EXHIBIT 4.32
CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
CLASS F CONVERTIBLE PREFERRED STOCK
OF
WAM!NET INC.
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The undersigned, Edward J. Driscoll, Jr., hereby certifies that:
A. He is the duly elected and acting Secretary of WAM!NET Inc. (the
"Company"), a Minnesota corporation.
B. The Articles of Incorporation of this Company provide for a class of up
to 50,000,000 shares known as Undesignated Stock, par value $.01 per share,
which shares may be issued from time to time in one or more classes or series.
C. The Board of Directors of the Company is authorized, pursuant to Article
6 of the Company's Articles of Incorporation and Minnesota Statutes, Section
302A.401, to fix or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Undesignated Stock, to
fix the number of shares constituting the series, and to determine the
designation thereof.
D. It is the desire of the Board of Directors of the Company, pursuant to
its authority, to fix the rights, preferences, restrictions and other matters
relating to the Undesignated Stock and the number of shares of Undesignated
Stock.
E. Pursuant to authority given by Article 6 of the Company's Articles of
Incorporation, the Company's Board of
Directors has adopted the following resolutions as of February 3, 2000:
RESOLVED, that, pursuant to Article 6 of the Articles of Incorporation of
WAM!NET Inc. (the "Company"), the Board of Directors of the Company (the
"Board") hereby creates and designates a series of Convertible Preferred Stock,
par value $0.01 per share, and authorizes the issuance of up to 50,000 of such
shares, and hereby fixes the designations, powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations or restrictions, of such shares, as follows:
1. DESIGNATION AND AMOUNT. The shares of such series shall be designated
"Class F Convertible Preferred Stock" (the "Class F Preferred Stock") and the
number of shares constituting such series shall be 50,000.
2. RANK. The Class F Preferred Stock shall rank, with respect to dividend
rights and distribution of assets on any Liquidation of the Company (as defined
herein) (a) junior to any other class or series of the Company's preferred stock
which shall specifically provide that such class or series shall rank senior to
the Class F Preferred Stock (the "Senior Stock"); (b) on parity with (i) the
Company's Class A Preferred Stock, par value $10.00 per share (the "Class A
Preferred Stock") (except with respect to a Liquidation of the Company resulting
from the merger or consolidation of the Company into or with another
corporation, the merger or consolidation of any other corporation into or with
the Company or the sale of all or substantially all the assets of the Company,
which events do not give rise to a right of the holders of the Class A Preferred
Stock to receive distributions), (ii) the Company's Class B Convertible
Preferred Stock, par value $0.01 per share (the "Class B Preferred Stock"),
(iii) the Company's Class C Convertible Preferred Stock, par value $0.01 per
share (the "Class C Preferred Stock"), (iv) the Company's Class D Convertible
Preferred Stock, par value $0.01 per share (the "Class D Preferred Stock"), (v)
the Company's Class E Preferred Stock, par value $0.01 per share (the "Class E
Preferred Stock"), and (vi) any other class or series of the Company's preferred
stock which shall specifically provide that such class or series shall rank on
parity with the Class F Preferred Stock ((i) through (iv) collectively, the
"Parity Stock"); and (c) prior to (i) the Company's common stock, par value
$0.01 per share (the "Common Stock"), and (ii) any other class or series of the
Company's Undesignated Stock except for any class or series which is Senior
Stock or Parity Stock ((i) and (ii) together, the "Junior Stock").
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3. DIVIDENDS.
(a) Each holder of Class F Preferred Stock shall be entitled to
receive, in respect of each Dividend Period, when, as and if declared by
the Board of Directors of the Company, out of funds legally available for
the payment of dividends, cumulative dividends in an amount per share equal
to the Applicable Percentage of the Accreted Value as of the immediately
preceding Dividend Payment Date (or, for the initial Dividend Period, as of
the date of issuance). Dividends paid pursuant to this paragraph 3(a) shall
be payable in arrears monthly on the last day of each month (each of such
dates being a "Dividend Payment Date" and each such monthly period being a
"Dividend Period"). Such dividends shall accrue from the date of issue
(except that dividends on any amounts added to Accreted Value pursuant to
Section 3(b) shall accrue from the date such amounts are added to Accreted
Value), whether or not in any Dividend Period or Periods there shall be
funds of the Company legally available for the payment of such dividends.
Each such dividend shall be payable to the holders of record of shares of
the Class F Preferred Stock on the 25th day of each month, as they appear
on the stock records of the Company at the close of business on such record
dates.
(b) At the Company's option, dividends may be paid in cash. If
dividends are not paid in cash on any Dividend Payment Date for the
immediately preceding Dividend Period (or portion thereof if less than a
full Dividend Period), the unpaid amount shall be added to the Accreted
Value for purposes of calculating succeeding periods' dividends.
Notwithstanding anything else contained herein, once any dividends for the
immediately preceding Dividend Period (or portion thereof if less than a
full Dividend Period) are so added to Accreted Value, such dividends will
no longer be payable in cash.
(c) The Applicable Percentage for each full Dividend Period for the
Class F Preferred Stock shall be 0.5834%. The Applicable Percentage for the
initial Dividend Period, or any other period shorter or longer than a full
Dividend Period, on the Class F Preferred Stock shall be computed on the
basis of a per annum rate of 7.0008% and the actual number of days elapsed
over 12 30-day months and a 360-day year.
(d) So long as any shares of the Class F Preferred Stock are
outstanding, no dividends, except as described in the next succeeding
sentence, shall be declared or paid or set apart for payment on Parity
Stock for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Class F Preferred
Stock (or the unpaid amount shall have been added to the Accreted Value
pursuant to Section 3(b)) for all Dividend Periods terminating on or prior
to the date of payment of the dividend on such class or series of Parity
Stock. When dividends are not paid in full or a sum
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sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the Class F Preferred Stock and all dividends
declared upon any other class or series of Parity Stock shall be declared
ratably in proportion to the respective amounts of dividends accrued on the
Class F Preferred Stock and accrued and unpaid on such Parity Stock.
(e) Limit on Junior Dividends and Redemption. For so long as the Class
F Preferred Stock remains outstanding, the Company shall not pay any
dividend upon the Junior Stock, whether in cash or other property (other
than shares of Junior Stock), or purchase, redeem or otherwise acquire any
such Junior Stock; provided, however, that nothing in this Section 3(e)
shall prohibit or otherwise limit the ability of the Company to make any
purchase, redemption or other acquisition pursuant to written agreements
existing as of the date of filing of the Certificate of Designation of the
Class F Preferred Stock (the "Filing Date").
4. LIQUIDATION, DISSOLUTION OR WINDING-UP.
(a) Liquidation Preference. In the event of any Liquidation of the
Company, the holders of shares of Class F Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Company available for
distribution to its stockholders, after and subject to the payment in full
of all amounts required to be distributed to the holders of Senior Stock
upon such Liquidation of the Company and before any payment shall be made
to the holders of Junior Stock, the Liquidation Amount (as defined herein)
per share of Class F Preferred Stock. If upon any such Liquidation of the
Company, the remaining assets of the Company available for the distribution
to its stockholders after payment in full of amounts required to be paid or
distributed to holders of Senior Stock shall be insufficient to pay the
holders of shares of Parity Stock the full amount to which they shall be
entitled, the holders of the Class F Preferred Stock shall share ratably
with the holders of Parity Stock in any distribution of the remaining
assets and funds of the Company in proportion to the respective amounts
which would otherwise be payable in respect of the shares held by them upon
such distribution if all amounts payable on or with respect to said shares
were paid in full. After the payment of all preferential amounts required
to be paid to the holders of Senior Stock and Parity Stock and any other
series of the Company's preferred stock upon any Liquidation of the
Company, the holders of shares of Junior Stock then outstanding shall be
entitled to receive the remaining assets and funds of the Company available
for distribution to its stockholders in accordance with the terms thereof.
(b) Certain Definitions. (i) The term "Liquidation of the Company"
shall mean any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Company.
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(ii) The term "Liquidation Amount" shall mean an amount per share
of Class F Preferred Stock equal to the greater of: (A) the Accreted
Value plus any per share dividends accrued on the Class F Preferred
Stock (whether or not earned or declared) since the most recent
Dividend Payment Date and (B) the per share amount that holders of the
Class F Preferred Stock would have received had they exercised their
right to convert the Class F Preferred Stock to Common Stock
immediately prior to a Liquidation of the Company.
5. VOTING.
(a) Number of Votes. Each issued and outstanding share of Class F
Preferred Stock shall be entitled to the number of votes equal to (i) the
number of shares of Common Stock into which each such share of Class F
Preferred Stock is then convertible (as adjusted from time to time) divided
by the Number of Common Shares Deemed Outstanding) (as defined herein) at
such time, multiplied by (ii) the aggregate number of shares of Common
Stock then outstanding and entitled to vote (giving effect to the voting
power of all of the securities of the Company convertible into or
exchangeable for Common Stock that are entitled to vote with the Common
Stock, but without giving effect to the voting power of the Class F
Preferred Stock) at each meeting of holders of the Common Stock of the
Company (or any written consent without a meeting in accordance with the
Minnesota Business Corporation Act) with respect to any and all matters
presented to such shareholders for their action or consideration. Except as
provided by law, by the provisions of this Section 5 or by the provisions
establishing any other series of the Company's preferred stock, holders of
Class F Preferred Stock and of any other outstanding preferred stock then
entitled to vote shall vote together with the holders of Common Stock as a
single class.
(b) Protective Provisions. In addition to any other rights provided by
law, the Company shall not (i) without first obtaining the affirmative vote
or written consent of a majority of the holders of the Class F Preferred
Stock, voting separately as a class, (A) amend, alter or repeal any
provision of the Company's Articles of Incorporation or By-Laws in a manner
that is adverse to the holders of the Class F Preferred Stock, or (B)
authorize the issuance of a class or series of capital stock having
preferences or rights with respect to dividends or dissolution or the
distribution of assets that would be superior to the preferences or rights
of the Class F Preferred Stock, and (ii) without first obtaining the
affirmative vote or written consent of a majority of the holders of the
Company's Voting Securities other than MCI WORLDCOM, Inc. (together with
its majority-owned subsidiaries and other controlled affiliates, "MCI
WCOM"), (A) authorize any transaction of a type referred to in clause (i)
or clause (ii) of the definition of "Change of Control," (B) authorize or
consent to any liquidation, dissolution or winding-up of the affairs of the
Company, or (C)
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enter into any merger or consolidation into or with MCI WCOM or enter into
any other contract or arrangement involving the sale or license of the
Company's material assets with MCI WCOM (excluding contractual arrangements
with MCI WCOM existing as of the Filing Date).
6. OPTIONAL CONVERSION. At any time and from time to time, each share of
Class F Preferred Stock may be converted, at the option of the holder thereof,
into the number of fully paid and nonassessable shares of Common Stock obtained
by dividing the amount determined pursuant to clause (A) of the definition of
Liquidation Amount by the Conversion Price then in effect (the "Conversion
Rate"); provided, however, that upon any Liquidation of the Company, the right
of conversion shall terminate at the close of business on the full business day
next preceding the date fixed for such redemption or for the payment of any
amounts distributable on liquidation to the holders of Class F Preferred Stock.
No notice delivered by the Company of any proposed redemption, change of control
or other event will limit in any way the holders' rights to convert Class F
Preferred Stock into Common Stock of the Company.
(a) Initial Conversion Rate. The initial Conversion Rate for the Class
F Preferred Stock shall be 193.79845 shares of Common Stock for each one
share of Class F Preferred Stock surrendered for conversion representing an
initial Conversion Price of $5.16 per share of Common Stock. The applicable
Conversion Rate and Conversion Price from time to time in effect is subject
to adjustment as hereinafter provided.
(b) No Fractional Shares. If any fraction of a share of Common Stock
would be issuable upon conversion of any Class F Preferred Stock, the
Company shall round up to the next whole share the number of shares of
Class F Preferred Stock to be issued upon such conversion.
(c) Adjustment. Whenever the Conversion Rate and Conversion Price
shall be adjusted as provided herein, the Company shall forthwith file at
each office designated for the conversion of Class F Preferred Stock, a
statement, signed by the President, any Vice President or Treasurer of the
Company, showing in reasonable detail the facts requiring such adjustment
and the Conversion Rate that will be effective after such adjustment. The
Company shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to each record holder of Class
F Preferred Stock at his or its address appearing on the stock register. If
such notice relates to an adjustment resulting from an event referred to in
Section 7(g), such notice shall be included as part of the notice required
to be mailed and published under the provisions of such Section 7(g).
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(d) Exercise. In order to exercise the conversion privilege, the
holder of any Class F Preferred Stock to be converted shall surrender his
or its certificate or certificates therefore to the principal office of the
transfer agent for the Class F Preferred Stock (or if no transfer agent be
at the time appointed, then the Company at its principal office), and shall
give written notice to the Company at such office that the holder elects to
convert the Class F Preferred Stock represented by such certificates, or
any number thereof. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of Common
Stock which shall be issuable on such conversion shall be issued, subject
to any restrictions on transfer relating to shares of the Class F Preferred
Stock or shares of Common Stock upon conversion thereof. If so required by
the Company, certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Company, duly authorized in writing. The date of
receipt by the transfer agent (or by the Company if the Company serves as
its own transfer agent) of the certificates and notice shall be the
conversion date. Within three Market Days after receipt of such notice and
the surrender of the certificate or certificates for Class F Preferred
Stock as set forth herein, the Company shall cause to be issued and
delivered at such office to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and
cash as provided in Section 6(b) in respect of any fraction of a share of
Common Stock otherwise issuable upon such conversion.
(e) Reservation of Shares of Common Stock. The Company shall at all
times while any shares of Class F Preferred Stock shall be outstanding,
reserve and keep available out of its authorized but unissued stock, for
the purposes of effecting the conversion of the Class F Preferred Stock,
such number of its duly authorized shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding
Class F Preferred Stock. Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value of the
shares of Common Stock issuable upon conversion of the Class F Preferred
Stock, the Company will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of such Common Stock at
such adjusted Conversion Price.
(f) Surrender. All shares of Class F Preferred Stock which shall have
been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares,
including the rights, if any, to receive notices and to vote, shall
forthwith cease and terminate except only the right of the holder thereof
to receive shares of Common Stock in exchange therefor and payment of any
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accrued and unpaid dividends on such shares of Common Stock. Any shares of
Class F Preferred Stock so converted shall be retired and canceled and
shall not be reissued, and the Company may from time to time take such
appropriate action as may be necessary to reduce the authorized Class F
Preferred Stock accordingly.
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7. ANTI-DILUTION PROVISIONS.
(a) General. In order to prevent dilution of the rights granted
hereunder, the Conversion Price shall be subject to adjustment from time to
time in accordance with this Section 7. Upon each adjustment of the
Conversion Price pursuant to this Section 7, the registered holder of
shares of Class F Preferred Stock shall thereafter be entitled to acquire
upon conversion, at the Conversion Price resulting from such adjustment,
the number of shares of Common Stock obtainable by multiplying the
Conversion Price in effect immediately prior to such adjustment by the
number of shares of Common Stock acquirable immediately prior to such
adjustment and dividing the product thereof by the Conversion Price
resulting from such adjustment.
(b) Adjustment of Conversion Price. Except as provided in Sections
7(c) or 7(f) below, if and whenever on or after the Filing Date, the
Company shall issue or sell, or shall pursuant to Section 7(b)(1) through
(10) inclusive, be deemed to have issued or sold any shares of its Common
Stock for a consideration per share that is (i) at any time prior to the
closing of a Qualified Initial Public Offering, less than the per share
Conversion Price in effect immediately prior to the time of such issue or
sale or (ii) at any time during the three-year period after the closing of
a Qualified Initial Public Offering, less than 90% of the Current Market
Price Per Common Share calculated as of the date of such issue or sale,
then forthwith upon such issue or sale (the "Triggering Transaction"), the
Conversion Price shall, subject to Section 7(b)(1) through (10) inclusive,
be reduced to the Conversion Price (calculated to the nearest one-hundredth
of a cent) determined by dividing: (A) an amount equal to the sum of the
product derived by multiplying the Number of Common Shares Deemed
Outstanding immediately prior to such Triggering Transaction by the
Conversion Price then in effect, plus the consideration, if any, received
by the Company upon consummation of such Triggering Transaction by (B) an
amount equal to the sum of the Number of Common Shares Deemed Outstanding
immediately prior to such Triggering Transaction plus the number of shares
of Common Stock issued (or deemed to be issued in accordance with Section
7(b)(1) through (10) inclusive) in connection with the Triggering
Transaction. The term "Number of Common Shares Deemed Outstanding" at any
given time shall mean the sum of (i) the number of shares of Common Stock
outstanding at such time, (ii) the number of shares of Common Stock
issuable upon conversion or exchange at such time of all of the Company's
outstanding securities that are then convertible into, or exchangeable for,
Common Stock and (iii) the number of shares of the Company's Common Stock
deemed to be outstanding under Section 7(b)(1) through (10) inclusive, at
such time. For purposes of determining the adjusted Conversion Price under
this Section 7(b), the following provisions shall be applicable:
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(1) In case the Company at any time shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any
rights to subscribe for or to purchase, or any options for the
purchase of, Common Stock or any stock or other securities convertible
into or exchangeable for Common Stock (such rights or options being
herein called "Options" and such convertible or exchangeable stock or
securities being herein called "Convertible Securities"), whether or
not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable and the price per
share for which the Common Stock is issuable upon exercise, conversion
or exchange (determined by dividing (Y) the total amount, if any,
received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise of
all such Options, plus, in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by
(Z) the total maximum number of shares of Common Stock issuable upon
the exercise of such Options or the conversion or exchange of such
Convertible Securities) shall be less than the Conversion Price in
effect immediately prior to the time of the granting of such Option,
then the total maximum amount of Common Stock issuable upon the
exercise of such Options or in the case of Options for Convertible
Securities, upon the conversion or exchange of such Convertible
Securities shall (as of the date of granting of such Options) be
deemed to be outstanding and to have been issued and sold by the
Company for such price per share. No further adjustment of the
Conversion Price shall be made upon the actual issue of such shares of
Common Stock or such Convertible Securities upon the exercise of such
Options, except as otherwise provided in Section 7(b)(3).
(2) In case the Company at any time shall in any manner issue
(whether directly or by assumption in a merger or otherwise) or sell
any Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (Y) the total amount received or
receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (Z) the total maximum number of
shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Conversion Price
in effect immediately prior to the time of such issue or sale, then
the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such
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Convertible Securities shall (as of the date of the issue or sale of
such Convertible Securities) be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. No
further adjustment of the Conversion Price shall be made upon the
actual issue of such Common Stock upon exercise of the rights to
exchange or convert under such Convertible Securities, except as
otherwise provided in Section (7)(b)(3).
(3) If the purchase price provided for in any Options referred to
in Section 7(b)(1), the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities referred to
in Sections 7(b)(1) or (2), or the rate at which any Convertible
Securities referred to in Sections 7(b)(1) or (2) are convertible into
or exchangeable for Common Stock shall change at any time (other than
under or by reason of provisions designed to protect against dilution
of the type set forth in Sections 7(b) or 7(d)), the Conversion Price
in effect at the time of such change shall forthwith be readjusted to
the Conversion Price which would have been in effect at such time had
such Options or Convertible Securities still outstanding provided for
such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or
sold. If the purchase price provided for in any Option referred to in
Section 7(b)(1) or the rate at which any Convertible Securities
referred to in Sections 7(b)(1) or (2) are convertible into or
exchangeable for Common Stock, shall be reduced at any time under or
by reason of provisions with respect thereto designed to protect
against dilution, then in case of the delivery of Common Stock upon
the exercise of any such Option or upon conversion or exchange of any
such Convertible Security, the Conversion Price then in effect
hereunder shall forthwith be adjusted to such respective amount as
would have been obtained had such Option or Convertible Security never
been issued as to such Common Stock and had adjustments been made upon
the issuance of the shares of Common Stock delivered as set forth
herein, but only if as a result of such adjustment the Conversion
Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any
right to convert or exchange any Convertible Securities, the
Conversion Price then in effect hereunder shall forthwith be increased
to the Conversion Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with the
issue or sale of other securities of the Company, together comprising
one integral transaction in
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which no specific consideration is allocated to such Options by the
parties thereto, such Options shall be deemed to have been issued
without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or
sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Company therefor. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be the
fair value of such consideration as determined in good faith by the
Board. In case any shares of Common Stock, Options or Convertible
Securities shall be issued in connection with any merger in which the
Company is the surviving corporation, the amount of consideration
therefor shall be deemed to be the fair value of such portion of the
net assets and business of the non-surviving corporation as shall be
attributable to such Common Stock, Options or Convertible Securities,
as the case may be.
(7) The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of
the Company, and the disposition of any shares so owned or held shall
be considered an issue or sale of Common Stock for the purpose of this
Section 7(b).
(8) In case the Company shall declare a dividend or make any
other distribution upon the stock of the Company payable in Options or
Convertible Securities, then in such case any Options or Convertible
Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without
consideration.
(9) For purposes of this Section 7(b), in case the Company shall
take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or other distribution payable in
Common Stock, Options or in Convertible Securities or to subscribe for
or purchase Common Stock, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or the date of the granting of such right or subscription or purchase,
as the case may be.
(10) For purposes of this Section 7(b), notwithstanding Section
7(f), in the event that the "Class B Warrants" issued to MCI WCOM on
September 26, 1997 vest and become exercisable for shares of Common
Stock, whether or
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not MCI WCOM shall exercise such Class B Warrants, the consideration
per share that the Common Stock shall be deemed to have been issued or
sold at shall be equal to $4.98.
(c) Liquidating Dividends. In the event the Company shall declare a
dividend upon the Common Stock (other than a dividend payable in Common
Stock) payable otherwise than out of earnings or earned surplus, determined
in accordance with generally accepted accounting principles, including the
making of appropriate deductions for minority interests, if any, in
subsidiaries (herein referred to as "Liquidating Dividends"), then the
Company shall pay to the person converting such Class F Preferred Stock an
amount equal to the aggregate value of such Liquidating Dividends
(including but not limited to the Common Stock which would have been issued
at the time of such earlier exercise and all other securities which would
have been issued with respect to such Common Stock by reason of stock
splits, stock dividends, mergers or reorganizations, or for any other
reason). For the purposes of this Section 7(c), a dividend other than in
cash shall be considered payable out of earnings or earned surplus only to
the extent that such earnings or earned surplus are charged an amount equal
to the fair value of such dividend as determined in good faith by the
Board.
(d) Subdivisions and Dividends; Combinations. In case the Company
shall at any time (i) subdivide the outstanding Common Stock or (ii) issue
a stock dividend on its outstanding Common Stock, the number of shares of
Common Stock issuable upon conversion of the Class F Preferred Stock shall
be proportionately increased by the same ratio as the subdivision or
dividend (with appropriate adjustments to the Conversion Price in effect
immediately prior to such subdivision or dividend). In case the Company
shall at any time combine its outstanding Common Stock, the number of
shares issuable upon conversion of the Class F Preferred Stock immediately
prior to such combination shall be proportionately decreased by the same
ratio as the combination (with appropriate adjustments to the Conversion
Price in effect immediately prior to such combination).
(e) Reorganizations, etc. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities, cash or other property with respect to or in exchange for
Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate
provision shall be made whereby the holders of the Class F Preferred Stock
shall have the right to acquire and receive upon conversion of the Class F
Preferred Stock, which right shall be prior to the rights of the holders of
Junior Stock, equal to the rights of the holders of Parity Stock and after
and subject
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to the rights of holders of Senior Stock, such shares of stock, securities,
cash or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in
exchange for such number of outstanding shares of Common Stock as would
have been received upon conversion of the Class F Preferred Stock at the
Conversion Price then in effect.
(f) Exceptions to Antidilution. The provisions of this Section 7 shall
not apply to any Common Stock issued, issuable or deemed outstanding under
Section 7(b)(1) through (10) inclusive (and no such transaction shall
constitute a Triggering Transaction): (i) to any person pursuant to any
stock option, stock purchase or similar plan or arrangement for the benefit
of employees, consultants or other representatives of the Company or its
subsidiaries (A) in effect on the Filing Date or (B) thereafter adopted by
the Board and approved by the holders of the Voting Securities, (ii)
pursuant to options, warrants and conversion rights in existence on the
Filing Date (other than as provided for in Section 7(b)(10)) or (iii) on
conversion of the Class B Preferred Stock, the Class C Preferred Stock, the
Class D Preferred Stock or the Class E Preferred Stock.
(g) Procedures. In the event that (i) the Company shall declare any
cash dividend upon its Common Stock, (ii) the Company shall declare any
dividend upon its Common Stock payable in stock or make any special
dividend or other distribution to the holders of its Common Stock, (iii)
the Company shall offer for subscription pro rata to the holders of its
Common Stock any additional shares of stock of any class or other rights,
(iv) there shall be any capital reorganization or reclassification of the
capital stock of the Company, including any subdivision or combination of
its outstanding shares of Common Stock, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to, another
corporation, (v) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, in connection with any such
event, the Company shall give to the holders of the Class F Preferred Stock
(A) at least twenty (20) days prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to
vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up; and
(B) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at
least twenty (20) days prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (A) shall
also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause
(B) shall also specify the date on which the holders of Common Stock shall
be entitled to exchange
14
their Common Stock for securities or other property deliverable upon such
reorganization, reclassification consolidation, merger, sale, dissolution,
liquidation or winding-up, as the case may be. Each such written notice
shall be given by first class mail, postage prepaid, addressed to the
holders of the Class F Preferred Stock at the address of each such holder
as shown on the books of the Company.
(h) Intended Effect. If any event occurs as to which, in the opinion
of the Board, the provisions of this Section 7 are not strictly applicable
or if strictly applicable would not fairly protect the rights of the
holders of the Class F Preferred Stock in accordance with the essential
intent and principles of such provisions, then the Board shall make an
adjustment in the application of such provisions, in accordance with such
essential intent and principles, so as to protect such rights as set forth
herein, but in no event shall any adjustment have the effect of increasing
the Conversion Price as otherwise determined pursuant to any of the
provisions of this Section 7 except in the case of a combination of shares
of a type contemplated in Section 7(d) and then in no event to an amount
greater than the Conversion Price as adjusted pursuant to Section 7(d).
8. MANDATORY CONVERSION.
(a) Mandatory Conversion. Each share of Class F Preferred Stock shall
automatically be converted into shares of Common Stock at the Conversion
Price in effect on the last Market Day of the first consecutive period of
twenty Market Days during which the Current Market Price Per Common Share
is at least 155% of the Liquidation Amount beginning after the later to
occur of the closing of an underwritten offering which is a "Qualified
Initial Public Offering" pursuant to an effective registration statement
under the Securities Act or the third anniversary of the date of issuance
of the Class F Preferred Stock ("Initial Issuance Date").
(b) A "Qualified Initial Public Offering" shall mean an initial public
offering of the Company's Common Stock raising not less than $50,000,000 of
gross proceeds.
(c) Procedures. All holders of record of shares of Class F Preferred
Stock will be given prompt written notice of the occurrence of mandatory
conversion and at least sixty (60) days prior written notice of the date
fixed for any optional conversion and also of the place designated for
conversion of all of such shares of Class F Preferred Stock. Such notice
will be sent by mail, first class, postage prepaid, to each record holder
of shares of Class F Preferred Stock at such holder's address appearing on
the stock register. Each holder of shares of Class F Preferred Stock shall
surrender his or its certificates or certificates for all such shares to
the Company at the place designated in such notice, and shall thereafter
receive
15
certificates for the number of shares of Common Stock to which such holder
is entitled pursuant to this Section 8. On the date of occurrence of
mandatory conversion or the date fixed for any optional conversion, all
rights with respect to the Class F Preferred Stock so converted will
terminate, except only the rights of the holders thereof, upon surrender of
their certificate or certificates therefore, to receive certificates for
the number of shares of Common Stock into which such Class F Preferred
Stock has been converted and payment of any accrued and unpaid dividends
thereon. If so required by the Company, certificates surrendered for
conversion shall be endorsed or accompanied by written instrument or
instruments of transfer, in form satisfactory to the Company, duly executed
by the registered holder or by his attorneys duly authorized in writing.
All certificates evidencing shares of Class F Preferred Stock which are
required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the date such certificates are so required to
be surrendered, be deemed to have been retired and canceled and the shares
of Class F Preferred Stock represented thereby converted into Common Stock
for all purposes, notwithstanding the failure of the holder or holders
thereof to surrender such certificates. As soon as practicable after the
surrender of the certificate or certificates for Class F Preferred Stock as
set forth herein, the Company shall cause to be issued and delivered to
such holder, or on his or its written order, a certificate or certificates
for the number of full shares of Common Stock issuable on such conversion
in accordance with the provisions hereof and as provided in Section 6(b) in
respect of any fraction of a share of Common Stock otherwise issuable upon
such conversion.
9. CHANGE OF CONTROL OFFER.
(a) Promptly after the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the Company shall
commence (or cause to be commenced) an offer to purchase all outstanding
shares of Class F Preferred Stock pursuant to the terms described in
Section 9(d) (the "Change of Control Offer") at a purchase price equal to
the Change of Control Amount on the Change of Control Payment Date, and
shall purchase (or cause the purchase of) any shares of Class F Preferred
Stock tendered in the Change of Control Offer pursuant to the terms hereof.
(b) At the Company's option, the Change of Control Amount shall be
payable in cash or in shares of Common Stock (or the securities of the
entity into which the Common Stock became converted in connection with the
Change of Control), which shares shall be valued for purposes of this
Section 9(b) at 97% of the Current Market Price Per Common Share on the
Change of Control Payment Date.
16
(c) If the Company elects to pay the Change of Control Amount in cash,
prior to the mailing of the notice referred to in Section 9(d), but in any
event within 30 days following the date on which a Change of Control has
occurred, the Company shall (A) promptly determine if the purchase of the
Class F Preferred Stock for cash would violate or constitute a default
under the indebtedness of the Company or the terms of any other series of
the Company's outstanding preferred stock and (B) either shall repay to the
extent necessary all such indebtedness or preferred stock of the Company
that would prohibit the repurchase of the Class F Preferred Stock pursuant
to a Change of Control Offer or obtain any requisite consents or approvals
under instruments governing any indebtedness or preferred stock of the
Company to permit the repurchase of the Class F Preferred Stock for cash.
The Company shall first comply with this Section 9(c) before it shall
repurchase for cash any Class F Preferred Stock pursuant to this Section 9.
(d) Within 30 days following the date on which a Change in Control has
occurred, the Company shall send, by first-class mail, postage prepaid, a
notice to each holder of Class F Preferred Stock. If applicable, such
notice shall contain all instructions and materials necessary to enable
such holders to tender Class F Preferred Stock pursuant to the Change of
Control Offer. Such notice shall state:
(i) that a Change of Control has occurred, that a Change of
Control Offer is being made pursuant to this Section 9 and that all
Class F Preferred Stock validly tendered and not withdrawn will be
accepted for payment;
(ii) the purchase price (including the amount of accrued
dividends, if any) and the purchase date (which must be no earlier
than 30 days nor later than 60 days from the date such notice is
mailed, other than as may be required by law) (the "Change of Control
Payment Date");
(iii) that any shares of Class F Preferred Stock not tendered
will continue to accrue dividends;
(iv) that, unless the Company defaults in making payment
therefor, any share of Class F Preferred Stock accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
dividends after the Change of Control Payment Date;
(v) that holders electing to have any share of Class F Preferred
Stock purchased pursuant to a Change of Control Offer will be required
to surrender stock certificates representing such shares of Class F
Preferred Stock, properly endorsed for transfer, together with such
other customary documents as the Company and the Transfer Agent may
reasonably request to the Transfer Agent and registrar for the Class F
Preferred Stock at the address
17
specified in the notice prior to the close of business on the business
day prior to the Change of Control Payment Date;
(vi) that holders will be entitled to withdraw their election if
the Company receives, not later than five business days prior to the
Change of Control Payment Date, a telegram, facsimile transmission or
letter setting forth the name of the holder, the number of shares of
Class F Preferred Stock the holder delivered for purchase and a
statement that such holder is withdrawing its election to have such
shares of Class F Preferred Stock purchased;
(vii) that holders who tender only a portion of the shares of
Class F Preferred Stock represented by a certificate delivered will,
upon purchase of the shares tendered, be issued a new certificate
representing the unpurchased shares of Class F Preferred Stock; and
(viii) the circumstances and relevant facts regarding such Change
of Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change
of Control).
(e) The Company will comply with any tender offer rules under the
Exchange Act which then may be applicable in connection with any offer made
by the Company to repurchase the shares of Class F Preferred Stock as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Certificate
of Designation, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its
obligation under this Certificate of Designation by virtue thereof.
(f) On the Change of Control Payment Date, the Company shall (i)
accept for payment the shares of Class F Preferred Stock validly tendered
pursuant to the Change of Control Offer, (ii) pay to the holders of shares
so accepted the purchase price therefor in cash or Common Stock (or the
securities of the entity into which the Common Stock became converted in
connection with the Change of Control) as provided above and (iii) cancel
each surrendered certificate and retire the shares represented thereby.
Unless the Company defaults in the payment for the shares of Class F
Preferred Stock tendered pursuant to the Change of Control Offer, dividends
will cease to accrue with respect to the shares of Class F Preferred Stock
tendered and all rights of holders of such tendered shares will terminate,
except for the right to receive payment therefor on the Change of Control
Payment Date.
(g) To accept the Change of Control Offer, the holder of a share of
Class F Preferred Stock shall deliver, prior to the
18
close of business on the business day prior to the Change of Control
Payment Date, written notice to the Company (or an agent designated by the
Company for such purpose) of such holder's acceptance, together with
certificates evidencing the shares of Class F Preferred Stock with respect
to which the Change of Control Offer is being accepted, duly endorsed for
transfer.
(h) For the avoidance of doubt, nothing in this Section 9 shall
restrict the right of the holders of Class F Preferred Stock, in connection
with a Change of Control, to convert and to receive the kind and amount of
consideration payable to holders of Common Stock in respect of the Common
Stock into which the Class F Preferred Stock may be converted.
10. CERTAIN MERGERS. In connection with any consolidation with or merger
with or into, any person in a transaction where the Common Stock is converted
into or exchanged for securities of such person or an affiliate of such person,
the Company covenants that the person issuing such securities will be organized
and existing under the laws of a jurisdiction which allows for the issuance of
preference stock and that the Class F Preferred Stock shall be converted into or
exchanged for and shall become shares of such person having in respect of such
person substantially the same powers, preference and relative participating,
optional or other special rights and the qualifications, limitations or
restrictions thereon that the Class F Preferred Stock had immediately prior to
such transaction.
11. REDEMPTION.
(a) Optional Redemption. At any time after the third anniversary of
the Initial Issuance Date, the Company may, at its option, redeem all (but
not less than all) of the shares of Class F Preferred Stock at a cash
redemption price equal to 155% of the Liquidation Amount on the date
specified for redemption plus accrued dividends thereon from such date to
the date of payment of the redemption price.
(b) Notice. Notice of such redemption shall be given by the Company by
first class mail, postage prepaid, mailed not less than 30 days nor more
than 60 days prior to the redemption date, to each holder of record of the
shares to be redeemed at such holder's address as the same appears on the
stock register of the Company; provided that neither the failure to give
such notice nor any defect therein shall affect the validity of the giving
of notice for the redemption of any share of Class F Preferred Stock to be
redeemed except as to the holder to whom the Company has failed to give
said notice or except as to the holder whose notice was defective. Each
such notice shall state: (i) the redemption date; (ii) the redemption
price; (iii) the place or places where certificates for such shares are to
be surrendered for payment of the redemption price; and (iv) that
19
dividends on the shares to be redeemed will cease to accrue on such
redemption date.
(c) Dividends; Payment. Notice having been mailed as aforesaid, from
and after the redemption date (unless default shall be made by the Company
in providing money for the payment of the redemption price of the shares
called for redemption), dividends on the shares of Class F Preferred Stock
so called for redemption shall cease to accrue, and all rights of the
holders thereof as shareholders of the Company (except the right to receive
from the Company the redemption price) shall cease. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of
the Company shall so require and the notice shall so state), such share
shall be redeemed by the Company at the redemption price aforesaid.
12. CONVERTED AND REACQUIRED SHARES. Any shares of Class F Preferred Stock
converted into Common Stock, redeemed, purchased or otherwise acquired by the
Company in any manner whatsoever shall be retired and canceled promptly after
the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of undesignated stock of the Company and may be
reissued subject to the conditions and restrictions on issuance in the Articles
of Incorporation, in any other Certificate of Designation creating a series of
preferred stock or any similar stock or as otherwise required by law.
13. PRE-EMPTIVE RIGHTS. Until the closing of a Qualified Initial Public
Offering, the holders of the Class F Preferred Stock shall have pre-emptive
rights to the extent set forth in Section 302A.413 of the Minnesota Business
Corporation Act as in effect on the Filing Date, except that the provisions of
subdivision 4, clause (e) thereof shall not apply.
14. AMENDMENT. If any proposed amendment to the Articles of Incorporation,
including this Certificate of Designation, would alter or change the
preferences, special rights or powers given to the holders of the Class F
Preferred Stock so as to affect such holders adversely, or would authorize the
issuance of a class or classes of stock having preferences or rights with
respect to dividends or dissolution or the distribution of assets that would be
superior to the preferences or rights of the Class F Preferred Stock, then the
holders of the Class F Preferred Stock shall be entitled to vote as a class upon
such amendment, and the affirmative vote of two-thirds of the outstanding shares
of Class F Preferred Stock shall be necessary for the adoption thereof, in
addition to such other vote as may be required by law.
15. MISCELLANEOUS. If, in connection with a Change of Control Offer
pursuant to Section 9 or a redemption pursuant to Section 11, the Company
determines to pay the Change of Control
20
Amount or the redemption price in shares of Common Stock, the Company will (a)
file a registration statement to register such shares of Common Stock under the
Securities Act, (b) cause such registration statement to be effective at or
prior to the time that the Company will deliver such shares to the holders of
Class F Preferred Stock, (c) have such shares listed on the principal trading
market for the Common Stock and (d) take such other actions as may reasonably be
required to register the issuance (or, as appropriate, the re-sale) of the
shares of Common Stock to be delivered to the holders of the Class F Preferred
Stock to enable such shares of Common Stock to be sold without restriction.
16. SUSPENSION OF VOTING RIGHTS PENDING HSR APPROVAL. Notwithstanding
anything to the contrary contained herein, unless and until all filings required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations of the Federal Trade Commission promulgated
thereunder, in connection with the acquisition of the Class F Preferred Stock
shall have been made and the applicable waiting period thereunder shall have
expired or been terminated, no holder of Class F Preferred Stock shall have any
voting rights as a stockholder of the Company or any other right to elect,
nominate, designate or vote for any member of the Company's Board of Directors.
17. DEFINITIONS. The following terms, as used herein, shall have the
following meanings:
"Accreted Value" equals, with respect to one share of Class F
Preferred Stock, $1,000, plus the amount of any dividends added to Accreted
Value in accordance with Section 3(b) (which aggregate amount shall be
subject to adjustment whenever there shall occur a stock split,
combination, re-classification or other similar event involving the Class F
Preferred Stock).
"Change of Control" means: (i) the sale, lease, transfer, conveyance
other disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the assets
of the Company and its subsidiaries taken as a whole to any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act, other than a
holder of Class F Preferred Stock on the Initial Issuance Date, (ii) the
consummation of any transaction (including any merger or consolidation) the
result of which is that (A) any "person" (as defined above) other than a
holder of Class F Preferred Stock on the Initial Issuance Date becomes the
beneficial owner (as determined in accordance with Rules 13d-3 and 13d-5
under the Exchange Act except that a person will be deemed to have
beneficial ownership of all shares that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 50% of the Voting
Securities
21
of the Company, other than in connection with an underwritten public
offering of securities of the Company or (B) the holders of Voting
Securities become entitled to receive less than 50% of the voting power of
holders of the equity securities of the surviving entity, or (iii) the
first day on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors.
"Change of Control Amount" means, with respect to one share of Class F
Preferred Stock, the greater of (i) 125% of the Liquidation Amount per
share on the Change of Control Payment Date or (ii) the per share amount a
holder of Class F Preferred Stock would have received had he exercised his
right to convert a share of Class F Preferred Stock into shares of Common
Stock immediately prior to the issuance of a Change of Control.
"Continuing Directors" means individuals who constituted the Board of
Directors of the Company on the Filing Date (the "Incumbent Directors");
provided that any individual becoming a director during any year shall be
considered to be an Incumbent Director if such individual's election,
appointment or nomination was recommended or approved by at least
two-thirds of the other Incumbent Directors continuing in office following
such election, appointment or nomination present, in person or by
telephone, at any meeting of the Board of Directors of the Company, after
the giving of a sufficient notice to each Incumbent Director so as to
provide a reasonable opportunity for such Incumbent Directors to be present
at such meeting.
"Current Market Price Per Common Share" means, as of any date, the
average (weighted by daily trading volume) of the Daily Prices per share of
Common Stock for the 20 consecutive Market Days immediately prior to such
date.
"Daily Price" means, as of any date, (i) if the shares of such class
of Common Stock then are listed and traded on the New York Stock Exchange,
Inc. ("NYSE"), the closing price on such date as reported on the NYSE
Composite Transactions Tape; (ii) if the shares of such class of Common
Stock then are not listed and traded on the NYSE, the closing price on such
date as reported by the principal national securities exchange on which the
shares are listed and traded; (iii) if the shares of such class of Common
Stock then are not listed and traded on any such securities exchange, the
last reported sale price on such date on Nasdaq National Market; or (iv) if
the shares of such class of Common Stock then are not traded on the Nasdaq
National Market, the average of the highest reported bid and lowest
reported asked price on such date as reported by Nasdaq.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Market Day" means a day on which the principal national securities
market or exchange on which the Common Stock
22
is listed or admitted for trading is open for the transaction of business.
"Securities Act" means the Securities Act of 1933, as amended.
"Voting Securities" means securities of the Company ordinarily having
the power to vote for the election of directors of the Company, including
but not limited to the Common Stock and all classes and series of
Undesignated Stock the holders of which have the right to vote with holders
of the Common Stock as a class.
RESOLVED FURTHER, that the officers of this Company be, and each of them
acting alone is, hereby authorized and instructed to take all steps necessary to
execute, deliver and file, for and on behalf of this Company and in its name,
any and all documents required in connection with the establishment and
authorization of the Company's Class F Preferred Stock, including but not
limited to filing the Statement of Rights and Preferences with the Minnesota
Secretary of State in accordance with Minnesota Statutes, Section 302A.401.
F. The undersigned further declares under penalty of perjury that the
matters set out in the foregoing Certificate are true and correct of his own
knowledge.
[Remainder of page intentionally left blank]
23
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
3rd day of February, 2000.
/s/ Edward J. Driscoll, Jr.
-----------------------------------------
Edward J. Driscoll, Jr.
Secretary
ARTICLES OF CORRECTION
OF
CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
CLASS E CONVERTIBLE PREFERRED STOCK AND
CLASS F CONVERTIBLE PREFERRED STOCK
OF
WAM!NET INC.
The undersigned, Edward J. Driscoll, Jr., Secretary of WAM!NET INC., a
Minnesota Corporation (the "Corporation"), acting pursuant to the provisions of
Minnesota Statutes, Section 5.16, does hereby correct and amend the Certificate
of Designation of Rights and Preferences of Class E Convertible Preferred Stock,
as follows, and does hereby correct and amend the Certificate of Designation of
Rights and Preferences of Class F Convertible Preferred stock, as follows,
effective as of the 16th day of February, 2000, and the 11th day of February,
2000, respectively:
1.) The undersigned, Edward J. Driscoll, Jr., executed and filed a
Certificate of Designation of Rights and Preferences of Class
E Convertible Preferred Stock which was filed with the
Minnesota Secretary of State on February 16, 2000.
2.) The undersigned, Edward J. Driscoll, Jr., executed and filed a
Certificate of Designation of Rights and Preferences of Class
F Convertible Preferred Stock which was filed with the
Minnesota Secretary of State on February 11, 2000.
3.) The Certificate of Designation of Rights and Preferences of
Class E Convertible Preferred Stock inadvertently indicated
that the Articles of Incorporation of the Corporation provide
for a class of up to 10,000,000 shares known as Undesignated
Stock, whereas the Amended Articles of Incorporation of the
Corporation provide for a class of up to 9,900,000 shares
known as Undesignated Stock.
4.) The Certificate of Designation of Rights and Preferences of
Class F Convertible Preferred Stock inadvertently indicated
that the Articles of Incorporation of the Corporation provide
for a class of up to 50,000,000 shares known as Undesignated
Stock, whereas the Amended Articles of Incorporation of the
Corporation provide for a class of up to 9,900,000 shares
known as Undesignated Stock.
5.) Subpart B of said Certificate of Designation of Rights and
Preferences of Class E Convertible Preferred Stock should
read:
"The Articles of Incorporation of this Company provide for
a class of up to 9,900,000 shares known as Undesignated
Stock, par value $.01 per share, which shares may be
issued from time to time in one or more classes or
series."
6.) Subpart B of said Certificate of Designation of Rights and
Preferences of Class F Convertible Preferred Stock should read
"The Articles of Incorporation of this Company provide for
a class of up to 9,900,000 shares known as Undesignated
Stock, par value $.01 per share, which shares may be
issued from time to time in one or more classes or
series."
IN WITNESS WHEREOF, I have hereunder subscribed my name effective the
29th day of February, 2000.
/s/ Edward J. Driscoll, Jr.
----------------------------------
Edward J. Driscoll, Jr., Secretary
ARTICLES OF CORRECTION
OF
CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
CLASS F CONVERTIBLE PREFERRED STOCK
OF
WAM!NET INC.
The undersigned, Edward J. Driscoll, Jr., Secretary of WAM!NET INC., a
Minnesota Corporation (the "Corporation"), acting pursuant to the provisions of
Minnesota Statutes, Section 5.16, does hereby correct and amend the Certificate
of Designation of Rights and Preferences of Class F Convertible Preferred stock,
as follows, effective as of the 11th day of February, 2000:
1.) The undersigned, Edward J. Driscoll, Jr., executed and filed a
Certificate of Designation of Rights and Preferences of Class
F Convertible Preferred Stock which was filed with the
Minnesota Secretary of State on February 11, 2000.
2.) The Certificate of Designation of Rights and Preferences of
Class F Convertible Preferred Stock inadvertently indicated
that the mandatory conversion provision would be pursuant to a
formula of conversion based, in part, on a defined Liquidation
Amount, whereas the mandatory conversion provision will, in
fact, be pursuant to a formula of conversion based, in part,
on a defined Conversion Price.
3.) Section 8, Mandatory Conversion, Subpart (a), of said
Certificate of Designation of Rights and Preferences of Class
F Convertible Preferred Stock should read:
(a) Mandatory Conversion. Each share of Class F Preferred
Stock shall automatically be converted into shares of Common
Stock at the Conversion Price in effect on the last Market Day
of the first consecutive period of twenty Market Days during
which the Current Market Price Per Common Share is at least
155% of the Conversion Price beginning after the later to
occur of the closing of an underwritten offering which is a
"Qualified Initial Public Offering" pursuant to an effective
registration statement under the Securities Act or the third
anniversary of the date of issuance of the Class F Preferred
Stock ("Initial Issuance Date").
IN WITNESS WHEREOF, I have hereunder subscribed my name effective the
9th day of March, 2000.
/s/ Edward J. Driscoll, Jr.
----------------------------------
Edward J. Driscoll, Jr., Secretary