if declared by the board of directors
(and as provided below), from any source of funds legally available therefor,
distributions in the form of cash dividends on each share of Series C Preferred
Stock, at a rate per annum equal to 15% of the Liquidation Preference per share
of Series C Preferred Stock from the Issue Date of such share of Series C
Preferred Stock. Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of dividends. All dividends shall
be cumulative, whether or not earned or declared, and shall compound on a
semi-annual basis from the Issue Date of each share of Series C Preferred Stock
and shall be payable only: (a) after no shares of Series D Preferred Stock
remain outstanding, and (b)(i) upon, and subject to the provisions of, a LSA
Event pursuant to
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Section 4(D)2 hereof or (ii) upon conversion of such share of Series C Preferred
Stock pursuant to Section 4(D)3 hereof (a "SERIES C DIVIDEND PAYMENT DATE").
Each distribution in the form of a dividend shall be payable to the Holders of
record of the Series C Preferred Stock as they appear on the stock register of
the Corporation on the relevant Series C Dividend Payment Date. Dividends shall
cease to accumulate in respect of any shares of Series C Preferred Stock on the
Series C Dividend Payment Date with respect to such shares, unless the
Corporation shall have failed to comply with the provisions of Section 4(D)2 or
Section 4(D)3, respectively.
Except for any dividends accruing in favor of Series C Preferred
Stock in accordance with the preceding paragraph, so long as any shares of
Series D Preferred Stock are outstanding, the Corporation shall not declare, pay
or set apart for payment any dividend on any Series C Preferred Stock or Junior
Preferred Stock or make any payment on account of, or set apart for payment
money for a sinking or other similar fund for, the purchase, redemption or other
retirement of, any Series C Preferred Stock or Junior Preferred Stock or any
warrants, rights, calls or options exercisable for or convertible into any
Series C Preferred Stock or Junior Preferred Stock, or make any distribution in
respect thereof, either directly or indirectly, and whether in cash, obligations
or shares of the Corporation or other property (other than distributions or
dividends in Series C Preferred Stock to the Holders of Series C Preferred Stock
and in Junior Preferred Stock to the Holders of Junior Preferred Stock), and
shall not permit any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any Series C Preferred Stock
or Junior Preferred Stock or any such warrants, rights, calls or options.
So long as any shares of Series C Preferred Stock are
outstanding, the Corporation shall not declare, pay or set apart for payment any
dividend on any Junior Preferred Stock or make any payment on account of, or set
apart for payment money for a sinking or other similar fund for, the purchase,
redemption or other retirement of, any Junior Preferred Stock or any warrants,
rights, calls or options exercisable for or convertible into any Junior
Preferred Stock, or make any distribution in respect thereof, either directly or
indirectly, and whether in cash, obligations or shares of the Corporation or
other property (other than distributions or dividends in Junior Preferred Stock
to the Holders of Junior Preferred Stock), and shall not permit any corporation
or other entity directly or indirectly controlled by the Corporation to purchase
or redeem any Junior Preferred Stock or any such warrants, rights, calls or
options.
So long as any shares of Preferred Stock are outstanding, without
the prior written consent of the Holders of 75% of all Preferred Stock then
outstanding, measured by the aggregate Liquidation Preference, the Corporation
shall not declare, pay or set apart for payment any dividend on any Junior
Securities or make any payment on account of, or set apart for payment money for
a sinking or other similar fund for, the purchase, redemption or other
retirement of, any Junior Securities or any warrants, rights, calls or options
exercisable for or convertible into any Junior Securities, or make any
distribution in respect thereof, either directly or indirectly, and whether in
cash, obligations or shares of the Corporation or other property (other than
distributions or dividends in Junior Securities to the holders of Junior
Securities), and shall not permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase or redeem any Junior
Securities or any such warrants, rights, calls or options.
Dividends payable on shares of any Preferred Stock for any period
of less than a year shall be computed on the basis of a 360-day year and the
number of days elapsed. If any dividend payment date occurs on a day that is not
a Business Day, any accumulated dividends otherwise payable on such dividend
payment date shall be paid on the next succeeding Business Day.
Without the consent of the Holders of 75% of the outstanding
shares of the Series D Preferred Stock, the Corporation may not issue any equity
securities ranking senior to, or on a parity with, the Series D Preferred Stock.
Without the consent of the Holders of 75% of the outstanding shares of the
Series C Preferred Stock, the Corporation may not issue any equity securities
ranking senior to, or on a parity with, the Series C Preferred Stock.
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2. LSA EVENT.
(a) LIQUIDATION PREFERENCE AND LSA EVENT. The shares of
Series D Preferred Stock shall rank senior to the Series C Preferred Stock,
Junior Preferred Stock and Junior Securities as to Liquidation Preference. The
shares of Series C Preferred Stock shall rank senior to the Junior Preferred
Stock and Junior Securities as to Liquidation Preference. The shares of Series A
Preferred Stock and Series B Preferred Stock shall rank equally as to each
other, and senior to the Junior Securities, as to Liquidation Preference.
Without limitation of the foregoing and subject to the provisions of Section
4(D)2(b) below, in a LSA Event, (i) each Holder of Series D Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to stockholders, before any distribution of assets shall be made to
the holders of the Series C Preferred Stock, Junior Preferred Stock or Junior
Securities or any other stock of the Corporation, an amount in cash (PROVIDED,
that such Holder does not elect to convert its shares pursuant to its rights in
Section 4(D)3) for each share equal to the greater of (x) the Series D
Liquidation Preference plus all accrued and unpaid dividends for each share of
Series D Preferred Stock, or (y) the amount such Holder would receive as a
holder of Common Stock if the Series D Preferred Stock held by such Holder was
converted into Common Stock, assuming the conversion into Common Stock of all
the Preferred Stock, (ii) after payment in full has been made in accordance with
this Section 4(D)2 to all Holders of shares of Series D Preferred Stock, each
Holder of the Series C Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to stockholders, before any
distribution of assets shall be made to the holders of the Junior Preferred
Stock or Junior Securities or any other stock of the Corporation ranking junior
to Series C Preferred Stock as to any such distribution, an amount in cash
(PROVIDED, that such Holder does not elect to convert its shares pursuant to its
rights in Section 4(D)3) for each share equal to the greater of (x) the Series C
Liquidation Preference or (y) the amount such Holder would receive as a holder
of Common Stock if the Series C Preferred Stock held by such Holder was
converted into Common Stock, assuming the conversion into Common Stock of all
the Preferred Stock, and (iii) after payment in full has been made in accordance
with this Section 4(D)2 to all Holders of shares of Series D Preferred Stock and
Series C Preferred Stock, each Holder of the Junior Preferred Stock, without
distinction as to series, shall be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, before any distribution
of assets shall be made to the holders of the Junior Securities or any other
stock of the Corporation ranking junior to Junior Preferred Stock as to any such
distribution, an amount in cash (PROVIDED, that such Holder does not elect to
convert its shares pursuant to its rights in Section 4(D)3) for each share equal
to the Junior Preferred Liquidation Preference. If, upon a LSA Event, the
amounts payable with respect to any series of Preferred Stock and any other
stock of the Corporation ranking as to any such distribution on a parity with
such series of Preferred Stock shall not be paid in full, then the Holders of
such series of Preferred Stock and such parity stock shall share ratably in any
such distribution of assets of the Corporation in proportion to the full
preferential amounts to which they are entitled.
(b) DISTRIBUTION OF REMAINDER IN LIQUIDATION. In the event of
a Liquidation, in addition to the distributions set forth in Section 4(D)2(a)
and after payment in full of all amounts payable to the Holders of Preferred
Stock under Section 4(D)2(a), (i) the holders of Common Stock shall be entitled
to participate in the distribution of the remainder of the assets of the
Corporation in respect of the Common Stock until each such holder has received
an amount per share equivalent to the amount per share received by the Holders
of Preferred Stock, considered on an as-if-converted basis (calculated by
dividing (x) the aggregate distributions made to all Holders of Preferred Stock
in accordance with Section 4(D)2(a) by (y) the total number of Common Stock into
which the Preferred Stock could be converted), and (ii) thereafter, the Holders
of Preferred Stock shall be entitled to participate with the holders of Common
Stock, on an as-if-converted basis, in the distribution of any remaining assets
of the Corporation in respect of the Common Stock.
(c) REDEMPTION IN SALE TRANSACTION OR ASSET SALE. In
connection with any Sale Transaction or Asset Sale, all consideration payable to
the stockholders of the Corporation, in connection with a Sale Transaction, or
all consideration payable to the Corporation, together with all other available
assets of the Corporation (net of obligations owed by the Corporation), in the
case of an Asset Sale, shall be paid to and deemed (to the fullest extent
permitted by law) distributed (in the case of a Sale Transaction) or available
for distribution and payment as provided herein (in the case of an Asset Sale),
as applicable, to the holders of Preferred Stock of the Corporation in
accordance with the preferences and priorities set forth in Section 4(D)2(a)
above. In the event of a Sale Transaction, the Corporation shall cause the Sale
Transaction agreement to provide as a consequence of such
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Sale Transaction for the conversion of (i) any outstanding Series D Preferred
Stock into the right of each Holder of Series D Preferred Stock to receive an
amount in cash equal to the amount set forth in Section 4(D)2(a)(i), (ii) any
outstanding Series C Preferred Stock into the right of each Holder of Series C
Preferred Stock to receive, subject to the prior satisfaction, in accordance
with the provisions of this Section 4(D)2, of the Holders of Series D Preferred
Stock, an amount in cash equal to the amount set forth in Section 4(D)2(a)(ii),
and (iii) any outstanding Junior Preferred Stock into the right of each Holder
of Junior Preferred Stock to receive, subject to the prior satisfaction, in
accordance with the provisions of this Section 4(D)2, of the Holders of Series D
Preferred Stock and Series C Preferred Stock, an amount in cash equal to the
amount set forth in Section 4(D)2(a)(iii). In the event of an Asset Sale,
immediately concurrent with the consummation of such Asset Sale, the Corporation
shall cause the redemption of all outstanding shares of Preferred Stock for an
amount (in cash) equal to the applicable amount payable under Section 4(D)2(a).
In the event of the foregoing redemption, (i) the Corporation shall revalue its
assets and liabilities to the fullest extent permitted by law to determine
lawfully available funds for such redemption, and (ii) if the Corporation shall
not have such funds available to redeem the shares of all series of Preferred
Stock, the Corporation shall redeem, to the fullest extent of available funds as
the same became available, the shares of each series of Preferred Stock in
accordance with the preferences and priorities set forth in Section 4(D)2(a).
(d) NOTICE OF REDEMPTION. Any redemption of the Preferred
Stock pursuant to Section 4(D)2(c) hereof may be made only if prior notice is
given by the Corporation at least 30 days but not more than 60 days prior to the
date fixed for such redemption (a "REDEMPTION DATE") to all Holders of record of
each series of Preferred Stock at their respective addresses appearing on the
books of the Corporation. Any such notice of a redemption shall specify (i) the
details of the transaction in connection with which such shares of Preferred
Stock are being redeemed, (ii) the Redemption Date, (iii) the redemption price
applicable to each series of Preferred Stock (as determined in accordance with
the provisions of Section 4(D)2(a)), and (iv) each Holder's right to convert the
shares of Preferred Stock held by such Holder into Common Stock in accordance
with the provisions of Section 4(D)3 hereof by notifying the Corporation in
writing prior to the Redemption Date. From and after the date fixed in such
notice as the Redemption Date, to the extent a Holder did not elect to convert
the shares of Preferred Stock held by such Holder (and unless default shall have
been made by the Corporation in providing monies for the payment in full of the
redemption price), all rights of such Holder of Preferred Stock as stockholder
of the Corporation (except the right to receive payment in full of the
redemption price) shall cease.
(e) SHARES RETIRED. All shares of the Preferred Stock redeemed
by the Corporation shall be retired and cancelled and shall not be reissued.
3. CONVERSION OF PREFERRED STOCK.
(a) RIGHT TO CONVERT. Each Holder of Preferred Stock shall
have the right, at any time (subject to the Corporation obtaining the requisite
government approvals referred to in Section 5), to convert all or any portion of
such Holder's shares of Preferred Stock into such number of validly issued fully
paid and nonassessable shares of Class A Common Stock or, if required by
applicable law, Class B Common Stock ("CONVERSION STOCK"), as is equal to the
quotient obtained by dividing (A) the Liquidation Preference of the shares of
Preferred Stock being converted, by (B) the applicable Conversion Price (as last
adjusted and then in effect) for the shares of Preferred Stock being converted,
by surrender of the certificates representing the shares of Preferred Stock to
be converted in the manner provided for in Section 4(D)3(b) hereof. As of the
Effective Time, the initial conversion price (the "CONVERSION PRICE") shall be,
(i) as to shares of Junior Preferred Stock, $125.00 per share of Common Stock,
(ii) as to shares of Series C Preferred Stock, $150.00 per share of Common
Stock, and (iii) as to shares of Series D Preferred Stock, $80.00 per share of
Common Stock, and each price shall be subject to adjustment as provided for in
Section 4(D)4 hereof. Any accrued but unpaid dividends on any shares of Series C
Preferred Stock or Junior Preferred Stock converted in accordance with the
provisions of this Section 4(D)3 form part of the Liquidation Preference of such
Preferred Stock and shall be converted into Conversion Stock as set forth in
this Section 4(D)3. The Holders of Series D Preferred Stock shall not be
entitled to payment in cash or stock of any accrued but unpaid dividends in the
event of any conversion under this Section 4(D)3.
(b) EXERCISE OF CONVERSION RIGHT. The Holder of any shares of
Preferred Stock may exercise the conversion right pursuant to Section 4(D)3(a)
hereof by delivering to the Corporation during regular business
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hours, at the office of any transfer agent of the Corporation for the Preferred
Stock, or at such other place as may be designated by the Corporation, the
certificate or certificates for the shares to be converted, duly endorsed or
assigned in blank to the Corporation, accompanied by written notice
(a "CONVERSION NOTICE") stating that such Holder elects to convert such shares
and stating the name or names (with address) in which the certificate or
certificates for the shares of Conversion Stock are to be issued and the class
or classes of Conversion Stock to be issued; PROVIDED, HOWEVER, that, if such
name or names are other than that of the Holder, such issuance of Conversion
Stock is permitted by applicable Federal and state securities laws. On a date
(the "CONVERSION DATE") to be scheduled as promptly as possible, but in any
event within ten Business Days thereafter, the Corporation shall issue and
deliver to the Holder, or upon the written order of such Holder, to the Person
and place designated by such Holder, (i) a certificate or certificates for the
number of full shares of Conversion Stock to which such Holder is entitled and
(ii) a check or cash in respect of any fractional interest in a share of Common
Stock, as provided for in Section 4(D)3(d) hereof, payable with respect to the
shares of Preferred Stock so converted up to and including the Conversion Date.
The Person in whose names the certificate or certificates for Conversion Stock
are to be issued shall be deemed to have become a stockholder of record on the
next succeeding date on which the transfer books are open, but the Conversion
Price shall be that in effect on the Conversion Date. Upon conversion of only a
portion of the number of shares covered by a certificate representing shares of
Preferred Stock surrendered for conversion, the Corporation shall issue and
deliver to or upon the written order of the Holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate
covering the number of shares of Preferred Stock representing the unconverted
portion of the certificate so surrendered, which new certificate shall entitle
the Holder thereof to declared but unpaid dividends, if any, on the shares of
Preferred Stock represented thereby to the same extent as if the certificate
therefor covering such unconverted shares had not been surrendered for
conversion. Notwithstanding the foregoing, any Holder exercising the right to
convert granted under this Section 4(D)3 in contemplation of a Public Offering,
Sale Transaction or Asset Sale or any other transaction or event shall have the
right to make such conversion contingent upon the consummation of such
transaction or event by so specifying in the relevant Conversion Notice. Any
contingent conversion shall be irrevocably effective on the date the applicable
transaction or event is consummated or occurs, and may be revoked by the Holder
at any time prior to such consummation or if the applicable Public Offering,
Sale Transaction or Asset Sale is abandoned.
(c) CONVERSION OF PREFERRED STOCK UPON PUBLIC OFFERING. Upon
the consummation of a Public Offering, the Corporation shall have the right (but
not the obligation) to require all Holders of Preferred Stock to convert their
shares of Preferred Stock into such number of validly issued fully paid and
nonassessable shares of Class A Common Stock or, if required by applicable law,
Class B Common Stock, as is equal to the quotient obtained by dividing (A) the
applicable Liquidation Preference of the shares of Preferred Stock being
converted, by (B) the respective Conversion Price (as last adjusted and then in
effect) for such Preferred Stock; PROVIDED, HOWEVER, that the Corporation's
right to require the Holders of Series C Preferred Stock or Series D Preferred
Stock to convert their shares of Preferred Stock shall be subject to the
satisfaction of the Mandatory Conversion Condition applicable to the Series C
Preferred Stock and the Series D Preferred Stock, respectively.
The mandatory conversion condition (the "MANDATORY CONVERSION
CONDITION") shall be satisfied if the Calculated IRR on the original purchase
price of each share of Series C Preferred Stock and Series D Preferred Stock,
respectively, assuming a conversion into shares of Common Stock at the
respective Conversion Price for the Series C Preferred Stock and the Series D
Preferred Stock then in effect, in each case, with a value on such Common Stock
at the price at which shares of Common Stock are sold to the public in the
Public Offering giving rise to the need to calculate the Calculated IRR, shall
be equal to or greater than 25%.
(d) NO FRACTIONAL SHARES. No fractional shares of Conversion
Stock or scrip shall be issued upon conversion of shares of Preferred Stock. If
more than one share of Preferred Stock shall be surrendered for conversion at
any one time by the same Holder, the number of full shares of Conversion Stock
issuable upon conversion thereof shall be computed using the aggregate number of
shares of Preferred Stock so surrendered. Instead of issuing any fractional
shares of Conversion Stock that would otherwise be issuable upon conversion of
any shares of Preferred Stock, the Corporation shall make payment to such
Holder, in cash, of an amount equal to the fraction of a share of Conversion
Stock otherwise issuable to such Holder, multiplied by the Market Price on the
Business Day immediately prior to conversion.
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(e) STAMP AND OTHER TAXES. The Corporation shall pay all
documentary, stamp or other transactional taxes attributable to the issuance or
delivery of shares of Capital Stock of the Corporation upon conversion of any
shares of Preferred Stock; PROVIDED, HOWEVER, that the Corporation shall not be
required to pay any taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificate of such shares in a name
other than that of the Holder of the shares of Preferred Stock in respect of
which such shares are being issued.
(f) RESERVATION OF COMMON STOCK. The Corporation shall
reserve, free from preemptive rights, out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
shares of Preferred Stock (assuming a Conversion Price of $80.00, as such amount
is adjusted from time to time as contemplated by Section 4(D)4 hereof and the
conversion, exercise and exchange of all other outstanding Convertible
Securities and Options) a sufficient number of shares of each of Class A Common
Stock and Class B Common Stock so as to provide for the conversion of all
outstanding shares of Preferred Stock and all other outstanding Convertible
Securities and Options into each of such applicable classes of Common Stock. The
Corporation shall take all such actions as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or governmental regulation or any requirements of any domestic securities
exchange upon which shares of Common Stock may be listed (except for official
notice of issuance which shall be immediately delivered by the Corporation upon
each such issuance). The Corporation shall not take any action which would cause
the number of authorized but unissued shares of Common Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
conversion of the Preferred Stock.
(g) NO LIENS. All shares of Conversion Stock which may be
issued in connection with the conversion provisions set forth herein will, upon
issuance by the Corporation, be validly issued, fully paid and nonassessable and
free from all taxes, liens or charges with respect thereto created or imposed by
the Corporation.
4. ADJUSTMENT OF CONVERSION PRICE, NUMBER OF SHARES OF COMMON
STOCK, ETC. The applicable Conversion Price for the Preferred Stock shall be
subject to adjustment from time to time as hereinafter provided for in this
Section 4(D)4.
(a) ADJUSTMENT UPON TRIGGERING EVENT. If a Triggering Event
shall occur and the Calculated IRR with respect to either the Series A Preferred
Stock or the Series B Preferred Stock, measured from their respective Original
Issue Dates to the date of such Triggering Event, shall be less than 25%, the
Conversion Price as to any such series in effect shall be reduced, but not
increased, effective as of the date of such Triggering Event, to the higher of
(i) $80.00 (as such price may be adjusted to reflect any event described in this
Section 4(D)4 which becomes effective after the date hereof), or (ii) such price
per share that, after giving effect to such reduction, the Calculated IRR in
respect of the Series A Preferred Stock or Series B Preferred Stock, as the case
may be, shall equal twenty-five percent (25%).
(b) STOCK DIVIDENDS. In case at any time the Corporation shall
declare a dividend or make any other distribution upon the Common Stock of the
Corporation which is payable in Common Stock or Convertible Securities, each
Conversion Price in effect immediately prior to such dividend or other
distribution shall be proportionately reduced and the number of shares of Common
Stock issuable upon conversion of each series of Preferred Stock immediately
prior to such dividend or other distribution shall be proportionately increased.
(c) SUBDIVISION OR COMBINATION OF STOCK. In case the
Corporation shall at any time subdivide the outstanding shares of Common Stock
into a greater number of shares, each Conversion Price in effect immediately
prior to such subdivision shall be proportionately reduced and the number of
shares issuable upon conversion of each series of Preferred Stock immediately
prior to such subdivision shall be proportionately increased, and conversely, in
case the outstanding shares of Common Stock shall be combined at any time into a
smaller number of shares, each Conversion Price in effect immediately prior to
such combination shall be proportionately increased and the number of shares
issuable upon conversion of each series of Preferred Stock immediately prior to
such combination shall be proportionately reduced.
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(d) ADJUSTMENTS FOR CONSOLIDATION, MERGER, REORGANIZATION,
ETC. In case the Corporation (i) consolidates with or merges into any other
corporation and is not the continuing or surviving corporation of such
consolidation or merger and such consolidation or merger does not constitute a
Sale Transaction, or (ii) permits any other corporation to consolidate with or
merge into the Corporation and the Corporation is the continuing or surviving
corporation but, in connection with such consolidation or merger, the Common
Stock is changed into or exchanged for stock or other securities of any other
corporation or cash or any other assets and such consolidation or merger does
not constitute a Sale Transaction, or (iii) effects a capital reorganization or
reclassification of the Capital Stock of the Corporation in such a way that
holders of Common Stock shall be entitled to receive stock, securities, cash or
assets with respect to or in exchange for Common Stock and such reorganization
or reclassification does not constitute a Sale Transaction, then, and in each
such case, proper provision, in form and substance reasonably satisfactory to
the Holders of 75% of all Preferred Stock then outstanding (measured by the
aggregate Liquidation Preference), shall be made so that, (i) upon the basis and
upon the terms and in the manner provided for in this Section 4(D)4(d), upon the
conversion of the Preferred Stock at any time after the consummation of such
consolidation, merger, reorganization or reclassification, each Holder shall be
entitled to receive (at the Conversion Price in effect for shares issuable upon
such conversion of each respective series of Preferred Stock immediately prior
to such consummation), in lieu of shares issuable upon such conversion of the
Preferred Stock prior to such consummation, the stock and other securities, cash
and assets to which such Holder would have been entitled upon such consummation
if such Holder had so converted such Preferred Stock immediately prior thereto
(subject to adjustments subsequent to such corporate action as nearly equivalent
as possible to the adjustments provided for in this Section 4(D)4) and (ii) the
provisions of this Section 4 thereafter shall remain applicable to the Preferred
Stock (including, in the case of any such consolidation or merger in which the
successor entity is other than the Corporation, an immediate adjustment of each
Conversion Price to the value for the Common Stock reflected by the terms of
such consolidation or merger, and a corresponding immediate adjustment in the
number of shares of Conversion Stock acquirable and receivable upon conversion
of each series of Preferred Stock, if the value so reflected is less than any
Conversion Price which otherwise would be in effect immediately after such
consolidation or merger). The Corporation shall not effect any such
consolidation or merger, unless prior to the consummation thereof, the successor
entity (if other than the Corporation) resulting from consolidation or merger
assumes by written instrument (in form and substance satisfactory to the Holders
of 75% of each class or series of the Preferred Stock then outstanding), the
obligation to deliver to each such Holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such Holder may be
entitled to acquire.
(e) NOTICE OF ADJUSTMENT. Whenever the number of shares
issuable upon the conversion of any series of Preferred Stock or any Conversion
Price is adjusted, as provided for in this Section 4(D)4, the Corporation shall
prepare and mail to each Holder a certificate setting forth (i) each Conversion
Price and the number of shares issuable upon the conversion of each series of
Preferred Stock after such adjustment, (ii) a brief statement of the facts
requiring such adjustment and (iii) the computation by which such adjustment was
made.
(f) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares of Common Stock owned or
held by or for the account of the Corporation. The disposition of any shares of
Common Stock owned or held by or for the account of the Corporation shall be
considered an issue of Common Stock for the purposes of this Section 4(D)4.
(g) CERTAIN ADJUSTMENT RULES.
(i) The provisions of this Section 4(D)4 shall
similarly apply to successive transactions.
(ii) If the Corporation shall declare any dividend
referred to in Section 4(D)4(b) hereof and if any Holder converts all or any
part of the Preferred Stock after such declaration, but before the payment of
such dividend, the Corporation may elect to defer, until the payment of such
dividend, issuing to such Holder the shares of Common Stock issuable upon such
conversion over and above the shares issuable upon such conversion on the basis
of the applicable Conversion Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Corporation shall deliver to each such Holder a due bill or
other appropriate instrument evidencing such Holder's right to receive such
additional shares upon the payment of such dividend.
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(iii) If the Corporation shall declare any dividend
referred to in Section 4(D)4(b) hereof and shall legally abandon such dividend
prior to payment, then no adjustment shall be made pursuant to this Section
4(D)4 in respect of such declaration.
5. VOTING RIGHTS.
(a) Subject to Section 4(D)5(b) hereof and, with respect to
the Holders of Preferred Stock that are limited in their ability to possess
voting rights by certain regulatory requirements applicable to such Holders,
subject to compliance with such requirements, the Holders of Preferred Stock
shall be entitled to vote separately as a class on each matter required to be
submitted to a vote of common stockholders under the Certificate of
Incorporation of the Corporation or Delaware law; PROVIDED, HOWEVER, that, in
respect of the election of the members of the board of directors of the
Corporation, (i) the Holders of Series C Preferred Stock and Junior Preferred
Stock shall vote together with the holders of Class A Common Stock and not
separately as a class (with each share of Series C Preferred Stock, Junior
Preferred Stock and Class A Common Stock having one vote) and (ii) the Holders
of Series D Preferred Stock shall have no right to vote.
(b) As long as any of the Preferred Stock shall be issued and
outstanding, the Corporation shall not, without first obtaining the approval (by
vote or by written consent as provided by law) of TC Carting L.L.C., TC Carting
II, L.L.C. and Thayer Equity Investors IV, L.P., and the Holders, including TC
Carting, L.L.C., TC Carting II, L.L.C. and Thayer Equity Investors IV, L.P., of
not less than 75% of the aggregate Liquidation Preference of the shares of
Preferred Stock then outstanding:
(i) amend or repeal any provision of, or add any
provision to, the Corporation's Certificate of Incorporation or By-Laws if such
action would alter or change the preferences, rights, privileges or powers of,
or the restrictions provided for the benefit of, the Preferred Stock;
(ii) authorize or issue any additional shares of
Preferred Stock except as a dividend on outstanding shares of Preferred Stock;
(iii) authorize, create or issue any Capital Stock
having any rights, preferences or priorities (including, without limitation,
dividend or liquidation preferences) (A) senior to the Preferred Stock, or (B)
on a parity with those of the Preferred Stock, or authorize, create or issue any
bonds, debentures, notes or other obligations convertible into or exchangeable
for, or having option rights to purchase, any shares of Capital Stock of the
Corporation having any rights, preferences or priorities (including, without
limitation, dividend or liquidation preferences) senior to or on a parity with
the Preferred Stock; or
(iv) reclassify any outstanding shares into shares
having any rights, preferences or priorities (including, without limitation,
dividend or liquidation preferences) (A) senior to the Preferred Stock, or (B)
on a parity with those of the Preferred Stock.
6. TRANSFERABILITY. The shares of Preferred Stock shall not
be transferable to any Person except in accordance with the Securities Act of
1933, as amended, and applicable state or "blue sky" laws, or an exemption
therefrom. Each certificate representing shares of Preferred Stock shall include
a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF OR PLEDGED OR HYPOTHECATED UNLESS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION UNDER
THE ACT AND ANY SUCH LAWS IS AVAILABLE (AND, IN SUCH CASE, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COMPANY, SHALL HAVE BEEN DELIVERED TO THE COMPANY TO THE EFFECT THAT THE OFFER,
SALE,
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TRANSFER, DISPOSITION, PLEDGE OR HYPOTHECATION THEREOF IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND ANY SUCH LAWS).
[The following section was added by an amendment to the Fourth Amended and
Restated Certificate of Incorporation that was filed with the Delaware Secretary
of State on June 7, 2002:]
(E) LIMITATIONS ON RESTRICTED PAYMENTS.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS FOURTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION (AS AMENDED AND/OR RESTATED AND IN EFFECT FROM TIME
TO TIME), A HOLDER OF ANY EQUITY SECURITY (INCLUDING SHARES OF ANY CLASS OR
SERIES OF COMMON STOCK OR PREFERRED STOCK) SHALL NOT BE ENTITLED TO RECEIVE, AND
THE CORPORATION SHALL NOT MAKE, ANY RESTRICTED PAYMENT (DIRECTLY OR INDIRECTLY)
UNLESS EITHER (I) ALL OBLIGATIONS THEN OUTSTANDING OF THE CORPORATION TO HOLDERS
OF RELEVANT INDEBTEDNESS HAVE BEEN INDEFEASIBLY PAID AND DISCHARGED IN FULL IN
CASH OR (II) THE RESTRICTED PAYMENT AT THE TIME IT IS MADE COMPLIES WITH ALL
COVENANTS IN THE RELEVANT INDEBTEDNESS THAT LIMIT RESTRICTED PAYMENTS AND WITH
ANY OTHER APPLICABLE PROVISIONS OF THE RELEVANT INDEBTEDNESS. IN FURTHERANCE OF
THE FOREGOING, EACH HOLDER OF ANY EQUITY SECURITY (BY ITS OWNERSHIP OR
ACCEPTANCE OF ANY SHARE OR INTEREST IN OR OF SUCH EQUITY SECURITY THEREOF) SHALL
BE DEEMED TO HAVE ACKNOWLEDGED AND AGREED THAT (A) SUCH HOLDER'S RIGHT TO
RECEIVE ANY RESTRICTED PAYMENT IS SUBJECT AND SUBORDINATED IN RIGHT OF PAYMENT
TO THE PAYMENT IN FULL AND DISCHARGE OF ALL OBLIGATIONS THEN OUTSTANDING UNDER
RELEVANT INDEBTEDNESS, AND (B) EXCEPT AS PERMITTED BY THE PREVIOUS SENTENCE, THE
CORPORATION SHALL NOT MAKE ANY RESTRICTED PAYMENT (OR ANY DEPOSIT IN RESPECT
THEREOF), WHETHER DIRECTLY OR INDIRECTLY, BY EXERCISE OF ANY RIGHT OF SET-OFF OR
OTHERWISE. IN THE EVENT THAT ANY PAYMENT BY, OR DISTRIBUTION OF THE ASSETS OF,
THE CORPORATION OF ANY KIND OR CHARACTER (WHETHER IN CASH, PROPERTY OR
SECURITIES, WHETHER DIRECTLY OR INDIRECTLY, BY EXERCISE OF ANY RIGHT OF SET-OFF
OR OTHERWISE AND WHETHER AS A RESULT OF A BANKRUPTCY PROCEEDING WITH RESPECT TO
THE CORPORATION OR OTHERWISE) SHALL BE RECEIVED BY A HOLDER OF CAPITAL STOCK AT
ANY TIME WHEN SUCH PAYMENT IS PROHIBITED BY THIS SECTION, SUCH PAYMENT SHALL BE
HELD IN TRUST FOR THE BENEFIT OF, AND SHALL BE PAID OVER TO, THE HOLDERS OF THE
RELEVANT INDEBTEDNESS IN ACCORDANCE WITH THE PRIORITIES THEN EXISTING AMONG SUCH
HOLDERS OF RELEVANT INDEBTEDNESS FOR APPLICATION TO THE PAYMENT OF ALL RELEVANT
INDEBTEDNESS REMAINING UNPAID.
FOR PURPOSES OF THIS SECTION 4(E), THE FOLLOWING TERMS SHALL HAVE THEIR
RESPECTIVE MEANINGS SET FORTH BELOW:
"OBLIGATION" MEANS, WITH RESPECT TO ANY RELEVANT INDEBTEDNESS,
THE OBLIGATION (WHETHER PRIMARY OR SECONDARY) TO PAY PRINCIPAL, PREMIUM,
LIQUIDATED DAMAGES, INTEREST AND FEES (HOWEVER DENOMINATED) AND ALL OTHER
OBLIGATIONS.
"CREDIT AGREEMENT" MEANS THE FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT, DATED AS OF SEPTEMBER 14, 2001, AMONG
IESI CORPORATION (THE "PARENT") AND ITS SUBSIDIARIES LISTED ON SCHEDULE 2
THERETO (COLLECTIVELY, THE "BORROWERS"), THE LENDERS LISTED ON SCHEDULE 1
THERETO, FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT, LASALLE BANK NATIONAL
ASSOCIATION, AS DOCUMENTATION AGENT, CREDIT SUISSE FIRST BOSTON, AS SYNDICATION
AGENT, AND CITICORP NORTH AMERICA, INC., AS SYNDICATION AGENT WITH FLEET
SECURITIES, INC., AS ARRANGER.
"RELEVANT INDEBTEDNESS" MEANS: (1) THE CREDIT AGREEMENT, (2) ANY
NOTES AND (3) ANY OTHER INDEBTEDNESS FOR BORROWED MONEY OF (OR GUARANTY THEREOF
BY) THE CORPORATION THAT CONTAINS A RESTRICTION ON THE MAKING OF A RESTRICTED
PAYMENT; IN EACH CASE OF CLAUSES (1) THROUGH (3), AS AMENDED, SUPPLEMENTED,
WAIVED OR OTHERWISE MODIFIED FROM TIME TO TIME, OR REFUNDED, REFINANCED,
RESTRUCTURED, REPLACED, RENEWED, REPAID, INCREASED OR EXTENDED FROM TIME TO TIME
(WHETHER IN WHOLE OR IN PART, WHETHER WITH THE ORIGINAL AGENT AND LENDERS OR
PLACEMENT AGENTS, OR UNDERWRITERS, OR OTHER AGENTS, LENDERS, PLACEMENT AGENTS OR
UNDERWRITERS OR OTHERWISE, AND WHETHER PROVIDED UNDER THE ORIGINAL AGREEMENT OR
INSTRUMENT OR OTHERWISE).
"RESTRICTED PAYMENT" MEANS:
(1) ANY DECLARATION OR PAYMENT OF ANY DIVIDEND OR MAKING OF
ANY OTHER PAYMENT OR DISTRIBUTION ON ACCOUNT OF ANY EQUITY SECURITY (OR ANY
EQUIVALENT SECURITY OF ANY SUBSIDIARY OF THE CORPORATION ("SUBSIDIARY EQUITY")
(INCLUDING, WITHOUT LIMITATION, ANY PAYMENT IN CONNECTION WITH ANY MERGER OR
CONSOLIDATION
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INVOLVING THE CORPORATION OR ANY OF ITS SUBSIDIARIES) OR TO THE DIRECT OR
INDIRECT HOLDERS OF ANY EQUITY SECURITY OR SUBSIDIARY EQUITY IN THEIR CAPACITY
AS SUCH;
(2) ANY PAYMENT IN CONNECTION WITH, OR THE MAKING OF, ANY
PURCHASE, REDEMPTION OR OTHER ACQUISITION OR RETIREMENT FOR VALUE (INCLUDING,
WITHOUT LIMITATION, IN CONNECTION WITH ANY MERGER OR CONSOLIDATION INVOLVING THE
CORPORATION) OF ANY EQUITY SECURITY OR ANY EQUIVALENT SECURITY OF ANY DIRECT OR
INDIRECT PARENT OF THE CORPORATION OR ANY SUBSIDIARY EQUITY; AND
(3) ANY PAYMENT PERMITTED OR REQUIRED, BUT FOR THE PROVISIONS
OF THIS SECTION 4(E), BY SECTIONS 4(C)2(E), 4(C)2(F), 4(D)1, 4(D)2(A), 4(D)2(C),
4(D)3(D) OR 4(D)3(E) (OR ANY SUCCESSOR PROVISIONS) OR BY ANY OTHER PROVISION OF
THIS FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION (AS AMENDED AND/OR
RESTATED AND IN EFFECT FROM TIME TO TIME).
"NOTES" MEANS (I) ANY NOTES OR OTHER SECURITIES (INCLUDING ANY
GUARANTY) EVIDENCING INDEBTEDNESS, AND ANY NOTES OR OTHER SECURITIES ISSUED IN
EXCHANGE THEREFORE OR IN ADDITION THERETO (INCLUDING WITHOUT LIMITATION ANY
NOTES OR OTHER SECURITIES THAT ARE REGISTERED UNDER THE ACT OR UNREGISTERED,
SENIOR OR SUBORDINATED, SECURED OR UNSECURED, CONVERTIBLE OR EXCHANGEABLE, OR
ISSUED AS AN INVESTMENT UNIT WITH OTHER SECURITIES) AND (II) THE INDENTURE UNDER
WHICH THEY ARE ISSUED.
Section 5. Notwithstanding anything to the contrary in
Section 4, the Corporation and any holder of Capital Stock, as applicable, shall
use their best efforts to make any filings with any governmental body, or obtain
any approvals of any governmental body (including those in connection with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to
time (the "HSR ACT")) required prior to or in connection with any conversion or
redemption of any Capital Stock within a reasonable period of time. Any
Conversion Date, Redemption Date, notice periods or other time periods provided
hereunder shall be extended to the extent necessary to allow such filings to be
made and such approvals to be obtained. In the event that any such approvals
cannot be obtained, the Corporation shall not, nor shall it have the obligation
to, convert or redeem any Capital Stock.
Section 6. The Corporation shall keep at its principal office
a register for the registration of the Common Stock and the Preferred Stock.
Upon the surrender of any certificate representing Common Stock or Preferred
Stock at such place, the Corporation shall, at the request of the record holder
of such certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares represented by the surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends,
if any, shall accrue on the Common Stock or Preferred Stock represented by such
new certificate from the date to which dividends have been fully paid on such
Common Stock or Preferred Stock represented by the surrendered certificate.
Section 7. Upon receipt of evidence reasonably satisfactory
to the Corporation (an affidavit of the registered holder shall be satisfactory)
of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing shares of Common Stock or Preferred Stock, and in the
case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Corporation (PROVIDED, that if the holder is a
financial institution or other institutional investor its own agreement shall be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class or series represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends, if any, shall accrue on the Common Stock
or Preferred Stock represented by such new certificate from the date up to which
dividends have been fully paid on such lost, stolen, destroyed or mutilated
certificate.
Section 8. Unless, and except to the extent that, the by-laws
of the Corporation (the "BY-LAWS") so require, the election of directors need
not be by written ballot.
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Section 9. The board of directors of the Corporation may from
time to time adopt, amend or repeal the By-Laws, subject to the power of the
stockholders to adopt any By-Laws or to amend or repeal any By-Laws adopted,
amended or repealed by the board of directors.
Section 10. To the fullest extent that the Delaware General
Corporation Law as it exists on the date hereof, or as it may hereafter be
amended, permits the limitation or elimination of the liability of directors, no
director will be liable to the Corporation or its stockholders for monetary
damage for breach of fiduciary duty as a director. Any repeal or amendment of
this Section 10 will not adversely affect any limitation on the personal
liability or alleged liability of a director arising from an act or omission of
that director occurring prior to the time of such repeal or amendment.
Section 11. No contract or transaction between the Corporation
and one or more of its directors or officers, or between the Corporation and any
other corporation, partnership, association, or other organization in which one
or more of its directors or officers, are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board of directors or committee which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(A) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the board of
directors or the committee, and the board of directors or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or
(B) The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(C) The contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified by the board of directors, a
committee or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the board of directors or of a committee which authorizes
the contract or transaction.
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<Page>
IN WITNESS WHEREOF, the undersigned has executed this Fourth
Amended and Restated Certificate of Incorporation this 10th day of September,
2001.
IESI CORPORATION
By:
----------------------------------------
Thomas J. Cowee
Chief Financial Officer, Vice President,
Treasurer and Assistant Secretary
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