Exhibit 4.5
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
OF
CD&L, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
The undersigned, Mark Carlesimo, Vice President of CD&L, INC.,
a corporation organized and existing under the laws of the State of Delaware
(the "Company"), does hereby certify that, pursuant to authority vested in the
Board of Directors of the Company (the "Board") by Article Fourth of the
Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), the following resolution was adopted as of April 13, 2004 by
the Board of Directors of the Company pursuant to Section 151 of the Delaware
General Corporation Law:
"RESOLVED that, pursuant to authority vested in the Board of
Directors of the Company by Article Fourth of the Certificate of Incorporation
of the Company, out of the total authorized number of 2,000,000 shares of
Company preferred stock, par value $.001 per share ("Preferred Stock"), there
shall be designated a series of 392,157 shares which shall be issued in and
constitute a single series to be known as "Series A Convertible Redeemable
Preferred Stock" (hereinafter called the "Series A Preferred Stock"). The shares
of Series A Preferred Stock shall have the voting powers, designations,
preferences and other rights, and the qualifications, limitations and
restrictions thereof (in addition to the voting powers, designations,
preferences and other rights, and the qualifications, limitations and
restrictions set forth in the Certificate of Incorporation which are applicable
to Preferred Stock generally) set forth below:
Section 1. Designation and Amount; Ranking.
(a) This series of Preferred Stock shall be designated as the
"Series A Convertible Redeemable Preferred Stock" of the Company, and the
authorized number of shares constituting such series shall be 392,157, par value
$.001 per share. The price and the liquidation preference of shares of Series A
Preferred Stock shall be the Liquidation Preference.
(b) The shares of Series A Preferred Stock shall rank senior
to shares of Junior Securities of the Company as to the payment of dividends and
the distribution of assets upon the liquidation, dissolution or winding up of
the Company.
Section 2. Dividends.
Dividends on the Series A Preferred Stock shall be declared
and paid from time to time as determined by the Company's Board out of funds
legally available therefor. The Company shall not declare, pay or set aside any
dividends or distributions (other than dividends payable solely in shares of
Common Stock) ("Dividends" or "Dividend", as applicable) on shares of Junior
Securities, unless the holders of Series A Preferred Stock first receive, or
simultaneously receive, a Dividend on each outstanding share of Series A
Preferred Stock equal to the product of (i) the per share Dividend to be
declared, paid or set aside for the Junior Securities, multiplied by (ii) the
number of shares of Common Stock into which such share of Series A Preferred
Stock is convertible immediately prior to the record date set by the Company
with respect to such Dividends. All Dividends paid with respect to shares of
Series A Preferred Stock shall be paid pro rata to the holders entitled thereto.
Section 3. Change in Control.
(a) In the event of a Change in Control of the Company,
the holders of shares of the Series A Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Company available for distribution
to its stockholders (after payment or provision for payment of all debts and
liabilities of the Company), before any payment shall be made to the holders of
Junior Securities by reason of their ownership thereof, for each share of Series
A Preferred Stock, an amount equal to the Issue Price plus any and all accrued
but unpaid dividends upon the Series A Preferred Stock, if any (subject to
equitable adjustment in the event of any stock dividend, stock split,
combination, reorganization, recapitalization, reclassification, or other
similar event affecting the shares of Series A Preferred Stock) pursuant to
Section 4(b)) (the "Liquidation Preference").
(b) If, upon such Change in Control of the Company, the
assets to be distributed are insufficient to permit the payment in full to the
holders of the Series A Preferred Stock of all amounts distributable to them
under Section 3(a) hereof, then the entire assets of the Company available for
such distribution shall be distributed ratably among the holders of the Series A
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive under Section 3(a).
(c) After payment has been made in full pursuant to
Section 3(a) above, the remaining assets available for distribution (after
payment or provision for payment of all debts and liabilities of the Company)
shall be distributed among the holders of the Junior Securities according to
their respective rights and preferences.
(d) Distributions Other than Cash. Whenever the
distribution provided for in this Section 3 shall be payable in property other
than cash, the value of such distribution shall be the fair market value as
follows:
(i) if such property is traded on a securities exchange
or through the Nasdaq National Market and if no
restrictions exist with respect to the
transferability thereof, the value shall be deemed to
be the average of the closing prices of the
securities on such exchange or system over the thirty
(30) calendar day period ending three (3) calendar
days prior to, but not including, the effective date
of the Change in Control;
(ii) if such property is actively (as determined in good
faith by the Board) traded over-the-counter but not
on the Nasdaq National Market and if no restrictions
exist with respect to the transferability thereof,
the value shall be deemed to be the average of the
closing bid or sale prices (whichever is applicable)
over the thirty (30) calendar day period ending three
(3) calendar days prior to, but not including, the
closing; and
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(iii) if Subsections 3(e)(i) and 3(e)(ii) do not apply, the
value shall be the fair market value thereof, as
determined in good faith by the Board.
(e) The Company shall give each holder of Series A
Preferred Stock written notice of any Change in
Control not later than ten (10) days prior to any
meeting of stockholders to approve such Change in
Control or, if no meeting is to be held, not later
than twenty (20) calendar days prior to the date of
such Change in Control.
Section 4. Conversion. The holders of Series A
Preferred Stock shall have conversion rights as follows (the "Conversion
Rights"):
(a) Right to Convert; Conversion Price. Each share of Series A
Preferred Stock shall be convertible, without the payment of any additional
consideration by the holder thereof and at the option of the holder thereof, at
any time and from time to time after the date of issuance of such share, at the
office of the Company or any transfer agent for the Series A Preferred Stock,
into such number of fully paid and non-assessable shares of the Common Stock
(excluding fractional shares which shall be rounded to the nearest full share)
as is determined by dividing the Issue Price by the Series A Conversion Price in
effect at the time of conversion. The "Series A Conversion Price" for purposes
of calculating the number of shares of the Common Stock deliverable upon
conversion without the payment of any additional consideration by the holder of
Series A Preferred Stock shall initially be equal to $1.02. Such initial Series
A Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of the Common Stock into which Series A Preferred Stock is
convertible, as hereinafter provided. In the event of a redemption of any shares
of Series A Preferred Stock pursuant to Section 8 hereof, the Conversion Rights
of the shares designated for redemption shall terminate at the close of business
on the first full day preceding the date fixed for redemption, unless the
redemption price is not paid on such redemption date, in which case the
Conversion Rights for such shares shall continue until such price is paid in
full. In the event of a Change in Control of the Company, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on a Change in Control
to the holders of Series A Preferred Stock, unless the Liquidation Preference is
not paid upon such date, in which case the Conversion Rights for such shares
shall continue until such Liquidation Preference is paid in full. At the time of
conversion and upon receipt of the stock certificates surrendered for
conversion, the Company shall pay in cash to the holder thereof an amount equal
to all accrued but unpaid dividends upon the Series A Preferred Stock, if any,
to the date of conversion, without interest.
(b) Mechanics of Conversion. Before any holder of Series A
Preferred Stock shall be entitled to convert the same into shares of the Common
Stock, such holder shall surrender the certificate or certificates therefor,
duly endorsed or with stock powers attached, at the office of the Company or of
any transfer agent for the Series A Preferred Stock, and shall give written
notice to the Company at such office that such holder elects to convert the same
and shall state therein the name of such holder or the name or names of the
nominees of such holder in which such holder wishes the certificate or
certificates for whole shares of the Common Stock to be issued and the date of
such
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conversion (the "Conversion Date") which shall be a Business Day. The Company
shall, within ten (10) Business Days, issue and deliver at such office to such
holder of Series A Preferred Stock, or to such holder's nominee or nominees, a
certificate or certificates for the number of whole shares of the Common Stock
to which such holder shall be entitled. Such conversion shall be deemed to have
been made immediately prior to the close of business on the Conversion Date, and
the Person or Persons entitled to receive the whole shares of Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such whole number of shares of Common Stock on such date. In case
the number of shares of Series A Preferred Stock represented by the certificate
or certificates surrendered pursuant to subparagraph 4(b) exceeds the number of
shares converted, the Company shall upon such conversion, execute and deliver to
the holder thereof at the expense of the Company, a new certificate for the
number of shares of Series A Preferred Stock represented by the certificate or
certificates surrendered which are not to be converted. Such conversion shall be
deemed to have been made immediately prior to the close of business on the
Conversion Date and the Person or Persons entitled to receive the shares of
Common Stock issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date. The
Company shall pay any and all issue and transfer taxes that may be payable in
respect of the issuance and delivery of whole shares of the Common Stock upon
conversion of the Series A Preferred Stock.
(c) Termination of Rights upon Conversion. All shares of
Series A Preferred Stock converted 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 and to further accrue dividends
shall immediately cease and terminate upon such conversion (except only the
right of the holders thereof to receive shares of the Common Stock in exchange
therefor pursuant to the terms hereof).
(d) Adjustments to Conversion Price for Dilutive Issuances.
The Series A Conversion Price shall be subject to adjustment as follows:
(i) In case the Company shall at any time
subdivide (by any stock split, stock
dividend or otherwise) its outstanding
shares of Common Stock into a greater number
of shares, the Series A Conversion Price in
effect immediately prior to such subdivision
shall be proportionately reduced, and,
conversely, in case the outstanding shares
of Common Stock shall be combined into a
smaller number of shares, the Series A
Conversion Price in effect immediately prior
to such combination shall be proportionately
increased. In the case of any such
subdivision, no further adjustment shall be
made pursuant to subparagraph (ii) below by
reason thereof.
(ii) In case the Company distributes to holders
of Junior Securities shares of capital
stock, then lawful and adequate provision
shall be made so that each holder of a share
of Series A Preferred Stock shall
thereafter, upon conversion, have the right
to receive an equal amount of capital stock
as if the Series A Preferred Stock had been
converted at that time.
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Section 5. Voting Rights of Series A Preferred Stock.
(a) Except as otherwise required by law, as set forth in any
agreement between the Company and the holders of the Series A Preferred Stock,
or as provided in this Certificate of Designations, each holder of shares of
Series A Preferred Stock shall have no voting rights. So long as at least
196,079 shares of Series A Preferred Stock (a majority of the initially issued
shares of Series A Preferred Stock) are outstanding, except where the vote or
written consent of the holders of a greater number of shares of the Company is
required by applicable law or the Certificate of Incorporation and in addition
to any other vote that may be required by applicable law, without the prior
written approval of the holders of a majority of the then outstanding Series A
Preferred Stock, given in person or by proxy, either in writing or at a meeting
called for that purpose, the Company will not alter or modify any of the terms,
designations, powers, preferences, privileges or other rights of, or
restrictions provided for the benefit of holders of Series A Preferred Stock.
(b) So long as at least 196,079 shares of Series A Preferred
Stock (a majority of the initially issued shares of Series A Preferred Stock)
are outstanding, the holders of the Series A Preferred Stock, voting as a
separate class, shall have the right to elect two members of the Board (the
"Series A Directors"). The rights of the holders of the Series A Preferred Stock
to elect the Series A Directors shall terminate on the first date on which less
than 196,079 shares (a majority of the initially issued shares of Series A
Preferred Stock) of Series A Preferred Stock are outstanding (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or similar recapitalization affecting such shares). At any meeting
(or in a written consent in lieu thereof) held for the purpose of electing
directors, the presence in person or by proxy (or the written consent) of the
holders of at least a majority in interest of the then outstanding shares of
Series A Preferred Stock shall constitute a quorum of the Series A Preferred
Stock for the election of the Series A Directors; provided that such election
shall occur at a duly convened meeting of the stockholders or otherwise in
accordance with the by-laws of the Company. A vacancy in any directorship
elected by the holders of the Series A Preferred Stock shall be filled only by
vote or written consent of a majority in interest of the holders of the Series A
Preferred Stock. The term of office of the Series A Directors shall terminate on
the earlier to occur of (i) the date three (3) months subsequent to the
termination of such rights, or (ii) the annual meeting of stockholders of the
Company immediately following the termination of such rights.
(c) With respect to the voting rights of the holders of the
Series A Preferred Stock pursuant to this Section 5, each holder of Series A
Preferred Stock shall be entitled to one vote for each share of Series A
Preferred Stock with respect to each matter referred to above.
Section 6. Notices of Record Date. In the event:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time issuable upon conversion
of the Series A Preferred Stock) for the purpose of entitling or enabling them
to receive any Dividend, or to receive any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right;
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(b) of any capital reorganization of the Company, any
reclassification of the Common Stock of the Company, any consolidation or merger
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the surviving entity and its Common Stock is not
converted into or exchanged for any other securities or property), or any
transfer of all or substantially all of the assets of the Company;
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
(d) of any other act or transaction requiring the approval of
holders of the Series A Preferred Stock pursuant to Section 5 above,
then, and in each such case, the Company will deliver or cause to be delivered
to the holders of the Series A Preferred Stock a notice specifying, as the case
may be, (i) the record date for such Dividend or right, and the amount and
character of such Dividend or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation, winding-up, act or transaction is to take place, and the time, if
any is to be fixed, as of which the holders of record of Common Stock (or such
other stock or securities at the time issuable upon the conversion of the Series
A Preferred Stock) shall be entitled to exchange their shares of Common Stock
(or such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up or other action. Such notice shall be
mailed at least fifteen (15) days prior to the record date (in the case of the
events described in Subsection 6(a)) or effective date (in the case of the
events described in Subsections 6(b), 6(c) and 6(d)).
Section 7. Common Stock Reserved. The Company shall
reserve and keep available out of its authorized but unissued Common Stock such
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A Preferred Stock.
Section 8. Redemption. The shares of Series A
Preferred Stock shall be redeemable as follows:
(a) Subject to the Company's legal ability to effect a
redemption under the applicable law, at any time on or after the initial
issuance date, the Company may elect to redeem all or any portion of the
outstanding shares of Series A Preferred Stock by paying for each share the
Issue Price.
(b) Notice of the election to redeem shall be mailed, not less
than thirty (30) days prior to the specified redemption date, to each holder of
Series A Preferred Stock which is to be redeemed, at such holder's address as it
appears on the books of the Company. The notice shall specify the date of
redemption and the amount payable per share.
(c) The holders of shares of Series A Preferred Stock which
have been called for redemption shall not have any rights as stockholders on and
after the specified redemption date, regardless of whether they have surrendered
their share certificates and received payment, except the right to receive the
redemption price (as described in paragraph (a) above), without interest, upon
surrender of their share certificates, provided that on or before the specified
redemption date the Company has deposited the funds necessary for redemption
with a bank or trust company with irrevocable instructions and authority to pay
the redemption price to the stockholders upon surrender of the appropriate share
certificates.
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Section 9. Reacquired Shares. Any shares of Series A
Preferred Stock converted, redeemed, purchased, or otherwise acquired by the
Company in any manner whatsoever shall, automatically and without further
action, be retired and canceled promptly after the acquisition thereof, and
shall not be reissued as shares of Series A Preferred Stock. Such shares shall
be restored to the status of authorized but unissued shares of Preferred Stock
and the Company from time to time shall take such action as may be necessary to
reduce accordingly the number of authorized shares of Series A Preferred Stock.
Section 10. No Impairment. The Company will not,
through any reorganization, transfer of assets, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company but will at all time in good faith assist in the
carrying out of all the provisions of this Certificate of Designations,
Preferences and Rights and in the taking of all such action as may be necessary
or appropriate in order to protect the conversion rights and liquidation
preferences granted hereunder of the holders of the Series A Preferred Stock
against impairment.
Section 11. No Waiver. Except as otherwise modified or
provided for herein, the holders of Series A Preferred Stock shall also be
entitled to, and shall not be deemed to have waived, any other applicable rights
granted to such holders under the Delaware General Corporation Law.
Section 12. Amendment; Waiver. Any term of the Series A
Preferred Stock may be amended or waived (including the adjustment provisions
included in Section 4(d) hereof) upon the written consent of the Company and the
holders of at least a majority of the Series A Preferred Stock then outstanding;
provided, however that the number of shares of Common Stock issuable upon
exercise of Conversion Rights hereunder and the Conversion Price may not be
amended, and the right to convert the Series A Preferred Stock may not be
altered or waived, without the written consent of the holders of all of the
Series A Preferred Stock then outstanding, except as provided in Section 4(d)
hereof.
Section 13. Remedies Cumulative. No failure or delay on
the part of the holders of the Series A Preferred Stock in the exercise of any
power, right or privilege under this Certificate of Designation shall impair
such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. All rights and remedies existing under this
Certificate of Designation are cumulative to and not exclusive of any rights or
remedies otherwise available.
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Section 14. Certain Definitions.
As used in this Certificate of Designations, Preferences and
Rights of Series A Convertible Redeemable Preferred Stock (this "Certificate of
Designations"), the following terms have the respective meanings set forth
below:
"Board" shall have the meaning set forth in the first
paragraph of this Certificate of Designation.
"Business Day" shall mean any day except Saturday, Sunday and
any day which in New York shall be a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close.
"Certificate of Incorporation" shall have the meaning set
forth in the first paragraph of this Certificate of Designation.
"Change in Control" shall be deemed to have occurred if any of
the following events occur:
(a) the consummation of any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the shares of the Company's Common Stock immediately prior to the
merger have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger; or
(b) the consummation of any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, other than to a subsidiary or
affiliate; or
(c) an approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company; or
(d) any action pursuant to which any person (as such term is
defined in Section 13(d) of the Securities Exchange Act of 1934), corporation or
other entity (other than the Lenders (as defined in the Amended Loan Agreement)
and any person who owns more than ten percent (10%) of the outstanding Common
Stock on the date hereof, the Company or any benefit plan sponsored by the
Company or any of its subsidiaries) shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of shares of capital stock entitled to vote generally
for the election of directors of the Company ("Voting Securities") representing
fifty-one (51%) percent or more of the combined voting power of the Company's
then outstanding Voting Securities (calculated as provided in Rule 13d-3(d) in
the case of rights to acquire any such securities), unless, prior to such person
so becoming such beneficial owner, the Company's Board of Directors shall
determine that such person so becoming such beneficial owner shall not
constitute a Change in Control; or
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(e) the individuals (A) who, as of the date hereof (including
the nominees of the holders of the Company's Series A Convertible Redeemable
Preferred Stock), constitute the Board of Directors (the "Original Directors")
and (B) who thereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of at least two
thirds of the Original Directors then still in office (such directors being
called "Additional Original Directors") and (C) who thereafter are elected to
the Board and whose election or nomination for election to the Board was
approved by a vote of at least two thirds of the Original Directors and
Additional Original Directors then still in office, cease for any reason to
constitute a majority of the members of the Board.
"Common Stock" means the common stock, par value $.001 per
share of the Company, including the stock into which the Series A Preferred
Stock is convertible, and any capital stock of any class of the Company
hereafter authorized that shall not be entitled to a fixed sum in respect of the
rights of the holders thereof to participate in dividends or in the distribution
of assets upon the voluntary or involuntary liquidation, dissolution or winding
up of the Company.
"Company" shall have the meaning set forth in the first
paragraph of this Certificate of Designation.
"Dividends" shall have the meaning set forth in Section 2 of
this Certificate of Designation.
"Issue Price" means $10.20 per share.
"Junior Securities" means (i) the Common Stock and (ii) all
classes and series of stock of the Company now or hereafter authorized, issued
or outstanding which by their terms do not expressly provide that they are
senior to, or on parity with, the Series A Preferred Stock with respect to
dividends or liquidation.
"Person" or "Persons" means and includes natural persons,
corporations, limited partnerships, general partnerships, joint stock companies,
joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereto.
"Preferred Stock" shall have the meaning set forth in the
resolution set forth in the preamble of this Certificate of Designation."
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IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Designations this 13th day of April, 2004.
CD&L, INC.
By:
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Name: Mark Carlesimo
Title: Vice-President
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