Exhibit 3.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
SERIES A AND SERIES B CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERRED STOCK
OF
CROWN CASTLE INTERNATIONAL CORP.
______________________________________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________________________________________
Crown Castle International Corp. (the "Corporation"), a corporation
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organized and existing under the General Corporation Law of the State of
Delaware, certifies that pursuant to the authority contained in Article IV of
its Certificate of Incorporation (the "Certificate of Incorporation") and in
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accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, on September 14, 1999 the Board of Directors of the
Corporation duly approved and adopted the following resolution which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by its Certificate of Incorporation, the Board of Directors does
hereby designate, create, authorize and provide for the issue of 200,000 shares
of Series A Cumulative Convertible Redeemable Preferred Stock, par value $0.01
per share, with a liquidation preference of $1,000 per share and 200,000 shares
of Series B Cumulative Convertible Redeemable Preferred Stock, par value $0.01
per share, with a liquidation preference of $1,000 per share, (collectively, the
"Convertible Preferred Stock"), in each case having the following voting powers,
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preferences and relative, participating, optional and other special rights, and
qualifications, limitations and restrictions thereof as follows:
1. Certain Definitions.
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Unless the context otherwise requires, the terms defined in this
Section 1 shall have, for all purposes of this Certificate of Designations, the
meanings herein specified (with terms defined in the singular having comparable
meanings when used in the plural).
Accrued Dividends. The term "Accrued Dividends" shall have the
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meaning set forth in Section 4(d) below.
Additional Dividends. The term "Additional Dividends" shall mean all
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Additional Dividends (as defined in the Registration Rights Agreement) then
accrued and owning under Section 5 of the Registration Rights Agreement.
Adjusted Conversion Price. The term "Adjusted Conversion Price" shall
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have the meaning set forth in Section 6(q) below.
Affiliate. The term "Affiliate" of any specified Person shall mean
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any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
Board of Directors. The term "Board of Directors" shall mean the
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Board of Directors of the Corporation.
Business Day. The term "Business Day" shall mean a day other than a
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Saturday or Sunday or any federal holiday.
Capital Stock. The term "Capital Stock" shall mean (i) in the case of
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a corporation, corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (iii) in the case of a
partnership, partnership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
CCUK. The term "CCUK" shall mean Crown Castle Holdings Limited (f/k/a
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Castle Transmission Services (Holdings) Ltd.)
Change of Control. The term "Change of Control" shall mean the
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occurrence of any of the following: (1) the sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Corporation and its Subsidiaries, taken as a whole, to any "person" (as such
term is used in Section 13(d)(3) of the Exchange Act) other than a Principal or
a Related Party of a Principal; (2) the adoption of a plan relating to the
liquidation or dissolution of the Corporation; (3) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than the
Principals and their Related Parties, becomes the "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the Voting Stock of the
Corporation (measured by voting power rather than number of shares); provided
that transfers of Equity Interests in the Corporation between or among the
beneficial owners of the Corporation's Equity Interests and/or Equity Interests
in CCUK, in each case as of the date hereof, will not be deemed
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to cause a Change of Control under this clause (3) so long as no single Person
together with its Affiliates acquires a beneficial interest in more of the
Voting Stock of the Corporation than is at the time collectively beneficially
owned by the Principals and their Related Parties; (4) the first day on which a
majority of the members of the Board of Directors are not Continuing Directors;
or (5) the Corporation consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, the Corporation, in any
such event pursuant to a transaction in which any of the outstanding Common
Stock of the Corporation is converted into or exchanged for cash, securities or
other property, other than any such transaction where: (a) the Voting Stock of
the Corporation outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of such
surviving or transferee Person (immediately after giving effect to such
issuance); or (b) the Principals and their Related Parties own a majority of
such outstanding shares after such transaction.
Change of Control Conversion Date. The term "Change of Control
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Conversion Date" shall have the meaning set forth in Section 6(q) below.
Change of Control Conversion Period. The term "Change of Control
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Conversion Period" shall have the meaning set forth in Section 6(q) below.
Common Equity. The term "Common Equity" shall mean all shares now or
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hereafter authorized of any class of common stock of the Corporation, including
the Common Stock and any other stock of the Corporation, howsoever designated,
authorized after the Initial Issue Date, that have the right (subject always to
prior rights of any class or series of preferred stock) to participate in the
distribution of the assets and earnings of the Corporation without limit as to
per share amount.
Common Stock. The term "Common Stock" shall mean the Common Stock,
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par value $.01 per share, of the Corporation.
Continuing Directors. The term "Continuing Directors" shall mean, as
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of any date of determination, any member of the Board of Directors who: (1) was
a member of such Board of Directors on the Initial Issue Date; (2) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election; or (3) is a designee of a Principal
or was nominated by a Principal.
Conversion Date. The term "Conversion Date" shall have the meaning
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set forth in Section 6(b) below.
Conversion Rate. The term "Conversion Rate" shall mean, as of any
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date, the number of shares of Common Stock issuable upon conversion of one share
of Convertible Preferred Stock, determined by dividing the Liquidation
Preference, plus all accrued and unpaid dividends thereon to the date of
conversion, of such share of Convertible Preferred Stock as of such date by the
Conversion Price then in effect.
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Conversion Price. The term "Conversion Price" shall initially mean
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$26.875 and thereafter shall be subject to adjustment from time to time pursuant
to the terms of Section 6 below. The Conversion Price shall be rounded to three
decimal places.
Current Market Price. The term "Current Market Price" shall mean,
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with respect to any particular security on any date of determination, the
average over the 10 Trading Days ending on the date immediately preceding the
date of such determination of the last reported sale price, or, if no such sale
takes place on any such day, the closing bid price, in either case as reported
for consolidated transactions on the principal national securities exchange
(including the Nasdaq National Market) on which such security is listed or
admitted for trading; provided, however, that if any event (other than a Change
of Control) that results in an adjustment of the Conversion Rate occurs during
the period beginning on the first day of such 10-day period and ending on the
date immediately preceding the date of determination, the Current Market Price
as determined pursuant to the foregoing will be appropriately adjusted as
necessary to reflect the occurrence of such event or, if such security is not
listed on any exchange or admitted for trading on the Nasdaq Stock Market, the
Current Market Price of such security shall be the last reported bid price for
such security on the date preceding the date of such determination provided by a
New York Stock Exchange member firm designated by the Corporation or, if no such
member firm can provide such a bid price, as determined in good faith by a
majority of the independent directors of the Corporation.
Depositary. The term "Depositary" shall mean United States Trust
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Company of New York, in its capacity as the Depositary under the Deposit
Agreement, and any successor thereto named pursuant to the Deposit Agreement.
Deposit Agreement. The term "Deposit Agreement" shall mean that
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certain Deposit Agreement, dated as of November 19, 1999, by and between the
Corporation and the Depositary, for the benefit of the Investor, as amended from
time to time.
Determination Date. The term "Determination Date" shall have the
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meaning assigned to it in Section 6(k).
Discounted Current Market Price. The term "Discounted Current Market
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Price" shall mean with respect to a dividend payment date, the product of (x)
97% and (y) the closing bid price for the Common Stock as reported by the Nasdaq
National Market, or the principal securities exchange or other securities market
on which the Common Stock is then being traded, on the fourth Trading Day
preceding such dividend payment date.
Distribution Date. The term "Distribution Date" shall have the
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meaning set forth in Section 4(b) below.
Dividend Amount. The term "Dividend Amount" shall have the meaning
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set forth in Section 4(b) below.
Dividend Payment Date. The term "Dividend Payment Date" shall have
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the meaning set forth in Section 4(a) below.
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Dividend Period. The term "Dividend Period" shall mean the period
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from, and including, the Initial Issue Date to, but not including, the first
Dividend Payment Date and thereafter, each quarterly period from, and including,
the preceding Dividend Payment Date to, but not including the next Dividend
Payment Date.
Equity Interests. The term "Equity Interests" shall mean Capital
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Stock and all warrants, options or other rights to acquire Capital Stock (but
excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
Exchange Act. The term "Exchange Act" shall mean the Securities
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Exchange Act of 1934 and the rules and regulations promulgated from time to time
thereunder, as the same may be amended from time to time.
Executive Officer. The term "Executive Officer" shall mean any
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officer of the Corporation that would be deemed to be an "executive officer"
within meaning of the rules and regulations of the Securities and Exchange
Commission.
Excess Proceeds. The term "Excess Proceeds" shall have the meaning
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assigned to it in Section 4(b) hereof.
Extra Dividends. The term "Extra Dividends" shall have the meaning
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set forth in Section 4(d) hereof.
Fair Market Value. The term "Fair Market Value" shall be determined
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in accordance with Section 6(m) hereof.
GAAP. The term "GAAP" shall mean generally accepted accounting
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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 have been approved by a
significant segment of the accounting profession, which are in effect on the
Initial Issue Date.
Holder. The term "Holder" shall mean the record holder of one or more
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shares of Convertible Preferred Stock, as shown on the books and records of the
Corporation.
Initial Issue Date. The term "Initial Issue Date" shall mean the date
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that shares of Convertible Preferred Stock are first issued by the Corporation.
Investor. The term "Investor" shall mean SFG-P Inc., a Delaware
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corporation and a wholly owned subsidiary of GE Capital Services Structured
Finance Group, Inc., or an Affiliate thereof directly or indirectly controlled
by the Parent.
Junior Securities. The term "Junior Securities" shall mean any class
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of stock the terms of which do not expressly provide that it ranks senior to, or
on parity with, the Convertible Preferred Stock as to the payment of dividends
and as to rights in liquidation, dissolution or winding up of the affairs of the
Corporation. The term "Junior Securities" shall include any
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options, warrants or rights to purchase any Junior Securities. The Corporation's
Common Stock shall be Junior Securities.
Liquidation Preference. The term "Liquidation Preference" shall mean
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$1,000 per share of Convertible Preferred Stock.
Market Capitalization. The term "Market Capitalization" shall mean,
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as of any date, the product of (x) the Current Market Price of the Common Stock
as of such date multiplied by (y) the number of shares of Common Stock
outstanding as of such date.
Officer's Certificate. The term "Officer's Certificate" shall mean a
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certificate signed on behalf of the Corporation by two officers of the
Corporation, one of whom must be the Chief Executive Officer, the Chief
Financial Officer, the Treasurer, the principal accounting officer or an
executive vice president of the Corporation that meets the requirements of
Section 12 hereof.
Parent. The term "Parent" shall mean General Electric Company, a New
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York corporation.
Parity Securities. The term "Parity Securities" shall mean any class
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or series of stock of the Corporation authorized after the Initial Issue Date
the terms of which expressly provide that such class or series of stock will
rank on parity with the Convertible Preferred Stock as to the payment of
dividends and as to rights in liquidation, dissolution or winding up of the
affairs of the Corporation. The term "Parity Securities" shall include any
options, warrants or rights to purchase any Parity Securities.
Permitted Interruption. shall have the meaning assigned to such term
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in the Registration Rights Agreement.
Permitted Senior Stock. The term "Permitted Senior Stock" shall mean
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up to an aggregate of $400.0 million in aggregate liquidation preference of
Senior Securities established hereafter by the Corporation's Board of Directors,
which maximum amount shall include all additional amounts paid as in-kind
dividends thereon.
Permitted Transferee. The term "Permitted Transferee" shall mean any
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Person that is directly or indirectly controlled by the Parent.
Person. The term "Person" shall mean any individual, corporation,
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limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or agency or political
subdivision thereof (including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business).
Principals. The term "Principals" shall mean Berkshire Fund III,
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Limited Partnership; Berkshire Fund IV, Limited Partnership; Berkshire Investors
LLC; Berkshire Partners LLC; Centenial Fund IV, L.P.; Centenial Fund V, L.P.;
Centenial Entrepreneurs Fund V, L.P.; Nassau Capital Partners II, L.P.; NAS
Partners I, L.L.C., and TdF and any Related Party of the foregoing.
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Purchase Agreement. The term "Purchase Agreement" shall mean that
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certain Purchase Agreement, dated as of November 19, 1999, between the
Corporation and the Investor.
Record Date. The term "Record Date" shall have the meaning set forth
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in Section 4(a) below.
Related Party. The term "Related Party" with respect to any Principal
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shall mean: (x) any controlling stockholder, 80% (or more) owned Subsidiary of
such Principal; or (y) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, members, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of such Principal
and/or such other Persons referred to in the immediately preceding clause (x).
Registration Rights Agreement. The term "Registration Rights
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Agreement" shall mean that certain Registration Rights Agreement, dated as of
November 19, 1999, among the Corporation, the Depositary and the Investor.
Replacement Senior Stock. The term "Replacement Senior Stock" shall
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mean up to $200.0 million in aggregate liquidation preference of shares of
preferred stock established after the Initial Issue Date by the Board of
Directors to replace either the Corporation's outstanding 12-3/4% Senior
Exchangeable Preferred Stock due 2010 once retired (through exchange or
otherwise) or any Replacement Senior Stock issued in accordance with this
Certificate of Designations once retired, in each case the terms of which
expressly provide that (i) the aggregate dividends payable thereon shall not
exceed 12-3/4% (compounding annually) over a ten year period in respect of
$200.0 million and (ii) such class or series will rank senior to the Convertible
Preferred Stock as to dividend rights and rights upon liquidation, winding up
and dissolution of the Corporation.
Rights. The term "Rights" shall mean securities, rights, options or
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warrants entitling a holder thereof to subscribe for or purchase any shares of
Common Stock or any securities convertible or exchangeable into Common Stock of
the Corporation.
SEC. The term "SEC" shall mean the Securities and Exchange
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Commission.
Securities Act. The term "Securities Act" shall mean the Securities
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Act of 1933, as amended.
Senior Securities. The term "Senior Securities" shall mean the
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Corporation's outstanding 12-3/4% Senior Exchangeable Preferred Stock due 2010,
any Replacement Senior Stock, any Permitted Senior Stock and any class or series
of stock of the Corporation permitted to be issued in the future the terms of
which expressly provide that such class or series of stock will rank senior to
the Convertible Preferred Stock as to the payment of dividends and as to rights
in liquidation, dissolution or winding up of the affairs of the Corporation.
Series A Convertible Preferred Stock. The term "Series A Convertible
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Preferred Stock" shall mean the Series A Convertible Preferred Stock to be
issued to the Investor on the Initial Issue Date.
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Series B Convertible Preferred Stock. The term "Series B Convertible
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Preferred Stock" shall mean the Series B Convertible Preferred Stock to be
issued (x) to any Person other than the Investor and (y) upon a transfer of the
Series A Convertible Preferred Stock to a party other than a Permitted
Transferee.
Shortfall Amount. The term "Shortfall Amount" shall have the meaning
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set forth in Section 4(b) below.
Stockholder Agreement. The term "Stockholder Agreement" shall mean
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that certain Stockholders Agreement, dated as of August 21, 1998, as the same
may be amended from time to time, among the Corporation and each of the
Stockholders listed on Schedule I to the Stockholders Agreement.
Subsidiary. The term "Subsidiary" shall mean, with respect to any
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person, (i) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Voting Stock thereof is at the
time owned or controlled, directly or indirectly, by such person or one or more
of the other Subsidiaries of that person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such person or a Subsidiary of such person or (b) the only general
partners of which are such person or of one or more Subsidiaries of such person
(or any combination thereof).
TdF. The term "TdF" shall mean Telediffusion de France International
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S.A., as a stockholder of the Corporation.
Trading Day. The term "Trading Day" shall mean any day on which the
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Common Stock is traded on the Nasdaq National Market (or on the principal
securities exchange or other securities market on which the Common Stock is then
being traded).
Triggering Distribution. The term "Triggering Distribution" shall
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have the meaning assigned to it in Section 6(k).
Voting Rights Trigger Event. The term "Voting Rights Trigger Event"
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shall have the meaning set forth in Section 8(c) below.
Voting Stock. The term "Voting Stock" shall mean with respect to any
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specified Person, Capital Stock with voting power, under ordinary circumstances
and without regard to the occurrence of any contingency, to elect the directors
or other managers or trustees of such Person.
2. Automatic Conversion. The Convertible Preferred Stock
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initially issued to the Investor will be issued as Series A Convertible
Preferred Stock. Any Convertible Preferred Stock initially issued to any Person
other than the Investor will be issued as Series B Convertible Preferred Stock.
Each share of Series A Convertible Preferred Stock shall automatically convert
to one share of Series B Convertible Preferred Stock upon a sale or other
transfer of such share of Series A Convertible Preferred Stock to a party other
than a Permitted Transferee.
3. Ranking. The Convertible Preferred Stock will, with respect to
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dividend rights and rights on liquidation, winding-up and dissolution, rank (i)
senior to each class of
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Junior Securities; (ii) on a parity with each class of Parity Securities; and
(iii) junior to each class of Senior Securities. The Corporation may not issue
any Senior Securities, other than Permitted Senior Stock and Replacement Senior
Stock, without the consent of the Holders of at least 66-2/3% of the outstanding
shares of Convertible Preferred Stock, voting together as a single separate
class.
4. Dividends.
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(a) General. The Holders of shares of the Convertible Preferred
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Stock shall be entitled to receive, when, as and if dividends are declared by
the Board of Directors, cumulative preferential dividends from the Initial Issue
Date accruing at the rate per share of 8.25% per annum, or $20.625 per share per
quarter, payable quarterly in arrears on March 15, June 15, September 15 and
December 15 in each year or, if any such date is not a Business Day, on the next
succeeding Business Day (each, a "Dividend Payment Date"), to the Holders of
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record as of the immediately preceding February 28, May 31, August 31 and
November 30 (each, a "Record Date"). The first dividend payment will be payable
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on December 15, 1999 and, notwithstanding the foregoing sentence, will equal
$6.19 per share of Convertible Preferred Stock. Dividends payable on the
Convertible Preferred Stock will be computed on the basis of a 360-day year of
twelve 30-day months and will be deemed to accrue on a daily basis. Holders of
the Convertible Preferred Stock will not be entitled to any dividends, whether
payable in cash, property or stock, in excess of the full cumulative dividends
as herein described.
(b) Series A Convertible Preferred Stock. Dividends on the Series
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A Convertible Preferred Stock will be payable in cash, Common Stock, or any
combination of cash and Common Stock, as follows:
(i) If the Corporation elects to pay all or part of a
dividend on the Series A Convertible Preferred Stock in Common Stock, the
Corporation shall (x) promptly notify the Holders of the Series A
Convertible Preferred Stock of the Corporation's election to pay dividends
in Common Stock, and (y) deliver to the Depositary on or prior to the
applicable Dividend Payment Date:
(A) a sufficient number of duly authorized, validly issued
and fully paid shares of Common Stock, free of preemptive or similar
rights, that will, upon sale by the Depositary in accordance with
instructions received from the Corporation, result in sufficient net cash
proceeds to enable the Depositary to distribute cash to the Holders of the
Series A Convertible Preferred Stock in an aggregate amount equal to the
quarterly dividend payment then due, including, if applicable, any Extra
Dividends accrued, pursuant to Section 4(d) hereof, if applicable,
(collectively, the "Dividend Amount"), and
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(B) an opinion of counsel addressed to the Depositary and
in form and substance reasonably acceptable to the Depositary, to the
effect that the shares of Common Stock delivered to the Depositary have
been duly authorized, fully paid and validly issued and delivered, and are
free of preemptive rights and freely tradeable (by use of a prospectus
under an effective shelf registration statement or otherwise) under the
Securities Act, subject only to Permitted Interruptions.
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(ii) The Corporation shall instruct the Depositary to sell
all shares of Common Stock received by the Depositary from the Corporation
as dividends on the Series A Convertible Preferred Stock as promptly as
practicable pursuant to the terms of the Deposit Agreement.
(iii) The Corporation shall instruct the Depositary to
distribute the net cash proceeds received by the Depositary from the sale
of Common Stock to the Holders, in accordance with the Deposit Agreement on
or prior to the 15/th/ day after the applicable Dividend Payment Date. The
Holders of the Series A Convertible Preferred Stock will not receive any
such shares of Common Stock.
(iv) If the proceeds from such sale do not result in a
sufficient amount of cash to enable the Depositary to distribute the
Dividend Amount to the Holders of the Series A Convertible Preferred Stock
(such deficiency being referred to herein as the "Shortfall Amount"), the
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Corporation shall promptly provide to the Depositary an amount of cash,
and/or a sufficient number of additional shares of Common Stock to be sold
and distributed as provided in this Section 4(b), and subject to this
sentence, that, in the aggregate will yield an amount equal to the
Shortfall Amount, and shall instruct the Depositary to distribute as
promptly as practicable the cash and/or cash proceeds from such sale of
Common Stock in an amount equal to the Shortfall Amount to the Holders of
Series A Convertible Preferred Stock.
(v) If the proceeds from any such sale exceed the required
dividend payment (the "Excess Proceeds"), the Corporation shall instruct
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the Depositary to retain such Excess Proceeds and to apply such Excess
Proceeds to the next succeeding distribution by the Depositary of the
Dividend Amount.
(vi) The Corporation will be deemed to have paid the
Dividend Amount on the applicable Dividend Payment Date if it delivers to
the Depositary shares of Common Stock in accordance with Section 4(b)(i) on
or prior to the Dividend Payment Date. In the event that the Holders of the
Series A Convertible Preferred Stock do not receive the full Dividend
Amount in cash on or prior to the date that is 15 days after such Dividend
Payment Date (the "Distribution Date"), the unpaid portion of the Dividend
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Amount shall be deemed to be unpaid from such Dividend Payment Date and
shall accrue Extra Dividends from such Dividend Payment Date.
(c) Series B Convertible Preferred Stock. The Holders of shares of
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the Series B Convertible Preferred Stock, if any, will be paid dividends, (i) in
cash, (ii) through the issuance of a number of shares (rounded up or down to the
nearest whole share) of Common Stock equal to the applicable Dividend Amount
divided by the Discounted Current Market Price of the Common Stock, or (iii) any
combination of cash and Common Stock, at the option of the Corporation. If the
Corporation elects to pay all or part of a dividend on the Series B Convertible
Preferred Stock in Common Stock, the Corporation shall deliver to the Holders of
the Series B Convertible Preferred Stock on or prior to the applicable Dividend
Payment Date a sufficient number of duly authorized, validly issued and fully
paid shares of Common Stock, free of preemptive or similar rights, equal to the
applicable Dividend Amount divided by the Discounted Current Market Price of the
Common Stock.
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(d) Accrual of Dividends; Accrual in Respect of Late Payments.
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Dividends on the Convertible Preferred Stock shall accrue whether or not the
Corporation has earnings or profits, whether or not there are funds legally
available for the payment of such dividends and whether or not dividends are
declared. Dividends will accumulate to the extent they are not paid on the
applicable Dividend Payment Date for the quarter to which they relate.
Accumulated unpaid dividends ("Accrued Dividends") will accrue and cumulate
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additional dividends (the "Extra Dividends") at the rate of 10.0% per annum
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(compounding quarterly) from the applicable Dividend Payment Date to the date of
payment thereof in accordance with the terms hereof. Accrued Dividends, if any,
may be paid on such dates as determined by the Board of Directors. The
Corporation shall take all actions required or permitted under Delaware law to
permit the payment of dividends on the Convertible Preferred Stock; provided,
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however, that no Extra Dividends will accrue if (x) the Corporation delivers a
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sufficient number of shares of Common Stock to the Depositary by the applicable
Dividend Payment Date and (y) cash in the amount equal to the Dividend Amount is
distributed to the Holders of Series A Convertible Preferred Stock by the
Distribution Date, in each case in accordance with Section 4(b).
(e) Additional Dividends. Additional Dividends shall accrue with
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respect to the Convertible Preferred Stock in the amounts and manner specified
in Section 5 of the Registration Rights Agreement in connection with certain
registration defaults by the Corporation.
5. Distributions Upon Liquidation, Dissolution or Winding Up.
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Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation or reduction or decrease in its capital
stock resulting in a distribution of assets to the holders of any class or
series of the Corporation's Capital Stock (a "reduction or decrease in capital
--------------------------------
stock") after the payment in full of the outstanding debt obligations of the
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Corporation, each Holder of shares of the Convertible Preferred Stock shall be
entitled to payment out of the assets of the Corporation available for
distribution of an amount equal to the Liquidation Preference per share of
Convertible Preferred Stock held by such Holder, plus Extra Dividends pursuant
to Section 4(d) hereof and Additional Dividends (if any) to the date fixed for
liquidation, dissolution, winding up or reduction or decrease in capital stock,
before any distribution is made on any Junior Securities. If, upon any voluntary
or involuntary liquidation, dissolution or winding-up of the Corporation, the
amounts payable with respect to the Convertible Preferred Stock and all other
Parity Securities are not paid in full, the Holders of Convertible Preferred
Stock and the holders of Parity Securities will share equally and ratably in any
distribution of assets of the Corporation in proportion to the full liquidation
preference and accumulated and unpaid dividends to which they are entitled.
After payment in full of the Liquidation Preference and an amount equal to all
accrued dividends and an amount equal to any Extra Dividends pursuant to Section
4(d) hereof and Additional Dividends (if any) to which Holders of Convertible
Preferred Stock are entitled, such Holders will not be entitled to any further
participation in any distribution of assets of the Corporation. However, neither
the voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with or into one or more corporations or other entities will be deemed to be a
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation or reduction or decrease in capital stock, unless such sale,
conveyance, exchange or
11
transfer shall be in connection with a liquidation, dissolution or winding up of
the affairs of the Corporation or reduction or decrease in capital stock.
6. Conversion Rights.
-----------------
(a) Each Holder of shares of Convertible Preferred Stock shall
have the right, at such Holder's option, to convert all or any portion of its
shares of Convertible Preferred Stock into shares of Common Stock, which would
have the same liquidation, voting and other rights as the outstanding shares of
Common Stock, at any time, at the Conversion Rate per share calculated as of the
close of business on the Conversion Date. The right to convert a share of the
Convertible Preferred Stock called for redemption or delivered for repurchase
will terminate at the close of business on the Business Day immediately
preceding the redemption date for such Convertible Preferred Stock (unless the
Corporation defaults in making the payment due upon redemption) or at the time
of the repurchase (unless the Corporation fails to make such repurchase), as the
case may be.
(b) The right of conversion attaching to any share of Convertible
Preferred Stock may be exercised by the Holder thereof by delivering the share
of Convertible Preferred Stock to be converted to the Corporation, at its
principal office or at such office or agency maintained by the Corporation for
that purpose, accompanied by a duly signed and completed notice of conversion in
form reasonably satisfactory to the Corporation. The "Conversion Date" will be
---------------
the date on which the share of Convertible Preferred Stock and the duly signed
and completed notice of conversion are so delivered. As promptly as practicable
on or after the Conversion Date, the Corporation shall issue and deliver to its
transfer agent (i) a certificate or certificates for the number of full shares
of Common Stock issuable upon conversion, with any fractional shares rounded up
to full shares or, at the Corporation's Option, with a payment in cash,
determined as provided below, in lieu of any fraction of a share and (ii) if
less 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 to be
converted. Such certificate or certificates shall be delivered by the
Corporation's transfer agent to the appropriate Holder on a book-entry basis or
by mailing certificates evidencing the additional shares to the Holders at their
respective addresses set forth in the register of Holders maintained by the
Corporation. All shares of Common Stock issuable upon conversion of the
Convertible Preferred Stock shall be fully paid and nonassessable and shall rank
pari passu with the other shares of Common Stock outstanding from time to time.
Any Convertible Preferred Stock surrendered for conversion during the period
from the close of business on any Record Date to the opening of business on the
next succeeding Dividend Payment Date must be accompanied by payment of an
amount equal to the dividends (including Additional Dividends, if any) payable
on such Dividend Payment Date on the Convertible Preferred Stock being
surrendered for conversion. No other payment or adjustment for dividends, or for
any dividends in respect of shares of Common Stock, will be made upon
conversion. In the case of any Convertible Preferred Stock that has been
converted after any Record Date but before the next Dividend Payment Date,
dividends that are payable on such Dividend Payment Date shall be payable on
such Dividend Payment Date notwithstanding such conversion, and such dividends
(including Additional Dividends, if any) shall be paid to the Holder of such
Convertible Preferred Stock on such Record Date. Holders of Common Stock issued
upon conversion will
12
not be entitled to receive any dividends payable to holders of Common Stock as
of any record time before the close of business on the Conversion Date.
(c) The Corporation shall not issue a fractional share of Common
Stock upon conversion of Convertible Preferred Stock. Instead, the Corporation
shall deliver a check for an amount equal to the applicable fraction of a share
multiplied by the Current Market Price calculated as of the close of business on
the Conversion Date, rounded to the nearest cent.
(d) A Holder delivering Convertible Preferred Stock for conversion
will not be required to pay any taxes or duties in respect of the issue or
delivery of Common Stock on conversion but will be required to pay any tax or
duty that may be payable in respect of any transfer involved in the issue or
delivery of the shares of Common Stock in a name other than that of the Holder
of the Convertible Preferred Stock. Certificates representing shares of Common
Stock will not be issued or delivered unless all taxes and duties, if any,
payable by the Holder have been paid.
(e) The Corporation has reserved and shall continue to reserve out
of its authorized but unissued Common Stock or its Common Stock held in treasury
enough shares of Common Stock to permit the conversion of all outstanding shares
of Convertible Preferred Stock in full. All shares of Common Stock that may be
issued upon conversion of Convertible Preferred Stock shall be fully paid and
nonassessable and free of preemptive or similar rights. The Corporation shall
take all commercially reasonable steps to comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Convertible Preferred Stock and shall take all commercially reasonable steps to
list such shares on each national securities exchange or the Nasdaq National
Market on which the Common Stock is listed or admitted for trading, if any.
(f) If the Corporation:
(i) pays a dividend (or makes a distribution) on its Common
Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into
a greater number of shares;
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares;
(iv) makes a distribution on its Common Stock in shares of
its Capital Stock other than Common Stock; or
(v) issues any shares of its Capital Stock by
reclassification of its Common Stock;
then the Conversion Price in effect immediately prior to such action shall be
adjusted so that the Holder of each share of Convertible Preferred Stock
thereafter converted may receive the number of shares of Common Stock that he
would have owned immediately following such action if he had converted
Convertible Preferred Stock immediately prior to such action. The
13
adjustment shall become effective immediately after the record date in the case
of a dividend or distribution and immediately after the effective date in the
case of a subdivision, combination or reclassification. Such adjustment shall be
made successively whenever any event listed above shall occur. If, after an
adjustment referred to in clauses (f)(i) through (v) above, a Holder of
Convertible Preferred Stock upon conversion of it may receive shares of two or
more classes of Capital Stock of the Corporation, then the Conversion Price
shall be split into two or more components, as the case may be, and the
Conversion Price of each class of Capital Stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 6(f).
(g) If the Corporation distributes any Rights to all or
substantially all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share that is less than the
Current Market Price per share of Common Stock on the record date of
distribution of such Rights, the Conversion Price shall be adjusted in
accordance with the formula:
C'= C x ((O + ((N x P) / M)) / (O + N))
where:
C' = the adjusted Conversion Price.
C = the Conversion Price as of the applicable record date.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered (or
into which the Rights so offered are convertible or
exercisable).
P = the offering price per share of the additional shares of Common
Stock (or the conversion price per share of the Rights so
offered).
M = the Current Market Price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such Rights are issued
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such Rights. If at the end of
the period during which such Rights are exercisable, not all Rights shall have
been exercised, the Conversion Price shall be immediately readjusted to what it
would have been if "N" in the above formula had been the number of shares
actually issued. For the purposes of this paragraph (g), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Corporation but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.
(h) If the Corporation distributes to all or substantially all
holders of shares of its Common Stock (i) any evidence of indebtedness or other
securities (other than shares of Common Stock) of the Corporation or any
Subsidiary of the Corporation, (ii) any other assets (including securities, but
excluding cash and those dividends, Rights and distributions referred to above
in this Section 6) or (iii) Rights to subscribe for or purchase any of its
securities
14
(excluding those referred to above in Section 6(g)), the Conversion Price shall
be adjusted in accordance with the formula:
C'= C x ((M - F)/ M)
where:
C' = the adjusted Conversion Price.
C = the Conversion Price as of the applicable record date.
M = the Current Market Price per share of Common Stock as of the
applicable record date.
F = the fair market value on the record date of the Capital Stock,
indebtedness, other securities or other assets distributed per
share of Common Stock, or of such Rights applicable to one
share of Common Stock (determined on the basis of the number of
shares of Common Stock outstanding on the record date).
The adjustment shall be made successively whenever any such distribution is made
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
(i) If the Corporation issues shares of Common Stock to all
or substantially all holders of shares of Common Stock for a consideration per
share less than the Current Market Price per share on the date the Corporation
issues such additional shares, the Conversion Price shall be adjusted in
accordance with the formula:
C'= C x ((O + (P / M)) / A)
where:
C' = the adjusted Conversion Price.
C = the Conversion Price as of the applicable record date.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the Current Market Price per share on the date of issuance of
such additional shares.
A = the number of shares Common Stock outstanding immediately after
the issuance of such additional shares.
15
The adjustment shall be made successively whenever any such issuance is made,
and shall become effective immediately after such issuance. This Section 6(i)
does not apply to any transaction or issuance described in Section 6(g) or 6(h)
above or Section 6(j) or 6(k) below. For the purpose of this paragraph (i), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of shares of Common
Stock.
(j) If the Corporation issues any securities convertible into or
exchangeable for Common Stock (other than Convertible Preferred Stock or
securities issued in transactions described in Sections 6(g), (h) or (i)) to all
or substantially all holders of shares of Common Stock and for a consideration
per share of Common Stock initially deliverable upon conversion, exchange or
exercise of such securities that is less than the Current Market Price per share
on the date of issuance of such securities, the Conversion Price shall be
adjusted in accordance with the formula:
C' = C x ((O + (P / M)) / (O + D))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities plus the aggregate consideration receivable upon
exercise of all such securities.
M = the Current Market Price per share of Common Stock on the date
of issuance of such securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for or upon exercise of such securities at the initial
conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance. If all of
the Common Stock deliverable upon conversion, exchange or exercise of such
securities has not been issued when such securities are no longer outstanding,
then the Conversion Price shall promptly be readjusted to the Conversion Price
that would then be in effect had the adjustment upon the issuance of such
securities been made on the basis of the actual number of shares of Common Stock
issued upon conversion, exchange or exercise of such securities. For the purpose
of this paragraph (j), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock.
(k) In case the Corporation shall, by dividend or otherwise, at
any time distribute (a "Triggering Distribution") to all or substantially all
-----------------------
holders of its Common Stock
16
cash in an aggregate amount that, together with the aggregate amount of all cash
distributions to all or substantially all holders of its Common Stock made
within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no Conversion Price adjustment pursuant to
this Section 6 has been made, exceeds 7.5% of the product of the Current Market
Price per share of Common Stock on the Business Day (the "Determination Date")
------------------
immediately preceding the day on which such Triggering Distribution is declared
by the Corporation multiplied by the number of shares of Common Stock
outstanding on such date, the Conversion Price shall be adjusted in accordance
with the following formula:
C' = C x ((M-D)/M)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share on the date of the
Triggering Distribution.
D = the amount of cash (plus the fair market value of other
consideration) distributed to all or substantially all
holders of Common Stock within the 12 months preceding
the date of the payment of the Triggering Distribution
(including, without limitation, the Triggering
Distribution) applicable to one share of Common Stock
(determined on the basis of the number of shares of
Common Stock outstanding on the Determination Date).
Such reduction shall become effective immediately prior to the
opening of business on the day following the date on which the Triggering
Distribution is paid. For the purpose of this paragraph (k), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Corporation but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.
(l) In addition, in the event that any other transaction or
event occurs as to which the foregoing conversion price adjustment provisions
are not strictly applicable but the failure to make any adjustment would
adversely affect the conversion rights represented by the Convertible Preferred
Stock in accordance with the essential intent and principles of such provisions,
then, in each such case, either (i) the Corporation shall appoint an investment
banking firm of recognized national standing, or any other financial expert that
does not (or whose directors, officers, employees, affiliates or stockholders do
not) have a direct or material indirect financial interest in the Corporation or
any of its Subsidiaries, who has not been, and, at the time it is called upon to
give independent financial advice to the Corporation, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a promoter,
director or officer of the Corporation or any of its Subsidiaries, which will
give their opinion upon or (ii) the Board of Directors shall determine,
consistent with the Board of Directors' fiduciary duties to the Corporation's
stockholders, the adjustment, if any, on a basis consistent with the essential
intent and principles established in the foregoing conversion price adjustment
provisions, necessary to preserve, without dilution, the conversion rights
represented by the Convertible Preferred Stock. Upon receipt of such opinion or
determination, the Corporation shall promptly mail a copy
17
thereof to the Holders of the Convertible Preferred Stock and will make the
adjustments described therein.
(m) For purposes of any computation respecting consideration
received pursuant to a transaction described or contemplated by this Section 6,
the following shall apply:
(i) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Corporation for any
underwriting of the issue or otherwise in connection therewith;
(ii) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market value
thereof (irrespective of the accounting treatment thereof);
(iii) whenever this Certificate of Designations calls for
the determination of "fair market value," such fair market value shall be
determined in good faith by the Board of Directors and as evidenced by a
written resolution thereof; and
(iv) in the case of the issuance of Rights, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Corporation for the issuance of such Rights plus the
additional consideration, if any, to be received by the Corporation upon
the conversion or exchange or exercise thereof (the consideration in each
case to be determined in the same manner as provided in this Section 6(m)).
(n) No adjustment in the Conversion Price will be required
unless the cumulative adjustments would require an increase or decrease of at
least 1% in the Conversion Price. Any adjustments that are not made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 6 shall be made to the nearest one hundredth of
a cent or to the nearest 1/1000th of a share, as the case may be.
(o) No adjustment in the Conversion Price will be required
under this Section 6 for (i) issuances to satisfy the Corporation's obligations
to TdF in connection with the pre-emptive rights granted to TdF under the
Governance Agreement, dated as of August 21, 1998, among the Corporation, TdF
and certain subsidiaries thereof, except to the extent that an adjustment was
made in connection with the issuance that triggered the pre-emptive rights; (ii)
issuances of Common Stock or Rights to Persons who are not Affiliates of the
Corporation as consideration for the acquisition of stock or assets to be used
in the principal business of the Corporation or any ancillary or related
business; (iii) rights to purchase Common Stock pursuant to a plan for
reinvestment of dividends or interest; (iv) any change in the par value or no
par value of the Common Stock, and in no event shall any adjustment be made
under this Section 6 that would reduce the Conversion Price below the par value
of the Common Stock; (v) Common Stock issued to the Corporation's employees
under bona fide employee benefit plans adopted by the Board of Directors and
approved by the holders of Common Stock when required by law; (vi) Common Stock
issued to acquire, or in the acquisition of, all or any portion of a business as
a going concern, in an arm's-length transaction between the Corporation and an
unaffiliated third
18
party, whether such acquisition shall be effected by purchase of assets,
exchange of securities, merger, consolidation or otherwise; (vii) Common Stock
issued in a bona fide public offering pursuant to a firm commitment
underwriting; or (viii) the conversion of Convertible Preferred Stock or the
conversion, exchange or exercise of securities issued in transactions that were
subject to Sections 6(g), 6(h) or 6(j) above. If an adjustment is made to the
Conversion Price upon the establishment of a record date for a distribution
subject to Sections 6(g), 6(h), 6(i), 6(j) or 6(k) above and if such
distribution is subsequently cancelled, the Conversion Price then in effect
shall be readjusted, effective as of the date when the Board of Directors of the
Corporation determines to cancel such distribution, to the Conversion Price that
would have been in effect if such record date had not been fixed. No adjustment
in the Conversion Price need be made under Section 6 above if the Corporation
issues or distributes to each Holder of Convertible Preferred Stock the shares
of Common Stock, evidences of indebtedness, assets or Rights referred to in this
Section that each Holder would have been entitled to receive had the Convertible
Preferred Stock been converted into Common Stock prior to the happening of such
event or the record date with respect thereto.
No adjustment need be made for a transaction referred to in
Sections 6(f), (g), (h), (i), (j) and (k) hereof, if Convertible Preferred Stock
Holders are to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction.
To the extent the Convertible Preferred Stock becomes convertible
into cash, no adjustment needs to be made thereafter as to the cash. Interest
will not accrue on the cash.
(p) If the Corporation consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any Person, upon
consummation of such transaction the Convertible Preferred Stock shall
automatically become convertible for the kind and amount of securities, cash, or
other assets which the Holder of the Convertible Preferred Stock would have
owned immediately after the consolidation, merger, transfer or lease if the
Holder had converted the Convertible Preferred Stock immediately before the
effective time of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such consolidation or
merger if other than the Corporation, or the Person to which such sale or
conveyance shall have been made, shall adopt an amended Certificate of
Designations so providing and further providing for adjustments which shall be
as nearly equivalent as may be practical to the adjustments provided for in this
Section. The successor Corporation shall mail to Convertible Preferred Stock
Holders a notice describing the amended Certificate of Designations. If this
subsection (p) applies, other subsections of this Section 6 do not apply.
(q) Change of Control.
-----------------
(i) In the event of a Change of Control, each Holder of
the Convertible Preferred Stock will, if the Current Market Price of the
Corporation's Common Stock as of the date of consummation of such Change of
Control is less than the Conversion Price, have a one time option,
exercisable at any time within 90 days after a Change of Control is
consummated (the "Change of Control Conversion Period"), to convert all of
-----------------------------------
their outstanding shares of Convertible Preferred Stock into shares of the
Common Stock at an adjusted Conversion Price (the "Adjusted Conversion
-------------------
Price") equal
-----
19
to the greater of (1) the last reported sale price for oneshare of the
Common Stock in an arm's-length transaction as of the date of the Change of
Control and (2) $12.96 (such dollar amount to be adjusted for transactions
in a manner consistent with the other adjustments to the Conversion Price
contemplated by this Section 6). In lieu of issuing the shares of the
Corporation's Common Stock issuable upon conversion pursuant to adjustment
described above in the event of a Change of Control, the Corporation may,
at its option, make a cash payment equal to the Current Market Price of
such Common Stock otherwise issuable.
(ii) Promptly upon the consummation of a Change of
Control, the Corporation shall mail a notice to each Holder describing the
transaction or transactions that constitute such Change of Control and
stating: (1) that the Change of Control has taken place and that the
Holders have an option to convert the shares of Convertible Preferred Stock
at the Adjusted Conversion Price; (2) the Adjusted Conversion Price
applicable to any conversion during the Change of Control Conversion
Period; (3) that any shares of Convertible Preferred Stock not converted
will be assumed by the successor corporation, if not the Corporation, and
will continue to be entitled to all the rights and privileges afforded to
it by this Certificate of Designations; (4) that, unless the Corporation
defaults in the conversion of the Convertible Preferred Stock upon the
Change of Control, all shares of Convertible Preferred Stock converted
pursuant to the Change of Control conversion shall cease to accrue
dividends after the Change of Control Conversion Date; (5) that Holders
electing to have any Convertible Preferred Stock converted pursuant to a
Change of Control conversion will be required to surrender the shares of
Convertible Preferred Stock, with the form entitled "Option of Holder to
Elect Conversion" on the reverse of the shares of the Convertible Preferred
Stock completed, to the Corporation at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control conversion date (the "Change of Control Conversion Date")
---------------------------------
specified in the notice, which Change of Control Conversion Date shall be
no earlier than the expiration of the Change of Control Conversion Period;
(6) that Holders will be entitled to withdraw their election if the
Corporation receives, not later than the close of business on the second
Business Day preceding the Change of Control Conversion Date, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the
liquidation preference of Convertible Preferred Stock delivered for
conversion, and a statement that such Holder is withdrawing his election to
have the shares of Convertible Preferred Stock converted; and (7) that the
Holder electing to convert its shares must convert all of its outstanding
shares of Convertible Preferred Stock.
(iii) The Change of Control provisions described above
shall be applicable whether or not any other provisions of this Certificate
of Designations are applicable.
(r) The Corporation shall provide to Holders of Convertible
Preferred Stock reasonable notice of any event that would result in an
adjustment to the Conversion Price pursuant to any of the adjustments in this
Section 6 so as to permit the Holders to effect a conversion of shares of
Convertible Preferred Stock into shares of Common Stock prior to the occurrence
of such event.
20
(s) The Corporation from time to time may reduce the Conversion
Price by any amount for any period of time if the period is at least 20 Business
Days or such longer period as may be required by law and if the reduction is
irrevocable during the period, but in no event may the Conversion Price be less
than the par value of a share of Common Stock. Whenever the Conversion Price is
reduced, the Corporation shall mail to holders of Convertible Preferred Stock a
notice of the reduction. The Corporation shall mail, first class, postage
prepaid, the notice at least 15 days before the date the reduced conversion
price takes effect. The notice shall state the reduced Conversion Price and the
period it will be in effect. A reduction of the Conversion Price does not change
or adjust the Conversion Price otherwise in effect for purposes of Sections
6(f), 6(g), 6(h), 6(i), 6(j), 6(k) and 6(q) above.
(t) If:
(i) the Corporation takes any action which would require
an adjustment in the Conversion Price pursuant to Section 6(g) or 6(h)
above, or clause (iv) of Section 6(f) above;
(ii) the Corporation consolidates or merges with, or
transfers all or substantially all of its assets to, another corporation,
and stockholders of the Corporation must approve the transaction; or
(iii) there is a dissolution or liquidation of the
Corporation;
a Holder of Convertible Preferred Stock may want to convert such stock into
shares of Common Stock prior to the record date for or the effective date of the
transaction so that he may receive the rights, warrants, securities or assets
which a holder of shares of Common Stock on that date may receive. Therefore,
the Corporation shall mail to such holders, first class, postage prepaid, a
notice stating the proposed record or effective date, as the case may be. The
Corporation shall mail the notice at least ten days before such date. Failure to
mail the notice or any defect in it shall not affect the validity of any
transaction referred to in clause (i), (ii) or (iii) of this Section 6(t).
(u) In any case in which this Section 6 shall require that an
adjustment in the Conversion Price as a result of any event become effective as
of a record date for a specified event, the Corporation may elect to defer until
after the occurrence of such event (i) the issuance to the Holder of any shares
of Convertible Preferred Stock converted after such record date and before the
occurrence of such event of the additional shares of Common Stock or other
Capital Stock of the Company issuable upon such conversion over and above the
shares of Common Stock or other Capital Stock of the Company issuable on the
basis of the Conversion Price in effect immediately prior to adjustment and (ii)
a check in lieu of any fractional shares of Common Stock as provided in Section
6(c) above; provided that the Corporation shall deliver to such Holder an
appropriate instrument evidencing such Holder's right to receive such additional
shares of Common Stock, other Capital Stock and cash upon the occurrence of the
event requiring such adjustment.
(v) Whenever the Corporation or its Board of Directors shall be
required to make a determination under this Section 6, such determination shall
be made in good faith and
21
may be challenged in good faith by the Holders of a majority of the outstanding
shares of Convertible Preferred Stock (with shares held by the Corporation or
any of its Subsidiaries not being considered to be outstanding for this
purpose), and any dispute shall be resolved by an investment banking firm of
recognized national standing selected by the Corporation and acceptable to such
Holders of Convertible Preferred Stock. If such investment banking firm resolves
that the adjustment should have been more favorable to the Holders, the
Corporation shall bear the costs of such firm and if such investment banking
firm resolves that such determination was correct or should have been less
favorable to the Holders, the Holders challenging such determination shall bear
the costs of such firm.
(w) All shares of Convertible Preferred Stock converted
pursuant to this Section 6 shall be automatically retired, shall not be reissued
as shares of Convertible Preferred Stock and shall be restored to the status of
authorized and unissued shares of preferred stock, without designation as to
series and may thereafter be reissued as shares of any series preferred stock
other than Convertible Preferred Stock.
(x) Except as specifically set forth in this Section 6, none of
the adjustments described in this Section 6 shall duplicate adjustments
previously made or made simultaneously pursuant to other subsections of this
Section 6, or otherwise double count any transaction.
7. Redemption.
----------
(a) The Convertible Preferred Stock may not be redeemed at the
option of the Corporation prior to October 1, 2002. The Convertible Preferred
Stock may be redeemed, in whole or in part, at the option of the Corporation, on
or after October 1, 2002, at the redemption prices specified below (expressed as
percentages of the Liquidation Preference thereof), in each case, together with
an amount equal to accrued and unpaid dividends and Additional Dividends (if
any), to the date of redemption, upon not less than 15 nor more than 60 days
prior written notice, during the 12-month period commencing on October 1 of each
of the years set forth below:
Year Percentage
---- ----------
2002 104.125%
2003 102.750%
2004 101.375%
2005 and thereafter 100.000%
(b) The Corporation shall redeem all of outstanding shares of
Convertible Preferred Stock on March 31, 2012, at the redemption price of
100.00% of the Liquidation Preference thereof, together with an amount equal to
accrued and unpaid dividends and Additional Dividends (if any) to the date of
redemption.
(c) In case of redemption of less than all shares of
Convertible Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by a method that complies with the requirements of
any national stock exchange (including the Nasdaq National Market) on which
Convertible Preferred Stock is listed as determined by the Corporation in its
sole discretion, except that the Corporation may redeem all of the shares held
22
by Holders of fewer than 100 shares (or all of the shares held by Holders who
would hold less than 100 shares as a result of such redemption), as may be
determined by the Corporation.
(d) Notice of any optional redemption shall be sent by or on
behalf of the Corporation not more than sixty (60) days nor less than fifteen
(15) days prior to the Redemption Date, by first class mail, postage prepaid, to
all holders of record of the Convertible Preferred Stock at their respective
last addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any shares of Convertible Preferred Stock except as to the Holder to whom the
Corporation has failed to give notice or except as to the Holder to whom notice
was defective. In addition to any information required by law or by the
applicable rules of any exchange (including the Nasdaq National Market) upon
which Convertible Preferred Stock may be listed or admitted to trading, such
notice shall state: (i) the redemption date; (ii) the redemption price; (iii)
whether all or less than all the outstanding shares of Convertible Preferred
Stock are to be redeemed and the number of such shares to be redeemed; (iv) the
place or places where certificates for such shares are to be surrendered for
payment of the redemption price; (v) that dividends on the shares to be redeemed
will cease to accrue on the redemption date; (vi) the Conversion Price; and
(vii) that Convertible Preferred Stock called for redemption may be converted at
any time before the close of business on the redemption date. Upon the mailing
of any such notices of redemption, the Corporation shall become obligated to
redeem at the time of redemption specified thereon all shares called for
redemption.
(e) If notice has been mailed in accordance with Section 7(d)
above and provided that on or before the redemption date specified in such
notice, all funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds in trust for the pro rata
benefit of the Holders of the shares so called for redemption, so as to be, and
to continue to be available therefor, then, from and after the redemption date,
dividends on the shares of the Convertible Preferred Stock so called for
redemption shall cease to accrue (except that, in the case a redemption date is
declared by the Corporation after a Record Date and prior to the corresponding
Dividend Payment Date, holders or Convertible Preferred Stock on the Record Date
shall be entitled on the Dividend Payment Date to receive the dividend payable
on such shares of Convertible Preferred Stock), and said shares shall no longer
be deemed to be outstanding and shall not have the status of shares of
Convertible Preferred Stock, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the applicable redemption price) shall cease. Upon surrender, in
accordance with said notice, of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Corporation shall so require
and the notice shall so state), such shares shall be redeemed by the Corporation
at the applicable redemption price. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed shares without cost to
the Holder thereof.
(f) Any funds deposited with a bank or trust company for the
purpose of redeeming Convertible Preferred Stock shall be irrevocable except
that:
(i) the Corporation shall be entitled to receive from such
bank or trust company the interest or other earnings, if any, earned on any
money so deposited in trust,
23
and the holders of any shares redeemed shall have no claim to such interest
or other earnings; and
(ii) any balance of monies so deposited by the Corporation and
unclaimed by the holders of the Convertible Preferred Stock entitled
thereto at the expiration of one (1) year from the applicable redemption
date shall be repaid, together with any interest or other earnings earned
thereon, to the Corporation, and after any such repayment, the holders of
the certificates formerly representing the shares entitled to the funds so
repaid to the Corporation shall look only to the Corporation for payment
without interest or other earnings.
(g) No Convertible Preferred Stock may be redeemed except with funds
legally available for the payment of the applicable redemption price.
(h) Notwithstanding the foregoing provisions of this Section 7,
unless the full cumulative dividends on all outstanding shares of Convertible
Preferred Stock shall have been paid or contemporaneously are declared and paid
for all past dividend periods, none of the shares of Convertible Preferred Stock
shall be redeemed unless all outstanding shares of Convertible Preferred Stock
are simultaneously redeemed.
(i) All shares of Convertible Preferred Stock redeemed pursuant to
this Section 7 shall be automatically retired, shall not be reissued as shares
of Convertible Preferred Stock and shall be restored to the status of authorized
and unissued shares of preferred stock, without designation as to series and may
thereafter be reissued as shares of any series of preferred stock other than
shares of Convertible Preferred Stock.
8. Voting Rights; Board Representation.
------------------------------------
In addition to any voting rights provided elsewhere herein, and any
voting rights provided by law, the holders of shares of Convertible Preferred
Stock shall have the following voting rights:
(a) So long as any shares of Series A Convertible Preferred Stock are
outstanding, each share of Series A Convertible Preferred Stock shall entitle
the Holder thereof to vote on all matters voted on by holders of the Capital
Stock of the Corporation into which such share of Series A Convertible Preferred
Stock is convertible, voting together as a single class with the other shares
entitled to vote, on all matters submitted to a vote of the stockholders of the
Corporation. With respect to any such vote, each share of Series A Convertible
Preferred Stock shall entitle the holder thereof to cast the number of votes
equal to the number of votes which could be cast in such vote by a holder of the
shares of capital stock of the Corporation into which such share of Series A
Convertible Preferred Stock is convertible on the record date for such vote or,
if no such record date is established, on the date any written consent of
stockholders is solicited.
(b) Except as provided in Section 8(c), the Series B Convertible
Preferred Stock shall have no voting rights.
24
(c) If the Accrued Dividends on the outstanding Convertible Preferred
Stock accumulate in an amount equal to three (3) full quarterly dividends (a
"Voting Rights Trigger Event"); then the authorized number of members of the
---------------------------
Corporation's Board of Directors will be immediately and automatically increased
by two, and the Holders of a majority of the outstanding shares of Convertible
Preferred Stock, voting separately as a class, shall be entitled to elect two
directors of the Corporation.
(d) Whenever such voting right shall have vested, such right may be
exercised initially either at a special meeting of the Holders of Convertible
Preferred Stock, called as hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and thereafter at such
annual meetings or by the written consent of the Holders of Convertible
Preferred Stock. Such right of the Holders of Convertible Preferred Stock to
elect directors may be exercised until (i) all dividends in arrears shall have
been paid in full and (ii) all other Voting Rights Trigger Events have been
cured or waived, at which time the right of the Holders of Convertible Preferred
Stock to elect such number of directors shall cease, the term of such directors
previously elected shall thereupon terminate, and the authorized number of
directors of the Corporation shall thereupon return to the number of authorized
directors otherwise in effect, but subject always to the same provisions for the
renewal and divestment of such special voting rights in the case of any such
future dividend default or defaults.
(e) At any time when a Voting Rights Triggering Event has occurred
and is continuing, if such voting rights shall not already have been initially
exercised, a proper officer of the Corporation shall, upon the written request
of Holders of record of 10% or more of the Convertible Preferred Stock then
outstanding, addressed to the Secretary of the Corporation, call a special
meeting of Holders of Convertible Preferred Stock. Such meeting shall be held at
the earliest practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of stockholders of the
Corporation or, if none, at a place designated by the Secretary of the
Corporation. If such meeting shall not be called by the proper officers of the
Corporation within 30 days after the personal service of such written request
upon the Secretary of the Corporation, or within 30 days after mailing the same
within the United States, by registered mail, addressed to the Secretary of the
Corporation at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the Holders of record
of 10% of the shares of Convertible Preferred Stock then outstanding may
designate in writing a Holder of Convertible Preferred Stock to call such
meeting at the expense of the Corporation, and such meeting may be called by
such person so designated upon the notice required for annual meetings of
stockholders and shall be held at the place for holding annual meetings of the
Corporation or, if none, at a place designated by such Holder. Any Holder of
Convertible Preferred Stock that would be entitled to vote at such meeting shall
have access to the stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to the provisions of this Section.
Notwithstanding the provisions of this paragraph, however, no such special
meeting shall be called if any such request is received less than 90 days before
the date fixed for the next ensuing annual or special meeting of stockholders.
(f) If the directors so elected by the Holders of Convertible
Preferred Stock shall cease to serve as a director before his term shall expire,
the Holders of Convertible Preferred Stock then outstanding may, at a special
meeting of the Holders called as provided
25
above, elect a successor to hold office for the unexpired term of the director
whose place shall be vacant.
(g) The Corporation shall not, without the affirmative vote or
consent of the Holders of a majority of the then outstanding shares of
Convertible Preferred Stock (with shares held by the Corporation or any of its
Subsidiaries not being considered to be outstanding for this purpose):
(i) amend this Certificate of Designations in a manner that is
adverse in any respect to the Holders of the Convertible Preferred Stock;
(ii) alter or change the rights, preferences or privileges of
the Convertible Preferred Stock;
(iii) increase or decrease the authorized number of shares of
Convertible Preferred Stock or issue shares of Convertible Preferred Stock
other than to Holders of Convertible Preferred Stock pursuant to its terms
or to TdF; or
(iv) amend or waive any provision of the Corporation's
Certification of Incorporation or bylaws in a manner that is adverse in any
respect to the Holders of the Convertible Preferred Stock.
(h) Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any shares of Convertible Preferred Stock held
by a non-consenting Holder):
(i) alter the voting rights with respect to the Convertible
Preferred Stock or reduce the number of shares of Convertible Preferred
Stock whose Holders must consent to an amendment, supplement or waiver;
(ii) reduce the Liquidation Preference of any share of
Convertible Preferred Stock;
(iii) reduce the rate of or change the time for payment of
dividends on any share of Convertible Preferred Stock;
(iv) waive a default or event of default in the payment of
dividends or Additional Dividends (if any) on the Convertible Preferred
Stock;
(v) make any share of Convertible Preferred Stock payable in
money other than that stated in this Certificate of Designations; or
(vi) make any change in the provisions of this Certificate of
Designations relating to waivers of the rights of Holders of Convertible
Preferred Stock to receive the Liquidation Preference, dividends or
Additional Dividends (if any) on the Convertible Preferred Stock or in the
foregoing amendment and waiver provisions.
26
9. Certain Covenants.
-----------------
(a) Reports. Whether or not required by the SEC, so long as any
-------
shares of Convertible Preferred Stock are outstanding, the Corporation shall
furnish to the Holders of shares of Convertible Preferred Stock all current,
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 8-K, 10-Q and 10-K if the
Corporation were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Corporation
and its consolidated Subsidiaries (showing in reasonable detail, in the
footnotes to the financial statements and in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" (in each case to the
extent not prohibited by the SEC's rules and regulations.
(b) Merger, Consolidation, or Sale of Assets. The Corporation shall
----------------------------------------
not (x) consolidate or merge with or into (whether or not the Corporation is the
surviving corporation); or (y) sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another corporation, Person or entity, unless:
(i) either (A) the Corporation is the surviving corporation; or
(B) the entity or the Person formed by or surviving any such consolidation
or merger (if other than the Corporation) or to which the sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia;
(ii) in the event of any such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition the agreement
implementing such consolidation, merger, sale, assignment, transfer, lease,
conveyance or disposition shall provide that the Convertible Preferred
Stock is converted into shares of such surviving entity or Person, having
in respect of such surviving entity or Person as nearly as practicable the
same powers, preference and relative, participating, optional or other
special rights that the Convertible Preferred Stock had immediately prior
to such transaction (except that no adjustments on conversion rights shall
be required pursuant to this Section 9(b));
(iii) immediately after such transaction no Voting Rights
Triggering Event exists; and
(iv) the Corporation delivers to the Holders of the Convertible
Preferred Stock an Officer's Certificate and an opinion of counsel stating
that such consolidation merger or transfer complies with this Certificate
of Designations.
(c) Restricted Payments. No dividend whatsoever shall be declared or
-------------------
paid upon, or any sum set apart for the payment of dividends upon, any
outstanding share of the Convertible Preferred Stock with respect to any
Dividend Period unless all dividends for all preceding Dividend Periods have
been declared and paid upon, or declared and a sufficient sum set apart for the
payment of such dividend upon, all outstanding shares of Convertible Preferred
27
Stock. Unless full cumulative dividends on all outstanding shares of
Convertible Preferred Stock due for all past Dividend Periods shall have been
declared and paid, or declared and a sufficient sum for the payment thereof set
apart, then: (i) no dividend (other than a dividend payable solely in shares of
any Junior Securities or Parity Securities, respectively) shall be declared or
paid upon, or any sum set apart for the payment of dividends upon, any shares of
Junior or Parity Securities; (ii) no other distribution (other than
distributions payable solely in shares of Junior or Parity Securities) shall be
declared or made upon or any sum set apart for the payment of any distribution
upon, any shares of Junior or Parity Securities; (iii) no shares of Junior or
Parity Securities or any warrants, rights, calls or options exercisable for or
convertible into any Junior or Parity Securities shall be purchased, redeemed or
otherwise acquired or retired for value (excluding an exchange for shares of
other Junior or Parity Securities or a purchase, redemption or other acquisition
from the proceeds of a substantially concurrent sale of Junior or Parity
Securities) by the Corporation or any of its Subsidiaries; and (iv) no monies
shall be paid into or set apart or made available for a sinking or other like
fund for the purchase, redemption or other acquisition or retirement for value
of any shares of Junior or Parity Securities or any warrants, rights, calls or
options exercisable for or convertible into any Junior or Parity Securities or
any warrants, rights, calls or options exercisable for or convertible into any
Junior or Parity Securities by the Corporation or any of its Subsidiaries;
provided, however, that any dividend or distribution on the Convertible
Preferred Stock shall be shared pro-rata with any Parity Securities, if funds
are not sufficient to pay all dividends or distributions due in full.
(d) No Amendments to Deposit Agreement or Registration Rights
---------------------------------------------------------
Agreement. The Corporation will not amend the Deposit Agreement or the
- ---------
Registration Rights Agreement without the consent of the Holders of at least 50%
of the shares of the outstanding Convertible Preferred Stock (excluding
Convertible Preferred Stock held by the Corporation or any of its Subsidiaries),
in each case other than amendments that are not adverse in any respect to the
Holders of the Convertible Preferred Stock.
10. Capital and Ownership Structure.
-------------------------------
The Corporation (a) will take all such action as may be necessary or
appropriate in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of Common Stock on the conversion of the
Convertible Preferred Stock from time to time outstanding and (b) will not take
any action which results in any adjustment of the Conversion Price if the total
number of shares of Common Stock issuable after the action upon the conversion
of all of the Convertible Preferred Stock would exceed the total number of
shares of Common Stock then authorized by the Corporation's certificate of
incorporation and available for the purposes of issue upon such exercise.
11. Form of Payments.
----------------
(a) All amounts payable in cash with respect to the Convertible
Preferred Stock shall be payable in United States dollars and may be made by
check mailed to the Holders of the Convertible Preferred Stock at their
respective addresses set forth in the register of Holders of Convertible
Preferred Stock maintained by the Corporation, provided that all cash payments
with respect to shares of Convertible Preferred Stock the Holders of which have
given wire transfer instructions to the Corporation at least 48 hours prior to
such payment will be
28
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof.
(b) Any payment on the Convertible Preferred Stock due on any day
that is not a Business Day need not be made on such day, but may be made on the
next succeeding Business Day with the same force and effect as if made on such
due date.
12. Officer's Certificate.
---------------------
Each Officer's Certificate provided for in this Certificate of
Designations shall include:
(a) a statement that the officer making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such officer, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such officer,
such condition or covenant has been satisfied.
13. Exclusion of Other Rights.
-------------------------
Except as may otherwise be required by law, the shares of Convertible
Preferred Stock shall not have any voting powers, preferences and relative,
participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designations (as such Certificate of
Designations may be amended from time to time) and in the Certificate of
Incorporation.
14. Headings of Subdivisions.
------------------------
The headings of the various subdivisions hereof are for convenience
of reference only and shall not affect the interpretation of any of the
provisions hereof.
15. Severability of Provisions.
--------------------------
If any voting powers, preferences and relative, participating,
optional and other special rights of the Convertible Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Convertible Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or
29
unenforceable voting powers, preferences and relative, participating, optional
and other special rights of Convertible Preferred Stock and qualifications,
limitations and restrictions thereof shall, nevertheless, remain in full force
and effect, and no voting powers, preferences and relative, participating,
optional or other special rights of Convertible Preferred Stock and
qualifications, limitations and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Convertible Preferred Stock
and qualifications, limitations and restrictions thereof unless so expressed
herein.
16. Form of Securities.
------------------
(a) The shares of Convertible Preferred Stock were initially issued
in a transaction exempt from the registration requirements of the United States
Securities Act of 1933 and are subject to the transfer restrictions as set forth
in Section 4.8 of the Purchase Agreement. The shares of Common Stock issuable
upon conversion thereof will bear a legend to the following effect, unless the
Corporation determines otherwise in compliance with applicable law:
THE SECURITIES (OR ITS PREDECESSOR) EVIDENCED HEREBY WERE ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND THE SECURITIES
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITIES EVIDENCED HEREBY IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITIES EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITIES MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) BY THE INITIAL INVESTOR (a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (d) TO THE
COMPANY OR (e) PURSUANT TO AN EXEMPTION TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (2) BY SUBSEQUENT INVESTORS, AS SET
FORTH IN (1) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED
INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE SECURITIES
30
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
31
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
duly executed by ___________________,______________________ this __/th/ day of
November, 1999.
CROWN CASTLE INTERNATIONAL CORP.
By:___________________________
Name:
Title: