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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): December 31, 1998
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BEYOND.COM CORPORATION
(Exact Name of Registrant as Specified in Charter)
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<S> <C> <C>
DELAWARE 000-24457 94-3212136
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(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION)
1195 West Fremont Avenue, Sunnyvale, California 94087
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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Registrant's telephone number, including area code: (408) 616-4200
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SOFTWARE.NET CORPORATION
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 5. OTHER EVENTS
On December 21, 1998, the registrant held a special meeting of its
stockholders and received their approval to legally change the name of the
registrant from software.net Corporation to Beyond.com Corporation. On December
21, 1998, the registrant filed an amendment to its Amended and Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware effecting the change of its corporate name to Beyond.com Corporation.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits
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<S> <C>
3.1 Form of Certificate of Incorporation, as amended
99.1 Press Release, dated December 21, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BEYOND.COM CORPORATION
(Registrant)
Dated: December 31, 1998 By: /s/ MICHAEL J. PRAISNER
-----------------------------------
Name: Michael J. Praisner
Title: Vice President,
Finance & Administration and
Chief Financial Officer
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Exhibit No. Description
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3.1 Form of Certificate of Incorporation, as amended
99.1 Press Release, dated December 21, 1998
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EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SOFTWARE.NET CORPORATION
(A DELAWARE CORPORATION)
SOFTWARE.NET CORPORATION (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that:
The amendment to the Corporation's Amended and Restated Certificate of
Incorporation set forth in the following resolution approved by the
Corporation's Board of Directors and stockholders was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware:
"RESOLVED, that the Certificate of Incorporation of the corporation be
amended by striking Article I in its entirety and replacing it with the
following:
'ARTICLE I: The name of this corporation is Beyond.com Corporation.'"
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed and attested by its duly authorized officers, this 21st day of December,
1998.
SOFTWARE.NET CORPORATION
By: /s/ MARK L. BREIER
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Mark L. Breier
President and Chief Executive Officer
ATTEST
By: /s/ RICHARD SCUDELLARI
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Richard Scudellari
Secretary
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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
software.net CORPORATION
ARTICLE I.
The name of this Corporation is software.net Corporation (hereafter the
"Corporation").
ARTICLE II.
The address of the Corporation's registered office in the State of Delaware
is Corporation Service Company, 1013 Centre Road, City of Wilmington, County of
New Castle, State of Delaware 19805. The name of its registered agent at such
address is Corporation Service Company.
ARTICLE III.
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware and to possess
and exercise all of the powers and privileges granted by such law. ARTICLE IV.
This Corporation is authorized to issue two classes of shares of stock,
designated "Common Stock" and "Preferred Stock". The total number of shares that
this Corporation is authorized to issue is sixty-five million (65,000,000)
shares. The number of shares of Common Stock authorized is fifty million
(50,000,000) shares, $0.001 par value per share. The number of shares of
Preferred Stock authorized is fifteen million (15,000,000) shares, $0.001 par
value per share. The holders of Common Stock shall be entitled to one vote for
each share in all matters required or permitted to be voted on by stockholders
of the Corporation.
The shares of Preferred Stock authorized by this Amended and Restated
Certificate of Incorporation may be issued from time to time in one or more
series. For any wholly unissued series of Preferred Stock, subject to compliance
with Section 6 of this Article IV, the Board of Directors is hereby authorized
to fix and alter the dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions),
redemption prices, and liquidation preferences, the number of shares
constituting any such series and the designation thereof, or any of them.
For any series of Preferred Stock having issued and outstanding shares, the
Board of Directors is hereby authorized to increase or decrease the number of
shares of such series when the number of shares of such series was originally
fixed by the Board of Directors, but such increase or decrease shall be subject
to the limitations and restrictions stated in the resolution of the Board of
Directors originally fixing the number of shares of such series. If the number
of shares of any series is so decreased, then the shares constituting such
decrease shall resume the status that they had prior to the adoption of the
resolution originally fixing the number of shares
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of such series. In no event may the number of shares of any series be decreased
to a number that is less than the number of shares of such series then
outstanding.
SECTION 1. DESIGNATION AND DEFINITIONS:
(a) "Board of Directors" shall mean the Board of Directors of this
Corporation.
(b) The "Common Shares" shall mean shares of the Common Stock.
(c) "Common Stock" shall mean this Corporation's common stock.
(d) The "Corporation" shall mean software.net Corporation.
(e) There shall be four series of Preferred Stock, designated and known as
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock. The number of shares constituting the Series A
Preferred Stock (the "Series A Preferred") shall be 1,985,520 shares. The number
of shares constituting the Series B Preferred Stock (the "Series B Preferred")
shall be 2,037,038 shares. The number of shares constituting the Series C
Preferred Stock (the "Series C Preferred") shall be 3,000,000 shares. The number
of shares constituting the Series D Preferred Stock (the "Series D Preferred")
shall be 1,523,424 shares. Subject to compliance with Section 6 of this Article
IV, the Board of Directors may issue the remaining undesignated Preferred Stock
in one or more series as permitted by this Amended and Restated Certificate of
Incorporation. The Series A Preferred, Series B Preferred, Series C Preferred
and Series D Preferred are referred to herein from time to time collectively as
the "Preferred Stock."
SECTION 2. DIVIDENDS.
(a) The holders of outstanding Series A Preferred shall be entitled to
receive in any fiscal year, when, as and if declared by the Board of Directors,
out of any assets at the time legally available therefor, dividends at the rate
of $0.04 per share of Series A Preferred per annum (the "Series A Dividend"),
which shall be payable pari passu with the Series B Dividend (as defined in
subsection (b) below), the Series C Dividend (as defined in subsection (c)
below), and the Series D Dividend (as defined in subsection (d) below) before
any dividend or distribution (other than pursuant to Section 5) is paid on
Common Stock. The Series A Dividend may be payable annually or otherwise as the
Board of Directors may from time to time determine provided that the Series B
Dividend, Series C Dividend, and Series D Dividend are also paid at such time.
(b) The holders of outstanding Series B Preferred shall be entitled to
receive in any fiscal year, when, as and if declared by the Board of Directors,
out of any assets at the time legally available therefor, dividends at the rate
of the sum of (i) $0.2268 per share of Series B Preferred per annum (the
"Noncumulative Series B Dividend"), plus (ii) for each month since the Series B
Original Issue Date (as defined in Section 4(d)), $0.01323 (as adjusted for any
stock dividends, combinations or splits with respect to such shares) per share
of Series B Preferred (the "Cumulative Series B Dividend" and together with the
Noncumulative Series B Dividend, the "Series B Dividend"), which shall be
payable pari passu with the Series A Dividend, Series C
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Dividend and Series D Dividend before any dividend or distribution (other than
pursuant to Section 5) is paid on Common Stock. The Series B Dividend may be
payable annually or otherwise as the Board of Directors may from time to time
determine provided that the Series A Dividend, Series C Dividend and Series D
Dividend are also paid at such time. Any amounts paid with respect to the Series
B Dividend in any fiscal year shall be applied first to the Noncumulative Series
B Dividend due for that fiscal year, second to any Cumulative Series B Dividends
due for any previous fiscal year or period, and third to the most recently
accumulated Cumulative Series B Dividend.
(c) The holders of outstanding Series C Preferred shall be entitled to
receive in any fiscal year, when, as and if declared by the Board of Directors,
out of any assets at the time legally available therefor, dividends at the rate
of the sum of (i) $0.17136 per share of Series C Preferred per annum (the
"Noncumulative Series C Dividend"), plus (ii) for each month since the Series C
Original Issue Date (as defined in Section 4(d)), $0.009996 (as adjusted for any
stock dividends, combinations or splits with respect to such shares) per share
of Series C Preferred (the "Cumulative Series C Dividend" and together with the
Noncumulative Series C Dividend, the "Series C Dividend"), which shall be
payable pari passu with the Series A Dividend, Series B Dividend and Series D
Dividend before any dividend or distribution (other than pursuant to Section 5)
is paid on Common Stock. The Series C Dividend may be payable annually or
otherwise as the Board of Directors may from time to time determine provided
that the Series A Dividend, Series B Dividend and Series D Dividend are also
paid at such time. Any amounts paid with respect to the Series C Dividend in any
fiscal year shall be applied first to the Noncumulative Series C Dividend due
for that fiscal year, second to any Cumulative Series C Dividend due for any
previous fiscal year or period, and third to the most recently accumulated
Cumulative Series C Dividend.
(d) The holders of outstanding Series D Preferred shall be entitled to
receive in any fiscal year, when, as and if declared by the Board of Directors,
out of any assets at the time legally available therefor, dividends at the rate
of the sum of (i) $0.26 per share of Series D Preferred per annum (the
"Noncumulative Series D Dividend"), plus (ii) for each month since the Series D
Original Issue Date (as defined in Section 4(d)), $0.0152 (as adjusted for any
stock dividends, combinations or splits with respect to such shares) per share
of Series D Preferred (the "Cumulative Series D Dividend" and together with the
Noncumulative Series D Dividend, the "Series D Dividend"), which shall be
payable pari passu with the Series A Dividend, Series B Dividend and Series C
Dividend before any dividend or distribution (other than pursuant to Section 5)
is paid on Common Stock. The Series D Dividend may be payable annually or
otherwise as the Board of Directors may from time to time determine provided
that the Series A Dividend, Series B Dividend and Series C Dividend are also
paid at such time. Any amounts paid with respect to the Series D Dividend in any
fiscal year shall be applied first to the Noncumulative Series D Dividend due
for that fiscal year, second to any Cumulative Series D Dividend due for any
previous fiscal year or period, and third to the most recently accumulated
Cumulative Series D Dividend.
(e) Dividends or distributions (other than dividends payable solely in
shares of Common Stock or distributions pursuant to Section 5) of up to $0.17136
per share may be declared and paid upon shares of Common Stock in any fiscal
year of the Corporation only if the Series A Dividend, Series B Dividend, Series
C Dividend and Series D Dividend has been
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declared and paid in such year. After dividends or distributions of $0.17136 per
share have been declared and paid on the Common Stock in any fiscal year, all
further dividends and distributions during such fiscal year shall be distributed
among the holders of the Common Stock, the Series A Preferred, Series B
Preferred, Series C Preferred and Series D Preferred in proportion to the shares
of Common Stock then held by them and the shares of Common Stock which they then
have the right to acquire upon conversion of the shares of Series A Preferred,
Series B Preferred, Series C Preferred, or Series D Preferred as the case may
be, then held by them.
(f) The right to the Series A Dividend, Noncumulative Series B Dividend,
Noncumulative Series C Dividend, and Noncumulative Series D Dividend shall not
be cumulative and no right shall accrue to holders of shares of Series A
Preferred, Series B Preferred, Series C Preferred or Series D Preferred by
reason of the fact that such dividends on said shares are not declared in any
prior year, nor shall any undeclared or unpaid dividend bear or accrue interest.
The Cumulative Series B Dividend, Cumulative Series C Dividend and Cumulative
Series D Dividend shall be cumulative, whether or not earned or declared, on a
daily basis from the Series B Original Issue Date, Series C Original Issue Date
and Series D Original Issue Date, respectively, provided that such Cumulative
Series B Dividend, Cumulative Series C Dividend and Cumulative Series D Dividend
shall be payable as dividends only as declared by the Board of Directors (but
will be paid upon liquidation, dissolution or winding up of the Corporation
under Section 5 below or upon redemption under Section 9 below regardless of
whether declared by the Board of Directors); provided further that no portion of
the Noncumulative Series B Dividend, Noncumulative Series C Dividend or
Noncumulative Series D Dividend shall be applied to or against the Cumulative
Series B Dividend, Cumulative Series C Dividend or Cumulative Series D Dividend,
respectively.
(g) Each holder of Preferred Stock shall be deemed to have consented, for
purposes of Sections 160 and 170-174 of the General Corporation Law of the State
of Delaware, to distributions made by this Corporation in connection with the
repurchase of shares of Common Stock issued to or held by employees of, or
consultants to, this Corporation upon termination of their employment or
services pursuant to agreements providing for such repurchase.
SECTION 3. VOTING.
(a) Each holder of Preferred Stock shall be entitled to the number of
votes equal to the number of shares of Common Stock into which such holder's
shares of Preferred Stock could be converted on the record date for the vote or
consent of stockholders and shall have voting rights and powers equal to the
voting rights and powers of the Common Stock. The holder of each share of
Preferred Stock shall be entitled to notice of any stockholders ' meeting in
accordance with the Bylaws of the Corporation and shall vote with holders of the
Common Stock upon any matter submitted to a vote of stockholders, except with
respect to (i) those matters required by law to be submitted to a class or
series vote and (ii) the election of directors (in respect of which the rights
of the holders of Preferred Stock are set forth in Sections 3(b) and 3(c)
hereof). Fractional votes by the holders of Preferred Stock shall not, however,
be permitted and any fractional voting rights resulting from the above formula
(after aggregating all shares into which shares of Preferred Stock held by each
holder could be converted) shall be rounded to the nearest whole number.
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(b) The number of directors shall be set as provided in the Bylaws of the
Corporation. So long as any shares of Series A Preferred remain outstanding, the
holders of the Series A Preferred outstanding, voting together as a class, shall
be entitled to elect one (1) director. So long as any shares of Series B
Preferred remain outstanding, the holders of the Series B Preferred outstanding,
voting together as a class, shall be entitled to elect one (1) director. So long
as any shares of Series C Preferred and Series D Preferred remain outstanding,
the holders of the Series C Preferred and Series D Preferred outstanding, voting
together as a class, shall be entitled to elect one (1) director. The holders of
Common Stock voting together as a class, shall be entitled to elect three (3)
directors.
(c) In the case of any vacancy in the office of a director occurring among
the directors elected by the holders of Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred or Common Stock pursuant to Section
3(b) hereof, the remaining director or directors so elected by the holders of
the Series A Preferred, Series B Preferred, Series C Preferred and Series D
Preferred, or Common Stock as the case may be, may, by affirmative vote thereof
(or the remaining director so elected if there is but one, or if there is no
such director remaining, by the vote of the shares of the applicable class or
series) elect a successor or successors to hold the office for the unexpired
term of the director or directors whose place or places shall be vacant. Any
director who shall have been elected by the holders of the Series A Preferred,
Series B Preferred, Series C Preferred and Series D Preferred, or Common Stock
or any director so elected as provided in the preceding sentence hereof, may be
removed during the aforesaid term of office only by the vote of the Series A
Preferred, Series B Preferred, Series C Preferred and Series D Preferred, or
Common Stock, as the case may be, provided that the shares voted against removal
would not be sufficient to elect the director with cumulative voting.
(d) Sections 3(b) and 3(c) above shall be void and of no effect thereafter
upon the occurrence of any of the following events:
(i) the consummation of the Corporation's Initial Registered Public
Offering (as defined in Section 4(b)(i) hereof); and
(ii) upon the distribution to the stockholders pursuant to Section 5
of the net proceeds of the sale of all or substantially all the assets of the
Corporation.
SECTION 4. PREFERRED STOCK CONVERSION.
The holders of Preferred Stock shall have conversion rights as follows (the
"Conversion Rights");
(a) Right to Convert. Each share of Series A Preferred shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $0.336 by the Series A Conversion
Price, determined as hereinafter provided, in effect on the date the certificate
is surrendered for conversion. The price at which shares of Common Stock shall
be deliverable upon conversion of shares of the Series A Preferred (the "Series
A Conversion Price") shall initially be $0.168 per share of Common Stock. Such
initial Series A Conversion Price shall be adjusted as hereinafter provided.
Each share of Series B Preferred shall be convertible, at the
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option of the holder thereof, at any time after the date of issuance of such
share at the office of the Corporation or any transfer agent for such stock,
into such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing $2.268 by the Series B Conversion Price, determined as
hereinafter provided, in effect on the date the certificate is surrendered for
conversion. The price at which shares of Common Stock shall be deliverable upon
conversion of shares of the Series B Preferred (the "Series B Conversion Price")
shall initially be $1.134 of Common Stock. Such initial Series B Conversion
Price shall be adjusted as hereinafter provided. Each share of Series C
Preferred shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share at the office of the Corporation or any
transfer agent for such stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1.7136 by the Series C
Conversion Price, determined as hereinafter provided, in effect on the date the
certificate is surrendered for conversion. The price at which shares of Common
Stock shall be deliverable upon conversion of shares of the Series C Preferred
(the "Series C Conversion Price") shall initially be $1.7136 per share of Common
Stock. Such initial Series C Conversion Price shall be adjusted as hereinafter
provided. Each share of Series D Preferred shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such share at
the office of the Corporation or any transfer agent for such stock, into such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing $2.60 by the Series D Conversion Price, determined as hereinafter
provided, in effect on the date the certificate is surrendered for conversion.
The price at which shares of Common Stock shall be deliverable upon conversion
of shares of the Series D Preferred (the "Series D Conversion Price") shall
initially be $2.60 per share of Common Stock. Such initial Series D Conversion
Price shall be adjusted as hereinafter provided.
(b) Automatic Conversion.
(i) Each share of Series A Preferred shall automatically be converted
without any action on the part of the Corporation or the holders of Series A
Preferred Stock into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $0.336 by the Series A Conversion
Price, determined as hereinafter provided, in effect on the date of the
occurrence of the earliest to occur of the following events:
(A) immediately prior to the consummation of the Corporation's
initial firm-commitment underwritten public offering of common stock under the
Securities Act of 1933, as amended (the "Securities Act"), provided that such
offering is made at $3.4272 per share (after adjustments for any stock splits or
stock dividends) and results in $15,000,000 or more in gross proceeds to the
Corporation (the "Initial Registered Public Offering"); or
(B) upon the receipt by the Corporation of the written consent
to or request for such conversion from holders of at least two-thirds of the
Series A Preferred then outstanding.
(ii) Each share of Series B Preferred shall automatically be
converted, without any action on the part of the Corporation or the holders of
Series B Preferred
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Stock, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing $2.268 by the Series B Conversion Price, determined
as hereinafter provided, in effect on the date of the occurrence of the earliest
to occur of the following events:
(A) immediately prior to the consummation of the Initial
Registered Public Offering; or
(B) upon the receipt by the Corporation of the written consent
to or request for such conversion from holders of at least two-thirds of the
Series B Preferred then outstanding.
(iii) Each share of Series C Preferred shall automatically be
converted, without any action on the part of the Corporation or the holders of
Series C Preferred Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1.7136 by the Series C
Conversion Price, determined as hereinafter provided, in effect on the date of
the occurrence of the earliest to occur of the following events:
(A) immediately prior to the consummation of the Initial
Registered Public Offering; or
(B) upon the receipt by the Corporation of the written consent
to or request for such conversion from holders of at least two-thirds of the
Series C Preferred then outstanding.
(iv) Each share of Series D Preferred shall automatically be
converted, without any action on the part of the Corporation or the holders of
Series D Preferred Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $2.60 by the Series D
Conversion Price, determined as hereinafter provided, in effect on the date of
the occurrence of the earliest to occur of the following events:
(A) immediately prior to the consummation of the Initial
Registered Public Offering; or
(B) upon the receipt by the Corporation of the written consent
to or request for such conversion from holders of at least two-thirds of the
Series D Preferred then outstanding.
(c) Mechanics of Conversion.
(i) Before any holder of Preferred Stock shall be entitled to convert
the same into shares of Common Stock, such holder shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for such stock, and shall give written
notice to the Corporation at such office that such holder elects to convert the
same and shall state therein the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued.
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The Corporation shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Preferred Stock, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of surrender of the shares of Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on such date.
(ii) If a voluntary conversion is in connection with an underwritten
offering of securities pursuant to the Securities Act, the conversion may, at
the option of any holder tendering shares of Preferred Stock for conversion, be
conditioned upon the closing with the underwriters of the sale of securities
pursuant to such offering, in which event the person(s) entitled to receive the
Common Stock upon conversion of the Preferred Stock shall not be deemed to have
converted such Preferred Stock until immediately prior to the closing of such
sale of securities.
(d) Adjustments to Series A Conversion Price, Series B Conversion Price,
Series C Conversion Price and Series D Conversion Price for Certain Diluting
Issues.
(i) Special Definitions. For purposes of this Section 4(d), the
following definitions apply:
(A) "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities (defined below).
(B) "Series B Original Issue Date" shall mean the first date of
issuance of a share of Series B Preferred Stock.
(C) "Series C Original Issue Date" shall mean the first date of
issuance of a share of Series C Preferred Stock.
(D) "Series D Original Issue Date" shall mean March 17, 1998.
(E) "Convertible Securities" shall mean any evidences of
indebtedness, shares (other than Common Stock, Series A Preferred, Series B
Preferred, Series C Preferred and Series D Preferred) or other securities
convertible into or exchangeable for Common Stock.
(F) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Section 4(d)(iii), deemed to be issued) by
the Corporation after the Series D Original Issue Date, other than shares of
Common Stock issued or issuable as follows:
(1) upon conversion of shares of Series A Preferred, Series
B Preferred, Series C Preferred or Series D Preferred;
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(2) up to 4,000,000 shares, subject to adjustment for all
stock splits, stock dividends, subdivisions and combinations of shares of Common
Stock issued (or, pursuant to Section 4(d)(iii), deemed to be issued) to
employees, officers, directors and consultants of the Corporation pursuant to
the Corporation's stock option, purchase or similar plans in effect on the
Series D Original Issue Date or shares issued pursuant to stock options
otherwise issued to employees, officers, directors or consultants of the
Corporation as approved by the Corporation's Board of Directors;
(3) (or pursuant to Section 4(d)(iii), deemed to be issued)
to employees, officers, directors and consultants of the Corporation after such
shares have been reacquired (upon the termination or expiration of Options or
otherwise) from such persons upon the termination of their relationship with the
Corporation; provided that such reacquired and reissued shares are not issued
(or pursuant to Section 4(d)(iii), deemed to be issued) for consideration which
is less than the consideration per share for which the shares previously issued
were reacquired or at which the shares deemed to be issued (pursuant to Section
4(d)(iii)) and reacquired (upon the termination or expiration of Options or
otherwise) were deemed to be issued;
(4) as a dividend or distribution on the Preferred Stock;
(5) pursuant to Section 4(e) for the purpose of adjusting
the Series A Conversion Price, Series B Conversion Price, the Series C
Conversion Price or Series D Conversion Price; or
(6) pursuant to warrants or other securities issued in
connection with any commercial loan, commercial lease obtained or equipment
leasing transaction or nonfinancing commercial transaction undertaken by the
Corporation with a non-affiliated third party and approved by the director
elected by the holders of the Series A Preferred, the director elected by the
holders of the Series B Preferred, and the director elected by the holders of
the Series C Preferred and the Series D Preferred.
(ii) No Adjustment of Conversion Price. Any provision herein to the
contrary notwithstanding, no adjustment in the Series A Conversion Price, Series
B Conversion Price, the Series C Conversion Price or the Series D Conversion
Price shall be made in respect of the issuance of Additional Shares of Common
Stock unless the consideration per share (determined pursuant to Section 4(d)(v)
hereof) for an Additional Share of Common Stock issued or deemed to be issued by
the Corporation is less than the Series A Conversion Price, Series B Conversion
Price, the Series C Conversion Price, or the Series D Conversion Price,
respectively, in effect on the date of, and immediately prior to, such issuance.
(iii) Deemed Issuance of Additional Shares of Common Stock. In the
event the Corporation at any time or from time to time after the Series D
Original Issue Date shall issue any Options or Convertible Securities or shall
fix a record date for the determination of holders of any class of securities
then entitled to receive any such Options or Convertible Securities, then the
maximum number of shares (as set forth in the instrument relating thereto
without regard to any provisions contained therein designed to protect against
dilution) of Common Stock issuable upon the exercise of such Options or,
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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,
provided that in any such case in which Additional Shares of Common Stock are
deemed to be issued:
(A) no further adjustments in the Series A Conversion Price,
Series B Conversion Price, the Series C Conversion Price or the Series D
Conversion Price, as the case may be, shall be made upon the subsequent issue of
Convertible Securities or shares of Common Stock upon the exercise of such
Options or conversion or exchange of such Convertible Securities;
(B) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase or decrease in
the consideration payable to the Corporation, or decrease or increase in the
number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Series A Conversion Price, Series B Conversion Price, the
Series C Conversion Price or the Series D Conversion Price, as the case may be,
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon any such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options or the rights of
conversion or exchange under such Convertible Securities (provided, however,
that no such adjustment of the Series A Conversion Price, Series B Conversion
Price, the Series C Conversion Price or the Series D Conversion Price, as the
case may be, shall affect the Common Stock previously issued upon conversion of
the Series A Preferred, Series B Preferred, Series C Preferred or Series D
Preferred, as the case may be);
(C) upon the expiration of any such Options or any rights of
conversion or exchange under such Convertible Securities which shall not have
been exercised, the Series A Conversion Price, Series B Conversion Price, the
Series C Conversion Price or the Series D Conversion Price, as the case may be,
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon such expiration, be recomputed as if:
(1) in the case of Convertible Securities or Options for
Common Stock, the only Additional Shares of Common Stock issued were the shares
of Common Stock, if any, actually issued upon the exercise of such Options or
the conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for
the issue of all such Options, whether or not exercised, plus the consideration
actually received by the Corporation upon such exercise, or for the issue of all
such Convertible Securities which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the Corporation upon such
conversion or exchange, and
(2) in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued upon the exercise thereof
were
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issued at the time of issue of such Options, and the consideration received by
the Corporation for the Additional Shares of Common Stock deemed to have been
then issued was the consideration actually received by the Corporation for the
issue of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Corporation (determined pursuant to Section
4(d)(v)) upon the issue of the Convertible Securities with respect to which such
Options were actually exercised;
(D) no readjustment pursuant to clause (B) or (C) above shall
have the effect of increasing the Series A Conversion Price, Series B Conversion
Price, the Series C Conversion Price or the Series D Conversion Price, as the
case may be, to an amount which exceeds the lower of (1) the Series A Conversion
Price or the Series B Conversion Price or Series C Conversion Price or the
Series D Conversion Price, as the case may be, on the original adjustment date,
or (2) the Series A Conversion Price, Series B Conversion Price, the Series C
Conversion Price or the Series D Conversion Price, as the case may be, that
would have resulted from any issuance of Additional Shares of Common Stock
between the original adjustment date and such readjustment date;
(E) in the case of any Options which expire by their terms not
more than 30 days after the date of issue thereof, no adjustment of the Series A
Conversion Price, Series B Conversion Price, the Series C Conversion Price or
the Series D Conversion Price shall be made until the expiration or exercise of
all such Options, whereupon such adjustment shall be made in the same manner
provided in clause (C) above.
(iv) Adjustment of Conversion Price Upon Issuance of Additional Shares
of Common Stock. In the event this Corporation, at any time after the Series D
Original Issue Date, shall issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section
4(d)(iii)), without consideration or for a consideration per share less than the
Series A Conversion Price in effect on such date of and immediately prior to
such issuance, then and in such event, the Series A Conversion Price shall be
reduced, concurrently with such issue, to a price (calculated to the nearest
cent) determined by multiplying such Series A Conversion Price by a fraction,
the numerator of which shall be the number of shares of Series A Preferred
actually issued and outstanding immediately prior to such issue plus the number
of shares of Common Stock which the aggregate consideration received by the
Corporation for the total number of Additional Shares of Common Stock so issued
would purchase at such Series A Conversion Price in effect immediately prior to
such issuance, and the denominator of which shall be the number of shares of
Series A Preferred actually issued and outstanding immediately prior to such
issue plus the number of such Additional Shares of Common Stock so issued. In
the event this Corporation, at any time after the Series D Original Issue Date,
shall issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 4(d)(iii)), without
consideration or for a consideration per share less than the Series B Conversion
Price in effect on such date of and immediately prior to such issuance, then and
in such event, the Series B Conversion Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Series B Conversion Price by a fraction, the numerator of which
shall be the number of shares of
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Series B Preferred actually issued and outstanding immediately prior to such
issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Series B Conversion
Price in effect immediately prior to such issuance, and the denominator of which
shall be the number of shares of Series B Preferred actually issued and
outstanding immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued. In the event this Corporation, at any time
after the Series D Original Issue Date, shall issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued pursuant
to Section 4(d)(iii)), without consideration or for a consideration per share
less than the Series C Conversion Price in effect on such date of and
immediately prior to such issuance, then and in such event, the Series C
Conversion Price shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Series C
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Series C Preferred actually issued and outstanding immediately prior
to such issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Series C Conversion
Price in effect immediately prior to such issuance, and the denominator of which
shall be the number of shares of Series C Preferred actually issued and
outstanding immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued. In the event this Corporation, at any time
after the Series D Original Issue Date, shall issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued pursuant
to Section 4(d)(iii)), without consideration or for a consideration per share
less than the Series D Conversion Price in effect on such date of and
immediately prior to such issuance, then and in such event, the Series D
Conversion Price shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Series D
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Series D Preferred actually issued and outstanding immediately prior
to such issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Series D Conversion
Price in effect immediately prior to such issuance, and the denominator of which
shall be the number of shares of Series D Preferred actually issued and
outstanding immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued.
(v) Determination of Consideration. For purposes of this Section
4(d), 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:
(1) 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 or accrued dividends;
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<PAGE> 14
(2) insofar as it consists of property other than cash, be
computed at the fair value thereof at the time of such issue, as determined in
good faith by the Board of Directors; and
(3) 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 (1) and (2) above, as
determined in good faith by the Board of Directors.
(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 4(d)(iii), relating to Options and
Convertible Securities shall be determined by dividing:
(1) the total amount, if any, received or receivable by the
Corporation as consideration for the issue 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 designed to protect against dilution) 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
(2) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein designed to protect against dilution) issuable upon the
exercise of such Options or conversion or exchange of such Convertible
Securities.
(e) Adjustments for Stock Dividends, Subdivisions, or Split-ups of Common
Stock. If the number of shares of Common Stock outstanding at any time after the
Series D Original Issue Date is increased by a stock dividend payable in shares
of Common Stock or by a subdivision or split-up of shares of Common Stock, then,
effective at the close of business upon the record date fixed for the
determination of holders of Common Stock entitled to receive such stock
dividend, subdivision or split-up, the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion Price and the Series D Conversion
Price shall be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of Series A Preferred, Series B
Preferred, Series C Preferred and Series D Preferred shall be increased in
proportion to such increase of outstanding shares of Common Stock.
(f) Adjustments for Combinations of Common Stock. If the number of shares
of Common Stock outstanding at any time after the Series D Original Issue Date
is decreased by a combination of the outstanding shares of Common Stock, then,
effective at the close of business upon the record date of such combination, the
Series A Conversion Price, the Series B Conversion Price, the Series C
Conversion Price and the Series D Conversion Price shall be appropriately
increased so that the number of shares of Common Stock issuable on conversion of
each share of Series A Preferred, Series B Preferred, Series C Preferred and
Series D Preferred shall be decreased in proportion to such decrease in
outstanding shares of Common Stock.
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<PAGE> 15
(g) Adjustments for Other Distributions. In the event the Corporation at
any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive any distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of Preferred
Stock shall receive upon conversion thereof, in addition to the number of shares
of Common Stock receivable thereupon, the amount of securities of the
Corporation which they would have received had their Preferred Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the date of
conversion, retained such securities receivable by them as aforesaid during such
period, subject to all other adjustments called for during such period under
this Section 4(g) with respect to the rights of the holders of the Preferred
Stock.
(h) Adjustments for Reorganizations, Reclassifications, etc. If the Common
Stock issuable upon conversion of the Preferred Stock shall be changed into the
same or a different number of shares of any other class or classes of stock or
other securities or property, whether by reclassification, a merger or
consolidation of this Corporation with or into any other corporation or
corporations, or a sale of all or substantially all of the assets of this
Corporation (but only if the stockholders of this Corporation hold more than 50%
of the outstanding voting equity securities of the surviving corporation in such
merger, consolidation or sale of assets reorganization), or otherwise (other
than a subdivision or combination of shares provided for above or a merger or
other transaction referred to in Section 5(f) below), the Series A Conversion
Price, Series B Conversion Price, the Series C Conversion Price and the Series D
Conversion Price then in effect, concurrently with the effectiveness of such
reorganization or reclassification, shall be proportionately adjusted such that
the Series A Preferred, Series B Preferred, Series C Preferred and Series D
Preferred shall be convertible into, in lieu of the number of shares of Common
Stock which the holders would otherwise have been entitled to receive, a number
of shares of such other class or classes of stock or securities or other
property equivalent to the number of shares of Common Stock that would have been
subject to receipt by the holders upon conversion of the Preferred Stock
immediately before such event; and, in any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the holders of the Preferred Stock, to the end that the provisions set forth
herein (including provisions with respect to changes in and other adjustments of
the Series A Conversion Price, the Series B Conversion Price, the Series C
Conversion Price and the Series D Conversion Price) shall thereafter be
applicable, as nearly as may be reasonable, in relation to any shares of stock
or other property thereafter deliverable upon the conversion of the Preferred
Stock.
(i) No Impairment. The Corporation will not, except by a properly approved
amendment of its Certificate of Incorporation, 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
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 4 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 Preferred Stock against impairment.
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<PAGE> 16
(j) Certificates as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Series A Conversion Price, the Series B Conversion Price,
the Series C Conversion Price or the Series D Conversion Price pursuant to this
Section 4, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and prepare and furnish to
each holder of Series A Preferred, Series B Preferred, Series C Preferred or
Series D Preferred, as applicable, a certificate executed by the Corporation's
President or Chief Financial Officer setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (1) such adjustments and readjustments,
(2) the Series A Conversion Price, the Series B Conversion Price, the Series C
Conversion Price or the Series D Conversion Price, as applicable, at the time in
effect, and (3) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion of the
Preferred Stock.
(k) Notices of Record Date. In the event that the Corporation shall
propose at any time: (a) to declare any special dividend or distribution upon
its Common Stock, whether in cash, property, stock or other securities, whether
or not out of earnings or earned surplus; (b) to offer for subscription pro rata
to the holders of any class or series of its stock any additional shares of
stock of any class or series or other rights; (c) to effect any reclassification
or recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or (d) to merge or consolidate with or into any other corporation
(other than a mere reincorporation transaction), or sell, lease or convey all or
substantially all of its assets, or to liquidate, dissolve or wind up; then, in
connection with each such event, the Corporation shall send to the holders of
Preferred Stock:
(i) at least twenty (20) days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of Common Stock shall be
entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in (c) and (d) above; and
(ii) in the case of the matters referred to in (c) and (d) above, at
least twenty (20) days' prior written notice of the date when the same shall
take place (and specifying the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon the occurrence of such event).
(l) Issue Taxes. The Corporation shall pay any and all issue and other
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of the Preferred Stock pursuant hereto; provided,
however, that the Corporation shall not be obligated to pay any transfer taxes
resulting from any transfer requested by any holder in connection with any such
conversion.
(m) Reservation of Stock Issuable Upon Conversion. The Corporation shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Preferred Stock, such
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number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the 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
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose, including, without limitation, engaging in its best efforts to obtain
the requisite stockholder approval of any necessary amendment to the Certificate
of Incorporation.
(n) Fractional Shares. No fractional share shall be issued upon the
conversion of any share or shares of Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Preferred Stock by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of a fraction of a share of Common Stock, the Corporation
shall, in lieu of issuing any fractional share, pay the holder otherwise
entitled to such fraction a sum in cash equal to the fair market value of such
fraction on the date of conversion (as determined in good faith by the Board of
Directors).
(o) Notices. Any notice required by the provisions of this Section 4 to be
given to the holders of shares of Preferred Stock shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at his or its address appearing on the books of the
Corporation.
SECTION 5. LIQUIDATION PREFERENCES.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation whether voluntary or involuntary the holders of the Series A
Preferred shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the Corporation to the
holders of the Series B Preferred, Series C Preferred, Series D Preferred or
Common Stock or any other shares of this corporation other than Series A
Preferred by reason of their ownership thereof, the amount of $0.336 (as
adjusted for any stock dividends, combinations or splits with respect to such
shares), plus all declared or accrued but unpaid, dividends on such share, for
each share of Series A Preferred then held by them. If upon the occurrence of
such event, the assets and funds thus distributed among the holders of the
Series A Preferred shall be insufficient to permit the payment to such holders
of the full aforesaid preferential amount, then the entire assets and funds of
the Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred in proportion to the preferential
amount each such holder is otherwise entitled to receive.
(b) After the payment to the holders of the Series A Preferred of the
amounts set forth in Section 5(a) above, the holders of the Series B Preferred,
Series C Preferred and Series D Preferred shall be entitled to receive,
respectively, prior and in preference to any distribution of any of the assets
or surplus funds of the Corporation to the holders of the Common Stock or any
other shares of this corporation other than Series B Preferred, Series C
Preferred and Series D Preferred by reason of their ownership thereof, the
amount equal to the sum of (i) $2.268 per share for the holders of Series B
Preferred, $1.7136 per share for the
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<PAGE> 18
holders of Series C Preferred (as adjusted for any stock dividends, combinations
or splits with respect to such shares) and $2.60 for the holders of Series D
Preferred (as adjusted for any stock dividends, combinations or splits with
respect to such shares); plus (ii) all declared or accrued but unpaid dividends
and all unpaid Cumulative Series B Dividends, with respect to Series B
Preferred, Cumulative Series C Dividends, with respect to Series C Preferred,
and Cumulative Series D Dividends, with respect to Series D Preferred, on such
shares. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Series B Preferred, Series C Preferred and
Series D Preferred shall be insufficient to permit the payment to such holders
of the full aforesaid preferential amount, then the entire assets and funds of
the Corporation legally available for distribution after the payment to the
holders of the Series A Preferred of the amounts set forth in Section 5 (a)
above shall be distributed ratably among the holders of the Series B Preferred,
Series C Preferred and Series D Preferred in proportion to the preferential
amount each such holder is otherwise entitled to receive.
(c) In the event of any liquidation or winding up of the Corporation (as
defined below), where the available assets and funds of the Corporation upon
such liquidation or winding up exceed $33.6 Million (a "Qualifying
Liquidation"), after the payment to the holders of the Series A Preferred,
Series B Preferred, Series C Preferred and Series D Preferred of the amounts set
forth in Sections 5(a) and 5(b) respectively, the holders of the Common Stock
shall be entitled to receive, prior and in preference to any distribution of any
of the assets or surplus funds of the Corporation to the holders of the other
capital stock of the Corporation by reason of their ownership thereof, an
aggregate distribution equal to $10,662,707.73 with each holder of Common Stock
participating on a pro rata basis based on the number of shares of Common Stock
they own. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Common Stock shall be insufficient to
permit the payment to such holders of the full aforesaid amount, then all assets
and funds of the Corporation legally available for distribution after the
payment to the holders of the Series A Preferred, Series B Preferred, Series C
Preferred and Series D Preferred of the amounts set forth above in Sections 5(a)
and 5(b), respectively, shall be distributed ratably among the holders of the
Common Stock in proportion to the amount each such holder is otherwise entitled
to receive.
(d) In the event of a liquidation or winding up other than a Qualifying
Liquidation, after the payment to the holders of the Series A Preferred, Series
B Preferred, Series C Preferred and Series D Preferred of the amounts set forth
above in Sections 5(a) and 5(b), respectively, the holders of the Common Stock
shall be entitled to receive, prior and in preference to any distribution of any
of the assets or surplus funds of the Corporation to the holders of the other
capital stock of the Corporation by reason of their ownership thereof, an
aggregate distribution equal to $5,521,907.73 with each holder of Common Stock
participating on a pro rata basis based on the number of shares of Common Stock
they own. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Common Stock shall be insufficient to
permit the payment to such holders of the full aforesaid amount, then all assets
and funds of the Corporation legally available for distribution after the
payment to the holders of the Series A Preferred, Series B Preferred, Series C
Preferred and Series D Preferred of the amounts set forth above in Sections 5(a)
and 5(b) respectively, shall be distributed ratably among the holders of the
Common Stock in proportion to the preferential amount each such holder is
otherwise entitled to receive.
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(e) After payments to (i) the holders of the Series A Preferred of the
amounts set forth in Section 5(a) above, and (ii) the holders of the Series B
Preferred, Series C Preferred and Series D Preferred set forth in Section 5(b)
above, and (iii) the holders of the Common Stock of the amounts set forth in
Section 5(c) or 5(d) above, as the case may be, the entire remaining assets and
funds of the Corporation legally available for distribution, if any, shall be
distributed among the holders of the Common Stock, the Series A Preferred,
Series B Preferred, Series C Preferred and Series D Preferred in proportion to
the shares of Common Stock then held by them and the shares of Common Stock
which they then have the right to acquire upon conversion of the shares of
Series A Preferred, Series B Preferred, Series C Preferred or Series D Preferred
then held by them.
(f) A merger of the Corporation with or into any other corporation or
corporations (other than a mere reincorporation transaction), a sale of all or
substantially all of the assets of the Corporation or a transaction or series of
related transactions (other than a public offering of the Corporation's
securities) in which the Corporation issues shares representing more than 50% of
the voting power of the Corporation immediately after giving effect to such
transaction, shall be treated as a liquidation, dissolution or winding up for
purposes of this Section 5; provided however, if holders of a majority of the
issued and outstanding shares of Series A Preferred, Series B Preferred, Series
C Preferred or Series D Preferred, respectively, elect to waive such treatment
with respect to any transaction, such transaction shall not be treated as a
liquidation, dissolution or winding up for purposes of this Section 5 with
respect to the Series A Preferred, Series B Preferred, Series C Preferred or
Series D Preferred, as the case may be. In making distributions to the holders
of Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Common Stock upon any such event, the amount of securities or
other non-cash assets will be distributed pro rata based on the amounts to be
distributed to the holders of Series A Preferred, the Series B Preferred, Series
C Preferred, Series D Preferred and Common Stock. Any securities to be delivered
to the holders of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Common Stock pursuant to such event shall be valued as
follows:
(i) Securities not subject to investment letter or other similar
restrictions on free marketability:
(A) If traded on a securities exchange or reported on a national
inter dealer quotation system, the value shall be deemed to be the average of
the closing prices of the securities on such exchange over the 30 day period
ending three (3) days prior to the closing;
(B) If actively traded over the counter and not reported on a
national inter dealer quotation system, the value shall be deemed to be the
average of the closing bid prices over the 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 determined in good faith by the Board of
Directors.
(ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability shall be to make an
appropriate discount from
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the market value determined as above in (i)(A), (B) or (C) to reflect the
approximate fair market value thereof, as determined in good faith by the Board
of Directors.
(g) In the event of a transaction (or series of related transactions) to
be treated as a liquidation pursuant to this Section 5, the Corporation shall
give each holder of record of Preferred Stock written notice of such impending
transaction not later than twenty (20) days prior to the stockholders' meeting
called to approve such transaction, or twenty (20) days prior to the closing of
such transaction, whichever is earlier, and shall also notify such holders in
writing of the final approval of such transaction. The first of such notices
shall describe the material terms and conditions of the impending transaction
and the provisions of this Section 5, and the Corporation shall thereafter give
such holders prompt notice of any material changes. The transaction shall in no
event take place sooner than twenty (20) days after the Corporation has given
the first notice provided for herein or sooner than ten (10) days after the
Corporation has given notice of any material changes provided for herein;
provided, however, that such periods may be shortened upon the written consent
of the holders of a majority of the shares of Preferred Stock, voting together
as one class for this purpose.
SECTION 6. PROTECTIVE PROVISIONS.
(a) In addition to any other rights provided by law, so long as any share
of Series A Preferred shall be outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of the
majority of the outstanding shares of Series A Preferred voting separately as a
separate class:
(i) Take any action which alters or changes any of the rights,
privileges or preferences of the Series A Preferred, including without
limitation (A) increasing or decreasing the aggregate number of authorized
shares of such series other than an increase incident to a stock split, (B)
effecting an exchange, reclassification or cancellation of all or part of the
shares of such series, other than a stock split, and (C) effecting an exchange,
or creating a right of exchange, of all or part of the shares of another class
into the shares of such class;
(ii) Take any action which creates any new class or series of shares
having any right, preference, priority or power superior to or on a parity with
any such right, preference, priority or power of the Series A Preferred; or
(iii) Except as provided elsewhere in this Amended and Restated
Certificate of Incorporation or the Corporation's Bylaws as in effect on the
Series B Original Issue Date, redeem, purchase or otherwise acquire any of the
Preferred Stock or Common Stock; provided, however, that this restriction shall
not apply to the repurchase of shares of Common Stock in accordance with
Sections 160 and 170-174 of the General Corporation Laws of the State of
Delaware from employees, officers, directors, consultants or other persons
performing services for the Corporation, provided that such repurchase does not
impair the redemption rights of the holders of Series A Preferred, Series B
Preferred, Series C Preferred and Series D Preferred set forth in Section 9
hereof.
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(b) In addition to any other rights provided by law, so long as any share
of Series B Preferred shall be outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of the
majority of the outstanding shares of Series B Preferred voting separately as a
separate class:
(i) Take any action which alters or changes any of the rights,
privileges or preferences of the Series B Preferred, including without
limitation (A) increasing or decreasing the aggregate number of authorized
shares of such series other than an increase incident to a stock split, (B)
effecting an exchange, reclassification or cancellation of all or part of the
shares of such series, other than a stock split, and (C) effecting an exchange,
or creating a right of exchange, of all or part of the shares of another class
into the shares of such class;
(ii) Take any action which creates any new class or series of shares
having any right, preference, priority or power superior to or on a parity with
any such right, preference, priority or power of the Series B Preferred;
(iii) Except as provided elsewhere in this Amended and Restated
Certificate of Incorporation or the Corporation's Bylaws as in effect on the
Series B Original Issue Date, redeem, purchase or otherwise acquire any of the
Preferred Stock or Common Stock; provided, however, that this restriction shall
not apply to the repurchase of shares of Common Stock in accordance with
Sections 160 and 170-174 of the General Corporation Law of the State of Delaware
from employees, officers, directors, consultants or other persons performing
services for the Corporation upon termination of their employment or services
pursuant to agreements providing for such repurchase, provided that such
repurchase does not impair the redemption rights of the holders of Series A
Preferred, Series B Preferred, Series C Preferred or Series D Preferred set
forth in Section 9 hereof; or
(iv) Issue any shares of Series B Preferred at any time following the
thirtieth day following the Series B Original Issue Date.
(c) In addition to any other rights provided by law, so long as any share
of Series C Preferred shall be outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of the
majority of the outstanding shares of Series C Preferred voting separately as a
separate class:
(i) Take any action which alters or changes any of the rights,
privileges or preferences of the Series C Preferred so as to materially and
adversely affect such shares, including without limitation (A) increasing or
decreasing the aggregate number of authorized shares of Series C Preferred other
than an increase incident to a stock split, (B) effecting an exchange,
reclassification or cancellation of all or part of the shares of such series,
other than a stock split, and (C) effecting an exchange, or creating a right of
exchange, of all or part of the shares of another class into the shares of such
class;
(ii) Take any action which creates or issues any class or series of
shares having any right, preference, priority or power superior to or on a
parity with any such right, preference, priority or power of the Series C
Preferred;
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<PAGE> 22
(iii) Except as provided elsewhere in this Amended and Restated
Certificate of Incorporation or the Corporation's Bylaws as in effect on the
Series C Original Issue Date, redeem, purchase or otherwise acquire any of the
Preferred Stock or Common Stock; provided, however, that this restriction shall
not apply to the repurchase of shares of Common Stock in accordance with
Sections 160 and 170-174 of the General Corporation Law of the State of Delaware
from employees, officers, directors, consultants or other persons performing
services for the Corporation upon termination of their employment or services
pursuant to agreements providing for such repurchase, provided that such
repurchase does not impair the redemption rights of the holders of Series A
Preferred, Series B Preferred, Series C Preferred or Series D Preferred set
forth in Section 9 hereof; or
(iv) Pay or declare dividends on the Preferred Stock or Common Stock;
provided, however, that this restriction shall not apply to the repurchase of
shares of Common Stock in accordance with Sections 160 and 170-174 of the
General Corporation Law of the State of Delaware from employees, officers,
directors, consultants or other persons performing services for the Corporation
upon termination of their employment or services pursuant to agreements
providing for such repurchase, provided that such repurchase does not impair the
redemption rights of the holders of Series A Preferred, Series B Preferred,
Series C Preferred or Series D Preferred set forth in Section 9 hereof; or
(v) Change the number of directors.
(d) In addition to any other rights provided by law, so long as any share
of Series D Preferred shall be outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of the
majority of the outstanding shares of Series D Preferred voting separately as a
separate class:
(i) Take any action which alters or changes any of the rights,
privileges or preferences of the Series D Preferred so as to materially and
adversely affect such shares, including without limitation (A) increasing or
decreasing the aggregate number of authorized shares of Series D Preferred other
than an increase incident to a stock split, (B) effecting an exchange,
reclassification or cancellation of all or part of the shares of such series,
other than a stock split, and (C) effecting an exchange, or creating a right of
exchange, of all or part of the shares of another class into the shares of such
class;
(ii) Take any action which creates or issues any class or series of
shares having any right, preference, priority or power superior to or on a
parity with any such right, preference, priority or power of the Series D
Preferred;
(iii) Except as provided elsewhere in this Amended and Restated
Certificate of Incorporation or the Corporation's Bylaws as in effect on the
Series D Original Issue Date, redeem, purchase or otherwise acquire any of the
Preferred Stock or Common Stock; provided, however, that this restriction shall
not apply to the repurchase of shares of Common Stock in accordance with
Sections 160 and 170-171 of the General Corporation Law of the State of Delaware
from employees, officers, directors, consultants or other persons performing
services for the Corporation upon termination of
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their employment or services pursuant to agreements providing for such
repurchase, provided that such repurchase does not impair the redemption rights
of the holders of Series A Preferred, Series B Preferred, Series C Preferred or
Series D Preferred set forth in Section 9 hereof; or
(iv) Pay or declare dividends on the Preferred Stock or Common Stock;
provided, however, that this restriction shall not apply to the repurchase of
shares of Common Stock in accordance with Sections 160 and 170-174 of the
General Corporation Law of the State of Delaware from employees, officers,
directors, consultants or other persons performing services for the Corporation
upon termination of their employment or services pursuant to agreements
providing for such repurchase, provided that such repurchase does not impair the
redemption rights of the holders of Series A Preferred, Series B Preferred,
Series C Preferred or Series D Preferred set forth in Section 9 hereof; or
(v) Change the number of directors.
SECTION 7. NO REISSUANCE OF PREFERRED STOCK.
(a) No share or shares of Series A Preferred acquired by the Corporation
by reason of purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may, from time to
time, take such appropriate corporate action as may be necessary to reduce the
authorized number of shares of the Series A Preferred.
(b) No share or shares of Series B Preferred acquired by the Corporation
by reason of purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may, from time to
time, take such appropriate corporate action as may be necessary to reduce the
authorized number of shares of the Series B Preferred.
(c) No share or shares of Series C Preferred acquired by the Corporation
by reason of purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may, from time to
time, take such appropriate corporate action as may be necessary to reduce the
authorized number of shares of the Series C Preferred.
(d) No share or shares of Series D Preferred acquired by the Corporation
by reason of purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may, from time to
time, take such appropriate corporate action as may be necessary to reduce the
authorized number of shares of the Series D Preferred.
SECTION 8. RIGHT OF FIRST REFUSAL.
(a) Except as set forth in Section 8(d) below, if, at any time after the
Series D Original Issue Date, the Corporation shall propose to sell to any
persons in a transaction not registered under the Securities Act any Equity
Securities (as hereinafter defined), it shall give the
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<PAGE> 24
holders of the Preferred Stock the right to purchase all such Equity Securities
and each holder may purchase his or its pro rata share (which proportion is to
be determined by dividing the number of shares of Common Stock issued or
issuable upon conversion of the Preferred Stock held by such holder of Preferred
Stock by all of the Corporation's Common Stock then outstanding or issuable upon
exercise of warrants or options or conversion of Preferred Stock) of such
privately offered Equity Securities on the same terms and conditions as the
Corporation is offering such Equity Securities to such other persons. Prior to
any sale or issuance by the Corporation of any Equity Securities subject to this
right of first offer, the Corporation shall notify the holders of the Preferred
Stock, in writing, of its intention to sell and issue such Equity Securities,
setting forth the terms under which it proposes to make such sale. Within ten
(10) business days after receipt of such notice, the holders of the Preferred
Stock shall notify the Corporation as to whether they desire to purchase any or
all of their pro rata share of such Equity Securities for the price and on the
general terms specified in the notice. In the event any holder of Preferred
Stock elects not to purchase such holder's pro rata share of such Equity
Securities, the remaining holders of Preferred Stock shall have the right to
purchase their pro rata share of such available shares on the terms described
above. Within five (5) business days following receipt of such notice, the
remaining holders of the Preferred Stock shall notify the Corporation of the
number of such Equity Securities it chooses to purchase. (In the event that such
shares are over subscribed, each holder of Preferred Stock shall be entitled to
purchase on a pro-rata basis.) All such notifications by the holders of the
Preferred Stock to the Corporation shall be irrevocable, binding commitments to
purchase such Equity Securities.
(b) If, following the expiration of the notice periods set forth above,
the holders of the Preferred Stock have not notified the Corporation that they
desire to purchase all of the Equity Securities described in such notice upon
the terms and conditions set forth in such notice, the Corporation may, during a
period of one hundred twenty (120) days following the end of such fifteen (15)
business day period, sell and issue such Equity Securities which the holders of
Preferred Stock have not elected to purchase at a price and upon terms and
conditions no more favorable to such investors than those set forth in such
notice.
(c) If the holders of the Preferred Stock elect to purchase all of the
Equity Securities offered by the Corporation, the holders of the Preferred Stock
shall pay for them by check against delivery of the securities at the executive
offices of the Corporation at the time of the scheduled closing therefor. The
Corporation shall take all such action (except registration under the Securities
Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as
may be reasonably required by any regulatory authority in connection with the
exercise by the holders of the Preferred Stock of the right to purchase Equity
Securities as set forth herein.
(d) The right of first refusal contained in (a), above, shall not apply to
(i) securities offered to the public in an underwritten offering pursuant to a
registration statement filed under the Securities Act, (ii) securities issued
pursuant to the acquisition of another company by the Corporation by merger,
purchase of substantially all of the assets, or other reorganization, (iii) up
to 4,000,000 shares of the Common Stock (or related options) subject to
adjustment for all stock splits, stock dividends, subdivisions and combinations
of shares of Common Stock issued (or pursuant to Section 4(d)(iii), deemed to be
issued) to employees, officers, consultants or directors of the Corporation
pursuant to the Corporation's stock option, purchase or similar plans in effect
on the Series D Original Issue Date or shares issued pursuant
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<PAGE> 25
to stock options otherwise issued to employees, officers, directors or
consultants of the Corporation as approved by the Board of Directors, (iv)
shares issued in connection with any stock split, stock dividend or
recapitalization by the Corporation, (v) shares issued upon conversion of
Preferred Stock or upon the exercise of any Convertible Security, option or
warrant which was itself an Equity Security, or (vi) any shares of Common Stock
issued pursuant to warrants or other securities issued in connection with any
commercial loan, commercial lease obtained or equipment leasing transaction or
nonfinancing commercial transaction undertaken by the Corporation with a
non-affiliated third party and approved by the director elected by the holders
of the Series A Preferred, the director elected by the holders of the Series B
Preferred and the director elected by the holders of the Series C Preferred and
the Series D Preferred.
(e) The term "Equity Securities" shall mean any security having voting
rights in the election of the Board of Directors not contingent upon default and
any security convertible into or exchangeable for the foregoing.
(f) The rights set forth in this Section 8 shall terminate immediately
prior to the closing of the Corporation's Initial Registered Public Offering.
SECTION 9. REDEMPTION.
(a) At any time after January 5, 2000 at the election of holders of a
majority of the then outstanding shares of Series A Preferred, the Corporation
shall promptly, if it may lawfully do so, from any source of funds legally
available therefor, redeem all, but not less than all, of the Series A Preferred
by paying in cash therefor a sum equal to $0.63 for each share of Series A
Preferred (as adjusted for any stock dividends, combinations or splits with
respect to such shares)(the "Series A Redemption Price").
(b) The Corporation shall give each holder of Series A Preferred notice of
the date fixed for redemption ("Series A Redemption Date"). On or after the
Series A Redemption Date, the Series A Redemption Price of 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. From and after the Series A Redemption Date, unless there shall have
been a default in payment of the Series A Redemption Price, all rights of the
holders of such shares as holders of Series A Preferred of the Corporation
(except the right to receive the applicable Series A Redemption Price without
interest upon surrender of their certificate or certificates) shall cease with
respect to such shares, and such shares shall not thereafter be transferred on
the books of the Corporation or be deemed to be outstanding for any purpose
whatsoever.
(c) At any time after the sixth anniversary of the Series B Original Issue
Date, at the election of holders of a majority of the then outstanding shares of
Series B Preferred, the Corporation shall commencing not less than ninety (90)
days after the receipt by the Corporation of such election in the manner set
forth in subsection (d) below, if it may lawfully do so, from any source of
funds legally available therefor, redeem all, but not less than all, of the
Series B Preferred by paying in cash therefor a sum equal to the sum of (i)
$2.268 per share (as adjusted for any stock dividends, combinations or splits
with respect to such shares), plus (ii) all declared or accrued but unpaid
dividends and all unpaid Cumulative Series B Dividends on such shares (the
"Series B Redemption Price").
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(d) The Series B Redemption Price shall be payable in three (3) annual
installments commencing ninety (90) days after the receipt by the Corporation of
such election. The Corporation shall give each holder of Series B Preferred
notice of the dates fixed for redemption ("Series B Redemption Dates"). On or
after each Series B Redemption Date, the Series B Redemption Price of 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. From and after the initial Series B Redemption
Date, unless there shall have been a default in payment of the Series B
Redemption Price, all rights of the holders of such shares as holders of Series
B Preferred of the Corporation (except the right to receive the applicable
Series B Redemption Price without interest upon surrender of their certificate
or certificates) shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of the corporation or be deemed to be
outstanding for any purpose whatsoever.
(e) At any time after the sixth anniversary of the Series B Original Issue
Date, at the election of holders of at least two-thirds (2/3) of the then
outstanding shares of Series C Preferred, the Corporation shall commencing not
less than ninety (90) days after the receipt by the Corporation of such election
in the manner set forth in subsection (f) below, if it may lawfully do so, from
any source of funds legally available therefor, redeem all, but not less than
all, of the Series C Preferred by paying in cash therefor a sum equal to the sum
of (i) $1.7136 per share (as adjusted for any stock dividends, combinations or
splits with respect to such shares), plus (ii) all declared or accrued but
unpaid dividends and all unpaid Cumulative Series C Dividends on such shares
(the "Series C Redemption Price").
(f) The Series C Redemption Price shall be payable in three (3) annual
installments commencing ninety (90) days after the receipt by the Corporation of
such election. The Corporation shall give each holder of Series C Preferred
notice of the dates fixed for redemption ("Series C Redemption Dates"). On or
after each Series C Redemption Date, the Series C Redemption Price of 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. From and after the initial Series C Redemption
Date, unless there shall have been a default in payment of the Series C
Redemption Price, all rights of the holders of such shares as holders of Series
C Preferred of the Corporation (except the right to receive the applicable
Series C Redemption Price without interest upon surrender of their certificate
or certificates) shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of the corporation or be deemed to be
outstanding for any purpose whatsoever.
(g) At any time after the sixth anniversary of the Series B Original Issue
Date, at the election of holders of at least two-thirds (2/3) of the then
outstanding shares of Series D Preferred, the Corporation shall commencing not
less than ninety (90) days after the receipt by the Corporation of such election
in the manner set forth in subsection (h) below, if it may lawfully do so, from
any source of funds legally available therefor, redeem all, but not less than
all, of the Series D Preferred by paying in cash therefor a sum equal to the sum
of (i) $2.60 per share (as adjusted for any stock dividends, combinations or
splits with respect to such shares), plus (ii) all declared or accrued but
unpaid dividends and all unpaid Cumulative Series D Dividends on such shares
(the "Series D Redemption Price").
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<PAGE> 27
(h) The Series D Redemption Price shall be payable in three (3) annual
installments commencing ninety (90) days after the receipt by the Corporation of
such election. The Corporation shall give each holder of Series D Preferred
notice of the dates fixed for redemption ("Series D Redemption Dates"). On or
after each Series D Redemption Date, the Series D Redemption Price of 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. From and after the initial Series D Redemption
Date, unless there shall have been a default in payment of the Series D
Redemption Price, all rights of the holders of such shares as holders of Series
D Preferred of the Corporation (except the right to receive the applicable
Series D Redemption Price without interest upon surrender of their certificate
or certificates) shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of the corporation or be deemed to be
outstanding for any purpose whatsoever.
ARTICLE V.
The Corporation is to have perpetual existence.
ARTICLE VI.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Bylaws of the Corporation.
ARTICLE VII.
The election of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.
ARTICLE VIII.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any statutory provision) outside the State of Delaware at such place
or places as may be designated from time to time by the Board of Directors or in
the Bylaws of the Corporation.
ARTICLE IX.
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended. No amendment to or repeal of this
Article shall apply to or have any effect on
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the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment.
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EXHIBIT 99.1
BEYOND.COM STOCKHOLDERS APPROVE LEGAL NAME CHANGE
SUNNYVALE, Calif. -- (BUSINESS WIRE) -- Dec. 21, 1998 -- Internet software
superstore Beyond.com (tm) (Nasdaq:BYND news) http://www.beyond.com, has legally
changed its name to Beyond.com Corporation from software.net Corporation. The
company has been doing business as Beyond.com since Aug. 25, 1998, when it
revamped its website, adding Reviews and Recommendations, and launched a
national advertising campaign. On Dec. 21, 1998, the company held a special
meeting of its stockholders and received their approval to legally change the
name of the company to Beyond.com Corporation. The vote essentially aligns the
company's official corporate name with the trade name it has been using on its
website and in its listing on the Nasdaq National Market.
"We are thrilled to permanently be known as Beyond.com," said Mark Breier,
president and chief executive officer of Beyond.com. "Beyond.com is a great name
because it is inspirational, suggestive of grandeur and promises our customers
and suppliers that we will deliver beyond their expectations."
About Beyond.com
Beyond.com sells commercial, off-the-shelf software to the government
enterprise, corporate and consumer markets, offering its customers a better
place to buy software. Visitors to the company's online store
http://www.beyond.com enjoy a comprehensive selection of software backed by
customer service and competitive pricing. Approximately 30,000 software
stock-keeping units (SKUs) are available for online purchase with more than
3,300 SKUs available for immediate, electronic delivery, including software from
such major publishers as Adobe, Lotus, Microsoft, Sun Microsystems and Symantec.
The company has established strategic marketing alliances with America Online,
Inc., Excite, Inc. and Netscape Communications Corporation. Additionally,
Beyond.com offers publishers transaction processing, physical and electronic
order fulfillment, customer support, site design consultation, marketing support
and reporting. The company has applied for federal registration of the marks
BEYOND.COM and BEYOND DOT COM. Beyond.com Corporation trades on the Nasdaq
National Market under the symbol ("BYND"). More information on the company can
be found in the company's prospectus dated June 17, 1998, filed under its
original name, Software.net Corporation, as filed with the Securities and
Exchange Commission.
