STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 01/22/2001
010033559 - 2202214
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF DESIGNATION
OF MICROTEL INTERNATIONAL INC.,
A DELAWARE CORPORATION
The undersigned, Carmine T. Oliva, hereby certifies that:
A. He is the duly elected and acting President of MicroTel
International, Inc., a Delaware corporation (the "CORPORATION").
B. Pursuant to authority given by the Corporation's Certificate of
Incorporation, the Board of Directors of the Corporation has duly adopted the
following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of the Corporation provides
for two classes of shares known as Common Stock and Preferred Stock;
WHEREAS, the Board of Directors of the Corporation is authorized by the
Certificate of Incorporation to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof;
WHEREAS, the Corporation filed with the Delaware Secretary of State on
May 20, 1998, a Certificate of Designations, Preferences and Rights of Preferred
Stock (the "Certificate of Designations");
WHEREAS, pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation and Section 242 of the Delaware
General Corporation Law, said Board of Directors, by action taken without a
meeting by written consent on November 14, 2000, duly adopted a resolution
providing for the amendment of the Certificate of Designations, in its entirety,
to read as set forth herein; and
WHEREAS, pursuant to Sections 228(a) and 242 of the Delaware General
Corporation Law, approval of the stockholders holding a majority of the Common
Stock and a majority of the Series A Preferred Stock was duly obtained at a
Special Meeting of Stockholders of the Corporation held on January 16, 2001.
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NOW, THEREFORE, BE IT RESOLVED, that the Certificate of Designations is
amended to read in full as follows:
A. DESIGNATION. One series of Preferred Stock, designated Series A
Preferred Stock, is hereby provided for, which shares shall have the rights,
privileges and preferences set forth below.
B. AUTHORIZED NUMBER. The number of shares constituting the Series A
Preferred Stock shall be 200, par value .01 per share.
C. DIVIDEND PROVISIONS. The holders of shares of Series A Preferred
Stock shall not be entitled to receive dividends.
D. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary, the holders of shares of
Series A Preferred Stock shall be entitled to receive, prior and in preference
to any distribution of any of the assets of this Corporation to the holders of
the Common Stock by reason of their ownership, an amount per share equal to
$10,000 (the "STATED VALUE") for each outstanding share of Series A Preferred
Stock. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Series A Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amounts, then the entire assets and funds of the Corporation
legally available for distribution shall be distributed ratably among the
holders of the Series A Preferred Stock on a share-by-share basis in proportion
to the aggregate preferential amounts of each such series of Preferred Stock.
(b) A consolidation or merger of the Corporation with or into
any other corporation or corporations, or a sale, conveyance or disposition of
all or substantially all of the assets of this Corporation or the effectuation
by the Corporation of a transaction or series of related transactions in which
more than 50% of the voting power of the Corporation is disposed of, shall not
be deemed to be a liquidation, dissolution or winding up within the meaning of
this SECTION D but shall instead be treated pursuant to SECTION E hereto.
E. CONVERSION. The holders of the Series A Preferred Shares shall have
conversion rights as follows (the "CONVERSION RIGHTS"):
(1) CONVERSION RIGHTS.
(i) Each Series A Preferred Share shall be
convertible, at the option of the holders of such shares, at
any time, at the office of the Corporation or any transfer
agent for the Series A Preferred Shares, into 50,530 fully
paid and non-assessable Common Shares of the Corporation.
(ii) In the event of a call for redemption of any
Series A Preferred Shares pursuant to SECTION F hereof, each
holder of any Series A Preferred Shares shall have the right
to exercise the conversion rights set forth in this SECTION E
and the right to convert each share shall cease as to the
shares designated for redemption as of the close of business
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on the business day immediately prior to the Redemption Date,
unless default is made in payment of the redemption price. if
the Corporation has received a notice of conversion with
respect to any Series A Preferred Shares the Corporation may
not redeem such Series A Preferred Shares provided the Series
A Preferred Shares are delivered for conversion as set forth
in SECTION E(2).
(2) MECHANICS OF CONVERSION.
(i) No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Shares. In
lieu of any fractional share to which the holder would
otherwise be entitled, the Corporation shall round up to the
nearest whole share. In the case of a dispute as to the
calculation of the Conversion Rate, the Corporation's
calculation shall be deemed conclusive absent manifest error.
In order to convert Series A Preferred Shares into full shares
of Common Stock, the holder shall surrender the certificate or
certificates therefor, duly endorsed, by either overnight
courier or 2-day courier, to the office of the Corporation for
the Series A Preferred Shares, and shall give written notice
to the Corporation at such office that the holder elects to
convert the same, the number of shares of Series A Preferred
Shares so converted and a calculation of the Conversion Rate
(with an advance copy of the certificates) and the notice by
facsimile); provided, however, that the Corporation shall not
be obligated to deliver certificates evidencing the shares of
Common Stock issuable upon such conversion unless certificates
evidencing such Series A Preferred Shares are delivered to the
Corporation as provided above, or the holder notifies the
Corporation that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates.
(ii) The Corporation shall use reasonable efforts to
cause to be issued and delivered within two (2) business days
after delivery to the Corporation of such Series A Preferred
Shares, or after such agreement and indemnification, to such
holder of Series A Preferred Shares at the address of the
holder on the stock books of the Corporation, a certificate or
certificates for the number of shares of Common Stock to which
he shall be entitled as aforesaid. The date on which notice of
conversion is given (the "DATE OF CONVERSION") shall be deemed
to be the date set forth in such notice of conversion provided
the original Series A Preferred Shares to be converted are
received by the Corporation within five (5) business days
thereafter and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of
such shares of Common Stock on such date. If the original
Series A Preferred Shares to be converted are not received by
the Corporation within five (5) business days after the
Conversion, the notice of conversion shall become null and
void.
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(3) CONVERSION PRICE ADJUSTMENTS. The number of Common Shares
issuable upon conversion as set forth in SECTION E(1)(i) shall be
appropriately adjusted to reflect, as deemed equitable and appropriate
by the Corporation, any stock dividend, stock split or share
combination of the Common Stock. In the event of a merger,
reorganization, recapitalization or similar event of or with respect to
the Corporation (a "CORPORATE CHANGE") (other than a Corporate Change
in which all or substantially all of the consideration received by the
holders of the Corporation's equity securities upon such Corporate
Change consists of cash or assets other than securities issued by the
acquiring entity or any affiliate thereof), the Series A Preferred
Shares shall be convertible into such class and type of securities as
the Holder would have received had the Holder converted the Series A
Preferred Shares immediately prior to such Corporate Change, as
appropriately adjusted to equitably reflect the conversion price and
any stock dividend, stock split or share combination of the common
stock after such corporate event.
(4) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its
authorized but unissued Common Shares solely for the purpose of
effecting the conversion of the Series A Preferred Shares such number
of its Common Shares as shall from time to time be sufficient to effect
the conversion of all outstanding Series A Preferred Shares; and if at
any time the number of authorized but unissued Common Shares shall not
be sufficient to effect the conversion of all then outstanding Series A
Preferred Shares, in addition to such other remedies as shall be
available to the holder of such Series A Preferred Shares, the
Corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued
Common Shares to such number of shares as shall be sufficient for such
purposes.
F. REDEMPTION OF SERIES A PREFERRED SHARES.
(1) OPTIONAL REDEMPTION. The Corporation may redeem all
outstanding and unconverted Series A Preferred Shares for cash at a per
share price equal to $11,500 (115% of the Stated Value) for each Series
A Preferred Share by giving written notice to Buyer at least twenty
(20) days in advance of such redemption. Notwithstanding the above, the
Corporation may not redeem the Series A Preferred Shares unless there
are sufficient authorized and reserved Common Shares to permit
conversion by the holders thereof within such twenty (20) day period.
If the Corporation has received a notice of conversion with respect to
any Series A Preferred Shares, the Corporation may not redeem such
Series A Preferred Shares provided the Series A Preferred Shares are
delivered for conversion as set forth in SECTION E(2) during the notice
period prior to the Redemption Date as set forth in SECTION F(3)(11)
below.
(2) MANDATORY REDEMPTION. On May 22, 2003, the Corporation
shall redeem all Series A Preferred Shares then outstanding, by the
payment therefor of the redemption price of $11,500 per share.
(3) MANNER OF REDEMPTION OF SERIES A PREFERRED SHARES.
(i) If less than all of the outstanding Series A
Preferred Shares shall be called for redemption, the
particular shares of such series to be redeemed shall be
selected by lot or by such other equitable manner as may be
prescribed by resolution of the Board of Directors.
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(ii) Notice of redemption of any Series A Preferred
Shares shall be given by the Corporation by fax or other
written communication, at least twenty (20) days prior to the
date fixed by the Board of Directors of the Corporation for
redemption (herein called the "REDEMPTION DATE"), to the
holders of record of the shares to be redeemed at their
respective addresses then appearing on the records of the
Corporation. The notice of the redemption shall state:
(A) the Redemption Date,
(B) the redemption price (which must be paid
within five (5) business days after the date of
redemption),
(C) whether the redemption is an optional
redemption or a mandatory redemption,
(D) if less than all outstanding Series A
Preferred Shares are to be redeemed, the
identification of the Series A Preferred Shares to be
redeemed,
(E) the conversion rate on the date of the
notice,
(F) that on the Redemption Date the
redemption price will become due and payable upon
each Series A Preferred Shares to be redeemed and the
right to convert each share of Series A Preferred
Share shall cease as of the close of business on the
business day prior to the Redemption Date, unless
default shall be made in the payment of the
redemption price, and
(G) the place or places where such Series A
Preferred Shares to be redeemed are to be surrendered
for payment of the redemption price.
(4) FAILURE TO REDEEM. If the Corporation fails to pay the
redemption price after calling any Series A Preferred Shares for
optional redemption under SECTION F(1), the Corporation shall have no
further right to redeem Series A Preferred Shares under SECTION F(1).
(5) REACQUIRED SHARES. Any shares of the Series A Preferred
Stock converted, redeemed or purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Series A
Preferred Stock and may be reissued at the direction of the Corporation
subject to the conditions or restrictions on issuance set forth herein.
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G. CORPORATE EVENTS. In the event of (i) any declaration by the
Corporation of a record date of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than cash dividend) or other distribution or (ii) any capital
reorganization of the Corporation, any reclassification or recapitalization of
the capital stock of the Corporation, any merger or consolidation of the
Corporation, and any transfer of all or substantially all of the assets of the
Corporation to any other Corporation, or any other entity or person, or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of Series A Preferred
Shares at least twenty (20) days prior to the record date specified therein, a
notice specifying (A) the date on which any such record is to be declared for
the purpose of such dividend or distribution and a description of such dividend
or distribution, (B) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (C) the time, if any, that is to
be fixed, as to when the holders of record of Common Stock (or other securities)
will receive for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger, dissolution
or winding up.
H. VOTING RIGHTS.
(1) The Holders of the Series A Preferred Shares shall not
have any voting rights except as set forth below or as otherwise from
time to time required by law.
(2) To the extent that under Delaware law the vote of the
holders of the Series A Preferred Shares, voting separately as a class,
is required to authorize a given action of the Corporation, the
affirmative vote or consent of the holders of at least a majority of
the outstanding Series A Preferred Shares shall constitute the approval
of such action by the class. To the extent that under Delaware law the
holders of the Series A Preferred Shares are entitled to vote on a
matter with holders of Common Stock voting together as one class, each
Series A Preferred Share shall be entitled to a number of votes equal
to the number of shares of Common Stock into which it is then
convertible using the record date for the taking of such vote of
stockholders as of the date of determination. Holders of the Series A
Preferred Shares shall be entitled to notice of all shareholder
meetings or written consents with respect to which they would be
entitled to vote, which notice would be provided pursuant to the
Corporation's bylaws and applicable statutes.
I. PROTECTIVE PROVISIONS. So long as the Series A Preferred Shares are
outstanding, the Corporation shall not take any action that would impair the
rights of the holders of the Series A Preferred Shares set forth herein and
shall not without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of at least a majority in aggregate principal
amount of the Series A Preferred Shares then outstanding:
(1) Alter or change the rights, preferences or privileges of
the Series A Preferred Shares so as to affect adversely the Series A
Preferred Shares.
(2) For a period of eight (8) months from the issuance of the
Series A Preferred Shares, create any new class or series of stock
which ranks prior to or PARI PASSU to the Series A Preferred Shares
with respect to liquidation preference, other than any additional
series of Preferred Shares issued for a purchase price not to exceed $2
million, which may rank PARI PASSU.
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(3) Do any act or thing which would result in taxation of the
holders of Series A Preferred Shares under Section 305 of the Internal
Revenue Code of 1985, as amended (or any comparable provision of the
Internal Revenue Code as hereafter from time to time amended).
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its authorized officer as of November 20, 2000.
MICROTEL INTERNATIONAL, INC.
BY: /S/ CARMINE T. OLIVA
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CARMINE T. OLIVA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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