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Exhibit 4.1
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF 8.5% SENIOR
CONVERTIBLE PREFERRED SHARES, SERIES A
OF CORECOMM LIMITED AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
CoreComm Limited, a company incorporated under the laws of
Bermuda (the "Corporation"), hereby certifies that pursuant to the authority
contained in its Bye-laws (the "Bye-Laws") and Section 7(g) of its Memorandum
of Association (the "Memorandum of Association"), and in accordance with
Bermuda law, the Board of Directors of the Corporation on August ___, 2000 duly
approved and adopted the following resolution, which resolution remains in full
force and effect on the date hereof and shall be attached as a schedule to but
shall not form part of the Bye-Laws:
"BE IT RESOLVED that, pursuant to authority expressly granted
to the Board of Directors by the provisions of the Bye-Laws and Section 7(g) of
the Memorandum of Association there is hereby created and authorized the
issuance of a new series of the Corporation's existing preferred shares, par
value $0.01 per share (the "Preferred Shares"), with the following powers,
designation, dividend rights, voting powers, rights on liquidation, conversion
rights, redemption rights and other preferences and relative, participating,
optional or other special rights and with the qualifications, limitations or
restrictions on the shares of such series (in addition to the voting powers,
designation, preferences and relative, participating, optional or other special
rights and the qualifications, limitations or restrictions thereof set forth in
the Memorandum of Association that are applicable to each series of Preferred
Shares) hereinafter set forth:
(1) Number and Designation. 50,000 shares of the
Preferred Shares shall be designated as "8.5% Senior Convertible Preferred
Shares, Series A of the Corporation" (the "8.5% Preferred Shares, Series A"),
and no other shares of Preferred Shares shall be designated as 8.5% Preferred
Shares, Series A.
(2) Definitions. For purposes of the 8.5% Preferred
Shares, Series A, the following terms shall have the meanings indicated:
"Additional Preferred" shall have the meaning set forth in
paragraph (5)(a).
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more
intermediaries,
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controls, is controlled by, or is under common control with such
specified Person. Without limitation of the above, the term
"Affiliate" shall, with respect to the Initial Holder, include Ralph
H. Booth II, John L. Booth II, and any members of their "respective
families" within the meaning of SEC Rule 16a-1(e).
"Alternative Change of Control Price" shall have the meaning
set forth in paragraph (9)(f)(ii).
"ATX" means ATX Telecommunications Services, Inc., a Delaware
corporation.
"Board of Directors" shall mean the board of directors of the
Corporation. "Board of Directors" shall also mean the Executive
Committee, if any, of such board of directors or any other committee
duly authorized by such board of directors to perform any of its
responsibilities with respect to the 8.5% Preferred Shares, Series A.
"Booth American Company" shall mean Booth American Company, a
Michigan corporation.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which state or federally chartered banking
institutions in New York, New York are not required to be open.
"Bye-laws" means the bye-laws of the Corporation as amended as
of the date hereof and as may be amended from time to time.
"Change of Control" shall mean:
(i) the sale, lease or transfer of all or
substantially all of the assets of the Corporation to any
"Person" or "group", within the meaning of Sections 13(d)(3)
and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the
purpose of acquiring, holding or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act,
other than any Permitted Holder;
(ii) any "Person" or "group", within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing, including any
group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act, other than any
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Permitted Holder, becomes the "beneficial owner", as defined
in Rule 13d-3 under the Exchange Act, of more than 50% (or
more than 25% if neither George S. Blumenthal or Barclay Knapp
is an executive officer of the Corporation at such time) of
the total voting power of all classes of the voting stock of
the Corporation and/or warrants or options to acquire such
voting stock of the Corporation, calculated on a fully diluted
basis, unless, as a result of such transaction, the ultimate
direct or indirect ownership of the Corporation is
substantially the same immediately after such transaction as
it was immediately prior to such transaction;
(iii) without limitation of the provisions of
subparagraphs (i) or (ii) above, the acquisition by NTL
Incorporated (or any Affiliate of NTL Incorporated, which
shall not be deemed to include the Corporation) of (A) all or
substantially all of the assets of the Corporation or (B)
"beneficial ownership", as such term is defined in Rule 13d-3
under the Exchange Act, of more than 50% (or more than 25% if
neither George S. Blumenthal or Barclay Knapp is an executive
officer of the Corporation at such time) of the total voting
power of all classes of the voting stock of the Corporation
and/or warrants or options to acquire such voting stock of the
Corporation, calculated on a full-diluted basis; or
(iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors, together with any new directors whose
election or appointment by the Board of Directors or whose
nomination for election by the shareholders of the Corporation
was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of
such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority of the Board of Directors then in office.
Notwithstanding anything to the contrary contained in this
definition of "Change of Control", a Change of Control shall be deemed
not to have occurred upon the completion of any (or all) of the
following transactions: (A) a wholly-owned subsidiary of the Successor
Corporation (or in the event that the Voyager.net merger is completed
prior to the ATX merger, the Delaware corporation surviving the
Domestication Merger) merging with and into Voyager.net with
Voyager.net remaining as the surviving corporation in the merger, or
(B) the Delaware corporation surviving the Domestication Merger
merging with and into ATX with ATX as the surviving corporation in the
merger, or (C) the Domestication Merger; provided that each of the
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transactions set forth in subparagraphs (A), (B) or (C) above conforms
in all material respects to the description thereof contained in the
Corporation's Definitive Schedule 14A.
"Change of Control Conversion Rate" shall have the meaning set
forth in paragraph (9)(f).
"Change of Control Instigator" shall have the meaning set
forth in paragraph (9)(f)(iii).
"Change of Control Price" shall have the meaning set forth in
paragraph (9)(f)(ii).
"Common Stock" shall mean the Corporation's voting common
stock, par value $0.01 per share, existing on the date of this
Certificate of Designation or one or more classes of common stock or
other securities (including but not limited to tracking stock) of the
Corporation as such stock may be constituted or converted from time to
time.
"Constituent Person" shall have the meaning set forth in
paragraph (9)(e)(i).
"Conversion Rate" shall have the meaning set forth in
paragraph (9)(a).
"Corporation" shall have the meaning set forth in the
preamble, until a successor replaces it and thereafter means the
successor or any subsequent successor thereto.
"Current Market Price" of publicly traded shares of Common
Stock or any other class of capital stock or other security of the
Corporation or any other issuer for any day shall mean the last
reported sale price for such security on the principal exchange or
quotation system on which such security is listed or traded as of the
close of the applicable regular trading hours for such Trading Day, or
if such day is not a Trading Day, the last reported sales price for
such security on such principal exchange or quotation system as of the
close of the applicable regular trading hours for the immediately
preceding Trading Day. If the security is not admitted for trading on
any national securities exchange or the Nasdaq National Market,
"Current Market Price" for any day shall mean the average of the last
reported closing bid and asked prices reported by the Nasdaq for such
day as furnished by any member in good standing of the National
Association of Securities Dealers, Inc., selected from time to time by
the Corporation for
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that purpose or as quoted by the National Quotation Bureau
Incorporated. In the event that no such quotation is available for
such day, the Current Market Price shall be the average of the
quotations for the last five Trading Days for which a quotation is
available within the last 30 Trading Days prior to such day. In the
event that five such quotations are not available within such
30-Trading Day period, the Board of Directors shall be entitled to
determine the Current Market Price on the basis of such quotations as
it reasonably considers appropriate.
"Definitive Schedule 14A" shall mean the Corporation's
Definitive Schedule 14A, dated August 21, 2000 (as amended and
supplemented after such date), filed by the Corporation with the SEC
in connection with the solicitation of the Corporation's shareholders
to approve, among other matters, (A) a wholly-owned subsidiary of the
Successor Corporation (or in the event that the Voyager.net merger is
completed prior to the ATX merger, the Delaware corporation surviving
the Domestication Merger) merging with and into Voyager.net with
Voyager.net remaining as the surviving corporation in the merger, or
(B) the Delaware corporation surviving the Domestication Merger
merging with and into ATX with ATX as the surviving corporation in the
merger, or (C) the Domestication Merger.
"Determination Date" shall have the meaning set forth in
paragraph (9)(d)(ii).
"Dividend Payment Date" shall mean August [ ], November [
], February [ ] and May [ ] of each year, commencing on November [
], 2000; provided, however, that, if any Dividend Payment Date falls
on any day other than a Business Day, the dividend payment due on such
Dividend Payment Date shall be paid on the Business Day immediately
following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods
commencing on and including August [ ], November [ ], February [
] and May [ ] of each year and ending on and including the day
preceding the first day of the next succeeding Dividend Period (other
than the initial Dividend Period which shall commence on the Issue
Date and end on and include November [ ], 2000).
"Domestication Merger" means a merger of the Corporation into
a Delaware corporation with the Delaware corporation as the surviving
corporation in the merger in connection with the completion of either
of the ATX merger or the Voyager.net merger, as described in the
Definitive Schedule 14A.
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"8.5% Preferred Shares, Series A" shall have the meaning set
forth in paragraph (1).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Expiration Time" shall have the meaning set forth in
paragraph (9)(d)(v).
"Extended Tolling Period" shall have the meaning set forth in
paragraph (8)(d)(ii).
"Holdco" shall have the meaning set forth in paragraph
(9)(e)(ii).
"Holder" shall have the meaning set forth in Exhibit A.
"HSR Act" shall have the meaning set forth in paragraph 9(b).
"Initial Holder" shall mean Booth American Company.
"Issue Date" shall mean the date on which shares of 8.5%
Preferred Shares, Series A are first issued by the Corporation.
"Junior Securities" shall have the meaning set forth in
paragraph (4)(c).
"Junior Securities Distributions" shall have the meaning set
forth in paragraph (5)(f).
"Liquidation Preference" shall mean $1,000 per share of 8.5%
Preferred Shares, Series A.
"Liquidation Right" shall mean, for each share of 8.5%
Preferred Shares, Series A, the greater of (i) an amount equal to
$1,000 per share, plus an amount equal to all dividends (whether or
not declared) accrued and unpaid thereon, determined in accordance
with paragraph 5(a), to the date of final distribution to such holders
and (ii) the amount that would be received in liquidation following
conversion of a share of 8.5% Preferred Shares, Series A into Common
Stock.
"Mandatory Redemption Date" shall have the meaning set forth
in paragraph (7)(b).
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"Mandatory Redemption Obligation" shall have the meaning set
forth in paragraph (7)(c).
"Memorandum of Association" shall have the meaning set forth
in the preamble.
"Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
securities market regulated by the National Association of Securities
Dealers, Inc.
"Nasdaq National Market" shall have the meaning set forth in
Rule 4200(a)(23) of the rules of the National Association of
Securities Dealers, Inc.
"non-electing share" shall have the meaning set forth in
paragraph(9)(e)(i).
"Notice of Conversion" shall have the meaning set forth in
paragraph (8)(d).
"NYSE" means the New York Stock Exchange.
"outstanding" when used with reference to shares of capital
stock, shall mean issued shares, excluding shares held by the
Corporation or a subsidiary.
"Parity Securities" shall have the meaning set forth in
paragraph (4)(b).
"Permitted Designee" shall mean: (i) a spouse or child of a
Permitted Holder, (ii) trusts for the benefit of a Permitted Holder or
a spouse or child of a Permitted Holder, (iii) in the event of the
death or incompetence of a Permitted Holder, his estate, heirs,
executor, administrator, committee or other personal representative,
or (iv) any Person so long as a Permitted Holder owns at least 50% of
the voting power of all classes of the voting stock of such Person.
"Permitted Holders" shall mean George S. Blumenthal, Barclay
Knapp and their Permitted Designees.
"Person" shall mean any individual, partnership, association,
joint venture, corporation, business, trust, joint stock company,
limited liability company, any unincorporated organization, any other
entity, a "group" of
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such persons, as that term is defined in Rule 13d-5(b) under the
Exchange Act, or a government or political subdivision thereof.
"Preferred Share Certificate" shall have the meaning set forth
in paragraph 9(o).
"Preferred Shares" shall have the meaning set forth in the
first resolution.
"Purchase Agreement" shall mean the purchase agreement between
the Corporation and the Initial Holder, dated as of August 4, 2000,
with respect to the sale and purchase of the 8.5% Preferred Shares,
Series A, including all amendments thereto.
"Purchase Shares" shall have the meaning set forth in
paragraph (9)(d)(v).
"Record Date" shall have the meaning set forth in paragraph
(9)(d)(iv).
"Rights" shall have the meaning set forth in paragraph (14).
"Rights Agreement" shall have the meaning set forth in
paragraph (14).
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in paragraph
(9)(d)(iii).
"Securities Act" shall mean the Securities Act of 1933 and the
rules and regulations promulgated thereunder.
"Senior Securities" shall have the meaning set forth in
paragraph (4)(a).
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Corporation
in its accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that, if any funds for any class or series of
Junior Securities or any class or series of Parity Securities are
placed in a separate account of the Corporation or delivered to a
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disbursing, paying or other similar agent, then "set apart for
payment" with respect to the 8.5% Preferred Shares, Series A shall
mean placing funds in a separate account of the Corporation or
delivering such funds to a disbursing, paying or other similar agent,
as the case may be.
"Special Conversion Price" shall have the meaning set forth in
paragraph (9)(f)(i).
"Successor Corporation" means ATX in the event (i) the
Domestication Merger is completed and (ii) the Delaware corporation
surviving the Domestication Merger is merged with and into ATX with
ATX as the surviving corporation in the merger, as described in the
Definitive Schedule 14A.
"Tolling Period" shall have the meaning set forth in paragraph
(8)(d)(i).
"Trading Day" shall mean any day on which the securities in
question are traded on the NYSE or, if such securities are not listed
or admitted for trading on the NYSE, on the principal national
securities exchange on which such securities are listed or admitted
or, if not listed or admitted for trading on any national securities
exchange, on the Nasdaq National Market or, if such securities are not
quoted thereon, in the applicable securities market in which the
securities are traded.
"25-Day Average Market Price" shall mean, for any security,
the volume-weighted average of the Current Market Prices of that
security for the twenty-five Trading Days immediately preceding the
date of determination.
"Voyager.net" means Voyager.net, Inc., a Delaware corporation.
(3) Currency. All shares of 8.5% Preferred Shares,
Series A shall be denominated in United States currency, and all payments and
distributions thereon or with respect thereto and redemptions thereof shall be
made in United States currency. All references herein to "$", "dollars", "c."
or "cents" refer to United States currency.
(4) Rank. Any class or series of capital stock of the
Corporation whether now existing or hereafter created shall be deemed to rank:
(a) prior to the 8.5% Preferred Shares, Series A, either
as to the payment of dividends or as to the distribution of assets upon
liquidation, dissolution
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or winding up, or both, if the holders of such class or series shall be
entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, voluntary or
involuntary, or both, in preference or priority to the holders of 8.5%
Preferred Shares, Series A ("Senior Securities");
(b) on a parity with the 8.5% Preferred Shares, Series A,
either as to the payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, or both, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share
thereof be different from those of the 8.5% Preferred Shares, Series A, if the
holders of the 8.5% Preferred Shares, Series A and of such class of stock or
series shall be entitled by the respective terms thereof to the receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, voluntary or involuntary, or both, in proportion to their respective
amounts of accrued and unpaid dividends per share or liquidation preferences,
without preference or priority one over the other and such class of stock or
series is not a class of Senior Securities ("Parity Securities"); and
(c) junior to the 8.5% Preferred Shares, Series A, either
as to the payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, or both, if such stock or series shall
be Common Stock or if the holders of the 8.5% Preferred Shares, Series A shall
be entitled to receipt of dividends, and of amounts distributable upon
liquidation, dissolution or winding up, voluntary or involuntary, or both, in
preference or priority to the holders of shares of such stock or series
("Junior Securities").
(d) The 8.5% Preferred Shares, Series A and one or more
classes or series of Additional Preferred shall rank on a parity with any
shares of preferred stock issued by the Successor Corporation to stockholders
of ATX as to dividends or of amounts distributable upon liquidation,
dissolution or winding up, voluntary or involuntary, or both. One or more
classes or series of Additional Preferred shall be Parity Securities; provided,
however, that there shall be no issue of Senior Securities or rights or options
exercisable for or convertible into any Senior Securities, except as approved
by the holders of the 8.5% Preferred Shares, Series A pursuant to paragraph
12(c).
(e) The respective definitions of Senior Securities,
Junior Securities and Parity Securities shall also include any rights or
options exercisable for or convertible into any of the Senior Securities,
Junior Securities and Parity Securities, as the case may be. The 8.5%
Preferred Shares, Series A shall be subject to the creation of Junior
Securities, Parity Securities and Senior Securities as set forth herein.
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(5) Dividends. (a) Subject to paragraph (9)(b)(ii), the
holders of shares of 8.5% Preferred Shares, Series A shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, dividends at the quarterly rate
of $21.25 per share (assuming the Liquidation Preference), subject to
adjustment in accordance with subparagraph (ii)(B) below, payable in (i) shares
of Common Stock (such Common Stock for this purpose to be assigned a value
equal to the 25-Day Average Market Price as of the record date for such
Dividend Payment Date); provided that the Corporation may only pay a quarterly
dividend in shares of its Common Stock if such shares are issued under an
effective registration statement or if a shelf registration statement for the
resale of such shares is in effect on the relevant Dividend Payment Date or
(ii) additional shares of Preferred Shares of a class or series to be
designated by the Board of Directors having terms substantially identical to
the 8.5% Preferred Shares, Series A, except as follows: (A) the conversion rate
of such additional shares of Preferred Shares shall reflect that the conversion
price of the Common Stock issuable on such Preferred Shares shall be at a 20.0%
premium to the 25-Day Average Market Price as of the record date for such
Dividend Payment Date; (B) the number of shares of such Preferred Shares
payable as a dividend on any Dividend Payment Date shall be equal to the
product of (I) 0.02125 multiplied by (II) the sum of (1) the aggregate
Liquidation Preference of the 8.5% Preferred Shares, Series A on the Issue
Date, (2) the aggregate liquidation preference of the additional shares of
Preferred Shares (assuming a $1,000 face amount) paid on any one or more
previous Dividend Payment Dates (such classes or series of Preferred Shares
singularly and collectively, the "Additional Preferred"), and (3) the aggregate
amount of dividends accrued and unpaid on the 8.5% Preferred Shares, Series A
and Additional Preferred (whether or not declared) on any one or more previous
Dividend Payment Dates; and (C) any certificate of designation filed in
connection with the issuance of Additional Preferred shall provide that the
mandatory redemption date for such shares of Additional Preferred shall be the
tenth (10th) anniversary of the Issue Date. All dividends on the 8.5%
Preferred Shares, Series A, in whatever form, shall be payable in arrears
quarterly on each Dividend Payment Date and shall be cumulative from the Issue
Date (except that dividends on Additional Preferred shall accrue from the date
such Additional Preferred is issued or would have been issued in accordance
with this Certificate of Designation if such dividends had been declared),
whether or not in any Dividend Period or Dividend Periods there shall be funds
of the Corporation legally available for the payment of such dividends. Each
such dividend shall be payable to the holders of record of shares of 8.5%
Preferred Shares, Series A, as they appear on the stock records of the
Corporation at the close of business on the record date for such dividend.
Upon the declaration of any such dividend, the Board of Directors shall fix as
such record date on the fifth (5th) Business Day preceding the relevant
Dividend Payment Date and shall give written notice on or prior to the relevant
record date of the form of payment of such dividend. Accrued and unpaid
dividends for any past Dividend Payment Date may be declared and paid
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at any time, without reference to any Dividend Payment Date, to holders of
record on such record date, not more than 45 days nor less than five Business
Days preceding the payment date thereof, as may be fixed by the Board of
Directors.
(b) For the purpose of determining the number of shares
of Additional Preferred to be issued pursuant to paragraph (5)(a), each such
share of Additional Preferred shall be valued at $1,000.00. The applicable
certificate of designation for each class or series of Additional Preferred
shall provide that holders of such shares of Additional Preferred shall be
entitled to receive dividends payable at the rates specified in paragraph
(5)(a) and under the terms specified in paragraph (5).
(c) The Corporation may issue fractional shares of
Additional Preferred on a Dividend Payment Date.
(d) The dividends payable for the initial Dividend
Period, or any other period shorter or longer than a full Dividend Period, on
the 8.5% Preferred Shares, Series A shall accrue daily and be computed on the
basis of a 360-day year consisting of twelve 30-day months. Holders of shares
of 8.5% Preferred Shares, Series A shall not be entitled to receive any
dividends, whether payable in Common Stock or Additional Preferred, which are
in excess of the cumulative dividends provided for herein. No interest, or sum
of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the 8.5% Preferred Shares, Series A that may be in
arrears except as otherwise provided herein.
(e) So long as any shares of the 8.5% Preferred Shares,
Series A are outstanding, no dividends, except as described in the next
succeeding sentence, shall be declared or paid or set apart for payment on
Parity Securities or Junior Securities, for any period, nor shall any Parity
Securities or Junior Securities 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 Parity Securities or Junior Securities) by
or on behalf of the Corporation, directly or indirectly (except for conversion
into or exchange into other Parity Securities or Junior Securities, as the case
may be) unless, in each case, (i) full cumulative dividends on all outstanding
shares of the 8.5% Preferred Shares, Series A for all Dividend Periods
terminating on or prior to the date of such redemption, repurchase or other
acquisition shall have been paid or set apart for payment, (ii) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 8.5% Preferred Shares, Series A,
(iii) the Corporation is not in default with respect to any redemption of
shares of 8.5% Preferred Shares, Series A by the Corporation pursuant to
paragraph (7) and (iv) holders of at least seventy-five percent (75%) of the
aggregate Liquidation Preference of all shares of issued and outstanding 8.5%
Preferred Shares, Series A
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shall have consented in writing to such dividend, redemption, purchase or other
acquisition. When dividends are not fully paid in Common Stock or Additional
Preferred, as aforesaid, all dividends declared upon shares of the 8.5%
Preferred Shares, Series A and all dividends declared upon Parity Securities
shall be declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the 8.5% Preferred Shares, Series A and accumulated
and unpaid on such Parity Securities.
(f) So long as any shares of the 8.5% Preferred Shares,
Series A are outstanding, no dividends (other than (i) any Rights issued
pursuant to the Rights Agreement and (ii) dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities) shall be declared or paid or set apart for payment or
other distribution declared or made upon Junior Securities, nor shall any
Junior Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by or on behalf of the
Corporation, directly or indirectly (except by conversion into or exchange for
Junior Securities), unless, in each case, (A) full cumulative dividends on all
outstanding shares of the 8.5% Preferred Shares, Series A and all Parity
Securities shall have been paid or set apart for payment for all past Dividend
Periods and past dividend periods for such Parity Securities, (B) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 8.5% Preferred Shares, Series A and
all Parity Securities, (C) the Corporation is not in default with respect to
any redemption of shares of 8.5% Preferred Shares, Series A by the Corporation
pursuant to paragraph (7) and (D) the Corporation has fully performed its
obligations under paragraph (7) and (D) holders of at least seventy-five
percent (75%) of the aggregate Liquidation Preference of all shares of issued
and outstanding 8.5% Preferred Shares, Series A shall have consented in writing
to such dividend, redemption, purchase or other acquisition.
(6) Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of Junior Securities, the holders of the shares of 8.5% Preferred
Shares, Series A shall be entitled to receive the Liquidation Right. If, upon
any liquidation, dissolution or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distributable among the holders of the
shares of 8.5% Preferred Shares, Series A shall be insufficient to pay in full
the preferential amount aforesaid and liquidating payments on any Parity
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Securities, then such assets, or the proceeds thereof, shall be distributed
among the holders of shares of 8.5% Preferred Shares, Series A and any such
Parity Securities ratably in accordance with the respective amounts that would
be payable on such shares of 8.5% Preferred Shares, Series A and any such
Parity Securities if all amounts payable thereon were paid in full. For the
purposes of this paragraph (6), a Change of Control transaction (other than a
transaction meeting the requirements of subparagraph (i) of the definition of
"Change of Control" set forth in paragraph (2)) shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 8.5% Preferred
Shares, Series A, as provided in this paragraph (6), any other series or class
or classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the 8.5% Preferred
Shares, Series A shall not be entitled to share therein.
(c) The liquidation preference with respect to any Parity
Securities shall be as set forth in the certificate of designation in respect
thereof.
(7) Redemption. (a) On or after the first Business Day
following the earlier to occur of (i) the fifth anniversary of the Issue Date,
(ii) the date on which the 25-Day Average Market Price of the Common Stock
shall have exceeded 150% of the conversion price determined pursuant to
paragraph (9)(a) during the period beginning on the second anniversary of the
Issue Date and ending on the day immediately preceding the third anniversary of
the Issue Date, (iii) the date on which the 25-Day Average Market Price of the
Common Stock shall have exceeded 200% of the conversion price determined
pursuant to paragraph (9)(a) during the period beginning on the third
anniversary of the Issue Date and ending on the day immediately preceding the
fourth anniversary of the Issue Date and (iv) the date on which the 25-Day
Average Market Price of the Common Stock shall have exceeded 250% of the
conversion price determined pursuant to paragraph (9)(a) during the period
beginning on the fourth anniversary of the Issue Date and ending on the day
immediately preceding the fifth anniversary of the Issue Date, the Corporation
may redeem at its option outstanding shares of 8.5% Preferred Shares, Series A,
in whole or from time to time in part, payable at the option of the Corporation
in (A) shares of Common Stock, at a redemption price of $1,000.00 per share,
except in the case of a redemption pursuant to subparagraph (i) of this
paragraph, in which case the redemption price shall be $1,010.00 per share, (B)
cash, at a redemption price of $1,000.00 per share, except in the case of a
redemption pursuant to subparagraph (i) of this paragraph, in which case the
redemption price shall be $1,010.00 per share or (C) a combination of cash and
Common Stock, at a redemption price of $1,000 per
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<PAGE> 15
share, except in the case of a redemption pursuant to subparagraph (i) of this
paragraph, in which case the redemption price shall be $1,010.00 per share
based on the respective combination of consideration, together, in each case,
with accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (7)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price as of the date of the notice of redemption under paragraph
(8)(a). The Corporation may elect to pay all or a portion of the redemption
price to any holder of 8.5% Preferred Shares, Series A, in cash, if the
Corporation prior to such cash payment shall have received the written approval
of such holder of the shares of 8.5% Preferred Shares, Series A, subject to
redemption. Any right of the Corporation to redeem shares of 8.5% Preferred
Shares, Series A under the terms of subparagraph (ii), (iii) or (iv) of this
paragraph 7(a), respectively, shall terminate on the day immediately preceding
the third, fourth and fifth anniversaries of the Issue Date, respectively.
Subject to the terms of this paragraph (7), the Corporation shall have the
right to redeem shares of 8.5% Preferred Shares, Series A in accordance with
this paragraph (7)(a) at any time on after the first Business Day following the
fifth anniversary of the Issue Date. Any redemption of shares of 8.5%
Preferred Shares, Series A occurring on or after the date set forth in
subparagraph (i) of this paragraph (7)(a) and prior to the Mandatory Redemption
Date shall be at a redemption price of $1,010.00 per share. The per share
amounts specified in subparagraphs (ii), (iii) and (iv) of this paragraph shall
be adjusted for any stock splits, stock dividends, recombinations and similar
events occurring on or after the Issue Date.
(b) If the Corporation shall not have redeemed all
outstanding shares of 8.5% Preferred Shares, Series A pursuant to paragraph
(7)(a), prior to the tenth anniversary of the Issue Date (the "Mandatory
Redemption Date"), to the extent the Corporation shall have funds legally
available for such payment, the Corporation shall redeem all outstanding shares
of 8.5% Preferred Shares, Series A, at a redemption price of $1,000.00 per
share, payable at the option of the Corporation in shares of Common Stock, cash
or a combination thereof, together with accrued and unpaid dividends thereon,
whether or not declared, to, but excluding, the Mandatory Redemption Date,
without interest. For purposes of determining the number of shares of Common
Stock to be issued pursuant to this paragraph (7)(b), the price per share of
Common Stock shall be the 25-Day Average Market Price as of the Mandatory
Redemption Date. The Corporation may elect to pay all or a portion of the
redemption price in cash to any holder of shares of 8.5% Preferred Shares,
Series A if the Corporation prior to such cash payment shall have received the
written approval of such holder of the shares of 8.5% Preferred Shares, Series
A, subject to redemption.
(c) If the Corporation is unable or shall fail to
discharge its obligation to redeem all outstanding shares of 8.5% Preferred
Shares, Series A
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<PAGE> 16
pursuant to paragraph 7(b) (a "Mandatory Redemption Obligation"), the Mandatory
Redemption Obligation shall be discharged as soon as the Corporation is able to
discharge such Mandatory Redemption Obligation. If and so long as the
Mandatory Redemption Obligation with respect to the 8.5% Preferred Shares,
Series A shall not be fully discharged, the Corporation shall not (i) directly
or indirectly, redeem, purchase, or otherwise acquire any Parity Security or
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of any Parity Securities (except in connection with a
redemption, sinking fund or other similar obligation to be satisfied pro rata
with the 8.5% Preferred Shares, Series A) or (ii) declare or make any Junior
Securities Distribution (other than dividends or distributions paid in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
Junior Securities), or, directly or indirectly, discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of the
Junior Securities. Dividends shall continue to accrue on all issued and
outstanding shares of 8.5% Preferred Shares, Series A, subsequent to the
Mandatory Redemption Date, as provided in paragraph (5)(a), until all shares of
8.5% Preferred Shares, Series A have been redeemed in accordance with
paragraphs (7) and (8).
(d) Upon any redemption by the Corporation of shares of
8.5% Preferred Shares, Series A under paragraph (7)(a), it shall be a
requirement that the Corporation shall pay the redemption price and any accrued
and unpaid dividends in arrears (in accordance with paragraph (5)(a)) to, but
excluding, the applicable redemption date, without interest. Under no
circumstances may the Corporation complete a redemption under paragraph (7)(a)
without including in the redemption price the price of redeeming accrued and
unpaid dividends.
(e) For purposes of paragraph (7)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of
8.5% Preferred Shares, Series A and any Parity Securities shall have been paid
or contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
written notice has been given in accordance with paragraph (8), none of the
shares of 8.5% Preferred Shares, Series A shall be redeemed, and no sum shall
be set aside for such redemption, unless shares of 8.5% Preferred Shares,
Series A are redeemed pro rata with the Parity Securities and notice has
previously been given in accordance with paragraph (8).
(8) Procedure for Redemption. (a) If the Corporation shall
redeem shares of 8.5% Preferred Shares, Series A pursuant to paragraph 7(a),
notice of such redemption shall be given by certified mail, return receipt
requested, postage prepaid, mailed not less than 30 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation
and confirmed by facsimile transmission on the
16
<PAGE> 17
date of such notice to each holder of record if the Corporation has been
furnished with such facsimile address by the holder(s); provided, however, that
neither the failure to give such notice nor confirmation nor any defect therein
or in the mailing thereof, to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for redemption
with respect to any other holder. Any notice that was mailed in the manner
herein provided and confirmed by facsimile transmission on the date of such
notice if the Corporation has been furnished with such facsimile address by
such holder shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such notice shall
state: (i) the redemption date; (ii) the number of shares of 8.5% Preferred
Shares, Series A to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of shares to be redeemed from such
holder; (iii) the amount payable, whether such amount shall be paid in Common
Stock or in cash (subject to the consent of the applicable holder of shares of
8.5% Preferred Shares, Series A), or in a combination of Common Stock and cash
and, if the payment is to be made in Common Stock, an explanation of the
determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered; and (v) that dividends on
the shares to be redeemed will accrue up to, but excluding such redemption
date, without interest, except as otherwise provided herein.
(b) If notice has been mailed as aforesaid and confirmed
by facsimile transmission on the date of such notice, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 8.5% Preferred Shares, Series A so called
for redemption shall cease to accrue, (ii) such shares shall no longer be
deemed to be outstanding and (iii) all rights of the holders thereof as holders
of 8.5% Preferred Shares, Series A shall cease, except the right to receive
from the Corporation the redemption price without interest thereon, upon
surrender and endorsement of their certificates if so required, and to receive
all accrued and unpaid dividends thereon, if any.
(c) Upon surrender in accordance with notice given
pursuant to this paragraph (8) of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus accrued and unpaid
dividends thereon, if any. If fewer than all the outstanding shares of 8.5%
Preferred Shares, Series A are to be redeemed, the number of shares to be
redeemed shall be determined by the Board of Directors and the shares to be
redeemed shall be selected pro rata (with any fractional shares being rounded
to the nearest whole share with "5" being rounded upward). In case fewer than
all the shares represented by any such certificate are redeemed, a new
certificate
17
<PAGE> 18
shall be issued, representing the surrendered shares without cost to the holder
thereof. No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the 8.5% Preferred Shares,
Series A. Instead of any fractional interest in a share of Common Stock that
would otherwise be deliverable upon the redemption of a share of 8.5% Preferred
Shares, Series A, the Corporation shall round upward to determine the whole
number of shares of Common Stock issuable upon redemption of the 8.5% Preferred
Shares, Series A. If more than one share of 8.5% Preferred Shares, Series A
shall be surrendered for redemption at one time by the same holder, the number
of whole shares of Common Stock issuable upon redemption thereof shall be
computed on the basis of the aggregate number of shares of 8.5% Preferred
Shares, Series A surrendered for redemption by such holder.
(d) (i) Notwithstanding any other provision of this
Certificate of Designation, any redemption initiated by the Corporation with
respect to shares of 8.5% Preferred Shares, Series A pursuant to paragraph
(7)(a) shall be suspended for one period of up to ninety (90) days (from and
after the applicable scheduled redemption date designated by the Corporation)
per redemption initiated by the Corporation (the "Tolling Period") solely for
the purpose of any holder of shares of 8.5% Preferred Shares, Series A
satisfying any applicable legal and regulatory approvals required to effect
conversion of the 8.5% Preferred Shares, Series A, and during such period any
redemption initiated by the Corporation with respect to shares of 8.5%
Preferred Shares, Series A shall have no force and effect, as to any shares of
8.5% Preferred Shares, Series A, which such holder shall elect to convert to
Common Stock pursuant to paragraph (9) by delivery to the Corporation of a
notice of election to convert in the form of Exhibit A to this Certificate of
Designation completed and signed, specifying the number of shares to be
converted (the "Notice of Conversion") at least five (5) Business Days prior to
the applicable redemption date designated by the Corporation by notice of
redemption to such holder pursuant to paragraph (8)(a).
(ii) The Corporation and the Initial Holder of shares of
8.5% Preferred Shares, Series A (and any subsequent holders of shares of 8.5%
Preferred Shares, Series A as a condition to their receipt of shares of 8.5%
Preferred Shares, Series A by purchase, set-off, gift, bequeath or other manner
of transfer, whether or not for value) attempting to effect conversion by the
holder of shares of 8.5% Preferred Shares, Series A subsequent to the
Corporation taking action to redeem such shares pursuant to paragraph (7)(a)
mutually covenant and agree to promptly make any and all filings (including
requests for additional information), and appearances, and to take any and all
other actions necessary to secure legal and regulatory approval to effect
conversion of the 8.5% Preferred Shares, Series A. In the event that at the
expiration of the Tolling Period any applicable legal and regulatory approvals
required to effect conversion of the 8.5% Preferred Shares,
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<PAGE> 19
Series A have not been secured as a direct result of the Corporation not
complying with its obligations in the first sentence of this subparagraph (ii),
the Tolling Period shall be extended (the "Extended Tolling Period) (through no
action on the part of the holder of such shares of 8.5% Preferred Shares,
Series A) until such applicable legal and regulatory approvals shall have been
obtained, or until it shall have been finally determined by the applicable
authority that any such legal and regulatory approval shall not be available;
but such Extended Tolling Period shall in no event extend beyond sixty (60)
days after the expiration of the Tolling Period unless the Corporation fails or
refuses during such Extended Tolling Period to comply with its obligations
under the first sentence of this subparagraph (ii). The Tolling Period or
Extended Tolling Period (as applicable) shall cease in the event that the
holder of shares of 8.5% Preferred Shares, Series A has not complied with its
obligations in the first sentence of this subparagraph (ii) after written
notice of such non-compliance by the Corporation to such holder by certified
mail return receipt requested, and failure by such holder to come into
compliance with its obligations under the first sentence of this subparagraph
(ii) within ten (10) Business Days after the date of such notice. In the event
the holder shall not within such period have come into full compliance with its
obligations under the first sentence of this subparagraph (ii), the Corporation
shall be permitted to immediately effect such redemption.
(9) Conversion. (a) Subject to and upon compliance
with the provisions of this paragraph (9), a holder of shares of 8.5% Preferred
Shares, Series A shall have the right, at any time and from time to time, at
such holder's option, to convert any or all outstanding shares of 8.5%
Preferred Shares, Series A held by such holder into validly issued, fully paid
and non- assessable shares of Common Stock or any other shares of capital stock
or other securities of the Corporation or a successor corporation into which
such Common Stock (or such other shares or securities) may thereafter be
changed or reclassified by surrendering such shares to be converted, such
surrender to be made in the manner provided in paragraph (9)(b). The number of
shares of Common Stock initially deliverable upon conversion of each share of
8.5% Preferred Shares, Series A shall be equal to the quotient of the
Liquidation Preference divided by 16.50; provided, however, that if the 25-Day
Average Market Price of the Common Stock for the period up to and including
September 14, 2000 shall be less than or equal to $13.75, then the number of
shares of Common Stock deliverable upon conversion of each share of 8.5%
Preferred Shares, Series A shall be the quotient of the Liquidation Preference
of such share divided by 120% of the 25-Day Average Market Price of the Common
Stock up to and including September 14, 2000. To the extent that there exist
any accrued and unpaid dividends attributable to the shares of 8.5% Preferred
Shares, Series A, for which a holder has sought conversion, at the time of such
conversion the number of shares of Common Stock to be delivered by the
Corporation shall be increased in an amount equal to the quotient of the
Liquidation Preference of that number of shares
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<PAGE> 20
of Additional Preferred which the accrued and unpaid dividends as of the date
of conversion would become if paid in the form of Additional Preferred on the
conversion date divided by 120% of the 25-Day Average Market Price of the
Common Stock as of: (a) the immediately preceding Dividend Payment Date with
respect to accrued and unpaid dividends that have accrued since the immediately
preceding Dividend Payment Date; or (b) the Dividend Payment Date on which such
accrued and unpaid dividends would have been paid. In addition to the
foregoing, to the extent a holder of shares of Additional Preferred elects to
convert such shares, the certificate of designation for such shares of
Additional Preferred shall provide that, upon conversion, the number of shares
of Common Stock deliverable upon conversion of each share of Additional
Preferred, shall be equal to the quotient of the Liquidation Preference of such
shares divided by 120% of the 25-Day Average Market Price of Common Stock as of
the record date for the Dividend Payment Date on which the Additional Preferred
was issued. In addition, the Certificate of Designation for such shares shall
provide for identical treatment of accrued and unpaid dividends as is provided
for herein. The applicable conversion rate provided above, as adjusted, is
hereinafter referred to as the "Conversion Rate". The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (9)(d). Subject
to paragraph (8)(d), the right to convert shares called for redemption pursuant
to paragraph 7(a) shall terminate at the close of business on the date
immediately preceding the date fixed for such redemption unless the Corporation
shall default in making payment of the amount payable upon such redemption,
including accrued and unpaid dividends thereon, if any, in which case such
right of conversion shall be reinstated. Upon conversion, any accrued and
unpaid dividends, if any, on the 8.5% Preferred Shares, Series A up to, but
excluding, the date of conversion shall be paid to the holder thereof in
accordance with the provisions of paragraph (5).
(b) (i) In order to exercise the conversion privilege, the
holder of each share of 8.5% Preferred Shares, Series A or Additional Preferred
to be converted shall surrender the certificate representing such share, duly
endorsed or assigned to the Corporation or in blank, at the office of the
Corporation, or to any transfer agent of the Corporation previously designated
by the Corporation to the holders of the 8.5% Preferred Shares, Series A or
Additional Preferred for such purposes, with the Notice of Conversion. The
Notice of Conversion shall state that the holder has satisfied or will have
satisfied prior to the issuance of shares of Common Stock upon conversion of
the 8.5% Preferred Shares, Series A or Additional Preferred any and all legal
or regulatory requirements for conversion, including compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). The Corporation shall use its reasonable best efforts in cooperating
with such holder to obtain such legal or regulatory approvals to the extent its
cooperation is necessary. Such notice shall also state the name or names (with
address and social security or other taxpayer identification number, if
20
<PAGE> 21
applicable) in which the certificate or certificates for Common Stock are to be
issued. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of 8.5% Preferred Shares, Series A or
Additional Preferred is registered, each share surrendered for conversion shall
be accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or the 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 or satisfied in full). All certificates representing
shares of 8.5% Preferred Shares, Series A or Additional Preferred surrendered
for conversion shall be canceled by the Corporation or the transfer agent and
shall not thereafter be reissued.
(ii) Subject to the last sentence of paragraph (9)(a),
holders of shares of 8.5% Preferred Shares, Series A or Additional Preferred at
the close of business on a record date or a Dividend Payment Date shall not be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date if such holder shall have surrendered for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.
(iii) As promptly as reasonably practicable after the
surrender by a holder of the certificates for shares of 8.5% Preferred Shares,
Series A or Additional Preferred, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(12)(b)) for the whole number of duly authorized, validly issued, fully paid
and non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (9), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (9)(c). Upon conversion
of only a portion of the shares of 8.5% Preferred Shares, Series A or
Additional Preferred represented by any certificate, a new certificate shall be
issued representing the unconverted portion of the certificate so surrendered
without cost to the holder thereof. Upon the surrender of certificates
representing shares of 8.5% Preferred Shares, Series A or Additional Preferred
to be converted, such shares shall no longer be deemed to be outstanding and
all rights of a holder with respect to such shares so surrendered shall
immediately terminate except the right to receive the Common Stock and other
amounts payable pursuant to this paragraph (9).
(c) (i) No fractional shares or scrip representing
fractions of shares of Common Stock shall be issued upon conversion of the 8.5%
Preferred Shares, Series A or Additional Preferred. Instead of any fractional
interest in a share of Common Stock that would otherwise be deliverable upon
the conversion of a share of 8.5% Preferred Shares, Series A or Additional
Preferred, the Corporation shall round upward to determine the whole number of
shares of Common Stock issuable upon conversion of the 8.5% Preferred Shares,
Series A or Additional Preferred. If more than one share of 8.5% Preferred
Shares, Series A or Additional Preferred shall be surrendered for conversion at
one time by the same holder, the number of whole shares of Common Stock
21
<PAGE> 22
issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of 8.5% Preferred Shares, Series A or Additional
Preferred surrendered for conversion by such holder.
(ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of 8.5% Preferred Shares, Series A or Additional
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 for 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 of Common Stock represented thereby at such time on such date and
such conversion shall be into a number of shares of Common Stock as determined
in accordance with paragraph (9)(a), unless the stock transfer books 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 books are
open, but such conversion shall be based upon the applicable Conversion Rate in
effect on the date upon which such shares shall have been surrendered and such
notice received by the Corporation.
(d) The Conversion Rate shall be subject to adjustment
from time to time as follows:
(i) If the Corporation shall after the Issue Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) effect any reclassification of its outstanding Common Stock,
including a reclassification into one or more classes of Common Stock or other
securities (including, tracking stock), the Conversion Rate in effect on the
record date for such dividend or distribution, or the effective date of such
subdivision, combination or reclassification, as the case may be, shall be
proportionately adjusted so that the holder of any share of 8.5% Preferred
Shares, Series A thereafter surrendered for conversion shall be entitled to
receive the number and kind of shares of Common Stock (or other securities)
that such holder would have owned or have been entitled to receive after the
happening of any of the events described above had such share of 8.5% Preferred
Shares, Series A been converted immediately prior to the record date in the
case of a dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made pursuant to
this subparagraph (i) shall become effective immediately after the opening of
business on
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<PAGE> 23
the Business Day next following the record date (except as provided in
paragraph (9)(h)) in the case of a dividend or distribution and shall become
effective immediately after the opening of business on the Business Day next
following the effective date in the case of a subdivision, combination or
reclassification. Adjustments in accordance with this paragraph (9)(d)(i)
shall be made whenever any event listed above shall occur.
(ii) If the Corporation shall after the Issue Date fix a
record date for the issuance of rights or warrants (in each case, other than
any Rights issued pursuant to the Rights Agreement) to all holders of Common
Stock entitling them (for a period expiring within 45 days after such record
date) to subscribe for or purchase Common Stock (or securities convertible or
exercisable into Common Stock) at a price per share (or, in the case of a right
or warrant to purchase securities convertible or exercisable into Common Stock,
having an effective exercise price per share of Common Stock, computed on the
basis of the maximum number of shares of Common Stock issuable upon conversion
or exercise of such convertible or exercisable securities, as the case may be,
plus the amount of additional consideration payable, if any, to receive one
share of Common Stock upon conversion or exercise of such securities, as the
case may be) less than the 25-Day Average Market Price on the date on which
such issuance was declared or otherwise announced by the Corporation (the
"Determination Date"), then the Conversion Rate in effect at the opening of
business on the Business Day next following such record date shall be adjusted
so that the holder of each share of 8.5% Preferred Shares, Series A shall be
entitled to receive, upon the conversion thereof, the number of shares of
Common Stock determined by multiplying (I) the Conversion Rate in effect
immediately prior to such record date by (II) a fraction, the numerator of
which shall be the sum of (A) the number of shares of Common Stock outstanding
on the close of business on the Determination Date and (B) the number of
additional shares of Common Stock offered for subscription or purchase pursuant
to such rights or warrants (or in the case of a right or warrant to purchase
securities convertible or exercisable into Common Stock, the aggregate number
of additional shares of Common Stock into which the convertible or exercisable
securities so offered are initially convertible or exercisable), and the
denominator of which shall be the sum of (A) the number of shares of Common
Stock outstanding on the close of business on the Determination Date and (B)
the number of shares that the aggregate proceeds to the Corporation from the
exercise of such rights or warrants for Common Stock would purchase at such
25-Day Average Market Price on such date (or, in the case of a right of warrant
to purchase securities convertible or exercisable into Common Stock, the number
of shares of Common Stock obtained by dividing the aggregate exercise price of
such rights or warrants for the maximum number of shares of Common Stock
issuable upon conversion or exercise of such convertible or exercisable
securities, plus the aggregate amount of additional consideration payable, if
any, to convert or exercise such securities into Common Stock, by such
23
<PAGE> 24
25-Day Average Market Price). Such adjustment shall become effective
immediately after the opening of business on the Business Day next following
such record date (except as provided in paragraph (9)(h)). Such adjustment
shall be made successively whenever such a record date is fixed. In the event
that after fixing a record date such rights or warrants are not so issued, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed. In determining whether any
rights or warrants entitle the holders of Common Stock to subscribe for or
purchase shares of Common Stock at less than such 25-Day Average Market Price,
there shall be taken into account any consideration received by the Corporation
upon issuance and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors
in good faith. If any rights or warrants referred to in this subparagraph (ii)
shall expire unexercised after the same shall have been distributed or issued
by the Corporation (or, in the case of rights or warrants to purchase
securities convertible or exercisable into Common Stock once exercised, the
conversion or exercise right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(iii) If the Corporation shall fix a record date for the
making of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (9)(d)(i)) or rights or warrants (in each case, other
than the Rights issued pursuant to the Rights Agreement) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45
days after such record date) to subscribe for or purchase Common Stock or
securities convertible or exercisable into shares of Common Stock, which rights
and warrants are referred to in and treated under subparagraph (ii) above) (any
of the foregoing being hereinafter in this subparagraph (iii) called the
"Securities"), then in each such case the Conversion Rate shall be adjusted so
that the holder of each share of 8.5% Preferred Shares, Series A shall be
entitled to receive, upon the conversion thereof, the number of shares of
Common Stock determined by multiplying (I) the Conversion Rate in effect
immediately prior to the close of business on such record date by (II) a
fraction, the numerator of which shall be the 25-Day Average Market Price per
share of the Common Stock on such record date, and the denominator of which
shall be the 25-Day Average Market Price per share of the Common Stock on such
record date less the then-fair market value (as determined by the Board of
Directors in good faith, whose determinations shall be conclusive) of the
portion of the assets, shares of its capital stock or evidences of indebtedness
so distributed or of such rights or warrants applicable to one share of
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<PAGE> 25
Common Stock. Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such
distribution is not so made, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. Such adjustment shall become effective immediately at the opening of
business on the Business Day next following (except as provided in paragraph
(9)(h)) the record date for the determination of shareholders entitled to
receive such distribution. For the purposes of this subparagraph (iii), the
distribution of a Security, which is distributed not only to the holders of the
Common Stock on the date fixed for the determination of shareholders entitled
to such distribution of such Security, but also is distributed with each share
of Common Stock delivered to a Person converting a share of 8.5% Preferred
Shares, Series A after such determination date, shall not require an adjustment
of the Conversion Rate pursuant to this subparagraph (iii); provided, however,
that on the date, if any, on which a Person converting a share of 8.5%
Preferred Shares, Series A would no longer be entitled to receive such Security
with a share of Common Stock (other than as a result of the termination of all
such Securities), a distribution of such Securities shall be deemed to have
occurred and the Conversion Rate shall be adjusted as provided in this
subparagraph (iii) (and such day shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution" and "the
record date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii) shall expire
unexercised after the same shall have been distributed or issued by the
Corporation (or, in the case of rights or warrants to purchase securities
convertible or exercisable into Common Stock once exercised, the conversion
right of such securities shall expire), the Conversion Rate shall be readjusted
at the time of such expiration to the Conversion Rate that would have been in
effect if no adjustment had been made on account of the distribution or
issuance of such expired rights or warrants.
(iv) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock cash in the amount per
share that, together with the aggregate of the per share amounts of any other
cash distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of
such dividend or distribution (excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, and any cash that is distributed upon a
merger, consolidation or other transaction for which an adjustment pursuant to
paragraph 9(e) is made), then, in such case, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by multiplying (I)
the Conversion Rate in effect immediately prior to the close of business on the
Record Date for the cash dividend or distribution by (II) a fraction,
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<PAGE> 26
the numerator of which shall be the Current Market Price of a share of the
Common Stock on the Record Date and the denominator shall be such Current
Market Price less the per share amount of cash so distributed during the
12-month period applicable to one share of Common Stock, such adjustment to be
effective immediately prior to the opening of business on the Business Day
following the Record Date; provided, however, that in the event the denominator
of the foregoing fraction is zero or negative, in lieu of the foregoing
adjustment, adequate provision shall be made so that each holder of 8.5%
Preferred Shares, Series A shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
share of 8.5% Preferred Shares, Series A at the beginning of the 12-month
period. In the event that such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate
which would then be in effect if such dividend or distribution had not been
declared. Notwithstanding the foregoing, if any adjustment is required to be
made as set forth in this paragraph (9)(d)(iv), the calculation of any such
adjustment shall include the amount of the quarterly cash dividends paid during
the 12-month reference period only to the extent such dividends exceed on an
aggregate basis the regular quarterly cash dividends paid during the 12 months
preceding the 12-month reference period. For purposes of this paragraph
(9)(d)(iv), "Record Date" shall mean, with respect to any dividend or
distribution in which the holders of Common Stock have the right to receive
cash, the date fixed for determination of shareholders entitled to receive such
cash. In the event that at any time cash distributions to holders of Common
Stock are not paid equally on all series of Common Stock, the provisions of
this paragraph 9(d)(iv) will apply to any cash dividend or cash distribution on
any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.
(v) In case of the consummation of a tender or exchange
offer (other than an odd-lot tender offer) made by the Corporation or any
subsidiary of the Corporation for all or any portion of the outstanding shares
of Common Stock to the extent that the cash and fair market value (as
determined in good faith by the Board of Directors, whose determination shall
be conclusive and shall be described in a resolution of the Board of Directors)
of any other consideration included in such payment per share of Common Stock
at the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as amended) exceed by more than
5.0%, with any smaller excess being disregarded in computing the adjustment to
the Conversion Rate provided in this paragraph (9)(d)(v), the first reported
sale price per share of the Common Stock on the Trading Day next succeeding the
Expiration Time, then the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in
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<PAGE> 27
effect immediately prior to the Expiration Time by a fraction the numerator of
which shall be the sum of (I) the fair market value (determined as aforesaid)
of the aggregate consideration payable to shareholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchase Shares") and (II) the product of the number of shares of
Common Stock outstanding (less any Purchase Shares) on the Expiration Time and
the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and the denominator of which shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Expiration Time multiplied by the first reported sale
price of the Common Stock on the Trading Day next succeeding the Expiration
Time, such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time.
(vi) No adjustment in the Conversion Rate shall be
required unless such adjustment would require a cumulative increase or decrease
of at least 1.0% in the Conversion Rate; provided, however, that any
adjustments that by reason of this subparagraph (vi) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment until made; and provided further that any adjustment shall be
required and made in accordance with the provisions of this paragraph (9)
(other than this subparagraph (vi)) not later than such time as may be required
in order to preserve the tax-free nature of a distribution for United States
income tax purposes to the holders of shares of 8.5% Preferred Shares, Series A
or Common Stock. Notwithstanding any other provisions of this paragraph (9),
the Corporation shall not be required to make any adjustment of the Conversion
Rate for the issuance of any shares of Common Stock pursuant to any plan
providing for the reinvestment of dividends or interest payable on securities
of the Corporation and the investment of additional optional amounts in shares
of Common Stock under such plan. All calculations under this paragraph (9)
shall be made to the nearest cent or rounded upward to the nearest share, as
the case may be. The Conversion Rate and any adjustments thereto shall be
calculated to the fifth decimal point (with the sixth decimal point rounded
upward, when applicable). Anything in this paragraph (9)(d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (9)(d), as it in its discretion shall determine to
be advisable in order that any stock dividends, subdivision of shares,
reclassification or combination of shares, distribution of rights or warrants
to purchase stock or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its shareholders shall not
be taxable.
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<PAGE> 28
(vii) In the event that, at any time as a result of shares
of any other class of capital stock becoming issuable in exchange or
substitution for or in lieu of shares of Common Stock or as a result of an
adjustment made pursuant to the provisions of this paragraph (9)(d), the holder
of 8.5% Preferred Shares, Series A upon subsequent conversion shall become
entitled to receive any shares of capital stock of the Corporation other than
Common Stock or any shares of capital stock of a Successor Corporation, the
number of such other shares so receivable upon conversion of any shares of 8.5%
Preferred Shares, Series A shall thereafter be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions contained herein.
(viii) Any certificate of designation filed in connection
with the issuance of any class or series of Additional Preferred shall contain
terms substantially identical to this paragraph (9)(d).
(e) (i) Subject to paragraph (f) below, if the Corporation
shall be a party to a Change of Control transaction and excluding any
transaction as to which paragraph (9)(d)(i) applies), in each case as a result
of which shares of Common Stock shall be converted into the right to receive
stock, securities or other property (including cash or any combination
thereof), there shall be no adjustment to the Conversion Rate but each share of
8.5% Preferred Shares, Series A which is not converted into the right to
receive stock, securities or other property in connection with such Change of
Control transaction shall thereafter be convertible or exercisable into the
kind and amount of shares of stock, securities and other property (including
cash or any combination thereof) receivable upon the consummation of such
Change of Control transaction by a holder of that number of shares of Common
Stock into which one share of 8.5% Preferred Shares, Series A was convertible
or exercisable immediately prior to such Change of Control transaction,
assuming such holder of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation merged or which merged
into the Corporation or to which such sale or transfer was made, 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 stock, securities and other property (including cash) receivable upon
such Change of Control transaction (provided, that, if the kind or amount of
stock, securities and other property (including cash) receivable upon such
Change of Control transaction is not the same for each share of Common Stock
held immediately prior to such Change of Control transaction by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised (a "non-electing share"), then for
the purpose of this paragraph (9)(e) the kind and amount of stock, securities
and other property (including cash) receivable upon such Change of Control
transaction by each non-electing share shall be deemed to be the kind and
amount so receivable per
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share by a plurality of the non-electing shares). The provisions of this
paragraph (9)(e)(i) shall similarly apply to successive Change of Control
transactions.
(ii) Notwithstanding anything herein to the contrary, if
the Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation shall (A) cause Holdco to comply with
the terms of paragraph (11) and (B) by notice to the holders of the 8.5%
Preferred Shares, Series A, may cause the exchange of certificates evidencing
8.5% Preferred Shares, Series A for certificates evidencing preferred stock of
Holdco having the same terms and conditions as set forth herein if as a result
of such reorganization the corporation into which the shares of 8.5% Preferred
Shares, Series A are convertible does not have the identical name of the
Corporation; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 8.5% Preferred
Shares, Series A (including for these purposes any resultant change in the tax
treatment for the holders of such stock). The terms of this paragraph
(9)(e)(ii) shall also apply with respect to the Domestication Merger and to the
merger of the Delaware corporation surviving the Domestication Merger into ATX,
as described in the last paragraph of the definition of "Change of Control" in
paragraph (2).
(f) Notwithstanding anything herein to the contrary, if a
Change of Control occurs, each holder of shares of 8.5% Preferred Shares,
Series A shall have a one-time option, for a period of thirty (30) days
following written notice from the Corporation, which written notice shall be
given not less than fifteen (15) days prior to the expected occurrence of the
Change of Control, to convert all of its shares of 8.5% Preferred Shares,
Series A into shares of Common Stock at the Change of Control Conversion Rate.
The "Change of Control Conversion Rate" shall be equal to the Liquidation
Preference divided by the Special Conversion Price. The Change of Control
Conversion Rate shall be adjusted from time to time in accordance with the
provisions of paragraph (9) applicable generally to adjustment of the
Conversion Rate. Nothing in this paragraph (f) is intended to limit or alter
the conversion rights of a holder of shares of 8.5% Preferred Shares, Series A
in paragraph (9)(a). For purposes of this paragraph (9)(f), the following
definitions shall apply:
(i) "Special Conversion Price" shall mean the greater of
(x) 66.67% of the 25-Day Average Market Price of the Common Stock on and
including September 14, 2000 and (y) the Change of Control Price.
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<PAGE> 30
(ii) "Change of Control Price" shall mean (x) the fair
market value of the consideration that would be received by a holder of Common
Stock for one share of Common Stock in a Change of Control transaction from any
successor, acquiror or other third party if such transaction were to occur on
the date of the notice referred to in the first sentence of this paragraph
(9)(f) or (y) the Alternative Change of Control Price if the holders of Common
Stock do not receive any consideration in a Change of Control transaction from
any successor, acquiror or other third party. For purposes of this
definition, "Alternative Change of Control Price" shall mean the fair market
value per share of Common Stock on the date of the notice referred to in the
first sentence of this paragraph (9)(f).
(iii) "Change of Control Instigator" shall mean any
"Person" or "group", within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act or any successor provision to either of the foregoing, including
any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act, other
than any Permitted Holder, whose activities, actions or participation results,
directly or indirectly, in a Change of Control.
(g) If:
(i) the Corporation shall declare a dividend or any other
distribution on the Common Stock; or
(ii) the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or
(iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any Change of Control transaction for
which approval of any shareholders of the Corporation is required; or
(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (9)(b) and shall cause to be mailed by
certified mail, return receipt requested, to the holders of shares of the 8.5%
Preferred Shares, Series A at their addresses as shown on the stock records of
the Corporation, as promptly as reasonably practicable, but at least ten days
prior to the applicable date hereinafter specified, a notice stating (A) the
date on which a record is to be taken for the purpose of such dividend (or such
other distribution) or rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of
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<PAGE> 31
record to be entitled to such dividend, distribution or rights or warrants are
to be determined or (B) the date on which such subdivision, combination,
reclassification, Change of Control transaction, liquidation, dissolution or
winding up or other action 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 or other property, if
any, deliverable upon such subdivision, combination, reclassification, Change
of Control transaction, liquidation, dissolution or winding up. Failure to
give or receive such notice or any defect therein shall not affect the legality
or validity of any dividend, distribution, right, warrant, subdivision,
combination, reclassification, Change of Control transaction, liquidation,
dissolution, winding up or other action, or the vote upon any of the foregoing.
(h) Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect
to such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 8.5% Preferred Shares,
Series A at such holder's last address as shown on the stock records of the
Corporation and confirm by facsimile transmission on the date of such notice to
such holder if the Corporation has been furnished with such facsimile address
by such holder. If the Corporation shall have designated a transfer agent
pursuant to paragraph (9)(b), it shall also as promptly as reasonably
practicable file with such transfer agent an officer's certificate setting
forth the Conversion Rate after such adjustment and setting forth a brief
statement of the facts requiring such adjustment which certificate shall be
conclusive evidence of the correctness of such adjustment.
(i) In any case in which paragraph (9)(d) provides that
an adjustment shall become effective on the day next following a record date
for an event, the Corporation may defer until the occurrence of such event (i)
issuing to the holder of any share of 8.5% Preferred Shares, Series A converted
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the
adjustment contemplated by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment.
(j) For purposes of this paragraph (9), the number of
shares of Common Stock at any time outstanding shall not include any shares of
Common Stock then owned or held by or for the account of the Corporation.
(k) There shall be no adjustment of the Conversion Rate
in case of the issuance of any stock of the Corporation in a Change of Control
transaction, except as specifically set forth in this paragraph (9). If any
single action would
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require adjustment of the Conversion Rate pursuant to more than one
subparagraph of this paragraph (9), only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute
value.
(l) If the Corporation shall take any action affecting
the Common Stock, other than action described in this paragraph (9), that in
the opinion of the Board of Directors materially adversely affects the
conversion rights of the holders of the shares of 8.5% Preferred Shares, Series
A, the Conversion Rate may be adjusted by the Board of Directors, to the extent
permitted by law, in such manner, if any, and at such time, as the Board of
Directors may determine in good faith to be equitable in the circumstances;
provided that the provisions of this paragraph (9)(l) shall not affect any
rights the holders of 8.5% Preferred Shares, Series A may have at law or in
equity.
(m) (i) The Corporation covenants that it will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock for the purpose
of effecting conversion of the 8.5% Preferred Shares, Series A, the full number
of shares of Common Stock deliverable upon the conversion of all outstanding
shares of 8.5% Preferred Shares, Series A not theretofore converted. For
purposes of this paragraph (9)(m) the number of shares of Common Stock that
shall be deliverable upon the conversion of all outstanding shares of 8.5%
Preferred Shares, Series A shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
(ii) The Corporation covenants that any shares of Common
Stock initially issued upon conversion of the 8.5% Preferred Shares, Series A
shall be duly authorized, validly issued, fully paid and non-assessable.
Before taking any action that would cause an adjustment increasing the
Conversion Rate such that the quotient of the Liquidation Preference and the
Conversion Rate (which quotient initially shall be as described in paragraph
(9)(a) with respect to the shares of 8.5% Preferred Shares, Series A,
denominated in dollars and cents) would be reduced below the then-par value of
the shares of Common Stock deliverable upon conversion of the 8.5% Preferred
Shares, Series A, the Corporation will take any corporate action that, based on
the opinion of its counsel, may be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of Common Stock
with respect to such adjusted Conversion Rate.
(iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 8.5% Preferred
Shares, Series A, the Corporation shall comply with all applicable federal and
state laws and regulations which require action to be taken by the Corporation,
including but not limited to compliance with the Securities Act, the Exchange
Act, the HSR Act, the
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rules and regulations of Nasdaq (or any other exchange or automated quotation
system on which the Common Stock is then traded or listed). The Corporation
shall pay or cause to be paid the costs and expenses of the Initial Holder
associated with such compliance in accordance with the Purchase Agreement and
the Corporation agrees to pay or cause to be paid the costs and expenses of
subsequent holders of shares of 8.5% Preferred Shares, Series A associated with
such compliance.
(n) The Corporation will pay any and all documentary
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of shares of Common Stock or other securities or property on
conversion of the 8.5% Preferred Shares, Series A pursuant hereto; provided,
however, that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or other securities or property in a name other than that of
the holder of the 8.5% Preferred Shares, Series A to be converted and no such
issue or delivery shall be made unless and until the Person requesting such
issue or delivery has paid to the Corporation the amount of any such tax or
established, to the satisfaction of the Corporation, that such tax has been
paid or satisfied in full.
(10) Loss, Theft, Mutilation or Destruction of
Certificates. Upon receipt by the Corporation of evidence of the loss, theft,
destruction or mutilation of any certificates representing shares of 8.5%
Preferred Shares, Series A (the "Preferred Share Certificates") and (in the
case of loss, theft or destruction) of indemnity satisfactory to the
Corporation, and upon surrender and cancellation of the Preferred Share
Certificate(s), if mutilated, the Corporation shall execute and deliver new
Preferred Share Certificate(s) of like tenor and date. Any holder of 8.5%
Preferred Shares, Series A making a request under this paragraph (10) shall be
responsible for all costs and expenses associated therewith, including, but not
limited to the securing of an indemnity bond.
(11) Assumption of Obligations. Prior to the consummation
of a Change of Control transaction, the Domestication Merger, the merger of the
Delaware corporation surviving the Domestication Merger into ATX, as described
in the last paragraph of the definition of "Change of Control" in paragraph (2)
or any other transaction in which any Person other than the Corporation shall
be the successor or acquiring Person, the resulting successor or acquiring
Person (if not the Corporation) and, if an entity different from the successor
or acquiring entity, the entity whose capital stock or assets the holders of
the Common Stock are entitled to receive as a result of the Change of Control
transaction, the Domestication Merger, the merger of the Delaware corporation
surviving the Domestication Merger into ATX, as described in the last paragraph
of the definition of "Change of Control" in paragraph (2) or any other
transaction in which any Person other than the Corporation shall be the
successor or acquiring Person shall be required to assume
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by written instrument (in form and substance reasonably satisfactory to the
holders of least 50% of the aggregate Liquidation Preference of the issued and
outstanding shares of 8.5% Preferred Shares, Series A) the obligations of this
Certificate of Designation.
(12) Governance. (a) The holders of record of shares of
8.5% Preferred Shares, Series A shall not be entitled to any voting rights,
except as hereinafter provided in this paragraph (12) or as otherwise provided
by law.
(b) Without the written consent of the holders of at
least seventy-five percent (75%) of the aggregate Liquidation Preference or the
vote of the holders of at least seventy-five percent (75%) of the aggregate
Liquidation Preference at a meeting of the holders of 8.5% Preferred Shares,
Series A called for such purpose, the Corporation will not amend, alter or
repeal any provision of the Memorandum of Association (by merger or otherwise),
or any other comparable organizational documents, so as to adversely affect the
powers, designation, dividend rights, voting powers, rights on liquidation,
conversion rights, redemption rights and other preferences and relative,
participating, optional or other special rights of the 8.5% Preferred Shares,
Series A; provided that any such amendment or alteration that changes the
dividend payable on the 8.5% Preferred Shares, Series A, or the Conversion Rate
or the Liquidation Preference shall require the vote of holders of at least
ninety (90%) of the aggregate Liquidation Preference at a meeting of the
holders of 8.5% Preferred Shares, Series A called for such purpose or the
written consent of the holders of at least ninety (90%) of the aggregate
Liquidation Preference.
(c) Without the written consent of the holders of at
least seventy-five percent (75%) of the aggregate Liquidation Preference or the
vote of holders of at least seventy-five percent (75%) of the aggregate
Liquidation Preference at a meeting of the holders of 8.5% Preferred Shares,
Series A called for such purpose, the Corporation will not issue any additional
8.5% Preferred Shares, Series A or create, authorize or issue any Senior
Securities or increase the authorized amount of any such class or series of
Senior Securities; provided that this paragraph 12(c) shall not limit the right
of the Corporation to issue Additional Preferred as dividends pursuant to
paragraph (5) or the issuance of any shares of Parity Securities by the
Successor Corporation to stockholders of ATX, as described in the Definitive
Schedule 14A.
(d) In exercising the voting rights set forth in this
paragraph (10), each share of 8.5% Preferred Shares, Series A shall have one
vote per share, except that when any other series of preferred stock shall have
the right to vote with the 8.5% Preferred Shares, Series A as a single class on
any matter, then the 8.5% Preferred Shares, Series A and other series shall
have with respect to such matters
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<PAGE> 35
one vote per $1,000 of stated liquidation preference. Except as otherwise
required by applicable law or as set forth herein, the shares of 8.5% Preferred
Shares, Series A shall not have any relative, participating, optional or other
special voting rights and powers and the consent of the holders thereof shall
not be required for the taking of any corporate action.
(13) General Provisions. (a) The headings of the
paragraphs, subparagraphs, clauses and subclauses of this Certificate of
Designation are for convenience of reference only and shall not define, limit
or affect any of the provisions hereof.
(b) The shares of 8.5% Preferred Shares, Series A shall
bear the following legend:
THE PREFERRED SHARES, PAR VALUE $0.01 PER SHARE, OF THE
COMPANY (THE "PREFERRED SHARES") (AND THE SHARES OF COMMON
STOCK, PAR VALUE $0.01 PER SHARE, OF THE COMPANY (THE "COMMON
STOCK") INTO WHICH THE PREFERRED SHARES MAY BE CONVERTED)
REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.
THE TRANSFER OF THE PREFERRED SHARES (OR COMMON STOCK, IF THE
PREFERRED SHARES HAVE BEEN CONVERTED) EVIDENCED BY THIS
CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER
PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED AUGUST 4, 2000,
AS AMENDED, BY AND BETWEEN CORECOMM LIMITED AND BOOTH AMERICAN
COMPANY, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES
OF CORECOMM LIMITED AND WILL BE FURNISHED WITHOUT CHARGE TO
THE HOLDER OF SUCH PREFERRED SHARES (OR COMMON STOCK, IF THE
PREFERRED SHARES HAVE BEEN CONVERTED) UPON WRITTEN REQUEST TO
CORECOMM LIMITED.
The shares of Common Stock issuable upon conversion of the
8.5% Preferred Shares, Series A shall bear the following legend:
THE SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE
COMPANY (THE "COMMON STOCK")
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REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.
THE TRANSFER OF THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE
IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE
PURCHASE AGREEMENT, DATED AS OF AUGUST 4, 2000, AS AMENDED, BY
AND BETWEEN CORECOMM LIMITED AND BOOTH AMERICAN COMPANY, A
COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF CORECOMM
LIMITED AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
SUCH COMMON STOCK UPON WRITTEN REQUEST TO CORECOMM LIMITED.
(c) At the request of any holder made subsequent to the
expiration or termination of any restrictions on transfer set forth in the
Purchase Agreement, the Corporation shall reissue any certificates for shares
of 8.5% Preferred Shares, Series A, or Common Stock to remove from the above
legends any reference to such restrictions on transfer set forth in the
Purchase Agreement.
(d) Unless the certificates to be issued shall be
registered in the same name as the name in which such surrendered certificates
are registered, each certificate so surrendered shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or the 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 or satisfied in full).
All certificates so surrendered shall be canceled by the Corporation or the
transfer agent and thereafter shall not be reissued.
(e) As promptly as reasonably practicable after the
surrender by a holder of such certificates, the Corporation shall issue and
shall deliver to such holder, or on the holder's written order, a certificate
or certificates (which certificate or certificates shall have the legend set
forth in paragraph 13(b)) for the number of duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock represented by the
certificates so surrendered.
(14) Shareholder Rights Plan. The shares of 8.5%
Preferred Shares, Series A shall be entitled to the benefits of a number of
rights ("Rights") issuable under the Shareholder Rights Agreement, dated as of
August 18, 1998, as amended, between the Corporation and Continental Stock
Transfer & Trust Company or any successor plan of similar purpose and effect
(the "Rights
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Agreement") equal to the number of shares of Common Stock then issuable upon
conversion of the 8.5% Preferred Shares, Series A at the prevailing Conversion
Rate. Any shares of Common Stock deliverable upon conversion or redemption of
a share of 8.5% Preferred Shares, Series A or upon payment of a dividend shall
be accompanied by a Right pursuant to the Rights Agreement."
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IN WITNESS WHEREOF, CoreComm Limited has caused this
Certificate of Designation to be signed by the undersigned on behalf of
CoreComm Limited this __ day of September, 2000.
CORECOMM LIMITED
By: /s/ Richard J. Lubasch
---------------------------------
Name: Richard J. Lubasch
Title: Senior Vice President, General
Counsel and Secretary
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Exhibit A
NOTICE OF CONVERSION
(To be Executed by the Holder of Shares of 8.5% Preferred Shares, Series A
in order to Convert the 8.5% Preferred Shares, Series A)
The undersigned (the "Holder") hereby irrevocably elects to convert
______ shares of 8.5% Preferred Shares, Series A, represented by stock
certificate No(s). __________ into shares of Common Stock according to the
terms and conditions of the Certificate of Designation, as of the date written
below. If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged
to the Holder for any conversion, except for transfer taxes, if any.
The Holder hereby represents and warrants that it has satisfied or
will have satisfied prior to the issuance of shares of Common Stock upon
conversion of the 8.5% Preferred Shares, Series A any and all legal and
regulatory requirements for conversion, including compliance with the HSR Act.
The Corporation shall electronically transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the
undersigned or its nominee with The Depository Trust Company ("DTC") through
its Deposit Withdrawal Agent Commission system ("DWAC Transfer").
Name of DTC Prime Broker:
--------------------------------
Account Number:
------------------------------------------
[ ] In lieu of receiving shares of Common Stock issuable pursuant to this
Notice of Conversion by way of a DWAC Transfer, the undersigned hereby
requests that the Corporation issue a certificate or certificates for
the number of shares of Common Stock set forth above (which numbers are
based on the Holder's calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary, on an
attachment hereto:
A-1
<PAGE> 40
Name:
-----------------------------------------------------------
Address:
--------------------------------------------------------
The Holder hereby represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of
the 8.5% Preferred Shares, Series A shall be made pursuant to registration of
the securities under the Securities Act and any applicable state securities
laws, or pursuant to an applicable exemption from registration under the
Securities Act and any applicable state securities laws.
Date of Conversion:
--------------------------------------------
Conversion Rate:
------------------------------------------------
Number of Shares of
Common Stock to be Issued:
-------------------------------------
Signature:
-----------------------------------------------------
Name:
----------------------------------------------------------
Address:
-------------------------------------------------------
* The Corporation is not required to issue shares of Common Stock until the
original Preferred Share Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Corporation or its
transfer agent.
A-2
