EXHIBIT 3.3
TRANSMEDIA ASIA PACIFIC, INC.
CERTIFICATE OF DESIGNATIONS OF
SERIES A CONVERTIBLE PREFERRED STOCK
(Pursuant to Section 151 of the General Corporation
Law of the State of Delaware)
--------------------
Transmedia Asia Pacific, Inc., a Delaware corporation (the
"Corporation"), in accordance with the provisions of Section 103 of the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
That pursuant to authority vested in the Board of Directors of the
Corporation by the Certificate of Incorporation of the Corporation, the Board of
Directors of the Corporation by unanimous written consent dated March 24, 2000,
adopted a resolution providing for the creation of a series of the Corporation's
Preferred Stock, $.01 par value, which series is designated as "Series A
Convertible Preferred Stock," which resolution is as follows:
RESOLVED, that pursuant to authority vested in the Board of
Directors by the Certificate of Incorporation of the Corporation, the Board of
Directors does hereby provide for the creation of a series of the Preferred
Stock, $.01 par value (hereinafter called the "Preferred Stock"), of the
Corporation, and to the extent that the voting powers and the designations,
preferences and relative, participating, optional or other special rights
thereof and the qualifications, limitations or restrictions of such rights have
not been set forth in the Certificate of Incorporation of the Corporation, does
hereby fix the same as follows:
SERIES A CONVERTIBLE PREFERRED STOCK
Section 1. Definitions. As used herein, the following terms shall
have the following meanings:
"Accrual Amount" means with respect to any share of Series A
Convertible Preferred Stock on any date an amount calculated at the rate of 5%
per annum of the Conversion Amount of such share from the Issuance Date to the
date of determination.
"Affiliate" means, with respect to any person, any other person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the subject person; for purposes
of this definition, "control" (including, with correlative meanings, the terms
"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 and policies of such person,
whether through the ownership of voting securities or by contract or otherwise.
"Aggregated Person" means, with respect to any person, any person
whose beneficial ownership of shares of Common Stock would be aggregated with
the beneficial ownership of shares of Common Stock by such person for purposes
of Section 13(d) of the Exchange Act, and Regulation 13D-G thereunder.
"AMEX" means the American Stock Exchange, Inc.
"Auditors" means BDO Stoy Hayward or such other firm of independent
public accountants of recognized standing as shall have been engaged by the
Corporation to audit its financial statements.
"Auditors' Determination" means a determination requested by the
Corporation and signed by the Auditors concurring with the Company's conclusion
that a requirement of the Corporation to redeem, or a right of any holder of
shares of Series A Convertible Preferred Stock to require redemption of, shares
of Series A Convertible Preferred Stock by reason of the occurrence of a
specified Inconvertibility Day or a specified Optional Redemption Event would
result in the Corporation being required to classify the Series A Convertible
Preferred Stock as redeemable preferred stock on a balance sheet of the
Corporation in accordance with Generally Accepted Accounting Principles and
Regulation S-X of the SEC. To the extent any facts are assumed for purposes of
either the Company's conclusion or the Auditors' Determination, the validity of
such conclusion or determination shall depend upon such assumed facts being true
and complete in all material respects.
"Average Market Price" for any date means the arithmetic average of
the Market Price for each of the five Trading Days, whether or not consecutive,
during the applicable Measurement Period on which the lowest Market Prices
occurred.
"Biannual Reset Date" means the date occurring every six months
after the Initial Reset Date on the same day of each sixth month as the Initial
Reset Date through the third anniversary of the Issuance Date (for example, if
the Issuance Date is March 10, 2000 and the Initial Reset Date is December 10,
2000, Biannual Reset Dates shall occur on each June 10 and December 10
thereafter through March 10, 2003).
"Board of Directors" or "Board" means the Board of Directors of the
Corporation.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.
"Ceiling Price" means $6.74375 (subject to equitable adjustments
from time to time on terms reasonably acceptable to the Majority Holders for
stock splits, stock dividends, combinations, recapitalizations,
reclassifications, distributions, Tender Offers and similar events relating to
the Common Stock occurring or with respect to which "ex-" trading commences on
or after the date of filing of this Certificate of Designations with the
Secretary of State of the State of Delaware).
"Closing Bid Price" of the Common Stock on any date means the
closing bid price for one share of Common Stock on such date on the first
applicable among the following: (a) the national securities exchange on which
the shares of Common Stock are listed which constitutes the principal securities
market for the Common Stock, (b) the Nasdaq, if the Nasdaq constitutes the
principal securities market for the Common Stock on such date, or (c) the Nasdaq
SmallCap, if the Nasdaq SmallCap constitutes the principal securities market for
the Common Stock on such date, in any such case as reported by Bloomberg, L.P.
(subject to equitable adjustments from time to time on terms reasonably
acceptable to the Majority Holders for stock splits, stock dividends,
combinations, recapitalizations, reclassifications, distributions, Tender Offers
and similar events relating to the Common Stock occurring or with respect to
which "ex-" trading commences on or after the date of filing of this Certificate
of Designations with the Secretary of State of Delaware).
"Common Stock" means the Common Stock, $.00001 par value, of the
Corporation.
"Control Notice" means a notice given by the Corporation to the
holders of shares of the Series A Convertible Preferred Stock, in accordance
with Section 7(a)(5) or Section 11(b)(4), (i) stating that an Inconvertibility
Day or an Optional Redemption Event, as the case may be, has occurred by reason
of events which are not solely within the control of the Corporation and (ii)
enclosing an executed copy of an Auditors' Determination.
"Conversion Agent" means American Stock Transfer & Trust Company, or
its duly appointed successor, as conversion agent for the Series A Convertible
Preferred Stock pursuant to the Transfer Agent Agreement.
"Conversion Amount" initially shall be equal to $1,000.00, subject
to adjustment as herein provided.
"Conversion Date" means, with respect to each conversion of shares
of Series A Convertible Preferred Stock pursuant to Section 10, the date on
which the Conversion Notice relating to such conversion is actually received by
the Conversion Agent, whether by mail, courier, personal service, telephone line
facsimile transmission or other means.
"Conversion Notice" means a written notice, duly signed by or on
behalf of a holder of shares of Series A Convertible Preferred Stock, stating
the number of shares of Series A Convertible Preferred Stock to be converted in
the form specified in the Subscription Agreements.
"Conversion Price" means:
(1) for any Conversion Date during the period from the Issuance
Date through the day immediately prior to the Initial Reset
Date, the Fixed Conversion Price; and
(2) for any Conversion Date during the Reset Period commencing on
each Reset Date, the lesser of:
(a) the Ceiling Price; and
(b) the Average Market Price during the Measurement Period
for such Reset Date;
provided, however, that the Conversion Price applicable to a particular
conversion shall be subject to reduction as provided in Section 10(b)(6).
"Conversion Rate" shall have the meaning provided in Section 10(a).
"Converted Market Price" means, for any share of Series A
Convertible Preferred Stock as of any date of determination, an amount equal to
the product obtained by multiplying (x) the number of shares of Common Stock
which would, at the time of such determination, be issuable on conversion in
accordance with Section 10(a) of one share of Series A Convertible Preferred
Stock if a Conversion Notice were given by the holder of such share of Series A
Convertible Preferred Stock on the date of such determination (determined
without regard to any limitation on conversion based on beneficial ownership
contained in Section 10(a)) times (y) the average Closing Bid Price of the
Common Stock during the five Trading Days immediately prior to the date of such
determination.
"Corporation Optional Redemption Notice" means a notice given by the
Corporation to the holders of shares of Series A Convertible Preferred Stock
pursuant to Section 9(a) which notice shall state (1) that the Corporation is
exercising its right to redeem all or a portion of the
outstanding shares of Series A Convertible Preferred Stock pursuant to Section
9(a), (2) the number of shares of Series A Convertible Preferred Stock held by
such holder which are to be redeemed, (3) the Redemption Price per share of
Series A Convertible Preferred Stock to be redeemed or the formula for
determining the same, determined in accordance herewith, and (4) the applicable
Redemption Date.
"Current Price" means with respect to any date the arithmetic
average of the Closing Bid Price of the Common Stock on the 30 consecutive
Trading Days commencing 45 Trading Days before such date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Final Redemption Date" means the date or dates of redemption of
shares of Series A Convertible Preferred Stock pursuant to Section 9(b),
determined in accordance therewith.
"Final Redemption Notice" means a notice given by the Corporation to
each holder of Series A Convertible Preferred Stock pursuant to Section 9(b),
which notice shall state (1) that the Corporation is exercising its right to
redeem outstanding shares of Series A Convertible Preferred Stock pursuant to
Section 9(b), (2) the number of shares of Series A Convertible Preferred Stock
held by such holder which are to be redeemed, (3) the Final Redemption Price per
share of Series A Convertible Preferred Stock held by such holder which are to
be redeemed, determined in accordance herewith, and (4) the Final Redemption
Date.
"Final Redemption Price" means, for any share of Series A
Convertible Preferred Stock on any date, an amount equal to the sum of (i)
$1,000 plus (ii) an amount equal to the Accrual Amount on the share of Series A
Convertible Preferred Stock to be redeemed to the Final Redemption Date.
"Fixed Conversion Price" means $6.225 (subject to equitable
adjustments from time to time on terms reasonably acceptable to the Majority
Holders for stock splits, stock dividends, combinations, recapitalizations,
reclassifications, distributions, Tender Offers and similar events relating to
the Common Stock occurring or with respect to which "ex-" trading commences on
or after the date of filing of this Certificate of Designations with the
Secretary of State of the State of Delaware).
"Generally Accepted Accounting Principles" for any person means the
generally accepted accounting principles and practices applied by such person
from time to time in the preparation of its audited financial statements.
"Inconvertibility Day" means any Reset Date on which the Corporation
would not have been required to convert in accordance with Section 10(a) any
shares of Series A Convertible Preferred Stock held by a holder as a consequence
of the limitations set forth in Section 7(a)(1) had all outstanding shares of
Series A Convertible Preferred Stock held by such holder on such Trading Day
been converted into Common Stock on such Trading Day (without regard to the
limitation, if any, on beneficial ownership by such holder contained in Section
10(a)).
"Inconvertibility Notice" shall have the meaning provided in Section
7(a)(2).
"Initial Reset Date" means December 28, 2000.
"Issuance Date" means the first date of original issuance of any
shares of Series A Convertible Preferred Stock.
"Junior Dividend Stock" means, collectively, the Common Stock and
any other class or series of capital stock of the Corporation ranking junior as
to dividends to the Series A
Convertible Preferred Stock as to any dividends which have been declared on the
Series A Convertible Preferred Stock.
"Junior Liquidation Stock" means the Common Stock or any other class
or series of the Corporation's capital stock ranking junior as to liquidation
rights to the Series A Convertible Preferred Stock.
"Junior Stock" shall have the meaning provided in Section 10(b)(8).
"Liquidation Preference" means, for each share of Series A
Convertible Preferred Stock, the sum of (i) an amount equal to the Accrual
Amount thereon to the date of final distribution to the holders of shares of
Series A Convertible Preferred Stock in connection with the liquidation,
dissolution or winding up of the Corporation plus (ii) $1,000.00.
"Majority Holders" means at any time the holders of shares of Series
A Convertible Preferred Stock which shares constitute a majority of the
outstanding shares of Series A Convertible Preferred Stock.
"Market Price" of the Common Stock on any date means the lowest sale
price for one share of Common Stock on such date on the first applicable among
the following: (a) the national securities exchange on which the shares of
Common Stock are listed which constitutes the principal securities market for
the Common Stock, (b) the Nasdaq, if the Nasdaq constitutes the principal
securities market for the Common Stock on such date, or (c) the Nasdaq SmallCap,
if the Nasdaq SmallCap constitutes the principal securities market for the
Common Stock on such date, in any such case as reported by Bloomberg, L.P.
(subject to equitable adjustments from time to time on terms reasonably
acceptable to the Majority Holders for stock splits, stock dividends,
combinations, recapitalizations, reclassifications, distributions, Tender Offers
and similar events relating to the Common Stock occurring or with respect to
which "ex-" trading commences on or after the date of filing of this Certificate
of Designations with the Secretary of State of the State of Delaware).
"Maximum Share Amount" means 6,815,000 shares of Common Stock, or
such greater number of shares as permitted by the rules of the Nasdaq SmallCap
or such other securities market on which the Common Stock is then listed for
trading (such amount to be subject to equitable adjustment from time to time on
terms reasonably acceptable to the Majority Holders for stock splits, stock
dividends, combinations, recapitalizations, reclassifications, distributions,
Tender Offers and similar events relating to the Common Stock occurring or with
respect to which "ex-" trading commences after the date of filing of this
Certificate of Designations with the Secretary of State of the State of
Delaware).
"Measurement Period" means, with respect to any date, the period of
20 consecutive Trading Days ending on the Trading Day prior to such date.
"Merger" means the proposed merger of a subsidiary of the Company
with Transmedia Europe, Inc., a Delaware corporation, pursuant to the Merger
Agreement, dated as of December 28, 1999, among such parties.
"Nasdaq" means the Nasdaq National Market.
"Nasdaq SmallCap" means the Nasdaq SmallCap Market.
"1933 Act" means the Securities Act of 1933, as amended.
"NYSE" means the New York Stock Exchange, Inc.
"Option Share Surrender" means the surrender of shares of Common
Stock to the Corporation in payment of the exercise price or tax obligations
incurred in connection with the exercise of a stock option granted by the
Corporation to any of its employees, directors or consultants.
"Optional Redemption Event" means any one of the following events:
(1) For any period of five consecutive Trading Days there shall be
no closing bid price of the Common Stock on the Nasdaq SmallCap, the NYSE, the
AMEX or the Nasdaq;
(2) The Common Stock ceases to be listed for trading on any of the
Nasdaq SmallCap, the NYSE, the AMEX or the Nasdaq;
(3) The inability for 30 or more days (whether or not consecutive)
commencing on or after the SEC Effective Date of any holder of shares of Series
A Convertible Preferred Stock to sell any shares of Common Stock issued or
issuable on conversion of shares of Series A Convertible Preferred Stock
pursuant to the Registration Statement for any reason on each of such 30 days;
(4) The Corporation shall (A) default in the timely performance of
the obligation to issue shares of Common Stock upon conversion of shares of
Series A Convertible Preferred Stock as and when required by Section 10 or (B)
fail or default in the timely performance of any material obligation (other than
as specifically set forth elsewhere in this definition) to a holder of shares of
Series A Convertible Preferred Stock under the terms of this Certificate of
Designations or under the Subscription Agreements, the Registration Rights
Agreements, the Warrants or any other agreement or document entered into in
connection with the issuance of shares of Series A Convertible Preferred Stock,
as such instruments may be amended from time to time;
(5) Any consolidation or merger of the Corporation with or into
another entity (other than a merger or consolidation of a subsidiary of the
Corporation into the Corporation or a wholly-owned subsidiary of the
Corporation) where the shareholders of the Corporation immediately prior to such
transaction do not collectively own at least 51% of the outstanding voting
securities of the surviving corporation of such consolidation or merger
immediately following such transaction or the common stock of such surviving
corporation is not listed for trading on the NYSE, the AMEX, the Nasdaq or the
Nasdaq SmallCap; or any sale or other transfer of all or substantially all of
the assets of the Corporation; or
(6) The taking of any action, including any amendment to the
Corporation's Certificate of Incorporation, without the consent of the Majority
Holders which materially and adversely affects the rights of any holder of
shares of Series A Convertible Preferred Stock; provided however, that no
Optional Redemption Event shall be deemed to occur by reason of an amendment to
the Corporation's Certificate of Incorporation which increases the number of
authorized shares of Common Stock in connection with the Merger.
"Optional Redemption Notice" means a notice from a holder of shares
of Series A Convertible Preferred Stock to the Corporation which states (1) that
the holder delivering such notice is thereby requiring the Corporation to redeem
shares of Series A Convertible Preferred Stock pursuant to Section 11, (2) in
general terms the Optional Redemption Event giving rise to such redemption, and
(3) the number of shares of Series A Convertible Preferred Stock held by such
holder which are to be redeemed.
"Parity Dividend Stock" means any class or series of the
Corporation's capital stock ranking, as to dividends, on a parity with the
Series A Convertible Preferred Stock as to any dividends which have been
declared on the Series A Convertible Preferred Stock.
"Parity Liquidation Stock" means any class or series of the
Corporation's capital stock having parity as to liquidation rights with the
Series A Convertible Preferred Stock.
"Premium Percentage" means 120%.
"Premium Price" means, for any share of Series A Convertible
Preferred Stock as of any date of determination, the product obtained by
multiplying (a) the sum of (1) the Conversion Amount plus (2) an amount equal to
the Accrual Amount on such share of Series A Convertible Preferred Stock to the
date of determination times (b) the Premium Percentage.
"Redemption Date" means the date of a redemption of shares of Series
A Convertible Preferred Stock pursuant to Section 9(a) or 11(a), as the case may
be, determined in accordance therewith.
"Redemption Price" means the greater of (i) the Premium Price on the
applicable Redemption Date and (ii) the Converted Market Price on the applicable
Redemption Date.
"Registration Rights Agreements" means the several Registration
Rights Agreements entered into between the Corporation and the original holders
of the shares of Series A Convertible Preferred Stock, as amended or modified
from time to time in accordance with their respective terms.
"Registration Statement" means the Registration Statement required
to be filed by the Corporation with the SEC pursuant to Section 2(a) of the
Registration Rights Agreements.
"Reset Date" means the Initial Reset Date and each Biannual Reset
Date thereafter.
"Reset Period" means the applicable six month period commencing on
the Initial Reset Date and on each Biannual Reset Date thereafter and ending on
the day immediately prior to the next Biannual Reset Date.
"SEC" means the United States Securities and Exchange Commission.
"SEC Effective Date" means the date the Registration Statement is
first declared effective by the SEC.
"Senior Dividend Stock" means any class or series of capital stock
of the Corporation ranking senior as to dividends to the Series A Convertible
Preferred Stock as to any dividends which have been declared on the Series A
Convertible Preferred Stock.
"Senior Liquidation Stock" means any class or series of capital
stock of the Corporation ranking senior as to liquidation rights to the Series A
Convertible Preferred Stock.
"Series A Convertible Preferred Stock" means the Series A
Convertible Preferred Stock, $.01 par value, of the Corporation.
"Share Limitation Redemption Date" means each date on which the
Corporation is required to redeem shares of Series A Convertible Preferred Stock
as provided in Section 7(a).
"Stockholder Approval" shall mean the approval by a majority of the
votes cast by the holders of shares of Common Stock (in person or by proxy) at a
meeting of the stockholders of the
Corporation (duly convened at which a quorum was present), or a written consent
of holders of shares of Common Stock entitled to such number of votes given
without a meeting, of the issuance by the Corporation of 20% or more of the
Common Stock of the Corporation outstanding on the Issuance Date for less than
the greater of the book or market value of such Common Stock on conversion of
the Series A Convertible Preferred Stock, as and to the extent required under
the Stockholder Approval Rule.
"Stockholder Approval Rule" means Rule 4310(c)(25)(H) of the Nasdaq
SmallCap as in effect from time to time or any successor, replacement or similar
rule or regulation of the Nasdaq SmallCap or any other principal securities
market on which the Common Stock is listed for trading.
"Subscription Agreements" means the several Subscription Agreements
by and between the Corporation and the original holders of shares of Series A
Convertible Preferred Stock pursuant to which the shares of Series A Convertible
Preferred Stock were issued.
"Tender Offer" means a tender offer or exchange offer.
"Trading Day" means a day on whichever of (x) the national
securities exchange, (y) the Nasdaq or (z) the Nasdaq SmallCap which at the time
constitutes the principal securities market for the Common Stock is open for
general trading.
"Transfer Agent Instructions" means the Transfer Agent Instructions
from the Corporation to the Conversion Agent issued pursuant to the Subscription
Agreements for the benefit of the holders from time to time of shares of Series
A Convertible Preferred Stock.
"Warrants" means the Common Stock Purchase Warrants issued by the
Corporation in connection with the issuance of the shares of Series A
Convertible Preferred Stock.
Section 2. Designation and Amount. The shares of such series shall
be designated as "Series A Convertible Preferred Stock", and the number of
shares constituting the Series A Convertible Preferred Stock shall be 10,000,
and shall not be subject to increase. The Corporation shall not issue any shares
of Series A Convertible Preferred Stock other than pursuant to the Subscription
Agreements, unless such issuance shall have been approved by the Majority
Holders. Any shares of Series A Convertible Preferred Stock which are redeemed
by the Corporation and retired and any shares of Series A Convertible Preferred
Stock which are converted in accordance with Section 10 shall be restored to the
status of authorized, unissued and undesignated shares of the Corporation's
class of Preferred Stock and shall not be subject to issuance, and may not
thereafter be outstanding, as shares of Series A Convertible Preferred Stock.
Section 3. Series A Convertible Preferred Stock Capital. The amount
to be represented in the Series A Convertible Preferred Stock capital of the
Corporation at all times for each outstanding share of Series A Convertible
Preferred Stock shall be the greater of (i) the Premium Price and (ii) the
Converted Market Price. The Corporation shall take such action as may be
required to maintain the amount required by this Section 3 to be represented in
stated capital for the Series A Convertible Preferred Stock capital not less
frequently than quarterly.
Section 4. Rank. Subject to the provisions of Section 12(b), all
Series A Convertible Preferred Stock shall rank (i) senior to the Common Stock,
now or hereafter issued, as to payment of dividends and distribution of assets
upon liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, (ii) senior to any additional series of the class of
Preferred Stock which series the Board of Directors may from time to time
authorize, both as to payment of dividends and as to distributions of assets
upon liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, and (iii) senior to any additional class of preferred
stock (or series of
preferred stock of such class) which the Board of Directors or the stockholders
may from time to time authorize in accordance herewith.
Section 5. Dividends and Distributions. (a) The holders of shares of
Series A Convertible Preferred Stock shall be entitled to receive, when, as, and
if declared by the Board of Directors out of funds legally available for such
purpose, dividends in such amounts as determined from time to time by the Board
of Directors. Dividends on the shares of Series A Convertible Preferred Stock
shall not be cumulative.
If at any time any dividend on any Senior Dividend Stock shall be in
arrears, in whole or in part, no dividend shall be paid or declared and set
apart for payment on the Series A Convertible Preferred Stock unless and until
all accrued and unpaid dividends with respect to the Senior Dividend Stock,
including the full dividends for the then current dividend period, shall have
been paid or declared and set apart for payment, without interest. No dividends
shall be paid or declared and set apart for payment on any Parity Dividend Stock
for any period unless dividends have been, or contemporaneously are, paid or
declared and set apart for such payment on the Series A Convertible Preferred
Stock. No dividends shall be paid or declared and set apart for payment on the
Series A Convertible Preferred Stock for any period unless all accrued but
unpaid dividends have been, or contemporaneously are, paid or declared and set
apart for payment on the Parity Dividend Stock for all dividend periods
terminating on or prior to the date of payment of such dividends.
Any references to "distribution" contained in this Section 5 shall
not be deemed to include any stock dividend or distributions made in connection
with any liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary.
(b) Neither the Corporation nor any subsidiary of the Corporation
shall redeem, repurchase or otherwise acquire in any one transaction or series
of related transactions any shares of Common Stock, Parity Dividend Stock,
Parity Liquidation Stock, Junior Dividend Stock or Junior Liquidation Stock if
the number of shares so repurchased, redeemed or otherwise acquired in such
transaction or series of related transactions (excluding any Option Share
Surrender) is more than either (x) 5% of the number of shares of Common Stock,
Parity Dividend Stock, Parity Liquidation Stock, Junior Dividend Stock or Junior
Liquidation Stock, as the case may be, outstanding immediately prior to such
transaction or series of related transactions or (y) 1% of the number of shares
of Common Stock, Parity Dividend Stock, Parity Liquidation Stock, Junior
Dividend Stock or Junior Liquidation Stock, as the case may be, outstanding
immediately prior to such transaction or series of related transactions if such
transaction or series of related transactions is with any one person or group of
affiliated persons, unless the Corporation or such subsidiary offers to purchase
for cash from each holder of shares of Series A Convertible Preferred Stock at
the time of such redemption, repurchase or acquisition the same percentage of
such holder's shares of Series A Convertible Preferred Stock as the percentage
of the number of outstanding shares of Common Stock, Parity Dividend Stock,
Parity Liquidation Stock, Junior Dividend Stock or Junior Liquidation Stock, as
the case may be, to be so redeemed, repurchased or acquired at a purchase price
per share of Series A Convertible Preferred Stock equal to the greater of (i)
the Premium Price in effect on the date of purchase pursuant to this Section
5(b) and (ii) the Converted Market Price on the date of purchase pursuant to
this Section 5(b).
(c) Neither the Corporation nor any subsidiary of the Corporation
shall (1) make any Tender Offer for outstanding shares of Common Stock, unless
the Corporation contemporaneously therewith makes an offer, or (2) enter into an
agreement regarding a Tender Offer for outstanding shares of Common Stock by any
person other than the Corporation or any subsidiary of the Corporation, unless
such person agrees with the Corporation to make an offer, in either such case to
each holder of outstanding shares of Series A Convertible Preferred Stock to
purchase for cash at the time of purchase in such Tender Offer the same
percentage of shares of Series A Convertible Preferred Stock held by such holder
as the percentage of outstanding shares of Common Stock offered to be purchased
in such Tender Offer at a price per share of Series A Convertible Preferred
Stock equal to the greater of (i) the
Premium Price in effect on the date of purchase pursuant to this Section 5(c)
and (ii) the Converted Market Price on the date of purchase pursuant to this
Section 5(c).
Section 6. Liquidation Preference. In the event of a liquidation,
dissolution, or winding up of the Corporation, whether voluntary or involuntary,
the holders of Series A Convertible Preferred Stock shall be entitled to receive
out of the assets of the Corporation, whether such assets constitute stated
capital or surplus of any nature, an amount per share of Series A Convertible
Preferred Stock equal to the Liquidation Preference, and no more, before any
payment shall be made or any assets distributed to the holders of Junior
Liquidation Stock; provided, however, that such rights shall accrue to the
holders of Series A Convertible Preferred Stock only in the event that the
Corporation's payments with respect to the liquidation preference of the holders
of Senior Liquidation Stock are fully met. After the liquidation preferences of
the Senior Liquidation Stock are fully met, the entire assets of the Corporation
available for distribution shall be distributed ratably among the holders of the
Series A Convertible Preferred Stock and any Parity Liquidation Stock in
proportion to the respective preferential amounts to which each is entitled (but
only to the extent of such preferential amounts). After payment in full of the
liquidation price of the shares of the Series A Convertible Preferred Stock and
the Parity Liquidation Stock, the holders of such shares shall not be entitled
to any further participation in any distribution of assets by the Corporation.
Neither a consolidation or merger of the Corporation with another corporation
nor a sale or transfer of all or part of the Corporation's assets for cash,
securities, or other property in and of itself will be considered a liquidation,
dissolution or winding up of the Corporation.
Section 7. Mandatory Redemption.
(a) Mandatory Redemption Based on Maximum Share Amount. (1)
Notwithstanding any other provision herein, unless the Stockholder Approval
shall have been obtained from the stockholders of the Corporation or waived by
the Nasdaq SmallCap or other securities market on which the Common Stock is then
listed, so long as the Common Stock is listed on the NYSE, the AMEX, the Nasdaq
or the Nasdaq SmallCap, the Corporation shall not be required to issue upon
conversion of shares of Series A Convertible Preferred Stock pursuant to Section
10 more than the Maximum Share Amount. The Maximum Share Amount shall be
allocated among the shares of Series A Convertible Preferred Stock at the time
of initial issuance thereof pro rata based on the initial issuance of 10,000
shares of Series A Convertible Preferred Stock. Each certificate for shares of
Series A Convertible Preferred Stock initially issued shall bear a notation as
to the number of shares constituting the portion of the Maximum Share Amount
allocated to the shares of Series A Convertible Preferred Stock represented by
such certificate for purposes of conversion thereof. Upon surrender of any
certificate for shares of Series A Convertible Preferred Stock for transfer or
re-registration thereof (or, at the option of the holder, for conversion
pursuant to Section 10(a) of less than all of the shares of Series A Convertible
Preferred Stock represented thereby), the Corporation shall make a notation on
the new certificate issued upon such transfer or re-registration or evidencing
such unconverted shares, as the case may be, as to the remaining number of
shares of Common Stock from the Maximum Share Amount remaining available for
conversion of the shares of Series A Convertible Preferred Stock evidenced by
such new certificate. If any certificate for shares of Series A Convertible
Preferred Stock is surrendered for split-up into two or more certificates
representing an aggregate number of shares of Series A Convertible Preferred
Stock equal to the number of shares of Series A Convertible Preferred Stock
represented by the certificate so surrendered (as reduced by any contemporaneous
conversion of shares of Series A Convertible Preferred Stock represented by the
certificate so surrendered), each certificate issued on such split-up shall bear
a notation of the portion of the Maximum Share Amount allocated thereto
determined by pro rata allocation from among the remaining portion of the
Maximum Share Amount allocated to the certificate so surrendered. If any shares
of Series A Convertible Preferred Stock represented by a single certificate are
converted in full pursuant to Section 10, all of the portion of the Maximum
Share Amount allocated to such shares of Series A Convertible Preferred Stock
which remains unissued after such conversion shall be re-allocated pro rata to
the outstanding shares of Series A Convertible Preferred Stock held of record
by the holder of record at the close of business on the date of such conversion
of the shares of Series A Convertible Preferred Stock so converted, and if there
shall be no other shares of Series A Convertible Preferred Stock held of record
by such holder at the close of business on such date, then such portion of the
Maximum Share Amount shall be allocated pro rata among the shares of Series A
Convertible Preferred Stock outstanding on such date.
(2) The Corporation shall promptly, but in no event later than three
Business Days after the occurrence, give notice to each holder of shares of
Series A Convertible Preferred Stock (by telephone line facsimile transmission
at such number as such holder has specified in writing to the Corporation for
such purposes or, if such holder shall not have specified any such number, by
overnight courier or first class mail, postage prepaid, at such holder's address
as the same appears on the stock books of the Corporation) and any holder of
shares of Series A Convertible Preferred Stock may at any time after the
occurrence give notice to the Corporation, in either case, if on any Reset Date
or on any ten Trading Days within any period of 20 consecutive Trading Days the
Corporation would not have been required to convert shares of Series A
Convertible Preferred Stock of such holder in accordance with Section 10(a) as a
consequence of the limitations set forth in Section 7(a)(1) had the shares of
Series A Convertible Preferred Stock held by such holder been converted in full
into Common Stock on such Reset Date or on each such day of such ten Trading
Days, as the case may be, determined without regard to the limitation, if any,
on such holder contained in the proviso to the second sentence of Section 10(a)
(any such notice, whether given by the Corporation or a holder, an
"Inconvertibility Notice"). If the Corporation shall have given or been required
to give any Inconvertibility Notice, or if a holder shall have given any
Inconvertibility Notice, then within ten Trading Days after such
Inconvertibility Notice is given or was required to be given, the holder
receiving or giving, as the case may be, such Inconvertibility Notice shall have
the right by written notice to the Corporation (which written notice may be
contained in the Inconvertibility Notice given by such holder) to direct the
Corporation to redeem the portion of such holder's outstanding shares of Series
A Convertible Preferred Stock (which, if applicable, shall be all of such
holder's outstanding shares of Series A Convertible Preferred Stock) as shall
not, on the Business Day prior to the date of such redemption, be convertible
into shares of Common Stock by reason of the limitations set forth in Section
7(a)(1) (determined without regard to the limitation, if any, on beneficial
ownership of Common Stock by such holder contained in the proviso to the second
sentence of Section 10(a)), within 15 Trading Days after such holder so directs
the Corporation, at a price per share equal to the Converted Market Price. If a
holder of shares of Series A Convertible Preferred Stock directs the Corporation
to redeem outstanding shares of Series A Convertible Preferred Stock and, prior
to the date the Corporation is required to redeem such shares of Series A
Convertible Preferred Stock, the Corporation would have been able, within the
limitations set forth in Section 7(a)(1), to convert all of such holder's shares
of Series A Convertible Preferred Stock (determined without regard to the
limitation, if any, on beneficial ownership of shares of Common Stock by such
holder contained in the proviso to the second sentence of Section 10(a)) on any
ten Trading Days within any period of 15 consecutive Trading Days commencing
after the Reset Date or after the period of 20 consecutive Trading Days, as the
case may be, which gave rise to the applicable Inconvertibility Notice from the
Corporation or such holder of shares of Series A Convertible Preferred Stock, as
the case may be, had all of such holder's shares of Series A Convertible
Preferred Stock been surrendered for conversion into Common Stock on each of
such ten Trading Days within such 15 Trading Day period, then the Corporation
shall not be required to redeem any shares of Series A Convertible Preferred
Stock by reason of such Inconvertibility Notice.
(3) Notwithstanding the giving of any Inconvertibility Notice by the
Corporation to the holders of Series A Convertible Preferred Stock pursuant to
Section 7(a)(2) or the giving or the absence of any notice by the holders of the
Series A Convertible Preferred Stock in response thereto or any redemption of
shares of Series A Convertible Preferred Stock pursuant to Section 7(a)(2),
thereafter the provisions of Section 7(a)(2) shall continue to be applicable on
any occasion unless the Stockholder Approval shall have been obtained from the
stockholders of the Corporation or waived by the Nasdaq SmallCap, or other
securities market on which the Common Stock is listed for trading.
(4) On each Share Limitation Redemption Date (or such later date as
a holder of shares of Series A Convertible Preferred Stock shall surrender to
the Corporation the certificate(s) for the shares of Series A Convertible
Preferred Stock being redeemed pursuant to this Section 7(a)), the Corporation
shall make payment in immediately available funds of the applicable Converted
Market Price per share to such holder of shares of Series A Convertible
Preferred Stock to be redeemed to or upon the order of such holder as specified
by such holder in writing to the Corporation at least one Business Day prior to
such Share Limitation Redemption Date. Upon redemption of less than all of the
shares of Series A Convertible Preferred Stock evidenced by a particular
certificate, promptly, but in no event later than three Business Days after
surrender of such certificate to the Corporation, the Corporation shall issue a
replacement certificate for the shares of Series A Convertible Preferred Stock
evidenced by such certificate which have not been redeemed. Only whole shares of
Series A Convertible Preferred Stock may be redeemed.
(5) (A) Notwithstanding any other provision of this Certificate of
Designations, if an Inconvertibility Day occurs by reason of events which are
not solely within the control of the Corporation, the Corporation shall have the
right to give a Control Notice to the holders of Series A Convertible Preferred
Stock at any time after such Inconvertibility Day occurs and prior to the
earlier of (1) the date on which all holders of shares of Series A Convertible
Preferred Stock who had the right (other than as limited by this Section
7(a)(5)) to require redemption of any shares of Series A Convertible Preferred
Stock by reason of the occurrence of such Inconvertibility Day no longer have
such right and (2) the applicable Share Limitation Redemption Date by reason of
the earliest notice given by any holder of shares of Series A Convertible
Preferred Stock directing the Corporation to redeem such shares in accordance
with Section 7(a)(2) by reason of such Inconvertibility Day. For purposes of
this Section 7(a)(5), an Inconvertibility Day shall be deemed to have occurred
by reason of events which are not solely within the control of the Corporation
if a requirement of the Corporation to redeem, or a right of any holder of
shares of Series A Convertible Preferred Stock to require redemption of, shares
of Series A Convertible Preferred Stock by reason thereof would result in the
Corporation being required to classify the Series A Convertible Preferred Stock
as redeemable preferred stock on a balance sheet of the Corporation prepared in
accordance with Generally Accepted Accounting Principles and Regulation S-X of
the SEC. If the Corporation timely gives a Control Notice to the holders of
shares of Series A Convertible Preferred Stock, then, in lieu of payment of the
Converted Market Price per share pursuant to a redemption notice given by any
holder of shares of Series A Convertible Preferred Stock in accordance with
Section 7(a)(2) by reason of such Inconvertibility Day and commencing on such
Inconvertibility Day, the Conversion Price for all outstanding shares of Series
A Convertible Preferred Stock will be 80% of the amount the Conversion Price
would otherwise be. Such adjustment of the Conversion Price shall continue in
effect until the earliest of (x) the date which is 90 days after the Stockholder
Approval shall have been obtained from the stockholders of the Corporation or
waived by the NYSE or other securities market on which the Common Stock is then
listed, (y) the date any further adjustments are made following a failure to
obtain the Stockholder Approval as provided below, and (z) the date when shares
of Series A Convertible Preferred Stock are no longer outstanding. On or after
the date the Corporation gives such Control Notice, upon notice from the
Majority Holders, the Corporation promptly shall call a special meeting of its
stockholders, to be held not later than 60 days after such notice is given, to
seek the Stockholder Approval and shall use its best efforts to obtain the
Stockholder Approval. The Corporation shall prepare and file with the SEC within
20 days after such notice is given preliminary proxy materials which set forth a
proposal to seek such Stockholder Approval. The Corporation shall provide the
Majority Holders an opportunity to consult with the Corporation regarding the
content of such proxy materials insofar as it relates to the Stockholder
Approval by providing copies of such preliminary proxy materials and any revised
preliminary proxy materials to the Majority Holders a reasonable period of time
prior to their filing with the SEC. The Corporation shall furnish to each holder
of shares of Series A Convertible Preferred Stock a copy of its definitive proxy
materials for such special meeting and any amendments or supplements thereto
promptly after the same are mailed to stockholders or filed with the SEC. Upon
the earlier of (i) the failure to obtain the Stockholder Approval at the special
meeting or (ii) the failure to hold the special meeting within such 60-day
period, the Corporation shall so notify the
holders of shares of Series A Convertible Preferred Stock and, if requested by
notice to the Corporation from the Majority Holders, commencing on the Business
Day following the Corporation's receipt of such notice, the Conversion Price of
the outstanding shares of Series A Convertible Preferred Stock will be 60% of
the amount the Conversion Price would otherwise be without regard to other
adjustments pursuant to this Section 7(a)(5) or Section 11(b)(4).
(B) If and for so long as an adjustment of the Conversion Price is
simultaneously required by this Section 7(a)(5) and by Section 11(b)(4), the
applicable Conversion Price shall be the lower of the two amounts required by
each such section.
(C) The rights of holders of shares of Series A Convertible
Preferred Stock to require redemption of their shares and exercise other rights
pursuant to Sections 7(a)(1) through 7(a)(4) by reason of an Inconvertibility
Day as to which the Corporation does not have a right to give a Control Notice,
or fails to exercise such right on a timely basis, shall not be limited by the
operation of this Section 7(a)(5).
(b) No Other Redemption at Holders' Option. The shares of Series A
Convertible Preferred Stock shall not be subject to redemption by the
Corporation at the option of the Holders except as provided in Section 7(a) and
Section 11.
Section 8. No Sinking Fund. The shares of Series A Convertible
Preferred Stock shall not be subject to the operation of a purchase, retirement
or sinking fund.
Section 9. Optional Redemption.
(a) Corporation Optional Redemption. If (1) the Corporation shall be
in compliance in all material respects with its obligations to the holders of
shares of Series A Convertible Preferred Stock (including, without limitation,
its obligations under the Subscription Agreements, the Registration Rights
Agreements, the Warrants and the provisions of this Certificate of
Designations), (2) on the date the Corporation Optional Redemption Notice is
given and at all times until the Redemption Date, the Registration Statement is
effective and available for use by each holder of shares of Series A Convertible
Preferred Stock for the resale of shares of Common Stock acquired by such holder
upon conversion of all shares of Series A Convertible Preferred Stock held by
such holder and (3) no Optional Redemption Event shall have occurred with
respect to which, on the date a Corporation Optional Redemption Notice is to be
given or on the Redemption Date, any holder of shares of Series A Convertible
Preferred Stock (A) shall be entitled to exercise optional redemption rights
under Section 11 by reason of such Optional Redemption Event or (B) shall have
exercised optional redemption rights under Section 11 by reason of such Optional
Redemption Event and the Corporation shall not have paid the Redemption Price to
such holder, then the Corporation shall have the right, exercisable by giving a
Corporation Optional Redemption Notice not less than 20 Trading Days or more
than 30 Trading Days prior to the Redemption Date to all holders of record of
the shares of Series A Convertible Preferred Stock, at any time to redeem all or
from time to time to redeem any part of the outstanding shares of Series A
Convertible Preferred Stock in accordance with this Section 9(a). If the
Corporation shall redeem less than all outstanding shares of Series A
Convertible Preferred Stock, such redemption shall be made as nearly as
practical pro rata from all holders of shares of Series A Convertible Preferred
Stock. Any Corporation Optional Redemption Notice under this Section 9(a) shall
be given to the holders of record of the shares of Series A Convertible
Preferred Stock at their addresses appearing on the records of the Corporation;
provided, however, that any failure or defect in the giving of such notice to
any such holder shall not affect the validity of notice to or the redemption of
shares of Series A Convertible Preferred Stock of any other holder. On the
Redemption Date (or such later date as a holder of shares of Series A
Convertible Preferred Stock surrenders to the Corporation the certificate(s) for
shares of Series A Convertible Preferred
Stock to be redeemed pursuant to this Section 9(a)), the Corporation shall make
payment of the applicable Redemption Price to each holder of shares of Series A
Convertible Preferred Stock to be redeemed in immediately available funds to
such account as specified by such holder in writing to the Corporation at least
one Business Day prior to the Redemption Date. A holder of shares of Series A
Convertible Preferred Stock to be redeemed pursuant to this Section 9(a) shall
be entitled to convert in accordance with Section 10 such shares of Series A
Convertible Preferred Stock (x) through the tenth day prior to the Redemption
Date and (y) if the Corporation shall fail to pay the Redemption Price of any
share of Series A Convertible Preferred Stock when due, at any time after the
due date thereof until such date as the Corporation pays the Redemption Price of
such share of Series A Convertible Preferred Stock. Subject to the limitation on
conversion in clause (x) of the immediately preceding sentence, no share of
Series A Convertible Preferred Stock as to which the holder exercises the right
of conversion pursuant to Section 10 or the optional redemption right pursuant
to Section 11 may be redeemed by the Corporation pursuant to this Section 9(a)
on or after the date of exercise of such conversion right or optional redemption
right, as the case may be, regardless of whether the Corporation Optional
Redemption Notice shall have been given prior to, on or after the date of
exercise of such conversion right or optional redemption right, as the case may
be.
(b) Final Redemption. The Corporation shall have the right to redeem
all or from time to time any part of the outstanding shares of Series A
Convertible Preferred Stock at any time on or after the date which is 1,096 days
after the Issuance Date so long as (1) the Corporation shall be in compliance in
all material respects with its obligations to the holders of the Series A
Convertible Preferred Stock (including, without limitation, its obligations
under the Subscription Agreements, the Registration Rights Agreements, the
Warrants and this Certificate of Designations) and (2) no Optional Redemption
Event shall have occurred with respect to which on the date a Final Redemption
Notice is to be given or on the Final Redemption Date, any holder of shares of
Series A Convertible Preferred Stock (a) shall be entitled to exercise optional
redemption rights under Section 11 by reason of such Optional Redemption Event
or (b) shall have exercised optional redemption rights under Section 11 by
reason of such Optional Redemption Event and the Corporation shall not have paid
the Redemption Price to such holder. In order to exercise its rights under this
Section 9(b), the Corporation shall give a Final Redemption Notice not less than
30 Trading Days or more than 50 Trading Days prior to the Final Redemption Date
to all holders of record of the shares of Series A Convertible Preferred Stock.
Any Final Redemption Notice shall be given to the holders of record of the
shares of Series A Convertible Preferred Stock by telephone line facsimile
transmission to such number as shown on the records of the Corporation for such
purpose; provided, however, that any failure or defect in the giving of such
notice to any such holder shall not affect the validity of notice to or the
redemption of shares of Series A Convertible Preferred Stock of any other
holder. On the Final Redemption Date (or such later date as a holder of shares
of Series A Convertible Preferred Stock surrenders to the Corporation the
certificate(s) for shares of Series A Convertible Preferred Stock to be redeemed
pursuant to this Section 9(b)), the Corporation shall make payment of the
applicable Final Redemption Price to each holder of shares of Series A
Convertible Preferred Stock to be redeemed in immediately available funds to
such account as specified by such holder in writing to the Corporation at least
one Business Day prior to the Final Redemption Date. A holder of shares of
Series A Convertible Preferred Stock to be redeemed pursuant to this Section
9(b) shall be entitled to convert in accordance with Section 10 such shares of
Series A Convertible Preferred Stock (x) through the day prior to the Final
Redemption Date and (y) if the Corporation shall fail to pay the Final
Redemption Price of any share of Series A Convertible Preferred Stock when due,
at any time after the due date thereof until such date as the Corporation pays
the Final Redemption Price of such share of Series A Convertible Preferred Stock
to such holder. No share of Series A Convertible Preferred Stock as to which a
holder exercises the right of conversion pursuant to Section 10 or the optional
redemption right pursuant to Section 11 may be redeemed by the Corporation
pursuant to this Section 9(b) on or after the date of exercise of such
conversion right or optional redemption right, as the case may be, regardless of
whether the Final Redemption Notice shall have been given prior to, on or after
the date of exercise of such conversion right or optional redemption right, as
the case may be.
(c) No Other Optional Redemption. The shares of Series A Convertible
Preferred Stock shall not be subject to redemption at the option of the
Corporation except as provided in Sections 9(a) and 9(b).
Section 10. Conversion.
(a) Conversion at Option of Holder. The holders of the Series A
Convertible Preferred Stock may at any time on or after the Issuance Date
convert at any time all or from time to time any part of their shares of Series
A Convertible Preferred Stock into fully paid and nonassessable shares of Common
Stock and such other securities and property as herein provided. Each share of
Series A Convertible Preferred Stock may be converted at the office of the
Conversion Agent or at such other additional office or offices, if any, as the
Board of Directors may designate, into such number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) determined by dividing (x) the sum of (i) the
Conversion Amount and (ii) an amount equal to the Accrual Amount on the share of
Series A Convertible Preferred Stock being converted to the applicable
Conversion Date by (y) the Conversion Price for such Conversion Date (the
"Conversion Rate"); provided, however, that in no event shall any holder of
shares of Series A Convertible Preferred Stock be entitled to convert any shares
of Series A Convertible Preferred Stock in excess of that number of shares of
Series A Convertible Preferred Stock upon conversion of which the sum of (1) the
number of shares of Common Stock beneficially owned by such holder and all
Aggregated Persons of such holder (other than shares of Common Stock deemed
beneficially owned through the ownership of (x) unconverted shares of Series A
Convertible Preferred Stock and (y) the unconverted or unexercised portion of
any instrument, including, without limitation, the Warrants, which contains
limitations similar to those set forth in this sentence) and (2) the number of
shares of Common Stock issuable upon the conversion of the number of shares of
Series A Convertible Preferred Stock with respect to which the determination in
this proviso is being made, would result in beneficial ownership by such holder
and all Aggregated Persons of such holder of more than 4.9% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13D-G thereunder, except as otherwise
provided in clause (1) of the proviso to the immediately preceding sentence.
(b) Other Provisions. (1) Notwithstanding anything in this Section
10(b) to the contrary, no change in the Conversion Amount pursuant to this
Section 10(b) shall actually be made until the cumulative effect of the
adjustments called for by this Section 10(b) since the date of the last change
in the Conversion Amount would change the Conversion Amount by more than 1%.
However, once the cumulative effect would result in such a change, then the
Conversion Amount shall actually be changed to reflect all adjustments called
for by this Section 10(b) and not previously made.
(2) Notwithstanding anything in this Section 10(b), no change in the
Conversion Amount shall be made that would result in the price at which a share
of Series A Convertible Preferred Stock is converted being less than the par
value of the Common Stock into which shares of Series A Convertible Preferred
Stock are at the time convertible.
(3) (A) The right of the holders of Series A Convertible Preferred
Stock to convert their shares shall be exercised by giving (which may be done by
telephone line facsimile transmission) a Conversion Notice to the Conversion
Agent, with a copy to the Corporation. If a holder of Series A Convertible
Preferred Stock elects to convert any shares of Series A Convertible Preferred
Stock in accordance with Section 10(a), such holder shall not be required to
surrender the certificate(s) representing such shares of Series A Convertible
Preferred Stock to the Corporation unless all of the shares of Series A
Convertible Preferred Stock represented thereby are so converted. Subject to the
provisions of clause (B) of this Section 10(b)(3), each holder of shares of
Series A Convertible Preferred Stock and the Corporation shall maintain records
showing the number of shares so converted
and the dates of such conversions or shall use such other method, satisfactory
to such holder and the Corporation, so as to not require physical surrender of
such certificates upon each such conversion. In the event of any dispute or
discrepancy, such records of the Corporation shall be controlling and
determinative in the absence of manifest error. Notwithstanding the foregoing,
if any shares of Series A Convertible Preferred Stock evidenced by a particular
certificate therefor are converted as aforesaid, the holder of Series A
Convertible Preferred Stock may not transfer the certificate(s) representing
such shares of Series A Convertible Preferred Stock unless such holder first
physically surrenders such certificate(s) to the Corporation, whereupon the
Corporation will forthwith issue and deliver upon the order of such holder of
shares of Series A Convertible Preferred Stock new certificate(s) of like tenor,
registered as such holder of shares of Series A Convertible Preferred Stock
(upon payment by such holder of shares of Series A Convertible Preferred Stock
of any applicable transfer taxes) may request, representing in the aggregate the
remaining number of shares of Series A Convertible Preferred Stock represented
by such certificate(s). Each holder of shares of Series A Convertible Preferred
Stock, by acceptance of a certificate for such shares, acknowledges and agrees
that (1) by reason of the provisions of this paragraph, following conversion of
any shares of Series A Convertible Preferred Stock represented by such
certificate, the number of shares of Series A Convertible Preferred Stock
represented by such certificate may be less than the number of shares stated on
such certificate, and (2) the Corporation may place a legend on the certificates
for shares of Series A Convertible Preferred Stock which refers to or describes
the provisions of this paragraph.
(B) Within five Business Days after the end of each calendar month
in which one or more Conversion Notices are given by a holder, such holder shall
physically surrender to the Corporation the applicable certificate(s)
representing such shares of Series A Convertible Preferred Stock so converted
during such calendar month. Within three Business Days after receiving such
certificate(s), the Corporation will issue and deliver upon the order of such
holder of shares of Series A Convertible Preferred Stock, new certificate(s) of
like tenor, registered as such holder of shares of Series A Convertible
Preferred Stock may request, representing in the aggregate the number of shares
of Series A Convertible Preferred Stock remaining as of the close of business on
the last day of such calendar month.
(C) The Corporation shall pay any transfer tax arising in connection
with any conversion of shares of Series A Convertible Preferred Stock except
that the Corporation shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery upon
conversion of shares of Common Stock or other securities or property in a name
other than that of the holder of the shares of the Series A Convertible
Preferred Stock being converted, and the Corporation shall not be required to
issue or deliver any such shares or other securities or property unless and
until the person or persons requesting the issuance thereof shall have paid to
the Corporation the amount of any such tax or shall have established to the
satisfaction of the Corporation that such tax has been paid. The number of
shares of Common Stock to be issued upon each conversion of shares of Series A
Convertible Preferred Stock shall be the number set forth in the applicable
Conversion Notice which number shall be conclusive absent manifest error. The
Corporation shall notify a holder who has given a Conversion Notice of any claim
of manifest error within two Trading Days after such holder gives such
Conversion Notice and no such claim of error shall limit or delay performance of
the Corporation's obligation to issue upon such conversion the number of shares
of Common Stock which are not in dispute. A Conversion Notice shall be deemed
for all purposes to be in proper form unless the Corporation notifies a holder
of shares of Series A Convertible Preferred Stock being converted within two
Trading Days after a Conversion Notice has been given (which notice shall
specify all defects in the Conversion Notice) and any Conversion Notice
containing any such defect shall nonetheless be effective on the date given if
the converting holder promptly corrects all such defects.
(4) The Corporation (and any successor corporation) shall take all
action necessary so that a number of shares of the authorized but unissued
Common Stock (or common stock in the case of any successor corporation)
sufficient to provide for the conversion of the Series A Convertible Preferred
Stock outstanding upon the basis hereinbefore provided are at all times reserved
by the
Corporation (or any successor corporation), free from preemptive rights, for
such conversion, subject to the provisions of the next succeeding paragraph. If
the Corporation shall issue any securities or make any change in its capital
structure which would change the number of shares of Common Stock into which
each share of the Series A Convertible Preferred Stock shall be convertible as
herein provided, the Corporation shall at the same time also make proper
provision so that thereafter there shall be a sufficient number of shares of
Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Series A Convertible Preferred Stock on the new
basis. If at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of all of the outstanding
shares of Series A Convertible Preferred Stock, the Corporation promptly shall
seek, and use its best efforts to obtain and complete, such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose.
(5) In case of any consolidation or merger of the Corporation with
any other corporation (other than a wholly-owned subsidiary of the Corporation)
in which the Corporation is not the surviving corporation, or in case of any
sale or transfer of all or substantially all of the assets of the Corporation,
or in the case of any share exchange pursuant to which all of the outstanding
shares of Common Stock are converted into other securities or property, the
Corporation shall make appropriate provision or cause appropriate provision to
be made so that each holder of shares of Series A Convertible Preferred Stock
then outstanding shall have the right thereafter to convert such shares of
Series A Convertible Preferred Stock into the kind of shares of stock and other
securities and property receivable upon such consolidation, merger, sale,
transfer, or share exchange by a holder of shares of Common Stock into which
such shares of Series A Convertible Preferred Stock could have been converted
immediately prior to the effective date of such consolidation, merger, sale,
transfer, or share exchange and on a basis which preserves the economic benefits
of the conversion rights of the holders of shares of Series A Convertible
Preferred Stock on a basis as nearly as practical as such rights exist hereunder
prior thereto. If, in connection with any such consolidation, merger, sale,
transfer, or share exchange, each holder of shares of Common Stock is entitled
to elect to receive securities, cash, or other assets upon completion of such
transaction, the Corporation shall provide or cause to be provided to each
holder of Series A Convertible Preferred Stock the right to elect the
securities, cash, or other assets into which the Series A Convertible Preferred
Stock held by such holder shall be convertible after completion of any such
transaction on the same terms and subject to the same conditions applicable to
holders of the Common Stock (including, without limitation, notice of the right
to elect, limitations on the period in which such election shall be made, and
the effect of failing to exercise the election). The Corporation shall not
effect any such transaction unless the provisions of this paragraph have been
complied with. The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share exchanges.
(6) If a holder shall have given a Conversion Notice for shares of
Series A Convertible Preferred Stock, the Corporation shall issue and deliver to
such person certificates for the Common Stock issuable upon such conversion
within three Trading Days after such Conversion Notice is given and the person
converting shall be deemed to be the holder of record of the Common Stock
issuable upon such conversion, and all rights with respect to the shares
surrendered shall forthwith terminate except the right to receive the Common
Stock or other securities, cash, or other assets as herein provided. If a holder
shall have given a Conversion Notice as provided herein, the Corporation's
obligation to issue and deliver the certificates for Common Stock shall be
absolute and unconditional, irrespective of any action or inaction by the
converting holder to enforce the same, any waiver or consent with respect to any
provision thereof, the recovery of any judgment against any person or any action
to enforce the same, any failure or delay in the enforcement of any other
obligation of the Corporation to such holder, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by such
holder or any other person of any obligation to the Corporation or any violation
or alleged violation of law by such holder or any other person, and irrespective
of any other circumstance which might otherwise limit such obligation of the
Corporation to the holder in connection with such conversion. If the Corporation
fails to issue and deliver the certificates for the Common Stock to the holder
converting
shares of Series A Convertible Preferred Stock pursuant to the first sentence of
this paragraph within three Trading Days after such Conversion Notice is given,
in addition to any other liabilities the Corporation may have hereunder and
under applicable law (1) the Corporation shall pay or reimburse such holder on
demand for all out-of-pocket expenses including, without limitation, reasonable
fees and expenses of legal counsel incurred by such holder as a result of such
failure, (2) for each Trading Day thereafter on which the Corporation so fails
to deliver such certificates, the Conversion Price applicable to such conversion
shall be reduced by an amount equal to one percent of the amount that the
Conversion Price would otherwise be, and (3) such holder may by written notice
(which may be given by mail, courier, personal service or telephone line
facsimile transmission) or oral notice (promptly confirmed in writing) given at
any time prior to delivery to such holder of the certificates for the shares of
Common Stock issuable upon such conversion of shares of Series A Convertible
Preferred Stock, rescind such conversion, whereupon such holder shall have the
right to convert such shares of Series A Convertible Preferred Stock thereafter
in accordance herewith.
(7) No fractional shares of Common Stock shall be issued upon
conversion of Series A Convertible Preferred Stock but, in lieu of any fraction
of a share of Common Stock which would otherwise be issuable in respect of the
aggregate number of such shares surrendered for conversion at one time by the
same holder, the Corporation shall pay in cash an amount equal to the product of
(i) the arithmetic average of the Closing Bid Price of one share of Common Stock
on the three consecutive Trading Days ending on the Trading Day immediately
preceding the Conversion Date times (ii) such fraction of a share.
(8) The Conversion Amount shall be adjusted from time to time under
certain circumstances, subject to the provisions of Section 10(b)(1), as
follows:
(i) In case the Corporation shall issue rights or warrants on a pro
rata basis to all holders of the Common Stock entitling such holders to
subscribe for or purchase Common Stock on the record date referred to below at a
price per share less than the Current Price for such record date, then in each
such case the Conversion Amount in effect on such record date shall be adjusted
in accordance with the following formula:
C1 = C x O + N
-----
O + N x P
-----
M
where
C1 = the adjusted Conversion Amount
C = the current Conversion Amount
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock issuable pursuant
to the exercise of such rights or warrants.
P = the offering price per share of the additional shares (which
amount shall include amounts received by the Corporation in
respect of the issuance and the exercise of such rights or
warrants).
M = the Current Price per share of Common Stock on the record date.
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants. If
any or all such rights or warrants are not so issued or expire or terminate
before being exercised, the Conversion Amount then in effect shall be readjusted
appropriately.
(ii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Junior Stock (as hereinafter defined) evidences
of its indebtedness or assets (including securities, but excluding any warrants
or subscription rights referred to in subparagraph (i) above and any dividend or
distribution paid in cash out of the retained earnings of the Corporation), then
in each such case the Conversion Amount then in effect shall be adjusted in
accordance with the formula
C1 = C x M
-------
M - F
where
C1 = the adjusted Conversion Amount
C = the current Conversion Amount
M = the Current Price per share of Common Stock on the record date
mentioned below.
F = the aggregate amount of such cash dividend and/or the fair market
value on the record date of the assets or securities to be
distributed divided by the number of shares of Common Stock
outstanding on the record date. The Board of Directors shall
determine such fair market value, which determination shall be
conclusive.
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
For purposes of this subparagraph (ii), "Junior Stock" shall include any class
of capital stock ranking junior as to dividends or upon liquidation to the
Series A Convertible Preferred Stock.
(iii) All calculations hereunder shall be made to the nearest cent
or to the nearest 1/100 of a share, as the case may be.
(iv) If at any time as a result of an adjustment made pursuant to
Section 10(b)(5), the holder of any shares of Series A Convertible Preferred
Stock thereafter surrendered for conversion shall become entitled to receive
securities, cash, or assets other than Common Stock, the number or amount of
such securities or property so receivable upon conversion shall be subject to
adjustment from time to time in a manner and on terms nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
subparagraphs (i) to (iii) above.
(9) Except as otherwise provided above in this Section 10, no
adjustment in the Conversion Amount shall be made in respect of any conversion
for share distributions or dividends theretofore declared and paid or payable on
the Common Stock.
(10) Whenever the Conversion Amount is adjusted as herein provided,
the Corporation shall send to each holder and each transfer agent, if any, for
the Series A Convertible Preferred Stock and the transfer agent for the Common
Stock, a statement signed by the Chairman of the Board, the President, or any
Vice President of the Corporation and by its Treasurer or its Secretary or an
Assistant Secretary stating the adjusted Conversion Amount determined as
provided in this Section 10, and any adjustment so evidenced, given in good
faith, shall be binding upon all stockholders and upon the
Corporation. Whenever the Conversion Amount is adjusted, the Corporation will
give notice by mail to the holders of record of Series A Convertible Preferred
Stock, which notice shall be made within 15 days after the effective date of
such adjustment and shall state the adjustment and the Conversion Amount.
Notwithstanding the foregoing notice provisions, failure by the Corporation to
give such notice or a defect in such notice shall not affect the binding nature
of such corporate action of the Corporation.
(11) Whenever the Corporation shall propose to take any of the
actions specified in Section 10(b)(5) or in subparagraphs (i) or (ii) of Section
10(b)(8) which would result in any adjustment in the Conversion Amount under
this Section 10(b), the Corporation shall cause a notice to be mailed at least
ten days prior to the date on which the books of the Corporation will close or
on which a record will be taken for such action, to the holders of record of the
outstanding Series A Convertible Preferred Stock on the date of such notice.
Such notice shall specify the action proposed to be taken by the Corporation and
the date as of which holders of record of the Common Stock shall participate in
any such actions or be entitled to exchange their Common Stock for securities or
other property, as the case may be. Failure by the Corporation to mail the
notice or any defect in such notice shall not affect the validity of the
transaction.
(c) Notice to Holder Prior to Certain Actions. In case on or after
the Issuance Date:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out of retained
earnings); or
(ii) the Corporation shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any
share of any class or any other rights or warrants; or
(iii) the Board of Directors shall authorize any reclassification of
the Common Stock (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from par value to
no par value, or from no par value to par value), or any consolidation or
merger or other business combination transaction to which the Corporation
is a party and for which approval of any stockholders of the Corporation
is required, or the sale or transfer of all or substantially all of the
assets of the Corporation; or
(iv) there shall be pending the voluntary or involuntary
dissolution, liquidation or winding-up of the Corporation;
the Corporation shall give the Holders as promptly as possible but in any event
at least ten Trading Days 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, distribution or 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 or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, other business
combination transaction, sale, transfer, dissolution, liquidation or winding-up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record who shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, other business combination
transaction, sale, transfer, dissolution, liquidation or winding-up shall be
determined. Such notice shall not include any information which would be
material non-public information for purposes of the 1934 Act. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. In the case of
any such action of which the Corporation gives such notice to the Holders or is
required to give such notice to the Holders, the Holders shall be entitled to
give a Conversion Notice which is contingent on the completion of such action.
Section 11. Redemption at Option of Holders.
(a) Redemption Right. If an Optional Redemption Event occurs, then,
in addition to any other right or remedy of any holder of shares of Series A
Convertible Preferred Stock, each holder of shares of Series A Convertible
Preferred Stock shall have the right, at such holder's option, to require the
Corporation to redeem all of such holder's shares of Series A Convertible
Preferred Stock, or any portion thereof, on the date which is three Business
Days after the date such holder gives the Corporation an Optional Redemption
Notice with respect to such Optional Redemption Event at any time while any of
such holder's shares of Series A Convertible Preferred Stock are outstanding, at
a price equal to the Redemption Price.
(b) Notices; Method of Exercising Optional Redemption Rights, Etc.
(1) On or before the fifth Business Day after the occurrence of an Optional
Redemption Event, the Corporation shall give to each holder of outstanding
shares of Series A Convertible Preferred Stock a notice of the occurrence of
such Optional Redemption Event and of the redemption right set forth herein
arising as a result thereof. Such notice from the Corporation shall set forth:
(i) the date by which the optional redemption right must be
exercised, and
(ii) a description of the procedure (set forth below) which each
such holder must follow to exercise such holder's optional redemption
right.
No failure of the Corporation to give such notice or defect therein shall limit
the right of any holder of shares of Series A Convertible Preferred Stock to
exercise the optional redemption right or affect the validity of the proceedings
for the redemption of such holder's shares of Series A Convertible Preferred
Stock.
(2) To exercise its optional redemption right, each holder of
outstanding shares of Series A Convertible Preferred Stock shall deliver to the
Corporation on or before the 30th day after the notice required by Section
11(b)(1) is given to such holder (or if no such notice has been given by the
Corporation to such holder, within 40 days after such holder first learns of
such Optional Redemption Event) an Optional Redemption Notice to the
Corporation. An Optional Redemption Notice may be revoked by such holder giving
such Optional Redemption Notice by giving notice of such revocation to the
Corporation at any time prior to the time the Corporation pays the Redemption
Price to such holder.
(3) If a holder of shares of Series A Convertible Preferred Stock
shall have given an Optional Redemption Notice, on the date which is three
Business Days after the date such Optional Redemption Notice is given (or such
later date as such holder surrenders such holder's certificates for the shares
of Series A Convertible Preferred Stock to be redeemed) the Corporation shall
make payment in immediately available funds of the applicable Redemption Price
to such account as specified by such holder in writing to the Corporation at
least one Business Day prior to the applicable redemption date.
(4) Notwithstanding any other provision of this Certificate of
Designations, if an Optional Redemption Event occurs by reason of events which
are not solely within the control of the Corporation, the Corporation shall have
the right to give a Control Notice to the holders of shares of Series A
Convertible Preferred
Stock at any time after such Optional Redemption Event occurs and prior to the
earlier of (1) the date on which all holders of shares of Series A Convertible
Preferred Stock who had the right (other than as limited by this Section
11(b)(4)) to require redemption of any shares of Series A Convertible Preferred
Stock by reason of the occurrence of such Optional Redemption Event no longer
have such right and (2) the applicable Redemption Date by reason of the earliest
Optional Redemption Notice given by any holder of shares of Series A Convertible
Preferred Stock by reason of such Optional Redemption Event. If the Corporation
timely gives such Control Notice to the holders of shares of Series A
Convertible Preferred Stock, then in lieu of payment of the Redemption Price by
reason of any such Optional Redemption Event and commencing on the first date on
which such Optional Redemption Event occurs the following adjustments shall take
effect (subject to the provisions of Section 7(a)(5)(B)):
(A) In the case of an Optional Redemption Event described in clauses
(1), (2), (3), (4) or (6) of the definition of the term Optional
Redemption Event, for so long as such Optional Redemption Event continues
and for a period of 60 days thereafter the Conversion Price will be 70% of
the amount which the Conversion Price would otherwise be; and
(B) In the case of an Optional Redemption Event described in clause
(5) of the definition of the term Optional Redemption Event, for so long
as any shares of Series A Convertible Preferred Stock are outstanding the
Conversion Price will be 70% of the amount which the Conversion Price
would otherwise be.
For purposes of this Section 11(b)(4), an Optional Redemption Event shall be
deemed to have occurred by reason of events which are not solely within the
control of the Corporation if a requirement of the Corporation to redeem, or a
right of any holder of shares of Series A Convertible Preferred Stock to require
redemption of, shares of Series A Convertible Preferred Stock by reason thereof
would result in the Corporation being required to classify the Series A
Convertible Preferred Stock as redeemable preferred stock on a balance sheet of
the Corporation prepared in accordance with Generally Accepted Accounting
Principles and Regulation S-X of the SEC, and, in the case of an Optional
Redemption Event described in clause (5) of the definition of the term Optional
Redemption Event, the Board or the stockholders of the Corporation do not have
the right to approve or disapprove the transactions resulting in such event.
(c) Other. (1) In connection with a redemption pursuant to this
Section 11 of less than all of the shares of Series A Convertible Preferred
Stock evidenced by a particular certificate, promptly, but in no event later
than three Business Days after surrender of such certificate to the Corporation,
the Corporation shall issue and deliver to such holder a replacement certificate
for the shares of Series A Convertible Preferred Stock evidenced by such
certificate which have not been redeemed.
(2) An Optional Redemption Notice given by a holder of shares of
Series A Convertible Preferred Stock shall be deemed for all purposes to be in
proper form unless the Corporation notifies such holder in writing within three
Business Days after such Optional Redemption Notice has been given (which notice
shall specify all defects in such Optional Redemption Notice), and any Optional
Redemption Notice containing any such defect shall nonetheless be effective on
the date given if such holder promptly undertakes to correct all such defects.
No such claim of error shall limit or delay performance of the Corporation's
obligation to redeem all shares of Series A Convertible Preferred Stock not in
dispute whether or not such holder makes such undertaking.
Section 12. Voting Rights; Certain Restrictions.
(a) Voting Rights. Except as otherwise required by law or expressly
provided herein, shares of Series A Convertible Preferred Stock shall not be
entitled to vote on any matter.
(b) Certificate of Incorporation; Certain Stock. The affirmative
vote or consent of the Majority Holders, voting separately as a class, will be
required for (1) any amendment, alteration, or repeal, whether by merger or
consolidation or otherwise, of the Corporation's Certificate of Incorporation if
the amendment, alteration, or repeal materially and adversely affects the
powers, preferences, or special rights of the Series A Convertible Preferred
Stock, or (2) the creation and issuance of any Senior Dividend Stock, Senior
Liquidation Stock, Parity Dividend Stock or Parity Liquidation Stock; provided,
however, that (i) any increase in the authorized Preferred Stock of the
Corporation, (ii) an increase in the authorized Common Stock of the Corporation
in connection with the Merger or (iii) the creation and issuance of any stock
which is both Junior Dividend Stock and Junior Liquidation Stock shall not be
deemed to affect materially and adversely such powers, preferences, or special
rights and any such increase or creation and issuance may be made without any
such vote by the holders of Series A Convertible Preferred Stock except as
otherwise required by law.
Section 13. Outstanding Shares. For purposes of this Certificate of
Designations, all authorized and issued shares of Series A Convertible Preferred
Stock shall be deemed outstanding except (i) from the applicable Conversion
Date, each share of Series A Convertible Preferred Stock converted into Common
Stock, unless the Corporation shall default in its obligation to issue and
deliver shares of Common Stock upon such conversion as and when required by
Section 10; (ii) from the date of registration of transfer, all shares of Series
A Convertible Preferred Stock held of record by the Corporation or any
subsidiary or Affiliate of the Corporation (other than any original holder of
shares of Series A Convertible Preferred Stock) and (iii) from the applicable
Redemption Date, Share Limitation Redemption Date, Final Redemption Date or date
of redemption pursuant to Section 11, all shares of Series A Convertible
Preferred Stock which are redeemed or repurchased, so long as in each case the
Redemption Price, the Final Redemption Price or other repurchase price, as the
case may be, of such shares of Series A Convertible Preferred Stock shall have
been paid by the Corporation as and when due hereunder.
Section 14. Miscellaneous.
(a) Notices. Any notices required or permitted to be given under the
terms of this Certificate of Designations shall be in writing and shall be
delivered personally (which shall include telephone line facsimile transmission)
or by courier and shall be deemed given upon receipt, if delivered personally or
by courier (a) in the case of the Corporation, addressed to the Corporation at
11 St. James's Square, London SW1Y 4LB, England, Attention: Chief Executive
Officer (telephone line facsimile transmission number 011-44-171-839-5727, or
(b) in the case of any holder of shares of Series A Convertible Preferred Stock,
at such holder's address or telephone line facsimile transmission number shown
on the stock books maintained by the Corporation with respect to the Series A
Convertible Preferred Stock or such other address as the Corporation shall have
provided by notice to the holders of shares of Series A Convertible Preferred
Stock in accordance with this Section or any holder of shares of Series A
Convertible Preferred Stock shall have provided to the Corporation in accordance
with this Section.
(b) Replacement of Certificates. Upon receipt by the Corporation of
evidence reasonably satisfactory to the Corporation of the ownership of and the
loss, theft, destruction or mutilation of any certificate for shares of Series A
Convertible Preferred Stock and (1) in the case of loss, theft or destruction,
of indemnity from the record holder of the certificate for such shares of Series
A Convertible Preferred Stock reasonably satisfactory in form to the Corporation
(and without the requirement to post any bond or other security) or (2) in the
case of mutilation, upon surrender and cancellation of the certificate for such
shares of Series A Convertible Preferred Stock, the Corporation will execute and
deliver to such holder a new certificate for such shares of Series A Convertible
Preferred Stock without charge to such holder.
(c) Overdue Amounts. Except as otherwise specifically provided in
Section 5 with respect to dividends in arrears on the Series A Convertible
Preferred Stock, whenever any amount which is due to any holder of shares of
Series A Convertible Preferred Stock is not paid to such holder
when due, such amount shall bear interest at the rate of 14% per annum (or such
other rate as shall be the maximum rate allowable by applicable law) until paid
in full.
IN WITNESS WHEREOF, Transmedia Asia Pacific, Inc. has caused this Certificate of
Designations to be signed by James J. Fyfe, its Vice President and Assistant
Secretary, as of the 27th day of March, 2000.
TRANSMEDIA ASIA PACIFIC, INC.
By: /s/ James J. Fyfe
-------------------------------------
Title: Vice President and Assistant
Secretary