EXHIBIT 4.18
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
GRUBB & ELLIS COMPANY, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That on June 1, 1994, the Board of Directors of said
Corporation duly adopted the following resolution setting forth proposed
amendments to the Restated Certificate of Incorporation of said Corporation,
declaring said amendments to be advisable and calling a meeting of the
stockholders of said Corporation for consideration thereof. The resolution
setting forth the proposed amendments is as follows:
RESOLVED, that Article IV of the Certificate of Incorporation of
this Corporation is hereby amended to read in its entirety as follows:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is twenty-six million (26,000,000) shares, of
which twenty-five million (25,000,000) shares with a par value of $.01 each
shall be designated Common Stock, and of which one million (1,000,000) shares
with a par value of $.01 each shall be designated Preferred Stock, of which
Preferred Stock fifty thousand (50,000) shares with a par value of $.01 each
shall be designated Series A Senior Convertible Preferred Stock ("Series A
Senior Preferred Stock"), two hundred thousand (200,000) shares with a par value
of $.01 each shall be designated Series B Senior Convertible Preferred Stock
("Series B Senior Preferred Stock") and two hundred thousand (200,000) shares
with a par value of $.01 each shall be designated Junior Convertible Preferred
Stock. Except as noted in the second following paragraph, as used herein,
"Senior Convertible Preferred Stock," shall mean collectively, the Series A
Senior Preferred Stock and the Series B Senior Preferred Stock, or either of
them. As used herein, "Convertible Preferred Stock" shall mean collectively,
the Senior Convertible Preferred Stock and the Junior Convertible Preferred
Stock, or either of them.
Upon the filing on January 29, 1993 of the Certificate of Amendment
of Certificate of Incorporation (the "Amendment"), every five shares of
outstanding Common Stock were automatically reclassified, changed and converted
into one share of Common Stock. No fractional shares of Common Stock were
issued upon such conversion, but in lieu thereof, the Corporation paid a cash
adjustment in respect of such fractional interest in an amount equal to such
fractional interest multiplied by the Market Price of a share of Common Stock on
the date on which the Amendment was filed. Unless otherwise requested by the
holders thereof, the share certificates representing the shares of Common Stock
outstanding prior to the filing of the Amendment represent such shares as
reclassified, changed and converted following the filing of the Amendment. In
addition, on December 8, 1993, the Company filed a Restated Certificate of
Incorporation restating, integrating, and not further amending the provisions of
the Company's certificate of incorporation as amended and supplemented before
that date.
Upon the filing of this Certificate of Amendment of Restated
Certificate of Incorporation (the "Certificate of Amendment"), Warburg, Pincus
Investors, L.P. ("Warburg") will exchange all of its shares of Senior
Convertible Preferred Stock held prior to such filing ("Existing
Senior Convertible Preferred Stock") for an equal number of shares of Series B
Senior Preferred Stock. Effective immediately after the issuance of such shares
of Series B Senior Preferred Stock, each remaining share of Existing Senior
Convertible Preferred Stock shall be automatically reclassified, changed and
converted into one share of Series A Senior Preferred Stock. Unless otherwise
requested by the holders thereof, the share certificates representing the shares
of Existing Senior Convertible Preferred Stock outstanding prior to the filing
of the Certificate of Amendment which have not been exchanged for Series B
Senior Convertible Stock shall represent shares of Series A Senior Convertible
Preferred Stock as reclassified, changed and converted following the issuance of
the Series B Senior Convertible Stock.
The class of capital stock of the Corporation designated Common
Stock shall have (i) subject to the proviso at the end of this sentence, full
voting rights, with one vote represented by each share of stock; (ii) rights to
payment of dividends without preference if, as, and when declared by the Board
of Directors of the Corporation; and (iii) rights to liquidation distributions
of the Corporations's assets without preference after payment of preferential
liquidation distributions, if any, payable on any issued and outstanding series
of Preferred Stock; provided, however, that, notwithstanding the provisions of
clause (i) of this sentence, the holders of Common Stock shall not have the
right to vote on any of the matters described in Section 4(b)(i) or 4(b)(ii)
below in this Article IV except in clauses (A) and (D) thereof, except as
otherwise required by the laws of the State of Delaware.
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby expressly vested with authority to fix
by resolution or resolutions the designations and the powers, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof (including, without
limitation, the voting powers, if any, the dividend rate, conversion rights,
redemption price, or liquidation preference), of any wholly unissued series of
Preferred Stock, to fix the number of shares constituting any such series, and
to increase or decrease the number of shares of any such series (but not below
the number of shares thereof then outstanding). In case the number of shares of
any such series shall be so decreased, the shares constituting such decrease
shall resume the status which they had prior to the adoption of the resolution
or resolutions originally fixing the number of shares of such series.
A statement of the designations and the voting powers, preferences
and relative, participating, optional and other special rights of the shares of
the Senior Convertible Preferred Stock and the Junior Convertible Preferred
Stock, and the qualifications, limitations or restrictions thereof are as
follows:
1. RANK. The Senior Convertible Preferred Stock shall, with
respect to dividend rights and rights on liquidation, winding up and
dissolution, rank prior to any other equity securities of the Corporation,
including all classes of Common Stock and any other series of Preferred Stock of
the Corporation, with the Series A Senior Preferred Stock and the Series B
Senior Preferred Stock ranking on an equal priority in all such foregoing
respects. The Junior Convertible Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and dissolution, rank
prior to any other equity securities of the Corporation, including all classes
of Common Stock and any other series of Preferred Stock of the Corporation other
than the Senior Convertible Preferred Stock which shall rank prior to the Junior
Convertible Preferred Stock (all of such equity securities of the Corporation to
which the Junior Convertible Preferred Stock ranks prior are collectively
referred to herein as the "Junior Stock").
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2. DIVIDENDS
(a) SENIOR CONVERTIBLE PREFERRED STOCK. The holders of Senior
Convertible Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors out of funds legally available therefor, cumulative
dividends at a rate (the "Senior Dividend Rate") equal to the greater of 12% or
the Junior Preferred Dividend Rate (as defined below). Such dividends shall be
computed on the basis of the Series A Senior Preferred Stock Stated Value and
the Series B Senior Preferred Stock Stated Value, respectively, and shall be
payable annually on the first day of each October commencing on the first of
such dates to occur after the Issue Date. Dividends shall accrue on each share
of Senior Convertible Preferred Stock from the Issue Date and shall accrue from
day to day, whether or not earned or declared. Accrued but unpaid dividends on
the Senior Convertible Preferred Stock shall increase at a compounding rate
equal to the Senior Dividend Rate compounded annually. Dividends paid on the
shares of Senior Convertible Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of all, but not less than all shares of Senior Convertible Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 30 days prior to the date
fixed for the payment thereof. During such time as any shares of the Senior
Convertible Preferred Stock are outstanding, the Corporation shall not declare,
pay or set apart for payment any dividend on any of the Junior Convertible
Preferred Stock or Junior Stock, other than a redemption pursuant to Section
5(h), or make any payment on account of, or set apart money for a sinking or
other similar fund or make any payment for, the purchase, redemption or other
retirement of, any of the Junior Convertible Preferred Stock or Junior Stock or
any warrants, rights, calls or options exercisable for or convertible into any
of the Junior Convertible Preferred Stock or Junior 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 Convertible Preferred Stock or Junior Stock
to the holders of Junior Convertible Preferred Stock or Junior Stock), and shall
not permit any corporation or other entity directly or indirectly controlled by
the Corporation to purchase or redeem any of the Junior Convertible Preferred
Stock or Junior Stock or any warrants, rights, calls or options exercisable for
or convertible into any of the Junior Convertible Preferred Stock or Junior
Stock, other than a redemption pursuant to Section 5(h), unless prior to or
concurrently with such declaration, payment, setting apart for payment,
purchase, redemption or distribution, as the case may be, the full cumulative
dividends on all outstanding shares of Senior Convertible Preferred Stock shall
have been paid in full or contemporaneously are declared and paid through the
most recent dividend payment date. Notwithstanding the foregoing, a redemption
pursuant to Section 5(h) may be effected prior to the payment in full of
cumulative dividends on all outstanding shares of Senior Convertible Preferred
Stock. The dividend rights of the Series A Senior Preferred Stock and Series B
Senior Preferred Stock shall be on an equal priority.
(b) JUNIOR CONVERTIBLE PREFERRED STOCK. The holders of Junior
Convertible Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors out of funds legally available therefor, cumulative
dividends payable in cash at a rate (the "Junior Preferred Dividend Rate") of 5%
per annum through December 31, 2001, 10% per annum from January 1, 2002 through
December 31, 2002, 11% per annum from January 1, 2003 through December 31, 2003,
12% per annum from January 1, 2004 through December 31, 2004, and commencing on
January 1, 1995 and on each January 1 thereafter, such rate shall increase by
2%. Such dividends shall be computed on the basis of the Junior Convertible
Preferred Stock Stated Value and shall be payable annually on the first day of
each October commencing on the first of such dates to occur after
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the shares of Junior Convertible Preferred Stock are initially issued.
Dividends shall accrue on each share of Junior Convertible Preferred Stock from
the date of issuance thereof and shall accrue from day to day, whether or not
earned or declared. Accrued but unpaid dividends shall increase at a
compounding rate equal to the Junior Preferred Dividend Rate compounded
annually. Dividends paid on the shares of Junior Convertible Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Junior Convertible
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 30 days prior to the
date fixed for the payment thereof. During such time as any shares of the
Junior Convertible Preferred Stock are outstanding, the Corporation shall not
declare, pay or set apart for payment any dividend on any of the Junior Stock or
make any payment on account of, or set apart money for a sinking or other
similar fund or make any payment for, the purchase, redemption or other
retirement of, any of the Junior Stock or any warrants, rights, calls or options
exercisable for or convertible into any of the Junior 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 Stock to the holders of Junior Stock), and
shall not permit any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any of the Junior Stock or
any warrants, rights, calls or options exercisable for or convertible into any
of the Junior Stock, unless prior to or concurrently with such declaration,
payment, setting apart for payment, purchase, redemption or distribution, as the
case may be, the full cumulative dividends on all outstanding shares of Junior
Convertible Preferred Stock shall have been paid in full or contemporaneously
are declared and paid through the most recent dividend payment date.
3. LIQUIDATION PREFERENCE
(a) SENIOR CONVERTIBLE PREFERRED STOCK. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, the holders of the shares of Series A Senior Preferred Stock
and Series B Senior Preferred Stock then outstanding shall be entitled to be
first paid out of the assets of the Corporation available for distribution to
its stockholders an amount in cash equal to $100.00 per share of Series A Senior
Preferred Stock (the "Series A Senior Preferred Stock Stated Value") and $100.00
per share of Series B Senior Preferred Stock (the "Series B Senior Preferred
Stock Stated Value"), respectively, plus an amount equal to all dividends
(whether or not earned or declared) on such shares accrued and unpaid thereon to
the date of final distribution, before any payment shall be made or any assets
distributed to the holders of the Junior Convertible Preferred Stock or Junior
Stock. Except as provided in the preceding sentence, holders of the Senior
Convertible Preferred Stock shall not be entitled to any distribution in the
event of liquidation, dissolution or winding up of the affairs of the
Corporation. If, upon any such liquidation, dissolution or winding up of the
Corporation, the remaining assets of the Corporation available for distribution
to its stockholders shall be insufficient to pay the holders of the Senior
Convertible Preferred Stock the full amount to which they shall be entitled, the
holders of any of the Senior Convertible Preferred Stock shall share ratably in
any distribution of the remaining assets and funds of the Corporation in
proportion to the respective amounts which would otherwise be payable in respect
of the shares held by them upon such distribution if all amounts payable on or
with respect to such shares were paid in full. The distribution rights of the
Series A Senior Preferred Stock and Series B Senior Preferred Stock shall be on
an equal priority.
(b) JUNIOR CONVERTIBLE PREFERRED STOCK. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, if assets are
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remaining after the payment in full of the preferential amount of the Series A
Senior Preferred Stock Stated Value and the Series B Senior Preferred Stock
Stated Value set forth in Section 3(a) plus an amount equal to all dividends
(whether or not earned or declared) on such shares accrued and unpaid thereon,
the holders of the shares of Junior Convertible Preferred Stock then outstanding
shall be next entitled to be first paid out of the assets of the Corporation
available for distribution to its stockholders an amount in cash equal to
$100.00 per share (the "Junior Convertible Preferred Stock Stated Value") plus
an amount equal to all dividends (whether or not earned or declared) on such
shares accrued and unpaid thereon to the date of final distribution, before any
payment shall be made or any assets distributed to the holders of any of the
Junior Stock. Except as provided in the preceding sentence, holders of the
Junior Convertible Preferred Stock shall not be entitled to any distribution in
the event of liquidation, dissolution or winding up of the affairs of the
Corporation. If, upon any such liquidation, dissolution or winding up of the
Corporation, the remaining assets of the Corporation available for distribution
to its stockholders shall be insufficient to pay the holders of the Junior
Convertible Preferred Stock the full amount to which they shall be entitled, the
holders of the Junior Convertible Preferred Stock shall share ratably in any
distribution of the remaining assets and funds of the Corporation in proportion
to the respective amounts which would otherwise be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to such shares were paid in full.
(c) For the purposes of this Section 3, neither the voluntary
sale, conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all the property or assets of the
Corporation nor the consolidation or merger of the Corporation with one or more
other corporations shall be deemed a liquidation, dissolution or winding up,
voluntary or involuntary.
(d) The liquidation payment with respect to each outstanding
fractional share of Convertible Preferred Stock shall be equal to a ratably
proportionate amount of the liquidation payment with respect to each outstanding
share of Convertible Preferred Stock.
4. VOTING RIGHTS
(a) RIGHT TO VOTE. Except as otherwise required by law, the
Senior Convertible Preferred Stock, the Junior Convertible Preferred Stock, the
Common Stock and any other capital stock of the Corporation entitled to vote
with the Common Stock shall be deemed to be one class for the purpose of voting,
or giving written consent in lieu of voting, on all matters submitted for the
approval of the stockholders of the Corporation. Each person in whose name
shares of Convertible Preferred Stock shall be registered on the record date for
determining the holders of the Convertible Preferred Stock entitled to vote at
any meeting of stockholders (or adjournment thereof) or to consent to corporate
action in writing without a meeting shall be entitled to, at such meeting or
with respect to such action, one vote for each share of Common Stock of the
Corporation into which each share of Convertible Preferred Stock registered in
the name of such person on such record date could be converted (with any
fractional share determined on an aggregate conversion basis being rounded to
the nearest whole share).
(b) SIGNIFICANT EVENTS
(i) During such time as any shares of Senior Convertible
Preferred Stock are outstanding, the Corporation will not, without the
affirmative vote or consent of the holders of at least two-thirds of the
issued and outstanding shares of Senior Convertible
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Preferred Stock voting together as one single and separate class, (A)
create, authorize or issue (including on conversion or exchange of any
convertible or exchangeable securities or by reclassification) any class
or series of shares ranking on a parity with or prior to the Senior
Convertible Preferred Stock, either as to dividends upon voluntary or
involuntary liquidation, dissolution or winding up, (B) increase the
authorized shares of, or issue (including on conversion or exchange of any
convertible or exchangeable securities or by reclassification) any shares
of Senior Convertible Preferred Stock, (C) amend, alter, waive the
application of, or repeal (whether by merger, consolidation or otherwise)
any provision of the Certificate of Incorporation of the Corporation,
enter into any agreement or take any other corporate action which in any
manner would alter, change or otherwise adversely affect the powers,
rights or preferences of the Senior Convertible Preferred Stock, (D)
effect the reorganization, recapitalization, liquidation, dissolution or
winding up of the Corporation, or the sale, lease, conveyance or exchange
of all or substantially all of the assets, property or business of the
Corporation, or the merger or consolidation of the Corporation with or
into any other corporation, if such transaction in any manner would alter,
change or otherwise adversely affect the powers, rights or preferences of
the Senior Convertible Preferred Stock or (E) take any action which would
cause a dividend or other distribution to be deemed to be received by the
holders of the Senior Convertible Preferred Stock for federal income tax
purposes unless such dividend or other distribution is actually received
by such holders.
(ii) During such time as any shares of Junior Convertible
Preferred Stock are outstanding, the Corporation will not, without the
affirmative vote or consent of the holders of at least two-thirds of the
issued and outstanding shares of Junior Convertible Preferred Stock voting
together as a separate class, (A) create, authorize or issue (including on
conversion or exchange of any convertible or exchangeable securities or by
reclassification) any class or series of shares ranking on a parity with
or prior to the Junior Convertible Preferred Stock, either as to dividends
or redemption or upon voluntary or involuntary liquidation, dissolution or
winding up, (B) increase the authorized shares of, or issue (including on
conversion or exchange of any convertible or exchangeable securities or by
reclassification) any shares of Junior Convertible Preferred Stock, (C)
amend, alter, waive the application of, or repeal (whether by merger,
consolidation or otherwise) any provision of the Certificate of
Incorporation of the Corporation, enter into any agreement or take any
other corporate action which in any manner would alter, change or
otherwise adversely affect the powers, rights or preferences of the Junior
Convertible Preferred Stock, (D) effect the reorganization,
recapitalization, liquidation, dissolution or winding up of the
Corporation, or the sale, lease, conveyance or exchange of all or
substantially all of the assets, property or business of the Corporation,
or the merger or consolidation of the Corporation with or into any other
corporation, if such transaction in any manner would alter, change or
otherwise
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adversely affect the powers, rights or preferences of the Junior
Convertible Preferred Stock or (E) take any action which would cause a
dividend or other distribution to be deemed to be received by the holders
of the Junior Convertible Preferred Stock for federal income tax purposes
unless such dividend or other distribution is actually received by such
holders.
(c) WRITTEN CONSENT. Whenever holders of the Convertible
Preferred Stock are required or permitted to take any action by vote, such
action may be taken without a meeting by written consent, setting forth the
action so taken and signed by the holders of the outstanding Senior Convertible
Preferred Stock or Junior Convertible Preferred Stock, as the case may be,
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all such shares entitled to
vote thereon were present and voted.
5. CONVERSION. Holders of the Convertible Preferred Stock
shall have the following conversion rights (collectively, the "Conversion
Rights"):
(a) RIGHT TO CONVERT. Each share of Series A Senior Preferred
Stock, Series B Senior Preferred Stock and Junior Convertible Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and from
time to time, into such number of validly issued, fully paid and nonassessable
shares of Common Stock of the Corporation, as is determined by dividing the
Series A Senior Preferred Stock Stated Value, the Series B Senior Preferred
Stock Stated Value or the Junior Convertible Preferred Stock Stated Value, as
the case may be, by the respective "Conversion Prices" (as defined below) in
effect at the time of the conversion; provided, however, that if such share
shall be called for redemption pursuant to Section 5(h), it may not be converted
after the redemption date unless the Corporation shall have failed to pay or
provide for the payment of the redemption price therefor (in accordance with
Section 5(h)). The Conversion Prices initially in effect shall be $2.6716 for
the Series A Senior Preferred Stock (the "Series A Senior Preferred Stock
Conversion Price"), $ 2.6564 for the Series B Senior Preferred Stock (the
"Series B Senior Preferred Stock Conversion Price"), and $5.6085 for the Junior
Convertible Preferred Stock (the "Junior Preferred Stock Conversion Price") (the
Series A Senior Preferred Stock Conversion Price, the Series B Senior Preferred
Stock Conversion Price, and the Junior Preferred Stock Conversion Price,
collectively the "Conversion Prices" and each individually, a "Conversion
Price"). Such initial Conversion Prices, and the rate at which shares of
Convertible Preferred Stock may be converted into shares of Common Stock, shall
be subject to adjustment as provided in Section 5(d) below.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of the Convertible Preferred Stock, but in lieu
thereof, the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Market Price of a share of Common Stock on the date on which such shares of
Convertible Preferred Stock are deemed to have been converted.
(c) MECHANICS OF CONVERSION
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(i) In order for a holder of the Convertible Preferred Stock
to convert shares of Convertible Preferred Stock into shares of Common
Stock, such holder shall surrender the certificate or certificates for
such shares of Convertible Preferred Stock, at the office of the transfer
agent for the Convertible Preferred Stock (or at the principal office of
the Corporation if the Corporation serves as its own transfer agent),
together with written notice that such holder elects to convert all or any
number of the shares of the Convertible Preferred Stock represented by
such certificate or certificates. Such notice shall state such holder's
name or the names of the nominees in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued. If
required by the Corporation, certificates surrendered for conversion shall
be endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed by the
registered holder or his or its attorney duly authorized in writing. The
date on which the transfer agent (or the Corporation, if the Corporation
serves as its own transfer agent) receives such certificate or
certificates and notice shall be the conversion date ("Conversion Date").
As soon as practicable, and in any event within five business days, after
the Conversion Date, the Corporation shall issue and deliver, or cause to
be issued and delivered, to such holder of Convertible Preferred Stock, or
to his or its nominees, (i) a certificate or certificates for the number
of validly issued, fully paid and nonassessable shares of Common Stock to
which such holder shall be entitled upon conversion and (ii) if fewer than
the full number of shares of Convertible Preferred Stock evidenced by the
surrendered certificate or certificates are being converted, a new
certificate or certificates of like tenor for the number of shares
evidenced by such surrendered certificate or certificates less the number
of shares converted.
(ii) During such times as any shares of Convertible Preferred
Stock are outstanding, the Corporation shall reserve and keep available
out of its authorized but unissued stock, for the purpose of effecting the
conversion of Convertible Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of Convertible
Preferred Stock.
(iii) All shares of Convertible Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares
(including the rights, if any, to receive notices and to vote) shall
immediately cease and terminate on the Conversion Date, except only the
right of the holders thereof to receive shares of Common Stock in exchange
therefor. Such conversions shall be deemed to have been made at the close
of business on the Conversion Date and the converting holder shall be
treated for all purposes as having become the record holder of such Common
Stock at such time. Any shares of Convertible Preferred Stock so
converted shall be retired and canceled and shall not be reissued, and the
Corporation may from time to time take such appropriate action as may be
necessary to reduce the authorized Convertible Preferred Stock
accordingly.
(d) ANTI-DILUTION PROVISIONS
(i) ADJUSTMENTS; CAPITAL STOCK. The Series A Senior
Preferred Stock Conversion Price set forth above shall be subject to
adjustment from time to time as hereinafter provided. For purposes of
this Section 5, the term "Capital Stock" as used herein includes the
Corporation's Common Stock and shall also include any capital stock of any
class of the Corporation thereafter authorized which shall not be limited
to a fixed sum or
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percentage in respect of the rights of the holders thereof to participate
in dividends and in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation.
(ii) ADJUSTMENT OF SERIES A SENIOR PREFERRED STOCK
CONVERSION PRICE UPON ISSUANCE OF ADDITIONAL SHARES OF CAPITAL STOCK
(A) In case the Corporation, at any time or from time
to time after the Issue Date shall issue or sell Additional Shares
of Capital Stock without consideration or for a consideration per
share less than the greater of the Series A Senior Preferred Stock
Conversion Price or the Market Price in effect, in each case, on the
date of such issue or sale, then, and in each such case, subject to
Section 5(d)(viii), the Series A Senior Preferred Stock Conversion
Price shall be reduced, concurrently with such issue or sale, to a
price (calculated to the nearest .001 of a cent) determined by
multiplying such Series A Senior Preferred Stock Conversion Price by
a fraction:
(1) the numerator of which shall be (a) the number of
shares of Capital Stock outstanding immediately prior to such
issue or sale plus (b) the number of shares of Capital Stock
which the aggregate consideration received by the Corporation
for the total number of such Additional Shares of Capital
Stock so issued or sold would purchase at the greater of such
Market Price or such Series A Senior Preferred Stock
Conversion Price, and
(2) the denominator of which shall be the number of
shares of Capital Stock outstanding immediately after such
issue or sale,
provided that, for the purposes of this Section 5(d)(ii)(A), (w)
immediately after any Additional Shares of Capital Stock are deemed to
have been issued pursuant to Section 5(d)(iii) or 5(d)(iv), such
Additional Shares shall be deemed to be outstanding, and (x) treasury
shares shall not be deemed to be outstanding; and provided further that,
for the purposes of this Section 5(d)(ii)(A), (y) the crediting of shares
of the Corporation's Common Stock to participating real estate
salespersons under the Corporation's Deferred Equity Program which was
adopted by the Corporation on October 18, 1989 shall cause an adjustment
in the Series A Senior Preferred Stock Conversion Price concurrently with
such crediting of the shares of the Corporation's Common Stock and (z) the
issuance of such shares previously credited to participating real estate
salespersons under the Corporation's Deferred Equity Program shall not
cause an adjustment in the Series A Senior Preferred Stock Conversion
Price.
(B) In case the Corporation, at any time or from time
to time after the Issue Date, shall declare, order, pay or make a
dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or
property or Options by way of dividend or spinoff, reclassification,
recapitalization or similar corporate rearrangement) on the Capital
Stock, other than (1) a dividend payable in Additional Shares of
Capital Stock or in Options for Capital Stock or Convertible
Securities or (2) a dividend payable in cash or other property and
declared out of retained earnings of the Corporation, then, and in
each such case, subject to Section 5(d)(viii), the Series A Senior
Preferred Stock Conversion Price in effect immediately prior to the
close of business on the record date fixed for the
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determination of holders of any class of securities entitled to
receive such dividend or distribution shall be reduced, effective as
of the close of business on such record date, to a price (calculated
to the nearest .001 of a cent) determined by multiplying the Series
A Senior Preferred Stock Conversion Price by a fraction:
(1) the numerator of which shall be the Market Price
in effect on such record date or, if any class of Capital
Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading, less the value of such
dividend or distribution which has not been declared out of
retained earnings (as determined in good faith by the Board of
Directors of the Corporation) applicable to one share of
Capital Stock, and
(2) the denominator of which shall be such Market
Price.
(iii) TREATMENT OF OPTIONS AND CONVERTIBLE SECURITIES. In
case the Corporation, at any time or from time to time after the Issue
Date, shall issue, sell, grant or assume, or shall fix a record date for
the determination of holders of any class of securities entitled to
receive, any Options or Convertible Securities, then, and in each such
case, the maximum number of Additional Shares of Capital Stock (as set
forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Capital
Stock issued as of the time of such issue, sale, grant or assumption or,
in case such a record date shall have been fixed, as of the close of
business on such record date, provided that such Additional Shares of
Capital Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to Section 5(d)(v)) of such
shares would be less than the greater of the applicable Conversion Price
or the Market Price in effect, in each case, on the date of and
immediately prior to such issue, sale, grant or assumption or immediately
prior to the close of business on such record date or, if the Capital
Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading, as the case may be, and provided,
further, that in any such case in which Additional Shares of Capital Stock
are deemed to be issued,
(A) no further adjustment of the Series A Senior
Preferred Conversion Price shall be made upon the subsequent issue
or sale of Additional Shares of Capital Stock or Convertible
Securities upon the exercise of such Options or the conversion or
exchange of such Convertible Securities;
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any change
in the consideration payable to the Corporation, or change in the
number of Additional Shares of Capital Stock issuable, upon the
exercise, conversion or exchange thereof (by change of rate or
otherwise), the Conversion Price computed upon the original issue,
sale, grant or assumption thereof (or upon the occurrence of the
record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon any such change becoming effective, be
recomputed to reflect such change insofar as it affects such
Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;
10
(C) upon the expiration of any such Options or of the
rights of conversion or exchange under any such Convertible
Securities which shall not have been exercised (or upon purchase by
the Corporation and cancellation or retirement of any such Options
which shall not have been exercised or of any such Convertible
Securities the rights of conversion or exchange under which shall
not have been exercised), the Conversion Price computed upon the
original issue, sale, grant or assumption thereon (or upon the
occurrence of the record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration
(or such cancellation or retirement, as the case may be), be
recomputed as if:
(1) in the case of Options for Capital Stock or of
Convertible Securities, the only Additional Shares of Capital
Stock issued or sold (or deemed issued or sold) were the
Additional Shares of Capital Stock, if any, actually issued or
sold upon the exercise of such Options or the conversion or
exchange of such Convertible Securities and the consideration
received therefor were (a) an amount equal to (i) the
consideration actually received by the Corporation for the
issue, sale, grant or assumption of all such Options, whether
or not exercised, plus (ii) the consideration actually
received by the Corporation upon such exercise, minus (iii)
the consideration paid by the Corporation for any purchase of
such Options which were not exercised, or (b) an amount equal
to (i) the consideration actually received by the Corporation
for the issue, sale, grant or assumption of all such
Convertible Securities which were actually converted or
exchanged, plus (ii) the additional consideration, if any,
actually received by the Corporation upon such conversion or
exchange, minus (iii) the excess, if any, of the consideration
paid by the Corporation for any purchase of such Convertible
Securities, the rights of conversion or exchange under which
were not exercised, over an amount that would be equal to the
fair value (as determined in good faith by the Board of
Directors of the Corporation) of the Convertible Securities so
purchased if such Convertible Securities were not convertible
into or exchangeable for Additional Shares of Capital Stock,
and
(2) in the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued or
sold upon the exercise of such Options were issued at the time
of the issue, sale, grant or assumption of such Options, and
the consideration received by the Corporation for the
Additional Shares of Capital Stock deemed to have then been
issued were an amount equal to (a) the consideration actually
received by the Corporation for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus
(b) the consideration deemed to have been received by the
Corporation (pursuant to Section 5(d)(v)) upon the issue or
sale of the Convertible Securities with respect to which such
Options were actually exercised, minus (c) the consideration
paid by the Corporation for any purchase of such Options which
were not exercised.
(iv) TREATMENT OF STOCK DIVIDENDS, STOCK SPLITS, ETC.;
CERTAIN STOCK REPURCHASES
11
(A) In case the Corporation, at any time or from time
to time after the Issue Date, shall declare or pay any dividend or
other distribution on the Capital Stock payable in Capital Stock, or
shall effect a subdivision of the outstanding shares of Capital
Stock into a greater number of shares of Capital Stock (by
reclassification or otherwise than by payment of a dividend in
Capital Stock), then, and in each such case, Additional Shares of
Capital Stock shall be deemed to have been issued (1) in the case of
any such dividend, immediately after the close of business on the
record date for the determination of holders of any class of
securities entitled to receive such dividend, or (2) in the case of
any such subdivision, at the close of business on the day
immediately prior to the day upon which such corporate action
becomes effective.
(B) If the Corporation at any time or from time to
time after the Issue Date shall, directly or indirectly, including
through a Subsidiary (as defined below) or otherwise, purchase,
redeem or otherwise acquire (a "Repurchase") any of its Capital
Stock at a price per share greater than the Market Price, then the
Series A Senior Preferred Stock Conversion Price upon each such
Repurchase shall be adjusted to the price determined by multiplying
the Series A Senior Preferred Stock Conversion Price by a fraction
(1) the numerator of which shall be the number of shares of Capital
Stock outstanding immediately prior to the such Repurchase minus the
number of shares of Capital Stock which the aggregate consideration
for total repurchased Capital Stock would purchase at the Market
Price; and (2) the denominator of which shall be the number of
shares of Capital Stock outstanding immediately after such
Repurchase. For the purposes of this Subsection 5(d)(iv)(B), the
date as of which the Series A Senior Preferred Stock Conversion
Price shall be computed shall be the earlier of (x) the date on
which the Corporation shall enter into contract for the Repurchase
of such Capital Stock, or (y) the date of the actual Repurchase of
such Capital Stock. For purposes of this Section 5(d)(iv)(B), a
Repurchase of Convertible Securities shall be deemed to be a
Repurchase of the underlying Capital Stock, and the computation
herein required shall be made on the basis of the full exercise,
conversion or exchange for such Convertible Securities on the date
as of which such computation is required hereby to be made even if
such Convertible Securities are not exercisable, convertible or
exchangeable on such date.
(v) COMPUTATION OF CONSIDERATION. For the purposes of
this Section 5:
(A) The consideration for the issue or sale of any
Additional Shares of Capital Stock or for the issue, sale, grant or
assumption of any Options or Convertible Securities, irrespective of
the accounting treatment of such consideration,
(1) insofar as it consists of cash, shall be computed
as the amount of cash received by the Corporation, and insofar
as it consists of securities or other non-cash consideration,
shall be computed as of the date immediately preceding such
issue, sale, grant or assumption as the fair value (as
determined in good faith by the Board of Directors of the
Corporation) of such consideration (or, if such consideration
is received for the issue or sale of Additional Shares of
Capital Stock and the Market Price thereof is less than the
fair value, as so determined, of such consideration, then such
consideration shall be computed as the Market Price of such
Additional Shares of Capital Stock), in each case without
deducting any expenses paid or incurred
12
by the Corporation, any commissions or compensation paid or
concessions or discounts allowed to underwriters, dealers or
others performing similar services and any accrued interest or
dividends in connection with such issue or sale, and
(2) in case Additional Shares of Capital Stock are
issued or sold or Options or Convertible Securities are
issued, sold, granted or assumed together with other stock or
securities or other assets of the Corporation for a
consideration which covers both, shall be the proportion of
such consideration so received, computed as provided in
subsection (1) above, allocable to such Additional Shares of
Capital Stock or Options or Convertible Securities, as the
case may be, all as determined in good faith by the Board of
Directors of the Corporation.
(B) All Additional Shares of Capital Stock, Options or
Convertible Securities issued in payment of any dividend or other
distribution on any class of stock of the Corporation and all
Additional Shares of Capital Stock issued to effect a subdivision of
the outstanding shares of Capital Stock into a greater number of
shares of Capital Stock (by reclassification or otherwise than by
payment of a dividend in Capital Stock) shall be deemed to have been
issued without consideration.
(C) Additional Shares of Capital Stock deemed to have
been issued for consideration pursuant to Section 5(d)(iii),
relating to Options and Convertible Securities, shall be deemed to
have been issued for a consideration per share determined by
dividing
(1) the total amount, if any, received and receivable
by the Corporation as consideration for the issue, sale, grant
or assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration) payable to the
Corporation upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in
the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and the conversion
or exchange of such Convertible Securities, in each case
comprising such consideration as provided in the foregoing
subsection (A), by
(2) the maximum number of shares of Capital Stock (as
set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities.
(D) In case the Corporation shall issue any Additional
Shares of Capital Stock, Options or Convertible Securities in
connection with the acquisition by the Corporation of the stock or
assets of any other corporation or the merger of any other
corporation into the Corporation under circumstances where on the
date of issue of such Additional Shares of Capital Stock, Options or
Convertible Securities the
13
consideration received for such Additional Shares of Capital Stock
or deemed to have been received for the Additional Shares of Capital
Stock deemed to be issued pursuant to Section 5(d)(iii) is less than
the Market Price of the Capital Stock in effect immediately prior to
such issue but on the date the number of Additional Shares of
Capital Stock or the amount and the exercise price or conversion
price of such Options or Convertible Securities to be so issued were
set forth in a binding agreement between the Corporation and the
other party or parties to such transaction the consideration
received for such Additional Shares of Capital Stock or deemed to
have been received for the Additional Shares of Capital Stock deemed
to be issued pursuant to Section 5(d)(iii) would not have been less
than the Market Price of the Capital Stock then in effect, such
Additional Shares of Capital Stock shall not be deemed to have been
issued for less than the Market Price of the Capital Stock if such
terms so set forth in such binding agreement are not changed prior
to the date of issue.
(vi) ADJUSTMENTS FOR COMBINATIONS, ETC. In case the
outstanding shares of Capital Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Capital
Stock, the Conversion Prices in effect immediately prior to such
combination or consolidation shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
(vii) DILUTION IN CASE OF OTHER SECURITIES. In case any
Other Securities shall be issued or sold or shall become subject to issue
or sale upon the conversion or exchange of any securities of the
Corporation or to subscription, purchase or other acquisition pursuant to
any options issued or granted by the Corporation for a consideration such
as to dilute, on a basis to which the standards established in the other
provisions of this Section 5 are applicable, the conversion rights of the
holders of the Series A Senior Preferred Stock, then, and in each such
case, the computations, adjustments and readjustments provided for in this
Section 5 with respect to the applicable Conversion Price shall be made as
nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable upon the
conversion of the Series A Senior Preferred Stock, so as to protect the
holders of the Series A Senior Preferred Stock against the effect of such
dilution.
(viii) MINIMUM ADJUSTMENT AND TIMING OF ADJUSTMENT OF
CONVERSION PRICE
(A) If the amount of any adjustment of the Series A
Senior Preferred Stock Conversion Price required pursuant to this
Section 5 would be less than one percent (1%) of such Conversion
Price in effect at the time such adjustment is otherwise so required
to be made, such amount shall be carried forward and adjustment with
respect thereto made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate at least one percent
(1%) of such Conversion Price; provided that, upon the conversion of
any shares of Series A Senior Preferred Stock, all adjustments
carried forward and not theretofore made up to and including the
date of such conversion shall, with respect to the Series A Senior
Preferred Stock then converted, be made to the nearest .001 of a
cent.
14
(B) Each Series A Senior Preferred Conversion Price
shall be adjusted within 90 days of the end of each fiscal year of
the Corporation with respect to events subject to the anti-dilution
provisions of the Series A Senior Preferred Stock which have
occurred during such fiscal year; provided that, upon the conversion
of any shares of Series A Senior Preferred Stock, all adjustments
carried forward and not theretofore made up to and including the
date of such conversion shall, with respect to the shares of Series
A Senior Preferred Stock then converted, be made to the nearest .001
of a cent and provided further that the applicable Series A Senior
Preferred Conversion Price shall also be adjusted prior to any
transfer or other disposition of any Series A Senior Preferred Stock
and promptly at any time upon the request of the holder of any
Series A Senior Preferred Stock, subject to the provisions of clause
5(d)(viii)(A) above.
(ix) CHANGES IN CAPITAL STOCK; SERIES A SENIOR PREFERRED
STOCK. In case at any time the Corporation shall be a party to any
transaction (including, without limitation, a merger, consolidation, sale
of all or substantially all of the Corporation's assets, liquidation or
recapitalization of the Capital Stock) in which the previously outstanding
Capital Stock shall be changed into or exchanged for different securities
of the Corporation or common stock or other securities of another
corporation or interests in a noncorporate entity or other property
(including cash) or any combination of any of the foregoing or in which
the Capital Stock ceases to be a publicly traded security either listed on
the New York Stock Exchange or the American Stock Exchange or quoted by
NASDAQ or any successor thereto or comparable system (each such
transaction being herein called the "Transaction," the date of
consummation of the Transaction being herein called the "Consummation
Date," the Corporation (in the case of a recapitalization of the Capital
Stock or any other such transaction in which the Corporation retains
substantially all of its assets and survives as a corporation) or such
other corporation or entity (in each other case) being herein called the
"Acquiring Company," and the common stock (or equivalent equity interests)
of the Acquiring Company being herein called the "Acquirer's Common
Stock"), then, as a condition of the consummation of the Transaction,
lawful and adequate provisions shall be made so that each holder of Series
A Senior Preferred Stock, upon the conversion thereof at any time on or
after the Consummation Date (but subject, in the case of an election
pursuant to clause (B) or (C) below, to the time limitation hereinafter
provided for such election),
(A) shall be entitled to receive, and any Series A
Senior Preferred Stock shall thereafter represent the right to
receive, in lieu of the Common Stock issuable upon such conversion
prior to the Consummation Date, such number of shares of the
Acquirer's Common Stock as are issuable in exchange for each share
of Common Stock, unless the Acquiring Company fails to meet the
requirements set forth in clauses (D), (E) and (F) below, in which
case shares of the common stock of the corporation (herein called a
"Parent") which directly or indirectly controls the Acquiring
Company if it meets the requirements set forth in clauses (D), (E)
and (F) below, at an aggregate conversion price for such number of
shares equal to the lesser of (1) the Conversion Price in effect
immediately prior to the Consummation Date multiplied by a fraction
the numerator of which is the aggregate market price for such number
of shares (determined in the same manner as provided in the
definition of Market Price) of the Acquirer's Common Stock or the
Parent's common stock, as the case may be, immediately prior to the
Consummation Date and the denominator of which is the Market Price
per share of Common Stock immediately prior to the
15
Consummation Date, or (2) the aggregate market price for such number
of shares (as so determined) of the Acquirer's Common Stock or the
Parent's common stock, as the case may be, immediately prior to the
Consummation Date (subject in each case to adjustments from and
after the Consummation Date as nearly equivalent as possible to the
adjustments provided for in this Section 5),
or at the election of the holder of such Series A Senior Preferred Stock
pursuant to notice given to the Corporation on or before the later of (1)
the thirtieth day following the Consummation Date, and (2) the sixtieth
day following the date of delivery or mailing to such holder of the last
proxy statement relating to the vote on the Transaction by the holders of
the Capital Stock,
(B) shall be entitled to receive, and any Series A
Senior Preferred Stock shall thereafter represent the right to
receive, in lieu of the Capital Stock issuable upon such conversion
prior to the Consummation Date, the highest amount of securities or
other property to which such holder would actually have been
entitled as a stockholder upon the consummation of the Transaction
if such holder had converted such Series A Senior Preferred Stock
immediately prior thereto (subject to adjustments from and after the
Consummation Date as nearly equivalent as possible to the
adjustments provided for in this Section 5), provided that if a
purchase, tender or exchange offer shall have been made to and
accepted by the holders of more than 50% of the outstanding shares
of Capital Stock, and if the holder of such Series A Senior
Preferred Stock so designates in such notice given to the
Corporation, the holder of such Series A Senior Preferred Stock
shall be entitled to receive in lieu thereof, the highest amount of
securities or other property to which such holder would actually
have been entitled as a stockholder if such holder had converted
such Series A Senior Preferred Stock prior to the expiration of such
purchase, tender or exchange offer and accepted such offer (subject
to adjustments from and after the consummation of such purchase,
tender or exchange offer as nearly equivalent as possible to the
adjustments provided for in this Section 5),
or, if neither the Acquiring Company nor the Parent meets the requirements
set forth in clauses (D), (E) and (F) below, at the election of the holder
of Series A Senior Preferred Stock pursuant to notice given to the
Corporation on or before the later of (1) the thirtieth day following the
Consummation Date, and (2) the sixtieth day following the date of delivery
or mailing to such holder of the last proxy statement relating to the vote
on the Transaction by the holders of the Common Stock,
(C) shall be entitled to receive, within 15 days after
such election, in full satisfaction of the Conversion Rights
afforded to the Series A Senior Preferred Stock held by such holder
under this Section 5, an amount equal to the fair market value of
such conversion rights as determined by an independent investment
banker (with an established national reputation as a valuer of
equity securities) selected by the Corporation, such fair market
value to be determined with regard to all material relevant factors
but without regard to the effects on such value of the Transaction.
The Corporation agrees to obtain, and deliver to each holder of Series A
Senior Preferred Stock a copy of, the determination of an independent
investment banker (selected by the Corporation and reasonably satisfactory
to the holders of Series A Senior Preferred Stock)
16
necessary for the valuation under clause (C) above within 15 days after
the Consummation Date of any Transaction to which clause (C) is
applicable.
The requirements referred to above in the case of the
Acquiring Company or its Parent are that immediately after the
Consummation Date:
(D) it is a solvent corporation organized under the
laws of any State of the United States of America having its common
stock listed on the New York Stock Exchange or the American Stock
Exchange or quoted by NASDAQ or any successor thereto or comparable
system, and such common stock continues to meet such requirements
for such listing or quotation,
(E) it is required to file, and in each of its three
fiscal years immediately preceding the Consummation Date has filed,
reports with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and
(F) in the case of the Parent, such Parent is required
to include the Acquiring Company in the consolidated financial
statements contained in the Parent's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission and is not itself
included in the consolidated financial statements of any other
Person (other than its consolidated subsidiaries).
Notwithstanding anything contained herein to the contrary, the Corporation
shall not effect any Transaction unless prior to the consummation thereof
each corporation or entity (other than the Corporation) which may be
required to deliver any securities or other property upon the conversion
of Series A Senior Preferred Stock, the surrender of Series A Senior
Preferred Stock or the satisfaction of conversion rights as provided
herein shall assume, by written instrument delivered to each holder of
Series A Senior Preferred Stock, the obligation to deliver to such holder
such securities or other property to which, in accordance with the
foregoing provisions, such holder may be entitled, and such corporation or
entity shall have similarly delivered to each holder of Series A Senior
Preferred Stock an opinion of counsel for such corporation or entity,
satisfactory to each holder of Series A Senior Preferred Stock, which
opinion shall state that all the outstanding Series A Senior Preferred
Stock, including, without limitation, the conversion provisions applicable
thereto, if any, shall thereafter continue in full force and effect and
shall be enforceable against such corporation or entity in accordance with
the terms hereof and thereof, together with such other matters as such
holders may reasonably request.
(x) TREATMENT OF STOCK DIVIDENDS, STOCK SPLITS, ETC.;
CERTAIN TRANSACTIONS. In case the Corporation, at any time or from time
to time after the Issue Date, shall be a party to any Transaction, each
holder of Series B Senior Preferred Stock and each holder of Junior
Convertible Preferred Stock, upon the exercise thereof at any time on or
after the Consummation Date shall be entitled to receive, and such Series
B Senior Preferred Stock and Junior Convertible Preferred Stock shall
thereafter represent the right to receive, in lieu of the Common Stock
issuable upon conversion prior to the Consummation Date the kind and
amount of securities or property (including cash) which it would have
owned or have been entitled to receive after the happening of such
Transaction had such Series B Senior Preferred
17
Stock or Junior Convertible Preferred Stock been converted immediately
prior to such Transaction.
Notwithstanding anything contained herein to the contrary, the
Corporation shall not effect any Transaction unless prior to the
consummation thereof each corporation or entity (including, without
limitation, the Corporation) which may be required to deliver any
securities or property (including cash) upon the conversion of Series B
Senior Preferred Stock or Junior Convertible Preferred Stock, the
surrender of Series B Senior Preferred Stock or Junior Convertible
Preferred Stock or the satisfaction of conversion rights as provided
herein shall assume, by written instrument delivered to each holder of
Series B Senior Preferred Stock or Junior Convertible Preferred Stock, the
obligation to deliver to such holder such securities or other property to
which, in accordance with the foregoing provisions, such holder may be
entitled, and such corporation or entity shall have similarly delivered to
each holder of Series B Senior Preferred Stock or Junior Convertible
Preferred Stock an opinion of counsel for such corporation or entity,
satisfactory to each such holder, which opinion shall state that all the
rights and privileges, including without limitation, conversion privileges
of the Series B Senior Preferred Stock and the Junior Convertible
Preferred Stock shall thereafter continue in full force and effect and
shall be enforceable against such corporation or entity in accordance with
the terms hereof and thereof, together with such other matters as such
holders may reasonably request.
In case the Corporation shall (i) pay a dividend in shares of
Capital Stock or securities convertible into Capital Stock or make a
distribution to all holders of shares of Capital Stock in shares of
Capital Stock or securities convertible into Capital Stock, (ii) subdivide
its outstanding shares of Capital Stock, (iii) combine its outstanding
shares of Capital Stock into a smaller number of shares of Capital Stock
or (iv) issue by reclassification of its shares of Capital Stock other
securities of the Corporation, the Series B Preferred Stock Conversion
Price and the Junior Preferred Stock Conversion Price shall be adjusted
(to the nearest cent) by multiplying, (x) in the case of the Series B
Senior Preferred Stock, the Series B Preferred Stock Conversion Price
immediately prior to such adjustment by a fraction, of which the numerator
shall be the number of shares of Capital Stock outstanding immediately
prior to the occurrence of such event, and of which the denominator shall
be the number of shares of Capital Stock outstanding (including any
convertible securities issued pursuant to clause (i) or (iv) above on an
as converted basis) immediately thereafter, or (y) in the case of the
Junior Preferred Stock Conversion Price, the Junior Preferred Stock
Conversion Price immediately prior to such adjustment by a fraction, of
which the numerator shall be the number of shares of Capital Stock
outstanding immediately prior to the occurrence of such event, and of
which the denominator shall be the number of shares of Capital Stock
outstanding (including any convertible securities issued pursuant to
clause (i) or (iv) above on an as converted basis) immediately thereafter.
An adjustment made pursuant to the foregoing sentence shall become
effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.
(xi) CERTAIN ISSUES AND REPURCHASES EXCEPTED. Anything
herein to the contrary notwithstanding, the Corporation shall not be
required to make any adjustment of the Series A Senior Preferred
Conversion Prices in the case of (A) the issuance of shares of the Senior
Convertible Preferred Stock on the Issue Date and the issuance of shares
of Series A Senior Preferred Stock and Series B Senior Preferred Stock
pursuant to this Article IV upon the filing of the Certificate of
Amendment as described herein, (B) the issuance of shares of
18
the Junior Convertible Preferred Stock on the Issue Date, (C) the issuance
of warrants to purchase shares of Common Stock (the "Warburg Warrants")
concurrently with the issuance of the Senior Convertible Preferred Stock
on January 29, 1993 (the "Restructuring Date"), and any amendments to such
Warburg Warrants through the date of filing of the Certificate of
Amendment, (D) the issuance to The Prudential Insurance Company of America
("Prudential") of warrants to purchase shares of Common Stock (the "New
Prudential Warrants") concurrently with the issuance of the Junior
Convertible Preferred Stock, and any amendments to such New Prudential
Warrants through the date of filing of the Certificate of Amendment, (E)
the issuance of warrants to purchase shares of Common Stock (the "1994
Warrants") concurrently with the filing of this Certificate of Amendment,
and any amendments to such 1994 Warrants, (F) the issuance of shares of
Capital Stock issuable upon conversion of the Convertible Preferred Stock
or upon exercise of the Warburg Warrants, the New Prudential Warrants, the
1994 Warrants, the Stock Subscription Warrant, dated as of November 25,
1986, by the Corporation to Prudential or any other Option or right
outstanding on the Issue Date to purchase or otherwise acquire Capital
Stock, (G) the granting by the Corporation, after the Issue Date, of
Options to purchase Capital Stock or the sale or grant, after the Issue
Date, of Capital Stock, pursuant to option or stock purchase plans or
agreements, or other incentive compensation plans or agreements,
heretofore or hereafter adopted in respect of, or entered into with,
directors, officers, employees or salespersons (other than pursuant to the
Corporation's Preferred Equity Program) of the Corporation or any of its
Subsidiaries in connection with their employment, being directors or
acting as salesperson, provided that the consideration for the sale or
grant of any such Options or Capital Stock (including the exercise price
of any Option) is at least equal to the Market Price of such shares of
Capital Stock on the date such Options are granted or the date established
by any such plan for a purchase thereunder, as the case may be, (H) the
Repurchase from any director, officer, employee or salesperson of the
Corporation or any Subsidiary of any Option or share of Capital Stock upon
his resignation or other termination from being a director, officer,
employee or salesperson of the Corporation or any Subsidiary or (I) the
issuance of shares of Common Stock in payment of the redemption price of
the Rights issued pursuant to the Rights Agreement, dated as of March 13,
1989, as amended, between the Corporation and Bank of America N.T. & S.A.,
as Rights Agent.
(xii) NOTICE OF ADJUSTMENT. Upon the occurrence of any
event requiring an adjustment of any Conversion Price, then and in each
such case the Corporation shall promptly deliver to each holder of
Convertible Preferred Stock a certificate signed by the President or any
Vice President and the Secretary or any Assistant Secretary of the
Corporation (an "Officers' Certificate") stating the applicable Conversion
Price resulting from such adjustment and the increase or decrease, if any,
in the number of shares of Common Stock issuable upon conversion of such
Convertible Preferred Stock, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. Within
90 days after each fiscal year in which any such adjustment shall have
occurred, or within 30 days after any request therefor by any holder of
Convertible Preferred Stock stating that such holder contemplates
conversion of such Convertible Preferred Stock, the Corporation will
obtain and deliver to each holder of Convertible Preferred Stock the
opinion of its regular independent auditors or another firm of independent
public accountants of recognized national standing selected by the
Corporation's Board of Directors who are satisfactory to the registered
holders of a majority of the Convertible Preferred Stock, which opinion
shall confirm the statements in the most recent Officers' Certificate
delivered under this Section 5(d)(xi). It is understood and agreed that
the independent public accountant
19
rendering any such opinion shall be entitled expressly to assume in such
opinion the accuracy of any determination of fair value made by the Board
of Directors of the Corporation pursuant to Section 5(d)(v).
(xiii)OTHER NOTICES. In case at any time:
(A) the Corporation shall declare or pay to the
holders of Capital Stock any dividend other than a regular periodic
cash dividend or any periodic cash dividend in excess of 115% of the
cash dividend for the comparable fiscal period in the immediately
preceding fiscal year;
(B) the Corporation shall declare or pay any dividend
upon Capital Stock payable in stock or make any special dividend or
other distribution (other than regular cash dividends) to the
holders of Capital Stock;
(C) the Corporation shall offer for subscription pro
rata to the holders of Capital Stock any additional shares of stock
of any class or other rights;
(D) there shall be any capital reorganization, or
reclassification of the Capital Stock of the Corporation, or
consolidation or merger of the Corporation with, or sale of all or
substantially all of its assets to, another corporation or other
entity;
(E) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Corporation; or
(F) there shall be any other Transaction;
then, in any one or more of such cases, the Corporation shall give to each
holder of Convertible Preferred Stock (1) at least 15 days prior to any
event referred to in clause (A) or (B) above, at least 30 days prior to
any event referred to in clause (C), (D) or (E) above, and within five
business days after it has knowledge of any pending Transaction, written
notice of the date on which the books of the Corporation shall close or a
record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, winding-up or Transaction and (2) in the case of
any such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, winding-up or Transaction known to the
Corporation, at least 30 days prior written notice of the date (or, if not
then known, a reasonable approximation thereof by the Corporation) when
the same shall take place. Such notice in accordance with the foregoing
clause (1) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of
Capital Stock shall be entitled thereto, and such notice in accordance
with the foregoing clause (2) shall also specify the date on which the
holders of Capital Stock shall be entitled to exchange their Capital Stock
for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or Transaction, as the case may be. Such notice shall also
state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act of
1933, as amended, or to a favorable vote of security holders, if either is
required.
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(xiv) CERTAIN EVENTS. If any event occurs as to which, in
the good faith judgment of the Board of Directors of the Corporation, the
other provisions of this Section 5 are not strictly applicable or if
strictly applicable would not fairly protect the conversion rights of the
holders of the Series A Senior Preferred Stock in accordance with the
essential intent and principles of such provisions, then the Board of
Directors of the Corporation shall appoint its regular independent
auditors or another firm of independent public accountants of recognized
national standing who are satisfactory to the holders of a majority of the
Series A Senior Preferred Stock which shall give their opinion upon the
adjustment, if any, on a basis consistent with such essential intent and
principles, necessary to preserve, without dilution, the rights of the
holders of the Series A Senior Preferred Stock. Upon receipt of such
opinion, the Board of Directors of the Corporation shall forthwith make
the adjustments described therein; provided, that no such adjustment shall
have the effect of increasing any Series A Senior Preferred Stock
Conversion Price as otherwise determined pursuant to this Section 5. The
Corporation may make such reductions in the Series A Senior Preferred
Conversion Price or increase in the number of shares of Common Stock
purchasable hereunder as it deems advisable, including any reductions or
increases, as the case may be, necessary to ensure that any event treated
for Federal income tax purposes as a distribution of stock or stock rights
not be taxable to recipients.
(e) NO IMPAIRMENT. The Corporation shall not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Corporation, but
shall at all times in good faith assist in the carrying out of all the
provisions of this Section 5 and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series A Senior Preferred Stock against impairment.
(f) MANDATORY CONVERSION. If (i) at all times during a two-year
period prior to the date of conversion the ratio of Consolidated Debt to EBITDA
(each as defined below) of the Corporation has not exceeded 3.0:1.0, (ii) on
each Trading Day during a six-month period prior to the date of conversion the
Daily Market Price of the Common Stock has exceeded $8.75 per share, subject to
proportionate adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event involving the Common Stock, and (iii)
the Corporation is in full compliance with all of the terms and conditions of
all agreements pursuant to which the Corporation or any Subsidiary shall have
incurred Indebtedness for borrowed money all, but not less than all, of the then
outstanding shares of Convertible Preferred Stock shall be converted into shares
of Common Stock as provided below. The Corporation shall provide written notice
of the occurrence of the foregoing events giving rise to such mandatory
conversion by United States certified or registered mail, postage prepaid,
mailed not more than 30 days thereafter to all holders of record of the shares
to be converted at such holders' addresses as the same appear on the stock
register of the Corporation. Each such notice shall state the proposed date on
which such mandatory conversion will occur (which date shall not be fewer than
30 days after the date notice thereof is received), the applicable Conversion
Price and the place or places where certificates for shares of the Convertible
Preferred Stock are to be surrendered for conversion. From and after the date
of mandatory conversion, the certificates for the Convertible Preferred Stock
shall be deemed to represent only the shares of Common Stock into which such
shares of Convertible Preferred Stock shall have been converted. The Holder of
such certificates shall surrender such certificates for conversion upon and
pursuant to the request of the Corporation.
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(g) CERTAIN DEFINITIONS. For purposes of this Article IV, the
following terms shall have the following meanings:
(i) "ADDITIONAL SHARES OF CAPITAL STOCK" shall mean
all shares (including treasury shares) of Capital Stock issued or
sold (or, pursuant to Sections 5(d)(iii) or 5(d)(iv) deemed to be
issued) by the Corporation after the Issue Date, whether or not
subsequently reacquired or retired by the Corporation, other than
shares of Common Stock issued upon the conversion of the Convertible
Preferred Stock.
(ii) "CONSOLIDATED DEBT" shall mean with respect to
any Person, the total Indebtedness of such Person and its
Subsidiaries on a consolidated basis determined in accordance with
GAAP.
(iii) "CONVERTIBLE SECURITIES" shall mean any
evidences of indebtedness, shares of stock (other than Common Stock)
or securities directly or indirectly convertible into or
exchangeable for Additional Shares of Capital Stock.
(iv) "DAILY MARKET PRICE" shall mean, on any date
specified herein, (A) if any class of Capital Stock is listed or
admitted to trading on any national securities exchange, the average
of the high and low sale price of shares of each such class of
Capital Stock or if no such sale takes place on such date, the
average of the highest closing bid and lowest closing asked prices
thereof on such date, in each case as officially reported on all
national securities exchanges on which each such class of Capital
Stock is then listed or admitted to trading, or (B) if no shares of
any class of Capital Stock are then listed or admitted to trading on
any national securities exchange, the highest closing price of any
class of Capital Stock on such date in the over-the-counter market
as shown by NASDAQ or, if no such shares of any class of Capital
Stock are then quoted in such system, as published by the National
Quotation Bureau, Incorporated or any similar successor
organization, and in either case as reported by any member firm of
the New York Stock Exchange selected by the Corporation. If no
shares of any class of Capital Stock are then listed or admitted to
trading on any national securities exchange and if no closing bid
and asked prices thereof are then so quoted or published in the
over-the-counter market, "Daily Market Price" shall mean the higher
of (x) the book value per share of Capital Stock (assuming for the
purposes of this calculation the economic equivalence of all shares
of all classes of Capital Stock) as determined on a fully diluted
basis in accordance with generally accepted accounting principles by
a firm of independent public accountants of recognized standing
(which may be its regular auditors) selected by the Board of
Directors of the Corporation as of the last day of any month ending
within 60 days preceding the date as of which the determination is
to be made or (y) the fair value per share of Capital Stock
(assuming for the purposes of this calculation the economic
equivalence of all shares of all classes of Capital Stock), as
determined on a fully diluted basis in good faith by an independent
brokerage firm or Standard & Poor's Corporation (as selected by the
Board of Directors of the Corporation), as of a date which is 15
days preceding the date as of which the determination is to be made.
(v) "EBITDA" shall mean, with respect to any Person,
for any period, the sum of (A) the net income of such Person and its
Subsidiaries on a
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consolidated basis before taxes, excluding extraordinary items and
income or loss from discontinued operations, (B) total interest
expense of such Person and its Subsidiaries on a consolidated basis
and (C) depreciation and amortization for such Person and its
Subsidiaries on a consolidated basis.
(vi) "GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by
such other entity as may be approved by a significant segment of the
accounting profession.
(vii) "INDEBTEDNESS" shall mean, with respect to any
Person, all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with GAAP
would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined.
(viii) "ISSUE DATE" shall mean the date on which
shares of Convertible Preferred Stock are first issued by the
Corporation. "Issue Date" with respect to the shares of Series A
Senior Preferred Stock and Series B Senior Preferred Stock
outstanding on the date of filing of the Certificate of Amendment
shall be deemed to be the date of issuance of the respective shares
of Existing Senior Convertible Preferred Stock which were exchanged
for or converted into such shares of Series A Senior Preferred Stock
and Series B Senior Preferred Stock.
(ix) "MARKET PRICE" shall mean, on any date specified
herein, (A) if any class of Capital Stock is listed or admitted to
trading on any national securities exchange, the highest price
obtained by taking the arithmetic mean over a period of 20
consecutive Trading Days ending the second Trading Day prior to such
date of the average, on each such Trading Day, of the high and low
sale price of shares of each such class of Capital Stock or if no
such sale takes place on such date, the average of the highest
closing bid and lowest closing asked prices thereof on such date, in
each case as officially reported on all national securities
exchanges on which each such class of Capital Stock is then listed
or admitted to trading, or (B) if no shares of any class of Capital
Stock are then listed or admitted to trading on any national
securities exchange, the highest closing price of any class of
Capital Stock on such date in the over-the-counter market as shown
by NASDAQ or, if no such shares of any class of Capital Stock are
then quoted in such system, as published by the National Quotation
Bureau, Incorporated or any similar successor organization, and in
either case as reported by any member firm of the New York Stock
Exchange selected by the Corporation. If no shares of any class of
Capital Stock are then listed or admitted to trading on any national
securities exchange and if no closing bid and asked prices thereof
are then so quoted or published in the over-the-counter market,
"Market Price" shall mean the higher of (x) the book value per share
of Capital Stock (assuming for the purposes of this calculation the
economic equivalence of all shares of all classes of Capital Stock)
as determined on a fully diluted basis in accordance with generally
accepted accounting principles by a firm of independent public
accountants of recognized standing (which may be its regular
auditors) selected by the
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Board of Directors of the Corporation as of the last day of any
month ending within 60 days preceding the date as of which the
determination is to be made or (y) the fair value per share of
Capital Stock (assuming for the purposes of this calculation the
economic equivalence of all shares of all classes of Capital Stock),
as determined on a fully diluted basis in good faith by an
independent brokerage firm or Standard & Poor's Corporation (as
selected by the Board of Directors of the Corporation), as of a date
which is 15 days preceding the date as of which the determination is
to be made.
(x) "OPTIONS" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Additional
Shares of Capital Stock or Convertible Securities.
(xi) "OTHER SECURITIES" shall mean any stock (other
than Capital Stock) and any other securities of the Corporation or
any other Person (corporate or otherwise) which the holders of the
Convertible Preferred Stock at any time shall be entitled to
receive, or shall have received, upon the conversion or partial
conversion of the Convertible Preferred Stock, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Section 5(d)(ix) or otherwise.
(xii) "PERSON" shall mean any individual, firm,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(xiii) "SUBSIDIARY" shall mean any corporation or
other entity the majority of the outstanding voting shares of which
is at the time owned (either alone or through Subsidiaries or
together with Subsidiaries) by the Corporation or another
Subsidiary.
(xiv) "TRADING DAY" shall mean any day on which the
New York Stock Exchange is open for trading on a regular basis.
(xv) "TRANSACTION" shall have the meaning set forth
in Section 5(d)(ix).
(h) JUNIOR CONVERTIBLE PREFERRED STOCK
(i) In the event that the Corporation undertakes to sell its
Common Stock through an underwritten public offering (an "Offering"), and
if the underwriter advises the Corporation that in order to complete such
Offering on the most favorable terms to the Corporation it is necessary
for the Junior Convertible Preferred Stock to be retired, then the
Corporation may so notify the holders of the Junior Convertible Preferred
Stock (the "Conversion Notice"), and such holders shall, on or prior to
the Conversion Date (as defined below) convert their Junior Convertible
Preferred Stock into Common Stock pursuant to the terms of this Article
IV. The holders of the Junior Convertible Preferred Stock shall be
obligated to convert their Junior Convertible Preferred Stock only if (A)
on or prior to the Conversion Date, all the holders of the Series B Senior
Preferred Stock shall have converted their Series B Senior Preferred Stock
into Common Stock, or all Series B Senior Preferred Stock shall otherwise
have been retired, and (B) the Market Price of the Common Stock at
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the Conversion Date is greater than the sum of the Junior Preferred Stock
Stated Value plus accrued dividends per share of Junior Convertible
Preferred Stock (such sum being referred to herein as the "Accreted
Value"); PROVIDED that if at the Conversion Date, the Market Price of
the Common Stock is less than the Accreted Value, then each holder of the
Junior Convertible Preferred Stock must either, at its option (A) convert
the Junior Convertible Preferred Stock into Common Stock on or prior to
the Conversion Date or (B) require the Corporation to redeem the Junior
Convertible Preferred Stock at the Accreted Value, in which case such
holder shall notify the Corporation of its election on or prior to the
Conversion Date. If a holder elects to require the Corporation to redeem
the Junior Convertible Preferred Stock, then the Corporation shall make
such redemption within 60 days after the Conversion Date; PROVIDED that
the Corporation shall be obligated to redeem the Junior Convertible
Preferred Stock only if it has sufficient funds legally available on the
redemption date in order to redeem shares of Junior Convertible Preferred
Stock pursuant to this Section 5(h); PROVIDED FURTHER that if the
Board determines not to proceed with the Offering any notice of redemption
shall be withdrawn and the Corporation's obligation to redeem such shares
shall terminate. "Conversion Date" shall mean the date stated in the
Conversion Notice on or prior to which the holders of the Junior
Convertible Preferred Stock shall be required to convert their Junior
Convertible Preferred Stock in accordance with this Section 5(h). Without
the consent of each holder of Junior Convertible Preferred Stock, the
Conversion Date may not be a date earlier than the closing date of the
Offering; PROVIDED that the Conversion Notice may identify the
Offering's closing date as "the closing date," in lieu of using a calendar
date.
(ii) If the Corporation shall be required to redeem shares
Junior Convertible Preferred Stock pursuant to Section 5(h)(i), then
notice of such redemption shall be given by United States certified or
registered mail, postage prepaid, mailed not less than thirty (30) days
nor more than sixty (60) days prior to the redemption date, to all holders
of record of the shares to be redeemed at such holders' addresses as the
same appear on the stock register of the Corporation. Each such notice
shall state: (A) the redemption date; (B) the number of shares of Junior
Convertible Preferred Stock to be redeemed and, if less than all the
shares held by such holder are to be redeemed from such holder, the number
of shares to be redeemed from such holder; (C) the redemption price; and
(D) the place or places where certificates for shares of the Junior
Convertible Preferred Stock are to be surrendered for payment of the
redemption price.
(iii) Notice having been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing payment of the redemption price by deposit with a bank or trust
company having capital and surplus of at least $50,000,000 of the shares
called for redemption) said shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender, in accordance with the
above-mentioned notice, of the certificates for any shares so redeemed
(properly endorsed or signed for transfer, if the Board of Directors of
the Corporation shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the redemption price
provided for in this Section 5(h). In the event fewer than all of the
shares represented by any such certificate are redeemed, a new certificate
shall be issued, without cost to the holder thereof, representing the
unredeemed shares. The provisions of this Section 5(h)(iii) shall be
subject to Section 5(h)(i).
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(i) REACQUIRED SHARES. Shares of Convertible Preferred Stock
which have been issued and reacquired in any manner, including shares purchased
or redeemed or exchanged, shall (upon compliance with any applicable provisions
of the laws of the State of Delaware) have the status of authorized and unissued
shares of Preferred Stock undesignated as to series and may be redesignated and
reissued as part of any series of the Preferred Stock; provided, however, that
no such issued and reacquired shares of Senior Convertible Preferred Stock shall
be reissued or sold as Series A Senior Preferred Stock and no such issued and
reacquired shares of Junior Convertible Preferred Stock shall be reissued or
sold as Junior Convertible Preferred Stock.
SECOND: That thereafter, pursuant to resolution of the Board of
Directors, a meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendments.
THIRD: That said amendments were duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, GRUBB & ELLIS COMPANY has caused this
certificate to be signed by Robert J. Walner, its Senior Vice President, and
Carol M. Vanairsdale, its Assistant Secretary, this 1st day of November, 1994.
GRUBB & ELLIS COMPANY
/s/ Robert J. Walner
______________________________
Robert J. Walner
Senior Vice President
Attest:
/s/ Carol M. Vanairsdale
______________________________
Carol M. Vanairsdale
Assistant Secretary
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