KMC TELECOM HOLDINGS, INC.
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RIGHTS OF THE SERIES A
CUMULATIVE CONVERTIBLE PREFERRED
STOCK, PAR VALUE $.01 PER SHARE
Pursuant to Sections 141 and 242 of the
General Corporation Law of the State of Delaware
As contemplated by Sections 141 and 242 of the General Corporation Law of
the State of Delaware (the "DGCL"), the following resolution was duly adopted by
the Board of Directors of KMC Telecom Holdings, Inc., a Delaware corporation
(the "Corporation"), by unanimous written consent, dated a June 28, 2000:
WHEREAS, the Board of Directors of the Corporation is authorized, within
the limitations and restrictions stated in the Certificate of Incorporation of
the Corporation, to propose by resolution or resolutions for the amendment of
outstanding series of preferred stock, par value $.01 per share, of the
Corporation, to contain such voting powers, full or limited, or without voting
powers, and such designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions as
shall be stated and expressed in the resolution or resolutions providing for the
amendment thereof adopted by the Board of Directors, and as are not stated and
expressed in the Amended and Restated Certificate of Incorporation, or any
amendment thereto, including (but without limiting the generality of the
foregoing) such provisions as may be desired concerning voting, redemption,
dividends, dissolution, or the distribution of assets and such other subjects or
matters as may be fixed by resolution or resolutions of the Board of Directors
under the DGCL.
WHEREAS, the Board of Directors of the Corporation, pursuant to its
authority under Section 242 of the DGCL, deems it advisable to further amend the
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terms of the Certificate of the Powers, Designations, Preferences and Rights of
the Series A Cumulative Convertible Preferred Stock, Par Value $.01 per Share,
dated as of November 4, 1997, as previously amended (the "Certificate of
Designation").
WHEREAS, the holders of two-thirds of the shares of Series A Preferred
Stock outstanding, voting as a separate class, have approved the amendment of
the terms of the Certificate of Designation as set forth herein. Unless defined
otherwise herein, all capitalized terms shall have the meaning given to them in
the Certificate of Designation.
NOW, THEREFORE, BE IT RESOLVED:
1. Exceptions to Conversion Price Adjustment. Section 5(f) is deleted in its
entirety and replaced with the following:
"(f) Exceptions to Conversion Price Adjustment. Notwithstanding the
foregoing, no adjustment to the Conversion Price shall be made
pursuant to this Section 5 in connection with the grant, issuance or
sale of Common Stock, Convertible Securities, warrants, options or
other rights to subscribe for or purchase Common Stock or
Convertible Securities: (i) pursuant to employee stock purchase or
stock option ownership plans adopted by the Corporation for
employees, consultants and/or directors of the Corporation and its
affiliates; (ii) pursuant to the terms of any Convertible
Securities, warrants, options or other rights to subscribe for or
purchase granted, issued or sold pursuant to clause (i) above; (iii)
pursuant to the High Yield Debt and Equity Offering (as defined in a
Subordinated Loan and Security Agreement, dated as of September 22,
1997, among KMC Telecom Inc. ("KMC") and KMC Telecom II, Inc. and
AT&T Commercial Finance Corporation, as in effect on the Series C
Preferred Stock Issue Date) or a subsequent debt offering occurring
prior to December 31, 1998; (iv) pursuant to the terms of any
Convertible Securities, warrants, options or other rights to
subscribe for or purchase granted, issued or sold pursuant to clause
(iii) above; (v) pursuant to Section 10C of the Amended and Restated
Note Purchase and Investment Agreement, dated as of October 22,
1996, as amended, by and among the Corporation, Nassau Capital
Partners L.P., NAS Partners I L.L.C. and Harold N. Kamine; or (vi)
pursuant to the issuance of Series C Cumulative Convertible
Preferred Stock and Series D Cumulative Convertible Preferred Stock
pursuant to a Purchase Agreement, by and among the Corporation,
General Electric Capital Corporation, CoreStates Holdings, Inc.,
Nassau Capital Partners L.P., NAS Partners I L.L.C. and the issuance
of any shares of Common Stock issued in conversion thereof; provided
that the aggregate number of shares of Common Stock issued or
issuable pursuant to clauses (i) and (ii) above shall not exceed 25%
of the Common Stock (on a Fully Diluted basis) outstanding from time
to time and the aggregate number of shares of Common Stock issued or
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issuable pursuant to clause (iii) and (iv) above shall not exceed
11% of the Common Stock (on a Fully Diluted basis) outstanding from
time to time."
2. Voting Rights. Section 6(c)(vii) is deleted in its entirety and replaced
with the following:
"(vii) authorize or enter into any transaction or series of
transactions (excluding transactions authorized by the Corporation
or its subsidiaries prior to the Series A Preferred Stock Issue Date
and any amendments thereto that do not alter the economic value of
such transactions) with any director or executive officer of the
Corporation or any Person directly or indirectly controlling the
Corporation (or any affiliate thereof other than a subsidiary of the
Corporation) if the aggregate amount involved in such transaction or
series of transactions involves the payment by or to the Corporation
or its subsidiaries of more than $100,000 in any one fiscal year of
the Corporation, provided, however, that transactions or series of
transactions which involve any type of payment or grant of salary or
compensation to any director or executive officer of the Corporation
or any Person directly or indirectly controlling the Corporation or
any affiliate thereof, excluding any subsidiary of the Corporation,
shall not be subject to this restriction nor the provisions of
Section 6(c) hereof; or"
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IN WITNESS WHEREOF, KMC TELECOM HOLDINGS, INC. has caused this certificate
to be duty executed by its Chief Financial Officer this 29th day of June, 2000.
KMC TELECOM HOLDINGS, INC.
By: /s/William H. Stewart
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Name: William H. Stewart
Title: Chief Financial Officer
