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EXHIBIT 4.1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
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I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "MICROTEL INTERNATIONAL INC.", FILED IN THIS OFFICE ON THE
NINETEENTH DAY OF SEPTEMBER, A.D. 2000, AT 4:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SEAL]
/s/ EDWARD J. FREEL
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Edward J. Freel, Secretary of State
AUTHENTICATION: 0685069
DATE: 09-20-00
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CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B PREFERRED STOCK
OF MICROTEL INTERNATIONAL INC.,
A DELAWARE CORPORATION
The undersigned, Carmine T. Oliva, hereby certifies that:
A. He is the duly elected and acting President of MicroTel International
Inc., a Delaware corporation (the "Corporation").
B. Pursuant to authority given by the corporation's Certificate of
Incorporation, and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the Board of Directors of the
Corporation has duly adopted the following recitals and resolutions:
WHEREAS, the Certificate of Incorporation of the Corporation provides for
two classes of shares known as Common Stock and Preferred Stock:
WHEREAS, the Board of Directors of the Corporation is authorized by the
Certificate of Incorporation to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix the designation,
powers, preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof, and
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors deems it
advisable to adopt, and hereby does adopt, the Corporation's Certificate of
Designations, Preferences and Rights of Series B Preferred Stock of MicroTel
International, Inc., a Delaware corporation:
A. DESIGNATION. A series of Preferred Stock, designated Series B Preferred
Stock, is hereby provided for, which shares shall have the rights, privileges
and preferences set forth below.
B. AUTHORIZED NUMBER. The number of shares constituting the Series B
Preferred Stock shall be 150,000, par value .01 per share.
C. DIVIDEND PROVISIONS. The holders of shares of Series B Preferred Stock
shall not be entitled to receive dividends.
D. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of shares of Series B
Preferred Stock shall be entitled to receive, subject to prior preference and
distribution to holders of Series A Preferred Stock, but prior and in preference
to any distribution of any of the assets of this corporation to the holders of
the Common Stock by reason of their ownership, an amount per share equal to
$6.40 (the "Stated Value") for each outstanding share of Series B Preferred
Stock. If upon the occurrence of such
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event, and following full payment of preferential amounts to holders of Series A
Preferred Stock, the assets and funds to thus be distributed among the holders
of the Series B Preferred Stock shall be insufficient to permit the payment to
such holders of the full aforesaid preferential amounts, then the entire assets
and funds of the corporation legally available for distribution shall be
distributed ratably among the holders of the Series B Preferred Stock on a
share-by-share basis in proportion to the aggregate preferential amounts of each
such series of Preferred Stock.
(b) A consolidation or merger of the Corporation with or into any
other corporation or corporations, or a sale, conveyance or disposition of all
or substantially all of the assets of this corporation or the effectuation by
the Corporation of a transaction or series of related transactions in which more
than 50% of the voting power of the Corporation is disposed of, shall not be
deemed to be a liquidation, dissolution or winding up within the meaning of this
Section D but shall instead be treated pursuant to Section E hereto.
E. CONVERSION. The holders of the Series B Preferred Shares shall have
conversion rights as follows (the "Conversion Rights"):
(1) CONVERSION RIGHTS.
(i) Each Series B Preferred Share shall be convertible, at the
option of the holders of such shares, at the office of the Corporation or any
transfer agent for the Series B Preferred Shares, into ten (10) fully paid
and non-assessable Common Shares of the Corporation by the respective holders
thereof subject to the following limits:
(a) Up to one-third (1/3) of the total number of a holder's Preferred
Shares, but not to exceed 50,000 Series B Preferred Shares converted by all
holders in the aggregate, on or after March 20, 2001;
(b) Up to two-thirds (2/3) of the total number of a holder's Preferred
Shares, but not to exceed 100,000 Series B Preferred Shares converted by all
holders in the aggregate, on or after September 20, 2001;
(c) All of a holder's Preferred Shares on or after March 20, 2002.
(ii) In the event of a call for redemption of any Series B
Preferred Shares pursuant to Section F hereof, each holder of any Series B
Preferred Shares shall have the right to exercise the conversion rights set
forth in this Section E and the right to convert each share shall cease as to
the shares designated for redemption as of the close of business on the business
day immediately prior to the redemption date, unless default is made in payment
of the redemption price. If the Corporation has received a notice of conversion
with respect to any Series B Preferred Shares the Corporation may not redeem
such Series B Preferred Shares provided the Series B Preferred Shares are
delivered for conversion as set forth in Section E(2).
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(2) MECHANICS OF CONVERSION.
(i) No fractional shares of Common Stock shall be issued upon
conversion of the Series B Preferred Shares. In lieu of any fractional share to
which the holder would otherwise be entitled, the Corporation shall round up to
the nearest whole share. In the case of a dispute as to the calculation of the
Conversion Rate, the Corporation's calculation shall be deemed conclusive absent
manifest error. In order to convert Series B Preferred Shares into full shares
of Common Stock, the holder shall surrender the certificate or certificates
therefor, duly endorsed, by either overnight courier or 2-day courier, to the
office of the Corporation for the Series B Preferred Shares, and shall give
written notice to the Corporation at such office that the holder elects to
convert the same, the number of shares of Series B Preferred Shares so converted
and a calculation of the Conversion Rate (with an advance copy of the
certificate(s) and the notice by facsimile); provided, however, that the
Corporation shall not be obligated to deliver certificates evidencing the shares
of Common Stock issuable upon such conversion unless certificates evidencing
such Series B Preferred Shares are delivered to the Corporation as provided
above, or the holder notifies the Corporation that such certificates have been
lost, stolen or destroyed and executes an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates.
(ii) The Corporation shall use reasonable efforts to cause to be
issued and delivered within two (2) business days after delivery to the
Corporation of such Series B Preferred Shares, or after such agreement and
indemnification, to such holder of Series B Preferred Shares at the address of
the holder on the stock books of the Corporation, a certificate or certificates
for the number of shares of Common Stock to which he shall be entitled as
aforesaid. The date on which notice of conversion is given (the "Date of
Conversion") shall be deemed to be the date set forth in such notice of
conversion provided the original Series B Preferred Shares to be converted are
received by the Corporation within five (5) business days thereafter 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. If the original Series B
Preferred Shares to be converted are not received by the Corporation within five
(5) business days after the Conversion, the notice of conversion shall become
null and void.
(3) CONVERSION PRICE ADJUSTMENTS. The number of Common Shares issuable
upon conversion as set forth in Section E(1)(i) shall be appropriately adjusted
to reflect, as deemed equitable and appropriate by the Corporation, any stock
dividend, stock split or share combination of the Common Stock. In the event of
a merger, reorganization, recapitalization or similar event of or with respect
to the Corporation (a "Corporate Change") (other than a Corporate Change in
which all or substantially all of the consideration received by the holders of
the Company's equity securities upon such Corporate Change consists of cash or
assets other than securities issued by the acquiring entity or any affiliate
thereof), the Series B Preferred Shares shall be convertible into such class and
type of securities as the Holder would have received had the Holder converted
the Series B Preferred Shares immediately prior to such Corporate Change, as
appropriately adjusted to equitably reflect the conversion price and any stock
dividend, stock split or share combination of the common stock after such
corporate event.
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F. REDEMPTION OF SERIES B PREFERRED SHARES.
(1) OPTIONAL REDEMPTION. The Corporation may redeem all outstanding
and unconverted Series B Preferred Shares for cash at a per share price equal to
$7.36 (115% of the Stated Value) for each Series B Preferred Share by giving
written notice to Holder at least twenty (20) days in advance of such
redemption. Notwithstanding the above, the Corporation may not redeem the
Preferred Shares (i) unless there are sufficient authorized and reserved Common
Shares to permit conversion by the holders thereof within such twenty (20) day
period, or (ii) to the extent such Series B Preferred Shares are subject to a
lock-up. If the Corporation has received a notice of conversion with respect to
any Series B Preferred Shares, the Corporation may not redeem such Series B
Preferred Shares provided the Series B Preferred Shares are delivered for
conversion as set forth in Section E(2) during the notice period prior to the
redemption date as set forth in F(3)(ii) below.
(2) MANNER OF REDEMPTION OF SERIES B PREFERRED SHARES.
(i) If less than all of the outstanding Series B Preferred Shares
shall be called for redemption, the particular shares of such series to be
redeemed shall be selected by lot or by such other equitable manner as may be
prescribed by resolution of the Board of Directors.
(ii) Notice of redemption of any Series B Preferred Shares shall
be given by the Corporation by fax or other written communication, at least
twenty (20) days prior to the date fixed by the Board of Directors of the
Corporation for redemption (herein called the "redemption date"), to the holders
of record of the shares to be redeemed at their respective addresses then
appearing on the records of the Corporation. The notice of the redemption shall
state:
(A) the redemption date,
(B) the redemption price (which must be paid within five (5)
business days after the date of redemption),
(C) whether the redemption is an optional redemption or a
mandatory redemption,
(D) if less than all outstanding Series B Preferred Shares
are to be redeemed, the identification of the Series B Preferred Shares to be
redeemed,
(E) the conversion rate on the date of the notice,
(F) that on the redemption date the redemption price will
become due and payable upon each Series B Preferred Shares to be redeemed and
the right to convert each share of Series B Preferred Share shall cease as of
the close of business on the business day prior to the redemption date, unless
default shall be made in the payment of the redemption price, and
(G) the place or places where such Series B Preferred Shares
to be redeemed are to be surrendered for payment of the redemption price.
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(3) FAILURE TO REDEEM. If the Corporation fails to pay the redemption
price after calling any Series B Preferred Shares for optional redemption under
Section F(1), the Corporation shall have no further right to redeem Series B
Preferred Shares under Section F(1).
(4) REACQUIRED SHARES. Any shares of the Series B Preferred Stock
converted, redeemed or purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Series B Preferred Stock and may be reissued at the direction
of the Corporation subject to the conditions or restrictions on issuance set
forth herein.
G. CORPORATE EVENTS. In the event of (i) any declaration by the Corporation
of a record date of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than cash dividend) or other distribution or (ii) any capital reorganization of
the Corporation, any reclassification or recapitalization of the capital stock
of the Corporation, any merger or consolidation of the Corporation, and any
transfer of all or substantially all of the assets of the Corporation to any
other Corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, the
Corporation shall mail to each holder of Series B Preferred Shares at least
twenty (20) days prior to the record date specified therein, a notice specifying
(A) the date on which any such record is to be declared for the purpose of such
dividend or distribution and a description of such dividend or distribution, (B)
the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective and (C) the time, if any, that is to be fixed, as to when the
holders of record of Common Stock (or other securities) will receive for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution or winding up.
H. VOTING RIGHTS.
(1) The Holders of the Series B Preferred Shares shall not have any
voting rights except as set forth below or as otherwise from time to time
required by law.
(2) To the extent under Delaware law the vote of the holders of the
Series B Preferred Shares, voting separately as a class, is required to
authorize a given action of the Corporation, the affirmative vote or consent of
the holders of at least a majority of the outstanding Series B Preferred Shares
shall constitute the approval of such action by the class. To the extent that
under Delaware law the holders of the Series B Preferred Shares are entitled to
vote on a matter with holders of Common Stock voting together as one class, each
Series B Preferred Shares shall be entitled to a number of votes equal to the
number of shares of Common Stock into which it is then convertible using the
record date for the taking of such vote of stockholders as of the date of
determination. Holders of the Series B Preferred Shares shall be entitled to
notice of all shareholder meetings or written consents with respect to which
they would be entitled to vote, which notice provided pursuant to the
Corporation's bylaws and applicable statutes.
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(3) In the event that the authorized number of Common Shares of the
Corporation is not sufficient as of March 20, 2001 so as to permit for the
conversion of the Preferred Shares as provided in Section E hereof, each Series
B Preferred Share then outstanding shall become entitled to such number of votes
as would provide the aggregate number of Series B Preferred Shares then
outstanding voting rights equal to ten percent (10%) of the then outstanding
Common Stock of the Corporation for any matter upon which shareholders are
entitled to vote.
I. PROTECTIVE PROVISIONS. So long as the Series B Preferred Shares are
outstanding, the Corporation shall not take any action that would impair the
rights of the holders of the Series B Preferred Shares set forth herein and
shall not without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of at least a majority in aggregate principal
amount of the Series B Preferred Shares then outstanding:
(1) Alter or change the rights, preferences or privileges of the
Series B Preferred Shares so as to affect adversely the Series B Preferred
Shares.
(2) Do any act or thing which would result in taxation of the holders
of Series B Preferred Shares under Section 305 of the Internal Revenue Code of
1985, as amended (or any comparable provision of the Internal Revenue Code as
hereafter from time to time amended).
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its authorized officer as of September 19, 2000.
MICROTEL INTERNATIONAL INC.
By: /s/ Carmine T. Oliva
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Carmine T. Oliva
President and Chief Executive Officer
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