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As filed with the Securities and Exchange Commission on May 15, 2000
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TERREMARK WORLDWIDE, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 52-1989122
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(State or other jurisdiction of (I.R.S. Employer Identification)
incorporation or organization)
2601 S. BAYSHORE DRIVE
COCONUT GROVE, FLORIDA 33133
(305) 856-3200
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(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
Brian K. Goodkind
Executive Vice President and General Counsel
Terremark Worldwide, Inc.
2601 S. Bayshore Drive
Coconut Grove, Florida 33133
(305) 856-3200
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(Name, address and telephone number of agent for service)
COPIES OF COMMUNICATIONS TO:
Paul Berkowitz, Esq.
Sheida R. Sahandy, Esq.
Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
(305) 579-0500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time or at one time after this Registration Statement becomes
effective
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities Amount to be Proposed Maximum Offering Proposed Maximum Amount of
to be Registered Registered Price per Share (1) Aggregate Offering Price Registration Fee
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<S> <C> <C> <C> <C>
Common Shares, $0.001 par value (1) 147,262,179 $2.6563 $391,172,526 $103,270
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</TABLE>
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and
based on the average of the high and low prices as reported on the American
Stock Exchange of the registrant's common stock on May 11, 2000.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED MAY 15, 2000
PROSPECTUS
TERREMARK WORLDWIDE, INC.
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147,262,179 SHARES OF
COMMON STOCK
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The selling securityholders named on page 9 may offer for sale up to
147,262,179 shares of our common stock.
We will not receive any proceeds from the sale of the shares offered.
Our common stock is listed on the American Stock Exchange under the
symbol "TWW." On May 11, 2000, the closing price of the common stock was
$2.625 per share.
These securities involve a high degree of risk. See "Risk Factors"
beginning on page 2 of this prospectus.
The selling securityholders may sell, directly or through one or more
underwriters, brokers, dealers or agents in one or more transactions in the
market, all or a portion of the securities offered. Any underwriters, brokers,
dealers or agents may receive compensation in the form of discounts, concessions
or commissions from the selling securityholders or commissions from purchasers
of shares for whom they may act as agent. This compensation may be in excess of
those customary in the types of transactions involved. See "Plan of
Distribution."
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is May __, 2000.
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TABLE OF CONTENTS
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<S> <C>
Cautionary Note Regarding Forward-Looking Statements.............................................................. i
Prospectus Summary................................................................................................ 1
Risk Factors...................................................................................................... 2
Use of Proceeds................................................................................................... 8
Selling Stockholders.............................................................................................. 9
Plan of Distribution.............................................................................................. 10
Legal Matters..................................................................................................... 11
Where You Can Obtain Additional Information....................................................................... 11
Incorporation by Reference........................................................................................ 11
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain "forward-looking statements" based on
our current expectations, assumptions, and estimates about us and our industry.
These forward-looking statements involve risks and uncertainties. Words such as
"believe," "anticipate," "expect," "intend," "plan," "will," "may," and other
similar expressions identify forward-looking statements. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Our actual
results could differ materially from those anticipated in such forward-looking
statements as a result of several factors more fully described in "Risk Factors"
and elsewhere in this prospectus. The forward-looking statements made in this
prospectus relate only to events as of the date on which the statements are
made. We undertake no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur in the future.
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PROSPECTUS SUMMARY
We are a company that provides value-added telecommunications services
to and from the Far East and has telecommunictions investments in the People's
Republic of China. We initially focused our business on China because of China's
large and rapidly growing need for telecommunications services and its
requirement for foreign capital and technology to meet that need. More recently,
we have formed a joint venture with Fusion Telecommunications International to
provide telecom services, both voice and data, to and from Asia. We have also
invested in IXS.NET, Inc. to provide fax services over the Internet, prepaid
credit cards and other Internet Protocol based services. Our joint venture
operations in six cellular networks in Hebei Province in Northeast China have
been terminated. We continue to have a joint venture with the Electronics
Industry Department of Hebei Province and are repositioning that joint venture
with a view to providing Internet Protocol fax, voice and other services which
can be transmitted over digital telephone lines or the Internet.
We recently completed a merger with Terremark Holdings, Inc., a company
engaged in the development, construction, sale, leasing, management and
financing of various real estate projects since 1982. Pursuant to this merger,
we changed our name from Amtec, Inc. to Terremark Worldwide, Inc. Terremark has
provided services to private and institutional investors, as well as for its own
account. The real estate projects with which Terremark has been involved have
included retail, high rise office complexes, mixed use projects, condominiums,
condominium hotels and governmental assisted housing. Terremark has also been
involved in a number of ancillary businesses which complement its core
development operation including brokering of financial services, property
management, construction management, condominium hotel management, residential
sales and commercial leasing and brokerage and advisory services. As part of
the merger, we issued 78,539,830 shares of our common stock to Terremark
shareholders.
In connection with our merger with Terremark, we also sold 68,722,349
shares of our common stock to Vistagreen Holdings (Bahamas), Ltd., Paradise
Stream (Bahamas) Limited and Morraine Investments Inc., which we refer to in
this document as the Vistagreen Group, for $28,122,925.51, being the proceeds of
payment of the promissory notes guaranteed by us and issued to the Vistagreen
Group for the sale of the Terremark Centre, an office building in Miami,
Florida, to us. We have since sold the building.
We were originally founded as a Colorado corporation on May 10, 1982,
and were reincorporated under the laws of the state of Delaware on July 10,
1996. Since April 1995, we have been engaged in the business of developing
telecommunications networks in China. In January 1996, we sold substantially all
of the assets of ITV Communications, Inc., our former primary operating
subsidiary. On July 8, 1997, we changed our name to AmTec, Inc. from AVIC Group
International, Inc. Pursuant to a merger completed on April 28, 2000 we changed
our name from Amtec, Inc. to Terremark Worldwide, Inc. Our principal executive
office is located at 2601 S. Bayshore Drive, 9th floor, Coconut Grove, Florida
33133. Our telephone number is (305) 856-3200.
The shares being registered consist of:
o 78,539,830 shares of common stock issued in connection with
our merger with Terremark; and
o 68,722,349 shares of common stock issued in connection with
our stock purchase agreement with the Vistagreen Group.
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RISK FACTORS
These securities are speculative in nature, involve a high degree of
risk, and should not be purchased by anyone who cannot afford the loss of his or
her entire investment. Prior to making an investment decision with respect to
these securities, you should carefully consider, along with the other matters
discussed in this prospectus, the risk factors set forth below. If any of the
following risks actually occur, our business, financial condition, results of
operations and prospects may be seriously harmed and the trading price of our
common stock may decline. If any of these things happen, you may lose all or
part of your investment.
RISKS RELATED TO OUR RECENT MERGER
INTEGRATION OF THE OPERATIONS OF AMTEC AND TERREMARK MAY BE DIFFICULT
AND MAY LEAD TO ADVERSE EFFECTS. Realization of the anticipated benefits of the
merger will depend in part on whether we can integrate our operations in an
efficient and effective manner. Successful integration will require combining
the companies' respective:
o management cultures;
o strategic goals;
o boards of directors; and
o business development efforts.
We may not accomplish this integration smoothly or successfully. The
diversion of the attention of management to the integration effort could cause
the interruption of, or a loss of momentum in, the activities of either or both
of the companies' businesses. Furthermore, employee morale may suffer, and we
may have difficulty retaining key managerial personnel. If we are unable to
address any of the foregoing risks, it could materially our business and impair
the value of our stock.
THE MERGER HAS RESULTED AND WILL CONTINUE TO RESULT IN COSTS OF
INTEGRATION AND TRANSACTION EXPENSES THAT COULD ADVERSELY AFFECT OUR FINANCIAL
RESULTS. If the benefits of the merger do not exceed the associated costs, our
financial results could be adversely affected. Although we estimated that total
transaction costs associated with the merger would be approximately $2 million,
actual costs may substantially exceed our estimates. In addition, unexpected
expenses associated with integrating the two companies may arise.
WE HAVE RECENTLY, AS A RESULT OF THE MERGER, ADDED A NEW FOCUS TO OUR
BUSINESS AND, IF WE ARE NOT SUCCESSFUL IN THIS BUSINESS, THE VALUE OF YOUR
INVESTMENT MAY DECLINE. Our primary business will now involve both
telecommunications and real estate. Because of this new focus, our results of
operations to date may not reflect future results. In addition, we will
encounter challenges and difficulties frequently encountered by early-stage
companies in new and evolving markets. We may not successfully address any of
these challenges and the failure to do so would seriously harm our business and
operating results. These challenges include our:
o dependence on our telecommunications joint ventures;
o dependence on the growth of our new and evolving markets;
o need to expand our customer base;
o need to develop new services and projects;
o need to compete effectively;
o need to manage expanding operations;
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o need to establish strategic partnership, marketing and
distribution arrangements; and
o dependence on key personnel.
In addition, because of our lack of operating history in combining
telecommunications and real estate operations, we have limited insight into
trends that may emerge and affect our business. Addressing these challenges may
require us to incur significant expenditures.
THE MARKET FOR OUR COMMON STOCK IS HIGHLY VOLATILE. There may be no
regular trading market for our common stock. The market price for our common
stock may be significantly affected by such factors as our financial
performance, the market price of our competitors' stock, or market conditions in
general. Our common stock price has been volatile. During the past 12 months,
our common stock has traded in a range between $0.8125 per share and $6.25 per
share. As of May 8, 2000, the closing price of our common stock on the AMEX was
$3.0625. These wide price fluctuations are not necessarily related to the
operating performance of our company.
WE PLAN ADDITIONAL INTERNATIONAL EXPANSION WHICH MAY SUBJECT US TO
NUMEROUS RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS. To be successful, we
believe we must expand our international operations. If successful, we will be
subject to a number of risks associated with international business activities.
These risks generally include:
o currency exchange rate fluctuations;
o unexpected changes in regulatory requirements;
o tariffs, export controls and other trade barriers;
o longer accounts receivable payment cycles and difficulties in
collecting accounts receivable;
o difficulties in managing and staffing international
operations;
o potentially adverse tax consequences, including restrictions
on the repatriation of earnings;
o the burdens of complying with a wide variety of foreign laws;
and
o political instability.
YOU SHOULD NOT EXPECT TO RECEIVE DIVIDENDS ON OUR COMMON STOCK. We have
not paid dividends on our common stock to date and have no plans for paying
dividends on the common stock in the foreseeable future. We have certain
obligations to pay dividends in kind, which are to be paid in common stock to
holders of the Series G preferred shares. Except for the dividends in kind which
we will pay on the shares of issued and outstanding preferred stock, and cash or
in-kind dividends which we may pay on other preferred stock that may be issued
in the future that require dividends, we intend to retain any earnings to pay
for the expansion of our business.
RISKS RELATED TO BOTH THE TELECOMMUNICATIONS AND REAL ESTATE OPERATIONS
WE HAVE A HISTORY OF OPERATING LOSSES AND MAY NOT GENERATE SUFFICIENT
REVENUE TO ACHIEVE PROFITABILITY. Prior to the merger, we incurred operating
losses on a quarterly basis since inception. AmTec had net operating losses of
$5.6 million during the fiscal year ended March 31, 1999 and $2.1 million for
the nine months ended December 31, 1999. AmTec had no revenues in 1999, 1998 or
1997. In light of our operating history, we can not assure you when, if ever, we
would be able to achieve profitability from the telecommunication operations.
Terremark, prior to our merger, had operating income of $624,000 during the
fiscal year ended March 31, 1999 and incurred operating losses of $3.3 million
for the nine months ended December 31, 1999. Terremark had a retained deficit of
$9.2 million as of December 31, 1999. We may not be able to generate enough
revenue to achieve
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profitability in the event of continued or growing operating losses from our
telecommunications or real estate operations.
OUR INABILITY TO SECURE ADDITIONAL FUNDING COULD LEAD TO LOSS OF YOUR
INVESTMENT. Our current resources will be sufficient to meet our capital needs
for at least one year. After that, we will require additional resources in order
to fulfill our business plan. There is no guarantee that we will be able to
obtain additional financing on favorable terms, if at all. Further, if we issue
equity securities, the ownership percentage of our stockholders would be reduced
and the holders of new equity securities may have rights, preferences or
privileges senior to those of existing holders of our common stock. If we cannot
raise funds needed on acceptable terms, we may not be able to take advantage of
future opportunities or to respond to competitive pressures or unanticipated
requirements, which could materially harm our business, operating results and
financial condition.
WE ARE DEPENDENT ON KEY PERSONNEL. We are highly dependent on the
services of Manuel D. Medina, our Chairman. The loss of the services of Mr.
Medina could materially harm our business. The merger and integration of the
separate businesses, and our potential growth and expansion, are expected to
place increased demands on our management skills and resources. We cannot assure
you that we will be able to retain and attract skilled and experienced
management. The failure to attract and retain personnel could materially harm
our business and impair the price of our stock.
WE WILL FACE POTENTIAL VOLATILITY IN OUR STOCK PRICE. The market prices
for telecommunications and real estate companies have in the past been and can
in the future be expected to be especially volatile. The market price of our
common stock will continue to be subject to substantial volatility as a result
of many factors, including:
o regulatory changes and developments that affect either
component of our business;
o establishment of additional corporate partnerships or joint
ventures;
o economic and other external factors; and
o fluctuations in our financial results and degree of trading
liquidity in our common stock.
One or more of these factors could significantly harm our business and
decrease the price of our common stock in the public market.
WE MAY FACE SUBSTANTIAL LIABILITIES FOR INDEMNIFICATION OF TAX
OBLIGATIONS IF WE ARE OR BECOME A UNITED STATES REAL PROPERTY HOLDING
CORPORATION. If our company was at the time of the merger or becomes a United
States real property holding corporation as defined in Section 897(c)(2) of the
U.S. Internal Revenue Code, while the Vistagreen Group continues to hold at
least one percent of our common stock registered hereunder on its behalf, then
we could be liable to the Vistagreen Group for any U.S. tax liability the
Vistagreen Group incurs on dispositions of our common stock. The amount of this
tax liability would depend on the amount of any gains the Vistagreen Group
recognizes on dispositions of our common stock and on the effective U.S. tax
rate payable by the Vistagreen Group at the time it recognizes those gains.
RISKS FACTORS SPECIFIC TO OUR TELECOMMUNICATIONS BUSINESS
WE COULD BE SUED AS A RESULT OF AN UNCOMPLETED TRANSACTION. During
1998, AmTec entered into an agreement to acquire an investment in a cable
television network venture located in Hunan province, PRC, from United
International Holdings or UIH. AmTec terminated the agreement because, among
other reasons, the closing had not occurred by December 31, 1999 through no
fault of AmTec. On December 30, 1999, UIH had indicated that it was ready to
close the agreement. Should UIH seek judicial relief to require us to close, its
superior financial resources could limit our ability to defend ourself. We
believe that AmTec had clear rights to terminate the agreement.
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CHINA TELECOMMUNICATIONS REGULATIONS COULD IMPACT OUR BUSINESS. Chinese
laws and regulations have prohibited foreign investors and foreign invested
enterprises from owning or operating telecommunication networks in China. Since
the fall of 1998, the Chinese government has taken a number of actions which
have changed the legal environment in which AmTec is operating in China:
o preparing a new telecommunications law not yet issued; and
o seeking admission to the World Trade Organization.
The result of these actions is difficult to predict since negotiations
with relevant parties are ongoing and political uncertainties exist in China.
Among other possibilities:
o we may be unable to convert returns of or on its investment
it receives, if any, to U.S. currency or repatriate funds from
China;
o the new telecommunications law may facilitate entry into
telecommunications businesses in China by national and
international entities and increase competition; and
o WTO accession will require China to abide by certain rules
which assures foreign investors minimum direct ownership
percentages in licensed telecommunications operators and may
foster competition from Chinese or foreign telecommunications
operators or investors.
The result of the foregoing may have a material adverse effect on us.
A number of regulatory bodies in China seek to control and regulate the
Internet; most notably, the Ministry of Information Industry, which combines the
former Ministry of Posts & Telecommunications, Ministry of Electronics Industry
and Ministry of Radio, Film and Television, and regulates the telecommunications
and information industries. In addition, China Telecom, under direct authority
of the Ministry of Information and Industry, has significant control over the
development of the Internet infrastructure in China as it owns China's largest
Internet backbone and operates telecoms and datacomms services.
INTERNET REGULATION IN CHINA IS UNCLEAR, AND NO SINGLE REGULATORY ACT
HAS BEEN PROMULGATED TO GOVERN THE INTERNET IN CHINA. Consequently, our ability
to operate or invest in Internet-based services is unclear. To date, Chinese
Internet operating licenses have been available to Chinese companies only.
Through our joint venture with Fusion Communications and alliance with IXS.NET,
we seek to participate in Internet-based businesses in China. If the Chinese
government liberalizes its policy toward foreign participation in Internet
operating licenses, it could substantially increase competition in the markets
where our strategic partners operate. The Chinese government, while currently
open to joint ventures, could at any time restrict operations or expropriate
foreign participants' assets in China. Furthermore, China Telecom has challenged
the ability of Internet service providers to provide Internet telephone and fax
services. This action could have materially adverse consequences to the
company's business and financial condition.
On November 15, 1999, the United States and China reached a trade
agreement whereby China agreed to reduce tariffs on various industrial and
agricultural products and lift many of the barriers that prevent US companies
from doing business in China. Under the agreement, China agreed, among other
things to permit:
o foreign entities to invest in Chinese Internet businesses; and
o foreign entities to own up to 49% of Chinese telephone service
providers, which would increase up to 50% in two years.
The United States agreed that in return for these concessions, that it
would support China's entry into the World Trade Organization, the group that
sets the rules for international commerce. Entry into the WTO would give China
access to international economic protections, such as protection from unfair
trade practices abroad, but also would impose a body of rules on China's
internal economy and put China under the jurisdiction of international
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courts that enforce the World Trade Organization's rules. The agreement is
subject to approval by the United States Congress. We cannot predict the impact
of the new trade agreement between China and the United States.
China also must negotiate trade agreements with each of the European
Union and Japan in order to gain the support of these groups to China's entry
into the WTO.
It is impossible to predict how entry into the World Trade Organization
would affect China's economy or the manner in which it conducts business
domestically and internationally.
WE HAVE LIMITED OPERATING CONTROL IN OUR JOINT VENTURE. Because we do
not have majority voting rights in certain of our joint ventures, we cannot
completely control or direct the operation of these entities. In addition, our
ability to derive revenues from each joint venture depends upon our ability to
receive distributions, so it is possible that we may receive little or no
revenue from our joint ventures.
POLITICAL RISKS IN CHINA MAY ADVERSELY AFFECT OUR BUSINESS OPERATIONS.
China has been a socialist state since 1949 and is controlled by the Communist
Party of China. Changes in the political leadership of China may have a
significant effect on laws and policies related to the current economic reforms
program. These changes may also affect other policies affecting business and the
general political, economic and social environment in China, including the
introduction of measures to control inflation, changes in the rate or method of
taxation and imposition of additional restrictions on currency conversion,
remittances abroad and foreign investment. These effects could substantially
impair our business, profits or prospects in China. In addition, economic
reforms and growth in China have been more successful in some provinces than in
others. The continuation or increases of such disparities could affect the
political or social stability of China.
TECHNOLOGICAL ADVANCES MAY MAKE OUR TELECOMMUNICATIONS OPERATIONS
OBSOLETE. The market in the telecommunications industry is characterized by
rapidly changing technology. Technologies developed by others may render
obsolete or otherwise significantly diminish the value of the business
operations of the joint ventures in which we participate.
WE FACE SEVERE COMPETITION. The Internet service provider market is
highly competitive in China. There are five national ISPs owned and operated by
the national government. There are over 150 private ISPs licensed to operate in
various provinces. Thus, privately owned ISPs often compete with government
owned or affiliated ISPs. The playing field is unequal, with
government-affiliated ISPs having access to subsidized dial up lines, leased
lines and Internet bandwidth. Our strategic partners may face severe competition
as the Internet develops in China.
RISK FACTORS SPECIFIC TO OUR REAL ESTATE BUSINESS
ECONOMIC, INTEREST RATES AND OTHER CONDITIONS GREATLY IMPACT THE REAL
ESTATE MARKET. It is possible that our real estate operations will not generate
income sufficient to meet our operating expenses or will generate income and
capital appreciation, if any, at a rate less than that anticipated or available
through comparable real estate or other investments.
The real estate industry is cyclical and affected by changes in general
and local economic and other conditions including employment levels, demographic
considerations, availability of financing, interest rate levels, consumer
confidence and real estate demand. In addition, developers are subject to
various risks, many of them outside their control including competitive
overbuilding, availability and cost of property, materials and labor, adverse
weather conditions which can cause delays in construction schedules, cost
overruns, changes in government regulations pertaining to building standards or
environmental matters, increases in real estate taxes and other local government
fees and acts of God, such as hurricanes and floods.
We cannot predict whether interest rates will be at levels attractive
to prospective tenants or buyers and any increase in interest rates could affect
our business adversely.
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UP FRONT CASH REQUIREMENTS MAY CREATE CASH FLOW PROBLEMS. We develop
real estate projects. Acquiring land and committing the financial and managerial
resources to develop such projects involve significant risks. Before a
development generates any revenue, material expenditures are required for items
such as acquiring land, professional fees, construction, financing costs, sales
and marketing.
OUR REAL ESTATE INVESTMENTS ARE HIGHLY LEVERAGED AND WE MAY NOT BE ABLE
TO MAKE THE DEBT SERVICE PAYMENTS. Our ability to make debt service payments in
the future will be dependent on our operating results, which are subject to
financial, economic and other factors affecting it that are beyond our control.
We may acquire real estate in the future through debt financing. The degree to
which we are leveraged could have an adverse impact on us, including:
o increased vulnerability to adverse general economic and market
conditions;
o impaired ability to expand and to respond to increased
competition;
o impaired ability to obtain additional financing for future
working capital, capital expenditures, general corporate or
other purposes; and
o significant portions of cash provided by operating activities
must be used for the payment of debt obligations, thereby
reducing funds available for operations and future business
opportunities.
A SIGNIFICANT PORTION OF OUR REAL ESTATE BUSINESS' FINANCING IS
STRUCTURED AS BALLOON PAYMENTS, WHICH MAY BE HARDER FOR US TO PAY OFF. Most of
our real estate project financings provide for the repayment of a significant
part of the loan at maturity. These financings involve greater risks than
financings structured such that the principal amount is amortized over the term
of the loan because our ability to repay the outstanding principal amount at
maturity may depend on our ability to obtain adequate refinancing or dispose of
the assets before maturity, which in turn depend upon economic conditions in
general and the value of the underlying properties in particular. Further, a
shrinkage in value of the underlying property held as collateral for loans could
result in a loss of the property by us through foreclosure and result in a
possible deficiency judgment for the difference between the amount of the
underlying debt and value of the collateral.
INCREASES IN VARIABLE MORTGAGE RATES COULD NEGATIVELY IMPACT US. Most
of our real estate business' borrowings are pursuant to agreements which provide
for the periodic adjustment of the interest rate to be consistent with
prevailing interest rates. An increase in prevailing interest rates would result
in higher borrowing costs to us and, therefore, a reduction in income or, in
extreme cases, project failure.
MANAGEMENT CONTRACTS ARE GENERALLY CANCELLABLE ON SHORT NOTICE. In the
real estate industry, third party contracts to manage buildings are generally
subject to cancellation on 30 to 90 days notice. If our property management
contracts with third parties were cancelled, there could be a material adverse
impact on our results of operations.
OUR GEOGRAPHIC CONCENTRATION EXPOSES US TO CERTAIN RISKS. Our real
estate operations are situated primarily in South Florida. For fiscal 1999, all
of Terremark's revenue and operating income were derived from operations in
South Florida. Adverse general economic conditions in South Florida could have a
material adverse impact on our operations. Although our planned expansion into
other geographic areas may reduce our exposure to adverse developments in the
South Florida economy, we may become subject to similar risks in new locations.
In addition, as development of real estate is subject to local laws, we may not
be in a position to fully comply with them which would adversely impact our
business.
THE OCCURRENCE OF UNINSURED LOSSES COULD HAVE A MATERIAL ADVERSE EFFECT
ON OUR FINANCIAL CONDITION. We carry comprehensive insurance with respect to our
properties and operations. However, there are certain types of losses, generally
of a catastrophic nature, such as significant construction defects, hurricanes,
floods or war, which are either uninsurable or not economically insurable. In
the event of such a disaster, we could lose both our capital investment in
certain properties and the anticipated profits from such properties. In
addition, we may have
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liability for services it renders to others if those services are negligently
provided and losses are sustained. We carry errors and omissions insurance for
some of its service operations, but for some other types of losses (e.g. general
contracting), that insurance is either not available or not economical.
WE MAY NOT BE ABLE TO COMPETE IN THE HIGHLY COMPETITIVE REAL ESTATE
MARKET. The real estate development industry is highly competitive and
fragmented.
We compete in the acquisition of property with many other entities
engaged in real estate investment activities, including real estate investment
trusts and insurance companies, many of which have greater assets and financial
resources than we do. There may be intense competition in obtaining properties
of the type in which we intend to invest. The number of entities and the amount
of funds available for investment in properties of a type suitable for
investment by us may increase, resulting in increased competition for those
investments. Competition among purchasers of real property may result in
increases in the prices paid for real property investments.
In our construction and development activities, we compete for buyers
and tenants. We face similar intense competition in our brokerage, property
management and advisory and consulting businesses from well established local
and national organizations which specialize in the provision of those services.
GOVERNMENTAL REGULATION MAY ADVERSELY IMPACT OUR BUSINESS. We are
subject to a variety of federal, state and local statutes, ordinances, rules and
regulations concerning land use. Land use and zoning laws can vary greatly and
may result in delays, cause us to incur substantial compliance and other costs
and prohibit or severely restrict development in certain regions or areas, any
of which could have an adverse effect on our business and results of operations.
In developing real estate, we must obtain the approval of numerous government
authorities regulating such matters as permitted land uses and levels of density
and the installation of utility services such as water and waste disposal.
Several authorities in Florida and other states have imposed impact fees as a
means of defraying the cost of providing certain governmental services to
developing areas and the amount of these fees has increased significantly during
recent years. Many state laws require the use of specific construction materials
which reduce the need for energy-consuming heating and cooling systems. Also,
local governments, at times, declare moratoriums on the issuance of building
permits and impose other restrictions for various reasons, including but not
limited to, when sewage treatment facilities and other public facilities do not
reach minimum standards.
TO VARYING DEGREES, CERTAIN PERMITS AND APPROVALS WILL BE REQUIRED TO
COMPLETE THE RESIDENTIAL DEVELOPMENTS CURRENTLY BEING PLANNED BY US. Our ability
to obtain necessary approvals and permits for these projects is often beyond our
control, and could restrict or prevent the development of otherwise desirable
property. The length of time necessary to obtain permits and approvals increases
the carrying costs of unimproved property acquired for the purpose of
development and construction. In addition, the continued effectiveness of
permits already granted is subject to factors such as changes in policies, rules
and regulations and their interpretation and application.
LIABILITY RELATING TO ENVIRONMENTAL CONTAMINATION MAY ADVERSELY IMPACT
OUR BUSINESS. Applicable laws impose strict liability on property owners to
remediate environmental contamination found on land they own. This means that we
can be liable regardless of how or when the contamination occurred, even if the
contamination occurred before our purchase of such land. As an owner of real
estate, we may be held responsible for remediation of this kind. Although we
engage environmental engineers to evaluate real estate before a purchase, such
evaluations are not capable of detecting all contamination. Insurance for these
risks is either not available or not economical.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling
stockholder of any of the shares offered hereby. We will pay all of the costs of
this offering.
8
<PAGE> 12
SELLING STOCKHOLDERS
The following table sets forth information with respect to the selling
stockholders as of May 1, 2000. Except as otherwise disclosed, the selling
stockholders do not have and within the past three years have not had any
position, office or other material relationship with us or any of our
predecessors or affiliates. Because the selling stockholders may offer all or
some portion of the shares pursuant to this prospectus, we cannot give an
estimate as to the number of shares that the selling stockholders will hold upon
termination of any of these sales. In addition, the selling stockholders
identified below may have sold, transferred or otherwise disposed of all or a
portion of their shares since the date on which it provided the information to
us regarding its shares, in transactions exempt from the registration
requirements of the Securities Act.
<TABLE>
<CAPTION>
Percentage of
Number of Shares Shares
Number of Shares Beneficially Owned Beneficially
Beneficially Number of Shares Offered After Owned After
Selling Stockholder Owned (1) Offered Offering (1)(2) Offering (1)(2)
- ------------------- --------------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Paradise Stream (Bahamas) Limited 54,290,655 54,290,655 0 0%
TCO Company Limited 34,094,139 34,094,139 0 0
Manuel D. Medina 32,197,913 32,169,913 28,000 *
Vistagreen Holdings (Bahamas), Ltd 7,818,473 7,818,473 0 0
Moraine Investments, Inc. 6,613,221 6,613,221 0 0
ATTU Services, Inc. 4,186,173 4,186,173 0 0
Michael Katz 3,055,830 3,015,930 39,900 *
Brian Goodkind 2,269,801 2,269,801 0 0
AJR, LLC 1,027,301 1,027,301 0 0
Irving A. Padron, Jr 516,151 513,651 2,500 *
Edward Jacobson 513,651 513,651 2,000 *
William Biondi 513,651 513,651 0 0
Willy Bermello 235,620 235,620 0 0
</TABLE>
* Less than 1%
(1) Except as otherwise noted, we determine beneficial ownership in accordance
with Rule 13d-3(d) promulgated by the Commission under the Securities and
Exchange Act of 1934, as amended. We treat shares of common stock issuable
pursuant to options, warrants and convertible securities, to the extent
these securities are currently exercisable or convertible within 60 days of
May 1, 2000, as outstanding for computing the percentage of the person
holding such securities. Unless otherwise noted, each identified person or
group possesses sole voting and investment power with respect to shares,
subject to community property laws where applicable. We treat shares not
outstanding but deemed beneficially owned by virtue of the right of a
person or group to acquire them within 60 days as outstanding only to
determine the number and percent owned by such person or group.
(2) Assuming that all shares offered here are sold but no other securities
held by the selling securityholder are sold.
9
<PAGE> 13
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling stockholders
which includes transferees among such selling stockholders, donees and pledgees
receiving shares from them after the date of this prospectus. The selling
stockholders have advised us that they may sell their shares offered here to
purchasers directly. Alternatively, the selling stockholders may offer the
shares to or through underwriters, brokers/dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling stockholders or the purchasers of shares for whom they may act
as agents. The selling stockholders and any underwriters, brokers/dealers or
agents that participate in the distribution of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act. Any profit realized by
them on the sale of such shares and any discounts, commissions, concessions or
other compensation received by any underwriter, broker/dealer or agent may be
deemed to be underwriting discounts and commissions under the Securities Act.
This compensation may be in excess of that customary in the types of
transactions involved.
Each of the selling stockholders has agreed, except as provided below,
not to sell, or otherwise dispose of any interest in the common stock that we
are registering before April 27, 2001. This does not preclude open market sales
in amounts that would be permitted under SEC Rule 145 as if that rule applied.
Generally, Rule 145 allows the sale of the greater of, in any three month
period, the outstanding shares or the average trading volume of our shares on
the AMEX during the four weeks prior to filing a notice of sale with the SEC.
The selling stockholders are also permitted to make sales or otherwise dispose
of any interest in the common stock we are registering before April 27, 2001
to any other selling stockholder or any affiliate of any selling stockholder.
The selling stockholders have advised us that they may sell the shares
in one or more transactions:
o at fixed prices;
o at market prices prevailing at the time of sale;
o at prices related to prevailing market prices; and/or
o at varying prices determined at the time of sale or at
negotiated prices.
The sale of shares may be effected in transactions (which may involve
crosses or block transactions):
o on any national securities exchange or quotation service on
which the shares may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in transactions otherwise than on such exchanges or in the
over-the-counter market; or
o through the writing of options.
Because the selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the selling
stockholders will be subject to the prospectus delivery requirements of the
Securities Act, which may include delivery through the facilities of the New
York Stock Exchange. We have informed the selling stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Act may apply to their sales in the market.
Upon being notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, which supplement will disclose:
o the name of each such selling stockholder and of the
participating broker-dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable;
10
<PAGE> 14
o that such broker-dealer(s) did not conduct any investigations
to verify the information set out or incorporated by reference
in this prospectus; and
o such other facts as may be material to the transaction.
Pursuant to our agreement with the selling stockholders, we will pay
all expenses of the registration of the shares, including, without limitation,
commission filing fees and expenses of compliance with state securities or "blue
sky" laws; provided, however, that the selling stockholders will pay all
underwriting discounts and selling commissions, if any. We will indemnify the
selling stockholders against certain civil liabilities, including certain
liabilities under the Securities Act, or they will be entitled to the
appropriate contribution.
LEGAL MATTERS
Greenberg Traurig, P.A. has passed upon the validity of the issuance of
the shares being offered by this prospectus.
EXPERTS
The financial statements of Terremark Holdings, Inc. as of March 31,
1999 and 1998 and for each of the three years in the period ended March 31, 1999
incorporated in this prospectus by reference to the Proxy Statement of AmTec,
Inc. dated March 24, 2000 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting. The financial statements
incorporated in this prospectus by reference from AmTec, Inc.'s Annual Report on
Form 10-K for the year ended March 31, 1999 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy the materials we file with the Commission at the Commission's public
reference room at 450 Fifth Street, N.W. Washington D.C. 20549 and at the
Commission's regional offices in Chicago, Illinois and New York, New York.
Please call the Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. The Commission also maintains an
Internet site that contains reports, proxy and information statements and other
information regarding issuers that file with the Commission, including us. The
site's address is http://www.sec.gov. You can request copies of those documents,
upon payment of a duplicating fee, by writing to the Commission.
INCORPORATION BY REFERENCE
The Commission allows us to "incorporate by reference" in this
prospectus other information we file with them, which means that we can disclose
important information to you by referring you to those documents. This
prospectus incorporates important business and financial information about us
that is not included in or delivered with this prospectus. The information that
we file later with the SEC will automatically update and supersede the
information included in and incorporated by reference in this prospectus. We
incorporate by reference the documents listed below which have been filed with
the Commission and any future filings made with the Commission under Sections
13(a), 13 (c), 14, or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), until we sell all the securities offered by this prospectus:
1. our annual report on Form 10-K for the year ended March 31,
1999,
2. our quarterly reports on Form 10-Q for the periods ended
June 30, 1999, September 30, 1999 and December 31, 2000;
3. our definitive proxy statement on Form 14A dated March 24,
2000;
4. Current Report on Form 8-K filed May 3, 2000; and
5. Current Report on Form 8-K filed May 15, 2000.
We have filed each of these documents with the Commission and they are
available from the Commission's Internet site and public reference rooms
described under "Where you can obtain additional available information about us"
above. You may also request a copy of these filings, at no cost, by writing or
calling us at the following address:
Brian K. Goodkind
Executive Vice President and General Counsel
Terremark Worldwide, Inc.
2601 S. Bayshore Drive
Coconut Grove, Florida 33133
Telephone requests may be directed to Brian K. Goodkind at (305) 856-3200.
11
<PAGE> 15
147,262,179 SHARES
TERREMARK WORLDWIDE, INC.
COMMON STOCK
PROSPECTUS
May 15, 2000
- --------------------------------------------------------------------------------
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this prospectus and, if given or made, any information and representations must
not be relied upon as having been authorized. This prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the securities to which it relates or an offer to sell or
the solicitation of an offer to buy these securities in any circumstances in
which this offer or solicitation is unlawful. Neither the delivery of this
prospectus nor any sale made under this prospectus shall, under any
circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information contained in
this prospectus is correct as of any time subsequent to its date.
12
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate that expenses in connection with the distribution described
in this registration statement will be as follows. All expenses incurred with
respect to the distribution will be paid by us, and such amounts, with the
exception of the Securities and Exchange Commission registration fees, are
estimates.
<TABLE>
<S> <C>
SEC registration fee................................................................... $ 103,270
American Stock Exchange................................................................ 16,000
Accounting fees and expenses........................................................... 35,000
Legal fees and expenses................................................................ 20,000
Printing and engraving expenses........................................................ 5,800
Miscellaneous.......................................................................... 930
---------
Total.................................................................................. $ 181,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Section 102(b)(7) of the General Corporation Law of the
State of Delaware, our certificate of incorporation eliminates the liability of
our directors to us or our stockholders, except for liabilities related to
breach of duty of loyalty, actions not in good faith, and certain other
liabilities.
Our certificate of incorporation, and bylaws provide for the
indemnification of directors and officers to the fullest extent permitted by the
General Corporate Law.
Section 145 of the General Corporate Law authorizes indemnification
when a person is made a party to any proceeding by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation or
was serving as a director, officer, employee or agent of another enterprise, at
the request of the corporation, and if such person acted in good faith and in a
manner reasonably believed by him or her to be in, or not opposed to, the best
interests of the corporation. With respect to any criminal proceeding, such
person must have had no reasonable cause to believe that his or her conduct was
unlawful. If it is determined that the conduct of such person meets these
standards, he or she may be indemnified for expenses incurred and amounts paid
in such proceeding if actually and reasonably incurred by him or her in
connection therewith.
If such a proceeding is brought by or on behalf of the corporation
(i.e., a derivative suit), such person may be indemnified against expenses
actually and reasonably incurred if he or she acted in good faith and in a
manner reasonably believed by him or her to be in, or not opposed to, the best
interests of the corporation. There can be no indemnification with respect to
any matter as to which such person is adjudged to he liable to the corporation;
however, a court may, even in such case, allow such indemnification to such
person for such expenses as the court deems proper. Where such person is
successful in any such proceeding, he or she is entitled to be indemnified
against expenses actually and reasonably incurred by him or her. In all other
cases, indemnification is made by the corporation upon determination by it that
indemnification of such person is proper because such person has met the
applicable standard of conduct.
In addition, we have adopted a form of indemnification agreement which
provides the indemnitee with the maximum indemnification allowed under
applicable law. As of the date of this prospectus, we have not entered into
indemnification agreements with any of our directors, officers, employees or
consultants. Since the Delaware statute is non-exclusive, it is possible that
certain claims beyond the scope of the statute may be indemnifiable. The form
indemnification agreement provides a scheme of indemnification which may be
broader than that specifically provided by Delaware law. It has not yet been
determined, however, to what extent the indemnification expressly permitted by
Delaware law may be expanded, and therefore the scope of indemnification
provided by the form indemnification agreements may be subject to future
judicial interpretation.
II-1
<PAGE> 17
The indemnification agreement provides, in pertinent part, that we
shall indemnify an indemnitee who is or was a party or is threatened, pending or
completed action or proceeding whether civil, criminal, administrative or
investigative by reason of the fact that the indemnitee is or was our director,
officer, key employee or agent. We shall advance all expenses, judgments, fines,
penalties and amounts paid in settlement (including taxes imposed on indemnitee
on account of receipt of such payouts) incurred by the indemnitee in connection
with the investigation, defense, settlement or appeal of any civil or criminal
action or proceeding as described above. The indemnitee shall repay such amounts
advanced only if it shall be ultimately determined that he or she is not
entitled to be indemnified by us. The advances paid to the indemnitee by us
shall be delivered within 20 days following a written request by the indemnitee.
Any award of indemnification to an indemnitee, if not covered by insurance,
would come directly from our assets, thereby affecting a stockholder's
investment.
We have obtained directors' and officers' liability insurance with an
aggregate liability for the policy year, inclusive of costs of defense, in the
amount of $3,000,000.
ITEM 16. EXHIBITS
The following exhibits, which are furnished with this registration
statement or incorporated by reference, are filed as part of this registration
statement:
3.1 Restated Certificate of Incorporation of the Registrant
3.2 Restated Bylaws of the Registrant
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (contained in Part II)
- ------------------
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective amendment to
this Registration Statement.
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
II-2
<PAGE> 18
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement; provided, however,
that (i) and (ii) do not apply if the Registration Statement
is on Form S-3, and the information required to be included in
a post-effective amendment is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized in Miami, Florida on May 15, 2000.
TERREMARK WORLDWIDE, INC.
By: /s/ Manuel D. Medina
----------------------------
Manuel D. Medina
Chairman of the Board
Chief Executive Officer
II-4
<PAGE> 20
SIGNATURES AND POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Brian K.
Goodkind his true and lawful attorney-in-fact with the authority to execute in
the name of each such person, and to file with the Securities and Exchange
Commission, together with any exhibits thereto and other documents therewith,
any and all amendments (including without limitation post-effective amendments)
to this registration statement necessary or advisable to enable the registrant
to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, which amendments may make such other changes in the
registration statement as the aforesaid attorney-in-fact executing the same
deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Manuel D. Medina Chairman of the Board, Chief Executive Officer May 15, 2000
- --------------------------------------- (Principal Executive)
Manuel D. Medina
/s/ Joseph R. Wright, Jr. Director May 15, 2000
- ---------------------------------------
Joseph R. Wright, Jr.
/s/ Joel A. Schleicher Director May 15, 2000
- ---------------------------------------
Joel A. Schleicher
/s/ Marvin S. Rosen Director May 15, 2000
- ---------------------------------------
Marvin S. Rosen
Director May 15, 2000
/s/ Kenneth I. Starr
- ---------------------------------------
Kenneth I. Starr
/s/ Timothy Elwes Director May 15, 2000
- ---------------------------------------
Timothy Elwes
/s/ Miguel Rosenfeld Director May 15, 2000
- ---------------------------------------
Miguel Rosenfeld
/s/ Brian K. Goodkind Executive Vice President and General Counsel May 15, 2000
- ---------------------------------------
Brian K. Goodkind
/s/ Irving A. Padron, Jr. Senior Vice-President and Chief Financial May 15, 2000
- --------------------------------------- Officer
Irving A. Padron, Jr.
</TABLE>
II-5
<PAGE> 21
EXHIBIT INDEX
Exhibits
--------
3.1 Restated Certificate of Incorporation of the Registrant
3.2 Restated Bylaws of the Registrant
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (contained in Exhibit 5.1)
- ------------
II-6
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF MERGER
OF
AMTEC, INC.
Pursuant to Section 252 of the General
Corporation Law of the State of Delaware
AmTec, Inc., a Delaware corporation, does hereby certify:
FIRST: The name and state of incorporation of each of the constituent
corporations to the Merger (as defined below) are as follows:
Terremark Holdings, Inc. - Florida
AmTec, Inc. - Delaware
SECOND: An Agreement and Plan of Merger, dated as of November 24, 1999
has been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the Business Corporation Law of the
State of Florida and Section 252(c) of the General Corporation Law of the State
of Delaware.
THIRD: Pursuant to such Agreement and Plan of Merger, Terremark
Holdings, Inc. will be merged with and into AmTec, Inc. (the "MERGER") , with
AmTec, Inc. being the surviving corporation in the Merger (the "SURVIVING
CORPORATION"). The Merger shall be effective on April 28, 2000.
FOURTH: The Certificate of Incorporation of AmTec, Inc. shall be the
Certificate of Incorporation of the Surviving Corporation; PROVIDED, HOWEVER,
that:
(i) Article 1 of such Certificate of Incorporation shall be amended
upon the filing of this Certificate of Merger to read in its entirety as
follows:
FIRST: The name of the corporation is Terremark Worldwide, Inc.; and
<PAGE> 2
(ii) The first paragraph of Article 4 of such Certificate of
Incorporation is deleted in its entirety and replaced by the following:
1. The total number of shares of stock which the Corporation shall have
authority to issue is Three Hundred Ten Million (310,000,000) shares, consisting
of Three Hundred Million (300,000,000) shares of Common Stock, par value $0.001
per share (the "Common Stock"), and Ten Million (10,000,000) shares of Preferred
Stock, par value $0.001 per share (the "Preferred Stock").
FIFTH: The executed Agreement and Plan of Merger is on file at an
office of the Surviving Corporation, at 599 Lexington Avenue, 44th Floor, in the
City of New York, State of New York. A copy of such agreement will be provided,
upon request and without cost, to any stockholder of either constituent
corporation.
SIXTH: The authorized capital stock of Terremark Holdings, Inc.
consisted of five million (5,000,000) shares of common stock, and four million
one hundred seventy six thousand six hundred and ninety three (4,176,693) shares
of preferred stock, each having a par value of $1.00 per share.
2
<PAGE> 3
IN WITNESS WHEREOF, AmTec, Inc. has caused this Certificate of Merger
to be executed in its corporate name as of the 28th day of April, 2000.
AMTEC, INC.
By: /s/ Joseph R. Wright
----------------------------------
Joseph R. Wright, Chairman of the
Board of Directors and Chief
Executive Officer
3
<PAGE> 4
RESTATED
CERTIFICATE OF INCORPORATION
OF
AVIC GROUP INTERNATIONAL, INC.
This Restated Certificate of Incorporation (the "Certificate") of AVIC
Group International, Inc. (the "Corporation"), was duly adopted by the Board of
Directors and the stockholders of the Corporation, as set forth below, in
accordance with Sections 242 and 245 of the General Corporation Law of the State
of Delaware. The original Certificate of Incorporation was filed on June 20,
1996.
The foregoing Restated Certificate of Incorporation was adopted by a
majority of the issued and outstanding stock of each class of stockholders of
the Corporation entitled to vote thereon as a class.
This Restated Certificate of Incorporation restates and integrates and
further amends the original Certificate of Incorporation of this Corporation to
read in its entirety as follows:
FIRST: The name of the corporation is AVIC Group International, Inc.
SECOND: The address of the registered office of the Corporation in the
State of Delaware shall be at Corporation Trust Center, 1209 Orange Street, City
of Wilmington, County of New Castle, Delaware 19801. The name and address of the
Corporation's registered agent in the State of Delaware is The Corporation Trust
Company, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware
19801.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may now or hereafter be organized under the
General Corporation Law of the State of Delaware.
FOURTH: 1. The total number of shares of stock which the Corporation
shall have authority to issue is One Hundred Ten Million (110,000,000) shares,
consisting of One Hundred Million (100,000,000) shares of Common Stock, par
value $0.001 per share (the "Common Stock"), and Ten Million (10,000,000) shares
of Preferred Stock, par value $0.001 per share (the "Preferred Stock").
1
<PAGE> 5
2. Shares of Preferred Stock may be issued from time to time
in one or more series as may be established from time to time by resolution of
the Board of Directors of the Corporation (the "Board of Directors"), each of
which series shall consist of such number of shares and have such distinctive
designation or title as shall be fixed by resolution of the Board of Directors
prior to the issuance of any shares of such series. Each such class or series of
Preferred Stock shall have such voting powers, full or limited, or no voting
powers, and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution of the Board of Directors providing for the
issuance of such series of Preferred Stock. The Board of Directors is further
authorized to increase or decrease (but not below the number of shares of such
class or series then outstanding) the number of shares of any series subsequent
to the issuance of shares of that series.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute and subject to Article Sixth hereof, the Board of Directors is expressly
authorized to adopt, repeal, rescind, alter or amend in any respect the Bylaws
of the Corporation (the "Bylaws") of the Corporation (the "Bylaws").
SIXTH: Notwithstanding Article Fifth hereof, the Bylaws may be adopted,
rescinded, altered or amended in any respect by the stockholders of the
Corporation, but only by the affirmative vote of the holders of not less than 66
2/3% of the voting power of all outstanding shares of voting stock regardless of
class and voting together as a single voting class; PROVIDED, HOWEVER, that
where such action is approved by a majority of the continuing directors the
affirmative vote of a majority of the voting power of all outstanding shares of
voting stock, regardless of class and voting together as a single voting class,
shall be required for approval of such action.
SEVENTH: The business and affairs of the Corporation shall be managed
by and under the direction of the Board of Directors. Except as may otherwise be
provided pursuant to Section 2 of Article Fourth hereof in connection with
rights to elect additional directors under specified circumstances which may be
granted to the holders of any series of Preferred Stock, the exact number of
directors of the Corporation shall be determined from time to time by a Bylaw or
Amendment thereof provided that the number of directors shall not be reduced to
less than three (3), except that there need be only as many directors as there
are stockholders in the event that the outstanding shares are held of record by
fewer than three (3) stockholders.
Elections of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.
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EIGHTH: Each director shall serve until his successor is elected and
qualified or until his death, resignation or removal; no decrease in the
authorized number of directors shall shorten the term of any incumbent director;
and additional directors, elected pursuant to Section 2 of Article Fourth hereof
in connection with rights to elect such additional directors under specified
circumstances which may be granted to the holders of any series of Preferred
Stock, shall not be included in any class, but shall serve for such term or
terms and pursuant to such other provisions as are specified in the resolution
of the Board of Directors establishing such series.
NINTH: Except as may otherwise be provided pursuant to Section 2 of
Article Fourth hereof in connection with rights to elect additional directors
under specified circumstances which may be granted to the holders of any series
of Preferred Stock, newly created directorships resulting from any increase in
the number of directors, or any vacancies on the Board of Directors resulting
from death, resignation, removal or other causes, shall be filled solely by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall have
been elected and qualified or until such director's death, resignation or
removal, whichever first occurs.
TENTH: Except for such additional directors as may be elected by the
holders of any series of Preferred Stock pursuant to the terms thereof
established by a resolution of the Board of Directors pursuant to Article Fourth
hereof, any director may be removed from office with or without cause and only
by the affirmative vote of the holders of not less than 66 2/3% of the voting
power of all outstanding shares of voting stock entitled to vote in connection
with the election of such director regardless of class and voting together as a
single voting class; PROVIDED, HOWEVER, that where such removal is approved by a
majority of the continuing directors, the affirmative vote of a majority of the
voting power of all outstanding shares of voting stock entitled to vote in
connection with the election of such director, regardless of class and voting
together as a single voting class, shall be required for approval of such
removal.
ELEVENTH: Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called Annual Meeting
or at a special meeting of stockholders of the Corporation, unless such action
requiring or permitting stockholder approval is approved by a majority of the
continuing directors, in which case such action may be authorized or taken by
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the written consent of the holders of outstanding shares of voting stock having
not less than the minimum voting power that would be necessary to authorize or
take such action at a meeting of stockholders at which all shares entitled to
vote thereon were present and voted, provided, all other requirements of
applicable law and this Certificate have been satisfied. Except as specifically
set forth in this Article Eleventh, no action may be taken by stockholders by
written demand.
TWELFTH: Meetings of stockholders of the Corporation may be held within
or without the State of Delaware, as the Bylaws may provide. The books of the
Corporation may be kept (subject to any provision of applicable law) 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 Bylaws.
THIRTEENTH: For the purposes of this Restated Certificate of
Incorporation, the following definitions shall apply:
(a) "continuing director" means: (i) any member of the Board of
Directors who (A) is not an interested stockholder or an
affiliate or associate of an interested stockholder and (B)
was a member of the Board of Directors prior to the time that
an interested stockholder became an interested stockholder;
and (ii) any person who is elected or nominated to succeed a
continuing director, or to join the Board of Directors, by a
majority of the continuing directors.
(b) The terms "affiliate," "associate," "control," "interested
stockholder," "owner," "person" and "voting stock" shall have
the meanings set forth in Section 203(c) of the Delaware
General Corporation Law.
FOURTEENTH: The provisions set forth in this Article Fourteenth and in
Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth and Eleventh hereof
may not be repealed, rescinded, altered or amended in any respect, and no other
provision or provisions may be adopted which impair(s) in any respect the
operation or effect of any such provision, except by the affirmative vote of the
holders of not less than 66 2/3% of the voting power of all o outstanding shares
of voting stock regardless of class and voting together as a single voting
class, and, where such action is proposed by an interested stockholder or by any
associate or affiliate of an interested stockholder or by any associate or
affiliate of an interested stockholder, the affirmative vote of the holders of a
majority of the voting power of all outstanding shares of voting stock,
regardless of class and voting together as a single class, other than shares
held by the interested stockholder which proposed (or the affiliate or associate
of which proposed) such action, or any affiliate or associate of such interested
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stockholder; PROVIDED, HOWEVER, that where such action is approved by a majority
of the continuing directors, the affirmative vote of a majority of the voting
power of all outstanding shares of voting stock, regardless of class and voting
together as a single voting class, shall be required for approval of such
action.
FIFTEENTH: The Corporation reserves the right to adopt, repeal,
rescind, alter or amend in any respect any provision contained in this
Certificate in the manner now or hereafter prescribed by applicable law, and all
rights conferred on stockholders herein are granted subject to this reservation.
Notwithstanding the preceding sentence, the provisions set forth in Articles
Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleven and Fourteenth may
not be repealed, rescinded, altered or amended in any respect, and no other
provision or provisions may be adopted which impair(s) in any respect the
operation or effect of any such provision, unless such action is approved as
specified in Article Fourteenth hereof.
SIXTEENTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the Delaware General Corporation Law,
or (d) for any transaction from which the director derived an improper personal
benefit. If the Delaware General Corporation Law hereafter is amended to
authorize the further elimination or limitation of the liability of directors,
then the liability of a director of the Corporation, in addition to the
limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended Delaware General Corporation Law. Any
repeal or modification of this Section by the stockholders of the Corporation
shall be prospective only and shall not adversely affect any limitation on the
personal liability of a director of the Corporation existing at the time of such
repeal or modification.
SEVENTEENTH: No contract or other transaction of the Corporation with
any other person, firm or corporation, or in which this corporation is
interested, shall be affected or invalidated by: (a) the fact that any one or
more of the directors or officers of the Corporation is interested in or is a
director or officer of such other firm or corporation; or, (b) the fact that any
director or officer of the Corporation, individually or jointly with others, may
be a party to or may be interested in any such contract or transaction, so long
as the contract or transaction is authorized, approved or ratified at a meeting
of the Board of Directors by sufficient vote thereon by directors not interested
therein, to which such fact of relationship or interest has been disclosed, or
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the contract or transaction has been approved or ratified by vote or written
consent of the stockholders entitled to vote, to whom such fact of relationship
or interest has been disclosed, or so long as the contract or transaction is
fair and reasonable to the Corporation. Each person who may become a director or
officer of the Corporation is hereby relieved from any liability that might
otherwise arise by reason of his contracting with the Corporation for the
benefit of himself or any firm or corporation in which he may in any way be
interested.
EIGHTEENTH: The Corporation hereby provides for a series of Preferred
Stock designated as the Series A Convertible Preferred Stock, as follows:
1. DEFINITIONS. For purposes of this Article, the following
definitions shall apply:
"COMMON STOCK" shall mean the common stock, par value $0.001
per share, of the Corporation.
"DEFAULTED DIVIDENDS" shall mean dividends for any full
calendar annual period which, as of the date of conversion or redemption, have
not been declared by the Board of Directors or shall remain accrued and unpaid
as of such date.
"LIQUIDATION PREFERENCE" shall mean $3.00 per share, subject
to adjustment from time to time as provided in Section 2(b)(1)(C) of this
Article.
"PREFERRED STOCK" shall mean the preferred stock, par value
$0.001 per share, of the Corporation.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any successor act.
"SERIES A PREFERRED STOCK" shall mean the series of Preferred
Stock designated as the Series A Convertible Preferred Stock by the
Corporation's Board of Directors.
2. DETERMINATION OF PREFERENCES OF SERIES A PREFERRED STOCK.
The rights, preferences, privileges, restrictions and other matters related to
the Series A Preferred Stock in this Article are as follows:
(a) DIVIDEND PROVISIONS.
(1) The holders of the Series A Preferred
Stock shall be entitled to receive a cumulative preferential dividend of $0.18
per share PER ANNUM, payable in cash, out of funds legally available therefor,
once annually, on December 31 of each year (the "Dividend Payment Date"),
commencing December 31, 1996, (or, if any such Dividend Payment Date shall be a
weekend or a bank holiday, on the next business day thereafter), in arrears, to
each holder of record of Series A Preferred Stock on the Corporation's books on
each December 15, commencing December 15, 1996 (the "Record Date").
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(2) The rate of dividends payable with
respect to the Series A Preferred Stock shall be adjusted from time to time in
connection with any stock split, reverse stock split or reclassification of the
Series A Preferred Stock which would result in an adjustment of the Conversion
Base for such class of stock under Section 2(c)(4) of this Article.
(3) CUMULATIVE RIGHTS. To the extent, if
any, that dividends at the rate set forth in Section 2(a)(1) above shall not be
paid or set apart in full for the Series A Preferred Stock, the aggregate
deficiency shall be cumulated and must be fully paid or set apart for payment
before any dividends may be paid upon or set apart for the Common Stock of the
Corporation or before the Corporation may purchase any of its Common Stock or
otherwise make any distribution on account of its Common Stock or any other
class of capital stock now or hereafter authorized or issued by the Corporation
which ranks on a parity with or junior to the Series A Preferred Stock (other
than (a) a dividend payable in Common Stock, or (b) by conversion into or
exchange for capital stock of the Corporation ranking junior to the Series A
Preferred Stock as to dividends).
(4) NO INTEREST ON ACCRUED DIVIDENDS. Any
accumulations of dividends on the Series A Preferred Stock shall not bear
interest.
(5) DECLARATION. Dividends on the Series A
Preferred Stock shall be declared if, when and as the Board of Directors of the
Corporation shall in its sole discretion deem advisable, and only from the
surplus of the Corporation as such shall be fixed and determined by the Board of
Directors. The determination of the Board of Directors at any time of the amount
of surplus available for the payment of dividends shall be binding and
conclusive on the holders of the shares of Series A Preferred Stock then
outstanding. If dividends are not paid in full upon the Series A Preferred Stock
and any other Preferred Stock ranking on a parity as to the dividends with the
Series A Preferred Stock, all dividends declared upon shares of Series A
Preferred Stock and upon such other shares of Preferred Stock shall bear the
same ratio to each other that the accumulated dividends per share on the shares
of the Series A Preferred Stock and such other shares of Preferred Stock bear to
each other. The holders of the Series A Preferred Stock shall not be entitled to
receive any dividends thereon other than the dividends provided for in the
preceding provisions of this Section.
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(b) LIQUIDATION PREFERENCE.
(1) PREFERENCE. In the event of any
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Corporation, after payment or provision for payment of the debts and
other liabilities of the Corporation, each holder of the Series A Preferred
Stock shall be entitled to receive, out of the remaining net assets of the
Corporation legally available for distribution to its shareholders, before any
payment or distribution shall be made on the Common Stock, or on any other class
of stock of the Corporation ranking junior to the shares of Series A Preferred
Stock upon liquidation, the amount of the Liquidation Preference, plus all
Defaulted Dividends, as of the date of such dissolution, liquidation or winding
up.
(2) PROPORTIONATE DISTRIBUTION WHERE ASSETS
INSUFFICIENT. In the event the assets of the Corporation available for
distribution to the holders of shares of Series A Preferred Stock upon
dissolution, liquidation or winding up of the Corporation whether voluntary or
involuntary, shall be sufficient to pay in full all amounts to which such
holders are entitled pursuant to paragraph (1) of this Section, no such
distribution shall be made on account of any shares of any class of capital
stock of the Corporation ranking on a parity with the shares of Series A
Preferred Stock upon such dissolution, liquidation or winding up unless
proportionate distributive amounts shall be paid on account of the shares of
Series A Preferred Stock, ratably, in proportion to the full distributable
amounts for which holders of all such parity shares are respectively entitled
upon such dissolution, liquidation or winding up.
(3) NONPARTICIPATION RIGHT. After the
payment to the holders of the shares of Series A Preferred Stock of the full
preferential amounts provided for in either paragraph (1) or (2) of this
Section, as applicable, the holders of Series A Preferred Stock such shall have
no right or claim to any of the remaining assets of the Corporation.
(4) REORGANIZATION. For the purposes of this
Article, a liquidation, dissolution or winding up of the affairs of the
Corporation shall not be deemed to be occasioned by or to include the sale of
all or substantially all of the assets of the Corporation or the acquisition of
the Corporation by another entity by means of a merger, consolidation or other
reorganization.
(5) ADJUSTMENTS TO LIQUIDATION PREFERENCE.
The Liquidation Preference shall be adjusted from time to time in connection
with any stock split, reverse stock split or reclassification of the Series A
Preferred Stock which would result in an adjustment to the Conversion Base for
such class of stock under Section 2(c)(4) of this Article.
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(c) CONVERSION AND REDEMPTION RIGHTS. The
holders of the Series A Preferred Stock shall have conversion rights (the
"Conversion Rights") and redemption rights ("Redemption Rights"), respectively
as follows:
(1) OPTIONAL CONVERSION.
(A) Each shares of the Series A
Preferred Stock shall be convertible, at the option of the holder thereof at any
time after January 1, 1997, in accordance with Section 2(c)(2) of this Article.
(B) In order to convert shares of
the Series A Preferred Stock into shares of Common Stock, the holder thereof
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or its transfer agent, together with written notice
(the "Conversion Notice") to the Corporation stating that it elects to convert
the same and setting forth the name or names in which it wishes the certificate
or certificates for Common Stock to be issued, and the number of shares of
Series A Preferred Stock being converted.
(C) The Corporation shall, as soon
as practicable after the surrender of the certificate or certificates evidencing
shares of Series A Preferred Stock for conversion, issue to the holder of such
shares a certificate or certificates evidencing the number of shares of Common
Stock (and any other securities and property) to which it shall be entitled and,
in the event that only a part of the shares evidenced by such certificate or
certificates are converted, a certificate evidencing the number of shares of
Series A Preferred Stock, as the case may be, which are not converted. 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 at such date and
shall, with respect to such shares, thereafter have only the rights of a holder
of Common Stock; PROVIDED, HOWEVER, that if, at the date of such notice and
surrender, the transfer books for the Common Stock or other class of stock
purchasable upon the exercise of such conversion rights shall be closed, the
certificate or certificates for the shares of Common Stock in respect of which
such conversion rights are then exercised shall be issuable as of the date on
which such books shall next be opened, and until such date the Corporation shall
be under no duty to deliver any certificate for such shares of Common Stock; and
PROVIDED, FURTHER, that the transfer books of record, unless otherwise required
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by law, shall not be closed at any one time for a period longer than twenty (20)
days. The rights of purchase represented by the foregoing conversion rights
shall be exercisable, at the election of the holder, either in full or from time
to time in part.
(D) With respect to the issue of
shares of Common Stock upon conversion of the Series A Preferred Stock and the
transfer of such shares of Common Stock:
(i) The holder and any
transferee of the shares of Common Stock issuable upon the
exercise of the foregoing conversion rights agree that,
notwithstanding anything in this Certificate to the contrary,
during such period as delivery of a prospectus or like
document with respect to such Common Stock may be required by
the securities laws of any applicable jurisdiction, no public
distribution of such Common Stock will be made in a manner or
on terms different from those set forth in, or without
delivery of, a prospectus or other document then meeting the
requirements of such laws. The holder and any such transferee
further agree that if any distribution of any of such Common
Stock is proposed to be made to them or by them otherwise than
by delivery of such a prospectus or other document meeting the
requirements of the securities laws of all applicable
jurisdictions, such action shall be taken only after
submission to the Corporation of an opinion of counsel,
reasonably satisfactory in form and substance to the
Corporation's counsel, to the effect that the proposed
distribution will not be in violation of such securities laws.
(ii) It shall be a condition to
the transfer of such Common Stock that any transferee of such
Common Stock deliver to the Corporation his or its written
agreement to accept and be bound by all of the terms and
conditions of this Certificate.
(2) NUMBER OF SHARES.
(A) Each share of the Series A Preferred Stock shall
be convertible, subject to adjustment from time to time in connection with any
stock split, reverse stock split or reclassification of the Series A Preferred
Stock which would result in an adjustment to the Conversion Base for such class
of stock under Section 2(c)(4) of this Article, into duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock, calculated as to
each conversion to the greater number of full shares of Common Stock,
disregarding fractions, with a cash adjustment for fractional shares as
hereinafter provided, at any time after January 1, 1997 (the "Conversion
Period"), into one share of Common Stock (the "Conversion Base"); PROVIDED,
HOWEVER, that the holder shall be entitled to convert the aggregate of any
eligible shares of Series A Preferred Stock, previously not so elected to be
converted, during the Conversion Period; and PROVIDED, FURTHER, that such right
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of conversion shall only be exercisable at such time as: (i) the exercise of
such right of conversion and the delivery of such shares of Common Stock are
lawful under federal securities laws and the securities laws of the jurisdiction
of residence of all persons to whom such shares of Common Stock are otherwise
deliverable, and (ii) only if a current prospectus, as set forth in Section
2(c)(2) of this Article, relating to the underlying shares of Common Stock is
then in effect and only if such shares of Common Stock are qualified for sale
under the securities laws of the jurisdiction or jurisdictions in which the
holder resides.
(B) No fractional shares of Common Stock or scrip
shall be issued upon conversion of the Series A Preferred Stock. If more than
one share of Series A Preferred Stock shall be surrendered for conversion at any
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 of Series A Preferred Stock so surrendered. If the computation for
determining the number of shares of Common Stock issuable upon conversion of
Series A Preferred Stock shall result in other than a whole number, the
Corporation shall issue to such shareholder, in respect of the aggregate number
of shares of Series A Preferred Stock held by any shareholder, one share of
Common Stock in respect of any fractional shares of Common Stock otherwise
issuable to such shareholder.
(3) OPTIONAL REDEMPTION.
(A) The Series A Preferred Stock at any time
outstanding may be redeemed by the Corporation, in whole or in part, at any time
or from time to time after January 1, 1997, at the option of the Board of
Directors upon not less than thirty (30) days' prior written notice (the
"Redemption Notice") to the holders of record of the shares of Series A
Preferred Stock to be redeemed, upon payment to the holders of the Series A
Preferred Stock of the Liquidation Preference, plus the Defaulted Dividends, as
of the redemption date (the "Redemption Price"), and no penalty shall become due
as a result of such redemption. If less than all of the outstanding shares of
Series A Preferred Stock are to be redeemed, the redemption may be made either
by lot or PRO RATA or by such other method as the Board of Directors in its
discretion may determine. If such notice of redemption shall have been duly
given and if, on or before the redemption date specified in such notice, all
funds necessary for such redemption shall have been set aside so as to be
available therefor, then notwithstanding that any certificate for shares of
Series A Preferred Stock so called for redemption shall not have been
surrendered for cancellation, all dividends on such shares of Series A Preferred
Stock shall forthwith on such redemption date cease and terminate, except only
the right of holders thereof to receive the amount payable upon redemption
thereof, but without interest.
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(B) SURRENDER OF SHARES. The Corporation shall, as
soon as practicable after the surrender of the certificate or certificates
evidencing shares of Series A Preferred Stock for redemption, issue to the
holder of such shares, in the event that only a part of the shares evidenced by
such certificate or certificates are redeemed, a certificate evidencing the
number of shares of Series A Preferred Stock which are not redeemed. Such
redemption shall be deemed to have become effective immediately prior to the
close of business on the date of such surrender of the shares of Series A
Preferred Stock to be redeemed. On or after the date fixed for redemption, each
holder of Series A Preferred Stock called for redemption shall, unless such
holder shall have previously exercised such holder's option to convert the
Series A Preferred Stock into Common Stock in the manner set forth in Section
2(c)(i) above, surrender such holder's certificates for such shares of Series A
Preferred Stock to the Corporation at the place designated in the Redemption
Notice and shall thereupon be entitled to receive the Redemption Price. Should
less than all the shares of Series A Preferred Stock represented by any
surrendered certificate be redeemed, a new certificate for the unredeemed shares
shall be issued to the holder of record of such unredeemed shares.
Notwithstanding anything to the contrary, the holder of Series A Preferred Stock
shall not be obligated to exercise the conversion rights hereunder, if the
Corporation calls the Series A Preferred Stock for redemption, during such time
as the holder may be liable for damages or penalties with respect to the
conversion of such shares pursuant to Section 16 of the Securities Exchange Act
of 1934, as amended, only with respect to an event occurring prior to the date
of the Redemption Notice. However, in such event, the holder of Series A
Preferred Stock shall provide the Corporation with an opinion of qualified
United States securities counsel to the effect that the conversion of the Series
A Preferred Stock shall subject the holder to such damages or penalties for such
reasons and shall set forth the inclusive dates during which such damages or
penalties shall accrue and terminate. Upon the termination date of such
inclusive dates, the holder shall have ten (10) days to elect to convert the
shares of Series A Preferred Stock into shares of Common Stock, or shall
otherwise be subject to call for redemption pursuant to the terms and conditions
of the previously delivered Redemption Notice.
(C) CESSATION OF RIGHTS AS SHAREHOLDER. From and
after the redemption date (unless default shall be made by the Corporation is
duly paying the Redemption Price in which case all rights of the holders of
Series A Preferred Stock shall continue), the holders of the shares of the
Series A Preferred Stock called for redemption shall cease to have any rights as
shareholders of the Corporation except the right to receive, without interest,
the Redemption Price thereof upon surrender of the certificate(s) representing
the shares of Series A Preferred Stock being redeemed, and such shares shall not
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thereafter be transferred (except with the consent of the Corporation) on the
books of the corporation and shall not be deemed outstanding for any purpose
whatsoever.
(D) CANCELLATION OF REDEEMED SHARES. All shares of
Series A Preferred Stock that are redeemed shall be cancelled and such shares
shall be restored to the status of authorized but unissued shares of Preferred
Stock.
(4) STOCK SPLITS AND REVERSE STOCK SPLITS. If outstanding
shares of Common Stock shall be subdivided into a greater number of shares, or a
dividend in Common Stock or other securities of the Corporation convertible into
or exchangeable for Common Stock (in which latter event the number of shares of
Common Stock issuable upon the conversion or exchange of such securities shall
be deemed to have been distributed) shall be paid in respect of the Common
Stock, the Conversion Base in effect immediately prior to such subdivision or at
the record date of such dividend shall each, simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend, be proportionately reduced, and conversely, if outstanding shares of
the Common Stock shall be combined into a smaller number of shares, the
Conversion Base in effect immediately prior to such combination shall each,
simultaneously with the effectiveness of such combination, be proportionately
increased.
Any adjustments to the Conversion Base under this Section 2 (c)(4) of
this Article shall become effective at the close of business on the date the
subdivision or combination referred to herein becomes effective.
(5) CERTAIN DISTRIBUTIONS. In the event the Corporation
at any time, or from time to time, shall make or issue, or fix a record date for
the determination of holders of Common Stock entitled to receive a dividend or
other distribution payable in securities of the Corporation other than shares of
Common Stock or securities convertible into or exchangeable for Common Stock,
then and in each such event, provision shall be made so that the holders of the
Series A Preferred Stock shall receive upon conversion thereof, in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Corporation which they would have received had their Series A
Preferred Stock been converted into Common Stock on the date of such event and
had thereafter, during the period from the date of such event to and including
the date of conversion, retained such securities receivable by them as aforesaid
during such period, giving application to all adjustments called for during such
period under this Section 2(c)(6) of this Article with respect to the rights of
the holders of Series A Preferred Stock.
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(6) CERTAIN REORGANIZATIONS. In the event of any capital
reorganization, any reclassification of the Common Stock (other than a change in
par value or as a result of a stock dividend, subdivision, split-up or
combination of shares), the consolidation or merger of the Corporation with or
into another person, or the sale or other disposition of all or substantially
all of the properties of the Corporation as an entirety to another person
(collectively referred to hereinafter as a "Reorganization"), the holders of the
Series A Preferred Stock shall thereafter be entitled to receive, and provision
shall be made therefor in any agreement relating to a Reorganization, upon
conversion of the Series A Preferred Stock, the kind and number of shares of
Common Stock or other securities or property (including cash) of the
Corporation, or the other corporation resulting from such consolidation or
surviving such merger, which the Series A Preferred Stock entitled the holder
thereof to convert to immediately prior to such Reorganization; and in any such
case appropriate adjustment shall be made in the application of the provisions
herein set forth with respect to the rights and interests thereafter of the
holders of the Series A Preferred Stock to the end that the provisions set forth
herein shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares, to such other securities or property thereafter
receivable upon conversion of the Series A Preferred Stock. The provisions of
this Section 2(c)(6) of this Article shall similarly apply to successive
Reorganizations.
(7) NOTICE OF ADJUSTMENT. In each case of an adjustment
or readjustment of the Conversion base or the number of shares of Common Stock
or other securities issuable upon conversion of the Series A Preferred Stock,
the Corporation, at its expense, shall prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first-class
mail, postage prepaid, to each holder of the Series A Preferred Stock which is
the subject of adjustment. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (A) the Conversion Base at the
time in effect for the Series A Preferred Stock, and (B) the number of shares of
Common Stock and the type and amount, if any, of other property which at the
time would be received upon conversion of such Series A Preferred Stock.
(8) RESERVATION OF SHARES. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion or the issuance
or dividends in respect of the shares of Series A Preferred Stock, such number
of shares of Common Stock as shall from time to time be sufficient to effect a
conversion or the issuance of dividends in respect of the shares of Series A
Preferred Stock, such number of the shares of Common Stock as shall from time to
time be sufficient to effect a conversion or the issuance of dividends in
respect of all outstanding shares of the Series A Preferred Stock, and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion or the issuance of dividends in respect of
14
<PAGE> 18
all then outstanding shares of the Series A Preferred Stock, the Corporation
shall promptly seek such corporate action as may in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose. In the event of
the consolidation or merger of the Corporation with another corporation,
effective provision shall be made in the certificate or articles of
incorporation, documents of merger or consolidation, or otherwise, of the
surviving corporation so that such corporation will at all times reserve and
keep available a sufficient number of shares of Common Stock or other securities
or property to provide for the conversion or issuance of dividends in respect of
the Series A Preferred Stock in accordance with the provisions of this Section
2(c) of this Article.
(9) TAXES. The Corporation shall pay all taxes and other
governmental charges (other than any income or other taxes imposed upon the
profits realized by the recipient) that may be imposed in respect of the issue
or delivery of shares of Common Stock or other securities or property upon
conversion or issuance of dividends in respect of shares of Series A Preferred
Stock, including without limitation, any tax or other charge (other than any
transfer tax) imposed in connection with the issue and delivery of shares of
Common Stock or other securities at the time of such conversion or issuance of
dividends in a name other than that in which the shares of Series A Preferred
Stock so converted or otherwise held were registered.
(10) CANCELLATION OF CERTIFICATES. All certificates
representing Series A Preferred Stock surrendered for conversion or redemption
shall be appropriately canceled on the books, and the shares so converted or
redeemed represented by such certificates shall be restored to the status of
authorized but unissued shares of undesignated Preferred Stock, but may not be
reissued as part of the Series A Preferred Stock.
(11) NO AVOIDANCE. The Corporation shall not amend the
Corporation's Articles of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or
attempting to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation.
(d) VOTING RIGHTS. The holders of the Series A Preferred Stock
shall have one vote per share. In the event that the outstanding shares of
Common Stock shall be adjusted from time to time in connection with any stock
split, reverse stock split or reclassification of the Common Stock pursuant to
which the outstanding shares of Common Stock shall be subdivided into a greater
number of shares of combined into a smaller number of shares, and which would
15
<PAGE> 19
result in an adjustment of the Conversion Base under Section 2(c)(4) of this
Article, the number of votes per share of Series A Preferred Stock shall be
proportionately increased simultaneously with the effectiveness of such
subdivision or reduced simultaneously with the effectiveness of such
combination.
(e) ADDITIONAL SERIES OF PREFERRED STOCK. Except for the
Series A Preferred Stock, the Board of Directors of the Corporation is
authorized to fix the number of shares of any additional series of Preferred
Stock and to determine the designation of any such series. The Board of
Directors is also authorized to determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly unissued
series of Preferred Stock and, within the limits and restrictions stated in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any series, to increase or decrease (but not below the
number of shares of any such series then outstanding) the number of shares of
any series subsequent to the issue of shares of that series. The Corporation
expressly reserves the right to issue additional series of Preferred Stock from
time to time which may rank on a parity with or junior to the Series A Preferred
Stock with respect to any distributions upon dissolution, liquidation or winding
up, or of dividends pursuant to Sections 2(a) and 2(b) of this Article,
respectively, without the prior authorization of the holders of the Series A
Preferred Stock.
(f) MISCELLANEOUS.
(1) NOTICES. All notices, requests,
consents and other communications required hereunder shall be in writing and by
overnight, registered or certified mail, postage prepaid, return receipt
requested, and shall be deemed to have been duly made when deposited in the
mails upon mailing or by overnight, registered or certified mail, postage
prepaid, return receipt requested: if addressed to the holder at the last
ladders of such holder on the books of the Corporation; if addressed to the
Corporation, at 599 Lexington Avenue, 44th Floor, New York, New York 10022 or
such other address as the Corporation may designate in writing.
(2) HOLDERS. For purposes of this
Article, the "holder" of any share of Common Stock or Series A Preferred Stock
shall be the holder of record of such share as set forth in the stock register
of the Corporation, and the Corporation shall be entitled to treat the holder as
the owner of such securities for all purposes.
NINETEENTH: The Corporation hereby provides for a series of Preferred
Stock designated as the Series B Convertible Preferred Stock, as follows:
16
<PAGE> 20
1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock") and the number of shares constituting the Series B Preferred Stock shall
be 100. Such number of shares may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the number of shares
of Series B Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.
2. BANK. The Series B Preferred Stock shall rank: (i) prior to
all of the Corporation's Common Stock, par value $0.001 per share ("Common
Stock"); (ii) prior to any class or series of capital stock of the Corporation
hereafter created (collectively, with the Common Stock, "Junior Securities");
(iii) on parity with any class or series of capital stock of the Corporation
hereafter created specifically ranking by its terms on parity with the Series B
Preferred Stock ("Parity Securities") in each case as to dividends, premium,
conversion, redemption, voting rights, and distributions of assets upon
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary (all such distributions being referred to collectively as
"Distributions"); and (iv) junior to the Series A Preferred Stock ("Senior
Securities") in terms of Distributions.
3. DIVIDENDS. The Series B Preferred Stock will bear no
dividends, and the holders of the Series B Preferred Stock shall not be entitled
to receive dividends on the Series B Preferred Stock.
4. 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, immediately
after any distributions to Senior Securities required by the Corporation's
Articles of Incorporation or any statement of designation of preferences, and
prior and in preference to any distribution to Junior Securities but in parity
with any distribution of Parity Securities, an amount per share equal to the sum
of (i) $25,000 for each outstanding share of Series B Preferred Stock (the
"Original Series B Issue Price") and (ii) an amount equal to 8% of the Original
Series B Issue Price per annum for the period that has passed since the date of
issuance of any Series B Preferred Stock (such amount being referred to herein
as the "Premium"). If upon the occurrence of such event, the assets and funds
thus distributed among the holders of the Series B Preferred Stock and Parity
17
<PAGE> 21
Securities shall be insufficient to permit the payment to such holders of the
full preferential amounts due to the holders of the Series B Preferred Stock and
the Parity Securities, respectively, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among the
holders of the Series B Preferred Stock and the Parity Securities, pro rata,
based on the respective liquidation amounts to which each such series of stock
is entitled by the Corporation's Articles of Incorporation and any statement(s)
of designation of preference.
(b) Upon the completion of the distribution required by
subsection 4(a), if assets remain in this Corporation, they shall be distributed
to holders of Parity Securities (unless holders of Parity Securities have
received distributions pursuant to subsection (a) above) and Junior Securities
in accordance with the Corporation's Articles of Incorporation including any
duly adopted certificate(s) of designation of preferences.
(c) 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 the 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 4, but shall instead be treated pursuant to Section 7 hereof.
5. CONVERSION.
The record holders of the Series B Preferred Stock shall have conversion rights
as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. The record holder of the Series B
Preferred Stock shall be entitled, as set forth below, and, subject to the
Company's right of redemption set forth in Section 6(a) and the restrictions on
conversion set forth in Section 5(b) below, at the office of the Company or any
transfer agent for he Series B Preferred Stock, to convert the shares of Series
B Preferred Stock held by such holder into that number of fully-paid and
nonassessable shares of the Company's Common Stock at the Conversion Rate as set
forth below. The number of shares of Common Stock into which this Series B
Preferred Stock may be converted is hereinafter referred to as the "Conversion
Rate" for such Series B Preferred Stock, and is computed as follows:
Number of shares issued upon conversion of one share of Preferred Stock
equals
[(.08) (N/365) (Issue Price)] + Issue Price
-------------------------------------------
Conversion Price
18
<PAGE> 22
where
*N = the number of days between (i) the date that, in
connection with the consummation of the initial purchase of
this Series B Preferred Stock from the Company, the escrow
agent first had in its possession funds representing full
payment for the Series B Preferred Stock for which conversion
is being elected, and (ii) the applicable date of conversion
for the Series B Preferred Stock for which conversion is being
elected.
*Issue Price = the Original Series B Issue Price, as defined
in Section 4(a), and
*Conversion Price = the lesser of (x) the Fixed Conversion
Price, as may be adjusted pursuant to Section 5(e) below, or
(y) the price which is the lesser of (i) 85% of the average
Closing Bid Price of the Company's Common Stock on each of the
five (5) trading days immediately preceding he Date of
Conversion, as defined below, or (ii) 85% of the average of
the Daily Low Trading Price of the Company's Common Stock on
each of the five (5) trading days immediately preceding the
Date of Conversion, as defined below.
For purposes hereof, (i) the "Fixed Conversion Price" shall
equal 110% of the Index Price, provided, however, that if on
the date that is 180 calendar days after the termination of
the offering of the Series B preferred Stock, the average
Closing Bid Price for the prior 20 business days has declined
25% or more from the Index Price, then the Fixed Conversion
Price shall be reset to equal 110% of that 20-day average
Closing Bid Price, (ii) the "Index Price" shall be $5.40, and
(iii) the terms "Closing Bid Price" and "Daily Low Trading
Price" shall mean the closing bid price and daily low trading
price, respectively, of the Company's Common Stock as reported
by NASDAQ (or, if not reported by NASDAQ, as reported by such
other exchange or market where traded) on the applicable date.
(b) MECHANICS OF CONVERSION. No fractional shares of
Common Stock shall be issued upon conversion of this Series B Preferred Stock.
In lieu of any fractional share to which the holder would otherwise be entitled,
the number of shares of Common Stock to be received shall be rounded up to the
next whole number of shares. In the case of a dispute as to the calculation of
the Conversion Rate, the Company's calculation shall be deemed conclusive absent
manifest error. In order to convert Series B Preferred Stock 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 Company or of any transfer agent for the Series B Preferred Stock,
and shall give written notice ("Notice of Conversion") to the Company at such
office that he elects to convert the same, the number of shares of Series B
19
<PAGE> 23
Preferred Stock so converted and a calculation of the Conversion Rate (with an
advance copy of the certificate(s) and the notice by facsimile). Once the Notice
of Conversion has been so delivered, the conversion set forth therein shall be
irrevocable, and the certificate(s) indicated for conversion shall be cancelled
on the Company's books; provided, however, that the company shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless either the certificates evidencing such Series B
Preferred Stock are delivered to the Company or its transfer agent as provided
above, or the holder notifies the Company or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection with such certificates.
The Company shall issue and deliver within three (3) business days
after delivery to the Company of such certificates, or after such agreement and
indemnification, to such holder of Series B Preferred Stock at the address of
the holder on the books of the Company, a certificate or certificates for the
number of shares of Common Stock to which the holder shall be entitled as
aforesaid. The date on which conversion occurs (the "Date of Conversion") shall
be deemed to be the date set forth in such Notice of Conversion, provided that
the advance copy of the Notice of Conversion is faxed to the Company before
midnight, New York City time, on the Date of Conversion.
(c) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the Series B Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
then outstanding shares of Series B Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of Series B Preferred
Stock, the Company will take such corporate action as may be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(d) AUTOMATIC CONVERSION. Each share of Series B
Preferred Stock outstanding on June 7, 1998 automatically shall be converted
into Common Stock on such date at the Conversion Price then in effect and June
7, 1998 shall be deemed the Date of Conversion with respect to such Conversion.
(e) ADJUSTMENT TO FIXED CONVERSION PRICE.
In computing the Fixed Conversion Price for purposes
of Section 5(a):
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<PAGE> 24
(i) If, prior to the conversion of all of
the Series B Preferred Stock, the number of outstanding shares
of Common Stock is increased by a stock split, stock dividend,
or other similar event, the Fixed Conversion Price shall be
proportionately reduced, or if the number of outstanding
shares of Common Stock is decreased by a combination or
reclassification of shares, or other similar event, the Fixed
Conversion Price shall be proportionately increased.
(ii) If, prior to the conversion of all
Series B Preferred Stock, there shall be any merger,
consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which
shares of Common Stock of the Company shall be changed into
the same or a different number of shares of the same or
another class or classes of stock or securities of the Company
or another entity, then the holders of Series B Preferred
Stock shall thereafter have the right to purchase and receive
upon conversion of Series B Preferred Stock, upon the basis
and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable
upon conversion, such shares of stock and/or securities as may
be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore
purchasable and receivable upon the conversion of Series B
Preferred Stock held by such holders had such merger,
consolidation, exchange of shares, recapitalization or
reorganization not taken place, and in any such case
appropriate provisions shall be made with respect to the
rights and interests of the holders of the Series B Preferred
Stock to the end that the provisions hereof (including,
without limitation, provisions for adjustment of the Fixed
Conversion Price and of the number of shares issuable upon
conversion of the Series B Preferred Stock) shall thereafter
be applicable, as nearly as may be practicable in relation to
any shares of stock or securities thereafter deliverable upon
the exercise hereof. The Company shall not effect any
transaction described in this subsection 5(e) unless the
resulting successor or acquiring entity (if not the Company)
assumes by written instrument the obligation to deliver to the
holders of the Series B Preferred Stock such shares of stock
and/or securities as, in accordance with the foregoing
provisions, the holders of the Series B Preferred Stock may be
entitled to purchase.
(iii) If any adjustment under this Section
5(e) would create a fractional share of Common Stock or a
right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of shares
of Common Stock issuable upon conversion shall be the next
higher number of shares.
21
<PAGE> 25
(f) FORCED CONVERSION OPTION. At any time after one year
from the termination of the offering of the Series B Preferred Stock, the
Company may, at its option, elect to force conversion of the Series B Preferred
Stock into Common Stock. In order to do so, the Company must give sixty days
prior written notice, delivered by facsimile with hard copy by courier, to the
holders of the Series B Preferred Stock of the Company's election to force
conversion. The notice must state the effective date of the forced conversion.
Prior to the effective date of the forced conversion, the holders of the Series
B Preferred Stock may exercise any rights they may have under this Certificate
or applicable law. In the event of a forced conversion, notwithstanding anything
to the contrary herein, the conversion formula applicable to the shares of
Series B Preferred Stock that are the subject of the forced conversion shall be
as follows:
Number of shares issued upon conversion of one share of Preferred Stock
equals
[(.08 + FORCED CONVERSION PREMIUM) (N/365) (ISSUE PRICE)] + ISSUE PRICE
-----------------------------------------------------------------------
Conversion Price
where the term "Forced Conversion Premium" means six percent (6% or
0.06) for the thirteenth month after the Final Closing Date, declining
by one-half of one percent (0.5%) each month thereafter until it equals
zero the end of the twenty-third month after the Final Closing Date,
and the terms "N", "Issue Price" and "Conversion Price" have the
meanings set forth in 5(a) above.
6. REDEMPTION BY COMPANY UPON CONVERSION.
(a) RIGHT TO REDEEM. In the event the Conversion Price
per share shall be less than or equal to 75% of the Index Price, the Company
shall have the right, in its sole discretion, upon receipt of a Notice of
Conversion pursuant to Section 5, to redeem in whole or in part any Series B
Preferred Stock submitted for conversion, immediately prior to conversion, at
the Redemption Price on Conversion (as defined below). If the Company elects to
redeem some, but not all, of the Series B Preferred Stock submitted for
conversion, the Company shall redeem from among the Series B Preferred Stock
submitted by the various shareholders for conversion on the applicable date, a
pro-rata amount from each shareholder so submitting Series B Preferred Stock for
conversion.
(b) MECHANICS OF REDEMPTION. Any shareholder considering
submitting Preferred Stock for conversion at such time as the Company's right of
redemption under Section 6(a) is or may be in effect may provide notice to the
Company of his possible desire to convert and ask the Company to determine
whether or not the Company would exercise its right of redemption if the
Preferred Stock were submitted for conversion. The Company shall respond within
two business days of the date of that notice, and state whether it would redeem
the shares, in whole or in part, or allow conversion into shares without
redemption, which election will be applicable to conversion by such shareholder
within the next five business days after the date of the Company's response.
22
<PAGE> 26
Failure of the Company to respond within the two-day period shall be deemed an
election by the Company not to redeem the shares covered by that notice if
submitted for conversion within the next five business days. If the shareholder
does not provide advance notice of intention to convert as contemplated in this
section (ii), the Company shall effect such redemption of shares submitted for
conversion by giving notice of its election to redeem, by facsimile within 2
business days following receipt of a Notice of Conversion from a holder, with a
copy by 2-day courier, to (A) the holder of Series B Preferred Stock submitted
for conversion at the address and facsimile number of such holder appearing in
the Company's register for the Series B Preferred Stock and (B) the Company's
Transfer Agent. Such redemption notice shall indicate whether the Company will
redeem all or part of the Series B Preferred Stock submitted for conversion and
the applicable redemption price. The Company shall not be entitled to exercise
its right to redeem shares submitted for conversion under this Section 6(a)
unless it has (x) the full amount of the redemption price, in cash, available in
a demand or other immediately available account in a bank or similar financial
institution or (y) immediately available credit facilities, in the full amount
of the redemption price, with a bank or similar financial institution on the
date the redemption notice is sent to shareholders.
(c) REDEMPTION PRICE. In the case of a redemption under
this Section 6(a), the redemption price ("Redemption Price on Conversion") shall
equal:
[[(.08) (N/365) (ISSUE PRICE)] + ISSUE PRICE] [CLOSING BID PRICE]
----------------------------------------------------------------
Conversion Price
where "N," "Issue Price," "Closing Bid Price" and "Conversion Price"
have the meanings set forth in Section 5.
The Redemption Price on Conversion shall be paid to the holder of Series B
Preferred Stock redeemed within 10 business days of the delivery of the notice
of such redemption to such holder; provided, however, that the Company shall not
be obligated to delivery any portion of such Redemption Price on Conversion
unless either the certificates evidencing the Series B Preferred Stock redeemed
are delivered to the Company or its transfer agent as provided in Section 4(b),
or the holder notifies the Company or its transfer agent that such certificates
23
<PAGE> 27
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Company to indemnify the Company from any loss incurred by it in connection
with such certificates.
7. CORPORATE CHANGE. In the event of a merger, reorganization,
recapitalization or similar event of or with respect to the Company (a
"Corporate Change") (other than a Corporate Change in which 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), this Series B
Preferred Stock shall be assumed by the acquiring entity and thereafter this
Series B Preferred Stock shall be convertible into such class and type of
securities as the holder would have received had the holder converted this
Series B Preferred Stock immediately prior to such Corporate Change.
8. PROTECTIVE PROVISIONS. So long as shares of Series B Preferred Stock
are outstanding, the Corporation shall not without first obtaining the approval
(by vote or written consent, as provided by law) of the holders of at least a
majority of the then outstanding shares of Series B Preferred Stock:
(a) alter or change the rights, preferences or privileges
of the shares of Series B Preferred Stock or any Senior Securities so as to
affect adversely the Series B Preferred Stock;
(b) create any new class or series of stock having a
rights preferential to or equal to those of the Series B Preferred Stock with
respect to conversion, redemption or voting rights or privileges, or with
respect to Distributions (as defined in Section 2 above); or
(c) do any act or thing not authorized or contemplated by
this Designation which would result in taxation of the holders of shares of the
Series B Preferred Stock under Section 305 of the Internal Revenue Code of 1986,
as amended (or any comparable provision of the Internal Revenue Code as
hereafter from time to time amended).
9. STATUS OF REDEEMED OR CONVERTED STOCK. In the event any shares of
Series B Preferred Stock shall be redeemed or converted pursuant to Section 5 or
Section 6 hereof, the shares so converted or redeemed shall be cancelled, shall
return to the status of authorized but unissued Preferred Stock of no designated
series, and shall not be issuable by the Corporation as Series B Preferred
Stock.
10. MISCELLANEOUS. As used herein, the term "business day" means a
business day in the City of New York.
24
<PAGE> 28
IN WITNESS WHEREOF AVIC GROUP INTERNATIONAL, INC. has caused this
Restated Certificate of Incorporation to be executed by its President and to be
attested to by its Secretary as of June 24, 1996.
AVIC GROUP INTERNATIONAL, INC.
By: /s/ JOSEPH R. WRIGHT, JR.
------------------------------
Joseph R. Wright, Jr.
Chief Executive Officer
By: /s/ TIMOTHY P.F. CROWLEY
------------------------------
Timothy P.F. Crowley
Secretary
25
<PAGE> 1
Exhibit 3.2
-1-
AMENDED AND RESTATED
BYLAWS OF
TERREMARK WORLDWIDE, INC.
(a Delaware corporation)
The following are the Bylaws of TERREMARK WORLDWIDE, INC., a Delaware
corporation (the "Corporation"), effective as of April 28, 2000:
ARTICLE I
Offices
Section 1.01. PRINCIPAL EXECUTIVE OFFICE. The principal executive
office of the Corporation shall be located at 599 Lexington Avenue, 44th Floor,
New York, New York 10022. The Board of Directors of the Corporation (the "Board
of Directors") may change the location of said principal executive office.
Section 1.02. OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
Section 2.01. ANNUAL MEETINGS. The annual meeting of stockholders of
the Corporation shall be held at a date and at such time as the Board of
Directors shall determine. At each annual meeting of stockholders, directors
shall be elected in accordance with the provisions of Section 3.03 hereof and
any other proper business may be transacted.
Section 2.02. SPECIAL MEETINGS. Special meetings of stockholders for
any purpose or purposes may be called at any time by a majority of the Board of
Directors, by the Chairman of the Board or, by the President. Special meetings
may not be called by any other person or persons. Each special meeting shall be
held at such date and time as is requested by the person or persons calling the
meeting, within the limits fixed by law.
<PAGE> 2
-2-
Section 2.03. PLACE OF MEETINGS. Each annual or special meeting of
stockholders shall be held at such location as may be determined by the Board of
Directors or, if no such determination is made, at such place as may be
determined by the Chairman of the Board. If no location is so determined, any
annual or special meeting shall be held at the principal executive office of the
Corporation.
Section 2.04. NOTICE OF STOCKHOLDER MEETINGS. Written notice of each
annual or special meeting of stockholders stating the date and time when, and
the place where, it is to be held shall be delivered either personally or by
mail to stockholders entitled to vote at such meeting not less than ten (10) nor
more than sixty (60) days before the date of the meeting. The purpose or
purposes for which the meeting is called may, in the case of an annual meeting,
and shall, in the case of a special meeting, also be stated. If mailed, notice
is given when deposited in the United States mail, postage prepaid, directed to
the stockholder at his address as it shall appear on the stock books of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices intended for him be mailed to some other address,
in which case such notice shall be mailed to the address designated in such
request.
Section 2.05. NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.
(a) NOMINATION OF DIRECTORS. Only persons who are nominated in
accordance with the procedures set forth in these By-Laws shall be eligible to
serve as directors. Nominations of persons for election to the Board of
Directors of the Corporation may be made at a meeting of stockholders (a) by or
at the direction of the Board of Directors or (b) by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice for
the election of directors at the meeting and who complies with the notice
procedures set forth in this Section 2.5(a). Such nominations, other than those
made by or at the direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 5 days prior to
that date which shall be set by the Board of Directors as the date by which
information is required to be received for inclusion in the proxy statement;
provided, however, that in the event that less than 55 days' notice or prior
public disclosure of the date of the meeting or, of the date the proxy materials
are due, is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the seventh
day following the day on which such notice of the date of the meeting or such
public disclosure was made. Such stockholder's notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or reelection
as a director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election
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of directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected), and (b) as to the stockholder giving the
notice (i) the name and address, as they appear on the Corporation's books, of
such stockholder and (ii) the class and number of shares of the Corporation
which are beneficially owned by such stockholder. At the request of the Board of
Directors, any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the Corporation that information
required to be set forth in a stockholder's notice of nomination which pertains
to the nominee. No person shall be eligible to serve as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 2.5(a). The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the By-Laws, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded. Notwithstanding the foregoing provisions of this Section 2.5(a),
a stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.5(a).
(b) NOTICE OF BUSINESS. At any meeting of the stockholders, only such
business shall be conducted as shall have been brought before the meeting (a) by
or at the direction of the Board of Directors or (b) by any stockholder of the
Corporation who is a stockholder of record at the time of giving of the notice
provided for in this Section 2.5(b), who shall be entitled to vote at such
meeting and who complies with the notice procedures set forth in this Section
2.5(b). For business to be properly brought before a stockholder meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 5 days prior to that date which shall be set by the
Board of Directors as the date by which information is required to be received
for inclusion in the proxy statement; provided, however, that in the event that
less than 55 days' notice or prior public disclosure of the date of the meeting
or, of the date the proxy materials are due, is given or made to stockholders,
notice by the stockholder to be timely must be received no later than the close
of business on the seventh day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the meeting (a) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting; (b) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business, (c) the class
and
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number of shares of the Corporation which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder in such business.
Notwithstanding anything in the By-Laws to the contrary, no business shall be
conducted at a stockholder meeting except (i) in accordance with the procedures
set forth in this Section 2.5(b) or (ii) with respect to nominations of persons
for election as directors of the Corporation, in accordance with the provisions
of Section 2.5(a) hereof. The Chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the provisions of the By-Laws,
and if he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Notwithstanding the foregoing provisions of this Section 2.5(b), a stockholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder with respect
to the matters set forth in this Section.
Section 2.06. CONDUCT OF MEETINGS. All actual and special meetings of
stockholders shall be conducted in accordance with such rules and procedures as
the Board of Directors may determine subject to the requirements of applicable
law and, as to matters not governed by such rules and procedures, as the
chairman of such meeting shall determine. The chairman of any annual or special
meeting of stockholders shall be the Chairman of the Board. The Secretary, or in
the absence of the Secretary, a person designated by the Chairman of the Board,
shall act as secretary of the meeting.
Section 2.07. QUORUM. At any meeting of stockholders of the
Corporation, the presence, in person or by proxy, of the holders of record of a
majority of the shares then issued and outstanding and entitled to vote at the
meeting shall constitute a quorum for the transaction of business; PROVIDED,
HOWEVER, that this Section 2.07 shall not affect any different requirement which
may exist under statute, pursuant to the rights of any authorized class or
series of stock, or under the Certificate of Incorporation of the Corporation,
as amended or restated from time to time (the "Certificate"), for the vote
necessary for the adoption of any measure governed thereby. The stockholders
present at a duly called or held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the withdrawal of
enough stockholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
In the absence of a quorum, the stockholders present in person or by
proxy, by majority vote and without further notice, may adjourn the meeting from
time to time until a quorum is attained, but in the absence of a quorum, no
other business may be transacted at that meeting, except as provided in this
section. At any
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reconvened meeting following such adjournment at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting as originally notified.
Section 2.08. VOTES REQUIRED. The affirmative vote of a majority of the
shares present in person or represented by proxy at a duly called meeting of
stockholders of the Corporation, at which a quorum is present and entitled to
vote on the subject matter, shall be sufficient to take or authorize action upon
any matter which may properly come before the meeting, except that the election
of directors shall be by plurality vote, unless the vote of a greater or
different number thereof is required by statute, by the rights of any authorized
class of stock or by the Certificate.
Unless the Certificate or a resolution of the Board of Directors
adopted in connection with the issuance of shares of any class or series of
stock provides for a greater or lesser number of votes per share, or limits or
denies voting rights, each outstanding share of stock, regardless of class or
series, shall be entitled to one (1) vote on each matter submitted to a vote at
a meeting of stockholders.
Section 2.09. PROXIES. Every person entitled to vote for directors or
on any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the Secretary of the corporation. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the stockholder or the
stockholder's attorney in fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the person executing it, before the vote pursuant to that proxy, by a
writing delivered to the corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or as to any meeting by attendance at such meeting
and voting in person by, the person executing the proxy; or (ii) written notice
of the death or incapacity of the maker of that proxy is received by the
corporation before the vote pursuant to that proxy is counted; provided,
however, that no proxy shall be valid after the expiration of three (3) years
from the date of the proxy, unless otherwise provided in the proxy.
A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally.
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Section 2.10. NO STOCKHOLDER ACTION BY WRITTEN CONSENT. Unless
otherwise provided in the Certificate of Incorporation, and subject to the
rights, if any, of the holders, if any, of Preferred Stock to take action by
written consent, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.
Section 2.11. RECORD DATE FOR STOCKHOLDER NOTICE AND VOTING. For
purposes of determining the stockholders entitled to notice of any meeting or to
vote or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) days nor fewer than ten (10) days before the date of
any such meeting nor more than sixty (60) days before any such other action, and
in this event only stockholders at the close of business on the record date are
entitled to notice or to vote, as the case may be, notwithstanding any transfer
of any shares on the books of the corporation after the record date, except as
otherwise provided in the General Corporation Law of the State of Delaware.
If the board of directors does not so fix a record date:
(a) The record date for determining the stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the business day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held.
(b) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
(c) A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting.
Section 2.12. LIST OF STOCKHOLDERS. The Secretary of the Corporation
shall prepare and make (or cause to be prepared and made), at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of, and the number of shares registered in the name of, each
stockholder. Such list shall
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be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the duration
thereof, and may be inspected by any stockholder who is present.
Section 2.13. VOTING. The stockholders entitled to vote at any meeting
of stockholders shall be determined in accordance with the provisions of Section
2.12. The stockholders' vote may be by voice vote or by ballot. Any stockholder
may vote part of the shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal, but, if the stockholder
fails to specify the number of shares which the stockholder is voting
affirmatively, it will be conclusively presumed that the stockholder's approving
vote is with respect to all shares that the stockholder is entitled to vote.
Section 2.14. WAIVER OF NOTICE OR CONSENT BY ABSENT STOCKHOLDERS. The
transactions of any meeting of stockholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each person
entitled to vote, who was not present in person or by proxy, signs a written
waiver of notice or a consent to a holding of the meeting, or an approval of the
minutes. The waiver of notice, consent or approval need not specify either the
business to be transacted or the purpose of any annual or special meeting of
stockholders. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting. Attendance by a
person at a meeting shall also constitute a waiver of notice of that meeting,
except when the person attends the meeting for the express purpose of objecting
and objects, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened, and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by law to be included in the notice of the
meeting but not so included if that objection is expressly made at the meeting.
Section 2.15. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors shall appoint Inspectors of Election to act
at such meeting or at any adjournment or adjournments thereof. If such
Inspectors are not so appointed or fail or refuse to act, the chairman of any
such meeting may (and, upon the demand of any stockholder or stockholder's
proxy, shall) make such an appointment.
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The number of Inspectors of Election shall be one (1) or three (3). If
there are three (3) Inspectors of Election, the decision, act or certificate of
a majority shall be effective and shall represent the decision, act or
certificate of all. No such Inspector need be a stockholder of the Corporation.
Subject to any provisions of the Certificate of Incorporation, the
Inspectors of Election shall determine the number of shares outstanding, the
voting power of each, the shares represented at the meeting, the existence of a
quorum and the authenticity, validity and effect of proxies; they shall receive
votes, ballots or consents, hear and determine all challenges and questions in
any way arising in connection with the right to vote, count and tabulate all
votes or consents, determine when the polls shall close and determine the
result; and finally, they shall do such acts as may be proper to conduct the
election or vote with fairness to all stockholders. On request, the Inspectors
shall make a report in writing to the secretary of the meeting concerning any
challenge, question or other matter as may have been determined by them and
shall execute and deliver to such secretary a certificate of any fact found by
them.
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ARTICLE III
Directors
Section 3.01. POWERS. The business and affairs of the Corporation shall
be managed by and be under the direction of the Board of Directors. The Board of
Directors shall exercise all the powers of the Corporation, except those that
are conferred upon or reserved to the stockholders by statute, the Certificate
or these Bylaws.
Section 3.02. NUMBER. The number of directors shall be fixed from time
to time by resolution of the Board of Directors but shall not be less than three
(3) nor more than thirteen (13).
Section 3.03. ELECTION AND TERM OF OFFICE. Effective as of the date of
the amendment to the Certificate of Incorporation which amendment shall reflect
an article consistent with the terms of this Section 3.03 (the "Effective
Date"), the Board of Directors shall consist of three classes of directors, such
classes to be as nearly equal in number of directors as possible, having
staggered three-year terms of office, the term of office of the directors of the
first such class to expire at the first annual meeting of the Corporation's
stockholders following the Effective Date, those of the second class to expire
at the second annual meeting of the Corporation's stockholders following the
Effective Date, and those of the third class at the third annual meeting of the
Corporation's stockholders following the Effective Date, such that at each such
annual meeting of stockholders, nominees will stand for election for three-year
terms to succeed those directors whose terms are to expire at such meeting.
Likewise, at each other annual meeting of stockholders held from and after the
Effective Date, those nominees elected at such meeting to succeed those
directors whose terms expire at such meeting, shall serve for a term expiring at
the third annual meeting of stockholders following their election. Members of
the Board of Directors shall hold office until the annual meeting of
stockholders for the year in which their term is scheduled to expire as set
forth above in this Section 3.03 and their respective successors are duly
elected and qualified or until their earlier death, incapacity, resignation, or
removal. No decrease in the authorized number of directors shall shorten the
term of any incumbent director, and additional directors elected in connection
with rights to elect such additional directors under specified circumstances
which may be granted to the holders of any series of Preferred Stock shall not
be included in any class, but shall serve for such term or terms and pursuant to
such other provisions as are specified in the resolution of the Board of
Directors establishing such series.
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Section 3.04. ELECTION OF CHAIRMAN OF THE BOARD. At the organizational
meeting immediately following the annual meeting of stockholders, the directors
shall elect a Chairman of the Board from among the directors who shall hold
office until the corresponding meeting of the Board of Directors in the next
year and until his successor shall have been elected or until his earlier
resignation or removal. Any vacancy in such office may be filled for the
unexpired portion of the term in the same manner by the Board of Directors at
any regular or special meeting.
Section 3.05. REMOVAL. Any director may be removed from office only as
provided in the Certificate of Incorporation.
Section 3.06. VACANCIES AND ADDITIONAL DIRECTORSHIPS. Except as the
Delaware General Corporate Laws may otherwise require, and subject to the rights
of the holders of any series of Preferred Stock with respect to the filling of
vacancies or new directorships in the Board of Directors, newly created
directorships resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board
of Directors. Any director elected in accordance with the preceding sentence
shall hold office for the remainder of the full term of the class of directors
in which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
Section 3.07. REGULAR AND SPECIAL MEETINGS. Regular meetings of the
Board of Directors shall be held immediately following the annual meeting of the
stockholders; without call at such time as shall from time to time be fixed by
the Board of Directors; and as called by the Chairman of the Board in accordance
with applicable law.
Special meetings of the Board of Directors shall be held upon call by
or at the direction of the Chairman of the Board, the President or any two (2)
directors, except that when the Board of Directors consists of one (1) director,
then the one director may call a special meeting. Except as otherwise required
by law, notice of each special meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least three
days before the day on which the meeting is to be held, or shall be sent to him
at such place by telex, telegram, cable, facsimile transmission or telephoned or
delivered to him personally, not later than the day before the day on which the
meeting is to be held. Such notice shall state the time and place of such
meeting, but need not state the purpose or purposes thereof, unless otherwise
required by law, the Certificate of Incorporation or these Bylaws ("Bylaws").
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Notice of any meeting need not be given to any director who shall
attend such meeting in person (except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened) or who shall waive notice thereof, before or after such meeting, in a
signed writing.
Section 3.08. QUORUM. At all meetings of the Board of Directors, a
majority of the fixed number of directors shall constitute a quorum for the
transaction of business, except that when the Board of Directors consists of one
(1) director, then the one director shall constitute a quorum. In the absence of
a quorum, the directors present, by majority vote and without notice other than
by announcement, may adjourn the meeting from time to time until a quorum shall
be present. At any reconvened meeting following such an adjournment at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 3.09. VOTES REQUIRED. Except as otherwise provided by
applicable law or by the Certificate of Incorporation, the vote of a majority of
the directors present at a meeting duly held at which a quorum is present shall
be sufficient to pass any measure.
Section 3.10. PLACE AND CONDUCT OF MEETINGS. Each regular meeting and
special meeting of the Board of Directors shall be held at a location determined
as follows: The Board of Directors may designate any place, within or without
the State of Delaware, for the holding of any meeting. If no such designation is
made: (a) any meeting called by a majority of the directors shall be held at
such location, within the county of the Corporation's principal executive
office, as the directors calling the meeting shall designate; and (b) any other
meeting shall be held at such location, within the county of the Corporation's
principal executive office, as the Chairman of the Board may designate or, in
the absence of such designation, at the Corporation's principal executive
office. Subject to the requirements of applicable law, all regular and special
meetings of the Board of Directors shall be conducted in accordance with such
rules and procedures as the Board of Directors may approve and, as to matters
not governed by such rules and procedures, as the chairman of such meeting shall
determine. The chairman of any regular or special meeting shall be the Chairman
of the Board, or, in his absence, a person designated by the Board of Directors.
The Secretary, or, in the absence of the Secretary, a person designated by the
chairman of the meeting shall act as secretary of the meeting. Any meeting,
regular or special, may be held by conference telephone or similar communication
equipment, so long as all directors
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participating in the meeting can hear one another, and all such directors shall
be deemed to be present in person at the meeting.
Section 3.11. FEES AND COMPENSATION. Directors shall be paid such
compensation as may be fixed from time to time by resolution of the Board of
Directors: (a) for their usual and contemplated services as directors; (b) for
their services as members of committees appointed by the Board of Directors,
including attendance at committee meetings as well as services which may be
required when committee members must consult with management staff; and (c) for
extraordinary services as directors or as members of committees appointed by the
Board of Directors, over and above those services for which compensation is
fixed pursuant to items (a) and (b) in this Section 3.11. Compensation may be in
the form of an annual retainer fee or a fee for attendance at meetings, or both,
or in such other form or on such basis as the resolutions of the Board of
Directors shall fix. Directors shall be reimbursed for all reasonable expenses
incurred by them in attending meetings of the Board of Directors and committees
appointed by the Board of Directors and in performing compensable extraordinary
services. Nothing contained herein shall be construed to preclude any director
from serving the Corporation in any other capacity, such as an officer, agent,
employee, consultant or otherwise, and receiving compensation therefor.
Section 3.12. COMMITTEES OF THE BOARD OF DIRECTORS. To the full extent
permitted by applicable law, the Board of Directors may from time to time
establish committees, including, but not limited to, standing or special
committees and an executive committee with authority and responsibility for
bookkeeping, with authority to act as signatories on Corporation bank or similar
accounts and with authority to choose attorneys for the Corporation and direct
litigation strategy, which shall have such duties and powers as are authorized
by these Bylaws or by the Board of Directors. Committee members, and the
chairman of each committee, shall be appointed by the Board of Directors. The
Chairman of the Board, in conjunction with the several committee chairmen, shall
make recommendations to the Board of Directors for its final action concerning
members to be appointed to the several committees of the Board of Directors. Any
member of any committee may be removed at any time with or without cause by the
Board of Directors. Vacancies which occur on any committee shall be filled by a
resolution of the Board of the Directors. If any vacancy shall occur in any
committee by reason of death, resignation, disqualification, removal or
otherwise, the remaining members of such committee, so long as a quorum is
present, may continue to act until such vacancy is filled by the Board of
Directors. The Board of Directors may, by resolution, at any time deemed
desirable, discontinue any standing or special committee. Members of standing
committees, and their chairmen, shall be elected yearly at the regular meeting
of the Board of Directors which is held immediately following the
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annual meeting of stockholders. The provisions of Sections 3.07, 3.08, 3.09 and
3.10 of these Bylaws shall apply, MUTATIS MUTANDIS, to any such Committee of the
Board of Directors.
Section 3.13. WAIVER OF NOTICE. The transactions of any meeting of the
board of directors, however called and noticed or wherever held, shall be as
valid as though had at a meeting duly held after regular call and notice if a
quorum is present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, a consent to holding the
meeting or an approval of the minutes. The waiver of notice or consent need not
specify the purpose of the meeting. All such waivers, consents, and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting. Notice of a meeting shall also be deemed given to any director who
attends the meeting without protesting, before or at its commencement, the lack
of notice to that director.
Section 3.14. ADJOURNMENT. A majority of the directors present, whether
or not constituting a quorum, may adjourn any meeting to another time and place.
Section 3.15. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent directors if the time
and place are fixed at the meeting adjourned.
Section 3.16. ACTION WITHOUT MEETING. Any action required or permitted
to be taken by the board of directors or any committee thereof may be taken
without a meeting, if all members of the board shall individually or
collectively consent in writing to that action. Such action by written consent
shall have the same force and effect as a unanimous vote of the board of
directors. Such written consent or consents shall be filed with the minutes of
the proceedings of the board.
ARTICLE IV
Officers
Section 4.01. DESIGNATION, ELECTION AND TERM OF OFFICE. The Corporation
shall have a Chairman of the Board, a President, a Treasurer, such senior vice
presidents and vice presidents as the Board of Directors deems appropriate, a
Secretary and such other officers as the Board of Directors may deem
appropriate. These officers shall be elected annually by the Board of Directors
at
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the organizational meeting immediately following the annual meeting of
stockholders, and each such officer shall hold office until the corresponding
meeting of the Board of Directors in the next year and until his successor shall
have been elected and qualified or until his earlier resignation, death or
removal. Any vacancy in any of the above offices may be filled for the unexpired
portion of the term by the Board of Directors at any regular or special meeting.
Any number of offices may be held by the same person in accordance with section
4.08 herein.
Section 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall preside at all meetings of the directors and shall have such
other powers and duties as may from time to time be assigned to him by the Board
of Directors.
Section 4.03. PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall, subject to the power of the Board of
Directors, have general supervision, direction and control of the business and
affairs of the Corporation. He shall preside at all meetings of the stockholders
and, in the absence of the Chairman of the Board, at all meetings of the
directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
duties as may be assigned to him from time to time by the Board of Directors.
Section 4.04. TREASURER. The Treasurer shall keep and maintain, or
cause to be kept and maintained, adequate and correct books and records of
account of the properties and business transactions of the Corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, retained earnings and shares. The books of account shall at all
reasonable times be open to inspection by the directors. The Treasurer shall
deposit all moneys and other valuables in the name and to the credit of the
Corporation with such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, shall render to the President and directors, whenever
they request it, an account of all of his transactions as the Treasurer and of
the financial condition of the Corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board of Directors or the
Bylaws.
Section 4.05. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, the Board of Directors and all committees. He
shall be the custodian of the corporate seal and shall affix it to all documents
which he is authorized by law or the Board of Directors to sign and seal. He
also shall perform such other duties as may be assigned to him from time to time
by the Board of Directors or the Chairman of the Board or President.
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Section 4.06. ASSISTANT OFFICERS. The President may appoint one or more
assistant secretaries and such other assistant officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as may be specified from time to time by
the President.
Section 4.07. WHEN DUTIES OF AN OFFICER MAY BE DELEGATED. In the case
of absence or disability of an officer of the Corporation or for any other
reason that may seem sufficient to the Board of Directors, the Board of
Directors or any officer designated by it, or the President, may, for the time
of the absence or disability, delegate such officer's duties and powers to any
other officer of the Corporation.
Section 4.08. OFFICERS HOLDING TWO OR MORE OFFICES. The same person may
hold any two (2) or more of the above-mentioned offices.
Section 4.09. COMPENSATION. The Board of Directors shall have the power
to fix the compensation of all officers and employees of the Corporation.
Section 4.10. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Board of Directors, to the President, or to the
Secretary of the Corporation. Any such resignation shall take effect at the time
specified therein unless otherwise determined by the Board of Directors. The
acceptance of a resignation by the Corporation shall not be necessary to make it
effective.
Section 4.11. REMOVAL. Any officer of the Corporation may be removed,
with or without cause, by the affirmative vote of a majority of the entire Board
of Directors. Any assistant officer of the Corporation may be removed, with or
without cause, by the President or by the Board of Directors.
ARTICLE V
Indemnification of Directors, Officers, Employees and other Corporate Agents
Section 5.01. ACTION, ETC., OTHER THAN BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, trustee or
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agent of another corporation, partnership, joint venture, trust or other
enterprise (all such persons being referred to hereinafter as an "Agent"),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
Section 5.02. ACTION, ETC., BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was an Agent against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation by a court of competent jurisdiction, after exhaustion
of all appeals therefrom, unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
Section 5.03. DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Sections 5.01 or 5.02 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the Agent is proper in the circumstances
because the Agent has met the applicable standard of conduct set forth in
Sections 5.01 and 5.02 hereof, which determination is made (a) by the Board of
Directors, by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (c) by the
stockholders.
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Section 5.04. INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article V, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any action, suit or proceeding referred to in Sections
5.01 or 5.02 hereof, or in defense of any claim, issue or matter therein, such
Agent shall be indemnified against expenses, including attorneys' fees actually
and reasonably incurred by such Agent in connection therewith.
Section 5.05. ADVANCES OF EXPENSES. Except as limited by Section 5.06
of this Article V, expenses incurred by an Agent in defending any civil or
criminal action, suit, or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding, if the Agent shall
undertake to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified as authorized in this Article V.
Notwithstanding the foregoing, no advance shall be made by the Corporation if a
determination is reasonably and promptly made by the Board of Directors by a
majority vote of a quorum of disinterested directors, or (if such a quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs) by independent legal counsel in a written opinion, that, based upon the
facts known to the Board of Directors or counsel at the time such determination
is made, such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interest of the Corporation, or,
with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe his conduct was unlawful.
Section 5.06. RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any indemnification or advance under this Article V
shall be made promptly, and in any event within ninety days, upon the written
request of the Agent, unless a determination shall be made in the manner set
forth in the second sentence of Subsection 5.05 hereof that such Agent acted in
a manner set forth therein so as to justify the Corporation's not indemnifying
or making an advance to the Agent. The right to indemnification or advances as
granted by this Article V shall be enforceable by the Agent in any court of
competent jurisdiction, if the Board of Directors or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such proceeding shall also be indemnified by the Corporation.
Section 5.07. OTHER RIGHTS AND REMEDIES. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article V
shall not be deemed exclusive of any other rights to which an Agent seeking
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indemnification or advancement of expenses may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be an Agent and shall inure
to the benefit of the heirs, executors and administrators of such a person. All
rights to indemnification under this Article V shall be deemed to be provided by
a contract between the Corporation and the Agent who serves in such capacity at
any time while these Bylaws and other relevant provisions of the Delaware
General Corporation Law and other applicable law, if any, are in effect. Any
repeal or modification thereof shall not affect any rights or obligations then
existing.
Section 5.08. INSURANCE. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of any
person who is or was an Agent against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article V.
Section 5.09. CONSTITUENT CORPORATIONS. For the purposes of this
Article V, references to "the Corporation" shall include, in addition to the
resulting corporation, all constituent corporations (including all constituents
of constituents) absorbed in a consolidation or merger as well as the resulting
or surviving corporation, which, if the separate existence of such constituent
corporation had continued, would have had power and authority to indemnify its
Agents, so that any Agent of such constituent corporation shall stand in the
same position under the provisions of the Article V with respect to the
resulting or surviving corporation as that Agent would have with respect to such
constituent corporation if its separate existence had continued.
Section 5.10. OTHER ENTERPRISES, FINES, AND SERVING AT CORPORATION'S
REQUEST. For purposes of this Article V, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
V.
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Section 5.11. SAVINGS CLAUSE. If this Article V or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent as to expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or. investigative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article V that shall not have been invalidated, or by any other applicable law.
ARTICLE VI
Stock
Section 6.01. CERTIFICATES. Except as otherwise provided by law, each
stockholder shall be entitled to a certificate or certificates which shall
represent and certify the number and class (and series, if appropriate) of
shares of stock owned by him in the Corporation. Each certificate shall be
signed in the name of the Corporation by the Chairman of the Board or a
Vice-Chairman of the Board or the President or a Vice President, together with
the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary. Any or all of the signatures on any certificate may be a facsimile.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue.
Section 6.02. TRANSFER OF SHARES. Shares of stock shall be transferable
on the books of the Corporation only by the holder thereof, in person or by his
duly authorized attorney, upon the surrender of the certificate representing the
shares to be transferred, properly endorsed, to the Corporation's transfer
agent, if the Corporation has a transfer agent, or to the Corporation's
registrar, if the Corporation has a registrar, or to the Secretary, if the
Corporation has neither a transfer agent nor a registrar. The Board of Directors
shall have power and authority to make such other rules and regulations
concerning the issue, transfer and registration of certificates of the
Corporation's stock as it may deem expedient.
Section 6.03. TRANSFER AGENTS AND REGISTRARS. The Corporation may have
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or the Secretary may, from time to
time, define. No certificate of stock shall be valid until countersigned by a
transfer agent,
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if the Corporation has a transfer agent, or until registered by a registrar, if
the Corporation has a registrar. The duties of transfer agent and registrar may
be combined.
Section 6.04. STOCK LEDGERS. Original or duplicate stock ledgers,
containing the names and addresses of the stockholders of the Corporation and
the number of shares of each class of stock held by them, shall be kept at the
principal executive office of the Corporation or at the office of its transfer
agent or registrar.
ARTICLE VII
Miscellaneous
Section 7.01. RELATIONSHIP BETWEEN BYLAWS, CERTIFICATE OF
INCORPORATION, AND DELAWARE GENERAL CORPORATE LAW. To the extent that the
Certificate of Incorporation or the Delaware General Corporate Laws grant to any
Person any rights which are restricted under these Bylaws and which are not
permitted to be so restricted by the Certificate of Incorporation or the
Delaware General Corporate Laws, than the extent of such right shall be as
stated in the Certificate of Incorporation or the Delaware General Corporate
Laws, as the case may be, and these Bylaws shall be so interpreted.
<PAGE> 1
OPINION OF GREENBERG TRAURIG EXHIBIT 5.1
GREENBERG TRAURIG, P.A.
May 15, 2000
Terremark Worldwide, Inc.
2601 S. Bayshore Drive
Miami, Florida 33133
Ladies and Gentlemen:
We have acted as counsel for Terremark Worldwide, Inc., a Delaware
corporation (the "Company") in connection with the Company's Registration
Statement on Form S-3 (the "Registration Statement") being filed by the Company
under the Securities Act of 1933, as amended, with respect to 147,262,179 shares
(the "Shares") of the Company's common stock, par value $.001 per share (the
"Common Stock"), which were issued as a result of the merger transaction and a
subsequent stock purchase agreement, to the selling stockholders named therein
(the "Selling Stockholders").
In connection with the preparation of the Registration Statement and
this opinion letter, we have examined, considered and relied upon the following
documents (collectively, the "Documents"): (1) the Agreement and Plan of Merger
by and between Terremark Holdings, Inc. and Amtec, Inc., dated as of November
24, 1999, as amended, (2) the Stock Purchase Agreement by and between Vistagreen
Holdings (Bahamas), Ltd. and Amtec, Inc. dated as of November 24, 1999, as
amended, (3) the Company's Certificate of Incorporation, as amended, as filed
with the Secretary of State of the State of Delaware; (4) the Company's bylaws,
as amended, (5) resolutions of the shareholders and board of directors of the
Company, and (6) such other documents and matters of law as we have considered
necessary or appropriate for the expression of the opinions contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as copies, and the veracity of the
Documents. As to questions of fact material to the opinions hereinafter
expressed, we have relied upon the representations and warranties of the Company
made in the Documents.
Based solely upon and subject to the Documents, and subject to the
qualifications set forth below, we are of the opinion that the Shares to be sold
by the Selling Stockholders pursuant to the Registration Statement have been
duly authorized and, when issued in accordance with the terms thereof will be,
fully paid and nonassessable.
Although we have acted as counsel to the Company in connection with
certain other matters, our engagement is limited to certain matters about which
we have been consulted. Consequently, there may exist matters of a legal nature
involving the Company in connection with which we have not been consulted and
have not represented the Company. This opinion letter is limited to the matters
stated herein and no opinions may be implied or inferred beyond the matters
expressly stated herein. The opinions expressed herein are as of the date
hereof, and we assume no obligation to update or supplement such opinions to
reflect any facts or circumstances that may hereafter come to our attention or
any changes in law that may hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus contained in the Registration Statement. In giving
such consent, we do not admit that we come within the category of persons whose
consent is required by Section 7 of the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
Very truly yours,
GREENBERG TRAURIG, P.A.
By: /s/ Paul Berkowitz
-------------------------
Paul Berkowitz
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Terremark Worldwide, Inc. (formerly known as AmTec, Inc.) of our
report dated June 29, 1999, appearing in the Annual Report on Form 10-K of
AmTec, Inc. for the year ended March 31, 1999 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
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Deloitte & Touche LLP
New York, New York
May 11, 2000
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in Terremark Worldwide,
Inc.'s Registration Statement on Form S-3 of our report dated October 28, 1999,
except as to Note 13 dated December 22, 1999 relating to the financial
statements of Terremark Holdings, Inc. and of our report dated December 22,
1999 relating to the historical statement of revenue and certain expenses of
Terremark Centre, which appear in the Proxy Statement of AmTec, Inc. dated March
24, 2000. We also consent to the reference to us under the heading "Experts" in
such Registration Statement and to the references to us under the headings
"Terremark Summary Historical Financial Information" and "Terremark Selected
Historical Financial Information" included in the Proxy Statement of AmTec, Inc.
dated March 24, 2000 incorporated by reference in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Fort Lauderdale, Florida
May 12, 2000
