Document:

CERTIFICATE OF DESIGNATIONS

of

8% SERIES A REDEEMABLE PREFERRED STOCK

of

ASCENT ENERGY INC.

(Pursuant to Section 151(g) of the

Delaware General Corporation Law)

 

        Ascent Energy Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), hereby
certifies that the following resolution was duly adopted by the board of
directors of the Company (the "Board of Directors") pursuant to a duly
called meeting of directors at which a quorum was present and acting throughout
dated July 26, 2001, pursuant to Section 151(g) of the Delaware General
Corporation Law:

        RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors in accordance with the provisions of the
Certificate of Incorporation of the Company, the Board of Directors hereby
creates a series of Preferred Stock, par value $0.001 per share, of the Company
and hereby states the designation and number of shares, and fixes the relative
rights, preferences and limitations thereof as follows:

         Section 1.    Designation and Amount. The shares of this
series of Preferred Stock shall be designated as "8% Series A Redeemable
Preferred Stock" (the "Series A Redeemable Preferred Stock") and
the number of shares constituting the Series A Redeemable Preferred Stock shall
be 21,100. Such number of shares may be increased or decreased at any time by
resolution of the Board of Directors; provided, however, no decrease shall
reduce the number of shares of Series A Redeemable 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 for, or upon the conversion or exchange of, any outstanding securities
issued by the Company convertible or exchangeable into, Series A Redeemable
Preferred Stock.

        Section 2.    Ranking. The Series A Redeemable Preferred
Stock shall rank, as to the payment of dividends and the distribution of the
assets upon liquidation, dissolution or winding up of the Company: (a) on a
parity with the Company's Series B Convertible Preferred Stock, par value $0.001
per share (the "Series B Convertible Preferred Stock"), (b) senior to
or on a parity with all other classes and series of the Company's preferred
stock, and (c) senior to the Company's common stock, par value $0.001 per share
("Common Stock").

        Section 3.    Liquidation. Upon the voluntary or
involuntary liquidation, winding up or dissolution of the Company (in connection
with the bankruptcy or insolvency of the Company or otherwise), out of the
assets available for distribution to shareholders, the holders of Series A
Redeemable Preferred Stock shall be entitled to receive, in preference to any
payment or distribution to the holders of Common Stock or any other stock of the
Company ranking junior to the Series A Redeemable Preferred Stock, as to
dividends, liquidation, dissolution or winding up, $1,000 per share (the
"Preferred Liquidation Value") plus an amount equal to all Preferred
Dividends (as defined in Section 4 below) (whether or not earned or declared)
accrued and unpaid on each such share up to and including the date of final
distribution to such holders. After the Preferred Liquidation Value and all
accrued and unpaid Preferred Dividends have been paid on the Series A Redeemable
Preferred Stock, the remaining assets shall be paid to the holders of Common
Stock and other junior classes of stock in accordance with their respective
priority, if any. In the event the net assets of the Company are insufficient to
pay the holders of the Series A Redeemable Preferred Stock the full amount of
their preference set forth above and the holders of any other series of capital
stock of the Company ranking on a parity with the Series A Redeemable Preferred
Stock the liquidating payments to which they are entitled, then the remaining
net assets of the Company shall be divided among and paid to the holders of the
shares of Series A Redeemable Preferred Stock and any such other capital stock
of the Company ranking on a parity with the Series A Redeemable Preferred Stock
ratably per share in proportion to the full per share amounts to which they
would be entitled if all amounts payable thereon were paid in full, and the
holders of Common Stock and other junior classes of stock will receive nothing.
Neither a merger or consolidation of the Company with or into any other
corporation or entity nor the sale of all or substantially all of the assets of
the Company shall be deemed to be a liquidation, dissolution or winding up
within the meaning of this provision.

        Section 4.    Dividends. The Series A Redeemable
Preferred Stock is entitled to receive, out of legally available funds,
preferential cumulative dividends from the issuance date thereof at the annual
rate of eight percent (8%) of the Preferred Liquidation Value per share
("Preferred Dividends"). All Preferred Dividends, if declared by the
Board of Directors, shall be payable quarterly and promptly after the tenth
business day of each January, April, July and October of each year (each, a
"Dividend Payment Date"), commencing on October 10, 2001, to holders
of record on the record date, which the Board of Directors shall fix not more
than sixty (60) days or less than ten (10) days preceding a Dividend Payment
Date. As provided below in Section 7(d), Preferred Dividends shall cease to
accrue on shares of Series A Redeemable Preferred Stock on the date of their
redemption. No dividend shall be declared on any other series or class or
classes of stock to which the Series A Redeemable Preferred Stock ranks prior as
to dividends or liquidation, in respect of any period, nor shall any shares of
any such series or class be redeemed, purchased or otherwise acquired for any
consideration (or any money be paid into any sinking fund or otherwise set apart
for the purchase of any such shares), unless there shall have been or
contemporaneously are declared and paid on all shares of the Series A Redeemable
Preferred Stock at the time outstanding dividends for all quarterly periods
coinciding with or ending before such quarterly period, ratably in proportion to
the respective annual dividend rates per annum fixed therefor. No dividend shall
be declared on any other series or class or classes of stock ranking on a parity
with the Series A Redeemable Preferred Stock, as to dividends, in respect of any
quarterly period, nor shall any shares of any such series or class be redeemed
or purchased or otherwise acquired for any consideration (or any money be paid
into any sinking fund or otherwise set apart for the purchase of any such
shares), unless there shall have been or contemporaneously are declared and paid
on all shares of the Series A Redeemable Preferred Stock at the time outstanding
dividends for all quarterly periods coinciding with or ending before such
quarterly period, ratably in proportion to the respective annual dividend rates
per annum fixed therefor. Preferred Dividends shall also be payable upon any
Redemption Date (as defined in Section 7(c) below) and upon the final
distribution date relating to the dissolution, liquidation or winding up of the
Company. Preferred Dividends shall begin to accrue on outstanding shares of
Series A Redeemable Preferred Stock and to accumulate from the issuance date of
such shares whether or not earned or declared, but Preferred Dividends for any
period less than a full quarterly period between Dividend Payment Dates shall be
computed on the basis of a 365-day year for the actual number of days elapsed.
Preferred Dividends shall accrue whether or not there shall be (at the time any
such dividend becomes payable or at any other time) profits, surplus or other
funds of the Company legally available for the payment of dividends.
Accumulations of dividends on shares of Series A Redeemable Preferred Stock
shall not bear interest.

        Section 5.    Conversion Rights. The Series A Redeemable
Preferred Stock is not convertible into or exchangeable for any securities or
other property of the Company.

        Section 6.    Voting Rights.

                   
(a)    Except as set forth below or as otherwise provided by
Delaware law, holders of shares of Series A Redeemable Preferred Stock shall not
be entitled to vote such shares; provided, that in all cases where the holders
of shares of Series A Redeemable Preferred Stock have the right to vote such
shares, such holders shall be entitled to one vote for each such share held by
them.

                   
(b)    Without the affirmative vote of the holders of not less
than a majority of the shares of Series A Redeemable Preferred Stock
outstanding, voting together as a single class, the Company shall not amend or
waive any of the provisions of the Certificate of Incorporation or this
Certificate of Designations, which would materially and adversely affect any
right, preference or privilege of the Series A Redeemable Preferred Stock or of
the holders thereof; provided, however, that any increase in the amount of
authorized Preferred Stock or the creation and/or issuance of other series of
Preferred Stock, in each case ranking on a parity with or junior to the Series A
Redeemable Preferred Stock, shall not be deemed to materially and adversely
affect such rights, preferences or privileges and shall not require the consent
of the holders of the then outstanding Series A Redeemable Preferred Stock; and
provided further, that the authorization and/or issuance of additional shares of
Series A Redeemable Preferred Stock and/or the creation and/or issuance of other
series or classes of preferred stock ranking prior to the Series A Redeemable
Preferred Stock shall be deemed to materially and adversely affect such rights,
preferences and privileges.

        Section 7.    Redemption.

                   
(a)    On the fifth anniversary of the date that the Series A
Redeemable Preferred Stock was issued (the "Mandatory Redemption
Date"), the Company shall redeem from any source of funds legally available
therefore, in the manner provided herein, all of the shares of Series A
Redeemable Preferred Stock then outstanding, at a cash price per share equal to
100% of the Preferred Liquidation Value plus an amount equal to all Preferred
Dividends (whether or not earned or declared) accrued and unpaid on each such
share up to and including the date fixed for redemption (the "Redemption
Price"), in immediately available funds. Any such redemption shall be
conducted in accordance with Section 7(c) below.

                   
(b)    The Company shall have the right, at any time and from
time to time, on and after the date of issuance, and at its sole option and
election, to redeem the shares of Series A Redeemable Preferred Stock, in whole
or in part, at the Redemption Price. Any such redemption shall be conducted in
accordance with Section 7(c). If less than all the outstanding shares of Series
A Redeemable Preferred Stock are to be redeemed, the number of shares of Series
A Redeemable Preferred Stock to be redeemed shall be as determined by the Board
of Directors. Any such partial redemption shall be effected on a pro rata basis.

                   
(c)    The Company shall provide each holder of Series A
Redeemable Preferred Stock with a written notice of redemption (addressed to the
holder at its address as it appears on the stock transfer books of the Company),
not earlier than sixty (60) nor later than twenty (20) days before the date
fixed for redemption. The notice of redemption shall specify (i) the date fixed
for redemption (the "Redemption Date"); (ii) whether all or less than
all of the outstanding shares of Series A Redeemable Preferred Stock are to be
redeemed and the total number of shares of the Series A Redeemable Preferred
Stock to be redeemed; (iii) the amount of the Redemption Price; (iv) whether the
redemption is an optional redemption or a mandatory redemption; and (v) that the
holder's are to surrender to the Company, at the place or places the holders of
Series A Redeemable Preferred Stock may obtain payment of the Redemption Price,
their certificates in the manner designated. If funds are available on the date
fixed for redemption, then whether or not shares are surrendered for payment of
the Redemption Price, the shares of Series A Redeemable Preferred Stock shall no
longer be outstanding and the holders thereof shall cease to be Series A
Redeemable Preferred Stock holders of the Company with respect to the shares
redeemed on and after the date fixed for redemption and shall be entitled to
receive the Redemption Price, without interest, upon the surrender of the share
certificate. On or before the applicable Redemption Date, each holder of shares
of Series A Redeemable Preferred Stock to be redeemed on such Redemption Date
shall surrender the certificate or certificates representing such shares to the
Company, duly endorsed, in the manner and at the place designated in the
Redemption Notice and there upon the Redemption Price for such shares shall be
payable in cash to the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be cancelled and retired. In the event less than all of the
shares of Series A Redeemable Preferred Stock represented by a certificate are
redeemed, a new certificate representing the unredeemed shares of Series A
Redeemable Preferred Stock shall be issued forthwith. Failure to mail the notice
described in the first sentence of this Section 7(c), or any defect therein or
in the mailing thereof, to any particular holder shall not affect the validity
of the proceeding for the redemption of any shares so to be redeemed from any
other holder. In order to facilitate the redemption of shares of Series A
Redeemable Preferred Stock, the Board of Directors may fix a record date for the
determination of shares of Series A Redeemable Preferred Stock to be redeemed,
or may cause the transfer books of the Company for the Series A Redeemable
Preferred Stock to be closed, not more than sixty (60) days or less than twenty
(20) days prior to the applicable Redemption Date.

                   
(d)    Notice of redemption having been given as provided in
Section 7(c) above, notwithstanding that any certificates for such shares shall
not have been surrendered for cancellation, unless the Company defaults in the
payment in full of the applicable redemption price, from and after the
Redemption Date designated in the notice of redemption (i) the shares
represented thereby shall no longer be deemed outstanding, (ii) the rights to
receive dividends thereon shall cease to accrue and (iii) all rights of the
holders of shares of Series A Redeemable Preferred Stock to be redeemed shall
cease and terminate, excepting only the right to receive the Redemption Price
therefor.

                   
(e)    The Company shall not be required to establish any
sinking or retirement fund with respect to the shares of Series A Redeemable
Preferred Stock.

        Section 8.    Change of Control Redemption.

                   
(a)    Upon the occurrence of a Change of Control (as defined
below) each holder of Series A Redeemable Preferred Stock shall have the right
to require the Company to redeem such Series A Redeemable Preferred Stock, in
cash at a price per share equal to 101% of the Preferred Liquidation Value plus
an amount equal to all Preferred Dividends (whether or not earned or declared)
accrued and unpaid on each such share up to and including the date fixed for
redemption. Any such redemption shall be conducted in accordance with Section
7(c). For purposes of this Section 8, "Change of Control" means the
occurrence of any of the following events:

                               
(i)   
    any "person" or "group" (within
    the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
    1934, as amended (the "Exchange Act")), other than any stockholder
    that owns individually, or with its affiliates, in excess of 25% of the
    voting power of all classes of voting stock of the Company on the initial
    date of issuance of the Series A Preferred Stock, becomes the
    "beneficial owner" (as defined in Rules 13d-3 under the Exchange
    Act, except that a person or entity shall be deemed to have "beneficial
    ownership" of all securities that such person or group has the right to
    acquire, whether such right is exercisable immediately or only after the
    passage of time), directly or indirectly, of more than a majority of the
    voting power of all classes of voting stock of the Company;

    

                                   
(ii)    the direct or indirect sale, lease, exchange or
    other transfer of all or substantially all of the assets of the Company to
    any "person" or "group" (within the meaning of Section
    13(d) or 14(d) of the Exchange Act), other than a subsidiary or other
    affiliate of the Company;

    

                                   
(iii)    the consummation of any consolidation or merger of
    the Company with or into another entity with the effect that the
    stockholders of the Company as of the date of issuance of the Series A
    Redeemable Preferred Stock hold less than 51% of the combined voting power
    of the outstanding voting securities of the surviving entity of such merger
    or the entity resulting from such consolidation ordinarily having the right
    to vote in the election of directors immediately after such merger or
    consolidation;

    

                                    
(iv)    during any consecutive two-year period, individuals
    who at the beginning of such period constituted the Board of Directors of
    the Company (together with any new directors whose election to such Board of
    Directors, or whose nomination for election by the stockholders of the
    Company, was approved by a vote of a majority of the directors then still in
    office who were either directors at the beginning of such period or whose
    election or nomination for election was previously so approved) cease for
    any reason to constitute a majority of the Board of Directors of the Company
    then in office; or

    

                                   
(v)    the Company is liquidated or dissolved or adopts a
    plan of liquidation or dissolution.

    

                       
(b)    The Company shall provide each holder of Series A
Redeemable Preferred Stock with a written notice of the occurrence of a Change
of Control (addressed to the holder at its address as it appears on the stock
transfer books of the Company), not earlier than sixty (60) nor later than
twenty (20) days before the date of such occurrence. Such notice shall specify
the date for redemption payments to be made, which shall be a date not later
than the date of the occurrence of the Change of Control.

        Section 9.    Failure to Redeem. If the Company is unable
or shall fail to discharge its obligation to redeem all outstanding shares of
Series A Redeemable Preferred Stock pursuant to Section 7(a) or 8(a) (each, a
"Mandatory Redemption Obligation"), such Mandatory Redemption
Obligation shall be discharged as soon as the Company is able to discharge such
Mandatory Redemption Obligation. The shares of Series A Redeemable Preferred
Stock not redeemed shall remain outstanding and entitled to all the rights and
preferences provided herein. If and so long as any Mandatory Redemption
Obligation with respect to the Series A Redeemable Preferred Stock shall not be
fully discharged, the Company shall not declare or make any dividend or other
distribution or, directly or indirectly, redeem, purchase, or otherwise acquire
for any consideration any other series or class or classes of stock to which the
Series A Redeemable Preferred Stock ranks equal or prior as to dividends or
liquidation or discharge any mandatory or optional redemption, sinking fund or
other similar obligation in respect of any such securities (except in connection
with a redemption, sinking fund or other similar obligation to be satisfied pro
rata with the Series A Redeemable Preferred Stock).

        Section 10.    Reacquired Shares. Any shares of Series A
Redeemable Preferred Stock converted, exchanged, redeemed, purchased or
otherwise acquired by the Company in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock
without designation as to series and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors as permitted by the Certificate of Incorporation or as otherwise
permitted under Delaware law.

        Section 11.    Preemptive Rights. The Series A Redeemable
Preferred Stock is not entitled to any preemptive rights in respect of any
securities of the Company.

        Section 12.    Severability of Provisions. Whenever
possible, each provision hereof shall be interpreted in a manner as to be
effective and valid under applicable law, but if any provision hereof is held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating or otherwise adversely affecting the remaining provisions hereof.
If a court of competent jurisdiction should determine that a provision hereof
would be valid or enforceable if a period of time were extended or shortened or
a particular percentage were increased or decreased, then such court may make
such change as shall be necessary to render the provision in question effective
and valid under applicable law.

        Section 13.    Replacement. Upon receipt of evidence
satisfactory to the Company (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of Series A Redeemable Preferred Stock, and,
in the case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Company (provided, that, if the holder is a
financial institution or other institutional investor, its own agreement shall
be satisfactory), or, in the case of any such mutilation, upon surrender of such
certificate, the Company shall execute and deliver in lieu of such certificate a
new certificate of like kind representing the number of shares of Series A
Redeemable Preferred Stock of such class represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of the lost, stolen,
destroyed or mutilated certificate, and dividends shall accrue on the Series A
Redeemable Preferred Stock represented by such new certificate from the date to
which dividends have been fully paid on the Series A Redeemable Preferred Stock
represented by the lost, stolen, destroyed or mutilated certificate.

        Section 14.    Successors and Transferees. The provisions
applicable to shares of Series A Redeemable Preferred Stock shall bind and inure
to the benefit of and be enforceable by the Company, the respective successors
to the Company, and by any record holder of shares of Series A Redeemable
Preferred Stock.

        IN WITNESS WHEREOF, Ascent Energy Inc. has caused this
Certificate of Designations to be signed by the undersigned on this 27th
day of July, 2001.

                                                                   
    ASCENT ENERGY INC.

    

    

                                                                   
    By:         /s/ Jeffrey
    Clarke                                               
    
    

                                                                                               
    Jeffrey Clarke

                                                                                                   
    President(FORM OF FACE)

Ascent Energy Inc.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

PREFERRED STOCK

This Certificate is transferable in New York, NY or Ridgefield Park, NJ

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP 04362R 20 3

THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF 8% SERIES A REDEEMABLE PREFERRED
STOCK, $.001 PAR VALUE, OF

ASCENT ENERGY INC.|

transferable on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed. This
Certificate is not valid unless countersigned by the Transfer Agent-Registrar.

   

     IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers

Countersigned and Registered:

SECRETARY

PRESIDENT

MELLON INVESTOR SERVICES LLC

Transfer Agent and Registrar

By 

                   
Authorized Signature

 

(FORM OF REVERSE)

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS THE SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY SUCH REGISTRATION AND QUALIFICATION ARE
NOT SO REQUIRED.

ANY STOCKHOLDER MAY OBTAIN, WITHOUT CHARGE, BY REQUEST TO THE OFFICE OF THE
SECRETARY OF THE CORPORATION, A COPY OF A STATEMENT OF THE RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS GRANTED TO OR IMPOSED UPON THE SHARES OF SERIES A
PREFERRED STOCK REPRESENTED HEREBY AND OF EACH OTHER CLASS OR SERIES OF SHARES
AUTHORIZED TO BE ISSUED BY THE CORPORATION AND UPON THE HOLDERS THEREOF.

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

        TEN COM     --   
 
as tenants in common UNIF GIFT MIN ACT     --

        __________Custodian__________

                                                                           
(Cust)                    
(Minor)

        TEN ENT     --    
as tenants by the entireties under                    
Uniform Gifts to Minors

        JT TEN        
--     as joint tenants with right Act______________________

   

                                                                                     of survivorship and not as (State)

   

                                                                                     tenants in common

Additional abbreviations may also be used though not in the above list.

For Value Received,                          
hereby sell, assign and transfer unto

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)

Shares

of the Stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint

Attorney

to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.

Dated:

 

        NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE

        NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED

 

 

 

 

 

 

 

By

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION,
(Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17Ad-15.

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