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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ZEFER CORP.
ZEFER Corp. (the "Corporation"), a corporation organized and existing under
and by virtue of the General Corporation Law of Delaware, does hereby certify as
follows:
1. The Corporation filed its original Certificate of Incorporation with
the Secretary of State of the State of Delaware (the "Delaware Secretary") on
March 10, 1999 under the name ZC Acquisition Corp. The Corporation's original
Certificate of Incorporation was amended and restated as follows: (i) by a
Certificate of Restated Certificate of Incorporation before Payment of Capital
filed with the Delaware Secretary on March 23, 1999; (ii) by a Certificate of
Amendment to Restated Certificate of Incorporation filed with the Delaware
Secretary on April 29, 1999; (iii) by a Certificate of Amendment of Certificate
of Incorporation filed with the Delaware Secretary on May 5, 1999; (iv) by a
Certificate of Amendment of Certificate of Incorporation filed with the Delaware
Secretary on June 15, 1999; (v) by a Certificate of Amendment of Certificate of
Incorporation filed with the Delaware Secretary on December 1, 1999 and (vi) by
a Certificate of Merger filed with the Delaware Secretary on December 30, 1999.
2. By a unanimous written action of the Board of Directors of the
Corporation, a resolution was duly adopted, pursuant to Sections 141(f), 242 and
245 of the General Corporation Law of Delaware, setting forth an Amended and
Restated Certificate of Incorporation of the Corporation and declaring said
Amended and Restated Certificate of Incorporation advisable. The stockholders
of the Corporation duly approved said proposed Amended and Restated Certificate
of Incorporation by written consent in accordance with Sections 228, 242 and 245
of the General Corporation Law of Delaware. The resolution setting forth the
Amended and Restated Certificate of Incorporation is as follows:
RESOLVED: That the Certificate of Incorporation of the Corporation, as amended
to date, be and hereby is amended and restated in its entirety so
that the same shall read as follows:
FIRST. The name of the Corporation is:
ZEFER Corp.
SECOND. The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or promoted
by the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
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FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 100,296,632 shares, consisting of
(i) 100,000,000 shares of Common Stock, $.001 par value per share ("Common
Stock"), and (ii) 296,632 shares of Preferred Stock, $.01 par value per share
("Preferred Stock").
The following is a statement of the designations and the powers, privileges
and rights, and the qualifications, limitations or restrictions thereof in
respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the holders of
the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any class or series as may be designated by the Board of
Directors upon any issuance of the Preferred Stock of any class or series.
2. Voting. The holders of the Common Stock shall have voting rights at all
meetings of stockholders, each such holder being entitled to one vote for each
share thereof held by such holder. There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote, irrespective of the provisions of Section 242(b)(2) of the
General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common Stock from
funds lawfully available therefor as and when determined by the Board of
Directors, and the holders of the Common Stock shall be entitled to receive such
dividends pro rata at the same rate per share.
4. Liquidation. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders.
5. Registration of Transfer. The Corporation shall keep at its principal
office (or such other place as the Corporation reasonably designates) a register
for the registration of shares of Common Stock. Upon the surrender of any
certificate representing shares of any class of Common Stock at such place, the
Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares of such class represented by the surrendered certificate and the
Corporation shall forthwith cancel such surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
shares of such class as is requested by the holder of the surrendered
certificate and shall be substantially identical in form to the surrendered
certificate. The issuance of new certificates shall be made without charge to
the holders of the surrendered certificates for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
issuance.
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6. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (provided, that an affidavit of the registered holder will be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing one or more shares of any class of Common Stock, and
in the case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Corporation (provided that if the holder is a
financial institution or other institutional investor its own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
7. Notices. All notices referred to herein shall be in writing, and shall
be delivered by registered or certified mail, return receipt requested, postage
prepaid, and shall be deemed to have been given when so mailed (i) to the
Corporation, at its principal executive offices and (ii) to any stockholder at
such holder's address as it appears in the stock records of the Corporation
(unless otherwise specified in a written notice to the Corporation by such
holder).
8. Amendment and Waiver. No amendment or waiver of any provision of this
Part A shall be effective without the prior consent of the holders of a majority
of the then outstanding shares of Common Stock voting as a single class.
B. PREFERRED STOCK.
The Corporation hereby creates and designates the following two classes of
Preferred Stock: (i) 96,632 shares of the Preferred Stock shall be designated
as the "Class A Preferred Stock" ("Class A Preferred"); and (ii) 200,000 shares
of the Preferred Stock shall be designated as the "Class B Convertible Preferred
Stock" ("Class B Preferred").
1. Dividends.
(a) General Obligation. When and as declared by the Corporation's
Board of Directors and to the extent permitted under the General Corporation Law
of Delaware, the Corporation shall pay preferential dividends to the holders of
the Class A Preferred as provided in this Section 1. Dividends on each share of
the Class A Preferred (a "Class A Share") shall accrue on a daily basis at the
rate of 8% per annum of the sum of the applicable Liquidation Value thereof plus
all accumulated and unpaid dividends thereon from and including the date of
issuance of such Class A Share to and including the first to occur of (i) the
date on which the applicable Liquidation Value of such Class A Share (plus all
accrued and unpaid dividends thereon) is paid to the holder thereof in
connection with the liquidation of the Corporation or the redemption of such
Class A Share by the Corporation or (ii) the date on which such Class A Share is
otherwise acquired by the Corporation. Such dividends shall accrue whether or
not they have been declared and whether or not there are profits, surplus or
other funds of the Corporation legally available for the payment of dividends.
The date on which the Corporation initially issues any Class A Share shall be
deemed to be its "date of issuance" regardless of the number of times transfer
of such Class A Share is made on the stock records maintained by or for the
Corporation and regardless of the number of certificates which may be issued to
evidence such Class A Share. Notwithstanding anything in this Section 1(a) to
the contrary, dividends shall
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accrue and not be paid in cash (and shall accumulate as provided in Section
1(b)) until the first to occur of a Public Offering, a Change in Ownership or a
Fundamental Change, or achievement of earnings by the Corporation reasonably
sufficient (as determined by the Board) to cover payment of such dividends.
(b) Dividend Reference Dates. To the extent not paid on March 31, June
30, September 30 and December 31 of each year, beginning March 31, 1999 (the
"Dividend Reference Dates"), all dividends which have accrued on each Class A
Share outstanding during the three-month period (or other period in the case of
the initial Dividend Reference Date) ending upon each such Dividend Reference
Date shall be accumulated and shall remain accumulated dividends with respect to
such Class A Share until paid to the holder thereof.
(c) Distribution of Partial Dividend Payments. Except as otherwise
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Class A Preferred, such payment
shall be distributed pro rata among the holders thereof based upon the aggregate
accrued but unpaid dividends on the Class A Shares held by each such holder.
(d) Dividends on Equity Other than Class A Preferred. The Corporation
shall not declare or pay any cash dividends on shares of Common Stock or Class B
Preferred until the holders of Class A Preferred then outstanding shall have
first received the total amount of dividends then accrued with respect to the
Class A Preferred (the "Class A Dividend"). So long as any shares of Class B
Preferred are outstanding, (i) no cash dividend shall be paid or declared, and
no cash distribution shall be made, on any Common Stock or other capital stock
of the Corporation ranking with regard to dividend rights or liquidation rights
junior to the Class B Preferred, and (ii) no shares of Common Stock or other
capital stock of the Corporation ranking with regard to dividend rights or
liquidation rights junior to the Class B Preferred shall be purchased, redeemed
or acquired by the Corporation and no monies shall be paid into or set aside or
made available for a sinking fund for the purchase, redemption or acquisition
thereof; provided that the Corporation may repurchase shares of Common Stock
from current or former employees of the Company or its subsidiaries in
accordance with the provisions of any agreement approved by the Board.
2. Liquidation. Upon any liquidation, dissolution or winding up of the
Corporation (whether voluntary or involuntary), each holder of Preferred Stock
shall be entitled to be paid, before any distribution or payment is made upon
any other capital stock or equity securities of the Corporation, an amount in
cash equal to the aggregate Liquidation Value of all shares of Preferred Stock
(a "Preferred Share") held by such holder (plus all accrued and unpaid dividends
thereon), and the holders of Preferred Stock shall not be entitled to any
further payment. If upon any such liquidation, dissolution or winding up of the
Corporation, the Corporation's assets to be distributed among the holders of the
Preferred Stock are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this Section 2, then
the entire assets available to be distributed to the Corporation's stockholders
shall be distributed pro rata among such holders based upon the aggregate
Liquidation Value (plus all accrued and unpaid dividends) of the Preferred Stock
held by each such holder. Prior to the liquidation, dissolution or winding up
of the Corporation, the Corporation shall declare for payment all accrued and
unpaid dividends with respect to the Preferred Stock, but only to the extent of
funds
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of the Corporation legally available for the payment of dividends. No less than
30 days prior to the payment date stated therein, the Corporation shall mail
written notice of any such liquidation, dissolution or winding up to each record
holder of Preferred Stock, setting forth in reasonable detail the amount of
proceeds to be paid with respect to each share of Common Stock and Preferred
Stock in connection with such liquidation, dissolution or winding up.
3. Priority of Preferred Stock on Dividends and Redemptions. So long as any
Preferred Stock remains outstanding, without the satisfaction of the conditions
set forth in Section B.1(d) of this Paragraph FOURTH and the prior written
consent of the holders of Preferred Stock representing a majority of the
aggregate Liquidation Value of the outstanding shares of Preferred Stock, voting
as a single class, the Corporation shall not, nor shall it permit any Subsidiary
to, redeem, purchase or otherwise acquire directly or indirectly any Common
Stock, nor shall the Corporation directly or indirectly pay or declare any
dividend or make any distribution upon any such securities; provided that the
Corporation may repurchase shares of Common Stock from current or former
employees of the Company or its Subsidiaries in accordance with the provisions
of an agreement approved by the Board..
4. Optional Conversion of the Class B Preferred. The holders of the Class B
Preferred shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Class B Preferred shall be
convertible, at the option of the holder thereof, at any time and from time to
time, and without the payment of additional consideration by the holder thereof,
into such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing $10.00 by the Class B Conversion Price (as defined below)
in effect at the time of conversion. The "Class B Conversion Price" shall
initially be $10.00. Such initial Class B Conversion Price, and the rate at
which shares of Class B Preferred may be converted into shares of Common Stock,
shall be subject to adjustment as provided below.
In the event of a notice of redemption of any shares of Class B Preferred
pursuant to Section 6(j) hereof, the Conversion Rights of the shares designated
for redemption shall terminate at the close of business on the first full day
preceding the date fixed for redemption, unless the redemption price is not paid
on such redemption date, in which case the Conversion Rights for such shares
shall continue until such price is paid in full. In the event of a liquidation
of the Corporation, the Conversion Rights shall terminate at the close of
business on the first full day preceding the date fixed for the payment of any
amounts distributable on liquidation to the holders of Class B Preferred.
(b) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Class B Preferred. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to such fraction multiplied by the then effective Class B
Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Class B Preferred to convert shares
of Class B Preferred into shares of Common Stock, such holder shall surrender
the certificate or
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certificates for such shares of Class B Preferred, at the office of the transfer
agent for the Class B Preferred (or at the principal office of the Corporation
if the Corporation serves as its own transfer agent), together with written
notice that such holder elects to convert all or any number of the shares of the
Class B Preferred represented by such certificate or certificates. Such notice
shall state such holder's name or the names of the nominees in which such holder
wishes the certificate or certificates for shares of Common Stock to be issued.
If required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
("Conversion Date"), and the shares of Common Stock issuable upon conversion of
the shares represented by such certificate shall be deemed to be outstanding of
record as of such date. The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Class B
Preferred, or to his or its nominees, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Class B
Preferred shall be outstanding, reserve and keep available out of its authorized
but unissued stock, for the purpose of effecting the conversion of the Class B
Preferred, such number of its duly authorized shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
Class B Preferred. Before taking any action which would cause an adjustment
reducing the Class B Conversion Price below the then par value of the shares of
Common Stock issuable upon conversion of the Class B Preferred, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and nonassessable shares of Common Stock at such adjusted Class B Conversion
Price.
(iii) Upon any such conversion, no adjustment to the Class B
Conversion Price shall be made for any declared but unpaid dividends on the
Class B Preferred surrendered for conversion or on the Common Stock delivered
upon conversion.
(iv) All shares of Class B Preferred which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease and terminate on
the Conversion Date, except only the right of the holders thereof to receive
shares of Common Stock in exchange therefor and payment of any dividends
declared but unpaid thereon. Any shares of Class B Preferred so converted shall
be retired and cancelled and shall not be reissued, and the Corporation (without
the need for stockholder action) may from time to time take such appropriate
action as may be necessary to reduce the authorized number of shares of Class B
Preferred accordingly.
(v) The Corporation shall pay any and all issue and other taxes
that may be payable in respect of any issuance or delivery of shares of Common
Stock upon conversion of shares of Class B Preferred pursuant to this Section 4.
The Corporation shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in
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the issuance and delivery of shares of Common Stock in a name other than that in
which the shares of Class B Preferred so converted were registered, and no such
issuance or delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Corporation the amount of any such tax
or has established, to the satisfaction of the Corporation, that such tax has
been paid.
(d) Adjustments to Class B Conversion Price for Diluting Issues:
(i) Special Definitions. For purposes of this Section 4, the
following definitions shall apply:
(A) "Option" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.
(B) "Class B Original Issue Date" shall mean the date on
which a share of Class B Preferred was first issued.
(C) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly convertible into
or exchangeable for Common Stock, but excluding Options and shares of Class A
Preferred.
(D) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Subsection 4(d)(iii) below,
deemed to be issued) by the Corporation after the Class B Original Issue Date,
other than:
I. shares of Common Stock issued or issuable upon
conversion or exchange of any Convertible Securities or exercise of any Options
(i) outstanding on the Class B Original Issue Date or (ii) issued to GTCR Golder
Rauner, L.L.C. or any of its affiliates after the Class B Original Issue Date
pursuant to arrangements existing as of the Class B Original Issue Date or
contemplated by such arrangements;
II. shares of Common Stock issued or issuable as a
dividend or distribution on Class B Preferred;
III. shares of Common Stock issued or issuable by
reason of a dividend, stock split, split-up or other distribution on shares of
Common Stock that is covered by Subsection 4(e) or 4(f) below;
IV. shares of Common Stock (or Options with respect
thereto) issued or issuable to employees or directors of, or consultants or
advisors to, the Corporation pursuant to a plan or arrangement approved by the
Board of Directors of the Corporation;
V. shares of Common Stock (or Options with respect
thereto) issued or issuable in connection with debt financings or lease
arrangements approved by the Board of Directors of the Corporation; or
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VI. shares of Class A Preferred or any shares issued or
issuable in exchange therefor pursuant to arrangements with officers of the
Corporation or arrangements existing as of the Class B Original Issue Date or
contemplated by such existing arrangements.
(ii) No Adjustment of Class B Conversion Price. No adjustment in
the Class B Conversion Price shall be made as the result of the issuance of
Additional Shares of Common Stock if: (a) the consideration per share
(determined pursuant to Subsection 4(d)(v)) for such Additional Share of Common
Stock issued or deemed to be issued by the Corporation is equal to or greater
than the applicable Class B Conversion Price in effect immediately prior to the
issuance or deemed issuance of such Additional Shares, or (b) prior to such
issuance or deemed issuance, the Corporation receives written notice from the
holders of at least a majority of the then outstanding shares of Class B
Preferred agreeing that no such adjustment shall be made as the result of the
issuance or deemed issuance of Additional Shares of Common Stock.
(iii) Issue of Securities Deemed Issue of Additional Shares of
Common Stock. If the Corporation at any time or from time to time after the
Class B Original Issue Date shall issue any Options (excluding Options covered
by Subsections 4(d)(i)(D)(I) or 4(d)(i)(D)(IV) above) or Convertible Securities
or shall fix a record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible Securities, then
the maximum number of shares of Common Stock (as set forth in the instrument
relating thereto without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such Options
or, in the case of Convertible Securities and Options therefor, the conversion
or exchange of such Convertible Securities, shall be deemed to be Additional
Shares of Common Stock issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record
date, provided that Additional Shares of Common Stock shall not be deemed to
have been issued unless the consideration per share (determined pursuant to
Subsection 4(d)(v) hereof) of such Additional Shares of Common Stock would be
less than the applicable Class B Conversion Price in effect on the date of and
immediately prior to such issue, or such record date, as the case may be, and
provided further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(A) No further adjustment in the Class B Conversion Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) If such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease in
the consideration payable to the Corporation, then upon the exercise, conversion
or exchange thereof, the Class B Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or exchange under
such Convertible Securities;
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(C) Upon the expiration or termination of any such
unexercised Option or unconverted Convertible Security, the Class B Conversion
Price shall not be readjusted, but the Additional Shares of Common Stock deemed
issued as the result of the original issue of such Option or Convertible
Security shall not be deemed issued for the purposes of any subsequent
adjustment of the Class B Conversion Price;
(D) In the event of any change in the number of shares of
Common Stock issuable upon the exercise, conversion or exchange of any such
Option or Convertible Security, including, but not limited to, a change
resulting from the anti-dilution provisions thereof, the Class B Conversion
Price then in effect shall forthwith be readjusted to such Class B Conversion
Price as would have obtained had the adjustment which was made upon the issuance
of such Option or Convertible Security not exercised, converted or exchanged
prior to such change been made upon the basis of such change; and
(E) No readjustment pursuant to clause (B) or (D) above
shall have the effect of increasing the Class B Conversion Price to an amount
which exceeds the Class B Conversion Price on the original adjustment date,
except in the case of such a readjustment due to a stock split, combination or
similar transaction of the Class B Preferred.
In the event the Corporation, after the Class B Original Issue Date, amends
the terms of any such Options or Convertible Securities (whether such Options or
Convertible Securities were outstanding on the Class B Original Issue Date or
were issued after the Class B Original Issue Date), then such Options or
Convertible Securities, as so amended, shall be deemed to have been issued after
the Class B Original Issue Date and the provisions of this Subsection 4(d)(iii)
shall apply.
(iv) Adjustment of Class B Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event the Corporation shall at any
time after the Class B Original Issue Date issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued pursuant
to Subsection 4(d)(iii)), without consideration or for a consideration per share
less than the applicable Class B Conversion Price in effect immediately prior to
such issue, then and in such event, such Class B Conversion Price shall be
reduced, concurrently with such issue, to a price (calculated to the nearest
cent) determined by multiplying such Class B Conversion Price by a fraction, (A)
the numerator of which shall be (1) the number of shares of Common Stock
outstanding immediately prior to such issue plus (2) the number of shares of
Common Stock which the aggregate consideration received or to be received by the
Corporation for the total number of Additional Shares of Common Stock so issued
would purchase at such Class B Conversion Price; and (B) the denominator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of such Additional Shares of Common Stock so
issued; provided that, (i) for the purpose of this Subsection 4(d)(iv), all
shares of Common Stock issuable upon conversion or exchange of Convertible
Securities outstanding immediately prior to such issue shall be deemed to be
outstanding, and (ii) the number of shares of Common Stock deemed issuable upon
conversion or exchange of such outstanding Convertible Securities shall not give
effect to any adjustments to the conversion or exchange price or conversion or
exchange rate of such Convertible Securities resulting from the issuance of
Additional Shares of Common Stock that is the subject of this calculation.
Notwithstanding the foregoing, if at any time on or
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prior to November 26, 2000 the Corporation issues any class or series of
preferred stock in a transaction other than a public offering to one or more
persons at a price which reflects a price per share of preferred stock (on an
as-converted basis) of less than $9.00 (the "Common Stock Equivalent Price"),
then, in each such event, the Class B Conversion Price shall be reduced,
concurrently with such issue or issues, to the lowest per share Common Stock
Equivalent Price received by the Corporation for the issue of any such class or
series of preferred stock (determined pursuant to Subsection 4(d)(v) of this
Part B); provided, however, that the Class B Conversion Price shall not be so
reduced for the issuance and sale by the Corporation of preferred stock
pursuant to arrangements existing as of the Class B Original Issue Date (or
contemplated by such arrangements) to GTCR Golder Rauner, L.L.C., its
affiliates or the holders of Class A Preferred as of the Class B Original
Issue Date or any affiliates of such holders.
(v) Determination of Consideration. For purposes of this
Subsection 4(d), the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock (including Preferred Equity Shares) shall
be computed as follows:
(A) Cash and Property: Such consideration shall:
I. insofar as it consists of cash, be computed at the
aggregate of cash received by the Corporation, excluding amounts paid or payable
for accrued interest;
II. insofar as it consists of property other than cash,
be computed at the fair market value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
III. in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (I) and (II) above,
as determined in good faith by the Board of Directors.
(B) Options and Convertible Securities. The consideration
per share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Subsection 4(d)(iii), relating to Options
and Convertible Securities, shall be determined by dividing
I. the total amount, if any, received or receivable by
the Corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by
II. the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard to any provision
contained therein
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for a subsequent adjustment of such number) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities.
(vi) Multiple Closing Dates. In the event the Corporation shall
issue on more than one date Additional Shares of Common Stock which consist of
shares of the same series or class of Preferred Stock, and such issuance dates
occur within a period of no more than 120 days, then, upon the final such
issuance, the Class B Conversion Price shall be readjusted to give effect to all
such issuances as if they occurred on the date of the final such issuance (and
without giving effect to any adjustments as a result of such prior issuances
within such period).
(e) Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the Class B Original Issue Date
effect a subdivision of the outstanding Common Stock, the Class B Conversion
Price then in effect immediately before that subdivision shall be
proportionately decreased. If the Corporation shall at any time or from time to
time after the Class B Original Issue Date combine the outstanding shares of
Common Stock, the Class B Conversion Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the event
the Corporation at any time, or from time to time after the Class B Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event the
Class B Conversion Price then in effect immediately before such event shall be
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date, by
multiplying the Class B Conversion Price then in effect by a fraction:
(i) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Class B Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Class B Conversion
Price shall be adjusted pursuant to this paragraph as of the time of actual
payment of such dividends or distributions; and provided further, however, that
no such adjustment shall be made if the holders of Class B Preferred
simultaneously receive (i) a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Class B Preferred had been converted
into Common Stock on the date of such event or (ii) a dividend or other
distribution of shares of Class B Preferred which are convertible, as of the
date of such
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event, into such number of shares of Common Stock as is equal to the number of
additional shares of Common Stock being issued with respect to each share of
Common Stock in such dividend or distribution.
(g) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Class B Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation (other than shares of Common Stock) or
in cash or other property (other than cash out of earnings or earned surplus,
determined in accordance with generally accepted accounting principles), then
and in each such event provision shall be made so that the holders of the Class
B Preferred shall receive upon conversion thereof in addition to the number of
shares of Common Stock receivable thereupon, the kind and amount of securities
of the Corporation, cash or other property which they would have been entitled
to receive had the Class B Preferred been converted into Common Stock on the
date of such event and had they thereafter, during the period from the date of
such event to and including the conversion date, retained such securities
receivable by them as aforesaid during such period, giving application to all
adjustments called for during such period under this paragraph with respect to
the rights of the holders of the Class B Preferred; provided, however, that no
such adjustment shall be made if the holders of Class B Preferred simultaneously
receive a dividend or other distribution of such securities in an amount equal
to the amount of such securities as they would have received if all outstanding
shares of Class B Preferred had been converted into Common Stock on the date of
such event.
(h) Adjustment for Merger or Reorganization, etc. Subject to the
provisions of Subsection 6(j), if there shall occur any reorganization,
recapitalization, consolidation or merger involving the Corporation in which the
Common Stock (but not the Class B Preferred) is converted into or exchanged for
securities, cash or other property (other than a transaction covered by
paragraphs (e), (f) or (g) of this Section 4), then, following any such
reorganization, recapitalization, consolidation or merger, each share of Class B
Preferred shall be convertible into the kind and amount of securities, cash or
other property which a holder of the number of shares of Common Stock of the
Corporation issuable upon conversion of one share of Class B Preferred
immediately prior to such reorganization, recapitalization, consolidation or
merger would have been entitled to receive pursuant to such transaction; and, in
such case, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this Section 4
set forth with respect to the rights and interest thereafter of the holders of
the Class B Preferred, to the end that the provisions set forth in this Section
4 (including provisions with respect to changes in and other adjustments of the
Class B Conversion Price) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the conversion of the Class B Preferred.
(i) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
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appropriate in order to protect the Conversion Rights of the holders of the
Class B Preferred against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Class B Conversion Price pursuant to this
Section 4, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to each holder
of Class B Preferred a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of any holder
of Class B Preferred, furnish or cause to be furnished to such holder a
certificate setting forth (i) the Class B Conversion Price then in effect, and
(ii) the number of shares of Common Stock and the amount, if any, of other
securities, cash or property which then would be received upon the conversion of
Class B Preferred.
(k) Notice of Record Date. In the event:
(i) the Corporation shall take a record of the holders of its
Common Stock (or other stock or securities at the time issuable upon conversion
of the Class B Preferred) for the purpose of entitling or enabling them to
receive any dividend or other distribution, or to receive any right to subscribe
for or purchase any shares of stock of any class or any other securities, or to
receive any other right; or
(ii) of any capital reorganization of the Corporation, any
reclassification of the Common Stock of the Corporation, any consolidation or
merger of the Corporation with or into another corporation (other than a
consolidation or merger in which the Corporation is the surviving entity and its
Common Stock is not converted into or exchanged for any other securities or
property), or any transfer of all or substantially all of the assets of the
Corporation; or
(iii) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation,
then, and in each such case, the Corporation will mail or cause to be mailed to
the holders of the Class B Preferred a notice specifying, as the case may be,
(i) the record date for such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such other
stock or securities at the time issuable upon the conversion of the Class B
Preferred) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 10
days prior to the record date or effective date for the event specified in such
notice.
5. Mandatory Conversion of the Class B Preferred.
(a) Upon the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
under the Securities
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Act of 1933, as amended (the "Securities Act") for which the aggregate gross
proceeds attributable to sales for the account of the Corporation exceed
$20,000,000 (the "Mandatory Conversion Date"), (i) all outstanding shares of
Class B Preferred shall automatically be converted into shares of Common Stock,
at the then effective conversion rate and (ii) the number of authorized shares
of Preferred Stock shall be automatically reduced by the number of shares of
Preferred Stock that had been designated as Class B Preferred, and all
provisions included under the caption "Class B Convertible Preferred Stock", and
all references to the Class B Preferred, shall be deleted and shall be of no
further force or effect.
(b) All holders of record of shares of Class B Preferred shall be
given written notice of the Mandatory Conversion Date and the place designated
for mandatory conversion of all such shares of Class B Preferred pursuant to
this Section 5. Such notice need not be given in advance of the occurrence of
the Mandatory Conversion Date. Such notice shall be sent by first class or
registered mail, postage prepaid, to each record holder of Class B Preferred at
such holder's address last shown on the records of the transfer agent for the
Class B Preferred (or the records of the Corporation, if it serves as its own
transfer agent). Upon receipt of such notice, each holder of shares of Class B
Preferred shall surrender his or its certificate or certificates for all such
shares to the Corporation at the place designated in such notice, and shall
thereafter receive certificates for the number of shares of Common Stock to
which such holder is entitled pursuant to this Section 5. On the Mandatory
Conversion Date, all outstanding shares of Class B Preferred shall be deemed to
have been converted into shares of Common Stock, which shall be deemed to be
outstanding of record, and all rights with respect to the Class B Preferred so
converted, including the rights, if any, to receive notices and vote (other than
as a holder of Common Stock) will terminate, except only the rights of the
holders thereof, upon surrender of their certificate or certificates therefor,
to receive certificates for the number of shares of Common Stock into which such
Class B Preferred has been converted, and payment of any declared but unpaid
dividends thereon. If so required by the Corporation, certificates surrendered
for conversion shall be endorsed or accompanied by written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or by his or its attorney duly authorized in writing.
As soon as practicable after the Mandatory Conversion Date and the surrender of
the certificate or certificates for Class B Preferred, the Corporation shall
cause to be issued and delivered to such holder, or on his or its written order,
a certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and cash as
provided in Subsection 4(b) in respect of any fraction of a share of Common
Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of Class B Preferred which are
required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the Mandatory Conversion Date, be deemed to have
been retired and cancelled and the shares of Class B Preferred represented
thereby converted into Common Stock for all purposes, notwithstanding the
failure of the holder or holders thereof to surrender such certificates on or
prior to such date. Such converted Class B Preferred may not be reissued, and
the Corporation may thereafter take such appropriate action (without the need
for stockholder action) as may be necessary to reduce the authorized number of
shares of Class B Preferred accordingly.
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6. Redemptions.
(a) Optional Redemptions. The Corporation may at any time and from
time to time redeem all or any portion of the shares of Class A Preferred then
outstanding. Upon any such redemption, the Corporation shall pay a price per
share of Class A Preferred equal to the Liquidation Value thereof (plus all
accrued and unpaid dividends thereon). No redemption pursuant to this Section
may be made for less than 1,000 shares (or such lesser number of shares then
outstanding).
(b) Redemption After Public Offering. The Corporation shall, at the
request (by written notice given to the Corporation) of the holders of a
majority of the outstanding shares of Class A Preferred, apply the net cash
proceeds from any Public Offering remaining after deduction of all discounts,
underwriters' commissions and other reasonable expenses to redeem shares of
Class A Preferred at a price per share equal to the Liquidation Value thereof
(plus all accrued and unpaid dividends thereon). Such redemption shall take
place on a date fixed by the Corporation, which date shall be not more than five
days after the Corporation's receipt of such proceeds.
(c) Redemption of Class B Preferred. If at any time, whether pursuant
to Section 6(a) hereof or otherwise (except for the redemption of Class A
Preferred pursuant to Section 6(b) hereof), the Corporation's Board of Directors
approves the redemption or repurchase of any shares of the Corporation's capital
stock, the Corporation shall promptly notify the holders of Class B Preferred in
writing of the terms of such redemption (a "Triggering Redemption") and shall
offer to redeem all or any portion of each holder's Class B Preferred on terms
and conditions substantially similar to the Triggering Redemption. For a period
of twenty (20) days from the delivery of such notice, each holder of Class B
Preferred shall have the right to accept such offer by delivery of a written
acceptance to the Corporation.
(d) Redemption Payments. For each share of Preferred Stock (a "Share,"
or collectively, the "Shares") which is to be redeemed hereunder, the
Corporation shall be obligated on the Redemption Date to pay to the holder
thereof (upon surrender by such holder at the Corporation's principal office of
the certificate representing such Share) an amount in immediately available
funds equal to the Liquidation Value of such Share (plus all accrued and unpaid
dividends thereon). If the funds of the Corporation legally available for
redemption of Shares on any Redemption Date are insufficient to redeem the total
number of Shares to be redeemed on such date, those funds which are legally
available shall be used to redeem the maximum possible number of Shares pro rata
among the holders of the Shares to be redeemed based upon the aggregate
Liquidation Value of such Shares held by each such holder (plus all accrued and
unpaid dividends thereon). At any time thereafter when additional funds of the
Corporation are legally available for the redemption of Shares, such funds shall
immediately be used to redeem the balance of the Shares which the Corporation
has become obligated to redeem on any Redemption Date but which it has not
redeemed pro rata among the holders of the Shares to be redeemed based upon the
aggregate Liquidation Value of such Shares held by each such holder (plus all
accrued but unpaid dividends thereon).
(e) Notice of Redemption. Except as otherwise provided herein, the
Corporation shall mail written notice of each redemption of any shares of
Preferred Stock to each
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record holder thereof not more than 60 nor less than 30 days prior to the date
on which such redemption is to be made. In case fewer than the total number of
Shares represented by any certificate are redeemed, a new certificate
representing the number of unredeemed Shares shall be issued to the holder
thereof without cost to such holder within five business days after surrender of
the certificate representing the redeemed Shares.
(f) Determination of the Number of Each Holder's Shares to be
Redeemed. The number of Shares of Preferred Stock to be redeemed from each
holder thereof in redemptions hereunder shall be the number of Shares determined
by multiplying the total number of Class A Shares or Class B Shares, as the case
may be, to be redeemed times a fraction, the numerator of which shall be the
total number of Class A Shares or Class B Shares, as the case may be, then held
by such holder and the denominator of which shall be the total number of Class A
Shares or Class B Shares, as the case may be, then outstanding.
(g) Dividends After Redemption Date. No Share shall be entitled to any
dividends accruing after the date on which the Liquidation Value of such Share
(plus all accrued and unpaid dividends thereon) is paid to the holder of such
Share. On such date, all rights of the holder of such Share shall cease, and
such Share shall no longer be deemed to be issued and outstanding.
(h) Redeemed or Otherwise Acquired Shares. Any Shares which are
redeemed or otherwise acquired by the Corporation shall be canceled and retired
to authorized but unissued shares and shall not be reissued, sold or
transferred.
(i) Other Redemptions or Acquisitions. The Corporation shall not, nor
shall it permit any Subsidiary to, redeem or otherwise acquire any Shares of
Preferred Stock, except as expressly authorized herein.
(j) Special Redemptions.
(i) If a Change in Ownership has occurred or the Corporation
obtains knowledge that a Change in Ownership is proposed to occur, the
Corporation shall give prompt written notice of such Change in Ownership
describing in reasonable detail the material terms and date of consummation
thereof to each holder of Preferred Stock, but in any event such notice shall
not be given later than five days after the occurrence of such Change in
Ownership, and the Corporation shall give each holder of Preferred Stock prompt
written notice of any material change in the terms or timing of such
transaction. The holder or holders of a majority of the shares of each class of
Preferred Stock then outstanding may require the Corporation to redeem all or
any portion of such class of Preferred Stock owned by such holders at a price
per Share equal to the Liquidation Value thereof (plus all accrued and unpaid
dividends thereon) by giving written notice to the Corporation of such election
prior to the later of (a) 21 days after receipt of the Corporation's notice and
(b) five days prior to the consummation of the Change in Ownership (the
"Expiration Date"). The Corporation shall give prompt written notice of any such
election to all other holders of Preferred Stock within five days after the
receipt thereof, and each such holder shall have until the later of (a) the
Expiration Date or (b) ten days after receipt of such second notice to request
redemption hereunder (by giving written notice to the Corporation) of all or any
portion of the Preferred Stock owned by such holder.
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Upon receipt of such election(s), the Corporation shall be obligated to
redeem the aggregate number of Shares specified therein on the later of (a) the
occurrence of the Change in Ownership or (b) five days after the Corporation's
receipt of such election(s). If any proposed Change in Ownership does not
occur, all requests for redemption in connection therewith shall be
automatically rescinded, or if there has been a material change in the terms or
the timing of the transaction, any holder of Preferred Stock may rescind such
holder's request for redemption by delivering written notice thereof to the
Corporate prior to the consummation of the transaction.
The term "Change in Ownership" means any sale, transfer or issuance or
series of sales, transfers and/or issuances of Common Stock by the Corporation
or any holders thereof which results in any Person or group of Persons (as the
term "group" is used under the Securities Exchange Act of 1934), other than the
holders of Common Stock and Preferred Stock as of the date of the Purchase
Agreement, owning more than 50% of the Common Stock outstanding at the time of
such sale, transfer or issuance or series of sales, transfers and/or issuances.
(ii) If a Fundamental Change is proposed to occur, the
Corporation shall give written notice of such Fundamental Change describing in
reasonable detail the material terms and date of consummation thereof to each
holder of Preferred Stock not more than 45 days nor less than 20 days prior to
the consummation of such Fundamental Change, and the Corporation shall give each
holder of Preferred Stock prompt written notice of any material change in the
terms or timing of such transaction. The holder or holders of a majority of the
shares of each class of Preferred Stock then outstanding, may require the
Corporation to redeem all or any portion of the class of Preferred Stock owned
by such holders at a price per Share equal to the Liquidation Value thereof
(plus all accrued and unpaid dividends thereon) by giving written notice to the
Corporation of such election prior to the later of (a) ten days prior to the
consummation of the Fundamental Change or (b) ten days after receipt of notice
from the Corporation. The Corporation shall give prompt written notice of such
election to all other holders of Preferred Stock (but in any event within five
days prior to the consummation of the Fundamental Change), and each such holder
shall have until two days after the receipt of such notice to request redemption
(by written notice given to the Corporation) of all or any portion of the
Preferred Stock owned by such holder.
Upon receipt of such election(s), the Corporation shall be obligated to
redeem the aggregate number of Shares specified therein upon the consummation of
such Fundamental Change. If any proposed Fundamental Change does not occur, all
requests for redemption in connection therewith shall be automatically
rescinded, or if there has been a material change in the terms or the timing of
the transaction, any holder of Preferred Stock may rescind such holder's request
for redemption by delivering written notice thereof to the Corporation prior to
the consummation of the transaction.
The term "Fundamental Change" means (a) any sale or transfer of more than
50% of the assets of the Corporation and its Subsidiaries on a consolidated
basis (measured either by book value in accordance with generally accepted
accounting principles consistently applied or by fair market value determined in
the reasonable good faith judgment of the Corporation's Board of Directors) in
any transaction or series of transactions (other than sales in the ordinary
course of business) and (b) any merger or consolidation to which the Corporation
is a party, except for a
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merger in which the Corporation is the surviving corporation, the terms of the
Preferred Stock are not changed and the Preferred Stock is not exchanged for
cash, securities or other property, and after giving effect to such merger, the
holders of the Corporation's outstanding capital stock possessing a majority of
the voting power (under ordinary circumstances) to elect a majority of the
Corporation's Board of Directors immediately prior to the merger shall continue
to own the Corporation's outstanding capital stock possessing the voting power
(under ordinary circumstances) to elect a majority of the Corporation's Board of
Directors.
7. Voting Rights. Each holder of outstanding shares of Class B Preferred
shall be entitled to the number of votes equal to the number of whole shares of
Common Stock into which the shares of Class B Preferred held by such holder are
then convertible (as adjusted from time to time pursuant to Section 4 hereof),
at each meeting of stockholders of the Corporation (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Corporation for their action or consideration. Except
as provided by law, holders of Class B Preferred shall vote together with the
holders of Common Stock as a single class. Except as otherwise provided herein
and as otherwise required by applicable law, the Class A Preferred shall have no
voting rights; provided that each holder of Class A Preferred shall be entitled
to notice of all stockholders meetings at the same time and in the same manner
as notice is given to all stockholders entitled to vote at such meetings.
8. Registration of Transfer. The Corporation shall keep at its principal
office a register for the registration of Preferred Stock. Upon the surrender
of any certificate representing Preferred Stock at such place, the Corporation
shall, at the request of the record holder of such certificate, execute and
deliver (at the Corporation's expense) a new certificate or certificates in
exchange therefor representing in the aggregate the number of Shares represented
by the surrendered certificate. Each such new certificate shall be registered
in such name and shall represent such number of Shares as is requested by the
holder of the surrendered certificate and shall be substantially identical in
form to the surrendered certificate, and dividends shall accrue on the Preferred
Stock represented by such new certificate from the date to which dividends have
been fully paid on such Preferred Stock represented by the surrendered
certificate.
9. Replacement. Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing Shares of Preferred Stock, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and delivery in lieu of such certificate a new
certificate of like kind representing the number of Shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
shall accrue on the Preferred Stock represented by such new certificate from the
date to which dividends have been fully paid on such lost, stolen, destroyed or
mutilated certificate.
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10. Definitions.
"Change in Ownership" has the meaning set forth in Section 6(j) hereof.
"Common Stock" means, collectively, the Corporation's Common Stock and any
capital stock of any class of the Corporation hereafter authorized which is not
limited to a fixed sum or percentage of par or stated value in respect to the
rights of the holders thereof to participate in dividends or in the distribution
of assets upon any liquidation, dissolution or winding up of the Corporation.
"Fundamental Change" has the meaning set forth in Section 6(j) hereof.
"Liquidation Value" of any share of Preferred Stock as of any particular
date shall be equal to (i) in the case of shares of the Class A Preferred,
$1,000.00 (One Thousand Dollars) and (ii) in the case of shares of the Class B
Preferred, $10.00 (Ten Dollars), subject, with respect to clauses (i) and (ii),
to appropriate adjustment for stock splits, stock dividends, combinations and
other similar recapitalizations affecting such class of Preferred Stock.
"Management Agreements" has the meaning specified in the Purchase
Agreement.
"Person" means an individual, a partnership, a corporation, a limited
liability company, a limited liability, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Public Offering" means any offering by the Corporation of its capital
stock or equity securities to the public pursuant to an effective registration
statement under the Securities Act or any comparable statement under any similar
federal statute then in force.
"Purchase Agreement" means the Purchase Agreement, dated as of March 23,
1999, by and among the Corporation and certain investors, as such agreement may
from time to time be amended in accordance with its terms.
"Redemption Date" as to any Share means the date specified in the notice of
any redemption at the Corporation's option or at the holder's option or the
applicable date specified herein in the case of any other redemption; provided
that no such date shall be a Redemption Date unless the Liquidation Value of
such Share (plus all accrued and unpaid dividends thereon and any required
premium with respect thereto) is actually paid in full on such date, and if not
so paid in full, the Redemption Date shall be the date on which such amount is
fully paid.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any
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Person or one or more Subsidiaries of that person or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing general partner of such
limited liability company, partnership, association or other business entity.
11. Amendment and Waiver. No amendment, modification or waiver shall be
binding or effective with respect to any provision of Part B without the prior
written consent of the holders of a majority of the outstanding shares of the
Class A Preferred. The prior written consent of the holders of a majority of
the outstanding shares of the Class B Preferred shall be required for any
amendment, modification or waiver with respect to any provision of Part B only
if the rights and preferences of the Class B Preferred are adversely affected
thereby.
12. Notices. Except as otherwise expressly provided hereunder, all notices
referred to herein shall be in writing and shall be delivered by registered or
certified mail, return receipt requested and postage prepaid, or by reputable
overnight courier service, charges prepaid, and shall be deemed to have been
given when so mailed or sent (i) to the Corporation, at its principal executive
offices and (ii) to any stockholder, at such holder's address as it appears in
the stock records of the Corporation (unless otherwise indicated by any such
holder).
FIFTH: Except as otherwise provided herein, the Corporation reserves the
right to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute and this Certificate of Incorporation, and all rights conferred upon
stockholders herein are granted subject to this reservation.
SIXTH: In furtherance and not in limitation of the powers conferred upon
it by the laws of the State of Delaware, the Board of Directors shall have the
power to adopt, amend, alter or repeal the Corporation's By-Laws.
SEVENTH: Except to the extent that the General Corporation Law of Delaware
prohibits the elimination or limitation of liability of directors for breaches
of fiduciary duty, no director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, notwithstanding any provision of law imposing such
liability. No amendment to or repeal of this provision shall apply to or have
any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
EIGHTH:
1. Actions, Suits and Proceedings Other than by or in the Right of the
Corporation. The Corporation shall indemnify each person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer, partner, employee or trustee
of, or in a similar capacity with, another
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corporation, partnership, joint venture, trust or other enterprise (including
any employee benefit plan) (all such persons being referred to hereafter as an
"Indemnitee"), or by reason of any action alleged to have been taken or omitted
in such capacity, against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or
on his behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer, partner, employee or trustee
of, or in a similar capacity with, another corporation, partnership, joint
venture, trust or other enterprise (including any employee benefit plan), or by
reason of any action alleged to have been taken or omitted in such capacity,
against all expenses (including attorneys' fees) and, to the extent permitted by
law, amounts paid in settlement actually and reasonably incurred by him or on
his behalf in connection with such action, suit or proceeding and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of Delaware shall
determine upon application that, despite the adjudication of such liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses (including attorneys' fees)
which the Court of Chancery of Delaware shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding the
other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article EIGHTH, or in defense
of any claim, issue or matter therein, or on appeal from any such action, suit
or proceeding, he shall be indemnified against all expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection therewith. Without limiting the foregoing, if any action, suit or
proceeding is disposed of, on the merits or otherwise (including a disposition
without prejudice), without (i) the disposition being adverse to the Indemnitee,
(ii) an adjudication that the Indemnitee was liable to the Corporation, (iii) a
plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that
the Indemnitee did not act in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, and (v) with
respect to any criminal proceeding, an adjudication that the Indemnitee had
reasonable cause to believe his conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.
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4. Notification and Defense of Claim. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such action,
suit, proceeding or investigation, other than as provided below in this Section
4. The Indemnitee shall have the right to employ his own counsel in connection
with such action, suit, proceeding or investigation, but the fees and expenses
of such counsel incurred after notice from the Corporation of its assumption of
the defense thereof shall be at the expense of the Indemnitee unless (i) the
employment of counsel by the Indemnitee has been authorized by the Corporation,
(ii) counsel to the Indemnitee shall have reasonably concluded that there may be
a conflict of interest or position on any significant issue between the
Corporation and the Indemnitee in the conduct of the defense of such action,
suit, proceeding or investigation or (iii) the Corporation shall not in fact
have employed counsel to assume the defense of such action, suit, proceeding or
investigation, in each of which cases the fees and expenses of counsel for the
Indemnitee shall be at the expense of the Corporation, except as otherwise
expressly provided by this Article. The Corporation shall not be entitled,
without the consent of the Indemnitee, to assume the defense of any claim
brought by or in the right of the Corporation or as to which counsel for the
Indemnitee shall have reasonably made the conclusion provided for in clause (ii)
above. The Corporation shall not be required to indemnify the Indemnitee under
this Article for any amounts paid in settlement of any action, suit, proceeding
or investigation effected without its written consent. The Corporation shall
not settle any action, suit, proceeding or investigation in any manner which
would impose any penalty or limitation on the Indemnitee without the
Indemnitee's written consent. Neither the Corporation nor the Indemnitee will
unreasonably withhold or delay its consent to any proposed settlement.
5. Advance of Expenses. Subject to the provisions of Section 6 of this
Article EIGHTH, in the event that the Corporation does not assume the defense
pursuant to Section 4 of this Article EIGHTH of any action, suit, proceeding or
investigation of which the Corporation receives notice under this Article, any
expenses (including attorneys' fees) incurred by an Indemnitee in defending a
civil or criminal action, suit, proceeding or investigation or any appeal
therefrom shall be paid by the Corporation in advance of the final disposition
of such matter; provided, however, that the payment of such expenses incurred by
the Indemnitee in advance of the final disposition of such matter shall be made
only upon receipt of an undertaking by or on behalf of the Indemnitee to repay
all amounts so advanced in the event that it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Article; and further provided that no such advancement of
expenses shall be made if it is determined (in the manner described in Section
6) that (i) the Indemnitee did not act in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, or (ii) with respect to any criminal action or proceeding, the
Indemnitee had reasonable cause to believe his conduct was unlawful. Such
undertaking shall be accepted without reference to the financial ability of the
Indemnitee to make such repayment.
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6. Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article EIGHTH,
the Indemnitee shall submit to the Corporation a written request, including in
such request such documentation and information as is reasonably available to
the Indemnitee and is reasonably necessary to determine whether and to what
extent the Indemnitee is entitled to indemnification or advancement of expenses.
Any such advancement of expenses shall be made promptly, and in any event within
60 days after receipt by the Corporation of the written request of the
Indemnitee, unless with respect to requests under Section 1, 2 or 5 of this
Article EIGHTH the Corporation determines within such 60-day period that the
Indemnitee did not meet the applicable standard of conduct set forth in Section
1, 2 or 5 of this Article EIGHTH, as the case may be. Any such indemnification,
unless ordered by a court, shall be made with respect to requests under Section
1 or 2 only as authorized in the specific case upon a determination by the
Corporation that the indemnification of the Indemnitee is proper because the
Indemnitee has met the applicable standard of conduct set forth in Section 1 or
2, as the case may be. Such determination shall be made in each instance (a) by
a majority vote of the directors of the Corporation consisting of persons who
are not at that time parties to the action, suit or proceeding in question
("disinterested directors"), whether or not a quorum, (b) by a majority vote of
a committee of disinterested directors designated by majority vote of
disinterested directors, whether or not a quorum, (c), if there are no
disinterested directors, or if disinterested directors so direct, by independent
legal counsel (who may, to the extent permitted by law, be regular legal counsel
to the Corporation) in a written opinion, or (d) by the stockholders of the
Corporation.
7. Remedies. The right to indemnification or advances as granted by this
Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction. Neither the failure of the Corporation to have made a
determination prior to the commencement of such action that indemnification is
proper in the circumstances because the Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Corporation pursuant to
Section 6 of this Article EIGHTH that the Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the Indemnitee has not met the applicable standard of conduct. The
Indemnitee's expenses (including attorneys' fees) incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such proceeding shall also be indemnified by the Corporation.
8. Limitations. Notwithstanding anything to the contrary in this Article,
except as set forth in Section 7 of the Article EIGHTH, the Corporation shall
not indemnify an Indemnitee in connection with a proceeding (or part thereof)
initiated by the Indemnitee unless the initiation thereof was approved by the
Board of Directors of the Corporation. Notwithstanding anything to the contrary
in this Article, the Corporation shall not indemnify an Indemnitee to the extent
such Indemnitee is reimbursed from the proceeds of insurance, and in the event
the Corporation makes any indemnification payments to an Indemnitee and such
Indemnitee is subsequently reimbursed from the proceeds of insurance, such
Indemnitee shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance reimbursement.
9. Subsequent Amendment. No amendment, termination or repeal of this
Article or of the relevant provisions of the General Corporation Law of Delaware
or any other applicable laws shall affect or diminish in any way the rights of
any Indemnitee to indemnification under
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the provisions hereof with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the final adoption of such amendment, termination or repeal.
10. Other Rights. The indemnification and advancement of expenses
provided by this Article shall not be deemed exclusive of any other rights to
which an Indemnitee seeking indemnification or advancement of expenses may be
entitled under any law (common or statutory), agreement or vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
Corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article. In addition, the Corporation may, to the extent authorized from time
to time by its Board of Directors, grant indemnification rights to other
employees or agents of the Corporation or other persons serving the Corporation
and such rights may be equivalent to, or greater or less than, those set forth
in this Article.
11. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any appeal
therefrom but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.
12. Insurance. The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation Law of Delaware.
13. Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
14. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the fullest extent permitted
by applicable law.
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15. Definitions. Terms used herein and defined in Section 145(h) and
Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).
16. Subsequent Legislation. If the General Corporation Law of Delaware is
amended after adoption of this Article to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the General Corporation Law of Delaware, as so
amended.
NINTH: The Corporation is to have a perpetual existence.
TENTH: Meetings of stockholders may be held within or outside of the State
of Delaware, as the by-laws of the Corporation may provide. The books of the
Corporation may be kept outside the State of Delaware at such place or places as
may be designated from time to time by the board of directors or in the by-laws
of the Corporation. Election of directors need not be by written ballot unless
the by-laws of the Corporation so provide.
ELEVENTH: The Corporation expressly elects not to be governed by Section
203 of the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Certificate of Incorporation to be signed by its duly authorized officer this
26th day of May, 2000.
ZEFER CORP.
By: /s/ Sean W. Mullaney
--------------------------------------
Name: Sean W. Mullaney
Title: Executive Vice President and
Secretary
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