EXHIBIT 3.1
CERTIFICATE OF CORRECTION
FILED TO CORRECT A CERTAIN ERROR IN THE
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
LODGIAN, INC.
FILED IN THE OFFICE OF
THE SECRETARY OF STATE OF DELAWARE
ON APRIL 28, 2004
LODGIAN, INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
1. The name of the corporation is "LODGIAN, INC."
2. That a Second Amended and Restated Certificate of
Incorporation (the "Certificate") was filed by the Secretary of State of
Delaware on April 28, 2004, and that said Certificate requires correction as
permitted by Section 103 of the General Corporation Law of the State of
Delaware.
3. Section 4.1 of the Certificate inaccurately stated that the
total number of shares of all classes of stock that the Corporation shall have
authority to issue is Sixty Million (60,000,000), of which Fifty Million
(50,000,000) shares shall be shares of Common Stock, par value $0.01 per share
("Common Stock"), and Ten Million (10,000,000) shares shall be shares of
Preferred Stock, par value $0.01 per share ("Preferred Stock").
4. The inaccuracy or defect of said Certificate to be corrected
is as follows:
FIRST: That Section 4.1 of the Second Amended and Restated
Certificate of Incorporation of the Corporation be and it hereby is
amended by deleting Section 4.1 in its entirety and substituting the
following in lieu thereof:
"SECTION 4.1 Authorized Capital; Shares. The total number of
shares of all classes of stock that the Corporation shall have
authority to issue is Seventy Million (70,000,000), of which Sixty
Million (60,000,000) shares shall be shares of Common Stock, par value
$0.01 per share ("Common Stock"), and Ten Million (10,000,000) shares
shall be shares of Preferred Stock, par value $0.01 per share
("Preferred Stock")."
IN WITNESS WHEREOF, Lodgian, Inc. has caused this certificate
to be signed by its President and Chief Executive Officer on June 3,
2004.
LODGIAN, INC.
By: /S/ W. Thomas Parrington
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W. Thomas Parrington, President
and Chief Executive Officer
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
LODGIAN, INC.
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Pursuant to the provisions of Section 102
of the Delaware General Corporation Law
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Lodgian, Inc. (the "Corporation"), a corporation organized and
validly existing under the General Corporation Law of the State of Delaware,
does hereby certify as follows:
(1) The name of the Corporation is Lodgian, Inc. The Corporation
was originally incorporated under the name Servico Hotel Group, Inc. The
original Certificate of Incorporation of the Corporation was filed with the
office of the Secretary of State of the State of Delaware on February 11, 1998,
and restated most recently on April 13, 1998; amended by the Certificate of
Designations of Participating Preferred Stock filed on April 15, 1998; amended
by the Court Ordered Certificate of Amendment filed on November 22, 2002; and
further amended by the Certificate of Designation of the Series A Preferred
Stock filed on November 22, 2002.
(2) The provisions of the certificate of incorporation as
heretofore amended and/or supplemented, and as herein amended, are hereby
restated and integrated into the single instrument which is hereinafter set
forth, including APPENDIX A, and which is entitled the Second Amended and
Restated Certificate of Incorporation of Lodgian, Inc., without any further
amendment other than the amendment certified herein and without any discrepancy
between the provisions of the certificate of incorporation as heretofore amended
and supplemented and the provisions of the said single instrument hereinafter
set forth.
(3) The amendment and restatement of the certificate of
incorporation herein certified has been duly adopted by the stockholders in
accordance with the provisions of Sections 203(b)(3), 242 and 245 of the General
Corporation Law of the State of Delaware.
(4) The Restated Certificate of Incorporation, dated April 13,
1998 ("First Restated Certificate"), authorizes a class of stock designated as
preferred stock (the "Preferred Stock"), comprising 10,000,000 shares, par value
$0.01 per share, provides that such Preferred Stock may be issued from time to
time in one or more series, and vests authority in the Board of Directors of the
Corporation, within the limitations and restrictions stated in Section 4.2 of
Article IV of the First Restated Certificate, to fix or alter the voting powers,
designation, preferences and relative participating, optional or other special
rights, rights and terms of redemption, the redemption price or prices and the
liquidation preferences of any series of Preferred Stock within the limitations
set forth in the Delaware General Corporation Law. The Certificate of
Designation of Participating Preferred Stock designated 350,000 shares of the
Preferred Stock as Participating Preferred Stock (the "Participating
Preferred"). As of the date hereof, there are no issued and outstanding shares
of Participating Preferred. It is the desire of the Board of Directors of the
Corporation to cancel any previous rights, preferences or designations for the
Participating Preferred, and as a result, such shares of Participating Preferred
shall hereafter be considered authorized but unissued Preferred Stock subject to
the provisions of Section 4.2 of Article IV of the First Restated Certificate.
(5) The First Restated Certificate authorizes a class of stock
designated as common stock (the "Common Stock"), comprising 30,000,000 shares,
par value $0.01 per share. Each three (3) shares of the Common Stock issued as
of the date and time immediately preceding April 30, 2004, the effective date of
a reverse stock split (the "Split Effective Date"), shall be automatically
changed and reclassified, as of the Split Effective Date and without further
action, into one (1) fully paid and nonassessable share of the Common Stock;
provided, however, that there shall be no fractional interest resulting from
such change and reclassification. In the case of any holder of fewer than three
(3) shares of Common Stock or any number of shares of Common Stock which, when
divided by three (3), does not result in a whole number (a "Fractional
Stockholder"), the fractional share interest of Common Stock held by such
Fractional Stockholder as a result of such change and reclassification shall be
redeemed for a cash payment by the Corporation in lieu of issuance. Each holder
of record of a certificate or certificates which immediately prior to the Split
Effective Date represents outstanding shares of Common Stock (the "Old
Certificates," whether one or more) shall be entitled to receive upon surrender
of such Old Certificates to the Corporation's transfer agent for cancellation, a
certificate or certificates (the "New Certificates," whether one or more)
representing the number of whole shares of Common Stock into and for which the
shares of the Common Stock formerly represented by such Old Certificates so
surrendered plus a cash payment in place of the fractional shares at a price
equal to the fraction to which the holder would otherwise be entitled multiplied
by the average of the closing prices of the Common Stock for the last ten (10)
trading days immediately prior to the Split Effective Date (or if such price is
not available, the average of the last bid and ask prices of the Common Stock on
such days or other price determined by the Board of Directors). From and after
the Split Effective Date, Old Certificates shall represent only the right to
receive New Certificates, plus cash in lieu of fractional shares, pursuant to
the provisions hereof.
(6) This filing shall be made effective as of midnight, April 29,
2004.
(7) The certificate of incorporation of the Corporation, as
amended and restated herein, shall at the effective time of this Second Restated
Certificate of Incorporation (the "Second Restated Certificate"), read as
follows:
"ARTICLE I
NAME
SECTION 1.1 Name. The name of the Corporation is Lodgian, Inc.
ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT
SECTION 2.1 Office and Agent. The address of the registered
office of the Corporation in the State of Delaware is Corporation Trust Center,
1209 Orange Street, in the City of Wilmington, County of New Castle. The name of
the registered agent of the Corporation at such address is The Corporation Trust
Company.
ARTICLE III
CORPORATE PURPOSE
SECTION 3.1 Purpose. The purpose of the Corporation is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the "DGCL").
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ARTICLE IV
CAPITALIZATION
SECTION 4.1 Authorized Capital; Shares. The total number of
shares of all classes of stock that the Corporation shall have authority to
issue is Sixty Million (60,000,000), of which Fifty Million (50,000,000) shares
shall be shares of Common Stock, par value $0.01 per share ("Common Stock"), and
Ten Million (10,000,000) shares shall be shares of Preferred Stock, par value
$0.01 per share ("Preferred Stock").
SECTION 4.2 Preferred Stock. Shares of Preferred Stock of the
Corporation may be issued from time to time in one or more classes or series,
each of which class or series shall have such distinctive designation or title
as shall be fixed by the affirmative vote of a majority of the Board of
Directors of the Corporation prior to the issuance of any shares thereof. Each
such class or series of Preferred Stock shall have such voting powers, full or
limited, or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions, including the dividend rate, redemption price and liquidation
preference, and may be convertible into, or exchangeable for, at the option of
either the holder or the Corporation or upon the happening of a specified event,
shares of any other class or classes or any other series of the same or any
other class or classes of capital stock, or any debt securities, of the
Corporation at such price or prices or at such rate or rates of exchange and
with such adjustments as shall be stated and expressed in this Second Restated
Certificate of Incorporation or in any amendment hereto or in such resolution or
resolutions providing for the issuance of such class or series of Preferred
Stock as may be adopted from time to time by the affirmative vote of the number
of directors constituting the majority of the Board of Directors prior to the
issuance of any shares thereof pursuant to the authority hereby expressly vested
in it, all in accordance with the DGCL. The authority of the Board of Directors
with respect to each series shall also include, but not be limited to, the
determination of restrictions, if any, on the issue or reissue of any additional
shares of Preferred Stock.
SECTION 4.3 Series A Preferred Stock. Of the 10,000,000 shares
of Preferred Stock, a total of 7,100,000 shares shall be designated as Series A
Preferred Stock, with such powers, preferences and relative rights as set forth
on "APPENDIX A" attached hereto and made a part hereof.
SECTION 4.4 No Preemptive Rights. The holders of shares of
Common Stock shall have no preemptive or preferential rights of subscription to
any shares of any class of capital stock of the Corporation or any securities
convertible into or exchangeable for shares of any class of capital stock of the
Corporation.
SECTION 4.5 Prohibition of Non-Voting Equity Securities.
Notwithstanding anything herein to the contrary, the Corporation shall not be
authorized to issue non-voting equity securities of any class, series or other
designation to the extent prohibited by Section 1123(a)(6) of Title 11 of the
United States Code (the "Bankruptcy Code"); provided, however, that the
foregoing restriction shall (i) have no further force and effect beyond that
required under Section 1123(a)(6) of the Bankruptcy Code, (ii) only have such
force and effect for so long as such Section 1123(a)(6) is in effect and applies
to the Corporation, and (iii) be deemed void or eliminated if required by
applicable law.
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ARTICLE V
INDEMNIFICATION
SECTION 5.1 Indemnification. (a) General. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, to
the full extent authorized or permitted by law, as now or hereafter in effect,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person seeking indemnification did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) Derivative Actions. The Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, to the full extent authorized or permitted by law, as now or
hereafter in effect, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation; provided,
however, that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) Successful Defense. To the extent that a present or
former director or officer of the Corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) above, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(d) Proceedings Initiated by any Person. Notwithstanding
anything to the contrary contained in subsections (a) or (b) above, except for
proceedings to enforce rights to indemnification, the Corporation shall not be
obligated to indemnify any person in connection with a proceeding (or part
thereof) initiated by such person unless such proceeding (or part thereof) was
authorized in advance, or unanimously consented to, by the Board of Directors.
(e) Procedure. Any indemnification under subsections (a)
and (b) above (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the present or former director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) above. Such determination shall be made with respect to
a person who is a director or officer at
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the time of such determination, (i) by a majority vote of a quorum of the
directors who are not parties to such action, suit or proceeding, (ii) by a
committee of such nonparty directors designated by a majority vote of such
directors, even though less than a quorum, (iii) if there are no such directors,
or if such directors so direct, by independent legal counsel in a written
opinion, or (iv) by the stockholders of the Corporation.
(f) Advancement of Expenses. Expenses (including
attorneys' fees) incurred by a director or an officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking in form and substance satisfactory
to the Corporation by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation pursuant to this Article V. Such expenses
(including attorneys' fees) incurred by former directors or officers or other
employees and agents may be so paid upon such terms and conditions, if any, as
the Corporation deems appropriate.
(g) Rights Not Exclusive. The indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of this Article V shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any law, bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
(h) Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of the DGCL.
(i) Definition of "Corporation". For purposes of this
Article V, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article V with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(j) Certain Other Definitions. For purposes of this
Article V, references to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on a person
with respect to any employee benefit plan; and references to "serving at the
request of the Corporation" shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves
service by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries; and a person who acted
in good faith and in a manner he reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
Corporation," as referred to in this Article V.
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(k) Continuation of Rights. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article V
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
(l) Repeal or Modification. Any repeal or modification of
this Article V by the stockholders of the Corporation shall not adversely affect
any rights to indemnification and to advancement of expenses that any person may
have at the time of such repeal or modification with respect to any acts or
omissions occurring prior to such repeal or modification.
(m) Action Against Corporation. Notwithstanding any
provisions of this Article V to the contrary, no person shall be entitled to
indemnification or advancement of expenses under this Article V with respect to
any action, suit or proceeding, or any claim therein, brought or made by him
against the Corporation.
ARTICLE VI
DIRECTORS
SECTION 6.1 Director Liability. (a) A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived any improper personal benefit.
(b) If the DGCL is amended hereafter to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent authorized by the DGCL, as so amended, without further action by
either the Board of Directors or the stockholders of the Corporation.
(c) Any repeal or modification of this Article VI shall
not adversely affect any right or protection of a director of the Corporation
existing hereunder with respect to any act or omission occurring prior to or at
the time of such repeal or modification.
SECTION 6.2 Removal. Subject to the rights, if any, of the
holders of shares of Preferred Stock then outstanding, any or all of the
directors of the Corporation may be removed from office at any time, with or
without cause, by the affirmative vote of the record holders of a majority of
the outstanding shares of the Corporation entitled to vote generally in the
election of directors.
ARTICLE VII
MANAGEMENT OF THE AFFAIRS OF THE CORPORATION
SECTION 7.1 Management of the Affairs of the Corporation. (a)
The business and affairs of the Corporation shall be managed by the Board of
Directors, which may exercise all the powers of the Corporation and do all such
lawful acts and things that are not conferred upon or reserved to the
stockholders by law, by this Second Restated Certificate of Incorporation or by
the bylaws of the Corporation (the "Bylaws").
(b) Election of directors of the Corporation need not be
by written ballot, unless required by the Bylaws.
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(c) The following provisions are inserted for the
limitation and regulation of the powers of the Corporation and of its directors
and stockholders:
(i) The Bylaws, or any of them, may be altered,
amended or repealed, or new bylaws may be made, but only to the extent
any such alteration, amendment, repeal or new bylaw is not inconsistent
with any provision of this Second Restated Certificate of Incorporation
as it may be amended from time to time, either by the number of
directors constituting the majority of the Board of Directors or by the
stockholders of the Corporation upon the affirmative vote of the
holders of at least 80% of the outstanding capital stock entitled to
vote thereon.
(ii) The Board of Directors shall be elected each
year at the annual meeting of stockholders. Each director shall hold
office until the annual meeting of stockholders for the year following
the year of his or her election until his or her successor is elected
and has qualified or until his or her earlier resignation, retirement,
disqualification or removal from office.
Notwithstanding the foregoing, whenever the holders
of any one or more classes or series of Preferred Stock issued by the
Corporation shall have the right, voting separately by class or series,
to elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacancies and other features of
such directorships shall be governed by the terms of this Second
Restated Certificate of Incorporation or the resolution or resolutions
adopted by the Board of Directors pursuant to Section 4.2 of Article IV
hereof applicable thereto.
(iii) Subject to the rights, if any, of the
holders of shares of Preferred Stock then outstanding and the notice
provisions set forth in Section 6.2 of Article VI, any or all of the
directors of the Corporation may be removed from office at any time
only for cause by the affirmative vote of holders of a majority of the
outstanding shares of the Corporation entitled to vote generally in the
election of directors, considered for purposes of this paragraph as one
class.
(iv) Special meetings of the stockholders of the
Corporation for any purpose or purposes may be called at any time by a
majority of the members of the Board of Directors or Chief Executive
Officer of the Corporation. A special meeting of the stockholders of
the Corporation may not be called by any other person or persons.
SECTION 7.2 Business Combinations with Interested
Stockholders. To the fullest extent permitted by the DGCL, the Corporation
hereby elects not to be governed by Section 203 of the DGCL; provided, however,
this Section 7.2 shall not apply to any business combination between the
Corporation and any person who became an interested stockholder on or prior to
the filing date of this Second Restated Certificate of Incorporation.
ARTICLE VIII
PRIVATE PROPERTY
SECTION 8.1 Private Property. The private property of the
stockholders of the Corporation shall not be subject to the payment of corporate
debts to any extent whatsoever.
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ARTICLE IX
SHAREHOLDER CONSENT
SECTION 9.1 No Stockholders' Consent in Lieu of Meeting. Any
action required or permitted to be taken by the stockholders of the Corporation
must be effected at a duly called annual meeting or special meeting of such
stockholders and may not be effected by any consent in writing by any such
stockholders.
ARTICLE X
AMENDMENT
SECTION 10.1 Amendments. Notwithstanding anything contained in
this Second Restated Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least 80% of the outstanding shares of
capital stock of the Corporation entitled to vote thereon shall be required to
amend, repeal, or adopt any provision inconsistent with, Section 6.2 of Article
VI, Section 7.1(c) of Article VII or this Article X of this Second Restated
Certificate of Incorporation."
Balance of Page Intentionally Left Blank
- Signature Page Follows -
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IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the
Corporation, has executed this Second Amended and Restated Certificate of
Incorporation this 28th day of April, 2004.
LODGIAN, INC.
By:/s/ W. Thomas Parrington
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W. Thomas Parrington
President and Chief Executive Officer
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APPENDIX A
CERTIFICATE OF DESIGNATION
FOR
SERIES A PREFERRED STOCK
OF
LODGIAN, INC.
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Pursuant to the provisions of Section 303
of the Delaware General Corporation Law
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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
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(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.
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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.
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
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
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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 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;
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(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
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.
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"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.
"Share" shall have the meaning set forth in Section 1.
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"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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