ALLIANCE IMAGING, INC.
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C 5% CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERRED STOCK
(Pursuant to Section 151(g) of the General Corporation
Law of the State of Delaware.)
Alliance Imaging, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "COMPANY"), DOES HEREBY CERTIFY THAT,
pursuant to authority conferred upon the Board of Directors of the Company (the
"BOARD") by the Restated Certificate of Incorporation of the Company, as
amended (the "CERTIFICATE OF INCORPORATION"), the Board, pursuant to a
unanimous written consent dated as of April [__], 1996, adopted the following
resolutions authorizing the issuance of Series C 5% Cumulative Convertible
Redeemable Preferred Stock of the Company, which resolutions are still in full
force and effect and are not in conflict with any provisions of the Certificate
of Incorporation or Bylaws of the Company:
RESOLVED, that pursuant to authority vested in the Board by the
Certificate of Incorporation, the Board does hereby establish a series of
Preferred Stock of the Company from the Company's authorized class of 1,000,000
shares of $0.01 par value preferred shares, such series to consist of 4000
shares, which number may be decreased (but not below the number of shares
thereof then outstanding) from time to time by the Board, and to the extent
that the voting rights, designation, powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions of that series are not stated and expressed in the
Certificate of Incorporation, does hereby fix and state the voting rights,
designation, powers, preferences and relative participating, optional or other
special rights and the qualifications, limitations or restrictions thereof, as
follows:
1. DEFINITIONS. Unless otherwise specified herein, the following
capitalized terms shall have the meanings ascribed to them below:
A. COMMON STOCK. "COMMON STOCK" shall mean the Company's Common
Stock, $0.01 par value per share.
B. DGCL. "DGCL" shall mean the Delaware General Corporation Law.
C. FACE AMOUNT. The "FACE AMOUNT" of each share of Series C Stock
(as defined below), regardless of its par value, shall be One Hundred Dollars
($100.00), as the Series C Stock is presently constituted, such amount to be
proportionately adjusted to reflect any combination, consolidation,
reclassification or like adjustment to the Series C Stock.
D. MARKET PRICE. The "MARKET PRICE" of a share of Common Stock on
or with respect to any day shall mean (i) the closing sales price on the
immediately preceding trading day of a share of Common Stock on the principal
national securities exchange or automated quotation system on which the shares
of Common Stock are listed or admitted to trading or, if not listed or admitted
to trading on any national securities exchange or automated quotation system,
the average of the last reported bid and asked prices on such immediately
preceding trading day in the over-the-counter market as furnished by the
National Association of Securities Dealers, Inc., or, if such firm is not then
engaged in the business of reporting such prices, as furnished by any similar
firm then engaged in such business selected in good faith by the Company or, if
there is no such firm, as furnished by any member of the National Association
of Securities Dealers, Inc., selected in good faith by the Company, or (ii) if
the shares of Common Stock are not then traded on any such exchange or system,
the amount determined in good faith by the Board to represent the fair value of
a share of Common Stock, which determination shall be conclusive.
2. DESIGNATION OF SERIES; ISSUANCE AND FACE AMOUNT. This series of
Preferred Stock is designated "Series C 5% Cumulative Convertible Redeemable
Preferred Stock" (the "SERIES C STOCK"), and the number of shares which shall
constitute such series shall be 4000, which number may be
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decreased (but not below the number thereof then outstanding) from time to
time by the Board. The shares of Series C Stock shall be issued by the
Company for their Face Amount (as herein defined), in such amounts, at such
times and to such persons as shall be specified by the Board, from time to
time. Fractional shares of Series C Stock may be issued.
3. RANK; SENIOR AND JUNIOR SECURITIES. The Series C Stock shall, with
respect to dividend rights and rights on liquidation, winding up and
dissolution, rank junior to all Senior Securities and senior to all Junior
Securities, all as more fully set forth herein. For purposes hereof, "SENIOR
SECURITIES" shall mean the Company's Series A 6.0% Cumulative Preferred Stock
("SERIES A STOCK"), the Company's Series B Convertible Preferred Stock ("SERIES
B STOCK"), and all other classes and series of stock of the Company hereafter
authorized, issued or outstanding except for Junior Securities and any classes
or series of stock or other securities of the Company that are designated as
equal in rank to the Series C Stock with respect to dividend rights and rights
on liquidation, winding up and dissolution by (i) the Board pursuant to the
authority granted to it under Article FOUR of the Company's Certificate of
Incorporation or (ii) amendment to the Certificate of Incorporation duly
adopted by the Company and its stockholders as provided pursuant to the DGCL.
For purposes hereof, "JUNIOR SECURITIES" shall mean the Common Stock, any other
class or series of the Company's common equity, and such other classes or
series of stock and other securities of the Company as shall be designated as
junior to the Series C Stock with respect to dividend rights and rights on
liquidation, winding up and dissolution by (i) the Board pursuant to the
authority granted to it under Article FOUR of the Company's Certificate of
Incorporation or (ii) amendment to the Company's Certificate of Incorporation
duly adopted by the Company and its stockholders as provided pursuant to the
DGCL.
4. DIVIDENDS.
A. AMOUNT. The holders of shares of the Series C Stock shall be
entitled to receive, when, as and if declared by the Board, out of funds
legally available therefor, cash dividends at the rate of 5% per annum of the
Face Amount per
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share, and no more. Declared dividends shall be paid pro rata to the holders
entitled thereto.
B. CUMULATION AND TIME OF PAYMENT. The dividends indicated in
paragraph 4.a shall be cumulative and shall accrue from day to day, whether or
not earned or declared, commencing with the date of issue of the particular
shares of Series C Stock or from the most recent preceding Dividend Payment
Date (as defined below) through which all dividends have been paid, whichever
is later. Dividends with respect to any year, as and if declared by the Board,
shall be payable annually at a date to be designated by the Board which falls
within the last fifteen days (or, if the Board of Directors has not designated
a day, the last day) of April of the succeeding year (each such date being a
"Dividend Payment Date"), the first such Dividend Payment Date being within the
last fifteen days of April 1997. No undeclared or unpaid dividend shall bear
or accrue interest.
C. PAYMENT OF ACCUMULATED DIVIDENDS. Accumulated dividends not
paid on prior Dividend Payment Dates may be declared by the Board and paid to
the holders of record of outstanding shares of Series C Stock as their names
shall appear on the stock register of the Company on a record date to be
established by the Board, which record date shall be not more than sixty (60)
nor less than thirty (30) days preceding the date of payment, whether or not
such date is a Dividend Payment Date. Holders of outstanding shares of
Series C Stock shall not be entitled to receive any dividends in excess of the
full cumulative dividends to which such holders are entitled as herein
provided. Any payment of accumulated dividends pursuant to this provision
shall be applied first to accumulated dividends relating to the earliest
Dividend Payment Date for which dividends were not paid, then to the next such
Dividend Payment Date, and so on, up to and including the most recent Dividend
Payment Date for which dividends were not paid.
D. PRIORITY OF CUMULATIVE DIVIDENDS. In addition to certain other
restrictions contained herein, so long as any shares of Series C Stock are
outstanding, the Company shall not (i) declare, pay or set apart for payment
any dividend on, or make any distribution in respect of, the Junior Securities
or any warrants, rights, calls or options exercisable for or
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convertible into any of the Junior Securities, either directly or indirectly,
whether in cash, obligations or shares of the Company or other property
(other than distributions or dividends of a particular class or series of
Junior Securities, or warrants, rights or options exercisable for such Junior
Securities, to holders of such Junior Securities), or (ii) make any payment
on account of, or set apart for payment money for a sinking or other similar
fund for, the purchase, redemption, retirement or other acquisition for value
of any of, or redeem, purchase, retire or otherwise acquire for value any of,
the Junior Securities (other than as a result of a reclassification of Junior
Securities into other Junior Securities or the exchange or conversion of one
class or series of Junior Securities for or into another class or series of
Junior Securities) or any warrants, rights, calls or options exercisable for
or convertible into any of the Junior Securities, or (iii) permit any
corporation or other entity directly or indirectly controlled by the Company
to purchase, redeem, retire or otherwise acquire for value any of the Junior
Securities or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Securities, unless, and in each such case,
prior to or concurrently with such declaration, payment, setting apart for
payment, purchase, redemption, retirement or other acquisition for value or
distribution in respect of Junior Securities, all accumulated and unpaid
dividends (including accumulated dividends, if any, not paid by reason of the
terms and conditions of Section 4.e hereof), if any, on shares of Series C
Stock shall have been paid through the most recent Dividend Payment Date or,
if such declaration, payment, setting apart for payment, purchase,
redemption, retirement, other acquisition for value or distribution occurs on
a Dividend Payment Date, through such Dividend Payment Date; PROVIDED,
HOWEVER, that the restrictions provided in this subparagraph d. shall not
apply to the repurchase of shares of Common Stock held by any employee or
consultant of the Company or any of its subsidiaries (or their permitted
transferees) in connection with the termination of such employee's or
consultant's services to the Company or any of its subsidiaries.
E. RESTRICTIONS ON PAYMENT OF DIVIDENDS. Notwithstanding anything
contained herein to the contrary, no cash dividends on shares of Series C Stock
shall be declared
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by the Board or paid or set apart for payment by the Company: (i) unless,
prior to or concurrently with such declaration, payment or setting apart, all
accrued and unpaid dividends, if any, on shares of Senior Securities shall
have been paid or declared and set apart for payment through the dividend
payment period with respect to such Senior Securities which immediately
precedes or coincides with the date of declaration, payment or setting apart
for payment by the Company of such cash dividends; or (ii) at such time as
such declaration, payment or setting apart is prohibited by the DGCL; or
(iii) at such time as the terms and provisions of any contract or other
agreement of the Company or any of its subsidiaries entered into or assumed
providing financing or working capital to the Company or any of its
subsidiaries (whether entered into prior to, at or after the issuance of the
Series C Stock), specifically prohibits such declaration, payment or setting
apart for payment or provides that such declaration, payment or setting apart
for payment would constitute a breach thereof or a default thereunder.
5. LIQUIDATION PREFERENCE.
A. GENERAL. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, the
holders of Series C Stock shall be entitled to receive, prior and in preference
to any distribution of any of the assets or surplus funds of the Company in
respect of any Junior Securities, but after all required distributions of
assets and surplus funds in respect of any Senior Securities, an amount equal
to the Face Amount per share plus accumulated and unpaid dividends to the date
fixed for liquidation, dissolution or winding up. Upon any liquidation,
dissolution or winding up of the Company, after payment shall have been made in
full on the Series C Stock as provided in the preceding sentence, but not prior
thereto, the holders of Junior Securities shall, subject to the respective
terms and provisions applying thereto, if any, be entitled to receive any and
all assets and surplus funds remaining to be paid or distributed, and the
Series C Stock shall not be entitled to share therein.
B. DISTRIBUTIONS PRO RATA. If upon any liquidation, dissolution or
winding up of the Company the amounts payable on or with respect to the Series
C Stock are
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not paid in full, the holders of shares of Series C Stock together
with all classes or series of stock ranking on a parity with the Series C Stock
as to distribution of assets and surplus funds shall share ratably in any
distribution of assets according to the respective amounts which would be
payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to the Series C Stock and any other class or
series of stock that so ranks on a parity with the Series C Stock were paid in
full.
C. MERGER OR CONSOLIDATION. Neither the merger nor consolidation
of the Company with another corporation nor the sale or lease of all or
substantially all of the assets of the Company shall be deemed to be a
liquidation, dissolution or winding up of the Company.
D. NOTICE REQUIRED. Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, stating
the payment date and the place where the distributable amount shall be payable,
shall be given by mail, postage prepaid, not less than thirty (30) days prior
to the payment date stated therein, to the holders of record of the Series C
Stock at their respective addresses as the same shall then appear on the books
of the Company.
6. CONVERSION.
A. EXERCISE OF CONVERSION RIGHT. Each holder of Series C Stock
shall have the right, at his or her option, at any time and from time to time
after issuance of the Series C Stock, to convert, subject to the terms and
provisions of this Section 6, all or any portion of its Series C Stock then
outstanding into fully paid and non-assessable shares of Common Stock at a
conversion rate of twenty (20) shares of Common Stock for each one (1) share of
Series C Stock (the "CONVERSION RATE"). At the time of any such conversion,
any accumulated and unpaid dividends on the Series C Stock to be so converted
shall likewise be converted, at the Conversion Rate, into fully paid and non-
assessable shares of Common Stock. Any such conversion shall be deemed to have
been made at the close of business on the date that the certificate or
certificates for shares of Series C Stock shall have been surrendered for
conversion and written notice shall have been
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received as provided in Section 6.b (the "CONVERSION DATE"), so that the
person or persons entitled to receive the shares of Common Stock upon
conversion of such shares of Series C Stock shall be treated for all purposes
as having become the record holder or holders of such shares of Common Stock
at such time.
B. NOTICE TO COMPANY. In order to convert all or any portion of
its outstanding Series C Stock into shares of Common Stock, the holder of such
Series C Stock shall deliver the shares to be converted to the Company at its
principal office, together with written notice that it elects to convert those
shares of Series C Stock into shares of Common Stock in accordance with the
provisions of this Section 6. Such notice shall specify the number of shares
of Series C Stock to be converted and the name or names in which the holder
wishes the certificates for shares of Common Stock to be registered, together
with the address or addresses of the person or persons so named, and, if so
required by the Company, be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company, duly executed by the
registered holder of the shares of Series C Stock to be converted or by his or
her attorney duly authorized in writing.
C. DELIVERY OF CERTIFICATE. As promptly as practicable after the
surrender as hereinabove provided of shares of Series C Stock for conversion
into shares of Common Stock, the Company shall deliver or cause to be delivered
to the holder, or the holder's designees, certificates representing the number
of fully paid and non-assessable shares of Common Stock into which the shares
of Series C Stock (and any accumulated and unpaid dividends thereon) are
entitled to be converted, together with a cash adjustment in respect of any
fraction of a share of Common Stock to which the holder would otherwise be
entitled, and, if less than the entire number of shares of Series C Stock
represented by the certificate or certificates surrendered is to be converted,
a new certificate for the number of shares of Series C Stock not so converted.
So long as any shares of Series C Stock remain outstanding, the Company shall
not close its Common Stock transfer books. The issuance of certificates for
shares of Common Stock upon the conversion of shares of Series C Stock shall be
made without charge to the holder for any tax in
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respect of the issuance of such certificates (other than any transfer tax if
the shares of Common Stock are to be registered in a name different from that
of the registered holder of Series C Stock).
D. FRACTIONAL SHARES. No fractional shares of Common Stock or
scrip representing fractional shares of Common Stock shall be issued upon any
conversion of any shares of Series C Stock, but, in lieu thereof, there shall
be paid an amount in cash equal to the same fraction of the Market Price of a
whole share of Common Stock as of the Conversion Date.
E. ADJUSTMENT TO CONVERSION RATE. The Conversion Rate and other
terms of conversion shall be subject to adjustment from time to time as
follows:
(1) If, at any time or times after issuance of shares of Series C
Stock, the Company shall (x) declare and pay to the holders of Common Stock a
dividend or other distribution payable in shares of Common Stock or
(y) subdivide the outstanding shares of Common Stock into a greater number of
shares of Common Stock or combine the outstanding shares of Common Stock into a
lesser number of shares or issue by reclassification of its shares of Common
Stock any shares of the Company or other property, then in each such case the
Conversion Rate and other terms of conversion in effect immediately prior
thereto shall be adjusted so that the holders of Series C Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock or other securities or property which such holder would have owned
or been entitled to receive after the declaration and payment of the dividend
or other distribution described in clause (x) or after the happening of the
event described in clause (y), if such shares of Series C Stock had been
converted immediately prior to the record date for the determination of
stockholders entitled to receive the dividend or other distribution described
in clause (x) or the happening of the event described in clause (y) on the day
upon which such event becomes effective.
(2) If, at any time or times after the issuance of shares of
Series C Stock, the Company shall effect a reorganization, shall merge with or
into or consolidate into another corporation, or shall sell, transfer or
otherwise
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dispose of all or substantially all of its property, assets or business and,
pursuant to the terms of such reorganization, merger, consolidation or
disposition of assets, shares of stock or other securities, property or
assets of the Company (or the successor, transferee or affiliate of the
Company) or cash are to be received by or distributed to the holders of
Common Stock, then the holder of shares of Series C Stock shall have the
right thereafter to receive, upon conversion of each share of Series C Stock,
the number of shares of stock or other securities, property or assets of the
Company (or the successor, transferee or affiliate of the Company), or cash
receivable upon or as a result of such reorganization, merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock
into which a share of Series C Stock was convertible immediately prior to
such event. The provisions of this subparagraph (2) shall similarly apply to
successive reorganizations, mergers, consolidations or dispositions of assets.
(3) Anything herein to the contrary notwithstanding, no
adjustments pursuant to this Section 6.e shall be made by reason of or in
connection with the issuance of shares of Common Stock upon (x) conversion of
any shares of Series C Stock, (y) conversion of any convertible securities of
the Company outstanding as of the date on which this Certificate is filed with
the Secretary of State of the State of Delaware or (z) exercise of any warrant,
option or other right entitling the holder thereof to subscribe for or purchase
shares of Common Stock.
F. RESERVATION OF SHARES. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of shares of Series C Stock,
the full number of whole shares of Common Stock then deliverable upon the
conversion of all shares of Series C Stock then outstanding. The Company shall
take at all times such corporate action as shall be necessary in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Common Stock upon the conversion of shares of Series C Stock in accordance with
the provisions of this Section 6.
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G. RETIREMENT OF SHARES. Any shares of Series C Stock converted
pursuant to the provisions of this Section 6 shall be retired and given the
status of authorized and unissued Preferred Stock, undesignated as to series,
subject to reissuance by the Company as shares of Preferred Stock of one or
more series, as may be determined from time to time by the Board.
7. VOTING RIGHTS.
A. GENERAL. Except as specifically set forth in the DGCL or
provided in the balance of this Section 7, the holders of shares of Series C
Stock shall not be entitled to any voting rights with respect to any matters
voted upon by stockholders.
B. VOTING BY CLASS ON CERTAIN MATTERS. So long as any shares of
Series C Stock are outstanding, the written consent or the affirmative vote at
a meeting called for that purpose of the holders of a majority of the votes of
the shares of Series C Stock then outstanding, voting separately as a class,
shall be necessary to validate or effectuate any of the following: (i) the
amendment, alteration or repeal of the Certificate of Incorporation of the
Company so as to affect adversely the powers, preferences or special rights of
such Series C Stock, or (ii) any increase in the number of authorized shares of
Series C Stock.
8. REDEMPTION.
A. OPTIONAL REDEMPTION. The Company may at any time redeem out of
funds legally available therefor all or any part of the shares of Series C
Stock at its election expressed by resolution of the Board, upon not less than
thirty (30) days' prior notice to the holders of record of the Series C Stock
to be redeemed, given by mail, at a price per share of Series C Stock equal to
the Face Amount thereof plus accumulated and unpaid dividends thereon up to the
date of redemption. The date of redemption shall be the date fixed therefor in
the notice of redemption.
B. PRO RATA REDEMPTION. If less than all outstanding Series C
Stock is to be redeemed, the redemption may be made either pro rata or by lot
or in some other
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equitable manner as may be prescribed by resolution of the Board.
C. NOTICE OF REDEMPTION. Any notice of redemption mailed to a
holder of Series C Stock at his or her address as the same shall appear on the
books of the Company shall be conclusively presumed to have been given whether
or not the holder receives the notice. Each such notice shall state: the date
of redemption; the number of shares of Series C Stock to be redeemed, and, if
less than all shares of Series C Stock held by such holder are to be redeemed,
the number of such shares to be redeemed from him or her and the fact that a
new certificate or certificates representing any unredeemed shares shall be
issued without cost to such holder; the redemption price applicable to the
shares to be redeemed; the place or places where such shares are to be
surrendered; and that shares to be redeemed may be converted at any time prior
to the close of business on the business day immediately preceding the
redemption date pursuant to Section 6 hereof, giving the then applicable
Conversion Rate. No defect in any such notice to any holder of Series C Stock
shall affect the validity of the proceedings for the redemption of any other
shares of such Series C Stock.
D. EFFECT OF REDEMPTION. From and after the date of redemption,
all dividends on the Series C Stock called for redemption shall cease to
accumulate and all rights of the holders thereof as stockholders of the
Company, except the right to receive the redemption price, shall terminate.
E. RETIREMENT OF SHARES. Any shares of Series C Stock redeemed
pursuant to the provisions of this Section 8 shall be retired and given the
status of authorized and unissued Preferred Stock, undesignated as to series,
subject to reissuance by the Company as shares of Preferred Stock of one or
more series, as may be determined from time to time by the Board.
9. NO SINKING FUND.
No sinking fund shall be established for the retirement or redemption of
shares of Series C Stock.
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10. PREEMPTIVE OR SUBSCRIPTION RIGHTS.
No holder of shares of Series C Stock shall have any preemptive or
subscription rights in respect of any securities of the Company that may be
issued.
11. NO OTHER RIGHTS.
The shares of Series C Stock shall not have any designations, preferences
or relative, participating, optional or other special rights except as
expressly set forth in the Company's Certificate of Incorporation, this
Certificate or as otherwise required by law.
RESOLVED FURTHER, that the Secretary of this Company be, and he hereby is,
authorized, empowered and directed to execute a Certificate of Designation,
Preferences and Rights of Series C Stock and that such Certificate be delivered
to and filed with the Secretary of State of the State of Delaware pursuant to
the provisions of Section 103 and Section 151(g) of the DGCL, both as amended.
IN WITNESS WHEREOF, Alliance Imaging, Inc., has caused this Certificate of
Designation to be executed by its Secretary as of April [__], 1996.
ALLIANCE IMAGING, INC.
By:
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Terrence M. White,
Secretary
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