EXHIBIT 4.33
CERTIFICATE OF DESIGNATION OF
RIGHTS AND PREFERENCES
OF
CLASS G CONVERTIBLE PREFERRED STOCK
OF
WAM!NET INC.
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 the Company provide for a class of up to
9,900,000 shares known as Undesignated Stock, par value $0.01 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 18, 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 10,000 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 G Convertible Preferred Stock" (the "Class G Preferred Stock"), par value
$0.01 per share, and the number of shares constituting such series shall be
10,000.
2. RANK. The Class G 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 G 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 Convertible Preferred
Stock, par value $0.01 per share (the "Class E Preferred Stock"), (vi) the
Company's Class F Convertible Preferred Stock per value $.01 per share (the
"Class F Preferred Stock) and (vii) 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 G Preferred Stock ((i) through (vi) 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 preferred stock except for any class or series which are Senior Stock
or Parity Stock ((i) and (ii) together, the "Junior Stock").
3. DIVIDENDS. (a) Payment. The holders of Class G Preferred Stock shall be
entitled to receive dividends as set forth herein, payable only (i) if, as and
when declared by the Board, out of any funds legally available therefor or (ii)
to the extent declared by the Board, upon the Liquidation of the Company,
subject to and as set forth in Section 4 hereof. All such dividends (X) shall be
cumulative and shall accrue on each share of Class G Preferred Stock from the
date of issuance thereof at the rate of SEVEN PERCENT (7%) per annum of the
original purchase price per share ($1,000) for such shares of Class G Preferred
Stock (the "Original Purchase Price Per Share"), solely in the form of
additional shares of Class G Preferred Stock (Y) shall be payable before any
dividends shall be set apart for or paid upon Junior Stock in any year and (Z)
shall be payable in accordance with Section 2 when any dividends shall be set
apart for or paid upon Parity Stock in any year. All such dividends declared
upon Class G Preferred Stock shall be declared pro rata per share.
(b) Limit on Junior Dividends and Redemption. For so long as the Class G
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(b) shall prohibit or otherwise
limit the ability of the Company to (i) purchase unvested shares of Common Stock
from former employees of the Company at their original purchase price or (ii)
make any purchase, redemption or other acquisition pursuant to arrangements
existing as of the date of the initial issuance of the Class G Preferred Stock
(the "Initial Issuance 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 G 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 G 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 G 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, and 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.
(ii) The term "Liquidation Amount" shall mean an amount per share of Class
G Preferred Stock equal to the greater of: (A) the Original Purchase Price Per
Share plus any per share dividends accrued on the Class G Preferred Stock but
not paid and (B) the per share amount that holders of the Class G Preferred
Stock would have received had they exercised their right to convert the Class G
Preferred Stock to Common Stock immediately prior to a Liquidation of the
Company; provided that for purposes of the antidilution provisions of Section 7
hereof and the mandatory conversion provisions of Section 8 hereof, the term
"Liquidation Amount" shall exclude any dividends accrued on the Class G
Preferred Stock but not paid.
5. VOTING. (a) Number of Votes. Each issued and outstanding share of Class
G Preferred Stock shall be entitled to the number of votes equal to the number
of shares of Common Stock into which each such share of Class G Preferred Stock
is then convertible (as adjusted from time to time) at each meeting of
stockholders 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 the stockholders of the Company 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 G Preferred Stock and of any other outstanding preferred
stock 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 without first obtaining the affirmative vote or written
consent of a majority of the holders of the Class G Preferred Stock, voting
separately as a class, 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 G Preferred Stock.
6. OPTIONAL CONVERSION. (a) Each share of Class G Preferred Stock may be
converted at any time, at the option of the holder thereof, into the number of
fully paid and nonassessable shares of Common Stock obtained by dividing the
Original Purchase Price Per Share by the Conversion Price then in effect (the
"Conversion Rate"); provided, however, that upon any redemption of the Class G
Preferred Stock contemplated by Section 9 hereof or 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 G
Preferred Stock.
(b) Initial. Subject to the provisions of Subsection (a) of this Section 6,
the initial Conversion Rate for the Class G Preferred Stock shall be
193.79844961 shares of Common Stock for each one share of Class G Preferred
Stock surrendered for conversion representing an initial conversion price of
$5.16 per share of Common Stock (the price per share of Common Stock at which
the Class G Preferred Stock may be converted into shares of Common Stock shall
be referred to herein as the "Conversion Price"). The applicable Conversion Rate
and Conversion Price from time to time in effect is subject to adjustment as
hereinafter provided.
(c) No Fractional Shares. The Company shall not issue fractions of shares
of Common Stock upon conversion of Class G Preferred Stock or scrip in lieu
thereof. If any fraction of a share of Common Stock would, except for the
provisions of this Section 6(c), be issuable upon conversion of any Class G
Preferred Stock, the Company shall in lieu thereof pay to the person entitled
thereto an amount in cash equal to the current value of such fraction,
calculated to the nearest one hundredth (1/100) of a share, to be computed (i)
if the Common Stock is listed on any national securities exchange on the basis
of the last sales price of the Common Stock on such exchange (or the quoted
closing bid price if there shall have been no sales) on the date of conversion
or (ii) if the Common Stock shall not be listed, on the basis of the mean
between the closing bid and asked prices for the Common Stock on the date of
conversion as reported by Nasdaq, or its successor, and if there are not such
closing bid and asked prices, on the basis of the fair market value per share as
determined by the Board of Directors of the Company.
(d) 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 G 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 G 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).
(e) Exercise. In order to exercise the conversion privilege, the holder of
any Class G 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 G 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
G 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 G 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. As soon as practicable after receipt of such notice and the
surrender of the certificate or certificates for Class G 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(c) in
respect of any fraction of a share of Common Stock otherwise issuable upon such
conversion.
(f) Reservation of Shares of Common Stock. The Company shall at all times
while any shares of Class G 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 G 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 G 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 G 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.
(g) Surrender. All shares of Class G 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 accrued and unpaid dividends on such shares
of Common Stock. Any shares of Class G 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 G Preferred Stock accordingly.
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 G 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 Initial Issuance 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 less than the per share Conversion Price in effect
immediately prior to the time 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:
(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 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 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 not MCI WCOM
shall exercise such Class B Warrants, the following shall apply: the
consideration per share that the Common Stock shall be deemed to have been
issued or sold at shall be equal to the Conversion Price that would have been
payable by the holder of the Class G Preferred Stock on the Initial Issuance
Date if the vested Class B Warrants had vested and been exercised (and the
exercise price thereon had been paid to the Company) prior to the Initial
Issuance Date.
(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, as soon as possible after
the conversion of any Class G Preferred Stock, the Company shall pay to the
person converting such Class G Preferred Stock an amount equal to the aggregate
value at the time of such exercise of all 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 G 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 G 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 G Preferred
Stock shall have the right to acquire and receive upon conversion of the Class G
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 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 G 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) in connection with a public or private debt
financing effected by the Company (other than with an affiliate of the Company,
including MCI WCOM) within nine months after the Initial Issuance Date, (ii)
after the issuance of shares of Common Stock to the public in an underwritten
offering pursuant to a registration statement filed under the Securities Act of
1933, as amended (the "Securities Act") covering the offer and sale of Common
Stock in which the proceeds to the Company are not less than $20 million, (iii)
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 in effect on the Initial Issuance Date or
thereafter adopted by the Board, (iv) pursuant to options, warrants and
conversion rights in existence on the Initial Issuance Date (other than as
provided for in Section 7(b)(10)) or (v) on conversion of the Class B Preferred
Stock, the Class C Preferred Stock or the Class D Preferred Stock or the sale of
any additional shares of any of the foregoing at a price not less than the
applicable conversion price thereof.
(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 G 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 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 G 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 G 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 G Preferred Stock shall
automatically be converted into shares of Common Stock at the then effective
Conversion Price at any time upon the closing of an underwritten offering
pursuant to an effective registration statement under the Securities Act,
covering the offer and sale of Common Stock to the public. In addition, each
share of Class G Preferred Stock shall automatically be converted into shares of
Common Stock at the then effective Conversion Price for such shares (A) upon the
vote to so convert of the holders of at least a majority of the shares of Class
G Preferred Stock then outstanding or (B) at any time after the conversion into
Common Stock of at least a majority of the shares of Class G Preferred Stock
issued on the Initial Issuance Date.
(b) Procedures. All holders of record of shares of Class G Preferred Stock
will be given at least twenty (20) days' prior written notice of the date fixed
and the place designated for mandatory conversion of all of such shares of Class
G Preferred Stock
pursuant to this Section 8. Such notice will be sent by mail, first class,
postage prepaid, to each record holder of shares of Class G Preferred Stock at
such holder's address appearing on the stock register. On or before the date
fixed for conversion each holder of shares of Class G 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
certificates for the number of shares of Common Stock to which such holder is
entitled pursuant to this Section 8. On the date fixed for conversion, all
rights with respect to the Class G 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 G 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 G 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 G Preferred Stock represented thereby
converted into Common Stock for all purposes, notwithstanding the failure of the
holder or holders thereof to surrender such certificates on or prior to such
date. As soon as practicable after the date of such mandatory conversion and the
surrender of the certificate or certificates for Class G 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 cash as provided in Section 6(b) in respect of any
fraction of a share of Common Stock otherwise issuable upon such conversion.
(c) Lock-up. In case of any optional conversion pursuant to Section 6 or
mandatory conversion pursuant to this Section 8, the holders of the Class G
Preferred Stock agree not to resell any of the Common Shares acquired upon
conversion for a period not exceeding 180 days following the Company's initial
public offering in accordance with customary terms and conditions of lock-up
agreement as may be reasonably required by the underwriter of the offering.
9. REDEMPTION.
(a) Redemption Price. At any time within 18 months from the Initial
Issuance Date, the Company may redeem all (but not less than all) of the shares
of the Class G Preferred Stock at Original Purchase Price plus an amount equal
to the per share dividends accrued on the Class G Preferred Stock but not paid
(such amount, the "Redemption Price").
(b) Redemption Notice; Surrender. At least thirty (30) days prior to the
date that the Company elects to redeem the Class G Preferred Stock (the
"Redemption Date"), written notice shall be mailed, postage prepaid, to each
holder of record of Class G
Preferred Stock to be redeemed, at his or its post office address last shown on
the records of the Company, notifying such holder of the number of shares so to
be redeemed, specifying the Redemption Date and calling upon such holder to
surrender to the Company, in the manner and at the place designated, his or its
certificate or certificates representing the shares to be redeemed (such notice,
the "Redemption Notice"). On or prior to each Redemption Date, each holder of
Class G Preferred Stock to be redeemed shall surrender his or its certificate or
certificates representing such shares to the Company, in the manner and at the
place designated in the Redemption Notice, and thereupon the Redemption Price of
such shares shall be payable to the order of the person whose name appears on
such certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. From and after the Redemption Date, unless there
shall have been a default in payment of the Redemption Price, all rights of the
holders of the Class G Preferred Stock designated for redemption in the
Redemption Notice as holders of Class G Preferred Stock of the Company (except
the right to receive the Redemption Price without interest upon surrender of
their certificate or certificates) shall cease with respect to such shares, and
such shares shall not thereafter be transferred on the books of the Company or
be deemed to be outstanding for any purpose whatsoever.
10. CONVERTED AND REACQUIRED SHARES. Any shares of Class G 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.
RESOLVED FURTHER, that the officers of the 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 the Company and in its name, any
and all documents required in connection with the establishment and
authorization of the Company's Class G 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 the matters
set out in the foregoing Certificate are true and correct of his own knowledge.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the
18th day of February, 2000.
/s/ Edward J. Driscoll, Jr.
------------------------------------
Edward J. Driscoll, Jr., Secretary