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Exhibit 4.3
NETWORK PLUS CORP.
CERTIFICATE OF DESIGNATIONS OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF [ ]% SERIES A
CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Network Plus Corp. (the "Company"), a corporation organized
and existing under the General Corporation Law of the State of Delaware, does
hereby certify that, pursuant to authority conferred upon the board of directors
of the Company (the "Board of Directors") by its Restated Certificate of
Incorporation, as amended (hereinafter referred to as the "Restated Certificate
of Incorporation"), and pursuant to the provisions of Sections 141(c)(2) and 151
of the General Corporation Law of the State of Delaware, said Board of Directors
is authorized to issue Preferred Stock of the Company in one or more series and
has duly approved and adopted the following resolution on [ ], 2000 (the
"Resolution"):
RESOLVED that, pursuant to the authority vested in the Board
of Directors by its Restated Certificate of Incorporation, the Board of
Directors does hereby create, authorize and provide for the issuance of
[ ]% Series A Cumulative Convertible Preferred Stock, par value $.01
per share, with a liquidation preference of $500 per share, consisting
of 500,000 shares having the designations, preferences, relative,
participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth
in the Restated Certificate of Incorporation and in this Resolution as
follows:
(a) Designation. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Company a series of Preferred Stock
designated as the "[ ]% Series A Cumulative Convertible Preferred Stock" (the
"Convertible Preferred Stock"). The number of shares constituting the
Convertible Preferred Stock shall be 500,000. The liquidation preference of the
Convertible Preferred Stock shall be $500 per share (the "Liquidation
Preference").
Capitalized terms used herein but not defined shall have the meanings
assigned to them in paragraph (o).
(b) Rank. The Convertible Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up and dissolution, rank
(i) junior to all of the Company's existing and future indebtedness and
other obligations;
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(ii) on parity with any other class of Capital Stock or preferred
shares established by the Company after [ ], 2000, the terms of which
expressly provide that such class or series will rank on a parity with
the Convertible Preferred Stock as to dividend distribution and
distributions upon liquidation, winding-up and dissolution of the
Company, or "parity" securities; and
(iii) senior to all classes of Common Stock and to each other class of
Capital Stock of the Company or series of preferred stock of the
Company established after [ ], 2000, the terms of which do not
expressly provide that such class or series ranks senior to or on a
parity with the Convertible Preferred Stock as to dividend
distributions and distributions upon liquidation, winding-up and
dissolution of the Company, or "junior" securities.
The Company may not, without the affirmative vote or consent
of the holders of at least 662/3% of the outstanding shares of Convertible
Preferred Stock, authorize, create, by way of reclassification or otherwise or
issue any class or series of Capital Stock of the Company ranking senior to the
Convertible Preferred Stock, or "senior" securities, or any obligation or
security convertible or exchangeable into or evidencing a right to purchase,
shares of any senior securities.
(c) Dividends. (i) Holders of the outstanding shares of Convertible
Preferred Stock will be entitled to receive, when, as and if declared by the
Board of Directors of the Company, out of funds legally available therefor,
dividends on each share from the Issue Date of the Convertible Preferred Stock
accumulating at the rate of $[ ] per share of Convertible Preferred Stock per
annum, or $[ ] per share of Convertible Preferred Stock per quarter, payable
quarterly in arrears on April 1, July 1, October 1 and January 1 of each year
(each, a "Dividend Payment Date") or, if any such date is not a business day, on
the next succeeding business day, to the holders of record as of the next
preceding March 15, June 15, September 15 and December 15 (each, a "Record
Date"). Accumulated but unpaid dividends, if any, may be paid on such dates as
determined by the Board of Directors. Dividends will be payable in cash except
as set forth below. The first dividend payment of $[ ] per share of Convertible
Preferred Stock will be payable on July 1, 2000.
(ii) All dividends on the Convertible Preferred Stock, to the
extent accumulated, shall be cumulative, whether or not earned or declared, on a
daily basis from the last date through which dividends have been paid or, if no
dividends have been paid, from the Issue Date. Dividends will accumulate to the
extent they are not paid on the Dividend Payment Date for the quarter to which
they relate. Accumulated unpaid dividends will accrue and cumulate at a rate of
[ ]% per annum. The Company will take all reasonable actions required or
permitted under Delaware law to permit the payment of dividends on the
Convertible Preferred Stock.
(iii) Any dividend on the Convertible Preferred Stock shall
be, at the option of the Company, payable (A) in cash, (B) through the issuance
of a number of shares (rounded up or down to the nearest whole number) of Common
Stock (hereinafter referred to as "Dividend Common Stock") determined as set
forth in the next paragraph or (C) a combination thereof.
(iv) Dividends may, at the option of the Company, be paid in
Common Stock. If the Company elects to pay any dividend with Dividend Common
Stock, the
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Company will give the Holders of the Convertible Preferred Stock 10 trading days
(as defined herein) notice prior to the related Dividend Payment Date. If the
Company elects to pay any dividend with Dividend Common Stock, the number of
shares of Dividend Common Stock to be distributed will be calculated by dividing
the amount of such dividend otherwise payable in cash by 95% of the arithmetic
average of the closing price (as defined below) for the 5 trading days preceding
the Dividend Payment Date. The Convertible Preferred Stock will not be
redeemable unless all dividends accrued through such redemption date shall have
been paid in full. The Company shall not be required to declare or pay a
dividend if another person, including, without limitation, any of its
Subsidiaries, pays an amount to the Holders of the Convertible Preferred Stock
equal to the amount of such dividend on the Company's behalf and, in such event,
the dividend will be deemed paid for all purposes.
(v) All dividends paid with respect to shares of the
Convertible Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata
to the holders entitled thereto.
(vi) 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 or
declared and a sufficient sum set apart for the payment of such dividend, upon
all outstanding shares of Convertible Preferred Stock. Unless all 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:
(A) no dividend, other than a dividend payable solely in shares of
junior securities or options, warrants or rights to purchase junior
securities, shall be declared or paid upon, or any sum set apart for
the payment of dividends upon, any shares of junior securities;
(B) no other distribution shall be declared or made upon, or any sum
set apart for the payment of any distribution upon, any shares of
junior securities;
(C) no shares of junior securities shall be purchased, redeemed or
otherwise acquired or retired for value, excluding an exchange for
shares of other junior securities or a purchase, redemption or other
acquisition from the proceeds of a substantially concurrent sale of
junior securities, by the Company or any Subsidiary; and
(D) 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 securities
by the Company or any Subsidiary.
Holders of the Convertible Preferred Stock will not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of the dividends as herein described.
(iv) The Company will not (A) declare, pay or set apart funds
for the payment of any dividend or other distribution with respect to any junior
securities or (B) redeem, purchase or otherwise acquire for consideration any
junior securities through a sinking fund or otherwise, unless (1) all accrued
and unpaid dividends with respect to
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the Convertible Preferred Stock and any parity securities at the time such
dividends are payable have been paid or funds have been set apart for payment of
such dividends and (2) sufficient funds have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the
Convertible Preferred Stock and any parity securities. Notwithstanding anything
in this Certificate of Designations to the contrary, the Company may declare and
pay dividends on parity securities which are payable solely in additional shares
of or by the increase in the liquidation value of parity securities or junior
securities or on junior securities which are payable in additional shares of or
by the increase in the liquidation value of junior securities, as applicable, or
repurchase, redeem or otherwise acquire junior securities in exchange for junior
securities and parity securities in exchange for parity securities or junior
securities.
(v) Dividends on account of arrears for any past Dividend
Period and dividends in connection with any optional redemption may be declared
and paid at any time, without reference to any regular Dividend Payment Date, to
holders of record on the Business Day immediately prior to the payment thereof,
as may be fixed by the Board of Directors of the Company.
(vi) Dividends payable on the Convertible Preferred Stock for
any period other than a Dividend Period shall be computed on the basis of a
360-day year consisting of twelve 30-day months and will be deemed to accrue on
a daily basis. If a Dividend Payment Date is not a Business Day, payment of
dividends shall be made on the next succeeding Business Day and dividends
accruing for the intervening period shall be paid on the next succeeding
Dividend Payment Date.
(d) Liquidation Preference. (i) Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, after payment in full of
the Liquidation Preference (and any accumulated and unpaid dividends) on any
senior securities, Holders of Convertible Preferred Stock will be entitled to be
paid, out of the assets of the Company available for distribution to its
stockholders, on an equal basis with the holders of any outstanding parity
securities, the Liquidation Preference of the outstanding shares of Convertible
Preferred Stock, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends (whether or not earned or declared) thereon to
the date fixed for liquidation, dissolution or winding-up (including an amount
equal to a prorated dividend for the period from the last Dividend Payment Date
to the date fixed for liquidation, dissolution or winding-up that would have
been payable had the Convertible Preferred Stock been the subject of a
redemption on such date pursuant to paragraph (e)(i)) before any distribution is
made on any junior securities. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to the Convertible Preferred Stock and all parity securities are not
paid in full, the Convertible Preferred Stock and the parity securities will
share equally and ratably (in proportion to the respective amounts that would be
payable on such shares of Convertible Preferred Stock and the parity securities,
respectively, if all amounts payable thereon had been paid in full) in any
distribution of assets of the Company to which each is entitled. After payment
of the full amount of the Liquidation Preference of the outstanding shares of
Convertible Preferred Stock (and, if applicable, an amount equal to a prorated
dividend), the Holders of shares of Convertible Preferred Stock will not be
entitled to any further participation in any distribution of assets of the
Company.
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(ii) For the purposes of this paragraph (d), 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 Company nor the consolidation or merger of the Company with or
into one or more other entities shall be deemed to be a voluntary or involuntary
liquidation, dissolution or winding-up of the Company unless such sale,
conveyance, exchange, transfer, consolidation or merger shall be in connection
with a liquidation, dissolution or winding up of the affairs of the Company or a
reduction or decrease in Capital Stock.
(e) Redemption. (i) Optional Redemption. (A) The Convertible Preferred
Stock shall not be redeemable at the option of the Company prior to April 10,
2005. On or after April 10, 2005, each share of the Convertible Preferred Stock
may be redeemed (subject to the legal availability of funds therefor) at any
time, in whole or in part, at the option of the Company, at the redemption
prices set forth below (expressed as percentages of the Liquidation Preference
thereof) plus, without duplication, an amount equal to all accrued and unpaid
dividends to the "redemption effective date", upon not less than 15 nor more
than 60 days prior written notice, during the 12-month period commencing on
[ ] of each of the years set forth below:
Redemption
Year Price
- ---- -----
2005......................................... %
2006......................................... %
2007......................................... %
2008......................................... %
2009......................................... %
2010......................................... %
2011......................................... %
2012......................................... %
If any date set forth above is not a Business Day then the
period beginning on that day will start on the next succeeding Business Day.
(B) In the case of a redemption date falling after a Record
Date and prior to the related Dividend Payment Date, the Holders of the
Convertible Preferred Stock at the close of business on such record date will be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date, notwithstanding the redemption of such shares following
such record date. Except as provided for in the preceding sentence, no payment
or allowance will be made for accrued dividends on any shares of Convertible
Preferred Stock called for redemption.
(C) The Company must give the Holders of the Convertible
Preferred Stock 30 days' prior notice of its intention to satisfy the Company's
redemption payment obligation by delivering Common Stock instead of cash.
(ii) Procedure for Redemption. (A) The "redemption effective
date" will be a Business Day specified as such date in the Redemption Notice (as
defined below). On the redemption effective date:
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(1) all consideration to be paid as part of the redemption price will
become payable,
(2) all dividends on the Convertible Preferred Stock to be redeemed
will cease to accrue, and
(3) the right to convert the Convertible Preferred Stock to be redeemed
will cease at the close of business.
(B) As described below, if any shares of Common Stock are to
be delivered as part of the redemption price,
(1) the number of shares of Common Stock to be delivered will be
determined on the basis of 95% of the average of the closing market
prices of those shares for the 10 "trading days", which is each Monday,
Tuesday, Wednesday, Thursday or Friday, other than any day on which
securities are not traded on the applicable securities exchange or in
the applicable securities market, following the redemption effective
date, and
(2) those shares will be deliverable on the 14th trading day following
the redemption effective date.
(C) With respect to a redemption pursuant to paragraph (e)(i),
the Company will send a written notice of redemption by first class mail to each
Holder of shares of Convertible Preferred Stock, not fewer than 30 days nor more
than 60 days prior to the Redemption Date at its registered address (the
"Redemption Notice"); provided, however, that no failure to give such notice nor
any deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Convertible Preferred Stock to be redeemed except as
to the Holder or Holders to whom the Company has failed to give said notice or
except as to the Holder or Holders whose notice was defective. Each Redemption
Notice must specify:
(1) the redemption effective date,
(2) the redemption price,
(3) the form of consideration to be paid, and
(4) if any portion of the redemption price is to be paid by the
delivery of Common Stock, the method for determining the applicable
average market value and the date on which the shares of Common Stock
will be deliverable.
In the case of any partial redemption, the Company will select
the shares of Convertible Preferred Stock to be redeemed on a pro rata basis, by
lot or any other method that the Company believes is fair and appropriate,
provided that the Company may redeem all shares held by Holders of fewer than
100 shares of Convertible Preferred Stock following such redemption, prior to
the Company's redemption of other Convertible Preferred Stock.
If the redemption effective date falls after a dividend
payment record date and before the related Dividend Payment Date, the Holders of
Convertible Preferred
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Stock at the close of business on that dividend payment record date will be
entitled to receive the dividend payable on those shares on the corresponding
Dividend Payment Date, even if those shares are redeemed after that dividend
payment record date.
The number of shares of Common Stock to be delivered to the
Holders of Convertible Preferred Stock will be the amount of the redemption
payment divided by the market price of the Common Stock, determined as described
in this subsection (C).
(D) Each holder of Convertible Preferred Stock shall surrender
the certificate or certificates representing such shares of Convertible
Preferred Stock to the Company, duly endorsed (or otherwise in proper form for
transfer, as determined by the Company), in the manner and at the place
designated in the Redemption Notice, and on the Redemption Date the full
Optional Redemption Price for such shares shall be payable to the person whose
name appears on such certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the event that less
than all of the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(E) Mandatory Redemption. Unless it has already been redeemed
or converted, the Company will be required to redeem the Convertible Preferred
Stock on April 1, 2012 at a redemption price equal to 100% of the Liquidation
Preference, together with accumulated and unpaid dividends to the mandatory
redemption date.
(F) Repurchase at the Option of Holders. If the Company
experiences a change of control, unless the Company has delivered a Redemption
Notice in connection with the Convertible Preferred Stock pursuant to the
provisions described above, each holder of Convertible Preferred Stock will have
the right to require the Company to repurchase all or any part of the holder's
Convertible Preferred Stock pursuant to an offer (the "change of control
offer"), on the terms set forth herein. In the change of control offer, the
Company will offer a payment in cash equal to 100% of the Liquidation Preference
of Convertible Preferred Stock repurchased plus all accumulated and unpaid
dividends and liquidated damages, if any, thereon, to the date of purchase,
subject to the right of holders of record on the relevant record date to receive
dividends due on the relevant dividend payment date. Within 30 days following
any change of control, the Company will mail a notice to each holder describing
the transaction or transactions that constitute the change of control and
offering to repurchase Convertible Preferred Stock on the date specified in such
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, pursuant to the procedures required by this
Certificate of Designations and described in such notice.
The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations to the
extent those laws and regulations are applicable in connection with the purchase
of the Convertible Preferred Stock as a result of a change of control. To the
extent that the provisions of any securities laws or regulations conflict with
the change of control provisions of this Certificate of Designations, the
Company will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under the change of control
provisions herein by virtue of such conflict.
On the date scheduled for payment of the Convertible Preferred
Stock, the Company will, to the extent lawful:
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- - accept for payment all Convertible Preferred Stock or portions thereof
properly tendered;
- - deposit with the Transfer Agent an amount of consideration equal to the
change of control payment in respect of all Convertible Preferred Stock
or portions thereof so tendered; and
- - deliver or cause to be delivered to the Transfer Agent for cancellation
the Convertible Preferred Stock so accepted together with an officers'
certificate stating the aggregate Liquidation Preference of the
Convertible Preferred Stock or portions thereof being purchased by the
Company.
The Transfer Agent will promptly mail to each Holder of shares
of Convertible Preferred Stock so tendered the applicable payment for those
shares of Convertible Preferred Stock, and the Transfer Agent will promptly
authenticate and mail, or cause to be transferred by book entry, to each holder
a new Convertible Preferred Stock certificate equal in liquidation preference to
any unpurchased portion of the Convertible Preferred Stock surrendered, if any.
Prior to complying with any of the provisions of the change of
control covenant, but in any event within 90 days following a change of control,
the Company will either repay all outstanding obligations under the Existing
Credit Facility or the Senior Secured Credit Facilities or obtain the requisite
consents, if any, under all agreements governing the Company's outstanding
indebtedness to permit the repurchase of Convertible Preferred Stock required by
this repurchase obligation. The Company will publicly announce the results of
the change of control offer on or as soon as practicable after the change of
control payment date.
The provisions described above that require the Company to
make a change of control offer (as defined herein) following a change of control
(as defined herein) will be applicable regardless of whether any other
provisions of this Certificate of Designations are applicable.
The Company will not be required to make a change of control
offer upon a change of control if a third party makes the change of control
offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Certificate of Designations applicable to a
change of control offer made by the Company and purchases all Convertible
Preferred Stock validly tendered and not withdrawn under such change of control
offer.
The provisions under this Certificate of Designations relating
to the Company's obligation to make an offer to repurchase the Convertible
Preferred Stock as a result of a change of control may be waived or modified
with the written consent of the holders of 662/3% of the Convertible Preferred
Stock.
A "change of control" means:
- - a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act (other than the Hale Family; provided,
however, that the Hale Family may not engage in such a transaction that
would result in the Company no longer being subject to the periodic
reporting requirements under the Exchange
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Act without such transaction being deemed a change of control) becomes
the ultimate "beneficial owner" (as defined in Rule 13-d under the
Exchange Act without such transaction being deemed a change of control)
of more than 50% of the total voting power of the Company's "voting
stock" on a fully diluted basis; or
- - Individuals who on the effective date of the Certificate of
Designations constitute the Board of Directors (together with any new
directors whose election by the Board of Directors or whose nomination
for election by stockholders was approved by a vote of at least 662/3%
of the members of the Board of Directors then in office who either were
members of the Board of Directors on the closing date or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board of
Directors then in office.
There shall be no change of control if either the closing
price of the Common Stock exceeds 105% of the effective conversion rate at the
time of the announcement of the change of control or all of the consideration
received by the holders of Common Stock in a transaction that gives rise to the
change of control is publicly-traded common stock.
(f) Voting Rights. (A) The holders of Convertible Preferred
Stock, except as otherwise required under Delaware law or as set forth in
paragraphs (B) and (C) below, shall not be entitled to vote on any matter
required or permitted to be voted upon by the stockholders of the Company.
(B) (1) If dividends on the Convertible Preferred Stock are in
arrears and unpaid for six or more Dividend Periods, whether or not
consecutive, together with any event with a similar effect pursuant to
the terms of any series of preferred stock upon which like rights have
been conferred, which is referred to as a "Voting Rights Triggering
Event", then the number of directors constituting the Board of
Directors will, subject to paragraph (f)(B)(5), be increased by two
directors, unless previously increased pursuant to the terms of any
other series of preferred stock upon which like rights have been
conferred, and the Holders of the then outstanding shares of
Convertible Preferred Stock (together with the holders of parity
securities upon which like rights have been conferred and are
exercisable), voting separately and as a class, shall have the right
and power to elect to serve on the Board of Directors such two
additional members to the Board of Directors, unless previously
increased pursuant to the terms of any other series of preferred stock
upon which like rights have been conferred.
(2) The voting rights set forth in paragraph (f)(B)(1) above
will continue until such time as all dividends in arrears on the
Convertible Preferred Stock are paid in full, at which time the term of
any directors elected pursuant to the provisions of paragraph (f)(B)(1)
above (subject to the right of holders of any other Preferred Stock to
elect directors pursuant to the terms of the instruments governing such
Preferred Stock) shall terminate forthwith and the number of directors
constituting the Board of Directors shall be decreased by such number
(until the occurrence of any subsequent Voting Rights Triggering
Event). The right to elect directors upon a Voting Rights Triggering
Event will expire when the number of shares of Convertible Preferred
Stock outstanding is reduced to 83,333 or less.
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At any time after voting power to elect directors shall have
become vested and be continuing in the holders of Convertible Preferred
Stock (together with the holders of parity securities upon which like
rights have been conferred and are exercisable) pursuant to paragraph
(f)(B)(1) hereof, or if vacancies shall exist in the offices of
directors elected by such holders, a proper officer of the Company may,
and upon the written request of the holders of record of at least 25%
of the shares of Convertible Preferred Stock then outstanding or the
holders of 25% of the shares of parity securities then outstanding upon
which like rights have been confirmed and are exercisable addressed to
the secretary of the Company shall, call a special meeting of the
Holders of Convertible Preferred Stock and the holders of such parity
securities for the purpose of electing the directors which such holders
are entitled to elect pursuant to the terms hereof; provided, however,
that no such special meeting shall be called if the next annual meeting
of stockholders of the Company is to be held within 60 days after the
voting power to elect directors shall have become vested, in which case
such meeting shall be deemed to have been called for such next annual
meeting. If such meeting shall not be called by a proper officer of the
Company within 20 days after personal service to the secretary of the
Company at its principal executive offices, then the Holders of record
of at least 25% of the outstanding shares of Convertible Preferred
Stock or the holders of 25% of the shares of parity securities upon
which like rights have been confirmed and are exercisable may designate
in writing one of their members to call such meeting at the expense of
the Company, and such meeting may be called by the person so designated
upon the notice required for the annual meetings of stockholders of the
Company and shall be held at the place for holding the annual meetings
of stockholders. Any holder of Convertible Preferred Stock or such
parity securities so designated shall have, and the Company shall
provide, access to the lists of holders of Convertible Preferred Stock
and the holders of such parity securities to be called pursuant to the
provisions hereof. If no special meeting of the Holders of Convertible
Preferred Stock and the holders of such parity securities is called as
provided in this paragraph (f)(B), then such meeting shall be deemed to
have been called for the next annual meeting of stockholders of the
Company or special meeting of the holders of any other Capital Stock of
the Company.
(3) At any meeting held for the purposes of electing directors
at which the Holders of Convertible Preferred Stock (together with the
holders of parity securities upon which like rights have been conferred
and are exercisable) shall have the right, voting together as a
separate class, to elect directors as aforesaid, the presence in person
or by proxy of the holders of at least a majority in voting power of
the outstanding shares of Convertible Preferred Stock (and such parity
securities) shall be required to constitute a quorum thereof.
(4) Any vacancy occurring in the office of a director elected
by the Holders of Convertible Preferred Stock (and such parity
securities) may be filled by the remaining director elected by the
Holders of Convertible Preferred Stock (and such parity securities)
unless and until such vacancy shall be filled by the Holders of
Convertible Preferred Stock (and such parity securities).
(5) If an event occurs at any time that results in the holders
of any parity securities having voting rights to elect directors to the
Board of Directors, then holders of Convertible Preferred Stock shall,
whether or not such event otherwise
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constitutes a Voting Rights Triggering Event pursuant to paragraph
(f)(B)(1), have the voting rights set forth in paragraphs (f)(B)(1) and
(f)(B)(2), and such event shall be deemed (for purposes of this
paragraph (f) only) to constitute a Voting Rights Triggering Event. In
addition, in the event that during a time in which directors elected by
the holders of Convertible Preferred Stock pursuant to this paragraph
(f)(B) are serving on the Board of Directors ("Previously-Elected
Directors") an event occurs that results in holders of parity
securities having voting rights to elect (voting together with the
Holders of Convertible Preferred Stock) at least two directors to the
Board of Directors, the Holders of Convertible Preferred Stock shall
vote together with the holders of such parity securities to elect such
new directors, and upon the election of the new directors the
Previously-Elected Directors shall (unless such Previously-Elected
Directors are elected as new directors) cease to serve on the Board of
Directors.
(C) (1) So long as any shares of the Convertible Preferred
Stock are outstanding, the Company will not authorize, create or
increase the authorized amount of any class or series of senior
securities without the affirmative vote or consent of Holders of at
least 662/3% of the shares of Convertible Preferred Stock then
outstanding, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting. However, without the consent of any
Holder of Convertible Preferred Stock, the Company may create
additional classes of stock, increase the authorized number of shares
of Convertible Preferred Stock or issue a series of parity securities
or junior securities.
(2) The Company may amend this Certificate of Designations
with the consent of the Holders of a majority of the Convertible
Preferred Stock then outstanding, including votes or consents obtained
in connection with a tender offer or exchange offer for Convertible
Preferred Stock, and, except as otherwise provided by applicable law,
any past default or failure to comply with any provision of this
Certificate of Designations may also be waived with the consent of such
Holders. Notwithstanding the foregoing, however, without the consent of
each Holder affected, an amendment or waiver may not (with respect to
any shares of the Convertible Preferred Stock held by a non-consenting
Holder) (a) alter the voting rights with respect to the Convertible
Preferred Stock or reduce the number of shares of the Convertible
Preferred Stock the Holders of which must consent to an amendment,
supplement or waiver, (b) reduce the Liquidation Preference of any
share of the Convertible Preferred Stock or adversely alter the
provisions with respect to the redemption of Convertible Preferred
Stock, (c) reduce the rate of or change the time for payment of
dividends on any share of the Convertible Preferred Stock, (d) waive a
default in the payment of dividends or liquidated damages, if any, on
the Convertible Preferred Stock, (e) make any share of the Convertible
Preferred Stock payable in money other than United States dollars, (f)
make any change in the provisions of the Certificate of Designations
relating to waivers of the rights of holders of the Convertible
Preferred Stock to receive the liquidation, (g) preference, dividends
or liquidated damages, if any, on the Convertible Preferred Stock, or
(h) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any
Holder of the Convertible Preferred Stock, the Company may, to the
extent permitted by
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Delaware law, amend or supplement the Certificate of Designations to
cure any ambiguity, defect or inconsistency, to provide for
uncertificated shares of the Convertible Preferred Stock in addition to
or in place of certificated shares of the Convertible Preferred Stock
or to make any change that would provide any additional rights or
benefits to the Holders of the Convertible Preferred Stock or to make
any change that the Board of Directors determines, in good faith, is
not materially adverse to Holders of the Convertible Preferred Stock.
(3) Except as set forth in paragraph (f)(C)(1) or (2) above,
(x) the creation, authorization or issuance of any shares of any junior
securities or parity securities, including the designation of a series
of Convertible Preferred Stock, or (y) the increase or decrease in the
amount of authorized Capital Stock of any class, including Preferred
Stock, shall not require the consent of Holders of Convertible
Preferred Stock and shall not be deemed to affect adversely the rights,
preferences, privileges or voting rights of shares of Convertible
Preferred Stock.
(D) In any case in which the Holders of Convertible Preferred
Stock shall be entitled to vote pursuant to this paragraph (f) or pursuant to
Delaware law, each Holder of Convertible Preferred Stock entitled to vote with
respect to such matters shall be entitled to one vote for each share of
Convertible Preferred Stock held.
(E) Except as required by law, the Holders of the Convertible
Preferred Stock will not be entitled to vote on any merger or consolidation
involving the Company or a sale of all or substantially all the assets of the
Company.
(g) Conversion. The Convertible Preferred Stock will be convertible, at
the option of the Holder and unless previously redeemed or repurchased, into the
number of shares of Common Stock issuable upon conversion of one share of
Convertible Preferred Stock, which will be 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 (as defined herein) then in effect, which is referred to
as the "conversion rate", subject to the adjustments described below. 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
redemption date, as defined below, for such Convertible Preferred Stock or at
the time of repurchase, as the case may be.
(3) The price at which Common Stock shall be delivered upon
conversion, herein called the "Conversion Price", shall be initially $[ ] per
share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in paragraph (g)(D) and paragraph (g)(E).
(B) In order to exercise the conversion privilege provided for
in paragraph (g)(A)(1), the Holder of any share of Convertible Preferred Stock
to be converted shall surrender the certificate for such share of Convertible
Preferred Stock, duly endorsed or assigned to the Company or in blank, at the
office of the Transfer Agent or at any office or agency of the Company
maintained for that purpose, accompanied by written notice to the Company in the
form of Exhibit B that the Holder elects to convert such share of Convertible
Preferred Stock or, if fewer than all the shares of Convertible Preferred Stock
represented by a single share certificate are to be converted, the number of
shares represented thereby to be converted. Such notice shall also contain the
office or the
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address to which the Company should deliver shares of Common Stock issuable upon
conversion (and any other payments or certificates related thereto). Upon any
conversion of Convertible Preferred Stock pursuant to paragraph (g)(A)(2), the
Company will promptly notify the Holders thereof and will deliver shares of
Common Stock issuable upon such conversion to the office or address specified by
such Holders.
Holders of shares of Convertible Preferred Stock at the close
of business on a record date will be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date notwithstanding the
conversion of such shares following such record date and prior to such Dividend
Payment Date. Shares of Convertible Preferred Stock surrendered for conversion
during the period between the close of business on any record date and the
opening of business on the corresponding Dividend Payment Date (except shares
converted after the issuance of a notice of redemption with respect to a
redemption date during such period, which will be entitled to such dividend)
must be accompanied by payment of an amount equal to the dividend payable on
such shares on such Dividend Payment Date. A holder of shares of Convertible
Preferred Stock on a record date who (or whose transferee) tenders any such
shares for conversion into shares of Common Stock on or prior to such Dividend
Payment Date (or where shares of Convertible Preferred Stock are automatically
converted during such period) will receive the dividend payable by the Company
on such shares of Convertible Preferred Stock on such date, and the converting
holder need not include payment of the amount of such dividend upon surrender of
shares of Convertible Preferred Stock for conversion. Except as provided above,
the Company will make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares or the dividends on the shares of Common
Stock issued upon such conversion.
Shares of Convertible Preferred Stock shall be deemed to have
been converted immediately prior to the close of business on the day (x) of
surrender of such shares of Convertible Preferred Stock for conversion in
accordance with the foregoing provisions or (y) in the case of an automatic
conversion, the Transfer Agent receives the appropriate notice from the Company,
and at such time the rights of the Holders of such shares of Convertible
Preferred Stock as Holders shall cease, and the person or persons entitled to
receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall issue
and shall deliver to such office or agency as the converting Holder shall have
designated in its written notice to the Company a certificate or certificates
for the number of full shares of Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share, as provided in paragraph (g)(C)
hereof.
In the case of any conversion of fewer than all the shares of
Convertible Preferred Stock evidenced by a certificate, upon such conversion the
Company shall execute and the Transfer Agent shall authenticate and deliver to
the Holder thereof (at the address designated by such Holder), at the expense of
the Company, a new certificate or certificates representing the number of
unconverted shares of Convertible Preferred Stock.
(C) No fractional shares of Common Stock shall be issued upon
the conversion of a share of Convertible Preferred Stock. If more than one share
of Convertible Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares of Common Stock which shall be
issuable upon
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conversion thereof shall be computed on the basis of the aggregate shares of
Convertible Preferred Stock so surrendered. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any share of
Convertible Preferred Stock, the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the closing price
(as defined in paragraph (g)(D)(7)) per share of Common Stock at the close of
business on the Business Day prior to the day of conversion.
(D) The Conversion Price shall be adjusted from time to time
by the Company as follows:
(1) If the Company shall hereafter pay a dividend or make a
distribution in Common Stock to all holders of any outstanding class or
series of Common Stock, the Conversion Price in effect at the opening
of business on the date following the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date (as defined in
paragraph (g)(D)(7)) fixed for such determination and the denominator
shall be the sum of such number of outstanding shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution
of the type described in this paragraph (g)(D)(1) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(2) If the Company shall offer or issue rights or warrants to
all holders of its outstanding Common Stock entitling them to subscribe
for or purchase Common Stock at a price per share less than the Current
Market Price (as defined in paragraph (g)(D)(7)) on the Record Date
fixed for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion
Price in effect at the opening of business on the date after such
Record Date by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the
Record Date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock
subject to such rights or warrants would purchase at such Current
Market Price and of which the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the Record Date
plus the total number of additional shares of Common Stock subject to
such rights or warrants for subscription or purchase. Such adjustment
shall become effective immediately after the opening of business on the
day following the Record Date fixed for determination of stockholders
entitled to purchase or receive such rights or warrants. To the extent
that shares of Common Stock are not delivered pursuant to such rights
or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion
Price shall
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again be adjusted to be the Conversion Price which would then be in
effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of such shares
of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, with the value of such
consideration, if other than cash, to be determined by the Board of
Directors.
(3) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, if the outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) If the Company shall, by dividend or otherwise, distribute
to all holders of its shares of Common Stock shares of any class of
Capital Stock of the Company (other than any dividends or distributions
to which paragraph (g)(D)(1) applies) or evidences of its indebtedness,
cash or other assets (including securities, but excluding any rights or
warrants of a type referred to in paragraph (g)(D)(2) and excluding
dividends and distributions paid exclusively in cash and excluding any
Capital Stock, evidences of indebtedness, cash or assets distributed
upon a merger or consolidation to which paragraph (g)(E) applies) (the
foregoing hereinafter in this paragraph (g)(D)(4) called the
"Distributed Securities"), then, in each such case, the Conversion
Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Record Date (as defined in
paragraph (g)(D)(7)) with respect to such distribution by a fraction of
which the numerator shall be the Current Market Price (determined as
provided in paragraph (g)(D)(7)) of the Common Stock on such date less
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock and
the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the
day following the Record Date. If such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of
this paragraph (g)(D)(4) by reference to the actual or when issued
trading market for any securities comprising all or part of such
distribution, it must in doing so consider the prices in such market
over the same period used in computing the Current Market Price
pursuant to paragraph (g)(D)(7) to the extent possible.
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Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's Capital Stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Dilution Trigger Event"): (i) are deemed to
be transferred with such Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this
paragraph (g)(D)(4) (and no adjustment to the Conversion Price under
this paragraph (g)(D)(4) shall be required) until the occurrence of the
earliest Dilution Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment
to the Conversion Price under this paragraph (g)(D)(4) shall be made;
provided, however, that no such adjustment shall be made unless the
rights or warrants issued are exercisable for shares of Common Stock or
other securities with an exercise price per share less than the Current
Market Price. If any such rights or warrants, including any such
existing rights or warrants distributed prior to the date hereof, are
subject to subsequent events, upon the occurrence of each of which such
rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the
occurrence of each such event shall be deemed to be such date of
issuance and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any
Dilution Trigger Event with respect thereto, that was counted for
purposes of calculating a distribution amount for which an adjustment
to the Conversion Price under this paragraph (g)(D)(4) was made, (1) in
the case of any such rights or warrants which shall all have been
redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Dilution Trigger
Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or
holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants which shall
have expired or been terminated without exercise by any holders
thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
Notwithstanding any other provision of this paragraph (g)(D)(4) to the
contrary, Capital Stock, rights, warrants, evidences of indebtedness,
other securities, cash or other assets (including any rights
distributed pursuant to any shareholder rights plan) shall be deemed
not to have been distributed for purposes of this paragraph (g)(D)(4)
if the Company makes proper provision so that each holder of shares of
Convertible Preferred Stock who converts a share of Convertible
Preferred Stock (or any portion thereof) after the date fixed for
determination of stockholders entitled to receive such distribution
shall be entitled to receive upon such conversion, in addition to the
Common Stock issuable upon such conversion, the amount and kind of such
distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date,
converted such share of Convertible Preferred Stock into Common Stock.
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For purposes of this paragraph (g)(D)(4) and paragraphs (g)(D)(1) and
(2), any dividend or distribution to which this paragraph (g)(D)(4) is
applicable that also includes Common Stock, or rights or warrants to
subscribe for or purchase Common Stock to which paragraph (g)(D)(2)
applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, cash, assets, shares of
Capital Stock, rights or warrants other than (A) such shares of Common
Stock or (B) rights or warrants to which paragraph (g)(D)(2) applies
(and any Conversion Price reduction required by this paragraph
(g)(D)(4) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such
Common Stock or such rights or warrants (and any further Conversion
Price reduction required by paragraph (g)(D)(1) and (2) with respect to
such dividend or distribution shall then be made), except that (x) the
Record Date of such dividend or distribution shall be substituted as
"the Record Date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "Record Date fixed for
such determination" and "Record Date" within the meaning of paragraph
(g)(D)(1) and as "the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants", "the date
fixed for the determination of the stockholders entitled to receive
such rights or warrants" and "such Record Date" within the meaning of
paragraph (g)(D)(2), and (y) any share of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close
of business on the date fixed for such determination" within the
meaning of paragraph (g)(D)(1).
(5) If the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which paragraph (g)(E)
applies or as part of a distribution referred to in paragraph
(g)(D)(4)) in an aggregate amount that, combined together with (1) the
aggregate amount of any other such distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution, and in respect of which no
adjustment pursuant to this paragraph (g)(D)(5) has been made, and (2)
the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of consideration
payable in respect of any tender offer by the Company or a Subsidiary
of the Company for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to
paragraph (g)(D)(4) has been made, exceeds the greater of (x) 10% of
the product of the Current Market Price (determined as provided in
paragraph (g)(D)(7)) on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on
such date or (y) the amount paid on shares of Common Stock within the
preceding 12-month period, to the extent such payments did not require
an adjustment to the conversion rate, then, and in each such case,
immediately after the close of business on such date, the Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Record Date by a fraction (i)
the numerator of which shall be equal to the Current Market Price on
the Record Date less an amount equal to the quotient of (x) the excess
of such combined amount over the greater of (1) such 10% amount or (2)
the amount paid on Common Stock within the preceding
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12-month period divided by (y) the number of shares of Common Stock
outstanding on the Record Date and (ii) the denominator of which shall
be equal to the Current Market Price on such Record Date; provided,
however, that, if the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
holder of Convertible Preferred Stock shall have the right to receive
upon conversion of a share of Convertible Preferred Stock (or any
portion thereof) the amount of cash such holder would have received had
such holder converted such share of Convertible Preferred Stock (or
portion thereof) immediately prior to such Record Date. If such
dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such dividend or distribution had not been declared.
(6) If a tender or exchange offer made by the Company or any
of its Subsidiaries for all or any portion of the Common Stock expires
and such tender or exchange offer (as amended upon the expiration
thereof) requires the payment to stockholders (based on the acceptance
(up to any maximum specified in the terms of the tender offer) of
Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Board of Directors) that, combined together with (i) the
aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of
any other tender offers by the Company or any of its Subsidiaries for
all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to this paragraph (g)(D)(6) has been made and
(ii) the aggregate amount of any distributions to all holders of the
Common Stock made exclusively in cash within 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to paragraph (g)(D)(5) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in
paragraph (g)(D)(7)) as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender offer (as it may
be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
close of business on the date of the Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time
multiplied by the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the number which equals (1) the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares")
divided by (2) 10% of the Current
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Market Price (as determined in paragraph (g)(D)(7)) as of the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration
Time, such reduction (if any) to become effective immediately prior to
the opening of business on the day following the Expiration Time. If
the Company is obligated to purchase shares pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such tender offer had not been made.
If the application of this paragraph (g)(D)(6) to any tender offer
would result in an increase in the Conversion Price, no adjustment
shall be made for such tender offer under this paragraph (g)(D)(6).
(7) For purposes of this paragraph (g), the following terms
shall have the meaning indicated:
"closing price" with respect to any securities on any day means the
last sale price on such day or, if no such sale takes place on such
day, the average of the reported high bid and low ask prices on such
day, in each case on the NNM or the New York Stock Exchange, as
applicable, or, if such security is not listed or admitted to trading
on such national market or exchange, on the principal national
securities exchange or quotation system on which such security is
quoted or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation
system, the average of the high bid and low ask prices of such security
on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated or a similar generally
accepted reporting service, or, if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors.
"Current Market Price" means 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 NNM) on which the Common Stock 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.
"fair market value" shall mean the amount which a willing buyer would
pay a willing seller in an arm's-length transaction.
"Record Date" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have
the right to
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receive any cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed
for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(8) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which
by reason of this paragraph (g)(D)(8) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this paragraph (g)(D) shall be made by the
Company and shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. No adjustment need be
made for a change in the par value or no par value of the Common Stock.
(9) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Transfer Agent an
Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring
such adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of Convertible
Preferred Stock at such holder's last address appearing on the register
of holders maintained for that purpose within 20 days of the effective
date of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
(10) In any case in which this paragraph (g)(D) provides that
an adjustment shall become effective immediately after a Record Date
for an event, the Company may defer until the occurrence of such event
issuing to the holder of any share of Convertible Preferred Stock
converted after such Record Date and before the occurrence of such
event the additional Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment.
(11) For purposes of this paragraph (g)(D), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of Common
Stock. The Company shall not pay any dividend or make any distribution
on Common Stock held in the treasury of the Company.
(E) In case of any consolidation of the Company with, or
merger of the Company into, any other corporation, or in case of any
merger of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company), or
in case of any conveyance or transfer of the properties and assets of
the Company substantially as an entirety, the holder of each share of
Convertible Preferred Stock then outstanding shall have the right
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thereafter, during the period such Convertible Preferred Stock shall be
convertible as specified in paragraph (g)(A), to convert such share of
Convertible Preferred Stock only (subject to paragraph (e)(ii)(F) in
the case of a Common Stock Change in Control) into the kind and amount
of securities, cash and other property receivable upon such
consolidation, merger, conveyance or transfer by a holder of the number
of shares of Common Stock of the Company into which such share of
Convertible Preferred Stock might have been converted immediately prior
to such consolidation, merger, conveyance or transfer, assuming such
holder of Common Stock of the Company failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance
or transfer (provided that, if the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
conveyance or transfer is not the same for each share of Common Stock
of the Company in respect of which such rights of election shall not
have been exercised ("nonelecting share"), then for the purpose of this
paragraph (g)(E) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or
transfer by each nonelecting share of Common Stock shall be deemed to
be the kind and amount so receivable per share by a plurality of the
nonelecting shares). In the event that the consideration received in
such consolidation, merger, conveyance or transfer is securities, and
such securities received are convertible or exchangeable, such
securities shall provide for adjustments which, for events subsequent
to the effective date of the triggering event, shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this paragraph (g)(E). The above provisions of this Section shall
similarly apply to successive consolidations, mergers, conveyances or
transfers.
(F) In case:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of its
earned surplus; or
(2) the Company shall authorize the granting to all holders of
its Common Stock of rights or warrants to subscribe for or purchase any shares
of Capital Stock of any class or of any other rights; or
(3) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock), or of
any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or the sale or transfer
of all or substantially all the assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Transfer Agent and at each
office or agency maintained for the purpose of conversion of the Convertible
Preferred Stock, and shall cause to be mailed to all holders at their last
addresses as they shall appear in the Convertible Preferred Stock Register, at
least 20 days (or 10 days in any case specified in clause (1) or (2) above)
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
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distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give the notice requested by
this Section or any defect therein shall not affect the legality or validity of
any dividend, distribution, right, warrant, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up, or the vote upon
any such action.
(G) The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued shares
of Common Stock (or out of its authorized shares of Common Stock held
in the treasury of the Company), for the purpose of effecting the
conversion of the Convertible Preferred Stock, the full number of
shares of Common Stock then issuable upon the conversion of all
outstanding shares of Convertible Preferred Stock.
(H) The Company will pay any and all document, stamp or
similar issue or transfer taxes that may be payable in respect of the
issue or delivery of Common Stock on conversion of the Convertible
Preferred Stock pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that of the holder of the share of Convertible Preferred
Stock or the shares of Convertible Preferred Stock to be converted, and
no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such
tax has been paid.
(I) Reserved.
(J) If, as a result of the operation of this paragraph (g),
the cumulative number of shares of Common Stock issued or issuable upon
conversion of the Convertible Preferred Stock, after giving effect to the
adjustments described in this paragraph (g) and all prior conversions of
Convertible Preferred Stock, would exceed a number (the "Threshold Number")
equal to [19.99]% of the outstanding shares of Common Stock as of the Issue
Date, then until and unless the Company obtains the approval of its Common
Stockholders for the issuance of any shares of Common Stock in excess of the
Threshold Number, the Conversion Price shall be adjusted pursuant to this
paragraph (g) to that price that would entitle the holders of Convertible
Preferred Stock to receive in the aggregate, upon conversion of all the
Convertible Preferred Stock (including all prior conversions of Convertible
Preferred Stock), no more than the Threshold Number of shares of Common Stock.
If, as a result of the operation of the preceding sentence, the adjustments
required by operation of paragraph (g) in the Conversion Price is limited
because appropriate stockholder approval has not been obtained, the Company
agrees for the benefit of the Holders of Convertible Preferred Stock to seek, as
promptly as reasonably practicable, the requisite approval of its Common
Stockholders for the full adjustment of the Conversion Price as required by
operation of paragraph (g) (without giving effect to the preceding sentence) and
the
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Company shall not be required to issue securities in excess of the Threshold
Number until such stockholder approval is obtained.
(h) Reissuance of Convertible Preferred Stock. Shares of Convertible
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased, redeemed, converted or exchanged, shall not be reissued as
shares of Convertible Preferred Stock and shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized and
unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock; provided,
however, that so long as any shares of Convertible Preferred Stock are
outstanding, any issuance of such shares must be in compliance with the terms
hereof. Upon any such reacquisitions, the number of shares of Convertible
Preferred Stock authorized pursuant to this Certificate of Designations shall be
reduced by the number of shares so reacquired.
(i) Business Day. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately succeeding
Business Day.
(j) Limitation on Mergers and Asset Sales. The Company may not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any person unless: (1) the successor,
transferee or lessee (if not the Company) is organized and existing under the
laws of the United States of America or any State thereof or the District of
Columbia and the Convertible Preferred Stock shall be converted into or
exchanged for and shall become shares of such successor, transferee or lessee,
having in respect of such successor, transferee or lessee substantially the same
powers, preference and relative participating, optional or other special rights
and the qualifications, limitations or restrictions thereon, that the
Convertible Preferred Stock had immediately prior to such transaction; and (2)
the Company delivers to the Transfer Agent an Officers' Certificate and an
Opinion of Counsel stating that such consolidation, merger or transfer does not
conflict with the Certificate of Designations. The successor, transferee or
lessee will be the successor company.
(k) Reserved.
(l) Reports. So long as any shares of the Convertible Preferred Stock
are outstanding, the Company will furnish to the holders of the Convertible
Preferred Stock
- all quarterly and annual financial information that
would be required to be contained in a fling with the
SEC on Forms 10-Q and 10-K and, with respect to the
annual information only, a report thereon by our
certified independent accountants, and
- all information that would be required to be
contained in a current report on Form 8-K.
In the event we have filed any of these reports with the SEC,
we will only furnish the report to holders who request a copy of the report.
Unless prohibited by the SEC, we will make our reports publicly available.
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(m) Payment for Consents. The Company may not pay, whether by way of
dividend or other distribution, fee or otherwise, to any holder of shares of the
Convertible Preferred Stock (and the corresponding depositary shares) for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Certificate of Designations or the Convertible Preferred Stock
unless such consideration is offered to be paid and is paid to all Convertible
Preferred Stock that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
(n) Transactions with Affiliates. The Company will not, and will not
permit any of its Subsidiaries to, without the affirmative vote or consent of
the holders of a majority of the outstanding shares of Convertible Preferred
Stock, make any payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any affiliate, unless
- the transaction is on terms that no less favorable to
us than those that would have been obtained in a
comparable transaction with an unrelated third party,
and
- the transaction has been approved by a majority of
the members of the board of directors that are
disinterested with the transaction.
The provisions of the foregoing paragraph shall not prohibit:
- any issuance of securities, or other payments,
pursuant to employment arrangements and stock plans,
- the grant of stock options or similar rights to any
employees and directors under our stock plans,
- any employment or consulting agreement,
- the payment of reasonable fees to our directors who
are not our employees,
- any transaction with one of our Subsidiaries, or
- the grant of registration rights with respect to
securities of the Company.
The provisions of the foregoing paragraph shall also not apply to any affiliate
transaction publicly disclosed prior to [ ], 2000 in a filing by the Company
with the SEC or in the prospectus dated [ ], 2000.
(o) Certain Definitions. As used in this Certificate of Designations,
the following terms shall have the following meanings (and (1) terms defined in
the singular have comparable meanings when used in the plural and vice versa,
(2) "including" means including without limitation, (3) "or" is not exclusive
and (4) an accounting term not otherwise defined has the meaning assigned to it
in accordance with United States generally accepted accounting principles as in
effect on the Issue Date and all accounting
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calculations will be determined in accordance with such principles), unless the
content otherwise requires:
"affiliate" means, with respect to any specified person, 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; provided that beneficial ownership of 10% or more of the voting
securities of a person shall be deemed to be control.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether now outstanding
or issued after the Issue Date, including all Common Stock and Preferred Stock.
"Common Stock" means the Company's common stock, par value
$0.01 per share.
"Continuing Directors" means, as of any date of determination,
individuals who on the Issue Date constituted the Board of Directors (together
with any new directors whose election by the Board of Directors or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the members of the Board of Directors then in office who
either were members of the Board of Directors on the Issue Date or whose
election or nomination for election was previously so approved).
"Dividend Period" means each period between two consecutive
Dividend Payment Dates and the period from the Issue Date to the first Dividend
Payment Date.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Credit Facility" means the Loan and Security
Agreement dated October 7, 1998 by and between Network Plus, Inc., as Borrower,
Goldman Sachs Credit Partners L.P. and Fleet National Bank as Lenders, Fleet
National Bank as Agent and Goldman Sachs Credit Partners L.P. as Syndication and
Arrangement Agent, as amended from time to time.
"Hale Family" means collectively Robert T. Hale, Robert T.
Hale, Jr. and members of their immediate families, any of their respective
spouses, estates, lineal descendants, heirs, executors, personal
representatives, administrators, trusts for any of their benefit and charitable
foundations to which shares of the Company's Capital Stock beneficially owned by
any of the foregoing have been transferred.
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"Holders" means the registered holders from time to time of
the Convertible Preferred Stock.
"Issue Date" means the date on which the Convertible Preferred
Stock is initially issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York.
"NNM" means The Nasdaq National Market.
"Officer" means the Chairman of the Board of Directors, the
President, any Vice President, the Treasurer, the Secretary or any Assistant
Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Transfer Agent. The counsel may be an employee
of or counsel to the Company or the Transfer Agent.
"person" or "Person" means any individual, corporation,
partnership, joint venture, limited liability company, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the Issue Date, including all series and
classes of such preferred or preference stock.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933.
"Senior Secured Credit Facilities" means the Company's
proposed senior secured credit facility to be provided and syndicated by Goldman
Sachs Credit Partners L.P. which is described in the Company Registration
Statement on Form S-3 filed with the U.S. Securities and Exchange Commission
(File No. 333-32040), as in effect from time to time.
"Subsidiary" means with respect to any Person any corporation,
association or other business entity of which Voting Stock representing more
than 50% of the voting power of shares of outstanding Voting Stock is owned,
directly or indirectly, by such Person, or one or more other Subsidiaries of
such Person.
"Transfer Agent" means the Transfer Agent for the Convertible
Preferred Stock appointed by the Company, which initially shall be American
Stock Transfer & Trust Company.
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"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
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IN WITNESS WHEREOF, said Network Plus Corp., has caused this
Certificate of Designations to be signed by [ ], its [ ], this [ ] day of [ ],
2000.
NETWORK PLUS CORP.,
by_______________________________
Name:
Title:
29
EXHIBIT B
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Convertible Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion") shares
of [ ]% Series A Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"), represented by stock certificate No(s). (the
"Convertible Preferred Stock Certificates") into shares of common stock ("Common
Stock") of Network Plus Corp. (the "Company") according to the conditions of the
Certificate of Designations, Preferences and Rights of the Convertible Preferred
Stock (the "Certificate of Designations"), as of the date written below. If
shares are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates. No fee will be charged to the holder for
any conversion, except for transfer taxes, if any. A copy of each Convertible
Preferred Stock Certificate is attached hereto (or evidence of loss, theft or
destruction thereof).
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Convertible Preferred Stock shall be made pursuant to
registration of the Common Stock under the Securities Act of 1933 (the "Act"),
or pursuant to any exemption from registration under the Act.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Certificate of Designations.
Date of Conversion:__________________________________
Applicable Conversion Price:_________________________
Number of shares of Convertible
Preferred Stock to be Converted:_____________________
Number of shares of
Common Stock to be Issued:___________________________
Signature:___________________________________________
Name:________________________________________________
Address:**___________________________________________
Fax No.:_____________________________________________
*The Company is not required to issue shares of Common Stock until the original
Convertible Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Company or its Transfer
Agent. The Company shall issue and deliver shares of Common Stock to an
overnight courier not
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later than three business days following receipt of the original Convertible
Preferred Stock Certificate(s) to be converted.
**Address where shares of Common Stock and any other payments or certificates
shall be sent by the Company.