EXHIBIT 4.45
CERTIFICATE OF DESIGNATION OF RIGHTS AND
PREFERENCES
OF
CLASS H 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 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.
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 September 29, 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 60,000 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 H Convertible Preferred Stock" (the "Class H Preferred Stock")
and the number of shares constituting such series shall be 60,000.
2. RANK. The Class H 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 H 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, par value $0.01 per share (the "Class F Preferred Stock"),
(vii) the Company's Class G Convertible Preferred Stock, par value $0.01 per
share (the "Class G Preferred Stock"), and (viii) 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 H Preferred Stock ((i) through
(vii) 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").
3. DIVIDENDS.
(a) Each holder of Class H 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
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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 H 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 H 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 H 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 H 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 H 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 sufficient for such payment is not set apart, as aforesaid, all
dividends declared upon shares of the Class H 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 H Preferred Stock and accrued and unpaid
on such Parity Stock.
(e) Limit on Junior Dividends and Redemption. For so long as
the Class H Preferred Stock remains outstanding, the Company shall not
pay any dividend upon the Junior Stock, whether in cash or other
property (other than in shares of Junior Stock with respect to Junior
Stock existing as of the date of the filing of the Certificate of
Designation of the Class H Preferred Stock (the "Filing Date")), or
purchase, redeem or otherwise acquire any such Junior
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Stock other than as required with respect to written agreements
existing as of the Filing Date, but in no event prior to September 29,
2003.
4. LIQUIDATION, DISSOLUTION OR WINDING-UP.
(a) Liquidation Preference. In the event of any Liquidation of
the Company, the holders of shares of Class H 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 H
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 H 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.
(ii) The term "Liquidation Amount" shall mean an
amount per share of Class H Preferred Stock equal to the
greater of: (A) the Accreted Value plus any per share
dividends accrued on the Class H 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 H
Preferred Stock would have received had they exercised their
right to convert the Class H Preferred Stock to Common Stock
immediately prior to a Liquidation of the Company.
5. VOTING.
(a) Number of Votes. (i) Each issued and outstanding share of
Class H 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 H Preferred Stock is then convertible (as adjusted from time to
time), 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,
provided that no Winstar Holder, as defined in Section (b) (based
solely on its ownership of Class E Preferred Stock, Class H
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Preferred Stock and shares of Common Stock issued upon exercise of
warrants issued in connection with the issuance of the Class H
Preferred Stock ("Warrant Shares")) shall be entitled to more than the
number of votes equal to 17.5% of the votes cast at any meeting for
which a vote is being taken ("Maximum Percentage") (and therefore to
the extent that its ownership of Class E Preferred Stock, Class H
Preferred Stock and Warrant Shares could entitle it to voting power in
excess of 17.5%, the voting power with respect to votes cast shall be
reduced to the Maximum Percentage). Notwithstanding the foregoing,
effective as of any April 1 on or after April 1, 2002, upon written
notice to the Corporation given to it by any holder whose voting power
has been limited to the Maximum Percentage provided for in the previous
sentence (the "Voting Limitation") no later than the March 31 prior
thereto, the Voting Limitation shall be terminated and cease to have
further effect for such security holder. 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 H
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.
(ii) Notwithstanding anything to the contrary, no
Voting Limitation shall apply to any shares of Class H
Preferred Stock assigned pursuant to Section 3.4 of the
Securities Purchase Agreement among the Company, Winstar
Communications, Inc., and Winstar Credit Corp. dated September
29, 2000 ("Purchase Agreement").
(b) Winstar Director. So long as Winstar Communications, Inc.
or any of its subsidiaries (collectively, "Winstar Holders") continues
to own at least 24,000 shares of Class H Preferred Stock and/or such
number of shares of Common Stock into which such shares of Class H
Preferred Stock are convertible, and to the extent Winstar has not
assigned such right pursuant to subsection 5(c) below, such Winstar
Holders shall have the right to appoint two persons to serve as
directors of the Company (the "Winstar Directors") which may,
individually or collectively, at the sole discretion of the Winstar
Holders serve as non-voting observers of the Company; provided that (i)
so long as the Voting Limitation is in effect, the Winstar Holders of
the Class E Preferred Stock and Class H Preferred Stock shall
collectively be entitled to appoint only one person to serve as a
Winstar Director who, at the sole discretion of the Winstar Holders,
may be a non-voting observer and (ii) if the Corporation consummates an
initial public offering of its securities, the Winstar Holders shall
collectively only be entitled to appoint one person to serve as a
Winstar Director, who at the sole discretion of the Winstar Holders,
may be a non-voting observer. Notwithstanding the foregoing, in the
event the Winstar Holders own collectively less than 24,000 but more
than 12,000 shares of Class H Preferred Stock and/or such number of
shares of Common Stock into which such shares of Class H Preferred
Stock are convertible, the Winstar Holders shall collectively have the
right to appoint only one person to serve as a director of the
Corporation who may, at the sole discretion of Winstar, serve as a
non-voting observer of the Corporation. In the event the Winstar
Holders own collectively, 12,000 or less than 12,000 shares of Class H
Convertible Preferred Stock and/or such number of Shares of Common
Stock into which such shares of Class H Preferred Stock are
convertible, the Winstar Holders shall have no right to appoint anyone
to serve as a director of the Corporation and no right to appoint
anyone as a non-voting observer. Any vacancy in the position of a
Winstar Director or the observer may be filled by and only by the
Winstar Holders. Any Winstar Director may, during his or her term of
office, be removed at any time, with or without cause, by and only by
the Winstar Holders.
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(c) Assignee Director. Winstar Credit Corp. ("Winstar Sub")
may transfer its right to appoint Winstar Director(s) to any assignee
of Winstar Sub pursuant to Section 3.4 of the Purchase Agreement who
purchases at least 15,000 shares of Class H Preferred Stock and/or such
number of shares of Common Stock into which such shares are convertible
pursuant to the Purchase Agreement (an "Assignee Director"). No more
than one director seat may be assigned to any one assignee unless such
assignee purchased at least 30,000 shares of Class H Preferred Stock
and/or such number of shares of Common Stock into which such shares are
convertible. Winstar Sub also has the right to provide up to two
observer rights to the Company's Board of Directors. Observer rights
may only be granted to assignees who have purchased at least 15,000
shares of Class H Preferred Stock and/or such number of shares of
Common Stock into which such shares are convertible. Any vacancy in the
position of the Assignee Director or observer may be filled by and only
by such assignee. Any Assignee Director may, during his or her term in
office, be removed at any time, with or without cause, by and only by
such assignee. Any assignee who has been granted the right to appoint
director(s) and/or observer(s) to the Company shall only be able to
exercise such right if and only if (i) with respect to the right to
appoint an Assignee Director, such assignee owns at least 15,000 shares
of Class H Preferred Stock and/or such number of shares of Common Stock
into which such shares are convertible and (ii) with respect to the
right to appoint an observer to the Company's Board of Directors, if
such assignee owns at least 10,000 shares of the Class H Preferred
Stock and/or such number of shares of Common Stock into which such
shares are convertible. The provisions of Sections 7.14(b) and (c) of
the Purchase Agreement shall apply with respect to the Assignee
Director or observer to the same extent that they apply to any Winstar
Director.
(d) 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 H 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 H
Preferred Stock, or (B) authorize the issuance of a Senior Stock or a
class or series of capital stock having preferences or rights with
respect to voting, dividends or dissolution or the distribution of
assets that would be superior to the preferences or rights of the Class
H 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) 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 H 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
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next preceding the date fixed for such redemption or for the payment of any
amounts distributable on liquidation to the holders of Class H 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 H
Preferred Stock into Common Stock of the Company.
(a) Initial Conversion Rate. The initial Conversion Rate for
the Class H Preferred Stock shall be 193.7984 shares of Common Stock
for each one share of Class H 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 H Preferred Stock,
the Company shall round up to the next whole share the number of shares
of Class H 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 H 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 H 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).
(d) Exercise. In order to exercise the conversion privilege,
the holder of any Class H 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 H 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 H 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 H 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 H 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
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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 H 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 H 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 H 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 H 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 H 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 H 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 H 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 H 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 (9) 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 (9) inclusive, be reduced to
the Conversion Price (calculated to the nearest one-
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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 (9) 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 (9) 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
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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
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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.
(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 H 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
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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 H
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 H 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 H
Preferred Stock shall have the right to acquire and receive upon
conversion of the Class H 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 H 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 (9) 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)(9)) or (iii) on conversion of the Class B
Preferred Stock, the Class C Preferred Stock or the Class D 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
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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 H 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 H 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 H 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 H 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 H 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 H
Preferred Stock will be given prompt written notice of the occurrence
of mandatory conversion and at least sixty
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(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 H Preferred Stock. Such notice will be sent by
mail, first class, postage prepaid, to each record holder of shares of
Class H Preferred Stock at such holder's address appearing on the stock
register. Each holder of shares of Class H 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 of occurrence of mandatory conversion or the date fixed for
any optional conversion, all rights with respect to the Class H
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 H 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 H 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 H 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 H 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 H 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 H 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.
(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
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if the purchase of the Class H 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 H 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 H Preferred Stock for
cash. The Company shall first comply with this Section 9(c) before it
shall repurchase for cash any Class H 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 H Preferred Stock. If
applicable, such notice shall contain all instructions and materials
necessary to enable such holders to tender Class H 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 H 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 H Preferred Stock not
tendered will continue to accrue dividends;
(iv) that, unless the Company defaults in making
payment therefor, any share of Class H 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
H Preferred Stock purchased pursuant to a Change of Control
Offer will be required to surrender stock certificates
representing such shares of Class H 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 H
Preferred Stock at the address 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 H Preferred Stock the
holder delivered for purchase and a statement that such holder
is withdrawing its election to have such shares of Class H
Preferred Stock purchased;
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(vii) that holders who tender only a portion of the
shares of Class H 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 H 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 H 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 H 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 H Preferred Stock tendered pursuant to
the Change of Control Offer, dividends will cease to accrue with
respect to the shares of Class H 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 H Preferred Stock shall deliver, prior to the 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 H 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 H 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 H 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 H 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,
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optional or other special rights and the qualifications, limitations or
restrictions thereon that the Class H Preferred Stock had immediately prior to
such transaction.
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11. REDEMPTION.
(a) Mandatory Redemption. On December 31, 2008, the Company
will be required to redeem all of the outstanding shares of Class H
Preferred Stock at a redemption price per share equal to the
Liquidation Amount on such date.
(b) 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 H
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.
(c) 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 H 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 dividends on the shares
to be redeemed will cease to accrue on such redemption date.
(d) 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 H 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 H 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 H 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.
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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 H
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 H Preferred Stock, then the
holders of the Class H 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 H 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 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 H 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 H Preferred Stock to enable such shares of Common
Stock to be sold without restriction.
16. DEFINITIONS. The following terms, as used herein, shall have the
following meanings:
"Accreted Value" equals, with respect to one share of Class H 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 H 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 H
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 H 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 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.
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"Change of Control Amount" means, with respect to one share of Class H
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 H Preferred Stock would have received had he exercised his right to
convert a share of Class H 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 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 H Preferred Stock, including
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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.
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IN WITNESS WHEREOF, the undersigned has executed this certificate as of
the 2nd day of October, 2000.
/s/ Edward J. Driscoll, Jr.
-----------------------------------
Edward J. Driscoll, Jr.
Secretary
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