EXHIBIT 4.3
[LETTERHEAD OF STATE OF CALIFORNIA]
SECRETARY OF STATE
CORPORATION DIVISION
I, BILL JONES, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the corporate record on
file in this office, of which it purports to be a copy, and that same is full,
true and correct.
IN WITNESS WHEREOF, I execute
this certificate and affix the Great
Seal of the State of California this
JUNE 27 1996
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[THE GREAT SEAL OF THE
STATE OF CALIFORNIA] /s/ Bill Jones
Secretary of State
Sec./State Form CE-107(rev 9-95)
CERTIFICATE OF DETERMINATION
OF
RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS
OF SERIES B CONVERTIBLE PREFERRED STOCK OF
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
A California Corporation
The undersigned, CHRISTOPHER R. POOK and GEMMA A. BANNON, hereby certify
that:
1. They are the duly elected and acting President and Secretary,
respectively, of GRAND PRIX ASSOCIATION OF LONG BEACH, INC. (the "Corporation").
2. Under authority given by the Corporation's Articles of Incorporation,
the Board of Directors has duly adopted the following recitals and resolutions:
WHEREAS, the Articles of Incorporation of the Corporation provide for a
class of shares known as Preferred Stock, issuable from time to time in one or
more series; and
WHEREAS, the Board of Directors of the Corporation is authorized to
determine or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Preferred Stock, to fix
the number of shares constituting any such series, and to fix the number of
shares constituting any such series; and
WHEREAS, the Board of Directors of the Corporation is authorized to
determine or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Preferred Stock, to fix
the number of shares constituting any such series, and to fix the number of
shares constituting any such series; and to determine the designation thereof,
or any of them; and
WHEREAS, the Board of Directors of the Corporation desires to determine the
rights, preferences, privileges and restrictions relating to the second series
of Preferred Stock, and the number of shares constituting and the designation of
the series;
NOW, THEREFORE, IT IS RESOLVED, that the Board of Directors hereby
determines the designation of, number of shares constituting, and the rights,
preferences, privileges and restrictions relating to the second series of
Preferred Stock as follows:
(a) The second series of Preferred Stock shall be designated "Series B
Convertible Preferred Stock."
(b) The number of shares constituting the Series B Convertible Preferred
Stock shall be 280,000.
(c)(i) The holders of the Series B Convertible Preferred Stock shall
be entitled to receive dividends when and as declared by the Board of Directors,
out of any corporate assets at the time legally available for this purpose, at
an annual rate equal to 4.185% of the original value of each share. The term
"original value" means the price at which the first share of the Series B
Convertible Preferred Stock was issued. Such dividends shall be payable in cash
annually on the anniversary of the
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issuance of the Series B Convertible Preferred Stock to holders of Series B
Convertible Preferred Stock of record on a date not more than sixty (60) nor
less than ten (10) days preceding the respective payment date as specified by
the Board of Directors or, if not so specified, as provided in the bylaws or by
law. Dividends shall accrue on each share of Series B Convertible Preferred
Stock from the date of its original issuance and shall accrue from day to day,
whether or not earned or declared. Dividends shall be cumulative so that if
dividends in respect of any previous annual dividend period at the above annual
rate shall not have been paid on or declared and set apart for all Series B
Convertible Preferred Stock, the deficiency shall be fully paid on or declared
and set apart for those shares before any dividends may be declared and paid on
Common Stock in any fiscal year of the Corporation. All dividends payable to the
holders of the Series B Convertible Preferred Stock shall be paid after all
dividends for the current fiscal year have been paid to the holders of the
Series A Convertible Preferred Stock.
(ii) The right to receive and accrue dividends shall cease on the
earliest of (A) the date on which the Series B Convertible Preferred Stock is
converted to Common Stock, (B) December 31, 1998, or (C) payment in full of
the indebtedness of the holder of the Series B Convertible Preferred Stock to
Boatman's Bank of Tennessee and certain other lenders in the aggregate principal
amount of $1,500,000 (the "Unassumed Debt").
(d) On any liquidation, dissolution, or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Series B Convertible
Preferred Stock shall share ratably with the holders of the Common Stock in any
distribution of cash or assets remaining after payment of the liquidation
preference to the holders of the Series A Convertible Preferred Stock.
(e)(i) Subject to the provisions of the California General Corporation
Law and to any other applicable restrictions on the right of a corporation to
redeem its own shares, the Corporation, on a date set during the month of
January, 1999, shall redeem all of the outstanding Series B Convertible
Preferred Stock which has not been converted as of December 31, 1998. Upon
redemption, the Corporation shall pay for each share redeemed, cash in the
amount of $.01 per share plus an amount, equal to all dividends thereon accrued
and unpaid as provided in subparagraph (c)(1), above, whether earned or declared
or not (the "Redemption Price.")
(ii) At least ten (10) days before the date of redemption (the
"Redemption Date"), a written redemption notice shall be given to each holder of
Series B Convertible Preferred Stock by first-class mail, postage prepaid, at
the shareholder's address as shown on the Corporation's records, stating: (A)
that the Series B Convertible Preferred Stock is to be redeemed; (B) the
Redemption Date; (C) the Redemption Price; and (D) the place of payment of the
Redemption Price.
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(iii) On or before the Redemption Date, each holder of shares to be
redeemed shall surrender the certificates representing the shares to the
Corporation at the place designated for payment in the redemption notice and
shall then be entitled to receive payment of the Redemption Price.
(iv) If the redemption notice shall have been duly given and if, on
the Redemption Date, the Redemption Price is available for payment, whether or
not the certificates covering these shares are surrendered, all rights with
respect to the redeemable Series B Convertible Preferred Stock shall terminate
except the right of the holders to receive the Redemption Price, without
interest, on the surrender of the certificates.
(v) Upon redemption of the Series B Convertible Preferred Stock,
the Corporation shall be obligated to assume, pay and indemnify the holders of
the Series B Convertible Preferred Stock and its shareholders from and against
the Unassumed Debt.
(f) The holders of the Series B Convertible Preferred Stock shall have
conversion rights as follows:
(i) The Series B Convertible Preferred Stock shall be convertible
into fully paid and nonassessable Common Stock of the Corporation (calculated to
the nearest one-hundredth of a share, fractions of less than one-hundredth of a
share being disregarded) at the option of the respective holders of the shares
at any time after June 30, 1997.
(ii) Each share of the Series B Convertible Preferred Stock shall be
convertible into one (1) share of Common Stock, subject to adjustment as
provided in subparagraph (f)(iv), below.
(iii) Before any shares of the Series B Convertible Preferred Stock
may be converted into Common Stock at the option of the holder, the holder must
surrender the certificate or certificates for those shares, duly endorsed in
blank or accompanied by proper instruments of transfer. Conversion shall be
deemed to have been made as of the date of surrender of the Series B Convertible
Preferred Stock to be converted, and the person or persons entitled to receive
the Common Stock issuable upon conversion shall be treated for all purposes as
the record holder or holders of those shares of Common Stock on that date.
(iv) The number of shares of Common Stock into which Series B
Convertible Preferred Stock may be converted shall be subject to adjustment from
time to time in certain cases as follows:
(A) If the Corporation shall subdivide or combine its
outstanding Common Stock into a greater or smaller number of shares, then in
each case the number of shares of Common Stock
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into which Series B Convertible Preferred Stock may be converted shall be
increased or reduced in the same proportion.
(B) If the Corporation shall set a record date for the purpose
of entitling the holders of its Common Stock to receive a dividend or other
distribution payable in Common Stock or securities convertible into or
exchangeable for Common Stock, then in each such case the maximum number of
shares of Common Stock issuable in payment of the dividend or distribution or
upon conversion of or in exchange for the securities convertible into or
exchangeable for Common Stock, shall be deemed to have been issued and to be
outstanding as of that record date, and in each such case the number of shares
of Common Stock into which Series B Convertible Preferred Stock may be
converted, shall be increased in proportion to the increase, through the
dividend or distribution, of the number of outstanding shares of Common Stock.
(C) If the Corporation shall set a record date for the purpose
of entitling the holders of its Common Stock to subscribe for additional Common
Stock upon payment of an amount per share of Common Stock less then the "market
value" (as defined in (D), below) per share of Common Stock on that record date,
then in each such case the number of Common Stock deliverable upon the
conversion of each Series B Convertible Preferred Stock shall be increased in
the ratio which (v) the sum of the number of shares of Common Stock
outstanding on that record date and the number of shares of Common Stock sold
bears to (w) the sum of the number of shares of Common Stock outstanding on that
record date and the number of shares of Common Stock which the aggregate
subscription price would purchase at the "market value" per share of the Common
Stock on that record date. Upon the setting of a record date by the Corporation
for the purpose of entitling the holders of its Common Stock to subscribe for
shares of stock or other securities convertible into, exchangeable for, or
carrying rights of purchase of, Common Stock, a record date shall be deemed to
have been set for the purpose of entitling the holders of its Common Stock to
subscribe for the total number of shares of Common Stock deliverable upon the
exercise of such rights of conversion, exchange, or purchase, upon payment of an
aggregate price equal to the sum of (x) the total consideration payable to the
Corporation for the stock or other securities so convertible or exchangeable,
and (y) in the case of the stock or other securities carrying such rights, but
not so convertible or exchangeable, the amount (if any) by which the
consideration payable to the Corporation for that stock or other securities
shall exceed the distributive amounts (excluding dividends) payable on voluntary
liquidation of the Corporation with respect to that stock or the principal
amount of securities, as the case may be, or the redemption price thereof,
whichever is higher, and (z) any additional amount thereafter payable to the
Corporation upon the exercise of the rights of conversion, exchange, or
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purchase.
(D) The "market value" per share of Common Stock at the time as
of which then "market value" is determined shall be deemed to be the average of
the daily closing prices for thirty (30) consecutive business days selected by
the Corporation out of the forty (40) such days immediately preceding the date
as of which "market value" is determined. For the purpose of the foregoing
sentence, a "business day" means a day on which the principal stock exchange or
other market on which the Common Stock is traded was open for at least one-half
of its normal business day. The closing price on any day shall be the last sale
price, regular way, as reported in a composite published report of transactions
which includes transactions on the exchange or other principal markets in which
the Common Stock is traded or, if there is no such composite report as to any
day, the last reported sales price, regular way (or if there is no such reported
sale on that day, the average of the closing reported bid and asked prices) on
the principal United States securities trading market (whether a stock exchange,
NASDAQ, or otherwise) in which the Common Stock is traded; provided, however,
that if the Common Stock is not publicly traded or listed during the time of any
computation pursuant to this paragraph, its "market value" for the purposes
hereof shall be the fair value as determined in good faith by the Board of
Directors of the Corporation.
(E) If there occurs any capital reorganization or any
reclassification of the capital stock of the Corporation, the consolidation or
merger of the Corporation with or into another corporation, or the sale or
conveyance of all or substantially all of the assets of the Corporation to
another corporation, each Series B Convertible Preferred Stock shall thereafter
be convertible into the same kind and amounts of securities (including shares of
stock) or other assets, or both, issuable or distributable to the holders of
outstanding Common Stock of the Corporation upon reorganization,
reclassification, consolidation, merger, sale, or conveyance, in respect of the
number of shares of Common Stock into which that Series B Convertible
Preferred Stock might have been converted immediately prior to the
reorganization, reclassification, consolidation, merger, sale or conveyance; and
in any such case, appropriate adjustments (as determined by the Board of
Directors) shall be made applying the provisions herein set forth with respect
to the rights and interest thereafter of the holders of the Series B Convertible
Preferred Stock, to the end that the provisions set forth (including provisions
with respect to changes in, and other adjustments of, the conversion rate) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
securities or other assets deliverable upon the conversion of the Series B
Convertible Preferred Stock.
(v) Immediately upon adjustment of the amount of
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Common Stock or other securities deliverable upon the conversion of Series B
Convertible Preferred Stock, the Corporation shall file, at its principal
executive office and with any transfer agent or agents for Series B Convertible
Preferred Stock and for Common Stock, a statement, signed by the Chairman of the
Board, President, or one of the Vice Presidents of the Corporation, and by its
Chief Financial Officer or one of its Assistant Treasurers, stating the adjusted
amount of its Common Stock or other securities deliverable upon the conversion
of the Series B Convertible Preferred Stock calculated to the nearest one one-
hundredth and setting forth in reasonable detail the method of calculation and
the facts requiring the adjustment and upon which the calculation is based. Each
adjustment shall remain in effect until a subsequent adjustment hereunder is
required.
(vi) No fractional shares of Common Stock shall be issued upon the
conversion of the Series B Convertible Preferred Stock. If any fractional
interest in a share of Common Stock would otherwise be deliverable upon the
conversion of any of the Series B Convertible Preferred Stock the Corporation
shall, in lieu of delivering the fractional share, pay the holder of the
converted Series B Convertible Preferred Stock an amount equal to the value of
the fractional interest.
(g) Each holder of Series B Convertible Preferred Stock shall have the
same rights to vote held by the holders of the Corporation's Common Stock. Each
holder of the Series B Convertible Preferred Stock shall have the number of
votes equal to the number of shares of Series B Convertible Preferred Stock
held.
FURTHER RESOLVED, that the President and Secretary of the Corporation are
each authorized to execute, verify, and file a Certificate of Determination of
Rights, Preferences, Privileges and Restrictions in accordance with California
law setting forth the foregoing rights, preferences, privileges and restrictions
on the Series B Convertible Preferred Stock.
3. The authorized number of shares of Preferred Stock of the Corporation
is 10,000,000, and the number of shares constituting the Series B Convertible
Preferred Stock, none of which has been issued, is 280,000.
IN WITNESS WHEREOF, the undersigned have executed this Certificate on June
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19, 1996.
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/s/ Christopher R. Pook
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CHRISTOPHER R. POOK, PRESIDENT
/s/ Gemma A. Bannon
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GEMMA A. BANNON, SECRETARY
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The undersigned, CHRISTOPHER R. POOK and GEMMA A. BANNON, the President and
Secretary, respectively, of GRAND PRIX ASSOCIATION OF LONG BEACH, INC., each
declares under penalty of perjury under the laws of the State of California that
the matters set out in the foregoing Certificate are true of his or her own
knowledge.
Executed at Long Beach, California, on 6/19, 1996.
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/s/ Christopher R. Pook
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CHRISTOPHER R. POOK
/s/ Gemma A. Bannon
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GEMMA A. BANNON
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