Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CROWN MEDIA HOLDINGS INC | mainbody.htm |
| EX-3.3 - FORM OF THIRD CERT OF INC - CROWN MEDIA HOLDINGS INC | thirdcert.htm |
| EX-2.2 - FORM OF MERGER HEH - CROWN MEDIA HOLDINGS INC | mergerheh.htm |
| EX-3.1 - FORM OF SECOND CERT OF INC - CROWN MEDIA HOLDINGS INC | secondcert.htm |
| EX-2.1 - FORM OF MERGER HEIC - CROWN MEDIA HOLDINGS INC | mergerheic.htm |
| EX-10.3 - FORM OF AMENDMENT NO. 2 TO TAX SHARING - CROWN MEDIA HOLDINGS INC | taxsharing.htm |
| EX-10.1 - MASTER RECAPITALIZATION AGREEMENT - CROWN MEDIA HOLDINGS INC | masterrecap.htm |
| EX-99.1 - PRESS RELEASE - CROWN MEDIA HOLDINGS INC | pressrelease.htm |
| EX-10.2 - FORM OF CREDIT AGREEMENT - CROWN MEDIA HOLDINGS INC | creditagreement.htm |
| EX-4.2 - FORM OF REGISTRATION RIGHTS AGREEMENT - CROWN MEDIA HOLDINGS INC | registrationrights.htm |
| EX-4.1 - FORM OF STOCKHOLDERS AGREEMENT - CROWN MEDIA HOLDINGS INC | stockholdersagreement.htm |
Exhibit
3.2
CERTIFICATE
OF DESIGNATION,
POWERS,
PREFERENCES, QUALIFICATIONS, LIMITATIONS,
RESTRICTIONS
AND RELATIVE RIGHTS OF SERIES A
CONVERTIBLE
PREFERRED STOCK
OF
CROWN
MEDIA HOLDINGS, INC.
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
The
undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted
by the Board of Directors of Crown Media Holdings, Inc., a Delaware corporation
(hereinafter the “Corporation”), with
the preferences and rights set forth therein relating to dividends, conversion,
redemption, dissolution and distribution of assets of the Corporation having
been fixed by the Board of Directors pursuant to authority granted to it by the
Corporation's Second Amended and Restated Certificate of Incorporation and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware:
RESOLVED: That,
pursuant to authority conferred upon the Board of Directors by the Second
Amended and Restated Certificate of Incorporation of the Corporation, the Board
of Directors hereby authorizes the designation of 400,000 shares of Series A
Convertible Preferred Stock of the Corporation, and hereby fixes the
designation, powers, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions thereof, of
such shares, in addition to those set forth in the Certificate of Incorporation
of the Corporation, as follows:
1. DESIGNATION
AND AMOUNT. The shares of
such series shall be designated “Series A Convertible Preferred Stock” (the
“Series A Preferred
Stock”) and the number of shares constituting such series shall be
400,000 shares.
2. RANK. The Series A
Preferred Stock shall, with respect to payment of dividends, redemption
payments, rights upon liquidation, dissolution or winding up of the affairs of
the Corporation, or otherwise: (i) rank senior and prior to the $0.01 par value
common stock of the Corporation (the “Common Stock”), and
each other class or series of equity securities of the Corporation, whether
currently issued or issued in the future, that by its terms ranks junior to the
Series A Preferred Stock (the “Junior Stock”)
(whether with respect to payment of dividends, redemption payments, rights upon
liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise); (ii) rank on a parity with each other class or series of equity
securities of the Corporation, whether currently issued or issued in the future,
that does not by its terms expressly provide that it ranks senior to or junior
to the Series A Preferred Stock (the “Pari Passu Stock”)
(whether with respect to payment of dividends, redemption payments, rights upon
liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise); (iii) rank junior to each other class or series of equity securities
of the Corporation, whether currently issued or issued in the future, that by
its terms ranks senior to the Series A Preferred Stock (the “Senior Stock”)
(whether with respect to payment of dividends, redemption payments, rights upon
liquidation, dissolution or winding up of the affairs of the Corporation, or
otherwise).
3. DIVIDENDS. The holders of
shares of Series A Preferred Stock shall be entitled to receive, out of funds
legally available therefor, dividends on the terms described below:
3.1 Between
January 1, 2011 and December 31, 2011, on March 31, June 30, September 30 and
December 31, and before any dividends shall be declared, set apart for or paid
upon the Common Stock or any other Junior Stock (each a “Dividend Payment
Date”, if any Dividend Payment Date is not a Business Day, then dividends
will be payable on the first Business Day following such date and dividends
shall accrue or accumulate, as applicable, to the actual payment date), the
holders of the Series A Preferred Stock as of the Dividend Payment Record Date
(as defined in Section
3.7), shall be entitled to receive with respect to each share of Series A
Preferred Stock, mandatory, cumulative dividends at a rate per annum equal to
14.0% of the Original Issue Price (as defined herein under Section 3.5) of each
such share, payable at the Corporation’s option either in (A) cash or (B) in
additional, fully paid and nonassessable shares of Series A Preferred Stock
legally available for such purpose (the “PIK
Dividends”).
3.2 Between
January 1, 2012 and December 31, 2014, on each Dividend Payment Date, the
holders of the Series A Preferred Stock as of the Dividend Payment Record Date,
shall be entitled to receive with respect to each share of Series A Preferred
Stock, mandatory, cumulative dividends at a rate per annum equal to 16.0% of the
Original Issue Price of each such share, payable at the Corporation’s option
either in (A) cash or (B) PIK Dividends.
3.3 Following
January 1, 2015, on each Dividend Payment Date, the holders of the Series A
Preferred Stock as of the Dividend Payment Record Date, shall be entitled to
receive with respect to each share of Series A Preferred Stock, mandatory,
cumulative cash dividends at a rate per annum equal to 16% of the Original Issue
Price.
3.4 The
holders of the Series A Preferred Stock shall participate with the holders of
Common Stock to the extent dividends are declared on the Common Stock, in which
circumstances the holders of Series A Preferred Stock shall be entitled to
receive dividends with respect to each share of Series A Preferred Stock on an
“as if converted” basis had all shares of Series A Preferred Stock been
converted into Common Stock pursuant to Section 6.1
immediately prior to the record date for such dividend in respect of
the Common Stock.
3.5 Dividends
payable on such shares of Series A Preferred Stock shall be cumulative and shall
continue to accrue or accumulate, as applicable, on a daily basis, from the date
of issue of such shares of Series A Preferred Stock, whether or not declared and
whether or not as of any Dividend Payment Date there shall be funds lawfully
available for the payment of dividends, so that if as of any Dividend Payment
Date, dividends in whole or in part are not paid upon the Series A Preferred
Stock, unpaid dividends thereon shall accrue or accumulate (“Cumulative
Dividends”). The Cumulative Dividends shall be paid at the
times, and subject to the terms, set forth in this Certificate of
Designation. The Corporation shall not declare, pay or set aside any
dividends on shares of Common Stock or Junior Stock unless, in addition to the
obtaining of any consents required in the Certificate of Incorporation of the
Corporation, the holders of the Series A Preferred Stock then outstanding shall
first receive, or simultaneously receive, a dividend on each outstanding share
of Series A Preferred Stock in an amount at least equal to the sum of (i) the
amount of the aggregate Cumulative Dividends then accrued or accumulated on such
share of Series A Preferred Stock and not previously paid and (ii) (A) in the
case of a dividend on Common Stock or any class or series that is convertible
into Common Stock, that dividend per share of Series A Preferred Stock as would
equal the product of (1) the dividend payable on each share of such class or
series determined, if applicable, as if all shares of such class or series had
been converted into Common Stock pursuant to Section 6.1 and
(2) the number of shares of Common Stock issuable upon conversion of one
share of Series A Preferred Stock pursuant to Section 6.1, in each
case calculated on the record date for determination of holders entitled to
receive such dividend or (B) in the case of a dividend on any class or series
that is not convertible into Common Stock, at a rate per share of Series A
Preferred Stock determined by (1) dividing the amount of the dividend payable on
each share of such class or series of capital stock by the original issuance
price of such class or series of capital stock (subject to appropriate
adjustment in the event of any stock dividend, stock split, combination or other
similar recapitalization with respect to such class or series) and
(2) multiplying such fraction by an amount equal to the Original Issue
Price. The “Original Issue Price”
shall mean $1,000 per share, subject to appropriate adjustment in the event of
any stock dividend, stock split, stock distribution or combination, subdivision,
reclassification or other corporate actions having the similar effect with
respect to the Series A Preferred Stock.
3.6 Any
dividends shall be payable to the holders of record of shares of Series A
Preferred Stock as they appear on the stock records of the Corporation at the
close of business on the record dates set by the Corporation with respect to
such dividends (each, a “Dividend Payment Record
Date”).
4. LIQUIDATION, DISSOLUTION OR
WINDING UP.
4.1 Series A Preferred Stock
Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation (including
a Deemed Liquidation Event (as defined below)), the holders of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders before any
payment shall be made to holders of any Junior Stock or Common Stock by reason
of their ownership thereof, a per share amount equal to the greater of (a) the
Original Issue Price per share plus any accrued but unpaid cash dividends with
respect to such share, or (b) that amount that would be received by such Series
A Preferred Stock holders on an “as if converted” basis had all shares of Series
A Preferred Stock been converted into Common Stock pursuant to Section 6.1
immediately prior to such liquidation, dissolution or winding up (including a
Deemed Liquidation Event) (the amount payable pursuant to this sentence is
hereinafter referred to as the “Liquidation
Preference”). Except as provided in Section 4.3.2, in the case
of a Deemed Liquidation Event, the Corporation shall utilize the net cash
proceeds of the Deemed Liquidation Event to redeem the Series A Preferred Stock,
out of funds legally available therefor, at a redemption price equal to the
Liquidation Preference; provided, that if upon a Deemed Liquidation Event (other
than a Deemed Liquidation Event described in Section 4.3(a)), the net cash
proceeds of the Deemed Liquidation Event available for distribution to the
stockholders shall be insufficient to redeem the Series A Preferred Stock, (x)
the Corporation shall redeem, to the fullest extent permitted by law, the Series
A Preferred Stock of the holders thereof ratably in proportion to the number of
shares of Series A Preferred Stock of each such holder which would have been
redeemed had sufficient funds been available therefor, (y) at any time(s) at
which additional funds are received by the Corporation, such funds shall be
used, to the extent legally available therefor, to redeem any shares of Series A
Preferred Stock that have not been redeemed until all shares of Series A
Preferred Stock have been redeemed and all redemption amounts have been paid and
(z) the Company shall not be permitted to effect an Optional Redemption under
Section 7.1 or a Mandatory Redemption under Section 7.2 at any time following a
Deemed Liquidation Event until all shares of Series A Preferred Stock have been
redeemed. If upon any such liquidation, dissolution or winding up of
the Corporation (including any Deemed Liquidation Event described in Section
4.3(a)), the assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of Series A Preferred
Stock the full amount to which they shall be entitled under this Section 4.1, the
holders of Series A Preferred Stock shall share ratably with each other and with
any holders of Pari Passu Stock in any distribution of the assets available for
distribution in proportion to the respective amounts which would otherwise be
payable in respect of the shares (which may include shares of Series A Preferred
Stock received as cumulative PIK Dividends pursuant to Section 3) held by
them upon such distribution if all amounts payable on or with respect to such
shares were paid in full.
4.2 Distribution of Remaining
Assets. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation (including a Deemed
Liquidation Event), after the payment of all preferential amounts required to be
paid to the holders of Series A Preferred Stock, the remaining assets of the
Corporation available for distribution to its stockholders shall be distributed
among the holders of Common Stock, pro rata based on the number of shares held
by each such holder.
|
4.3
|
Deemed Liquidation
Events.
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4.3.1 Definition. Unless
waived in writing by the holders of a majority of the outstanding shares of
Series A Preferred Stock voting together as a single class, each of the
following events shall be considered a “Deemed Liquidation
Event”:
(a) a merger
or consolidation in which (i) the Corporation is a constituent party or (ii) a
subsidiary of the Corporation is a constituent party and the Corporation issues
shares of its capital stock pursuant to such merger or consolidation, except any
such merger or consolidation involving the Corporation or a subsidiary in which
the shares of capital stock of the Corporation outstanding immediately prior to
such merger or consolidation continue to represent, or are converted into or
exchanged for shares of capital stock or other equity securities that represent,
immediately following such merger or consolidation, at least a majority, by
voting power, of the capital stock or other equity securities of (1) the
surviving or resulting corporation, limited liability company, partnership,
association, joint-stock corporation, trust or other form of business entity (a
“Party”) or (2)
if the surviving or resulting Party is a wholly owned subsidiary of another
Party immediately following such merger or consolidation, the parent entity of
such surviving or resulting Party (provided that, for
the purpose of this Section 4.3.1, all
shares of Common Stock issuable upon exercise of Options (as defined below)
outstanding immediately prior to such merger or consolidation or upon conversion
of Convertible Securities (as defined below) outstanding immediately prior to
such merger or consolidation shall be deemed to be outstanding immediately prior
to such merger or consolidation and, if applicable, converted or exchanged in
such merger or consolidation on the same terms as the actual outstanding shares
of Common Stock are converted or exchanged); or
(b) the sale,
lease, transfer, exclusive license or other disposition, in a single transaction
or series of related transactions, by the Corporation or any subsidiary of the
Corporation of all or substantially all the assets of the Corporation and its
subsidiaries taken as a whole, or the sale or disposition (whether by merger or
otherwise) of one or more subsidiaries of the Corporation if substantially all
of the assets of the Corporation and its subsidiaries taken as a whole are held
by such subsidiary or subsidiaries, except where such sale, lease, transfer,
exclusive license or other disposition is to a direct or indirect wholly owned
subsidiary of the Corporation.
4.3.2 Effecting a Deemed
Liquidation Event. Unless waived in writing by the holders of
a majority of the outstanding shares of Series A Preferred Stock voting together
as a single class, the Corporation shall not have the power to effect a Deemed
Liquidation Event referred to in Section 4.3.1(a)(i)
unless the agreement or plan of merger or consolidation for such transaction
provides that the consideration payable to the stockholders of the Corporation
in such transaction shall be allocated among the holders of capital stock of the
Corporation in accordance with Sections 4.1 and
4.2.
4.3.3 Amount Deemed Paid or
Distributed. The amount deemed paid or distributed to the
holders of capital stock of the Corporation upon any liquidation, dissolution or
winding up of the Corporation, including any Deemed Liquidation Event, shall be
the cash or the value of the property, rights or securities paid or distributed
to such holders by the Corporation or the acquiring person, firm or other
entity. The value of such non-cash property, rights or securities
shall be determined in good faith by the Board.
5. VOTING.
5.1 General. On
any matter presented to the stockholders of the Corporation for their action or
consideration at any meeting of stockholders of the Corporation (or by written
consent of stockholders in lieu of a meeting), each holder of outstanding shares
of Series A Preferred Stock (which may include shares of Series A Preferred
Stock received as cumulative PIK Dividends pursuant to Section 3) shall be
entitled to cast the number of votes equal to the number of whole shares of
Common Stock such Series A Preferred Stock holder would have received had all
shares of Series A Preferred Stock of such holder been converted into Common
Stock pursuant to Section 6
(disregarding, for these purposes, any prohibition set forth in Section 6 with
respect to the conversion of shares of Series A Preferred Stock) as of the
record date for determining stockholders entitled to vote on such
matter. Except as provided by the General Corporation Law of the
State of Delaware (the “DGCL”) or other
applicable law or by the Certificate of Incorporation of the Corporation, the
holders of the Series A Preferred Stock shall vote together with the holders of
Common Stock as a single class on all matters.
5.2 Series A Preferred Stock
Protective Provisions. The Corporation shall not, and shall
not permit any subsidiary to, either directly or indirectly, by amendment,
merger, consolidation or otherwise, do any of the following without (in addition
to any other vote required by the DGCL or the Certificate of Incorporation of
the Corporation) the written consent or affirmative vote of the holders of more
than fifty percent (50%) of the then outstanding shares of Series A Preferred
Stock, given in writing or by vote at a meeting, consenting or voting (as the
case may be) separately as a class:
(a) liquidate,
dissolve or wind-up the business and affairs of the Corporation or any
subsidiary or effect any Deemed Liquidation Event or any consolidation or merger
of the Corporation with or into another Party;
(b) make any
acquisition (whether by merger, stock purchase, asset purchase or otherwise) of
another business or Party involving the payment, contribution or assignment by
or to the Corporation or its subsidiaries of money or assets greater than
$5,000,000;
(c) amend,
change, waive, alter or repeal any provision of the Certificate of Incorporation
or Bylaws of the Corporation or the comparable organizational documents of any
subsidiary (by means of amendment or by merger, consolidation or otherwise), in
a manner that would adversely affect the powers, preferences or special rights,
or the qualifications, limitations or restrictions thereof, of the Series A
Preferred Stock;
(d) create,
or authorize the creation of, or issue, offer or sell, shares of any additional
class or series of the Pari Passu Stock or the Senior Stock or any additional
shares of the Series A Preferred Stock or increase the authorized number of
shares of any such class or series of stock or the Series A Preferred
Stock;
(e) issue any
additional shares of Common Stock (other than pursuant to options outstanding on
the date hereof) or options or similar rights to acquire Common
Stock;
(f) (i)
reclassify, alter or amend any Pari Passu Stock or Senior Stock in respect of
the distribution of assets on the liquidation, dissolution or winding up of the
Corporation, the payment of dividends or rights of redemption, or (ii)
reclassify, alter or amend any Junior Stock in a manner that would result in
such Junior Stock becoming Pari Passu Stock or Senior Stock;
(g) purchase
or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any
dividend or make any distribution on, any shares of capital stock of the
Corporation other than (i) dividends or distributions on (A) Senior Stock the
issuance of which was approved pursuant to this Section 5, (B) Pari
Passu Stock if (x) the issuance of such stock was approved by this Section 5 and (y) all
Cumulative Dividends have been paid and (C) the Common Stock solely in the form
of additional shares of Common Stock and (ii) purchases or redemptions of
capital stock from employees, following any such employee’s termination of
employment with the Corporation, pursuant to the terms of any repurchase,
redemption or similar arrangements or agreements, in effect from time to time,
providing for such repurchase or redemption at fair market value or, if such
termination is for “cause” (as defined in the applicable arrangements or
agreements), at the lesser of fair market value and the purchase price paid or
ascribed to such capital stock upon such employee’s acquisition
thereof;
(h) except
for (x) any permitted indebtedness pursuant to Section 6.1 of the Credit
Agreement, dated the date hereof, among the Corporation, as Borrower, and H C
Crown Corp., as Lender (initially in the form attached to the Recapitalization
Agreement (as defined below), the “Credit Agreement”),
(y) any permitted liens pursuant to Section 6.2 of the Credit Agreement and (z)
any permitted guaranties pursuant to Section 6.3 of the Credit Agreement,
(i) create or authorize the creation of, or issue or authorize the issuance
of, or guarantee any debt security, or permit any subsidiary to take any such
action with respect to any debt security, unless such debt security has received
the prior approval of the Board, or (ii) amend, modify, waive or otherwise alter
the terms of any agreement governing the terms of any material indebtedness of
the Corporation or any subsidiary, unless such amendment, modification, waiver
or alteration has been approved by the Board;
(i) authorize
or grant any registration rights on terms more favorable than the registration
rights granted to the holders of the Series A Preferred
Stock; or
(j) enter
into any agreement that would adversely alter or change the rights, preferences
or privileges of the Series A Preferred Stock.
6. OPTIONAL
CONVERSION.
The
holders of the Series A Preferred Stock shall have conversion rights as follows
(the “Conversion
Rights”):
6.1 Right to
Convert.
6.1.1 Conversion
Ratio. Each share of Series A Preferred Stock shall become and
remain convertible, at the option of the holder thereof, at the earlier of
December 31, 2013 or upon a payment or refinancing by the Corporation of the
$315 million debt (and any interest accrued thereon) owed to H C Crown Corp. and
its affiliates by the Corporation under the Credit Agreement (the “New Debt”), into such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing the Original Issue Price plus an amount equal to any accrued but
unpaid cash dividends with respect to such share by the Series A Conversion
Price (as defined below) in effect at the time of conversion. The
“Series A Conversion
Price” shall initially be equal to [_____]1 per share. Such initial Series A
Conversion Price, and the rate at which shares of Series A Preferred Stock may
be converted into shares of Common Stock, shall be subject to adjustments as
provided below under Sections 6.3, 6.4, or 6.5.
6.1.2 Termination of Conversion
Rights. In the event of a notice of redemption of any shares
of Series A Preferred Stock pursuant to Section 7, the
conversion rights of the shares designated for redemption shall terminate at the
close of business on the last full day preceding the date fixed for redemption,
unless the redemption price is not fully paid on such redemption date, in which
case the conversion rights for such shares shall continue until such price is
paid in full. In the event of a liquidation, dissolution or winding
up of the Corporation or a Deemed Liquidation Event, the conversion rights shall
terminate at the close of business on the last full day preceding the date fixed
for the payment of any such amounts distributable on such event to the holders
of Series A Preferred Stock.
6.2 Mechanics of
Conversion.
6.2.1 Notice of
Conversion. In order for a holder of Series A Preferred Stock
to voluntarily convert shares of Series A Preferred Stock into shares of Common
Stock, such holder shall surrender the certificate or certificates representing
such shares of Series A Preferred Stock (or, if such registered holder alleges
that such certificate has been lost, stolen or destroyed, a lost certificate
affidavit and agreement reasonably acceptable to the Corporation to indemnify
the Corporation against any claim that may be made against the Corporation on
account of the alleged loss, theft or destruction of such certificate which
agreement shall not require the posting of a bond), at the office of the
transfer agent for the Series A Preferred Stock (or at the principal office of
the Corporation if the Corporation serves as its own transfer agent), together
with written notice that such holder elects to convert all or any number of the
shares of the Series A Preferred Stock represented by such certificate or
certificates and, if applicable, any event on which such conversion is
contingent. Such notice shall state such holder’s name or the names
of the nominees in which such holder wishes the certificate or certificates
representing shares of Common Stock to be issued. If required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
reasonably satisfactory to the Corporation, duly executed by the registered
holder or his, her or its attorney-in-fact duly authorized in
writing. The close of business on the date of receipt by the transfer
agent (or by the Corporation if the Corporation serves as its own transfer
agent) of such certificates (or lost certificate affidavit and agreement) and
notice shall be the time of conversion (the “Conversion Time”),
and the shares of Common Stock issuable upon conversion of the shares
represented by such certificate shall be deemed to be outstanding of record as
of such date. The Corporation shall, promptly following the
Conversion Time, (i) issue and deliver to such holder of Series A Preferred
Stock, or to his, her or its nominees, a certificate or certificates
representing the number of full shares of Common Stock issuable upon such
conversion in accordance with the provisions hereof and a certificate
representing the number (if any) of the shares of Series A Preferred Stock
represented by the surrendered certificate that were not converted into Common
Stock, and (ii) in lieu of any fractional shares to which the holder would
otherwise be entitled upon such conversion, pay in cash an amount equal to such
fraction multiplied by the fair market value of a share of Common Stock as
determined in good faith by the Board.
6.2.2 Reservation of
Shares. The Corporation shall at all times when the Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued capital stock, for the purpose of effecting the
conversion of the Series A Preferred Stock, such number of its duly authorized
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding 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 of all then outstanding shares of the Series A
Preferred Stock, the Corporation shall 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 purposes, including, without
limitation, engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to the Certificate of Incorporation of the
Corporation. Before taking any action which would cause an adjustment
reducing the Series A Conversion Price below the then par value of the shares of
Common Stock issuable upon conversion of the Series A Preferred Stock, the
Corporation will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of Common Stock at such adjusted
Series A Conversion Price.
6.2.3 Effect of
Conversion. All shares of Series A Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares shall
immediately cease and terminate, and all dividends with respect to such shares
shall immediately cease to accrue, at the Conversion Time. Any shares
of Series A Preferred Stock so converted shall be cancelled and may not be
reissued as shares of such series or any other class or series, and the
Corporation shall take all action necessary to retire the shares and shall
thereafter take such appropriate action (without the need for stockholder
action) as may be necessary to reduce the authorized number of shares of
Preferred Stock and Series A Preferred Stock accordingly.
6.2.4 Taxes. The
Corporation shall pay any and all issue and other similar taxes that may be
payable in respect of any issuance or delivery of shares of Common Stock upon
conversion of shares of Series A Preferred Stock pursuant to this Section
6. The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Preferred Stock so converted were registered, and no such issuance
or delivery shall be made unless and until the person or entity requesting such
issuance has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
6.3 Adjustments to Series A
Conversion Price for Diluting Issues.
6.3.1 Special
Definitions. For purposes of this Article IV, the following
definitions shall apply:
(a) “Option” shall mean
rights, options or warrants to subscribe for, purchase or otherwise acquire
Common Stock or Convertible Securities.
(b) “Series A Original Issue
Date” shall mean the date of effectiveness of this Certificate of
Designation.
(c) “Convertible
Securities” shall mean any evidences of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock, but excluding Options.
(d) “Additional Shares of Common
Stock” shall mean all shares of Common Stock issued (or, pursuant to
Section 6.3.3
below, deemed to be issued) by the Corporation after the Series A Original Issue
Date, other than (1) the following shares of Common Stock and (2) shares of
Common Stock deemed issued pursuant to the following Options and Convertible
Securities (clauses (1) and (2), collectively, “Exempted
Securities”):
(i) shares of
Common Stock issued or issuable upon conversion of outstanding shares of Series
A Preferred Stock;
(ii) shares of
Common Stock issued by reason of a dividend, stock split or other distribution
on shares of Common Stock that is covered by Sections 6.4 and
6.5;
(iii) shares of
Common Stock or Options or Convertible Securities (provided such Options or
Convertible Securities are limited to a right to subscribe for, purchase or
otherwise acquire Common Stock) issued to employees or directors of, or
consultants or advisors to, the Corporation or any of its subsidiaries pursuant
to the stock incentive plan approved by the Board and in effect on or prior to
the Series A Original Issue Date or pursuant to any employment agreement,
restricted stock agreement, option pool, stock option, stock bonus or other
employee stock plans for the benefit of the employees of the Corporation
approved pursuant to Section 5;
(iv) shares of
Common Stock or Options or Convertible Securities (provided such Options are
limited to a right to subscribe for, purchase or otherwise acquire Common Stock)
issued (as consideration for the transaction and not in connection with
financing the transaction) pursuant to the acquisition of another Party by the
Corporation by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances
are approved pursuant to Section 5;
and
(v) shares of
Common Stock or Options or Convertible Securities (provided such Options or
Convertible Securities are limited to a right subscribe for, purchase or
otherwise acquire Common Stock) issued (as consideration for the transaction and
not in connection with financing the transaction) to third parties (a) in
connection with strategic partnerships or (b) providing the Corporation with
equipment leases, real property leases, loans or credit lines, in each of
clauses (a) and (b), pursuant to arrangements approved by the
Board.
6.3.2 No Adjustment of Series A
Conversion Price. Notwithstanding the provisions of this Section 6.3, no
adjustment in the Series A Conversion Price shall be made as the result of the
issuance or deemed issuance of Additional Shares of Common Stock if the
Corporation receives written notice from the holders of at least a majority of
the then outstanding shares of Series A Preferred Stock agreeing that no such
adjustment shall be made as the result of the issuance or deemed issuance of
such Additional Shares of Common Stock.
6.3.3 Deemed Issue of Additional
Shares of Common Stock.
(a) If the
Corporation at any time or from time to time after the Series A Original Issue
Date shall issue any Options or Convertible Securities (excluding Options or
Convertible Securities which are themselves Exempted Securities) or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such Options or Convertible Securities, then the maximum number
of shares of Common Stock (as set forth in the instrument relating thereto,
assuming the satisfaction of any conditions to exercisability, convertibility or
exchangeability but without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such Options
or, in the case of Convertible Securities and Options therefor, the conversion
or exchange of such Convertible Securities, shall be deemed to be Additional
Shares of Common Stock issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record
date.
(b) If the
terms of any Option or Convertible Security, the issuance of which resulted in
an adjustment to the Series A Conversion Price pursuant to the terms of Section 6.3.4, are
revised as a result of an amendment to such terms or any other adjustment
(including an accreting dividend or liquidation preference that adjusts the
applicable conversion rate or number of shares issuable pursuant to such Option
or Convertible Security) pursuant to the provisions of such Option or
Convertible Security to provide for either (1) any increase or decrease in the
number of shares of Common Stock issuable upon the exercise, conversion and/or
exchange of any such Option or Convertible Security or (2) any increase or
decrease in the consideration payable to the Corporation upon such exercise,
conversion and/or exchange, then, effective upon such increase or decrease
becoming effective, the Series A Conversion Price computed upon the original
issue of such Option or Convertible Security (or upon the occurrence of a record
date with respect thereto) shall be readjusted to such Series A Conversion Price
as would have obtained had such revised terms been in effect upon the original
date of issuance of such Option or Convertible
Security. Notwithstanding the foregoing, no readjustment pursuant to
this clause (b) shall have the effect of increasing the Series A Conversion
Price to an amount which exceeds the lower of (i) the Series A Conversion Price
in effect immediately prior to the original adjustment made as a result of the
issuance of such Option or Convertible Security, or (ii) the adjusted Series A
Conversion Price that would have resulted from any issuances of Additional
Shares of Common Stock (other than deemed issuances of Additional Shares of
Common Stock as a result of the issuance of such Option or Convertible Security)
between the original adjustment date and such readjustment date.
(c) If the
terms of any Option or Convertible Security (excluding Options or Convertible
Securities which are themselves Exempted Securities), the issuance of which did
not result in an adjustment to the Series A Conversion Price pursuant to the
terms of Section
6.3.4 (either because the consideration per share (determined pursuant to
Section 6.3.5)
of the Additional Shares of Common Stock subject thereto was equal to or greater
than the Series A Conversion Price then in effect, or because such Option or
Convertible Security was issued before the Series A Original Issue Date), are
revised after the Series A Original Issue Date as a result of an amendment to
such terms or any other adjustment pursuant to the provisions of such Option or
Convertible Security to provide for either (1) any increase in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange of any
such Option or Convertible Security or (2) any decrease in the consideration
payable to the Corporation upon such exercise, conversion or exchange, then such
Option or Convertible Security, as so amended or adjusted, and the Additional
Shares of Common Stock subject thereto (determined in the manner provided in
Section
6.3.3(a)) shall be deemed to have been issued effective upon such
increase or decrease becoming effective.
(d) Upon the
expiration or termination of any unexercised Option or unconverted or
unexchanged Convertible Security (or portion thereof) which resulted (either
upon its original issuance or upon a revision of its terms) in an adjustment to
the Series A Conversion Price pursuant to the terms of Section 6.3.4, the
Series A Conversion Price shall be readjusted to such Series A Conversion Price
as would have obtained had such Option or Convertible Security (or portion
thereof) never been issued.
(e) If the
number of shares of Common Stock issuable upon the exercise, conversion and/or
exchange of any Option or Convertible Security, or the consideration payable to
the Corporation upon such exercise, conversion and/or exchange, is calculable at
the time such Option or Convertible Security is issued or amended but is subject
to adjustment based upon subsequent events, any adjustment to the Series A
Conversion Price provided for in this Section 6.3.3
shall be effected at the time of such issuance or amendment based on such number
of shares or amount of consideration without regard to any provisions for
subsequent adjustments (and any subsequent adjustments shall be treated as
provided in clauses (b) and (c) of this Section
6.3.3). If the number of shares of Common Stock issuable upon
the exercise, conversion and/or exchange of any Option or Convertible Security,
or the consideration payable to the Corporation upon such exercise, conversion
and/or exchange, cannot be calculated at all at the time such Option or
Convertible Security is issued or amended, any adjustment to the Series A
Conversion Price that would result under the terms of this Section 6.3.3 at the
time of such issuance or amendment shall instead be effected at the time such
number of shares and/or amount of consideration is first calculable (even if
subject to subsequent adjustments), assuming for purposes of calculating such
adjustment to the Series A Conversion Price that such issuance or amendment took
place at the time such calculation can first be made.
6.3.4 Adjustment of Series A
Conversion Price Upon Issuance of Additional Shares of Common
Stock. In the event the Corporation shall at any time after
the Series A Original Issue Date issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Section 6.3.3)
without consideration or for a consideration per share less than the Series A
Conversion Price in effect immediately prior to such issue or deemed issue of
Additional Shares of Common Stock, then the Series A Conversion Price shall,
concurrently with such issuance, be adjusted to a price equal to the lowest
consideration paid per share for such issue or deemed issue of Additional Shares
of Common Stock; provided, that if such issuance or deemed issuance was or was
deemed to be without consideration then the Corporation shall be deemed to have
received an aggregate of $1.00 of consideration for all such shares of Common
Stock issued or deemed to be issued.
6.3.5 Determination of
Consideration. For purposes of this Section 6.3.5, the
consideration received by the Corporation for the issue of any Additional Shares
of Common Stock shall be computed as follows:
(a) Cash and
Property. Such consideration shall:
(i) insofar
as it consists of cash, be computed at the aggregate amount of cash received by
the Corporation, excluding amounts paid or payable for accrued interest,
discounts, commissions or fees;
(ii) insofar
as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board,
irrespective of any accounting treatment; and
(iii) in the
event Additional Shares of Common Stock are issued together with other shares or
securities or other assets of the Corporation for consideration which covers
both, be the proportion of such consideration so received, computed as provided
in clauses (i)
and (ii) above,
as determined in good faith by the Board, irrespective of any accounting
treatment.
(b) Options and Convertible
Securities. The consideration per share received by the
Corporation for Additional Shares of Common Stock deemed to have been issued
pursuant to Section
6.3.3, relating to Options and Convertible Securities, shall be
determined by dividing:
(i) the total
amount, if any, received or receivable by the Corporation as consideration for
the issuance of such Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the Corporation upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and the conversion or exchange of
such Convertible Securities, by
(ii) the
maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such Options
or the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible
Securities.
6.3.6 Multiple Closing
Dates. In the event the Corporation shall issue on more than
one date Additional Shares of Common Stock that are a part of one transaction or
a series of related transactions and that would result in an adjustment to the
Series A Conversion Price pursuant to the terms of Section 6.3.4 then,
upon the final such issuance, the Series A Conversion Price shall be readjusted
to give effect to all such issuances as if they occurred on the date of the
first such issuance (and without giving effect to any additional adjustments as
a result of any such subsequent issuances within such period).
6.4 Adjustment for Stock Splits
and Combinations. If the Corporation shall at any time or from
time to time after the Series A Original Issue Date effect a subdivision of the
outstanding Common Stock, the Series A Conversion Price in effect immediately
before that subdivision shall be proportionately decreased so that the number of
shares of Common Stock issuable on conversion of each share of such series shall
be increased in proportion to such increase in the aggregate number of shares of
Common Stock outstanding. If the Corporation shall at any time or
from time to time after the Series A Original Issue Date combine the outstanding
shares of Common Stock, the Series A Conversion Price in effect immediately
before the combination shall be proportionately increased so that the number of
shares of Common Stock issuable on conversion of each share of such series shall
be decreased in proportion to such decrease in the aggregate number of shares of
Common Stock outstanding. Any adjustment under this subsection shall
become effective at the close of business on the date the subdivision or
combination becomes effective. Whenever the Conversion Price shall be
adjusted as provided in this Section 6.4, the
Corporation shall make available for inspection during regular business hours,
at its principal executive offices or at such other place as may be designated
by the Corporation, a statement, signed by its chief executive officer, showing
in detail the facts requiring such adjustment and the Series A Conversion Price
that shall be in effect after such adjustment. The Corporation shall
also cause a copy of such statement to be sent by first class certified mail,
return receipt requested and postage prepaid, to each holder of Series A
Preferred Stock affected by the adjustment at such holder’s address appearing on
the Corporation’s records.
6.5 Adjustment for Merger or
Reorganization, etc. Subject to the provisions of Section 4, including
Section 4.3, if
there shall occur any reorganization, recapitalization, reclassification,
consolidation or merger involving the Corporation in which the Common Stock (but
not the Series A Preferred Stock) is converted into or exchanged for securities,
cash or other property (other than a transaction covered by Section 6.3), then,
following any such reorganization, recapitalization, reclassification,
consolidation or merger, each share of Series A Preferred Stock shall thereafter
be convertible in lieu of the Common Stock into which it was convertible prior
to such event into the kind and amount of securities, cash or other property
which a holder of the number of shares of Common Stock of the Corporation
issuable upon conversion of one share of Series A Preferred Stock immediately
prior to such reorganization, recapitalization, reclassification, consolidation
or merger would have been entitled to receive pursuant to such transaction, and,
in such case, appropriate adjustment (as determined in good faith by the Board)
shall be made in the application of the provisions in this Section 6 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 in this Section 6 (including
provisions with respect to changes in and other adjustments of the Series A
Conversion Price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any securities or other property thereafter deliverable upon
the conversion of the Series A Preferred Stock. The provisions of
this Certificate of Designation, including this Section 6.5, shall
not affect the right, if any, of any holder of Series A Preferred Stock to seek
an appraisal of his, her or its shares pursuant to Section 262 of the
DGCL.
6.6 Certificate as to
Adjustments. Upon the occurrence of each adjustment or
readjustment of the Series A Conversion Price pursuant to this Section 6, the
Corporation at its expense shall, as promptly as reasonably practicable
thereafter, compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each holder of Series A Preferred Stock a statement as set
forth in Section 6.4 setting forth such adjustment or readjustment (including
the kind and amount of securities, cash or other property into which the Series
A Preferred Stock is convertible) and showing in detail the facts upon which
such adjustment or readjustment is based. The Corporation shall, as
promptly as reasonably practicable after the written request at any time of any
holder of Series A Preferred Stock (but in any event not later than 10 days
thereafter), furnish or cause to be furnished to such holder a certificate
setting forth (i) the Series A Conversion Price then in effect, and (ii) the
number of shares of Common Stock and the amount, if any, of other securities,
cash or property which then would be received upon the conversion of Series A
Preferred Stock.
6.7 Notice of Record
Date. In the event the Corporation shall take a record of
the holders of its Common Stock (or other capital stock or securities at the
time issuable upon conversion of the Series A Preferred Stock) for the purpose
of entitling or enabling them to receive any dividend or other distribution, or
to receive any right to subscribe for or purchase any shares of capital stock of
any class or any other securities, or to receive any other security, or in the
event of any capital reorganization of the Corporation, any reclassification of
the Common Stock of the Corporation, or any Deemed Liquidation Event,
consolidation, merger or transfer, or of the voluntary or involuntary
dissolution, liquidation or winding-up of the Corporation, then, and in each
such case, the Corporation will send or cause to be sent to the holders of the
Series A Preferred Stock a notice specifying, as the case may be, (i) the record
date for such dividend, distribution or right, and the amount and character of
such dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, Deemed Liquidation Event, consolidation,
merger, transfer, dissolution, liquidation or winding-up is proposed to take
place, and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or such other capital stock or securities at the time issuable
upon the conversion of the Series A Preferred Stock) shall be entitled to
exchange their shares of Common Stock (or such other capital stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, Deemed Liquidation Event, consolidation,
merger, transfer, dissolution, liquidation or winding-up, and the amount per
share and character of such exchange applicable to the Series A Preferred Stock
and the Common Stock. Such notice shall also set forth such facts
with respect thereto as shall be reasonably necessary to indicate the effect of
such action (to the extent such effect may be known at the date of such notice)
on the Conversion Price and the number, kind or class of shares or other
securities or property which shall be deliverable or purchasable upon the
occurrence of such action or deliverable upon conversion of shares of Series A
Preferred Stock. Such notice shall be sent at least 30 days prior to
the record date or effective date for the event specified in such
notice. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.
7. REDEMPTION.
7.1 Optional
Redemption. Subject to the holder’s right to convert shares of
Series A Preferred Stock into Common Stock prior to any such redemption, at any
time and from time to time on or after the Series A Original Issue Date, upon a
Redemption Notice, the Corporation may redeem that certain number of outstanding
shares of Series A Preferred Stock set forth in the Redemption Notice (which may
include shares of Series A Preferred Stock received as cumulative PIK Dividends
pursuant to Section
3) for cash out of funds lawfully available therefor at a price equal to
the Original Issue Price, plus an amount equal to any accrued but unpaid cash
dividends with respect to such share, together with any other dividends declared
but unpaid thereon (the “Redemption
Price”). The date of redemption pursuant to this Section 7.1 shall be
a date that is not more than 10 days after receipt by the holders of the Series
A Preferred Stock of the Redemption Notice (the “Optional Redemption
Date”). On the Optional Redemption Date, the Corporation shall
redeem, on a pro rata basis in accordance with the number of shares of
Series A Preferred Stock owned by each holder, the number of outstanding
shares of Series A Preferred Stock set forth in the Redemption
Notice.
7.2 Mandatory
Redemption. At any time and from time to time on or after the
Series A Original Issue Date, when and as the Corporation receives, upon a
refinancing of the New Debt, net proceeds from such refinancing in excess of the
aggregate outstanding principal and interest amounts of New Debt (the “Excess Refinancing
Proceeds”), the Corporation shall promptly provide written notice of the
Excess Refinancing Proceeds to each holder of Series A Preferred Stock (an
“Excess Proceeds
Notice”). Upon receipt of an Excess Proceeds Notice, each
holder of Series A Preferred Stock shall be entitled to elect, via written
notice to the Corporation (a “Redemption Request”),
that the Corporation apply such Excess Refinancing Proceeds to redeem (to the
extent of funds legally available for such redemption) the number of outstanding
shares of Series A Preferred Stock set forth in the Redemption Request (which
may include shares of Series A Preferred Stock received as cumulative PIK
Dividends). Upon receipt of one or more Redemption Requests, the
Corporation shall, on the twentieth (20th) day after delivery by the Corporation
of the Excess Proceeds Notice (such twentieth day, the “Mandatory Redemption
Date”), redeem, at a price equal to the Redemption Price, the number of
outstanding shares of Series A Preferred Stock set forth in all Redemption
Requests received by the Corporation (to the extent legally available for such
redemption) within fifteen (15) days after delivery by the Corporation of the
Excess Proceeds Notice (the “Redemption Request Delivery
Deadline”). If the Excess Refinancing Proceeds are not
sufficient, on any Mandatory Redemption Date, to redeem all shares of Series A
Preferred Stock to be redeemed on the Mandatory Redemption Date, the Corporation
shall redeem a pro rata portion of redeemable shares of each holder that timely
delivered a Redemption Request, based on the share amounts set forth in the
holders’ respective Redemption Requests.
7.3 Redemption Notice to Series
A Preferred Stock Holders. The Corporation shall send written
notice (the “Redemption Notice”)
of the optional redemption contemplated by Section 7.1 (the “Optional Redemption”)
and mandatory redemption contemplated by Section 7.2 (the “Mandatory
Redemption”) to each holder of record of Series A Preferred Stock not
less than 10 days prior to the Optional Redemption Date, in the case of an
Optional Redemption, and not more than three days after the Redemption Request
Delivery Deadline, in the case of a Mandatory Redemption. The
Redemption Notice shall state:
(a) the
number of shares of Series A Preferred Stock held by the holder that the
Corporation shall redeem on the Redemption Date specified in the Redemption
Notice;
(b) the
Optional Redemption Date or Mandatory Redemption Date, as applicable, and the
Redemption Price;
(c) the date
upon which the holder’s right to convert such shares terminates (as determined
in accordance with Section 6.1);
and
(d) that the
holder is to surrender to the Corporation, in the manner and at the place
designated, his, her or its certificate or certificates representing the shares
of Series A Preferred Stock to be redeemed.
7.4 Surrender of Certificates;
Payment. On or before the Optional Redemption Date or
Mandatory Redemption Date, as applicable, each holder of shares of Series A
Preferred Stock to be redeemed on the Optional Redemption Date or Mandatory
Redemption Date, as applicable, unless such holder has exercised his, her or its
right to convert such shares as provided in Section 6.1,
shall surrender the certificate or certificates representing such shares (or, if
such registered holder alleges that such certificate has been lost, stolen or
destroyed, a lost certificate affidavit and agreement reasonably acceptable to
the Corporation to indemnify the Corporation against any claim that may be made
against the Corporation on account of the alleged loss, theft or destruction of
such certificate which agreement shall not require the posting of a bond) to the
Corporation, in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price for such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner thereof. In the event less than all of the shares of Series A
Preferred Stock represented by a certificate are redeemed, a new certificate
representing the unredeemed shares of Series A Preferred Stock shall promptly be
issued by the Corporation to such holder or their designee.
7.5 Rights Subsequent to
Redemption. If the Redemption Notice shall have been duly
given, and if on the Optional Redemption Date or the Mandatory Redemption Date
the Redemption Price payable upon redemption of the shares of Series A Preferred
Stock to be redeemed on such Optional Redemption Date or Mandatory Redemption
Date is paid or tendered for payment or irrevocably deposited with an
independent payment agent so as to be available therefor in a timely manner,
then notwithstanding that the certificates evidencing any of the shares of
Series A Preferred Stock so called for redemption shall not have been
surrendered, dividends with respect to such shares of Series A Preferred Stock
shall cease to accrue and accumulate after such Optional Redemption Date or
Mandatory Redemption Date and all rights with respect to such shares shall
forthwith after the Optional Redemption Date or Mandatory Redemption Date
terminate, except only the right of the holders to receive the Redemption Price
without interest upon surrender of their certificate or certificates
therefor.
7.6 Costs. The
Corporation agrees to pay all reasonable costs of collection by the holders of
Series A Preferred Stock that delivered the Redemption Request of any amounts
due and payable hereunder arising as a result of any default by the Corporation
hereunder, including, without limitation, attorneys’ fees and
expenses.
8. REDEEMED
OR OTHERWISE ACQUIRED SHARES. Any shares of
Series A Preferred Stock that are redeemed or otherwise acquired by the
Corporation or any of its subsidiaries shall be automatically and immediately
cancelled and shall not be reissued, sold or transferred as shares of such
series or any other class or series and the Corporation shall take all action
necessary to retire such shares and shall thereafter take such appropriate
action (without the need for stockholder action) as may be necessary to reduce
the authorized number of shares of Preferred Stock and Series A Preferred Stock
accordingly. Neither the Corporation nor any of its subsidiaries may
exercise any voting or other rights granted to the holders of Series A Preferred
Stock following the redemption or any other acquisition of shares of Series A
Preferred Stock.
9. WAIVER. Any
of the rights, powers, preferences and other terms of the Series A Preferred
Stock set forth herein may be waived on behalf of all holders of Series A
Preferred Stock by the affirmative written consent or vote of the holders of at
least a majority of the shares of Series A Preferred Stock then outstanding, and
such waiver shall be binding on all holders of Series A Preferred Stock whether
or not such holders of Series A Preferred Stock consent.
10. LOST
CERTIFICATE. In the event any
certificate of the Series A Preferred Stock (the “Certificate”) shall
have been lost, stolen or destroyed, upon the making of a lost certificate
affidavit and agreement reasonably acceptable to the Corporation to indemnify
the Corporation against any claim that may be made against the Corporation on
account of the alleged loss, theft or destruction of such certificate (which
agreement shall not require the posting of a bond), the Corporation shall issue
a replacement Certificate to such holder of Series A Preferred
Stock.
11. NOTICES. Any
notice required or permitted by the provisions of this Certificate of
Designation to be given to a holder of shares of Series A Preferred Stock shall
be mailed, postage prepaid, to the post office address last shown on the records
of the Corporation, or given by electronic communication in compliance with the
provisions of the DGCL, and shall be deemed sent upon such mailing or electronic
transmission.
IN WITNESS WHEREOF, this
Certificate of Designation has been executed by a duly authorized officer of
this Corporation on this [ ] day of
[
], 2010.
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CROWN
MEDIA HOLDINGS, INC.
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By:
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Name:
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Title:
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