Earthlink 2000 Annual Report Download - page 73

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issued, fully paid and nonassessable shares of Common Stock, free and clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever, as is determined by dividing the Liquidation Value by the Conversion Price at the time in effect for
such share; provided, however, that, notwithstanding any other provision hereof to the contrary, conversion of all outstanding shares of Series
A Preferred Stock shall be required in the event of consummation of a Business Combination. The Conversion Price per share for shares of
Series A Preferred Stock shall be (i) prior to the Dividend Accrual Date immediately after June 5, 2003, the product of (A) $260,837,114, times
(B) 116.118%, and (ii) thereafter, the Conversion Price then in effect shall be increased at a rate per annum equal to six percent (6%) thereof,
accruable quarterly, and in each case the Conversion Price shall be subject to adjustment, from time to time as set forth in Section 5(c).
(ii) Upon conversion of any Series A Preferred Stock, payment shall be made for (A) dividends under Section 3(a)(i) on each converted share
of Series A Preferred Stock in an amount equal to a prorated Liquidation Accretion Dividend for the period from the Dividend Accrual Date
immediately prior to the date of conversion to such conversion date, and (B) unpaid dividends under Section 3(b) resulting from events
described therein and occurring prior to the date of conversion.
(b) MECHANICS OF CONVERSION. If the Holder of shares of Series A Preferred Stock desires to exercise such right of conversion, such
Holder shall give written notice to the Corporation (the "Conversion Notice") of that Holder's election to convert a stated whole number of
shares of Series A Preferred Stock (the "Conversion Shares") into shares of Common Stock, and surrender to the Corporation, at its principal
office or at such other office or agency maintained by the Corporation for such purpose, such Holder's certificate or certificates evidencing such
Conversion Shares. The Conversion Notice shall also contain a statement of the name or names (with addresses) in which the certificate or
certificates for Common Stock shall be issued. Notwithstanding the foregoing, the Corporation shall not be required to issue any certificates to
any Person other than the Holder thereof unless the Corporation has obtained reasonable assurance that such transaction is exempt from the
registration requirements of, or is covered by an effective registration statement under, the Securities Act of 1933, as amended (the "Act"), and
all applicable state securities laws, including, if necessary in the reasonable judgment of the Corporation or its legal counsel, receipt of an
opinion to such effect from counsel reasonably satisfactory to the Corporation. In no event would such opinion be required if the shares of
Common Stock could, upon conversion, be resold pursuant to Rule 144 or Rule 144A under the Act. As promptly as practicable, and in any
event within five business days, after the receipt of the Conversion Notice and the surrender of the certificate or certificates representing the
Conversion Shares, the Corporation shall issue and deliver, or cause to be delivered, to the Holder of the Conversion Shares or his nominee or
nominees, (i) a certificate or certificates for the number of shares of Common Stock issuable upon the conversion of such Conversion Shares
and (ii) if less than the full
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