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SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange
Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[X] Definitive Information Statement
American Gaming & Entertainment, Ltd.
.............................................................................
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
..........................................................
2) Form, Schedule or Registration Statement No.:
..........................................................
3) Filing Party:
..........................................................
4) Date Filed:
..........................................................
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AMERICAN GAMING & ENTERTAINMENT, LTD.
51 Beech Road
Glen Rock, New Jersey 07452
April 20, 2000
Dear Stockholder:
Enclosed is an Information Statement regarding:
1) The transfer (the "Transfer") to Shamrock Holdings Group,
Inc. (together with certain affiliated entities, "Shamrock"),
the Company's majority stockholder and primary creditor, of
substantially all of the Company's assets, including, without
limitation, (a) substantially all of the Company's right, title
and interest under the First Amended Joint Plan of Liquidation
for AMGAM Associates and American Gaming and Resorts of
Mississippi, Inc. and (b) all payments, distributions, dividends
and proceeds of any type to which the Company is entitled
pursuant to or in connection with an Irrevocable Proxy and
Consent Agreement relating to the Company's interest in a
riverboat gaming and entertainment complex in Rising Sun,
Indiana (collectively, the "Transferred Assets"). In exchange
for the Transferred Assets, Shamrock shall release the Company
from all debts and liabilities and shall cause the dismissal
with prejudice of the adversary proceeding captioned Richard C.
Breeden, Trustee of the Bennett Funding Group, Inc. et al v.
Gamma International, American Gaming & Entertainment, Ltd. and
John Does 1 to 100 (AP 98-70465 A) (United States Bankruptcy
Court for the Northern District of New York);
2) The proposed amendment and restatement of the Company's
Certificate of Incorporation to provide for an increase in the
number of authorized shares of the Company's Common Stock to
3,000,000,000 shares (the "Authorized Share Amendment"); and
3) A proposed amendment to the Certificates of Designation
of the Company's Series C Cumulative Preferred Stock ("Series C
Stock") and Series D Cumulative Preferred Stock (Series D
Stock") to provide that dividends shall only be payable, on an
as-if-converted basis, if dividends are paid on the Company's
Common Stock (the "Dividend Amendments", collectively with the
Authorized Share Amendment and the Transfer, the "Proposals").
Details of the Proposals and other important information are set
forth in the accompanying Information Statement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
Under Section 228 of the General Corporation Law of the State of
Delaware, action by stockholders to approve the Proposals may be
taken without a meeting by written consent
<PAGE>
of the holders of the requisite percentage of the shares of
capital stock of the Company entitled to vote thereon. Shamrock
executed a written consent approving the Proposals as February
9, 2000 (the "Consent Date"). Shamrock owned 5,923,454 shares of
Common Stock (with one vote per share) and 55,982.61 shares of
the Company's Series A Preferred Stock (with 25 votes per share)
representing, collectively, approximately 52.6% of the total
voting power of the Company as of the Consent Date,. Pursuant to
the Certificates of Designation of the Series C Stock and Series
D Stock, any change adversely affecting the powers, special
rights or preferences of the holders requires the affirmative
vote of at least two-thirds of the outstanding shares of Series
C Stock and Series D Stock, respectively. Shamrock owned all of
the outstanding Series C Stock and Series D Stock as of the
Consent Date and executed a written consent approving the
Dividend Amendments as of such date. No other vote or
stockholder action is required.
The Company expects the Proposals will become effective
twenty (20) days after the mailing of the enclosed Information
Statement and upon the filing of a Restated Certificate of
Incorporation with the State of Delaware, each of which is
anticipated to be on or about May 10, 2000.
The Proposals are more fully described in the accompanying
Information Statement and in the exhibits thereto, all of which
you are urged to read carefully.
Sincerely,
J. Douglas Wellington
President and Chief Executive Officer
<PAGE>
INFORMATION STATEMENT
AMERICAN GAMING & ENTERTAINMENT, LTD.
51 Beech Road
Glen Rock, New Jersey 07452
Introduction
This Information Statement is being furnished by American Gaming
& Entertainment, Ltd., a Delaware corporation, (the "Company")
to its stockholders in connection with:
1) The transfer (the "Transfer") to Shamrock Holdings Group,
Inc. (together with certain affiliated entities, "Shamrock"),
the Company's majority stockholder and primary creditor, of
substantially all of the Company's assets, including, without
limitation, (a) substantially all of the Company's right, title
and interest (the "Mississippi Interest") under the First
Amended Joint Plan of Liquidation (the "Mississippi Plan") for
AMGAM Associates ("AMGAM") and American Gaming and Resorts of
Mississippi, Inc. ("AGRM") and (b) all payments, distributions,
dividends and proceeds of any type to which the Company is
entitled pursuant to or in connection with an Irrevocable Proxy
and Consent Agreement relating to the Company's 4.9% interest in
a riverboat gaming and entertainment complex in Rising Sun,
Indiana (the "RSR Interest") (collectively, the "Transferred
Assets"). In exchange for the Transferred Assets, Shamrock shall
release the Company from all debts and liabilities and shall
cause the dismissal with prejudice of the adversary proceeding
captioned Richard C. Breeden, Trustee of the Bennett Funding
Group, Inc. et al v. Gamma International, American Gaming &
Entertainment, Ltd. and John Does 1 to 100 (AP 98-70465 A)
(United States Bankruptcy Court for the Northern District of New
York) (the "Bennett Lawsuit");
2) The proposed amendment and restatement of the Company's
Certificate of Incorporation to provide for an increase in the
number of authorized shares of the Company's Common Stock, $0.01
par value per share ("Common Stock") to 3,000,000,000 shares
(the "Authorized Share Amendment"); and
3) A proposed amendment to the Certificates of Designation
of the Company's Series C Cumulative Preferred Stock, $0.01 par
value per share ("Series C Stock") and Series D Cumulative
Preferred Stock, $0.01 par value per share (Series D Stock") to
provide that dividends shall only be payable, on an as-if-
converted basis, if dividends are paid on the Company's Common
Stock (the "Dividend Amendments", collectively with the
Authorized Share Amendment and the Transfer, the "Proposals").
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This Information Statement is first being sent or given to
the Company's stockholders on or about April 20, 2000.
History and Expected Effective Date of Proposals
On November 19, 1999 the Board of Directors of the Company
unanimously adopted resolutions declaring the advisability of
the Proposals and directing that written consents approving the
Proposals be obtained from Shamrock, as the largest stockholder
of the Company, and that this Information Statement be mailed
thereafter to the other stockholders of the Company. On December
16, 1999 (the "Approval Date"), the Transfer was approved by
United States Bankruptcy Court for the Northern District of New
York (the "NYBC"), the court in which Shamrock was a debtor in
bankruptcy protection from June 1998 through February 2000, with
certain modifications discussed below. Shamrock executed a
written consent approving the Proposals on February 9, 2000 (the
"Consent Date").
Under Delaware law, stockholders of the Company are not
entitled to dissenter's rights of appraisal in connection with
the Proposals. The Company expects the Proposals will become
effective twenty (20) days after the mailing of this Information
Statement and upon the filing of a Restated Certificate of
Incorporation with the State of Delaware, each of which is
anticipated to be on or about May 10, 2000.
Approval of the Proposals by the Company's largest stockholder
and its affiliates
The Company's only classes of voting securities are its Common
Stock and its Series A Preferred stock, $0.01 par value per
share ("Series A Stock"). As of the Consent Date, there were
12,532,102 shares of Common Stock and 55,982.61 shares of the
Company's Series A Stock outstanding and entitled to vote with
respect to the Proposals. Each share of Common Stock is entitled
to one vote with respect to the Proposals. Each share of the
Series A Stock is entitled to 25 votes with respect to the
Proposals. Approval of the Proposals requires 6,965,835 votes.
Except as discussed below, no vote of any holders of the Common
Stock or Series A Stock, other than Shamrock, is required in
connection with the Proposals.
Under Section 228 of the General Corporation Law of the State of
Delaware (the "DGCL"), any action required by law or permitted
to be taken at an annual or special meeting of stockholders of a
Delaware corporation may be taken without a meeting, without
prior notice and without a vote, if a consent in writing,
setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of such action by written
consent must be given to those stockholders who have not
consented in writing.
Pursuant to Section 271 of the DGCL, the Proposals must be
approved by a majority of the outstanding stock entitled to vote
thereon, that is, a majority of the total voting power
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of the Company's outstanding voting securities.
Shamrock, the record owners as of the Consent Date of an
aggregate of 5,923,454 shares of Common Stock and all 55,982.61
shares of the Series A Stock, representing 7,323,020 votes or
approximately 52.6% of the total voting power of the Company's
voting securities, executed a written consent, dated as of the
Consent Date approving the Proposals. Pursuant to the
Certificates of Designation of the Series C Stock and Series D
Stock, any change adversely affecting the powers, special rights
or preferences of the holders requires the affirmative vote of
at least two-thirds of the outstanding shares of Series C Stock
and Series D Stock, respectively. Shamrock, the record owners as
of the Consent Date of all of the outstanding Series C Stock and
Series D Stock, executed a written consent approving the
Dividend Amendments as of such date. Therefore, no vote or
further action of the Company's stockholders is required in
order to approve the Proposals.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
The Company is required, in accordance with Rule 14c-2 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to mail this Information Statement to stockholders of the
Company no later than 20 days prior to the date the Proposals
will become effective. The Company anticipates that the
Proposals will become effective twenty (20) days after the
mailing of this Information Statement and upon the filing of a
Restated Certificate of Incorporation with the State of
Delaware, each of which is anticipated to be on or about May 10,
2000. This Information Statement shall also constitute notice of
the approval of the Proposals by less than unanimous written
consent to the stockholders who have not so consented thereto as
required by Section 228 of the DGCL.
The Parties.
The Company, with principal executive offices at 51 Beech Road,
Glen Rock, New Jersey 07452, and a telephone number of (201)
447-5360, owns equity interests in various properties that, at
the respective times of purchase, the Company anticipated could
be utilized in casino gaming projects. The Company owns the RSR
Interest and the Mississippi Interest. The Company is no longer
actively seeking to develop gaming projects and is currently
managing its equity interests.
Shamrock, with principal executive offices at Two Clinton
Square, Syracuse, New York 13202, and a telephone number of
(315) 422-9000, owns directly and beneficially through its
investment in the Company equity interests in various properties
that, at the respective times of purchase, Shamrock anticipated
could be utilized in casino gaming projects. Shamrock is no
longer actively seeking to develop gaming projects.
Summary Term Sheet for the Proposals.
. The Company will give Shamrock cash of approximately
$5,264,000 from the
<PAGE>
liquidation of AMGAM and AGRM.
. The Company will give Shamrock approximately $3,377,000
from payments to be paid over time from the liquidation
of AMGAM and AGRM.
. The Company will give Shamrock cash of approximately
$1,171,000 being held in escrow, relating to the RSR
Interest.
. The Company will give Shamrock any proceeds from the
sale of the RSR Interest.
. The Company will give Shamrock a security interest in
the RSR Interest.
. The Company will keep cash of approximately $464,000 to
pay anticipated expenses through January 31, 2001.
. All debt due from the Company to Shamrock, totaling
approximately $64,315,000, will be canceled.
. Shamrock owns all of the Company's preferred stock.
Shamrock will be entitled to dividends on preferred
stock only if dividends are paid on the Common Stock.
. A lawsuit filed by the President of Shamrock against the
Company will be dismissed.
. The Company will employ its current President and CEO
through January 31, 2001. The President might then
receive a severance payment of $125,000 from Shamrock.
Description of the Proposals. The following is a summary of the
Proposals.
The Transfer. In accordance with the Letter Agreement dated
November 23, 1999 between Shamrock and the Company (the "Letter
Agreement"), the Company is transferring to Shamrock the
Transferred Assets, including the RSR Interest and the
Mississippi Interest. The Transferred Assets constitute
substantially all of the assets of the Company. The transfer of
the Transferred Assets will reduce the Company's indebtedness to
Shamrock. The Company shall retain sufficient cash as to have
$464,000 as of January 1, 2000, less legal retainers plus
accounts payable incurred in the ordinary course of business to
bona fide third parties and mutually agreed upon by the Company
and Shamrock. Such retained amount represents the Company's
budgeted costs through January 31, 2001. As of January 31, 2001,
after paying any and all outstanding expenses, the Company would
transfer all remaining cash to Shamrock.
The Letter Agreement was approved by the NYBC on December 16,
1999. However, pursuant to an order by the NYBC dated December
23, 1999, the release by Shamrock of the Company is conditioned
upon the Company's fulfillment of its obligations under the
Letter Agreement, and the release of Mr. J. Douglas Wellington,
the President and Chief Executive Officer of the Company, by
Shamrock was effective as of December 23, 1999, except for his
obligations under his employment contract dated as of December
31, 1999.
In accordance with the Letter Agreement, the Company executed a
security agreement in favor of Shamrock relating to the RSR
Interest in exchange for Shamrock agreeing to forebear from the
exercise of any rights or remedies in respect of all obligations
owing by the Company to Shamrock.
<PAGE>
Pursuant to the Letter Agreement, Shamrock shall release the
Company from all debts and liabilities, in excess of the amount
of the Transferred Assets, and shall cause the dismissal with
prejudice of the Bennett Lawsuit.
Shamrock has agreed to waive all accrued dividends, whether
declared or undeclared, on the Series C Stock and Series D
Stock. Although undeclared dividends do not constitute legal
obligations of the Company, the Company accrued for such
dividends because, under the terms of the Series C Stock and the
Series D Stock, dividends are cumulative whether or not declared
and the Company was prohibited from paying dividends on,
purchasing or redeeming any of its Series A Stock or Common
Stock so long as any such cumulated dividends were unpaid.
Shamrock has further agreed to waive any future dividends on
such preferred stock so long as Shamrock owns such preferred
stock, provided, however, that if the Company declares any
dividends on its Common Stock or redeems any of its Common Stock
or Series A Stock, other than Common Stock or Series A Stock
owned by Shamrock, then the holders of Series C Stock and Series
D Stock shall be entitled to participate in such dividend or
redemption on the same basis as if such Series C Stock and
Series D Stock had been converted into Common Stock in
accordance with the terms of such Series C Stock and Series D
Stock. All other provisions of the Series C Stock and Series D
Stock shall remain in effect, including, without limitation,
provisions regarding voting and conversion.
The Company shall release Shamrock from all debts and
liabilities and shall withdraw all claims in the bankruptcy
cases of Shamrock and Bennett Funding Group, Inc. et al. The
Company shall endeavor to find a buyer of its stock and/or
remaining assets during the term ending January 31, 2001.
Mr. Wellington has agreed to continue his employment with the
Company through the term ending January 31, 2001 at an annual
compensation of $125,000. At the end of such term, assuming that
there has been no intervening voluntary bankruptcy filing by the
Company without Shamrock's consent and assuming that the
provisions of the Letter Agreement and Mr. Wellington's
employment contract are met, Mr. Wellington shall be entitled to
a severance payment of $125,000 from a reserve account set aside
and controlled by Shamrock.
A copy of the Letter Agreement, pursuant to which the Company is
transferring the Transferred Assets to Shamrock, is attached
hereto as Exhibit 1.
The Authorized Share Amendment. The Company is amending its
Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 50,000,000 shares to
3,000,000,000 shares. A copy of the proposed Restated
Certificate of Incorporation for the Company is attached hereto
as Exhibit 2.
The Dividend Amendments. As discussed above, Shamrock has agreed
to waive all accrued dividends, whether declared or undeclared,
on the Series C Stock and Series D Stock. As a result of the
Dividend Amendments, the holders of Series C Stock and
<PAGE>
Series D Stock shall be entitled to participate in any dividends
declared on the Company's Common Stock or redemption of any of
the Company's Common Stock or Series A Stock, other than Common
Stock or Series A Stock owned by Shamrock and its affiliates, on
the same basis as if such Series C Stock and Series D Stock had
been converted into Common Stock in accordance with the terms of
such Series C Stock and Series D Stock, only if the Company
declares such dividends or redeems such stocks. The proposed
amended Certificates of Designation of the Series C Stock and
Series D Stock are attached hereto as Exhibits B and C,
respectively, to Exhibit 2.
Reasons for the Proposals. The Board of Directors of the Company
believes that the Proposals are in the best interests of the
Company's stockholders and creditors for the reasons set forth
below.
The Transfer. As of the Approval Date, the Company was indebted
to Shamrock in the amount of approximately $64,315,000. The
Company was delinquent in the payment of interest and declared
dividends to Shamrock, among other defaults. As of the Approval
Date, the Company had total assets with a book value of
approximately $10,487,000 and a market value estimated at
$16,400,000 or less.
If the transactions under the Letter Agreement, including the
Transfer and the release by Shamrock of the remaining debt owed
by the Company to Shamrock had occurred as of December 31, 1999,
the Company's book value per common share would have increased
as of such date from ($4.31) to $0.04, as a result of a decrease
in assets of $9,915,000 offset by a decrease in liabilities of
$64,347,000. Assuming the Company fulfills its obligations under
the Letter Agreement, the Company shall no longer be in default
of its debt obligations to Shamrock. Additionally, so long as no
dividends are declared on the Common Stock, dividends will no
longer accrue on the Series C Stock and Series D Stock. If the
Company does not fulfill its obligations under the Letter
Agreement, the Company will be indebted to Shamrock in the
amount of approximately $64,347,000, less the market value of
the Transferred Assets.
Also, as a result of the Transfer, the Bennett Lawsuit, seeking
payment of approximately $70,155,000, shall be dismissed with
prejudice.
The Authorized Share Amendment. Except for their rights to
accrued dividends, Shamrock and its affiliates are retaining all
rights of their equity interests (including, without limitation,
common and preferred interests) in the Company.
Shamrock and its affiliates own all of the Company's outstanding
Series C Stock, Series D Stock and Series E Preferred Stock,
$0.01 par value per share ("Series E Stock"), convertible as of
December 31, 1999 into 2,296,243,886 shares of Common Stock. The
Company does not have a sufficient number of authorized shares
of
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Common Stock to enable the conversion of all of the Series C
Stock, the Series D Stock and the Series E Stock. As of the date
of this Information Statement, Shamrock and its affiliates have
not asserted any rights they may have against the Company for
the Company's failure to maintain a sufficient number of
authorized shares of Common Stock to enable the Shamrock and its
affiliates to convert all of the Series C Stock, the Series D
Stock and the Series E Stock. As a result of the Authorized
Share Amendment, the Company anticipates having a sufficient
number of authorized shares of Common Stock to enable Shamrock
to convert all of the Series C Stock, the Series D Stock and the
Series E Stock through January 31, 2001.
The Dividend Amendments. As discussed above, Shamrock has agreed
to waive all accrued dividends, whether declared or undeclared,
on the Series C Stock and the Series D Stock. As of the date the
Letter Agreement was approved by the NYBC, the Company had
accrued dividends of approximately $3,153,000, collectively, on
the Series C Stock and the Series D Stock, consisting of
declared dividends of approximately $303,000 and undeclared
dividends of approximately $2,850,000. Shamrock has further
agreed to waive any future dividends on such preferred stock so
long as Shamrock owns such preferred stock, provided, however,
that if the Company declares any dividends on its Common Stock
or redeems any of its Common Stock or Series A Stock, other than
Common Stock or Series A Stock owned by Shamrock, then the
holders of Series C Stock and Series D Stock shall be entitled
to participate in such dividend or redemption on the same basis
as if such Series C Stock and Series D Stock had been converted
into Common Stock in accordance with the terms of such Series C
Stock and Series D Stock. The Company has never declared or paid
any dividends on its Common Stock. The Board of Directors
presently intends to retain any and all earnings for use in the
Company's business and therefore does not anticipate paying any
cash dividends on the Common Stock in the foreseeable future.
Prior to the date the Letter Agreement was approved by the NYBC,
the Company accrued dividends of $75,000 per quarter on each of
the Series C Stock and the Series D Stock. As of such date, the
Company reversed all accrued dividends. If the Proposals do not
become effective, the Company will be obligated to Shamrock for
declared dividends in the amount of approximately $303,000 and
will accrue for undeclared dividends. If the Proposals become
effective, but the Company does not fulfill its obligations
under the Letter Agreement, the Company will be indebted to
Shamrock in the amount of the declared dividends.
<PAGE>
Principal effects of the Proposals.
The following table sets forth certain effects of the Proposals
on certain financial data of the Company, assuming the Proposals
were effective as of December 31, 1999.
As at, or for the year ended,
December 31, 1999, prior to Adjusted for Letter
Selected Financial Data adjustment Agreement transactions
======================= =========================== ======================
THE COMPANY
===========
Revenues $11,743,000 $11,743,000
Net income from continuing
operations 8,852,000 12,950,000
Net income from continuing
operations per common share 0.71 1.03
Net income 8,852,000 60,131,000
Net income per share 0.71 4.80
Net income for common
stockholders 6,985,000 61,417,000
Net income for common
stockholders per share 0.56 4.90
Total assets 10,487,000 573,000
Long-term obligations - -
Cash dividends declared per
common share - -
Book value per common share (4.31) 0.04
Net income from continuing operations would increase due to a
net gain of approximately $4,098,000 resulting from the
cancellation of indebtedness to Shamrock in exchange for all
payments, distributions, dividends and proceeds of any type to
which the Company is entitled pursuant to or in connection with
the Proxy Agreement relating to the RSR Interest, in accordance
with the terms of the Letter Agreement. The Company has valued
the RSR Interest, exclusive of distributions being escrowed for
the benefit of the Company, as the average of the appraisal of
the value of the RSR Interest obtained by the Company and the
value the Company understands an appraiser for RSR placed on the
RSR Interest.
Pursuant to the Letter Agreement, Shamrock will release the
Company from all debts and liabilities in excess of the amount
of the Transferred Assets. Accordingly, net income would
additionally increase by approximately $47,181,000.
Finally, net income for common stockholders per share would
further additionally increase by approximately $3,153,000 as a
result of the reversal of previously accrued dividends.
Total assets and book value per common share reflect a decrease
in assets in the amount
<PAGE>
of approximately $9,915,000 and a decrease in liabilities in the
amount of approximately $64,347,000 as a result of the Transfer.
Assuming the Authorized Share Amendment was effective as of
December 31, 1999 and Shamrock converted that number of shares
of the Series C Stock, the Series D Stock and the Series E Stock
convertible into the total number of the Company's authorized
but unissued shares of Common Stock immediately after giving
effect to such amendment (i.e. resulting in a total of
2,296,243,886 shares of Common Stock being issued to Shamrock as
of such date), Shamrock would own approximately 99.7% of both
the total outstanding shares of Common Stock and the total
voting power represented by the total outstanding voting
securities of the Company.
Upon the filing of a Restated Certificate of Incorporation with
the State of Delaware, dividends will no longer accrue on the
Series C Stock and Series D Stock, unless the Company declares a
dividend on the Common Stock. The Company would not longer be in
potential breach for failing to maintain a sufficient number of
authorized shares of Common Stock to enable Shamrock to convert
all of the Series C Stock, the Series D Stock and the Series E
Stock and for not paying Shamrock declared dividends on the
Series C Stock and Series D Stock.
Federal income tax consequences of the Proposals. The Proposals
are not expected to result in any tax gain to the Company.
The partial repayment of debt to Shamrock will be effectuated by
the transfer of the Transferred Assets and is a non-taxable
event. Under Section 108 of the Internal Revenue Code of 1986,
as amended (the "Tax Code"), if a company is "insolvent", as the
Company is, any forgiveness of debt will not result in taxable
income to the extent of insolvency. In the instant situation,
the release by Shamrock of the remaining debt owed by the
Company to Shamrock will not result in any taxable gain,
although the Company's net operating loss carryforwards ("NOLs")
and other tax attributes will be reduced by the amount of such
forgiveness. The Company anticipates that after the Transfer it
will no longer have any NOLs.
The Authorized Share Amendment is solely a corporate action,
with no tax effects on the Company's stockholders.
The waiver of declared dividends, as a debt of the Company, has
the tax effects discussed above. Undeclared dividends do not
constitute legal obligations of the Company, and therefore the
reversal of such accrued dividends has no tax effects.
Regulatory requirements. Other than the filing and mailing of
this Information Statement, there are no federal or state
regulatory requirements that must be complied with or approval
that must be obtained in connection with the Proposals.
Material contracts between the Company and Shamrock.
For the two years prior to the Letter Agreement, Shamrock was
the Company's primary
<PAGE>
creditor. The Company was indebted to Shamrock for approximately
(i) $1,066,000 related to a working capital line of credit, (ii)
2,041,000 related to a term loan to assist the Company in
financing pertaining to the Gold Shore Casino in Mississippi,
(iii) $384,000 related to the Company's utilization of slot
machine sales proceeds, which slot machines were beneficially
owned by Shamrock and (iv) $31,101,000 related to project
financing for the Gold Shore Casino. The Company was also
indebted to Shamrock for approximately $2,701,000 in rent due
under a gaming vessel lease.
As described above, Shamrock owns 5,923,454 shares of Common
Stock and of the Series A Stock, Series C Stock, Series D Stock
and Series E Stock. For the two years prior to the Letter
Agreement, the Company was indebted to Shamrock for declared
dividends on the Series C Stock and Series D Stock totaling
approximately $303,000 and had accrued for undeclared dividends
on such preferred stock.
On October 21, 1998, the Company and Shamrock executed a letter
agreement providing that any payments to the Company under the
Mississippi Plan would be escrowed and disbursed only upon the
order of the NYBC.
As discussed above, on November 23, 1999, the Company and
Shamrock entered into the Letter Agreement and on December 16,
1999, the Company executed a security agreement in favor of
Shamrock relating to the RSR Interest.
Effect on Securities. The Common Stock is currently registered
under section 12(g) of the Exchange Act, and as a result, the
Company is subject to the periodic reporting and other
requirements of the Exchange Act. The consummation of the
Transfer will not affect the registration of the Common Stock
under the Exchange Act. The Company does not anticipate that the
Transfer will materially affect the price of the Common Stock.
Shamrock owned, as of the Consent Date, an aggregate of
5,923,454 shares of Common Stock and 55,982.61 shares of the
Series A Stock or approximately 52.6% of the total voting power
of the Company's voting securities. Assuming that (a) the
effective date Authorized Share Amendment occurs in the first
quarter of 2000, (b) the price of the Common Stock at such time
is $0.02 per share, (c) Shamrock and its affiliates convert all
shares of the Series C Stock, the Series D Stock and the Series
E Stock into Common Stock at that time and (d) no additional
shares of voting stock are issued prior to such time, Shamrock
and its affiliates would own an aggregate of 1,169,416,787
shares of Common Stock and 55,982.61 shares of the Series A
Stock or approximately 99.4% of the total voting power of the
Company's voting securities.
Abandonment of Proposals by the Board. At any time prior to the
effective date of the Proposals, the Board of Directors of the
Company is authorized to abandon any of the Proposals without a
further vote or consent of the stockholders of the Company if,
for any reason, the Board of Directors deems it advisable to so
abandon such Proposal, subject to the rights, if any, of third
parties under the Letter Agreement.
<PAGE>
Appraisal rights. Under Delaware law, the stockholders of the
Company are not entitled to dissenters' rights of appraisal in
connection with the Proposals.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of the Consent
Date with respect to the only persons or groups known to the
Company who may be deemed to own beneficially more than 5% of
the Company's voting securities (i.e. Common Stock or Series A
Preferred Stock). Unless otherwise noted, each holder has sole
voting and investment power with respect to the shares of the
listed securities.
Title of Class Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial
Ownership (1)
Common Stock Shamrock Holdings 5,823,019 (2) 41.8%
Group, Inc.
2 Clinton Square
Syracuse, NY 13202
Common Stock Richard C. Breeden, 382,643,499 (3) 98.3%
Trustee
C/o Shamrock
Holdings Group, Inc.
2 Clinton Square
Syracuse, NY 13202
Series A Shamrock Holdings 55,982.61 (4) 100%
Preferred Stock Group, Inc.
2 Clinton Square
Syracuse, NY 13202
Series A Richard C. Breeden, 55,982.61 (5) 100%
Preferred Stock Trustee
C/o Shamrock
Holdings Group, Inc.
2 Clinton Square
Syracuse, NY 13202
<PAGE>
(1) Based on information supplied by persons listed or as
reported on the most recent Schedule 13D filed by any such
persons. As used in this table, "beneficial ownership" of
securities means the sole or shared power to vote, or to direct
the voting of, such securities, or the sole or shared investment
power with respect to such securities, including the power to
dispose of, or to direct the disposition of, such securities.
In addition, for purposes of this table, a person is deemed to
have "beneficial ownership" of any security that such person had
the right to acquire within 60 days after the Consent Date.
(2) Includes 1,399,565 shares of Common Stock issuable upon
the conversion of Series A Preferred Stock.
(3) Includes the 5,823,019 shares of Common Stock beneficially
owned by Shamrock. The Company understands that Mr. Breeden (the
"Bennett Funding Trustee") is sole stockholder and President of
Shamrock. Includes, collectively, 375,320,430 shares of Common
Stock issuable upon conversion of Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock, assuming
that those conversions took place on the Consent Date and that
the Company amended its Certificate of Incorporation by
increasing the number of authorized shares of Common Stock to
3,000,000,000 shares.
(4) Each share of Series A Preferred Stock is convertible into
25 shares of Common Stock.
(5) Includes the 55,982.61 shares of Series A Preferred Stock
beneficially owned by Shamrock. The Company understands that the
Bennett Funding Trustee is sole stockholder and President of
Shamrock.
<PAGE>
Security Ownership of Management
The following table sets forth information as of the Consent
Date with respect to (i) each director, (ii) all individuals
serving as the Company's CEO during 1999, and (iii) all
directors and all such executive officers as a group. Unless
otherwise noted, each holder has sole voting and investment
power with respect to the shares of the listed securities. An
asterisk (*) indicates beneficial ownership of less than 1%.
COMMON STOCK
Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
(1)
J. Douglas Wellington 518,750 3.97%
c/o American Gaming &
Entertainment, Ltd.,
51 Beech Road,
Glen Rock, New Jersey,
07652
Executive Officers and 518,750 3.97%
Directors as a group (1
person)
(1) As used in this table, "beneficial ownership" of
securities means the sole or shared power to vote, or to direct
the voting of, such securities, and/or the sole or shared
investment power with respect to such securities (i.e., the
power to dispose of, or to direct the disposition of, such
securities). In addition, for purposes of this table, a person
is deemed to have "beneficial ownership" of any security which
such person had the right to acquire within 60 days after the
Consent Date.
<PAGE>
Distribution of Information Statement
The cost of distributing this Information Statement has been
borne by the Company. The distribution will be made by mail.
BY ORDER OF THE BOARD OF DIRECTORS
J. Douglas Wellington
President and Chief Executive Officer
Dated: April 20, 2000
<PAGE>
EXHIBIT 1
November 23, 1999
J. Douglas Wellington
President & CEO
American Gaming & Entertainment, Ltd.
51 Beech Road
Glen Rock, New Jersey 07452
Re: In re The Bennett Funding Group, Inc.
Case No. 96-61376 (as substantively consolidated, "Bennett")
In re Shamrock Holdings Group, Inc. ("Shamrock")
Case No. 98-63631
Dear Mr. Wellington:
This letter agreement is written in connection with the
resolution of certain claims among American Gaming &
Entertainment, Ltd. and its subsidiaries and affiliates
including, without limitation, Emerald Gaming, Inc., AMGAM
Associates ("AMGAM") and American Gaming and Resorts of
Mississippi, Inc. ("AGRM") (collectively, "AGEL"), Shamrock and
Bennett.
Shamrock, Bennett and AGEL agree as follows:
1. On the Effective Date:
a. AGEL releases Shamrock and Bennett from all claims,
obligations, liabilities, causes of action, suits, debts, dues,
warrants, accountings, or any other claim incurred or arising at
any time from the beginning of the world through the Effective
Date (as defined below) except for their respective obligations
under this letter agreement.
b. Shamrock and Bennett release AGEL from all claims,
obligations, liabilities, causes of action, suits, debts, dues,
warrants, accountings, or any other claim incurred or arising at
any time from the beginning of the world through the Effective
Date except for their obligations under this letter agreement.
c. Mississippi Claims. Except as set forth in
paragraph 3(a) hereof, AGEL hereby transfers to Shamrock all of
its right, title and interest in all of its rights, title and
interests under the First Amended Joint Plan of Liquidation for
AmGam Associates and American Gaming and Resorts of Mississippi,
Inc. and all documents and instruments related thereto or
executed in connection therewith, as such Plan has been
<PAGE>
confirmed by the United States Bankruptcy Court for the District
of Mississippi.
d. Rising Sun Casino. Except as set forth in
paragraph 3(a) hereof, AGEL shall deliver or cause to be delivered
directly to Shamrock immediately upon receipt all payments,
distributions, dividends and proceeds of any type to which AGEL is
entitled pursuant to or in connection therewith the Irrevocable
Proxy and Consent Agreement dated August 23, 1996 by and between
Paul R. Partridge, Patrick F. Daly, James A. Everatt, Charles E.
Reisert, Eric C. Jackson and AGEL, as amended, including
distributions already made or to be made into the Rising Sun
escrow account which totaled approximately $1,148,428.16 as of
September 3, 1999, in addition to all other monies held by RSR for
the benefit of AGEL and all other rights which may be held by
Shamrock and obligations of AGEL in connection therewith. On or
before the Effective Date, AGEL and Shamrock shall execute a
security agreement relating to AGEL's interest in the Rising Sun
Casino in a form mutually agreeable to Shamrock and AGEL.
e. Withdrawal of Claims. AGEL withdraws all claims
in the bankruptcy cases of Shamrock and Bennett with prejudice.
2. Preservation of Equity Interests.
a. Nothing in this letter agreement shall constitute a
waiver or release of any type of Shamrock's or Bennett's equity
interests (including, without limitation, common and preferred
interests) and all rights related thereto in AGEL.
b. Notwithstanding the foregoing, however, Shamrock
and its affiliates agree to forgive all accrued dividends,
whether declared or undeclared, on AGEL's Series C Cumulative
Preferred Stock and Series D Cumulative Preferred Stock.
Shamrock and its affiliates further agree to waive any future
dividends on such preferred stock so long as Shamrock or its
affiliates own such preferred stock, provided, however, that if
AGEL declares any dividends on its Common Stock or redeems any
of its Common Stock or redeem any of its Common Stock or Series
A Preferred Stock, other than Common Stock or Series A Preferred
Stock owned by Shamrock and its affiliates, then dividends on
the Series C Cumulative Preferred Stock and Series D Cumulative
Preferred Stock shall accrue as of such date and the holders of
Preferred Stock shall be entitled to participate in such
dividend or redemption on the same basis as if such Preferred
Stock had been converted into Common Stock in accordance with
the terms of such Preferred Stock. All other provisions of the
Series C Cumulative Preferred Stock and Series D Cumulative
Preferred Stock shall remain in effect, including, without
limitation, provisions regarding voting and conversion.
c. AGEL shall endeavor to find during the thirteen month
term referred to in paragraph 5 hereof or such longer term as
agreed to by Shamrock in writing, a buyer of its stock and/or
remaining assets in cooperation with Shamrock and Bennett so as to
maximize for its stockholders any residuary value of AGEL.
<PAGE>
3. Retention of Certain Assets by AGEL.
a. AGEL shall be permitted to retain sufficient cash as
to have $464,000, less legal retainers and plus accounts payable
incurred in the ordinary course of business to bona fide third
parties and mutually agreed upon by AGEL and Shamrock, as of
January 1, 2000 in the aggregate which shall be used for ordinary
working capital purposes including officer and employee
compensation pursuant to the budget attached as Exhibit A. All
other monies and assets shall be delivered to Shamrock. AGEL
shall each month deliver to Shamrock a monthly statement for the
preceding month showing AGEL's actual expenses. AGEL and Shamrock
shall review AGEL's expenses at least on a quarterly basis to
determine if additional expense reductions can be made to,
including, Directors and Officers insurance and legal expenses.
Any monies retained by AGEL as of January 31, 2001, after paying
any and all outstanding expenses, shall be delivered to Shamrock.
b. Prior to the hearing by the United States Bankruptcy
Court for the Northern District of New York seeking approval of
this letter agreement, AGEL shall deliver an affidavit of its
President & CEO in form satisfactory to Shamrock and its counsel
certifying that AGEL has no liabilities other than the types and
amounts disclosed on its balance sheet dated as of September 30,
1999, a true copy of which shall be attached to such affidavit.
4. Employment of Wellington. J. Douglas Wellington
("Wellington") agrees to continue his employment by AGEL until at
least thirteen months following the Effective Date in order to
carry out his duties as President and Chief Executive Officer of
AGEL pursuant to the form of employment agreement attached as
Exhibit B ("Employment Agreement"). The Employment Agreement,
which supersedes the Employment Agreement dated September 12,
1996, as amended, shall not be amended without the prior written
consent of Shamrock and Bennett. AGEL shall provide Shamrock and
Bennett with reporting concerning its business and financial
activities from time to time as reasonably requested by Shamrock
and Bennett. Wellington's employment contract shall have a
thirteen month term, compensation of $125,000 annually for that
term, and $125,000 severance payment payable on termination of
agreement from a reserve account set aside and controlled by
Shamrock, assuming (a) no intervening voluntary bankruptcy filing
by AGEL prior to the conclusion of the thirteen month period
without Shamrock's consent and (b) provisions of this letter
agreement and employment agreement are met. Wellington's existing
employment agreement with AGEL shall remain in effect until this
letter agreement is approved by the United States Bankruptcy Court
of the Northern District of New York.
5. Corporate Existence. AGEL shall maintain its corporate
existence for a period of no less than thirteen months following
the Effective Date.
6. Dismissal of Adversary Proceeding. Bennett shall
dismiss the adversary proceeding captioned Richard C. Breeden,
Trustee of the Bennett Funding Group, Inc., et al v. Gamma
International, American Gaming & Entertainment, Ltd. and John Does
1 to 100 (AP 98-70465 A) (United States Bankruptcy Court for the
Northern District of
<PAGE>
New York) on the Effective Date, with prejudice and without costs.
7. Further Assurances. Each of AGEL, Shamrock and Bennett
agree to cooperate with each other to effectuate the intent of
this letter agreement including, without limitation, (a) the
active assistance of AGEL and Wellington in realizing upon the
assets of comprising the Mississippi Claim, the Rising Sun Casino
and other property of AGEL, and (b) the execution and delivery by
AGEL of notices to third parties respecting the delivery of
property directly to Shamrock or Bennett as the case may be as
contemplated by this letter agreement.
8. Effective Date. This letter agreement shall become
effective and binding upon the parties hereto ("Effective Date")
upon the entry of an Order of the United States Bankruptcy Court
for the Northern District of New York approving this letter
agreement, and such Order becoming a final order such that it is
not subject to appeal or reconsideration unless the condition of a
final order is waived by the parties hereto.
9. Notices. Wherever notices are required to be given
under this letter agreement, they shall be given by certified
mail, return receipt requested as follows:
If to AGEL: J. Douglas Wellington
51 Beech Road
Glen Rock, NJ 07452
Fax: (201) 447-1892
With copy to: Sharon L. Levine, Esq.
Ravin, Sarasohn, Cook, Baumgarten, Fisch &
Rosen, P.C.
103 Eisenhower Parkway
Roseland, NJ 07068-1072
Fax: (973) 228-9250
If to Shamrock: Shamrock Holding Group, Inc.
Clinton Square
Syracuse, New York 13202
Attn: Richard C. Breeden, President
Fax: (315) 422-9361
With copy to: William Brown, Esq.
Phillips, Lytle, Hitchcock, Blaine &
Huber, LLP
3400 HSBC Center
Buffalo, New York 14203
Fax: (716) 852-6100
<PAGE>
If to Bennett: Bennett Funding Group, Inc.
Clinton Square
Syracuse, New York 13202
Attn: Richard C. Breeden, Trustee
Fax: (315) 422-9361
With copy to: M.O. Sigal, Jr., Esq.
Simpson, Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax: (212) 455-2502
10. This letter agreement contains the entire agreement of
the parties hereto with respect to the subject matter hereof and
shall be governed by the internal laws of the State of New York
without reference to its conflict of law rules. Any dispute
arising under this letter agreement shall be resolved by the
United States Bankruptcy Court for the Northern District of New
York.
The parties acknowledge that Richard C. Breeden is
executing this agreement solely in his capacity as the Trustee
of Bennett and President of Shamrock and shall have no personal
responsibility or liability whatsoever under this agreement.
Very truly yours,
Shamrock Holdings Group, Inc.,
Debtor In Possession
By: /s/ Richard C. Breeden
____________________________
Title
Bennett Funding Group, Inc., Debtor
By: /s/ Richard C. Breeden
____________________________
Title
<PAGE>
Accepted and Agreed to:
American Gaming & Entertainment, Ltd.
By: /s/ J. Douglas Wellington
_____________________________
President & CEO Title
Emerald Gaming, Inc. American Gaming and Resorts of
Mississippi, Inc.
By: /s/ J. Douglas Wellington By: /s/ J. Douglas Wellington
_____________________________ __________________________
President Title President Title
AMGAM Associates
By: /s/ J. Douglas Wellington
_____________________________
Manager Title
<PAGE>
Exhibit A
<TABLE>
Budget Per Settlement Agreement
Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00
<C> <C> <C> <C> <C> <C> <C>
Payroll 14,465 14,465 14,465 10,799 10,799 15,880 10,799
Severance - - 5,610 - - - -
Expense Reports 100 100 100 100 100 100 100
Telephone, UPS 400 400 400 400 400 400 400
Insurance (Prop., D&O) 1,000 1,000 1,000 1,000 1,000 91,000 1,000
File Storage 300 300 300 300 300 300 300
Rent, Utils 200 650 200 100 100 100 100
Car 500 500 500 500 500 500 500
Ravin, Sarasohn 4,000 4,000 4,000 4,000 4,000 4,000 4,000
D & T/Mintz, Rosenfeld & Co. - - 20,000 25,000 1,500 - -
Dillon Bitar 2,000 4,000 - 1,000 5,000 2,000 2,000
Reilly & Matthews 2,500 - 5,000 2,500 2,500 - -
Director Fees - - - - - - -
American Stock Exchange 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Misc Other 2,100 2,100 2,100 1,500 1,500 1,500 1,500
Byrd & Wiser 1,000 - - - - - -
Mountaineer Settlement (5,600) - - - - - -
______ ______ ______ ______ ______ ______ ________
TOTALS 23,965 28,515 54,675 48,199 28,699 116,780 21,699
====== ====== ====== ====== ====== ====== ========
</TABLE>
<PAGE>
<TABLE>
Budget Per Settlement Agreement (Continued)
Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Totals
<C> <C> <C> <C> <C> <C> <C>
Payroll 10,799 10,799 10,799 10,799 15,880 10,799 161,547
Severance - - - - - - 5,610
Expense Reports 100 50 50 50 50 50 1,050
Telephone, UPS 400 400 400 400 400 400 5,200
Insurance (Prop., D&O) 1,000 1,000 1,000 1,000 1,000 1,000 103,000
File Storage 300 300 300 300 300 300 3,900
Rent, Utils 100 100 100 100 100 100 2,050
Car 500 500 500 500 500 500 6,500
Ravin, Sarasohn 4,000 4,000 4,000 4,000 4,000 4,000 52,000
D & T/Mintz, Rosenfeld & Co. 1,500 - - - 1,500 - 49,500
Dillon Bitar 2,000 - 3,000 3,000 2,000 4,000 30,000
Reilly & Matthews 2,500 - - - - - 15,000
Director Fees - - - - - - -
American Stock Exchange 1,000 1,000 1,000 1,000 1,000 1,000 13,000
Misc Other 1,500 1,500 1,500 1,500 1,000 1,000 20,300
Byrd & Wiser - - - - - - 1,000
Mountaineer Settlement - - - - - - (5,600)
______ ______ ______ ______ ______ ______ ________
TOTALS 25,699 19,649 22,649 22,649 27,730 23,149 464,057
====== ====== ====== ====== ====== ====== ========
</TABLE>
<PAGE>
Exhibit B
EMPLOYMENT AGREEMENT
To be filed and served prior to hearing
on approval of letter agreement
<PAGE>
EXHIBIT 2
RESTATED CERTIFICATE OF INCORPORATION OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
A DELAWARE CORPORATION
J. Douglas Wellington certifies that:
I. He is the President and Secretary of American Gaming
& Entertainment, Ltd., a Delaware corporation (the
"Corporation"). The date of filing of the Corporation's original
Certificate of Incorporation with the Secretary of State was
April 21, 1988.
II. The Certificate of Incorporation of the Corporation,
as heretofore amended, is further amended and restated in its
entirety as follows:
"FIRST. The name of the Corporation is American Gaming &
Entertainment, Ltd.
SECOND. The address of the Corporation's registered office
in the State of Delaware is 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 purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH. (1) The total number of shares of capital stock
which this corporation shall have the authority to issue is
Three Billion One Million (3,001,000,000) consisting of (a)
Three Billion (3,000,000,000) shares of common stock, each
having a par value of one cent ($0.01), amounting in the
aggregate to Thirty Million Dollars ($30,000,000) ("Common
Stock"), and (b) One Million (1,000,000) shares of preferred
stock, each having a par value of one cent ($0.01), amounting in
the aggregate to Ten Thousand Dollars ($10,000) ("Preferred
Stock").
(2) Except as otherwise expressly provided by
statute or by this Certificate, and subject to the express terms
and rights, if any, of any Preferred Stock authorized by the
Board of Directors pursuant to the authority granted in this
Article FOURTH, all voting rights shall be vested in the holders
of the Common Stock, who shall be entitled to one vote per share
on all matters submitted to a vote of holders of the Common
Stock and shall be entitled to receive: (a) such dividends on
the Common Stock as may be declared and paid by the Corporation
out of assets legally available therefor; and (b) in the event
of the liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation available for
distribution to stockholders.
(3) The Board of Directors is authorized,
subject to limitations prescribed by statute and the provisions
of this Article FOURTH, to provide for the issuance of Preferred
Stock, from time to time, in one or more series of any number of
shares, with a distinctive serial
<PAGE>
designation for each series, provided that the aggregate number
of shares issued and not cancelled of any and all such series
shall not exceed the total number of shares of Preferred Stock
authorized by this Article FOURTH, as shall hereafter be stated
and expressed in the resolution or resolutions providing for the
issuance of such Preferred Stock from time to time adopted by
the Board of Directors. Subject to said limitations, each series
of Preferred Stock: (a) may have such voting powers, full or
limited, or may be without voting powers; (b) may be subject to
redemption at such time or times and at such prices; (c) may be
entitled to receive dividends (which may be cumulative or
noncumulative) at such rate or rates, on such conditions and at
such times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes or
series of stock (d) may have such rights upon the dissolution
of; or upon any distribution of the assets of; the Corporation;
(e) may be made convertible into, or exchangeable for, shares of
any other class or classes of or any other series of the same or
any other class or classes of stock of the Corporation or any
other issuer, at such price or prices or at such rates of
exchange, and with such adjustments; (f) may be entitled to the
benefit of a sinking fund to be applied to the purchase or
redemption of shares of such series in such amount or amounts;
(g) may be entitled to the benefit of conditions and
restrictions upon the creation of indebtedness of the
Corporation or any subsidiary, upon the issue of any additional
stock (including additional shares of such series or of any
other series) and upon the payment of dividends or the making of
other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary, of any
outstanding stock of the Corporation; and (h) may have such
other relative, participating, optional or other special rights,
qualifications, limitations or restrictions thereon; all as
shall be stated in said resolution or resolutions providing for
the issue of such series of Preferred Stock.
(4) Shares of any series of Preferred Stock
which have been redeemed (whether through the operation of a
sinking fund or otherwise) or which, if convertible or
exchangeable, have been converted into or exchanged for shares
of stock of any other class or classes, shall have the status of
authorized and unissued shares of Preferred Stock of the same
series and maybe reissued as a part of the series of which they
were originally a part or may be reclassified and reissued as
part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors or as part
of any other series of Preferred Stock, all subject to the
conditions or restrictions on issuance set forth in the
resolution or resolutions adopted by the Board of Directors
providing for the issue of any such series of Preferred Stock.
FIFTH. The Corporation shall have perpetual existence.
SIXTH. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
authorized to adopt, amend or repeal the By-Laws of the
Corporation in any manner not inconsistent with the provisions
of such By-Laws.
SEVENTH. Elections of directors need not be by written
ballot unless the By-Laws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State
of Delaware as the By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in
<PAGE>
the statutes) 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;
EIGHTH. A director of the Corporation shall have no personal
liability to the Corporation or to its stockholders for monetary
damages for breach of fiduciary duty as a director except to the
extent that Section 102(b)(7) (or any successor or additional
provision) of the General Corporation Law of the State of
Delaware, as amended from time to time, expressly provides that
the liability of a director may not be eliminated or limited.
NINTH. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate in
the manner now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to
this reservation.
TENTH. (1) In order to enable the Corporation and any
Subsidiary (as hereinafter defined) to secure and maintain in
good standing all licenses and other regulatory approvals
necessary for the lawful operation of gaming and related
businesses now or hereafter engaged in by the Corporation or any
Subsidiary within or without the United States (the "Gaming
Licenses") from the Gaming Authorities (as hereinafter defined)
empowered to issue or grant Gaming Licenses and in order to
ensure that the business of the Corporation and its Subsidiaries
will be carried on in compliance with the laws, rules,
regulations and policies of the Gaming Authorities and in a
manner consistent with the responsibilities of the Corporation
and its Subsidiaries to the public as an organization engaged in
gaming and related businesses, the following provisions are
made:
(2) While any Gaming License is outstanding,
except as otherwise approved by the Board of Directors, no
stockholder who (a) Beneficially Owns (as hereinafter defined)
five percent (5%) or more of the outstanding Capital Stock (as
hereinafter defined) and who has neither been qualified by nor
obtained a waiver of qualification from each of the Gaming
Authorities requiring qualification with respect to each Gaming
License (an "Unqualified Stockholder") or (b) has been found to
be disqualified or unsuitable with respect to any Gaming
License, which finding has not been reversed, vacated or
superseded in any subsequent proceeding prior to the Redemption
Date (as hereinafter defined) (a "Disqualified Stockholder"),
shall be entitled to vote, directly or indirectly, any shares of
Capital Stock Beneficially Owned by such stockholder on any
matter, and no shares of Capital Stock Beneficially Owned by an
Unqualified Stockholder or a Disqualified Stockholder shall be
considered as outstanding stock entitled to vote for any
purpose.
(3) The Corporation shall have the right, at its
option, to call for redemption all or any part of the Capital
Stock Beneficially Owned by a Disqualified Stockholder for the
Redemption Price (as hereinafter defined) at any time after the
date the stockholder became a Disqualified Stockholder. The
Redemption Price may be paid in cash, property or rights,
including any Securities (as hereinafter defined) of the
Corporation, as the Board of Directors may by resolution
determine (the "Redemption Consideration").
(4) All Publicly-traded Securities (as
hereinafter defined) of the Corporation and any Subsidiary shall
be held subject to the condition that if a holder thereof (a
"Disqualified
<PAGE>
Holder") is found to be disqualified or unsuitable with respect
to any Gaming License, which finding has not been reversed,
vacated or superseded in any subsequent proceeding prior to the
date of a Written Notice (as hereinafter defined), such
Disqualified Holder shall dispose of his interest in the
Corporation within 10 days after the Corporation mails by first
class mail to the name and address of the persons known to the
Corporation to hold of record such Publicly-traded Securities,
as the same shall appear in the books of the Corporation as of
the date the notice is mailed, written notice to such effect (a
"Written Notice"). Notwithstanding any other provision of this
Article TENTH, if any Disqualified Holder fails to dispose of
his Publicly-traded Securities within 10 days after the mailing
of the Written Notice, such Disqualified Holder shall indemnify
the Corporation and its Subsidiaries for any and all direct or
indirect costs, including attorney's fees, incurred by the
Corporation and its Subsidiaries as a result of such
Disqualified Holder's continuing ownership or failure to divest
of such Publicly-traded Securities.
(5) Any right arising pursuant to the provisions
of Section 3 of this Article TENTH shall be exercised as
follows:
(a) If the Corporation shall determine to
redeem Capital Stock pursuant to Section 3 of this Article
TENTH, at least 10 days in advance of the date designated for
such redemption, the Corporation shall mail by first class mail
to the name and address of the person or persons known to the
Corporation to hold of record such shares of Capital Stock, as
the same shall appear on the books of the Corporation as of the
date such notice is mailed, a written notice advising of the
exercise of the right and stating the total number of shares to
be redeemed from the holder (the "Redemption Notice"). After the
Redemption Price and the Redemption Consideration for the shares
to be redeemed have been determined, the Corporation shall mail
as aforesaid a second notice (the "Price Notice") to such holder
or holders setting forth the Redemption Price and the Redemption
Consideration and the date and time of the redemption (the
"Redemption Date"). The Price Notice shall be mailed not less
than 10 days in advance of the Redemption Date. If the
Redemption Price and Redemption Consideration for the shares
have been determined prior to the time the Redemption Notice is
mailed, the Corporation, at its option, may include in the
Redemption Notice the information required to be provided in the
Price Notice and in that case no Price Notice need be sent. The
redemption shall be made at the principal place of business of
the Corporation or such other place as may be specified by the
Board of Directors.
(b) The record holder or holders of
shares to be redeemed shall deliver or cause to be delivered the
certificate or certificates representing those shares, properly
endorsed for transfer, to the Corporation on the Redemption Date
and shall receive therefor the Redemption Consideration. If, on
the Redemption Date, a holder shall fail to deliver the
certificate or certificates for all or part of the shares to be
redeemed from him properly endorsed for transfer, the Redemption
Consideration to be delivered by the Corporation with respect to
such shares shall be set aside by the Corporation, separate and
apart for the benefit of such holder, to be delivered to such
holder without payment of any interest thereon upon surrender of
the certificate or certificates for the shares to be delivered
by such holder properly endorsed for transfer.
<PAGE>
(6) After the Redemption Notice and Price Notice
have been given and the Redemption Consideration is set aside in
accordance with Section 5 of this Article TENTH, and
notwithstanding that any certificate for shares of Capital Stock
called for redemption has not been surrendered to the
Corporation, the shares heretofore evidenced thereby shall no
longer be deemed outstanding, the right to receive dividends
thereon shall cease to accrue from and after the Redemption Date
and all rights of the person holding certificates theretofore
evidencing such shares of Capital Stock shall cease and
terminate, excepting only the right to receive the Redemption
Consideration, without interest, in payment therefor, and the
person holding such certificates shall thereafter be restricted
exclusively to the Redemption Consideration for any and all
claims of whatever nature in respect of the redeemed shares.
(7) The following definitions shall apply with
respect to this Article TENTH.
(a) The term "Gaming Authorities" means
all federal, state or local government authorities which issue
or grant any license or approval necessary or appropriate for
the lawful operation of gaming and related businesses now or
hereafter engaged in by the Corporation or its Subsidiaries.
(b) The term "Publicly-traded Securities"
means any Security which is listed or admitted to trading on any
national securities exchange or is quoted on the National
Association of Securities Dealers, Inc. Automated Quotation
System.
(c) The "Redemption Price" for a share of
Capital Stock means the average closing sale price during the
20-day period immediately preceding the date of the Redemption
Notice of a share of such Capital Stock on the Nasdaq Small-Cap
Market or if such stock is not listed on such exchange, on the
principal United States securities exchange registered under the
Exchange Act on which such stock is listed, or if such stock is
not listed on any such exchange, the average last quoted price
or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market with respect to a share of
such Capital Stock during the 20-day period immediately
preceding the date of the Redemption Notice as reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System or any similar system then in use, or if no
such quotations are available, the fair market value on the date
of the call for redemption of a share of such stock as
determined by the Board of Directors.
(d) The term "Securities" means any
instrument; evidencing a direct or indirect beneficial ownership
or creditor interest in a corporation, including, by not limited
to; stock, common and preferred; bonds; mortgages; debentures;
security agreements; notes; warrants; options and rights.
(e) The terms "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934
(the '1Exchange Act") as in effect on the effective date of this
Certificate pursuant to the General Corporation Law of the State
of Delaware (the term "registrant" in said Rule 12b-2 meaning in
this case the Corporation).
<PAGE>
(f) A person shall be deemed the
"Beneficial Owner" of; and shall be deemed to "Beneficially Own"
shares of Capital Stock:
(i) which such person or any of
such person's Affiliates or Associates, directly or indirectly,
has the sole or shared right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3
promulgated under the Exchange Act or pursuant to any successor
provision), including, but not limited to, pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, that a person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own", any security
under this subparagraph (i) as a result of any agreement,
arrangement or understanding to vote such security that both (y)
arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the rules and
regulations promulgated under the Exchange Act and (z) is not
reportable by such person on Schedule 13D promulgated under the
Exchange Act (or any comparable or successor report) without
giving effect to any applicable waiting period; or
(ii) which are Beneficially
Owned, directly or indirectly, by any other person (or any
Affiliate or Associate thereof) with which such person (or any
such person's Affiliates or Associates) has any agreement,
arrangement or understanding, whether or not in writing, for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the provisions of subparagraph
(i) above), or disposing of any Capital Stock:
provided that (i) no director or officer of the Corporation (nor
any Affiliate or Associate of any such director or officer)
shall, solely by reason of acting in their capacities as such,
be deemed the "Beneficial Owner" of or to "Beneficially Own" any
shares of Capital Stock that are Beneficially Owned by any other
director or officer, and (ii) no person shall be deemed the
"Beneficial Owner" of or to "Beneficially Own" any shares of
Capital Stock held in any voting trust, any employee stock
ownership plan or any similar plan or trust, if such person does
not possess the right to vote, to direct the voting of or to be
consulted with respect to the voting of such shares.
(g) The term "Capital Stock" shall mean
all capital stock of the Corporation authorized to be issued
from time to time under this Certificate.
(h) The term "person" shall mean any
individual, firm, corporation, partnership or other entity and
shall include any group comprised of any person and any other
person with whom such person or any Affiliate or Associate of
such person has any agreement, arrangement or understanding,
directly or indirectly, for the purpose of acquiring, holding,
voting or disposing of Capital Stock.
(i) The term "Subsidiary" means any
company of which a majority of any class of equity security is
beneficially owned by the Corporation.
<PAGE>
(8) The Board of Directors shall have the power
to determine for the purposes of this Article TENTH on the basis
of information known to them after reasonable inquiry all
questions arising under this Article TENTH including, without
limitation, (a) whether a person is a Disqualified Holder, an
Unqualified Stockholder or a Disqualified Stockholder, (b)
whether a Disqualified Holder has disposed of his Securities
Beneficially Owned by any person and (c) whether a person is an
Affiliate or Associate of another. Any such determination shall
be binding and conclusive on all parties.
(9) The Corporation shall cause to be placed in
every indenture or other operative instrument of Publicly-traded
Securities (other than Capital Stock) of the Corporation entered
into after December 30, 1993 a provision requiring that any
holder of such securities who is found to be a Disqualified
Holder shall have his interest therein redeemed or shall dispose
of such interest in the Corporation in the manner set forth in
the indenture or other operative instrument.
(10) Nothing contained in this Article TENTH shall
be construed (a) to relieve any Unqualified Stockholder,
Disqualified Stockholder or Disqualified Holder from any
fiduciary obligation imposed by law, (b) to prohibit or affect
any contractual arrangements which the Corporation may make from
time to time with any holder of Securities to purchase all or
any part of shares of Capital Stock or other Securities held by
them, or (c) to be in derogation of any action, past or future,
which has been or may be taken by the Board of Directors or any
holder of Securities with respect to the subject matter of this
Article TENTH.
(11) The Corporation will be entitled to
injunctive relief in any court of competent jurisdiction to
enforce the provisions of this Article TENTH and each holder of
the Publicly-traded Securities of the Corporation will be deemed
to have acknowledged by acquiring or retaining such securities
that failure to comply with this Article TENTH will expose the
Corporation to irreparable injury for which there is no adequate
remedy at law and that the Corporation is entitled to injunctive
relief to enforce the provisions of this Article TENTH."
III. Attached to this Restated Certificate of
Incorporation are Certificates of Designation of Series A
Preferred Stock, Series C Cumulative Preferred Stock, Series D
Cumulative Preferred Stock and Series E Preferred Stock as
Exhibits A, B, C and D hereto, respectively.
<PAGE>
IV. The foregoing Restated Certificate of Incorporation
has been duly adopted by written consent of the holders of an
aggregate of 5,923,454 shares of Common Stock and all 55,982.61
shares of the Series A Preferred Stock or, collectively,
approximately 52.6% of the total voting power of the
Corporation's voting securities, in accordance with the
applicable provisions of Sections 228, 242 and 245 of the
General Corporation Law of the State of Delaware. The
Certificates of Designation of Series A Preferred Stock, Series
C Cumulative Preferred Stock, Series D Cumulative Preferred
Stock and Series E Preferred Stock have each been duly adopted
by written consent of the holders of all shares of each
respective series of preferred stock. Written notice of the
adoption of this Restated Certificate of Incorporation has been
given to every stockholder entitled to such notice as provided
by Section 228 of the General Corporation Law of the State of
Delaware. The undersigned, being the President and the Secretary
as named above, does make this certificate and declare and
certify that this is his act and deed, and that the facts stated
herein are true, and accordingly has set his hand hereunto this
_____ day of _____, 2000.
__________________________
J. Douglas Wellington
President, Chief Executive Officer and Secretary
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES A PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors
by the Certificate of Incorporation, as amended, of the
Corporation, and pursuant to the provisions of Sections 141 and
151 of the General Corporation Law of the State of Delaware,
said Board of Directors, at meetings duly called and held on
April 22, 1992, adopted, and on November 5, 1992 and November
19, 1999, amended, a resolution providing for the issuance of
one series of the Corporation's Preferred Stock, $0.01 par
value, to be designated "Series A Preferred Stock", and fixing
the designation, powers, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, which resolution, as
amended, is as follows:
RESOLVED, that pursuant and subject to the provisions of Article
FOURTH of the Certificate of Incorporation, as amended, of the
Corporation, there is hereby established a series of Preferred
Stock to which the following provisions shall be applicable:
(a) Designation. The series shall be designated as "Series A
Preferred Stock" (hereinafter "this Series A Preferred Stock").
(b) Number. The number of shares of Series A Preferred Stock
authorized to be issued is 55,982.61.
(c) Conversion. The holders of Series A Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
(i) Right to Convert. At any time:
(A) each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, into
twenty-five (25) (the "Conversion Factor") fully paid and
nonassessable shares of the Corporation's Common Stock ("Common
Stock"); and
(B) each share of Series A Preferred Stock shall
be automatically converted
<PAGE>
into that number of fully paid and nonassessable shares of
Common Stock equal to the Conversion Factor if the holders of
two-thirds of the Series A Preferred Stock vote to convert all
Series A Preferred Stock into Common Stock.
(ii) Mechanics of Conversion. No fractional shares of
Common Stock shall be issued upon conversion of the Series A
Preferred Stock. In lieu of any fractional share to which a
holder would otherwise be entitled, the corporation shall pay
cash equal to such fraction multiplied by the fair market value
of the Common Stock as determined by the Board. Before any
holder of Series A Preferred Stock shall be entitled to convert
the same into full shares of Common Stock, he shall surrender
the certificate or certificates therefor, duly endorsed, at the
office of the corporation or of any transfer agent for the
Series A Preferred Stock, and shall give written notice to the
corporation at such office that he elects to convert the same.
The corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Series A Preferred
Stock, a certificate or certificates for the number of shares of
Common Stock to which he shall be entitled as aforesaid and a
check payable to the holder in the amount of any cash amounts
payable as the result of a conversion into a fractional share of
Common Stock. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such
surrender of the shares of Series A Preferred Stock to be
converted, and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such
shares of Common Stock on such date.
(iii) Adjustments for Stock Dividends, Subdivisions,
Combinations, or Consolidations. In the event the Corporation
shall pay a stock dividend on the Common Stock, or the
outstanding shares of Common Stock shall be subdivided, combined
or consolidated, by reclassification or otherwise, into a
greater or lesser number of shares of Common Stock, the
Conversion Factor in effect immediately prior to such
subdivision, combination or consolidation shall, concurrently
with the effectiveness of such subdivision, combination or
consolidation, be proportionately adjusted.
(iv) Certificate as to Adjustments. Upon the occurrence
of each adjustment or readjustment of any Conversion Factor for
Series A Preferred Stock pursuant to this Section 2, the
Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof
and furnish to each holder of preferred stock 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 Series A Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) the Conversion
Factor for such Series A Preferred Stock at the time in effect
and (iii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received
upon the conversion of each share of Series A Preferred Stock.
(v) Notices of Record Date. In the event that this
Corporation shall propose at any time:
(A) to declare any dividend or distribution upon
its Common Stock, whether in
<PAGE>
cash, property, stock or other securities, whether or not a
regular cash dividend and whether or not out of earnings or
earned surplus;
(B) to offer for subscription pro rata to the
holders of any class or series of its stock any additional
shares of stock of any class or series or other rights;
(C) to effect any reclassification or
recapitalization of its shares of Common Stock outstanding
involving a change in the shares of Common Stock; or
(D) to merge or consolidate with or into any
other corporation, or sell, lease or convey all or substantially
all its property or business, or to liquidate, dissolve or wind
up;
then, in connection with each such event, this Corporation shall
send to the holders of the Series A Preferred Stock:
(1) at least 20 days' prior written
notice of the date on which a record shall be taken for such
dividend, distribution or subscription rights (and specifying
the date on which the holders of Common Stock shall be entitled
thereto) or for determining rights to vote in respect of the
matters referred to in (C) and (D) above; and
(2) in the case of the matters referred
to in (C) and (D) above, at least 20 days' prior written notice
of the date when the same shall take place (and specifying the
date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property
deliverable upon the occurrence of such event).
Each such written notice shall be given by first class mail,
postage prepaid, addressed to the holders of Series A Preferred
Stock at the address for each such holder as shown on the books
of the Corporation.
(d) Voting Rights.
(i) Voting Other than for Directors. Except as
otherwise required by law and except with respect to the
election of directors, the holders of Series A Preferred Stock
and the holders of Common Stock shall be entitled to notice of
any shareholders' meeting and to vote as a single class upon any
matter submitted to the shareholders for a vote, as follows:
(A) the holders of Series A Preferred
Stock shall have one vote for each full share of Common Stock
into which their respective shares of Series A Preferred Stock
would be convertible on the record date for the vote; and
(B) the holders of Common Stock shall
have one vote per share of Common Stock.
<PAGE>
(ii) Voting for Directors. The holders of Series
A Preferred Stock, voting together as a single class, shall
elect one director. In the election of the director to be
elected by holders of the Series A Preferred Stock, each share
of Series A Preferred Stock shall be entitled to one vote. For
so long as the aforesaid class voting is in effect, any vacancy
in the Board occurring because of the death, resignation or
removal of a director elected by the holders of Series A
Preferred Stock voting as a class, shall be filled by the vote
or written consent of the holders of a majority of Series A
Preferred Stock or, in absence of action by such holders, by
action of the remaining director, if any, elected by the holders
of Series A Preferred Stock. A director elected by the holders
of the Series A Preferred Stock, as aforesaid, may be removed
from the Board with or without cause by the vote or consent of
the holders of a majority of the issued and outstanding Series A
Preferred Stock.
(e) Status of Converted Stock. In the event any shares of
Series A Preferred Stock shall be converted pursuant to Section
(c) hereof, the shares so converted shall be cancelled and shall
not be issuable by the Corporation, and the Certificate of
Incorporation of the Corporation shall be appropriately amended
to effect the corresponding reduction in the Corporation's
authorized capital stock.
(f) Designation of Further Series A Preferred Stock. For so
long as any shares of the Series A Preferred Stock remain
outstanding, the Company shall not designate or issue any shares
of said Series A Preferred Stock in excess of 55,982.61 shares
without first obtaining the written consent of the holders of a
majority of the shares of said Series A Preferred Stock then
outstanding.
(g) Dividends on Common Stock. If, as of the record date for
any dividend hereafter paid on Common Stock by the Corporation,
there are outstanding any shares of the Series A Preferred
Stock, the Corporation shall promptly pay to the holder of each
such outstanding share of Series A Preferred Stock a dividend
equal to the total amount of said dividends which would have
been payable with respect to the number of shares of Common
Stock into which such share of Series A Preferred Stock could
have been converted as of said record date.
<PAGE>
Exhibit B
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES C CUMULATIVE
PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors
by the Certificate of Incorporation, as amended, of the
Corporation, and pursuant to the provisions of Sections 141 and
151 of the General Corporation Law of the State of Delaware,
said Board of Directors, at meetings duly called and held on
March 23, 1994 and November 19, 1999, adopted and amended,
respectively, a resolution providing for the issuance of one
series of the Corporation's Preferred Stock, $0.01 par value, to
be designated "Series C Cumulative Preferred Stock", and fixing
the designation, powers, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, which resolution, as
amended, is as follows:
RESOLVED, that pursuant and subject to the provisions of Article
FOURTH of the Certificate of Incorporation, as amended, of the
Corporation, there is hereby established a series of Preferred
Stock to which the following provisions shall be applicable:
(a) Designation. The series shall be designated as "Series C
Cumulative Preferred Stock" (hereinafter "this Series C
Preferred Stock").
(b) Number. The number of shares of Series C Preferred Stock
authorized to be issued is 4,000.
(c) Dividends. If, as of the record date for any dividend
hereafter paid on the Corporation's Common Stock ("Common
Stock") by the Corporation, there are outstanding any shares of
the Series C Preferred Stock, the Corporation shall promptly pay
to the holder of each such outstanding share of Series C
Preferred Stock a dividend equal to the total amount of said
dividends which would have been payable with respect to the
number of shares of Common Stock into which such share of Series
C Preferred Stock could have been converted as of said record
date.
So long as any shares of Series C Preferred Stock are
outstanding, the Corporation shall not declare, pay or set
<PAGE>
apart for payment any dividend on, make any payment on account
of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or other retirement
of any, or make any distribution in respect of, the Common
Stock, the Corporation's Series A Preferred Stock (the "Series
A") or the Junior Stock (as defined below), other than the
Corporation's Series E Preferred Stock (the "Series E"), or any
warrants, rights, calls or options exercisable for, or
convertible into, any Common Stock, Series A or Junior Stock
other than the Series E either directly or indirectly, and
whether in cash, obligations or shares of the Corporation, or
other property (other than distributions or dividends in Common
Stock, Series A or Junior Stock and/or warrants to purchase
Common Stock, Series A or Junior Stock to the holders of Common
Stock, Series A or Junior Stock and/or holders of warrants,
rights, calls or options exercisable for, or convertible into,
any Common Stock, Series A or Junior Stock), and shall not
permit any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any Common
Stock, Series A or Junior Stock, other than the Series E, or any
warrants, rights, calls or options exercisable for or
convertible into any of the Common Stock, Series A or Junior
Stock, other than the Series E, unless in any such instance the
holders of Series C Preferred Stock shall be entitled to
participate in such dividend, purchase, redemption, retirement
or distribution on the same basis as if such Series C Preferred
Stock had been converted into the number of shares of Common
Stock into which such shares of Series C Preferred Stock could
have been converted as of said record date.
The Series C Preferred Stock shall rank junior as to dividends
to any class or series of stock of the Corporation which are by
their terms expressly made senior as to dividends to the Series
C Preferred Stock in accordance with Section (e)(iii)(C) of this
Certificate. The Series C Preferred Stock shall rank equally as
to dividends with all shares of the Common Stock, Series A and
the Corporation's Series D Cumulative Preferred Stock ("Series
D") and any other class or series of stock of the Corporation
which are expressly made equal as to dividends to the Series C
Preferred Stock in accordance with Section (e)(iii)(C) of this
Certificate. Notwithstanding the foregoing, nothing contained
in the Certificate of Incorporation of the Corporation shall
prohibit the Corporation from redeeming shares of Series C
Preferred Stock, Series D and/or Series E while there are
accrued and unpaid dividends on shares of Series C Preferred
Stock and/or Series D. The Series C Preferred Stock shall rank
senior as to dividends to the Series E and any other class or
series of stock of the Corporation which are not by their terms
expressly made senior or equal as to dividends to the Series C
Preferred Stock (collectively, the "Junior Stock") in accordance
with Section (e)(iii)(C) of this Certificate.
(d) Liquidation. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary ("Liquidation"), the holder of each share of Series
C Preferred Stock shall be entitled to receive out of assets of
the Corporation before any distribution is made to, or set apart
for, the holders of any shares of Common Stock, Series A or of
any class or series of stock of the Corporation ranking junior
to the Series C Preferred Stock in respect of distribution of
assets upon Liquidation, a liquidating distribution in the
amount of $1,000 per share together with any accrued but unpaid
dividends thereon to the date of distribution. After payment to
holders of Series C Preferred Stock of the full preferential
amount as aforesaid, holders of Series C Preferred Stock, as
such, shall have no right or claim to any of the remaining
assets of the Corporation.
If upon any Liquidation of the Corporation the assets of the
Corporation or proceeds thereof
<PAGE>
distributable among the holders of shares of the Series C
Preferred Stock and of any class or series of stock ranking
equally with the Series C Preferred Stock as to distribution of
assets upon Liquidation shall be insufficient to pay in full the
preferential amounts payable to such holders, then such assets
or the proceeds thereof shall be distributed among such holders
ratably in accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were paid
in full.
The Series C Preferred Stock shall rank junior as to
distribution of assets upon Liquidation to any class or series
of stock of the Corporation which are by their terms expressly
made senior as to distribution of assets upon Liquidation to the
Series C Preferred Stock in accordance with Section (e)(iii)(B)
of this Certificate. The Series C Preferred Stock shall rank
equally as to distribution of assets upon Liquidation with all
shares of Series D and Series E and any other class or series of
stock of the Corporation which are expressly made equal as to
distribution of assets upon Liquidation to the Series C
Preferred Stock in accordance with Section (e)(iii)(B) of this
Certificate. The Series C Preferred Stock shall rank senior as
to distribution of assets upon Liquidation to the Corporation's
Common Stock and the Series A and any other class or series of
stock of the Corporation which are not by their terms expressly
made senior or equal as to distribution of assets upon
Liquidation to the Series C Preferred Stock in accordance with
Section (e)(iii)(B) of this Certificate.
A consolidation or merger or share exchange of the Corporation
with or into one or more corporations, or a sale, lease,
exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the assets
of the Corporation shall not be deemed to be a Liquidation.
(e) Voting Rights.
(i) Except as otherwise required by law, the
Corporation's Certificate of Incorporation, by contractual
arrangement or as hereinafter provided in this Section (e), the
holder(s) of Series C Preferred Stock shall not, by reason of
holding Series C Preferred Stock, have any voting rights as
stockholders of the Corporation including, without limitation,
any right to notice of or to be represented at any shareholders'
meetings or to vote upon the election of directors or upon any
other matter.
(ii) So long as any shares of Series C Preferred Stock
are outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least two-thirds of the
then outstanding shares of Series C Preferred Stock voting
separately as a class, change by amendment to the Corporation1s
Certificate of Incorporation or otherwise, the terms or
provisions of the Series C Preferred Stock so as to adversely
affect the powers, special rights and preferences of the holders
thereof.
(iii) So long as shares of Series C Preferred Stock are
outstanding, the Corporation shall not, without the consent of
the holders of at least a majority of the outstanding shares of
Series C Preferred Stock voting separately as a class, (A) merge
with or into another corporation unless (1) the Corporation is
the surviving or successor corporation or the entity formed by
such consolidation or merger is organized in the United States
or any state, municipality or other
<PAGE>
governmental division thereof, (2) the terms of the Series C
Preferred Stock are not changed in any manner which is
materially adverse to the holders thereof and (3) the powers,
special rights and preferences of any securities into which the
Series C Preferred Stock is converted in such transaction are
substantially the same as the powers, special rights and
preferences of the Series C Preferred Stock, (B) issue any class
or series of stock of the Corporation ranking senior to or
equally with the Series C Preferred Stock as to distribution of
assets upon Liquidation other than 4,000 shares of Series D, and
4,000 shares of Series E or (C) issue any class or series of
stock of the Corporation ranking senior to or equally with the
Series C Preferred Stock as to dividends other than 4,000 shares
of Series D. No vote or consent of the holders of the Series C
Preferred Stock shall be required in respect of any transaction
enumerated in this paragraph if at or prior to the time any such
transaction is to take effect, provision is made for the
redemption or other retirement of the Series C Preferred Stock
at the time outstanding, the consent of which would otherwise be
required and such redemption or retirement is made in accordance
herewith.
(f) Optional Redemption. At the option of the Corporation, by
vote of the Board of Directors, the Series C Preferred Stock may
be redeemed in whole or in part at any time and from time to
time, at the prices per share set forth below (the "Base
Redemption Prices"), plus an amount equal to any cash dividends
that have accumulated but have not been paid to the date fixed
for redemption (the applicable Base Redemption Price plus the
accumulated and unpaid dividends are hereinafter referred to as
the "Redemption Price"):
If redeemed during the following periods the Base Redemption
Prices shall be as follows:
October 1, 1999 - December 31, 1999, $1,498.86
Thereafter, the Base Redemption Price will increase $29.17 as of
the first day of each successive calendar quarter.
In the event that fewer than all of the outstanding shares of
Series C Preferred Stock are to be redeemed at any one time, the
shares so to be redeemed shall be selected by lot or pro rata as
determined by the Corporation. The Corporation shall cause a
notice to be mailed, first class postage prepaid, at least 13
days, but not more than 90 days, prior to the date fixed for
redemption, to each holder of record of shares of Series C
Preferred Stock. Such notice shall be mailed to such record
holders at their respective addresses as they shall appear upon
the books of the Corporation and shall set forth the date of
such redemption and the place for surrender of certificates for
shares to be redeemed.
If such notice of redemption shall have been duly given and if
on or before the redemption date specified in such notice there
shall have been deposited with a bank or trust company, having
capital, surplus and undivided profits of at least $50,000,000,
in trust for the account of the holders of the shares so called
for redemption, funds in an amount equal to the Redemption Price
applicable to the shares to be redeemed at the date fixed for
such redemption, together with irrevocable instruments and
authority to such bank or trust company to redeem such shares on
or after the date of such deposit upon surrender of the
certificates therefor, then upon the making of such deposit in
trust the shares with respect to which such deposit shall have
been made shall no longer be deemed to be outstanding. All
rights with respect to such shares shall forthwith
<PAGE>
terminate except only (i) the rights, if any, under Section
(g)(iii) of this Certificate, and (ii) the right to receive
forthwith from and after the date of such deposit the Redemption
Price, without interest.
If such notice of redemption shall have been duly given and if
no such deposit shall have been made, then upon the date fixed
for redemption, unless default shall be made in providing funds
at the time and place specified for the payment of the
Redemption Price, the shares so called for redemption shall no
longer be deemed to be outstanding, and all rights with respect
to such shares shall forthwith terminate, except only the right
to receive the Redemption Price, without interest.
Any interest accrued on funds so deposited in trust shall belong
to the Corporation and be paid to it from time to time. All
funds deposited in accordance with this Section (f) which shall
remain unclaimed by the holders of shares called for redemption
at the end of one year after the redemption date shall be
returned by such bank or trust company to the Corporation, after
which the holders of such shares shall look only to the
Corporation for the payment of such unclaimed amounts, without
interest.
In case fewer than all of the shares represented by any
certificate are redeemed, a new certificate representing the
unredeemed shares shall be issued to the surrendering holder at
the expense of the Corporation.
(g) Conversion. Holders of Series C Preferred Stock shall have
the right to convert their shares at any time subject to the
following:
(i) each share of Series C Preferred Stock shall be
convertible, at the option of the holder thereof, into that
number of fully paid and non-assessable shares of Common Stock
equal to (1) the then applicable Redemption Price for such
shares of Series C Preferred Stock divided by (2) 0.75
multiplied by the Average Market Price (as defined below) on the
Date of Conversion (as defined below).
(ii) on the first business day following the date that
at least 3,000 shares of Series C Preferred Stock have been
converted into Common Stock, each then outstanding share of
Series C Preferred Stock shall be automatically converted into
that number of fully paid and non-assessable shares of Common
Stock equal to (1) the then applicable Redemption Price for such
shares of Series C Preferred Stock divided by (2) 0.75
multiplied by the Average Market Price on the Date of
Conversion.
(iii) Notwithstanding anything to the contrary contained
herein, if any shares of Series C Preferred Stock shall be
called for redemption, the right of conversion as to the shares
called for redemption shall expire at the close of business on
the third business day preceding the date fixed for redemption
thereof unless default shall be made in payment of the
Redemption Price with respect to such shares, notwithstanding
any earlier deposit by the Corporation of funds reserved for
such redemption.
(iv) Upon any conversion of shares of Series C Preferred
Stock, the holders thereof
<PAGE>
shall not be entitled to receive any accumulated, accrued or
unpaid dividends in respect of the shares surrendered for
conversion or the shares of Common Stock issued on conversion
thereof; provided, however, that such holders shall be entitled
to receive any dividends on such shares of Series C Preferred
Stock paid or declared prior to such conversion if such holder
held such shares on the record date for the payment of such
dividend.
(v) Each holder of shares of Series C Preferred Stock
desiring to exercise his right of conversion shall deliver
written notice of his election to convert, stating the names and
addresses of the persons to whom the Common Stock is to be
issued, and the number (in whole shares) of shares to be
converted, and shall surrender the certificate or certificates
for such shares, duly endorsed or accompanied by proper
instruments of transfer (unless such endorsement or instruments
be waived by the Corporation) to the Corporation during usual
business hours at the office of the Transfer Agent of the
Corporation for the transfer of its Common Stock in New York,
New York (or such other place as may be designated by the
Corporation upon written notice to all holders of Series C
Preferred Stock). Upon receipt by the Corporation of any such
notice of election to convert shares of Series C Preferred
Stock, and upon surrender of the certificate or certificates
therefor, the Corporation shall execute and deliver, as soon as
practicable, to the converting holder, or to his nominee or
nominees, a certificate or certificates for the number of shares
of Common Stock resulting from such conversion, together with
any cash adjustment in lieu of fractional shares as hereinafter
provided. For all purposes except the right to receive
dividends, as provided in the foregoing paragraph, the rights of
a converting holder, as such, shall cease, and the person or
persons in whose name or names the certificate or certificates
for Common Stock issuable upon such conversion are to be issued
shall be deemed to have become the record holder or holders of
such Common Stock at the close of business on the day (the "Date
of Conversion") on which delivery of such notice or the
surrender of the certificate or certificates for such shares
(whichever shall later occur) shall be made.
(vi) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of shares of
Series C Preferred Stock. If more than one share of Series C
Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis
of the aggregate number of shares so surrendered. If any
fractional interest in a share of Common Stock would be
deliverable upon the conversion of any shares, the Corporation
may, in lieu of delivering the fractional share therefor, make a
cash adjustment in respect of such fraction in an amount equal
to the same fraction of the Current Market Price (as defined
below) of one share of the Common Stock of the Corporation on
the last business day before the Date of Conversion. The
"Current Market Price" on any given day shall be (i) if the
Common Stock of the Corporation is listed or admitted to
unlisted trading privileges on a National Securities Exchange
(defined as any exchange registered with the Securities and
Exchange Commission as a "national securities exchange" under
the Securities Exchange Act of 1934), the last sales price of
the shares of Common Stock of the Corporation on the National
Securities Exchange in or nearest the City of New York on which
the shares of Common Stock of the Corporation shall be listed or
admitted to unlisted trading privileges (or the quoted closing
bid if there are no sales on such Exchange) on such day, (ii) if
the Common Stock of the Corporation is included in the National
Market System ("NMS") of The NASDAQ Stock Market or on NASDAQ,
the last sales price of the shares of Common Stock of the
Corporation in the NMS of The NASDAQ Stock Market or
<PAGE>
on NASDAQ, as the case may be (or the quoted closing bid if
there be no sales on the NMS or on NASDAQ) on such day, or (iii)
if the Common Stock of the Corporation is not so listed,
admitted or included, the mean between the high and low bid
prices of the shares of Common Stock of the Corporation in the
over-the-counter market on such day as reported by National
Quotation Bureau Incorporated, or similar organization
designated by the Corporation, or if not so available in any
such manner, as shall be determined by the Corporation, which
determination shall be conclusive.
(vii) The "Average Market Price" at any date shall be
deemed to be the average of the Current Market Prices for the 10
consecutive business days prior to such date; provided, however,
that if the record date or payment date for a stock split or
stock combination occurs during such 10 day period, the Average
Market Price for the business days prior to such record date or
payment date shall be appropriately adjusted.
(viii) In case the Corporation shall (i) effect any
capital reorganization or reclassification of its Common Stock
(except a change in par value, or from par value to no par value
or from no par value to par value or as a result of a
subdivision, combination or stock dividend), or (ii) consolidate
or merge with or into any other corporation (other than a merger
in which the Corporation is the surviving corporation and each
share of Common Stock outstanding immediately prior to such
merger is to remain outstanding immediately after such merger),
lawful provision shall be made as part of the terms of such
transaction whereby the holders of shares of Series C Preferred
Stock shall, if entitled to convert such shares at any time
after the consummation of such transaction, receive upon
conversion thereof in lieu of each share of Common Stock
issuable upon conversion of such shares prior to such
consummation the same kind and amount of stock (or other
securities, cash or property, if any) as may be issuable or
distributable in connection with such transaction with respect
to each outstanding share of Common Stock, subject to
appropriate adjustments for subsequent stock splits, stock
combinations, reclassifications, capital reorganizations,
consolidations or mergers.
(h) Other Rights. The holders of the Series C Preferred Stock
shall not have any other preferences or special rights.
<PAGE>
Exhibit C
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES D CUMULATIVE
PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors
by the Certificate of Incorporation, as amended, of the
Corporation, and pursuant to the provisions of Sections 141 and
151 of the General Corporation Law of the State of Delaware,
said Board of Directors, at meetings duly called and held on
March 23, 1994 and November 19, 1999, adopted and amended,
respectively, a resolution providing for the issuance of one
series of the Corporation's Preferred Stock, $0.01 par value, to
be designated "Series D Cumulative Preferred Stock", and fixing
the designation, powers, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, which resolution, as
amended, is as follows:
RESOLVED, that pursuant and subject to the provisions of Article
FOURTH of the Certificate of Incorporation, as amended, of the
Corporation, there is hereby established a series of Preferred
Stock to which the following provisions shall be applicable:
(a) Designation. The series shall be designated as "Series D
Cumulative Preferred Stock" (hereinafter "this Series D
Preferred Stock").
(b) Number. The number of shares of Series D Preferred Stock
authorized to be issued is 4,000.
(c) Dividends. If, as of the record date for any dividend
hereafter paid on the Corporation's Common Stock ("Common
Stock") by the Corporation, there are outstanding any shares of
the Series D Preferred Stock, the Corporation shall promptly pay
to the holder of each such outstanding share of Series D
Preferred Stock a dividend equal to the total amount of said
dividends which would have been payable with respect to the
number of shares of Common Stock into which such share of Series
D Preferred Stock could have been converted as of said record
date.
So long as any shares of Series D Preferred Stock are
outstanding, the Corporation shall not
<PAGE>
declare, pay or set apart for payment any dividend on, make any
payment on account of, or set apart for payment money for a
sinking or other similar fund for, the purchase, redemption or
other retirement of any, or make any distribution in respect of,
the Common Stock, the Corporation's Series A Preferred Stock
(the "Series A") or the Junior Stock (as defined below), other
than the Corporation's Series E Preferred Stock (the "Series
E"), or any warrants, rights, calls or options exercisable for,
or convertible into, any Common Stock, Series A or Junior Stock
other than the Series E either directly or indirectly, and
whether in cash, obligations or shares of the Corporation, or
other property (other than distributions or dividends in Common
Stock, Series A or Junior Stock and/or warrants to purchase
Common Stock, Series A or Junior Stock to the holders of Common
Stock, Series A or Junior Stock and/or holders of warrants,
rights, calls or options exercisable for, or convertible into,
any Common Stock, Series A or Junior Stock), and shall not
permit any corporation or other entity directly or indirectly
controlled by the Corporation to purchase or redeem any Common
Stock, Series A or Junior Stock, other than the Series E, or any
warrants, rights, calls or options exercisable for or
convertible into any of the Common Stock, Series A or Junior
Stock, other than the Series E, unless in any such instance the
holders of Series D Preferred Stock shall be entitled to
participate in such dividend, purchase, redemption, retirement
or distribution on the same basis as if such Series D Preferred
Stock had been converted into the number of shares of Common
Stock into which such shares of Series D Preferred Stock could
have been converted as of said record date.
The Series D Preferred Stock shall rank junior as to dividends
to any class or series of stock of the Corporation which are by
their terms expressly made senior as to dividends to the Series
D Preferred Stock in accordance with Section (e)(iii)(C) of this
certificate. The Series D Preferred Stock shall rank equally as
to dividends with all shares of the Common Stock, the Series A
and the Corporation's Series C Cumulative Preferred Stock
("Series C") and any other class or series of stock of the
Corporation which are expressly made equal as to dividends to
the Series D Preferred Stock in accordance with Section
(e)(iii)(C) of this Certificate. Notwithstanding the foregoing,
nothing contained in the certificate of Incorporation of the
Corporation shall prohibit the Corporation from redeeming shares
of Series C, Series D Preferred Stock and/or Series E while
there are accrued and unpaid dividends on shares of Series C
and/or Series D Preferred Stock. The Series D Preferred Stock
shall rank senior as to dividends to the Series E and any other
class or series of stock of the Corporation which are not by
their terms expressly made senior or equal as to dividends to
the Series D Preferred Stock (collectively, the "Junior Stock")
in accordance with Section (e)(iii)(C) of this Certificate.
(d) Liquidation. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary ("Liquidation"), the holder of each share of Series
D Preferred Stock shall be entitled to receive out of assets of
the Corporation before any distribution is made to, or set apart
for, the holders of any shares of Common Stock, Series A or of
any class or series of stock of the Corporation ranking junior
to the Series D Preferred Stock in respect of distribution of
assets upon Liquidation, a liquidating distribution in the
amount of $1,000 per share together with any accrued but unpaid
dividends thereon to the date of distribution. After payment to
holders of Series D Preferred Stock of the full preferential
amount as aforesaid, holders of Series D Preferred Stock, as
such, shall have no right or claim to any of the remaining
assets of the Corporation.
<PAGE>
If upon any Liquidation of the Corporation the assets of the
Corporation or proceeds thereof distributable among the holders
of shares of the Series D Preferred Stock and of any class or
series of stock ranking equally with the Series D Preferred
Stock as to distribution of assets upon Liquidation shall be
insufficient to pay in full the preferential amounts payable to
such holders, then such assets or the proceeds thereof shall be
distributed among such holders ratably in accordance with the
respective amounts that would be payable on such shares if all
amounts payable thereon were paid in full.
The Series D Preferred Stock shall rank junior as to
distribution of assets upon Liquidation to any class or series
of stock of the Corporation which are by their terms expressly
made senior as to distribution of assets upon Liquidation to the
Series D Preferred Stock in accordance with Section (e)(iii)(B)
of this Certificate. The Series D Preferred stock shall rank
equally as to distribution of assets upon Liquidation with all
shares of Series C and Series E and any other class or series of
stock of the Corporation which are expressly made equal as to
distribution of assets upon Liquidation to the Series D
Preferred Stock in accordance with Section (e)(iii)(B) of this
Certificate. The Series D Preferred Stock shall rank senior as
to distribution of assets upon Liquidation to the Corporation's
Common Stock and the Series A and any other class or series of
stock of the Corporation which are not by their terms expressly
made senior or equal as to distribution of assets upon
Liquidation to the Series D Preferred Stock in accordance with
Section (e)(iii)(B) of this Certificate.
A consolidation or merger or share exchange of the Corporation
with or into one or more corporations, or a sale, lease,
exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the assets
of the Corporation shall not be deemed to be a Liquidation.
(e) Voting Rights.
(i) Except as otherwise required by law, the
Corporation's Certificate of Incorporation, by contractual
arrangement or as hereinafter provided in this Section (e), the
holder(s) of Series D Preferred Stock shall not, by reason of
holding Series D Preferred Stock, have any voting rights as
stockholders of the Corporation including, without limitation,
any right to notice of or to be represented at any shareholders'
meetings or to vote upon the election of directors or upon any
other matter.
(ii) So long as any shares of Series D Preferred Stock
are outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least two-thirds of the
then outstanding shares of Series D Preferred Stock voting
separately as a class, change by amendment to the Corporation's
Certificate of Incorporation or otherwise, the terms or
provisions of the Series D Preferred Stock so as to adversely
affect the powers, special rights and preferences of the holders
thereof.
(iii) So long as shares of Series D Preferred Stock are
outstanding, the Corporation shall not, without the consent of
the holders of at least a majority of the outstanding shares of
Series D Preferred Stock voting separately as a class, (A) merge
with or into another corporation unless (1) the Corporation is
the surviving or successor corporation or the entity formed by
such
<PAGE>
consolidation or merger is organized in the United States or any
state, municipality or other governmental division thereof, (2)
the terms of the Series D Preferred Stock are not changed in any
manner which is materially adverse to the holders thereof and
(3) the powers, special rights and preferences of any securities
into which the Series D Preferred Stock is converted in such
transaction are substantially the same as the powers, special
rights and preferences of the Series D Preferred Stock, (B)
issue any class or series of stock of the Corporation ranking
senior to or equally with the Series D Preferred Stock as to
distribution of assets upon Liquidation other than 4,000 shares
of Series C, and 4,000 shares of Series E or (C) issue any class
or series of stock of the Corporation ranking senior to or
equally with the Series D Preferred Stock as to dividends other
than 4,000 shares of Series C. No vote or consent of the
holders of the Series D Preferred Stock shall be required in
respect of any transaction enumerated in this paragraph if at or
prior to the time any such transaction is to take effect,
provision is made for the redemption or other retirement of the
series D Preferred Stock at the time outstanding, the consent of
which would otherwise be required and such redemption or
retirement is made in accordance herewith.
(f) Optional Redemption. At the option of the Corporation, by
vote of the Board of Directors, the Series D Preferred Stock may
be redeemed in whole or in part at any time and from time to
time, at the prices per share set forth below (the "Base
Redemption Prices"), plus an amount equal to any cash dividends
that have accumulated but have not been paid to the date fixed
for redemption (the applicable Base Redemption Price plus the
accumulated and unpaid dividends are hereinafter referred to as
the "Redemption Price"):
If redeemed during the following periods the Base Redemption
Prices shall be as follows:
October 1, 1999 - December 31, 1999, $1,444.67
Thereafter, the Base Redemption Price will increase $29.17 as of
the first day of each successive calendar quarter.
In the event that fewer than all of the outstanding shares of
Series D Preferred Stock are to be redeemed at any one time, the
shares so to be redeemed shall be selected by lot or pro rata as
determined by the Corporation. The Corporation shall cause a
notice to be mailed, first class postage prepaid, at least 13
days, but not more than 90 days, prior to the date fixed for
redemption, to each holder of record of shares of Series D
Preferred Stock. Such notice shall be mailed to such record
holders at their respective addresses as they shall appear upon
the books of the Corporation and shall set forth the date of
such redemption and the place for surrender of certificates for
shares to be redeemed.
If such notice of redemption shall have been duly given and if
on or before the redemption date specified in such notice there
shall have been deposited with a bank or trust company, having
capital, surplus and undivided profits of at least $50,000,000,
in trust for the account of the holders of the shares so called
for redemption, funds in an amount equal to the Redemption Price
applicable to the shares to be redeemed at the date fixed for
such redemption, together with irrevocable instruments and
authority to such bank or trust company to redeem such shares on
or after the date of such deposit upon surrender of the
certificates therefor, then upon the making of such deposit in
trust the shares with respect to which such deposit shall have
been made shall no
<PAGE>
longer be deemed to be outstanding. All rights with respect to
such shares shall forthwith terminate except only (1) the
rights, if any, under Section (g)(iii) of this Certificate and
(ii) the right to receive forthwith from and after the date of
such deposit the Redemption Price, without interest.
If such notice of redemption shall have been duly given and if
no such deposit shall have been made, then upon the date fixed
for redemption, unless default shall be made in providing funds
at the time and place specified for the payment of the
Redemption Price, the shares so called for redemption shall no
longer be deemed to be outstanding, and all rights with respect
to such shares shall forthwith terminate, except only the right
to receive the Redemption Price, without interest.
Any interest accrued on funds so deposited in trust shall belong
to the Corporation and be paid to it from time to time. All
funds deposited in accordance with this Section (f) which shall
remain unclaimed by the holders of shares called for redemption
at the end of one year after the redemption date shall be
returned by such bank or trust company to the Corporation, after
which the holders of such shares shall look only to the
Corporation for the payment of such unclaimed amounts, without
interest.
In case fewer than all of the shares represented by any
certificate are redeemed, a new certificate representing the
unredeemed shares shall be issued to the surrendering holder at
the expense of the Corporation.
(g) Conversion. Holders of Series D Preferred Stock shall have
the right to convert their shares at any time subject to the
following:
(i) each share of Series D Preferred Stock shall be
convertible, at the option of the holder thereof, into that
number of fully paid and non-assessable shares of Common Stock
equal to (1) the then applicable Redemption Price for such
shares of Series D Preferred Stock divided by (2) 0.75
multiplied by the Average Market Price (as defined below) on the
Date of Conversion (as defined below).
(ii) on the first business day following the date that
at least 3,000 shares of Series D Preferred Stock have been
converted into Common Stock, each then outstanding share of
Series D Preferred Stock shall be automatically converted into
that number of fully paid and non-assessable shares of Common
Stock equal to (1) the then applicable Redemption Price for such
shares of Series D Preferred Stock divided by (2) 0.75
multiplied by the Average Market Price on the Date of
Conversion.
(iii) Notwithstanding anything to the contrary contained
herein, if any shares of Series D Preferred Stock shall be
called for redemption, the right of conversion as to the shares
called for redemption shall expire at the close of business on
the third business day preceding the date fixed for redemption
thereof unless default shall be made in payment of the
Redemption Price with respect to such shares, notwithstanding
any earlier deposit by the Corporation of funds reserved for
such redemption.
<PAGE>
(iv) Upon any conversion of shares of Series D Preferred
Stock, the holders thereof shall not be entitled to receive any
accumulated, accrued or unpaid dividends in respect of the
shares surrendered for conversion or the shares of Common Stock
issued on conversion thereof; provided, however, that such
holders shall be entitled to receive any dividends on such
shares of Series D Preferred Stock paid or declared prior to
such conversion if such holder held such shares on the record
date for the payment of such dividend.
(v) Each holder of shares of Series D Preferred Stock
desiring to exercise his right of conversion shall deliver
written notice of his election to convert, stating the names and
addresses of the persons to whom the Common Stock is to be
issued, and the number (in whole shares) of shares to be
converted, and shall surrender the certificate or certificates
for such shares, duly endorsed or accompanied by proper
instruments of transfer (unless such endorsement or instruments
be waived by the Corporation) to the corporation during usual
business hours at the office of the Transfer Agent of the
Corporation for the transfer of its Common Stock in New York,
New York (or such other place as may be designated by the
Corporation upon written notice to all holders of Series D
Preferred Stock). Upon receipt by the Corporation of any such
notice of election to convert shares of Series D Preferred
Stock, and upon surrender of the certificate or certificates
therefor, the Corporation shall execute and deliver, as soon as
practicable, to the converting holder, or to his nominee or
nominees, a certificate or certificates for the number of shares
of Common Stock resulting from such conversion, together with
any cash adjustment in lieu of fractional shares as hereinafter
provided. For all purposes except the right to receive
dividends, as provided in the foregoing paragraph, the rights of
a converting holder, as such, shall cease, and the person or
persons in whose name or names the certificate or certificates
for Common Stock issuable upon such conversion are to be issued
shall be deemed to have become the record holder or holders of
such Common Stock at the close of business on the day (the "Date
of Conversion") on which delivery of such notice or the
surrender of the certificate or certificates for such shares
(whichever shall later occur) shall be made.
(vi) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of shares of
Series D Preferred Stock. If more than one share of Series D
Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis
of the aggregate number of shares so surrendered. If any
fractional interest in a share of Common Stock would be
deliverable upon the conversion of any shares, the Corporation
may, in lieu of delivering the fractional share therefor, make a
cash adjustment in respect of such fraction in an amount equal
to the same fraction of the Current Market Price (as defined
below) of one share of the Common Stock of the Corporation on
the last business day before the Date of Conversion. The
"Current Market Price" on any given day shall be (i) if the
Common Stock of the Corporation is listed or admitted to
unlisted trading privileges on a National Securities Exchange
(defined as any exchange registered with the Securities and
Exchange Commission as a "national securities exchange" under
the Securities Exchange Act of 1934), the last sales price of
the shares of Common Stock of the Corporation on the National
Securities Exchange in or nearest the City of New York on which
the shares of Common Stock of the Corporation shall be listed or
admitted to unlisted trading privileges (or the quoted closing
bid if there are no sales on such Exchange) on such day, (ii) if
the Common Stock of the Corporation is included in the National
Market System ("NMS") of The NASDAQ Stock Market or on NASDAQ,
the last sales price of
<PAGE>
the shares of Common Stock of the Corporation in the NMS of The
NASDAQ Stock Market or on NASDAQ, as the case may be (or the
quoted closing bid if there be no sales on the NMS or on NASDAQ)
on such day, or (iii) if the Common Stock or the Corporation is
not so listed, admitted or included, the mean between the high
and low bid prices of the shares of Common Stock of the
Corporation in the over-the-counter market on such day as
reported by National Quotation Bureau Incorporated, or similar
organization designated by the Corporation, or if not so
available in any such manner, as shall be determined by the
Corporation, which determination shall be conclusive.
(vii) The "Average Market Price" at any date shall be
deemed to be the average of the Current Market Prices for the 10
consecutive business days prior to such date; provided, however,
that if the record date or payment date for a stock split or
stock combination occurs during such 10 day period, the Average
Market Price for the business days prior to such record date or
payment date shall be appropriately adjusted.
(viii) In case the corporation shall (i) effect any
capital reorganization or reclassification of its Common Stock
(except a change in par value, or from par value to no par value
or from no par value to par value or as a result of a
subdivision, combination or stock dividend), or (ii) consolidate
or merge with or into any other corporation (other than a merger
in which the Corporation is the surviving corporation and each
share of Common Stock outstanding immediately prior to such
merger is to remain outstanding immediately after such merger),
lawful provision shall be made as part of the terms of such
transaction whereby the holders of shares of Series D Preferred
Stock shall, if entitled to convert such shares at any time
after the consummation of such transaction, receive upon
conversion thereof in lieu of each share of Common Stock
issuable upon conversion of such shares prior to such
consummation the same kind and amount of stock (or other
securities, cash or property, if any) as may be issuable or
distributable in connection with such transaction with respect
to each outstanding share of Common Stock, subject to
appropriate adjustments for subsequent stock splits, stock
combinations, reclassifications, capital reorganizations,
consolidations or mergers.
(h) Other Rights. The holders of the Series D Preferred Stock
shall not have any other preferences or special rights.
<PAGE>
Exhibit D
CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS
OF
SERIES E
PREFERRED STOCK
OF
AMERICAN GAMING & ENTERTAINMENT, LTD.
AMERICAN GAMING & ENTERTAINMENT, LTD., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors
by the Certificate of Incorporation, as amended, of the
Corporation, and pursuant to the provisions of Sections 141 and
151 of the General Corporation Law of the State of Delaware,
said Board of Directors, at meetings duly cal1ed and held on
March 23, 1994 and November 19, 1999, adopted and amended,
respectively, a resolution providing for the issuance of one
series of the Corporation's Preferred Stock, $0.01 par value, to
be designated "Series E Preferred Stock", and fixing the
designation, powers, preferences and relative, participating,
optional or other rights, and the qualifications, limitations or
restrictions thereof, which resolution, as amended, is as
follows:
RESOLVED, that pursuant and subject to the provisions of Article
FOURTH of the Certificate of Incorporation, as amended, of the
Corporation, there is hereby established a series of Preferred
Stock to which the following provisions shall be applicable:
(a) Designation. The series shall be designated as "Series E
Preferred Stock" (hereinafter "this Series E Preferred Stock").
(b) Number. The number of shares of Series E Preferred Stock
authorized to be issued is 4,000.
(c) Dividends. The holders of shares of Series E Preferred
Stock shall not be entitled to any dividends.
(d) Liquidation. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or
involuntary ("Liquidation"), the holder of each share of Series
E Preferred Stock shall be entitled to receive out of assets of
the Corporation before any distribution is made to, or set apart
for, the holders of any shares of Common Stock or of any class
or series of stock of the Corporation ranking junior to the
Series E Preferred Stock in respect of distribution of assets
upon Liquidation, a liquidating distribution in the amount of
$1,000 per share. After payment to holders of Series E
Preferred Stock of the full preferential amount as aforesaid,
<PAGE>
holders of Series E Preferred Stock, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
If upon any Liquidation of the Corporation the assets of the
Corporation or proceeds thereof distributable among the holders
of shares of the Series E Preferred Stock and of any class or
series of stock ranking equally with the Series E Preferred
Stock as to distribution of assets upon Liquidation shall be
insufficient to pay in full the preferential amounts payable to
such holders, then such assets or the proceeds thereof shall be
distributed among such holders ratably in accordance with the
respective amounts that would be payable on such shares if all
amounts payable thereon were paid in full.
The Series E Preferred Stock shall rank junior as to
distribution of assets upon Liquidation to any class or series
of stock of the Corporation which are by their terms expressly
made senior as to distribution of assets upon Liquidation to the
Series E Preferred Stock in accordance with Section (e)(iii)(B)
of this Certificate. The Series E Preferred Stock shall rank
equally as to distribution of assets upon Liquidation with all
the Corporation's shares of Series C Cumulative Preferred Stock
(the "Series C") and Series D Cumulative Preferred Stock (the
"Series D") and any other class or series of stock of the
Corporation which are expressly made equal as to distribution of
assets upon Liquidation to the Series E Preferred Stock in
accordance with Section (e)(iii)(B) of this Certificate. The
Series E Preferred Stock shall rank senior as to distribution of
assets upon Liquidation to the Corporation's Common Stock and
the Series A and any other class or series of stock of the
Corporation which are not by their terms expressly made senior
or equal as to distribution of assets upon Liquidation to the
Series E Preferred Stock in accordance with Section (e)(iii)(B)
of this Certificate.
A consolidation or merger or share exchange of the Corporation
with or into one or more corporations, or a sale, lease,
exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the assets
of the Corporation shall not be deemed to be a Liquidation.
(e) Voting Rights.
(i) Except as otherwise required by law, the
Corporation's Certificate of Incorporation, by contractual
arrangement or as hereinafter provided in this Section (e), the
holder(s) of Series E Preferred Stock shall not, by reason of
holding Series E Preferred Stock, have any voting rights as
stockholders of the Corporation including, without limitation,
any right to notice of or to be represented at any shareholders'
meetings or to vote upon the election of directors or upon any
other matter.
(ii) So long as any shares of Series E Preferred Stock
are outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least two-thirds of the
then outstanding shares of Series E Preferred Stock voting
separately as a class, change by amendment to the Corporation's
Certificate of Incorporation or otherwise, the terms or
provisions of the Series E Preferred Stock so as to adversely
affect the powers, special rights and preferences of the holders
thereof.
<PAGE>
(iii) So long as shares of Series E Preferred Stock are
outstanding, the Corporation shall not, without the consent of
the holders of at least a majority of the outstanding shares of
Series E Preferred Stock voting separately as a class (A) merge
with or into another corporation unless, (1) the Corporation is
the surviving or successor corporation or the entity formed by
such consolidation or merger is organized in the United States
or any state, municipality or other governmental division
thereof, (2) the terms of the Series E Preferred Stock are not
changed in any manner which is materially adverse to the holders
thereof and (3) the powers, special rights and preferences of
any securities into which the Series E Preferred Stock is
converted in such transaction are substantially the same as the
powers, special rights and preferences of the Series E Preferred
Stock or (B) issue any class or series of stock of the
Corporation ranking senior to or equally with the Series E
Preferred Stock as to distribution of assets upon Liquidation
other than 4,000 shares of Series C, and 4,000 shares of Series
D. No vote or consent of the holders of the Series E Preferred
Stock shall be required in respect of any transaction enumerated
in this paragraph if at or prior to the time any such
transaction is to take effect, provision is made for the
redemption or other retirement of the Series E Preferred Stock
at the time outstanding, the consent of which would otherwise be
required and such redemption or retirement is made in accordance
herewith.
(f) Optional Redemption. At the option of the Corporation, by
vote of the Board of Directors, the Series E Preferred Stock may
be redeemed in whole or in part at any time and from time to
time, at the prices per share set forth below (the "Redemption
Prices"):
If redeemed during the following periods the Redemption Prices
shall be as follows:
October 1, 1999 - December 31, 1999, $1,340.40
Thereafter, the Redemption Price will increase $20.83 as of the
first day of each successive calendar quarter.
In the event that fewer than all of the outstanding shares of
Series E Preferred Stock are to be redeemed at any one time, the
shares so to be redeemed shall be se1ected by lot or pro rata as
determined by the Corporation. The Corporation shall cause a
notice to be mailed, first class postage prepaid, at least 13
days, but not more than 90 days, prior to the date fixed for
redemption, to each holder of record of shares of Series E
Preferred Stock. Such notice shall be mailed to such record
holders at their respective addresses as they shall appear upon
the books of the Corporation and shall set forth the date of
such redemption and the place for surrender of certificates for
shares to be redeemed.
If such notice of redemption shall have been duly given and if
on or before the redemption date specified in such notice there
shall have been deposited with a bank or trust company, having
capital surplus and undivided profits of at least $50,000,000,
in trust for the account of the holders of the shares so called
for redemption, funds in an amount equal to the Redemption Price
applicable to the shares to be redeemed at the date fixed for
such redemption, together with irrevocable instruments and
authority to such bank or trust company to redeem such shares on
or after the date of such deposit upon surrender of the
certificates therefor, then upon the making of such deposit in
trust the shares with respect to which such deposit shall have
been made shall no
<PAGE>
longer be deemed to be outstanding. All rights with respect to
such shares shall forthwith terminate except only (i) the
rights, if any, under Section (g)(iii) of this Certificate and
(ii) the right to receive forthwith from and after the date of
such deposit the Redemption Price, without interest.
If such notice of redemption shall have been duly given and if
no such deposit shall have been made, then upon the date fixed
for redemption, unless default shall be made in providing funds
at the time and place specified for the payment of the
Redemption Price, the shares so called for redemption shall no
longer be deemed to be outstanding, and all rights with respect
to such shares shall forthwith terminate, except only the right
to receive the Redemption Price, without interest.
Any interest accrued on funds so deposited in trust shall belong
to the Corporation and be paid to it from time to time. All
funds deposited in accordance with this Section (f) which shall
remain unclaimed by the holders of shares called for redemption
at the end of one year after the redemption date shall be
returned by such bank or trust company to the Corporation, after
which the holders of such shares shall look only to the
Corporation for the payment of such unclaimed amounts, without
interest.
In case fewer than all of the shares represented by any
certificate are redeemed, a new certificate representing the
unredeemed shares shall be issued to the surrendering holder at
the expense of the Corporation.
(g) Conversion. Holders of Series E Preferred Stock shall have
the right to convert their shares at any time, subject to the
following:
(i) each share of Series E Preferred Stock shall be
convertible, at the option of the holder thereof, into that
number of fully paid and non-assessable shares of Common Stock
equal to (1) the then applicable Redemption Price for such
shares of Series E Preferred Stock divided by (2) 0.75
multiplied by the Average Market Price (as defined below) on the
Date of Conversion (as defined below).
(ii) on the first business day following the date that
at least 3,000 shares of Series E Preferred Stock have been
converted into Common Stock, each then outstanding share of
Series E Preferred Stock shall be automatically converted into
that number of fully paid and non-assessable shares of Common
Stock equal to (1) the then applicable Redemption Price for such
shares of Series E Preferred Stock divided by (2) 0.75
multiplied by the Average Market Price on the Date of
Conversion.
(iii) Notwithstanding anything to the contrary contained
herein, if any shares of Series E Preferred Stock shall be
called for redemption, the right of conversion, if any, as to
the shares called for redemption shall expire at the close of
business on the third business day preceding the date fixed for
redemption thereof unless default shall be made in payment of
the Redemption Price with respect to such shares,
notwithstanding any earlier deposit by the Corporation of funds
reserved for such redemption.
<PAGE>
(iv) Upon any conversion of shares of Series E Preferred
Stock, the holders thereof shall not be entitled to receive any
accumulated, accrued or unpaid dividends in respect of the
shares surrendered for conversion or the shares of Common Stock
issued on conversion thereof.
(v) Each holder of shares of Series E Preferred Stock
desiring to exercise his right of conversion shall deliver
written notice of his election to convert, stating the names and
addresses of the persons to whom the Common Stock is to be
issued, and the number (in whole shares) of shares to be
converted, and shall surrender the certificate or certificates
for such shares, duly endorsed or accompanied by proper
instruments of transfer (unless such endorsement or instruments
be waived by the Corporation) to the Corporation during usual
business hours at the office of the Transfer Agent of the
Corporation for the transfer of its Common Stock in New York,
New York (or such other place as may be designated by the
Corporation upon written notice to all holders of Series E
Preferred Stock). Upon receipt by the Corporation of any such
notice of election to convert shares of Series E Preferred
Stock, and upon surrender of the certificate or certificates
therefor, the Corporation shall execute and deliver, as soon as
practicable, to the converting holder, or to his nominee or
nominees, a certificate or certificates for the number of shares
of Common Stock resulting from such conversion, together with
any cash adjustment in lieu of fractional shares as hereinafter
provided. For all purposes, the rights of a converting holder,
as such, shall cease, and the person or persons in whose name or
names the certificate or certificates for Common Stock issuable
upon such conversion are to be issued shall be deemed to have
become the record holder or holders of such Common Stock at the
close of business on the day (the "Date of Conversion") on which
delivery of such notice or the surrender of the certificate or
certificates for such shares (whichever shall later occur) shall
be made.
(vi) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of shares of
Series E Preferred Stock. If more than one share of Series E
Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis
of the aggregate number of shares so surrendered. If any
fractional interest in a share of Common Stock would be
deliverable upon the conversion of any shares, the Corporation
may, in lieu of delivering the fractional share therefor, make a
cash adjustment in respect of such fraction in an amount equal
to the same fraction of the Current Market Price (as defined
below) of one share of the Common Stock of the Corporation on
the last business day before the Date of Conversion. The
"Current Market Price" on any given day shall be (i) if the
Common Stock of the Corporation is listed or admitted to
unlisted trading privileges on a National Securities Exchange
(defined as any exchange registered with the Securities and
Exchange Commission as a "national securities exchange" under
the Securities Exchange Act of 1934), the last sales price of
the shares of Common Stock of the Corporation on the National
Securities Exchange in or nearest the City of New York on which
the shares of Common Stock of the Corporation shall be listed or
admitted to unlisted trading privileges (or the quoted closing
bid if there be no sales on such Exchange) on such day, (ii) if
the Common Stock of the Corporation is included in the National
Market System ("NMS") of The NASDAQ Stock Market or on NASDAQ,
the last sales price of the shares of Common Stock of the
Corporation in the NMS of The NASDAQ Stock Market or on NASDAQ,
as the case may be (or the quoted closing bid if there be no
sale on the NMS or on NASDAQ) on such day, or (iii) if the
Common Stock of the Corporation is not so listed, admitted or
included, the mean between the high and low bid prices of the
shares of Common
<PAGE>
Stock of the Corporation in the over-the-counter market on such
day as reported by National Quotation Bureau Incorporated, or
similar organization designated by the Corporation, or if not so
available in such manner, as shall be determined by the
Corporation, which determination shall be conclusive.
(vii) The "Average Market Price" at any date shall be
deemed to be the average of the Current Market Prices for the 10
consecutive business days prior to such date; provided, however,
that if the record date or payment date for a stock split or
stock combination occurs during such 10 day period, the Average
Market Price for the business days prior to such record date or
payment date shall be appropriately adjusted.
(viii) In case the Corporation shall (i) effect any
capital reorganization or reclassification of its Common Stock
(except a change in par value, or from par value to no par value
or from no par value to par value or as a result of a
subdivision, combination or stock dividend), or (ii) consolidate
or merge with or into any other corporation (other than a merger
in which the Corporation is the surviving corporation and each
share of Common Stock outstanding immediately prior to such
merger is to remain outstanding immediately after such merger),
lawful provision shall be made as part of the terms of such
transaction whereby the holders of shares of Series E Preferred
Stock shall, if entitled to convert such shares at any time
after the consummation of such transaction, receive upon
conversion thereof in lieu of each share of Common Stock
issuable upon conversion of such shares prior to such
consummation the same kind and amount of stock (or other
securities, cash or property, if any) as may be issuable or
distributable in connection with such transaction with respect
to each outstanding share of Common Stock, subject to
appropriate adjustments for subsequent stock splits, stock
combinations, reclassifications, capital reorganizations,
consolidations or mergers.
(h) Other Rights. The holders of the Series E Preferred Stock
shall not have any other preferences or special rights.
