SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
---------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 28, 2000
FRONTLINE CAPITAL GROUP
(Formerly known as Reckson Service Industries, Inc.)
(Exact name of Registrant as specified in its Charter)
Delaware
(State of Incorporation)
0-30162 11-3383642
(Commission File Number) (IRS Employer Id. Number)
1350 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices) (Zip Code)
(212) 931-8000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
Name Change. On March 8, 2000, Reckson Service Industries, Inc. (the
"Company") formally changed its name to FrontLine Capital Group. The Company's
headquarters are currently located at 1350 Avenue of the Americas, New York,
New York.
Preferred Stock Issuances. From January 26, 2000 to March 17, 2000, the
Company completed convertible preferred stock offerings to Warburg Dillon
Read, LLC of an aggregate of 26,000 shares of 8.75% Cumulative Convertible
Preferred Stock for net proceeds of $24.6 million.
Dividends on the Preferred Stock are payable quarterly in cash or, at the
Company's election, in common stock, provided certain conditions have been
satisfied. The Preferred Stock is redeemable on or after the third anniversary
of the date of issuance and is convertible at any time, at the option of the
holder, on or after the one year anniversary of the date of issuance. The
Preferred Stock is convertible into shares of the Company's common stock at
prices ranging from $66.30 to $75.08.
Warrant Issuance. On March 7, 2000, the Company entered into a Warrant
Purchase Agreement with Gotham Partners, L.P. and affiliates ("Gotham").
Pursuant to such agreement the Company granted to Gotham a warrant to purchase
an aggregate of 1,500,000 shares of common stock of the Company at a price of
$70.00 per share. Gotham paid the Company an aggregate of $30,000,000.
Item 7. Exhibits
4.1 Specimen Warrant W-1, dated March 7, 2000, in the name Gotham
Partners, L.P. to purchase 1,000,000 shares of common stock
4.2 Specimen Warrant W-2, dated March 7, 2000, in the name Gotham
Partners III, L.P. to purchase 50,000 shares of common stock
4.3 Specimen Warrant W-3, dated March 7, 2000, in the name Gotham
Partners International, Ltd. to purchase 450,000 shares of common
stock
4.4 Certificate of Designations Establishing and Fixing the Rights of
Series A-1 Convertible Cumulative Preferred Stock
4.5 Certificate of Designations Establishing and Fixing the Rights of
Series A-2 Convertible Cumulative Preferred Stock
4.6 Certificate of Designations Establishing and Fixing the Rights of
Series A-3 Convertible Cumulative Preferred Stock
4.7 Certificate of Designations Establishing and Fixing the Rights of
Series A-4 Convertible Cumulative Preferred Stock
4.8 Certificate of Designations Establishing and Fixing the Rights of
Series A-5 Convertible Cumulative Preferred Stock
4.9 Certificate of Designations Establishing and Fixing the Rights of
Series A-6 Convertible Cumulative Preferred Stock
10.1 Warrant Registration Rights Agreement, dated as of March 7, 2000
between Reckson Service Industries, Inc. and Gotham Partners, L.P.,
Gotham Partners III, L.P. and Gotham Partners International, Ltd.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRONTLINE CAPITAL GROUP
By: /s/ Michael Maturo
-------------------------------------
Michael Maturo
Executive Vice President,
Chief Financial Officer and Treasurer
Date: March 28, 2000
Exhibit 4.1
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED UNLESS EITHER (A) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS, OR (B) RECKSON SERVICE
INDUSTRIES, INC. HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO
IT TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR
SUCH SALE, PLEDGE OR OTHER TRANSFER AND THAT AN APPLICABLE EXEMPTION THERETO
IS AVAILABLE; PROVIDED, HOWEVER, THAT IN NO EVENT MAY THIS WARRANT BE
EXERCISED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO MARCH 7, 2001.
WARRANT TO PURCHASE COMMON STOCK OF
RECKSON SERVICE INDUSTRIES, INC.
(Void after the Expiration Date set forth herein)
W-1
This certifies that GOTHAM PARTNERS, L.P.or its permitted assigns (the
"Holder"), for value received, is entitled to purchase from RECKSON SERVICE
INDUSTRIES, INC., a Delaware corporation (the "Company"), 1,000,000 fully paid
and nonassessable shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), subject to adjustment from time to time in
accordance with Section 3, for cash at a price of $70.00 per share (as may be
adjusted from time to time in accordance with Section 3, the "Stock Purchase
Price") at any time or from time to time on or after March 7, 2001 and up to
and including 5:00 p.m. (New York time) on June 7, 2003 (the "Expiration
Date"). The Holder may purchase the shares pursuant hereto upon surrender to
the Company at its principal office (or at such other location as the Company
may advise the Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto as Exhibit A and, unless this Warrant has
been registered for resale under the Securities Act of 1933, as amended (the
"1933 Act"), the Form of Investment Representation attached hereto as Exhibit
B duly filled in and signed and, if applicable, upon payment in cash or other
same-day funds of the aggregate Stock Purchase Price for the number of shares
for which this Warrant is being exercised determined in accordance with the
provisions hereof.
<PAGE>
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
1.1 Exercise. This Warrant is exercisable at any time or from time
to time on or after March 7, 2001 and on or prior to the Expiration Date with
respect to all or any part of the shares of Common Stock set forth in the
first paragraph of this Warrant. Any unexercised portion of this Warrant shall
terminate on the Expiration Date. The Company agrees that the shares of Common
Stock purchased under this Warrant shall be, and are deemed to be, issued to
the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered,
properly endorsed, the completed, executed Form of Subscription delivered and
full payment made in cash or other same-day funds for such shares.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by
this Warrant have been so exercised. In case of a purchase of less than all
the shares which may be purchased under this Warrant, the Company shall cancel
this Warrant and execute and deliver a new Warrant or Warrants of like tenor
for the balance of the shares purchasable under the Warrant surrendered upon
such purchase to the Holder hereof within a reasonable time. Each certificate
for shares of Common Stock so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered
in the name of such Holder.
1.2 Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock
is greater than the Stock Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash or other same-day
funds, the Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the designated office of the Company together
with the properly endorsed Form of Subscription and notice of such election in
which event the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised (at the
date of such calculation)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = the Stock Purchase Price (at the date of such calculation)
For purposes of this Warrant, fair market value of one share of Common Stock
shall be equal to the closing sales price for the Common Stock as quoted on
the Nasdaq National Market or any successor thereto or the primary exchange on
which the Common Stock is then quoted, or, if the Common Stock is not then
quoted on any automated quotation system or exchange, the price determined by
the Company's Board of Directors in good faith.
2. Warrant Agency; Transfer, Exchange and Replacement of Warrants.
2.1 Warrant Agency. If the holders of Warrants to purchase a
majority of the shares of Common Stock issuable upon exercise of the Warrants
shall request appointment of an independent warrant agency with respect to the
Warrants, the Company shall promptly appoint and thereafter maintain, at its
own expense, an agency in New York, New York, which agency may be the
Company's then existing transfer agent (the "Warrant Agency"), for certain
purposes specified herein, and shall give prompt notice of such appointment
(and appointment of any successor Warrant Agency) to all holders of Warrants.
Until an independent Warrant Agency is so appointed, the Company shall perform
the obligations of the Warrant Agency provided herein at its address at 1350
Avenue of the Americas, New York, New York, or such other address as the
Company shall specify by notice to all Warrantholders.
2.2 Ownership of Warrant. The Company may deem and treat the Holder
as the owner hereof (notwithstanding any notations of ownership or writing
hereon made by any Person other than the Warrant Agency) for all purposes and
shall not be affected by any notice to the contrary, until presentation of
this Warrant for registration of transfer as provided in this Section 2.
2.3 Transfer of Warrant. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in
whole or in part, on such books, upon surrender of this Warrant at the Warrant
Agency, together with a written assignment of this Warrant duly executed by
the Holder or his duly authorized agent or attorney, with (unless the Holder
is the original Warrantholder or another institutional investor) signatures
guaranteed by a bank or trust company or a broker or dealer registered with
the National Association of Securities Dealers, Inc., and funds sufficient to
pay any transfer taxes payable upon such transfer; provided, however, that
Warrants are transferable in denominations of 100,000 Warrants. Upon
surrender, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in
the instrument of assignment, and this Warrant shall promptly be cancelled.
The Warrant Agency shall not be required to register any transfers if the
Holder fails to furnish to the Company, after a request therefor, an opinion
of counsel reasonably satisfactory to the Company that such transfer is exempt
from the registration requirements of the 1933 Act and applicable state
securities laws. This Section 2.3 is subject to the provisions of Section 7.
2.4 Division or Combination of Warrants. This Warrant may be divided
or combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued (which may not be less than
100,000 Warrants), signed by the holders hereof and thereof or their
respective duly authorized agents or attorneys. Subject to compliance with
Section 2.3 as to any transfer which may be involved in the division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company (it being understood that the original Warrantholder's full and
unconditional indemnity shall be satisfactory indemnity in the event of loss,
theft or destruction of any Warrant owned by such holder), or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of shares of Common Stock as provided for
in such lost, stolen, destroyed or mutilated Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of this Warrant and
shares of Common Stock purchasable upon exercise of this Warrant.
3. Shares to Be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Common Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any stockholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights evidenced by this
Warrant may be exercised, the Company will at all times during such period
have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
evidenced by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the securities of
the Company may be listed; provided, however, that the Company shall not be
required to effect a registration under federal or state securities laws with
respect to such exercise except as otherwise provided by that certain Warrant
Registration Rights Agreement, of even date herewith, by and between the
Company and the Holder.
4. Adjustment of Stock Purchase Price and Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment in accordance with Sections 4, 4.1,
4.2, and 4.4 and from time to time upon the occurrence of certain events
described in Sections 4, 4.1, 4.2 and 4.4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Stock Purchase Price resulting from such adjustment.
4.1 Common Stock Dividends; Subdivision or Combination of Stock. In
case the Company shall at any time pay a dividend of shares of Common Stock on
all of its outstanding shares of Common Stock or subdivide its outstanding
shares of Common Stock into a greater number of shares, the Stock Purchase
Price in effect immediately prior to such dividend or subdivision shall be
proportionately reduced and, conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Stock Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
4.2 Cash Dividends. If the Company shall distribute a dividend in
cash, the Stock Purchase Price shall be decreased, effective immediately after
the record date for such dividend, to the price determined by multiplying the
Stock Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock of the Company on the last day before the Common Stock trades
without the right to receive such dividend in the relevant market or exchange
less the amount of cash distributed in such dividend with respect to one share
of Common Stock and the denominator of which shall be the fair market value
per share of Common Stock on such last day.
4.3 Other Distributions. In the event that the Company shall issue
or distribute to the holders of all of its Common Stock any security, property
or contractual right (including without limitation any subscription right),
other than as contemplated in Sections 4.1, 4.2 and 4.4, (each such security,
property or contractual right, an "Other Distribution") then the Holder hereof
shall be entitled to receive, at the time such Other Distribution is
distributed to the holders of the Company's Common Stock, without payment of
any additional consideration therefor, the amount of such Other Distribution
which such Holder would have received had such Holder been the holder of
record of the Common Stock deliverable upon exercise of this Warrant in full
as of the record date for such Other Distribution.
4.4 Tender Offers. If a tender offer made by the Company or any
subsidiary for all or any portion of the Common Stock shall expire and such
tender offer shall require payment to tendering holders of Common Stock of
aggregate consideration having a market value which exceeds the fair market
value of the Common Stock acquired in such tender offer ("Excess Tender
Amount"), then the Stock Purchase Price shall be adjusted to equal the price
determined by multiplying the Stock Purchase Price in effect immediately prior
to the close of business on the expiration date for such tender offer by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock on such expiration date, less the Excess Tender Amount, if any,
divided by the number of outstanding shares of Common Stock, and the
denominator of which shall be the fair market value per share of Common Stock
on such expiration date. Such adjustment shall be effective immediately after
the expiration date of such tender offer.
4.5 Reorganization, Reclassification, Consolidation, Merger or Sale.
(a) If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets,
shall be effected (an "Organic Change"), and in connection with such Organic
Change, the Common Stock shall be converted into common stock of another
entity, then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of
the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In the event of any such Organic
Change, the Company shall make appropriate provision with respect to the
rights and interests of the Holder of this Warrant that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock
Purchase Price and the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable to any shares of
stock thereafter deliverable upon the exercise hereof. The Company will not
effect any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor entity (if other than the Company)
resulting from such consolidation or merger or the entity purchasing such
assets shall assume by written instrument reasonably satisfactory in form and
substance to the Holders of a majority of the warrants of like tenor to
purchase Common Stock then outstanding, executed and mailed or delivered to
the Holder hereof at the last address of such Holder appearing on the books of
the Company, the obligation to deliver to such Holder such shares of stock as,
in accordance with the foregoing provisions, such Holder may be entitled to
purchase. The Company shall notify the Holder of this Warrant of any such
proposed Organic Change reasonably prior to the consummation thereof so as to
provide such Holder with a reasonable opportunity prior to such consummation
to exercise this Warrant in accordance with the terms and conditions hereof;
provided, however, that in the case of a transaction which requires notice be
given to the holders of Common Stock of the Company, the Holder of this
Warrant shall be provided the same notice given to the holders of Common Stock
of the Company.
(b) In the event of an Organic Change for which no adjustment is
specified by Section 4.1 or Section 4.5(a), this Warrant shall be adjusted so
that, after such Organic Change, the Holder shall have a right to purchase
common stock of the surviving, resulting or acquiring company in such Organic
Change, with the number of such shares and the exercise price therefor
determined by the Board of Directors of the Company prior to such Organic
Change so as to preserve the aggregate amount payable upon the exercise of
this Warrant in full and the difference (positive or negative), if any, on the
day immediately preceding the day such Organic Change is completed, between
the fair market value of the shares of Common Stock purchasable upon the
exercise of this Warrant in full and the Stock Purchase Price therefor.
4.6 Affiliate Transactions. In the event that the Company shall
issue any shares of Common Stock to, or repurchase any shares of Common Stock
from, any "affiliate", as defined in Rule 405 under the 1933 Act, of the
Company, other than in connection with any acquisition of or investment in a
partner entity, such issuance or repurchase shall be on terms no less
favorable to the Company than those obtainable by a party who is not such an
affiliate.
4.7 Certain Other Events. If any event occurs as to which the
foregoing provisions of this Section 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly protect the purchase rights of the Warrants
in accordance with the essential intent and principles of such provisions,
then such Board shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall
be reasonably necessary, in the good faith judgment of such Board, to protect
such purchase rights as aforesaid, but in no event shall any such adjustment
have the effect of increasing the Stock Purchase Price or decreasing the
number of shares of Common Stock purchasable upon exercise of this Warrant, or
otherwise adversely affect the Warrantholders.
4.8 Notices of Change.
(a) Immediately upon any adjustment in the Stock Purchase Price
and the number of shares purchasable upon exercise of this Warrant, the
Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at
least 5 business days prior to the date on which the Company closes its books
or takes a record for determining rights to receive any dividends or
distributions.
(c) The Company shall also give written notice to the Holder at
least 10 business days prior to the date on which an Organic Change
contemplated in Section 4.5 shall take place.
4.9 Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. Instead, the Company shall pay to the Holder, in
lieu of issuing any fractional share, a sum in cash equal to such fraction
multiplied by the current market price of a share of Common Stock, as
determined by the Company's Chief Executive Officer, Chief Financial Officer
or Board of Directors, on the business day immediately prior to the date of
exercise.
5. Issue Tax and Expenses. The issuance of certificates for shares of
Common Stock upon the exercise of any portion of this Warrant shall be made
without charge to the Holder of the Warrant for any issue tax (other than any
applicable income taxes) or other expenses in respect thereof; provided,
however, that the Company shall not be required to pay any tax or other
expenses which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer books
against the transfer of any shares of Common Stock issued or issuable upon the
exercise of any warrant in any manner which interferes with the timely
exercise of any portion of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder
of the Company or any other matters or any rights whatsoever as a stockholder
of the Company. Except as provided herein, no dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented
hereby or the shares of Common Stock purchasable hereunder until, and only to
the extent that, this Warrant shall have been exercised. No provisions hereof,
in the absence of affirmative action by the Holder to purchase shares of
Common Stock pursuant to this Warrant, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.
8. Transfer. This Warrant may not be sold, pledged or otherwise
transferred prior to March 7, 2001. On or after March 7, 2001, neither this
Warrant nor the shares of Common Stock issued upon exercise of this Warrant
may be sold, pledged or otherwise transferred unless (A) covered by an
effective registration statement under the 1933 Act and qualified under the
applicable state securities laws or (B) the Company has been furnished with an
opinion of counsel acceptable to it to the effect that no registration or
qualification is legally required for such sale, pledge or other transfer and
that an applicable exemption thereto is available.
The Holder, by acceptance hereof, agrees that it will not, prior to March
22, 2000, offer, agree to sell, sell, grant any option to purchase, or enter
into any hedging activities in respect of, directly or indirectly, any shares
of Common Stock of the Company or any securities convertible into or
exchangeable for any shares of Common Stock of the Company or warrants or
other rights to purchase shares of Common Stock of the Company.
9. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, the Holder of this Warrant and the holder of
shares of Common Stock issued upon exercise of this Warrant referred to in
Section 8 shall survive the exercise of this Warrant.
10. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to the Holder
at the Holder's address as shown on the books of the Company or to the Company
at 1350 Avenue of the Americas, New York, New York, Attention: General Counsel
or such other address as either party may from time to time provide to the
other party.
12. Binding Effect on Successors. This Warrant shall be binding upon any
entity succeeding the Company by merger, consolidation or acquisition of all
or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock purchasable upon the exercise of this
Warrant shall survive the exercise of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the permitted
successors and assigns of the Holder hereof.
13. Descriptive Headings and Governing Law. The description headings of
the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to any provisions relating to conflicts of law.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer thereunto duly authorized.
Dated: March 7, 2000 RECKSON SERVICE INDUSTRIES, INC.
By____________________________________
Name:
Title:
Exhibit 4.2
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED UNLESS EITHER (A) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS, OR (B) RECKSON SERVICE
INDUSTRIES, INC. HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO
IT TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR
SUCH SALE, PLEDGE OR OTHER TRANSFER AND THAT AN APPLICABLE EXEMPTION THERETO
IS AVAILABLE; PROVIDED, HOWEVER, THAT IN NO EVENT MAY THIS WARRANT BE
EXERCISED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO MARCH 7, 2001.
WARRANT TO PURCHASE COMMON STOCK OF
RECKSON SERVICE INDUSTRIES, INC.
(Void after the Expiration Date set forth herein)
W-2
This certifies that GOTHAM PARTNERS III, L.P. or its permitted assigns
(the "Holder"), for value received, is entitled to purchase from RECKSON
SERVICE INDUSTRIES, INC., a Delaware corporation (the "Company"), 50,000 fully
paid and nonassessable shares of the Company's common stock, par value $.01
per share (the "Common Stock"), subject to adjustment from time to time in
accordance with Section 3, for cash at a price of $70.00 per share (as may be
adjusted from time to time in accordance with Section 3, the "Stock Purchase
Price") at any time or from time to time on or after March 7, 2001 and up to
and including 5:00 p.m. (New York time) on June 7, 2003 (the "Expiration
Date"). The Holder may purchase the shares pursuant hereto upon surrender to
the Company at its principal office (or at such other location as the Company
may advise the Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto as Exhibit A and, unless this Warrant has
been registered for resale under the Securities Act of 1933, as amended (the
"1933 Act"), the Form of Investment Representation attached hereto as Exhibit
B duly filled in and signed and, if applicable, upon payment in cash or other
same-day funds of the aggregate Stock Purchase Price for the number of shares
for which this Warrant is being exercised determined in accordance with the
provisions hereof.
<PAGE>
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
1.1 Exercise. This Warrant is exercisable at any time or from time
to time on or after March 7, 2001 and on or prior to the Expiration Date with
respect to all or any part of the shares of Common Stock set forth in the
first paragraph of this Warrant. Any unexercised portion of this Warrant shall
terminate on the Expiration Date. The Company agrees that the shares of Common
Stock purchased under this Warrant shall be, and are deemed to be, issued to
the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered,
properly endorsed, the completed, executed Form of Subscription delivered and
full payment made in cash or other same-day funds for such shares.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by
this Warrant have been so exercised. In case of a purchase of less than all
the shares which may be purchased under this Warrant, the Company shall cancel
this Warrant and execute and deliver a new Warrant or Warrants of like tenor
for the balance of the shares purchasable under the Warrant surrendered upon
such purchase to the Holder hereof within a reasonable time. Each certificate
for shares of Common Stock so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered
in the name of such Holder.
1.2 Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock
is greater than the Stock Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash or other same-day
funds, the Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the designated office of the Company together
with the properly endorsed Form of Subscription and notice of such election in
which event the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised (at the
date of such calculation)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = the Stock Purchase Price (at the date of such calculation)
For purposes of this Warrant, fair market value of one share of Common Stock
shall be equal to the closing sales price for the Common Stock as quoted on
the Nasdaq National Market or any successor thereto or the primary exchange on
which the Common Stock is then quoted, or, if the Common Stock is not then
quoted on any automated quotation system or exchange, the price determined by
the Company's Board of Directors in good faith.
2. Warrant Agency; Transfer, Exchange and Replacement of Warrants.
2.1 Warrant Agency. If the holders of Warrants to purchase a
majority of the shares of Common Stock issuable upon exercise of the Warrants
shall request appointment of an independent warrant agency with respect to the
Warrants, the Company shall promptly appoint and thereafter maintain, at its
own expense, an agency in New York, New York, which agency may be the
Company's then existing transfer agent (the "Warrant Agency"), for certain
purposes specified herein, and shall give prompt notice of such appointment
(and appointment of any successor Warrant Agency) to all holders of Warrants.
Until an independent Warrant Agency is so appointed, the Company shall perform
the obligations of the Warrant Agency provided herein at its address at 1350
Avenue of the Americas, New York, New York, or such other address as the
Company shall specify by notice to all Warrantholders.
2.2 Ownership of Warrant. The Company may deem and treat the Holder
as the owner hereof (notwithstanding any notations of ownership or writing
hereon made by any Person other than the Warrant Agency) for all purposes and
shall not be affected by any notice to the contrary, until presentation of
this Warrant for registration of transfer as provided in this Section 2.
2.3 Transfer of Warrant. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in
whole or in part, on such books, upon surrender of this Warrant at the Warrant
Agency, together with a written assignment of this Warrant duly executed by
the Holder or his duly authorized agent or attorney, with (unless the Holder
is the original Warrantholder or another institutional investor) signatures
guaranteed by a bank or trust company or a broker or dealer registered with
the National Association of Securities Dealers, Inc., and funds sufficient to
pay any transfer taxes payable upon such transfer; provided, however, that
Warrants are transferable in denominations of 100,000 Warrants. Upon
surrender, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in
the instrument of assignment, and this Warrant shall promptly be cancelled.
The Warrant Agency shall not be required to register any transfers if the
Holder fails to furnish to the Company, after a request therefor, an opinion
of counsel reasonably satisfactory to the Company that such transfer is exempt
from the registration requirements of the 1933 Act and applicable state
securities laws. This Section 2.3 is subject to the provisions of Section 7.
2.4 Division or Combination of Warrants. This Warrant may be divided
or combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued (which may not be less than
100,000 Warrants), signed by the holders hereof and thereof or their
respective duly authorized agents or attorneys. Subject to compliance with
Section 2.3 as to any transfer which may be involved in the division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company (it being understood that the original Warrantholder's full and
unconditional indemnity shall be satisfactory indemnity in the event of loss,
theft or destruction of any Warrant owned by such holder), or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of shares of Common Stock as provided for
in such lost, stolen, destroyed or mutilated Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of this Warrant and
shares of Common Stock purchasable upon exercise of this Warrant.
3. Shares to Be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Common Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any stockholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights evidenced by this
Warrant may be exercised, the Company will at all times during such period
have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
evidenced by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the securities of
the Company may be listed; provided, however, that the Company shall not be
required to effect a registration under federal or state securities laws with
respect to such exercise except as otherwise provided by that certain Warrant
Registration Rights Agreement, of even date herewith, by and between the
Company and the Holder.
4. Adjustment of Stock Purchase Price and Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment in accordance with Sections 4, 4.1,
4.2, and 4.4 and from time to time upon the occurrence of certain events
described in Sections 4, 4.1, 4.2 and 4.4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Stock Purchase Price resulting from such adjustment.
4.1 Common Stock Dividends; Subdivision or Combination of Stock. In
case the Company shall at any time pay a dividend of shares of Common Stock on
all of its outstanding shares of Common Stock or subdivide its outstanding
shares of Common Stock into a greater number of shares, the Stock Purchase
Price in effect immediately prior to such dividend or subdivision shall be
proportionately reduced and, conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Stock Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
4.2 Cash Dividends. If the Company shall distribute a dividend in
cash, the Stock Purchase Price shall be decreased, effective immediately after
the record date for such dividend, to the price determined by multiplying the
Stock Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock of the Company on the last day before the Common Stock trades
without the right to receive such dividend in the relevant market or exchange
less the amount of cash distributed in such dividend with respect to one share
of Common Stock and the denominator of which shall be the fair market value
per share of Common Stock on such last day.
4.3 Other Distributions. In the event that the Company shall issue
or distribute to the holders of all of its Common Stock any security, property
or contractual right (including without limitation any subscription right),
other than as contemplated in Sections 4.1, 4.2 and 4.4, (each such security,
property or contractual right, an "Other Distribution") then the Holder hereof
shall be entitled to receive, at the time such Other Distribution is
distributed to the holders of the Company's Common Stock, without payment of
any additional consideration therefor, the amount of such Other Distribution
which such Holder would have received had such Holder been the holder of
record of the Common Stock deliverable upon exercise of this Warrant in full
as of the record date for such Other Distribution.
4.4 Tender Offers. If a tender offer made by the Company or any
subsidiary for all or any portion of the Common Stock shall expire and such
tender offer shall require payment to tendering holders of Common Stock of
aggregate consideration having a market value which exceeds the fair market
value of the Common Stock acquired in such tender offer ("Excess Tender
Amount"), then the Stock Purchase Price shall be adjusted to equal the price
determined by multiplying the Stock Purchase Price in effect immediately prior
to the close of business on the expiration date for such tender offer by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock on such expiration date, less the Excess Tender Amount, if any,
divided by the number of outstanding shares of Common Stock, and the
denominator of which shall be the fair market value per share of Common Stock
on such expiration date. Such adjustment shall be effective immediately after
the expiration date of such tender offer.
4.5 Reorganization, Reclassification, Consolidation, Merger or Sale.
(a) If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets,
shall be effected (an "Organic Change"), and in connection with such Organic
Change, the Common Stock shall be converted into common stock of another
entity, then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of
the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In the event of any such Organic
Change, the Company shall make appropriate provision with respect to the
rights and interests of the Holder of this Warrant that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock
Purchase Price and the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable to any shares of
stock thereafter deliverable upon the exercise hereof. The Company will not
effect any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor entity (if other than the Company)
resulting from such consolidation or merger or the entity purchasing such
assets shall assume by written instrument reasonably satisfactory in form and
substance to the Holders of a majority of the warrants of like tenor to
purchase Common Stock then outstanding, executed and mailed or delivered to
the Holder hereof at the last address of such Holder appearing on the books of
the Company, the obligation to deliver to such Holder such shares of stock as,
in accordance with the foregoing provisions, such Holder may be entitled to
purchase. The Company shall notify the Holder of this Warrant of any such
proposed Organic Change reasonably prior to the consummation thereof so as to
provide such Holder with a reasonable opportunity prior to such consummation
to exercise this Warrant in accordance with the terms and conditions hereof;
provided, however, that in the case of a transaction which requires notice be
given to the holders of Common Stock of the Company, the Holder of this
Warrant shall be provided the same notice given to the holders of Common Stock
of the Company.
(b) In the event of an Organic Change for which no adjustment is
specified by Section 4.1 or Section 4.5(a), this Warrant shall be adjusted so
that, after such Organic Change, the Holder shall have a right to purchase
common stock of the surviving, resulting or acquiring company in such Organic
Change, with the number of such shares and the exercise price therefor
determined by the Board of Directors of the Company prior to such Organic
Change so as to preserve the aggregate amount payable upon the exercise of
this Warrant in full and the difference (positive or negative), if any, on the
day immediately preceding the day such Organic Change is completed, between
the fair market value of the shares of Common Stock purchasable upon the
exercise of this Warrant in full and the Stock Purchase Price therefor.
4.6 Affiliate Transactions. In the event that the Company shall
issue any shares of Common Stock to, or repurchase any shares of Common Stock
from, any "affiliate", as defined in Rule 405 under the 1933 Act, of the
Company, other than in connection with any acquisition of or investment in a
partner entity, such issuance or repurchase shall be on terms no less
favorable to the Company than those obtainable by a party who is not such an
affiliate.
4.7 Certain Other Events. If any event occurs as to which the
foregoing provisions of this Section 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly protect the purchase rights of the Warrants
in accordance with the essential intent and principles of such provisions,
then such Board shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall
be reasonably necessary, in the good faith judgment of such Board, to protect
such purchase rights as aforesaid, but in no event shall any such adjustment
have the effect of increasing the Stock Purchase Price or decreasing the
number of shares of Common Stock purchasable upon exercise of this Warrant, or
otherwise adversely affect the Warrantholders.
4.8 Notices of Change.
(a) Immediately upon any adjustment in the Stock Purchase Price
and the number of shares purchasable upon exercise of this Warrant, the
Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at
least 5 business days prior to the date on which the Company closes its books
or takes a record for determining rights to receive any dividends or
distributions.
(c) The Company shall also give written notice to the Holder at
least 10 business days prior to the date on which an Organic Change
contemplated in Section 4.5 shall take place.
4.9 Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. Instead, the Company shall pay to the Holder, in
lieu of issuing any fractional share, a sum in cash equal to such fraction
multiplied by the current market price of a share of Common Stock, as
determined by the Company's Chief Executive Officer, Chief Financial Officer
or Board of Directors, on the business day immediately prior to the date of
exercise.
5. Issue Tax and Expenses. The issuance of certificates for shares of
Common Stock upon the exercise of any portion of this Warrant shall be made
without charge to the Holder of the Warrant for any issue tax (other than any
applicable income taxes) or other expenses in respect thereof; provided,
however, that the Company shall not be required to pay any tax or other
expenses which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer books
against the transfer of any shares of Common Stock issued or issuable upon the
exercise of any warrant in any manner which interferes with the timely
exercise of any portion of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder
of the Company or any other matters or any rights whatsoever as a stockholder
of the Company. Except as provided herein, no dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented
hereby or the shares of Common Stock purchasable hereunder until, and only to
the extent that, this Warrant shall have been exercised. No provisions hereof,
in the absence of affirmative action by the Holder to purchase shares of
Common Stock pursuant to this Warrant, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.
8. Transfer. This Warrant may not be sold, pledged or otherwise
transferred prior to March 7, 2001. On or after March 7, 2001, neither this
Warrant nor the shares of Common Stock issued upon exercise of this Warrant
may be sold, pledged or otherwise transferred unless (A) covered by an
effective registration statement under the 1933 Act and qualified under the
applicable state securities laws or (B) the Company has been furnished with an
opinion of counsel acceptable to it to the effect that no registration or
qualification is legally required for such sale, pledge or other transfer and
that an applicable exemption thereto is available.
The Holder, by acceptance hereof, agrees that it will not, prior to March
22, 2000, offer, agree to sell, sell, grant any option to purchase, or enter
into any hedging activities in respect of, directly or indirectly, any shares
of Common Stock of the Company or any securities convertible into or
exchangeable for any shares of Common Stock of the Company or warrants or
other rights to purchase shares of Common Stock of the Company.
9. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, the Holder of this Warrant and the holder of
shares of Common Stock issued upon exercise of this Warrant referred to in
Section 8 shall survive the exercise of this Warrant.
10. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to the Holder
at the Holder's address as shown on the books of the Company or to the Company
at 1350 Avenue of the Americas, New York, New York, Attention: General Counsel
or such other address as either party may from time to time provide to the
other party.
12. Binding Effect on Successors. This Warrant shall be binding upon any
entity succeeding the Company by merger, consolidation or acquisition of all
or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock purchasable upon the exercise of this
Warrant shall survive the exercise of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the permitted
successors and assigns of the Holder hereof.
13. Descriptive Headings and Governing Law. The description headings of
the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to any provisions relating to conflicts of law.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer thereunto duly authorized.
Dated: March 7, 2000 RECKSON SERVICE INDUSTRIES, INC.
By_________________________________
Name:
Title:
Exhibit 4.3
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED UNLESS EITHER (A) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS, OR (B) RECKSON SERVICE
INDUSTRIES, INC. HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO
IT TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR
SUCH SALE, PLEDGE OR OTHER TRANSFER AND THAT AN APPLICABLE EXEMPTION THERETO
IS AVAILABLE; PROVIDED, HOWEVER, THAT IN NO EVENT MAY THIS WARRANT BE
EXERCISED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO MARCH 7, 2001.
WARRANT TO PURCHASE COMMON STOCK OF
RECKSON SERVICE INDUSTRIES, INC.
(Void after the Expiration Date set forth herein)
W-3
This certifies that GOTHAM PARTNERS INTERNATIONAL, LTD. or its permitted
assigns (the "Holder"), for value received, is entitled to purchase from
RECKSON SERVICE INDUSTRIES, INC., a Delaware corporation (the "Company"),
450,000 fully paid and nonassessable shares of the Company's common stock, par
value $.01 per share (the "Common Stock"), subject to adjustment from time to
time in accordance with Section 3, for cash at a price of $70.00 per share (as
may be adjusted from time to time in accordance with Section 3, the "Stock
Purchase Price") at any time or from time to time on or after March 7, 2001
and up to and including 5:00 p.m. (New York time) on June 7, 2003 (the
"Expiration Date"). The Holder may purchase the shares pursuant hereto upon
surrender to the Company at its principal office (or at such other location as
the Company may advise the Holder in writing) of this Warrant properly
endorsed with the Form of Subscription attached hereto as Exhibit A and,
unless this Warrant has been registered for resale under the Securities Act of
1933, as amended (the "1933 Act"), the Form of Investment Representation
attached hereto as Exhibit B duly filled in and signed and, if applicable,
upon payment in cash or other same-day funds of the aggregate Stock Purchase
Price for the number of shares for which this Warrant is being exercised
determined in accordance with the provisions hereof.
<PAGE>
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
1.1 Exercise. This Warrant is exercisable at any time or from time
to time on or after March 7, 2001 and on or prior to the Expiration Date with
respect to all or any part of the shares of Common Stock set forth in the
first paragraph of this Warrant. Any unexercised portion of this Warrant shall
terminate on the Expiration Date. The Company agrees that the shares of Common
Stock purchased under this Warrant shall be, and are deemed to be, issued to
the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered,
properly endorsed, the completed, executed Form of Subscription delivered and
full payment made in cash or other same-day funds for such shares.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by
this Warrant have been so exercised. In case of a purchase of less than all
the shares which may be purchased under this Warrant, the Company shall cancel
this Warrant and execute and deliver a new Warrant or Warrants of like tenor
for the balance of the shares purchasable under the Warrant surrendered upon
such purchase to the Holder hereof within a reasonable time. Each certificate
for shares of Common Stock so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered
in the name of such Holder.
1.2 Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock
is greater than the Stock Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash or other same-day
funds, the Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the designated office of the Company together
with the properly endorsed Form of Subscription and notice of such election in
which event the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the
Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised (at the
date of such calculation)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = the Stock Purchase Price (at the date of such calculation)
For purposes of this Warrant, fair market value of one share of Common Stock
shall be equal to the closing sales price for the Common Stock as quoted on
the Nasdaq National Market or any successor thereto or the primary exchange on
which the Common Stock is then quoted, or, if the Common Stock is not then
quoted on any automated quotation system or exchange, the price determined by
the Company's Board of Directors in good faith.
2. Warrant Agency; Transfer, Exchange and Replacement of Warrants.
2.1 Warrant Agency. If the holders of Warrants to purchase a
majority of the shares of Common Stock issuable upon exercise of the Warrants
shall request appointment of an independent warrant agency with respect to the
Warrants, the Company shall promptly appoint and thereafter maintain, at its
own expense, an agency in New York, New York, which agency may be the
Company's then existing transfer agent (the "Warrant Agency"), for certain
purposes specified herein, and shall give prompt notice of such appointment
(and appointment of any successor Warrant Agency) to all holders of Warrants.
Until an independent Warrant Agency is so appointed, the Company shall perform
the obligations of the Warrant Agency provided herein at its address at 1350
Avenue of the Americas, New York, New York, or such other address as the
Company shall specify by notice to all Warrantholders.
2.2 Ownership of Warrant. The Company may deem and treat the Holder
as the owner hereof (notwithstanding any notations of ownership or writing
hereon made by any Person other than the Warrant Agency) for all purposes and
shall not be affected by any notice to the contrary, until presentation of
this Warrant for registration of transfer as provided in this Section 2.
2.3 Transfer of Warrant. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in
whole or in part, on such books, upon surrender of this Warrant at the Warrant
Agency, together with a written assignment of this Warrant duly executed by
the Holder or his duly authorized agent or attorney, with (unless the Holder
is the original Warrantholder or another institutional investor) signatures
guaranteed by a bank or trust company or a broker or dealer registered with
the National Association of Securities Dealers, Inc., and funds sufficient to
pay any transfer taxes payable upon such transfer; provided, however, that
Warrants are transferable in denominations of 100,000 Warrants. Upon
surrender, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in
the instrument of assignment, and this Warrant shall promptly be cancelled.
The Warrant Agency shall not be required to register any transfers if the
Holder fails to furnish to the Company, after a request therefor, an opinion
of counsel reasonably satisfactory to the Company that such transfer is exempt
from the registration requirements of the 1933 Act and applicable state
securities laws. This Section 2.3 is subject to the provisions of Section 7.
2.4 Division or Combination of Warrants. This Warrant may be divided
or combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued (which may not be less than
100,000 Warrants), signed by the holders hereof and thereof or their
respective duly authorized agents or attorneys. Subject to compliance with
Section 2.3 as to any transfer which may be involved in the division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company (it being understood that the original Warrantholder's full and
unconditional indemnity shall be satisfactory indemnity in the event of loss,
theft or destruction of any Warrant owned by such holder), or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of shares of Common Stock as provided for
in such lost, stolen, destroyed or mutilated Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of this Warrant and
shares of Common Stock purchasable upon exercise of this Warrant.
3. Shares to Be Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any stockholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights evidenced by this
Warrant may be exercised, the Company will at all times during such period
have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
evidenced by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the securities of
the Company may be listed; provided, however, that the Company shall not be
required to effect a registration under federal or state securities laws with
respect to such exercise except as otherwise provided by that certain Warrant
Registration Rights Agreement, of even date herewith, by and between the
Company and the Holder.
4. Adjustment of Stock Purchase Price and Number of Shares. The
Stock Purchase Price and the number of shares purchasable upon the exercise of
this Warrant shall be subject to adjustment in accordance with Sections 4,
4.1, 4.2, and 4.4 and from time to time upon the occurrence of certain events
described in Sections 4, 4.1, 4.2 and 4.4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Stock Purchase Price resulting from such adjustment.
4.1 Common Stock Dividends; Subdivision or Combination of Stock. In
case the Company shall at any time pay a dividend of shares of Common Stock on
all of its outstanding shares of Common Stock or subdivide its outstanding
shares of Common Stock into a greater number of shares, the Stock Purchase
Price in effect immediately prior to such dividend or subdivision shall be
proportionately reduced and, conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Stock Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
4.2 Cash Dividends. If the Company shall distribute a dividend in
cash, the Stock Purchase Price shall be decreased, effective immediately after
the record date for such dividend, to the price determined by multiplying the
Stock Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock of the Company on the last day before the Common Stock trades
without the right to receive such dividend in the relevant market or exchange
less the amount of cash distributed in such dividend with respect to one share
of Common Stock and the denominator of which shall be the fair market value
per share of Common Stock on such last day.
4.3 Other Distributions. In the event that the Company shall issue
or distribute to the holders of all of its Common Stock any security, property
or contractual right (including without limitation any subscription right),
other than as contemplated in Sections 4.1, 4.2 and 4.4, (each such security,
property or contractual right, an "Other Distribution") then the Holder hereof
shall be entitled to receive, at the time such Other Distribution is
distributed to the holders of the Company's Common Stock, without payment of
any additional consideration therefor, the amount of such Other Distribution
which such Holder would have received had such Holder been the holder of
record of the Common Stock deliverable upon exercise of this Warrant in full
as of the record date for such Other Distribution.
4.4 Tender Offers. If a tender offer made by the Company or any
subsidiary for all or any portion of the Common Stock shall expire and such
tender offer shall require payment to tendering holders of Common Stock of
aggregate consideration having a market value which exceeds the fair market
value of the Common Stock acquired in such tender offer ("Excess Tender
Amount"), then the Stock Purchase Price shall be adjusted to equal the price
determined by multiplying the Stock Purchase Price in effect immediately prior
to the close of business on the expiration date for such tender offer by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock on such expiration date, less the Excess Tender Amount, if any,
divided by the number of outstanding shares of Common Stock, and the
denominator of which shall be the fair market value per share of Common Stock
on such expiration date. Such adjustment shall be effective immediately after
the expiration date of such tender offer.
4.5 Reorganization, Reclassification, Consolidation, Merger or Sale.
(a) If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets,
shall be effected (an "Organic Change"), and in connection with such Organic
Change, the Common Stock shall be converted into common stock of another
entity, then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of
the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In the event of any such Organic
Change, the Company shall make appropriate provision with respect to the
rights and interests of the Holder of this Warrant that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock
Purchase Price and the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable to any shares of
stock thereafter deliverable upon the exercise hereof. The Company will not
effect any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor entity (if other than the Company)
resulting from such consolidation or merger or the entity purchasing such
assets shall assume by written instrument reasonably satisfactory in form and
substance to the Holders of a majority of the warrants of like tenor to
purchase Common Stock then outstanding, executed and mailed or delivered to
the Holder hereof at the last address of such Holder appearing on the books of
the Company, the obligation to deliver to such Holder such shares of stock as,
in accordance with the foregoing provisions, such Holder may be entitled to
purchase. The Company shall notify the Holder of this Warrant of any such
proposed Organic Change reasonably prior to the consummation thereof so as to
provide such Holder with a reasonable opportunity prior to such consummation
to exercise this Warrant in accordance with the terms and conditions hereof;
provided, however, that in the case of a transaction which requires notice be
given to the holders of Common Stock of the Company, the Holder of this
Warrant shall be provided the same notice given to the holders of Common Stock
of the Company.
(b) In the event of an Organic Change for which no adjustment is
specified by Section 4.1 or Section 4.5(a), this Warrant shall be adjusted so
that, after such Organic Change, the Holder shall have a right to purchase
common stock of the surviving, resulting or acquiring company in such Organic
Change, with the number of such shares and the exercise price therefor
determined by the Board of Directors of the Company prior to such Organic
Change so as to preserve the aggregate amount payable upon the exercise of
this Warrant in full and the difference (positive or negative), if any, on the
day immediately preceding the day such Organic Change is completed, between
the fair market value of the shares of Common Stock purchasable upon the
exercise of this Warrant in full and the Stock Purchase Price therefor.
4.6 Affiliate Transactions. In the event that the Company shall
issue any shares of Common Stock to, or repurchase any shares of Common Stock
from, any "affiliate", as defined in Rule 405 under the 1933 Act, of the
Company, other than in connection with any acquisition of or investment in a
partner entity, such issuance or repurchase shall be on terms no less
favorable to the Company than those obtainable by a party who is not such an
affiliate.
4.7 Certain Other Events. If any event occurs as to which the
foregoing provisions of this Section 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly protect the purchase rights of the Warrants
in accordance with the essential intent and principles of such provisions,
then such Board shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall
be reasonably necessary, in the good faith judgment of such Board, to protect
such purchase rights as aforesaid, but in no event shall any such adjustment
have the effect of increasing the Stock Purchase Price or decreasing the
number of shares of Common Stock purchasable upon exercise of this Warrant, or
otherwise adversely affect the Warrantholders.
4.8 Notices of Change.
(a) Immediately upon any adjustment in the Stock Purchase Price
and the number of shares purchasable upon exercise of this Warrant, the Company
shall give written notice thereof to the Holder, setting forth in reasonable
detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at least
5 business days prior to the date on which the Company closes its books or
takes a record for determining rights to receive any dividends or distributions.
(c) The Company shall also give written notice to the Holder at
least 10 business days prior to the date on which an Organic Change
contemplated in Section 4.5 shall take place.
4.9 Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. Instead, the Company shall pay to the Holder, in
lieu of issuing any fractional share, a sum in cash equal to such fraction
multiplied by the current market price of a share of Common Stock, as
determined by the Company's Chief Executive Officer, Chief Financial Officer
or Board of Directors, on the business day immediately prior to the date of
exercise.
5. Issue Tax and Expenses. The issuance of certificates for shares of
Common Stock upon the exercise of any portion of this Warrant shall be made
without charge to the Holder of the Warrant for any issue tax (other than any
applicable income taxes) or other expenses in respect thereof; provided,
however, that the Company shall not be required to pay any tax or other
expenses which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer books
against the transfer of any shares of Common Stock issued or issuable upon the
exercise of any warrant in any manner which interferes with the timely exercise
of any portion of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder
of the Company or any other matters or any rights whatsoever as a stockholder
of the Company. Except as provided herein, no dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented
hereby or the shares of Common Stock purchasable hereunder until, and only to
the extent that, this Warrant shall have been exercised. No provisions hereof,
in the absence of affirmative action by the Holder to purchase shares of
Common Stock pursuant to this Warrant, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.
8. Transfer. This Warrant may not be sold, pledged or otherwise
transferred prior to March 7, 2001. On or after March 7, 2001, neither this
Warrant nor the shares of Common Stock issued upon exercise of this Warrant
may be sold, pledged or otherwise transferred unless (A) covered by an
effective registration statement under the 1933 Act and qualified under the
applicable state securities laws or (B) the Company has been furnished with an
opinion of counsel acceptable to it to the effect that no registration or
qualification is legally required for such sale, pledge or other transfer and
that an applicable exemption thereto is available.
The Holder, by acceptance hereof, agrees that it will not, prior to March
22, 2000, offer, agree to sell, sell, grant any option to purchase, or enter
into any hedging activities in respect of, directly or indirectly, any shares
of Common Stock of the Company or any securities convertible into or
exchangeable for any shares of Common Stock of the Company or warrants or
other rights to purchase shares of Common Stock of the Company.
9. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, the Holder of this Warrant and the holder of
shares of Common Stock issued upon exercise of this Warrant referred to in
Section 8 shall survive the exercise of this Warrant.
10. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to the Holder
at the Holder's address as shown on the books of the Company or to the Company
at 1350 Avenue of the Americas, New York, New York, Attention: General Counsel
or such other address as either party may from time to time provide to the
other party.
12. Binding Effect on Successors. This Warrant shall be binding upon any
entity succeeding the Company by merger, consolidation or acquisition of all
or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock purchasable upon the exercise of this
Warrant shall survive the exercise of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the permitted
successors and assigns of the Holder hereof.
13. Descriptive Headings and Governing Law. The description headings of
the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to any provisions relating to conflicts of law.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer thereunto duly authorized.
Dated: March 7, 2000 RECKSON SERVICE INDUSTRIES, INC.
By________________________________
Name:
Title:
Exhibit 4.4
RECKSON SERVICE INDUSTRIES, INC.
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Reckson Service Industries, Inc., a Delaware corporation (the
"Corporation"), certifies that:
First : Pursuant to the authority expressly vested in the Board of Directors
of the Corporation by Article VI of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with these Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution,
duly designated and classified 5,000 shares of the Preferred Stock of the
Corporation into a series designated 8 7/8 % Series A-1 Convertible Cumulative
Preferred Stock and has provided for the issuance of such series.
Second : The preferences, rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption of the
shares of such series of Preferred Stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Article VI of the
Certificate of Incorporation, are as follows:
8 7/8% SERIES A-1 CONVERTIBLE CUMULATIVE PREFERRED STOCK
(1) Designation and Number. A series of Preferred Stock of the Corporation
("Preferred Stock"), designated the "8 7/8% Series A-1 Convertible Cumulative
Preferred Stock" (the "Series A-1 Preferred"), is hereby established. The
number of shares of the Series A-1 Preferred shall be 5,000.
Rank. The Series A-1 Preferred will, with respect to distribution rights and
rights upon liquidation, dissolution or winding up of the Corporation, rank:
(a) senior to all classes or series of Common Stock of the Corporation
("Common Stock") and to all equity securities issued by the Corporation the
terms of which provide that such equity securities shall rank junior to such
Series A-1 Preferred; (b) on a parity with all equity securities issued by the
Corporation other than those referred to in clauses (a) and (c); and (c)
junior to all equity securities issued by the Corporation that rank senior to
the Series A-1 Preferred in accordance with Section 6(d). The term "equity
securities" shall not include convertible debt securities.
Distributions.
(a) Holders of the shares of Series A-1 Preferred shall be entitled to
receive, when and as authorized by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions at the rate of 8 7/8% per annum of the liquidation preference
per share (equivalent to $88.75 per annum per share of Series A-1 Preferred ).
Distributions on the Series A-1 Preferred shall be cumulative from January 26,
2000 and shall be payable quarterly in arrears on January 26, April 26, July
26 and October 26 of each year or, if not a business day, the next succeeding
business day, commencing April 26, 2000 (each, a "Distribution Payment Date").
Any distribution payable on the Series A-1 Preferred for a partial
distribution period will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Distributions will be payable to holders of record as
they appear in the stock transfer records of the Corporation at the close of
business on the applicable record date, which shall be such date designated by
the Board of Directors of the Corporation for the payment of distributions
that is not more than 30 nor less than 10 days prior to such Distribution
Payment Date (each, a "Distribution Payment Record Date").
(b) Notwithstanding the foregoing, the Corporation may elect to pay any
distribution on the Series A-1 Preferred by delivery of shares of Common
Stock, but if and only if the following conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
distribution shall have a fair market value as of the Distribution Payment
Date equal to not less than the amount of such distribution. For purposes of
this Section 3, the fair market value of shares of Common Stock shall be equal
to 97.5% of the Current Market Price for the Trading Day immediately preceding
such distribution;
(ii) If such shares of Common Stock are delivered on or prior to the
second anniversary of the issue date of the Series A-1 Preferred, then such
shares shall be registered under the Securities Act of 1933 for resale by the
holders of the Series A-1 Preferred, and the Corporation shall have delivered
to each holder a current prospectus pursuant to which such resale may be
effected; and in the event any shares of Common Stock to be issued in respect
of any subsequent distribution require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the date of such distribution;
(iii) In the event any shares of Common Stock to be issued in
respect of such require registration with or approval of any governmental
authority under any State law or any other Federal law before such shares may
be validly issued or delivered upon issuance, such registration shall have
been completed or have become effective and such approval shall have been
obtained, in each case, prior to the date of such distribution;
(iv) The shares of Common Stock delivered in payment of such
distribution shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the date of such distribution;
(v) All shares of Common Stock delivered in payment of such
distribution shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights; and
(vi) In respect of each such Distribution Payment Date, the
Corporation shall have given the holders of the Series A-1 Preferred not less
than three nor more than 15 Trading Days' notice of its election to effect
payment in respect of such distribution by delivery of shares of Common Stock.
(vii) If all of the conditions set forth in the foregoing clauses
(i) through (vi) are not satisfied in accordance with the terms thereof, any
such distribution shall be paid by the Corporation only in cash.
(viii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
distribution if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than seven Trading Days prior to
the relevant Distribution Payment Date), represent more than 4.9% of the
Common Stock then outstanding. If the limitation set forth in the previous
sentence would apply to any distribution, the Corporation may elect (by notice
to the holder delivered not less than three Trading Days prior to the relevant
Distribution Payment Date) to satisfy a portion of such distribution in shares
of Common Stock (up to the maximum number of shares permitted under the
limitation set forth in the previous sentence) and the balance in cash.
(ix) Any issuance of shares of Common Stock in respect of any
distribution pursuant to this Section 3 shall be deemed to have been effected
immediately prior to the close of business on the Distribution Payment Date
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such delivery
shall be deemed to have become on such date the holder or holders of record of
the shares represented thereby; provided, however, that in case any
installment shall be deliverable on a date when the stock transfer books of
the Corporation shall be closed, the person or persons in whose name or names
the certificate or certificates for such shares are to be issued shall be
deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued pursuant to this Section 3
declared prior to the relevant delivery date.
(x) No fractions of shares shall be issued upon any payment made in
shares of Common Stock in respect of the Series A-1 Preferred. Instead of any
fractional share of Common Stock which would otherwise be so issuable, the
Corporation will round up to the next higher whole share or pay such
fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(xi) Any issuance and delivery of certificates for shares of Common
Stock pursuant to this Section 3 shall be made without charge to holders of
Series A-1 Preferred for such certificates or for any documentary, stamp or
similar issue tax or duty in respect of the issuance or delivery of such
certificates or the securities represented thereby; provided, however, that
the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-1 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the date
of distribution, delivery of any shares of Common Stock issuable to such
holders with respect of such distribution shall be effected through the
facilities of The Depository Trust Company.
(c) No distributions on the Series A-1 Preferred shall be authorized by
the Board of Directors of the Corporation or be paid or set apart for payment
by the Corporation at such time as the terms and provisions of any agreement
of the Corporation, including any agreement relating to its indebtedness,
prohibits such authorization , payment or setting apart for payment or
provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law.
(d) Distributions on the Series A-1 Preferred will accumulate whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Additional distributions will
accumulate on the amount of any accumulated but unpaid distributions on the
Series A-1 Preferred beyond the applicable Distribution Payment Date, at the
rate of 10 7/8% per annum, computed on a daily basis.
(e) No full distributions will be authorized or paid or set apart for
payment on any equity securities of the Corporation ranking, as to
distributions, on a parity with or junior to the Series A-1 Preferred for any
period unless full distributions have been or contemporaneously are authorized
and paid or authorized and a sum sufficient for the payment thereof is set
apart for such payment on the Series A-1 Preferred for all past distribution
periods and the then current distribution period. When distributions are not
paid in full or a sum sufficient for such full payment is not so set apart
upon the Series A-1 Preferred and the other equity securities of the
Corporation ranking on a parity as to distributions with the Series A-1
Preferred, all distributions authorized upon the Series A-1 Preferred and any
other equity securities of the Corporation ranking on a parity as to
distributions with the Series A-1 Preferred shall be authorized pro rata so
that the amount of distributions authorized per share of Series A-1 Preferred
and such other equity securities shall in all cases bear to each other the
same ratio that accumulated distributions per share on the Series A-1
Preferred and such other equity securities (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such equity securities do not have cumulative distributions) bear to each
other.
(f) Unless full distributions on the Series A-1 Preferred have been or
contemporaneously are authorized and paid or authorized and a sum sufficient
for the payment thereof is set apart for payment for all past distribution
periods and the then current distribution period, no distributions shall be
authorized or paid or set aside for payment or other distribution shall be
authorized or made upon the Common Stock or any other equity securities of the
Corporation ranking junior to or on a parity with the Series A-1 Preferred as
to distributions or upon liquidation, nor shall any shares of Common Stock or
any other equity securities of the Corporation ranking junior to or on a
parity with the Series A-1 Preferred as to distributions or upon liquidation
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of
any such shares) by the Corporation (except by conversion into or exchange for
other stock of the Corporation ranking junior as to the Series A-1 Preferred
with respect to distributions and upon liquidation).
(g) Any distribution payment made on shares of the Series A-1 Preferred
shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such shares which remains payable.
(2) Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation (referred to herein as a "liquidation"),
the holders of the Series A-1 Preferred will be entitled to be paid out of the
assets of the Corporation legally available for distribution to its
stockholders liquidating distributions, in cash or property at its fair market
value as determined by the Corporation's Board of Directors, in the amount of
a liquidation preference of $1,000 per share, plus an amount equal to any
accumulated and unpaid distributions to the date of such liquidation, before
any distribution or payment is made to holders of Common Stock or any other
equity securities of the Corporation ranking junior to the Series A-1
Preferred as to the distribution of assets upon a liquidation. After payment
of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A-1 Preferred will have no right or claim to
any of the remaining assets of the Corporation.
(b) In the event that, upon any liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A-1 Preferred
and the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series A-1 Preferred in the distribution
of assets upon a liquidation, then the holders of Series A-1 Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(c) The consolidation or merger of the Corporation with or into any other
entity, or the merger of another entity with or into the Corporation, or a
statutory share exchange by the Corporation, or the sale, lease or conveyance
of all or substantially all of the property or business of the Corporation,
shall not be deemed to constitute a liquidation of the Corporation.
(3) Redemption.
(a) Shares of Series A-1 Preferred will not be redeemable prior to
January 26, 2003. On or after January 26, 2003, the Corporation may redeem
shares of the Series A-1 Preferred, in whole or in part, from time to time, at
a redemption price of $1,000 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption, payable in cash, upon
not less than 30 nor more than 60 days' prior written notice. Notwithstanding
the foregoing, the Corporation may exchange shares of Series A-1 Preferred for
other shares of Convertible Cumulative Preferred Stock pursuant to the
Convertible Preferred Stock Purchase Agreement dated January 25, 2000 between
the Corporation and the Purchaser named therein.
(b) If fewer than all of the outstanding shares of Series A-1 Preferred
are to be redeemed, the shares to be redeemed shall be determined pro rata or
by lot or in such other manner as prescribed by the Board of Directors of the
Corporation.
(c) Notice of redemption will be mailed by the Corporation, postage
prepaid, not less than 35 nor more than 60 days prior to the date fixed for
redemption (the "Series A-1 Preferred Stock Redemption Date"), addressed to
the respective holders of record of the Series A-1 Preferred to be redeemed at
their respective addresses as they appear on the stock transfer records of the
Corporation. Each notice of redemption shall state: (i) the redemption date;
(ii) the number of shares of Series A-1 Preferred to be redeemed; (iii) the
redemption price; (iv) whether such redemption price will be paid in cash or,
subject to the conditions set forth in Section 5(d), by delivery of shares of
Common Stock; (v) the place or places where certificates representing such
shares of Series A-1 Preferred are to be surrendered for payment of the
redemption price; (vi) that distributions on the shares to be redeemed will
cease to accumulate on such redemption date; and (vii) the date upon which the
holder's conversion rights as to such shares shall terminate. If fewer than
all the shares of Series A-1 Preferred are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Series
A-1 Preferred to be redeemed from each such holder.
(d) Notwithstanding the foregoing, the Corporation may elect to pay the
redemption price of shares of Series A-1 Preferred called for redemption by
delivery of shares of Common Stock, but if and only if the following
conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
redemption price shall have a fair market value as of the Series A-1 Preferred
Stock Redemption Date equal to not less than the amount of such redemption
price due hereunder. For purposes of this Section 5, the fair market value of
shares of Common Stock shall be equal to 95% of the daily volume-weighted
average of the Current Market Price for the twenty Trading Days immediately
preceding the Series A-1 Preferred Stock Redemption Date;
(ii) In the event any shares of Common Stock to be issued in respect
of such redemption price require registration under any Federal securities law
before such shares may be freely transferable without being subject to any
transfer restrictions under the Securities Act of 1933 upon issuance, such
registration shall have been completed and shall have become effective prior
to the Series A-1 Preferred Stock Redemption Date;
(iii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration with or approval of any
governmental authority under any State law or any other Federal law before
such shares may be validly issued or delivered upon issuance, such
registration shall have been completed or have become effective and such
approval shall have been obtained, in each case, prior to the Series A-1
Preferred Stock Redemption Date;
(iv) The shares of Common Stock delivered in payment of such
redemption price shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the Series A-1 Preferred Stock Redemption Date;
(v) All shares of Common Stock delivered in payment of such
redemption price shall, upon issue, be duly and validly issued and fully paid
and non-assessable and free of any preemptive rights; and
(vi) If all of the conditions set forth in the foregoing clauses (i)
through (v) are not satisfied in accordance with the terms thereof, any such
redemption price shall be paid by the Corporation only in cash.
(vii) Notwithstanding the foregoing, at no time will the Corporation
deliver shares of Common Stock to any holder in satisfaction of a redemption
if the number of shares so delivered, together with the number of shares of
Common Stock owned (or deemed for bank regulatory purposes to be owned) by
such holder and its affiliates as theretofore notified to the Corporation (in
a notice delivered not less than 20 Trading Days prior to the relevant Series
A-1 Preferred Stock Redemption Date), represent more than 4.9% of the Common
Stock then outstanding. If the limitation set forth in the previous sentence
would apply to any redemption, the Corporation may elect (by notice to the
holder delivered not less than 20 Trading Days prior to the relevant Series
A-1 Preferred Stock Redemption Date) to satisfy a portion of such redemption
price in shares of Common Stock (up to the maximum number of shares permitted
under the limitation set forth in the previous sentence) and the balance in
cash.
(viii) Any issuance of shares of Common Stock in respect of any
redemption pursuant to this Section 5 shall be deemed to have been effected
immediately prior to the close of business on the Series A-1 Preferred Stock
Redemption Date, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such delivery shall be deemed to have become on such date the holder or
holders of record of the shares represented thereby; provided, however, that
in case such shares shall be deliverable on a date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name
or names the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued pursuant to this Section
5 declared prior to the relevant delivery date.
(ix) No fractions of shares shall be issued upon any payment made in
shares of Common Stock in respect of any redemption of Series A-1 Preferred.
Instead of any fractional share of Common Stock which would otherwise be so
issuable, the Corporation will round up to the next higher whole share or pay
such fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(x) Any issuance and delivery of certificates for shares of Common
Stock pursuant to this Section 5 shall be made without charge to holders of
Series A-1 Preferred for such certificates or for any documentary, stamp or
similar issue tax or duty in respect of the issuance or delivery of such
certificates or the securities represented thereby; provided, however, that
the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-1 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the
Series A-1 Preferred Stock Redemption Date, delivery of any shares of Common
Stock issuable to such holders in respect to such redemption shall be effected
through the facilities of The Depository Trust Company.
(e) At its election, the Corporation, prior to the Series A-1 Preferred
Stock Redemption Date, may irrevocably deposit the cash redemption price
(including accumulated and unpaid distributions) of the Series A-1 Preferred
so called for redemption in trust for the holders thereof with a bank or trust
company, in which case the notice of redemption to holders of the Series A-1
Preferred to be redeemed will (i) state the date of such deposit, (ii) specify
the office of such bank or trust company as the place of payment of the
redemption price and (iii) require such holders to surrender the certificates
representing such Series A-1 Preferred at such place on or about the date
fixed in such redemption notice (which may not be later than the Series A-1
Preferred Stock Redemption Date) against payment of the redemption price
(including all accumulated and unpaid distributions to the Series A-1
Preferred Stock Redemption Date). Any moneys so deposited which remain
unclaimed by the holders of the Series A-1 Preferred at the end of two years
after the Series A-1 Preferred Stock Redemption Date will be returned by such
bank or trust company to the Corporation.
(f) No failure to give notice of redemption or any defect thereto or in
the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A-1 Preferred except as to the holder to
whom notice was defective or not given.
(g) On or after the Series A-1 Preferred Stock Redemption Date, each
holder of Series A-1 Preferred to be redeemed must present and surrender the
certificates representing the Series A-1 Preferred to the Corporation at the
place designated in the notice of redemption and thereupon the redemption
price of such shares will be paid to or on the order of the person whose name
appears on such certificates as the owner thereof and each surrendered
certificate will be canceled. In the event that fewer than all the shares of
Series A-1 Preferred are to be redeemed, a new certificate will be issued
representing the unredeemed shares.
(h) From and after the Series A-1 Preferred Stock Redemption Date (unless
the Corporation defaults in payment of the redemption price), all
distributions on the Series A-1 Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid
distributions to the Series A-1 Preferred Stock Redemption Date), will cease
and terminate and such shares will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
shall not be deemed to be outstanding for any purpose whatsoever.
(i) Unless full distributions on all shares of Series A-1 Preferred shall
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no shares of
Series A-1 Preferred shall be redeemed unless all outstanding shares of Series
A-1 Preferred are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Series
A-1 Preferred pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A-1 Preferred.
(j) Unless full distributions on all shares of Series A-1 Preferred have
been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A-1 Preferred (except by conversion into or exchange for equity
securities of the Corporation ranking junior to the Series A-1 Preferred as to
distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A-1 Preferred pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A-1 Preferred.
(k) Immediately prior to any redemption of Series A-1 Preferred, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to
the Series A-1 Preferred Stock Redemption Date, unless such Series A-1
Preferred Stock Redemption Date falls after a Distribution Payment Record Date
and prior to the corresponding Distribution Payment Date, in which case each
holder of Series A-1 Preferred at the close of business on such Distribution
Payment Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on Series A-1 Preferred
for which a notice of redemption has been given.
(l) Any shares of Series A-1 Preferred that have been redeemed shall,
after such redemption, have the status of authorized but unissued Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors of the
Corporation.
(m) The Series A-1 Preferred will not have a stated maturity date and
will not be subject to any sinking fund or mandatory redemption provisions.
(4) Voting Rights
(a) Holders of the Series A-1 Preferred will not have any voting rights,
except as set forth below. In any matter in which the Series A-1 Preferred is
entitled to vote, including any action by written consent, each share of
Series A-1 Preferred shall be entitled to one vote.
(b) Whenever distributions on any shares of Series A-1 Preferred shall be
in arrears for more than two applicable Distribution Payment Dates, (a
"Preferred Distribution Default"), the holders of such shares of Series A-1
Preferred (voting separately as a class with all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two additional directors of the
Corporation (the "Preferred Stock Directors") at a special meeting called by
the holders of record of at least 10% of the outstanding shares of Series A-1
Preferred or the holders of any other series of Preferred Stock so in arrears
(unless such request is received less than 90 days before the date fixed for
the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
distributions accumulated on such shares of Series A-1 Preferred for the past
distribution periods and the then current distribution period shall have been
fully paid or declared and a sum sufficient for the payment thereof is set
aside for payment. In such cases, the entire Board of Directors of the
Corporation will be increased by two directors.
(c) If and when all accumulated distributions and the distribution for
the current distribution period on the Series A-1 Preferred shall have been
paid in full or set aside for payment in full, the holders of shares of Series
A-1 Preferred shall be divested of the voting rights set forth in Section 6(b)
(subject to revesting in the event of each and every Preferred Distribution
Default) and, if all accumulated distributions and the distribution for the
current distribution period have been paid in full or set aside for payment in
full on all other series of Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall terminate immediately. So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office or, if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series A-1
Preferred when they have the voting rights set forth in Section 6(b) (voting
separately as a class with all other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable). The Preferred Stock
Directors shall each be entitled to one vote per director on any matter
presented to the Board of Directors.
(d) So long as any shares of Series A-1 Preferred remain outstanding, the
Corporation shall not, without the affirmative vote or consent of the holders
of record of at least two-thirds of the outstanding shares of the Series A-1
Preferred given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any equity securities ranking senior to the
Series A-1 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation or reclassify any
authorized stock of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such stock, (ii) issue any share or other
security convertible into Common Stock at a conversion price equal to less
than the Current Market Price of the Common Stock on the Trading Day
immediately preceding the issue date of such share or other security, or (iii)
amend, alter or repeal the provisions of the Certificate of Incorporation,
whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting
power of the Series A-1 Preferred or the holders thereof; provided, however,
that the holders of the Series A-1 Preferred shall not be entitled to any
voting rights in connection with an Event if as a result of such Event (a)
shares of Series A-1 Preferred remain outstanding with the terms thereof
materially unchanged or (b) the Corporation is not the surviving entity but
the surviving entity issues to the holders of the Series A-1 Preferred the
same number of shares of a separate class of preferred stock with rights,
preferences, privileges and voting powers that are materially unchanged from
the preferences, rights, privileges and other terms of the Series A-1
Preferred; and provided, further, that (x) any increase in the amount of the
authorized Series A-1 Preferred or the creation or issuance of any other
series of Preferred Stock or (y) any increase in the amount of authorized
shares of such series, in each case ranking on a parity with or junior to the
Series A-1 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(e) The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Series A-1 Preferred shall have
been converted, redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
(5) Conversion.
(a) Subject to Section 8, shares of Series A-1 Preferred will be
convertible at any time on or after January 26, 2001, at the option of the
holders thereof, into Common Stock at a conversion rate of 13.9616 shares of
Common Stock for each share of Series A-1 Preferred, subject to adjustment as
described below (the "Conversion Rate"); provided, however, that the right to
convert shares of Series A-1 Preferred called for redemption will terminate at
the close of business on the Trading Day immediately preceding the Series A-1
Preferred Stock Redemption Date.
(b) To exercise the conversion right, the holder of each Series A-1
Preferred to be converted shall surrender the certificate representing such
Series A-1 Preferred, duly endorsed or assigned to the Corporation or in
blank, at the principal office of the Transfer Agent accompanied by written
notice to the Corporation that such holder elects to convert such Series A-1
Preferred. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such Series A-1 Preferred is registered, in
which case the Corporation shall bear the related taxes, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
(c) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates
representing shares of Series A-1 Preferred shall have been surrendered and
such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates representing
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be at the
Conversion Rate in effect at such time and on such date unless the stock
transfer records of the Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer records are open, but such conversion shall be at the
Conversion Rate in effect on the date on which such shares have been
surrendered and such notice received by the Corporation.
(d) Upon surrender of shares of Series A-1 Preferred for conversion, the
converting holder shall be entitled to receive all accumulated and unpaid
distributions on such shares to the date of conversion, payable in cash or, at
the election of the Corporation but subject to the conditions set forth in
Section 3(b), in shares of Common Stock. Except as provided above, the
Corporation shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted shares or for any distribution on the
Common Stock that is issued upon such conversion.
As promptly as practicable after the surrender of certificates for Series
A-1 Preferred as aforesaid, the Corporation shall issue and shall deliver at
such office to such holder, or on his written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions of this Section 7,
and any fractional interest in respect of a share of Common Stock arising upon
such conversion shall be settled as provided in Section 7(e). Upon request of
the converting holder, such delivery shall be effected through the facilities
of The Depository Trust Company.
(e) No fractional shares of Common Stock shall be issued upon conversion
of Series A-1 Preferred. Instead of any fractional share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series A-1
Preferred, the Corporation shall pay to the holder of such share an amount in
cash in respect of such fractional interest based upon the Current Market
Price of a share of Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one share of Series A-1 Preferred shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of Series A-1 Preferred so
surrendered.
(f) The Conversion Rate shall be adjusted from time to time as follows:
(1) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the Determination Date for such dividend or
other distribution shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date and the
denominator shall be the sum of such number of outstanding shares and the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) Subject to the last sentence of paragraph (7) of this Section 7(f),
in case the Corporation shall issue rights, options or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per share
(determined as provided in paragraph (8) of this Section 7(f)) of the Common
Stock on the Determination Date for such distribution, the Conversion Rate in
effect at the opening of business on the day following such Determination Date
shall be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on such Determination Date plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on such Determination
Date plus the number of shares of Common Stock so offered for subscription or
purchase, such increase to become effective immediately after the opening of
business on the day following such Determination Date. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Corporation will not issue
any rights, options or warrants in respect of shares of Common Stock held in
the treasury of the Corporation.
(3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the Conversion Rate in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) Subject to the last sentence of paragraph (7) of this Section 7(f),
in case the Corporation shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock, or other property (including securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this Section
7(f), (ii) any dividend or distribution paid exclusively in cash, (iii) any
dividend or distribution referred to in paragraph (1) of this Section 7(f) and
(iv) any merger or consolidation to which Section 7(l) applies), the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate in effect immediately prior to the
close of business on the Determination Date for such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (8) of this Section 7(f)) of the Common
Stock on such Determination Date less the then fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such Determination Date. However, if such fraction shall be not more than zero
(0), no adjustment to the Conversion Rate will be made. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (8) of this Section 7(f).
(5) In case the Corporation shall, by dividend or otherwise, make a Cash
Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided
in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (1) the amount of
such Cash Distribution divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (b) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 7(f)) of the Common Stock on such Determination
Date.
(6) In case the Corporation or any Subsidiary shall make an Excess
Purchase Payment, then, and in each such case, immediately prior to the
opening of business on the day after the tender offer in respect of which such
Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (A) the Excess
Purchase Payment divided by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date and (b) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section 7(f)) of the Common Stock as of such Determination Date. However,
if such fraction shall be not more than zero (0), no adjustment to the
Conversion Rate will be made.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger
to which Section 7(l) applies) shall be deemed to involve (a) a distribution
of such securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be the
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 7(f)). Rights or warrants
issued by the Corporation to all holders of its Common Stock entitling the
holders thereof to subscribe for or purchase shares of Common Stock, which
rights or warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for
purposes of this Section 7(f) not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 7(f), the current market price per share of Common Stock
on any date shall be calculated by the Corporation and be deemed to be the
average of the daily Closing Prices for the five consecutive Trading Days
ending on the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent
in such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
7(f) shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) The Corporation may, in its sole discretion, make such increases in
the Conversion Rate, for such period of time (not shorter than five Trading
Days) as the Company may elect, in addition to those required by paragraphs
(1), (2), (3), (4), (5) and (6) of this Section 7(f) as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
(g) Whenever the Conversion Rate is adjusted as provided in Section 7(f),
the Corporation shall compute the adjusted Conversion Rate in accordance with
Section 7(f) and shall prepare a certificate signed by the chief financial
officer of the Corporation setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which such adjustment is based,
and shall promptly deliver such certificate to the holders of the Series A-1
Preferred.
(h) In case:
(1) the Corporation shall declare a dividend or other distribution
on its Common Stock payable (i) otherwise than exclusively in cash or
(ii) exclusively in cash in an amount that would require any adjustment
pursuant to Section 7(f); or
(2) the Corporation shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights;
or
(3) of any reclassification of the Common Stock of the Corporation,
or of any consolidation, merger or share exchange to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or of the conveyance, sale, transfer or lease of
all or substantially all of the assets of the Corporation; or
(4) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation; or
(5) the Corporation or any Subsidiary shall commence a tender offer
for all or a portion of the Corporation's outstanding shares of Common
Stock (or shall amend any such tender offer);
then the Corporation shall cause to be delivered to the holders of the Series
A-1 Preferred at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up. Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings described in clauses (1)
through (5) of this Section 7(h).
(i) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the Series A-1 Preferred, the full
number of shares of Common Stock then issuable upon the conversion of the
Series A-1 Preferred.
(j) Except as provided in the next sentence, the Corporation will pay any
and all documentary, stamp or similar issue and transfer taxes and duties that
may be payable in respect of the issue or delivery of shares of Common Stock
on conversion of the Series A-1 Preferred. The Corporation shall not, however,
be required to pay any tax or duty which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a
name other than that of the holder of the Series A-1 Preferred, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or duty, or has
established to the satisfaction of the Corporation that such tax or duty has
been paid.
(k) The Corporation agrees that all shares of Common Stock which may be
delivered upon conversion of the Series A-1 Preferred, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable (and shall be issued out of the Corporation's authorized but
unissued Common Stock).
(l) In case of any consolidation of the Corporation with any other
person, or any merger of the Corporation into another person or of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock of the Corporation), recapitalization or other transaction in
which the Common Stock is exchanged for or converted into other securities or
assets, the person formed by such consolidation or resulting from such merger,
or issuing such other securities or assets, as the case may be, shall execute
and deliver to the holders of the Series A-1 Preferred a supplemental
agreement providing that such holder have the right thereafter, during the
period the Series A-1 Preferred shall be convertible as specified in this
Section 7, to convert this Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation or
merger, recapitalization or other transaction (including any Common Stock
retainable) by a holder of the number of shares of Common Stock of the
Corporation into which the Series A-1 Preferred might have been converted
immediately prior to such consolidation, merger, recapitalization or other
transaction, assuming such holder of Common Stock of the Corporation (i) is
not a person with which the Corporation consolidated, into which the
Corporation merged or which merged into the Corporation or was a party to such
recapitalization or other transaction, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
recapitalization or other transaction (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, recapitalization or other transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such
consolidation, merger, recapitalization or other transaction by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 7(1) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, recapitalization or other
transaction by the holders of each Non-electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental agreement shall provide for adjustments which, for
events subsequent to the effective date of such supplemental agreement, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 7. The above provisions of this Section 7(l) shall similarly
apply to successive consolidations, mergers, recapitalizations or other
transactions. In this paragraph, "securities of the kind receivable" upon such
consolidation, merger, recapitalization or other transaction by a holder of
Common Stock means securities that, among other things, are registered and
transferable under the Securities Act of 1933, and listed and approved for
quotation in all securities markets, in each case to the same extent as such
securities so receivable by a holder of Common Stock.
(m) The Corporation (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act of 1933, the
Securities Exchange Act of 1934 and state securities and Blue Sky laws) for
the shares of Common Stock issuable upon conversion of the Series A-1
Preferred to be lawfully issued and delivered as provided herein, and
thereafter publicly traded (if permissible under such Securities Act) and
qualified or listed as contemplated by clause (ii) (it being understood that
the Corporation shall not be required to register the resale of the Series A-1
Preferred or the issuance or sale of the Common Stock issuable on conversion
thereof under the Securities Act, except pursuant to the Registration Rights
Agreement between the Corporation and the initial holder of the Series A-1
Preferred); and (ii) will have the shares of Common Stock required to be
issued and delivered upon conversion of the Series A-1 Preferred, prior to
such issuance or delivery, approved for quotations on the Nasdaq National
Market or such other inter-dealer quotation system, if any, on which the
Common Stock is then quoted, or, if applicable, listed on the principal
national securities exchange on which outstanding Common Stock is listed at
the time of such delivery.
(8) Ownership Limitations. Notwithstanding the foregoing, at no time
will any holder be entitled to convert shares of Series A-1 Preferred into
shares of Common Stock that, together with the number of shares of Common
Stock owned (or deemed for bank regulatory purposes to be owned) by such
holder and its affiliates as set forth in the notice of conversion, represent
more than 4.9% of the Common Stock then outstanding. If at any time the
Conversion Rate and the number of shares of the Series A-1 Preferred held by
any holder would result in a greater number of shares being issuable to such
holder upon conversion, then for so long as such condition shall exist, upon
exercise of the conversion right such holder shall receive (i) up to that
number of shares of Common Stock that, together with the number of shares of
Common Stock owned (or deemed for bank regulatory purposes to be owned) by
such holder and its affiliates as set forth in the notice of conversion,
represent 4.9% of the Common Stock then outstanding, and (ii) an amount (in
cash but not less than zero), payable in immediately available funds,
determined pursuant to the formula:
C = ((N x CR) - I) x S
where C = the cash amount receivable by the holder;
N = the number of shares of the Series A-1 Preferred being
converted;
CR = the Conversion Rate (per share of the Series A-1 Preferred);
I = the number of shares of Common Stock issuable pursuant to clause
(i) above;
and
S = the Current Market Price of the Common Stock on the date of
conversion.
(9) Definitions.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day". The term "Business Day" shall mean any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.
"Cash Distribution" means the distribution by the Corporation to
holders of its Common Stock of cash, as an ordinary or extraordinary dividend,
other than any cash that is distributed upon a merger or consolidation to
which Section 7(l) applies or as part of a distribution referred to in
paragraph (4) of Section 7(f).
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 7(l), shares issuable on
conversion or repurchase of the Series A-1 Preferred shall include only shares
of Common Stock or shares of any class or classes of common stock resulting
from any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the
shares so issuable on conversion of the Series A-1 Preferred shall include
shares of all such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Current Market Price" of publicly traded Common Stock or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the Nasdaq National
Market or, if such security is not quoted on the Nasdaq National Market, on
the principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange or not quoted on the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on such
day shall not have been reported through Nasdaq the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making
a market in such security selected for such purpose by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation.
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender
offer, the last time that tenders could have been made pursuant to such tender
offer.
"Excess Purchase Payment" means the product of (A) the excess, if
any, of (i) the amount of cash plus the fair market value (as determined in
good faith by the Corporation's Board of Directors) of any non-cash
consideration required to be paid with respect to one share of Common Stock
acquired or to be acquired in a tender offer made by the Corporation or any
Subsidiary of the Corporation for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer and (B) the number of shares
validly tendered and not withdrawn as of the Determination Date in respect of
such tender offer.
"Subsidiary" means (1) any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
capital stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by the Corporation or one
ore more of the other Subsidiaries of the Corporation (or a combination
thereof); and (2) any partnership, limited liability company or similar
pass-through entity, (a) the sole general partner or the managing general
partner or managing member of which is the Corporation or a Subsidiary of the
Corporation or (b) the only general partners, managing members, or persons,
however designated in corresponding roles, of which are the Corporation or of
one or more Subsidaries of the Corporation (or any combination thereof).
"Trading Day" means (i) if the Common Stock is admitted to trading
on the Nasdaq National Market or any other system of automated dissemination
of quotations of securities prices, a day on which trades may be effected
through such system; (ii) if the Common Stock is listed or admitted for
trading on the New York Stock Exchange or any other national securities
exchange, a day on which such exchange is open for business; or (iii) if the
Common Stock is not listed or admitted for trading on any national securities
exchange or any other system of automated dissemination of quotation of
securities prices, a day on which the Common Stock is traded regular way in
the over-the-counter market and for which a closing bid and a closing asked
price for the Common Stock are available.
"Transfer Agent" means American Stock Transfer & Trust Corporation,
or such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series A-1 Preferred.
(10) Any determination by the Board of Directors pursuant to the terms of the
Series A-1 Preferred shall be final and binding upon the holders thereof and
shall be conclusive for all purposes.
Third : The Series A-1 Preferred has been classified and designated by the
Board of Directors under the authority contained in the Certificate of
Designations.
Fourth : This Certification of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.
Fifth : This Certificate of Designations shall be effective upon filing with
the Secretary of State.
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<PAGE>
IN WITNESS WHEREOF, RECKSON SERVICE INDUSTRIES, INC. has caused these
presents to be signed in its name and on its behalf by its President and Chief
Executive Officer and its corporate seal to be hereunto affixed and attested
by its Assistant Secretary, and the said officers of the Corporation further
acknowledge said instrument to be the corporate act of the Corporation, and
state under the penalties of perjury that, to the best of their knowledge,
information and belief, the matters and facts therein set forth with respect
to approval are true in all material respects.
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Scott Rechler
---------------------------------------------
Name: Scott Rechler
Title: President and Chief Executive Officer
[SEAL]
ATTEST:
/s/ Jason Barnett
--------------------------
Name: Jason Barnett
Title: Assistant Secretary
Exhibit 4.5
RECKSON SERVICE INDUSTRIES, INC.
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Reckson Service Industries, Inc., a Delaware corporation (the
"Corporation"), certifies that:
First: Pursuant to the authority expressly vested in the Board of Directors of
the Corporation by Article VI of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with these Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution,
duly designated and classified 5,000 shares of the Preferred Stock of the
Corporation into a series designated 8 7/8 % Series A-2 Convertible Cumulative
Preferred Stock and has provided for the issuance of such series.
Second : The preferences, rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption of the
shares of such series of Preferred Stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Article VI of the
Certificate of Incorporation, are as follows:
8 7/8% SERIES A-2 CONVERTIBLE CUMULATIVE PREFERRED STOCK
(1) Designation and Number.
A series of Preferred Stock of the Corporation ("Preferred Stock"),
designated the "8 7/8% Series A-2 Convertible Cumulative Preferred Stock" (the
"Series A-2 Preferred"), is hereby established. The number of shares of the
Series A-2 Preferred shall be 5,000.
(2) Rank. The Series A-2 Preferred will, with respect to distribution
rights and rights upon liquidation, dissolution or winding up of the
Corporation, rank: (a) senior to all classes or series of Common Stock of the
Corporation ("Common Stock") and to all equity securities issued by the
Corporation the terms of which provide that such equity securities shall rank
junior to such Series A-2 Preferred; (b) on a parity with all equity
securities issued by the Corporation other than those referred to in clauses
(a) and (c); and (c) junior to all equity securities issued by the Corporation
that rank senior to the Series A-2 Preferred in accordance with Section 4(d).
The term "equity securities" shall not include convertible debt securities.
(3) Distributions.
(a) Holders of the shares of Series A-2 Preferred shall be entitled to
receive, when and as authorized by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions at the rate of 8 7/8% per annum of the liquidation preference
per share (equivalent to $88.75 per annum per share of Series A-2 Preferred ).
Distributions on the Series A-2 Preferred shall be cumulative from January 27,
2000 and shall be payable quarterly in arrears on January 27, April 27, July
27 and October 27 of each year or, if not a business day, the next succeeding
business day, commencing April 27, 2000 (each, a "Distribution Payment Date").
Any distribution payable on the Series A-2 Preferred for a partial
distribution period will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Distributions will be payable to holders of record as
they appear in the stock transfer records of the Corporation at the close of
business on the applicable record date, which shall be such date designated by
the Board of Directors of the Corporation for the payment of distributions
that is not more than 30 nor less than 10 days prior to such Distribution
Payment Date (each, a "Distribution Payment Record Date").
(b) Notwithstanding the foregoing, the Corporation may elect to pay any
distribution on the Series A-2 Preferred by delivery of shares of Common
Stock, but if and only if the following conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
distribution shall have a fair market value as of the Distribution Payment
Date equal to not less than the amount of such distribution. For purposes of
this Section 1, the fair market value of shares of Common Stock shall be equal
to 97.5% of the Current Market Price for the Trading Day immediately preceding
such distribution;
(ii) If such shares of Common Stock are delivered on or prior to the
second anniversary of the issue date of the Series A-2 Preferred, then such
shares shall be registered under the Securities Act of 1933 for resale by the
holders of the Series A-2 Preferred, and the Corporation shall have delivered
to each holder a current prospectus pursuant to which such resale may be
effected; and in the event any shares of Common Stock to be issued in respect
of any subsequent distribution require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the date of such distribution;
(iii) In the event any shares of Common Stock to be issued in
respect of such require registration with or approval of any governmental
authority under any State law or any other Federal law before such shares may
be validly issued or delivered upon issuance, such registration shall have
been completed or have become effective and such approval shall have been
obtained, in each case, prior to the date of such distribution;
(iv) The shares of Common Stock delivered in payment of such
distribution shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the date of such distribution;
(v) All shares of Common Stock delivered in payment of such
distribution shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights; and
(vi) In respect of each such Distribution Payment Date, the
Corporation shall have given the holders of the Series A-2 Preferred not less
than three nor more than 15 Trading Days' notice of its election to effect
payment in respect of such distribution by delivery of shares of Common Stock.
(vii) If all of the conditions set forth in the foregoing clauses
(i) through (vi) are not satisfied in accordance with the terms thereof, any
such distribution shall be paid by the Corporation only in cash.
(viii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
distribution if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than seven Trading Days prior to
the relevant Distribution Payment Date), represent more than 4.9% of the
Common Stock then outstanding. If the limitation set forth in the previous
sentence would apply to any distribution, the Corporation may elect (by notice
to the holder delivered not less than three Trading Days prior to the relevant
Distribution Payment Date) to satisfy a portion of such distribution in shares
of Common Stock (up to the maximum number of shares permitted under the
limitation set forth in the previous sentence) and the balance in cash.
(ix) Any issuance of shares of Common Stock in respect of any
distribution pursuant to this Section 1 shall be deemed to have been effected
immediately prior to the close of business on the Distribution Payment Date
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such delivery
shall be deemed to have become on such date the holder or holders of record of
the shares represented thereby; provided, however, that in case any
installment shall be deliverable on a date when the stock transfer books of
the Corporation shall be closed, the person or persons in whose name or names
the certificate or certificates for such shares are to be issued shall be
deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued pursuant to this Section 1
declared prior to the relevant delivery date.
(x) No fractions of shares shall be issued upon any payment made in
shares of Common Stock in respect of the Series A-2 Preferred. Instead of any
fractional share of Common Stock which would otherwise be so issuable, the
Corporation will round up to the next higher whole share or pay such
fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(xi) Any issuance and delivery of certificates for shares of Common
Stock pursuant to this Section 1 shall be made without charge to holders of
Series A-2 Preferred for such certificates or for any documentary, stamp or
similar issue tax or duty in respect of the issuance or delivery of such
certificates or the securities represented thereby; provided, however, that
the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-2 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the date
of distribution, delivery of any shares of Common Stock issuable to such
holders with respect of such distribution shall be effected through the
facilities of The Depository Trust Company.
(c) No distributions on the Series A-2 Preferred shall be authorized by
the Board of Directors of the Corporation or be paid or set apart for payment
by the Corporation at such time as the terms and provisions of any agreement
of the Corporation, including any agreement relating to its indebtedness,
prohibits such authorization , payment or setting apart for payment or
provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law.
(d) Distributions on the Series A-2 Preferred will accumulate whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Additional distributions will
accumulate on the amount of any accumulated but unpaid distributions on the
Series A-2 Preferred beyond the applicable Distribution Payment Date, at the
rate of 10 7/8% per annum, computed on a daily basis.
(e) No full distributions will be authorized or paid or set apart for
payment on any equity securities of the Corporation ranking, as to
distributions, on a parity with or junior to the Series A-2 Preferred for any
period unless full distributions have been or contemporaneously are authorized
and paid or authorized and a sum sufficient for the payment thereof is set
apart for such payment on the Series A-2 Preferred for all past distribution
periods and the then current distribution period. When distributions are not
paid in full or a sum sufficient for such full payment is not so set apart
upon the Series A-2 Preferred and the other equity securities of the
Corporation ranking on a parity as to distributions with the Series A-2
Preferred, all distributions authorized upon the Series A-2 Preferred and any
other equity securities of the Corporation ranking on a parity as to
distributions with the Series A-2 Preferred shall be authorized pro rata so
that the amount of distributions authorized per share of Series A-2 Preferred
and such other equity securities shall in all cases bear to each other the
same ratio that accumulated distributions per share on the Series A-2
Preferred and such other equity securities (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such equity securities do not have cumulative distributions) bear to each
other.
(f) Unless full distributions on the Series A-2 Preferred have been or
contemporaneously are authorized and paid or authorized and a sum sufficient
for the payment thereof is set apart for payment for all past distribution
periods and the then current distribution period, no distributions shall be
authorized or paid or set aside for payment or other distribution shall be
authorized or made upon the Common Stock or any other equity securities of the
Corporation ranking junior to or on a parity with the Series A-2 Preferred as
to distributions or upon liquidation, nor shall any shares of Common Stock or
any other equity securities of the Corporation ranking junior to or on a
parity with the Series A-2 Preferred as to distributions or upon liquidation
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of
any such shares) by the Corporation (except by conversion into or exchange for
other stock of the Corporation ranking junior as to the Series A-2 Preferred
with respect to distributions and upon liquidation).
(g) Any distribution payment made on shares of the Series A-2 Preferred
shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such shares which remains payable.
(4) Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation (referred to herein as a "liquidation"),
the holders of the Series A-2 Preferred will be entitled to be paid out of the
assets of the Corporation legally available for distribution to its
stockholders liquidating distributions, in cash or property at its fair market
value as determined by the Corporation's Board of Directors, in the amount of
a liquidation preference of $1,000 per share, plus an amount equal to any
accumulated and unpaid distributions to the date of such liquidation, before
any distribution or payment is made to holders of Common Stock or any other
equity securities of the Corporation ranking junior to the Series A-2
Preferred as to the distribution of assets upon a liquidation. After payment
of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A-2 Preferred will have no right or claim to
any of the remaining assets of the Corporation.
(b) In the event that, upon any liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A-2 Preferred
and the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series A-2 Preferred in the distribution
of assets upon a liquidation, then the holders of Series A-2 Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(c) The consolidation or merger of the Corporation with or into any other
entity, or the merger of another entity with or into the Corporation, or a
statutory share exchange by the Corporation, or the sale, lease or conveyance
of all or substantially all of the property or business of the Corporation,
shall not be deemed to constitute a liquidation of the Corporation.
(5) Redemption.
(a) Shares of Series A-2 Preferred will not be redeemable prior to
January 27, 2003. On or after January 27, 2003, the Corporation may redeem
shares of the Series A-2 Preferred, in whole or in part, from time to time, at
a redemption price of $1,000 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption, payable in cash, upon
not less than 30 nor more than 60 days' prior written notice. Notwithstanding
the foregoing, the Corporation may exchange shares of Series A-2 Preferred for
other shares of Convertible Cumulative Preferred Stock pursuant to the
Convertible Preferred Stock Purchase Agreement dated January 25, 2000 between
the Corporation and the Purchaser named therein.
(b) If fewer than all of the outstanding shares of Series A-2 Preferred
are to be redeemed, the shares to be redeemed shall be determined pro rata or
by lot or in such other manner as prescribed by the Board of Directors of the
Corporation.
(c) Notice of redemption will be mailed by the Corporation, postage
prepaid, not less than 35 nor more than 60 days prior to the date fixed for
redemption (the "Series A-2 Preferred Stock Redemption Date"), addressed to
the respective holders of record of the Series A-2 Preferred to be redeemed at
their respective addresses as they appear on the stock transfer records of the
Corporation. Each notice of redemption shall state: (i) the redemption date;
(ii) the number of shares of Series A-2 Preferred to be redeemed; (iii) the
redemption price; (iv) whether such redemption price will be paid in cash or,
subject to the conditions set forth in Section 3(d), by delivery of shares of
Common Stock; (v) the place or places where certificates representing such
shares of Series A-2 Preferred are to be surrendered for payment of the
redemption price; (vi) that distributions on the shares to be redeemed will
cease to accumulate on such redemption date; and (vii) the date upon which the
holder's conversion rights as to such shares shall terminate. If fewer than
all the shares of Series A-2 Preferred are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Series
A-2 Preferred to be redeemed from each such holder.
(d) Notwithstanding the foregoing, the Corporation may elect to pay the
redemption price of shares of Series A-2 Preferred called for redemption by
delivery of shares of Common Stock, but if and only if the following
conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
redemption price shall have a fair market value as of the Series A-2 Preferred
Stock Redemption Date equal to not less than the amount of such redemption
price due hereunder. For purposes of this Section 3, the fair market value of
shares of Common Stock shall be equal to 95% of the daily volume-weighted
average of the Current Market Price for the twenty Trading Days immediately
preceding the Series A-2 Preferred Stock Redemption Date;
(ii) In the event any shares of Common Stock to be issued in respect
of such redemption price require registration under any Federal securities law
before such shares may be freely transferable without being subject to any
transfer restrictions under the Securities Act of 1933 upon issuance, such
registration shall have been completed and shall have become effective prior
to the Series A-2 Preferred Stock Redemption Date;
(iii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration with or approval of any
governmental authority under any State law or any other Federal law before
such shares may be validly issued or delivered upon issuance, such
registration shall have been completed or have become effective and such
approval shall have been obtained, in each case, prior to the Series A-2
Preferred Stock Redemption Date;
(iv) The shares of Common Stock delivered in payment of such
redemption price shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the Series A-2 Preferred Stock Redemption Date;
(v) All shares of Common Stock delivered in payment of such
redemption price shall, upon issue, be duly and validly issued and fully paid
and non-assessable and free of any preemptive rights; and
(vi) If all of the conditions set forth in the foregoing clauses (i)
through (v) are not satisfied in accordance with the terms thereof, any such
redemption price shall be paid by the Corporation only in cash.
(vii) Notwithstanding the foregoing, at no time will the Corporation
deliver shares of Common Stock to any holder in satisfaction of a redemption
if the number of shares so delivered, together with the number of shares of
Common Stock owned (or deemed for bank regulatory purposes to be owned) by
such holder and its affiliates as theretofore notified to the Corporation (in
a notice delivered not less than 20 Trading Days prior to the relevant Series
A-2 Preferred Stock Redemption Date), represent more than 4.9% of the Common
Stock then outstanding. If the limitation set forth in the previous sentence
would apply to any redemption, the Corporation may elect (by notice to the
holder delivered not less than 20 Trading Days prior to the relevant Series
A-2 Preferred Stock Redemption Date) to satisfy a portion of such redemption
price in shares of Common Stock (up to the maximum number of shares permitted
under the limitation set forth in the previous sentence) and the balance in
cash.
(viii) Any issuance of shares of Common Stock in respect of any
redemption pursuant to this Section 3 shall be deemed to have been effected
immediately prior to the close of business on the Series A-2 Preferred Stock
Redemption Date, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such delivery shall be deemed to have become on such date the holder or
holders of record of the shares represented thereby; provided, however, that
in case such shares shall be deliverable on a date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name
or names the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued pursuant to this Section
3 declared prior to the relevant delivery date.
(ix) No fractions of shares shall be issued upon any payment made in
shares of Common Stock in respect of any redemption of Series A-2 Preferred.
Instead of any fractional share of Common Stock which would otherwise be so
issuable, the Corporation will round up to the next higher whole share or pay
such fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(x) Any issuance and delivery of certificates for shares of Common
Stock pursuant to this Section 3 shall be made without charge to holders of
Series A-2 Preferred for such certificates or for any documentary, stamp or
similar issue tax or duty in respect of the issuance or delivery of such
certificates or the securities represented thereby; provided, however, that
the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-2 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the
Series A-2 Preferred Stock Redemption Date, delivery of any shares of Common
Stock issuable to such holders in respect to such redemption shall be effected
through the facilities of The Depository Trust Company.
(e) At its election, the Corporation, prior to the Series A-2 Preferred
Stock Redemption Date, may irrevocably deposit the cash redemption price
(including accumulated and unpaid distributions) of the Series A-2 Preferred
so called for redemption in trust for the holders thereof with a bank or trust
company, in which case the notice of redemption to holders of the Series A-2
Preferred to be redeemed will (i) state the date of such deposit, (ii) specify
the office of such bank or trust company as the place of payment of the
redemption price and (iii) require such holders to surrender the certificates
representing such Series A-2 Preferred at such place on or about the date
fixed in such redemption notice (which may not be later than the Series A-2
Preferred Stock Redemption Date) against payment of the redemption price
(including all accumulated and unpaid distributions to the Series A-2
Preferred Stock Redemption Date). Any moneys so deposited which remain
unclaimed by the holders of the Series A-2 Preferred at the end of two years
after the Series A-2 Preferred Stock Redemption Date will be returned by such
bank or trust company to the Corporation.
(f) No failure to give notice of redemption or any defect thereto or in
the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A-2 Preferred except as to the holder to
whom notice was defective or not given.
(g) On or after the Series A-2 Preferred Stock Redemption Date, each
holder of Series A-2 Preferred to be redeemed must present and surrender the
certificates representing the Series A-2 Preferred to the Corporation at the
place designated in the notice of redemption and thereupon the redemption
price of such shares will be paid to or on the order of the person whose name
appears on such certificates as the owner thereof and each surrendered
certificate will be canceled. In the event that fewer than all the shares of
Series A-2 Preferred are to be redeemed, a new certificate will be issued
representing the unredeemed shares.
(h) From and after the Series A-2 Preferred Stock Redemption Date (unless
the Corporation defaults in payment of the redemption price), all
distributions on the Series A-2 Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid
distributions to the Series A-2 Preferred Stock Redemption Date), will cease
and terminate and such shares will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
shall not be deemed to be outstanding for any purpose whatsoever.
(i) Unless full distributions on all shares of Series A-2 Preferred shall
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no shares of
Series A-2 Preferred shall be redeemed unless all outstanding shares of Series
A-2 Preferred are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Series
A-2 Preferred pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A-2 Preferred.
(j) Unless full distributions on all shares of Series A-2 Preferred have
been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A-2 Preferred (except by conversion into or exchange for equity
securities of the Corporation ranking junior to the Series A-2 Preferred as to
distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A-2 Preferred pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A-2 Preferred.
(k) Immediately prior to any redemption of Series A-2 Preferred, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to
the Series A-2 Preferred Stock Redemption Date, unless such Series A-2
Preferred Stock Redemption Date falls after a Distribution Payment Record Date
and prior to the corresponding Distribution Payment Date, in which case each
holder of Series A-2 Preferred at the close of business on such Distribution
Payment Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on Series A-2 Preferred
for which a notice of redemption has been given.
(l) Any shares of Series A-2 Preferred that have been redeemed shall,
after such redemption, have the status of authorized but unissued Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors of the
Corporation.
(m) The Series A-2 Preferred will not have a stated maturity date and
will not be subject to any sinking fund or mandatory redemption provisions.
(6) Voting Rights
(a) Holders of the Series A-2 Preferred will not have any voting rights,
except as set forth below. In any matter in which the Series A-2 Preferred is
entitled to vote, including any action by written consent, each share of
Series A-2 Preferred shall be entitled to one vote.
(b) Whenever distributions on any shares of Series A-2 Preferred shall be
in arrears for more than two applicable Distribution Payment Dates, (a
"Preferred Distribution Default"), the holders of such shares of Series A-2
Preferred (voting separately as a class with all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two additional directors of the
Corporation (the "Preferred Stock Directors") at a special meeting called by
the holders of record of at least 10% of the outstanding shares of Series A-2
Preferred or the holders of any other series of Preferred Stock so in arrears
(unless such request is received less than 90 days before the date fixed for
the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
distributions accumulated on such shares of Series A-2 Preferred for the past
distribution periods and the then current distribution period shall have been
fully paid or declared and a sum sufficient for the payment thereof is set
aside for payment. In such cases, the entire Board of Directors of the
Corporation will be increased by two directors.
(c) If and when all accumulated distributions and the distribution for
the current distribution period on the Series A-2 Preferred shall have been
paid in full or set aside for payment in full, the holders of shares of Series
A-2 Preferred shall be divested of the voting rights set forth in Section 4(b)
(subject to revesting in the event of each and every Preferred Distribution
Default) and, if all accumulated distributions and the distribution for the
current distribution period have been paid in full or set aside for payment in
full on all other series of Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall terminate immediately. So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office or, if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series A-2
Preferred when they have the voting rights set forth in Section 4(b) (voting
separately as a class with all other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable). The Preferred Stock
Directors shall each be entitled to one vote per director on any matter
presented to the Board of Directors.
(d) So long as any shares of Series A-2 Preferred remain outstanding, the
Corporation shall not, without the affirmative vote or consent of the holders
of record of at least two-thirds of the outstanding shares of the Series A-2
Preferred given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any equity securities ranking senior to the
Series A-2 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation or reclassify any
authorized stock of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such stock, (ii) issue any share or other
security convertible into Common Stock at a conversion price equal to less
than the Current Market Price of the Common Stock on the Trading Day
immediately preceding the issue date of such share or other security, or (iii)
amend, alter or repeal the provisions of the Certificate of Incorporation,
whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting
power of the Series A-2 Preferred or the holders thereof; provided, however,
that the holders of the Series A-2 Preferred shall not be entitled to any
voting rights in connection with an Event if as a result of such Event (a)
shares of Series A-2 Preferred remain outstanding with the terms thereof
materially unchanged or (b) the Corporation is not the surviving entity but
the surviving entity issues to the holders of the Series A-2 Preferred the
same number of shares of a separate class of preferred stock with rights,
preferences, privileges and voting powers that are materially unchanged from
the preferences, rights, privileges and other terms of the Series A-2
Preferred; and provided, further, that (x) any increase in the amount of the
authorized Series A-2 Preferred or the creation or issuance of any other
series of Preferred Stock or (y) any increase in the amount of authorized
shares of such series, in each case ranking on a parity with or junior to the
Series A-2 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(e) The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Series A-2 Preferred shall have
been converted, redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
(7) Conversion.
(a) Subject to Section 6, shares of Series A-2 Preferred will be
convertible at any time on or after January 27, 2001, at the option of the
holders thereof, into Common Stock at a conversion rate of 14.4300 shares of
Common Stock for each share of Series A-2 Preferred, subject to adjustment as
described below (the "Conversion Rate"); provided, however, that the right to
convert shares of Series A-2 Preferred called for redemption will terminate at
the close of business on the Trading Day immediately preceding the Series A-2
Preferred Stock Redemption Date.
(b) To exercise the conversion right, the holder of each Series A-2
Preferred to be converted shall surrender the certificate representing such
Series A-2 Preferred, duly endorsed or assigned to the Corporation or in
blank, at the principal office of the Transfer Agent accompanied by written
notice to the Corporation that such holder elects to convert such Series A-2
Preferred. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such Series A-2 Preferred is registered, in
which case the Corporation shall bear the related taxes, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
(c) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates
representing shares of Series A-2 Preferred shall have been surrendered and
such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates representing
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be at the
Conversion Rate in effect at such time and on such date unless the stock
transfer records of the Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer records are open, but such conversion shall be at the
Conversion Rate in effect on the date on which such shares have been
surrendered and such notice received by the Corporation.
(d) Upon surrender of shares of Series A-2 Preferred for conversion, the
converting holder shall be entitled to receive all accumulated and unpaid
distributions on such shares to the date of conversion, payable in cash or, at
the election of the Corporation but subject to the conditions set forth in
Section 1(b), in shares of Common Stock. Except as provided above, the
Corporation shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted shares or for any distribution on the
Common Stock that is issued upon such conversion.
As promptly as practicable after the surrender of certificates for Series
A-2 Preferred as aforesaid, the Corporation shall issue and shall deliver at
such office to such holder, or on his written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions of this Section 5,
and any fractional interest in respect of a share of Common Stock arising upon
such conversion shall be settled as provided in Section 5(e). Upon request of
the converting holder, such delivery shall be effected through the facilities
of The Depository Trust Company.
(e) No fractional shares of Common Stock shall be issued upon conversion
of Series A-2 Preferred. Instead of any fractional share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series A-2
Preferred, the Corporation shall pay to the holder of such share an amount in
cash in respect of such fractional interest based upon the Current Market
Price of a share of Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one share of Series A-2 Preferred shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of Series A-2 Preferred so
surrendered.
(f) The Conversion Rate shall be adjusted from time to time as follows:
(1) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the Determination Date for such dividend or
other distribution shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date and the
denominator shall be the sum of such number of outstanding shares and the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) Subject to the last sentence of paragraph (7) of this Section 5(f),
in case the Corporation shall issue rights, options or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per share
(determined as provided in paragraph (8) of this Section 5(f)) of the Common
Stock on the Determination Date for such distribution, the Conversion Rate in
effect at the opening of business on the day following such Determination Date
shall be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on such Determination Date plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on such Determination
Date plus the number of shares of Common Stock so offered for subscription or
purchase, such increase to become effective immediately after the opening of
business on the day following such Determination Date. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Corporation will not issue
any rights, options or warrants in respect of shares of Common Stock held in
the treasury of the Corporation.
(3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the Conversion Rate in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) Subject to the last sentence of paragraph (7) of this Section 5(f),
in case the Corporation shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock, or other property (including securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this Section
5(f), (ii) any dividend or distribution paid exclusively in cash, (iii) any
dividend or distribution referred to in paragraph (1) of this Section 5(f) and
(iv) any merger or consolidation to which Section 5(l) applies), the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate in effect immediately prior to the
close of business on the Determination Date for such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (8) of this Section 5(f)) of the Common
Stock on such Determination Date less the then fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such Determination Date. However, if such fraction shall be not more than zero
(0), no adjustment to the Conversion Rate will be made. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (8) of this Section 5(f).
(5) In case the Corporation shall, by dividend or otherwise, make a Cash
Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided
in paragraph (8) of this Section 5(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (1) the amount of
such Cash Distribution divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (b) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 5(f)) of the Common Stock on such Determination
Date.
(6) In case the Corporation or any Subsidiary shall make an Excess
Purchase Payment, then, and in each such case, immediately prior to the
opening of business on the day after the tender offer in respect of which such
Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 5(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (A) the Excess
Purchase Payment divided by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date and (b) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section 5(f)) of the Common Stock as of such Determination Date. However,
if such fraction shall be not more than zero (0), no adjustment to the
Conversion Rate will be made.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger
to which Section 5(l) applies) shall be deemed to involve (a) a distribution
of such securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be the
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 5(f)). Rights or warrants
issued by the Corporation to all holders of its Common Stock entitling the
holders thereof to subscribe for or purchase shares of Common Stock, which
rights or warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for
purposes of this Section 5(f) not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 5(f), the current market price per share of Common Stock
on any date shall be calculated by the Corporation and be deemed to be the
average of the daily Closing Prices for the five consecutive Trading Days
ending on the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent
in such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
5(f) shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) The Corporation may, in its sole discretion, make such increases in
the Conversion Rate, for such period of time (not shorter than five Trading
Days) as the Company may elect, in addition to those required by paragraphs
(1), (2), (3), (4), (5) and (6) of this Section 5(f) as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
(g) Whenever the Conversion Rate is adjusted as provided in Section 5(f),
the Corporation shall compute the adjusted Conversion Rate in accordance with
Section 5(f) and shall prepare a certificate signed by the chief financial
officer of the Corporation setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which such adjustment is based,
and shall promptly deliver such certificate to the holders of the Series A-2
Preferred.
(h) In case:
(1) the Corporation shall declare a dividend or other distribution
on its Common Stock payable (i) otherwise than exclusively in cash or
(ii) exclusively in cash in an amount that would require any adjustment
pursuant to Section 5(f); or
(2) the Corporation shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights;
or
(3) of any reclassification of the Common Stock of the Corporation,
or of any consolidation, merger or share exchange to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or of the conveyance, sale, transfer or lease of
all or substantially all of the assets of the Corporation; or
(4) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation; or
(5) the Corporation or any Subsidiary shall commence a tender offer
for all or a portion of the Corporation's outstanding shares of Common
Stock (or shall amend any such tender offer);
then the Corporation shall cause to be delivered to the holders of the Series
A-2 Preferred at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up. Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings described in clauses (1)
through (5) of this Section 5(h).
(i) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the Series A-2 Preferred, the full
number of shares of Common Stock then issuable upon the conversion of the
Series A-2 Preferred.
(j) Except as provided in the next sentence, the Corporation will pay any
and all documentary, stamp or similar issue and transfer taxes and duties that
may be payable in respect of the issue or delivery of shares of Common Stock
on conversion of the Series A-2 Preferred. The Corporation shall not, however,
be required to pay any tax or duty which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a
name other than that of the holder of the Series A-2 Preferred, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or duty, or has
established to the satisfaction of the Corporation that such tax or duty has
been paid.
(k) The Corporation agrees that all shares of Common Stock which may be
delivered upon conversion of the Series A-2 Preferred, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable (and shall be issued out of the Corporation's authorized but
unissued Common Stock).
(l) In case of any consolidation of the Corporation with any other
person, or any merger of the Corporation into another person or of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock of the Corporation), recapitalization or other transaction in
which the Common Stock is exchanged for or converted into other securities or
assets, the person formed by such consolidation or resulting from such merger,
or issuing such other securities or assets, as the case may be, shall execute
and deliver to the holders of the Series A-2 Preferred a supplemental
agreement providing that such holder have the right thereafter, during the
period the Series A-2 Preferred shall be convertible as specified in this
Section 5, to convert this Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation or
merger, recapitalization or other transaction (including any Common Stock
retainable) by a holder of the number of shares of Common Stock of the
Corporation into which the Series A-2 Preferred might have been converted
immediately prior to such consolidation, merger, recapitalization or other
transaction, assuming such holder of Common Stock of the Corporation (i) is
not a person with which the Corporation consolidated, into which the
Corporation merged or which merged into the Corporation or was a party to such
recapitalization or other transaction, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
recapitalization or other transaction (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, recapitalization or other transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such
consolidation, merger, recapitalization or other transaction by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 5(1) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, recapitalization or other
transaction by the holders of each Non-electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental agreement shall provide for adjustments which, for
events subsequent to the effective date of such supplemental agreement, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 5. The above provisions of this Section 5(l) shall similarly
apply to successive consolidations, mergers, recapitalizations or other
transactions. In this paragraph, "securities of the kind receivable" upon such
consolidation, merger, recapitalization or other transaction by a holder of
Common Stock means securities that, among other things, are registered and
transferable under the Securities Act of 1933, and listed and approved for
quotation in all securities markets, in each case to the same extent as such
securities so receivable by a holder of Common Stock.
(m) The Corporation (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act of 1933, the
Securities Exchange Act of 1934 and state securities and Blue Sky laws) for
the shares of Common Stock issuable upon conversion of the Series A-2
Preferred to be lawfully issued and delivered as provided herein, and
thereafter publicly traded (if permissible under such Securities Act) and
qualified or listed as contemplated by clause (ii) (it being understood that
the Corporation shall not be required to register the resale of the Series A-2
Preferred or the issuance or sale of the Common Stock issuable on conversion
thereof under the Securities Act, except pursuant to the Registration Rights
Agreement between the Corporation and the initial holder of the Series A-2
Preferred); and (ii) will have the shares of Common Stock required to be
issued and delivered upon conversion of the Series A-2 Preferred, prior to
such issuance or delivery, approved for quotations on the Nasdaq National
Market or such other inter-dealer quotation system, if any, on which the
Common Stock is then quoted, or, if applicable, listed on the principal
national securities exchange on which outstanding Common Stock is listed at
the time of such delivery.
(8) Ownership Limitations.
Notwithstanding the foregoing, at no time will any holder be entitled to
convert shares of Series A-2 Preferred into shares of Common Stock that,
together with the number of shares of Common Stock owned (or deemed for bank
regulatory purposes to be owned) by such holder and its affiliates as set
forth in the notice of conversion, represent more than 4.9% of the Common
Stock then outstanding. If at any time the Conversion Rate and the number of
shares of the Series A-2 Preferred held by any holder would result in a
greater number of shares being issuable to such holder upon conversion, then
for so long as such condition shall exist, upon exercise of the conversion
right such holder shall receive (i) up to that number of shares of Common
Stock that, together with the number of shares of Common Stock owned (or
deemed for bank regulatory purposes to be owned) by such holder and its
affiliates as set forth in the notice of conversion, represent 4.9% of the
Common Stock then outstanding, and (ii) an amount (in cash but not less than
zero), payable in immediately available funds, determined pursuant to the
formula:
C = ((N x CR) - I) x S
where C = the cash amount receivable by the holder;
N = the number of shares of the Series A-2 Preferred
being converted;
CR = the Conversion Rate (per share of the Series A-2
Preferred);
I = the number of shares of Common Stock issuable
pursuant to clause (i) above;
and
S = the Current Market Price of the Common Stock on
the date of conversion.
(9) Definitions.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day". The term "Business Day" shall mean any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.
"Cash Distribution" means the distribution by the Corporation to
holders of its Common Stock of cash, as an ordinary or extraordinary dividend,
other than any cash that is distributed upon a merger or consolidation to
which Section 5(l) applies or as part of a distribution referred to in
paragraph (4) of Section 5(f).
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 5(l), shares issuable on
conversion or repurchase of the Series A-2 Preferred shall include only shares
of Common Stock or shares of any class or classes of common stock resulting
from any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the
shares so issuable on conversion of the Series A-2 Preferred shall include
shares of all such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Current Market Price" of publicly traded Common Stock or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the Nasdaq National
Market or, if such security is not quoted on the Nasdaq National Market, on
the principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange or not quoted on the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on such
day shall not have been reported through Nasdaq the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making
a market in such security selected for such purpose by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation.
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender
offer, the last time that tenders could have been made pursuant to such tender
offer.
"Excess Purchase Payment" means the product of (A) the excess, if
any, of (i) the amount of cash plus the fair market value (as determined in
good faith by the Corporation's Board of Directors) of any non-cash
consideration required to be paid with respect to one share of Common Stock
acquired or to be acquired in a tender offer made by the Corporation or any
Subsidiary of the Corporation for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer and (B) the number of shares
validly tendered and not withdrawn as of the Determination Date in respect of
such tender offer.
"Subsidiary" means (1) any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
capital stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by the Corporation or one
ore more of the other Subsidiaries of the Corporation (or a combination
thereof); and (2) any partnership, limited liability company or similar
pass-through entity, (a) the sole general partner or the managing general
partner or managing member of which is the Corporation or a Subsidiary of the
Corporation or (b) the only general partners, managing members, or persons,
however designated in corresponding roles, of which are the Corporation or of
one or more Subsidaries of the Corporation (or any combination thereof).
"Trading Day" means (i) if the Common Stock is admitted to trading
on the Nasdaq National Market or any other system of automated dissemination
of quotations of securities prices, a day on which trades may be effected
through such system; (ii) if the Common Stock is listed or admitted for
trading on the New York Stock Exchange or any other national securities
exchange, a day on which such exchange is open for business; or (iii) if the
Common Stock is not listed or admitted for trading on any national securities
exchange or any other system of automated dissemination of quotation of
securities prices, a day on which the Common Stock is traded regular way in
the over-the-counter market and for which a closing bid and a closing asked
price for the Common Stock are available.
"Transfer Agent" means American Stock Transfer & Trust Corporation,
or such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series A-2 Preferred.
(10) Any determination by the Board of Directors pursuant to the terms
of the Series A-2 Preferred shall be final and binding upon the holders
thereof and shall be conclusive for all purposes.
Third : The Series A-2 Preferred has been classified and designated by the
Board of Directors under the authority contained in the Certificate of
Designations.
Fourth : This Certificate of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.
Fifth : This Certificate of Designations shall be effective upon filing with
the Secretary of State.
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<PAGE>
IN WITNESS WHEREOF, RECKSON SERVICE INDUSTRIES, INC. has caused these
presents to be signed in its name and on its behalf by its President and Chief
Executive Officer and its corporate seal to be hereunto affixed and attested
by its Assistant Secretary, and the said officers of the Corporation further
acknowledge said instrument to be the corporate act of the Corporation, and
state under the penalties of perjury that, to the best of their knowledge,
information and belief, the matters and facts therein set forth with respect
to approval are true in all material respects.
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Scott Rechler
--------------------------------------------
Name: Scott Rechler
Title: President and Chief Executive Officer
[SEAL]
ATTEST:
/s/ Jason Barnett
---------------------------
Name: Jason Barnett
Title: Assistant Secretary
Exhibit 4.6
RECKSON SERVICE INDUSTRIES, INC.
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Reckson Service Industries, Inc., a Delaware corporation (the
"Corporation"), certifies that:
First : Pursuant to the authority expressly vested in the Board of Directors
of the Corporation by Article VI of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with these Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution,
duly designated and classified 5,000 shares of the Preferred Stock of the
Corporation into a series designated 8 7/8 % Series A-3 Convertible Cumulative
Preferred Stock and has provided for the issuance of such series.
Second : The preferences, rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption of the
shares of such series of Preferred Stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Article VI of the
Certificate of Incorporation, are as follows:
8 7/8% SERIES A-3 CONVERTIBLE CUMULATIVE PREFERRED STOCK
(1) Designation and Number.
A series of Preferred Stock of the Corporation ("Preferred Stock"),
designated the "8 7/8% Series A-3 Convertible Cumulative Preferred Stock" (the
"Series A-3 Preferred"), is hereby established. The number of shares of the
Series A-3 Preferred shall be 5,000.
(2) Rank.
The Series A-3 Preferred will, with respect to distribution rights and
rights upon liquidation, dissolution or winding up of the Corporation, rank:
(a) senior to all classes or series of Common Stock of the Corporation
("Common Stock") and to all equity securities issued by the Corporation the
terms of which provide that such equity securities shall rank junior to such
Series A-3 Preferred; (b) on a parity with all equity securities issued by the
Corporation other than those referred to in clauses (a) and (c); and (c)
junior to all equity securities issued by the Corporation that rank senior to
the Series A-3 Preferred in accordance with Section 6(d). The term "equity
securities" shall not include convertible debt securities.
(3) Distributions.
(a) Holders of the shares of Series A-3 Preferred shall be entitled to
receive, when and as authorized by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions at the rate of 8 7/8% per annum of the liquidation preference
per share (equivalent to $88.75 per annum per share of Series A-3 Preferred ).
Distributions on the Series A-3 Preferred shall be cumulative from January 31,
2000 and shall be payable quarterly in arrears on January 31, April 30, July
31 and October 31 of each year or, if not a business day, the next succeeding
business day, commencing April 30, 2000 (each, a "Distribution Payment Date").
Any distribution payable on the Series A-3 Preferred for a partial
distribution period will be computed on the basis of a 360-day year consisting
of twelve 30-day months. Distributions will be payable to holders of record as
they appear in the stock transfer records of the Corporation at the close of
business on the applicable record date, which shall be such date designated by
the Board of Directors of the Corporation for the payment of distributions
that is not more than 30 nor less than 10 days prior to such Distribution
Payment Date (each, a "Distribution Payment Record Date").
(b) Notwithstanding the foregoing, the Corporation may elect to pay any
distribution on the Series A-3 Preferred by delivery of shares of Common
Stock, but if and only if the following conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
distribution shall have a fair market value as of the Distribution Payment
Date equal to not less than the amount of such distribution. For purposes of
this Section 3, the fair market value of shares of Common Stock shall be equal
to 97.5% of the Current Market Price for the Trading Day immediately preceding
such distribution;
(ii) If such shares of Common Stock are delivered on or prior to the
second anniversary of the issue date of the Series A-3 Preferred, then such
shares shall be registered under the Securities Act of 1933 for resale by the
holders of the Series A-3 Preferred, and the Corporation shall have delivered
to each holder a current prospectus pursuant to which such resale may be
effected; and in the event any shares of Common Stock to be issued in respect
of any subsequent distribution require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the date of such distribution;
(iii) In the event any shares of Common Stock to be issued in
respect of such require registration with or approval of any governmental
authority under any State law or any other Federal law before such shares may
be validly issued or delivered upon issuance, such registration shall have
been completed or have become effective and such approval shall have been
obtained, in each case, prior to the date of such distribution;
(iv) The shares of Common Stock delivered in payment of such
distribution shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the date of such distribution;
(v) All shares of Common Stock delivered in payment of such
distribution shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights; and
(vi) In respect of each such Distribution Payment Date, the
Corporation shall have given the holders of the Series A-3 Preferred not less
than three nor more than 15 Trading Days' notice of its election to effect
payment in respect of such distribution by delivery of shares of Common Stock.
(vii) If all of the conditions set forth in the foregoing clauses
(i) through (vi) are not satisfied in accordance with the terms thereof, any
such distribution shall be paid by the Corporation only in cash.
(viii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
distribution if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than seven Trading Days prior to
the relevant Distribution Payment Date), represent more than 4.9% of the
Common Stock then outstanding. If the limitation set forth in the previous
sentence would apply to any distribution, the Corporation may elect (by notice
to the holder delivered not less than three Trading Days prior to the relevant
Distribution Payment Date) to satisfy a portion of such distribution in shares
of Common Stock (up to the maximum number of shares permitted under the
limitation set forth in the previous sentence) and the balance in cash.
(ix) Any issuance of shares of Common Stock in respect of any
distribution pursuant to this Section 3 shall be deemed to have been effected
immediately prior to the close of business on the Distribution Payment Date
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such delivery
shall be deemed to have become on such date the holder or holders of record of
the shares represented thereby; provided, however, that in case any
installment shall be deliverable on a date when the stock transfer books of
the Corporation shall be closed, the person or persons in whose name or names
the certificate or certificates for such shares are to be issued shall be
deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued pursuant to this Section 3
declared prior to the relevant delivery date.
(x) No fractions of shares shall be issued upon any payment made in
shares of Common Stock in respect of the Series A-3 Preferred. Instead of any
fractional share of Common Stock which would otherwise be so issuable, the
Corporation will round up to the next higher whole share or pay such
fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(xi) Any issuance and delivery of certificates for shares of Common
Stock pursuant to this Section 3 shall be made without charge to holders of
Series A-3 Preferred for such certificates or for any documentary, stamp or
similar issue tax or duty in respect of the issuance or delivery of such
certificates or the securities represented thereby; provided, however, that
the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-3 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the date
of distribution, delivery of any shares of Common Stock issuable to such
holders with respect of such distribution shall be effected through the
facilities of The Depository Trust Company.
(c) No distributions on the Series A-3 Preferred shall be authorized by
the Board of Directors of the Corporation or be paid or set apart for payment
by the Corporation at such time as the terms and provisions of any agreement
of the Corporation, including any agreement relating to its indebtedness,
prohibits such authorization , payment or setting apart for payment or
provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law.
(d) Distributions on the Series A-3 Preferred will accumulate whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Additional distributions will
accumulate on the amount of any accumulated but unpaid distributions on the
Series A-3 Preferred beyond the applicable Distribution Payment Date, at the
rate of 10 7/8% per annum, computed on a daily basis.
(e) No full distributions will be authorized or paid or set apart for
payment on any equity securities of the Corporation ranking, as to
distributions, on a parity with or junior to the Series A-3 Preferred for any
period unless full distributions have been or contemporaneously are authorized
and paid or authorized and a sum sufficient for the payment thereof is set
apart for such payment on the Series A-3 Preferred for all past distribution
periods and the then current distribution period. When distributions are not
paid in full or a sum sufficient for such full payment is not so set apart
upon the Series A-3 Preferred and the other equity securities of the
Corporation ranking on a parity as to distributions with the Series A-3
Preferred, all distributions authorized upon the Series A-3 Preferred and any
other equity securities of the Corporation ranking on a parity as to
distributions with the Series A-3 Preferred shall be authorized pro rata so
that the amount of distributions authorized per share of Series A-3 Preferred
and such other equity securities shall in all cases bear to each other the
same ratio that accumulated distributions per share on the Series A-3
Preferred and such other equity securities (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such equity securities do not have cumulative distributions) bear to each
other.
(f) Unless full distributions on the Series A-3 Preferred have been or
contemporaneously are authorized and paid or authorized and a sum sufficient
for the payment thereof is set apart for payment for all past distribution
periods and the then current distribution period, no distributions shall be
authorized or paid or set aside for payment or other distribution shall be
authorized or made upon the Common Stock or any other equity securities of the
Corporation ranking junior to or on a parity with the Series A-3 Preferred as
to distributions or upon liquidation, nor shall any shares of Common Stock or
any other equity securities of the Corporation ranking junior to or on a
parity with the Series A-3 Preferred as to distributions or upon liquidation
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of
any such shares) by the Corporation (except by conversion into or exchange for
other stock of the Corporation ranking junior as to the Series A-3 Preferred
with respect to distributions and upon liquidation).
(g) Any distribution payment made on shares of the Series A-3 Preferred
shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such shares which remains payable.
(4) Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation (referred to herein as a "liquidation"),
the holders of the Series A-3 Preferred will be entitled to be paid out of the
assets of the Corporation legally available for distribution to its
stockholders liquidating distributions, in cash or property at its fair market
value as determined by the Corporation's Board of Directors, in the amount of
a liquidation preference of $1,000 per share, plus an amount equal to any
accumulated and unpaid distributions to the date of such liquidation, before
any distribution or payment is made to holders of Common Stock or any other
equity securities of the Corporation ranking junior to the Series A-3
Preferred as to the distribution of assets upon a liquidation. After payment
of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A-3 Preferred will have no right or claim to
any of the remaining assets of the Corporation.
(b) In the event that, upon any liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A-3 Preferred
and the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series A-3 Preferred in the distribution
of assets upon a liquidation, then the holders of Series A-3 Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(c) The consolidation or merger of the Corporation with or into any other
entity, or the merger of another entity with or into the Corporation, or a
statutory share exchange by the Corporation, or the sale, lease or conveyance
of all or substantially all of the property or business of the Corporation,
shall not be deemed to constitute a liquidation of the Corporation.
(5) Redemption.
(a) Shares of Series A-3 Preferred will not be redeemable prior to
January 31, 2003. On or after January 31, 2003, the Corporation may redeem
shares of the Series A-3 Preferred, in whole or in part, from time to time, at
a redemption price of $1,000 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption, payable in cash, upon
not less than 30 nor more than 60 days' prior written notice. Notwithstanding
the foregoing, the Corporation may exchange shares of Series A-3 Preferred for
other shares of Convertible Cumulative Preferred Stock pursuant to the
Convertible Preferred Stock Purchase Agreement dated January 25, 2000 between
the Corporation and the Purchaser named therein.
(b) If fewer than all of the outstanding shares of Series A-3 Preferred
are to be redeemed, the shares to be redeemed shall be determined pro rata or
by lot or in such other manner as prescribed by the Board of Directors of the
Corporation.
(c) Notice of redemption will be mailed by the Corporation, postage
prepaid, not less than 35 nor more than 60 days prior to the date fixed for
redemption (the "Series A-3 Preferred Stock Redemption Date"), addressed to
the respective holders of record of the Series A-3 Preferred to be redeemed at
their respective addresses as they appear on the stock transfer records of the
Corporation. Each notice of redemption shall state: (i) the redemption date;
(ii) the number of shares of Series A-3 Preferred to be redeemed; (iii) the
redemption price; (iv) whether such redemption price will be paid in cash or,
subject to the conditions set forth in Section 5(d), by delivery of shares of
Common Stock; (v) the place or places where certificates representing such
shares of Series A-3 Preferred are to be surrendered for payment of the
redemption price; (vi) that distributions on the shares to be redeemed will
cease to accumulate on such redemption date; and (vii) the date upon which the
holder's conversion rights as to such shares shall terminate. If fewer than
all the shares of Series A-3 Preferred are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Series
A-3 Preferred to be redeemed from each such holder.
(d) Notwithstanding the foregoing, the Corporation may elect to pay the
redemption price of shares of Series A-3 Preferred called for redemption by
delivery of shares of Common Stock, but if and only if the following
conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
redemption price shall have a fair market value as of the Series A-3 Preferred
Stock Redemption Date equal to not less than the amount of such redemption
price due hereunder. For purposes of this Section 5, the fair market value of
shares of Common Stock shall be equal to 95% of the daily volume-weighted
average of the Current Market Price for the twenty Trading Days immediately
preceding the Series A-3 Preferred Stock Redemption Date;
(ii) In the event any shares of Common Stock to be issued in respect
of such redemption price require registration under any Federal securities law
before such shares may be freely transferable without being subject to any
transfer restrictions under the Securities Act of 1933 upon issuance, such
registration shall have been completed and shall have become effective prior
to the Series A-3 Preferred Stock Redemption Date;
(iii) In the event any shares of Common Stock to be issued in respect
of such redemption price require registration with or approval of any
governmental authority under any State law or any other Federal law before
such shares may be validly issued or delivered upon issuance, such
registration shall have been completed or have become effective and such
approval shall have been obtained, in each case, prior to the Series A-3
Preferred Stock Redemption Date;
(iv) The shares of Common Stock delivered in payment of such
redemption price shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the Series A-3 Preferred Stock Redemption Date;
(v) All shares of Common Stock delivered in payment of such
redemption price shall, upon issue, be duly and validly issued and fully paid
and non-assessable and free of any preemptive rights; and
(vi) If all of the conditions set forth in the foregoing clauses (i)
through (v) are not satisfied in accordance with the terms thereof, any such
redemption price shall be paid by the Corporation only in cash.
(vii) Notwithstanding the foregoing, at no time will the Corporation
deliver shares of Common Stock to any holder in satisfaction of a redemption
if the number of shares so delivered, together with the number of shares of
Common Stock owned (or deemed for bank regulatory purposes to be owned) by
such holder and its affiliates as theretofore notified to the Corporation (in
a notice delivered not less than 20 Trading Days prior to the relevant Series
A-3 Preferred Stock Redemption Date), represent more than 4.9% of the Common
Stock then outstanding. If the limitation set forth in the previous sentence
would apply to any redemption, the Corporation may elect (by notice to the
holder delivered not less than 20 Trading Days prior to the relevant Series
A-3 Preferred Stock Redemption Date) to satisfy a portion of such redemption
price in shares of Common Stock (up to the maximum number of shares permitted
under the limitation set forth in the previous sentence) and the balance in
cash.
(viii) Any issuance of shares of Common Stock in respect of any
redemption pursuant to this Section 5 shall be deemed to have been effected
immediately prior to the close of business on the Series A-3 Preferred Stock
Redemption Date, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such delivery shall be deemed to have become on such date the holder or
holders of record of the shares represented thereby; provided, however, that
in case such shares shall be deliverable on a date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name
or names the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued pursuant to this Section
5 declared prior to the relevant delivery date.
(ix) No fractions of shares shall be issued upon any payment made in
shares of Common Stock in respect of any redemption of Series A-3 Preferred.
Instead of any fractional share of Common Stock which would otherwise be so
issuable, the Corporation will round up to the next higher whole share or pay
such fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(x) Any issuance and delivery of certificates for shares of Common
Stock pursuant to this Section 5 shall be made without charge to holders of
Series A-3 Preferred for such certificates or for any documentary, stamp or
similar issue tax or duty in respect of the issuance or delivery of such
certificates or the securities represented thereby; provided, however, that
the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-3 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the
Series A-3 Preferred Stock Redemption Date, delivery of any shares of Common
Stock issuable to such holders in respect to such redemption shall be effected
through the facilities of The Depository Trust Company.
(e) At its election, the Corporation, prior to the Series A-3 Preferred
Stock Redemption Date, may irrevocably deposit the cash redemption price
(including accumulated and unpaid distributions) of the Series A-3 Preferred
so called for redemption in trust for the holders thereof with a bank or trust
company, in which case the notice of redemption to holders of the Series A-3
Preferred to be redeemed will (i) state the date of such deposit, (ii) specify
the office of such bank or trust company as the place of payment of the
redemption price and (iii) require such holders to surrender the certificates
representing such Series A-3 Preferred at such place on or about the date
fixed in such redemption notice (which may not be later than the Series A-3
Preferred Stock Redemption Date) against payment of the redemption price
(including all accumulated and unpaid distributions to the Series A-3
Preferred Stock Redemption Date). Any moneys so deposited which remain
unclaimed by the holders of the Series A-3 Preferred at the end of two years
after the Series A-3 Preferred Stock Redemption Date will be returned by such
bank or trust company to the Corporation.
(f) No failure to give notice of redemption or any defect thereto or in
the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A-3 Preferred except as to the holder to
whom notice was defective or not given.
(g) On or after the Series A-3 Preferred Stock Redemption Date, each
holder of Series A-3 Preferred to be redeemed must present and surrender the
certificates representing the Series A-3 Preferred to the Corporation at the
place designated in the notice of redemption and thereupon the redemption
price of such shares will be paid to or on the order of the person whose name
appears on such certificates as the owner thereof and each surrendered
certificate will be canceled. In the event that fewer than all the shares of
Series A-3 Preferred are to be redeemed, a new certificate will be issued
representing the unredeemed shares.
(h) From and after the Series A-3 Preferred Stock Redemption Date (unless
the Corporation defaults in payment of the redemption price), all
distributions on the Series A-3 Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid
distributions to the Series A-3 Preferred Stock Redemption Date), will cease
and terminate and such shares will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
shall not be deemed to be outstanding for any purpose whatsoever.
(i) Unless full distributions on all shares of Series A-3 Preferred shall
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no shares of
Series A-3 Preferred shall be redeemed unless all outstanding shares of Series
A-3 Preferred are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Series
A-3 Preferred pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A-3 Preferred.
(j) Unless full distributions on all shares of Series A-3 Preferred have
been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A-3 Preferred (except by conversion into or exchange for equity
securities of the Corporation ranking junior to the Series A-3 Preferred as to
distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A-3 Preferred pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A-3 Preferred.
(k) Immediately prior to any redemption of Series A-3 Preferred, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to
the Series A-3 Preferred Stock Redemption Date, unless such Series A-3
Preferred Stock Redemption Date falls after a Distribution Payment Record Date
and prior to the corresponding Distribution Payment Date, in which case each
holder of Series A-3 Preferred at the close of business on such Distribution
Payment Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on Series A-3 Preferred
for which a notice of redemption has been given.
(l) Any shares of Series A-3 Preferred that have been redeemed shall,
after such redemption, have the status of authorized but unissued Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors of the
Corporation.
(m) The Series A-3 Preferred will not have a stated maturity date and
will not be subject to any sinking fund or mandatory redemption provisions.
(6) Voting Rights.
(a) Holders of the Series A-3 Preferred will not have any voting rights,
except as set forth below. In any matter in which the Series A-3 Preferred is
entitled to vote, including any action by written consent, each share of
Series A-3 Preferred shall be entitled to one vote.
(b) Whenever distributions on any shares of Series A-3 Preferred shall be
in arrears for more than two applicable Distribution Payment Dates, (a
"Preferred Distribution Default"), the holders of such shares of Series A-3
Preferred (voting separately as a class with all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two additional directors of the
Corporation (the "Preferred Stock Directors") at a special meeting called by
the holders of record of at least 10% of the outstanding shares of Series A-3
Preferred or the holders of any other series of Preferred Stock so in arrears
(unless such request is received less than 90 days before the date fixed for
the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
distributions accumulated on such shares of Series A-3 Preferred for the past
distribution periods and the then current distribution period shall have been
fully paid or declared and a sum sufficient for the payment thereof is set
aside for payment. In such cases, the entire Board of Directors of the
Corporation will be increased by two directors.
(c) If and when all accumulated distributions and the distribution for
the current distribution period on the Series A-3 Preferred shall have been
paid in full or set aside for payment in full, the holders of shares of Series
A-3 Preferred shall be divested of the voting rights set forth in Section 6(b)
(subject to revesting in the event of each and every Preferred Distribution
Default) and, if all accumulated distributions and the distribution for the
current distribution period have been paid in full or set aside for payment in
full on all other series of Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall terminate immediately. So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office or, if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series A-3
Preferred when they have the voting rights set forth in Section 6(b) (voting
separately as a class with all other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable). The Preferred Stock
Directors shall each be entitled to one vote per director on any matter
presented to the Board of Directors.
(d) So long as any shares of Series A-3 Preferred remain outstanding, the
Corporation shall not, without the affirmative vote or consent of the holders
of record of at least two-thirds of the outstanding shares of the Series A-3
Preferred given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any equity securities ranking senior to the
Series A-3 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation or reclassify any
authorized stock of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such stock, (ii) issue any share or other
security convertible into Common Stock at a conversion price equal to less
than the Current Market Price of the Common Stock on the Trading Day
immediately preceding the issue date of such share or other security, or (iii)
amend, alter or repeal the provisions of the Certificate of Incorporation,
whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting
power of the Series A-3 Preferred or the holders thereof; provided, however,
that the holders of the Series A-3 Preferred shall not be entitled to any
voting rights in connection with an Event if as a result of such Event (a)
shares of Series A-3 Preferred remain outstanding with the terms thereof
materially unchanged or (b) the Corporation is not the surviving entity but
the surviving entity issues to the holders of the Series A-3 Preferred the
same number of shares of a separate class of preferred stock with rights,
preferences, privileges and voting powers that are materially unchanged from
the preferences, rights, privileges and other terms of the Series A-3
Preferred; and provided, further, that (x) any increase in the amount of the
authorized Series A-3 Preferred or the creation or issuance of any other
series of Preferred Stock or (y) any increase in the amount of authorized
shares of such series, in each case ranking on a parity with or junior to the
Series A-3 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(e) The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Series A-3 Preferred shall have
been converted, redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
(7) Conversion.
(a) Subject to Section 8, shares of Series A-3 Preferred will be
convertible at any time on or after January 31, 2001, at the option of the
holders thereof, into Common Stock at a conversion rate of 15.0830 shares of
Common Stock for each share of Series A-3 Preferred, subject to adjustment as
described below (the "Conversion Rate"); provided, however, that the right to
convert shares of Series A-3 Preferred called for redemption will terminate at
the close of business on the Trading Day immediately preceding the Series A-3
Preferred Stock Redemption Date.
(b) To exercise the conversion right, the holder of each Series A-3
Preferred to be converted shall surrender the certificate representing such
Series A-3 Preferred, duly endorsed or assigned to the Corporation or in
blank, at the principal office of the Transfer Agent accompanied by written
notice to the Corporation that such holder elects to convert such Series A-3
Preferred. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such Series A-3 Preferred is registered, in
which case the Corporation shall bear the related taxes, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
(c) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates
representing shares of Series A-3 Preferred shall have been surrendered and
such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates representing
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be at the
Conversion Rate in effect at such time and on such date unless the stock
transfer records of the Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer records are open, but such conversion shall be at the
Conversion Rate in effect on the date on which such shares have been
surrendered and such notice received by the Corporation.
(d) Upon surrender of shares of Series A-3 Preferred for conversion, the
converting holder shall be entitled to receive all accumulated and unpaid
distributions on such shares to the date of conversion, payable in cash or, at
the election of the Corporation but subject to the conditions set forth in
Section 3(b), in shares of Common Stock. Except as provided above, the
Corporation shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted shares or for any distribution on the
Common Stock that is issued upon such conversion.
As promptly as practicable after the surrender of certificates for Series
A-3 Preferred as aforesaid, the Corporation shall issue and shall deliver at
such office to such holder, or on his written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions of this Section 7,
and any fractional interest in respect of a share of Common Stock arising upon
such conversion shall be settled as provided in Section 7(e). Upon request of
the converting holder, such delivery shall be effected through the facilities
of The Depository Trust Company.
(e) No fractional shares of Common Stock shall be issued upon conversion
of Series A-3 Preferred. Instead of any fractional share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series A-3
Preferred, the Corporation shall pay to the holder of such share an amount in
cash in respect of such fractional interest based upon the Current Market
Price of a share of Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one share of Series A-3 Preferred shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of Series A-3 Preferred so
surrendered.
(f) The Conversion Rate shall be adjusted from time to time as follows:
(1) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the Determination Date for such dividend or
other distribution shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date and the
denominator shall be the sum of such number of outstanding shares and the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) Subject to the last sentence of paragraph (7) of this Section 7(f),
in case the Corporation shall issue rights, options or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per share
(determined as provided in paragraph (8) of this Section 7(f)) of the Common
Stock on the Determination Date for such distribution, the Conversion Rate in
effect at the opening of business on the day following such Determination Date
shall be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on such Determination Date plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on such Determination
Date plus the number of shares of Common Stock so offered for subscription or
purchase, such increase to become effective immediately after the opening of
business on the day following such Determination Date. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Corporation will not issue
any rights, options or warrants in respect of shares of Common Stock held in
the treasury of the Corporation.
(3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the Conversion Rate in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) Subject to the last sentence of paragraph (7) of this Section 7(f),
in case the Corporation shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock, or other property (including securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this Section
7(f), (ii) any dividend or distribution paid exclusively in cash, (iii) any
dividend or distribution referred to in paragraph (1) of this Section 7(f) and
(iv) any merger or consolidation to which Section 7(l) applies), the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate in effect immediately prior to the
close of business on the Determination Date for such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (8) of this Section 7(f)) of the Common
Stock on such Determination Date less the then fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such Determination Date. However, if such fraction shall be not more than zero
(0), no adjustment to the Conversion Rate will be made. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (8) of this Section 7(f).
(5) In case the Corporation shall, by dividend or otherwise, make a Cash
Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided
in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (1) the amount of
such Cash Distribution divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (b) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 7(f)) of the Common Stock on such Determination
Date.
(6) In case the Corporation or any Subsidiary shall make an Excess
Purchase Payment, then, and in each such case, immediately prior to the
opening of business on the day after the tender offer in respect of which such
Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (A) the Excess
Purchase Payment divided by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date and (b) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section 7(f)) of the Common Stock as of such Determination Date. However,
if such fraction shall be not more than zero (0), no adjustment to the
Conversion Rate will be made.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger
to which Section 7(l) applies) shall be deemed to involve (a) a distribution
of such securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be the
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 7(f)). Rights or warrants
issued by the Corporation to all holders of its Common Stock entitling the
holders thereof to subscribe for or purchase shares of Common Stock, which
rights or warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for
purposes of this Section 7(f) not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 7(f), the current market price per share of Common Stock
on any date shall be calculated by the Corporation and be deemed to be the
average of the daily Closing Prices for the five consecutive Trading Days
ending on the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent
in such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
7(f) shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) The Corporation may, in its sole discretion, make such increases in
the Conversion Rate, for such period of time (not shorter than five Trading
Days) as the Company may elect, in addition to those required by paragraphs
(1), (2), (3), (4), (5) and (6) of this Section 7(f) as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
(g) Whenever the Conversion Rate is adjusted as provided in Section 7(f),
the Corporation shall compute the adjusted Conversion Rate in accordance with
Section 7(f) and shall prepare a certificate signed by the chief financial
officer of the Corporation setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which such adjustment is based,
and shall promptly deliver such certificate to the holders of the Series A-3
Preferred.
(h) In case:
(1) the Corporation shall declare a dividend or other distribution
on its Common Stock payable (i) otherwise than exclusively in cash or
(ii) exclusively in cash in an amount that would require any adjustment
pursuant to Section 7(f); or
(2) the Corporation shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights;
or
(3) of any reclassification of the Common Stock of the Corporation,
or of any consolidation, merger or share exchange to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or of the conveyance, sale, transfer or lease of
all or substantially all of the assets of the Corporation; or
(4) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation; or
(5) the Corporation or any Subsidiary shall commence a tender offer
for all or a portion of the Corporation's outstanding shares of Common
Stock (or shall amend any such tender offer);
then the Corporation shall cause to be delivered to the holders of the Series
A-3 Preferred at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up. Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings described in clauses (1)
through (5) of this Section 7(h).
(i) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the Series A-3 Preferred, the full
number of shares of Common Stock then issuable upon the conversion of the
Series A-3 Preferred.
(j) Except as provided in the next sentence, the Corporation will pay any
and all documentary, stamp or similar issue and transfer taxes and duties that
may be payable in respect of the issue or delivery of shares of Common Stock
on conversion of the Series A-3 Preferred. The Corporation shall not, however,
be required to pay any tax or duty which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a
name other than that of the holder of the Series A-3 Preferred, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or duty, or has
established to the satisfaction of the Corporation that such tax or duty has
been paid.
(k) The Corporation agrees that all shares of Common Stock which may be
delivered upon conversion of the Series A-3 Preferred, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable (and shall be issued out of the Corporation's authorized but
unissued Common Stock).
(l) In case of any consolidation of the Corporation with any other
person, or any merger of the Corporation into another person or of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock of the Corporation), recapitalization or other transaction in
which the Common Stock is exchanged for or converted into other securities or
assets, the person formed by such consolidation or resulting from such merger,
or issuing such other securities or assets, as the case may be, shall execute
and deliver to the holders of the Series A-3 Preferred a supplemental
agreement providing that such holder have the right thereafter, during the
period the Series A-3 Preferred shall be convertible as specified in this
Section 7, to convert this Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation or
merger, recapitalization or other transaction (including any Common Stock
retainable) by a holder of the number of shares of Common Stock of the
Corporation into which the Series A-3 Preferred might have been converted
immediately prior to such consolidation, merger, recapitalization or other
transaction, assuming such holder of Common Stock of the Corporation (i) is
not a person with which the Corporation consolidated, into which the
Corporation merged or which merged into the Corporation or was a party to such
recapitalization or other transaction, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
recapitalization or other transaction (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, recapitalization or other transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such
consolidation, merger, recapitalization or other transaction by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 7(1) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, recapitalization or other
transaction by the holders of each Non-electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental agreement shall provide for adjustments which, for
events subsequent to the effective date of such supplemental agreement, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 7. The above provisions of this Section 7(l) shall similarly
apply to successive consolidations, mergers, recapitalizations or other
transactions. In this paragraph, "securities of the kind receivable" upon such
consolidation, merger, recapitalization or other transaction by a holder of
Common Stock means securities that, among other things, are registered and
transferable under the Securities Act of 1933, and listed and approved for
quotation in all securities markets, in each case to the same extent as such
securities so receivable by a holder of Common Stock.
(m) The Corporation (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act of 1933, the
Securities Exchange Act of 1934 and state securities and Blue Sky laws) for
the shares of Common Stock issuable upon conversion of the Series A-3
Preferred to be lawfully issued and delivered as provided herein, and
thereafter publicly traded (if permissible under such Securities Act) and
qualified or listed as contemplated by clause (ii) (it being understood that
the Corporation shall not be required to register the resale of the Series A-3
Preferred or the issuance or sale of the Common Stock issuable on conversion
thereof under the Securities Act, except pursuant to the Registration Rights
Agreement between the Corporation and the initial holder of the Series A-3
Preferred); and (ii) will have the shares of Common Stock required to be
issued and delivered upon conversion of the Series A-3 Preferred, prior to
such issuance or delivery, approved for quotations on the Nasdaq National
Market or such other inter-dealer quotation system, if any, on which the
Common Stock is then quoted, or, if applicable, listed on the principal
national securities exchange on which outstanding Common Stock is listed at
the time of such delivery.
(8)
Ownership Limitations.
Notwithstanding the foregoing, at no time will any holder be entitled to
convert shares of Series A-3 Preferred into shares of Common Stock that,
together with the number of shares of Common Stock owned (or deemed for bank
regulatory purposes to be owned) by such holder and its affiliates as set
forth in the notice of conversion, represent more than 4.9% of the Common
Stock then outstanding. If at any time the Conversion Rate and the number of
shares of the Series A-3 Preferred held by any holder would result in a
greater number of shares being issuable to such holder upon conversion, then
for so long as such condition shall exist, upon exercise of the conversion
right such holder shall receive (i) up to that number of shares of Common
Stock that, together with the number of shares of Common Stock owned (or
deemed for bank regulatory purposes to be owned) by such holder and its
affiliates as set forth in the notice of conversion, represent 4.9% of the
Common Stock then outstanding, and (ii) an amount (in cash but not less than
zero), payable in immediately available funds, determined pursuant to the
formula:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
C = ((N x CR) - I) x S
where C = the cash amount receivable by the holder;
N = the number of shares of the Series A-3 Preferred being converted;
CR = the Conversion Rate (per share of the Series A-3 Preferred);
I = the number of shares of Common Stock issuable pursuant to clause (i) above;
and
S = the Current Market Price of the Common Stock on the date of conversion.
</TABLE>
(9) Definitions.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day". The term "Business Day" shall mean any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.
"Cash Distribution" means the distribution by the Corporation to
holders of its Common Stock of cash, as an ordinary or extraordinary dividend,
other than any cash that is distributed upon a merger or consolidation to
which Section 7(l) applies or as part of a distribution referred to in
paragraph (4) of Section 7(f).
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 7(l), shares issuable on
conversion or repurchase of the Series A-3 Preferred shall include only shares
of Common Stock or shares of any class or classes of common stock resulting
from any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the
shares so issuable on conversion of the Series A-3 Preferred shall include
shares of all such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Current Market Price" of publicly traded Common Stock or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the Nasdaq National
Market or, if such security is not quoted on the Nasdaq National Market, on
the principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange or not quoted on the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on such
day shall not have been reported through Nasdaq the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making
a market in such security selected for such purpose by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation.
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender
offer, the last time that tenders could have been made pursuant to such tender
offer.
"Excess Purchase Payment" means the product of (A) the excess, if
any, of (i) the amount of cash plus the fair market value (as determined in
good faith by the Corporation's Board of Directors) of any non-cash
consideration required to be paid with respect to one share of Common Stock
acquired or to be acquired in a tender offer made by the Corporation or any
Subsidiary of the Corporation for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer and (B) the number of shares
validly tendered and not withdrawn as of the Determination Date in respect of
such tender offer.
"Subsidiary" means (1) any corporation, association or other business
entity of which more than 50% of the total voting power of shares of capital
stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Corporation or one ore
more of the other Subsidiaries of the Corporation (or a combination thereof);
and (2) any partnership, limited liability company or similar pass-through
entity, (a) the sole general partner or the managing general partner or
managing member of which is the Corporation or a Subsidiary of the Corporation
or (b) the only general partners, managing members, or persons, however
designated in corresponding roles, of which are the Corporation or of one or
more Subsidaries of the Corporation (or any combination thereof).
"Trading Day" means (i) if the Common Stock is admitted to trading on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, a day on which trades may be effected through
such system; (ii) if the Common Stock is listed or admitted for trading on the
New York Stock Exchange or any other national securities exchange, a day on
which such exchange is open for business; or (iii) if the Common Stock is not
listed or admitted for trading on any national securities exchange or any
other system of automated dissemination of quotation of securities prices, a
day on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Transfer Agent" means American Stock Transfer & Trust Corporation,
or such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series A-3 Preferred.
(10) Any determination by the Board of Directors pursuant to the terms of the
Series A-3 Preferred shall be final and binding upon the holders thereof and
shall be conclusive for all purposes.
THIRD: The Series A-3 Preferred has been classified and designated by the
Board of Directors under the authority contained in the Certificate of
Designations.
FOURTH: This Certificate of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.
FIFTH This Certificate of Designations shall be effective upon filing with
the Secretary of State.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, RECKSON SERVICE INDUSTRIES, INC. has caused these
presents to be signed in its name and on its behalf by its President and Chief
Executive Officer and its corporate seal to be hereunto affixed and attested
by its Assistant Secretary, and the said officers of the Corporation further
acknowledge said instrument to be the corporate act of the Corporation, and
state under the penalties of perjury that, to the best of their knowledge,
information and belief, the matters and facts therein set forth with respect
to approval are true in all material respects.
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Scott Rechler
---------------------------------------------
Name: Scott Rechler
Title: President and Chief Executive Officer
[SEAL]
ATTEST:
/s/ Jason Barnett
---------------------------
Name: Jason Barnett
Title: Assistant Secretary
Exhibit 4.7
RECKSON SERVICE INDUSTRIES, INC.
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Reckson Service Industries, Inc., a Delaware corporation (the
"Corporation"), certifies that:
First : Pursuant to the authority expressly vested in the Board of Directors
of the Corporation by Article VI of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with these Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution,
duly designated and classified 5,000 shares of the Preferred Stock of the
Corporation into a series designated 8 7/8 % Series A-4 Convertible Cumulative
Preferred Stock and has provided for the issuance of such series.
Second : The preferences, rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption of the
shares of such series of Preferred Stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Article VI of the
Certificate of Incorporation, are as follows:
8 7/8% SERIES A-4 CONVERTIBLE CUMULATIVE PREFERRED STOCK
(1) Designation and Number.
A series of Preferred Stock of the Corporation ("Preferred Stock"),
designated the "8 7/8% Series A-4 Convertible Cumulative Preferred Stock" (the
"Series A-4 Preferred"), is hereby established. The number of shares of the
Series A-4 Preferred shall be 5,000.
(2) Rank.
The Series A-4 Preferred will, with respect to distribution rights
and rights upon liquidation, dissolution or winding up of the Corporation,
rank: (a) senior to all classes or series of Common Stock of the Corporation
("Common Stock") and to all equity securities issued by the Corporation the
terms of which provide that such equity securities shall rank junior to such
Series A-4 Preferred; (b) on a parity with all equity securities issued by the
Corporation other than those referred to in clauses (a) and (c); and (c)
junior to all equity securities issued by the Corporation that rank senior to
the Series A-4 Preferred in accordance with Section 6(d). The term "equity
securities" shall not include convertible debt securities.
(3) Distributions.
(a) Holders of the shares of Series A-4 Preferred shall be entitled to
receive, when and as authorized by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions at the rate of 8 7/8% per annum of the liquidation preference
per share (equivalent to $88.75 per annum per share of Series A-4 Preferred ).
Distributions on the Series A-4 Preferred shall be cumulative from February
11, 2000 and shall be payable quarterly in arrears on February 11, May 11,
August 11 and November 11 of each year or, if not a business day, the next
succeeding business day, commencing May 11, 2000 (each, a "Distribution
Payment Date"). Any distribution payable on the Series A-4 Preferred for a
partial distribution period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Distributions will be payable to holders
of record as they appear in the stock transfer records of the Corporation at
the close of business on the applicable record date, which shall be such date
designated by the Board of Directors of the Corporation for the payment of
distributions that is not more than 30 nor less than 10 days prior to such
Distribution Payment Date (each, a "Distribution Payment Record Date").
(b) Notwithstanding the foregoing, the Corporation may elect to pay any
distribution on the Series A-4 Preferred by delivery of shares of Common
Stock, but if and only if the following conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
distribution shall have a fair market value as of the Distribution Payment
Date equal to not less than the amount of such distribution. For purposes of
this Section 3, the fair market value of shares of Common Stock shall be equal
to 97.5% of the Current Market Price for the Trading Day immediately preceding
such distribution;
(ii) If such shares of Common Stock are delivered on or prior to
the second anniversary of the issue date of the Series A-4 Preferred, then
such shares shall be registered under the Securities Act of 1933 for resale by
the holders of the Series A-4 Preferred, and the Corporation shall have
delivered to each holder a current prospectus pursuant to which such resale
may be effected; and in the event any shares of Common Stock to be issued in
respect of any subsequent distribution require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the date of such distribution;
(iii) In the event any shares of Common Stock to be issued in
respect of such require registration with or approval of any governmental
authority under any State law or any other Federal law before such shares may
be validly issued or delivered upon issuance, such registration shall have
been completed or have become effective and such approval shall have been
obtained, in each case, prior to the date of such distribution;
(iv) The shares of Common Stock delivered in payment of such
distribution shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the date of such distribution;
(v) All shares of Common Stock delivered in payment of such
distribution shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights; and
(vi) In respect of each such Distribution Payment Date, the
Corporation shall have given the holders of the Series A-4 Preferred not less
than three nor more than 15 Trading Days' notice of its election to effect
payment in respect of such distribution by delivery of shares of Common Stock.
(vii) If all of the conditions set forth in the foregoing clauses
(i) through (vi) are not satisfied in accordance with the terms thereof, any
such distribution shall be paid by the Corporation only in cash.
(viii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
distribution if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than seven Trading Days prior to
the relevant Distribution Payment Date), represent more than 4.9% of the
Common Stock then outstanding. If the limitation set forth in the previous
sentence would apply to any distribution, the Corporation may elect (by notice
to the holder delivered not less than three Trading Days prior to the relevant
Distribution Payment Date) to satisfy a portion of such distribution in shares
of Common Stock (up to the maximum number of shares permitted under the
limitation set forth in the previous sentence) and the balance in cash.
(ix) Any issuance of shares of Common Stock in respect of any
distribution pursuant to this Section 3 shall be deemed to have been effected
immediately prior to the close of business on the Distribution Payment Date
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such delivery
shall be deemed to have become on such date the holder or holders of record of
the shares represented thereby; provided, however, that in case any
installment shall be deliverable on a date when the stock transfer books of
the Corporation shall be closed, the person or persons in whose name or names
the certificate or certificates for such shares are to be issued shall be
deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued pursuant to this Section 3
declared prior to the relevant delivery date.
(x) No fractions of shares shall be issued upon any payment made
in shares of Common Stock in respect of the Series A-4 Preferred. Instead of
any fractional share of Common Stock which would otherwise be so issuable, the
Corporation will round up to the next higher whole share or pay such
fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(xi) Any issuance and delivery of certificates for shares of
Common Stock pursuant to this Section 3 shall be made without charge to
holders of Series A-4 Preferred for such certificates or for any documentary,
stamp or similar issue tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby; provided, however,
that the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-4 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the date
of distribution, delivery of any shares of Common Stock issuable to such
holders with respect of such distribution shall be effected through the
facilities of The Depository Trust Company.
(c) No distributions on the Series A-4 Preferred shall be authorized by
the Board of Directors of the Corporation or be paid or set apart for payment
by the Corporation at such time as the terms and provisions of any agreement
of the Corporation, including any agreement relating to its indebtedness,
prohibits such authorization , payment or setting apart for payment or
provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law.
(d) Distributions on the Series A-4 Preferred will accumulate whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Additional distributions will
accumulate on the amount of any accumulated but unpaid distributions on the
Series A-4 Preferred beyond the applicable Distribution Payment Date, at the
rate of 10 7/8% per annum, computed on a daily basis.
(e) No full distributions will be authorized or paid or set apart for
payment on any equity securities of the Corporation ranking, as to
distributions, on a parity with or junior to the Series A-4 Preferred for any
period unless full distributions have been or contemporaneously are authorized
and paid or authorized and a sum sufficient for the payment thereof is set
apart for such payment on the Series A-4 Preferred for all past distribution
periods and the then current distribution period. When distributions are not
paid in full or a sum sufficient for such full payment is not so set apart
upon the Series A-4 Preferred and the other equity securities of the
Corporation ranking on a parity as to distributions with the Series A-4
Preferred, all distributions authorized upon the Series A-4 Preferred and any
other equity securities of the Corporation ranking on a parity as to
distributions with the Series A-4 Preferred shall be authorized pro rata so
that the amount of distributions authorized per share of Series A-4 Preferred
and such other equity securities shall in all cases bear to each other the
same ratio that accumulated distributions per share on the Series A-4
Preferred and such other equity securities (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such equity securities do not have cumulative distributions) bear to each
other.
(f) Unless full distributions on the Series A-4 Preferred have been or
contemporaneously are authorized and paid or authorized and a sum sufficient
for the payment thereof is set apart for payment for all past distribution
periods and the then current distribution period, no distributions shall be
authorized or paid or set aside for payment or other distribution shall be
authorized or made upon the Common Stock or any other equity securities of the
Corporation ranking junior to or on a parity with the Series A-4 Preferred as
to distributions or upon liquidation, nor shall any shares of Common Stock or
any other equity securities of the Corporation ranking junior to or on a
parity with the Series A-4 Preferred as to distributions or upon liquidation
be redeemed, purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the redemption of
any such shares) by the Corporation (except by conversion into or exchange for
other stock of the Corporation ranking junior as to the Series A-4 Preferred
with respect to distributions and upon liquidation).
(g) Any distribution payment made on shares of the Series A-4 Preferred
shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such shares which remains payable.
(4) Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation (referred to herein as a "liquidation"),
the holders of the Series A-4 Preferred will be entitled to be paid out of the
assets of the Corporation legally available for distribution to its
stockholders liquidating distributions, in cash or property at its fair market
value as determined by the Corporation's Board of Directors, in the amount of
a liquidation preference of $1,000 per share, plus an amount equal to any
accumulated and unpaid distributions to the date of such liquidation, before
any distribution or payment is made to holders of Common Stock or any other
equity securities of the Corporation ranking junior to the Series A-4
Preferred as to the distribution of assets upon a liquidation. After payment
of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A-4 Preferred will have no right or claim to
any of the remaining assets of the Corporation.
(b) In the event that, upon any liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A-4 Preferred
and the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series A-4 Preferred in the distribution
of assets upon a liquidation, then the holders of Series A-4 Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(c) The consolidation or merger of the Corporation with or into any other
entity, or the merger of another entity with or into the Corporation, or a
statutory share exchange by the Corporation, or the sale, lease or conveyance
of all or substantially all of the property or business of the Corporation,
shall not be deemed to constitute a liquidation of the Corporation.
(5) Redemption.
(a) Shares of Series A-4 Preferred will not be redeemable prior to
February 11, 2003. On or after February 11, 2003, the Corporation may redeem
shares of the Series A-4 Preferred, in whole or in part, from time to time, at
a redemption price of $1,000 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption, payable in cash, upon
not less than 30 nor more than 60 days' prior written notice. Notwithstanding
the foregoing, the Corporation may exchange shares of Series A-4 Preferred for
other shares of Convertible Cumulative Preferred Stock pursuant to the
Convertible Preferred Stock Purchase Agreement dated January 25, 2000 between
the Corporation and the Purchaser named therein.
(b) If fewer than all of the outstanding shares of Series A-4 Preferred
are to be redeemed, the shares to be redeemed shall be determined pro rata or
by lot or in such other manner as prescribed by the Board of Directors of the
Corporation.
(c) Notice of redemption will be mailed by the Corporation, postage
prepaid, not less than 35 nor more than 60 days prior to the date fixed for
redemption (the "Series A-4 Preferred Stock Redemption Date"), addressed to
the respective holders of record of the Series A-4 Preferred to be redeemed at
their respective addresses as they appear on the stock transfer records of the
Corporation. Each notice of redemption shall state: (i) the redemption date;
(ii) the number of shares of Series A-4 Preferred to be redeemed; (iii) the
redemption price; (iv) whether such redemption price will be paid in cash or,
subject to the conditions set forth in Section 5(d), by delivery of shares of
Common Stock; (v) the place or places where certificates representing such
shares of Series A-4 Preferred are to be surrendered for payment of the
redemption price; (vi) that distributions on the shares to be redeemed will
cease to accumulate on such redemption date; and (vii) the date upon which the
holder's conversion rights as to such shares shall terminate. If fewer than
all the shares of Series A-4 Preferred are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Series
A-4 Preferred to be redeemed from each such holder.
(d) Notwithstanding the foregoing, the Corporation may elect to pay the
redemption price of shares of Series A-4 Preferred called for redemption by
delivery of shares of Common Stock, but if and only if the following
conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
redemption price shall have a fair market value as of the Series A-4 Preferred
Stock Redemption Date equal to not less than the amount of such redemption
price due hereunder. For purposes of this Section 5, the fair market value of
shares of Common Stock shall be equal to 95% of the daily volume-weighted
average of the Current Market Price for the twenty Trading Days immediately
preceding the Series A-4 Preferred Stock Redemption Date;
(ii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration under any Federal
securities law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the Series A-4 Preferred Stock Redemption Date;
(iii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration with or approval of any
governmental authority under any State law or any other Federal law before
such shares may be validly issued or delivered upon issuance, such
registration shall have been completed or have become effective and such
approval shall have been obtained, in each case, prior to the Series A-4
Preferred Stock Redemption Date;
(iv) The shares of Common Stock delivered in payment of such
redemption price shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the Series A-4 Preferred Stock Redemption Date;
(v) All shares of Common Stock delivered in payment of such
redemption price shall, upon issue, be duly and validly issued and fully paid
and non-assessable and free of any preemptive rights; and
(vi) If all of the conditions set forth in the foregoing clauses
(i) through (v) are not satisfied in accordance with the terms thereof, any
such redemption price shall be paid by the Corporation only in cash.
(vii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
redemption if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than 20 Trading Days prior to the
relevant Series A-4 Preferred Stock Redemption Date), represent more than 4.9%
of the Common Stock then outstanding. If the limitation set forth in the
previous sentence would apply to any redemption, the Corporation may elect (by
notice to the holder delivered not less than 20 Trading Days prior to the
relevant Series A-4 Preferred Stock Redemption Date) to satisfy a portion of
such redemption price in shares of Common Stock (up to the maximum number of
shares permitted under the limitation set forth in the previous sentence) and
the balance in cash.
(viii) Any issuance of shares of Common Stock in respect of any
redemption pursuant to this Section 5 shall be deemed to have been effected
immediately prior to the close of business on the Series A-4 Preferred Stock
Redemption Date, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such delivery shall be deemed to have become on such date the holder or
holders of record of the shares represented thereby; provided, however, that
in case such shares shall be deliverable on a date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name
or names the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued pursuant to this Section
5 declared prior to the relevant delivery date.
(ix) No fractions of shares shall be issued upon any payment made
in shares of Common Stock in respect of any redemption of Series A-4
Preferred. Instead of any fractional share of Common Stock which would
otherwise be so issuable, the Corporation will round up to the next higher
whole share or pay such fractional share in cash (based on the Current Market
Price for the immediately preceding Trading Day).
(x) Any issuance and delivery of certificates for shares of
Common Stock pursuant to this Section 5 shall be made without charge to
holders of Series A-4 Preferred for such certificates or for any documentary,
stamp or similar issue tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby; provided, however,
that the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-4 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the
Series A-4 Preferred Stock Redemption Date, delivery of any shares of Common
Stock issuable to such holders in respect to such redemption shall be effected
through the facilities of The Depository Trust Company.
(e) At its election, the Corporation, prior to the Series A-4 Preferred
Stock Redemption Date, may irrevocably deposit the cash redemption price
(including accumulated and unpaid distributions) of the Series A-4 Preferred
so called for redemption in trust for the holders thereof with a bank or trust
company, in which case the notice of redemption to holders of the Series A-4
Preferred to be redeemed will (i) state the date of such deposit, (ii) specify
the office of such bank or trust company as the place of payment of the
redemption price and (iii) require such holders to surrender the certificates
representing such Series A-4 Preferred at such place on or about the date
fixed in such redemption notice (which may not be later than the Series A-4
Preferred Stock Redemption Date) against payment of the redemption price
(including all accumulated and unpaid distributions to the Series A-4
Preferred Stock Redemption Date). Any moneys so deposited which remain
unclaimed by the holders of the Series A-4 Preferred at the end of two years
after the Series A-4 Preferred Stock Redemption Date will be returned by such
bank or trust company to the Corporation.
(f) No failure to give notice of redemption or any defect thereto or in
the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A-4 Preferred except as to the holder to
whom notice was defective or not given.
(g) On or after the Series A-4 Preferred Stock Redemption Date, each
holder of Series A-4 Preferred to be redeemed must present and surrender the
certificates representing the Series A-4 Preferred to the Corporation at the
place designated in the notice of redemption and thereupon the redemption
price of such shares will be paid to or on the order of the person whose name
appears on such certificates as the owner thereof and each surrendered
certificate will be canceled. In the event that fewer than all the shares of
Series A-4 Preferred are to be redeemed, a new certificate will be issued
representing the unredeemed shares.
(h) From and after the Series A-4 Preferred Stock Redemption Date
(unless the Corporation defaults in payment of the redemption price), all
distributions on the Series A-4 Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid
distributions to the Series A-4 Preferred Stock Redemption Date), will cease
and terminate and such shares will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
shall not be deemed to be outstanding for any purpose whatsoever.
(i) Unless full distributions on all shares of Series A-4 Preferred
shall have been or contemporaneously are authorized and paid or authorized and
a sum sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no shares of
Series A-4 Preferred shall be redeemed unless all outstanding shares of Series
A-4 Preferred are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Series
A-4 Preferred pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A-4 Preferred.
(j) Unless full distributions on all shares of Series A-4 Preferred have
been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A-4 Preferred (except by conversion into or exchange for equity
securities of the Corporation ranking junior to the Series A-4 Preferred as to
distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A-4 Preferred pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A-4 Preferred.
(k) Immediately prior to any redemption of Series A-4 Preferred, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to
the Series A-4 Preferred Stock Redemption Date, unless such Series A-4
Preferred Stock Redemption Date falls after a Distribution Payment Record Date
and prior to the corresponding Distribution Payment Date, in which case each
holder of Series A-4 Preferred at the close of business on such Distribution
Payment Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on Series A-4 Preferred
for which a notice of redemption has been given.
(l) Any shares of Series A-4 Preferred that have been redeemed shall,
after such redemption, have the status of authorized but unissued Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors of the
Corporation.
(m) The Series A-4 Preferred will not have a stated maturity date and
will not be subject to any sinking fund or mandatory redemption provisions.
(6) Voting Rights.
(a) Holders of the Series A-4 Preferred will not have any voting rights,
except as set forth below. In any matter in which the Series A-4 Preferred is
entitled to vote, including any action by written consent, each share of
Series A-4 Preferred shall be entitled to one vote.
(b) Whenever distributions on any shares of Series A-4 Preferred shall
be in arrears for more than two applicable Distribution Payment Dates, (a
"Preferred Distribution Default"), the holders of such shares of Series A-4
Preferred (voting separately as a class with all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two additional directors of the
Corporation (the "Preferred Stock Directors") at a special meeting called by
the holders of record of at least 10% of the outstanding shares of Series A-4
Preferred or the holders of any other series of Preferred Stock so in arrears
(unless such request is received less than 90 days before the date fixed for
the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
distributions accumulated on such shares of Series A-4 Preferred for the past
distribution periods and the then current distribution period shall have been
fully paid or declared and a sum sufficient for the payment thereof is set
aside for payment. In such cases, the entire Board of Directors of the
Corporation will be increased by two directors.
(c) If and when all accumulated distributions and the distribution for
the current distribution period on the Series A-4 Preferred shall have been
paid in full or set aside for payment in full, the holders of shares of Series
A-4 Preferred shall be divested of the voting rights set forth in Section 6(b)
(subject to revesting in the event of each and every Preferred Distribution
Default) and, if all accumulated distributions and the distribution for the
current distribution period have been paid in full or set aside for payment in
full on all other series of Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall terminate immediately. So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a Preferred
Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office or, if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series A-4
Preferred when they have the voting rights set forth in Section 6(b) (voting
separately as a class with all other series of Preferred Stock upon which like
voting rights have been conferred and are exercisable). The Preferred Stock
Directors shall each be entitled to one vote per director on any matter
presented to the Board of Directors.
(d) So long as any shares of Series A-4 Preferred remain outstanding,
the Corporation shall not, without the affirmative vote or consent of the
holders of record of at least two-thirds of the outstanding shares of the
Series A-4 Preferred given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (i) authorize or create,
or increase the authorized or issued amount of, any equity securities ranking
senior to the Series A-4 Preferred with respect to payment of distributions or
the distribution of assets upon a liquidation of the Corporation or reclassify
any authorized stock of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such stock, (ii) issue any share or other
security convertible into Common Stock at a conversion price equal to less
than the Current Market Price of the Common Stock on the Trading Day
immediately preceding the issue date of such share or other security, or (iii)
amend, alter or repeal the provisions of the Certificate of Incorporation,
whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting
power of the Series A-4 Preferred or the holders thereof; provided, however,
that the holders of the Series A-4 Preferred shall not be entitled to any
voting rights in connection with an Event if as a result of such Event (a)
shares of Series A-4 Preferred remain outstanding with the terms thereof
materially unchanged or (b) the Corporation is not the surviving entity but
the surviving entity issues to the holders of the Series A-4 Preferred the
same number of shares of a separate class of preferred stock with rights,
preferences, privileges and voting powers that are materially unchanged from
the preferences, rights, privileges and other terms of the Series A-4
Preferred; and provided, further, that (x) any increase in the amount of the
authorized Series A-4 Preferred or the creation or issuance of any other
series of Preferred Stock or (y) any increase in the amount of authorized
shares of such series, in each case ranking on a parity with or junior to the
Series A-4 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(e) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series A-4 Preferred
shall have been converted, redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect such
redemption.
(7) Conversion.
(a) Subject to Section 8, shares of Series A-4 Preferred will be
convertible at any time on or after February 11, 2001, at the option of the
holders thereof, into Common Stock at a conversion rate of 13.3200 shares of
Common Stock for each share of Series A-4 Preferred, subject to adjustment as
described below (the "Conversion Rate"); provided, however, that the right to
convert shares of Series A-4 Preferred called for redemption will terminate at
the close of business on the Trading Day immediately preceding the Series A-4
Preferred Stock Redemption Date.
(b) To exercise the conversion right, the holder of each Series A-4
Preferred to be converted shall surrender the certificate representing such
Series A-4 Preferred, duly endorsed or assigned to the Corporation or in
blank, at the principal office of the Transfer Agent accompanied by written
notice to the Corporation that such holder elects to convert such Series A-4
Preferred. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such Series A-4 Preferred is registered, in
which case the Corporation shall bear the related taxes, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
(c) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates
representing shares of Series A-4 Preferred shall have been surrendered and
such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates representing
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be at the
Conversion Rate in effect at such time and on such date unless the stock
transfer records of the Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer records are open, but such conversion shall be at the
Conversion Rate in effect on the date on which such shares have been
surrendered and such notice received by the Corporation.
(d) Upon surrender of shares of Series A-4 Preferred for conversion, the
converting holder shall be entitled to receive all accumulated and unpaid
distributions on such shares to the date of conversion, payable in cash or, at
the election of the Corporation but subject to the conditions set forth in
Section 3(b), in shares of Common Stock. Except as provided above, the
Corporation shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted shares or for any distribution on the
Common Stock that is issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series A-4 Preferred as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon
the conversion of such shares in accordance with the provisions of this
Section 7, and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in Section 7(e).
Upon request of the converting holder, such delivery shall be effected through
the facilities of The Depository Trust Company.
(e) No fractional shares of Common Stock shall be issued upon conversion
of Series A-4 Preferred. Instead of any fractional share of Common Stock that
would otherwise be deliverable upon the conversion of a share of Series A-4
Preferred, the Corporation shall pay to the holder of such share an amount in
cash in respect of such fractional interest based upon the Current Market
Price of a share of Common Stock on the Trading Day immediately preceding the
date of conversion. If more than one share of Series A-4 Preferred shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of Series A-4 Preferred so
surrendered.
(f) The Conversion Rate shall be adjusted from time to time as follows:
(1) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the Determination Date for such dividend or
other distribution shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date and the
denominator shall be the sum of such number of outstanding shares and the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) Subject to the last sentence of paragraph (7) of this Section 7(f),
in case the Corporation shall issue rights, options or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current market price per share
(determined as provided in paragraph (8) of this Section 7(f)) of the Common
Stock on the Determination Date for such distribution, the Conversion Rate in
effect at the opening of business on the day following such Determination Date
shall be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on such Determination Date plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on such Determination
Date plus the number of shares of Common Stock so offered for subscription or
purchase, such increase to become effective immediately after the opening of
business on the day following such Determination Date. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Corporation will not issue
any rights, options or warrants in respect of shares of Common Stock held in
the treasury of the Corporation.
(3) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at
the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision
or combination becomes effective.
(4) Subject to the last sentence of paragraph (7) of this Section 7(f),
in case the Corporation shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock, or other property (including securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this Section
7(f), (ii) any dividend or distribution paid exclusively in cash, (iii) any
dividend or distribution referred to in paragraph (1) of this Section 7(f) and
(iv) any merger or consolidation to which Section 7(l) applies), the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate in effect immediately prior to the
close of business on the Determination Date for such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (8) of this Section 7(f)) of the Common
Stock on such Determination Date less the then fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such Determination Date. However, if such fraction shall be not more than zero
(0), no adjustment to the Conversion Rate will be made. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (8) of this Section 7(f).
(5) In case the Corporation shall, by dividend or otherwise, make a Cash
Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided
in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (1) the amount of
such Cash Distribution divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (b) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 7(f)) of the Common Stock on such Determination
Date.
(6) In case the Corporation or any Subsidiary shall make an Excess
Purchase Payment, then, and in each such case, immediately prior to the
opening of business on the day after the tender offer in respect of which such
Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (A) the Excess
Purchase Payment divided by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date and (b) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section 7(f)) of the Common Stock as of such Determination Date. However,
if such fraction shall be not more than zero (0), no adjustment to the
Conversion Rate will be made.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger
to which Section 7(l) applies) shall be deemed to involve (a) a distribution
of such securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be the
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 7(f)). Rights or warrants
issued by the Corporation to all holders of its Common Stock entitling the
holders thereof to subscribe for or purchase shares of Common Stock, which
rights or warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for
purposes of this Section 7(f) not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 7(f), the current market price per share of Common Stock
on any date shall be calculated by the Corporation and be deemed to be the
average of the daily Closing Prices for the five consecutive Trading Days
ending on the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent
in such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
7(f) shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) The Corporation may, in its sole discretion, make such increases in
the Conversion Rate, for such period of time (not shorter than five Trading
Days) as the Company may elect, in addition to those required by paragraphs
(1), (2), (3), (4), (5) and (6) of this Section 7(f) as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
(g) Whenever the Conversion Rate is adjusted as provided in Section
7(f), the Corporation shall compute the adjusted Conversion Rate in accordance
with Section 7(f) and shall prepare a certificate signed by the chief
financial officer of the Corporation setting forth the adjusted Conversion
Rate and showing in reasonable detail the facts upon which such adjustment is
based, and shall promptly deliver such certificate to the holders of the
Series A-4 Preferred.
(h) In case:
(1) the Corporation shall declare a dividend or other
distribution on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that
would require any adjustment pursuant to Section 7(f); or
(2) the Corporation shall authorize the granting to the
holders of its Common Stock of rights, options or warrants to
subscribe for or purchase any shares of capital stock of any class or
of any other rights; or
(3) of any reclassification of the Common Stock of the
Corporation, or of any consolidation, merger or share exchange to
which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or of the conveyance,
sale, transfer or lease of all or substantially all of the assets of
the Corporation; or
(4) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation; or
(5) the Corporation or any Subsidiary shall commence a
tender offer for all or a portion of the Corporation's outstanding
shares of Common Stock (or shall amend any such tender offer);
then the Corporation shall cause to be delivered to the holders of the Series
A-4 Preferred at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up. Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings described in clauses (1)
through (5) of this Section 7(h).
(i) The Corporation shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of the Series A-4 Preferred, the full
number of shares of Common Stock then issuable upon the conversion of the
Series A-4 Preferred.
(j) Except as provided in the next sentence, the Corporation will pay
any and all documentary, stamp or similar issue and transfer taxes and duties
that may be payable in respect of the issue or delivery of shares of Common
Stock on conversion of the Series A-4 Preferred. The Corporation shall not,
however, be required to pay any tax or duty which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in a
name other than that of the holder of the Series A-4 Preferred, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or duty, or has
established to the satisfaction of the Corporation that such tax or duty has
been paid.
(k) The Corporation agrees that all shares of Common Stock which may be
delivered upon conversion of the Series A-4 Preferred, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable (and shall be issued out of the Corporation's authorized but
unissued Common Stock).
(l) In case of any consolidation of the Corporation with any other
person, or any merger of the Corporation into another person or of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock of the Corporation), recapitalization or other transaction in
which the Common Stock is exchanged for or converted into other securities or
assets, the person formed by such consolidation or resulting from such merger,
or issuing such other securities or assets, as the case may be, shall execute
and deliver to the holders of the Series A-4 Preferred a supplemental
agreement providing that such holder have the right thereafter, during the
period the Series A-4 Preferred shall be convertible as specified in this
Section 7, to convert this Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation or
merger, recapitalization or other transaction (including any Common Stock
retainable) by a holder of the number of shares of Common Stock of the
Corporation into which the Series A-4 Preferred might have been converted
immediately prior to such consolidation, merger, recapitalization or other
transaction, assuming such holder of Common Stock of the Corporation (i) is
not a person with which the Corporation consolidated, into which the
Corporation merged or which merged into the Corporation or was a party to such
recapitalization or other transaction, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
recapitalization or other transaction (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, recapitalization or other transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such
consolidation, merger, recapitalization or other transaction by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 7(1) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, recapitalization or other
transaction by the holders of each Non-electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental agreement shall provide for adjustments which, for
events subsequent to the effective date of such supplemental agreement, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 7. The above provisions of this Section 7(l) shall similarly
apply to successive consolidations, mergers, recapitalizations or other
transactions. In this paragraph, "securities of the kind receivable" upon such
consolidation, merger, recapitalization or other transaction by a holder of
Common Stock means securities that, among other things, are registered and
transferable under the Securities Act of 1933, and listed and approved for
quotation in all securities markets, in each case to the same extent as such
securities so receivable by a holder of Common Stock.
(m) The Corporation (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act of 1933, the
Securities Exchange Act of 1934 and state securities and Blue Sky laws) for
the shares of Common Stock issuable upon conversion of the Series A-4
Preferred to be lawfully issued and delivered as provided herein, and
thereafter publicly traded (if permissible under such Securities Act) and
qualified or listed as contemplated by clause (ii) (it being understood that
the Corporation shall not be required to register the resale of the Series A-4
Preferred or the issuance or sale of the Common Stock issuable on conversion
thereof under the Securities Act, except pursuant to the Registration Rights
Agreement between the Corporation and the initial holder of the Series A-4
Preferred); and (ii) will have the shares of Common Stock required to be
issued and delivered upon conversion of the Series A-4 Preferred, prior to
such issuance or delivery, approved for quotations on the Nasdaq National
Market or such other inter-dealer quotation system, if any, on which the
Common Stock is then quoted, or, if applicable, listed on the principal
national securities exchange on which outstanding Common Stock is listed at
the time of such delivery.
(8) Ownership Limitations.
Notwithstanding the foregoing, at no time will any holder be entitled to
convert shares of Series A-4 Preferred into shares of Common Stock that,
together with the number of shares of Common Stock owned (or deemed for bank
regulatory purposes to be owned) by such holder and its affiliates as set
forth in the notice of conversion, represent more than 4.9% of the Common
Stock then outstanding. If at any time the Conversion Rate and the number of
shares of the Series A-4 Preferred held by any holder would result in a
greater number of shares being issuable to such holder upon conversion, then
for so long as such condition shall exist, upon exercise of the conversion
right such holder shall receive (i) up to that number of shares of Common
Stock that, together with the number of shares of Common Stock owned (or
deemed for bank regulatory purposes to be owned) by such holder and its
affiliates as set forth in the notice of conversion, represent 4.9% of the
Common Stock then outstanding, and (ii) an amount (in cash but not less than
zero), payable in immediately available funds, determined pursuant to the
formula:
C = ((N x CR) - I) x S
where C = the cash amount receivable by the holder;
N = the number of shares of the Series A-4 Preferred
being converted;
CR = the Conversion Rate (per share of the Series A-4
Preferred);
I = the number of shares of Common Stock issuable
pursuant to clause (i) above;
and
S = the Current Market Price of the Common Stock on
the date of conversion.
(9) Definitions.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day". The term "Business Day" shall mean any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.
"Cash Distribution" means the distribution by the Corporation to
holders of its Common Stock of cash, as an ordinary or extraordinary dividend,
other than any cash that is distributed upon a merger or consolidation to
which Section 7(l) applies or as part of a distribution referred to in
paragraph (4) of Section 7(f).
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 7(l), shares issuable on
conversion or repurchase of the Series A-4 Preferred shall include only shares
of Common Stock or shares of any class or classes of common stock resulting
from any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the
shares so issuable on conversion of the Series A-4 Preferred shall include
shares of all such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Current Market Price" of publicly traded Common Stock or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the Nasdaq National
Market or, if such security is not quoted on the Nasdaq National Market, on
the principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange or not quoted on the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on such
day shall not have been reported through Nasdaq the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making
a market in such security selected for such purpose by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation.
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender
offer, the last time that tenders could have been made pursuant to such tender
offer.
"Excess Purchase Payment" means the product of (A) the excess, if
any, of (i) the amount of cash plus the fair market value (as determined in
good faith by the Corporation's Board of Directors) of any non-cash
consideration required to be paid with respect to one share of Common Stock
acquired or to be acquired in a tender offer made by the Corporation or any
Subsidiary of the Corporation for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer and (B) the number of shares
validly tendered and not withdrawn as of the Determination Date in respect of
such tender offer.
"Subsidiary" means (1) any corporation, association or other business
entity of which more than 50% of the total voting power of shares of capital
stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Corporation or one ore
more of the other Subsidiaries of the Corporation (or a combination thereof);
and (2) any partnership, limited liability company or similar pass-through
entity, (a) the sole general partner or the managing general partner or
managing member of which is the Corporation or a Subsidiary of the Corporation
or (b) the only general partners, managing members, or persons, however
designated in corresponding roles, of which are the Corporation or of one or
more Subsidaries of the Corporation (or any combination thereof).
"Trading Day" means (i) if the Common Stock is admitted to trading on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, a day on which trades may be effected through
such system; (ii) if the Common Stock is listed or admitted for trading on the
New York Stock Exchange or any other national securities exchange, a day on
which such exchange is open for business; or (iii) if the Common Stock is not
listed or admitted for trading on any national securities exchange or any
other system of automated dissemination of quotation of securities prices, a
day on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Transfer Agent" means American Stock Transfer & Trust Corporation,
or such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series A-4 Preferred.
(10) Any determination by the Board of Directors pursuant to the terms of the
Series A-4 Preferred shall be final and binding upon the holders thereof and
shall be conclusive for all purposes.
Third : The Series A-4 Preferred has been classified and designated by the
Board of Directors under the authority contained in the Certificate of
Designations.
Fourth : This Certificate of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.
Fifth : This Certificate of Designations shall be effective upon filing with
the Secretary of State.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, RECKSON SERVICE INDUSTRIES, INC. has caused these
presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Secretary, and the said officers of the Corporation further acknowledge said
instrument to be the corporate act of the Corporation, and state under the
penalties of perjury that, to the best of their knowledge, information and
belief, the matters and facts therein set forth with respect to approval are
true in all material respects.
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Jeffrey Neumann
---------------------------------
Name: Jeffrey Neumann
Title: Executive Vice President
[SEAL]
ATTEST:
/s/ Mitchell Rechler
-----------------------
Name: Mitchell Rechler
Title: Secretary
Exhibit 4.8
RECKSON SERVICE INDUSTRIES, INC.
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Reckson Service Industries, Inc., a Delaware corporation (the
"Corporation"), certifies that:
First : Pursuant to the authority expressly vested in the Board of Directors
of the Corporation by Article VI of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with these Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution,
duly designated and classified 3,000 shares of the Preferred Stock of the
Corporation into a series designated 8 7/8 % Series A-5 Convertible Cumulative
Preferred Stock and has provided for the issuance of such series.
Second : The preferences, rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption of the
shares of such series of Preferred Stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Article VI of the
Certificate of Incorporation, are as follows:
8 7/8% SERIES A-5 CONVERTIBLE CUMULATIVE PREFERRED STOCK
(1) Designation and Number.
A series of Preferred Stock of the Corporation ("Preferred Stock"),
designated the "8 7/8% Series A-5 Convertible Cumulative Preferred Stock" (the
"Series A-5 Preferred"), is hereby established. The number of shares of the
Series A-5 Preferred shall be 3,000.
(2) Rank.
The Series A-5 Preferred will, with respect to distribution rights
and rights upon liquidation, dissolution or winding up of the Corporation,
rank: (a) senior to all classes or series of Common Stock of the Corporation
("Common Stock") and to all equity securities issued by the Corporation the
terms of which provide that such equity securities shall rank junior to such
Series A-5 Preferred; (b) on a parity with all equity securities issued by the
Corporation other than those referred to in clauses (a) and (c); and (c)
junior to all equity securities issued by the Corporation that rank senior to
the Series A-5 Preferred in accordance with Section 6(d). The term "equity
securities" shall not include convertible debt securities.
(3) Distributions.
(a) Holders of the shares of Series A-5 Preferred shall be entitled
to receive, when and as authorized by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions at the rate of 8 7/8% per annum of the liquidation preference
per share (equivalent to $88.75 per annum per share of Series A-5 Preferred ).
Distributions on the Series A-5 Preferred shall be cumulative from February
18, 2000 and shall be payable quarterly in arrears on February 18, May 18,
August 18 and November 18 of each year or, if not a business day, the next
succeeding business day, commencing May 18, 2000 (each, a "Distribution
Payment Date"). Any distribution payable on the Series A-5 Preferred for a
partial distribution period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Distributions will be payable to holders
of record as they appear in the stock transfer records of the Corporation at
the close of business on the applicable record date, which shall be such date
designated by the Board of Directors of the Corporation for the payment of
distributions that is not more than 30 nor less than 10 days prior to such
Distribution Payment Date (each, a "Distribution Payment Record Date").
(b) Notwithstanding the foregoing, the Corporation may elect to pay
any distribution on the Series A-5 Preferred by delivery of shares of Common
Stock, but if and only if the following conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
distribution shall have a fair market value as of the Distribution Payment
Date equal to not less than the amount of such distribution. For purposes of
this Section 3, the fair market value of shares of Common Stock shall be equal
to 97.5% of the Current Market Price for the Trading Day immediately preceding
such distribution;
(ii) If such shares of Common Stock are delivered on or prior to
the second anniversary of the issue date of the Series A-5 Preferred, then
such shares shall be registered under the Securities Act of 1933 for resale by
the holders of the Series A-5 Preferred, and the Corporation shall have
delivered to each holder a current prospectus pursuant to which such resale
may be effected; and in the event any shares of Common Stock to be issued in
respect of any subsequent distribution require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the date of such distribution;
(iii) In the event any shares of Common Stock to be issued in
respect of such require registration with or approval of any governmental
authority under any State law or any other Federal law before such shares may
be validly issued or delivered upon issuance, such registration shall have
been completed or have become effective and such approval shall have been
obtained, in each case, prior to the date of such distribution;
(iv) The shares of Common Stock delivered in payment of such
distribution shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the date of such distribution;
(v) All shares of Common Stock delivered in payment of such
distribution shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights; and
(vi) In respect of each such Distribution Payment Date, the
Corporation shall have given the holders of the Series A-5 Preferred not less
than three nor more than 15 Trading Days' notice of its election to effect
payment in respect of such distribution by delivery of shares of Common Stock.
(vii) If all of the conditions set forth in the foregoing clauses
(i) through (vi) are not satisfied in accordance with the terms thereof, any
such distribution shall be paid by the Corporation only in cash.
(viii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
distribution if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than seven Trading Days prior to
the relevant Distribution Payment Date), represent more than 4.9% of the
Common Stock then outstanding. If the limitation set forth in the previous
sentence would apply to any distribution, the Corporation may elect (by notice
to the holder delivered not less than three Trading Days prior to the relevant
Distribution Payment Date) to satisfy a portion of such distribution in shares
of Common Stock (up to the maximum number of shares permitted under the
limitation set forth in the previous sentence) and the balance in cash.
(ix) Any issuance of shares of Common Stock in respect of any
distribution pursuant to this Section 3 shall be deemed to have been effected
immediately prior to the close of business on the Distribution Payment Date
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such delivery
shall be deemed to have become on such date the holder or holders of record of
the shares represented thereby; provided, however, that in case any
installment shall be deliverable on a date when the stock transfer books of
the Corporation shall be closed, the person or persons in whose name or names
the certificate or certificates for such shares are to be issued shall be
deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued pursuant to this Section 3
declared prior to the relevant delivery date.
(x) No fractions of shares shall be issued upon any payment made
in shares of Common Stock in respect of the Series A-5 Preferred. Instead of
any fractional share of Common Stock which would otherwise be so issuable, the
Corporation will round up to the next higher whole share or pay such
fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(xi) Any issuance and delivery of certificates for shares of
Common Stock pursuant to this Section 3 shall be made without charge to
holders of Series A-5 Preferred for such certificates or for any documentary,
stamp or similar issue tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby; provided, however,
that the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-5 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the date
of distribution, delivery of any shares of Common Stock issuable to such
holders with respect of such distribution shall be effected through the
facilities of The Depository Trust Company.
(c) No distributions on the Series A-5 Preferred shall be authorized
by the Board of Directors of the Corporation or be paid or set apart for
payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such authorization , payment or setting apart for
payment or provides that such authorization, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if such
authorization or payment shall be restricted or prohibited by law.
(d) Distributions on the Series A-5 Preferred will accumulate whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Additional distributions will
accumulate on the amount of any accumulated but unpaid distributions on the
Series A-5 Preferred beyond the applicable Distribution Payment Date, at the
rate of 10 7/8% per annum, computed on a daily basis.
(e) No full distributions will be authorized or paid or set apart for
payment on any equity securities of the Corporation ranking, as to
distributions, on a parity with or junior to the Series A-5 Preferred for any
period unless full distributions have been or contemporaneously are authorized
and paid or authorized and a sum sufficient for the payment thereof is set
apart for such payment on the Series A-5 Preferred for all past distribution
periods and the then current distribution period. When distributions are not
paid in full or a sum sufficient for such full payment is not so set apart
upon the Series A-5 Preferred and the other equity securities of the
Corporation ranking on a parity as to distributions with the Series A-5
Preferred, all distributions authorized upon the Series A-5 Preferred and any
other equity securities of the Corporation ranking on a parity as to
distributions with the Series A-5 Preferred shall be authorized pro rata so
that the amount of distributions authorized per share of Series A-5 Preferred
and such other equity securities shall in all cases bear to each other the
same ratio that accumulated distributions per share on the Series A-5
Preferred and such other equity securities (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such equity securities do not have cumulative distributions) bear to each
other.
(f) Unless full distributions on the Series A-5 Preferred have been
or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no
distributions shall be authorized or paid or set aside for payment or other
distribution shall be authorized or made upon the Common Stock or any other
equity securities of the Corporation ranking junior to or on a parity with the
Series A-5 Preferred as to distributions or upon liquidation, nor shall any
shares of Common Stock or any other equity securities of the Corporation
ranking junior to or on a parity with the Series A-5 Preferred as to
distributions or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Corporation (except
by conversion into or exchange for other stock of the Corporation ranking
junior as to the Series A-5 Preferred with respect to distributions and upon
liquidation).
(g) Any distribution payment made on shares of the Series A-5
Preferred shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such shares which remains payable.
(4) Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation (referred to herein as a
"liquidation"), the holders of the Series A-5 Preferred will be entitled to be
paid out of the assets of the Corporation legally available for distribution
to its stockholders liquidating distributions, in cash or property at its fair
market value as determined by the Corporation's Board of Directors, in the
amount of a liquidation preference of $1,000 per share, plus an amount equal
to any accumulated and unpaid distributions to the date of such liquidation,
before any distribution or payment is made to holders of Common Stock or any
other equity securities of the Corporation ranking junior to the Series A-5
Preferred as to the distribution of assets upon a liquidation. After payment
of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A-5 Preferred will have no right or claim to
any of the remaining assets of the Corporation.
(b) In the event that, upon any liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A-5 Preferred
and the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series A-5 Preferred in the distribution
of assets upon a liquidation, then the holders of Series A-5 Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(c) The consolidation or merger of the Corporation with or into any
other entity, or the merger of another entity with or into the Corporation, or
a statutory share exchange by the Corporation, or the sale, lease or
conveyance of all or substantially all of the property or business of the
Corporation, shall not be deemed to constitute a liquidation of the
Corporation.
(5) Redemption.
(a) Shares of Series A-5 Preferred will not be redeemable prior to
February 18, 2003. On or after February 18, 2003, the Corporation may redeem
shares of the Series A-5 Preferred, in whole or in part, from time to time, at
a redemption price of $1,000 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption, payable in cash, upon
not less than 30 nor more than 60 days' prior written notice. Notwithstanding
the foregoing, the Corporation may exchange shares of Series A-5 Preferred for
other shares of Convertible Cumulative Preferred Stock pursuant to the
Convertible Preferred Stock Purchase Agreement dated January 25, 2000 between
the Corporation and the Purchaser named therein.
(b) If fewer than all of the outstanding shares of Series A-5
Preferred are to be redeemed, the shares to be redeemed shall be determined
pro rata or by lot or in such other manner as prescribed by the Board of
Directors of the Corporation.
(c) Notice of redemption will be mailed by the Corporation, postage
prepaid, not less than 35 nor more than 60 days prior to the date fixed for
redemption (the "Series A-5 Preferred Stock Redemption Date"), addressed to
the respective holders of record of the Series A-5 Preferred to be redeemed at
their respective addresses as they appear on the stock transfer records of the
Corporation. Each notice of redemption shall state: (i) the redemption date;
(ii) the number of shares of Series A-5 Preferred to be redeemed; (iii) the
redemption price; (iv) whether such redemption price will be paid in cash or,
subject to the conditions set forth in Section 5(d), by delivery of shares of
Common Stock; (v) the place or places where certificates representing such
shares of Series A-5 Preferred are to be surrendered for payment of the
redemption price; (vi) that distributions on the shares to be redeemed will
cease to accumulate on such redemption date; and (vii) the date upon which the
holder's conversion rights as to such shares shall terminate. If fewer than
all the shares of Series A-5 Preferred are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Series
A-5 Preferred to be redeemed from each such holder.
(d) Notwithstanding the foregoing, the Corporation may elect to pay
the redemption price of shares of Series A-5 Preferred called for redemption
by delivery of shares of Common Stock, but if and only if the following
conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
redemption price shall have a fair market value as of the Series A-5 Preferred
Stock Redemption Date equal to not less than the amount of such redemption
price due hereunder. For purposes of this Section 5, the fair market value of
shares of Common Stock shall be equal to 95% of the daily volume-weighted
average of the Current Market Price for the twenty Trading Days immediately
preceding the Series A-5 Preferred Stock Redemption Date;
(ii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration under any Federal
securities law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the Series A-5 Preferred Stock Redemption Date;
(iii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration with or approval of any
governmental authority under any State law or any other Federal law before
such shares may be validly issued or delivered upon issuance, such
registration shall have been completed or have become effective and such
approval shall have been obtained, in each case, prior to the Series A-5
Preferred Stock Redemption Date;
(iv) The shares of Common Stock delivered in payment of such
redemption price shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the Series A-5 Preferred Stock Redemption Date;
(v) All shares of Common Stock delivered in payment of such
redemption price shall, upon issue, be duly and validly issued and fully paid
and non-assessable and free of any preemptive rights; and
(vi) If all of the conditions set forth in the foregoing clauses
(i) through (v) are not satisfied in accordance with the terms thereof, any
such redemption price shall be paid by the Corporation only in cash.
(vii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
redemption if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than 20 Trading Days prior to the
relevant Series A-5 Preferred Stock Redemption Date), represent more than 4.9%
of the Common Stock then outstanding. If the limitation set forth in the
previous sentence would apply to any redemption, the Corporation may elect (by
notice to the holder delivered not less than 20 Trading Days prior to the
relevant Series A-5 Preferred Stock Redemption Date) to satisfy a portion of
such redemption price in shares of Common Stock (up to the maximum number of
shares permitted under the limitation set forth in the previous sentence) and
the balance in cash.
(viii) Any issuance of shares of Common Stock in respect of any
redemption pursuant to this Section 5 shall be deemed to have been effected
immediately prior to the close of business on the Series A-5 Preferred Stock
Redemption Date, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such delivery shall be deemed to have become on such date the holder or
holders of record of the shares represented thereby; provided, however, that
in case such shares shall be deliverable on a date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name
or names the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued pursuant to this Section
5 declared prior to the relevant delivery date.
(ix) No fractions of shares shall be issued upon any payment made
in shares of Common Stock in respect of any redemption of Series A-5
Preferred. Instead of any fractional share of Common Stock which would
otherwise be so issuable, the Corporation will round up to the next higher
whole share or pay such fractional share in cash (based on the Current Market
Price for the immediately preceding Trading Day).
(x) Any issuance and delivery of certificates for shares of
Common Stock pursuant to this Section 5 shall be made without charge to
holders of Series A-5 Preferred for such certificates or for any documentary,
stamp or similar issue tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby; provided, however,
that the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-5 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the
Series A-5 Preferred Stock Redemption Date, delivery of any shares of Common
Stock issuable to such holders in respect to such redemption shall be effected
through the facilities of The Depository Trust Company.
(e) At its election, the Corporation, prior to the Series A-5
Preferred Stock Redemption Date, may irrevocably deposit the cash redemption
price (including accumulated and unpaid distributions) of the Series A-5
Preferred so called for redemption in trust for the holders thereof with a
bank or trust company, in which case the notice of redemption to holders of
the Series A-5 Preferred to be redeemed will (i) state the date of such
deposit, (ii) specify the office of such bank or trust company as the place of
payment of the redemption price and (iii) require such holders to surrender
the certificates representing such Series A-5 Preferred at such place on or
about the date fixed in such redemption notice (which may not be later than
the Series A-5 Preferred Stock Redemption Date) against payment of the
redemption price (including all accumulated and unpaid distributions to the
Series A-5 Preferred Stock Redemption Date). Any moneys so deposited which
remain unclaimed by the holders of the Series A-5 Preferred at the end of two
years after the Series A-5 Preferred Stock Redemption Date will be returned by
such bank or trust company to the Corporation.
(f) No failure to give notice of redemption or any defect thereto or
in the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A-5 Preferred except as to the holder to
whom notice was defective or not given.
(g) On or after the Series A-5 Preferred Stock Redemption Date, each
holder of Series A-5 Preferred to be redeemed must present and surrender the
certificates representing the Series A-5 Preferred to the Corporation at the
place designated in the notice of redemption and thereupon the redemption
price of such shares will be paid to or on the order of the person whose name
appears on such certificates as the owner thereof and each surrendered
certificate will be canceled. In the event that fewer than all the shares of
Series A-5 Preferred are to be redeemed, a new certificate will be issued
representing the unredeemed shares.
(h) From and after the Series A-5 Preferred Stock Redemption Date
(unless the Corporation defaults in payment of the redemption price), all
distributions on the Series A-5 Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid
distributions to the Series A-5 Preferred Stock Redemption Date), will cease
and terminate and such shares will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
shall not be deemed to be outstanding for any purpose whatsoever.
(i) Unless full distributions on all shares of Series A-5 Preferred
shall have been or contemporaneously are authorized and paid or authorized and
a sum sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no shares of
Series A-5 Preferred shall be redeemed unless all outstanding shares of Series
A-5 Preferred are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Series
A-5 Preferred pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A-5 Preferred.
(j) Unless full distributions on all shares of Series A-5 Preferred
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A-5 Preferred (except by conversion into or exchange for equity
securities of the Corporation ranking junior to the Series A-5 Preferred as to
distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A-5 Preferred pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A-5 Preferred.
(k) Immediately prior to any redemption of Series A-5 Preferred, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to
the Series A-5 Preferred Stock Redemption Date, unless such Series A-5
Preferred Stock Redemption Date falls after a Distribution Payment Record Date
and prior to the corresponding Distribution Payment Date, in which case each
holder of Series A-5 Preferred at the close of business on such Distribution
Payment Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on Series A-5 Preferred
for which a notice of redemption has been given.
(l) Any shares of Series A-5 Preferred that have been redeemed shall,
after such redemption, have the status of authorized but unissued Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors of the
Corporation.
(m) The Series A-5 Preferred will not have a stated maturity date and
will not be subject to any sinking fund or mandatory redemption provisions.
(6) Voting Rights.
(a) Holders of the Series A-5 Preferred will not have any voting
rights, except as set forth below. In any matter in which the Series A-5
Preferred is entitled to vote, including any action by written consent, each
share of Series A-5 Preferred shall be entitled to one vote.
(b) Whenever distributions on any shares of Series A-5 Preferred
shall be in arrears for more than two applicable Distribution Payment Dates,
(a "Preferred Distribution Default"), the holders of such shares of Series A-5
Preferred (voting separately as a class with all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two additional directors of the
Corporation (the "Preferred Stock Directors") at a special meeting called by
the holders of record of at least 10% of the outstanding shares of Series A-5
Preferred or the holders of any other series of Preferred Stock so in arrears
(unless such request is received less than 90 days before the date fixed for
the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
distributions accumulated on such shares of Series A-5 Preferred for the past
distribution periods and the then current distribution period shall have been
fully paid or declared and a sum sufficient for the payment thereof is set
aside for payment. In such cases, the entire Board of Directors of the
Corporation will be increased by two directors.
(c) If and when all accumulated distributions and the distribution
for the current distribution period on the Series A-5 Preferred shall have
been paid in full or set aside for payment in full, the holders of shares of
Series A-5 Preferred shall be divested of the voting rights set forth in
Section 6(b) (subject to revesting in the event of each and every Preferred
Distribution Default) and, if all accumulated distributions and the
distribution for the current distribution period have been paid in full or set
aside for payment in full on all other series of Preferred Stock upon which
like voting rights have been conferred and are exercisable, the term of office
of each Preferred Stock Director so elected shall terminate immediately. So
long as a Preferred Distribution Default shall continue, any vacancy in the
office of a Preferred Stock Director may be filled by written consent of the
Preferred Stock Director remaining in office or, if none remains in office, by
a vote of the holders of record of a majority of the outstanding shares of
Series A-5 Preferred when they have the voting rights set forth in Section
6(b) (voting separately as a class with all other series of Preferred Stock
upon which like voting rights have been conferred and are exercisable). The
Preferred Stock Directors shall each be entitled to one vote per director on
any matter presented to the Board of Directors.
(d) So long as any shares of Series A-5 Preferred remain outstanding,
the Corporation shall not, without the affirmative vote or consent of the
holders of record of at least two-thirds of the outstanding shares of the
Series A-5 Preferred given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (i) authorize or create,
or increase the authorized or issued amount of, any equity securities ranking
senior to the Series A-5 Preferred with respect to payment of distributions or
the distribution of assets upon a liquidation of the Corporation or reclassify
any authorized stock of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such stock, (ii) issue any share or other
security convertible into Common Stock at a conversion price equal to less
than the Current Market Price of the Common Stock on the Trading Day
immediately preceding the issue date of such share or other security, or (iii)
amend, alter or repeal the provisions of the Certificate of Incorporation,
whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting
power of the Series A-5 Preferred or the holders thereof; provided, however,
that the holders of the Series A-5 Preferred shall not be entitled to any
voting rights in connection with an Event if as a result of such Event (a)
shares of Series A-5 Preferred remain outstanding with the terms thereof
materially unchanged or (b) the Corporation is not the surviving entity but
the surviving entity issues to the holders of the Series A-5 Preferred the
same number of shares of a separate class of preferred stock with rights,
preferences, privileges and voting powers that are materially unchanged from
the preferences, rights, privileges and other terms of the Series A-5
Preferred; and provided, further, that (x) any increase in the amount of the
authorized Series A-5 Preferred or the creation or issuance of any other
series of Preferred Stock or (y) any increase in the amount of authorized
shares of such series, in each case ranking on a parity with or junior to the
Series A-5 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(e) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series A-5 Preferred
shall have been converted, redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect such
redemption.
(7) Conversion.
(a) Subject to Section 8, shares of Series A-5 Preferred will be
convertible at any time on or after February 18, 2001, at the option of the
holders thereof, into Common Stock at a conversion rate of 14.1693 shares of
Common Stock for each share of Series A-5 Preferred, subject to adjustment as
described below (the "Conversion Rate"); provided, however, that the right to
convert shares of Series A-5 Preferred called for redemption will terminate at
the close of business on the Trading Day immediately preceding the Series A-5
Preferred Stock Redemption Date.
(b) To exercise the conversion right, the holder of each Series A-5
Preferred to be converted shall surrender the certificate representing such
Series A-5 Preferred, duly endorsed or assigned to the Corporation or in
blank, at the principal office of the Transfer Agent accompanied by written
notice to the Corporation that such holder elects to convert such Series A-5
Preferred. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such Series A-5 Preferred is registered, in
which case the Corporation shall bear the related taxes, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
(c) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates
representing shares of Series A-5 Preferred shall have been surrendered and
such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates representing
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be at the
Conversion Rate in effect at such time and on such date unless the stock
transfer records of the Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer records are open, but such conversion shall be at the
Conversion Rate in effect on the date on which such shares have been
surrendered and such notice received by the Corporation.
(d) Upon surrender of shares of Series A-5 Preferred for conversion,
the converting holder shall be entitled to receive all accumulated and unpaid
distributions on such shares to the date of conversion, payable in cash or, at
the election of the Corporation but subject to the conditions set forth in
Section 3(b), in shares of Common Stock. Except as provided above, the
Corporation shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted shares or for any distribution on the
Common Stock that is issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series A-5 Preferred as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon
the conversion of such shares in accordance with the provisions of this
Section 7, and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in Section 7(e).
Upon request of the converting holder, such delivery shall be effected through
the facilities of The Depository Trust Company.
(e) No fractional shares of Common Stock shall be issued upon
conversion of Series A-5 Preferred. Instead of any fractional share of Common
Stock that would otherwise be deliverable upon the conversion of a share of
Series A-5 Preferred, the Corporation shall pay to the holder of such share an
amount in cash in respect of such fractional interest based upon the Current
Market Price of a share of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share of Series A-5
Preferred shall be surrendered for conversion at one time by the same holder,
the number of full shares of Common Stock issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of Series A-5
Preferred so surrendered.
(f) The Conversion Rate shall be adjusted from time to time as
follows:
(1) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the Determination Date for such dividend or
other distribution shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date and the
denominator shall be the sum of such number of outstanding shares and the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) Subject to the last sentence of paragraph (7) of this Section
7(f), in case the Corporation shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in paragraph (8) of this Section 7(f)) of the
Common Stock on the Determination Date for such distribution, the Conversion
Rate in effect at the opening of business on the day following such
Determination Date shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date plus the
number of shares of Common Stock which the aggregate of the offering price of
the total number of shares of Common Stock so offered for subscription or
purchase would purchase at such current market price and the denominator shall
be the number of shares of Common Stock outstanding at the close of business
on such Determination Date plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following such
Determination Date. For the purposes of this paragraph (2), the number of
shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Corporation will not issue any rights, options or warrants in
respect of shares of Common Stock held in the treasury of the Corporation.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision
or combination becomes effective.
(4) Subject to the last sentence of paragraph (7) of this Section
7(f), in case the Corporation shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock, or other property (including securities, but excluding
(i) any rights, options or warrants referred to in paragraph (2) of this
Section 7(f), (ii) any dividend or distribution paid exclusively in cash,
(iii) any dividend or distribution referred to in paragraph (1) of this
Section 7(f) and (iv) any merger or consolidation to which Section 7(l)
applies), the Conversion Rate shall be adjusted so that the same shall equal
the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the Determination Date for such distribution
by a fraction of which the numerator shall be the current market price per
share (determined as provided in paragraph (8) of this Section 7(f)) of the
Common Stock on such Determination Date less the then fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such Determination Date. However, if such fraction shall be not more than zero
(0), no adjustment to the Conversion Rate will be made. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (8) of this Section 7(f).
(5) In case the Corporation shall, by dividend or otherwise, make a
Cash Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided
in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (1) the amount of
such Cash Distribution divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (b) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 7(f)) of the Common Stock on such Determination
Date.
(6) In case the Corporation or any Subsidiary shall make an Excess
Purchase Payment, then, and in each such case, immediately prior to the
opening of business on the day after the tender offer in respect of which such
Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (A) the Excess
Purchase Payment divided by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date and (b) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section 7(f)) of the Common Stock as of such Determination Date. However,
if such fraction shall be not more than zero (0), no adjustment to the
Conversion Rate will be made.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger
to which Section 7(l) applies) shall be deemed to involve (a) a distribution
of such securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be the
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 7(f)). Rights or warrants
issued by the Corporation to all holders of its Common Stock entitling the
holders thereof to subscribe for or purchase shares of Common Stock, which
rights or warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for
purposes of this Section 7(f) not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5)
or (6) of this Section 7(f), the current market price per share of Common
Stock on any date shall be calculated by the Corporation and be deemed to be
the average of the daily Closing Prices for the five consecutive Trading Days
ending on the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent
in such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
7(f) shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) The Corporation may, in its sole discretion, make such increases
in the Conversion Rate, for such period of time (not shorter than five Trading
Days) as the Company may elect, in addition to those required by paragraphs
(1), (2), (3), (4), (5) and (6) of this Section 7(f) as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
(g) Whenever the Conversion Rate is adjusted as provided in Section
7(f), the Corporation shall compute the adjusted Conversion Rate in accordance
with Section 7(f) and shall prepare a certificate signed by the chief
financial officer of the Corporation setting forth the adjusted Conversion
Rate and showing in reasonable detail the facts upon which such adjustment is
based, and shall promptly deliver such certificate to the holders of the
Series A-5 Preferred.
(h) In case:
(1) the Corporation shall declare a dividend or other
distribution on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that
would require any adjustment pursuant to Section 7(f); or
(2) the Corporation shall authorize the granting to the
holders of its Common Stock of rights, options or warrants to
subscribe for or purchase any shares of capital stock of any class or
of any other rights; or
(3) of any reclassification of the Common Stock of the
Corporation, or of any consolidation, merger or share exchange to
which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or of the conveyance,
sale, transfer or lease of all or substantially all of the assets of
the Corporation; or
(4) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; or
(5) the Corporation or any Subsidiary shall commence a
tender offer for all or a portion of the Corporation's outstanding
shares of Common Stock (or shall amend any such tender offer);
then the Corporation shall cause to be delivered to the holders of the Series
A-5 Preferred at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up. Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings described in clauses (1)
through (5) of this Section 7(h).
(i) The Corporation shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of the Series A-5 Preferred, the
full number of shares of Common Stock then issuable upon the conversion of the
Series A-5 Preferred.
(j) Except as provided in the next sentence, the Corporation will pay
any and all documentary, stamp or similar issue and transfer taxes and duties
that may be payable in respect of the issue or delivery of shares of Common
Stock on conversion of the Series A-5 Preferred. The Corporation shall not,
however, be required to pay any tax or duty which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in a
name other than that of the holder of the Series A-5 Preferred, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or duty, or has
established to the satisfaction of the Corporation that such tax or duty has
been paid.
(k) The Corporation agrees that all shares of Common Stock which may
be delivered upon conversion of the Series A-5 Preferred, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable (and shall be issued out of the Corporation's authorized but
unissued Common Stock).
(l) In case of any consolidation of the Corporation with any other
person, or any merger of the Corporation into another person or of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock of the Corporation), recapitalization or other transaction in
which the Common Stock is exchanged for or converted into other securities or
assets, the person formed by such consolidation or resulting from such merger,
or issuing such other securities or assets, as the case may be, shall execute
and deliver to the holders of the Series A-5 Preferred a supplemental
agreement providing that such holder have the right thereafter, during the
period the Series A-5 Preferred shall be convertible as specified in this
Section 7, to convert this Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation or
merger, recapitalization or other transaction (including any Common Stock
retainable) by a holder of the number of shares of Common Stock of the
Corporation into which the Series A-5 Preferred might have been converted
immediately prior to such consolidation, merger, recapitalization or other
transaction, assuming such holder of Common Stock of the Corporation (i) is
not a person with which the Corporation consolidated, into which the
Corporation merged or which merged into the Corporation or was a party to such
recapitalization or other transaction, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
recapitalization or other transaction (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, recapitalization or other transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such
consolidation, merger, recapitalization or other transaction by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 7(1) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, recapitalization or other
transaction by the holders of each Non-electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental agreement shall provide for adjustments which, for
events subsequent to the effective date of such supplemental agreement, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 7. The above provisions of this Section 7(l) shall similarly
apply to successive consolidations, mergers, recapitalizations or other
transactions. In this paragraph, "securities of the kind receivable" upon such
consolidation, merger, recapitalization or other transaction by a holder of
Common Stock means securities that, among other things, are registered and
transferable under the Securities Act of 1933, and listed and approved for
quotation in all securities markets, in each case to the same extent as such
securities so receivable by a holder of Common Stock.
(m) The Corporation (i) will effect all registrations with, and
obtain all approvals by, all governmental authorities that may be necessary
under any United States Federal or state law (including the Securities Act of
1933, the Securities Exchange Act of 1934 and state securities and Blue Sky
laws) for the shares of Common Stock issuable upon conversion of the Series
A-5 Preferred to be lawfully issued and delivered as provided herein, and
thereafter publicly traded (if permissible under such Securities Act) and
qualified or listed as contemplated by clause (ii) (it being understood that
the Corporation shall not be required to register the resale of the Series A-5
Preferred or the issuance or sale of the Common Stock issuable on conversion
thereof under the Securities Act, except pursuant to the Registration Rights
Agreement between the Corporation and the initial holder of the Series A-5
Preferred); and (ii) will have the shares of Common Stock required to be
issued and delivered upon conversion of the Series A-5 Preferred, prior to
such issuance or delivery, approved for quotations on the Nasdaq National
Market or such other inter-dealer quotation system, if any, on which the
Common Stock is then quoted, or, if applicable, listed on the principal
national securities exchange on which outstanding Common Stock is listed at
the time of such delivery.
(8) Ownership Limitations.
Notwithstanding the foregoing, at no time will any holder be entitled
to convert shares of Series A-5 Preferred into shares of Common Stock that,
together with the number of shares of Common Stock owned (or deemed for bank
regulatory purposes to be owned) by such holder and its affiliates as set
forth in the notice of conversion, represent more than 4.9% of the Common
Stock then outstanding. If at any time the Conversion Rate and the number of
shares of the Series A-5 Preferred held by any holder would result in a
greater number of shares being issuable to such holder upon conversion, then
for so long as such condition shall exist, upon exercise of the conversion
right such holder shall receive (i) up to that number of shares of Common
Stock that, together with the number of shares of Common Stock owned (or
deemed for bank regulatory purposes to be owned) by such holder and its
affiliates as set forth in the notice of conversion, represent 4.9% of the
Common Stock then outstanding, and (ii) an amount (in cash but not less than
zero), payable in immediately available funds, determined pursuant to the
formula:
C = ((N x CR) - I) x S
where C = the cash amount receivable by the holder;
N = the number of shares of the Series A-5
Preferred being converted;
CR = the Conversion Rate (per share of the Series
A-5 Preferred);
I = the number of shares of Common Stock issuable
pursuant to clause (i) above;
and
S = the Current Market Price of the Common Stock
on the date of conversion.
(9) Definitions.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day". The term "Business Day" shall mean any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.
"Cash Distribution" means the distribution by the Corporation to
holders of its Common Stock of cash, as an ordinary or extraordinary dividend,
other than any cash that is distributed upon a merger or consolidation to
which Section 7(l) applies or as part of a distribution referred to in
paragraph (4) of Section 7(f).
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 7(l), shares issuable on
conversion or repurchase of the Series A-5 Preferred shall include only shares
of Common Stock or shares of any class or classes of common stock resulting
from any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the
shares so issuable on conversion of the Series A-5 Preferred shall include
shares of all such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Current Market Price" of publicly traded Common Stock or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the Nasdaq National
Market or, if such security is not quoted on the Nasdaq National Market, on
the principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange or not quoted on the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on such
day shall not have been reported through Nasdaq the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making
a market in such security selected for such purpose by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation.
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender
offer, the last time that tenders could have been made pursuant to such tender
offer.
"Excess Purchase Payment" means the product of (A) the excess, if
any, of (i) the amount of cash plus the fair market value (as determined in
good faith by the Corporation's Board of Directors) of any non-cash
consideration required to be paid with respect to one share of Common Stock
acquired or to be acquired in a tender offer made by the Corporation or any
Subsidiary of the Corporation for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer and (B) the number of shares
validly tendered and not withdrawn as of the Determination Date in respect of
such tender offer.
"Subsidiary" means (1) any corporation, association or other business
entity of which more than 50% of the total voting power of shares of capital
stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Corporation or one ore
more of the other Subsidiaries of the Corporation (or a combination thereof);
and (2) any partnership, limited liability company or similar pass-through
entity, (a) the sole general partner or the managing general partner or
managing member of which is the Corporation or a Subsidiary of the Corporation
or (b) the only general partners, managing members, or persons, however
designated in corresponding roles, of which are the Corporation or of one or
more Subsidaries of the Corporation (or any combination thereof).
"Trading Day" means (i) if the Common Stock is admitted to trading on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, a day on which trades may be effected through
such system; (ii) if the Common Stock is listed or admitted for trading on the
New York Stock Exchange or any other national securities exchange, a day on
which such exchange is open for business; or (iii) if the Common Stock is not
listed or admitted for trading on any national securities exchange or any
other system of automated dissemination of quotation of securities prices, a
day on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Transfer Agent" means American Stock Transfer & Trust Corporation,
or such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series A-5 Preferred.
(10) Any determination by the Board of Directors pursuant to the
terms of the Series A-5 Preferred shall be final and binding upon the holders
thereof and shall be conclusive for all purposes.
Third : The Series A-5 Preferred has been classified and designated by the
Board of Directors under the authority contained in the Certificate of
Designations.
Fourth : This Certificate of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.
Fifth : This Certificate of Designations shall be effective upon filing with
the Secretary of State.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, RECKSON SERVICE INDUSTRIES, INC. has caused these
presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary, and the said officers of the Corporation further
acknowledge said instrument to be the corporate act of the Corporation, and
state under the penalties of perjury that, to the best of their knowledge,
information and belief, the matters and facts therein set forth with respect
to approval are true in all material respects.
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Michael Maturo
---------------------------------
Name: Michael Maturo
Title: Executive Vice President
[SEAL]
ATTEST:
/s/ Jason M. Barnett
--------------------------
Name: Jason M. Barnett
Title: Assistant Secretary
Exhibit 4.9
RECKSON SERVICE INDUSTRIES, INC.
CERTIFICATE OF DESIGNATIONS
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Reckson Service Industries, Inc., a Delaware corporation (the
"Corporation"), certifies that:
First : Pursuant to the authority expressly vested in the Board of Directors
of the Corporation by Article VI of its Certificate of Incorporation, as
heretofore amended (which, as hereafter restated or amended from time to time,
are together with these Certificate of Designations herein called the
"Certificate of Incorporation"), the Board of Directors has, by resolution,
duly designated and classified 3,000 shares of the Preferred Stock of the
Corporation into a series designated 8 7/8 % Series A-6 Convertible Cumulative
Preferred Stock and has provided for the issuance of such series.
Second : The preferences, rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption of the
shares of such series of Preferred Stock, which upon any restatement of the
Certificate of Incorporation shall be included as part of Article VI of the
Certificate of Incorporation, are as follows:
8 7/8% SERIES A-6 CONVERTIBLE CUMULATIVE PREFERRED STOCK
(1) Designation and Number.
A series of Preferred Stock of the Corporation ("Preferred Stock"),
designated the "8 7/8% Series A-6 Convertible Cumulative Preferred Stock" (the
"Series A-6 Preferred"), is hereby established. The number of shares of the
Series A-6 Preferred shall be 3,000.
(2) Rank.
The Series A-6 Preferred will, with respect to distribution rights
and rights upon liquidation, dissolution or winding up of the Corporation,
rank: (a) senior to all classes or series of Common Stock of the Corporation
("Common Stock") and to all equity securities issued by the Corporation the
terms of which provide that such equity securities shall rank junior to such
Series A-6 Preferred; (b) on a parity with all equity securities issued by the
Corporation other than those referred to in clauses (a) and (c); and (c)
junior to all equity securities issued by the Corporation that rank senior to
the Series A-6 Preferred in accordance with Section 6(d). The term "equity
securities" shall not include convertible debt securities.
(3) Distributions.
(a) Holders of the shares of Series A-6 Preferred shall be entitled
to receive, when and as authorized by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions at the rate of 8 7/8% per annum of the liquidation preference
per share (equivalent to $88.75 per annum per share of Series A-6 Preferred ).
Distributions on the Series A-6 Preferred shall be cumulative from February
28, 2000 and shall be payable quarterly in arrears on February 28, May 28,
August 28 and November 28 of each year or, if not a business day, the next
succeeding business day, commencing May 28, 2000 (each, a "Distribution
Payment Date"). Any distribution payable on the Series A-6 Preferred for a
partial distribution period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Distributions will be payable to holders
of record as they appear in the stock transfer records of the Corporation at
the close of business on the applicable record date, which shall be such date
designated by the Board of Directors of the Corporation for the payment of
distributions that is not more than 30 nor less than 10 days prior to such
Distribution Payment Date (each, a "Distribution Payment Record Date").
(b) Notwithstanding the foregoing, the Corporation may elect to pay
any distribution on the Series A-6 Preferred by delivery of shares of Common
Stock, but if and only if the following conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
distribution shall have a fair market value as of the Distribution Payment
Date equal to not less than the amount of such distribution. For purposes of
this Section 3, the fair market value of shares of Common Stock shall be equal
to 97.5% of the Current Market Price for the Trading Day immediately preceding
such distribution;
(ii) If such shares of Common Stock are delivered on or prior to
the second anniversary of the issue date of the Series A-6 Preferred, then
such shares shall be registered under the Securities Act of 1933 for resale by
the holders of the Series A-6 Preferred, and the Corporation shall have
delivered to each holder a current prospectus pursuant to which such resale
may be effected; and in the event any shares of Common Stock to be issued in
respect of any subsequent distribution require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the date of such distribution;
(iii) In the event any shares of Common Stock to be issued in
respect of such require registration with or approval of any governmental
authority under any State law or any other Federal law before such shares may
be validly issued or delivered upon issuance, such registration shall have
been completed or have become effective and such approval shall have been
obtained, in each case, prior to the date of such distribution;
(iv) The shares of Common Stock delivered in payment of such
distribution shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the date of such distribution;
(v) All shares of Common Stock delivered in payment of such
distribution shall, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights; and
(vi) In respect of each such Distribution Payment Date, the
Corporation shall have given the holders of the Series A-6 Preferred not less
than three nor more than 15 Trading Days' notice of its election to effect
payment in respect of such distribution by delivery of shares of Common Stock.
(vii) If all of the conditions set forth in the foregoing clauses
(i) through (vi) are not satisfied in accordance with the terms thereof, any
such distribution shall be paid by the Corporation only in cash.
(viii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
distribution if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than seven Trading Days prior to
the relevant Distribution Payment Date), represent more than 4.9% of the
Common Stock then outstanding. If the limitation set forth in the previous
sentence would apply to any distribution, the Corporation may elect (by notice
to the holder delivered not less than three Trading Days prior to the relevant
Distribution Payment Date) to satisfy a portion of such distribution in shares
of Common Stock (up to the maximum number of shares permitted under the
limitation set forth in the previous sentence) and the balance in cash.
(ix) Any issuance of shares of Common Stock in respect of any
distribution pursuant to this Section 3 shall be deemed to have been effected
immediately prior to the close of business on the Distribution Payment Date
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such delivery
shall be deemed to have become on such date the holder or holders of record of
the shares represented thereby; provided, however, that in case any
installment shall be deliverable on a date when the stock transfer books of
the Corporation shall be closed, the person or persons in whose name or names
the certificate or certificates for such shares are to be issued shall be
deemed to have become the record holder or holders thereof for all purposes at
the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued pursuant to this Section 3
declared prior to the relevant delivery date.
(x) No fractions of shares shall be issued upon any payment made
in shares of Common Stock in respect of the Series A-6 Preferred. Instead of
any fractional share of Common Stock which would otherwise be so issuable, the
Corporation will round up to the next higher whole share or pay such
fractional share in cash (based on the Current Market Price for the
immediately preceding Trading Day).
(xi) Any issuance and delivery of certificates for shares of
Common Stock pursuant to this Section 3 shall be made without charge to
holders of Series A-6 Preferred for such certificates or for any documentary,
stamp or similar issue tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby; provided, however,
that the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-6 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the date
of distribution, delivery of any shares of Common Stock issuable to such
holders with respect of such distribution shall be effected through the
facilities of The Depository Trust Company.
(c) No distributions on the Series A-6 Preferred shall be authorized
by the Board of Directors of the Corporation or be paid or set apart for
payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such authorization , payment or setting apart for
payment or provides that such authorization, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if such
authorization or payment shall be restricted or prohibited by law.
(d) Distributions on the Series A-6 Preferred will accumulate whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Additional distributions will
accumulate on the amount of any accumulated but unpaid distributions on the
Series A-6 Preferred beyond the applicable Distribution Payment Date, at the
rate of 10 7/8% per annum, computed on a daily basis.
(e) No full distributions will be authorized or paid or set apart for
payment on any equity securities of the Corporation ranking, as to
distributions, on a parity with or junior to the Series A-6 Preferred for any
period unless full distributions have been or contemporaneously are authorized
and paid or authorized and a sum sufficient for the payment thereof is set
apart for such payment on the Series A-6 Preferred for all past distribution
periods and the then current distribution period. When distributions are not
paid in full or a sum sufficient for such full payment is not so set apart
upon the Series A-6 Preferred and the other equity securities of the
Corporation ranking on a parity as to distributions with the Series A-6
Preferred, all distributions authorized upon the Series A-6 Preferred and any
other equity securities of the Corporation ranking on a parity as to
distributions with the Series A-6 Preferred shall be authorized pro rata so
that the amount of distributions authorized per share of Series A-6 Preferred
and such other equity securities shall in all cases bear to each other the
same ratio that accumulated distributions per share on the Series A-6
Preferred and such other equity securities (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such equity securities do not have cumulative distributions) bear to each
other.
(f) Unless full distributions on the Series A-6 Preferred have been
or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no
distributions shall be authorized or paid or set aside for payment or other
distribution shall be authorized or made upon the Common Stock or any other
equity securities of the Corporation ranking junior to or on a parity with the
Series A-6 Preferred as to distributions or upon liquidation, nor shall any
shares of Common Stock or any other equity securities of the Corporation
ranking junior to or on a parity with the Series A-6 Preferred as to
distributions or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Corporation (except
by conversion into or exchange for other stock of the Corporation ranking
junior as to the Series A-6 Preferred with respect to distributions and upon
liquidation).
(g) Any distribution payment made on shares of the Series A-6
Preferred shall first be credited against the earliest accumulated but unpaid
distribution due with respect to such shares which remains payable.
(4) Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation (referred to herein as a
"liquidation"), the holders of the Series A-6 Preferred will be entitled to be
paid out of the assets of the Corporation legally available for distribution
to its stockholders liquidating distributions, in cash or property at its fair
market value as determined by the Corporation's Board of Directors, in the
amount of a liquidation preference of $1,000 per share, plus an amount equal
to any accumulated and unpaid distributions to the date of such liquidation,
before any distribution or payment is made to holders of Common Stock or any
other equity securities of the Corporation ranking junior to the Series A-6
Preferred as to the distribution of assets upon a liquidation. After payment
of the full amount of the liquidating distributions to which they are
entitled, the holders of Series A-6 Preferred will have no right or claim to
any of the remaining assets of the Corporation.
(b) In the event that, upon any liquidation of the Corporation, the
available assets of the Corporation are insufficient to pay the amount of the
liquidating distributions on all outstanding shares of Series A-6 Preferred
and the corresponding amounts payable on all other equity securities of the
Corporation ranking on a parity with Series A-6 Preferred in the distribution
of assets upon a liquidation, then the holders of Series A-6 Preferred and all
other such equity securities shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(c) The consolidation or merger of the Corporation with or into any
other entity, or the merger of another entity with or into the Corporation, or
a statutory share exchange by the Corporation, or the sale, lease or
conveyance of all or substantially all of the property or business of the
Corporation, shall not be deemed to constitute a liquidation of the
Corporation.
(5) Redemption.
(a) Shares of Series A-6 Preferred will not be redeemable prior to
February 28, 2003. On or after February 28, 2003, the Corporation may redeem
shares of the Series A-6 Preferred, in whole or in part, from time to time, at
a redemption price of $1,000 per share, plus all accumulated and unpaid
distributions thereon to the date fixed for redemption, payable in cash, upon
not less than 30 nor more than 60 days' prior written notice. Notwithstanding
the foregoing, the Corporation may exchange shares of Series A-6 Preferred for
other shares of Convertible Cumulative Preferred Stock pursuant to the
Convertible Preferred Stock Purchase Agreement dated January 25, 2000 between
the Corporation and the Purchaser named therein.
(b) If fewer than all of the outstanding shares of Series A-6
Preferred are to be redeemed, the shares to be redeemed shall be determined
pro rata or by lot or in such other manner as prescribed by the Board of
Directors of the Corporation.
(c) Notice of redemption will be mailed by the Corporation, postage
prepaid, not less than 35 nor more than 60 days prior to the date fixed for
redemption (the "Series A-6 Preferred Stock Redemption Date"), addressed to
the respective holders of record of the Series A-6 Preferred to be redeemed at
their respective addresses as they appear on the stock transfer records of the
Corporation. Each notice of redemption shall state: (i) the redemption date;
(ii) the number of shares of Series A-6 Preferred to be redeemed; (iii) the
redemption price; (iv) whether such redemption price will be paid in cash or,
subject to the conditions set forth in Section 5(d), by delivery of shares of
Common Stock; (v) the place or places where certificates representing such
shares of Series A-6 Preferred are to be surrendered for payment of the
redemption price; (vi) that distributions on the shares to be redeemed will
cease to accumulate on such redemption date; and (vii) the date upon which the
holder's conversion rights as to such shares shall terminate. If fewer than
all the shares of Series A-6 Preferred are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Series
A-6 Preferred to be redeemed from each such holder.
(d) Notwithstanding the foregoing, the Corporation may elect to pay
the redemption price of shares of Series A-6 Preferred called for redemption
by delivery of shares of Common Stock, but if and only if the following
conditions have been satisfied:
(i) The shares of Common Stock deliverable in payment of such
redemption price shall have a fair market value as of the Series A-6 Preferred
Stock Redemption Date equal to not less than the amount of such redemption
price due hereunder. For purposes of this Section 5, the fair market value of
shares of Common Stock shall be equal to 95% of the daily volume-weighted
average of the Current Market Price for the twenty Trading Days immediately
preceding the Series A-6 Preferred Stock Redemption Date;
(ii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration under any Federal
securities law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act of 1933 upon
issuance, such registration shall have been completed and shall have become
effective prior to the Series A-6 Preferred Stock Redemption Date;
(iii) In the event any shares of Common Stock to be issued in
respect of such redemption price require registration with or approval of any
governmental authority under any State law or any other Federal law before
such shares may be validly issued or delivered upon issuance, such
registration shall have been completed or have become effective and such
approval shall have been obtained, in each case, prior to the Series A-6
Preferred Stock Redemption Date;
(iv) The shares of Common Stock delivered in payment of such
redemption price shall have been accepted for quotation on the Nasdaq National
Market immediately prior to the Series A-6 Preferred Stock Redemption Date;
(v) All shares of Common Stock delivered in payment of such
redemption price shall, upon issue, be duly and validly issued and fully paid
and non-assessable and free of any preemptive rights; and
(vi) If all of the conditions set forth in the foregoing clauses
(i) through (v) are not satisfied in accordance with the terms thereof, any
such redemption price shall be paid by the Corporation only in cash.
(vii) Notwithstanding the foregoing, at no time will the
Corporation deliver shares of Common Stock to any holder in satisfaction of a
redemption if the number of shares so delivered, together with the number of
shares of Common Stock owned (or deemed for bank regulatory purposes to be
owned) by such holder and its affiliates as theretofore notified to the
Corporation (in a notice delivered not less than 20 Trading Days prior to the
relevant Series A-6 Preferred Stock Redemption Date), represent more than 4.9%
of the Common Stock then outstanding. If the limitation set forth in the
previous sentence would apply to any redemption, the Corporation may elect (by
notice to the holder delivered not less than 20 Trading Days prior to the
relevant Series A-6 Preferred Stock Redemption Date) to satisfy a portion of
such redemption price in shares of Common Stock (up to the maximum number of
shares permitted under the limitation set forth in the previous sentence) and
the balance in cash.
(viii) Any issuance of shares of Common Stock in respect of any
redemption pursuant to this Section 5 shall be deemed to have been effected
immediately prior to the close of business on the Series A-6 Preferred Stock
Redemption Date, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such delivery shall be deemed to have become on such date the holder or
holders of record of the shares represented thereby; provided, however, that
in case such shares shall be deliverable on a date when the stock transfer
books of the Corporation shall be closed, the person or persons in whose name
or names the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder or holders thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open. No payment or adjustment shall be made for
dividends or distributions on any Common Stock issued pursuant to this Section
5 declared prior to the relevant delivery date.
(ix) No fractions of shares shall be issued upon any payment made
in shares of Common Stock in respect of any redemption of Series A-6
Preferred. Instead of any fractional share of Common Stock which would
otherwise be so issuable, the Corporation will round up to the next higher
whole share or pay such fractional share in cash (based on the Current Market
Price for the immediately preceding Trading Day).
(x) Any issuance and delivery of certificates for shares of
Common Stock pursuant to this Section 5 shall be made without charge to
holders of Series A-6 Preferred for such certificates or for any documentary,
stamp or similar issue tax or duty in respect of the issuance or delivery of
such certificates or the securities represented thereby; provided, however,
that the Corporation shall not be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of a holder
of Series A-6 Preferred, and no such issuance or delivery shall be made unless
and until the person requesting such issuance or delivery has paid to the
Corporation the amount of any such tax or duty or has established, to the
satisfaction of the Corporation, that such tax or duty has been paid. Upon the
request of any holder, given not less than two Trading Days prior to the
Series A-6 Preferred Stock Redemption Date, delivery of any shares of Common
Stock issuable to such holders in respect to such redemption shall be effected
through the facilities of The Depository Trust Company.
(e) At its election, the Corporation, prior to the Series A-6
Preferred Stock Redemption Date, may irrevocably deposit the cash redemption
price (including accumulated and unpaid distributions) of the Series A-6
Preferred so called for redemption in trust for the holders thereof with a
bank or trust company, in which case the notice of redemption to holders of
the Series A-6 Preferred to be redeemed will (i) state the date of such
deposit, (ii) specify the office of such bank or trust company as the place of
payment of the redemption price and (iii) require such holders to surrender
the certificates representing such Series A-6 Preferred at such place on or
about the date fixed in such redemption notice (which may not be later than
the Series A-6 Preferred Stock Redemption Date) against payment of the
redemption price (including all accumulated and unpaid distributions to the
Series A-6 Preferred Stock Redemption Date). Any moneys so deposited which
remain unclaimed by the holders of the Series A-6 Preferred at the end of two
years after the Series A-6 Preferred Stock Redemption Date will be returned by
such bank or trust company to the Corporation.
(f) No failure to give notice of redemption or any defect thereto or
in the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series A-6 Preferred except as to the holder to
whom notice was defective or not given.
(g) On or after the Series A-6 Preferred Stock Redemption Date, each
holder of Series A-6 Preferred to be redeemed must present and surrender the
certificates representing the Series A-6 Preferred to the Corporation at the
place designated in the notice of redemption and thereupon the redemption
price of such shares will be paid to or on the order of the person whose name
appears on such certificates as the owner thereof and each surrendered
certificate will be canceled. In the event that fewer than all the shares of
Series A-6 Preferred are to be redeemed, a new certificate will be issued
representing the unredeemed shares.
(h) From and after the Series A-6 Preferred Stock Redemption Date
(unless the Corporation defaults in payment of the redemption price), all
distributions on the Series A-6 Preferred called for redemption will cease to
accumulate and all rights of the holders thereof, except the right to receive
the redemption price thereof (including all accumulated and unpaid
distributions to the Series A-6 Preferred Stock Redemption Date), will cease
and terminate and such shares will not thereafter be transferred (except with
the consent of the Corporation) on the Corporation's records, and such shares
shall not be deemed to be outstanding for any purpose whatsoever.
(i) Unless full distributions on all shares of Series A-6 Preferred
shall have been or contemporaneously are authorized and paid or authorized and
a sum sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no shares of
Series A-6 Preferred shall be redeemed unless all outstanding shares of Series
A-6 Preferred are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of Series
A-6 Preferred pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A-6 Preferred.
(j) Unless full distributions on all shares of Series A-6 Preferred
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire, directly or indirectly, any shares of
Series A-6 Preferred (except by conversion into or exchange for equity
securities of the Corporation ranking junior to the Series A-6 Preferred as to
distributions and upon liquidation); provided, however, that the foregoing
shall not prevent the purchase or acquisition of Series A-6 Preferred pursuant
to a purchase or exchange offer made on the same terms to holders of all
outstanding shares of Series A-6 Preferred.
(k) Immediately prior to any redemption of Series A-6 Preferred, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to
the Series A-6 Preferred Stock Redemption Date, unless such Series A-6
Preferred Stock Redemption Date falls after a Distribution Payment Record Date
and prior to the corresponding Distribution Payment Date, in which case each
holder of Series A-6 Preferred at the close of business on such Distribution
Payment Record Date shall be entitled to the distribution payable on such
shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares on or prior to such Distribution Payment Date.
Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on Series A-6 Preferred
for which a notice of redemption has been given.
(l) Any shares of Series A-6 Preferred that have been redeemed shall,
after such redemption, have the status of authorized but unissued Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series by the Board of Directors of the
Corporation.
(m) The Series A-6 Preferred will not have a stated maturity date and
will not be subject to any sinking fund or mandatory redemption provisions.
(6) Voting Rights.
(a) Holders of the Series A-6 Preferred will not have any voting
rights, except as set forth below. In any matter in which the Series A-6
Preferred is entitled to vote, including any action by written consent, each
share of Series A-6 Preferred shall be entitled to one vote.
(b) Whenever distributions on any shares of Series A-6 Preferred
shall be in arrears for more than two applicable Distribution Payment Dates,
(a "Preferred Distribution Default"), the holders of such shares of Series A-6
Preferred (voting separately as a class with all other series of Preferred
Stock upon which like voting rights have been conferred and are exercisable)
will be entitled to vote for the election of two additional directors of the
Corporation (the "Preferred Stock Directors") at a special meeting called by
the holders of record of at least 10% of the outstanding shares of Series A-6
Preferred or the holders of any other series of Preferred Stock so in arrears
(unless such request is received less than 90 days before the date fixed for
the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
distributions accumulated on such shares of Series A-6 Preferred for the past
distribution periods and the then current distribution period shall have been
fully paid or declared and a sum sufficient for the payment thereof is set
aside for payment. In such cases, the entire Board of Directors of the
Corporation will be increased by two directors.
(c) If and when all accumulated distributions and the distribution
for the current distribution period on the Series A-6 Preferred shall have
been paid in full or set aside for payment in full, the holders of shares of
Series A-6 Preferred shall be divested of the voting rights set forth in
Section 6(b) (subject to revesting in the event of each and every Preferred
Distribution Default) and, if all accumulated distributions and the
distribution for the current distribution period have been paid in full or set
aside for payment in full on all other series of Preferred Stock upon which
like voting rights have been conferred and are exercisable, the term of office
of each Preferred Stock Director so elected shall terminate immediately. So
long as a Preferred Distribution Default shall continue, any vacancy in the
office of a Preferred Stock Director may be filled by written consent of the
Preferred Stock Director remaining in office or, if none remains in office, by
a vote of the holders of record of a majority of the outstanding shares of
Series A-6 Preferred when they have the voting rights set forth in Section
6(b) (voting separately as a class with all other series of Preferred Stock
upon which like voting rights have been conferred and are exercisable). The
Preferred Stock Directors shall each be entitled to one vote per director on
any matter presented to the Board of Directors.
(d) So long as any shares of Series A-6 Preferred remain outstanding,
the Corporation shall not, without the affirmative vote or consent of the
holders of record of at least two-thirds of the outstanding shares of the
Series A-6 Preferred given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (i) authorize or create,
or increase the authorized or issued amount of, any equity securities ranking
senior to the Series A-6 Preferred with respect to payment of distributions or
the distribution of assets upon a liquidation of the Corporation or reclassify
any authorized stock of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such stock, (ii) issue any share or other
security convertible into Common Stock at a conversion price equal to less
than the Current Market Price of the Common Stock on the Trading Day
immediately preceding the issue date of such share or other security, or (iii)
amend, alter or repeal the provisions of the Certificate of Incorporation,
whether by merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege or voting
power of the Series A-6 Preferred or the holders thereof; provided, however,
that the holders of the Series A-6 Preferred shall not be entitled to any
voting rights in connection with an Event if as a result of such Event (a)
shares of Series A-6 Preferred remain outstanding with the terms thereof
materially unchanged or (b) the Corporation is not the surviving entity but
the surviving entity issues to the holders of the Series A-6 Preferred the
same number of shares of a separate class of preferred stock with rights,
preferences, privileges and voting powers that are materially unchanged from
the preferences, rights, privileges and other terms of the Series A-6
Preferred; and provided, further, that (x) any increase in the amount of the
authorized Series A-6 Preferred or the creation or issuance of any other
series of Preferred Stock or (y) any increase in the amount of authorized
shares of such series, in each case ranking on a parity with or junior to the
Series A-6 Preferred with respect to payment of distributions or the
distribution of assets upon a liquidation of the Corporation, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(e) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series A-6 Preferred
shall have been converted, redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect such
redemption.
(7) Conversion.
(a) Subject to Section 8, shares of Series A-6 Preferred will be
convertible at any time on or after February 28, 2001, at the option of the
holders thereof, into Common Stock at a conversion rate of 14.1393 shares of
Common Stock for each share of Series A-6 Preferred, subject to adjustment as
described below (the "Conversion Rate"); provided, however, that the right to
convert shares of Series A-6 Preferred called for redemption will terminate at
the close of business on the Trading Day immediately preceding the Series A-6
Preferred Stock Redemption Date.
(b) To exercise the conversion right, the holder of each Series A-6
Preferred to be converted shall surrender the certificate representing such
Series A-6 Preferred, duly endorsed or assigned to the Corporation or in
blank, at the principal office of the Transfer Agent accompanied by written
notice to the Corporation that such holder elects to convert such Series A-6
Preferred. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such Series A-6 Preferred is registered, in
which case the Corporation shall bear the related taxes, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
(c) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates
representing shares of Series A-6 Preferred shall have been surrendered and
such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates representing
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be at the
Conversion Rate in effect at such time and on such date unless the stock
transfer records of the Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer records are open, but such conversion shall be at the
Conversion Rate in effect on the date on which such shares have been
surrendered and such notice received by the Corporation.
(d) Upon surrender of shares of Series A-6 Preferred for conversion,
the converting holder shall be entitled to receive all accumulated and unpaid
distributions on such shares to the date of conversion, payable in cash or, at
the election of the Corporation but subject to the conditions set forth in
Section 3(b), in shares of Common Stock. Except as provided above, the
Corporation shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted shares or for any distribution on the
Common Stock that is issued upon such conversion.
As promptly as practicable after the surrender of certificates for
Series A-6 Preferred as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon
the conversion of such shares in accordance with the provisions of this
Section 7, and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in Section 7(e).
Upon request of the converting holder, such delivery shall be effected through
the facilities of The Depository Trust Company.
(e) No fractional shares of Common Stock shall be issued upon
conversion of Series A-6 Preferred. Instead of any fractional share of Common
Stock that would otherwise be deliverable upon the conversion of a share of
Series A-6 Preferred, the Corporation shall pay to the holder of such share an
amount in cash in respect of such fractional interest based upon the Current
Market Price of a share of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share of Series A-6
Preferred shall be surrendered for conversion at one time by the same holder,
the number of full shares of Common Stock issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of Series A-6
Preferred so surrendered.
(f) The Conversion Rate shall be adjusted from time to time as
follows:
(1) In case the Corporation shall pay or make a dividend or other
distribution on any class of capital stock of the Corporation payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the Determination Date for such dividend or
other distribution shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date and the
denominator shall be the sum of such number of outstanding shares and the
total number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) Subject to the last sentence of paragraph (7) of this Section
7(f), in case the Corporation shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in paragraph (8) of this Section 7(f)) of the
Common Stock on the Determination Date for such distribution, the Conversion
Rate in effect at the opening of business on the day following such
Determination Date shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such Determination Date plus the
number of shares of Common Stock which the aggregate of the offering price of
the total number of shares of Common Stock so offered for subscription or
purchase would purchase at such current market price and the denominator shall
be the number of shares of Common Stock outstanding at the close of business
on such Determination Date plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following such
Determination Date. For the purposes of this paragraph (2), the number of
shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Corporation will not issue any rights, options or warrants in
respect of shares of Common Stock held in the treasury of the Corporation.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision
or combination becomes effective.
(4) Subject to the last sentence of paragraph (7) of this Section
7(f), in case the Corporation shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock, or other property (including securities, but excluding
(i) any rights, options or warrants referred to in paragraph (2) of this
Section 7(f), (ii) any dividend or distribution paid exclusively in cash,
(iii) any dividend or distribution referred to in paragraph (1) of this
Section 7(f) and (iv) any merger or consolidation to which Section 7(l)
applies), the Conversion Rate shall be adjusted so that the same shall equal
the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the Determination Date for such distribution
by a fraction of which the numerator shall be the current market price per
share (determined as provided in paragraph (8) of this Section 7(f)) of the
Common Stock on such Determination Date less the then fair market value (as
determined in good faith by the Board of Directors of the Corporation) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such Determination Date. However, if such fraction shall be not more than zero
(0), no adjustment to the Conversion Rate will be made. If the Board of
Directors determines the fair market value of any distribution for purposes of
this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (8) of this Section 7(f).
(5) In case the Corporation shall, by dividend or otherwise, make a
Cash Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of
business on such Determination Date by a fraction (a) the numerator of which
shall be equal to the current market price per share (determined as provided
in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (1) the amount of
such Cash Distribution divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (b) the denominator of which shall
be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 7(f)) of the Common Stock on such Determination
Date.
(6) In case the Corporation or any Subsidiary shall make an Excess
Purchase Payment, then, and in each such case, immediately prior to the
opening of business on the day after the tender offer in respect of which such
Excess Purchase Payment is to be made expires, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the
Determination Date for such tender offer by a fraction (a) the numerator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 7(f)) of the Common Stock on such
Determination Date less an amount equal to the quotient of (A) the Excess
Purchase Payment divided by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Determination Date less
the number of all shares validly tendered and not withdrawn as of the
Determination Date and (b) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of
this Section 7(f)) of the Common Stock as of such Determination Date. However,
if such fraction shall be not more than zero (0), no adjustment to the
Conversion Rate will be made.
(7) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or merger
to which Section 7(l) applies) shall be deemed to involve (a) a distribution
of such securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be the
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be,
and "the day upon which such subdivision or combination becomes effective"
within the meaning of paragraph (3) of this Section 7(f)). Rights or warrants
issued by the Corporation to all holders of its Common Stock entitling the
holders thereof to subscribe for or purchase shares of Common Stock, which
rights or warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for
purposes of this Section 7(f) not be deemed issued until the occurrence of the
earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2), (4), (5)
or (6) of this Section 7(f), the current market price per share of Common
Stock on any date shall be calculated by the Corporation and be deemed to be
the average of the daily Closing Prices for the five consecutive Trading Days
ending on the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, means the first date on which the Common Stock
trades regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or
distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least one percent
in such rate; provided, however, that any adjustments which by reason of this
paragraph (9) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
7(f) shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) The Corporation may, in its sole discretion, make such increases
in the Conversion Rate, for such period of time (not shorter than five Trading
Days) as the Company may elect, in addition to those required by paragraphs
(1), (2), (3), (4), (5) and (6) of this Section 7(f) as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes.
(g) Whenever the Conversion Rate is adjusted as provided in Section
7(f), the Corporation shall compute the adjusted Conversion Rate in accordance
with Section 7(f) and shall prepare a certificate signed by the chief
financial officer of the Corporation setting forth the adjusted Conversion
Rate and showing in reasonable detail the facts upon which such adjustment is
based, and shall promptly deliver such certificate to the holders of the
Series A-6 Preferred.
(h) In case:
(1) the Corporation shall declare a dividend or other
distribution on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that
would require any adjustment pursuant to Section 7(f); or
(2) the Corporation shall authorize the granting to the
holders of its Common Stock of rights, options or warrants to
subscribe for or purchase any shares of capital stock of any class or
of any other rights; or
(3) of any reclassification of the Common Stock of the
Corporation, or of any consolidation, merger or share exchange to
which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or of the conveyance,
sale, transfer or lease of all or substantially all of the assets of
the Corporation; or
(4) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation; or
(5) the Corporation or any Subsidiary shall commence a
tender offer for all or a portion of the Corporation's outstanding
shares of Common Stock (or shall amend any such tender offer);
then the Corporation shall cause to be delivered to the holders of the Series
A-6 Preferred at least 20 days (or 10 days in any case specified in clause (1)
or (2) above) prior to the applicable record, expiration or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, rights, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined, (y) the date on which the
right to make tenders under such tender offer expires or (z) the date on which
such reclassification, consolidation, merger, conveyance, transfer, sale,
lease, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up. Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings described in clauses (1)
through (5) of this Section 7(h).
(i) The Corporation shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of the Series A-6 Preferred, the
full number of shares of Common Stock then issuable upon the conversion of the
Series A-6 Preferred.
(j) Except as provided in the next sentence, the Corporation will pay
any and all documentary, stamp or similar issue and transfer taxes and duties
that may be payable in respect of the issue or delivery of shares of Common
Stock on conversion of the Series A-6 Preferred. The Corporation shall not,
however, be required to pay any tax or duty which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in a
name other than that of the holder of the Series A-6 Preferred, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax or duty, or has
established to the satisfaction of the Corporation that such tax or duty has
been paid.
(k) The Corporation agrees that all shares of Common Stock which may
be delivered upon conversion of the Series A-6 Preferred, upon such delivery,
will have been duly authorized and validly issued and will be fully paid and
nonassessable (and shall be issued out of the Corporation's authorized but
unissued Common Stock).
(l) In case of any consolidation of the Corporation with any other
person, or any merger of the Corporation into another person or of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock of the Corporation), recapitalization or other transaction in
which the Common Stock is exchanged for or converted into other securities or
assets, the person formed by such consolidation or resulting from such merger,
or issuing such other securities or assets, as the case may be, shall execute
and deliver to the holders of the Series A-6 Preferred a supplemental
agreement providing that such holder have the right thereafter, during the
period the Series A-6 Preferred shall be convertible as specified in this
Section 7, to convert this Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation or
merger, recapitalization or other transaction (including any Common Stock
retainable) by a holder of the number of shares of Common Stock of the
Corporation into which the Series A-6 Preferred might have been converted
immediately prior to such consolidation, merger, recapitalization or other
transaction, assuming such holder of Common Stock of the Corporation (i) is
not a person with which the Corporation consolidated, into which the
Corporation merged or which merged into the Corporation or was a party to such
recapitalization or other transaction, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
recapitalization or other transaction (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, recapitalization or other transaction is not the same for each share
of Common Stock of the Corporation held immediately prior to such
consolidation, merger, recapitalization or other transaction by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 7(1) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, recapitalization or other
transaction by the holders of each Non-electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental agreement shall provide for adjustments which, for
events subsequent to the effective date of such supplemental agreement, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 7. The above provisions of this Section 7(l) shall similarly
apply to successive consolidations, mergers, recapitalizations or other
transactions. In this paragraph, "securities of the kind receivable" upon such
consolidation, merger, recapitalization or other transaction by a holder of
Common Stock means securities that, among other things, are registered and
transferable under the Securities Act of 1933, and listed and approved for
quotation in all securities markets, in each case to the same extent as such
securities so receivable by a holder of Common Stock.
(m) The Corporation (i) will effect all registrations with, and
obtain all approvals by, all governmental authorities that may be necessary
under any United States Federal or state law (including the Securities Act of
1933, the Securities Exchange Act of 1934 and state securities and Blue Sky
laws) for the shares of Common Stock issuable upon conversion of the Series
A-6 Preferred to be lawfully issued and delivered as provided herein, and
thereafter publicly traded (if permissible under such Securities Act) and
qualified or listed as contemplated by clause (ii) (it being understood that
the Corporation shall not be required to register the resale of the Series A-6
Preferred or the issuance or sale of the Common Stock issuable on conversion
thereof under the Securities Act, except pursuant to the Registration Rights
Agreement between the Corporation and the initial holder of the Series A-6
Preferred); and (ii) will have the shares of Common Stock required to be
issued and delivered upon conversion of the Series A-6 Preferred, prior to
such issuance or delivery, approved for quotations on the Nasdaq National
Market or such other inter-dealer quotation system, if any, on which the
Common Stock is then quoted, or, if applicable, listed on the principal
national securities exchange on which outstanding Common Stock is listed at
the time of such delivery.
(8) Ownership Limitations.
Notwithstanding the foregoing, at no time will any holder be entitled
to convert shares of Series A-6 Preferred into shares of Common Stock that,
together with the number of shares of Common Stock owned (or deemed for bank
regulatory purposes to be owned) by such holder and its affiliates as set
forth in the notice of conversion, represent more than 4.9% of the Common
Stock then outstanding. If at any time the Conversion Rate and the number of
shares of the Series A-6 Preferred held by any holder would result in a
greater number of shares being issuable to such holder upon conversion, then
for so long as such condition shall exist, upon exercise of the conversion
right such holder shall receive (i) up to that number of shares of Common
Stock that, together with the number of shares of Common Stock owned (or
deemed for bank regulatory purposes to be owned) by such holder and its
affiliates as set forth in the notice of conversion, represent 4.9% of the
Common Stock then outstanding, and (ii) an amount (in cash but not less than
zero), payable in immediately available funds, determined pursuant to the
formula:
C = ((N x CR) - I) x S
where C = the cash amount receivable by the holder;
N = the number of shares of the Series A-6
Preferred being converted;
CR = the Conversion Rate (per share of the Series
A-6 Preferred);
I = the number of shares of Common Stock issuable
pursuant to clause (i) above;
and
S = the Current Market Price of the Common Stock
on the date of conversion.
(9) Definitions.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day". The term "Business Day" shall mean any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.
"Cash Distribution" means the distribution by the Corporation to
holders of its Common Stock of cash, as an ordinary or extraordinary dividend,
other than any cash that is distributed upon a merger or consolidation to
which Section 7(l) applies or as part of a distribution referred to in
paragraph (4) of Section 7(f).
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 7(l), shares issuable on
conversion or repurchase of the Series A-6 Preferred shall include only shares
of Common Stock or shares of any class or classes of common stock resulting
from any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the
shares so issuable on conversion of the Series A-6 Preferred shall include
shares of all such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Current Market Price" of publicly traded Common Stock or any other
equity security of the Corporation or any other issuer for any day shall mean
the last reported sales price, regular way, on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the Nasdaq National
Market or, if such security is not quoted on the Nasdaq National Market, on
the principal national securities exchange on which such security is listed or
admitted for trading or, if not listed or admitted for trading on any national
securities exchange or not quoted on the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by Nasdaq or, if bid and asked prices for such security on such
day shall not have been reported through Nasdaq the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making
a market in such security selected for such purpose by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation.
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender
offer, the last time that tenders could have been made pursuant to such tender
offer.
"Excess Purchase Payment" means the product of (A) the excess, if
any, of (i) the amount of cash plus the fair market value (as determined in
good faith by the Corporation's Board of Directors) of any non-cash
consideration required to be paid with respect to one share of Common Stock
acquired or to be acquired in a tender offer made by the Corporation or any
Subsidiary of the Corporation for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer and (B) the number of shares
validly tendered and not withdrawn as of the Determination Date in respect of
such tender offer.
"Subsidiary" means (1) any corporation, association or other business
entity of which more than 50% of the total voting power of shares of capital
stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Corporation or one ore
more of the other Subsidiaries of the Corporation (or a combination thereof);
and (2) any partnership, limited liability company or similar pass-through
entity, (a) the sole general partner or the managing general partner or
managing member of which is the Corporation or a Subsidiary of the Corporation
or (b) the only general partners, managing members, or persons, however
designated in corresponding roles, of which are the Corporation or of one or
more Subsidaries of the Corporation (or any combination thereof).
"Trading Day" means (i) if the Common Stock is admitted to trading on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, a day on which trades may be effected through
such system; (ii) if the Common Stock is listed or admitted for trading on the
New York Stock Exchange or any other national securities exchange, a day on
which such exchange is open for business; or (iii) if the Common Stock is not
listed or admitted for trading on any national securities exchange or any
other system of automated dissemination of quotation of securities prices, a
day on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Transfer Agent" means American Stock Transfer & Trust Corporation,
or such other agent or agents of the Corporation as may be designated by the
Board of Directors of the Corporation or its designee as the transfer agent
for the Series A-6 Preferred.
(10) Any determination by the Board of Directors pursuant to the
terms of the Series A-6 Preferred shall be final and binding upon the holders
thereof and shall be conclusive for all purposes.
Third : The Series A-6 Preferred has been classified and designated by the
Board of Directors under the authority contained in the Certificate of
Designations.
Fourth : This Certificate of Designations has been approved by the Board of
Directors in the manner and by the vote required by law.
Fifth : This Certificate of Designations shall be effective upon filing with
the Secretary of State.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, RECKSON SERVICE INDUSTRIES, INC. has caused these
presents to be signed in its name and on its behalf by its Executive Vice
President and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary, and the said officers of the Corporation further
acknowledge said instrument to be the corporate act of the Corporation, and
state under the penalties of perjury that, to the best of their knowledge,
information and belief, the matters and facts therein set forth with respect
to approval are true in all material respects.
RECKSON SERVICE INDUSTRIES, INC.
By: /s/ Jeffrey Neumann
----------------------------------
Name: Jeffrey Neumann
Title: Executive Vice President
[SEAL]
ATTEST:
/s/ Jason M. Barnett
--------------------------
Name: Jason M. Barnett
Title: Assistant Secretary
Exhibit 10.1
WARRANT REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of March 7, 2000 between RECKSON SERVICE INDUSTRIES, INC., a Delaware
corporation (the "Company"), and GOTHAM PARTNERS, L.P., a New York limited
partnership, Gotham Partners III, L.P., a New York limited partnership, and
Gotham Partners International, Ltd., a Cayman exempted company (the "Buyers").
RECITALS
WHEREAS, the Company is executing and delivering to the Buyers warrants
(the "Warrants") to purchase an aggregate of 1,500,000 shares of common stock,
par value $0.01 per share, of the Company, subject to adjustment as described
therein (the "Warrant Shares"), for cash at a price of $70.00 per Warrant
Share, subject to adjustment as described therein, exercisable on or after
March 7, 2001 and before the close of business on June 7, 2003, and the Buyers
are simultaneously purchasing the Warrant for an aggregate of $30,000,000 in
same-day funds and delivering the same to the Company;
WHEREAS, as an inducement to the Buyers to purchase the Warrant, the
Company desires to grant to the Buyers the registration rights set forth in
this Agreement, subject to the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the receipt and sufficiency of which is hereby
acknowledged, and subject to the terms and conditions set forth herein, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in The City of New York are authorized or required
by law, executive order or regulation to remain closed.
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"Effectiveness Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Holder" shall mean holders of record of any Registrable Securities.
"Inspectors" shall have the meaning set forth in Section 3(i) hereof.
"Issue Date" shall mean the date of original issuance of the Warrants or,
as applicable, the date of issuance of the Warrant Shares you exercise of the
Warrants.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability corporation, or a government or
agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and, in each case, including all documents incorporated by
reference therein.
"Records" shall have the meaning set forth in Section 3(k) hereof.
"Registrable Securities" shall mean the Warrants and the Warrant Shares;
provided, however, that (i) that Warrant Shares shall cease to be Registrable
Securities when the earlier of the following occurs (1) a Shelf Registration
Statement with respect to such Warrant Shares for the resale thereof shall
have been declared effective under the Securities Act and such Warrant Shares
shall have been disposed of pursuant to such Shelf Registration Statement, (2)
the Warrants or the Warrant Shares shall have been sold to the public pursuant
to Rule 144 (or any similar provision then in force, but not Rule 144A) under
the Securities Act or the Warrant Shares are eligible to be sold without
restriction as contemplated by Rule 144 or (3) the Warrant Shares shall have
ceased to be outstanding and (ii) the Warrants shall cease to be Registrable
Securities when the earlier of the following occurs (1) a Shelf Registration
Statement with respect to such Warrants for the resale thereof shall have been
declared effective under the Securities Act and such Warrants shall have been
disposed of pursuant to such Shelf Registration Statement, (2) the Warrants
shall have been sold to public pursuant to Rule 144 (or any similar provision
then in force, but not Rule 144A) under the Securities Act or the Warrants are
eligible to be sold without restrictions as contemplated by Rule 144 or (3)
the Warrants shall cease to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws
(including reasonable fees and disbursements of one counsel for all
underwriters or Holders as a group in connection with blue sky qualification
of any of the Registrable Securities), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Shelf Registration Statement, any Prospectus and any
amendments or supplements thereto, (iv) all fees and expenses incurred in
connection with the listing, if any, of the Registrable Securities on any
securities exchange or quoted on the Nasdaq National Market, (v) all fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any "cold comfort" letters required by
or incident to such performance and compliance.
"Rule 144(k) Period" shall mean a period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) from the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(a) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(a) hereof
which covers all of the Registrable Securities on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all documents incorporated by
reference therein.
"Warrant" shall have the meaning set forth in the recitals hereto.
"Warrant Shares" shall have the meaning set forth in the recitals hereto,
and shall also include any other securities for which the Warrants become
exercisable.
2. Registration Under the Securities Act.
(a) Shelf Registration. The Company shall use its reasonable best
efforts to file or cause to be filed, within 180 days after the date hereof, a
Shelf Registration Statement providing for the resale by the Holders of all of
the Registrable Securities and to have such Shelf Registration Statement
declared effective by the SEC. No Holder of Registrable Securities shall be
entitled to include any of its Registrable Securities in any Shelf
Registration pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company in writing, within 10 Business Days
after receipt of a request therefor, such information as the Company may,
after conferring with counsel with regard to information relating to Holders
that would be required by the SEC to be included in such Shelf Registration
Statement or Prospectus included therein, reasonably request for inclusion in
any Shelf Registration Statement or Prospectus included therein. Each Holder
as to which any Shelf Registration is being effected agrees to furnish to the
Company all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.
The Company agrees to use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective and the Prospectus usable
for resales during the Rule 144(k) Period or for such shorter period which
will terminate when the Warrant or all of the Warrant Shares covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement or otherwise cease to be Registrable Securities (the "Effectiveness
Period"); provided, however, that for 105 calendar days or less (consisting of
no more than three separate periods of consecutive days) in any twelve-month
period, the Company shall be permitted, by giving written notice to the
holders of Registrable Securities, to suspend resales of Warrants or Warrant
Shares: (i) if the Shelf Registration Statement is no longer effective or the
Prospectus usable for resales due to circumstances relating to pending
developments, public filings with the SEC and similar events, (ii) because the
Prospectus includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make statements therein, in the light of
the circumstances under which they were made, not misleading or (iii) if the
Company is engaged in or has completed an underwritten public offering and the
underwriters' lock-up period with respect to sales of common stock (or
securities convertible into common stock) has not expired. Each Holder agrees
that it shall not dispose of Registrable Securities under the Shelf
Registration Statement in any underwritten offering by one or more Holders of
less than an aggregate of $15 million of Registrable Securities determined on
the price per share offered to the public. The Company will, in the event a
Shelf Registration Statement is declared effective, provide to each Holder a
reasonable number of copies of the Prospectus which is a part of the Shelf
Registration Statement, and, at that time, notify each such Holder that the
Shelf Registration Statement has become effective. The Company further agrees
to supplement or amend the Shelf Registration Statement if and as required by
the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement or by the Securities
Act or by any other rules and regulations thereunder for shelf registrations,
and the Company agrees to furnish to the Holders of Registrable Securities
copies of any supplement or amendment to the Prospectus promptly after its
being used or filed with the SEC.
(b) Expenses. The Company, as issuer of the Warrant Shares, shall
pay all Registration Expenses in connection with any Shelf Registration
Statement filed pursuant to Section 2(a) hereof and will reimburse any single
counsel designated in writing by the Holders of a majority of the Registrable
Securities to act as counsel for the Holders of the Registrable Securities in
connection with a Shelf Registration Statement, which other counsel shall be
reasonably satisfactory to the Company; provided however, that such
reimbursement shall in no event exceed an aggregate of $10,000. Except as
provided herein, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to
the Shelf Registration Statement.
(c) Effective Shelf Registration Statement. A Shelf Registration
Statement will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
declared effective, the offering of Registrable Securities pursuant to such
Shelf Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Shelf Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Shelf Registration Statement may
legally resume. The Company will be deemed not to have used its reasonable
best efforts to cause a Shelf Registration Statement to become, or to remain,
effective during the requisite period if it voluntarily takes any action that
would result in any such Shelf Registration Statement not being declared
effective or that would result in the Holders of Registrable Securities
covered thereby not being able to offer and sell such Registrable Securities
during that period, unless such action is within the scope of the second
paragraph of Section 2(a) hereof or is required by applicable law.
(d) Specific Enforcement. The parties hereto acknowledge that there
may be no adequate remedy at law if any party fails to perform any of its
obligations hereunder and that each party may suffer material irreparable
injury, that it may not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, in addition to any other
remedy to which the aggrieved party may be entitled at law or in equity, the
aggrieved party may obtain such relief as may be required to specifically
enforce the other party's obligations hereunder. In addition, if the Company
notifies the Holder of a suspension period pursuant to Section 2(a) and the
Holder thereafter resells Warrants or Warrant Shares in deliberate violation
of such notice, then such Holder shall be deemed to have materially breached
this Agreement and shall have no further rights hereunder.
3. Registration Procedures. In connection with the obligations of
the Company with respect to the Shelf Registration Statement and Prospectus
pursuant to Section 2(a) hereof, the Company shall use its reasonable best
efforts to:
(a) prepare and file with the SEC a Shelf Registration Statement as
prescribed by Section 2(a) hereof within the relevant time period
specified in Section 2(a) hereof on the appropriate form under the
Securities Act, which form shall (i) be selected by the Company, (ii) be
available for the sale of the Registrable Securities by the selling
Holders thereof, and (iii) comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and the Company
shall use its reasonable best efforts to cause such Shelf Registration
Statement to become and remain effective and the Prospectus usable for
resales in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to
keep such Shelf Registration Statement effective for the Effectiveness
Period, subject to the proviso contained in the second paragraph in
Section 2(a), and cause each Prospectus to be supplemented, if so
determined by the Company or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to Rule
424 (or any similar provision then in force) under the Securities Act,
and comply with the provisions of the Securities Act, the Exchange Act
and the rules and regulations promulgated thereunder applicable to it
with respect to the disposition of all Registrable Securities covered by
a Shelf Registration Statement during the Effectiveness Period in
accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement;
(c) register or qualify the Registrable Securities under all
applicable state securities or "blue sky" laws of such jurisdictions by
the time the applicable Shelf Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities covered by a
Shelf Registration Statement and each underwriter of an underwritten
offering of Registrable Securities shall reasonably request in writing in
advance of such date of effectiveness, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this Section
3(c), (ii) file any general consent to service of process in any
jurisdiction where it would not otherwise be subject to such service of
process or (iii) subject itself to taxation in any such jurisdiction if
it is not then so subject;
(d) promptly notify each Holder of Registrable Securities, their
counsel and the managing underwriters, if any, and promptly confirm such
notice in writing (i) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Shelf
Registration Statement or the qualification of the Registrable Securities
in any jurisdiction described in Section 3(c) hereof or the initiation of
any proceedings for that purpose, (ii) if, between the effective date of
a Shelf Registration Statement and the closing of any resale of
Registrable Securities covered thereby, the representations and
warranties of the Company contained in any purchase agreement, securities
sales agreement or other similar agreement cease to be true and correct
in all material respects, and (iii) of the happening of any event or the
failure of any event to occur or the discovery of any facts, during the
Effectiveness Period, which makes any statement made in a Shelf
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Shelf Registration Statement or Prospectus
to omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(e) obtain the withdrawal of any order suspending the effectiveness
of the Shelf Registration Statement at the earliest possible moment;
(f) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends and registered in such names as the selling Holders
or the underwriters may reasonably request at least two (2) Business Days
prior to the closing of any sale of Registrable Securities pursuant to
the Shelf Registration Statement;
(g) promptly after the occurrence of any event specified in Section
3(d)(i) or 3(d)(iii) hereof (subject to the suspension provisions set
forth in Section 2(a)), prepare a supplement or post-effective amendment
to the Shelf Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company
shall notify each Holder to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and each Holder hereby
agrees to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(h) if requested by the Holders of Registrable Securities in
connection with a firm commitment underwritten offering of at least $15
million in public offering price of Registrable Securities: (i) enter
into such agreements (including underwriting agreements) as are customary
in underwritten offerings and make such representations and warranties to
the underwriters (if any), with respect to the business of the Company
and its subsidiaries as then conducted and with respect to the Shelf
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when requested; (ii) obtain opinions of
counsel to the Company and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the
managing underwriters covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (iii) obtain "cold comfort" accountants'
letters and updates thereof in form and substance reasonably satisfactory
to the managing underwriters from the independent certified public
accountants of the Company (and, if necessary, any other independent
certified public accountants of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings and such other matters as reasonably
requested by such underwriters in accordance with Statement on Auditing
Standards No. 72; and (iv) if an underwriting agreement is entered into,
the same shall contain customary indemnification provisions and
procedures;
(i) if requested by Holders of Registrable Securities in connection
with a firm commitment underwritten offering of at least $15 million in
public offering price of Registrable Securities make reasonably available
for inspection by any selling Holder of Registrable Securities who
certifies to the Company that it has a current intention to sell
Registrable Securities pursuant to the Shelf Registration, any
underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent retained
by any such selling Holder or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during the Company's
normal business hours, all financial and other records, pertinent
organizational and operational documents and properties of the Company
and its subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Company and its subsidiaries to supply all relevant information, in each
case reasonably requested by any such Inspector in connection with such
Shelf Registration Statement; Records which the Company, in good faith,
believes to be confidential and which it notifies the Inspectors are
confidential shall not be disclosed to any Inspector except where (i) the
disclosure of such Records or information is necessary to avoid or
correct a material misstatement or omission in such Shelf Registration
Statement, (ii) the release of such Records or information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) such Records or information previously has been made
generally available to the public; each selling Holder of such
Registrable Securities will be required to agree in writing that Records
and information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company unless and until
such ceases to be material or is made generally available to the public
through no fault of an Inspector or a selling Holder; and each selling
Holder of such Registrable Securities will be required to further agree
in writing that it will, upon learning that disclosure of such Records or
information is sought in a court of competent jurisdiction, or in
connection with any action, suit or proceeding, give notice to the
Company and allow the Company at its expense to undertake appropriate
action to prevent disclosure of the Records and information deemed
confidential;
(j) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any twelve-month period (or 90 days
after the end of any twelve-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Shelf Registration Statement, which
statements shall cover said twelve-month periods, provided that the
obligations under this Section 3(j) shall be satisfied by the timely
filing of quarterly and annual reports on Forms 10-Q and 10-K under the
Exchange Act;
(k) cooperate with each seller of Registrable Securities covered by
a Shelf Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made
with the NASD; and
(l) take all other steps necessary to effect the registration of the
Registrable Securities covered by a Shelf Registration Statement
contemplated hereby.
Each Holder agrees that, upon receipt of any notice from the Company
of the occurrence of any event specified in Section 3(d)(i) or 3(d)(iii)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Shelf Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated
by Section 3(g) hereof or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies in such Holder's possession, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition
of Registrable Securities pursuant to a Shelf Registration Statement, the
Company shall use its reasonable best efforts to file and have declared
effective (if an amendment) as soon as practicable after the resolution of the
related matters an amendment or supplement to the Shelf Registration Statement
and related Prospectus.
4. Indemnification and Contribution. (a) The Company hereby agrees
to indemnify and hold harmless each Holder, each underwriter who participates
in an offering of the Registrable Securities and each Person, if any, who
controls any of such parties within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in a Shelf Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact required to be stated therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that, such settlement is
effected with the prior written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
such Holder), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company by
such Holder or underwriter, respectively, for use in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
(b) Each Holder or underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers (including
each officer of the Company who signed the Shelf Registration Statement), and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Shelf Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Holder or
underwriter, respectively, expressly for use in such Shelf Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or
supplement thereto); provided, however, that no Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Securities.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have under this Section 4 to the extent that
it is not materially prejudiced by such failure as a result thereof, and in
any event shall not relieve it from liability which it may have otherwise on
account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 4(a) or (b) above, counsel to the indemnified parties
shall be selected by such parties. An indemnifying party may participate at
its own expense in the defense of such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from their own counsel, for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional written
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement set forth in this Section 4 is
for any reason held to be unenforceable by an indemnified party although
applicable in accordance with its terms, the Company, on the one hand, and the
Holders and underwriters, on the other hand, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated
by such indemnity agreement incurred by the Company and the Holders and
underwriters, as incurred; provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any Person that was not guilty of
such fraudulent misrepresentation. As between the Company, on the one hand,
and the Holders and underwriters, on the other hand, such parties shall
contribute to such aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement in such proportion as
shall be appropriate to reflect the relative fault of the Company, on the one
hand, and the Holders and underwriters, on the other hand, with respect to the
statements or omissions which resulted in such loss, liability, claim, damage
or expense, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and the Holders and underwriters, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or by or on behalf of the Holders and underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Holders of
the Registrable Securities agree that it would not be just and equitable if
contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each Affiliate of a Holder and each Person, if any, who controls a Holder or
such Affiliate within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Holder, and each director and officer of the Company and each Person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.
5. Participation in an Underwritten Registration. No Holder may
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in
the underwriting arrangement approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of
such underwriting arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell their
Registrable Securities covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Section 3(h) hereof. In any such
underwritten offering, the underwriter or underwriters and manager or managers
that will administer the offering will be selected by the Holders; provided,
however, that such underwriters and managers must be reasonably satisfactory
to the Company.
7. Miscellaneous.
(a) Rule 144. For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act and any Registrable
Securities or Warrant Shares which are no longer Registrable Securities solely
as a result of their issuance and sale pursuant to a Net Issue Exercise as
provided by Section 1.2 of the Warrant (collectively, "Eligible Securities")
remain outstanding, the Company will file the reports required to be filed by
it under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and
the rules and regulations adopted by the SEC thereunder; provided, however,
that if the Company ceases to be so required to file such reports, it will,
upon the request of any Holder of Eligible Securities, (a) make publicly
available such information as is necessary to permit sales of its securities
pursuant to Rule 144 under the Securities Act and (b) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to enable such Holder to sell its Eligible Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rules or regulations hereafter
adopted by the SEC. Upon the request of any Holder of Eligible Securities, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered into,
and will not enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's other issued and
outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of a
majority of the Holders affected by such amendment, modification, supplement,
waiver or departure; provided that no amendment, modification or supplement or
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder unless consented to in writing
by such Holder. Notwithstanding the foregoing sentence, (i) this Agreement may
be amended, without the consent of any Holder, by written agreement signed by
the Company and the Buyers or their successors and assigns to cure any
ambiguity, to correct or supplement any provision of this Agreement that may
be inconsistent with any other provision of this Agreement or to make any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with other provisions of this
Agreement, (ii) this Agreement may be amended, modified or supplemented, and
waivers and consents to departures from the provisions hereof may be given, by
written agreement signed by the Company and the Buyers or their successors and
assigns to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate
to comply with applicable law (including any interpretation of the Staff of
the SEC) or any change therein and (iii) to the extent any provision of this
Agreement relates to the Buyers and no other Holders, such provision may be
amended, modified or supplemented, and waivers or consents to departures from
such provisions may be given, by written agreement signed by the Buyers and
the Company.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder
to the Company by means of a notice given in accordance with the provisions of
this Section 7(d), which address initially is, with respect to the Buyers, 110
East 42nd Street, 18th Floor, New York, New York 10017; and (ii) if to the
Company, initially at 1350 Avenue of the Americas, New York, New York and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an overnight courier, including
Federal Express or similar courier utilizing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Buyer, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Warrant; If any
transferee of any Holder shall acquire Registrable Securities, whether by
operation of law or otherwise, such Registrable Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(f) Third Party Beneficiaries. Each Holder shall be a third party
beneficiary of the agreements made hereunder among the Company and the Buyers,
and the Buyers shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
any provisions relating to conflicts of law.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes
all prior agreements and understandings between the parties with respect to
such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed by one of their respective officers thereunto duly authorized.
RECKSON SERVICE INDUSTRIES, INC.
By:
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Name:
Title:
GOTHAM PARTNERS, L.P.
By:
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Name:
Title:
GOTHAM PARTNERS III, L.P.
By:
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Name:
Title:
GOTHAM PARTNERS INTERNATIONAL, LTD.
By:
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Name:
Title:
