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EXHIBIT 4.4
CERTIFICATE OF DESIGNATION OF SERIES
AND DETERMINATION OF RIGHTS AND PREFERENCES
OF
SERIES A PREFERRED STOCK
OF
CROSSWALK.COM, INC.
CROSSWALK.COM, INC., a Delaware corporation (the "Company"), acting
pursuant to Section 151 of the General Corporation Law of Delaware, does hereby
submit the following Certificate of Designation of Series and Determination of
Rights and Preferences of its Series A Preferred Stock.
FIRST: The name of the Company is Crosswalk.com, Inc.
SECOND: By unanimous consent of the Board of Directors (the "Board") of
the Company dated September 19, 2000, the following resolutions were duly
adopted:
WHEREAS the Amended and Restated Certificate of Incorporation of the
Company (the "Certificate of Incorporation") authorizes 5,000,000 shares of
preferred stock, par value $.001 per share ("Preferred Stock"), issuable from
time to time in one or more series;
WHEREAS the Board of the Company is authorized, subject to limitations
prescribed by law and by the provisions of paragraph four (4) of the Company's
Certificate of Incorporation, to establish and fix the number of shares to be
included in any series of Preferred Stock and the designation, rights,
preferences, powers, restrictions and limitations of the shares of such series;
and
WHEREAS it is the desire of the Board to establish and fix the number of
shares to be included in a new series of Preferred Stock and the designation,
rights, preferences and limitations of the shares of such new series.
NOW, THEREFORE, BE IT RESOLVED that pursuant to paragraph four of the
Company's Certificate of Incorporation, there is hereby established a new series
of Preferred Stock, and that the Board does hereby fix and determine the
designation, rights, preferences, powers, restrictions and limitations set forth
as follows:
SECTION 1. DESIGNATION; RANK.
This series of cumulative convertible Preferred Stock shall be designated
and known as the "Series A Preferred Stock." The number of shares constituting
the Series A Preferred Stock shall be 80,000 shares. The Series A Preferred
Stock shall, with respect to dividends and rights upon liquidation, dissolution
or winding up, whether voluntary or involuntary, rank prior to the common stock
of the Company, par value $.01 per share (the "Common Stock").
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SECTION 2. DIVIDENDS.
The holders of outstanding shares of Series A Preferred Stock shall be
entitled to receive a dividend of 6% per annum, payable, at the election of the
Board, out of funds legally available for such purpose or in shares of Common
Stock, in preference and priority to any payment of any dividend on Common
Stock. If the dividend is to be paid in Common Stock, the number of shares shall
be determined by dividing the dividend payable by the average closing price of
the Company's Common Stock for the sixty (60) trading days prior to the dividend
declaration or redemption of the Series A Preferred Stock. Such dividends shall
be payable only when, as and if declared by the Board, and such dividends shall
accrue and be cumulative.
SECTION 3. LIQUIDATION PREFERENCE.
(a) Upon any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, before any distribution or payment shall be
made to the holders of any Common Stock, the holders of Series A Preferred Stock
shall be entitled to be paid out of the remaining assets of the Company legally
available for distribution with respect to each share of Series A Preferred
Stock an amount equal to the sum of (i) $25 per share, as adjusted for any stock
dividends, combinations or splits with respect to such shares (the "Original
Series A Issue Price") plus (ii) any declared but unpaid dividends thereon (such
sum, the "Series A Liquidation Value"). If upon any such liquidation,
dissolution or winding up of the Company the remaining assets of the Company
available for distribution to its stockholders shall be insufficient to pay the
holders of shares of Series A Preferred Stock the full Series A Liquidation
Value, the holders of shares of Series A Preferred Stock shall share ratably in
any distribution of the remaining assets of the Company in proportion to the
respective amounts which would otherwise be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect to
such shares were paid in full.
(b) After payment in full of the Series A Liquidation Value, the
remaining assets of the Company legally available for distribution, if any,
shall be distributed to the holders of Common Stock.
(c) The following events shall be considered a liquidation for purposes
of Section 3(a) above and Section 6(a) below unless the holders of at least a
majority of the voting power of all then outstanding shares of Series A
Preferred Stock, voting together as a single class, vote otherwise:
(i) any merger, consolidation or other business combination of the
Company in which the stockholders of the Company immediately prior
to such transaction will, immediately after such transaction (by
virtue of securities issued in the transaction or otherwise),
beneficially own (as determined pursuant to rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
capital stock representing less than fifty percent (50%) of the
voting power of the surviving entity's voting stock immediately
after such transaction (an "Acquisition"); or
(ii) a sale of all or substantially all of the assets of the Company to
any other entity, where the Company's stockholders immediately
prior to such sale will, immediately after such sale (by virtue of
securities issued as consideration for the Company's sale or
otherwise), beneficially own (as determined pursuant to Rule 13d-3
under the Exchange Act) capital stock representing less than fifty
percent (50%) of the voting power of the acquiring entity's voting
stock (an "Asset Transfer").
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(d) In either of the events in Section 3(c) above, if the consideration
received by the Company is other than cash, its value will be deemed its fair
market value as determined in good faith by the Board. Any securities shall be
valued as follows:
(i) Securities not subject to investment letter or other
similar restrictions on free marketability covered by (ii)
below:
(A) If traded on a securities exchange or through the
Nasdaq National Market, the value shall be deemed to
be the average of the closing prices of the
securities on such quotation system over the thirty
(30) day period ending three (3) days prior to the
closing;
(B) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale
prices (whichever is applicable) over the thirty
(30) day period ending three (3) days prior to the
closing; and
(C) If there is no active public market, the value shall be
the fair market value thereof, as mutually
determined by the Board and the holders of at least
a majority of the voting power of all then
outstanding shares of Series A Preferred Stock.
(ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other
than restrictions arising solely by virtue of a
stockholder's status as an affiliate or former affiliate)
shall be to make an appropriate discount from the market
value determined as above in (i)(A),(B) or (C) to reflect
the approximate fair market value thereof, as mutually
determined by the Board and the holders of at least a
majority of the voting power of all then outstanding shares
of Series A Preferred Stock.
SECTION 4. VOTING RIGHTS.
(a) Each holder of outstanding shares of Series A Preferred Stock
shall be entitled to the number of votes equal to the number of whole shares of
Common Stock into which all of the shares of Series A Preferred Stock held by
such holder are convertible (as adjusted from time to time pursuant to Section 6
hereof), at each meeting of stockholders of the Company (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Company for their action or consideration. Except as
provided by law, by the express provisions hereof, or by the provisions
establishing any other series of Preferred Stock, holders of Series A Preferred
Stock and of any outstanding series of Other Preferred Stock shall vote together
with the holders of Common Stock as a single class.
(b) On the date this Certificate of Designations is filed with the
State of Delaware, the holders of the Series A Preferred Stock will nominate
Rusty Lewis, Jon Morgan and Eric Oliver as Director to the Corporation's Board
of Directors (the "Series A Board Nominees"). The Corporation's Board of
Directors will appoint one of the three Series A Board Nominees to serve as a
Director of the Corporation (the "Series A Director") until the next annual
meeting of the shareholders. Following the next annual meeting (and each
subsequent annual meeting) of the Corporation, the Series A Director will
continue to serve as a Director as long as the Series A Director is elected (and
reelected) by all the holders of the Series A Preferred Stock and Common Stock
voting together as a single class.
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SECTION 5. COVENANTS.
(a) In addition to any other rights provided by law, the
Corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of at
least fifty percent (50%) of the outstanding shares of the
Series A Preferred Stock (i) authorize or create (by
reclassification or otherwise) any new class or series of
shares of capital stock with rights senior or equal to the
Series A Preferred Stock; (ii) amend or waive any provision
of this Corporation's Certificate of Incorporation or
Bylaws in any manner that adversely affects the
preferences, privileges or rights of the Series A; (iii)
redeem or repurchase Common Stock or any other junior
equity security, except for shares repurchased upon the
termination of an employee, officer, director or consultant
pursuant to a restricted stock purchase agreement; (iv) pay
or declare any dividend on the Common Stock or any other
junior equity security other than a dividend in Common
Stock; or (v) liquidate or wind up the Corporation.
The Corporation shall not take any action, which results in any merger,
corporate reorganization, sale of control, or any transaction in which all or
substantially all of the assets of the Corporation are sold, unless the Series A
Director votes in favor of such action.
SECTION 6. CONVERSION RIGHTS.
The holders of the Series A Preferred Stock shall have conversion rights
as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from time to
time, into such number of fully paid and nonassessable shares of Common Stock as
is determined by dividing the Original Series A Issue Price by the Conversion
Price (as defined below) in effect at the time of conversion. The Conversion
Price at which shares of Common Stock shall be deliverable upon conversion of
Series A Preferred Stock without the payment of additional consideration by the
holder thereof (the "Conversion Price") shall initially be $2.32. Such initial
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 adjustment as
provided below.
(b) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. In lieu of fractional
shares, the Company shall round such fraction to the nearest whole number.
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(c) Mechanics of Conversion.
(i) In order to convert shares of Series A Preferred Stock into
shares of Common Stock, the holder shall surrender the
certificate or certificates for such shares of Series A
Preferred Stock at the office of the transfer agent (or at
the principal office of the Company if the Company serves
as its own transfer agent), together with written notice
that such holder elects to convert all or any number of the
shares represented by such certificate or certificates.
Such notice shall state the number of shares of Series A
Preferred Stock, which the holder seeks to convert. If
required by the Company, certificates surrendered for
conversion shall be endorsed or accompanied by a written
instrument or instruments of transfer, in form satisfactory
to the Company, duly executed by the registered holder or
his or its attorney duly authorized in writing. The date of
receipt of such certificates and notice by the transfer
agent or the Company shall be the conversion date
("Conversion Date"). As soon as practicable after the
Conversion Date, the Company shall promptly issue and
deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to
which such holder is entitled. Such conversion shall be
deemed to have been made at the close of business on the
date of such surrender of the certificate representing the
shares of Series A Preferred Stock to be converted, and the
person entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all
purposes as the record holder of such shares of Common
Stock on such date.
(ii) The Company shall at all times during which the Series A
Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued 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. Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock issuable upon
conversion of the Series A Preferred Stock, the Company
will take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Conversion Price.
(iii) Upon any conversion, the Company shall promptly pay in cash
or Common Stock (at the Common Stock's fair market value
determined by the Board as of the date of such conversion)
or a combination of cash and Common Stock, any declared but
unpaid dividends on the shares of Series A Preferred Stock
being converted.
(iv) 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, including the rights, if any, to
receive dividends, notices and to vote, shall immediately
cease and terminate on the Conversion Date, except only the
right of the holders thereof to receive shares of Common
Stock in exchange therefor, and if applicable, cash for any
fractional shares of Common Stock. Any shares of Series A
Preferred Stock so converted shall be retired and cancelled
and shall not be reissued, and the Company may from time to
time take such appropriate action as may be necessary to
reduce the number of shares of authorized Series A
Preferred Stock accordingly.
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(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this Subsection 6(b),
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, excluding rights or
options granted to employees, vendors, officers,
directors and executives of, and consultants or
shareholders to, the Company in an amount not
exceeding the number of Reserved Employee Shares.
(B) "Original Issue Date" shall mean the date on which
the first share of Series A Preferred Stock is first
issued.
(C) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for
Common Stock.
(D) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to
Subsection 6(d)(iii) below, deemed to be issued) by
the Company after the Original Issue Date, other
than Reserved Employee Shares and other than shares
of Common Stock issued or issuable:
(1) as a dividend or distribution on Series A
Preferred Stock;
(2) by reason of a dividend, stock split,
split-up or other distribution on shares of
Common Stock excluded from the definition by
the foregoing clause (1);
(3) upon the exercise of Options as set forth in
Subsection 6(d)(i)(A);
(4) upon conversion of shares of Series A
Preferred Stock;
(E) "Reserved Employee Shares" shall mean shares of
Common Stock issued to employees, officers,
directors, shareholders and executives of, and
consultants or vendors to, the Company upon the
exercise of options granted under the Company's
employee stock option plans, which plans have been
approved by the Company's stockholders.
(F) "Rights to Acquire Common Stock" (or "Rights") shall
mean all rights issued by the Company to acquire
Common Stock whether by exercise of a warrant,
option or similar call, or conversion of any
existing instruments, in either case for
consideration fixed, in amount or by formula, as of
the date of issuance.
(ii) No Adjustment of Conversion Price. No adjustment in the
number of shares of Common Stock into which the Series A
Preferred Stock is convertible shall be made, by adjustment
in the applicable Conversion Price thereof, unless the
consideration per share (determined pursuant to Subsection
6(d)(v) below) for an Additional Share of Common Stock
issued or deemed to be issued by the Company is less than
the applicable Conversion Price in effect on the date of,
and immediately prior to, the
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issue of such additional shares, or if prior to such
issuance, the Company receives written notice from the
holders of at least a majority of the voting power of all
then outstanding shares of Series A Preferred Stock, voting
together as a single class, agreeing that no such
adjustment shall be made as the result of the issuance of
Additional Shares of Common Stock.
(iii) Issue of Securities Deemed Issue of Additional Shares of
Common Stock. If the Company at any time or from time to
time after the Original Issue Date shall issue any Options
or Convertible Securities or Rights to Acquire Common
Stock, then the maximum number of shares of Common Stock
(as set forth in the instrument relating thereto without
regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of
such Options, Rights or, in the case of Convertible
Securities, 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; provided,
however, that Additional Shares of Common Stock shall not
be deemed to have been issued unless the consideration per
share (determined pursuant to Subsection 6(d)(v) hereof) of
such Additional Shares of Common Stock would be less than
the applicable Conversion Price in effect on the date of
and immediately prior to such issue, or such record date,
as the case may be, and provided, further, that in any such
case:
(A) No further adjustment in the Conversion Price shall
be made upon the subsequent issue of shares of
Common Stock upon the exercise of such Options,
Rights or conversion or exchange of such Convertible
Securities;
(B) Upon the expiration or termination of any unexercised
Option, Right or Convertible Security, the
Conversion Price shall be adjusted immediately to
reflect the applicable Conversion Price which would
have been in effect had such Option, Right or
Convertible Security (to the extent outstanding
immediately prior to such expiration or termination)
never been issued; and
(C) In the event of any change in the number of shares of
Common Stock issuable upon the exercise, conversion
or exchange of any Option, Right or Convertible
Security, including, but not limited to, a change
resulting from the anti-dilution provisions thereof,
the Conversion Price then in effect shall forthwith
be readjusted to such Conversion Price as would have
obtained had the Conversion Price adjustment that
was originally made upon the issuance of such
Option, Right or Convertible Security which were not
exercised or converted prior to such change been
made upon the basis of such change, but no further
adjustment shall be made for the actual issuance of
Common Stock upon the exercise or conversion of any
such Option, Right or Convertible Security.
(iv) Adjustment of Conversion Price upon Issuance of Additional
Shares of Common Stock. If the Company shall at any time
after the Original Issue Date issue Additional Shares of
Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Subsection 6(d)(iii), but
excluding shares issued as a dividend or distribution as
provided in Subsection 6(e) or upon a stock split or
combination as provided in Subsection 6(d)), without
consideration, or for a consideration per share less than
the applicable Conversion Price in effect on the date of
and immediately prior to such issue, or without the
requisite number of notices
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contemplated by Subsection 6(d)(ii) hereof, then and in
such event, such Conversion Price shall be reduced,
concurrently with such issue to a price (calculated to the
nearest cent) determined by multiplying such Conversion
Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares of Common
Stock which the aggregate consideration received by the
Company for the total number of Additional Shares of Common
Stock so issued would purchase at such Conversion Price;
and the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such issue
plus the number of such Additional Shares of Common Stock
so issued.
Notwithstanding the foregoing, the applicable Conversion
Price shall not be reduced if the amount of such reduction
would be an amount less than $.05, but any such amount
shall be carried forward and reduction with respect thereto
made at the time of and together with any subsequent
reduction which, together with such amount and any other
amount or amounts so carried forward, shall aggregate $.05
or more.
(v) Determination of Consideration. For purposes of this
Subsection 6(d), the consideration received by the Company
for the issue of any Additional Shares of Common Stock
shall be computed as follows:
(A) Cash and Property. Such consideration shall:
(1) insofar as it consists of cash, be computed
at the aggregate of cash received by the
Company, excluding amounts paid or payable
for accrued interest or accrued dividends;
(2) 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; and
(3) in the event Additional Shares of Common
Stock are issued together with other shares
or securities or other assets of the Company
for consideration which covers both, be the
proportion of such consideration so received,
computed as provided in clauses (1) and (2)
above, as determined in good faith by the
Board.
(B) Options, Rights and Convertible Securities. The
consideration per share received by the Company for
Additional Shares of Common Stock deemed to have
been issued pursuant to Subsection 6(d)(iii),
relating to Options, Rights and Convertible
Securities, shall be determined by dividing
(1) the total amount, if any, received or
receivable by the Company as consideration
for the issue of such Options, Rights 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 Company
upon the exercise of such Options, Rights or
the conversion or exchange of such
Convertible Securities, by
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(2) 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, Rights or the conversion or
exchange of such Convertible Securities.
(e) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Common Stock, the
Conversion Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company
shall at any time or from time to time after the Original Issue
Date combine the outstanding shares of Common Stock, the
Conversion Price then in effect immediately before the combination
shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the
date the subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time or from time to time after the Original
Issue Date shall make or issue a dividend or other distribution
payable in Additional Shares of Common Stock, then and in each
such event the Conversion Price shall be decreased as of the time
of such issuance, by multiplying the Conversion Price by a
fraction, the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to
the time of such issuance, and the denominator of which shall be
the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance plus the number of
shares of Common Stock issuable in payment of such dividend or
distribution.
(g) Adjustments for Other Dividends and Distributions. In the event
the Company at any time, or from time to time after the Original
Issue Date shall make or issue, a dividend or other distribution
payable in securities of the Company other than shares of Common
Stock, then and in each such event provision shall be made so that
the holders of shares of the Series A Preferred Stock shall
receive upon conversion thereof in addition to the number of
shares of Common Stock receivable thereupon, the amount of
securities of the Company that they would have received had their
Series A Preferred Stock been converted into Common Stock on the
date of such event and had thereafter, during the period from the
date of such event to and including the Conversion Date, retained
such securities receivable by them as aforesaid during such period
given application to all adjustments called for during such
period, under this paragraph with respect to the rights of the
holders of the Series A Preferred Stock.
(h) Adjustment for Reclassification, Exchange, or Substitution. If the
Common Stock issuable upon the conversion of the Series A
Preferred Stock shall be changed into the same or a different
number of shares of any class or classes of stock, whether by
capital reorganization, reclassification, or otherwise (other than
a subdivision or combination of shares or stock dividend provided
for above), then and in each such event the holder of each share
of Series A Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of
shares of Common Stock into which such shares of Series A
Preferred Stock might have been converted immediately prior to
such reorganization, reclassification, or change, all subject to
further adjustment as provided herein.
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(i) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the
provisions of this Section 6 and in the taking of all such action
as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock
against impairment to the extent required hereunder.
(j) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to
this Section 6, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms
hereof and furnish to each holder, if any, of Series A Preferred
Stock outstanding a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment or readjustment is based and shall file a copy of such
certificate with its corporate records. The Company shall, upon
the reasonable written request of any holder of Series A Preferred
Stock, furnish or cause to be furnished to such holder a similar
certificate setting forth (i) such adjustments and readjustments,
(ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property
which then would be received upon the conversion of Series A
Preferred Stock. Despite such adjustment or readjustment, the form
of each or all Series A Preferred Stock certificates, if the same
shall reflect the initial or any subsequent Conversion Price, need
not be changed in order for the adjustments or readjustments to be
valid in accordance with the provisions of this Certificate, which
shall control.
(k) Notice of Record Date. In the event
(i) that the Company declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock
or other securities of the Company;
(ii) that the Company subdivides or combines its outstanding
shares of Common Stock;
(iii) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding
shares of Common Stock or a stock dividend or stock
distribution thereon); or
(iv) of the involuntary or voluntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at its principal office or at
the office of the transfer agent of the Series A Preferred Stock, and shall
cause to be mailed to the holders of the Series A Preferred Stock at their last
addresses as shown on the records of the Company, or such transfer agent, at
least 10 days prior to the record date specified in (A) below or 20 days before
the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined, or
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(B) the date on which such reclassification, dissolution,
liquidation or winding up is expected to become effective,
and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property
deliverable upon such reclassification, dissolution or
winding up.
SECTION 7. REDEMPTION.
(a) Upon the third anniversary of the closing of the Original Issue
Date (as defined in Section 6(d)(i) above), the Company at its option may
redeem, out of its available cash or cash equivalents, any amount of the then
outstanding and not previously converted (pursuant to Section 6) Series A
Preferred Stock issued on the Original Issue Date, at a price per share equal to
the Original Series A Issue Price, plus any declared, but unpaid dividends
thereon. At any time subsequent to the third anniversary of the Original Issue
Date, the Company at its option may redeem, out of its available cash or cash
equivalents, any amount of the then outstanding and not previously converted
(pursuant to Section 6) Series A Preferred Stock exchanged on the Original
Closing Date, at a price per share equal to the Original Series A Issue Price,
plus any declared, but unpaid dividends thereon, upon notice provided in
accordance with Section 7(b). Shares subject to redemption pursuant to this
Section shall be redeemed from each holder of Series A Preferred Stock on a pro
rata basis.
(b) At least thirty (30) days prior to the dates that the Company
elects to redeem shares of the Series A Preferred Stock pursuant to Section 7(a)
(each a "Redemption Date," together the "Redemption Dates"), the Company shall
send a notice (the "Redemption Notice") to all holders of the outstanding Series
A Preferred Stock of such redemption to be effected, specifying the number of
shares to be redeemed from such holder, the Redemption Date, the price per share
to be paid (the "Redemption Price") and the place at which payment may be
obtained.
(c) On or prior to the Redemption Date, the Company shall deposit the
Redemption Price of all shares to be redeemed as of such date with a bank or
trust company having aggregate capital and surplus in excess of $50,000,000, as
a trust fund, with irrevocable instructions and authority to the bank or trust
company to pay, upon receipt of notice from the Company that such holder has
surrendered the Series A Preferred Stock share certificates in accordance with
Section 7(d), the Redemption Price of the shares to their respective holders.
Any moneys deposited by the Company pursuant to this Section 7 for the
redemption of shares thereafter converted into shares of Common Stock pursuant
to Section 6 hereof no later than the fifth (5th) day preceding the Redemption
Date shall be returned to the Company forthwith upon such conversion. The
balance of any funds deposited by the Company pursuant to this Section 7
remaining unclaimed at the expiration of one (1) year following such Redemption
Date shall be returned to the Company promptly upon its written request.
(d) On such Redemption Date, each holder of shares of Series A
Preferred Stock to be redeemed shall surrender such holder's certificates
representing such shares to the Company in the manner and at the place
designated in the Redemption Notice, and thereupon the Redemption Price of such
shares shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. In the event less than all the shares represented
by such certificates are redeemed, a new certificate shall be issued
representing the unredeemed shares. From and after such Redemption Date, all
rights of the holder of such shares as a holder of Series A Preferred Stock
(except the right to receive the Redemption Price without interest upon
surrender of their certificates), shall cease and terminate with respect to such
shares.
<PAGE> 12
(e) In the event of a call for redemption of any shares of Series A
Preferred Stock, the Conversion Rights (as defined in Section 6) for such Series
A Preferred Stock shall terminate as to the shares designated for redemption at
the close of business on the fifth (5th) day preceding the Redemption Date,
unless default is made in payment of the Redemption Price.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed this 29th day of September, 2000.
CROSSWALK.COM, INC.
By:
-----------------------------------
Name: William M. Parker
Title: Chief Executive Officer and
President
ATTEST:
---------------------------
Gary Struzik
Chief Financial Officer
