EXHIBIT 3.3
CERTIFICATE OF DESIGNATION
FOR
SERIES A PREFERRED STOCK
OF
LODGIAN, INC
PURSUANT TO SECTION 303 OF THE
DELAWARE GENERAL CORPORATION LAW
Lodgian, Inc., a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that pursuant to the provisions of Section 303 of the Delaware
General Corporation Law (the "DGCL"), the Corporation, pursuant to the Order
dated November 5, 2002 of the United States Bankruptcy Court for the Southern
District of New York (the "Order") adopted the following resolution effective as
of November 21, 2002 (the "Effective Time"), which resolution remains in full
force and effect as of the date hereof:
WHEREAS, the Corporation is authorized, pursuant to Section 303 of the
DGCL, without further action by its directors or stockholders to put into effect
and carry out the Order including making any change in its capital or capital
stock;
WHEREAS, it is the desire of the Corporation, pursuant to such
authority, to authorize and fix the terms of the series of Preferred Stock
designated as Series A Preferred Stock; and
WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings set forth in Section 10 hereof;
NOW THEREFORE, be it resolved, that the terms and provisions of such
series and all other rights or preferences granted to or imposed upon such
series or the holders thereof are as herein set forth:
SECTION 1. DESIGNATION; RANK. This series of preferred stock shall be
designated "Series A Preferred Stock", par value $0.01 per share (the "Series A
Preferred Stock"). The initial liquidation preference of each share (a "Share")
of Series A Preferred Stock, including shares of Series A Preferred Stock issued
as Payment-In-Kind, shall be $25 (the "Initial Liquidation Value"). The Series A
Preferred Stock shall rank, with respect to dividend rights and rights on
liquidation, dissolution and winding-up, senior to all Junior Securities.
SECTION 2. AUTHORIZED NUMBER. The number of authorized Shares
constituting the Series A Preferred Stock shall be 7,100,000. The initial number
of Shares issued shall be 5,000,000 with an aggregate Initial Liquidation Value
of $125,000,000. The additional authorized Shares allow for the payment of the
Pay-In-Kind dividends pursuant to Section 3 hereof.
SECTION 3. DIVIDENDS.
(a) General Obligation. To the extent permitted under applicable law,
dividends on each Share shall accrue annually in arrears at a rate of 12.25% per
annum of the Liquidation Value thereof (the "Dividend Rate"), from November 21,
2002 (the "Date of Issuance") to the date on which the Liquidation Value of each
such Share has been paid in full. Such dividends shall accrue whether or not
they have been earned or declared and whether or not there are profits, surplus
or other funds of the Corporation legally available for the payment of
dividends.
(b) Dividend Payment Date. The accrued dividends shall be payable, in
accordance with the terms of subsection (c), on November 21 of each year,
starting with November 21, 2003 (each a "Dividend Payment Date") to the holders
of record of Series A Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on such record date as shall be fixed
by the Board of Directors not more than 60 or less than 10 days preceding such
Dividend Payment Date.
(c) Payment Method. The Corporation shall make dividend payments on
each Dividend Payment Date in accordance with the following provisions:
(i) On the first Dividend Payment Date following the Date of
Issuance the Corporation shall Pay-In-Kind all dividends;
(ii) On each of the two consecutive Dividend Payment Dates
following the first Dividend Payment Date, the Corporation, at the sole
discretion of its Board of Directors, shall pay all accrued and unpaid
dividends either as Payment-In-Kind or, to the extent permitted under
applicable law, out of funds legally available therefor, in cash. The
Corporation shall give written notice to the record holders of Series A
Preferred Stock of its intention to Pay-In-Kind, pursuant to this
clause (ii), at least 5 business days prior to the applicable Dividend
Payment Date.
(iii) On each Dividend Payment Date following the third
Dividend Payment Date, the Corporation shall pay, to the extent
permitted under applicable law, out of funds legally available
therefor, all accrued and unpaid dividends in cash, and to the extent
not paid in cash, such dividends shall accrue and accumulate on each
such Dividend Payment Date and shall remain accumulated and unpaid
dividends until paid.
(d) Distribution of Partial Dividend Payments. With regards to cash
dividends, to the extent the Corporation, in accordance with the foregoing
provisions of this Section 3, is limited to paying less than the total amount of
dividends then accrued and unpaid with respect to the Series A Preferred Stock,
such payment will be distributed among the holders of the Series A Preferred
Stock pro rata based upon the aggregate accrued but unpaid dividends on the
Share(s) held by each such holder, and any amounts of such dividends remaining
thereafter shall be accumulated and shall remain accumulated and unpaid
dividends with respect to such Share(s) until paid.
(e) Dividend Preference. No dividend, distribution, repurchase,
redemption, or payment of cash or property (other than solely in shares of
common stock or a partial cash dividend on Parity Securities that is paid pro
rata on the Series A Preferred Stock) shall be declared, paid, set aside for
payment or made on or with respect to any Junior Securities or Parity
Securities, either directly or indirectly, unless and until (i) all accrued and
unpaid dividends (including all accumulated and unpaid dividends) on each Share
that the holder of such Share is entitled to receive pursuant to this Section 3,
including pro rata dividends for the period from last Dividend Payment Date to
the date of such dividend, distribution, repurchase, redemption or payment, have
been paid in full and (ii) the conditions to such dividend, distribution,
repurchase, redemption or payment set forth in Section 6 hereof have been
satisfied.
SECTION 4. LIQUIDATION. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, holders of the Series A Preferred
Stock shall be entitled to be paid, before any distribution or payment is made
upon any of the Junior Securities, an amount in cash equal to the aggregate
Liquidation Value of all such Series A Preferred Stock outstanding on the date
of such liquidation, dissolution or winding up, and the holders of Series A
Preferred Stock shall not be entitled to any further payment. If upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation's
assets (or proceeds thereof) to be distributed among the holders of the Series A
Preferred Stock and any Parity Securities are insufficient to permit payment in
full to such holders of the aggregate amount which they are entitled to be paid,
then the entire assets to be distributed shall be distributed ratably among such
holders based upon, in the case of holders of the Series A Preferred Stock, the
aggregate Liquidation Value of the Series A Preferred Stock held by each such
holder on the date of such liquidation, dissolution or winding up and, in the
case of holders of any Parity Securities, the liquidation preference and
accumulated and unpaid dividends which they are entitled to pursuant to such
Parity Securities. The Corporation shall mail written notice of such
liquidation, dissolution or winding up, not less than 10 days prior to the
payment date statement therein, to each record holder of Series A Preferred
Stock. Neither the consolidation or merger of the Corporation into or with any
other Person or Persons, nor the reduction of the capital stock of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up of
the Corporation within the meaning of this Section 4.
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SECTION 5. REDEMPTION.
(a) Optional Redemption. Prior to November 21, 2012, the Series A
Preferred Stock shall be redeemable at the option of the Corporation for cash,
in whole or in part out of funds legally available therefor, at any time and
from time to time, at the redemption prices per share (expressed as a percentage
of the Liquidation Value thereof as of the date of such redemption) set forth
below (the "Redemption Price"), if redeemed during the twelve-month period
beginning November 21 of each of the calendar years indicated below:
YEAR PERCENTAGE
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2002 105%
2003 104%
2004 103%
2005 102%
2006 101%
2007 and thereafter 100%
(b) Mandatory Redemption. On November 21, 2012 (the "Scheduled
Redemption Date") the Corporation shall redeem all remaining outstanding Shares
out of funds legally available therefor, at a price per Share equal to the
Liquidation Value thereof as of the date of such redemption.
(c) Payment of Redemption Price. For each Share which is to be
redeemed, the Corporation shall be obligated on the Redemption Date to pay to
the holder thereof (upon surrender by such holder at the Corporation's principal
office of the certificate representing such Share) the Redemption Price in
immediately available funds. If the Corporation's funds which are legally
available for redemption of Shares on any date of such redemption are
insufficient to redeem the total number of Shares to be redeemed on such date,
those funds which are legally available shall be used to redeem the maximum
possible number of Shares ratably among the holders of the Shares to be redeemed
based upon the aggregate Liquidation Value of such Shares held by each such
holder on the date of such redemption. At each Dividend Payment Date thereafter,
all funds of the Corporation that are legally available for the redemption of
Shares shall immediately be used to redeem the balance of the Shares which the
Corporation did not redeem on the date of such redemption. Without limiting any
rights of the holders of Series A Preferred Stock which are set forth in the
Certificate of Incorporation of the Corporation or are otherwise available under
law, the balance of the Shares which the Corporation has become obligated to
redeem on the date of any such redemption but which it has not redeemed shall
continue to have all of the powers, designations, preferences and relative
participating, optional, and other special rights (including without limitation,
rights to accrue dividends) which such Shares had prior to such date, until the
Redemption Price has been paid in full with respect to such Shares.
(d) Notice of Redemption. Except as otherwise provided herein, the
Corporation shall mail written notice of each redemption of Series A Preferred
Stock to each record holder not more than 60 nor less than 30 days prior to the
date on which such redemption is to be made. In case fewer than the total number
of Shares represented by any certificate are redeemed, a new certificate
representing the number of unredeemed Shares shall be issued to the holder
thereof without cost to such holder within 3 business days after surrender by
such holder of the certificate representing the redeemed Shares.
(e) Dividends After Redemption Date; Rights of Stockholder. No Share is
entitled to any dividends accruing after the Redemption Date of such Share. On
such Redemption Date all rights of the holder of such Share as a holder shall
cease, and such Share shall not be deemed to be outstanding.
(f) Redeemed or Otherwise Acquired Shares. Any Shares which are
redeemed or otherwise acquired by the Corporation shall be canceled and shall
not be reissued, sold or transferred thereafter.
SECTION 6. PRIORITY OF SERIES A PREFERRED STOCK ON DIVIDENDS AND
REDEMPTIONS.
So long as any Shares remain outstanding, without the prior written
consent of the holders of a majority of the outstanding Shares, the Corporation
shall not, nor shall it permit any Subsidiary to, redeem, retire, purchase or
otherwise acquire for value directly or indirectly any Junior Securities or
Parity Securities (other than upon
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conversion of convertible preferred stock into common stock), nor shall any
moneys or property be paid into or set apart, or made available for the
purchase, redemption or other retirement of any Junior Securities or Parity
Securities, nor shall the Corporation directly or indirectly pay or declare any
dividend or make any distribution (either in cash or property) with respect to
any Junior Securities or Parity Securities (other than dividends payable in
compliance with Section 3(e)).
SECTION 7. VOTING RIGHTS.
(a) General. The holders of Series A Preferred Stock shall have no
voting rights other than those voting rights prescribed by law or set forth in
this Certificate of Designation.
(b) Corporate Action Requiring Affirmative Vote of Holders of Shares of
Series A Preferred Stock. So long as any Shares are outstanding, the Corporation
shall not:
(i) Without first obtaining the consent, given in person or by proxy,
either in writing or at any meeting called for that purpose, of the record
holders of at least a majority of the Shares then outstanding,
(1) increase the authorized number of Shares;
(2) amend, alter, change, or repeal (by merger or otherwise)
any provision of the Certificate of Incorporation or Bylaws of the
Corporation or any terms or provisions of this Certificate of
Designation so as to affect the relative rights, preferences,
qualifications, limitations or restrictions of the Series A Preferred
Stock; or
(3) enter into a share exchange, reorganization,
recapitalization or other similar transaction that affects the Series A
Preferred Stock, or consolidate, merge with or into, or enter into a
business combination with, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or
assets to, another Person, unless (A) the entity formed by such
consolidation, merger or business combination (if other than the
Corporation) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (in any such case,
the "resulting entity") is a corporation organized and existing under
the laws of the United States, any State thereof or the District of
Columbia, and (B) if the Corporation is not the resulting entity, the
Shares are converted into or exchanged for and become shares of such
resulting entity, having in respect of such resulting entity the same
(or more favorable) powers, preferences and relative rights,
qualifications, limitations and restrictions that Shares of the Series
A Preferred Stock had immediately prior to such transaction (it being
understood that the resulting entity shall thereafter be deemed to be
the "Corporation" for all purposes of this Certificate and the
predecessor shall be relieved of all obligations with respect to the
Series A Preferred Stock).
(ii) For the purpose of this Section 7, except as otherwise
specifically provided, the holders of Series A Preferred Stock shall vote as one
class, and each holder of Series A Preferred Stock shall be entitled to one vote
for each Share held. The consent or votes under this Section 7 shall be in
addition to any approval of stockholders of the Corporation that may be required
by law or pursuant to any provision of the Corporation's Certificate of
Incorporation or Bylaws.
SECTION 8. REGISTRATION OF TRANSFER. The Corporation shall keep at its
principal office a register for the registration of Series A Preferred Stock.
Upon the surrender of any certificate representing Series A Preferred Stock at
such place, the Corporation shall, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of Shares represented by the surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
Shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.
SECTION 9. REPLACEMENT. Upon receipt of evidence reasonably
satisfactory to the Corporation (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, extraction or mutilation of
any certificate evidencing any Shares, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation, or, in the case of any such mutilation upon surrender of such
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certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
Shares represented by such lost, stolen, destroyed or mutilated certificate and
dated the date of such lost, stolen, destroyed or mutilated certificate.
SECTION 10. DEFINITIONS. Unless defined elsewhere herein, each
capitalized term shall have the meaning assigned to such term below:
"Date of Issuance" shall have the meaning set forth in Section 3.
"Dividend Rate" shall have the meaning set forth in Section 3.
"Dividend Payment Date" shall have the meaning set forth in Section 3.
"Initial Liquidation Value" shall have the meaning set forth in Section
1.
"Junior Securities" means any of the Corporation's securities (except
for the Series A Preferred Stock), whether presently issued and outstanding or
hereafter authorized and issued, the terms of which do not expressly provide
that such securities rank senior to or on a parity with the Series A Preferred
Stock as to dividend distributions and distributions upon the Corporation's
liquidation, dissolution and winding-up.
"Liquidation Value" as to any Share as of any date of determination,
means an amount equal to the sum of (x) the Initial Liquidation Value of such
Share, (y) all accumulated and unpaid dividends with respect to such Share as of
the date of determination and (z) in the case of liquidation pursuant to Section
4 or redemption pursuant to Section 5, all accrued and unpaid dividends with
respect to such Share as of the date of such determination, including pro rata
dividends for the period from the last Dividend Payment Date to the date of
determination, whether or not declared to the date of such determination.
"Order" shall have the meaning set forth in the preamble.
"Parity Securities" means any class or series of the Corporation's
securities, whether presently issued and outstanding or hereafter authorized and
issued, the terms of which expressly provide that such class or series will rank
on a parity with the Series A Preferred Stock as to dividend distributions and
distributions upon the Corporation's liquidation, dissolution and winding-up.
"Pay-In-Kind" or "Payment-In-Kind" with respect to any Dividend Payment
Date, means the issuance by the Corporation to each holder of record of one or
more outstanding Shares a number of additional Shares (or fractional portion
thereof) that have an aggregate Liquidation Value equal to the amount of accrued
dividends on such outstanding Share(s) as of such Dividend Payment Date.
"Person" means any individual, sole proprietorship, partnership
(including a limited partnership), joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
limited liability company, joint stock company, entity or government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof)
or any other business entity.
"Redemption Date" as to any Share means the Scheduled Redemption Date
or the applicable date specified herein in the case of any other redemption;
provided, that no such date shall be a Redemption Date unless the applicable
Redemption Price is actually paid in full in cash, and if not so paid, the
Redemption Date shall be the date on which such Redemption Price is fully paid
in cash.
"Redemption Price" shall have the meaning set forth in Section 5.
"Scheduled Redemption Date" shall have the meaning set forth in Section
5.
"Series A Preferred Stock" shall have the meaning set forth in Section
1.
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"Share" shall have the meaning set forth in Section 1.
"Stock" means all shares, options, warrants, general or limited
partnership interests, participation or other equivalents (regardless of how
designated) of or in a Person, whether voting or nonvoting, including, without
limitation, common stock, preferred stock, or any other "equity security" (as
such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended), including without limitation, any securities
with profit participation features, and any rights, warrants, options or other
securities convertible into or exercisable or exchangeable for any such shares,
equity or profits interests, participations or other equivalents, or such other
securities, directly or indirectly (or any equivalent ownership interests, in
the case of a Person which is not a corporation).
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation of which an aggregate of 50% or more of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors, managers or
trustees of such corporation (irrespective of whether, at the time, Stock of any
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially or controlled, directly or indirectly,
by such Person and/or one or more Subsidiaries of such Person, or any
combination thereof, or with respect to which any such Person has the right to
vote or designate the vote of 50% or more of such Stock whether by proxy,
agreement, operation of law or otherwise, (ii) any partnership, limited
liability company, association or other business entity, in which such Person
and/or one or more Subsidiaries of such Person shall have 50% or more of the
partnership or other similar ownership interests thereof (whether in the form of
voting or participation in profits or capital contribution), and (iii) all other
Persons from time to time included in the consolidated financial statements of
such Person. For purposes hereof, a Person or Persons shall be deemed to have
50% or more ownership interest in a limited liability company, partnership,
association or other business entity if such Person or Persons shall be
allocated 50% or more of limited liability company, partnership, association or
other business entity gains or losses or shall be or control any managing
director or general partner of such limited liability company, partnership,
association or other business entity.
SECTION 11. AMENDMENT AND WAIVER. No amendment, modification or waiver
shall be binding or effective with respect to any of the provisions stating the
number, designation, relative rights, preferences, qualifications, limitations
or restrictions of the Series A Preferred Stock, without the prior written
consent of the holders of at least a majority of Shares then outstanding.
SECTION 12. NOTICES. Except as otherwise expressly provided herein, all
notices referred to herein shall be in writing and shall be delivered by
registered or certified mail, return receipt requested, postage prepaid and
shall be deemed to have been given four business days after being deposited in
the mail (i) to the Corporation, at its principal executive offices and (ii) to
any stockholder, at such holder's address as it appears in the stock records of
the Corporation (unless otherwise indicated by any such holder).
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IN WITNESS WHEREOF, Lodgian, Inc. has caused this Certificate of
Designation to be signed by the undersigned this 21st day of November 2002.
LODGIAN, INC.
By: /s/ Daniel E. Ellis
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Name: Daniel E. Ellis
Title: Vice President and Secretary
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